UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549FORM 10-K(Mark One)ý ý ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2015, oro o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from to Commission file number 1-37393SPX FLOW, INC.(Exact Name of Registrant as Specified in Its Charter)Delaware47-3110748(State or Other Jurisdiction of Incorporation orOrganization)(I.R.S. Employer Identification No.)13320 Ballantyne Corporate PlaceCharlotte, NC28277(Address of Principal Executive Offices)(Zip Code)Registrant’s Telephone Number, Including Area Code (704) 752-4400(Former Name, Former Address, and Former Fiscal Year, if Changed Since Last Report) Title of Each ClassName of Each Exchange on Which RegisteredSecurities registered pursuant to Section 12(b) of the Act:Common Stock, Par Value $0.01New York Stock ExchangeSecurities registered pursuant to Section 12(g) of the Act:NoneN/A Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No ý Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No ý 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 preceding12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirement for the past 90 days. Yes ý No o Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted andposted 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 andpost such files). Yes ý No o Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant'sknowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ý Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “largeaccelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):Large Accelerated Filer o Accelerated Filer o Non-Accelerated Filer x Smaller Reporting Company o(Do not check if a smaller reporting company) Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). o Yes ý NoAs of June 27, 2015 the registrant's common shares were not publicly traded.Common shares outstanding as of February 5, 2016 were 41,631,344.Documents incorporated by reference: Portions of the registrant’s definitive proxy statement to be filed within 120 days of the close of the registrant’s fiscal year inconnection with the registrant’s Annual Meeting to be held on May 11, 2016 (the "Proxy Statement") are incorporated by reference into Part III of this Annual Report on Form 10-K. SPX FLOW, INC. AND SUBSIDIARIESFORM 10-K INDEXPART I Item 1 – Business1Item 1A – Risk Factors4Item 1B – Unresolved Staff Comments14Item 2 – Properties15Item 3 – Legal Proceedings16Item 4 – Mine Safety Disclosures16 PART II Item 5 – Market For Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of EquitySecurities17Item 6 – Selected Financial Data18Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations20Item 7A – Quantitative and Qualitative Disclosures About Market Risk35Item 8 – Consolidated and Combined Financial Statements and Supplementary Data Consolidated and Combined Statements of Operations for the Years Ended December 31, 2015, 2014 and 201339Consolidated and Combined Statements of Comprehensive Income (Loss) for the Years Ended December 31,2015, 2014 and 201340Consolidated and Combined Balance Sheets as of December 31, 2015 and 201441Consolidated and Combined Statements of Equity for the Years Ended December 31, 2015, 2014 and 201342Consolidated and Combined Statements of Cash Flows for the Years Ended December 31, 2015, 2014 and 201343Notes to Consolidated and Combined Financial Statements44Item 9 – Changes In and Disagreements with Accountants on Accounting and Financial Disclosure81Item 9A – Controls and Procedures81Item 9B – Other Information81 PART III Item 10 – Directors, Executive Officers and Corporate Governance81Item 11 – Executive Compensation83Item 12 – Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters83Item 13 – Certain Relationships and Related Transactions, and Director Independence83Item 14 – Principal Accountant Fees and Services83 PART IV Item 15 – Exhibits and Financial Statement Schedules84 SIGNATURES85 INDEX TO EXHIBITS87 PART IITEM 1. Business(All currency and share amounts are in millions)FORWARD-LOOKING STATEMENTSSome of the statements in this document and any documents incorporated by reference, including any statements as to operational and financialprojections, constitute “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “ExchangeAct”). These statements relate to future events or our future financial performance and involve known and unknown risks, uncertainties and other factors thatmay cause our businesses’ or our industries’ actual results, levels of activity, performance or achievements to be materially different from those expressed orimplied by any forward-looking statements. Such statements may address our plans, our strategies, our prospects, or changes and trends in our business andthe markets in which we operate under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations” (“MD&A”) orin other sections of this document. In some cases, you can identify forward-looking statements by terminology such as “may,” “could,” “would,” “should,”“expect,” “plan,” “anticipate,” “intend,” “believe,” “estimate,” “predict,” “project,” “potential” or “continue” or the negative of those terms or similarexpressions. Particular risks facing us include business, internal operations, legal and regulatory risks, costs of raw materials, pricing pressures, pensionfunding requirements, integration of acquisitions and changes in the economy. These statements are only predictions. Actual events or results may differmaterially because of market conditions in our industries or other factors, and forward-looking statements should not be relied upon as a prediction of actualresults. In addition, management’s estimates of future operating results are based on our current complement of businesses, which is subject to change asmanagement selects strategic markets.All the forward-looking statements in this document are qualified in their entirety by reference to the factors discussed under the heading “RiskFactors” and in any documents incorporated by reference herein that describe risks and factors that could cause results to differ materially from thoseprojected in these forward-looking statements. We caution you that these risk factors may not be exhaustive. We operate in a continually changing businessenvironment and intend to frequently enter into new businesses and product lines. We cannot predict these new risk factors, and we cannot assess the impact,if any, of these new risk factors on our businesses or the extent to which any factor, or combination of factors, may cause actual results to differ materiallyfrom those projected in any forward-looking statements. Accordingly, you should not rely on forward-looking statements as a prediction of actual results. Weundertake no obligation to update or publicly revise any forward-looking statements to reflect events or circumstances that arise after the date of thisdocument.BUSINESSSpin-Off TransactionOn October 29, 2014, SPX Corporation ("SPX" or the "former Parent") announced that its Board of Directors had unanimously approved a plan tospin off its Flow business, comprising its Flow Technology reportable segment, its Hydraulic Technologies business, certain of its corporate subsidiaries andcertain of its corporate assets and liabilities (collectively, SPX FLOW, Inc.), and separate SPX into two distinct, publicly-traded companies (the "Spin-Off").The Spin-Off was completed by way of a pro rata distribution of SPX FLOW, Inc. ("SPX FLOW," the "Company," "we," "us," or "our") common stockto SPX’s shareholders of record as of the close of business on September 16, 2015, the Spin-Off record date. Each SPX shareholder received, effective as of11:59 p.m., Eastern time, on September 26, 2015, one share of our common stock for every share of SPX common stock held by such shareholder on therecord date. On September 26, 2015, we became a separate publicly-traded company, and SPX did not retain any ownership interest in SPX FLOW. ARegistration Statement on Form 10 describing the transaction was filed by SPX FLOW with the U.S. Securities and Exchange Commission (the “SEC”) andwas declared effective on September 11, 2015 (as amended through the time of such effectiveness, the “Registration Statement on Form 10”).1 Our BusinessWe are a global supplier of highly specialized, engineered solutions with operations in over 35 countries and sales in over 150 countries around theworld. Our solutions play a role in helping to meet the global demand in the end markets we serve. Our total revenue in 2015 was $2.4 billion, withapproximately 29% from sales into emerging markets.We serve the food and beverage, power and energy and industrial markets. Our product portfolio of pumps, valves, mixers, filters, air dryers,hydraulic tools, homogenizers, separators and heat exchangers, along with the related aftermarket parts and services, supports global industries, includingfood and beverage, oil and gas, power generation (including nuclear and conventional), chemical processing, compressed air and mining. From an end marketperspective, in 2015, approximately 36% of our revenues were from sales into the food and beverage end markets, approximately 28% were from sales intothe power and energy end markets, and approximately 36% were from sales into the industrial end markets. Our core strengths include product breadth,global capabilities and the ability to create custom-engineered solutions for diverse flow processes. Over the past several years, we have strategicallyexpanded our scale, relevance to customers, and global capabilities. We believe there are attractive organic and acquisition opportunities to continue toexpand our business.We focus on a number of operating initiatives, including innovation and new product development, continuous improvement driven by leanmethodologies, supply chain management, process efficiency, expansion in emerging markets, information technology infrastructure improvement, andorganizational and talent development. These initiatives are designed to, among other things, capture synergies within our businesses to ultimately driverevenue, profit margin and cash flow growth. We believe our businesses are well-positioned for long-term growth based on our operating initiatives, thepotential within the current markets served and the potential for expansion into additional markets.REPORTABLE SEGMENTSOur business is organized into three reportable segments — Food and Beverage, Power and Energy and Industrial. The following summary describesthe products and services offered by each of our reportable segments:Food and Beverage: Our Food and Beverage reportable segment had revenues of $886.3, $968.9, and $970.0 in 2015, 2014 and 2013, respectively, andbacklog of $334.7 and $485.1 as of December 31, 2015 and 2014, respectively. Approximately 92% of the segment's backlog as of December 31, 2015 isexpected to be recognized as revenue during 2016. The Food and Beverage reportable segment operates in a regulated, global industry with customers whodemand highly engineered, turn-key solutions. Key demand drivers include dairy consumption, emerging market capacity expansion, sustainability andproductivity initiatives, customer product innovation and food safety. Key products for the segment include mixing, drying, evaporation and separationsystems and components, heat exchangers, and reciprocating and centrifugal pump technologies. Our core brands include Anhydro, APV, Bran+Luebbe,Gerstenberg Schroeder, LIGHTNIN, Seital and Waukesha Cherry-Burrell. The segment's primary competitors are Alfa Laval AB, Fristam Pumps, GEA GroupAG, Krones AG, Südmo, Tetra Pak, and various regional companies. Power and Energy: Our Power and Energy reportable segment had revenues of $723.0, $961.6 and $997.5 in 2015, 2014 and 2013, respectively, andbacklog of $399.1 and $475.5 as of December 31, 2015 and 2014, respectively. Approximately 86% of the segment's backlog as of December 31, 2015 isexpected to be recognized as revenue during 2016. The Power and Energy reportable segment primarily serves customers in the oil and gas industry and, to alesser extent, the nuclear and other conventional power industries. A large portion of the segment's revenues are concentrated in oil extraction, productionand transportation at existing wells, and pipeline applications. The underlying drivers of this segment include demand for power and energy. Key productsfor the segment include pumps, valves and the related accessories, while the core brands include APV, Bran+Luebbe, ClydeUnion Pumps, Copes-Vulcan,Dollinger Filtration, LIGHTNIN, M&J Valve, Plenty, and Vokes. The segment's primary competitors are Cameron International Corporation, Ebara FluidHandling, Flowserve Corporation, ITT Goulds Pumps, KSB AG, and Sulzer Ltd. Industrial: Our Industrial reportable segment had revenues of $779.2, $839.1 and $837.3 in 2015, 2014 and 2013, respectively, and backlog of $171.2 and$210.1 as of December 31, 2015 and 2014, respectively. Approximately 97% of the segment's backlog as of December 31, 2015 is expected to be recognizedas revenue during 2016. The Industrial reportable segment primarily serves customers in the chemical, air treatment, mining, pharmaceutical, marine,shipbuilding, infrastructure construction, general industrial and water treatment industries. Key demand drivers of this segment are tied to macroeconomicconditions and growth in the respective end markets we serve. Key products for the segment are air dryers, filtration equipment, mixers, pumps, hydraulictechnologies and heat exchangers. Core brands include Airpel, APV, Bolting Systems, Delair, Deltech, Hankison, Jemaco,2 Johnson Pump, LIGHTNIN, Power Team, and Stone. The segment's primary competitors are Alfa Laval AB, Chemineer Inc., EKATO, Actuant, Enerpac, IDEXViking Pump, KSB AG, Parker Domnick Hunter and various regional companies.See Note 4 to our consolidated and combined financial statements for more information on the results of our reportable segments, includingrevenues by geographic area.AcquisitionsWe did not acquire any businesses from the date of the Spin-Off through the end of 2015. However, we regularly review and negotiate potentialacquisitions in the ordinary course of business, some of which are or may be material. We plan to evaluate potential acquisition opportunities in the futurethat (a) strengthen our existing businesses, (b) expand our product offerings and technological know-how, and/or (c) provide access to new customers fromthe standpoint of end markets and/or geographies.International OperationsWe are a multinational corporation with operations in over 35 countries. Sales outside the United States were $1,552.0, $1,835.7 and $1,870.9 in2015, 2014 and 2013, respectively.See Note 4 to our consolidated and combined financial statements for more information on our international operations.Research and DevelopmentWe are actively engaged in research and development programs designed to improve existing products and manufacturing methods and to developnew products to better serve our current and future customers. We place particular emphasis on the development of new products that are compatible with,and build upon, our manufacturing and marketing capabilities. We expensed $19.1, $19.8 and $17.7 in 2015, 2014 and 2013, respectively, of researchactivities relating to the development and improvement of our products.Intellectual PropertyWe own approximately 160 domestic and 110 foreign patents, including 8 patents that were issued in 2015, covering a variety of our products andmanufacturing methods. We also own a number of registered trademarks. Although in the aggregate our patents and trademarks are of considerableimportance in the operation of our business, we do not consider any single patent or trademark to be of such importance that its absence would adverselyaffect our ability to conduct business as presently constituted. We are both a licensor and licensee of patents. For more information, please refer to "RiskFactors."Raw MaterialsWe purchase a wide variety of raw materials, including steel, titanium, copper, nickel and petroleum-based products. Where appropriate, we mayenter into long-term supply arrangements or fixed-cost contracts to lower the overall cost of raw materials. In addition, due to our diverse product and serviceoffering, as well as the wide geographic dispersion of our production facilities, we use numerous sources for the raw materials needed in our operations.However, we are not significantly dependent on any one supplier or a limited number of suppliers. Lastly, we continue to centralize certain aspects of supplychain management in an effort to ensure adequate materials are available for production at low cost.CompetitionThe markets we serve are highly competitive and fragmented. Our competitors are diverse, ranging from large multi-nationals to regional and localcompanies. Our principal global competitors include Alfa Laval AB, Flowserve Corporation, GEA Group AG, IDEX Corporation, ITT Gould Pumps, SulzerLtd., and Tetra Pak International S.A. We do not have any one competitor with all the same product offerings, nor do we have any one competitor whichserves all the same end markets.Our ability to compete effectively depends on a variety of factors including breadth of product offering, product quality, engineering strength, brandreputation, lead times, ability to deliver on-time, global capabilities, service capabilities, and cost position. As many of our products are sold throughdistributors and independent representatives, our success also depends on building and partnering with a strong channel network.3 Environmental MattersSee "MD&A — Critical Accounting Policies and Use of Estimates — Contingent Liabilities," "Risk Factors" and Note 13 to our consolidated andcombined financial statements for information regarding environmental matters.EmploymentAt December 31, 2015, we had over 8,000 employees. Less than 1% of our U.S. employees are covered under collective bargaining agreements,while certain of our non-U.S. employee groups are covered by various collective labor arrangements. While we generally have experienced satisfactory laborrelations, we are subject to potential union campaigns, work stoppages, union negotiations and other potential labor disputes.Executive OfficersSee Part III, Item 10 of this report for information about our executive officers.Other MattersNo customer or group of customers that, to our knowledge, are under common control accounted for more than 10% of our consolidated andcombined revenues for any period presented.Our businesses maintain sufficient levels of working capital to support customer requirements, particularly inventory. We believe our businesses'sales and payment terms are generally similar to those of our competitors.The results of many of our businesses closely follow changes in the industries and end markets they serve. In addition, certain of our businesses haveseasonal fluctuations. Demand in the oil and gas aftermarket is typically stronger in the second half of the year. Demand for food and beverage systems andrelated services is highly correlated to timing of large construction contracts, which may cause significant fluctuations in our financial performance fromperiod to period. In aggregate, our businesses generally tend to be stronger in the second half of the year.Our website address is www.spxflow.com. Information on our website is not incorporated by reference herein. We file reports with the SEC, includingannual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, and certain amendments to these reports. Copies of thesereports are available free of charge on our website as soon as reasonably practicable after we file the reports with the SEC. The SEC also maintains a website atwww.sec.gov that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.Additionally, you may read and copy any materials that we file with the SEC at the SEC's Public Reference Room at 100 F Street, NE, Washington, DC20549. You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.ITEM 1A. Risk FactorsYou should consider the risks described below and elsewhere in our documents filed with the SEC before investing in any of our securities. We mayamend, supplement or add to the risk factors described below from time to time in future reports filed with the SEC.Difficulties presented by international economic, political, legal, accounting and business factors could negatively affect our business.In 2015, approximately 65% of our revenues were generated outside the United States. We are also expanding our presence in emerging markets. Wemanage businesses with manufacturing facilities worldwide. Our reliance on non-U.S. revenues and non-U.S. manufacturing bases exposes us to a number ofrisks, including:•Significant competition could come from local or long-term participants in non-U.S. markets who may have significantly greater market knowledgeand substantially greater resources than we do;•Local customers may have a preference for locally-produced products;•Credit risk or financial condition of local customers and distributors could affect our ability to market our products or collect receivables;4 •Regulatory or political systems or barriers may make it difficult or impossible to enter or remain in new markets. In addition, these barriers mayimpact our existing businesses, including making it more difficult for them to grow;•Local political, economic and social conditions, including the possibility of hyperinflationary conditions, political instability, nationalization ofprivate enterprises, or unexpected changes relating to currency could adversely impact our operations;•Customs and tariffs may make it difficult or impossible for us to move our products or assets across borders in a cost-effective manner;•Complications related to shipping, including delays due to weather, labor action, or customs, may impact our profit margins or lead to lost business;•Government embargoes or foreign trade restrictions such as anti-dumping duties, as well as the imposition of trade sanctions by the United States orthe European Union against a class of products imported from or sold and exported to, or the loss of "normal trade relations" status with, countries inwhich we conduct business, could significantly increase our cost of products imported into the United States or Europe or reduce our sales and harmour business;•Environmental and other laws and regulations could increase our costs or limit our ability to run our business;•Our ability to obtain supplies from foreign vendors and ship products internationally may be impaired during times of crisis or otherwise;•Local, regional or worldwide hostilities could impact our operations; and•Distance, language and cultural differences may make it more difficult to manage our business and employees and to effectively market our productsand services.Any of the above factors or other factors affecting social and economic activity in emerging markets or affecting the movement of people andproducts into and from these countries to our major markets, including North America and Europe, could have a significant negative effect on our operations.Many of the markets in which we operate are cyclical or are subject to industry events, and our results have been and could be affected as a result.Many of the markets in which we operate are subject to general economic cycles or industry events. We have significant exposure to companiesoperating in or selling to oil and gas markets. Recent declines in the price of oil have depressed demand in these markets, and continued low oil prices maycontinue or exacerbate the decline in this market. Other of our markets, including food and beverage, chemical, mining, and petrochemical, particularlychemical companies and general industrial companies, are to varying degrees cyclical and have experienced, and may continue to experience, periodicdownturns. Cyclical changes and specific industry events could also affect sales of products in our other businesses. Downturns in the business cycles of ourdifferent operations may occur at the same time, which could exacerbate any adverse effects on our business. See "Management's Discussion and Analysis ofFinancial Condition and Results of Operations—Results of Reportable Segments."Contract timing on large construction projects, including food and beverage systems and projects in the oil and gas industries, may cause significantfluctuations in revenues and profits from period to period.In addition, certain of our businesses have seasonal fluctuations. Historically, some of our key businesses tend to be stronger in the second half ofthe year.Our business depends on capital investment and maintenance expenditures by our customers.Demand for most of our products and services depends on the level of new capital investment and planned maintenance expenditures by ourcustomers. The level of capital expenditures by our customers fluctuates based on planned expansions, new builds, and repairs, general economic conditions,availability of credit, and expectations of future market behavior. Any of these factors, individually or in the aggregate, could have a material adverse effecton our customers and, in turn, our business, financial condition, results of operations and cash flows.Our customers could be impacted by commodity availability and price fluctuations.A number of factors outside our control, including fluctuating commodity prices, impact the demand for our products. Increased commodity pricesmay increase our customers' cost of doing business, thus causing them to delay or cancel large capital projects.5 On the other hand, declining commodity prices may cause mines, oil refineries, oil and gas extraction fields and other customers to delay or cancelprojects relating to the production of such commodities. Also, oversupply could cause manufacturers to cut back on expenditures. Reduced demand for ourproducts and services could result in the delay or cancellation of existing orders or lead to excess manufacturing capacity, which unfavorably impacts ourabsorption of fixed manufacturing costs. This reduced demand may also erode average selling prices in the relevant market.Our ordinary course and future restructuring activities, including our realignment program, could result in additional costs and operational difficulties.We face risks relating to our efforts to reduce global costs, including those designed to reduce headcount and consolidate our manufacturingfootprint. In addition to the typical risks we face, we have announced a global realignment program designed to further optimize our global footprint,streamline business processes and reduce selling, general and administrative expense across operating sites and corporate and global functions over the nexttwo years. The financial costs and savings associated with the realignment program are expected to be well in excess of our historical, ordinary courserestructuring activities.We risk the loss of valuable employees, operational difficulties, product quality, higher than expected restructuring costs, and difficulties arisingfrom negotiations with work councils and other labor groups. We also risk disruption to our customer relationships if we are unable to meet our commitmentsto them. Further, these actions may take longer than anticipated, prove more costly than expected and distract management from other activities. Finally, wemay not fully realize the expected benefits of these activities.The price and availability of raw materials may adversely affect our business.We are exposed to a variety of risks relating to the price and availability of raw materials. In recent years, we have faced volatility in the prices ofmany of our key raw materials, including petroleum-based products, steel and copper. Increases in the prices of raw materials or shortages or allocations ofmaterials may have a material adverse effect on our financial position, results of operations or cash flows, as we may not be able to pass cost increases on toour customers, or our sales may be reduced. We are subject to long-term supplier contracts that may increase our exposure to pricing fluctuations.Credit and counterparty risks could harm our business.The financial condition of our customers could affect our ability to market our products or collect receivables. In addition, financial difficultiesfaced by our customers may lead to cancellation or delay of orders.Our customers may suffer financial difficulties that make them unable to pay for a project when completed or as payment milestones become due, orthey may decide not to pay us, either as a matter of corporate decision-making or in response to changes in local laws and regulations. We cannot assure youthat expenses or losses for uncollectible amounts will not have a material adverse effect on our revenues, earnings and cash flows.Failure to protect or unauthorized use of our intellectual property may harm our business.Despite our efforts to protect our proprietary rights, unauthorized parties or competitors may copy or otherwise obtain and use our products ortechnology. The steps we have taken may not prevent unauthorized use of our technology or knowledge, particularly in foreign countries where the laws maynot protect our proprietary rights to the same extent as in the United States. Costs incurred to defend our rights may be material.If we are unable to protect our information systems against data corruption, cyber-based attacks or network security breaches, our operations could bedisrupted.We are increasingly dependent on information technology ("IT") networks and systems, including the Internet, to process, transmit and storeelectronic information. In particular, we depend on such IT infrastructure for electronic communications among our locations around the world and betweenour personnel and suppliers and customers, and we rely on the systems and services of a variety of vendors to meet our data processing and communicationneeds. Despite our implementation of security measures, cybersecurity threats, such as malicious software, phishing attacks, computer viruses and attempts togain unauthorized access, cannot be completely mitigated. Security breaches of our, our customers' and our vendors' IT infrastructure can create systemdisruptions, shutdowns or unauthorized disclosure of confidential information, including our intellectual property, trade secrets, customer information orother confidential business information. If we are unable to prevent, detect or adequately respond to such breaches, our operations could be disrupted, ourcompetitiveness could be adversely affected or we may suffer financial damage or loss because of lost or misappropriated information. Such incidents alsocould require significant management attention and resources and increased costs.6 Currency conversion risk could have a material impact on our reported results of business operations.Our operating results are translated into U.S. dollars for reporting purposes. The strengthening or weakening of the U.S. dollar against othercurrencies in which we conduct business could result in unfavorable translation effects as the results of transactions in foreign countries are translated intoU.S. dollars. Increased strength of the U.S. dollar will increase the effective price of our products sold in U.S. dollars into other countries, which may have amaterial adverse effect on sales or require us to lower our prices, and also decrease our reported revenues or margins related to sales conducted in foreigncurrencies to the extent we are unable or determine not to increase local currency prices. Likewise, decreased strength of the U.S. dollar could have a materialadverse effect stemming from the cost of materials and products purchased overseas.Failure to comply with the U.S. Foreign Corrupt Practices Act, the U.K. Bribery Act or other applicable anti-bribery laws could have an adverse effect onour business.The U.S. Foreign Corrupt Practices Act, the U.K. Bribery Act and similar anti-bribery laws in other jurisdictions generally prohibit companies and theirintermediaries from making improper payments for the purpose of obtaining or retaining business. Recent years have seen a substantial increase in anti-bribery law enforcement activity with more frequent and aggressive investigations and enforcement proceedings by both the Department of Justice and theSEC, increased enforcement activity by non-U.S. regulators and increases in criminal and civil proceedings brought against companies and individuals. Ourpolicies mandate compliance with anti-bribery laws. However, we operate in certain countries that are recognized as having governmental and commercialcorruption. Our internal control policies and procedures may not always protect us from reckless or criminal acts committed by our employees or third-partyintermediaries. Violations of these anti-bribery laws may result in criminal or civil sanctions, which could have a material adverse effect on our business,financial condition and results of operations.We could experience operational difficulties and additional expense related to further implementations of Enterprise Resource Planning ("ERP")software.We are engaged in a major, multi-year process of upgrading, and where necessary, implementing, a standard ERP software program across many ofour business locations. Our expanded ERP software platform has involved, and will continue to involve, substantial expenditures on system hardware andsoftware, as well as design, development and implementation activities. Operational disruptions during the course of these activities could materially impactour operations. For example, our ability to forecast sales demand, ship products, manage our product inventory, and record and report financial andmanagement information on a timely and accurate basis could be impaired if there are significant problems implementing the expansion.Additionally, our cost estimates related to our new ERP system are based on assumptions which are subject to wide variability, requiring a great dealof judgment.Changes in tax laws and regulations or other factors could cause our income tax rate to increase, potentially reducing our net income and adverselyaffecting our cash flows.As a global manufacturing company, we are subject to taxation in various jurisdictions around the world. In preparing our financial statements, wecalculate our effective income tax rate based on current tax laws and regulations and the estimated taxable income within each of these jurisdictions. Oureffective income tax rate, however, may be higher due to numerous factors, including changes in tax laws or regulations. An effective income tax ratesignificantly higher than our expectations could have an adverse effect on our business, results of operations and liquidity.Officials in some of the jurisdictions in which we do business have proposed, or announced that they are reviewing, tax changes that couldpotentially increase taxes and other revenue-raising laws and regulations, including those that may be enacted as a result of the OECD Base Erosion andProfit Shifting project. Any such changes in tax laws or regulations could impose new restrictions, costs or prohibitions on existing practices as well as reduceour net income and adversely affect our cash flows.Cost overruns, delays, penalties or liquidated damages could negatively impact our results, particularly with respect to long-term fixed-price contracts.Substantially all our revenues are recorded and earned under fixed-price arrangements. A portion of our revenues and earnings is generated throughlong-term contracts. We recognize revenues for the majority of these long-term contracts using the percentage-of-completion method of accounting wherebyrevenues and expenses, and thereby profit, in a given period are determined based on our estimates as to the project status and the costs remaining tocomplete a particular project. During 2015, 2014 and 2013, approximately 20.5%, 20.7% and 21.8%, respectively, of our total revenues were recorded underthe percentage-of-completion method.7 Estimates of total revenues and cost at completion are subject to many variables, including the length of time to complete a contract. In addition,contract delays may negatively impact these estimates and our revenues and earnings results for affected periods.To the extent that we underestimate the remaining cost or time to complete a project, we may overstate the revenues and profit in a particular period.Further, certain of these contracts provide for penalties or liquidated damages for failure to timely perform our obligations under the contract, or require thatwe, at our expense, correct and remedy to the satisfaction of the other party certain defects. Because substantially all of our long-term contracts are at a fixedprice, we face the risk that cost overruns, delays, penalties or liquidated damages may exceed, erode or eliminate our expected profit margin, or cause us torecord a loss on our projects.The loss of key personnel and an inability to attract and retain qualified employees could have a material adverse effect on our operations.We are dependent on the continued services of our leadership team. The loss of these personnel without adequate replacement could have a materialadverse effect on our operations. Additionally, we need qualified managers and skilled employees with technical and manufacturing industry experience inmany locations in order to operate our business successfully. From time to time, there may be a shortage of skilled labor, which may make it more difficultand expensive for us to attract and retain qualified employees. If we were unable to attract and retain sufficient numbers of qualified individuals or our coststo do so were to increase significantly, our operations could be materially adversely affected.We operate in highly competitive markets. Our failure to compete effectively could harm our business.We sell our products in highly competitive markets, which could result in pressure on our profit margins and limit our ability to maintain or increasethe market share of our products. We compete on a number of fronts, including on the basis of product offerings, technical capabilities, quality, service andpricing. We have a number of competitors with substantial technological and financial resources, brand recognition and established relationships with globalservice providers. Some of our competitors have low cost structures, support from local governments, or both. In addition, new competitors may enter themarkets in which we participate. Competitors may be able to offer lower prices, additional products or services or a more attractive mix of products orservices, or services or incentives that we cannot or will not match. These competitors may be in a stronger position to respond quickly to new or emergingtechnologies and may be able to undertake more extensive marketing campaigns, and make more attractive offers to potential customers, employees andstrategic partners. In addition, competitive environments in slow-growth markets, to which some of our businesses have exposure, have been inherently moreinfluenced by pricing and domestic and global economic conditions. To remain competitive, we must invest in manufacturing, marketing, customer serviceand support and our distribution networks. We cannot assure you that we will have sufficient resources to continue to make the investment required tomaintain or increase our market share or that our investments will be successful. If we do not compete successfully, our business, financial condition, resultsof operations and cash flows could be materially adversely affected.Our strategy to outsource various elements of the products and services we sell subjects us to the business risks of our suppliers and subcontractors, whichcould have a material adverse impact on our operations.In areas where we depend on third-party suppliers and subcontractors for outsourced products, components or services, we are subject to the risk ofcustomer dissatisfaction with the quality or performance of the products or services we sell due to supplier or subcontractor failure. In addition, businessdifficulties experienced by a third-party supplier or subcontractor can lead to the interruption of our ability to obtain outsourced products or services andultimately our inability to supply products or services to our customers. Third-party supplier and subcontractor business interruptions can include, but are notlimited to, work stoppages, union negotiations and other labor disputes. Current or future economic conditions could also impact the ability of suppliers andsubcontractors to access credit and, thus, impair their ability to provide us quality products or services in a timely manner, or at all.We are subject to laws, regulations and potential liability relating to claims, complaints and proceedings, including those relating to environmental andother matters.We are subject to various laws, ordinances, regulations and other requirements of government authorities in the United States and other nations.With respect to acquisitions, divestitures and continuing operations, we may acquire or retain liabilities of which we are not aware, or which are of a differentcharacter or magnitude than expected. Additionally, changes in laws, ordinances, regulations or other governmental policies may significantly increase ourexpenses and liabilities.In addition, costs associated with regulatory compliance can be difficult to predict. If we underestimate the time or costs required to comply with ourlegal and regulatory obligations, our actual costs may significantly exceed our projections, which could impact our results of operations.8 We are subject to domestic and international environmental protection laws and regulations with respect to our business operations and areoperating in compliance with, or taking action aimed at ensuring compliance with, these laws and regulations. We cannot assure you that our complianceobligations with environmental protection laws and regulations, individually or in the aggregate, will not have a material adverse effect on our financialposition, results of operations or cash flows.Numerous claims, complaints and proceedings arising in the ordinary course of business, including those relating to litigation matters (e.g., classactions, derivative lawsuits and contracts, intellectual property and competitive claims), environmental matters, and risk management matters (e.g., productand general liability, personal injury claims, automobile, and workers' compensation claims), have been filed or are pending against us and certain of oursubsidiaries. From time to time, we face actions by governmental authorities, both in and outside the United States. Additionally, we may become subject tosignificant claims of which we are currently unaware or the claims of which we are aware may result in our incurring a significantly greater liability than weanticipate. Our insurance may be insufficient or unavailable (e.g., because of insurer insolvency, a significant adverse change in claim experience, orinsurance coverage is not available in applicable insured periods) to protect us against potential loss exposures.We devote significant time and expense to defend against the various claims, complaints and proceedings brought against us, and we cannot assureyou that the expenses or distractions from operating our businesses arising from these defenses will not increase materially.We cannot assure you that our accruals and rights to indemnity and insurance will be sufficient, that recoveries from insurance or indemnificationclaims will be available or that any of our current or future claims or other matters will not have a material adverse effect on our financial position, results ofoperations or cash flows.See "Management's Discussion and Analysis of Financial Condition and Results of Operations-Critical Accounting Policies and Use of Estimates-Contingent Liabilities" and Note 13 to our consolidated and combined financial statements for further discussion.If the fair value of any of our reporting units is insufficient to recover the carrying value of the goodwill and other intangibles of the respective reportingunit, a material non-cash charge to earnings could result.At December 31, 2015, we had goodwill and other intangible assets, net, of $1,602.8. We conduct annual impairment testing to determine if we willbe able to recover all or a portion of the carrying value of goodwill and indefinite-lived intangibles. In addition, we review goodwill and indefinite-livedintangible assets for impairment more frequently if impairment indicators arise. If the fair value is insufficient to recover the carrying value of our goodwilland indefinite-lived intangibles, we may be required to record a material non-cash charge to earnings.The fair values of our reporting units generally are based on discounted cash flow projections that are believed to be reasonable under current andforecasted circumstances, the results of which form the basis for making judgments about the recoverability of carrying values of the reported net assets of ourreporting units. Other considerations are also incorporated, including comparable price multiples. Many of our businesses closely follow changes in theindustries and end markets that they serve. For example, following recent declines in the price of oil and the resultant impact on oil markets, the results of ourinterim goodwill impairment test conducted at the end of 2015 indicated the estimated fair value of the Power and Energy reporting unit exceeded itscarrying value by less than 5%. Accordingly, we consider estimates and judgments that affect future cash flow projections, including principal methods ofcompetition such as volume, price, service, product performance and technical innovations and estimates associated with cost reduction initiatives, capacityutilization, and assumptions for inflation and foreign currency changes. We monitor impairment indicators across all of our businesses. Significant changes inmarket conditions and estimates or judgments used to determine expected future cash flows that indicate a reduction in carrying value may give rise toimpairments in the period that the change becomes known.Our failure to successfully complete acquisitions could negatively affect us.We may not be able to consummate desired acquisitions, which could materially impact our growth rate, results of operations, future cash flows andstock price. Our ability to achieve our goals depends upon, among other things, our ability to identify and successfully acquire companies, businesses andproduct lines, to effectively integrate them and to achieve cost savings and other synergies. We may also be unable to raise additional funds necessary toconsummate these acquisitions. In addition, decreases in our stock price may adversely affect our ability to consummate acquisitions. Competition foracquisitions in our business areas may be significant and result in higher prices for businesses, including businesses that we may target, which may also affectour acquisition rate or benefits achieved from our acquisitions.9 Dispositions or our failure to successfully complete dispositions could negatively affect us.Dispositions involve a number of risks and present financial, managerial and operational challenges, including diversion of management attentionfrom running our core businesses, increased expense associated with the dispositions, potential disputes with the customers or suppliers of the disposedbusinesses, potential disputes with the acquirers of the disposed businesses and a potential dilutive effect on our earnings per share.If dispositions are not completed in a timely manner, there may be a negative effect on our cash flows and/or our ability to execute our strategy.Our failure to successfully integrate acquisitions could have a negative effect on our operations; our acquisitions could cause financial difficulties.Our acquisitions could involve a number of risks and present financial, managerial and operational challenges, including:•Adverse effects on our reported operating results due to charges to earnings, including impairment charges associated with goodwill and otherintangibles;•Diversion of management attention from core business operations;•Integration of technology, operations, personnel and financial and other systems;•Increased expenses;•Increased foreign operations, often with unique issues relating to corporate culture, compliance with legal and regulatory requirements and otherchallenges;•Assumption of known and unknown liabilities and exposure to litigation;•Increased levels of debt or dilution to existing shareholders; and•Potential disputes with the sellers of acquired businesses, technology, services or products.In addition, internal controls over financial reporting of acquired companies may not be compliant with required standards. Issues may exist thatcould rise to the level of significant deficiencies or, in some cases, material weaknesses, particularly with respect to foreign companies or non-public U.S.companies.Our integration activities may place substantial demands on our management, operational resources and financial and internal control systems.Customer dissatisfaction or performance problems with an acquired business, technology, service or product could also have a material adverse effect on ourreputation and business.We may not achieve the expected cost savings and other benefits of any acquisitions.We strive for and expect to achieve cost savings in connection with our acquisitions, including: (i) manufacturing process and supply chainrationalization, (ii) streamlining redundant administrative overhead and support activities, and (iii) restructuring and repositioning sales and marketingorganizations to eliminate redundancies. Cost savings are inherently difficult to predict, and we cannot assure you that we will achieve expected, or any, costsavings. In addition, we cannot assure you that unforeseen factors will not offset the estimated cost savings or other benefits from our future acquisitions. As aresult, anticipated benefits could be delayed, differ significantly from our estimates and the other information contained in this report, or not be realized.We are subject to potential work stoppages, labor disputes and other matters associated with our labor force, which may adversely impact our operationsand cause us to incur incremental costs.We have various collective labor arrangements covering certain U.S. and non-U.S. employee groups. We are subject to potential work stoppages andother potential labor disputes. Further, we may be subject to work stoppages, which are beyond our control, at our suppliers or customers.Our technology is important to our success, and failure to develop new products may result in a significant competitive disadvantage.We believe the development of our intellectual property rights is critical to the success of our business. In order to maintain our market positions andmargins, we need to continually develop and introduce high quality, technologically advanced10 and cost-effective products on a timely basis, in many cases in multiple jurisdictions around the world. The failure to do so could result in a significantcompetitive disadvantage.Cost reduction actions may affect our business.Cost reduction actions often result in charges against earnings. These charges can vary significantly from period to period and, as a result, we mayexperience fluctuations in our reported net income and earnings per share due to the timing of restructuring actions.Our current and planned products may contain defects or errors that are detected only after delivery to customers. If that occurs, our reputation may beharmed and we may face additional costs.We cannot assure you that our product development, manufacturing and integration testing will be adequate to detect all defects, errors, failures andquality issues that could impact customer satisfaction or result in claims against us with regard to our products. As a result, we may have, and from time totime have had, to replace certain components and/or provide remediation in response to the discovery of defects in products that are shipped. The occurrenceof any defects, errors, failures or quality issues could result in cancellation of orders, product returns, diversion of our resources, legal actions by ourcustomers or our customers' end users and other losses to us or to any of our customers or end users, and could also result in the loss of or delay in marketacceptance of our products and loss of sales, which would harm our business and adversely affect our revenues and profitability.Increases in the number of shares of our outstanding common stock could adversely affect our common stock price or dilute our earnings per share.Sales of a substantial number of shares of common stock into the public market, or the perception that these sales could occur, could have a materialadverse effect on our stock price. As of December 31, 2015, we had the ability to issue up to an additional 2.9 shares as restricted stock shares, restricted stockunits, or stock options under our SPX FLOW Stock Compensation Plan. Additionally, we may issue a significant number of additional shares, in connectionwith acquisitions or otherwise. We also may issue a significant number of additional shares through other mechanisms. Additional shares granted and/orissued would have a dilutive effect on our earnings per share.Provisions in our corporate documents and Delaware law may delay or prevent a change in control of our company, and accordingly, we may notconsummate a transaction that our shareholders consider favorable.Provisions of our Certificate of Incorporation and By-laws may inhibit changes in control of our company not approved by our Board. Theseprovisions include, for example: a staggered board of directors; a prohibition on shareholder action by written consent; a requirement that special shareholdermeetings be called only by our Chairman, President or Board; advance notice requirements for shareholder proposals and nominations; limitations onshareholders' ability to amend, alter or repeal the By-laws; enhanced voting requirements for certain business combinations involving substantialshareholders; the authority of our Board to issue, without shareholder approval, preferred stock with terms determined in its discretion; and limitations onshareholders' ability to remove directors. In addition, we are afforded the protections of Section 203 of the Delaware General Corporation Law, which couldhave similar effects. In general, Section 203 prohibits us from engaging in a "business combination" with an "interested shareholder" (each as defined inSection 203) for at least three years after the time the person became an interested shareholder unless certain conditions are met. These protective provisionscould result in our not consummating a transaction that our shareholders consider favorable or discourage entities from attempting to acquire us, potentiallyat a significant premium to our then-existing stock price.Our indebtedness may affect our business and may restrict our operating flexibility.At December 31, 2015, we had $1,037.3 in total indebtedness. On that same date, we had $440.5 of available borrowing capacity under ourrevolving credit facilities, after giving effect to $9.5 reserved for outstanding letters of credit, and $50.0 of available borrowing capacity under our tradereceivables financing arrangement. In addition, at December 31, 2015, we had $227.7 of available issuance capacity under our foreign credit instrumentfacilities after giving effect to $272.3 reserved for outstanding letters of credit. At December 31, 2015, our cash and equivalents balance was $295.9. SeeMD&A and Note 10 to our consolidated and combined financial statements for further discussion. We may incur additional indebtedness in the future,including indebtedness incurred to finance, or assumed in connection with, acquisitions. We may renegotiate or refinance our senior credit facilities, seniornotes or other debt facilities, or enter into additional agreements that have different or more stringent terms. The level of our indebtedness could:•Impact our ability to obtain new, or refinance existing, indebtedness on favorable terms or at all;11 •Limit our ability to obtain, or obtain on favorable terms, additional debt financing for working capital, capital expenditures or acquisitions;•Limit our flexibility in reacting to competitive and other changes in the industry and economic conditions;•Limit our ability to pay dividends on our common stock;•Coupled with a substantial decrease in net operating cash flows due to economic developments or adverse developments in our business, make itdifficult to meet debt service requirements; and•Expose us to interest rate fluctuations to the extent existing borrowings are, and any new borrowings may be, at variable rates of interest, whichcould result in higher interest expense and interest payments in the event of increases in interest rates.Our ability to make scheduled payments of principal or pay interest on, or to refinance, our indebtedness and to satisfy our other debt obligationswill depend upon our future operating performance, which may be affected by general economic, financial, competitive, legislative, regulatory, business andother factors beyond our control. In addition, we cannot assure you that future borrowings or equity financing will be available for the payment orrefinancing of our indebtedness. If we are unable to service our indebtedness, whether in the ordinary course of business or upon an acceleration of suchindebtedness, we may pursue one or more alternative strategies, such as restructuring or refinancing our indebtedness, selling assets, reducing or delayingcapital expenditures, revising implementation of or delaying strategic plans or seeking additional equity capital. Any of these actions could have a materialadverse effect on our business, financial condition, results of operations and stock price. In addition, we cannot assure that we would be able to take any ofthese actions, that these actions would enable us to continue to satisfy our capital requirements, or that these actions would be permitted under the terms ofour various debt agreements.Numerous banks in many countries are syndicate members in our credit facility. Failure of one or more of our larger lenders, or several of our smallerlenders, could significantly reduce availability of our credit, which could harm our liquidity.We may not be able to finance future needs or adapt our business plan to react to changes in economic or business conditions because of restrictionsplaced on us by our senior credit facilities and any existing or future instruments governing our other indebtedness.Our senior credit facilities, the indenture governing our senior notes and agreements governing our other indebtedness contain, or future or revisedinstruments may contain, various restrictions and covenants that limit our ability to make distributions or other payments to our investors and creditorsunless certain financial tests or other criteria are satisfied. We also must comply with certain specified financial ratios and tests. Our subsidiaries may also besubject to restrictions on their ability to make distributions to us. In addition, our senior credit facilities, indenture governing our senior notes and agreementsgoverning our other indebtedness contain or may contain additional affirmative and negative covenants. Material existing restrictions are described morefully in the MD&A and Note 10 to our consolidated and combined financial statements. Each of these restrictions could affect our ability to operate ourbusiness and may limit our ability to take advantage of potential business opportunities, such as acquisitions.If we do not comply with the covenants and restrictions contained in our senior credit facilities, indenture governing our senior notes andagreements governing our other indebtedness, we could default under those agreements, and the debt, together with accrued interest, could be declared dueand payable. If we default under our senior credit facilities, the lenders could cause all our outstanding debt obligations under our senior credit facilities tobecome due and payable or require us to repay the indebtedness under these facilities. If our debt is accelerated, we may not be able to repay or refinance ourdebt. In addition, any default under our senior credit facilities, indenture governing our senior notes or agreements governing our other indebtedness couldlead to an acceleration of debt under other debt instruments that contain cross-acceleration or cross-default provisions. If the indebtedness under our seniorcredit facilities is accelerated, we may not have sufficient assets to repay amounts due under our senior credit facilities, senior notes or other debt securitiesthen outstanding. Our ability to comply with these provisions of our senior credit facilities, indenture governing our senior notes and agreements governingour other indebtedness will be affected by changes in the economic or business conditions or other events beyond our control. Complying with ourcovenants may also cause us to take actions that are not favorable to us and may make it more difficult for us to successfully execute our business strategyand compete, including against companies that are not subject to such restrictions.12 Risks Related to our Recent Spin-OffWe may not be able to engage in certain corporate transactions.To preserve the intended tax-free treatment of the Spin-Off, under our Tax Matters Agreement with SPX, for a period of two years following the Spin-Off, we generally will be prohibited from taking certain actions that would prevent the Spin-Off from qualifying as a transaction that generally is tax-free toSPX and SPX’s shareholders, for U.S. federal income tax purposes, under Sections 355 and 368(a)(1)(D) of the Code.These restrictions, which generally relate to acquisitions of our stock and similar transactions, may limit our ability to pursue certain strategictransactions or other transactions that we may otherwise believe to be in the best interests of our shareholders or that might increase the value of our business.We are subject to additional costs and demands on management as an independent, publicly-owned company.As a public entity, we are subject to the reporting requirements of the Exchange Act and requirements of the Sarbanes-Oxley Act of 2002 (the"Sarbanes-Oxley Act"). These requirements may place a strain on our systems and resources. The Exchange Act requires that we file annual, quarterly andcurrent reports about our business and financial condition. Under the Sarbanes-Oxley Act, we must maintain effective disclosure controls and procedures andinternal control over financial reporting, which requires significant resources and management oversight. We have implemented additional procedures andprocesses to address the standards and requirements applicable to public companies. To comply with these requirements, we may need to upgrade oursystems; implement additional financial and management controls, reporting systems and procedures; and hire additional accounting and finance staff. Weexpect to incur additional annual expenses for the purpose of addressing these requirements, and those expenses may be significant. These activities maydivert management's attention from other business concerns, which could have a material adverse effect on our financial position, results of operations or cashflows.In connection with our Spin-Off, SPX will indemnify us for certain liabilities and we will indemnify SPX for certain liabilities. If we are required to act onthese indemnities to SPX, we may need to divert cash to meet those obligations and our financial results could be negatively impacted. The SPX indemnitymay not be sufficient to insure us against the full amount of liabilities for which we will be allocated responsibility, and SPX may not be able to satisfy itsindemnification obligations in the future.Pursuant to the Separation and Distribution Agreement, the Employee Matters Agreement and the Tax Matters Agreement between us and SPX, SPXhas agreed to indemnify us for certain liabilities, and we have agreed to indemnify SPX for certain liabilities, in each case for uncapped amounts. Suchindemnities may be significant and could negatively impact our business, particularly our indemnity to SPX regarding the intended tax-free treatment of theSpin-Off. Third parties could also seek to hold us responsible for any of the liabilities that SPX has agreed to retain. Further, the indemnity from SPX may notbe sufficient to protect us against the full amount of such liabilities, and SPX may not be able to fully satisfy its indemnification obligations. Moreover, evenif we ultimately succeed in recovering from SPX any amounts for which we are held liable, we may be temporarily required to bear these losses ourselves.Each of these risks could negatively affect our business, financial condition, results of operations and cash flows.The Spin-Off may expose us to potential liabilities arising out of state and federal fraudulent conveyance laws and legal dividend requirements.The Spin-Off is subject to review under various state and federal fraudulent conveyance laws. Fraudulent conveyance laws generally provide that anentity engages in a constructive fraudulent conveyance when (1) the entity transfers assets and does not receive fair consideration or reasonably equivalentvalue in return, and (2) the entity (a) is insolvent at the time of the transfer or is rendered insolvent by the transfer, (b) has unreasonably small capital withwhich to carry on its business, or (c) intends to incur or believes it will incur debts beyond its ability to repay its debts as they mature. An unpaid creditor oran entity acting on behalf of a creditor (including, without limitation, a trustee or debtor-in-possession in a bankruptcy by us or SPX or any of our respectivesubsidiaries) may bring a lawsuit alleging that the Spin-Off or any of the related transactions constituted a constructive fraudulent conveyance. If a courtaccepts these allegations, it could impose a number of remedies, including, without limitation, voiding our claims against SPX, requiring our shareholders toreturn to SPX some or all of the shares of our common stock issued in the Spin-Off, or providing SPX with a claim for money damages against us in an amountequal to the difference between the consideration received by SPX and the fair market value of our company at the time of the Spin-Off.The measure of insolvency for purposes of the fraudulent conveyance laws will vary depending on which jurisdiction's law is applied. Generally, anentity would be considered insolvent if (1) the present fair saleable value of its assets is less than the amount of its liabilities (including contingentliabilities); (2) the present fair saleable value of its assets is less than its probable liabilities on its debts as such debts become absolute and matured; (3) itcannot pay its debts and other liabilities (including contingent liabilities and other commitments) as they mature; or (4) it has unreasonably small capital forthe business in which13 it is engaged. We cannot assure you what standard a court would apply to determine insolvency or that a court would determine that we, SPX or any of ourrespective subsidiaries were solvent at the time of or after giving effect to the Spin-Off.The distribution of our common stock is also subject to review under state corporate distribution statutes. Under the General Corporation Law of theState of Delaware (the "DGCL"), a corporation may only pay dividends to its shareholders either (1) out of its surplus (net assets minus capital) or (2) if thereis no such surplus, out of its net profits for the fiscal year in which the dividend is declared and/or the preceding fiscal year.Although we believe that we and SPX were each solvent at the time of the Spin-Off (including immediately after the distribution of shares of SPXFLOW common stock), that we are able to repay our debts as they mature and have sufficient capital to carry on our businesses, and that the distribution wasmade entirely out of surplus in accordance with Section 170 of the DGCL, we cannot assure you that a court would reach the same conclusions indetermining whether SPX or we were insolvent at the time of, or after giving effect to, the Spin-Off, or whether lawful funds were available for the separationand the distribution to SPX's shareholders.A court could require that we assume responsibility for obligations allocated to SPX under the Separation and Distribution Agreement.Under the Separation and Distribution Agreement, both we and SPX are responsible for the debts, liabilities and other obligations related to thebusiness or businesses which it owns and operates. Although we do not expect to be liable for any obligations that are not allocated to us under theSeparation and Distribution Agreement, a court could disregard the allocation agreed to between the parties, and require that we assume responsibility forobligations allocated to SPX (including, for example, environmental liabilities), particularly if SPX were to refuse or were unable to pay or perform theallocated obligations.We are subject to continuing contingent tax liabilities of SPX.Under the Code and U.S. Treasury Regulations, each corporation that was a member of the SPX consolidated group for U.S. federal income taxpurposes during any taxable period (or portion thereof) ending on or before the effective time of the Spin-Off is jointly and severally liable for the entire U.S.federal income tax liability of the SPX consolidated group for that taxable period subsequent to the year ended December 31, 2011. Our Tax MattersAgreement with SPX generally allocates economic responsibility for taxes of the SPX consolidated group to SPX. However, if SPX is unable to pay any suchtaxes, we could be liable for the entire amount of such taxes, which would include taxes arising out of the Spin-Off if SPX were to take an action (over whichwe may have no control) that causes the Spin-Off to be taxable to SPX.Certain of our executive officers and directors may have actual or potential conflicts of interest because of their current or former positions in SPX or theirownership of SPX equity.Certain of our executive officers and directors are former directors, officers or employees of SPX and thus have professional relationships with SPX’sexecutive officers and directors. One of our directors, our Chairman, continues to serve on the board of directors of SPX following the Spin-Off. In addition,the majority of our executive officers and directors have a financial interest in SPX as a result of their beneficial ownership of SPX equity. These relationshipsand financial interests may create, or may create the appearance of, conflicts of interest when these directors and officers face decisions that could havedifferent implications for SPX than for us.We might have been able to receive better terms from unaffiliated third parties than the terms we receive in our agreements with SPX.The agreements related to the Spin-Off, including the Separation and Distribution Agreement, the Employee Matters Agreement, the Tax MattersAgreement, the Transition Services Agreement, the Trademark License Agreement, and any other agreements, were negotiated in the context of our separationfrom SPX while we were still part of SPX. Although these agreements are intended to be on an arm's-length basis, they may not reflect terms that would haveresulted from arm's-length negotiations among unaffiliated third parties. The terms of the agreements negotiated in the context of our separation concern,among other things, allocations of assets, liabilities, rights, indemnifications and other obligations among SPX and us.ITEM 1B. Unresolved Staff CommentsNone.14 ITEM 2. PropertiesThe following is a summary of our principal properties as of December 31, 2015: Approximate Square Footage Location No. of Facilities Owned Leased (in millions)Food and Beverage3 U.S. states and 10 foreign countries 19 0.7 0.7Power and Energy5 U.S. states and 9 foreign countries 26 2.0 0.6Industrial6 U.S. states and 13 foreign countries 30 1.1 0.7Total 75 3.8 2.0In addition to manufacturing plants, we own our corporate office in Charlotte, NC, and lease our Asia Pacific center in Shanghai, China, ourEuropean shared service center in Manchester, United Kingdom and various sales, service and other locations throughout the world. We consider theseproperties, as well as the related machinery and equipment, to be well maintained and suitable and adequate for their intended purposes.The following table lists the locations of our primary manufacturing and engineering facilities as of December 31, 2015:Americas EMEA Asia PacificBurlington, Canada Annecy, France Ahmedabad, IndiaDelavan, WI Assen, Netherlands Auckland, New ZealandGoldsboro, NC Brixworth, U.K. Bangalore, IndiaHanover Park, IL Budapest, Hungary Busan, South KoreaHouston, TX Bydgoszcz, Poland Jaipur, IndiaMcKean, PA Capetown, South Africa Melbourne, AustraliaNewport, NC De Lier, Netherlands New Delhi, IndiaOcala, FL Ekero, Sweden Pune, IndiaRochester, NY Erpe-Mere, Belgium SingaporeRockford, IL Etten-Leur, Netherlands Sydney, AustraliaSantiago, Chile Eygelshoven, Netherlands Tokyo, JapanSao Paulo, Brazil Glasgow, U.K. Xidu, China Johannesburg, South Africa Killarney, Ireland Kolding, Denmark Moers, Germany Newbury, U.K. Norderstedt, Germany Orebro, Sweden Penistone, U.K. Santorso, Italy Silkeborg, Denmark Soeborg, Denmark Unna, Germany 15 ITEM 3. Legal ProceedingsWe are subject to legal proceedings and claims that arise in the normal course of business. We believe these matters are either without merit or of akind that should not have a material effect, individually or in the aggregate, on our financial position, results of operations or cash flows; however, we cannotassure you that these proceedings or claims will not have a material effect on our financial position, results of operations or cash flows.See "Risk Factors," "MD&A — Critical Accounting Policies and Estimates — Contingent Liabilities," and Note 13 to our consolidated andcombined financial statements for further discussion of legal proceedings.ITEM 4. Mine Safety DisclosuresNot applicable.16 PART IIITEM 5. Market For Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity SecuritiesOur common stock is traded on the New York Stock Exchange ("NYSE") under the symbol "FLOW."The number of shareholders of record of our common stock as of February 5, 2016 was 3,490.The following table sets forth the reported high and low trading prices for our common stock during the fourth quarter of fiscal 2015, beginningSeptember 28, 2015, the date that our common stock began open trading, as reported on the NYSE. High Low2015: 4th Quarter$42.06 $25.49Any dividends in future periods, including declaration, record and payment dates, will be at the discretion of our Board of Directors and will dependon, among other things, our results of operations, ongoing capital needs, financial condition and other factors that the Board of Directors may deem relevant,as well as our ability to declare and pay dividends.Issuer Purchases of Equity SecuritiesThe following table summarizes the repurchases of common stock during the three months ended December 31, 2015:Period Total Number of SharesPurchased(1) Average Price Per Share Total Number of SharesPurchased as Part of aPublicly Announced Plan orProgram Maximum ApproximateDollar Value of Shares ThatMay Yet be Purchased Underthe Plan or Program9/27/15 - 10/31/15 42,274 $34.43 — 11/1/15 - 11/30/15 — — 12/1/15 - 12/31/15 — — Total 42,274 (1) Reflects the surrender to us of shares of common stock to satisfy tax withholding obligations in connection with the vesting of restricted stock units17 Company Performance This graph shows a comparison of cumulative total returns for SPX FLOW, the S&P 500 Index and the S&P Composite 1500 Industrials Indexbeginning on September 28, 2015, the date that our common stock began open trading, assuming an initial investment of $100. Sep 2015 Oct 2015 Nov 2015 Dec 2015SPX FLOW$100.00 $99.71 $98.82 $82.10S&P 500100.00 110.65 110.98 109.20S&P 1500 Industrials100.00 111.26 112.61 109.60ITEM 6. Selected Financial DataThe following table presents our selected historical consolidated and combined financial data as of and for each of the years in the five-year periodended December 31, 2015. Our historical consolidated and combined financial statements, prior to the Spin-Off, include certain expenses of SPX that werecharged to us for certain corporate centralized functions and programs, including information technology, payroll services, shared services for accounting,supply chain and manufacturing operations, and business and health insurance coverage. In addition, for purposes of preparing the consolidated andcombined financial statements prior to the Spin-Off, a portion of SPX’s total corporate costs were allocated to such financial statements, with the allocationsrelated primarily to (i) the support provided by SPX's executive management, finance and accounting, legal, risk management, and human resource functionsand (ii) costs associated with SPX's Charlotte, NC corporate headquarters and its Asia Pacific corporate center in Shanghai, China. Our historical consolidatedand combined financial statements, prior to the Spin-Off, also do not reflect the allocation of certain assets and liabilities between SPX and us. Consequently,the financial information included here may not necessarily reflect our financial position, results of operations and cash flows in the future or what ourfinancial condition, results of operations and cash flows would have been had we been an independent, publicly-traded company during the periodspresented.18 The selected historical consolidated and combined financial data presented below should be read in conjunction with our audited combinedfinancial statements included in our Registration Statement on Form 10, as well as our audited consolidated and combined financial statements andaccompanying notes and "Management's Discussion and Analysis of Financial Condition and Results of Operations" included elsewhere in this AnnualReport on Form 10-K.(in millions, except per share amounts) As of and for the year ended December 31,Summary of operations:2015 2014 2013 2012 2011Revenues(1)$2,388.5 $2,769.6 $2,804.8 $2,846.3 $2,197.2Operating income(2)(3)145.5 254.6 231.2 188.9 185.2Other income (expense), net(4)9.8 2.2 (5.2) (3.4) (36.8)Interest expense, net(5)(18.1) (23.4) (34.7) (56.0) (51.3)Income before income taxes137.2 233.4 191.3 129.5 97.1Income tax provision(6)(49.8) (97.5) (58.8) (0.6) (37.6)Net income87.4 135.9 132.5 128.9 59.5Less: Net income (loss) attributable to noncontrolling interests(0.1) 1.4 1.5 2.0 1.2Net income attributable to SPX FLOW, Inc.$87.5 $134.5 $131.0 $126.9 $58.3Basic income per share of common stock$2.14 $3.30 $3.21 $3.11 $1.43Diluted income per share of common stock$2.14 $3.29 $3.20 $3.10 $1.42Other financial data: Total assets(7)$3,309.4 $4,028.1 $4,490.7 $3,918.4 $3,614.2Total debt(8)1,037.3 1,021.1 1,006.4 805.8 819.1Other long-term obligations275.4 342.8 382.7 402.3 345.5SPX FLOW, Inc. shareholders' equity1,259.1 1,925.4 2,238.9 1,832.9 1,621.6Noncontrolling interests11.5 13.4 11.6 9.0 7.4Capital expenditures57.0 40.7 23.4 26.3 22.6Depreciation and amortization61.9 65.8 69.9 67.3 45.0(1)On December 22, 2011, we completed the acquisition of Clyde Union (Holdings) S.a.r.l. ("Clyde Union"). Revenues for Clyde Union for the period from January 1, 2011 tothe date of acquisition, which are not included above, totaled $434.2.(2)During 2015, we recognized Special Charges totaling $23.0 related to the ongoing consolidation and relocation of two manufacturing facilities, located in Germany andDenmark, to an existing facility in Poland.During 2015, 2014, 2013, 2012 and 2011, we recognized expense related to changes in the fair value of plan assets, actuarial gains/losses, and settlement/curtailmentgains/losses of $6.3, $25.8, $2.0, $25.4 and $0.5, respectively, associated with our and SPX's pension and postretirement benefit plans. See Note 8 to our consolidated andcombined financial statements for further discussion of employee benefit plans sponsored by us and sponsored by SPX.(3)During 2015, we recorded impairment charges of $15.0 and $0.6 related to the trademarks of certain businesses within our Power and Energy and Food and Beveragereportable segments, respectively, and $7.1 related to certain technology assets of a business within our Food and Beverage reportable segment.During 2014, we recorded impairment charges of $7.3 and $4.4 related to the trademarks of certain businesses within our Power and Energy and Industrial reportablesegments, respectively.During 2013, we recorded impairment charges of $3.4 and $1.3 related to the trademarks of certain businesses within our Power and Energy and Food and Beveragereportable segments, respectively.During 2012, we recorded an impairment charge of $2.0 related to the trademarks of a business within our Power and Energy reportable segment.See Note 7 to our consolidated and combined financial statements for further discussion of impairment charges associated with intangible assets.(4)In 2011, we recorded a charge of $34.6 related to a foreign currency forward contract that was entered into to hedge the purchase price of the Clyde Union acquisition.(5)During 2015, 2014, 2013, 2012 and 2011, we recognized interest expense, net, of $2.2, $25.8, $36.3, $55.6 and $52.4 on related party notes receivable and payable inwhich SPX, or its affiliates that were not part of the Spin-Off, were the counterparties.19 (6)During 2015, the income tax provision was impacted by tax charges of $11.7 related to dividends from foreign subsidiaries, partially offset by tax benefits of (i) $5.1 relatedto net changes in uncertain tax positions, (ii) $2.8 related to tax rate decreases in Italy and the U.K. and (iii) $2.0 related to foreign exchange losses recognized for incometax purposes with respect to a foreign branch.During 2014, the income tax provision was impacted by tax charges of (i) $18.7 related to increases in valuation allowances recorded against certain foreign deferredincome tax assets, and (ii) $18.6 related to the repatriation of certain earnings of our non-U.S. subsidiaries. The impact of these items was partially offset by $3.8 of taxbenefits related to various audit settlements and statute expirations.During 2012, the income tax provision was impacted by income tax benefits of $18.3 associated with various audit closures and settlements, statute expirations, and otherchanges in the accrual for uncertain tax positions, with the most notable being the closure of the German tax examination for the years 2005 through 2009.(7)Included in total assets as of December 31, 2014, 2013, 2012 and 2011 are related party notes receivable of $707.1, $763.4, $5.6 and $12.1, respectively.(8)Included in total debt as of December 31, 2014, 2013, 2012 and 2011 are related party notes payable of $1,003.1, $988.4, $775.8 and $758.0, respectively.ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations(All currency and share amounts are in millions)The following should be read in conjunction with the other sections of this Annual Report on Form 10-K, including our audited consolidated andcombined financial statements and the related notes and "Our Business." The following discussion contains certain forward-looking statements that involverisks, uncertainties and assumptions. Our actual results could differ materially from the results contemplated by these forward-looking statements due to anumber of factors including, but not limited to, those discussed under the heading "Risk Factors."Our audited consolidated and combined financial statements, which we discuss below, reflect our historical financial condition, results of operationsand cash flows. The financial information discussed below and included in this Annual Report on Form 10-K, however, may not necessarily reflect what ourfinancial condition, results of operations or cash flows would have been had we been operated as a separate, independent entity during the periods presented,or what our financial condition, results of operations and cash flows may be in the future.EXECUTIVE OVERVIEWSpin-off TransactionOn September 26, 2015, SPX completed the previously announced Spin-Off of SPX FLOW, comprising SPX's Flow Technology reportable segment,its Hydraulic Technologies business, various related legal entities, and certain of its corporate assets and liabilities through the pro rata distribution of allshares of SPX FLOW common stock to SPX’s stockholders of record as of 5:00 p.m., New York City time, on September 16, 2015. Accordingly, SPXdistributed to its stockholders one share of SPX FLOW common stock, par value $0.01 per share, for every one share of SPX common stock outstanding (the“Distribution”).Summary of Operating ResultsThe following summary is intended to provide a few highlights of the discussion and analysis that follows (all comparisons are to the related periodin the prior year):Revenues•In 2015, decreased 13.8% to $2,388.5, primarily as a result of the strengthening of the U.S. dollar during the period and lower sales of powerand energy pumps, largely reflecting the impact of lower oil prices.•In 2014, decreased 1.3% to $2,769.6, primarily as a result of lower sales of power and energy pumps, partially offset by increased sales of foodand beverage systems.•In 2013, decreased 1.5% to $2,804.8, primarily as a result of lower sales of power and energy pumps and industrial heat exchangers, partiallyoffset by an increase in sales of valves, closures and other components into the oil and gas end market, as well as increased sales of systemsand components into the food and beverage end market.20 Income before Income Taxes•In 2015, decreased $96.2, or 41.2%, to $137.2, primarily as a result of a decline in segment profitability, increases in impairments ofintangible assets, special charges and third party interest expense, partially offset by declines in pension and postretirement expense andrelated party interest expense.•In 2014, increased $42.1, or 22.0%, to $233.4, primarily as a result of the improvement in income for our reportable segments, partially offsetby an increase in pension and postretirement expense.•In 2013, increased $61.8, or 47.7%, to $191.3, primarily as a result of the improvement in income for our reportable segments, and a reductionin pension and postretirement expense.Cash Flows from Operations•In 2015, decreased to $213.6 (from $302.6 in 2014), primarily as a result of a decline in segment profitability.•In 2014, increased to $302.6 (from $263.3 in 2013), primarily as a result of the improved profitability noted above.•In 2013, increased to $263.3 (from $150.6 in 2012), primarily as a result of reductions in working capital at our Clyde Union business and, toa lesser extent, the improved profitability noted above.RESULTS OF OPERATIONSCyclicality of End Markets, Seasonality and Competition -The financial results of our businesses closely follow changes in the industries and endmarkets they serve. In addition, certain businesses have seasonal fluctuations. Demand in the oil and gas aftermarket is typically stronger in the second half ofthe year. Also, capital spending on original equipment by our customers in the oil and gas industries is heavily influenced by current and expected oil andgas prices. The significant decline in oil prices from the latter half of 2014 and continuing throughout 2015, as well as the recent volatility in oil prices andthe uncertainty in future oil prices, continue to impact both operational and capital spending by end customers in our Power and Energy reportable segment. Revenues from food and beverage systems and related services are highly correlated to timing on large construction contracts, which may cause significantfluctuations in our financial performance from period to period. The reduction in dairy commodity prices and increased production of dry powder dairyproducts, particularly related to the China market, has resulted in delayed or deferred capital spending by many end customers in our Food and Beveragereportable segment. As a result, we expect an organic decline of approximately 10% for both our Power and Energy and Food and Beverage reportablesegments on a year-over-year basis.Although our businesses operate in highly competitive markets, our competitive position cannot be determined accurately in the aggregate or bysegment since our competitors do not offer all the same product lines or serve all the same markets. In addition, specific reliable comparative figures are notavailable for many of our competitors. In most product groups, competition comes from numerous concerns, both large and small. The principal methods ofcompetition are service, product performance, technical innovation and price. These methods vary with the type of product sold. We believe we competeeffectively on the basis of each of these factors. See "Our Business" for a discussion of our competitors.Non-GAAP Measures - Organic revenue growth (decline) presented herein is defined as revenue growth (decline) excluding the effects of foreigncurrency fluctuations and acquisitions. We believe this metric is a useful financial measure for investors in evaluating our operating performance for theperiods presented, as, when read in conjunction with our revenues, it presents a useful tool to evaluate our ongoing operations and provides investors with atool they can use to evaluate our management of assets held from period to period. In addition, organic revenue growth (decline) is one of the factors we usein internal evaluations of the overall performance of our business. This metric, however, is not a measure of financial performance under accountingprinciples generally accepted in the United States (“GAAP”), should not be considered a substitute for net revenue growth (decline) as determined inaccordance with GAAP and may not be comparable to similarly titled measures reported by other companies.21 Years Ended December 31, 2015, 2014 and 2013The following table provides selected financial information for the years ended December 31, 2015, 2014 and 2013, including the reconciliation oforganic revenue decline to net revenue decline: Year ended December 31, 2015 2014 2013 2015 vs. 2014% 2014 vs. 2013%Revenues$2,388.5 $2,769.6 $2,804.8 (13.8) (1.3)Gross profit792.2 936.5 898.0 (15.4) 4.3% of revenues33.2% 33.8% 32.0% Selling, general and administrative558.0 629.9 618.9 (11.4) 1.8% of revenues23.4% 22.7% 22.1% Intangible amortization23.4 26.1 27.2 (10.3) (4.0)Impairment of intangible assets22.7 11.7 4.7 94.0 148.9Special charges, net42.6 14.2 16.0 200.0 (11.3)Other income (expense), net9.8 2.2 (5.2) 345.5 *Related party interest expense, net(2.2) (25.8) (36.3) (91.5) (28.9)Other interest income (expense), net(15.9) 2.4 1.6 * 50.0Income before income taxes137.2 233.4 191.3 (41.2) 22.0Income tax provision(49.8) (97.5) (58.8) (48.9) 65.8Net income87.4 135.9 132.5 (35.7) 2.6Less: Net income (loss) attributable to noncontrolling interests(0.1) 1.4 1.5 (107.1) (6.7)Net income attributable to SPX FLOW, Inc.$87.5 $134.5 $131.0 (34.9) 2.7Components of consolidated and combined revenue decline: Organic decline (6.1) (1.1)Foreign currency (7.7) (0.2)Net revenue decline (13.8) (1.3)____________________________________________________________* Not meaningful for comparison purposes.Revenues - For 2015, the decrease in revenues, compared to 2014, was due to the strengthening of the U.S. dollar against various foreign currenciesduring the period and, to a lesser extent, a decrease in organic revenue. The decrease in organic revenue was due primarily to lower sales of power and energypumps, largely reflecting the impact of lower oil prices. See "Results of Reportable Segments" for additional details.For 2014, the decrease in revenues, compared to 2013, was due to a decline in organic revenue and, to a lesser extent, the strengthening of the U.S.dollar during the period against certain foreign currencies. The decline in organic revenue was due primarily to lower sales of power and energy pumps,partially offset by increased sales of food and beverage systems. See "Results of Reportable Segments" for additional details.Gross Profit - The decrease in gross profit and gross profit as a percentage of revenue during 2015, compared to 2014, was primarily attributable toour Power and Energy reportable segment and due to the revenue decline noted above, partially offset by the effects of (i) improved operational performancewithin the Food and Beverage reportable segment and (ii) cost reductions associated with restructuring initiatives implemented during 2014 primarily withinthe Power and Energy reportable segment. See "Results of Reportable Segments" for additional details.The increase in gross profit and gross profit as a percentage of revenue during 2014, compared to 2013, was primarily attributable to our Power andEnergy reportable segment and was the result of improved operational execution and favorable sales mix, as well as cost reductions associated withrestructuring initiatives implemented during the latter half of 2013 and the first half of 2014.Selling, General and Administrative (“SG&A”) Expense - Prior to the Spin-Off in September 2015, SG&A expense included allocations of generalcorporate expenses from SPX, including pension and postretirement expense and stock-based compensation expense. See Note 1 to our consolidated andcombined financial statements for further details on our methodology for allocating corporate-related costs prior to the Spin-Off. For 2015, the decrease inSG&A expense, compared to 2014, was due primarily to the impact of a stronger U.S. dollar during the period, a decrease in pension and postretirementexpense of $21.4 and a decrease in incentive compensation expense, partially offset by an increase in stock-based compensation expense of $5.822 during the period (see “Corporate and Other Expenses” for additional details). The decrease in incentive compensation expense was due to lower profitabilityin 2015, compared to 2014.For 2014, the increase in SG&A expense, compared to 2013, was due primarily to an increase in pension and postretirement expense of $24.2,partially offset by cost reductions from restructuring actions completed in 2013 and 2014. The increase in pension and postretirement expense resultedprimarily from our allocated share of the increase in actuarial losses recorded by SPX on its pension and postretirement plans during 2014. These actuariallosses were due primarily to reductions in discount rates and changes in mortality assumptions used to measure SPX's pension and postretirement obligations,as well as settlement losses associated with certain of SPX's plans.Intangible Amortization - For 2015 and 2014, respectively, the decrease in intangible amortization, compared to 2014 and 2013, respectively, wasdue primarily to the impact of foreign currency translation.Impairment of Intangible Assets - During 2015, we recorded impairment charges of (i) $15.0 related to the trademarks of a business within our Powerand Energy reportable segment primarily resulting from the impact of lower oil prices on the purchasing patterns of our customers in the oil and gas markets,and (ii) $7.7 related to certain technology assets and trademarks associated with a business in our Food and Beverage reportable segment due primarily to adecline in order rates and projected future revenues for products derived from such technology.During 2014, we recorded impairment charges of $7.3 and $4.4 related to the trademarks of certain businesses within our Power and Energy andIndustrial reportable segments, respectively.During 2013, we recorded impairment charges of $3.4 and $1.3 related to the trademarks of certain businesses within our Power and Energy andFood and Beverage reportable segments, respectively.See Note 7 to our consolidated and combined financial statements for further discussion of impairment charges.Special Charges, net - Special charges, net, related primarily to restructuring initiatives to consolidate manufacturing, distribution, sales andadministrative facilities, reduce workforce, and rationalize certain product lines, as well as asset impairment charges. See Note 5 to our consolidated andcombined financial statements for the details of actions taken in 2015, 2014 and 2013. The components of special charges, net, were as follows: Year ended December 31, 2015 2014 2013Employee termination costs$38.5 $11.6 $13.5Facility consolidation costs2.5 0.6 1.0Other cash costs (recoveries), net— 0.5 (0.2)Non-cash asset write-downs1.6 1.5 1.7Total(1)$42.6 $14.2 $16.0(1)Includes $23.0 in 2015 related to the ongoing consolidation and relocation of two manufacturing facilities, located in Germany and Denmark, to an existing facility inPoland.Other Income (Expense), net - Other income, net, for 2015 was composed of net gains on asset sales and other of $8.0, a foreign currency ("FX") gainof $1.1 and investment-related earnings of $0.7.Other income, net, for 2014 was composed primarily of investment-related earnings of $6.0 and gains on FX embedded derivatives of $2.6, partiallyoffset by (i) FX transaction losses of $2.8 and (ii) losses on FX forward contracts of $2.4. The $6.0 of investment-related earnings represented unrealized gainson our investment in equity securities. See Note 14 to our consolidated and combined financial statements for additional details.Other expense, net, for 2013 was composed primarily of FX transaction losses of $6.6 and losses on FX embedded derivatives of $0.4, partially offsetby gains on FX forward contracts of $1.2.Related Party Interest Expense, net - Related party interest expense, net, was comprised of interest on notes receivable and notes payable with SPX(and certain other of its affiliates that were not part of the Spin-Off) serving as the counterparties. See Note 15 to our consolidated and combined financialstatements for additional details on our related party notes.Related party interest expense, net, for 2015, 2014 and 2013 was comprised of $28.4, $72.9 and $61.1 of interest expense, respectively, partiallyoffset by $26.2, $47.1 and $24.8 of interest income, respectively. The decrease in related party interest expense in 2015, compared to 2014, reflects primarilythe extinguishments of notes payable by way of capital contributions during both the second and third quarters of 2015. The decrease in related party interestincome in 2015, compared to 2014, reflects the23 transfer or cancellation of notes receivable with SPX during September 2015, as well as lower average interest rates as compared to the prior year. All relatedparty notes payable were extinguished by way of capital contribution to the Company by SPX, and all related party notes receivable were transferred to SPXor canceled by the Company, prior to the Spin-Off.The increase in related party interest expense in 2014, compared to 2013, as noted above, primarily was due to net borrowings from SPX during2013 of $142.3, while there were no borrowings from SPX under related party notes payable during 2014 and repayments of such notes payable were only$6.7. The increase in related party interest income in 2014, compared to 2013, was due primarily to increased interest associated with advances we made toSPX of $743.3 during the second and fourth quarters of 2013.Other Interest Income (Expense), net - Other interest income (expense), net, is comprised primarily of interest expense on (i) our senior creditfacilities and senior notes, primarily incurred during the fourth quarter of 2015, after the Spin-Off, and (ii) capital lease obligations and miscellaneous lines ofcredit during all periods presented, offset by interest income on cash and equivalents. See Note 10 to our consolidated and combined financial statements foradditional details on our third-party debt.Interest expense, net, during 2015 included $14.4 related to our senior credit facilities and senior notes, which were entered into or becameobligations of the Company in connection with the Spin-Off. Excluding the interest on the senior credit facilities and senior notes, the reduction in interestincome, net, during 2015, compared to 2014, was due primarily to a decrease of $3.1 in interest income associated with cash and equivalents. The increase ininterest income, net, during 2014, compared to 2013, was not significant.Income Tax Provision - During 2015, we recorded an income tax provision of $49.8 on $137.2 of income before income taxes, resulting in aneffective tax rate of 36.3%. The effective tax rate for 2015 was impacted by tax charges of $11.7 related to dividends from foreign subsidiaries, partially offsetby tax benefits of (i) $5.1 related to net changes in uncertain tax positions, (ii) $2.8 related to tax rate decreases in Italy and the U.K. and (iii) $2.0 related toforeign exchange losses recognized for income tax purposes with respect to a foreign branch.During 2014, we recorded an income tax provision of $97.5 on $233.4 of income before income taxes, resulting in an effective tax rate of 41.8%.The effective tax rate for 2014 was impacted by (i) an income tax charge of $18.7 related to increases in valuation allowances recorded against certain foreigndeferred income tax assets and (ii) an income tax charge of $18.6 related to the repatriation of certain earnings of our non-U.S. subsidiaries, partially offset by$3.8 of income tax benefits related to various audit settlements and statute expirations.During 2013, we recorded an income tax provision of $58.8 on $191.3 of income before income taxes, resulting in an effective tax rate of 30.7%.The effective tax rate for 2013 was impacted by an income tax charge of $3.9 related to net increases in valuation allowances recorded against certain foreigndeferred income tax assets, partially offset by $2.0 of income tax benefits related to various audit settlements and statute expirations and $0.7 of income taxbenefits associated with the Research and Experimentation Credit generated in 2012.RESULTS OF REPORTABLE SEGMENTSThe following information should be read in conjunction with our consolidated and combined financial statements and related notes.Non-GAAP Measures—Throughout the following discussion of reportable segments, we use "organic revenue" growth (decline) to facilitateexplanation of the operating performance of our reportable segments. Organic revenue growth (decline) is a non-GAAP financial measure, and is not asubstitute for net revenue growth (decline). Refer to the explanation of this measure and purpose of use by management under "Results of Operations-Non-GAAP Measures."24 Food and Beverage Year ended December 31, 2015 vs. 2014% 2014 vs. 2013% 2015 2014 2013 Revenues$886.3 $968.9 $970.0 (8.5) (0.1)Income106.9 99.3 90.4 7.7 9.8% of revenues12.1% 10.2% 9.3% Components of revenue decline: Organic growth 1.2 1.0Foreign currency (9.7) (1.1)Net revenue decline (8.5) (0.1)Revenues - For 2015, the decrease in revenues, compared to 2014, was due primarily to the strengthening of the U.S. dollar against various foreigncurrencies, partially offset by an increase in organic revenue. The increase in organic revenue was driven by higher sales of systems in Europe and AsiaPacific, partially offset by reduced sales of component parts in North America.For 2014, the decrease in revenues, compared to 2013, was due to a strengthening of the U.S. dollar during the period against various foreigncurrencies, largely offset by an increase in organic revenue. The increase in organic revenue was due primarily to higher sales of systems and components inEurope.Income - For 2015, income and margin increased, compared to 2014, primarily as a result of improved operational execution on large systemsprojects and the organic revenue growth noted above.For 2014, income and margin increased, compared to 2013, primarily as a result of cost reductions associated with restructuring initiatives at variouslocations in Europe and, to a lesser extent, improved operational execution and a more favorable sales mix within the segment’s European operations.Backlog - The segment had backlog of $334.7 and $485.1 as of December 31, 2015 and 2014, respectively. Of the $150.4 year-over-year decline inbacklog, $111.3 was attributable to an organic decline and $39.1 was attributable primarily to the impact of a stronger U.S. dollar. The organic decline wasprimarily due to a lower level of system orders in 2015 as reduced dairy commodity prices and increased production of dry powder dairy products,particularly related to the China market, delayed or deferred capital spending decisions by many end customers. Approximately 92% of the segment'sbacklog as of December 31, 2015 is expected to be recognized as revenue during 2016.Power and Energy Year ended December 31, 2015 vs. 2014% 2014 vs. 2013% 2015 2014 2013 Revenues$723.0 $961.6 $997.5 (24.8) (3.6)Income87.5 168.7 127.4 (48.1) 32.4% of revenues12.1% 17.5% 12.8% Components of revenue decline: Organic decline (18.7) (5.0)Foreign currency (6.1) 1.4Net revenue decline (24.8) (3.6)Revenues - For 2015, the decrease in revenues, compared to 2014, was due primarily to the decrease in organic revenue and, to a lesser extent, thestrengthening of the U.S. dollar during the period against various foreign currencies. The decline in organic revenue was due largely to the impact of low,volatile and uncertain oil prices which significantly reduced both operational and capital spending by end customers, particularly for projects related toupstream oil applications.For 2014, the decrease in revenues, compared to 2013, was due to a decline in organic revenue, partially offset by the weakening of the U.S. dollarduring the period against the Great Britain Pound (‘‘GBP’’). The decline in organic revenue was due primarily to lower sales of pumps, as the segment entered2014 with a lower backlog (as compared to 2013) which we believe resulted from our more selective approach to large orders.Income - For 2015, income and margin decreased, compared to 2014, primarily due to the decline in revenue mentioned above, as well ascompetitive price pressures and lower utilization rates at certain of our manufacturing locations. These declines25 in income and margin were offset partially by the effects of cost reductions associated with restructuring initiatives implemented during 2014 within thesegment's Clyde Union business.For 2014, income and margin increased, compared to 2013, primarily due to improved operational execution, favorable sales mix during the periodwhich we attribute to our more selective approach to large orders, and cost reductions associated with restructuring initiatives implemented during the latterhalf of 2013 and the first half of 2014 at our Clyde Union business.Backlog - The segment had backlog of $399.1 and $475.5 as of December 31, 2015 and 2014, respectively. Of the $76.4 year-over-year decline inbacklog, $52.9 was attributable to an organic decline, primarily due to the impact of lower oil prices mentioned above and $23.5 was attributable primarily tothe impact of a stronger U.S. dollar. Approximately 86% of the segment's backlog as of December 31, 2015 is expected to be recognized as revenue during2016.Industrial Year ended December 31, 2015 vs. 2014% 2014 vs. 2013% 2015 2014 2013 Revenues$779.2 $839.1 $837.3 (7.1) 0.2Income107.3 123.0 119.3 (12.8) 3.1% of revenues13.8% 14.7% 14.2% Components of revenue growth (decline): Organic growth — 1.4Foreign currency (7.1) (1.2)Net revenue growth (decline) (7.1) 0.2Revenues - For 2015, the decrease in revenues, compared to 2014, was due to the strengthening of the U.S. dollar against various foreign currencies.For 2014, the increase in revenues, compared to 2013, was due to an increase in organic revenue, partially offset by the strengthening of the U.S.dollar during the period against various foreign currencies. The increase in organic revenues was due primarily to higher sales of heat exchangers,dehydration equipment and pumps, partially offset by lower sales of mixers. Income - For 2015, income and margin decreased, compared to 2014, primarily due to the revenue decline noted above and lower sales of generallyhigher margin hydraulic tools and equipment, which were impacted by a decline of activity in oil and gas markets.For 2014, income and margin increased, compared to 2013, primarily due to a more favorable sales mix during 2014. Backlog - The segment had backlog of $171.2 and $210.1 as of December 31, 2015 and 2014, respectively. Of the $38.9 year-over-year decline inbacklog, $26.2 was attributable to an organic decline and $12.7 was attributable primarily to the impact of a stronger U.S. dollar. Approximately 97% of thesegment's backlog as of December 31, 2015 is expected to be recognized as revenue during 2016.CORPORATE AND OTHER EXPENSES Year ended December 31, 2015 vs. 2014% 2014 vs. 2013% 2015 2014 2013 Total consolidated and combined revenues$2,388.5 $2,769.6 $2,804.8 (13.8) (1.3)Corporate expense54.3 58.3 59.8 (6.9) (2.5)% of revenues2.3% 2.1% 2.1% Stock-based compensation expense25.8 20.0 17.4 29.0 14.9Pension and postretirement expense10.8 32.2 8.0 (66.5) 302.5Corporate Expense - Corporate expense generally relates to the cost of our Charlotte, NC corporate headquarters and our Asia Pacific center inShanghai, China for the period subsequent to the Spin-Off in September 2015. Corporate expense includes allocations of general corporate expenses fromSPX that largely relate to the cost of corporate functions and/or resources provided by SPX for periods prior to the Spin-Off. See Note 1 to our consolidatedand combined financial statements for further details on our methodology for allocating corporate-related costs prior to the Spin-Off.26 The decrease in corporate expense during 2015, compared to 2014, was primarily due to a decline in incentive compensation expense associatedwith lower profitability in 2015, compared to 2014.The decrease in corporate expense during 2014, compared to 2013, was primarily due to lower marketing expenses.Stock-based Compensation Expense - Stock-based compensation expense for the period subsequent to the Spin-Off in September 2015 representsthe cost associated with eligible employees who participate in SPX FLOW-sponsored stock compensation plans. For periods prior to the Spin-Off, stock-based compensation represents the cost associated with the eligible employees of the Company, as well as an allocation of a portion of the costs associatedwith the eligible corporate employees of SPX, who participated in SPX-sponsored stock compensation plans. See Note 1 to our consolidated and combinedfinancial statements for further details on our methodology for determining SPX FLOW's allocated portion of SPX corporate-related costs prior to the Spin-Off.During the year ended December 31, 2015, we recognized compensation cost of $2.8 related to the increase in fair value of certain stock-basedcompensation awards for employees, none of whom were named executive officers, as a result of a modification of those awards which became effective uponcompletion of the Spin-Off.See Note 12 to our consolidated and combined financial statements for further details on SPX's stock-based compensation plans, the modification ofstock-based compensation awards as well as the conversion of SPX-sponsored awards to SPX FLOW-sponsored awards that occurred in connection with theSpin-Off.The increase in stock-based compensation expense for 2014, compared to 2013, was primarily the result of an increase in the fair value of the 2014restricted stock share and restricted stock unit awards, as the weighted-average fair value of the 2014 awards was approximately 41% higher than the 2013awards.Pension and Postretirement Expense - SPX sponsors a number of pension and postretirement plans. In addition, we also sponsor pension andpostretirement 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 fourthquarter of each year as a component of net periodic benefit expense, unless earlier remeasurement is required. The remaining components of pension andpostretirement expense, primarily service and interest costs and expected return on plan assets, are recorded on a quarterly basis.Pension and postretirement expense for the period subsequent to the Spin-Off in September 2015 represents net periodic benefit expense associatedwith plans that SPX FLOW sponsors. For periods prior to the Spin-Off, pension and postretirement expense represents net periodic benefit expense associatedwith the plans we sponsor as well as an allocation of a portion of the net periodic benefit expense associated with the plans sponsored by SPX. See Note 1 toour consolidated and combined financial statements for further details on our methodology for allocating corporate-related costs prior to the Spin-Off.During 2015, pension and postretirement expense decreased, compared to 2014, primarily as a result of a decrease in actuarial losses associated withthe plans we sponsor (in 2015) compared to the plans sponsored by SPX and those that we sponsor (in 2014).During 2014, pension and postretirement expense increased, compared to 2013, primarily as a result of an increase in actuarial losses associated withboth the plans sponsored by SPX and those that we sponsor.See Note 8 to our consolidated and combined financial statements for further details on our and SPX’s pension and postretirement plans.LIQUIDITY AND FINANCIAL CONDITIONListed below are the cash flows from (used in) operating, investing, and financing activities, as well as the net change in cash and equivalents, for theyears ended December 31, 2015, 2014 and 2013.27 Cash Flow Year ended December 31, 2015 2014 2013Cash flows from operating activities$213.6 $302.6 $263.3Cash flows used in investing activities(44.8) (34.0) (752.0)Cash flows from (used in) financing activities(68.1) (297.8) 388.3Change in cash and equivalents due to changes in foreign currency exchange rates(21.4) (12.0) (4.8)Net change in cash and equivalents$79.3 $(41.2) $(105.2)Years Ended December 31, 2015 and 2014Operating Activities—During 2015, the decrease in cash flows from operating activities, compared to 2014, was primarily attributable to a decline insegment profitability.Investing Activities—During 2015, cash flows used in investing activities were comprised primarily of capital expenditures of $57.0 associatedgenerally with upgrades of manufacturing facilities and information technology, partially offset by proceeds from asset sales and other of $12.5. Cash flowsused in investing activities during 2014 were comprised primarily of capital expenditures of $40.7 associated generally with upgrades of manufacturingfacilities and replacement of equipment, partially offset by proceeds from asset sales and other of $7.3.Financing Activities —During 2015, cash flows used in financing activities related primarily to net transfers to SPX of $453.9, repayments of relatedparty notes payable of $5.4, and payments of financing fees of $6.2, partially offset by net borrowings under our senior credit facilities of $400.0. Cash flowsused in financing activities during 2014 related primarily to net transfers to SPX of $291.6 and repayments of related party notes payable of $6.7.Change in Cash and Equivalents due to Changes in Foreign Currency Exchange Rates - The decrease in cash and equivalents due to foreigncurrency exchange rates of $21.4 and $12.0 in 2015 and 2014, respectively, reflected primarily a reduction in U.S. dollar equivalent balances of foreign-denominated cash and equivalents as a result of the strengthening of the U.S. dollar against various foreign currencies in 2015 and against primarily the Euroin 2014.Years Ended December 31, 2014 and 2013Operating Activities—During 2014, the increase in cash flows from operating activities, compared to 2013, was due primarily to improvedprofitability.Investing Activities—During 2014, cash flows used in investing activities were comprised primarily of capital expenditures of $40.7, partially offsetby proceeds from asset sales and other of $7.3. Cash flows used in investing activities during 2013 were comprised primarily of loans to SPX of $743.3 andcapital expenditures of $23.4, partially offset by proceeds from asset sales and other of $12.0.Financing Activities —During 2014, cash flows used in financing activities related primarily to net transfers to SPX of $291.6, while cash flows fromfinancing activities in 2013 related primarily to net transfers from SPX of $261.3 and net borrowings from SPX (and certain of its affiliates that were not partof the Spin-Off) of $142.3.Change in Cash and Equivalents due to Changes in Foreign Currency Exchange Rates—The decrease in cash and equivalents due to foreigncurrency exchange rates of $12.0 and $4.8 in 2014 and 2013, respectively, reflected primarily a reduction in U.S. dollar equivalent balances of Euro- andGBP-denominated cash and equivalents, as a result of the strengthening of the U.S. dollar against these currencies during the respective periods.28 Borrowings and AvailabilityBorrowings —Debt (other than related party notes payable, discussed further in Note 15 of our consolidated and combined financial statements) atDecember 31, 2015 and 2014 comprised the following: December 31, 2015 2014Term loan(1)$400.0 $—6.875% senior notes, due in August 2017600.0 —Other indebtedness(2)37.3 18.0Total debt1,037.3 18.0Less: short-term debt28.0 6.0Less: current maturities of long-term debt10.3 1.7Total long-term debt$999.0 $10.3(1)The term loan of $400.0 is repayable in quarterly installments of 5.0% annually, beginning with our third quarter of 2016, with the remaining balance repayable in full onSeptember 24, 2020.(2)Primarily includes capital lease obligations of $9.3 and $12.0 and balances under a purchase card program of $23.6 and $0.0 as of December 31, 2015 and 2014,respectively. The purchase card program allows for payment beyond the normal payment terms for goods and services acquired under the program. As this arrangementextends the payment of these purchases beyond their normal payment terms through third-party lending institutions, we have classified these amounts as short-term debt.Senior Credit FacilitiesOn September 1, 2015, we entered into senior credit facilities with a syndicate of lenders that provide for committed senior secured financing in theaggregate amount of $1.35 billion, consisting of the following, each with a final maturity of September 24, 2020:•A term loan facility in an aggregate principal amount of $400.0;•A domestic revolving credit facility, available for loans and letters of credit, in an aggregate principal amount up to $250.0;•A global revolving credit facility, available for loans (and performance letters of credit and guarantees up to the equivalent of $100.0) in Euros,GBP and other currencies, in an aggregate principal amount up to the equivalent of $200.0;•A participation multi-currency foreign credit instrument facility, available for performance letters of credit and guarantees, in an aggregateprincipal amount up to the equivalent of $250.0; and•A bilateral multi-currency foreign credit instrument facility, available for performance letters of credit and guarantees, in an aggregate principalamount up to the equivalent of $250.0.Senior NotesOn September 22, 2015, in anticipation of the completion of the Spin-Off, we entered into a supplemental indenture and issued substitute globalnotes in connection with our substitution for SPX as the obligor of $600.0 aggregate principal amount of 6.875% senior notes. These notes mature in August2017, with interest payable on March 1 and September 1 of each year. The notes are redeemable, in whole or in part, at any time prior to maturity at a priceequal to 100% of the principal amount thereof plus an applicable premium, plus accrued and unpaid interest. If we experience certain types of change ofcontrol transactions, we must offer to repurchase the notes at 101% of the aggregate principal amount of the notes repurchased, plus accrued and unpaidinterest. These notes are unsecured and rank equally with all our existing and future unsubordinated unsecured senior indebtedness, but are effectively juniorto our senior credit facilities. The indenture governing these notes contains covenants that, among other things, limit our ability to incur liens, enter into saleand leaseback transactions and consummate some mergers. Payment of the principal, interest and premium (if any) on the notes is guaranteed on a seniorunsecured basis by our domestic subsidiaries.AvailabilityAs of December 31, 2015, we had $440.5 of available borrowing capacity under our revolving credit facilities after giving effect to $9.5 reserved foroutstanding letters of credit, and $50.0 of available borrowing capacity under our trade receivables29 financing arrangement. In addition, as of December 31, 2015, we had $227.7 of available issuance capacity under our foreign credit instrument facilities aftergiving effect to $272.3 reserved for outstanding letters of credit.Refer to Note 10 to our consolidated and combined financial statements for further information on our borrowings as of December 31, 2015.Financial InstrumentsWe measure our financial assets and liabilities on a recurring basis, and nonfinancial assets and liabilities on a non-recurring basis, at fair value. Fairvalue 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 measurementdate. We utilize market data or assumptions that we believe market participants would use in pricing the asset or liability, including assumptions about riskand the risks inherent in the inputs to the valuation technique. These inputs can be readily observable quoted prices in active markets for identical assets orliabilities (Level 1), significant other observable inputs (Level 2) or significant unobservable inputs (Level 3).Our derivative financial assets and liabilities include FX forward contracts and FX embedded derivatives measured at fair value using observablemarket inputs such as forward rates, interest rates, our own credit risk and our counterparties' credit risks. Based on these inputs, the derivative assets andliabilities are classified within Level 2 of the valuation hierarchy. Based on our continued ability to enter into forward contracts, we consider the markets forour fair value instruments active.As of December 31, 2015, there had been no significant impact to the fair value of our derivative liabilities due to our own credit risk as the relatedinstruments were collateralized under our senior credit facilities. Similarly, there had been no significant impact to the fair value of our derivative assetsbased on our evaluation of our counterparties' credit risks.We primarily use the income approach, which uses valuation techniques to convert future amounts to a single present amount. Assets and liabilitiesmeasured at fair value on a recurring basis are further discussed below.Currency Forward Contracts and Currency Forward Embedded DerivativesWe manufacture and sell our products in a number of countries and, as a result, are exposed to movements in foreign currency exchange rates. Ourobjective is to preserve the economic value of non-functional currency-denominated cash flows and to minimize the impact of changes as a result of currencyfluctuations (see Note 11 to our consolidated and combined financial statements). Our principal currency exposures relate to the Euro, Chinese Yuan andGBP.We had FX forward contracts with an aggregate notional amount of $44.7 and $84.4 outstanding as of December 31, 2015 and 2014, respectively,with all such contracts scheduled to mature within one year. We also had FX embedded derivatives with an aggregate notional amount of $31.6 and $53.4 atDecember 31, 2015 and 2014, respectively, with scheduled maturities of $30.8 and $0.8 within one and two years, respectively. The unrealized loss, net oftax, recorded in accumulated other comprehensive loss related to FX forward contracts was less than $0.1 as of December 31, 2015 and 2014. The net gains(losses) recorded in "Other income (expense), net" related to foreign currency gains (losses) totaled $1.1, $(2.6), and $(5.8) for the years ended December 31,2015, 2014 and 2013, respectively.The net fair values of our FX forward contracts and FX embedded derivatives were $0.5 (asset) and $0.6 (liability) at December 31, 2015 and 2014,respectively.Other Fair Value Financial Assets and LiabilitiesThe carrying amounts of cash and equivalents and receivables (excluding related party notes receivable) reported in our consolidated and combinedbalance sheets approximate fair value due to the short-term nature of those instruments. At December 31, 2014, the aggregate estimated fair value of ourrelated party notes receivable was approximately $758.0, compared to the aggregate carrying value of $707.1. There were no related party notes receivableoutstanding as of December 31, 2015.The fair value of our debt instruments (excluding capital leases), based on borrowing rates available to us at December 31, 2015 for similar debt, was$1,065.5, compared to our carrying value of $1,028.0. There were no related party notes payable outstanding as of December 31, 2015.As of December 31, 2014, the fair value of our debt instruments (excluding capital leases and related party notes payable), based on borrowing ratesavailable to us at December 31, 2014 for similar debt, was $6.0, compared to our carrying value of $6.0. The aggregate estimated fair value of our relatedparty notes payable was approximately $1,127.0, compared to the aggregate carrying value of $1,003.1.30 Concentrations of Credit RiskFinancial instruments that potentially subject us to significant concentrations of credit risk consist of cash and equivalents, trade accountsreceivable, and FX forward contracts. These financial instruments, other than trade accounts receivable, are placed with high-quality financial institutionsthroughout the world. We periodically evaluate the credit standing of these financial institutions.We maintain cash levels in bank accounts that, at times, may exceed federally-insured limits. We have not experienced, and believe we are notexposed 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. We anticipate that counterparties will be able to fully satisfy their obligations under the contracts. We do not obtaincollateral 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 are due to selling to customers in a particular industry. Credit risks are mitigatedby performing ongoing credit evaluations of our customers' financial conditions and obtaining collateral, advance payments, or other security whenappropriate. No one customer, or group of customers that to our knowledge are under common control, accounted for more than 10% of our revenues for anyperiod presented.Cash and Other Commitments We use operating leases to finance certain equipment, vehicles and properties. At December 31, 2015, we had $77.0 of future minimum rentalpayments under operating leases with remaining non-cancelable terms in excess of one year.Capital expenditures for 2015 totaled $57.0, compared to $40.7 and $23.4 in 2014 and 2013, respectively. Capital expenditures in 2015 relatedprimarily to upgrades to manufacturing facilities and information technology. We expect 2016 capital expenditures to approximate $60, with a significantportion related to upgrades of manufacturing facilities and information technology. While the impact of continued market volatility cannot be predicted, webelieve we have sufficient operating flexibility, cash reserves and funding sources to maintain adequate amounts of liquidity and to meet our future operatingcash needs and internal growth opportunities.In 2015, we made contributions and direct benefit payments of $2.5 to our defined benefit pension and postretirement plans. We expect to make$68.4 of minimum required funding contributions and direct benefit payments in 2016, consisting primarily of expected direct pension benefit payments tocertain former officers of the Company. Our pension plans have not experienced any liquidity difficulties or counterparty defaults due to the volatility in thecredit markets. Our foreign pension funds experienced a positive return on assets of approximately 7.0% in 2015. See Note 8 to our consolidated andcombined financial statements for further disclosure of expected future contributions and benefit payments.On a net basis, we paid $35.9, $11.4 and $19.0 in income taxes in 2015, 2014 and 2013, respectively. The amount of income taxes we pay annuallyis dependent on various factors, including the timing of certain deductions. Deductions and the amount of income taxes can and do vary from year to year.See Note 9 to our consolidated and combined financial statements for further disclosure of earnings held by foreign subsidiaries, amounts consideredpermanently reinvested, and our intentions with respect to repatriation of earnings.As of December 31, 2015, except as discussed in Note 13 to our consolidated and combined financial statements and in the contractual obligationstable below, we did not have any material guarantees, off-balance sheet arrangements or purchase commitments.We continually review each of our businesses in order to determine their long-term strategic fit. These reviews could result in selected acquisitionsto expand an existing business or result in the disposition of an existing business. See "Risk Factors," "Results of Reportable Segments" included in this"Management's Discussion and Analysis of Financial Condition and Results of Operations," and "Business" for an understanding of the risks, uncertaintiesand trends facing our businesses.Global Realignment ProgramOn February 10, 2016, we announced our intent to further optimize our global footprint, streamline business processes and reduce selling, generaland administrative expense through a global realignment program. The two year realignment program is intended to reduce costs across operating sites andcorporate and global functions, in part by making structural changes which allow us to operate more efficiently. We plan to have approximately $105 in cashoutflows in support of our realignment program in 2016. Additionally, we expect to recognize pre-tax charges to earnings of approximately $100 in theaggregate over the next two years. These realignment actions are expected to be substantially complete by the end of 2017.31 Contractual Obligations The following is a summary of our primary contractual obligations as of December 31, 2015: Total Due Within 1Year Due in 1-3Years Due in 3-5Years Due After 5YearsShort-term debt obligations$28.0 $28.0 $— $— $—Long-term debt obligations1,009.3 10.3 645.0 350.8 3.2Pension and postretirement benefit plan contributions and payments(1)152.5 68.4 5.9 12.5 65.7Purchase and other contractual obligations(2)262.5 252.0 8.0 2.5 —Future minimum operating lease payments(3)77.0 21.8 26.2 14.3 14.7Interest payments108.7 50.6 44.5 13.1 0.5Total contractual cash obligations(4)$1,638.0 $431.1 $729.6 $393.2 $84.1(1)Estimated minimum required pension contributions and pension and postretirement benefit payments are based on actuarial estimates using current assumptions for, amongother things, discount rates, expected long-term rates of return on plan assets (where applicable), rates of compensation increases, and health care cost trend rates. See Note 8to our consolidated and combined financial statements for additional information on expected future contributions and benefit payments. (2)Represents contractual commitments to purchase goods and services at specified dates. (3)Represents rental payments under operating leases with remaining non-cancelable terms in excess of one year.(4)Contingent obligations, such as environmental accruals and those relating to uncertain tax positions, generally do not have specific payment dates and accordingly have beenexcluded from the above table. Based on the outcome of certain examinations or as a result of the expiration of statutes of limitations for certain jurisdictions, we believe thatwithin the next 12 months it is reasonably possible that our previously unrecognized tax benefits could decrease by $1.0 to $3.0. In addition, the above table does notinclude potential payments under our derivative financial instruments.We believe that our cash flows, together with cash and equivalents on hand, provide us with the ability to fund our operations and make plannedcapital expenditure payments for at least the next twelve months. However, such cash flows are dependent upon our future operating performance which, inturn, is subject to prevailing economic conditions and to financial, business and other factors, including the conditions of our markets, some of which arebeyond our control. If, in the future, we cannot generate sufficient cash from operations to meet any future debt service obligations, we would need torefinance such debt obligations, obtain additional financing or sell assets. We cannot assure you that our business will generate cash from operations, or thatwe will be able to obtain financing from other sources, sufficient to satisfy any such debt service or other requirements.Critical Accounting Policies and Use of EstimatesThe preparation of financial statements in accordance with GAAP requires us to make estimates and assumptions that affect the reported amounts ofassets, liabilities, revenues and expenses, and disclosure of contingent assets and liabilities. The accounting policies that we believe are most critical to theportrayal of our financial condition and results of operations and that require our most difficult, subjective or complex judgments in estimating the effect ofinherent uncertainties are listed below. This section should be read in conjunction with Notes 1 and 2 to our consolidated and combined financial statements,which include a detailed discussion of these and other accounting policies.Long-Term Contract AccountingCertain of our businesses recognize revenues and profits from long-term construction/installation contracts under the percentage-of-completionmethod of accounting. The percentage-of-completion method requires estimates of future revenues and costs over the full term of product delivery. Wemeasure the percentage-of-completion principally by the contract costs incurred to date as a percentage of the estimated total costs for that contract atcompletion. Under the percentage-of-completion method, we recognized revenues of $490.7, $573.1 and $612.8 during the years ended December 31, 2015,2014 and 2013, respectively.We record any provision for estimated losses on uncompleted long-term contracts in the period in which the losses are determined. In the case ofcustomer change orders for uncompleted long-term contracts, we include estimated recoveries for work performed in forecasting ultimate profitability onthese contracts. Due to uncertainties inherent in the estimation process, it is reasonably possible that completion costs, including those arising from contractpenalty provisions and final contract settlements, will be revised during the duration of a contract. These revisions to costs and income are recognized in theperiod in which the revisions are determined.32 Our estimation process for determining revenues and costs for contracts accounted for under the percentage-of-completion method is based upon(i) our historical experience, (ii) the professional judgment and knowledge of our engineers, project managers, and operations and financial professionals, and(iii) an assessment of the key underlying factors (see below) that impact the revenues and costs of our long-term contracts. Each long-term contract is unique,but typically similar enough to other contracts that we can effectively leverage our experience. As our long-term contracts generally range from six toeighteen months in duration, we typically reassess the estimated revenues and costs of these contracts on a quarterly basis, but may reassess more often assituations warrant. We record changes in estimates of revenues and costs when identified using the cumulative catch-up method prescribed under theRevenue Recognition Topic of the Codification.We believe the underlying factors used to estimate our costs to complete and percentage-of-completion are sufficiently reliable to provide areasonable estimate of revenue and profit; however, due to the length of time over which revenue streams are generated and costs are incurred, along with thejudgment required in developing the underlying factors, the variability of revenue and cost can be significant. Factors that may affect revenue and costsrelating to long-term contracts include, but are not limited to, the following:•Sales Price Incentives and Sales Price Escalation Clauses—Sales price incentives and sales price escalations that are reasonably assured andreasonably estimable are recorded over the performance period of the contract. Otherwise, these amounts are recorded when awarded.•Cost Recovery for Product Design Changes and Claims—On occasion, design specifications may change during the course of the contract. Anyadditional costs arising from these changes may be supported by change orders, or we may submit a claim to the customer. Change orders areaccounted for as described above. See below for our accounting policies related to claims.•Material Availability and Costs—Our estimates of material costs generally are based on existing supplier relationships, adequate availability ofmaterials, prevailing market prices for materials and, in some cases, long-term supplier contracts. Changes in our supplier relationships, delays inobtaining materials, or changes in material prices can have an impact on our cost and profitability estimates.•Use of Sub-Contractors—Our arrangements with sub-contractors are generally based on fixed prices; however, our estimates of the cost andprofitability can be impacted by sub-contractor delays, customer claims arising from sub-contractor performance issues, or a sub-contractor'sinability to fulfill its obligations.•Labor Costs and Anticipated Productivity Levels—Where applicable, we include the impact of labor improvements in our estimation of costs, suchas in cases where we expect a favorable learning curve over the duration of the contract. In these cases, if the improvements do not materialize, costsand profitability could be adversely impacted. Additionally, to the extent we are more or less productive than originally anticipated, estimated costsand profitability may also be impacted.•Effect of Foreign Currency Fluctuations—Fluctuations between currencies in which our long-term contracts are denominated and the currenciesunder which contract costs are incurred can have an impact on profitability. When the impact on profitability is potentially significant, we may (butgenerally do not) enter into FX forward contracts or prepay certain vendors for raw materials to manage the potential exposure. See Note 11 to ourconsolidated and combined financial statements for additional details on our FX forward contracts.Costs and estimated earnings in excess of billings on uncompleted contracts arise when revenues have been recorded but the amounts have not beenbilled under the terms of the contracts. These amounts are recoverable from customers upon various measures of performance, including achievement ofcertain milestones, completion of specified units or completion of the contract.We periodically make claims against customers, suppliers and sub-contractors associated with alleged non-performance and other disputes overcontractual terms. Claims related to long-term contracts are recognized as additional revenues or as a reduction of costs only after we have determined thatcollection is probable and the amount is reasonably estimable. Claims made by us may involve negotiation and, in certain cases, litigation or other dispute-resolution processes. In the event we incur litigation or other dispute-resolution costs in connection with claims, these costs are expensed as incurred,although we may seek to recover these costs. Claims against us are recognized when a loss is considered probable and amounts are reasonably estimable.Impairment of Goodwill and Indefinite-Lived Intangible AssetsGoodwill and indefinite-lived intangible assets are not amortized, but instead are subject to annual impairment testing. We monitor the results ofeach of our reporting units as a means of identifying trends and/or matters that may impact their financial33 results and, thus, be an indicator of a potential impairment. The trends and/or matters that we specifically monitor for each of our reporting units are asfollows:•Significant variances in financial performance (e.g., revenues, earnings and cash flows) in relation to expectations and historical performance; •Significant changes in end markets or other economic factors; •Significant changes or planned changes in our use of a reporting unit's assets; and •Significant changes in customer relationships and competitive conditions.The identification and measurement of goodwill impairment involves the estimation of the fair value of reporting units. We consider a number offactors, including the input of an independent appraisal firm, in conducting the impairment testing of our reporting units. We perform our impairment testingby comparing the estimated fair value of the reporting unit to the carrying value of the reported net assets, with such testing occurring during the fourthquarter of each year in conjunction with our annual financial planning process (or more frequently if impairment indicators arise), based primarily on eventsand circumstances existing as of the end of the third quarter. Fair value is generally based on the income approach using a calculation of discounted cashflows, based on the most recent financial projections for the reporting units. The revenue growth rates included in the financial projections are our bestestimates based on current and forecasted market conditions, and the profit margin assumptions are projected by each reporting unit based on current coststructure and, when applicable, anticipated net cost reductions.The calculation of fair value for our reporting units incorporates many assumptions including future growth rates, profit margin and discount factors.Changes in economic and operating conditions impacting these assumptions could result in impairment charges in future periods.We perform our annual trademarks impairment testing during the fourth quarter, or on a more frequent basis if there are indications of potentialimpairment. The fair values of our trademarks are determined by applying estimated royalty rates to projected revenues, with the resulting cash flowsdiscounted at a rate of return that reflects current market conditions. During 2015, 2014 and 2013, we recorded impairment charges of $15.6, $11.7 and $4.7,respectively, related to trademarks of certain of our businesses. In addition, during 2015, we recorded an impairment charge of $7.1 related to certaintechnology assets of a business. We determined the impairment for technology assets by comparing the future discounted cash flows associated with thetechnology assets to their carrying values. Other changes in the gross values of trademarks and other identifiable intangible assets related primarily to foreigncurrency translation.Refer to Note 7 to our consolidated and combined financial statements for further information on our 2015 goodwill and indefinite-lived intangibleassets as of and for the year ended December 31, 2015.Employee Benefit PlansFor both the plans we sponsor and the plans sponsored by SPX, changes in the fair value of plan assets and actuarial gains and losses are recognizedto 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.Neither our pension plans nor the pension plans sponsored by SPX have experienced any significant impact on liquidity or counterparty exposuredue to the volatility in the credit markets.The costs and obligations associated with these plans are determined based on actuarial valuations. The critical assumptions used in determiningthese obligations and related expenses are discount rates and healthcare cost projections. These critical assumptions are calculated based on relevant data andappropriate market indicators, and are evaluated at least annually in consultation with outside actuaries. Other assumptions involving demographic factorssuch as retirement patterns, mortality, turnover and the rate of increase in compensation levels are evaluated periodically and are updated to reflect actualexperience and expectations for the future. While we believe that the assumptions used are appropriate, actual results may differ.The discount rate enables the expected future cash flows to be stated at a present value on the measurement date. This rate is the yield on high-quality fixed income investments at the measurement date. A lower discount rate increases the present value of benefit obligations and increases pensionexpense. Including the effects of recognizing actuarial gains and losses into earnings as described above, a 50 basis point increase (decrease) in the discountrate on the plans we sponsor would have decreased (increased) our 2015 pension expense by approximately $4.3.34 See Note 8 to our consolidated and combined financial statements for further information on our accounting for pension and postretirement benefitplans.Income TaxesFor purposes of our consolidated and combined financial statements, our income tax provision has been determined as if we filed income tax returnson a stand-alone basis for periods prior to the Spin-Off. Our tax results from periods prior to the Spin-Off as presented in the consolidated and combinedfinancial statements may not be reflective of the results that we will generate in the future. In jurisdictions where we were included in the tax returns filed bySPX or its subsidiaries that were not part of the Spin-Off, any income taxes payable resulting from the related income tax provision were reflected in ourcombined balance sheet as of December 31, 2014 and through the Spin-Off date within "Former parent company investment."Deferred tax assets and liabilities reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities forfinancial reporting purposes and the amounts used for income tax purposes. We periodically assess whether deferred tax assets will be realized and theadequacy of deferred tax liabilities, including the results of tax audits or estimates and judgments used.Realization of deferred tax assets involves estimates regarding (1) the timing and amount of the reversal of taxable temporary differences,(2) expected future taxable income, and (3) the impact of tax planning strategies. We believe that it is more likely than not that we may not realize the benefitof certain deferred tax assets and, accordingly, have established a valuation allowance against them. In assessing the need for a valuation allowance, weconsider all available positive and negative evidence, including past operating results, projections of future taxable income and the feasibility of andpotential changes to ongoing tax planning strategies. The projections of future taxable income include a number of estimates and assumptions regarding ourvolume, pricing and costs. Although realization is not assured for the remaining deferred tax assets, we believe it is more likely than not that the remainingdeferred tax assets will be realized through future taxable earnings or alternative tax strategies. However, deferred tax assets could be reduced in the near termif our estimates of taxable income are significantly reduced or tax strategies are no longer viable.We review our income tax positions on a continuous basis and record a provision for potential uncertain tax positions when we determine that anuncertain position meets the criteria of the Income Taxes Topic of the Codification. As events change or resolutions occur, adjustments are made to amountspreviously provided, such as in the case of audit settlements with taxing authorities. We believe we have adequately provided for any reasonably foreseeableoutcome related to these matters.Our future results may include favorable or unfavorable adjustments to our estimated tax liabilities due to closure of income tax examinations,statute expirations, new regulatory or judicial pronouncements, changes in tax laws, changes in projected levels of taxable income, future tax planningstrategies, or other relevant events. See Note 9 to our consolidated and combined financial statements for additional details regarding our uncertain taxpositions.Contingent LiabilitiesWe are subject to litigation matters that arise in the normal course of business. We believe these matters are either without merit or of a kind thatshould 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 areoperating in compliance with, or taking action aimed at ensuring compliance with, these laws and regulations. None of our compliance obligations withenvironmental protection laws and regulations, individually or in the aggregate, is expected to have a material adverse effect on our financial position,results of operations or cash flows.New Accounting Pronouncements See Note 3 to our consolidated and combined financial statements for a discussion of recent accounting pronouncements.ITEM 7A. Quantitative and Qualitative Disclosures about Market RiskWe are exposed to market risk related to changes in interest rates, foreign currency exchange rates and commodity raw material prices, and weselectively use financial instruments to manage certain of these risks. We do not enter into financial instruments for speculative or trading purposes; however,these instruments may be deemed speculative if the future cash flows originally hedged are no longer probable of occurring as anticipated. Our currencyexposures vary, but are primarily concentrated in the Euro, Chinese Yuan and GBP. We generally do not hedge currency translation exposures. Our exposuresfor commodity35 raw materials vary, with the highest concentration relating to steel, copper, and oil. See Note 11 to our consolidated and combined financial statements forfurther details.The following table provides information, as of December 31, 2015, about our primary outstanding debt obligations and presents principal cashflows by expected maturity dates, weighted-average interest rates and fair values. Expected Maturity Date Through December 31, 2016 2017 2018 2019 2020 Thereafter Total Fair Value6.875% senior notes$— $600.0 $— $— $— $— $600.0 $637.5Average interest rate 6.875% Term loan10.0 20.0 20.0 20.0 330.0 — 400.0 400.0Average interest rate 2.170% We believe that cash and equivalents, cash flows from operations, and availability under revolving credit facilities and our trade receivablesfinancing arrangement will be sufficient to fund working capital needs, planned capital expenditures, dividend payments (if declared), other operational cashrequirements and required debt service obligations for at least the next 12 months.We had FX forward contracts with an aggregate notional amount of $44.7 outstanding as of December 31, 2015, with all such contracts scheduled tomature within one year. We had FX embedded derivatives with an aggregate notional amount of $31.6 outstanding as of December 31, 2015, with scheduledmaturities of $30.8 and $0.8 within one and two years, respectively. The gross fair values of our FX forward contracts and FX embedded derivatives, inaggregate, were $2.0 (gross assets) and $1.5 (gross liabilities) as of December 31, 2015.36 ITEM 8. Financial Statements And Supplementary DataSPX FLOW, INC. AND SUBSIDIARIESINDEX TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTSReport of Independent Registered Public Accounting Firm - Deloitte & Touche LLP38Consolidated and Combined Statements of Operations for the Years Ended December 31, 2015, 2014 and201339Consolidated and Combined Statements of Comprehensive Income (Loss) for the Years Ended December31, 2015, 2014 and 201340Consolidated and Combined Balance Sheets as of December 31, 2015 and 201441Consolidated and Combined Statements of Equity for the Years Ended December 31, 2015, 2014 and 201342Consolidated and Combined Statements of Cash Flows for the Years Ended December 31, 2015, 2014 and201343Notes to Consolidated and Combined Financial Statements44All schedules are omitted because they are not applicable, not required or because the required information is included in our consolidated and combinedfinancial statements or notes thereto.37 Report of Independent Registered Public Accounting FirmTo the Shareholders and Board of Directors of SPX FLOW, Inc.:We have audited the accompanying consolidated and combined balance sheets of SPX FLOW, Inc. and subsidiaries (the “Company”) as ofDecember 31, 2015 and 2014, and the related consolidated and combined statements of operations, comprehensive income (loss), equity, and cash flows foreach of the three years in the period ended December 31, 2015. These financial statements are the responsibility of the Company’s management. Ourresponsibility is to express an opinion on these financial statements based on our audits.We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standardsrequire that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. TheCompany is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included considerationof internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose ofexpressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An auditalso includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principlesused and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide areasonable basis for our opinion.In our opinion, such consolidated and combined financial statements present fairly, in all material respects, the financial position of SPX FLOW, Inc.and subsidiaries as of December 31, 2015 and 2014 and the results of their operations and their cash flows for each of the three years in the period endedDecember 31, 2015, in conformity with accounting principles generally accepted in the United States of America./s/ Deloitte & Touche LLPCharlotte, North CarolinaFebruary 12, 201638 SPX FLOW, INC. AND SUBSIDIARIESCONSOLIDATED AND COMBINED STATEMENTS OF OPERATIONS(in millions, except per share amounts) Year ended December 31, 2015 2014 2013Revenues$2,388.5 $2,769.6 $2,804.8Costs and expenses: Cost of products sold1,596.3 1,833.1 1,906.8Selling, general and administrative558.0 629.9 618.9Intangible amortization23.4 26.1 27.2Impairment of intangible assets22.7 11.7 4.7Special charges, net42.6 14.2 16.0Operating income145.5 254.6 231.2 Other income (expense), net9.8 2.2 (5.2)Related party interest expense, net(2.2) (25.8) (36.3)Other interest income (expense), net(15.9) 2.4 1.6Income before income taxes137.2 233.4 191.3Income tax provision(49.8) (97.5) (58.8)Net income87.4 135.9 132.5Less: Net income (loss) attributable to noncontrolling interests(0.1) 1.4 1.5Net income attributable to SPX FLOW, Inc.$87.5 $134.5 $131.0 Basic income per share of common stock$2.14 $3.30 $3.21Diluted income per share of common stock$2.14 $3.29 $3.20 Weighted-average number of common shares outstanding — basic40.863 40.809 40.809Weighted-average number of common shares outstanding — diluted40.960 40.932 40.932The accompanying notes are an integral part of these statements.39 SPX FLOW, INC. AND SUBSIDIARIESCONSOLIDATED AND COMBINED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)(in millions) Year ended December 31, 2015 2014 2013Net income$87.4 $135.9 $132.5Other comprehensive income (loss), net: Net unrealized losses on qualifying cash flow hedges, net of tax benefit of $0.4 in 2013— — (0.6)Pension liability adjustment, net of tax provision of $0.0 and $0.1 in 2015 and 2014, respectively(0.1) 0.2 —Net unrealized gains (losses) on available-for-sale securities— 3.7 (0.6)Foreign currency translation adjustments(165.0) (202.5) 10.8Other comprehensive income (loss), net(165.1) (198.6) 9.6Total comprehensive income (loss)(77.7) (62.7) 142.1Less: Total comprehensive income (loss) attributable to noncontrolling interests(1.7) 3.1 0.7Total comprehensive income (loss) attributable to SPX FLOW, Inc.$(76.0) $(65.8) $141.4The accompanying notes are an integral part of these statements.40 SPX FLOW, INC. AND SUBSIDIARIESCONSOLIDATED AND COMBINED BALANCE SHEETS(in millions, except share data) December 31,2015 December 31,2014ASSETS Current assets: Cash and equivalents$295.9 $216.6Accounts receivable, net483.9 591.9Related party accounts receivable— 16.6Inventories, net305.2 330.0Other current assets72.4 36.4Deferred income taxes— 52.6Total current assets1,157.4 1,244.1Property, plant and equipment: Land37.7 30.8Buildings and leasehold improvements224.9 158.6Machinery and equipment483.9 350.0 746.5 539.4Accumulated depreciation(314.1) (267.0)Property, plant and equipment, net432.4 272.4Goodwill1,023.4 1,081.0Intangibles, net579.4 659.3Other assets116.8 64.2Related party notes receivable— 707.1TOTAL ASSETS$3,309.4 $4,028.1 LIABILITIES AND EQUITY Current liabilities: Accounts payable$227.1 $252.0Related party accounts payable— 11.9Accrued expenses467.3 426.1Income taxes payable31.7 35.4Short-term debt28.0 6.0Current maturities of long-term debt10.3 1.7Current maturities of related party notes payable— 36.8Total current liabilities764.4 769.9Long-term debt999.0 10.3Related party notes payable— 966.3Deferred and other income taxes142.0 234.1Other long-term liabilities133.4 108.7Total long-term liabilities1,274.4 1,319.4Commitments and contingent liabilities (Note 13) Equity: SPX FLOW, Inc. shareholders’ equity: Preferred stock, no par value, 3,000,000 shares authorized, and no shares issued and outstanding— —Common stock, $0.01 par value, 300,000,000 shares authorized, 41,429,014 issued and 41,386,740 outstanding at December 31,2015, and no shares issued and outstanding at December 31, 20140.4 —Paid-in capital1,621.7 —Retained earnings21.1 —Accumulated other comprehensive loss(382.7) (219.2)Common stock in treasury (42,274 shares at December 31, 2015, and no shares at December 31, 2014)(1.4) —Former parent company investment— 2,144.6Total SPX FLOW, Inc. shareholders' equity1,259.1 1,925.4Noncontrolling interests11.5 13.4Total equity1,270.6 1,938.8TOTAL LIABILITIES AND EQUITY$3,309.4 $4,028.1 The accompanying notes are an integral part of these statements.41 SPX FLOW, INC. AND SUBSIDIARIESCONSOLIDATED AND COMBINED STATEMENTS OF EQUITY(in millions) Common Stock Paid-InCapital RetainedEarnings Accumulated OtherComprehensive Loss CommonStock inTreasury Former ParentCompanyInvestment Total SPX FLOW,Inc. Shareholders'Equity NoncontrollingInterests Total Equity SharesOutstanding Par Balance atDecember 31,2012— $— $— $— $(29.3) $— $1,862.2 $1,832.9 $9.0 $1,841.9Net income— — — — — — 131.0 131.0 1.5 132.5Othercomprehensiveincome (loss),net— — — — 10.4 — — 10.4 (0.8) 9.6Net transfersfrom parent— — — — — — 264.6 264.6 — 264.6Other changesinnoncontrollinginterests— — — — — — — — 1.9 1.9Balance atDecember 31,2013— — — — (18.9) — 2,257.8 2,238.9 11.6 2,250.5Net income— — — — — — 134.5 134.5 1.4 135.9Othercomprehensiveincome (loss),net— — — — (200.3) — — (200.3) 1.7 (198.6)Net transfers toparent— — — — — — (247.7) (247.7) — (247.7)Dividendsattributable tononcontrollinginterests— — — — — — — — (0.5) (0.5)Other changesinnoncontrollinginterests— — — — — — — — (0.8) (0.8)Balance atDecember 31,2014— — — — (219.2) — 2,144.6 1,925.4 13.4 1,938.8Net income(loss)— — — 21.1 — — 66.4 87.5 (0.1) 87.4Othercomprehensiveloss, net— — — — (163.5) — — (163.5) (1.6) (165.1)Net transfers toparent— — — — — — (592.3) (592.3) — (592.3)Reclassificationof former parentcompanyinvestment tocommon stockand paid-incapital41.3 0.4 1,618.3 — — — (1,618.7) — — —Incentive planactivity0.1 — 1.7 — — — — 1.7 — 1.7Stock-basedcompensationexpense— — 5.4 — — — — 5.4 — 5.4Restricted stockand restrictedstock unitvesting,includingrelated taxbenefit of $3.6and net of taxwithholdings— — (3.7) — — (1.4) — (5.1) — (5.1)Dividendsattributable tononcontrollinginterests— — — — — — — — (0.2) (0.2) Balance atDecember 31,201541.4 $0.4 $1,621.7 $21.1 $(382.7) $(1.4) $— $1,259.1 $11.5 $1,270.6The accompanying notes are an integral part of these statements.42 SPX FLOW, INC. AND SUBSIDIARIESCONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS(in millions) Year ended December 31, 2015 2014 2013Cash flows from operating activities: Net income$87.4 $135.9 $132.5Adjustments to reconcile net income to net cash from operating activities: Special charges, net42.6 14.2 16.0Impairment of intangible assets22.7 11.7 4.7Deferred and other income taxes(25.4) 22.4 (10.3)Depreciation and amortization61.9 65.8 69.9Pension and other employee benefits11.3 9.4 5.0Stock-based compensation5.4 — —Gain on asset sales and other, net(8.0) — —Changes in operating assets and liabilities: Accounts receivable and other assets47.4 64.4 35.4Inventories(2.5) (9.6) 13.1Accounts payable, accrued expenses and other(14.9) 2.0 11.4Cash spending on restructuring actions(14.3) (13.6) (14.4)Net cash from operating activities213.6 302.6 263.3Cash flows used in investing activities: Amounts advanced for related party notes receivable— — (743.3)Repayments of related party notes receivable— — 5.6Proceeds from asset sales and other, net12.5 7.3 12.0Increase in restricted cash(0.3) (0.6) —Other investments— — (2.9)Capital expenditures(57.0) (40.7) (23.4)Net cash used in investing activities(44.8) (34.0) (752.0)Cash flows from (used in) financing activities: Borrowings under senior credit facilities534.0 — —Repayments of senior credit facilities(134.0) — —Borrowings under trade receivables agreement34.0 — —Repayments of trade receivables agreement(34.0) — —Borrowings under related party notes payable— — 147.5Repayments of related party notes payable(5.4) (6.7) (5.2)Borrowings under other financing arrangements6.1 5.7 3.1Repayments of other financing arrangements(7.0) (3.9) (20.3)Minimum withholdings paid on behalf of employees for net share settlements, net(1.5) — —Financing fees paid(6.2) — —Change in noncontrolling interests in subsidiary— (0.8) 1.9Dividends paid to noncontrolling interests in subsidiary(0.2) (0.5) —Change in former parent company investment(453.9) (291.6) 261.3Net cash from (used in) financing activities(68.1) (297.8) 388.3Change in cash and equivalents due to changes in foreign currency exchange rates(21.4) (12.0) (4.8)Net change in cash and equivalents79.3 (41.2) (105.2)Combined cash and equivalents, beginning of period$216.6 $257.8 $363.0Consolidated and combined cash and equivalents, end of period$295.9 $216.6 $257.8 Supplemental disclosure of cash flow information: Interest paid$5.8 $3.7 $4.3Income taxes paid, net of refunds of $3.2, $6.2 and $4.8 in 2015, 2014 and 2013, respectively$35.9 $11.4 $19.0Non-cash investing and financing activity: Debt assumed$622.4 $— $—The accompanying notes are an integral part of these statements. 43 SPX FLOW, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS(in millions, except share data)(1)BACKGROUND, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESSPX FLOW, Inc. (“SPX FLOW,” ‘‘the Company,’’ “we,” “us,” or “our”) operates in three business segments and was wholly owned by SPXCorporation (“SPX” or the “former Parent”) until September 26, 2015, when SPX distributed 100% of our outstanding common stock to the SPX shareholdersthrough a tax-free spin-off transaction (the “Spin-Off”).The Company engineers, designs, manufactures and markets products and solutions used to process, blend, filter, dry, meter and transport fluids witha focus on original equipment installation, including turn-key systems, modular systems and components, as well as comprehensive aftermarket componentsand support services. Primary component offerings include engineered pumps, valves, mixers, plate heat exchangers, dehydration and filtration technologies,and industrial tools and hydraulic units. The Company primarily serves customers in the food and beverage, power and energy and industrial end markets.BackgroundOn October 29, 2014, SPX announced that its Board of Directors had unanimously approved a plan to spin off its Flow business, comprising its FlowTechnology reportable segment, its Hydraulic Technologies business, certain of its corporate subsidiaries and certain of its corporate assets and liabilities(collectively, SPX FLOW, Inc.), and separate SPX into two distinct, publicly-traded companies. The Spin-Off was completed by way of a pro rata distributionof our common stock to SPX’s shareholders of record as of the close of business on September 16, 2015, the Spin-Off record date. Each SPX shareholderreceived, effective as of 11:59 p.m., Eastern time, on September 26, 2015, one share of our common stock for every share of SPX common stock held by suchshareholder on the record date. On September 26, 2015, SPX FLOW became a separate publicly-traded company, and SPX did not retain any ownershipinterest in SPX FLOW. A Registration Statement on Form 10 describing the transaction was filed by SPX FLOW with the U.S. Securities and ExchangeCommission (the “SEC”) and was declared effective on September 11, 2015 (as amended through the time of such effectiveness, the “Registration Statementon Form 10”).Basis of PresentationOur consolidated balance sheet as of December 31, 2015 consists of the consolidated balances of SPX FLOW as prepared on a stand-alone basis. Ourcombined balance sheet as of December 31, 2014, and consolidated and combined statements of operations, comprehensive income (loss), equity, and cashflows for the years ended December 31, 2015, 2014 and 2013, have been prepared on a “carve out” basis for the periods and dates prior to the Spin-Off andinclude adjustments for certain transactions that occurred concurrently upon completion of the Spin-Off (see Notes 8 and 12) as well as stand-alone results forthe period subsequent to the date of the Spin-Off. These consolidated and combined financial statements have been derived from the consolidated financialstatements and accounting records of SPX and SPX FLOW and prepared in conformity with accounting principles generally accepted in the United States("GAAP"). Consequently, the financial information included herein may not necessarily reflect our financial position, results of operations and cash flows inthe future or what our financial condition, results of operations and cash flows would have been had we been an independent, publicly-traded companyduring the periods presented.The consolidated and combined statements of operations include costs for certain centralized functions and programs provided and/or administeredby SPX prior to the Spin-Off that were charged directly to SPX’s business units, including business units of SPX FLOW. These centralized functions andprograms included, but were not limited to, information technology, payroll services, shared services for accounting, supply chain and manufacturingoperations, and business and health insurance coverage. Prior to the Spin-Off and during the years ended December 31, 2015, 2014 and 2013, $81.0, $109.0and $77.0 respectively, of such costs were directly charged to the Company's business units and were included in selling, general and administrativeexpenses in the accompanying consolidated and combined statements of operations.In addition, for purposes of preparing these consolidated and combined financial statements on a “carve out” basis, a portion of SPX’s totalcorporate expenses have been allocated to SPX FLOW. These expense allocations include the cost of corporate functions and/or resources provided by SPXincluding, but not limited to, executive management, finance and accounting, legal, and human resources support, and the cost of our Charlotte, NCcorporate headquarters and our Asia Pacific center in Shanghai, China, and included the related benefit costs associated with such functions, such as pensionand postretirement benefits and stock-based compensation. Prior to the Spin-Off and in the years ended December 31, 2015, 2014 and 2013, the Companywas allocated $50.7, $95.9 and $73.9, respectively, of such general corporate and related benefit costs, which were primarily included within selling, generaland administrative expenses in the consolidated and combined statements of operations.44 SPX FLOW, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)(in millions, except share data)In addition to pre-Spin-Off allocation of costs associated with SPX's corporate functions, including the related benefit costs, the consolidated and combinedfinancial statements include an allocation of corporate-related special charges. Costs were allocated to the Company based on direct usage when identifiableor, when not directly identifiable, on the basis of proportional revenues of the Company to SPX's consolidated revenues from continuing operations.Management considers the basis on which the expenses have been allocated to reasonably reflect the utilization of services provided to or the benefitreceived by the Company during the periods presented. The allocations may not, however, reflect the expenses the Company would have incurred if theCompany had been a stand-alone company for the periods presented.Pre-Spin-Off cash and equivalents held by SPX at the corporate level that were not specifically identifiable to the Company have not been reflectedin the Company's combined financial statements prior to the date of the Spin-Off. Cash transfers between SPX and the Company (other than related to notesreceivable and payable, as discussed further below) were accounted for through former parent company investment. Cash and equivalents in the combinedfinancial statements prior to the date of the Spin-Off represent cash and equivalents held locally by the Company's entities. SPX's third-party debt and therelated interest expense were not allocated to us for any of the periods presented as we were not the legal obligor of such debt.All intercompany transactions have been eliminated. All transactions between the Company and SPX (including its affiliates that were not part ofthe Spin-Off) have been included in these combined financial statements prior to the date of Spin-Off. For those transactions historically settled in cashbetween the Company and SPX (including its affiliates that were not part of the Spin-Off), the Company has reflected such balances in the combined balancesheet as of December 31, 2014 as "Related party accounts receivable" or "Related party accounts payable." The aggregate net effect of such transactions nothistorically settled in cash between the Company and SPX has been reflected in the combined balance sheet as of December 31, 2014 as "Former parentcompany investment" and in the combined statements of cash flows prior to the date of the Spin-Off as "Change in former parent company investment." Inaddition, prior to the Spin-Off, the Company had amounts due from and due to SPX (and its affiliates that were not part of the Spin-Off) supported bypromissory notes. The respective amounts have been reflected in the Company's combined balance sheet as of December 31, 2014 as "Related party notesreceivable" and "Related party notes payable," while the respective interest income and interest expense amounts recognized prior to the Spin-Off have beenreflected in "Related party interest expense, net" within the Company's consolidated and combined statements of operations.Certain operating cash flow amounts in the accompanying combined statements of cash flows for the years ended December 31, 2014 and 2013 havebeen reclassified to conform to the current year presentation.The Company operates on a calendar year-end.Transition Services Agreement - Post-Spin-OffOn September 26, 2015 in connection with the Spin-Off, we entered into a transition services agreement with SPX, under which SPX or certain of itssubsidiaries provide us, and we provide SPX or certain of its subsidiaries, with certain services to help ensure an orderly transition following the Spin-Off (the"Transition Services Agreement").The services SPX agreed to provide to us include information technology, human resources, finance and financial reporting and other administrativeservices. The services we have agreed to provide to SPX include information technology, human resources, finance and financial reporting, tax compliance,facility access and other administrative services. The charges for these services are intended to allow SPX or us, as applicable, to recover the direct andindirect costs incurred in providing such services. The Transition Services Agreement generally provides for a term of services starting at the Spin-Off dateand continuing for a period of up to twelve months following the Spin-Off. Other than with respect to certain fixed-term pass-through services, the applicablerecipient of services may terminate any transition services it is receiving upon prior notice to the other party, upon thirty days' notice, with any extension orrenewal of the Transition Services Agreement or the services provided thereunder requiring mutual agreement between SPX and us.Amounts related to services provided and received by us subsequent to the Spin-Off were not significant.Other Agreements with SPX - Post-Spin-OffIn connection with the Spin-Off, we entered into other definitive agreements with SPX that, among other matters, set forth the terms and conditionsof the Spin-Off and provide a framework for our relationship with SPX after the Spin-Off. A summary of the material terms of these agreements can be found inthe "Certain Relationships and Related Party Transactions" section of the Information Statement of the Company, attached as Exhibit 99.1 to ourRegistration Statement on Form 10.45 SPX FLOW, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)(in millions, except share data)Summary of Significant Accounting PoliciesOur significant accounting policies are described below, as well as in other Notes that follow.Foreign Currency Translation and Transactions—The financial statements of our foreign subsidiaries are translated into U.S. dollars in accordancewith the Foreign Currency Matters Topic of the Financial Accounting Standards Board Codification ("Codification" or "ASC"). Balance sheet accounts aretranslated 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 onforeign currency translations are reflected as a separate component of equity and other comprehensive income (loss). Foreign currency transaction gains andlosses, 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 $1.1, $(2.6) and $(5.8) in 2015, 2014 and 2013, respectively.Cash Equivalents—We consider highly liquid money market investments with original maturities of three months or less at the date of purchase tobe cash equivalents.Revenue Recognition—We recognize revenues from product sales upon shipment to the customer (e.g., FOB shipping point) or, to a lesser extent,upon receipt by the customer (e.g., FOB destination), in accordance with the agreed upon customer terms. Revenues from service contracts and long-termmaintenance arrangements are recognized on a straight-line basis over the agreement period.Amounts billed for shipping and handling are included in revenues. Costs incurred for shipping and handling are recorded in "Cost of productssold." Taxes assessed by governmental authorities that are directly imposed on a revenue-producing transaction between a seller and a customer are presentedon a net basis (excluded from revenues) in our consolidated and combined statements of operations.We recognize revenue from long-term construction/installation contracts under the percentage-of-completion method of accounting. Thepercentage-of-completion is measured principally by the percentage of costs incurred to date for each contract to the estimated total costs for such contract atcompletion. We recognize revenues for similar short-term contracts using the completed-contract method of accounting.Provisions for any estimated losses on uncompleted long-term contracts are made in the period in which such losses are determined. In the case ofcustomer change orders for uncompleted long-term contracts, estimated recoveries are included for work performed in forecasting ultimate profitability oncertain contracts. Due to uncertainties inherent in the estimation process, it is reasonably possible that completion costs, including those arising from contractpenalty provisions and final contract settlements, will be revised in the near-term. Such revisions to costs and income are recognized in the period in whichthe revisions are determined.Costs and estimated earnings in excess of billings arise when revenues have been recorded but the amounts have not been billed under the terms ofthe contracts. These amounts are recoverable from customers upon various measures of performance, including achievement of certain milestones, completionof specified units or completion of the contract. Claims related to long-term contracts are recognized as revenue only after we have determined that collectionis probable and the amount can be reliably estimated. Claims made by us involve negotiation and, in certain cases, litigation or other dispute-resolutionprocesses. In the event we incur litigation or other dispute-resolution costs in connection with claims, such costs are expensed as incurred, although we mayseek to recover these costs. Claims against us are recognized when a loss is considered probable and amounts are reasonably estimable.We recognized $490.7, $573.1 and $612.8 in revenues under the percentage-of-completion method for the years ended December 31, 2015, 2014and 2013, respectively. Costs and estimated earnings on uncompleted contracts, from their inception, and related amounts billed as of December 31, 2015and 2014 were as follows: December 31, 2015 2014Costs incurred on uncompleted contracts$1,392.8 $1,424.9Estimated earnings to date324.2 324.1 1,717.0 1,749.0Less: Billings to date(1,682.5) (1,691.8)Net costs and estimated earnings in excess of billings$34.5 $57.246 SPX FLOW, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)(in millions, except share data)These amounts are included in the accompanying consolidated and combined balance sheets at December 31, 2015 and 2014 as shown below.Amounts for billed retainages and receivables to be collected in excess of one year are not significant for the periods presented. December 31, 2015 2014Costs and estimated earnings in excess of billings(1)$87.4 $139.5Billings in excess of costs and estimated earnings on uncompleted contracts(2)(52.9) (82.3)Net costs and estimated earnings in excess of billings$34.5 $57.2(1)Reported as a component of "Accounts receivable, net."(2) Reported as a component of "Accrued expenses."Research and Development Costs—The Company conducts research and development activities for the purpose of developing and improving newproducts. The related expenditures are expensed as incurred and totaled $19.1, $19.8 and $17.7 in 2015, 2014 and 2013, respectively, and are classifiedwithin selling, general and administrative expense within the consolidated and combined statements of operations.Property, Plant and Equipment—Property, plant and equipment ("PP&E") is stated at cost, less accumulated depreciation. We use the straight-linemethod 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 formachinery and equipment. Depreciation expense, including amortization of capital leases, was $38.5, $39.7 and $42.7 for the years ended December 31,2015, 2014 and 2013, 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 dispositionof 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 theundiscounted cash flows expected to result from the use and eventual disposition of the asset. Fair values for assets subject to impairment testing aredetermined primarily by management, taking into consideration various factors including third-party appraisals, quoted market prices and previousexperience. 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 overits 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 theasset 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 assetheld for sale. In addition, the asset is written down to its fair value less any selling costs, if impaired.Income Taxes—For purposes of our combined financial statements prior to the date of the Spin-Off, our income tax provision was determined as if wefiled income tax returns on a stand-alone basis. The Company's tax results as presented in the consolidated and combined financial statements from periodsprior to the Spin-Off may not be reflective of the results that the Company will generate in the future. In jurisdictions where the Company has been includedin the tax returns filed by SPX or its subsidiaries that were not part of the Spin-Off, any income taxes payable resulting from the related income tax provisionwere reflected in the combined balance sheet as of December 31, 2014 and through the date of the Spin-Off within "Former parent company investment."Deferred income tax assets and liabilities, as presented in the consolidated and combined balance sheets, reflect the net tax effects of temporary differencesbetween the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. We periodically assesswhether deferred tax assets will be realized and the adequacy of deferred tax liabilities, including the results of local, state, federal or foreign statutory taxaudits or estimates and judgments used.Derivative Financial Instruments—We use foreign currency forward contracts to manage our exposures to fluctuating currency exchange rates.Derivatives are recorded on the balance sheet and measured at fair value. For derivatives designated as hedges of the fair value of assets or liabilities, thechanges in fair values of both the derivatives and the hedged items are recorded in current earnings. For derivatives designated as cash flow hedges, theeffective portion of the changes in fair value of the derivatives is recorded in accumulated other comprehensive loss ("AOCL") and subsequently recognizedin earnings when the hedged items impact earnings. Changes in the fair value of derivatives not designated as hedges, and the ineffective portion of cash flowhedges, are recorded in current earnings. We do not enter into financial instruments for speculative or trading purposes.47 SPX FLOW, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)(in millions, except share data)For those transactions that are designated as cash flow hedges, on the date the derivative contract is entered into, we document our hedgerelationship, including identification of the hedging instruments and the hedged items, as well as our risk management objectives and strategies forundertaking the hedge transaction. We also assess, both at inception and quarterly thereafter, whether such derivatives are highly effective in offsettingchanges in the fair value of the hedged item. See Notes 11 and 14 for further information.Cash flows from hedging activities are included in the same category as the items being hedged, which are primarily operating activities.Former Parent Company Investment—Former parent company investment in the combined balance sheet as of December 31, 2014 represents SPX'shistorical investment in us, our accumulated net earnings after taxes and the net effect of the transactions with and allocations from SPX. See "Basis ofPresentation" above and Note 15 for additional information.Goodwill and Other Intangible Assets—Consistent with the requirements of the Intangible—Goodwill and Other Topic of the Codification, the fairvalues of our reporting units generally are estimated using discounted cash flow projections that we believe to be reasonable under current and forecastedcircumstances, the results of which form the basis for making judgments about the recoverability of carrying values of the net assets of our reporting units.Other considerations are also incorporated, including comparable industry price multiples. The financial results of our businesses closely follow changes inthe industries and end markets that they serve. Accordingly, we consider estimates and judgments that affect the future cash flow projections, includingprincipal methods of competition such as volume, price, service, product performance and technical innovations and estimates associated with costimprovement initiatives, capacity utilization and assumptions for inflation and foreign currency changes. Any significant change in market conditions andestimates or judgments used to determine expected future cash flows that indicate a reduction in carrying value may give rise to impairment in the period thatthe change becomes known.We perform our annual goodwill impairment testing during the fourth quarter in conjunction with our annual financial planning process, with suchtesting based primarily on events and circumstances existing as of the end of the third quarter. In addition, we test goodwill for impairment on a morefrequent basis if there are indications of potential impairment.We perform our annual trademarks impairment testing during the fourth quarter in conjunction with our annual financial planning process, or on amore frequent basis if there are indications of potential impairment. The fair values of our trademarks are determined by applying estimated royalty rates toprojected revenues, with the resulting cash flows discounted at a rate of return that reflects current market conditions. The basis for these projected revenues isthe annual operating plan for each of the related businesses.Investments in Unconsolidated Companies—Investments in unconsolidated companies where we exercise significant influence but do not havecontrol are accounted for using the equity method. In determining whether we are the primary beneficiary of a variable interest entity ("VIE"), we perform aqualitative analysis that considers the design of the VIE, the nature of our involvement and the variable interests held by other parties to determine whichparty 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 toabsorb losses or the right to receive benefits that could potentially be significant to the VIE. We have interests in VIEs, primarily joint ventures, in which weare the primary beneficiary. The financial position, results of operations and cash flows of our VIEs are not material, individually or in the aggregate, inrelation to our consolidated and combined financial statements.(2) USE OF ESTIMATESThe preparation of our consolidated and combined 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 theconsolidated and combined financial statements, and the reported amounts of revenues (e.g., our percentage-of-completion estimates described above) andexpenses during the reporting period. We evaluate these estimates and judgments on an ongoing basis and base our estimates on experience, current andexpected future conditions, third-party evaluations and various other assumptions that we believe are reasonable under the circumstances. The results of theseestimates form the basis for making judgments about the carrying values of assets and liabilities as well as identifying and assessing the accounting treatmentwith respect to commitments and contingencies. Actual results may differ from the estimates and assumptions used in the consolidated and combinedfinancial statements and related notes.Listed below are certain significant estimates and assumptions used in the preparation of our consolidated and combined financial statements.Certain other estimates and assumptions are further explained in the related notes.48 SPX FLOW, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)(in millions, except share data)Accounts Receivable Allowances—We provide allowances for estimated losses on uncollectible accounts based on our historical experience and theevaluation of the likelihood of success in collecting specific customer receivables. In addition, we maintain allowances for customer returns, discounts andinvoice pricing discrepancies, with such allowances primarily based on historical experience. Summarized below is the activity for these allowance accounts. Year ended December 31, 2015 2014 2013Balance at beginning of year$22.0 $21.7 $23.3Allowances provided15.6 14.7 12.0Write-offs, net of recoveries, credits issued and other(14.0) (14.4) (13.6)Balance at end of year$23.6 $22.0 $21.7Inventory—We estimate losses for excess and/or obsolete inventory and the net realizable value of inventory based on the aging and historicalutilization of the inventory and the evaluation of the likelihood of recovering the inventory costs based on anticipated demand and selling price.Long-Lived Assets and Intangible Assets Subject to Amortization—We continually review whether events and circumstances subsequent to theacquisition of any long-lived assets, or intangible assets subject to amortization, have occurred that indicate the remaining estimated useful lives of thoseassets 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 assetsare 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 fairvalues 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, andhistorical and expected future operating cash flows of each acquired asset, as well as our commitment to support these assets through continued investmentand legal infringement protection.Goodwill and Indefinite-Lived Intangible Assets—We test goodwill and indefinite-lived intangible assets for impairment annually during the fourthquarter and continually assess whether a triggering event has occurred to determine whether the carrying value exceeds the implied fair value. The fair valueof reporting units is based generally on discounted projected cash flows, but we also consider factors such as comparable industry price multiples. We employcash flow projections that we believe to be reasonable under current and forecasted circumstances, the results of which form the basis for making judgmentsabout the carrying values of the reported net assets of our reporting units. The financial results of many of our businesses closely follow changes in theindustries and end markets that they serve. Accordingly, we consider estimates and judgments that affect the future cash flow projections, including principalmethods of competition, such as volume, price, service, product performance and technical innovations, as well as estimates associated with cost reductioninitiatives, capacity utilization and assumptions for inflation and foreign currency changes. Actual results may differ from these estimates under differentassumptions or conditions. See Note 7 for further information, including discussion of impairment charges recorded in 2015, 2014 and 2013, and an interimimpairment test in the fourth quarter of 2015.Accrued Expenses—We make estimates and judgments in establishing accruals as required under GAAP. Summarized in the table below are thecomponents of accrued expenses at December 31, 2015 and 2014. December 31, 2015 2014Unearned revenue(1)$155.8 $203.9Employee benefits172.6 95.4Warranty14.0 17.4Other(2)124.9 109.4Total$467.3 $426.149 SPX FLOW, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)(in millions, except share data)(1)Unearned revenue includes billings in excess of costs and estimated earnings on uncompleted contracts accounted for under the percentage-of-completion method ofrevenue recognition, customer deposits and unearned amounts on service contracts.(2)Other consists of various items including, among other items, accrued commissions, accrued sales and value-added taxes, and accruals for restructuring, interest and freightcosts.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 probableand they can be reasonably estimated. We do not discount legal obligations or reduce them by anticipated insurance recoveries.Environmental Remediation Costs—We expense costs incurred to investigate and remediate environmental issues unless they extend the economicuseful lives of related assets. We record liabilities when it is probable that an obligation has been incurred and the amounts can be reasonably estimated. Ourenvironmental accruals cover anticipated costs, including investigation, remediation and operation and maintenance of clean-up sites. Our estimates arebased primarily on investigations and remediation plans established by independent consultants, regulatory agencies and potentially responsible thirdparties. We generally do not discount environmental obligations or reduce them by anticipated insurance recoveries.Self-Insurance—SPX is self-insured for certain of its workers' compensation, automobile, product, general liability, disability and health costs and,thus, records an accrual for its retained liability. SPX's businesses, including the business units of the Company, were charged directly for their estimatedshare of the cost of these self-insured programs prior to the Spin-Off, with the Company's share of the cost included in our consolidated and combinedstatements of operations for such periods. In addition, the Company's estimated share of SPX's retained liability for these programs was reflected in ourcombined balance sheet as of December 31, 2014 within "Accrued expenses." SPX FLOW is self-insured for such costs and the Company's liability for theseprograms is reflected in our consolidated balance sheet as of December 31, 2015 within "Accrued expenses."Warranty—In the normal course of business, we issue product warranties for specific products and provide for the estimated future warranty cost inthe 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 isperiodically adjusted for recent actual experience. Because warranty estimates are forecasts that are based on the best available information, actual claimscosts may differ from amounts provided. In addition, due to the seasonal fluctuations at certain of our businesses, the timing of warranty provisions and theusage of warranty accruals can vary period to period. We make adjustments to initial obligations for warranties as changes in the obligations becomereasonably estimable. The following is an analysis of our product warranty accrual for the periods presented: Year ended December 31, 2015 2014 2013Balance at beginning of year$18.4 $20.4 $23.2Provisions10.3 13.5 8.1Usage(12.6) (14.2) (10.8)Currency translation adjustment(1.3) (1.3) (0.1)Balance at end of year14.8 18.4 20.4Less: Current portion of warranty14.0 17.4 20.2Non-current portion of warranty$0.8 $1.0 $0.2Income Taxes—We review our income tax positions on a continuous basis and accrue for potential uncertain tax positions in accordance with theIncome Taxes Topic of the Codification. Accruals for these uncertain tax positions are classified as "Deferred and other income taxes" in the accompanyingconsolidated and combined balance sheets based on an expectation as to the timing of when the matter will be resolved. As events change or resolutionsoccur, 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 taxbenefit will be sustained, we record the largest amount of tax benefit with a greater than 50% likelihood of being realized upon ultimate settlement with ataxing authority, assuming such authority has full knowledge of all relevant information. These reviews also entail analyzing the realization of deferred taxassets. 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 wewill not realize a benefit associated with such assets.Employee Benefit Plans—Certain of our employees participate in defined benefit pension and other postretirement plans we sponsor and, prior to thedate of the Spin-Off, participated in plans sponsored by SPX. The expense for these plans is derived from an actuarial calculation based on the plans'provisions and assumptions regarding discount rates and rates of increase50 SPX FLOW, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)(in millions, except share data)in compensation levels. Discount rates for most of the plans are based on representative bond indices. Rates of increase in compensation levels areestablished based on expectations of current and foreseeable future increases in compensation. Independent actuaries are consulted in determining theseassumptions. See Note 8 for further discussion of our accounting for pension and postretirement benefits.(3) NEW ACCOUNTING PRONOUNCEMENTSThe following is a summary of new accounting pronouncements that apply or may apply to our business.In May 2014, the Financial Accounting Standards Board (the "FASB") issued a new standard on revenue recognition that outlines a singlecomprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognitionguidance, including industry-specific guidance. The new standard requires a number of disclosures intended to enable users of financial statements tounderstand the nature, amount, timing and uncertainty of revenue, and the related cash flows. The standard is effective for interim and annual reportingperiods beginning after December 15, 2017. We are currently evaluating the effect that this new standard will have on our consolidated and combinedfinancial statements.In April 2015, the FASB issued a new standard that requires debt issuance costs related to a recognized debt liability to be reported in the balancesheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The standard is effective for interim and annualreporting periods beginning after December 15, 2015, and shall be applied retrospectively. We do not expect the adoption of this standard to have a materialimpact on our consolidated and combined financial statements.In April 2015, the FASB issued an amendment to existing guidance that, among other changes, permits an entity that has a significant event in aninterim period that requires a remeasurement of defined benefit plan assets and obligations to remeasure such assets and obligations using the month-end datethat is closest to the date of the significant event, rather than the date of the plan event. Although earlier application is permitted, the amendment is effectivefor interim and annual reporting periods beginning after December 15, 2015, and shall be applied prospectively. The impact of the adoption of thisamendment on our consolidated and combined financial statements will be based on any future significant events of our defined benefit plans.In November 2015, the FASB issued an amendment to existing guidance that eliminates the current requirement for an entity to separate deferredincome tax assets and liabilities into current and non-current amounts on the balance sheet. To simplify the presentation of deferred income taxes, thisamendment requires that deferred tax assets and liabilities be classified as non-current amounts. We early adopted this amendment effective December 31,2015 without retrospective application to prior periods.(4) INFORMATION ON REPORTABLE SEGMENTS, CORPORATE EXPENSE AND OTHERWe are a global supplier of highly specialized, engineered solutions with operations in over 35 countries and sales in over 150 countries around theworld. Many of our solutions play a role in helping to meet global demand for processed foods and beverages and power and energy, particularly inemerging markets. In 2015, an estimated 29% of our revenues were from sales into emerging markets.We have three reportable segments: Food and Beverage, Power and Energy, and Industrial. In determining our segments, we apply the thresholdcriteria of the Segment Reporting Topic of the Codification to operating income or loss of each segment before considering impairment and special charges,pension and postretirement expense/income, stock-based compensation and other indirect corporate expenses. This is consistent with the way our chiefoperating decision maker evaluates the results of each segment.Revenues by reportable segment and geographic area represent sales to unaffiliated customers, and no one customer or group of customers that, toour knowledge, are under common control accounted for more than 10% of our consolidated and combined revenues for any period presented. Intercompanyrevenues among our reportable segments are not significant. Identifiable assets by reportable segment are those used in the respective operations of each.51 SPX FLOW, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)(in millions, except share data)Food and BeverageThe Food and Beverage reportable segment operates in a regulated, global industry with customers who demand highly engineered, turn-keysolutions. Key demand drivers include dairy consumption, emerging market capacity expansion, sustainability and productivity initiatives, customer productinnovation and food safety. Key products for the segment include mixing, drying, evaporation and separation systems and components, heat exchangers, andreciprocating and centrifugal pump technologies. Our core brands include Anhydro, APV, Bran+Luebbe, Gerstenberg Schroeder, LIGHTNIN, Seital, andWaukesha Cherry-Burrell.Power and EnergyThe Power and Energy reportable segment primarily serves customers in the oil and gas industry and, to a lesser extent, the nuclear and otherconventional power industries. A large portion of the segment's revenues are concentrated in oil extraction, production and transportation at existing wellsand pipeline applications. The underlying drivers of this segment include demand for power and energy. Key products for the segment include pumps, valvesand related accessories, while the core brands include APV, Bran+Luebbe, ClydeUnion Pumps, Copes-Vulcan, Dollinger Filtration, LIGHTNIN, M&J Valve,Plenty, and Vokes.IndustrialThe Industrial reportable segment primarily serves customers in the chemical, air treatment, mining, pharmaceutical, marine, shipbuilding,infrastructure construction, general industrial and water treatment industries. Key demand drivers of this segment are tied to macroeconomic conditions andgrowth in the respective end markets we serve. Key products for the segment are air dryers, filtration equipment, mixers, pumps, hydraulic technologies andheat exchangers. Core brands include Airpel, APV, Bolting Systems, Delair, Deltech, Hankison, Jemaco, Johnson Pump, LIGHTNIN, Power Team, and Stone.Corporate ExpenseCorporate expense generally relates to the cost of our Charlotte, NC corporate headquarters and our Asia Pacific center in Shanghai, China for theperiod subsequent to the Spin-Off, and includes allocations of the cost of corporate functions and/or resources provided by SPX prior to the Spin-Off. SeeNote 1 for a discussion of the methodology used to allocate corporate-related costs prior to the Spin-Off.52 SPX FLOW, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)(in millions, except share data)Financial data for our reportable segments as of or for the years ended December 31, 2015, 2014 and 2013 were as follows: As of or for the Year Ended December 31, 2015 2014 2013Revenues: Food and Beverage$886.3 $968.9 $970.0Power and Energy723.0 961.6 997.5Industrial779.2 839.1 837.3 Total revenues$2,388.5 $2,769.6 $2,804.8 Income: Food and Beverage$106.9 $99.3 $90.4Power and Energy87.5 168.7 127.4Industrial107.3 123.0 119.3 Total income for reportable segments301.7 391.0 337.1 Corporate expense54.3 58.3 59.8Stock-based compensation expense25.8 20.0 17.4Pension and postretirement expense10.8 32.2 8.0Impairment of intangible assets22.7 11.7 4.7Special charges, net42.6 14.2 16.0Consolidated and combined operating income$145.5 $254.6 $231.2 Capital expenditures: Food and Beverage$24.5 $12.8 $7.3Power and Energy19.1 16.3 7.3Industrial5.1 6.9 7.6Other(1)8.3 4.7 1.2Total capital expenditures$57.0 $40.7 $23.4 Depreciation and amortization: Food and Beverage$17.3 $21.6 $20.8Power and Energy27.9 29.7 32.2Industrial14.0 14.2 16.4Other(1)2.7 0.3 0.5Total depreciation and amortization$61.9 $65.8 $69.9 Identifiable assets: Food and Beverage$925.0 $969.6 $1,122.4Power and Energy1,455.0 1,567.8 1,736.5Industrial638.7 662.5 724.9Other(2)290.7 828.2 906.9Total identifiable assets$3,309.4 $4,028.1 $4,490.7 Geographic areas: Revenues(3): United States$836.5 $933.9 $933.9United Kingdom316.5 417.5 482.7China140.1 137.5 152.1France136.3 176.8 155.3Germany119.0 140.7 130.5Denmark116.0 185.4 204.1Other724.1 777.8 746.2 Total revenues$2,388.5 $2,769.6 $2,804.8 53 SPX FLOW, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)(in millions, except share data) As of or for the Year Ended December 31, 2015 2014 2013Tangible long-lived assets: United States$312.7 $119.0 $108.3Other236.5 217.6 285.3Total tangible long-lived assets$549.2 $336.6 $393.6(1) Relates to corporate PP&E or PP&E that is utilized by all of our reportable segments along with related depreciation expense.(2)Relates primarily to assets (e.g., cash and PP&E at December 31, 2015, and cash and related party notes receivable at December 31, 2014 and 2013) of the corporatesubsidiaries that are included in these consolidated and combined financial statements.(3)Revenues are included in the above geographic areas based on the country that recorded the customer revenue.(5) SPECIAL CHARGES, NETAs 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 manufacturingcapacity. Our restructuring and integration decisions are based, in part, on discounted cash flows and are designed to achieve our goals of reducing structuralfootprint and maximizing profitability. As a result of our strategic review process, we recorded net special charges of $42.6, $14.2 and $16.0 in 2015, 2014and 2013, respectively. These net special charges were primarily related to restructuring initiatives to consolidate manufacturing and sales facilities, reduceworkforce, and rationalize certain product lines, as well as tangible asset impairment charges.The components of the charges have been computed based on expected cash payouts, including severance and other employee benefits based onexisting severance policies, local laws, and other estimated exit costs, and our estimate of the realizable value of the affected tangible and intangible assets.Liabilities for exit costs including, among other things, severance, other employee benefit costs, and operating lease obligations on idle facilities,are measured initially at their fair value and recorded when incurred.With the exception of certain multi-year operating lease obligations and other contractual obligations, which are not material to our consolidatedand combined financial statements, we anticipate that liabilities related to restructuring actions as of December 31, 2015 will be paid within one year fromthe period in which the action was initiated.Special charges for the years ended December 31, 2015, 2014 and 2013 are described in more detail below and in the applicable sections thatfollow: Year ended December 31, 2015 2014 2013Employee termination costs$38.5 $11.6 $13.5Facility consolidation costs2.5 0.6 1.0Other cash costs (recoveries), net— 0.5 (0.2)Non-cash asset write-downs1.6 1.5 1.7Total$42.6 $14.2 $16.02015 Charges: Employee TerminationCosts Facility ConsolidationCosts Other Cash Costs(Recoveries), Net Non-Cash Asset Write-downs Total Special ChargesFood and Beverage$25.1 $0.3 $0.1 $0.3 $25.8Power and Energy7.8 0.3 (0.1) 0.1 8.1Industrial3.4 1.9 — 0.7 6.0Other2.2 — — 0.5 2.7Total$38.5 $2.5 $— $1.6 $42.6 54 SPX FLOW, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)(in millions, except share data)Food and Beverage—Charges for 2015 related primarily to severance and other costs associated with (i) the ongoing consolidation and relocationof a manufacturing facility in Germany to an existing facility in Poland and, to a much lesser extent, (ii) restructuring initiatives in South America and theU.S. Once completed, these restructuring activities are expected to result in the termination of approximately 250 employees. Charges for 2015 also includedasset impairment charges of $0.3 related to certain tangible long-lived assets.Power and Energy—Charges for 2015 related primarily to severance and other costs associated with actions taken to (i) reduce the cost base of thesegment in response to oil price declines that began in the latter half of 2014 and have continued throughout 2015, which has resulted in a reduction incapital spending by our customers in the oil and gas industries, and (ii) realign certain sites around core service markets. Once completed, these restructuringactivities are expected to result in the termination of approximately 90 employees. Charges for 2015 also included asset impairment charges of $0.1 related tocertain tangible long-lived assets.Industrial—Charges for 2015 related primarily to severance and other costs associated with (i) the ongoing consolidation and relocation of amanufacturing facility in Denmark to an existing facility in Poland and (ii) a reorganization of the commercial and operational structure of certain of thesegment's business in Europe and the U.S. Once completed, these restructuring activities are expected to result in the termination of approximately 180employees. Charges for 2015 also included asset impairment charges of $0.7 related to certain tangible long-lived assets.Other—Charges for 2015 related primarily to (i) a restructuring of the Company's corporate development function subsequent to the Spin-Off and(ii) an allocation of special charges associated with SPX's corporate functions and activities prior to the Spin-Off. Charges for 2015 also included assetimpairment charges of $0.5 related to certain information technology assets. See Note 1 for a discussion of the methodology used to allocate corporate-related costs prior to the Spin-Off.Expected charges still to be incurred under actions approved as of December 31, 2015 are approximately $15.4.2014 Charges: Employee TerminationCosts Facility ConsolidationCosts Other Cash Costs(Recoveries), Net Non-Cash Asset Write-downs Total Special ChargesFood and Beverage$3.4 $0.5 $— $0.7 $4.6Power and Energy5.7 — 0.8 0.8 7.3Industrial1.6 0.1 (0.3) — 1.4Other0.9 — — — 0.9Total$11.6 $0.6 $0.5 $1.5 $14.2Food and Beverage—Charges for 2014 related primarily to severance and other costs associated with the reorganization of the segment'scommercial organization in Europe, which resulted in the termination of 25 employees. Charges for 2014 also included asset impairment charges of $0.7related to certain tangible long-lived assets.Power and Energy—Charges for 2014 related primarily to severance and other costs associated with restructuring initiatives at various locations inEurope and the U.S. These actions were taken primarily to reduce the cost base of Clyde Union, as we continued to integrate this business into the segment,and resulted in the termination of 49 employees. Charges for 2014 also included asset impairment charges of $0.8 related to certain Clyde Union tangiblelong-lived assets in the U.S.Industrial—Charges for 2014 related primarily to severance and other costs associated with the reorganization of the Johnson Pump managementstructure in Europe, as well as facility consolidation in the U.S., and resulted in the termination of 26 employees.Other—Charges for 2014 related primarily to an allocation of special charges associated with SPX's corporate functions and activities. See Note 1 fora discussion of the methodology used to allocate corporate-related costs prior to the Spin-Off.55 SPX FLOW, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)(in millions, except share data)2013 Charges: Employee TerminationCosts Facility ConsolidationCosts Other Cash Costs(Recoveries), Net Non-Cash Asset Write-downs Total Special ChargesFood and Beverage$2.6 $— $(0.3) $0.7 $3.0Power and Energy8.0 0.5 — 0.9 9.4Industrial1.4 0.5 — 0.1 2.0Other1.5 — 0.1 — 1.6Total$13.5 $1.0 $(0.2) $1.7 $16.0Food and Beverage—Charges for 2013 related primarily to severance and other costs associated with the operational realignment of the segment'sreporting structure which resulted in the termination of 43 employees. Charges for 2013 also included asset impairment charges of $0.7 related to the exit offacilities in Denmark and the U.K.Power and Energy—Charges for 2013 related primarily to severance and other costs associated with restructuring initiatives at various locations inEurope and the U.S. These actions were taken primarily to reduce the cost base of Clyde Union, as we continued to integrate the business into the segment.These activities resulted in the termination of 416 employees. Charges for 2013 also included asset impairment charges of $0.9 related to the exit of a ClydeUnion facility in the U.S.Industrial—Charges for 2013 related primarily to severance and other costs associated with restructuring initiatives at various locations in Europeand Asia Pacific, as well as the closure of a facility in the U.S. These activities resulted in the termination of 30 employees.Other—Charges for 2013 related primarily to severance costs incurred in connection with the consolidation of certain overhead support functionsthat were dedicated to the Company's operations and an allocation of special charges associated with SPX's corporate functions and activities. See Note 1 fora discussion of the methodology used to allocate corporate-related costs prior to the Spin-Off.The following is an analysis of our restructuring liabilities for the years ended December 31, 2015, 2014 and 2013: December 31, 2015 2014 2013Balance at beginning of year$9.2 $10.1 $10.4Special charges (1)41.0 12.7 14.3Utilization — cash(14.3) (13.6) (14.4)Currency translation adjustment and other(3.0) — (0.2)Balance at end of year$32.9 $9.2 $10.1(1)The years ended December 31, 2015, 2014 and 2013 excluded $1.6, $1.5 and $1.7, respectively, of asset impairment and non-cash charges allocated from SPX thatimpacted special charges but not the restructuring liabilities.(6) INVENTORIES, NETInventories at December 31, 2015 and 2014 comprised the following: December 31, 2015 2014Finished goods$87.5 $98.2Work in process88.8 99.1Raw materials and purchased parts135.2 140.5Total FIFO cost311.5 337.8Excess of FIFO cost over LIFO inventory value(6.3) (7.8)Total inventories$305.2 $330.056 SPX FLOW, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)(in millions, except share data)Inventories include material, labor and factory overhead costs and are reduced, when necessary, to estimated net realizable values. Certain domesticinventories are valued using the last-in, first-out (“LIFO”) method. These inventories were approximately 5% and 6% of total inventory at December 31, 2015and 2014, respectively. Other inventories are valued using the first-in, first-out (“FIFO”) method.(7) GOODWILL AND OTHER INTANGIBLE ASSETSGoodwillThe changes in the carrying amount of goodwill, by reportable segment for the year ended December 31, 2015, were as follows: December 31, 2014 Goodwill Resulting fromBusiness Combinations Impairments Foreign CurrencyTranslationand Other December 31, 2015Food and Beverage$293.7 $— $— $(23.8) $269.9Power and Energy562.9 — — (24.0) 538.9Industrial(1)224.4 — — (9.8) 214.6Total$1,081.0 $— $— $(57.6) $1,023.4 (1) The carrying amount of goodwill included $67.7 of accumulated impairments as of December 31, 2015 and 2014.The changes in the carrying amount of goodwill, by reportable segment for the year ended December 31, 2014, were as follows: December 31, 2013 Goodwill Resulting fromBusiness Combinations Impairments Foreign CurrencyTranslationand Other December 31, 2014Food and Beverage$326.1 $— $— $(32.4) $293.7Power and Energy595.0 — — (32.1) 562.9Industrial(1)243.9 — — (19.5) 224.4Total$1,165.0 $— $— $(84.0) $1,081.0 (1) The carrying amount of goodwill included $67.7 of accumulated impairments as of December 31, 2014 and 2013.Consistent with our accounting policy stated in Note 1, we performed our annual goodwill impairment testing as of the first day of our fiscal fourthquarter of 2015, which indicated the estimated fair value of our Power and Energy reporting unit exceeded its carrying value by approximately 10%. Theestimated fair value of each of our other reporting units significantly exceeded its respective book value.Over the course of the fourth quarter, global oil prices continued to decline, resulting in delayed customer order patterns. Based on these slowerorder rates at the end of the fourth quarter, we lowered the 2016 forecasted revenue and profitability of our Power and Energy segment. The combination ofadverse market conditions, lower order trends, and resultant impact to our 2016 forecast subsequent to our annual goodwill impairment test led managementto conclude an interim impairment test of our Power and Energy reporting unit was necessary as of December 31, 2015. The results of our interim goodwill impairment test indicated the estimated fair value of the Power and Energy reporting unit exceeded its carryingvalue by approximately 3%, while the carrying value of the Power and Energy segment goodwill was $538.9. Key assumptions included in our analysis werethe following:•Fourth quarter 2015 order trends remain flat for the first half of 2016, with modest recovery in the second half of 2016.•Targeted cost savings are executable in 2016, with resulting cash savings beginning before the end of 2016.•A discount rate of 11% was applied to determine our income method fair values.57 SPX FLOW, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)(in millions, except share data)•Current and forward EBITDA multiples remain consistent with oil and gas industry transactions observed over the prior twelve months.A change in any of the assumptions used in testing Power and Energy's goodwill for impairment (e.g., projected revenue and profit growth rates,discount rate, expected control premium, etc.) could result in Power and Energy's estimated fair value being less than the carrying value of its net assets. Forexample, a one-hundred basis point increase in the discount rate used in determining Power and Energy's discounted cash flows would result in Power andEnergy's fair value being approximately $50 lower than the carrying value of its net assets.Adverse changes to or a failure to achieve these business plans, further deterioration of macroeconomic conditions including oil remaining athistorical lows into the second half of 2016, and/or significant declines in industry multiples could result in a future impairment.Other Intangibles, NetIdentifiable intangible assets were as follows: December 31, 2015 December 31, 2014 GrossCarryingValue AccumulatedAmortization Net CarryingValue Gross CarryingValue AccumulatedAmortization Net CarryingValueIntangible assets with determinable lives: Customer relationships$344.0 $(94.1) $249.9 $363.2 $(83.5) $279.7Technology122.1 (38.0) 84.1 141.7 (36.3) 105.4Patents6.7 (4.6) 2.1 6.8 (4.3) 2.5Other13.0 (10.3) 2.7 14.4 (10.8) 3.6 485.8 (147.0) 338.8 526.1 (134.9) 391.2Trademarks with indefinite lives240.6 — 240.6 268.1 — 268.1Total$726.4 $(147.0) $579.4 $794.2 $(134.9) $659.3Amortization expense was $23.4, $26.1 and $27.2 for the years ended December 31, 2015, 2014 and 2013, respectively. Estimated amortizationexpense related to these intangible assets is $22.8 in 2016, 2017, 2018, 2019, and 2020.At December 31, 2015, the net carrying value of intangible assets with determinable lives consisted of the following by reportable segment: $241.7in Power and Energy, $59.5 in Food and Beverage, and $37.6 in Industrial. Trademarks with indefinite lives consisted of the following by reportablesegment: $105.9 in Food and Beverage, $74.0 in Power and Energy, and $60.7 in Industrial.During 2015, we recorded an impairment charge of $15.0 related to trademarks of a business within our Power and Energy reportable segmentprimarily resulting from the impact of lower oil prices on the purchasing patterns of our customers in the oil and gas markets. During the third quarter of 2015,sequential orders in our Power and Energy segment declined nearly 20%, which reduced our estimates of future revenues. In the fourth quarter of 2015, werecorded an impairment charge of $7.7 related to certain technology assets and trademarks associated with a business in our Food and Beverage reportablesegment. We estimated the fair value of our trademarks by applying estimated royalty rates to projected revenues, with the resulting cash flows discounted ata rate of return that reflects current market conditions. We determined the impairment for technology assets by comparing the future discounted cash flowsassociated with the technology assets to their carrying values. Other changes in the gross carrying values of trademarks and other identifiable intangibleassets during 2015 relate to foreign currency translation.During 2014, we recorded impairment charges of $7.3 and $4.4 related to the trademarks of certain businesses within our Power and Energy andIndustrial reportable segments, respectively.During 2013, we recorded impairment charges of $3.4 and $1.3 related to the trademarks of certain businesses within our Power and Energy andFood and Beverage reportable segments, respectively.58 SPX FLOW, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)(in millions, except share data)(8) EMPLOYEE BENEFIT PLANSDefined Benefit PlansOverview—SPX FLOW sponsors a number of defined benefit pension plans and a postretirement plan. In addition, SPX sponsors defined benefitpension 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 inthe fourth quarter of each year, unless earlier remeasurement is required. The remaining components of pension and postretirement expense, primarily serviceand interest costs and expected return on plan assets, are recorded on a quarterly basis.Pension and postretirement expense includes net periodic benefit expense associated with defined benefit pension and postretirement plans wesponsor, as well as an allocation of a portion of the net periodic benefit expense associated with the plans sponsored by SPX in the periods prior to the Spin-Off.Plans Sponsored by SPX FLOW—We sponsor defined benefit pension plans that cover certain employees in foreign countries, principally inEurope, and we assumed certain domestic nonqualified pension and postretirement obligations from SPX and formed a new domestic nonqualified pensionplan in connection with the Spin-Off. The formation of the new domestic nonqualified pension plan resulted in the remeasurement of such obligations as ofSeptember 26, 2015 which resulted in recognition of an actuarial loss of $7.4 during 2015, recorded as a component of “Selling, general and administrative”expense in the accompanying consolidated and combined statements of operations.Plans Sponsored by SPX—Certain of the Company’s U.S. and U.K. salaried and hourly paid employees participate in defined benefit pension plansand certain U.S. salaried and hourly paid employees participate in other postretirement benefit plans, such as health and life insurance plans, that aresponsored by SPX. Subsequent to the Spin-Off, SPX remained the sponsor of these plans. As such, liabilities associated with these plans have not beenreflected in our consolidated and combined balance sheets. Our consolidated and combined statements of operations include expense allocations related tothese plans for participants who are, or were, employees of the Company, as well as an allocation of expenses for SPX corporate personnel. The amount of netperiodic benefit cost allocated to the Company related to the plans sponsored by SPX was $1.2, $22.8 and $3.0 for the years ended December 31, 2015, 2014and 2013, respectively, and is reflected within "Selling, general and administrative" expense and, to a lesser extent, "Cost of products sold," in theconsolidated and combined statements of operations. See Note 1 for a discussion of the methodology used to allocate corporate-related costs prior to theSpin-Off.Clyde Union—Upon the acquisition of Clyde Union in December 2011, we assumed participation in a multiemployer benefit plan under the terms ofa collective-bargaining agreement that covers Clyde Union’s domestic union-represented employees. The risks of participating in these multiemployer plansare different from single-employer plans in the following respects:•Assets contributed to the multiemployer plan by us may be used to provide benefits to employees of other participating employers;•If a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the remaining participatingemployers; and•If we choose to stop participating in the multiemployer plan, we may be required to pay an amount based on the underfunded status of the plan,referred to as a withdrawal liability.We participate in the following multiemployer benefit plan:Pension Fund EIN Pension PlanNumber PensionProtection ActZone Status -2015 FinancialImprovementPlan/RehabilitationPlan Status Pending 2015 Contributions 2014 Contributions SurchargeImposed Expiration Date ofCollective BargainingAgreementIAM 51-6031295-002 Green No $— $0.1 No August 10, 2017The contributions made by Clyde Union during 2015 and 2014 were not more than 5% of the total contributions made to the IAM National PensionFund, National Pension Plan (‘‘IAM’’). In 2011, the IAM began applying an election for funding relief which allows the IAM to amortize the investmentlosses incurred for the plan year ended December 31, 2008 over a period59 SPX FLOW, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)(in millions, except share data)of up to 29 years (as opposed to 15 years that would otherwise have been required). Furthermore, in accordance with the election, the current asset valuationmethod has been updated to recognize the investment losses incurred during the 2008 plan year over a ten-year period as opposed to the previous period offive years.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, and periodic pension and postretirement benefit expense.Plan assets—Our investment strategy is based on the protection and long-term growth of principal while mitigating overall investment risk. Ourforeign defined benefit pension plans’ assets, with fair values of $4.2 and $4.1 at December 31, 2015 and 2014, respectively, are invested in insurancecontracts and classified as Level 3 assets in the fair value hierarchy. During 2015 and 2014, there were no transfers between levels of the fair value hierarchyfor any of our plans, and no shares of SPX FLOW or SPX common stock were held by our defined benefit pension plans as of December 31, 2015 and 2014.Our domestic nonqualified pension and postretirement benefit plans are unfunded and 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 insteadare funded by us on a pay as you go basis in the form of direct benefit payments. In 2015, we made contributions of $0.2 to our foreign plans that are funded.In addition, we made direct benefit payments of $2.3 related to our foreign plans that are unfunded. Our domestic nonqualified pension and postretirementplans are funded by us on a pay as you go basis. There were no direct benefit payments related to these plans in 2015.In 2016, we expect to make minimum required funding contributions of $0.2 and direct benefit payments of $2.2 to our foreign pension plans anddirect benefit payments of $66.0 related to our domestic nonqualified pension and postretirement benefit plans. The direct benefit payments to our domesticnonqualified pension and postretirement benefit plans consist primarily of expected pension payments to certain former officers of the Company.Estimated Future Benefit Payments—Following is a summary, as of December 31, 2015, of the estimated future benefit payments for our foreign anddomestic pension plans and our domestic postretirement plan in each of the next five fiscal years and in the aggregate for five fiscal years thereafter. Benefitpayments are paid from plan assets or directly by us for our unfunded plans. Foreign Pension Benefits Domestic Pension Benefits Domestic Postretirement Benefits2016$2.2 $65.9 $0.120172.6 — 0.120182.7 — 0.120192.6 — 0.120202.8 6.5 0.1Subsequent five years12.6 — 0.6The expected future benefit payments for our plans are estimated based on the same assumptions used at December 31, 2015 to measure ourobligations and include benefits attributable to estimated future employee service, to the extent applicable.60 SPX FLOW, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)(in millions, except share data)Obligations and Funded Status—The funded status of our pension plans is dependent upon many factors, including returns on invested assets andthe level of market interest rates. The following tables show the foreign pension plans’ funded status and amounts recognized in our consolidated andcombined balance sheets: Foreign Pension Plans 2015 2014Change in projected benefit obligation: Projected benefit obligation - beginning of year$59.4 $59.3Service cost1.2 1.2Interest cost1.3 1.7Actuarial (gains) losses(1.8) 6.7Plan amendment— (0.2)Benefits paid(2.4) (2.9)Foreign exchange and other(6.1) (6.4)Projected benefit obligation - end of year$51.6 $59.4 Foreign Pension Plans 2015 2014Change in plan assets: Fair value of plan assets - beginning of year$4.1 $4.2Actual return on plan assets0.3 0.2Contributions (employer and employee)0.2 0.3Benefits paid(0.1) (0.1)Foreign exchange and other(0.3) (0.5)Fair value of plan assets - end of year$4.2 $4.1Funded status at year-end(47.4) (55.3)Amounts recognized in the consolidated and combined balance sheets consist of: Accrued expenses(2.0) (2.1)Other long-term liabilities(45.4) (53.2)Net amount recognized$(47.4) $(55.3)Amount recognized in accumulated other comprehensive loss (pre-tax) consists of net prior service credits$— $(0.1)The funded status of the domestic nonqualified pension obligations we assumed from SPX in connection with the Spin-Off was ($73.9) as ofDecember 31, 2015, with $64.9 and $9.0 of liabilities associated with this nonqualified, unfunded pension plan reflected within “Accrued expenses” and“Other long-term liabilities”, respectively, in the accompanying consolidated balance sheet as of December 31, 2015. The obligations of this plan totaled$72.2 as of September 26, 2015, and increased by $0.8, $0.5 and $0.9 due to service cost, interest cost, and actuarial losses recognized, respectively, duringthe fourth quarter of 2015, partially offset by recognition of a curtailment gain of $0.5 related to the termination of a former participant in this plan during thefourth quarter of 2015.The funded status and accumulated benefit obligation of our domestic postretirement benefit plans were ($3.2) and ($5.8) at December 31, 2015 and2014, respectively, with $0.1 and $0.4 recognized in "Accrued expenses," respectively, and $3.1 and $5.4 recognized in "Other long-term liabilities,"respectively, in the accompanying consolidated and combined balance sheets at those dates.The accumulated benefit obligation for each foreign pension plan exceeded the fair value of its plan assets at December 31, 2015 and 2014. Theaccumulated benefit obligation for all foreign pension plans was $48.3 and $56.2 at December 31, 2015 and 2014, respectively. The accumulated benefitobligation for the domestic nonqualified pension plan was $72.5 at December 31, 2015.61 SPX FLOW, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)(in millions, except share data)Components of Net Periodic Pension and Postretirement Benefit Expense—Net periodic pension benefit expense for our foreign pension plansincluded the following components: Year ended December 31, 2015 2014 2013Service cost$1.2 $1.2 $1.1Interest cost1.3 1.7 1.8Expected return on plan assets(0.1) (0.2) (0.1)Amortization of unrecognized prior service costs (credits)(0.1) 0.1 —Recognized net actuarial (gains) losses(1)(2.0) 6.7 2.4Total net periodic pension benefit expense$0.3 $9.5 $5.2 (1) Consists of reported actuarial (gains) losses and the difference between actual and expected returns on plan assets.The net periodic pension benefit expense for the domestic nonqualified pension plan we assumed in connection with the Spin-Off was $9.1 for 2015,comprised of service cost of $0.8, interest cost of $0.5, and recognized net actuarial losses of $8.3, partially offset by recognition of a curtailment gain of $0.5related to the termination of a former participant of this plan during the fourth quarter of 2015. Net periodic postretirement benefit (income) expense for ourdomestic postretirement plans was $0.2, ($0.1) and ($0.1) for the years ended December 31, 2015, 2014 and 2013, respectively.Assumptions—Actuarial assumptions used in accounting for our foreign pension plans and, for the domestic nonqualified pension plan we assumedfrom SPX for the period since the Spin-Off, were as follows: Year ended December 31, Foreign Pension Plans Domestic PensionPlan 2015 2014 2013 2015Weighted-average actuarial assumptions used in determining net periodic pension expense: Discount rate2.20% 3.16% 3.38% 2.86%Rate of increase in compensation levels2.88% 2.87% 2.73% 3.75%Expected long-term rate of return on assets2.29% 2.88% 2.97% N/AWeighted-average actuarial assumptions used in determining year-end benefit obligations: Discount rate2.09% 2.20% 3.16% 3.01%Rate of increase in compensation levels2.85% 2.88% 2.87% 2.50%We review pension assumptions annually. Pension income or expense 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 thefunded status is determined using assumptions as of the end of the year. We determined assumptions and established them at the respective balance sheet dateusing the following principles: (i) the expected long-term rate of return on plan assets is established based on forward looking long-term expectations of assetreturns over the expected period to fund participant benefits based on the target investment mix of our plans; (ii) the discount rate is determined by matchingthe 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 orhigher) fixed income debt instruments as of the measurement date; and (iii) the rate of increase in compensation levels is established based on ourexpectations of current and foreseeable future increases in compensation. In addition, we consider advice from independent actuaries.62 SPX FLOW, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)(in millions, except share data)Actuarial assumptions used in accounting for our domestic postretirement plans were as follows: Year ended December 31, 2015 2014 2013Assumed health care cost trend rates: Health care cost trend rate for next year6.60% 6.50% 6.50%Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)5.00% 5.00% 5.00%Year that the rate reaches the ultimate trend rate2024 2019 2017Discount rate used in determining net periodic postretirement benefit expense3.53% 3.78% 3.02%Discount rate used in determining year-end postretirement benefit obligation4.66% 3.87% 3.78%The accumulated postretirement benefit obligation was determined using the terms and conditions of our plans, together with relevant actuarialassumptions and health care cost trend rates. It is our policy to review the postretirement assumptions annually. The assumptions are determined by us and areestablished based on our prior experience and our expectations that future rates will decline. In addition, we consider advice from independent actuaries.Defined Contribution Retirement PlanIn connection with the Spin-Off, we established a defined contribution retirement plan (the ‘‘DC 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 DC Plan, such employees may contribute upto 50% of their compensation into the DC Plan and the Company matches a portion of participating employees’ contributions. The Company’s matchingcontributions are primarily made in newly issued shares of SPX FLOW common stock and are issued at the prevailing market price. The matchingcontributions vest with the employee immediately upon the date of the match and there are no restrictions on the resale of SPX FLOW common stock held byemployees. Amounts contributed under the DC Plan for the period subsequent to the Spin-Off were $1.7.Prior to the Spin-Off, eligible employees could participate in SPX's defined contribution retirement plan pursuant to the above guidelines. Theamount of cost directly charged to the Company related to matching contributions under the DC Plan was $4.7, $5.9 and $6.0 for the years endedDecember 31, 2015, 2014 and 2013, respectively. In addition, the Company was allocated $1.1, $1.2 and $0.9 of cost for matching contributions for SPXcorporate personnel for the years ended December 31, 2015, 2014 and 2013, respectively.(9) INCOME TAXESFor purposes of our consolidated and combined financial statements, income taxes have been calculated as if we filed income tax returns on a stand-alone basis for periods prior to the Spin-Off. The Company’s U.S. operations and certain of its non-U.S. operations historically were included in the taxreturns of SPX or its subsidiaries that were not part of the Spin-Off. Therefore, the Company’s tax results from periods prior to the Spin-Off, as presented in theconsolidated and combined financial statements, may not be reflective of the results that the Company will generate in the future. In jurisdictions where theCompany was included in the tax returns filed by SPX or its subsidiaries that were not part of the Spin-Off, any income taxes payable resulting from therelated income tax provision were reflected in the combined balance sheet as of December 31, 2014 and through the date of the Spin-Off within ‘‘Formerparent company investment.’’63 SPX FLOW, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)(in millions, except share data)Income before income taxes and the provision for (benefit from) income taxes consisted of the following: Year ended December 31, 2015 2014 2013Income before income taxes: United States$110.0 $95.1 $109.7Foreign27.2 138.3 81.6 $137.2 $233.4 $191.3Provision for (benefit from) income taxes: Current: United States$55.5 $65.0 $33.1Foreign19.7 10.1 36.0Total current75.2 75.1 69.1Deferred and other: United States(13.1) (13.1) 4.6Foreign(12.3) 35.5 (14.9)Total deferred and other(25.4) 22.4 (10.3)Total provision$49.8 $97.5 $58.8The 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, 2015 2014 2013Tax at U.S. federal statutory rate35.0 % 35.0 % 35.0 %State and local taxes, net of U.S. federal benefit1.7 1.4 1.8U.S. credits and exemptions(1.6) (1.5) (1.9)Foreign earnings taxed at lower rates(5.5) (6.5) (10.0)Adjustments to uncertain tax positions(1.7) (2.3) 2.5Changes in valuation allowance3.8 9.6 3.6Tax on repatriation of foreign earnings7.3 6.8 —Other(2.7) (0.7) (0.3) 36.3 % 41.8 % 30.7 %64 SPX FLOW, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)(in millions, except share data)Significant components of our deferred tax assets and liabilities were as follows: As of December 31, 2015 2014Deferred tax assets: Net operating loss and credit carryforwards$199.2 $206.5Pension, other postretirement and postemployment benefits36.8 10.6Payroll and compensation36.2 18.5Working capital accruals23.3 25.9Basis difference in assets— 17.2Other42.2 17.9Total deferred tax assets337.7 296.6Valuation allowance(70.3) (110.9)Net deferred tax assets267.4 185.7Deferred tax liabilities: Accelerated depreciation20.0 —Intangible assets recorded in acquisitions173.6 197.9Basis difference in affiliates176.0 142.3Other2.7 6.2Total deferred tax liabilities372.3 346.4 $(104.9) $(160.7)General MattersDeferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reportingpurposes and the amounts used for income tax purposes. We periodically assess deferred tax assets to determine if they will likely be realized and theadequacy of deferred tax liabilities, incorporating the results of local, state, federal and foreign tax audits in our estimates and judgments.At December 31, 2015, we had the following tax loss carryforwards available: tax loss carryforwards of various foreign jurisdictions ofapproximately $732.0 and state tax loss carryforwards of approximately $27.7. Of these amounts, approximately $4.3 expires in 2016 and $55.1 expires atvarious times between 2017 and 2034. The remaining carryforwards have no expiration date.Realization of deferred tax assets, including those associated with net operating loss and credit carryforwards, is dependent upon generatingsufficient taxable income in the appropriate tax jurisdiction. We believe that it is more likely than not that we may not realize the benefit of certain of thesedeferred tax assets and, accordingly, have established a valuation allowance against certain of these deferred tax assets. Although realization is not assuredfor 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 taxplanning strategies. However, deferred tax assets could be reduced in the near term if our estimates of taxable income are significantly reduced or taxplanning strategies are no longer viable. The valuation allowance decreased by $40.6 in 2015 and increased by $6.0 in 2014. Of the net changes in 2015 and2014, $5.2 and $22.3 were recognized as an increase in tax expense. The decrease in the valuation allowance during 2015 was primarily due to the sale ofcertain legal entities and the impact of a stronger U.S. dollar on foreign currency-denominated balances, which exceeded the increase in tax expense. Theincrease in the valuation allowance during 2014 was largely offset by a decrease to the valuation allowance resulting from the impact of a stronger U.S. dollaron foreign currency-denominated balances.The amount of income tax that we pay annually is dependent on various factors, including the timing of certain deductions. These deductions canvary from year to year and, consequently, the amount of income taxes paid in future years will vary from the amounts paid in prior years.Undistributed Foreign EarningsIn general, it is our practice and intention to reinvest the earnings of our non-U.S. subsidiaries in those operations. However, during the fourthquarter of 2015, we elected to repatriate sufficient foreign source income for U.S. tax purposes to allow us to utilize our 2015 foreign tax credits and providedU.S. taxes of $4.2 related to the dividend. In anticipation of the65 SPX FLOW, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)(in millions, except share data)Spin-Off, we elected, during the fourth quarter of 2014, to repatriate certain earnings of our non-U.S. subsidiaries and, thus, provided for U.S. and foreignwithholding taxes of $18.6 on such foreign dividends and undistributed earnings that were no longer considered to be indefinitely reinvested. In addition,there are discrete amounts of foreign earnings (approximately $56.2) that we plan to repatriate in the future.As of December 31, 2015, we had not recorded a provision for U.S. or foreign withholding taxes on approximately $822.1 of the excess of theamount for financial reporting over the tax basis of investments in foreign subsidiaries that are essentially permanent in duration. Generally, such amountsbecome subject to U.S. taxation upon the remittance of dividends and under certain other circumstances. It is not practicable to estimate the amount of adeferred tax liability related to the undistributed earnings of these foreign subsidiaries, in the event that these earnings are no longer considered to beindefinitely reinvested, due to the hypothetical nature of the calculation.Unrecognized Tax BenefitsAs of December 31, 2015, we had gross unrecognized tax benefits of $25.4 (net unrecognized tax benefits of $12.4), of which $12.4, if recognized,would impact our effective tax rate. Similarly, at December 31, 2014 and 2013, we had gross unrecognized tax benefits of $27.3 (net unrecognized taxbenefits of $14.5) and $31.5 (net unrecognized benefits of $17.4), respectively.We classify interest and penalties related to unrecognized tax benefits as a component of our income tax provision. As of December 31, 2015, grossaccrued interest totaled $1.6 (net accrued interest of $1.5), while the related amounts as of December 31, 2014 and 2013 were $1.8 (net accrued interest of$1.6) and $2.4 (net accrued interest of $2.0), respectively. Our income tax provision for the years ended December 31, 2015, 2014 and 2013 included grossinterest (income) expense of $(0.1), $0.7 and $0.9, respectively. There were no significant penalties recorded during any year presented.Based on the outcome of certain examinations or as a result of the expiration of statutes of limitations for certain jurisdictions, we believe that withinthe next 12 months it is reasonably possible that our previously unrecognized tax benefits could decrease by $1.0 to $3.0. The previously unrecognized taxbenefits relate to a variety of tax issues, including transfer pricing and non-U.S. income tax matters.The aggregate changes in the balance of unrecognized tax benefits for the years ended December 31, 2015, 2014 and 2013 were as follows: Year ended December 31, 2015 2014 2013Unrecognized tax benefit - opening balance$27.3 $31.5 $26.9Gross increases - tax positions in prior period3.6 7.3 0.1Gross decreases - tax positions in prior period(5.9) (8.2) (1.4)Gross increases - tax positions in current period5.3 4.6 6.9Settlements— (0.7) (0.2)Lapse of statute of limitations(4.3) (6.8) (0.9)Change due to foreign currency exchange rates(0.6) (0.4) 0.1Unrecognized tax benefit - ending balance$25.4 $27.3 $31.5The unrecognized tax benefits described above represent amounts that were included in tax returns filed by the Company. Historically, a portion ofthe Company's operations were included in tax returns filed by SPX or its subsidiaries that were not part of the Spin-Off. As a result, some uncertain taxpositions related to the Company's operations resulted in unrecognized tax benefits that are potential obligations of SPX or its subsidiaries that were part ofthe Spin-Off. Because activities that gave rise to these unrecognized tax benefits related to the Company's operations, the impact of these items was recordedto "Income tax provision" within our consolidated and combined statements of operations, with the offset recorded to "Former parent company investment"within our combined balance sheets prior to the Spin-Off date, which have been reclassified to "Paid-in capital" as of December 31, 2015.In addition, some of the Company's tax returns have included the operations of SPX subsidiaries that were not part of the Spin-Off. In certain of thesecases, these subsidiaries' activities gave rise to unrecognized tax benefits for which the Company could be potentially liable. When required under theIncome Taxes Topic of the Codification, we have recorded a liability for these uncertain tax positions within our consolidated and combined balance sheets.However, since the potential obligations66 SPX FLOW, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)(in millions, except share data)were the result of activities associated with operations that were not part of the Spin-Off, we have not reflected any related amounts within our "Income taxprovision," but have instead recorded the amounts directly to "Former parent company investment" within our combined balance sheets prior to the Spin-Offdate, which have been reclassified to "Paid-in capital" as of December 31, 2015.Other Tax MattersDuring 2015, we recorded an income tax provision of $49.8 on $137.2 of pre-tax income, resulting in an effective tax rate of 36.3%. The effectivetax rate for 2015 was impacted by tax charges of $11.7 related to dividends from foreign subsidiaries, partially offset by tax benefits of (i) $5.1 related to netchanges in uncertain tax positions, (ii) $2.8 related to tax rate decreases in Italy and the U.K. and (iii) $2.0 related to foreign exchange losses recognized forincome tax purposes with respect to a foreign branch.During 2014, our income tax provision was impacted by the following income tax charges: (i) $18.7 related to increases in valuation allowancesrecorded against certain foreign deferred income tax assets, and (ii) $18.6 related to the repatriation of certain earnings of our non-U.S. subsidiaries. Theimpact of these items was partially offset by $3.8 of tax benefits related to various audit settlements and statute expirations.During 2013, our income tax provision was impacted by $3.9 related to net increases in valuation allowances recorded against certain foreigndeferred income tax assets, partially offset by the following benefits: (i) $2.0 related to various audit settlements and statute expirations, and (ii) $0.7associated with the Research and Experimentation Credit generated in 2012.We review our income tax positions on a continuous basis and record a provision for potential uncertain positions when we determine that anuncertain position meets the criteria of the Income Taxes Topic of the Codification. As events change and resolutions occur, adjustments are made toamounts previously provided, such as in the case of audit settlements with taxing authorities.In connection with the Spin-Off, we and SPX entered into a Tax Matters Agreement which, among other matters, addresses the allocation of certaintax adjustments that might arise upon examination of the 2013, 2014 and the pre-Spin-Off portion of the 2015 federal income tax returns of SPX. None ofthose returns are currently under examination, and we believe any contingencies have been adequately provided for.State income tax returns generally are subject to examination for a period of three to five years after filing the respective tax returns. The impact onsuch tax returns of any federal changes remains subject to examination by various states for a period of up to one year after formal notification to the states.We have various state income tax returns in the process of examination or administrative appeal. We believe any uncertain tax positions related to theseexaminations have been adequately provided for.We have various non-U.S. income tax returns under examination. The most significant of these are in Denmark for the 2006 and 2007 tax years andin Germany for the 2010 through 2013 tax years. We believe that any uncertain tax positions related to these examinations have been adequately providedfor.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 thequarter 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 thefinal 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 atthis time.67 SPX FLOW, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)(in millions, except share data)(10) INDEBTEDNESSDebt (other than related party notes payable, which are discussed in Note 15) at December 31, 2015 and 2014 was comprised of the following: December 31, 2015 2014Term loan(1)$400.0 $—6.875% senior notes, due in August 2017600.0 —Other indebtedness(2)37.3 18.0Total debt1,037.3 18.0Less: short-term debt28.0 6.0Less: current maturities of long-term debt10.3 1.7Total long-term debt$999.0 $10.3(1)The term loan of $400.0 is repayable in quarterly installments of 5.0% annually, beginning with our third quarter of 2016, with the remaining balance repayable in full onSeptember 24, 2020.(2)Primarily includes capital lease obligations of $9.3 and $12.0 and balances under a purchase card program of $23.6 and $0.0 as of December 31, 2015 and 2014,respectively. The purchase card program allows for payment beyond the normal payment terms for goods and services acquired under the program. As this arrangementextends the payment of these purchases beyond their normal payment terms through third-party lending institutions, we have classified these amounts as short-term debt.Maturities of long-term debt payable during each of the five years subsequent to December 31, 2015 are $10.3, $620.6, $24.4, $20.4 and $330.4,respectively.Senior Credit FacilitiesOn September 1, 2015, we entered into senior credit facilities with a syndicate of lenders that provide for committed senior secured financing in theaggregate amount of $1.35 billion, consisting of the following, each with a final maturity of September 24, 2020:•A term loan facility in an aggregate principal amount of $400.0;•A domestic revolving credit facility, available for loans and letters of credit, in an aggregate principal amount up to $250.0;•A global revolving credit facility, available for loans (and performance letters of credit and guarantees up to the equivalent of $100.0) in Euros,Great Britain Pound and other currencies, in an aggregate principal amount up to the equivalent of $200.0;•A participation multi-currency foreign credit instrument facility, available for performance letters of credit and guarantees, in an aggregateprincipal amount up to the equivalent of $250.0; and•A bilateral multi-currency foreign credit instrument facility, available for performance letters of credit and guarantees, in an aggregate principalamount up to the equivalent of $250.0.We also may seek additional commitments, without consent from the existing lenders, to add an incremental term loan facility and/or increase thecommitments in respect of the domestic revolving credit facility, the global revolving credit facility, the participation foreign credit instrument facility,and/or the bilateral foreign credit instrument facility by an aggregate principal amount not to exceed (x) $500.0 plus (y) an unlimited amount so long as,immediately after giving effect thereto, our Consolidated Senior Secured Leverage Ratio (as defined in the credit agreement generally as the ratio ofconsolidated total debt (excluding the face amount of undrawn letters of credit, bank undertakings, or analogous instruments and net of cash and cashequivalents in excess of $50.0) at the date of determination secured by liens to consolidated adjusted EBITDA, as defined in the credit agreement, for the fourfiscal quarters ended most recently before such date) does not exceed 2.75 to 1.00 plus (z) an amount equal to all voluntary prepayments of the term loanfacility and voluntary prepayments accompanied by permanent commitment reductions of the revolving credit facilities and foreign credit instrumentfacilities.We are the borrower under all of the senior credit facilities, and certain of our foreign subsidiaries are (and we may designate other foreignsubsidiaries to be) borrowers under the global revolving credit facility and the foreign credit instrument68 SPX FLOW, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)(in millions, except share data)facilities. All borrowings and other extensions of credit under our senior credit facilities are subject to the satisfaction of customary conditions, includingabsence of defaults and accuracy in material respects of representations and warranties.The interest rates applicable to loans under our senior credit facilities are, at our option, equal to either (x) an alternate base rate (the highest of (a)the federal funds effective rate plus 0.5%, (b) the prime rate of Bank of America, N.A., and (c) the one-month LIBOR rate plus 1.0%) or (y) a reserve-adjustedLIBOR rate for dollars (Eurodollar) plus, in each case, an applicable margin percentage, which varies based on our Consolidated Leverage Ratio (as definedin the credit agreement generally as the ratio of consolidated total debt (excluding the face amount of undrawn letters of credit, bank undertakings oranalogous instruments and net of cash and cash equivalents in excess of $50.0) at the date of determination to consolidated adjusted EBITDA, as defined inthe credit agreement, for the four fiscal quarters ended most recently before such date). We may elect interest periods of one, two, three or six months (and, ifconsented to by all relevant lenders, nine or twelve months) for Eurodollar borrowings. The per annum fees charged and the interest rate margins applicableto Eurodollar and alternate base rate loans are as follows:Consolidated Leverage RatioDomesticRevolvingCommitment Fee Global RevolvingCommitment Fee Letter ofCredit Fee Foreign CreditCommitment Fee Foreign CreditInstrument Fee LIBORLoans ABR LoansGreater than or equal to 3.00 to 1.000.350% 0.350% 2.000% 0.350% 1.250% 2.000% 1.000%Between 2.00 to 1.00 and 3.00 to 1.000.300% 0.300% 1.750% 0.300% 1.000% 1.750% 0.750%Between 1.50 to 1.00 and 2.00 to 1.000.275% 0.275% 1.500% 0.275% 0.875% 1.500% 0.500%Between 1.00 to 1.00 and 1.50 to 1.000.250% 0.250% 1.375% 0.250% 0.800% 1.375% 0.375%Less than 1.00 to 1.000.225% 0.225% 1.250% 0.225% 0.750% 1.250% 0.250%The fees for bilateral foreign credit commitments are as specified above for foreign credit commitments unless otherwise agreed with the bilateralforeign issuing lender. We also pay fronting fees on the outstanding amounts of letters of credit and foreign credit instruments (in the participation facility) atrates of 0.125% per annum and 0.25% per annum, respectively.Our senior credit facilities require mandatory prepayments in amounts equal to the gross proceeds from the sale or other disposition of, includingfrom any casualty to, or governmental taking of, property in excess of specified values (other than in the ordinary course of business and subject to otherexceptions) by the Company or its subsidiary guarantors. Mandatory prepayments are applied to repay, first, amounts outstanding under any term loans and,then, amounts outstanding under the global revolving credit facility and the domestic revolving credit facility (without reducing the commitmentsthereunder). No prepayment is required generally 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 360 days (and if committed to be reinvested, actually reinvested within 180 days after theend of such 360-day period) of the receipt of such proceeds. We may voluntarily prepay loans under our senior credit facilities, in whole or in part, withoutpremium or penalty. Any voluntary prepayment of loans is subject to reimbursement of the lenders’ breakage costs in the case of a prepayment of Eurodollarrate borrowings other than on the last day of the relevant interest period.Indebtedness under our senior credit facilities is guaranteed by:•Each existing and subsequently acquired or organized domestic material subsidiary with specified exceptions; and•The Company with respect to the obligations of our foreign borrower subsidiaries under the global revolving credit facility, the participationforeign credit instrument facility and the bilateral foreign credit instrument facility.Indebtedness under our senior credit facilities is secured by a first priority pledge and security interest in 100% of the capital stock of our domesticsubsidiaries (with certain exceptions) held by the Company or its domestic subsidiary guarantors and 65% of the capital stock of our material first-tier foreignsubsidiaries (with certain exceptions). If our corporate credit rating is less than ‘‘Ba2’’ (or not rated) by Moody’s and less than ‘‘BB’’ (or not rated) by S&P,then the Company and its domestic subsidiary guarantors are required to grant security interests, mortgages and other liens on substantially all their assets. Ifthe Company’s corporate credit rating is ‘‘Baa3’’ or better by Moody’s or ‘‘BBB-’’ or better by S&P and no defaults would exist, then all collateral securitywill be released and the indebtedness under our senior credit facilities will be unsecured.69 SPX FLOW, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)(in millions, except share data)Our senior credit facilities require that we maintain:•A Consolidated Interest Coverage Ratio (as defined in the credit agreement generally as the ratio of consolidated adjusted EBITDA for the fourfiscal quarters ended on such date to consolidated cash interest expense for such period) as of the last day of any fiscal quarter of at least 3.50 to1.00; and•A Consolidated Leverage Ratio, as defined in the credit agreement, as of the last day of any fiscal quarter of not more than 3.25 to 1.00 (or 3.50to 1.00 for the four fiscal quarters after certain permitted acquisitions).Our senior credit facilities also contain covenants that, among other things, restrict our ability to incur additional indebtedness, grant liens, makeinvestments, loans, guarantees, or advances, make restricted junior payments, including dividends, redemptions of capital stock, and voluntary prepaymentsor repurchase of certain other indebtedness, engage in mergers, acquisitions or sales of assets, enter into sale and leaseback transactions, or engage in certaintransactions with affiliates, and otherwise restrict certain corporate activities. Our senior credit facilities contain customary representations, warranties,affirmative covenants and events of default.We are permitted under the senior credit facilities to repurchase our capital stock and pay cash dividends in an unlimited amount if our ConsolidatedLeverage Ratio, as defined in the credit agreement, is (after giving pro forma effect to such payments) less than 2.50 to 1.00. If our Consolidated LeverageRatio is (after giving pro forma effect to such payments) greater than or equal to 2.50 to 1.00, the aggregate amount of such repurchases and dividenddeclarations cannot exceed (a) $100.0 in any fiscal year plus (b) an additional amount for all such repurchases and dividend declarations made afterSeptember 1, 2015 equal to the Available Amount (as defined in the credit agreement as the sum of (i) $300.0 plus (ii) a positive amount equal to 50% ofcumulative Consolidated Net Income (as defined in the credit agreement, generally as consolidated net income subject to certain adjustments solely for thepurposes of determining this basket) during the period from September 1, 2015, to the end of the most recent fiscal quarter preceding the date of suchrepurchase or dividend declaration for which financial statements have been (or were required to be) delivered (or, in case such Consolidated Net Income is adeficit, minus 100% of such deficit) plus or minus (iii) certain other amounts specified in the credit agreement).At December 31, 2015, we had $440.5 of available borrowing capacity under our revolving credit facilities after giving effect to $9.5 reserved foroutstanding letters of credit. In addition, at December 31, 2015, we had $227.7 of available issuance capacity under our foreign credit instrument facilitiesafter giving effect to $272.3 reserved for outstanding letters of credit.The weighted-average interest rate of outstanding borrowings under our senior credit facilities was approximately 2.2% at December 31, 2015.Senior NotesOn September 22, 2015, in anticipation of the completion of the Spin-Off, we entered into a supplemental indenture and issued substitute globalnotes in connection with our substitution for SPX as the obligor of $600.0 aggregate principal amount of 6.875% senior notes. These notes mature in August2017, with interest payable on March 1 and September 1 of each year. The notes are redeemable, in whole or in part, at any time prior to maturity at a priceequal to 100% of the principal amount thereof plus an applicable premium, plus accrued and unpaid interest. If we experience certain types of change ofcontrol transactions, we must offer to repurchase the notes at 101% of the aggregate principal amount of the notes repurchased, plus accrued and unpaidinterest. These notes are unsecured and rank equally with all our existing and future unsubordinated unsecured senior indebtedness, but are effectively juniorto our senior credit facilities. The indenture governing these notes contains covenants that, among other things, limit our ability to incur liens, enter into saleand leaseback transactions and consummate some mergers. Payment of the principal, interest and premium (if any) on the notes is guaranteed on a seniorunsecured basis by our domestic subsidiaries.OtherOn September 22, 2015, we entered into a trade receivables financing arrangement under which we can borrow, on a continuous basis, up to $50.0,as available. The facility contains representations, warranties, covenants and indemnities customary for facilities of this type. The facility does not containany covenants that we view as materially constraining to the activities of our business. This arrangement has a final maturity of September 21, 2018. AtDecember 31, 2015, there were no borrowings outstanding under this facility.At December 31, 2015, in addition to the revolving lines of credit described above, we had approximately $5.5 of letters of credit outstanding underseparate arrangements in China and India.70 SPX FLOW, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)(in millions, except share data)At December 31, 2015, we were in compliance with all covenants of our senior credit facilities and our senior notes.(11) DERIVATIVE FINANCIAL INSTRUMENTSWe manufacture and sell our products in a number of countries and, as a result, are exposed to movements in foreign currency exchange rates. Ourobjective is to preserve the economic value of non-functional currency-denominated cash flows and to minimize the impact of changes as a result of currencyfluctuations. Our principal currency exposures relate to the Euro, Chinese Yuan and Great Britain Pound.From time to time, we enter into forward contracts to manage the exposure on contracts with forecasted transactions denominated in non-functionalcurrencies and to manage the risk of transaction gains and losses associated with assets/liabilities denominated in currencies other than the functionalcurrency of certain subsidiaries ("FX forward contracts"). In addition, some of our contracts contain currency forward embedded derivatives ("FX embeddedderivatives"), because the currency of exchange is not "clearly and closely" related to the functional currency of either party to the transaction. Certain of ourFX 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 AOCL. These changes in fair value are reclassified into earningsas a component of revenues or cost of products sold, as applicable, when the forecasted transaction impacts earnings. In addition, if the forecasted transactionis 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 whichthe transaction is no longer considered probable of occurring. To the extent a previously designated hedging transaction is no longer an effective hedge, anyineffectiveness 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 $44.7 and $84.4 outstanding as of December 31, 2015 and 2014, respectively,with all such contracts scheduled to mature within one year. We also had FX embedded derivatives with an aggregate notional amount of $31.6 and $53.4 atDecember 31, 2015 and 2014, respectively, with scheduled maturities of $30.8 and $0.8 within one and two years, respectively. The unrealized loss, net oftax, recorded in AOCL related to FX forward contracts was less than $0.1 as of December 31, 2015 and 2014. The net gains (losses) recorded in "Other income(expense), net" related to foreign currency gains (losses) totaled $1.1, ($2.6) and ($5.8) for the years ended December 31, 2015, 2014 and 2013, respectively.We enter into arrangements designed to provide the right of setoff in the event of counterparty default or insolvency, and have elected to offset thefair values of our FX forward contracts in our consolidated and combined balance sheets. The gross fair values of our FX forward contracts and FX embeddedderivatives, in aggregate, were $2.0 and $0.5 (gross assets) and $1.5 and $1.1 (gross liabilities) at December 31, 2015 and 2014, 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,and FX forward contracts. These financial instruments, other than trade accounts receivable, are placed with high-quality financial institutions throughout theworld. We periodically evaluate the credit standing of these financial institutions. We maintain cash levels in bank accounts that, at times, may exceed federally-insured limits. We have not experienced, and believe we are not exposedto 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-sheetcredit risk of accounting loss. We anticipate that counterparties will be able to fully satisfy their obligations under the contracts. We do not obtain collateralor 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 are due to selling to customers in a particular industry. Credit risks are mitigated byperforming 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 periodpresented.71 SPX FLOW, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)(in millions, except share data)(12) EQUITY AND STOCK-BASED COMPENSATIONIncome Per SharePrior to the Spin-Off, SPX FLOW had no common shares outstanding. On September 26, 2015, 41.322 SPX FLOW common shares were distributedto SPX shareholders in conjunction with the Spin-Off. For comparative purposes, basic shares outstanding reflect this amount in all periods presented prior tothe Spin-Off. For purposes of computing dilutive shares, unvested SPX FLOW awards at the Spin-Off date were assumed to have been issued and outstandingfrom January 1, 2015. The resulting number of weighted-average dilutive shares has been used in all periods presented prior to the Spin-Off. The followingtable sets forth the number of weighted average shares outstanding used in the computation of basic and diluted income per share: Year ended December 31, 2015 2014 2013Weighted-average shares outstanding, basic40.863 40.809 40.809Dilutive effect of share-based awards0.097 0.123 0.123Weighted-average shares outstanding, dilutive(1)40.960 40.932 40.932(1)For the years ended December 31, 2015, 2014 and 2013, 0.474, 0.479 and 0.479, respectively, of unvested restricted stock shares/units were not included in thecomputation of diluted income per share because required market thresholds for vesting (as discussed below) were not met. For the year ended December 31, 2015, 0.389 ofstock options were not included in the computation of diluted income per share because their exercise price was greater than the average market price of common shares.There were no stock options outstanding during 2014 or 2013.Stock-Based CompensationPrior to the Spin-Off, eligible employees of the Company participated in SPX’s share-based compensation plan pursuant to which they were grantedshare-based awards of SPX stock. SPX’s share-based compensation plan includes awards for restricted stock shares, restricted stock units and stock options.Compensation expense for share-based awards recorded by the Company prior to the Spin-Off includes the expense associated with the employeeshistorically attributable to the Company’s operations, as well as an allocation of stock-based compensation expense for SPX’s corporate employees whoprovided certain centralized support functions.SPX restricted stock shares, SPX restricted stock units, and SPX stock options were granted to eligible employees in accordance with applicableequity compensation plan documents and agreements. Subject to participants' continued employment and other plan terms and conditions, the restrictionslapse and awards generally vest over a period of time, generally one or three years. In some instances, such as death, disability, or retirement, stock may vestconcurrently with or following an employee's termination. A substantial portion of the SPX restricted stock shares and SPX restricted stock unit awardsgranted in 2014 and 2013 vest based on performance thresholds.Eligible employees received target performance awards in 2014 and 2013 in which the employee can earn between 25% and 125% of the targetperformance award in the event the award meets the required vesting criteria. Vesting for the 2014 and 2013 target performance awards is based on SPXshareholder return versus the S&P Composite 1500 Industrials Index over three-year periods ending December 31, 2016 and December 31, 2015,respectively. Awards granted in 2015 did not contain such target performance conditions.Each eligible non-officer employee also received awards in 2015, 2014 and 2013 that vest ratably over three years, subject only to the passage oftime. Officers of SPX received awards in 2015, 2014 and 2013 that vest ratably over three years, subject to an internal performance metric.SPX restricted stock shares and SPX restricted stock units that do not vest within the applicable vesting period are forfeited.In connection with the Spin-Off, outstanding equity-based awards granted to SPX FLOW employees under the SPX plan were converted into awardsof the Company using a formula designed to preserve the intrinsic value of the awards immediately prior to the Spin-Off. This conversion did not result inadditional compensation expense. Additionally, certain restricted stock units granted to employees, none of whom were named executive officers, in 2013and 2014 were modified at the Spin-Off date to provide a minimum vesting equivalent to 50% of the underlying shares at the end of the applicable remaining72 SPX FLOW, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)(in millions, except share data)service periods. Compensation expense related to the modification is $4.0, of which $2.8 was recognized in the year ended December 31, 2015, with theremaining $1.2 to be recognized over the remaining service periods of the related awards.The recognition of compensation expense for SPX share-based awards is based on their grant-date fair values. The fair value of each award isamortized over the lesser of the award's requisite or derived service period, which is generally up to three years. For the years ended December 31, 2015, 2014and 2013, we recognized compensation expense related to share-based programs in “Selling, general and administrative” expense in the accompanyingconsolidated and combined statements of operations as follows: Year ended December 31, 2015 2014 2013Expense associated with individuals attributable to SPX FLOW's operations$9.6 $5.2 $6.3Allocation of expense historically associated with SPX's corporate employees(1)13.4 14.8 11.1Expense related to modification as of Spin-Off date2.8 — —Stock-based compensation expense25.8 20.0 17.4Income tax benefit(9.5) (7.3) (6.4)Stock-based compensation expense, net of income tax benefit$16.3 $12.7 $11.0(1)See Note 1 for a discussion of the methodology used to allocate corporate-related costs prior to the Spin-Off.Restricted Stock Share and Restricted Stock Unit AwardsThe Monte Carlo simulation model valuation technique was used to determine the fair value of SPX's restricted stock shares and restricted stock unitsthat contain a "market condition." The Monte Carlo simulation model utilizes multiple input variables that determine the probability of satisfying the marketcondition stipulated in the award and calculates the fair value of each restricted stock share and restricted stock unit award. The following assumptions wereused in determining the fair value of the awards granted on the dates indicated below (awards granted during 2015 did not contain a market condition): Annual Expected StockPrice Volatility Annual ExpectedDividend Yield Risk-free Interest Rate Correlation BetweenTotal ShareholderReturn for SPX andthe S&P IndexJanuary 2, 2014: SPX Corporation33.7% 1.02% 0.76% 0.7631S&P Composite 1500 Industrials Index19.9% n/a 0.76% January 2, 2013: SPX Corporation36.3% 1.42% 0.37% 0.7778S&P Composite 1500 Industrials Index22.4% n/a 0.37% Annual expected stock price volatility was based on the three-year SPX historical volatility. The annual expected dividend yield was based onannual expected SPX dividend payments and the stock price on the date of grant. The average risk-free interest rate was based on the one-year through three-year daily treasury yield curve rate as of the grant date.73 SPX FLOW, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)(in millions, except share data)In connection with the Spin-Off, certain former corporate employees of SPX became employees of the Company. The following table summarizes theunvested restricted stock share and restricted stock unit activity (i) from December 31, 2012 through September 26, 2015, for the Company's employees withSPX awards before the Spin-Off, and (ii) the resulting, converted SPX FLOW awards after the Spin-Off and activity from September 26, 2015 throughDecember 31, 2015:SPX - Prior to Spin-Off:Unvested RestrictedStock Shares andRestricted Stock Units Weighted-AverageGrant-Date Fair ValuePer ShareOutstanding at December 31, 20120.385 $55.18Granted0.115 62.90Vested(0.118) 54.85Forfeited and other(0.112) 53.97Outstanding at December 31, 20130.270 59.10Granted0.071 89.37Vested(0.066) 59.78Forfeited and other(0.126) 59.39Outstanding at December 31, 20140.149 72.93Granted0.075 85.47Vested(0.035) 79.92Forfeited and other(0.019) 63.45Outstanding at September 26, 2015, immediately prior to Spin-Off0.170 $79.65 SPX FLOW - Post Spin-Off: Conversion of SPX Plan awards to SPX FLOW Stock Plan awards on September 26, 20151.154 $53.32Granted0.069 26.05Vested(0.091) 61.34Forfeited and other(0.004) 59.93Outstanding at December 31, 20151.128 $51.13As of December 31, 2015, there was $16.0 of unrecognized compensation cost related to SPX FLOW's restricted stock share and restricted stock unitcompensation arrangements, including the effects of the modification discussed above. We expect this cost to be recognized over a weighted-average periodof 1.7 years.Stock OptionsOn January 2, 2015, eligible employees of the Company were granted 0.034 options in SPX stock, all of which were outstanding (but notexercisable) from that date up to the Spin-Off. The weighted-average exercise price per share of these options was $85.87 and the maximum contractual termof these options is 10 years. There were no SPX stock options outstanding during the years ended December 31, 2014 and 2013.The weighted-average grant-date fair value per share of the SPX stock options granted on January 2, 2015 was $27.06. The fair value of each SPXoption grant was estimated using the Black-Scholes option-pricing model with the following assumptions:Annual expected SPX stock price volatility36.53%Annual expected SPX dividend yield1.75%Risk-free interest rate1.97%Expected life of SPX stock option (in years)6.0Annual expected stock price volatility was based on the six-year historical volatility of SPX stock. The annual expected dividend yield was basedon annual expected SPX dividend payments and SPX's stock price on the date of grant. The average risk-free interest rate was based on the seven-yeartreasury constant maturity rate. The expected SPX option life was based on a three-year pro-rata vesting schedule and represents the period of time thatawards are expected to be outstanding.74 SPX FLOW, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)(in millions, except share data)In connection with the Spin-Off, certain former corporate employees of SPX became employees of the Company. The number of outstanding SPXFLOW stock options, after reflecting (i) SPX stock options that had been granted to former corporate employees of SPX on January 2, 2015, and (ii) theconversion of SPX stock options to SPX FLOW stock options, was 0.396. After reflecting 0.025 of forfeitures during the fourth quarter of 2015, there were0.371 of SPX FLOW stock options outstanding as of December 31, 2015, of which 0.242 were exercisable. As a result of the conversion of the stock options,the weighted-average exercise price per share of the SPX FLOW stock options is $61.29 and the weighted-average grant-date fair value per share of the SPXFLOW stock options is $19.33. Other terms of the SPX FLOW stock options are the same as those discussed above.As of December 31, 2015, there was $0.9 of unrecognized compensation cost related to SPX FLOW stock options. We expect this cost to berecognized over a weighted-average period of 2.1 years.Accumulated Other Comprehensive LossThe changes in the components of AOCL, net of tax, for the years ended December 31, 2015 and 2014 were as follows: Foreign CurrencyTranslationAdjustment Net UnrealizedGains (Losses) onAvailable-for-SaleSecurities Pension LiabilityAdjustment(1) TotalBalance at December 31, 2013$(15.1) $(3.7) $(0.1) $(18.9)Other comprehensive income (loss) before reclassifications(204.2) 3.6 0.1 (200.5)Amounts reclassified from accumulated other comprehensive loss— 0.1 0.1 0.2Current-period other comprehensive income (loss)(204.2) 3.7 0.2 (200.3)Balance at December 31, 2014(219.3) — 0.1 (219.2)Other comprehensive loss before reclassifications(163.4) — — (163.4)Amounts reclassified from accumulated other comprehensive income— — (0.1) (0.1)Current-period other comprehensive loss(163.4) — (0.1) (163.5)Balance at December 31, 2015$(382.7) $— $— $(382.7)(1) Net of tax benefit of $0 and $0.1 as of December 31, 2014 and 2013, respectively. The balances as of December 31, 2014 and 2013 include unamortized prior servicecredits (costs).Amounts reclassified from AOCL related to pension liability adjustments were recorded in “Selling, general and administrative” expense in theaccompanying consolidated and combined statements of operations for the years ended December 31, 2015 and 2014. Amounts reclassified from AOCLrelated to available-for-sale securities were recorded in "Other income (expense), net" in the accompanying combined statement of operations for the yearended December 31, 2014.Common Stock in TreasurySubsequent to the Spin-Off, "Common stock in treasury" was increased by $1.4 for common stock that was surrendered by recipients of restrictedstock as a means of funding the related minimum income tax withholding requirements.(13) COMMITMENTS AND CONTINGENT LIABILITIESLeasesWe lease certain manufacturing facilities, offices, sales and service locations, machinery and equipment, vehicles and office equipment undervarious leasing programs accounted for as operating and capital leases, some of which include scheduled rent increases stated in the lease agreement. We donot have any significant leases that require rental payments based on contingent events nor have we received any significant lease incentive payments.75 SPX FLOW, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)(in millions, except share data)Operating LeasesThe future minimum rental payments under operating leases with remaining non-cancelable terms in excess of one year are:Year Ending December 31, 2016 $21.82017 15.02018 11.22019 7.92020 6.4Thereafter 14.7Total minimum payments $77.0Total operating lease expense, inclusive of rent based on scheduled rent increases and rent holidays recognized on a straight-line basis, was $31.9 in2015, $35.0 in 2014 and $36.1 in 2013.Capital LeasesFuture minimum lease payments under capital lease obligations are:Year Ending December 31, 2016 $1.02017 1.22018 4.62019 0.62020 0.6Thereafter 3.7Total minimum payments 11.7Less: interest (2.4)Capital lease obligations as of December 31, 2015 9.3Less: current maturities as of December 31, 2015 0.3Long-term portion as of December 31, 2015 $9.0Our current and long-term capital lease obligations as of December 31, 2014 were $1.7 and $10.3, respectively.Assets held through capital lease agreements at December 31, 2015 and 2014 comprise the following: December 31, 2015 2014Buildings$6.0 $17.4Machinery and equipment1.4 10.6Other— 3.3Total7.4 31.3Less: accumulated depreciation(2.0) (10.4)Net book value$5.4 $20.9Litigation and Contingent LiabilitiesWe are subject to litigation matters that arise in the normal course of business. We believe these matters are either without merit or of a kind thatshould 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.76 SPX FLOW, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)(in millions, except share data)We believe our compliance obligations with environmental protection laws and regulations should not have a material effect, individually or in theaggregate, on our financial position, results of operations or cash flows.(14) FAIR VALUEFair 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 themeasurement date. In the absence of active markets for the identical assets or liabilities, such measurements involve developing assumptions based on marketobservable data and, in the absence of such data, internal information consistent with what market participants would use in a hypothetical transaction thatoccurs at the measurement date. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our marketassumptions. 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 notactive; 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 InstrumentsOur derivative financial assets and liabilities include FX forward contracts and FX embedded derivatives, valued using valuation models based onobservable market inputs such as forward rates, interest rates, our own credit risk and the credit risk of our counterparties, which comprise investment-gradefinancial institutions. Based on these inputs, the derivative assets and liabilities are classified within Level 2 of the valuation hierarchy. We have not madeany adjustments to the inputs obtained from the independent sources. Based on our continued ability to enter into forward contracts, we consider the marketsfor our fair value instruments active. We primarily use the income approach, which uses valuation techniques to convert future amounts to a single presentamount.As of December 31, 2015 and 2014, the gross fair values of our derivative financial assets and liabilities, in aggregate, were $2.0 and $0.5 (grossassets) and $1.5 and $1.1 (gross liabilities), respectively. As of December 31, 2015, there had been no significant impact to the fair value of our derivativeliabilities due to our own credit risk as the related instruments are collateralized under our senior credit facilities. Similarly, there had been no significantimpact to the fair value of our derivative assets based on our evaluation of our counterparties’ credit risks.Investments in Equity SecuritiesCertain of our investments in equity securities that are not readily marketable are accounted for under the fair value option and are classified asLevel 3 assets in the fair value hierarchy, with such values determined by multidimensional pricing models. These models consider market activity based onmodeling of securities with similar credit quality, duration, yield and structure. A variety of inputs are used, including benchmark yields, reported trades,non-binding broker/dealer quotes, issuer spread and reference data including market research publications. Market indicators, industry and economic eventsare also considered. We have not made any adjustments to the inputs obtained from the independent sources. At December 31, 2015 and 2014, these assetshad a fair value of $8.1 and $7.4, respectively.77 SPX FLOW, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)(in millions, except share data)The table below presents a reconciliation of our investment in equity securities measured at fair value on a recurring basis using significantunobservable inputs (Level 3) for the years ended December 31, 2015 and 2014, including net unrealized gains recorded to “Other income (expense), net." Year ended December 31, 2015 2014Balance at beginning of year$7.4 $1.4Unrealized gains recorded to earnings0.7 6.0Balance at end of year$8.1 $7.4Goodwill, Indefinite-Lived Intangible and Other Long-Lived AssetsCertain of our non-financial assets are subject to impairment analysis, 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 atleast annually for indefinite-lived intangible assets and goodwill. Any resulting impairment would require that the asset be recorded at its fair value. During2015, certain trademarks associated with businesses within our Power and Energy and Food and Beverage reportable segments and certain technology assetsassociated with a business within our Food and Beverage reportable segment were impaired based on their respective fair value measurements. Refer to Note7 for further discussion pertaining to our annual and interim evaluation of goodwill and other intangible assets for impairment.During 2015, 2014 and 2013, we recorded impairment charges of $22.7, $11.7 and $4.7, respectively, related to the trademarks (and, in 2015,technology assets) of certain businesses within our Power and Energy, Food and Beverage and Industrial reportable segments as we determined that the fairvalues of such trademarks (and, in 2015, technology assets) were less than the carrying values. See Note 7 for additional information regarding suchimpairment charges.Indebtedness and OtherThe estimated fair values of other financial liabilities (excluding capital leases and related party notes payable) not measured at fair value on arecurring basis as of December 31, 2015 and 2014 were as follows: December 31, 2015 December 31, 2014 Carrying Amount Fair Value Carrying Amount Fair ValueTerm loan$400.0 $400.0 $— $—Senior notes600.0 637.5 — —Other indebtedness28.0 28.0 6.0 6.0The following methods and assumptions were used in estimating the fair value of these financial instruments:•The fair values of the senior notes and term loan were determined using Level 2 inputs within the fair value hierarchy and were based on quotedmarket prices for the same or similar instruments or on current rates offered to us for debt with similar maturities, subordination and creditdefault expectations.•The fair value of our other indebtedness approximated carrying value due primarily to the short-term nature of these instruments.As of December 31, 2014, the aggregate estimated fair value of our related party notes payable was approximately $1,127.0, compared to theaggregate carrying value of $1,003.1. There were no related party notes payable outstanding as of December 31, 2015.The carrying amounts of cash and equivalents and receivables (excluding related party notes receivable) reported in our consolidated and combinedbalance sheets approximate fair value due to the short-term nature of those instruments. As of December 31, 2014, the aggregate estimated fair value of ourrelated party notes receivable was approximately $758.0, compared to the aggregate carrying value of $707.1. There were no related party notes receivableoutstanding as of December 31, 2015.78 SPX FLOW, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)(in millions, except share data)(15) RELATED PARTY TRANSACTIONSAllocation of General Corporate ExpensesThe consolidated and combined statements of operations include expenses for certain centralized functions and other programs provided and/oradministered by SPX charged directly to business units of the Company. In addition, for purposes of preparing these consolidated and combined financialstatements for periods prior to the Spin-Off on a "carve-out" basis, a portion of SPX's total corporate expenses have been allocated to the Company. A detaileddescription of the methodology used to allocate corporate-related costs is included in Note 1.Related Party NotesAs of December 31, 2014, the Company had related party notes receivable of $707.1, with SPX serving as the counterparty. These related party noteswere transferred to SPX or canceled by the Company with a corresponding decrease to "Former parent company investment" of $669.7 during the thirdquarter of 2015. We recorded interest income of $26.2, $47.1 and $24.8 for the years ended December 31, 2015, 2014 and 2013, respectively, related to thesenotes. The related party notes receivable had a weighted-average interest rate of approximately 6.0% as of December 31, 2014. There were no related partynotes receivable outstanding as of December 31, 2015.As of December 31, 2014, the Company had related party notes payable of $1,003.1, with SPX (and certain other of its affiliates that were not part ofthe Spin-Off) serving as the counterparties. During the nine months ended September 26, 2015, these related party notes payable were extinguished by way ofcapital contributions to the Company by SPX. As a result, related party notes payable were reduced by $991.3 with a corresponding increase to "Formerparent company investment" during the nine months ended September 26, 2015. In aggregate, we recorded interest expense of $28.4, $72.9 and $61.1 for theyears ended December 31, 2015, 2014 and 2013, respectively, related to these notes. The related party notes payable had a weighted-average interest rate ofapproximately 7.0% as of December 31, 2014. There were no related party notes payable outstanding as of December 31, 2015.79 SPX FLOW, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)(in millions, except share data)(16) QUARTERLY RESULTS (UNAUDITED) First(2) Second Third Fourth(2) 2015 2014 2015 2014 2015 2014 2015 2014Revenues$571.2 $659.3 $615.1 $706.3 $589.5 $681.5 $612.7 $722.5Gross profit188.3 208.7 211.2 238.9 197.9 234.9 194.8 254.0Net income (loss) (1)23.1 19.6 46.7 37.8 (4.2) 56.3 21.8 22.2Less: Net income (loss) attributable tononcontrolling interests(0.3) (0.4) (0.4) 0.6 (0.1) 0.8 0.7 0.4Net income (loss) attributable to SPX FLOW, Inc.$23.4 $20.0 $47.1 $37.2 $(4.1) $55.5 $21.1 $21.8 Basic income (loss) per share of common stock$0.57 $0.49 $1.15 $0.91 $(0.10) $1.36 $0.52 $0.53Diluted income (loss) per share of common stock$0.57 $0.49 $1.15 $0.91 $(0.10) $1.36 $0.51 $0.53(1)During the fourth quarter of 2015, we recognized a gain, net of taxes, of $1.3, related to changes in the fair value of plan assets, actuarial gains/losses, and curtailment gainsassociated with our pension and postretirement plans. During the third quarter of 2015, we recognized a loss, net of taxes, of ($5.0), related to changes in the fair value ofplan assets, actuarial gains/losses, and curtailment gains associated with our and SPX’s pension plans. The third quarter loss resulted primarily from the formation of a newSPX FLOW domestic nonqualified pension plan in connection with the Spin-Off and its related remeasurement and, to a lesser extent, our allocated share of a curtailmentgain and actuarial loss related to an amendment to certain of SPX’s U.S. pension plans to freeze all benefits for active non-union participants.During the fourth and third quarters of 2015, we recorded impairment charges, net of taxes, of $5.4 and $10.9, respectively, related to the trademarks and certaintechnology assets of certain businesses within our Food and Beverage and Power and Energy reportable segments.During the third quarter of 2015, we recognized Special Charges, net of taxes, of $16.5 related to the ongoing consolidation and relocation of two manufacturing facilities,located in Germany and Denmark, to an existing facility in Poland.During the third quarter of 2015 and fourth quarter of 2014, we recorded income tax charges of $7.4 and $18.6, respectively, related to repatriation of certain earnings ofour non-U.S. subsidiaries. During the second quarter of 2014, we recorded an income tax charge of $17.0 resulting from increases in valuation allowances recorded againstcertain deferred income tax assets.During the fourth and first quarters of 2014, we recognized a loss, net of taxes, of ($16.5) and ($1.1), respectively, related to changes in fair value of plan assets, actuariallosses, and settlement losses associated with our and an allocated share of SPX’s pension and postretirement plans. The fourth quarter settlement loss related to the partialannuitization of SPX’s U.K. Pension Plan and the first quarter settlement loss related to a lump-sum payment action related to one of SPX’s U.S. pension plans.During the fourth quarter of 2014, we recorded impairment charges, net of taxes, of $9.2 related to the trademarks of certain businesses within our Power and Energy andIndustrial reportable segments.(2)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 calendarquarter, 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 thirdquarters of 2015 were March 28, June 27 and September 26, compared to the respective March 29, June 28 and September 27, 2014 dates. This practice only affects thequarterly reporting periods and not the annual reporting period. We had one less day in the first quarter of 2015 and one more day in the fourth quarter of 2015 than in therespective 2014 periods.(17) SUBSEQUENT EVENTSGlobal Realignment ProgramOn February 10, 2016, the Company announced its intent to further optimize its global footprint, streamline business processes and reduce selling,general and administrative expense through a global realignment program. The two year realignment program is intended to reduce costs across operatingsites and corporate and global functions, in part by making structural changes which will allow the Company to operate more efficiently.80 ITEM 9. Changes In and Disagreements with Accountants on Accounting and Financial DisclosureNone.ITEM 9A. Controls and ProceduresEvaluation of Disclosure Controls and ProceduresSPX FLOW management, including the Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the effectiveness of theCompany's disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, asamended (the "Exchange Act")), as of December 31, 2015. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded as ofDecember 31, 2015, that the Company's disclosure controls and procedures were effective in ensuring that information required to be disclosed by theCompany in reports that it files or submits under the Exchange Act has been recorded, processed, summarized and reported, within the time periods specifiedin the Commission's rules and forms, and that such information has been accumulated and communicated to the Company's management including its ChiefExecutive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.Management's Report on Internal Control Over Financial ReportingThis Annual Report on Form 10-K does not include a report of management’s assessment regarding internal control over financial reporting or anattestation report of the Company’s registered public accounting firm due to a transition period established by the rules of the SEC for newly publiccompanies.Changes in Internal Control Over Financial ReportingBefore the Spin-Off, the Company relied on certain financial information and resources of SPX to manage aspects of the Company’s business and toreport financial results. These resources included executive management, investor relations, corporate communications, finance and accounting, legal, andhuman resources support, benefit plan administration and reporting, general management, real estate, treasury, insurance and risk management, and oversightfunctions, such as the Board of Directors and internal audit, including those functions required for Sarbanes-Oxley compliance. In conjunction with the Spin-Off, the Company enhanced its own financial, administrative, and other support systems. The Company formed its accounting, reporting, legal, and internalaudit departments and reformed its policies and systems, as needed, to meet all regulatory requirements on a stand-alone basis. While most of these changesin staffing, policies and systems were accomplished prior to December 31, 2015, we continue to review, document and test our internal controls over financialreporting, and may from time to time make changes aimed at enhancing their effectiveness and to ensure that our systems evolve with our business. Theseefforts may lead to changes in our internal control over financial reporting.ITEM 9B. Other InformationNone.PART IIIITEM 10. Directors, Executive Officers and Corporate Governancea) Directors of the Company.This information is included in our definitive proxy statement for the 2016 Annual Meeting of Stockholders under the heading "Election ofDirectors" and is incorporated herein by reference.b) Executive Officers of the Company.Marcus G. Michael, 52, is President and Chief Executive Officer, having succeeded Christopher J. Kearney effective January 1, 2016. He was alsonamed a director at that time. He was previously President of our Food and Beverage segment. Prior to the Spin-Off, he was President, Flow Technology—Food and Beverage of SPX Corporation, and was appointed an officer of SPX in December 2014. He joined SPX Corporation in 2003 and prior to his mostrecent position held various senior81 positions within the company, including President of the company’s global evaporative and dry cooling businesses and President of Flow Technology’sEMEA region. Prior to joining SPX Corporation, Mr. Michael held positions at General Electric and TDK Corporation.Jeremy W. Smeltser, 41, is Vice President and Chief Financial Officer. He was previously Vice President and Chief Financial Officer of SPXCorporation, where he served in various roles, most recently as Vice President and Chief Financial Officer, Flow Technology, and became an officer of SPXCorporation in April 2009. He joined SPX Corporation in 2002 from Ernst & Young LLP, where he was an audit manager in Tampa, Florida. Prior to that, heheld various positions with Arthur Andersen LLP, in Tampa, Florida, and Chicago, Illinois, focused primarily on assurance services for global manufacturingclients.Stephen A. Tsoris, 58, is Vice President, Secretary and General Counsel. He was previously Vice President, Secretary and General Counsel of SPXCorporation since April 2015. Mr. Tsoris joined SPX Corporation in 2008 as the assistant general counsel, corporate development, where he played a majorrole in many significant acquisitions, divestitures and strategic ventures. Prior to joining SPX Corporation, he was a partner at Gardner Carton & Douglas LLPwhere in addition to working with a wide spectrum of clients across many industries, he supported SPX Corporation on over fifty M&A transactions.David A. Kowalski, 57, is President, Global Manufacturing Operations. He was previously President, Global Manufacturing Operations of SPXCorporation since August 2013. Since August 2011, he also has served as President of the SPX Industrial Products group of businesses. He joined SPXCorporation in 1999 as the Vice President and General Manager of Tools and Equipment at Service Solutions and was named President of Service Solutionsin 2004. He became the segment President, Test and Measurement, and an officer of the company in August 2005. Before joining SPX, he held positions withAmerican National Can Company, J.I. Case, Picker International and Warner Swasey.Anthony A. Renzi, 67, is President, Power and Energy. He was previously President, Flow Technology—Power and Energy of SPX Corporation, andwas appointed an officer of the company in December 2014. He joined SPX Corporation in 2003 and prior to his most recent position, he held various seniorpositions within the company, including President, SPX Dehydration and Filtration; President, SPX Process Equipment; President, APV; Senior VicePresident, Global Operations; and President, Flow Technology—Clyde Union and Americas region. Prior to joining SPX Corporation, Mr. Renzi heldpositions at James Burn International, Clopay, Breed Technologies, Sundstrand and General Electric.David J. Wilson, 47, is President, Industrial. He was previously President, Flow Technology—Industrial, of SPX Corporation and was appointed anofficer of the company in December 2014. He joined SPX Corporation in 1998 and prior to his most recent position, he held various senior positions withinthe company, including President, Asia Pacific region for both Flow Technology and the company’s Service Solutions business, and Vice President, BusinessDevelopment for the Thermal Equipment and Services segment. Prior to joining SPX Corporation, Mr. Wilson held operating and engineering leadershippositions at Polaroid Corporation.Belinda G. Hyde, 45, is Vice President and Chief Human Resources Officer. She was previously Vice President and Chief Human Resources Officerof SPX Corporation since July 2015. Ms. Hyde served as the Senior Vice President and Chief Human Resources Officer of Schnitzer Steel Industries, Inc. fromOctober 2011 until joining SPX Corporation. Prior to joining Schnitzer, Ms. Hyde was Vice President of Human Resources with Celanese Corporation from2008 to 2011. Previously, she led the talent management, development, and communications functions for biotech Life Technologies from 2005 to 2008.Ms. Hyde also worked at Dell Computer from 2000 to 2005 in a variety of human resources leadership positions.Kevin J. Eamigh, 45, is the Chief Information Officer and Vice President, Global Business Services, with overall strategic and operationalresponsibility of the global Information Technologies and Shared Services organizations, the role he previously held at SPX Corporation. Mr. Eamigh joinedSPX Corporation in 2000 and held various positions within information technology services and business management. He was named Chief InformationOfficer of SPX Corporation in 2009 and accepted the additional responsibility of the Shared Services organization in June 2012. He was appointed an officerof SPX Corporation in July 2015. Mr. Eamigh joined SPX Corporation in 2000 and has since served in various other positions within information technologyservices and business management. Mr. Eamigh began his career with IBM in Dallas, TX prior to co-founding PrimeSource Technologies, a businesstechnology consulting firm based in Scottsdale, AZ.c) Section 16(a) Beneficial Ownership Reporting Compliance.This information is included in our definitive proxy statement for the 2016 Annual Meeting of Stockholders under the heading "Section 16(a)Beneficial Ownership Reporting Compliance" and is incorporated herein by reference.82 d) Code of Ethics.This information is included in our definitive proxy statement for the 2016 Annual Meeting of Stockholders under the heading "CorporateGovernance" and is incorporated herein by reference.e) Other Matters.Information regarding our Audit Committee and Nominating and Governance Committee is set forth in our definitive proxy statement for the 2016Annual Meeting of Stockholders under the headings "Corporate Governance" and "Board Committees" and is incorporated herein by reference.ITEM 11. Executive CompensationThis information is included in our definitive proxy statement for the 2016 Annual Meeting of Stockholders under the headings "ExecutiveCompensation" and "Director Compensation" and is incorporated herein by reference.ITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder MattersThis information is included in our definitive proxy statement for the 2016 Annual Meeting of Stockholders under the headings "Ownership ofCommon Stock" and "Equity Compensation Plan Information" and is incorporated herein by reference.ITEM 13. Certain Relationships and Related Transactions, and Director IndependenceThis information is included in our definitive proxy statement for the 2016 Annual Meeting of Stockholders under the heading "CorporateGovernance" and is incorporated herein by reference.ITEM 14. Principal Accountant Fees and ServicesThis information is included in our definitive proxy statement for the 2016 Annual Meeting of Stockholders under the heading "Ratification of theAppointment of Independent Public Accountants" and is incorporated herein by reference.83 PART IVITEM 15. Exhibits and Financial Statement SchedulesThe following documents are filed as part of this Form 10-K:1.All financial statements. See Index to Consolidated and Combined Financial Statements on page 37 of this Form 10-K. 2.Financial Statement Schedules. None required. See page 37 of this Form 10-K. 3.Exhibits. See Index to Exhibits.84 SIGNATURESPursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signedon its behalf by the undersigned, thereunto duly authorized on this 12th day of February, 2016. SPX FLOW, Inc. (Registrant) By/s/ Jeremy W. Smeltser Jeremy W. Smeltser Vice President and Chief Financial Officer85 POWER OF ATTORNEYThe undersigned officers and directors of SPX FLOW, Inc. hereby severally constitute Marcus G. Michael and Jeremy W. Smeltser and each of themsingly our true and lawful attorneys, with full power to them and each of them singly, to sign for us in our names in the capacities indicated below the AnnualReport on Form 10-K filed herewith and any and all amendments thereto, and generally do all such things in our name and on our behalf in our capacities asofficers and directors to enable SPX FLOW, Inc. to comply with the provisions of the U.S. Securities and Exchange Commission, hereby ratifying andconfirming our signatures as they may be signed by our said attorneys, or any one of them on the Annual Report on Form 10-K and any and all amendmentsthereto.Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of theRegistrant and in the capacities indicated on this 12th day of February, 2016./s/ Marcus G. Michael /s/ Jeremy W. SmeltserMarcus G. Michael Jeremy W. SmeltserPresident, Chief Executive Officer and Director Vice President and Chief Financial Officer /s/ Jaime M. Easley /s/ Christopher J. KearneyJaime M. Easley Christopher J. KearneyCorporate Controller and Chief Accounting Officer Non-Executive Chairman of the Board of Directors /s/ Anne K. Altman /s/ Patrick D. CampbellAnne K. Altman Patrick D. CampbellDirector Director /s/ Emerson U. Fullwood /s/ Robert F. Hull, Jr.Emerson U. Fullwood Robert F. Hull, Jr.Director Director /s/ Terry S. Lisenby /s/ David V. SingerTerry S. Lisenby David V. SingerDirector Director86 INDEX TO EXHIBITSItem No. Description2.1Separation and Distribution Agreement, dated as of September 22, 2015, by and between SPX FLOW, Inc. and SPX Corporation,incorporated by reference from the Company’s Current Report on Form 8-K filed on September 28, 2015 (file no. 1-37393).3.1Amended and Restated Certificate of Incorporation of SPX FLOW, Inc., incorporated by reference from the Company’s Current Report onForm 8-K filed on September 28, 2015 (file no. 1-37393).3.2 Certificate of Change of Registered Agent and/or Registered Office, incorporated by reference from the Company’s Current Report on Form8-K filed on October 26, 2015 (file no. 1-37393).3.3Amended and Restated Bylaws of SPX FLOW, Inc., incorporated by reference from the Company’s Current Report on Form 8-K filed onSeptember 28, 2015 (file no. 1-37393).4.1Indenture, dated as of August 16, 2010 between SPX Corporation, the Initial Subsidiary Guarantors (as defined therein), and U.S. BankNational Association, as trustee, incorporated herein by reference from the SPX Corporation Current Report on Form 8-K filed on August 17,2010 (file no. 1-6948).4.2First Supplemental Indenture, dated as of January 23 2014, among SPX Corporation, the Additional Guarantors (as defined therein), and U.S.Bank National Association, as Trustee, to the Indenture dated as of August 16, 2010, incorporated herein by reference from the SPXCorporation Current Report on Form 8-K filed on January 24, 2014 (file no. 1-6948).4.3 Second Supplemental Indenture, dated as of November 7, 2014, among SPX Corporation, the Subsidiary Guarantors (as defined therein), andU.S. Bank National Association, as Trustee, to the Indenture, dated as of August 16, 2010, incorporated herein by reference from SPXCorporation's Current Report on Form 8-K filed on November 10, 2014 (file no. 1-6948).4.4 Third Supplemental Indenture, dated as of September 22, 2015, by and between SPX FLOW, Inc. and U.S. Bank National Association, asTrustee, to the Indenture dated as of August 16, 2010, incorporated by reference from the Company’s Current Report on Form 8-K filed onSeptember 28, 2015 (file no. 1-37393).4.5 Fourth Supplemental Indenture, dated as of September 24, 2015, by and among SPX FLOW, Inc., the Guarantors (as defined herein) and U.S.Bank National Association, as Trustee, to the Indenture dated as of August 16, 2010, incorporated by reference from the Company’s CurrentReport on Form 8-K filed on September 28, 2015 (file no. 1-37393).10.1Transition Services Agreement, dated as of September 26, 2015, by and between SPX FLOW, Inc. and SPX Corporation, incorporated byreference from the Company’s Current Report on Form 8-K filed on September 28, 2015 (file no. 1-37393).10.2Tax Matters Agreement, dated as of September 26, 2015, by and between SPX FLOW, Inc. and SPX Corporation, incorporated by referencefrom the Company’s Current Report on Form 8-K filed on September 28, 2015 (file no. 1-37393).10.3Employee Matters Agreement, dated as of September 26, 2015, by and between SPX FLOW, Inc. and SPX Corporation, incorporated byreference from the Company’s Current Report on Form 8-K filed on September 28, 2015 (file no. 1-37393).10.4Trademark License Agreement, dated as of September 26, 2015, by and between SPX FLOW, Inc. and SPX Corporation, incorporated byreference from the Company’s Current Report on Form 8-K filed on September 28, 2015 (file no. 1-37393).10.5*SPX FLOW Stock Compensation Plan, incorporated by reference from the Company’s Current Report on Form 8-K filed on September 28,2015 (file no. 1-37393).10.6*Form of SPX FLOW Stock Option Award Agreement, incorporated by reference from the Company’s Current Report on Form 8-K filed onSeptember 28, 2015 (file no. 1-37393).10.7*Form of SPX FLOW Restricted Stock Unit Award Agreement, incorporated by reference from the Company’s Current Report on Form 8-Kfiled on September 28, 2015 (file no. 1-37393).10.8*Form of SPX FLOW Restricted Stock Award Agreement, incorporated by reference from the Company’s Current Report on Form 8-K filed onSeptember 28, 2015 (file no. 1-37393).10.9*SPX FLOW Executive Annual Bonus Plan, incorporated by reference from the Company’s Current Report on Form 8-K filed on September28, 2015 (file no. 1-37393).10.10*SPX FLOW Supplemental Retirement Plan for Top Management, incorporated by reference from the Company’s Current Report on Form 8-Kfiled on September 28, 2015 (file no. 1-37393).87 Item No. Description10.11*SPX FLOW Life Insurance Plan for Key Managers, incorporated by reference from the Company’s Current Report on Form 8-K filed onSeptember 28, 2015 (file no. 1-37393).10.12*SPX FLOW Supplemental Retirement Savings Plan, incorporated by reference from the Company’s Current Report on Form 8-K filed onSeptember 28, 2015 (file no. 1-37393).10.13*SPX FLOW Executive Long-Term Disability Plan, incorporated by reference from the Company’s Current Report on Form 8-K filed onSeptember 28, 2015 (file no. 1-37393).10.14*Form of Assignment and Assumption of and Amendment to Employment Agreement, incorporated by reference from the Company’s CurrentReport on Form 8-K filed on September 28, 2015 (file no. 1-37393).10.15*Form of Assignment and Assumption of and Amendment to Change of Control Agreement, incorporated by reference from the Company’sCurrent Report on Form 8-K filed on September 28, 2015 (file no. 1-37393).10.16 Credit Agreement, dated as of September 1, 2015, among SPX FLOW, Inc., the Foreign Subsidiary Borrowers party thereto, Bank of America,N.A., as Administrative Agent, Deutsche Bank AG Deutschlandgeschäft Branch, as Foreign Trade Facility Agent, and the other agents andlenders party thereto, incorporated by reference from SPX Corporation’s Current Report on Form 8-K filed on September 1, 2015 (file no. 1-6948).10.17* Form of SPX FLOW Confidentiality and Non-Competition Agreement, incorporated by reference from the Company’s Quarterly Report onForm 10-Q for the period ended September 26, 2015 (file no. 1-37393).10.18* Amendment to the SPX FLOW Supplemental Retirement Savings Plan, incorporated by reference from the Company’s Quarterly Report onForm 10-Q for the period ended September 26, 2015 (file no. 1-37393).10.19* Separation Agreement Between J. Michael Whitted and SPX FLOW, Inc., incorporated herein by reference from the Company’s Form 8-K/Afiled December 31, 2015 (file no. 1-37393).10.20* Employment Agreement between Marcus G. Michael and SPX FLOW, Inc., incorporated herein by reference from the Company’s Form 8-K/Afiled January 8, 2016 (file no. 1-37393).10.21* Change of Control Agreement between Marcus G. Michael and SPX FLOW, Inc., incorporated herein by reference from the Company’s Form8-K/A filed January 8, 2016 (file no. 1-37393).10.22* Amended and Restated Employment Agreement between SPX Corporation and Christopher J. Kearney, incorporated herein by reference fromthe SPX Corporation Annual Report on Form 10-K for the year ended December 31, 2008 (file no. 1-6948).10.23* Amended and Restated Employment Agreement between SPX Corporation and Robert B. Foreman, incorporated herein by reference from theSPX Corporation Annual Report on Form 10-K for the year ended December 31, 2008 (file no. 1-6948).10.24* Amended and Restated Employment Agreement between SPX Corporation and David A. Kowalski, incorporated herein by reference from theSPX Corporation Annual Report on Form 10-K for the year ended December 31, 2008 (file no. 1-6948).10.25* Employment Agreement between SPX Corporation and Jeremy W. Smeltser, incorporated herein by reference to the SPX CorporationQuarterly Report on Form 10-Q for the quarter ended June 27, 2009 (file no. 1-6948).10.26* Employment Agreement between SPX Corporation and J. Michael Whitted, incorporated herein by reference to SPX Corporation's QuarterlyReport on Form 10-Q for the quarter ended June 27, 2009 (file no. 1-6948).10.27* Amendment to Change of Control Agreement between SPX Corporation and J. Michael Whitted, incorporated herein by reference to SPXCorporation's Quarterly Report on Form 10-Q for the quarter ended June 27, 2009 (file no. 1-6948).10.28* Change of Control Agreement between Christopher J. Kearney and SPX Corporation, as amended and restated December 2, 2013,incorporated herein by reference from SPX Corporation's Current Report on Form 8-K filed on December 5, 2013 (file no. 1-6948).10.29* Change of Control Agreement between Jeremy W. Smeltser and SPX Corporation, as amended and restated December 2, 2013, incorporatedherein by reference from SPX Corporation's Current Report on Form 8-K filed on December 5, 2013 (file no. 1-6948).10.30* Change of Control Agreement between Robert B. Foreman and SPX Corporation, as amended and restated December 2, 2013, incorporatedherein by reference from SPX Corporation's Current Report on Form 8-K filed on December 5, 2013 (file no. 1-6948).10.31* Change of Control Agreement between David A. Kowalski and SPX Corporation, as amended and restated December 2, 2013, incorporatedherein by reference from SPX Corporation's Current Report on Form 8-K filed on December 5, 2013 (file no. 1-6948).88 Item No. Description10.32* Change of Control Agreement between J. Michael Whitted and SPX Corporation, as amended and restated December 2, 2013, incorporatedherein by reference from SPX Corporation's Current Report on Form 8-K filed on December 5, 2013 (file no. 1-6948).10.33* Form of Waiver of Certain Employment Agreement Provisions by each of Christopher J. Kearney, Jeremy W. Smeltser, Robert B. Foreman,David A. Kowalski, Kevin L. Lilly, and J. Michael Whitted, dated December 2, 2013, incorporated herein by reference from SPXCorporation's Current Report on Form 8-K filed on December 5, 2013 (file no. 1-6948).10.34* Form of Change of Control Agreement between each of Eugene J. Lowe III, Marcus G. Michael, Anthony A. Renzi, Stephen A. Tsoris,Belinda G. Hyde, Kevin J. Eamigh and David J. Wilson, and SPX Corporation, incorporated herein by reference from the SPX CorporationAnnual Report on Form 10-K for the year ended December 31, 2014 (file no. 1-6948).11.1 Statement regarding computation of earnings per share. See consolidated and combined statements of operations on page 39 of this Form 10-K.21.1 Subsidiaries.23.1 Consent of Independent Registered Public Accounting Firm.24.1 Power of Attorney on page 86 of this Annual Report on Form 10-K.31.1 Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31.2 Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32.1 Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, adopted pursuant to Section 906 ofthe Sarbanes-Oxley Act of 2002.101.1 SPX FLOW, Inc. financial information from its Form 10-K for the annual period ended December 31, 2015, formatted in XBRL, including:(i) Consolidated and Combined Statements of Operations for the years ended December 31, 2015, 2014, and 2013; (ii) Consolidated andCombined Statements of Comprehensive Income (Loss) for the years ended December 31, 2015, 2014, and 2013; (iii) Consolidated andCombined Balance Sheets as of December 31, 2015 and 2014; (iv) Consolidated and Combined Statements of Equity for the years endedDecember 31, 2015, 2014, and 2013; (v) Consolidated and Combined Statements of Cash Flows for the years ended December 31, 2015,2014, and 2013; and (vi) Notes to Consolidated and Combined Financial Statements.__________________________________________________________________* Denotes management contract or compensatory plan or arrangement.89 EXHIBIT 21.1Entity Name Domestic JurisdictionAnhydro (Hong Kong) Limited Hong KongAnhydro China Co., Ltd. ChinaAnhydro North America, Inc. DelawareAPV (China) Co., Ltd. ChinaAPV Benelux B.V. NetherlandsAPV Benelux NV BelgiumAPV Hills and Mills (Malaysia) Sdn Bhd MalaysiaAPV Middle East Limited Saudi ArabiaAPV Overseas Holdings Limited United KingdomBallantyne Company Cayman IslandsBallantyne Holding Company Cayman IslandsBallantyne Holding Mauritius Ltd. MauritiusCarnoustie Finance Limited United KingdomClyde Pumps India Pvt Limited IndiaClyde Pumps Limited United KingdomClyde Pumps, Inc. DelawareClyde Union (France) S.A.S. FranceClyde Union (Holdings) Limited ScotlandClyde Union (Holdings) S.á.r.l. LuxembourgClyde Union (Indonesia) (Holdings) Limited ScotlandClyde Union (US), Inc. DelawareClyde Union Canada Limited CanadaClyde Union China Holdings Limited ScotlandClyde Union DB Limited United KingdomClyde Union Inc. MichiganClyde Union Limited ScotlandClyde Union Middle East LLC United Arab EmiratesClyde Union Pumps Middle East FZE United Arab EmiratesClyde Union S.A.S. FranceClyde Union S.á.r.l. LuxembourgClyde Union South East Asia Pte. Ltd. SingaporeClyde Union Technology (Beijing) Co., Ltd. ChinaCorporate Place, LLC DelawareDelaney Holdings, Co. DelawareDrysdale & Company Limited ScotlandFastighets AB Klädeshandlaren SwedenFirethorne AB SwedenGeneral Signal (China) Co., Ltd. ChinaGeneral Signal Ireland B.V. NetherlandsGirdlestone Pumps Limited ScotlandHangzhou Kayex Zheda Electromechanical Co., Ltd. ChinaInvensys Philippines, Inc. PhilippinesJohnson Pumps Of America, Inc. DelawareJohnston Ballantyne Holdings Limited United Kingdom Entity Name Domestic JurisdictionLaunch Tech Company Limited ChinaMarley Engineered Products (Shanghai) Co. Ltd. ChinaMather & Platt Machinery Limited ScotlandMedinah Holding Company Cayman IslandsMedinah Holding GmbH GermanyMerion Finance S.A.R.L. LuxembourgMuirfield Finance Company Limited United KingdomNewlands Junior College Limited ScotlandOakmont Finance S.A.R.I. LuxembourgPT Barata David Brown Gear Industries IndonesiaPT. Clyde Union Pumps Indonesia IndonesiaRathi Lightnin Mixers Private Limited IndiaS & N International, L.L.C. DelawareS & N Pump Company TexasS & N Pump Middle East, LLC TexasS&N Pump (Africa) Ltda. AngolaS&N Pump and Rewind Limited United KingdomShinnecock Holding Company Cayman IslandsSouth Eastern Europe Services Limited United KingdomSPX (China) Industrial Manufacturing Center Co., Ltd. ChinaSPX (Shanghai) Flow Technology Co., Ltd. ChinaSPX (Shanghai) Mechanical & Electrical Equipment Co., Ltd. ChinaSPX Canada Co. CanadaSPX Chile Limitada ChileSPX Clyde Luxembourg S.á.r.l. LuxembourgSPX Clyde UK Limited United KingdomSPX Corporation (China) Co., Ltd. ChinaSPX Denmark Holdings ApS DenmarkSPX Europe Shared Services Limited United KingdomSPX FLOW Germany Holding GmbH GermanySPX Flow Holdings, Inc. DelawareSPX Flow Receivables LLC DelawareSPX Flow Technology (India) Private Limited IndiaSPX Flow Technology (Pty) Limited South AfricaSPX Flow Technology (Thailand) Limited ThailandSPX Flow Technology Argentina S.A. ArgentinaSPX Flow Technology Assen B.V. NetherlandsSPX Flow Technology Australia Pty Ltd. AustraliaSPX Flow Technology Belgium NV BelgiumSPX Flow Technology Canada Inc. CanadaSPX Flow Technology Copenhagen A/S DenmarkSPX Flow Technology Crawley Limited United KingdomSPX Flow Technology Danmark A/S DenmarkSPX Flow Technology do Brasil Indústria e Comércio Ltda. BrazilSPX Flow Technology Dublin Limited Ireland Entity Name Domestic JurisdictionSPX Flow Technology Etten-Leur B.V. NetherlandsSPX Flow Technology Finland Oy FinlandSPX Flow Technology Hanse GmbH GermanySPX Flow Technology Hong Kong Limited Hong KongSPX Flow Technology Hungary Kft. (SPX Flow Technology Hungary Mérnöki és Képviseleti Kft.) HungarySPX Flow Technology Ibérica S.A. SpainSPX Flow Technology Italia S.p.A. ItalySPX Flow Technology Japan, Inc. JapanSPX Flow Technology Kerry Limited IrelandSPX Flow Technology Korea Co., Ltd. South KoreaSPX Flow Technology Limited United KingdomSPX Flow Technology London Limited United KingdomSPX Flow Technology Mexico, S. A. de C.V. MexicoSPX Flow Technology Moers GmbH GermanySPX Flow Technology New Zealand Limited New ZealandSPX Flow Technology Norderstedt GmbH GermanySPX Flow Technology Poland sp. z.o.o. PolandSPX Flow Technology Rosista GmbH GermanySPX Flow Technology s.r.o. Czech RepublicSPX Flow Technology Santorso S.r.l. ItalySPX Flow Technology SAS FranceSPX Flow Technology Singapore Pte. Ltd. SingaporeSPX Flow Technology Sweden AB SwedenSPX Flow Technology Systems, Inc. DelawareSPX Flow Technology Unna GmbH GermanySPX Flow Technology USA, Inc. DelawareSPX Flow Technology Warendorf GmbH GermanySPX Flow US, LLC DelawareSPX FLOW, Inc. DelawareSPX France Holdings SAS FranceSPX Industrial Equipment Manufacturing (Suzhou) Co., Ltd. ChinaSPX International GmbH GermanySPX International Holding GmbH GermanySPX International Limited United KingdomSPX International Management LLC DelawareSPX Korea Co., Ltd. South KoreaSPX Latin America Corporation DelawareSPX Luxembourg Acquisition Company S.a.r.l. LuxembourgSPX Luxembourg Holding Company S.á.r.l. LuxembourgSPX Middle East FZE United Arab EmiratesSPX Netherlands B.V. NetherlandsSPX Process Equipment Pty Ltd. AustraliaSPX Russia Limited RussiaSPX Serviços Industriais Ltda. BrazilSPX Singapore Pte. Ltd. Singapore Entity Name Domestic JurisdictionSPX U.L.M. GmbH GermanySPX UK Holding Limited United KingdomThe Harland Engineering Co. Limited ScotlandTorque Tension Systems (Asia Pacfic) Pty Limited AustraliaTorque Tension Systems Limited United KingdomTurnberry Rubicon Limited ScotlandTurnberry Rubicon Limited Partnership ScotlandUD-RD Holding Company Limited United KingdomUnion Pump Limited United KingdomUnited Dominion Industries Corporation CanadaValhalla Holding Company Cayman Islands EXHIBIT 23.1CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMWe consent to the incorporation by reference in Registration Statement Nos. 333-207128 and 333-207129 both on Form S-8 of our report datedFebruary 12, 2016, relating to the consolidated and combined financial statements of SPX FLOW, Inc. and subsidiaries (the “Company”), appearing in thisAnnual Report on Form 10-K of the Company for the year ended December 31, 2015./s/ Deloitte & Touche LLPCharlotte, North CarolinaFebruary 12, 2016 EXHIBIT 31.1 Certification I, Marcus G. Michael, certify that: 1. I have reviewed this annual report on Form 10-K of SPX FLOW, Inc.; 2. Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to makethe statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by thisreport; 3. Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all materialrespects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined inExchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: a. designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others withinthose entities, particularly during the period in which this report is being prepared; b. evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusion about theeffectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and c. disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s mostrecent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likelyto materially affect, the registrant’s internal control over financial reporting; and 5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to theregistrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): a. all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting, which arereasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and b. any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internalcontrol over financial reporting. Date: February 12, 2016/s/ MARCUS G. MICHAEL President, Chief Executive Officer and Director EXHIBIT 31.2 Certification I, Jeremy W. Smeltser, certify that: 1. I have reviewed this annual report on Form 10-K of SPX FLOW, Inc.; 2. Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to makethe statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by thisreport; 3. Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all materialrespects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined inExchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: a. designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others withinthose entities, particularly during the period in which this report is being prepared; b. evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusion about theeffectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and c. disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s mostrecent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likelyto materially affect, the registrant’s internal control over financial reporting; and 5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to theregistrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): a. all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting, which arereasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and b. any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internalcontrol over financial reporting. Date: February 12, 2016/s/ JEREMY W. SMELTSER Vice President and Chief Financial Officer EXHIBIT 32.1 The following statement is being made to the U.S. Securities and Exchange Commission solely for purposes of Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350), which carries with it certain criminal penalties in the event of a knowing or willful misrepresentation.U.S. Securities and Exchange Commission100 F. Street N.E.Washington, DC 20549 Re: SPX FLOW, Inc. Ladies and Gentlemen: In accordance with the requirements of Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350), each of the undersigned hereby certifies that, tothe best of his knowledge: (i) this Annual Report on Form 10-K, for the year ended December 31, 2015, fully complies with the requirements of section 13(a) or 15(d) of theSecurities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and (ii) the information contained in this report fairly presents, in all material respects, the financial condition and results of operations of SPX FLOW, Inc.Date: February 12, 2016 /s/ MARCUS G. MICHAEL /s/ JEREMY W. SMELTSER Marcus G. Michael Jeremy W. SmeltserPresident, Chief Executive Officer and Director Vice President and Chief Financial Officer
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