JBT Corporation
200 East Randolph Drive
Suite 6600
Chicago, Illinois 60601
www.jbtcorporation.com
2008 Annual Report
J
B
T
C
o
r
p
o
r
a
t
i
o
n
2
0
0
8
A
n
n
u
a
l
R
e
p
o
r
t
w
chicken nuggets cooked.
680,000
186,000
5,500
cans of ready meals sterilized.
airline passengers boarded.
ALL IN ONE HOUR’S WORK.
jbt: about the cover
680,000 chicken nuggets cooked: A global leader in Freezing & Chilling and Protein
Processing, JBT FoodTech products and services deliver high-throughput performance
for the world’s best-known food and food service brands. JBT’s Stein THERMoFIN®
Fryer (shown) is the market’s leading large-volume performer for high product
quality and low operating cost.
186,000 cans of ready meals sterilized: JBT FoodTech serves the world’s most trusted
names in the food industry through its In-Container Processing and Fruit Process-
ing product lines. JBT FoodTech sterilization equipment like the JBT SuperAgi™
Agitating Batch Retort system (shown) delivers high-capacity performance for lead-
ing processors of shelf stable ready meals, soups and sauces.
5,500 airline passengers boarded: JBT AeroTech provides market-leading equipment
and support services through its Ground Support Equipment, Gate Equipment,
Military Equipment, Airport Services and Automatic Guided vehicles product lines.
JBT’s Jetway Systems® products (shown) are one of the leaders in the global air
transportation industry for maximum passenger comfort, faster turn times and
reduced operating costs.
EACH OF THE HOURLY FIGURES ABOvE AND ON PAGES 7, 9 AND 11 IS BASED UPON EITHER THE AvERAGE HOURLY CAPACITY OF OUR INSTALLED EqUIPMENT,
OR AvERAGE HOURLY PRODUCTION UTILIzING OUR EqUIPMENT, AT AN ACTUAL JBT CORPORATION CUSTOMER FACILITY.
financial highlights
(In millions, except per share and return on invested capital data)
2008
2007
% change
Revenue
Income from continuing operations
Net income
Pro forma income from continuing operations 1
per share of common stock 2
$1,028.1
$ 44.1
$ 44.2
$ 40.1
$ 978.0
$ 40.1
$ 36.4
$ 33.2
Income from continuing operations per share, diluted
Pro forma income from continuing operations per share, diluted
$ 1.59
$ 1.44
$ 1.45
$ 1.20
5.1%
10.0%
21.4%
20.8%
9.7%
20.0%
other information
Inbound orders
Backlog
Cash flows from continuing operating activities
Return on invested capital 3
reconciliation of non-gaap measures (as required by regulation g)
$ 925.1
$ 295.3
$ 81.8
$ 1,054.3
$ 398.3
$ 39.0
24.0%
19.8%
-12.3%
-25.9%
109.7%
21.2%
1 Pro forma income from continuing operations results include an estimate of interest expense of $6.4 million in 2008 and $11.0 million in 2007 that would have been incurred
had the spin-off of JBT Corporation from its former parent, FMC Technologies, Inc., occurred on January 1, 2007. Interest expense is based on $189.4 million of debt at the interest
rate applicable on July 31, 2008, or 5.8%, for all periods prior to the date of our spin-off from FMC Technologies, Inc. Related income tax was estimated using a tax rate of 37%,
or $2.4 million in 2008 and $4.1 million in 2007.
2 The number of shares used to compute diluted and diluted pro forma earnings per share for the period ending December 31, 2007 is based on the number of shares outstanding
on July 31, 2008, the distribution date of our shares following our spin-off from FMC Technologies, Inc., or 27.5 million shares, as our common stock was not publicly traded
prior to July 31, 2008 and we had no outstanding equity awards in that period.
3 Return on invested capital is calculated as net income from continuing operations plus after tax interest expense as a percentage of average owner’s equity and long term debt.
executive officers
annual Meeting
stocK exchange
JBT Corporation is listed on the
New York Stock Exchange under
the symbol JBT.
auditors
KPMG LLP
303 East Wacker Drive
Chicago, Illinois 60601
stocK transfer agent
Address stockholder inquiries, including
requests for stock transfers, to:
National City Bank
Shareholder Services Operations
P.O. Box 92301
Cleveland, Ohio 44193-0900
Phone: 800.622.6757
E-mail:
shareholder.inquiries@nationalcity.com
additional inforMation
Additional information about JBT
Corporation, including news and
financial data, is available by visiting
the company’s website:
www.jbtcorporation.com
An e-mail alert service is available by
request under the Investor Relations
section of the site. This service will
provide an automatic alert, via e-mail,
each time a news release is posted to
the site or a new filing is made with
the U.S. Securities and Exchange
Commission.
Information may be also be obtained
by writing to Corporate Communica-
tions in Chicago, Illinois.
Charles H. Cannon, Jr.
Chairman, Chief Executive Officer and
President
Ronald D. Mambu
Vice President, Chief Financial Officer,
Treasurer and Controller
Torbjörn Arvidsson
Vice President and Division Manager,
Food Solutions and Services
Juan C. Podestá
Vice President and Division Manager,
Food Processing Systems
John Lee
Vice President and Division Manager,
JBT AeroTech
Kenneth C. Dunn
Vice President and General Counsel
Mark K. Montague
Vice President, Human Resources
Megan J. Donnelly
Chief Accounting Officer
corporate office
John Bean Technologies Corporation
200 East Randolph Drive
Suite 6600
Chicago, Illinois 60601
Phone: 312.861.5900
investor relations
John Bean Technologies Corporation
Investor Relations
Cindy Shiao
200 East Randolph Drive
Suite 6600
Chicago, Illinois 60601
Phone: 312.861.5931
http://ir.jbtcorporation.com
The Annual Meeting will be held
at 2:15 p.m. EDT on Thursday, May 7,
2009 at 1622 First Street, Sandusky,
Ohio 44870. Notice of the meeting,
together with proxy materials, will be
delivered to stockholders in advance
of the meeting.
forM 10-K
A copy of the company’s 2008 Annual
Report on Form 10-K, as filed with the
U.S. Securities and Exchange Commis-
sion, is included within this Annual
Report to Shareholders, and is also
available at http://ir.jbtcorporation.com.
Additional copies of the company’s
Annual Report on Form 10-K are
available upon written request to:
JBT Corporation
Corporate Communications
200 East Randolph Drive
Suite 6600
Chicago, Illinois 60601
However, certain information required
under Part III of the company’s 2008
Annual Report on Form 10-K has been
incorporated by reference from the
company’s Proxy Statement for its 2009
Annual Meeting of Stockholders.
Certifications required by Section 302
of the Sarbanes-Oxley Act of 2002,
as amended, were filed as Exhibits to
the company’s 2008 Annual Report on
Form 10-K. Since the company listed
with the New York Stock Exchange
(NYSE) in 2008, we were not required
to file the CEO certification required by
Section 303A.12(a) of the NYSE’s Listed
Company Manual with respect to fiscal
year 2007. Instead, in connection with
our listing, we submitted letters to the
NYSE in August and October of 2008
confirming our compliance with all
applicable requirements of Section 303A
of the NYSE’s Listed Company Manual.
JBT Corporation was originally incor-
porated as Frigoscandia, Inc. in the
State of Delaware in May 1994.
.
c
n
I
,
s
k
r
e
w
u
a
B
,
c
i
v
o
k
a
v
o
N
a
k
n
a
v
o
J
:
)
2
1
,
3
.
p
p
(
y
h
p
a
r
g
o
t
o
h
P
s
n
o
i
t
a
c
i
n
u
m
m
o
C
l
i
a
t
e
v
o
D
,
k
i
o
t
S
d
e
T
:
l
a
i
r
o
t
i
d
E
o
g
a
c
i
h
C
,
n
g
i
s
e
D
n
a
m
l
e
d
E
:
n
g
i
s
e
D
The scale, impact and sophistication of our technologies
surprise those who don’t know us. But to many of the
world’s leading corporations, we’re a valuable long-term
partner. We’re John Bean Technologies Corporation (JBT
Corporation, NYSE: JBT), a newly independent company
formed in 2008 by a spin-off of FMC Technologies’ food
processing and air transportation businesses. We’ve hit
the ground running to leverage our strengths — including
a large installed base of equipment, a global customer base
and more than a century as an innovator and market
leader — to continue to thrive and grow.
financial highlights
financial highlights
n JBT AeroTech
n JBT AeroTech
n JBT FoodTech
n JBT FoodTech
n JBT Corporation
n JBT Corporation
446.9
446.9
386.0
386.0
594.1
594.1
584.0
584.0
348.7
348.7
496.2
496.2
38.5
38.5
32.4
32.4
60.2
60.2
55.0
55.0
27.1
27.1
46.3
46.3
24.0%
24.2%
19.8%
20.2%
17.3%
17.6%
2006
2006
2007
2007
2008
2008
2006
2006
2007
2007
2008
2008
2006
2006
2007
2007
2008
2008
revenue
revenue
(us$ in millions)
(us$ in millions)
segment operating
segment operating
income
income
(us$ in millions)
(us$ in millions)
return on
return on
invested capital
invested capital
DEAR FELLOW
DEAR FELLOW
SHAREHOLDERS:
SHAREHOLDERS:
It’s been quite a first year for JBT Corporation. We spun-off from our former parent
It’s been quite a first year for JBT Corporation. We spun-off from our former parent
and delivered record profits in our two segments, JBT FoodTech and JBT AeroTech.
and delivered record profits in our two segments, JBT FoodTech and JBT AeroTech.
But we also found ourselves in the most challenging and uncertain economic environ-
But we also found ourselves in the most challenging and uncertain economic environ-
ment the world has seen in more than 70 years.
ment the world has seen in more than 70 years.
STArTing From A poSiTion
STArTing From A poSiTion
oF STrengTh
oF STrengTh
Let me start with our results. JBT reported
Let me start with our results. JBT reported
revenue of $1.0 billion, up 5 percent year
revenue of $1.0 billion, up 5 percent year
over year, driven by a second consecutive
over year, driven by a second consecutive
year of record consolidated sales. We ex-
year of record consolidated sales. We ex-
ceeded our full-year earnings projections
ceeded our full-year earnings projections
for 2008, achieving diluted earnings per
for 2008, achieving diluted earnings per
share (EPS) from continuing operations
share (EPS) from continuing operations
of $1.59 compared with 2007’s $1.45 per
of $1.59 compared with 2007’s $1.45 per
share. Pro-forma diluted EPS from con-
share. Pro-forma diluted EPS from con-
tinuing operations, a non-GAAP measure
tinuing operations, a non-GAAP measure
that includes comparable debt and interest
that includes comparable debt and interest
expense in this and the previous year, was
expense in this and the previous year, was
$1.44, a 20 percent increase over $1.20
$1.44, a 20 percent increase over $1.20
in 2007.
in 2007.
Our cash flow from continuing operations
Our cash flow from continuing operations
was strong in 2008 at $81.8 million, which
was strong in 2008 at $81.8 million, which
we used to reduce our debt, make our
we used to reduce our debt, make our
first acquisition (the assets of USA Sales
first acquisition (the assets of USA Sales
& Automation, LLC, a leading North Ameri-
& Automation, LLC, a leading North Ameri-
can supplier of industrial slicing equipment
can supplier of industrial slicing equipment
for meat, seafood and poultry) and declare
for meat, seafood and poultry) and declare
our first dividend to shareholders.
our first dividend to shareholders.
Enthusiasm over our first-year financial
Enthusiasm over our first-year financial
performance obviously was tempered by
performance obviously was tempered by
highly turbulent economic conditions that
highly turbulent economic conditions that
accelerated in the second half of the
accelerated in the second half of the
year and continue as I write this letter.
year and continue as I write this letter.
No one can say what lies ahead of us in
No one can say what lies ahead of us in
2009 and beyond, but I assume it will be
2009 and beyond, but I assume it will be
a challenging period for our company and
a challenging period for our company and
our customers.
our customers.
There’s a lot of uncertainty in the market-
There’s a lot of uncertainty in the market-
place, to say the least. But if the current
place, to say the least. But if the current
environment can be likened to rough and
environment can be likened to rough and
unpredictable seas, I’ll tell you something:
unpredictable seas, I’ll tell you something:
I like our ship.
I like our ship.
JBT boasts an excellent combination of
JBT boasts an excellent combination of
financial strength, business mix diversity,
financial strength, business mix diversity,
global presence, market leadership, estab-
global presence, market leadership, estab-
lished customer relationships and is led
lished customer relationships and is led
by a highly experienced management team
by a highly experienced management team
and a stellar board.
and a stellar board.
2.
Our executive team is invested in the future
success of this enterprise — literally. Since
the spin-off, we have increased our stake
through share purchases on the open mar-
ket; including restricted share awards, JBT
executive officers now hold an equity stake
amounting to approximately 4% of out-
standing shares.
We intend to pursue growth
both organically and through
acquisition, while managing
aggressively to keep costs
in line with demand.
To a person, we at JBT are excited about
the long-term potential this company rep-
resents and confident we can deliver that
potential for customers, shareholders and
employees. Now that we are an indepen-
dent corporation, it’s gratifying to be able
to invest our cash and earnings entirely to
grow JBT and create shareholder value.
The voyage ahead will not be easy, but as
I said before, in stormy seas, I like our ship.
Thanks for coming on board.
Sincerely,
Charles H. Cannon, Jr.
Chairman of the Board,
Chief Executive Officer and President
JBT Corporation
We have a solid balance sheet with low fixed
costs and businesses that, in the aggregate,
generate strong, consistent cash flow. These
attributes give us maximum strategic flex-
ibility to build shareholder value from day
one, even in difficult economic conditions.
Equally important, we are efficient users of
capital — we don’t need high levels of capital
to sustain or grow the business.
We have a broad business mix within our
two segments, with operations in more than
25 countries, customers in more than 100,
and a number-one or -two market share in
our major product lines based on sales. Our
largest product line, freezing and chilling,
represents just 15 percent of our revenue.
We have a sizable installed base of equip-
ment, which provides a significant source
of recurring revenue. Taken together, these
characteristics form a very stable platform
— to continue my naval analogy, this is a
sturdy vessel for navigating whatever seas
lie ahead.
Our strengths and established
customer relationships
give us the ability to build
value from day one.
At the helm we have an excellent manage-
ment team, highly experienced in operating
and delivering results in a variety of eco-
nomic conditions, including downturns.
Our senior operating team averages more
than 20 years of industry experience. It’s
an international group, as well — between
us, we speak 10 different languages. And
we were successful in recruiting an out-
standing Board of Directors, bringing to
JBT the benefit of diverse backgrounds
and executive leadership experience from
some of the most respected firms in the
corporate world.
A look AT The yeAr AheAd
While we entered 2009 with confidence,
our business plan is conservative given the
uncertainties in the economy. We will con-
tinue to focus on growing our aftermarket
business while thoughtfully putting our
strong cash flow to work to strengthen our
balance sheet, build our business and return
value to shareholders.
We’re always looking to develop new ways
to bring more value to our customer rela-
tionships, to help our partners operate
more efficiently and cost effectively and
to help them be stronger competitors.
These are outcomes that are always top
of mind for customers but even more
critical in times of economic challenge.
Through high-value parts, leases and ser-
vices, we seek to provide market-leading
customer benefit while maintaining a solid
base for recurring revenue and growth
for JBT.
We intend to drive external growth as well.
Throughout the year ahead, we’ll be alert
for appropriate opportunities to build our
business through bolt-on acquisitions in our
FoodTech and AeroTech segments.
In this turbulent environment, we’ll continue
to watch our markets like a hawk. We have
refined our management reporting pro-
cesses to provide the executive team with
more frequent briefings on the market
segments we serve. This, along with our
relatively low fixed costs, will enable us to
react more quickly to keep our cost struc-
ture in line with demand.
CommiTTed To delivering vAlue
To our inveSTorS
I know I speak for the entire JBT manage-
ment team when I say that our first priority
is to be good stewards of our shareholders’
investment. That means wisely deploying
the cash our businesses generate to grow
this business both organically and through
acquisition, and if there aren’t opportunities
available that offer sufficient value, being
prepared to return that cash to our share-
holders through dividends, share buybacks
or a combination of the two.
3.
1884
1921
1928
1930s
1930s
John Bean invents the
continuous spray pump.
Bean Spray Pump
Company founded.
The world’s first continuous
rotary pressure sterilizer
developed for processing
low acid foods such as
vegetables, milk and soup —
helps open the door for
dramatic canning industry
growth through the first half
of the 20th century. 1982
designated Engineering
Landmark by the American
Society of Mechanical
Engineers.
John Bean stock is
introduced on the San
Francisco Exchange.
John Bean Mfg. Company
changes name to Food
Machinery Corporation
(FMC).
Mergers in 1920s and 30s
add canning and fruit
businesses to the portfolio.
FMC becomes the world’s
largest food processing
equipment supplier for
fruit, vegetables, milk, fish
and meat.
FMC opens export
offices in New York,
San Francisco and South
Africa and forms agree-
ments to provide products
and services throughout
the British Empire and
continental Europe.
1959
1960
1962
The first Jetway® Apron
Drive Passenger Boarding
Bridges pioneered with
the airline industry, revolu-
tionizes the passenger
boarding process.
The first Frigoscandia IQF
freezer — FLoFREEZE® —
introduced, giving birth to
individual quick-freezing of
seasonal foods and replacing
block or cluster-freezing
of small-sized products.
The first FMC citrus juice
extractors come to Brazil
in response to a major Florida
freeze — today Brazil is the
largest worldwide producer
of orange juice. Subsequently,
in 1975 Araraquara, Brazil
manufacturing facility opened
— today produces equipment
for most of JBT FoodTech
product lines.
JBT: A CENTURY
OF SUCCESS
1979
1982
1982
1987
1987
First bulk aseptic tank farm
process is commercialized,
leading to development
of the Florida not-from-
concentrate (NFC) market.
In 1990, the world’s first fully
integrated aseptic bulk
storage tank farm for NFC
juice was installed.
LOG-TEC® Process
Management System is
introduced — first computer-
ized record keeping system
unconditionally accepted
by FDA and USDA. Today
LOG-TEC® control systems
are used throughout the
food processing industry.
LOG-TEC® paves the way
for NumeriCAL® modeling
software for optimizing
cooking processes.
The XL Series of high-
volume breading applicators
are introduced, helping in
the development of the fast
food restaurant chicken
nugget market.
The world’s first commer-
cially viable selfstacking
spiral convection oven
(GYRoCOMPACT® Oven)
is developed utilizing
Frigoscandia’s self-stacking
belt technology.
The Commander loader
system is introduced to meet
the wide pallet requirements
of the B767, including a new
Heliroll® conveyor system.
1997
1999
2001
2001
2004
The AirFirst® forced air
de-icing system introduced,
reducing glycol fluid usage
and environmental impact.
Two years later the new
Tempest heavy-duty de-icer
is introduced, meeting
demand for lower de-icing
operational cost.
South African-based
IMC acquired, reestablish-
ing African presence after
Apartheid.
Airport Services busi-
ness launched to provide
outsourced, comprehensive
facility maintenance
services at airports across
North America.
Awarded Next Generation
Small Loader program by the
United States Air Force, with
over 400 loaders delivered
to date. Now known as the
Halvorsen 25K Loader, used
by military forces for rapid
deployment and loading and
transporting of palletized
cargo. In 2008 the new third
generation Halvorsen 44K
Loader is introduced.
The next generation of
citrus juice extraction
technology introduced,
improving efficiencies and
yields for production of
both concentrate and
not-from-concentrate citrus
juices and other citrus
by-products.
4.
1930s
1946
1947
1952
1953
First automated citrus juice
extractors developed — the
innovative “Polk” extractor
quartered the fruit, then
removed pulp and juice.
Inline juice extractor intro-
duced — the revolutionary
concept, coupled with its
high yields and excellent
juice quality, helped create
the citrus juice industry as
it is known today. 1984
designated Engineering
Landmark by the American
Society of Mechanical
Engineers.
Continuous freezer technology
developed during the post-
war boom — providing for
assembly-line production of
pre-packaged frozen foods.
The Spore Count Reduction
Method developed for
biological validation of the
effectiveness of sterilization
processes — now one of the
two most widely recognized
methods to ensure safety of
thermally processed foods
and optimize their cooking.
The world’s first commercial
conveyorized breading
machine is introduced,
paving the way for our
protein processing busi-
ness. Followed by further
developments in frying,
batter mixing, oil filtration
and convection cooking
technologies.
1962
1964
1965
1969
1979
The first mobile de-icing
system introduced, devel-
oped from a Bean spray
pump.
The breakthrough dual
chain hydrostatic sterilizer
technology introduced for
the continuous processing
of in-container foods. Allows
processors more flexibility
in the range of container
sizes processed simultane-
ously in one machine.
The first Frigoscandia
GYRoFREEZE® spiral
freezer is delivered,
dramatically increasing
the amount of food frozen
in a single unit.
The Jumbo Cargo Loader
(JCL) developed, specially
designed for the Boeing 747
jumbo jet. Five years later the
Main Deck Loader (MDL) is
introduced to meet the new
B747 freighter requirements.
The GYRoCOMPACT®
self-stacking spiral freezer
is introduced. In total, more
than 3,500 GYRoCOMPACT
freezers have been sold
worldwide.
1990
1991
1993
1993
1994
The first high pressure
waterjet DSI Portioning
System is delivered for
poultry applications. Later,
in 2004, the new Accura™
portioner with SuperShape
software revolutionizes
protein portioning through
higher yields and meeting
precise shape and weight
requirements.
The Steam Water Spray Auto-
mated Batch Retort System
is introduced, combining
three technologies (batch
retorts, automated container
loading and automatic guided
vehicles) into one system.
The first impingement
freezer (flat product freezer)
is delivered. Later, the
ADvANTEC™ impingement
freezer technology is
introduced, replacing many
cryogenic gas freezing
applications for flat products
while decreasing freezing
operating costs.
The THERMoFIN® Fryer is
developed, introducing a
high-capacity and energy-
efficient conveyorized fryer
that enables increased
cooking of high quality food
products while reducing
operating costs.
The first point-of-use
pre-conditioned air unit is
introduced, providing
cooling for aircraft while
parked at the gate. Reduces
fuel consumption and
emissions by minimizing
auxiliary power unit or engine
usage on the ground.
2005
2005
2006
2007
2008
The electric drive Ramp-
Snake® mobile bulk loader
introduced, expediting loading
and unloading of bulk cargo
and turn times for narrow body
aircraft while providing a
lower total cost of ownership.
The first passenger boarding
bridge manufactured to service
the Airbus A380. The Jetway®
bridge unloaded passengers
at the Sydney Airport,
Australia in 2007 for the
A380’s first commercial flight.
A local Chinese manufacturing
presence established with
the opening of a production
facility in Ningbo, China.
Greening of our product line
continues with alternative
fuel Ground Support Equip-
ment, including Commander
cargo loader, RampSnake®
bulk loader, aircraft tow
tractors, and mobile passen-
ger steps.
JBT Corporation is created
through spin-off of FMC
Technologies’ FoodTech and
AeroTech businesses.
5.
jbt fruit processing solutions are the
state of the art worldwide for high-
volume production of fruit juices,
purees, concentrates, and more.
WE’RE GLOBAL
INNOVATORS
From our founding, we have introduced
a steady stream of innovations, many of
which have literally helped create indus-
tries. This tradition of invention is a major
factor in the value we deliver today across
our strong global footprint and broad cus-
tomer base.
gAme-ChAnging innovATionS ThAT
helped deFine hoW We live TodAy
From founder John Bean’s invention of the continuous
high-pressure spray pump to protect orchards in the
1880s to de-icing technology for a commercial air travel
industry still in its infancy in the early 1960s, JBT in-
novation has played a vital role in modern life. if
you’ve ever drank a glass of orange juice, opened a
can of soup, eaten a quick-serve hamburger, thawed
chicken breasts or fish filets for dinner, received an
overnight package or boarded a commercial aircraft,
you have been touched by JBT technology.
leAding The WAy To The FuTure
Through r&d inveSTmenT
our 100-year heritage of innovation has contributed to
a position of leadership in a wide range of technolo-
gies — freezing, portioning, cooking, canning and fruit
processing on the food processing side; de-icing, pas-
senger boarding, cargo loading, system maintenance
and terminal management in air transportation. We
continue to invest significant resources in r&d today,
working in JBT Centers of excellence worldwide to
maintain and build upon our technology leadership.
gloBAl preSenCe remArkABle
For A CompAny our Size
JBT’s global footprint spans every major region in the
world, with sales, r&d, manufacturing, distribution and
aftermarket service centers strategically located to serve
multi-national and regional customers wherever they
do business. Currently more than 50 percent of our sales
and more than 40 percent of our people are located
outside the united States.
6.
100,000 gallons
of juice
squeezed in
an hour
Brazil, the world’s number-one exporter of orange
juice, is home to the largest orange processing
facility in the world. Florida and California put
orange juice on breakfast tables across the united
States. european, African, Asian and other latin
American juice processors are expanding
to meet growing demand for regionally
produced orange juice. Wherever citrus is
grown, customers use JBT FoodTech’s Citrus
extractors to produce the highest quality juice.
75%
JBT products squeeze
approximately 75% of the
world’s citrus juices.
7.
jbt advanced cargo handling equipment
drives high productivity levels at the
lowest cost of ownership for airlines,
freight carriers and military customers.
WE’RE ESTABLISHED
LEADERS
JBT’s century-long history of innovation and
customer value has created a company that
today is a global leader — well positioned
to leverage long-term customer relation-
ships and invest in growth.
JBT FoodTech provides freezing, protein processing, in-
container processing and fruit processing solutions to
multi-national and regional food processors; JBT Aero-
Tech is a provider of ground support and other equipment
and services to commercial airlines, airports, air-freight
carriers, ground handling and military customers.
A CenTury-old neW CompAny
With beginnings that date back to 1884, JBT has deep
roots in the markets it serves — a well-established
global infrastructure, proven products and processes,
and a solid reputation for delivering value. With the
spin-off, JBT’s workforce and management team are
energized with the excitement and new sense of pos-
sibility of a start-up.
numBer-one or -TWo mArkeT ShAre
in every mAJor produCT line
We occupy the leader’s position in a diverse array of
industries and technologies within our two businesses.
With a number-one or -two market share in our major
product lines, and with a customer list that reads like a
global and regional who’s-who of industry players, JBT
truly is a leader serving leaders. This is an ideal position
for delivering maximum shareholder value.
CuSTomer relATionShipS CreATe A STABle BASe
JBT’s business includes a delivered base of more than
40,000 pieces of food processing technology and some
30,000 pieces of airport equipment located all over the
world — a strong and stable platform for growing re-
curring revenue, expanding relationships and turning
customer insights into new product innovation.
8.
400,000 pieces
of overnight
packages loaded
in an hour
more than 40 years ago, JBT AeroTech devel-
oped the first modern aircraft cargo loader.
Some 8,700 loaders later, we continue to
develop products that deliver lower total cost
of ownership through a focus on safety,
operation, maintenance, reliability, durability
and environmental impact. Case in point: The
Commander 15i is a fully electric loader, which
lowers operating and maintenance expenses
while meeting emission requirements.
70%
Approximately 70% of the
world’s overnight express packages
are loaded by JBT systems.
9.
jbt freezing and chilling products are
the first choice for maximum hygiene,
flexibility and performance among the
world’s biggest names in packaged foods.
WE INTEND TO
KEEP GROWING
JBT is a compelling combination of financial
strength, product breadth, global scale,
market leadership and long-term customer
relationships. We’re pursuing strategies to
convert these attributes into growth.
relationships in FoodTech and AeroTech by continu-
ously enhancing our aftermarket offerings. The size,
breadth and nature of our many relationships repre-
sent a knowledge base that we can leverage both to
benefit our existing customers and pursue new ones.
exTending our TeChnology leAderShip
Competitive and economic pressures are driving a need
for new efficiencies and capabilities among food proces-
sors. Air transportation industry sources are projecting
long-term growth in global air traffic, creating demand
both for new infrastructure and increased productivity
of existing assets. These trends align with JBT’s primary
strengths. We’re continuing our investments in r&d, ex-
tending JBT technology leadership to help customers
meet the challenges of a changing marketplace.
leverAging our inSTAlled BASe
And gloBAl preSenCe
We have strategies in place to deepen our customer
We see opportunities for global growth as well. our
well-established, expanding international presence places
JBT in an excellent position to help customers benefit
from growing demand in developing markets such as
latin America, the middle east, eastern europe and Asia
for food processing and air transportation ground sup-
port technologies.
groWing Through ACquiSiTion
in addition to organic growth, a significant element of
our long-term strategy is to identify and pursue acqui-
sitions that add immediate and tangible value to our
business. our global infrastructure lends itself to smooth
and efficient integration of new businesses and tech-
nologies added through acquisition.
10.
88,000 pounds
of green peas
individually frozen
in an hour
As a company that has delivered more than 7,000
freezers over the years, technical skill, engineering
knowledge and practical expertise are in abundant
supply at JBT FoodTech. The FloFreeze ® iqF
(individually quick Frozen) freezer by JBT FoodTech
is considered to be one of the industry’s most
important innovations, with advanced technology
designed to individually freeze sensitive, sticky,
hard-to-handle foods of differing shapes and sizes.
Whether it’s strawberries, peas or shrimp, this
technology preserves maximum product flavor,
texture and quality in the freezing process. The
secret is a patented, controlled airflow system
that creates a bed of super-cooled air, gently
suspending and separating solid food products
while simultaneously freezing them.
50%
JBT products freeze approxi-
mately half of the world’s
commercially frozen foods.
11.
1
2
3
BOARD OF
DIRECTORS
1/ Charles h. Cannon, Jr., Chairman
Served in various positions within FMC
Corporation and FMC Technologies, Inc. since
1982 including Senior Vice President of FMC
Technologies, Inc. and General Manager of
FMC FoodTech and Airport Systems; currently
a Board Member of Standex International
Corporation.
2/ C. maury devine
Served in various positions within Exxon
Mobil Corporation from 1994 to 2000 in-
cluding President and Managing Director of
Exxon Mobil Norway and Secretary of Mobil
Corporation; previously held positions with-
in the U.S. Government; currently a Board
Member of FMC Technologies, Inc. and Det
Norske Veritas.
12.
4
6
5
7
3/ Alan d. Feldman
Has served as the President and CEO of
Midas, Inc. since 2003 and as its Chairman
since 2006; previously held senior man-
agement positions within McDonald’s and
PepsiCo; currently a Board Member of Foot
Locker, Inc.
4/ James e. goodwin
Served as Chairman and CEO of UAL Cor-
poration and United Airlines from 1999 to
2001; currently a Board Member of AAR
Corporation, Federal Signal Corporation and
First Chicago Bank & Trust.
5/ polly B. kawalek
Served as President of PepsiCo’s Quaker
Foods Division from 2002 to 2004; previ-
ously held various positions for 25 years
within Quaker Oats; currently a Board Mem-
ber of Martek Biosciences Corp. and Elkay
Manufacturing, Inc.
6/ James m. ringler
Has served as Chairman of Teradata Corpo-
ration since 2007; previously held senior
management positions with Illinois Tool
Works, Inc., Premark International, Inc.,
White Consolidated Industries and The Tap-
pan Company; currently a Board Member
of FMC Technologies, Inc., Dow Chemical
Company, Corn Products International, Inc.
and Autoliv, Inc.
7/ James r. Thompson
Has served in various positions with Winston
& Strawn LLP since 1991 including Senior
Chairman and Chairman; previously held
various positions with the U.S. Government
and was the the Governor of Illinois from
1977 to 1991; currently a Board Member
of FMC Technologies, Inc., Navigant Con-
sulting Group, Inc. and Maximus, Inc.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
È ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2008
OR
‘ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission file number: 1-34036
John Bean Technologies Corporation
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of
incorporation or organization)
91-1650317
(I.R.S. Employer
Identification Number)
200 East Randolph Drive
Chicago, IL 60601
(Address of principal executive offices)
(312) 861-5900
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class
Name of Exchange on Which Registered
Common Stock, $0.01 par value
Preferred Share Purchase Rights
New York Stock Exchange
New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer as defined in Rule 405 of the Securities
Act. Yes ‘ No È
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 ‘ No È
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes È No ‘
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 the registrant’s knowledge, 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. ‘
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 “large accelerated filer,” “accelerated filer” and “smaller reporting company” in
Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer ‘ Accelerated filer ‘ Non-accelerated filer È Smaller reporting company ‘
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act). Yes ‘ No È
The aggregate market value of common stock held by non-affiliates of the registrant on the last business day of the
registrant’s most recently completed second fiscal quarter was: N/A (the registrant was not yet a public company).
At February 27, 2009, there were 27,542,522 shares of the registrant’s common stock outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant’s Proxy Statement for the 2009 Annual Meeting of Stockholders are incorporated herein by
reference in Part III of this Annual Report on Form 10-K to the extent stated herein.
TABLE OF CONTENTS
PART I
Item 1. Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 1A. Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 1B. Unresolved Staff Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 2.
Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 3.
Submission of Matters to a Vote of Security Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 4.
PART II
Item 5. Market for Registrant’s Common Equity and Related Stockholder Matters . . . . . . . . . . . . . . . . . .
Item 6.
Selected Financial Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations . . . . .
Item 7A. Qualitative and Quantitative Disclosures About Market Risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Financial Statements and Supplementary Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 8.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure . . . . .
Item 9A. Controls and Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 9B. Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PART III
Item 10. Directors, Executive Officers and Corporate Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 11. Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 13. Certain Relationships and Related Transactions, and Director Independence . . . . . . . . . . . . . . . .
Item 14. Principal Accountant Fees and Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PART IV
Item 15. Exhibits and Financial Statement Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Signatures
Page
5
20
34
34
34
34
35
37
39
53
55
89
89
89
91
91
91
91
91
92
95
2
SPECIAL NOTE ABOUT FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K and other materials filed or to be filed by John Bean Technologies
Corporation, as well as information in oral statements or other written statements made or to be made by us,
contain statements that are, or may be considered to be, forward-looking statements [within the meaning of the
Private Securities Litigation Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934]. All statements that are not historical facts, including statements about our
beliefs or expectations, are forward-looking statements. You can identify these forward-looking statements by
the use of forward-looking words such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,”
“will,” “should,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “estimates,” “anticipates,” “foresees”
or the negative version of those words or other comparable words and phrases. Any forward-looking statements
contained in this Annual Report on Form 10-K are based upon our historical performance and on current plans,
estimates and expectations. The inclusion of this forward-looking information should not be regarded as a
representation by us or any other person that the future plans, estimates or expectations contemplated by us will
be achieved. These forward looking statements include, among others, statements relating to:
•
Fluctuations in our financial results;
• Unanticipated delays or acceleration in our sales cycles;
• Deterioration of economic conditions;
•
Sensitivity of segments to variable or volatile factors;
• Changes in demand for our products and services;
• Changes in commodity prices, including those impacting materials used in our business;
• Disruptions in the political, regulatory, economic and social conditions of the foreign countries in
which we conduct business;
•
Increases in energy prices;
• Changes in food consumption patterns;
•
Impacts of pandemic illnesses, food borne illnesses and diseases to various agricultural products;
• Weather conditions and natural disasters;
• Changes in U.S. immigration policy;
• Acts of terrorism or war;
• Termination or loss of major customer contracts;
• Customer sourcing initiatives;
• Competition and innovation in our industries;
• Our ability to develop and introduce new or enhanced products and services;
• Difficulty in developing, preserving and protecting our intellectual property;
• Competition from low-cost suppliers in Asia;
• Our ability to protect our information systems;
• Adequacy of our internal controls;
• Our ability to successfully integrate, operate and manage acquired businesses and assets;
• Loss of key management and other personnel;
3
•
Potential liability arising out of the installation or use of our systems;
• Our ability to comply with the laws and regulations governing our U.S. government contracts;
• Our ability to comply with U.S. and international laws governing our operations and industries;
• The outcome of pending or future litigation;
•
Increases in tax liabilities;
• Difficulty in implementing our business strategies;
• Availability and access to financial and other resources;
•
Failure to qualify as a tax-free reorganization; and
• Our ability to establish our own financial, administrative and other support functions.
We believe that the factors that could cause our actual results to differ materially include but are not limited
to the factors we describe herein, including under “Risk Factors,” and “Management’s Discussion and Analysis
of Financial Condition and Results of Operations.” If one or more of those or other risks or uncertainties
materialize, or if our underlying assumptions prove to be incorrect, actual results may vary materially from what
we projected. Consequently, actual events and results may vary significantly from those included in or
contemplated or implied by our forward-looking statements. The forward-looking statements included in this
Annual Report on Form 10-K are made only as of the date hereof, and we undertake no obligation to publicly
update or review any forward-looking statement made by us or on our behalf, whether as a result of new
information, future developments, subsequent events or circumstances or otherwise.
4
PART I
Unless the context indicates otherwise, all references in this report to JBT Corporation, the Company, us,
we, or our include John Bean Technologies Corporation and its subsidiaries (JBT Corporation). Effective
July 31, 2008, JBT Corporation was spun-off from FMC Technologies, Inc. (FMC Technologies) and became a
separate, publicly-traded company. This transaction is referred to in this Annual Report on Form 10-K as the
“distribution” or the “spin-off.” Prior to the spin-off, JBT Corporation and its subsidiaries were wholly-owned
subsidiaries of FMC Technologies and our operations were a part of FMC Technologies’ operations.
ITEM 1. BUSINESS
OVERVIEW
We are a global technology solutions provider for the food processing and air transportation industries. We
design, manufacture, test and service technologically sophisticated systems and products for customers through
our JBT FoodTech and JBT AeroTech segments.
JBT FoodTech markets its solutions and services to multi-national and regional industrial food processing
companies. The product offerings of our JBT FoodTech businesses include:
•
•
•
•
freezer solutions for the freezing and chilling of meat, seafood, poultry, ready-to-eat meals, fruits,
vegetables and bakery products;
protein processing solutions that portion, coat and cook poultry, meat, seafood, vegetable and bakery
products;
in-container processing solutions for fruits, vegetables, soups, sauces, dairy and pet food products as
well as ready-to-eat meals in a wide variety of modern packages; and
fruit processing solutions that extract, concentrate and aseptically process citrus, tomato and other
fruits.
JBT AeroTech markets its solutions and services to domestic and international airport authorities, passenger
airlines, air freight and ground handling companies and the United States military. The product offerings of our
JBT AeroTech businesses include:
•
•
•
ground support equipment for cargo loading, aircraft deicing and aircraft towing;
gate equipment for passenger boarding, on the ground aircraft power and cooling;
airport services for maintenance of airport equipment, systems and facilities;
• military equipment for cargo loading, aircraft towing and on the ground aircraft cooling; and
•
automatic guided vehicles for material handling in the automotive, printing, warehouse, and hospital
industries.
Financial information about our business segments is incorporated herein by reference from Note 18 to our
consolidated financial statements included in Item 8 of this Annual Report on Form 10-K.
Prior to our spin-off from FMC Technologies, we were a wholly-owned subsidiary of FMC Technologies
operating under the name of FMC FoodTech, Inc. As part of the plan to separate into two independent publicly-
traded companies, FMC Technologies changed our name to John Bean Technologies Corporation and transferred
to us the equity interests of the entities that held all of the assets and liabilities of its Airport Systems business
and FoodTech related businesses. On July 31, 2008, FMC Technologies distributed all of its shares of JBT
Corporation to its shareholders at a ratio of .216 of a share of JBT Corporation common stock for every share of
FMC Technologies common stock held on the record date of July 22, 2008 (the “Separation”).
Our principal executive offices are located at 200 East Randolph Drive, Suite 6600, Chicago, IL 60601.
5
BUSINESS SEGMENTS
JBT FoodTech
Overview
JBT FoodTech is a leading supplier of customized industrial food processing solutions and services used in
the food processing industry. We design, manufacture and service technologically sophisticated food processing
systems for the preparation of ready-to-eat meals, shelf stable packaged foods, meat, seafood and poultry
products, juice and dairy products, fruit and vegetable and bakery products. During the year ended December 31,
2008, JBT FoodTech generated $584.0 million of revenue and $60.2 million of segment operating profit,
resulting in compound annual growth rates since 2006 of 8.5% and 14.0%, respectively.
We believe our success is derived from our continued technological innovation. We broadly categorize our
technology solutions offerings into freezing and chilling, protein processing, in-container processing and fruit
processing. We apply these differentiated and proprietary technologies to meet our customers’ processing needs.
We continually strive to improve our existing solutions and develop new solutions by working closely with our
customers.
Our historically strong position in the markets we serve has provided us with a large installed base of
systems and equipment. Throughout our history, we have delivered over 40,000 pieces of food processing
equipment which includes more than 7,000 industrial freezers, 2,400 industrial citrus juice extractors, 3,000
industrial sterilization systems and 8,000 coating systems. We estimate that the installed base of our equipment
collectively processes approximately 75% of the global production of citrus juices, freezes approximately 50% of
commercially frozen foods on a global basis and sterilizes approximately 50% of the world’s canned foods. This
installed base provides strong, recurring aftermarket products, parts and services revenue, which accounted for
approximately 28% of our JBT FoodTech total revenue in 2008. Our installed base also provides us with strong,
long-term customer relationships from which we derive information for new product development to meet the
evolving needs of our food processing customers.
We have operations located globally to serve our existing JBT FoodTech equipment base located in more
than 100 countries. Our principal production facilities are located in the United States (California, Ohio and
Florida), Belgium, Brazil, South Africa, China, Italy and Sweden. In addition to sales and services offices based
in more than 25 countries, we also support our customers in their development of new food products and
processes as well as the refinement and experimentation of their current applications through seven technical
centers located in the United States (California, Ohio and Florida), Brazil, Sweden, Belgium and China. Our
global presence allows us to provide direct customized support to customers virtually anywhere they process
foods.
Solutions, Products and Services
We offer a broad portfolio of systems, equipment and services to our customers which are often sold as part
of a fully integrated processing line solution. Our systems are typically customized to meet the specific customer
application needs. Thus, actual production capacity ranges vary and are dependent on the food and product
packaging type being processed.
Freezing and Chilling. We developed the first commercial food processing freezers in the 1960s, and we
remain the world’s leading supplier of freezing and chilling solutions to the food processing industry. We design,
assemble, test and install industry-leading technologies that include individual quick freezing (IQF), self-stacking
spiral, linear/impingement and contact freezers and chillers. Our freezers are designed to meet the most stringent
demands for quality, economy, hygiene and user-friendliness. We offer a full range of capacities and accessories
to optimize our customers’ variable production needs. Our industrial freezers can be found in plants that are
processing food products ranging from meat, seafood and poultry to bakery products and ready-to-eat meals,
6
fruits, vegetables and dairy products. The following is an overview of our freezing and chilling technology
offerings.
Product Description
Food Applications
Capacity Ranges
Up to 13 tons/hour
Delivered
Base
1,300+
Product Offering
FloFREEZE®
Individual Quick
Freeze (IQF)
GYRoCOMPACT®
Self-Stacking
Spiral Freezer,
Chiller, Proofer
ADVANTEC®
Linear Freezers and
Chillers
Individually freezes sensitive,
sticky and uneven shaped
products
Compact, self-contained design
for quick, uniform freezing
Fruits,
Vegetables,
Seafood, Pasta,
Rice
Poultry, Meat,
Seafood, Bakery,
Dairy, Vegetables,
Ready Meals
Quick freezing of thin, flat food Meat, Seafood
Up to 7 tons/hour
3,500+
Up to 5 tons/hour
(over 20,000 1⁄4 lb
burgers per hour)
300+
Protein Processing. We are a leading supplier of equipment and services that enable us to provide
integrated protein processing lines for a variety of convenient food products. Our broad systems offering includes
horizontal slicers, continuous water-jet portioners, coating and seasoning applicators, frying systems and oven
and cooking systems. Our fully integrated processing lines often span from the raw products initial point of entry
onto the processing line through final packaging. Although our solutions are primarily used in the processing of
poultry (including nuggets, strips and wings), we also provide systems that portion, coat or cook other food
products ranging from breads and pizzas to meat patties, seafood and ready-to-eat meals. All of these
applications we collectively refer to as “protein processing.” We believe that our installed base of cooking
systems processes more meat, seafood and poultry products in North America than that of any other food
processing equipment supplier. The following is an overview of our protein processing technology offerings.
Product Offering
DSI Portioners
Product Description
Food Applications
Capacity Ranges
Horizontal slicing for
consistent product thickness
and computer-positioned
vertical high-pressure waterjets
cut complex shapes
Poultry, Meat,
Seafood, Pizza
Up to 3/4
ton/hour
Coating
Applicators
Application of batter, tempura
or breading prior to cooking
THERMoFIN™
Frying Systems
Patented technology that heats
oil quickly and precisely for
even and cost effective frying
Poultry, Meat,
Seafood,
Vegetables
Poultry, Meat,
Seafood
Over 7 tons/hour
(over 150,000 1⁄ 2
oz. chicken nuggets
per hour)
Over 7 tons/hour
(over 150,000 1⁄ 2
oz. nuggets/hour)
Delivered
Base
200+
8,000+
340+
7
Product Offering
Product Description
Food Applications
Capacity Ranges
GYRoCOMPACT®
Spiral Ovens
JSO JetStream®
Linear Ovens
Multi-zone spiral oven
with programmable air
control for consistent and
uniform cooking
High intensity convection
oven for fast cooking with
optimal flavor sealing and
browning
Poultry, Meat,
Seafood
Over 9 tons/hour (over
40,000 4 oz. chicken
breasts per hour)
Delivered
Base
90+
Meat, Poultry
Over 4.5 tons/hour (over
20,000 1⁄4 lb. burgers
per hour)
490+
In-Container Processing. We are a leading global supplier of fully integrated industrial sterilization
systems that manufacture shelf stable foods in a wide variety of flexible and rigid packages. These integrated
solutions include fillers, closers, sterilizers, material handling systems and controls that process foods including
fruits and vegetables, soups and sauces, dairy products, a broad range of ready-to-eat meals and pet foods. We
offer the largest selection of sterilization products in the industry, including continuous rotary and hydrostatic
sterilizers primarily used for processing metal cans. We also provide automated batch retorts which can process a
variety of flexible and rigid packages such as plastic pouches, cartons, glass and cans. Our offering also includes
specialized material handling systems to automate the handling and tracking of processed and unprocessed
containers. In addition, we offer leading modeling software as well as thermal processing controls that help our
customers optimize and track their cooking processes and introduce on-line corrections in the case of any process
deviations. The following is an overview of our in-container processing solutions technology offerings.
Product Offering
Product Description
Food Applications
Capacity Ranges
Over 1,200 containers
per minute
Delivered
Base
1,900+
Fillers
Filling of wide-neck, rigid
and pre-formed containers
with food and beverage
products
Closers
Closing and seaming of
can after being filled
Ready Meals,
Soups, Sauces,
Baby Food,
Fruits,
Vegetables,
Seafood, Meat,
Poultry, Milk,
Ready to Drink
Coffee and Tea,
Pet Food
Ready Meals,
Soups, Sauces,
Baby Food,
Fruits,
Vegetables,
Seafood, Meat,
Poultry, Milk,
Ready to Drink
Coffee and Tea,
Pet Food
8
Up to 2,000 containers
per minute
3,400+
Product Offering
Product Description
Food Applications
Capacity Ranges
Continuous Rotary and
Hydrostatic Sterilizers
Commercial
sterilization of
food in cans
Automated Batch
Retorts
LOG-TEC™
Control Systems and
Modeling Software
Commercial
Sterilization of
foods in flexible or
rigid pre-formed
packaging
Automated control
and documentation
of sterilization
process; modeling
software to
optimize cooking
processes
Ready Meals,
Canned Milk,
Soups, Sauces,
Fruits,
Vegetables,
Seafood, Meat,
Poultry, Pet Food
Ready Meals,
Soups, Sauces,
Baby Food,
Fruits,
Vegetables,
Seafood, Meat,
Poultry
Ready Meals,
Canned Milk,
Soups, Sauces,
Baby Food,
Fruits,
Vegetables,
Seafood, Meat,
Poultry, Pet Food
Delivered
Base
2,700+ systems
8,000+ vessels
Over 1,800 containers
per minute (550 cans of
soup/minute or 2,000
cans of cat food per
minute)
Over 1,500 containers
per minute (600
microwave pasta bowls
per minute)
220+ systems
470+ vessels
Matches the sterilization
system capacity
1,900+
Fruit Processing. We are the leading supplier of industrial citrus processing equipment. Our citrus
processing solutions typically include citrus extractors, finishers, pulp systems, evaporators and by-product
recovery systems as well as aseptic systems (including sterilizers, fillers, flow lines and controls) integrated with
bulk aseptic storage systems for not-from-concentrate orange juice. In addition to our high capacity industrial
extractors, we also offer point of use Fresh’n Squeeze ® produce juicers. These patented juicers are used around
the world in hotels, restaurants, coffee shops, convenience stores and juice bars.
We are among the leading suppliers of tomato and fruit processing equipment and aseptic sterilization and
bulk filling systems. Our tomato and fruit processing lines are comprised of extraction, finishing, heating and
mixing equipment, enzyme inactivators, evaporators, flash coolers, sterilizers and aseptic fillers that are mainly
sold as an integrated processing line. We can also provide equipment for a specific need within a line. Our
tomato processing lines are installed with leading processors throughout the world’s key tomato growing regions
and produce a range of finished tomato products including tomato concentrates, peeled tomato products, diced
tomatoes, salsa, pizza sauce, ketchup, pureed and crushed tomatoes. Our aseptic processing lines are used in the
bulk processing of a wide range of deciduous and tropical fruits into juices, particulates, purees and concentrates.
These fruit products are used as ingredients for dairy products (yogurts, smoothies, flavored milk, ice cream),
bakery products and fruit-based beverages.
9
We also provide technology solutions and products to extend the life, improve the appearance and preserve
the taste of fresh fruits and vegetables. Once treated, fresh fruits or vegetables are individually labeled by our fast
and efficient produce labeling systems. The following is an overview of our fruit processing technology
offerings.
Product Offering
Product Description
Food Applications
Capacity Ranges
Delivered
Base
7,800+
Industrial extractor: over
900 gallons per hour of
juice
Over 70 tons/hour
350+
Citrus, Tomatoes,
Berries,
Deciduous and
Tropical Fruits
Citrus, Tomatoes,
Berries,
Deciduous and
Tropical Fruits
Citrus, Tomatoes,
Deciduous and
Tropical Fruits
Extractors, Pulpers,
Finishers
Hot & Cold Breaks,
Evaporators
Aseptic Sterilizers and
Fillers
Fresh Produce
Technologies
Extract juice and/or pulp
from fruit for large-scale
processing and point-of-
sale applications
Enzymatic inactivation,
concentration and aseptic
cooling to preserve fruit
product color and taste
Aseptic commercial
sterilization, cooling and
bulk filling of fruit puree,
concentrate or paste into 3
gallon to 300 gallon
containers
Preservation of fresh
produce life, appearance
and taste.
High speed application of
Price Look Up labels
Aseptic sterilizer:
over 60 tons/hour
Aseptic fertilizer:
over 19 tons/hour
100+
1,300+
labeler
heads
Fruits, Vegetables Coating application
rates variable to match
line speed
Apply 900+ labels per
minute
Aftermarket Products, Parts and Services. We provide aftermarket products, parts and services for all of
our integrated food processing systems and equipment. We provide retrofits to accommodate changing
operational requirements, and we supply our own brand of food grade lubricants designed specifically for our
equipment. We also provide continuous, proactive service to our customers including the fulfillment of
preventative maintenance agreements, consulting services such as water treatment and corrosion monitoring
control and the provision of on-site personnel. In addition to helping our customers reduce their operating costs
and improve operating efficiencies, integrated customer service focus also helps us maintain strong commercial
relationships and provides us with ongoing access to information about our customers’ requirements and
strategies to foster continuing product development. Our aftermarket products, parts and services coupled with
our large installed base of food processing systems and equipment, provides us with a growing, recurring revenue
stream.
Strategy
As part of our core mission of being the leading supplier of customized solutions to the food processing
industry, we will focus on four critical strategic initiatives:
Extend Technology Leadership. By maintaining and extending our technological leadership positions, we
will remain well positioned to capture the growth created by the trends in the food processing industry. We are
focused on enhancing processing efficiencies which include increased production speeds and improved final
product yield and quality. Additionally, we are focused on reducing the total cost of ownership for food
processing plants through reducing capital and operational costs and solving the technological challenges posed
by evolving food processing and packaging requirements.
10
Leverage Our Installed Base. From 2006 to 2008, our aftermarket revenue increased at a compound
annual rate of approximately 11.0%. We intend to continue to leverage our large delivered base of industrial
equipment and systems to generate new aftermarket business and to grow our offering of aftermarket products,
parts and services. Our large installed base provides a recurring revenue stream as well as the opportunity to
strengthen and enhance customer relationships, increase our customer knowledge and generate ideas for new
product development. We will continue to enhance the capabilities of our on-line spare parts ordering site to help
our customers find the information they need and conduct business more efficiently.
Capture International Opportunities. JBT FoodTech has built a strong global presence with
manufacturing, sales and service organizations located on six continents. As demand for processed foods
increases in emerging regions such as Latin America, the Middle East, Eastern Europe and Asia, we are
positioned to provide local food processors or expanding multi-national processors with our products, expertise
and local customer service. Additionally, our new manufacturing facility in China and our established sourcing
teams in India and China provide us with a strong base to supply products to and from Asia.
Growth Through Acquisitions. In addition to benefiting from organic growth, we also intend to pursue
external growth through select, value-accretive acquisitions of companies and technologies. We believe that the
food processing equipment industry provides us with opportunities for acquisitions. We also believe that our
global presence and capabilities will permit us to efficiently integrate complementary companies and
technologies into our global businesses.
JBT AeroTech
Overview
JBT AeroTech is a leading supplier of customized solutions and services used for applications in the air
transportation industry. We design, manufacture and service technologically sophisticated ground support
equipment, airport gate equipment, automated systems and services for airport authorities, airlines, air freight,
ground handling companies, the military and other industries. During the year ended December 31, 2008, JBT
AeroTech generated $446.9 million of revenue and $38.5 million of segment operating profit, resulting in
compound annual growth rates since 2006 of 13.2% and 19.2%, respectively.
We believe our strong market positions result from our ability to customize our equipment and services
utilizing differentiated technology to meet the specific needs of our customers. We continually strive to improve
our existing technologies and develop new technologies by working closely with our customers.
As a market leader for many years, there is a significant installed base of our airport and airline equipment
around the world. We have delivered the largest volume of cargo loaders (8,700+), passenger boarding bridges
(7,000+) and aircraft deicers (4,300+). We have also sold more than 2,000 mobile passenger steps, 1,800 cargo
transporters and 1,300 tow tractors operating at airports around the world. This installed base of our JBT
AeroTech products provides a recurring revenue stream from aftermarket parts, products and services that was
over 14.5% of our JBT AeroTech total revenue in 2008. Our installed base also offers continuous access to
customer feedback for improvements and new product development.
JBT AeroTech products have been delivered to more than 100 countries. To support this equipment, we
have operations located throughout the world. Our principle production facilities are located in the United States
(Florida, Utah and Pennsylvania), Mexico, Spain and the United Kingdom. To augment our sourcing capabilities,
we have established regional manufacturing partnerships in Asia, Africa and South America as well as dedicated
sourcing resources in India, China and Eastern Europe. We also have sales and services offices located in more
than ten countries and collaborative relationships with independent sales representatives, distributors and service
providers in more than ten additional countries.
11
Solutions, Products and Services
We offer a broad portfolio of systems, equipment and services to our airport authority, airline, air cargo,
ground handling and military customers.
Ground Support Equipment. We are a leading supplier of air cargo loaders to commercial air passenger
and freight carriers and ground handlers. Our Commander loaders service wide-body jet aircraft and are available
in a wide range of configurations. We believe that we provide the loader of choice to the air transportation
industry.
We manufacture and supply the RampSnake® narrow-body aircraft baggage loader. The RampSnake’s
design requires only a single baggage handler in the cargo hold and one operator at the baggage cart, minimizing
lifting and reducing costs.
We manufacture and supply the Tempest aircraft deicers with a broad range of options that can be
configured to meet customers’ need to eliminate aircraft icing while on the tarmac. We offer a full array of
conventional and towbarless aircraft tow tractors for moving aircraft without consumption of jet fuel. We also
offer a line of self-propelled passenger steps.
Airlines and ground handling companies face increased pressure to reduce Green House Gas (GHG)
emissions and minimize fuel usage. We have a long history of delivering alternative fuel ground support
equipment that provides a solution to these environmental and operational challenges. Our alternative fuel design
approach is to provide modular ground support equipment, capable of being powered by a variety of power
sources. Our alternative fuel product offering includes Commander cargo loaders, cargo transporters,
RampSnake® bulk loading systems, conventional aircraft pushback tractors, towbarless tow tractors and
passenger boarding steps. We also offer electric retrofit kits for our existing delivered base of diesel powered
ground support equipment.
The following is an overview of our ground support equipment technology offerings.
Product Description
Aircraft Ranges
Capacity Ranges
Up to 33,000 lbs
Delivered
Base
8,700+
Product Offering
Cargo Loaders
Cargo Transporters
Baggage Loading
Systems
Aircraft Deicers
Loading and unloading of
containerized cargo onto
main and lower decks of
aircraft
Transport of containerized
cargo to or from aircraft
Wide variety of
passenger and
freighter aircraft up
to Airbus A380
Aircraft handling
full size pallets or
containers
Loading of baggage, cargo or
mail packages into baggage
holds with minimal lifting
Boeing 717 to 757-
200 and Airbus
A319 to 321
Deicing of aircraft on the
ground including removal of
snow, ice and frost
Wide variety of
aircraft up to
Airbus A380
Up to 15,400 lbs at
15.5 mph
1,800+
Up to 880 lbs
100+
Up to 2,000 gallons
capacity of deicing fluid
4,300+
Aircraft Tow Tractors
Passenger Steps
Pushing back of aircraft from
gate or aircraft towing
between gate and hangar
Boarding of passengers when
a boarding bridge is not
available
Regional to wide-
body aircraft
Draw bar pull of up to
72,000 lbs
1,300+
Front and rear
boarding doors of
narrow and wide-
body aircraft
Load capacity up to
13,000 lbs.
2,000+
12
Gate Equipment. We are a leading supplier of gate equipment. Our Jetway® passenger boarding bridges
have been used by airlines and airport authorities to move passengers between the terminal building and the
aircraft since 1959.
We also manufacture a variety of sizes and configurations of auxiliary equipment including 400 Hertz
ground power and preconditioned air units that supply aircraft requirements of both electrical power and air for
the environmental control system (air-conditioning) and main engine starting during ground operations. Our
point-of-use 400 Hertz and pre-conditioned air units enable reduced fuel consumption and emissions through
minimizing usage of auxiliary power units or aircraft engines while parked at the gate.
The following is an overview of our gate equipment technology offerings.
Product Offering
Product Description
Aircraft Ranges
Capacity Ranges
Passenger Boarding
Bridges
Ground Power
Preconditioned Air
Bridge for moving
passengers between the
airport terminal building and
the aircraft
Provide power and light for
passenger and crew onboard,
while waiting to be pushed
back from gate
Climate convenience for
passenger and crew onboard,
while waiting to be pushed
back from gate
Regional Jets up to
Airbus A380
Link aircraft with the
airport terminal
Regional Jets up to
Airbus A380
Regional Jets up to
Airbus A380
Converts 50/60 Hertz
utility power to aircraft
compatible 400 Hertz
power
20 to 120 refrigerated
tons preconditioned air
units for ground cooling
Delivered
Base
7,100+
3,600+
2,200+
Military Equipment. In 2000, we were awarded the production contract to supply the U.S. Air Force with a
new generation of military air cargo loader which is now known as the Halvorsen loader. We continue to supply
the U.S. Air Force Mobility Command with these Halvorsen loaders as well as provide parts support, service and
retrofit kits and also have begun to supply these units to other branches of the U.S. Department of Defense and
the Canadian Forces.
Our Ground Support and Gate Equipment product lines also supply three sizes of aircraft tow tractors to the
U.S. Air Force and mobile air conditioning units to U.S. and international military forces and airframe
manufacturers.
The following is an overview of our military equipment technology offering.
Product Offering
Product Description
Aircraft Ranges
Capacity Ranges
Cargo transport aircraft
from C-130 up to C-17
Load and transport up
to 44,000 lbs
Delivered
Base
400+
Halvorsen 25K and
44K Cargo Loaders
Rapidly deployable, high-
reach loader that can transport
and lift cargo onto military
cargo aircraft
Aircraft Tow Tractors Towing of aircraft around the
Mobile Air
Conditioning
airport ramp
Mobile air conditioning units
used for on the ground
cooling
Jet fighters up to cargo
transport aircraft
Draw bar pull of up to
72,000 lbs
Jet fighters up to cargo
transport aircraft
30 to 110 ton mobile
air conditioning units
200+
400+
13
Airport Services. We are an industry leading provider of equipment, systems and facility maintenance
services to airlines and airports throughout North America. Our expertise extends to the operation, maintenance
and repair of airport gate systems, baggage handling systems, airport facilities and ground support equipment.
We also offer technology and operations monitoring services centered around our patented iOPS™ Suite that
links maintenance management systems and aircraft avionics data to critical ground-based monitoring, diagnostic
and tracking systems on gate equipment, baggage handling systems, facility systems and ground support
equipment.
Automated Systems. We are an industry leader in providing fully integrated Automatic Guided Vehicle
Systems for repetitive material movement to the automotive, printing, warehouse, and hospital industries. We
provide and integrate material handling systems, hardware and software as well as the controls, software, and
simulations required for automated guided vehicle systems.
Aftermarket Products, Parts and Services. We provide aftermarket products, parts and services for our
equipment. We also provide retrofits to accommodate changing operational requirements and continuous,
proactive service, including, in some cases, on-site personnel. These systems and other services represent an
integrated approach to addressing critical problems faced by our customers and ensure that we remain well
positioned to respond to their new requirements and strategic initiatives through our strong customer relations.
In support of our focus and strategy of meeting our customers’ needs, we have developed a global parts
service network to provide “the right part in the right place.” Our highly experienced global parts representatives
help reduce equipment downtime by providing fast, accurate responses to technical questions. We also provide
worldwide operations and maintenance training programs to provide maintenance technicians with the tools
necessary to deliver the highest possible level of systems reliability.
Strategy
As part of our core mission of being the leading supplier of customized solutions to the air transportation
industry, we will focus on five critical strategic initiatives:
Extend Technology Leadership. By maintaining and extending our technological leadership position, we
will remain well positioned to capture the growth created by the trends in the air transportation industry. The
focus of our investments in product improvement and development will be improving airport ramp and terminal
efficiencies and reducing the total cost of ownership for airports, passenger and cargo carriers and ground
handlers. We will also strive to continually meet the technological challenges posed by evolving aircraft designs,
safety and environmental concerns.
Leverage Our Installed Base. From 2006 to 2008, our aftermarket revenue increased at a compound
annual rate of approximately 20.6%. We intend to continue to leverage our large installed base of airport
equipment, to expand our aftermarket products, parts and services and to provide increased focus on upgrades
and services that will improve our customers’ operational efficiency. Our large installed base not only generates
a recurring revenue stream, it also provides us with strong, long-term customer relationships from which we can
derive information for new product development to meet the evolving needs of our customers.
We also intend to expand the capabilities of our airport services product line and to selectively expand our
presence within the 20 busiest United States airports. We will leverage our experience gained at airports by
pursuing additional opportunities in military ground support equipment, cargo handling systems for air cargo
carriers and sophisticated port entry systems. We will continue to create differentiated service products and value
added operational information systems that provide productivity, efficiency and financial gains to our customers.
14
Capture International Opportunities. Asia-Pacific has become a growth region for the aviation industry.
To accommodate this growth, investments are made in airport infrastructure. We are well positioned with
dedicated local sales and service staff to meet the increased airport equipment demand in developing countries
with our trusted products as well as our product expertise and customer service.
Expand Military Programs. We supply Halvorsen loaders and provide Halvorsen parts support, service
and retrofit kits to the U.S. Air Force Mobility Command. We intend to continue to extend our support for this
program by offering engineering and logistics support contracts. We further intend to expand the Halvorsen
installed base to the U.S. Navy, Army and selected international military services. We will expand the loader
design to meet the specification requirements of new loader programs as they are issued. We will continue our
expansion of our military ground support equipment offerings of tow tractors, aircraft deicers, preconditioned air,
air conditioning and ground power units to the United States and selected international defense departments.
Growth Through Acquisitions. In addition to benefiting from the expected growth in the business areas
that we serve, we intend to pursue external growth opportunities through select, value-accretive acquisitions. We
believe that the air transportation industry provides opportunities for acquisitions. Our global capabilities and
leading industry positions will facilitate our ability to integrate complementary companies and technologies into
the JBT AeroTech businesses.
OTHER BUSINESS INFORMATION RELEVANT TO ALL OF OUR BUSINESS SEGMENTS
Order Backlog
Information regarding order backlog is incorporated herein by reference from the section entitled “Inbound
Orders and Order Backlog” in Item 7 of this Annual Report on Form 10-K.
Sources and Availability of Raw Materials
All of our business segments purchase carbon steel, stainless steel, aluminum and steel castings and forgings
both domestically and internationally. We do not use single source suppliers for the majority of our raw material
purchases and believe the available supplies of raw materials are adequate to meet our needs.
Research and Development
The objectives of our research and development programs are to create new products and business
opportunities in relevant fields, and to improve existing products.
Additional financial information about Company-sponsored research and development activities is
incorporated herein by reference from Note 18 to our consolidated financial statements included in Item 8 of this
Annual Report on Form 10-K.
Sales and Marketing
We sell and market our products and services through a predominantly direct sales force, supplemented with
independent distributors and sales representatives. Our experienced international sales force is comprised of
individuals with strong technical expertise in our products and services and the industries in which they are sold.
We support our sales force with marketing and training programs that are designed to increase awareness of
our product offerings and highlight our differentiation while providing a set of sales tools to aid in the sales of
our technology solutions. We actively employ a broad range of marketing tactics to inform and educate
customers, the media, industry analysts and academia through targeted newsletters, our web site, seminars, trade
shows, user groups and conferences.
15
Patents, Trademarks and Other Intellectual Property
We own a number of United States and foreign patents, trademarks and licenses that are cumulatively
important to our business. We own approximately 590 United States and foreign patents and have approximately
440 patent applications pending in the United States and abroad. Further, we license certain intellectual property
rights to or from third parties. We also own numerous United States and foreign trademarks and trade names and
have approximately 370 registrations and pending applications in the United States and abroad. Developing and
maintaining a strong intellectual property portfolio is an important component of our strategy to extend our
technology leadership. However, we do not believe that the loss of any one or group of related patents,
trademarks or licenses would have a material adverse effect on our overall business.
Competition
We conduct business worldwide and compete with a variety of local and regional companies, which
typically are focused on a specific application, technology or geographical area, and a few large multinational
companies.
We compete by leveraging our industry expertise to provide differentiated and proprietary technology,
integrated systems, high product quality and reliability and quality aftermarket service. In the food processing
industry, we also distinguish ourselves by providing increased yields with improved final product quality.
JBT FoodTech’s major competitors include GEA Group Aktiengesellschaft, MYCOM, Convenience Food
Systems Inc., Heat & Control, Inc., PneumaticScaleAngelus, Allpax Products, Inc., Atlas Pacific Engineering
Company, Inc., Marel Food Systems, Brown International Corp. and CFP Spa. JBT AeroTech’s major
competitors include TLD, Schopf Maschinenbau GmbH, Airmarrel, Global Ground Support LLC,
ThyssenKrupp AG, Shenzhen CIMC-TianDa Airport Support Ltd., Linc Facility Services and Elite Line
Services, Inc.
Employees
We employ approximately 3,400 people with approximately 1,900 located in the United States.
Approximately 230 of our employees in the United States are represented by one collective bargaining agreement
that covers these employees through August of 2011.
Outside the United States, the company enters into employment contracts and agreements in those countries
in which such relationships are mandatory or customary. The provisions of these agreements correspond in each
case with the required or customary terms in the subject jurisdiction. Approximately 60% of our international
employees are covered under national employee unions.
We maintain good employee relations and have successfully concluded all of our recent negotiations
without a work stoppage. However, we cannot predict the outcome of future contract negotiations.
Customers
No single customer accounted for more than 10% of our total revenue in any of the last three fiscal years.
JBT FoodTech’s customers range from large multinational food processing companies to smaller regional
food processing companies. Our principal customers include companies such as: Agrosuper S.A., Ajinomoto, Co.
Ltd., Aujan Inudstries Co LLC, Bonduelle Group, Campbell Soup Company, CIA Pesquera Camanchaca S.A.,
Citrofrut, Citrovita, The Coca-Cola Company, COFCO Tunhe Tomato Products Co. Ltd., ConAgra Foods, Inc.,
Conserva Italia, DelMonte Foods Company, Dole Food Company, Inc., Florida’s Natural Growers, General
Mills, Inc., Gloria Foods Company, Great Giant Pineapple Co., Grupo Altex, Grupo Bertin, Grupo Fisher, Hero
16
AG, H.J. Heinz Company, Huiyan Group, Inghams Enterprises Pty Limited, Industrias Bachoco, J. Garcia-
Carrion, Jamba Juice Company, Jain Irrigation Systems Ltd., JBS-Friboi Group, Keystone Foods LLC., Leche
Pascual, Mafrig Group, Morning Star Packing Company, National Food Industries LLC, Nestlé, Novartis AG,
Nutricima Limited, OSI Group, LLC, Perdiga˘o S.A., Sadia S.A., Southern Gardens Citrus, Starkist Tuna,
Sucocitrico Cutrale, Sunkist Growers, Inc., Thai Dairy Industry Co. Ltd., Thai Union Frozen Products Public
Company Limited, Tropicana Products, Inc., Tyson Foods, Inc., Unilever PLC and Xinjiang Chalkis Tomato
Products Co. Ltd.
JBT AeroTech’s customers are domestic and international airlines, air freight and ground handling
companies, United States domestic airport authorities and the United States military. Our principal customers
include companies such as: Air Canada, Air China, Air France KLM, The Boeing Company, British Airports
Authority, British Airways, the Canadian Forces, China Southern Airlines, Continental Airlines, Dallas Fort
Worth International Airport, Delta Air Lines, Denver International Airport, DHL, FedEx Corp., EgyptAir,
Houston Airport Systems, Iberia Airlines, LAN Airlines, Los Angeles International Airport, Massport/Logan
International Airport, McCarren International Airport, Menzies Aviation, Miami International Airport, Saab AB,
Servisair, Singapore Airlines, Southwest Airlines, Swissport International, TAM Airlines, Thai Airways
International, United Airlines, UPS, and the U.S. Air Force.
Government Contracts
We currently supply the Halvorsen cargo loader, aircraft tow tractors and trailer mounted air conditioning
units to the U.S. Department of Defense. The amount of equipment built for these programs is dependent upon
annual government appropriations and levels of military spending. In addition, United States defense contracts
are unilaterally terminable at the option of the United States government with compensation for work completed
and costs incurred. Contracts with the United States government are subject to special laws and regulations, the
noncompliance with which may result in various sanctions that could materially affect our ongoing government
business.
Governmental Regulation and Environmental Matters
Our operations are subject to various federal, state, local and foreign laws and regulations governing the
prevention of pollution and the protection of environmental quality. If we fail to comply with these
environmental laws and regulations, administrative, civil and criminal penalties may be imposed, and we may
become subject to regulatory enforcement actions in the form of injunctions and cease and desist orders. We may
also be subject to civil claims arising out of an accident or other event causing environmental pollution. These
laws and regulations may expose us to liability for the conduct of or conditions caused by others or for our own
acts even though these actions were in compliance with all applicable laws at the time they were performed.
Under the Comprehensive Environmental Response, Compensation and Liability Act, referred to as
CERCLA, and related state laws and regulations, joint and several liability can be imposed without regard to
fault or the legality of the original conduct on certain classes of persons that contributed to the release of a
hazardous substance into the environment. These persons include the owner and operator of a contaminated site
where a hazardous substance release occurred and any company that transported, disposed of or arranged for the
transport or disposal of hazardous substances that have been released into the environment, and including
hazardous substances generated by any closed operations or facilities. In addition, neighboring landowners or
other third parties may file claims for personal injury, property damage and recovery of response cost. We may
also be subject to the corrective action provisions of the Resource, Conservation and Recovery Act, or RCRA,
and analogous state laws that require owners and operators of facilities that treat, store or dispose of hazardous
waste to clean up releases of hazardous waste constituents into the environment associated with their operations.
Some of our facilities and operations are also governed by laws and regulations relating to worker health
and workplace safety, including the Federal Occupational Safety and Health Act, or OSHA. We believe that
17
appropriate precautions are taken to protect our employees and others from harmful exposure to potentially
hazardous materials handled and managed at our facilities, and that we operate in substantial compliance with all
OSHA or similar regulations.
Financial Information about Geographic Areas
The majority of our consolidated revenue is generated in markets outside of the United States. JBT
FoodTech and AeroTech serve a global market, with sales to customers in North America, Europe, Asia and
Latin America. Financial information about geographic areas is incorporated herein by reference from Note 18 to
our consolidated financial statements in Item 8 of this Annual Report on Form 10-K.
Available Information
All periodic and current reports, registration filings, and other filings that we are required to file with the
Securities and Exchange Commission (“SEC”), including annual reports on Form 10-K, quarterly reports on
Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to
Section 13(a) or 15(d) of the Securities Exchange Act of 1933, proxy statements and other information are
available free of charge through our website as soon as reasonably practicable after we file them with, or furnish
them to, the SEC. You may access and read our SEC filings free of charge through our website at
www.jbtcorporation.com, under “Investor Relations – Financial Information – SEC Filings,” or the SEC’s
website at www.sec.gov. These reports are also available to read and copy at the SEC’s Public Reference Room
by contacting the SEC at 1-800-SEC-0330.
The information contained on or connected to our website, www.jbtcorporation.com, is not incorporated by
reference into this Annual Report on Form 10-K or any other report we file with the SEC.
Executive Officers
The executive officers of JBT Corporation, together with the offices currently held by them, their business
experience and their ages as of February 27, 2009, are as follows:
Name
Age Office, year of election
. . . . .
Charles H. Cannon, Jr.
Ronald D. Mambu . . . . . . . . .
Torbjörn Arvidsson . . . . . . . .
Juan C. Podesta . . . . . . . . . . .
John Lee . . . . . . . . . . . . . . . .
Kenneth Dunn . . . . . . . . . . . .
Mark Montague . . . . . . . . . . .
Megan Donnelly . . . . . . . . . .
56 Chairman, Chief Executive Officer and President (2008)
59 Vice President, Chief Financial Officer, Treasurer and Controller (2008)
57 Vice President and Division Manager-Food Solutions and Services (2008)
57 Vice President and Division Manager-Food Processing Systems (2008)
51 Vice President and Division Manager-JBT AeroTech (2008)
52 Vice President, General Counsel and Assistant Secretary (2008)
55 Vice President, Human Resources (2008)
40 Chief Accounting Officer (2008)
CHARLES H. CANNON, JR. has served as Chairman of the Board of Directors, Chief Executive Officer
and President of JBT Corporation since April 2008. Mr. Cannon served as Senior Vice President of FMC
Technologies from March 2004 until July 2008, when FMC Technologies distributed all of the stock of its
wholly-owned subsidiary, JBT Corporation, to its shareholders in a spin-off effective July 31, 2008. Mr. Cannon
served as a Vice President of FMC Technologies since February 2001. Since 1998, Mr. Cannon served as Vice
President and General Manager-FMC FoodTech and Transportation Systems Group. Mr. Cannon joined FMC
Corporation in 1982 as a Senior Business Planner in the Corporate Development Department. He became
Division Manager of FMC Corporation’s Citrus Machinery Division in 1989, Division Manager of its Food
Processing Systems Division in 1992 and Vice President and General Manager of FMC FoodTech in 1994.
Mr. Cannon serves on the Board of Directors of Standex International Corporation.
18
RONALD D. MAMBU has served as our Vice President, Chief Financial Officer, Treasurer and Controller
since April 2008. From February 2001 until April 2008, Mr. Mambu served as Vice President and Controller of
FMC Technologies. Mr. Mambu was Director of Financial Planning of FMC Corporation from 1994 until his
appointment as Controller. Mr. Mambu joined FMC Corporation in 1974 as a financial manager in Philadelphia.
Since then, he has served in a variety of roles at FMC Corporation, including Controller of its former Food and
Pharmaceutical Products Division from 1977 to 1982, Controller of Machinery Europe Division from 1982 to
1984, Controller of Agricultural Products Group from 1984 to 1987, Director of Financial Control from 1987 to
1993 and Director of Strategic Planning from 1993 to 1994.
TORBJÖRN ARVIDSSON has served as our Vice President and Division Manager-Food Solutions and
Services since July 2008. Mr. Arvidsson served as a Division Manager for FMC Technologies’ Food Solutions
and Services from October 2005 until July 2008. Mr. Arvidsson rejoined Frigoscandia Equipment in 1994 as
Business Development Manager, a role he continued in after the acquisition of Frigoscandia Equipment by FMC
FoodTech in 1996. In 1998, Mr. Arvidsson was appointed General Manager North America, located in Seattle,
Washington, a position he held until late 2000 when he was appointed General Manager Europe and relocated
back to Helsingborg, Sweden. In 2001, Mr. Arvidsson also assumed responsibility for FMC FoodTech’s Asia
Pacific region. Mr. Arvidsson has been involved in the international food equipment industry his whole career,
dating back to 1975 when he first joined Frigoscandia Equipment after graduating from Lund University,
Sweden. In 1983 he graduated from IMI, Geneva (Advanced Management MBA). In 1984, Mr. Arvidsson served
as General Manager for Square AB within the Alfa-Laval Group until 1987, when he joined Akerlund & Rausing
as Division Manager for its overseas companies. In 1990, Mr. Arvidsson rejoined Alfa-Laval as Deputy General
Manager for its convenience food division. Alfa-Laval later became Tetra-Laval after Tetra-Pak’s acquisition of
Alfa-Laval.
JUAN C. PODESTA has served as our Vice President and Division Manager-Food Processing Systems
since July 2008. Mr. Podesta served as a Division Manager for FMC Technologies’ Food Processing Systems
from July 2000 until July 2008. Mr. Podesta joined FMC Corporation in 1989 as Product Manager, Citrus
Systems in Lakeland, Florida. Since then, he has served in a variety of sales, marketing, and line management
roles within FMC FoodTech, including International Manager for the Citrus Machinery Division from 1989 to
1992, General Manager, Fruit & Vegetable Processing based in Parma, Italy from 1992 to 1994, General
Manager, Canning Systems based in St. Niklaas, Belgium from 1995 to 1996, Division Manager, Food
Processing Systems & Agricultural Machinery from 1997 to 1999 and President FMC Europe, based in Brussels,
Belgium from 2000 to 2002. Mr. Podesta served as Vice Chairman of Food Processing Machinery Europe, on the
Board of Directors of The Council of the Americas, and on the Board of Directors of Equipment Hygiene
Engineering Design Group.
JOHN LEE has served as our Vice President and General Manager – JBT AeroTech since August 2008.
Prior to joining the Company, Mr. Lee worked for United Technologies Corporation, most recently as President,
North America for Carrier Refrigeration. From 2006 to 2007, he was President, Building Systems and Services
for Asia Pacific, and from 2005 to 2006, he was President, Carrier Refrigeration, based in Shanghai, China for
both positions. From 2002 to 2005, Mr. Lee served as Director, Purchasing, Vice President, Sales and Marketing,
and then President, for Carrier Asia Pacific in Seoul, Korea. He started with United Technologies in 1993 as a
program manager for Sikorsky Aircraft, a role he served until 1997. From 1997 to 2000, he was a Regional
Director for Pratt & Whitney, Southeast Asia, based in Singapore. Before working for United Technologies,
Mr. Lee served various marketing and strategic planning roles with McDonnell Douglas Corporation and
Northrop Grumman Corporation. Mr. Lee is a graduate of the United States Military Academy, West Point and
holds an MBA from The Sloan School of Management (MIT).
KENNETH C. DUNN has served as our Vice President and General Counsel since October 2008. Prior to
joining the Company, Mr. Dunn served as Chief Sustainability Officer for the Denver Public School (“DPS”)
system from June through September 2008. Prior to DPS, Mr. Dunn worked for Qwest Communications
International, Inc., where he served as Vice President and Chief Corporate Development and Strategy Officer
from 2004 to May 2008. From 2002 to 2004, Mr. Dunn served Qwest as Vice President and Deputy General
19
Counsel – Complex Transactions. From 2001 to 2002, Mr. Dunn performed pro-bono environmental law work
primarily on public lands issues in the Mountain West. From 1999 to 2001, Mr. Dunn worked for SBC
Communications, Inc., serving as its General Attorney and Assistant General Counsel – Mergers and
Acquisitions. From 1995 to 1999 he served as Assistant General Counsel – Transactions for Ameritech
Corporation. Prior to that, Mr. Dunn was a Vice President and Associate General Counsel of John Nuveen &
Company. From 1982 thru 1995, Mr. Dunn was in private law practice with the Chicago based law firm of
Gardner, Carton & Douglas. Mr. Dunn received his law degree from Stanford University in 1982 and his
undergraduate degree from Duke University in 1978.
MARK K. MONTAGUE has served as our Vice President of Human Resources since August 2008. Prior to
joining the Company, Mr. Montague worked for Molex, Inc., where he served as Senior Vice President,
Corporate Human Resources since 2006. From 1999 to 2006, Mr. Montague served as Vice President, Human
Resources, Americas Region. Prior to Molex, Mr. Montague worked for Whirlpool Corporation, serving as its
Vice President, Human Resources, North America Appliance Group from 1997 to 1999, its Group Director,
Human Resources and Quality, Corporate Technology Group from 1996 to 1997 and as its Group Director,
Human Resources, Manufacturing and Technology in 1996. From 1992 through 1996, Mr. Montague worked for
the consulting group, Competitive Human Resources Strategies. Mr. Montague worked for Whirlpool
Corporation from 1981 through 1992, in a variety of Human Resources Group Director and Vice President
positions, and as a Labor Relations Attorney from 1981 to 1984. Mr. Montague began his professional career as
an attorney with Shughart, Thomson & Kilroy, after receiving his law degree from George Washington
University, and he earned his undergraduate degree from the University of Notre Dame.
MEGAN DONNELLY has served as our Chief Accounting Officer since November 2008. Ms. Donnelly
served as our Director of Financial Control since July 2008. Ms. Donnelly was FMC Technologies’ Manager of
Financial Reporting and Accounting Research from April 2005 until July 2008. Prior to that, Ms. Donnelly
served as a consultant to FMC Technologies from January 2002 until April 2005. From July 1998 until
December 2001, Ms. Donnelly was Director of Finance for Chart House Enterprises, Inc. Ms. Donnelly is a
certified public accountant and began her professional career in the Assurance practice of Ernst & Young LLP in
1992 after receiving her degree from the University of Illinois.
ITEM 1A. RISK FACTORS
You should carefully consider the risks described below, together with all of the other information included
in this Annual Report on Form 10-K, in evaluating our company and our common stock. If any of the risks
described below actually occurs, our business, financial condition, results of operations, cash flows and stock
price could be materially adversely affected.
Risk Factors Relating to Our Business
Our financial results are subject to fluctuations caused by many factors that could result in our failing to
achieve anticipated financial results.
Our quarterly and annual financial results have varied in the past and are likely to continue to vary in the
future due to a number of factors, many of which are beyond our control. In particular, the capital goods
industries in which we compete can have significant variations in the number, contractual terms and size of
orders. The timing of our receipt of orders and our shipment of the products or provision of services can
significantly impact the sales and income of a period. These and any one or more of the factors listed below,
among other things, could cause us not to achieve our revenue or profitability expectations. The resulting failure
to meet market expectations could cause a drop in our stock price. These factors include the risks discussed
elsewhere in this section and the following:
• Changes in demand for our products and services, including changes in growth rates in the food
processing and air transportation industries;
• Downturns in our customers’ businesses resulting from deteriorating domestic and international
economies where our customers do substantial business;
20
• Changes in commodity prices resulting in increased manufacturing costs, such as petroleum-based
products, metals or other raw materials we use in significant quantities;
• Changes in pricing policies resulting from competitive pressures, such as aggressive price discounting
by our competitors and other market factors;
• Our ability to develop and introduce on a timely basis new or enhanced versions of our products and
services;
• Unexpected needs for capital expenditures or other unanticipated expenses;
• Changes in the mix of revenue attributable to domestic and international sales;
• Changes in the mix of products and services that we sell;
•
•
Seasonal fluctuations in buying patterns; and
Future acquisitions and divestitures of technologies, products and businesses.
Unanticipated delays or acceleration in our sales cycles make accurate estimation of our revenue difficult and
could result in significant fluctuation in quarterly operating results.
The length of our sales cycle varies depending on a number of factors over which we may have little or no
control, including the size and complexity of a potential transaction, the level of competition that we encounter in
our selling activities and our current and potential customers’ internal budgeting and approval process. As a
result of a generally long sales cycle, we may expend significant effort over a long period of time in an attempt to
obtain an order, but ultimately not obtain the order, or the order ultimately received may be smaller than
anticipated. Our revenue from different customers varies from quarter to quarter, and a customer with a large
order in one quarter may generate significantly lower revenue in subsequent quarters. Due to resulting
fluctuations, we believe that quarter-to-quarter comparisons of our revenue and operating results may not be
meaningful, and that these comparisons may not be an accurate indicator of our future performance.
Deterioration of economic conditions could negatively impact our business.
Our business may be adversely affected by changes in national or global economic conditions, including
interest rates, availability of capital, consumer spending rates, foreign currency exchange rates, energy
availability and costs and the effects of governmental initiatives to manage economic conditions. Any such
changes could adversely affect the demand for our products or the cost and availability of our required raw
materials, thereby negatively affecting our financial results. The recent disruptions in credit and other financial
markets and deterioration of national and global economic conditions could, among other things:
• make it more difficult or costly for us to obtain increased financing for our operations or investments or
to refinance our debt in the future;
•
•
•
•
•
•
render our lenders or other financial instrument counterparties unable to honor their commitments or
otherwise default under a financing agreement;
impair the financial condition of some of our customers, thereby hindering our customers’ ability to
obtain financing to purchase our products and/or increasing customer bad debts;
impair the financial condition of some of our suppliers thereby potentially increasing both the
likelihood of having to renegotiate supply terms and the risk of non-performance by suppliers;
negatively impact global demand for air transportation services as well as protein food products and
processed food products, which could result in a reduction of sales, operating income and cash flows in
our JBT AeroTech and JBT FoodTech segments, respectively;
negatively affect our currency hedges; or
impair the financial viability of our insurers.
21
Some of our business segments are cyclical or are otherwise sensitive to volatile or variable factors. A
downturn or weakness in overall economic activity or fluctuations in those other factors may have a material
adverse effect on us.
Historically, sales of products that we manufacture and sell have been subject to cyclical variations caused
by changes in general economic conditions and other factors. The strength of the economy generally may affect
the rates of expansion, consolidation, renovation and equipment replacement within the air transportation
industry and within the food processing industry, which may affect the performance of our JBT AeroTech and
JBT FoodTech segments, respectively.
Similarly, our sales depend in part upon our customers’ replacement or repair cycles. Adverse economic
conditions may cause customers to forgo or postpone new purchases in favor of repairing existing equipment and
machinery, thereby reducing our revenue and/or profits.
The air transportation industry is particularly sensitive to changes in economic condition; continued negative
economic conditions likely may have a negative impact on our JBT AeroTech segment and our results of
operations.
The air transportation industry in general is particularly sensitive to changes in economic conditions.
Unfavorable general economic conditions, such as a constrained credit market, reduced consumer confidence,
higher unemployment rates and increased business operating costs, particularly fuel costs, can reduce spending
for both passenger travel and decrease demand for cargo air carrier services. Unfavorable economic conditions
can also impact our customers’ ability to raise pricing to counteract increased fuel, labor, and other costs, making
it less likely that they will expend resources on JBT AeroTech equipment as they have in the recent past.
Demand for ground support equipment and inbound orders declined during the fourth quarter of 2008, which we
believe may be primarily attributed to unfavorable financial conditions facing airlines and air freight companies.
Therefore, a continued global economic downturn would likely continue to negatively impact our future results
of operations in the JBT AeroTech segment in particular.
Disruptions in the political, regulatory, economic and social conditions of the foreign countries in which we
conduct business or fluctuations in currency exchange rates could negatively affect our business, financial
condition and results of operations.
We operate manufacturing facilities in nine countries other than the United States, and our international
operations accounted for approximately half of our 2008 revenue. Multiple factors relating to our international
operations and to particular countries in which we operate could have an adverse effect on our financial condition
or results of operations. These factors include:
• Nationalization and expropriation;
•
•
Potentially burdensome taxation;
Increased growth in our international business operations and revenue relative to our domestic
operations may result in increasing tax liabilities resulting from repatriation of income generated
outside of the United States;
• Continuing economic downturns, inflationary and recessionary markets, including capital and equity
markets;
• Civil unrest, political instability, terrorist attacks and wars;
•
Seizure of assets;
• Trade restrictions, trade protection measures or price controls;
•
•
Foreign ownership restrictions;
Import or export licensing requirements;
22
• Restrictions on operations, trade practices, trade partners and investment decisions resulting from
domestic and foreign laws and regulations;
• Changes in governmental laws and regulations;
•
Inability to repatriate income or capital; and
• Reductions in the availability of qualified personnel.
Because a significant portion of our revenue is denominated in foreign currencies, changes in exchange rates
will result in increases or decreases in our costs and earnings and may also affect the book value of our assets
located outside the United States and the amount of our stockholders’ equity. We prepare our consolidated
financial statements in U.S. dollars, but these results may fluctuate due to the fact that a significant portion of our
earnings and expenditures are denominated in other currencies. Although we may seek to minimize our currency
exposure by engaging in hedging transactions where we deem it appropriate, we cannot assure you that our
efforts will be successful. To the extent we sell our systems and services in foreign markets, currency
fluctuations may result in our systems and services becoming too expensive for foreign customers.
The increase in energy or raw material prices may reduce the profitability of our customers, which ultimately
could negatively affect our business, financial condition, results of operations and cash flows.
In recent years, energy prices have hit historically high levels. These increases had a negative trickle down
effect on many areas involved in running a business, straining profitability through increased operating costs.
Our customers require large amounts of energy to run their businesses, particularly in the air transportation
industry. Energy prices can affect the profitability of passenger and cargo air carriers through increased jet and
ground support equipment fuel prices. Energy prices also affect food processors through increased energy and
utility costs to run the plant, chemical and petroleum based raw materials used in production and fuel costs to run
logistics and service fleet vehicles.
Food processors are also dependent upon the cost and supply of raw materials such as feed grains, livestock,
produce and dairy products. Recent rises in the cost and limitations in availability of these commodities can
negatively affect the profitability of their operations.
A reduction in profitability due to increased energy or raw material prices within our customer base may
reduce their future investments in food processing equipment or airport equipment. This reduction in investment
may have a material adverse effect on our business, financial condition, results of operations and cash flows.
Changes in food consumption patterns due to diet trends or economic conditions may negatively affect our
business, financial condition, results of operations and cash flows.
Dietary trends can create demand for protein food products but negatively impact high-carbohydrate foods,
or create demand for easy to prepare, transportable meals but negatively impact traditional canned products.
Because various food types and packaging can quickly go in and out of style as a function of health, dietary or
convenience trends, food processors can be challenged in forecasting the needed capacity and related equipment
and services for their food plants. During periods of economic uncertainty, consumer demand for protein
products or processed food products may also be negatively impacted by increases in food prices. Shifting
consumer demand for protein products or processed foods may have a material adverse effect on our business,
financial condition, results of operations and cash flows.
An outbreak of animal borne diseases (H5N1, BSE or other virus strains affecting poultry or livestock) may
negatively affect protein processors.
An outbreak or pandemic stemming from H5N1 (avian flu) or BSE (mad cow disease) or any other animal
related disease strains could reduce the availability of poultry or beef that is processed for the restaurant, food
service, wholesale or retail consumer. Should a pandemic break out, eradication of entire regional animal
populations could be mandated.
23
Any limitation on raw material could discourage producers from making additional capital investments in
processing equipment, aftermarket products, parts and services. Such a decrease in demand for our products
could have a material adverse effect on our business, financial condition, results of operations and cash flows.
An outbreak of food borne illness or other food safety or quality concerns may negatively affect our business,
financial condition, results of operations and cash flows.
Should an E. coli or other food borne illness cause a recall of meat or produce, the companies supplying
those fresh, further processed or canned forms of these products could be severely financially affected. This type
of recall, whether voluntary or mandatory, could have broad ranging and long lasting negative affects on
growers, packers, retailers, wholesalers and/or restaurants. If a consumer were to become critically ill due to the
outbreak, the food provider’s reputation and brand could be permanently tarnished. Any affect on the financial
viability of our customer base of fresh or processed food providers could seriously affect and reduce our
immediate and recurring revenue base.
Our business, financial condition, results of operations and cash flows could be materially adversely
affected if consumers were to lose confidence in the safety or quality of certain food products or ingredients.
Adverse publicity about these types of concerns, whether or not valid, may discourage consumers from buying
processed food products or cause production and delivery disruptions. Any disruption within the food supply
chain could have a negative effect on the demand for our food processing machinery and on our financial results.
Freezes, hurricanes, droughts or other natural disasters may negatively affect our business, financial
condition, results of operations and cash flows.
Should a natural disaster negatively affect the production of growers or farms, the food processing industry
may not have the fresh foods necessary to meet consumer demand. The crops of entire groves or fields can be
severely impacted by a drought, freeze or hurricane. Should a drought or freeze continue for an extended duration
or high category hurricane directly impact a tree crop area, the trees themselves could be permanently damaged.
If orchards had to be replanted, the trees may not produce viable product for several years. Since our revenue
generation is dependent on a farmer’s ability to provide high quality crops to some of our customers, our
business, financial condition, results of operations and cash flows could be materially adversely impacted.
Citrus tree diseases may negatively affect our business, financial condition, results of operations and cash
flows.
The success of our citrus business is directly related to the viability and health of citrus crops. The citrus
industries in Florida, Brazil and other countries are facing increased pressure on their harvests and citrus bearing
acreage due to citrus canker and greening diseases. These citrus tree diseases are often incurable once a tree has
been infested and the end result can be the destruction of the tree.
We realize operating lease revenue based partially upon capacity or throughput that a citrus processor or
produce packinghouse produces. Reduced amounts of available fruit for the processed or fresh markets could
materially adversely affect our business, financial condition, results of operations and cash flows.
Our failure to comply with the laws and regulations governing our U.S. government contracts or the loss of
production funding of any of our U.S. government contracts could harm our business.
The federal government is the largest contractor in the United States. Our JBT AeroTech business enters
into contracts with the U.S. government, including a long-term contract relating to the sale of our Halvorsen
Loader, which is a military air cargo loader, to the U.S. Air Force. As a result we are subject to various laws and
regulations that apply to companies doing business with the U.S. government. The laws governing U.S.
government contracts differ in several respects from the laws governing private contracts. They are heavily
24
regulated to curb misappropriation of funds and ensure uniform policies and practices across agencies. Their
terms are carefully drafted by teams of government attorneys. Their ongoing funding is tied to National Defense
Budgets and Procurement Programs that are annually negotiated and approved or disapproved by the U.S.
Department of Defense, Executive Branch and the Congress. For example, if there were any shifts in spending
priorities or if funding for the U.S. Air Force cargo loader program were reduced or cancelled, the resulting loss
of revenue may have a material adverse impact on our JBT AeroTech business. Many U.S. government contracts
contain pricing terms and conditions that are not applicable to private contracts. Moreover, U.S. defense
contracts, in particular, are unilaterally terminable at the option of the U.S. government with compensation for
work completed and costs incurred.
Contracts with the U.S. government are also subject to special laws and regulations, the noncompliance with
which may result in various sanctions. Contractors, sometimes without their knowledge, are subject to
investigations by the U.S. government initiated in various ways. If, for any reason, we were now or at any time in
the future found to be non-compliant to any laws or regulations governing U.S. government contracts, our
earnings could be negatively impacted. In addition, any delays of deliverables due to our non-performance would
also have a negative impact on these contracts.
Terrorist attacks and threats, escalation of military activity in response to such attacks or acts of war may
negatively affect our business, financial condition, results of operations and cash flows.
Terrorist attacks and threats, escalation of military activity in response to such attacks or acts of war may
negatively affect our business, financial condition, results of operations and cash flows. Any future terrorist
attacks against U.S. targets, rumors or threats of war, actual conflicts involving the United States or its allies, or
military or trade disruptions affecting our customers or the economy as a whole may materially adversely affect
our operations or those of our customers. As a result, there could be delays or losses in transportation and
deliveries to our customers, decreased sales of our products and extension of time for payment of accounts
receivable from our customers. Strategic targets such as those relating to transportation and food processing may
be at greater risk of future terrorist attacks than other targets in the United States. It is possible that any of these
occurrences, or a combination of them, could have a material adverse effect on our business, financial condition,
results of operations and cash flows.
Due to the type of contracts we enter into, the cumulative loss of several major contracts may negatively affect
our business, financial condition, results of operations and cash flows.
We often enter into large, project-oriented contracts or long-term equipment leases and service agreements.
These agreements may be terminated or breached, or our customers may fail to renew these agreements. If we
were to lose several key agreements over a relatively short period of time and if we were to fail to develop
alternative business opportunities, we could experience a materially adverse impact on our business, financial
condition, results of operations and cash flows.
We may lose money on fixed-price contracts.
As is customary for several of the business areas in which we operate, we agree, in some cases, to provide
products and services under fixed-price contracts. Under these contracts, we are typically responsible for cost
overruns. Our actual costs and any gross profit realized on these fixed-price contracts may vary from the
estimated amounts on which these contracts were originally based. There is inherent risk in the estimation
process, including significant unforeseen technical and logistical challenges or longer than expected lead times.
A fixed-price contract may prohibit our ability to mitigate the impact of unanticipated increases in raw material
prices (including the price of steel) through increased pricing. Depending on the size of a project, variations from
estimated contract performance could have a materially adverse impact on our business, financial condition,
results of operations and cash flows.
25
Customer sourcing initiatives may negatively affect new equipment and aftermarket businesses.
Integration of the supply chain to provide a sustainable competitive advantage has become an objective for
many multi-national companies. With continued price pressure from consumers, wholesalers and retailers,
manufacturers are focusing their efforts on ways to reduce costs, improve sourcing processes and enhance
profitability.
Although these inherently are good practices, it can depersonalize the sales process and result in a shift in
focus to short term cost savings as opposed to fully understanding all of the cost components that are associated
with capital goods and aftermarket products, parts and services purchases over the lifetime of the investment. If
customers implement sourcing initiatives focused solely on immediate cost savings and not on total cost of
ownership, our new equipment and aftermarket sales could be negatively affected.
The emergence of low-cost suppliers in Asia may negatively affect our business, financial condition, results of
operations and cash flows.
Asian equipment manufacturers originally provided low cost and undifferentiated machinery to markets
focused on less complex and less expensive solutions. Some of these equipment suppliers are shifting their focus
upstream to an emerging domestic middle market and preparing themselves for worldwide competition.
Although these competitors find it difficult to compete in the global arena through innovation or by establishing a
strong brand presence, their determination cannot be underestimated and at some point in the future, may pose a
threat to our global market positions.
The solutions we sell are very complex, and we need to rapidly and successfully develop and introduce new
solutions in a global, competitive, demanding and changing environment.
To succeed in the globally competitive food processing and air transportation industries, we must
continually develop our product and service offerings. This requires a high level of innovation. In addition,
bringing new solutions to the market entails a costly and lengthy process and requires us to accurately anticipate
customer needs and technology trends. We must continue to respond to demands and develop leading
technologies in the food processing and air transportation industries, or our business, financial condition, results
of operations and cash flows may be materially adversely affected.
There can be no assurance that our innovations will be profitable, and if we cannot successfully market and
sell both existing and newly developed solutions, our business and operating results could be impacted.
Significant investments in unsuccessful research and development efforts could materially adversely affect our
business, financial condition and results of operations. If we were to lose our significant technology advantage,
our market share and growth could be materially adversely affected. In addition, if we are unable to deliver
products, features and functionality as projected, we may be unable to meet our commitments to customers,
which could have a materially adverse effect on our reputation and business.
Our business, financial condition, results of operations and cash flows could be materially adversely
affected by competing technology. Some of our competitors are large multinational companies that may have
greater financial resources than us, and they may be able to devote greater resources to research and development
of new systems, services and technologies than we are able to do. Moreover, some of our competitors operate in
narrow business areas, allowing them to concentrate their research and development efforts directly on products
and services for those areas.
26
When we develop new products with higher capacity and more advanced technology, the increased difficulty
and complexity associated with producing these products increases the likelihood of reliability, quality or
operability problems.
Despite rigorous testing prior to their release and superior quality processes, newly developed or enhanced
products and solutions may have some start up issues which may be found after the products are introduced and
shipped. This risk is enhanced when products are first introduced, as well as when we develop products with
more advanced technology, since the increased difficulty and complexity associated with producing these
products increases the likelihood of reliability, quality or operability problems. The correction and detection of
issues may cause delays, lost revenue and incremental costs. While we attempt to remedy errors that we believe
would be considered critical by our customers prior to shipment, we may not be able to detect or remedy all such
errors.
Our customers who rely on our solutions for business-critical applications are more sensitive to product
errors, which could expose us to product liability, performance and warranty claims, as well as harm to our
reputation. These and other risks associated with new product and service offerings may have a materially
adverse impact on our business, financial condition, results of operations and cash flows.
Product introductions and certain enhancements of existing products by us in future periods may also reduce
demand for our existing products or could delay purchases by customers awaiting arrival of our new products. As
new or enhanced products are introduced, we must successfully manage the transition from older products.
In the ordinary course of business, we continually evaluate opportunities for new product and service
offerings, new markets and new geographic sectors, and development of such opportunities could entail certain
business risks which could affect our financial condition.
If we are unable to develop, preserve and protect our intellectual property assets, our business, financial
condition, results of operations and cash flows may be negatively affected.
As a technology company, our intellectual property portfolio is crucial to our continuing ability to be a
leading solutions and services provider to the food processing and air transportation industries. We strive to
protect and enhance our proprietary intellectual property rights through patent, copyright, trademark and trade
secret laws, as well as through technological safeguards. To the extent we are not successful, our business,
financial condition, results of operations and cash flows could be materially adversely impacted. We may be
unable to prevent third parties from using our technology without our authorization or independently developing
technology that is similar to ours, particularly in those countries where the laws do not protect our proprietary
rights as fully as in the United States. With respect to our pending patent applications, we may not be successful
in securing patents for these claims, and our competitors may already have applied for patents that, once issued,
will prevail over our patent rights or otherwise limit our ability to sell our products.
While we take steps to provide for confidentiality obligations of employees and third parties with whom we
do business (including customers, suppliers and strategic partners), there is a risk that such parties will breach
such obligations and jeopardize our intellectual property rights. Although we have agreements in place to
mitigate this risk, there can be no assurance that such protections will be sufficient.
We are actively engaged in efforts to protect the value of our intellectual property and to prevent others
from infringing our intellectual property rights. However, due to the complex and technical nature of such efforts
and the potentially high stakes involved, such enforcement activity can be expensive and time consuming, and
there can be no assurance that we will be successful in these efforts.
27
Claims by others that we infringe their intellectual property rights could harm our business, financial
condition, results of operations and cash flows.
We have seen a trend towards aggressive enforcement of intellectual property rights as the functionality of
products in our industry increasingly overlaps and the volume of issued patents continues to grow. As a result,
there is a risk that we could be subject to infringement claims which, regardless of their validity, could:
• Be expensive, time consuming and divert management attention away from normal business
operations;
• Require us to pay monetary damages or enter into non-standard royalty and licensing agreements;
• Require us to modify our product sales and development plans; or
• Require us to satisfy indemnification obligations to our customers.
Regardless of whether these claims have any merit, they can be burdensome to defend or settle and can
harm our business and reputation.
Our information systems, computer equipment and information databases are critical to our business
operations, and any damage or disruptions could negatively affect our business, financial condition, results of
operations and cash flows.
Our operations are dependent on our ability to protect our computer equipment and the information stored in
our databases from damage by, among other things, earthquake, fire, natural disaster, power loss,
telecommunications failures, unauthorized intrusions and other catastrophic events. A part of our operations is
based in an area of California that has experienced power outages and earthquakes, while another part of our
operations is based in an area of Florida that has experienced power outages and hurricanes. Despite our best
efforts at planning for such contingencies, catastrophic events of this nature may still result in system failures and
other interruptions in our operations, which could have a material adverse effect on our business, financial
condition, results of operations and cash flows.
In addition, it is periodically necessary to replace, upgrade or modify our internal information systems. If we
are unable to do this in a timely and cost-effective manner, especially in light of demands on our information
technology resources, our ability to capture and process financial transactions and therefore our business,
financial condition, results of operations and cash flows may be materially adversely impacted.
Inadequate internal controls and accounting practices could lead to errors, which could negatively impact our
business, financial condition, results of operations and cash flows.
We have internal controls and management oversight systems in place, however, we may not be able to
prevent or detect misstatements in our reported financial statements due to system errors, the potential for human
error and unauthorized actions of employees or contractors, inadequacy of controls, temporary lapses in controls
due to shortfalls in transition planning and oversight of resource contracts and other factors. In addition, due to
their inherent limitations, such controls may not prevent or detect misstatements in our reported financial results
as required under SEC and New York Stock Exchange (NYSE) rules, which could increase our operating costs or
impair our ability to operate our business. Controls may also become inadequate due to changes in
circumstances, and it is necessary to replace, upgrade or modify our internal information systems from time to
time. If we are unable to implement these changes in a timely and cost-effective manner, our ability to capture
and process financial transactions and support our customers as required may be materially adversely impacted
and could harm our business, financial condition, results of operations and cash flows.
28
We may supplement our internal growth through strategic combinations, and our success depends on our
ability to successfully integrate, operate and manage these acquired businesses and assets.
We may supplement our internal growth through strategic combinations, asset purchases and other
transactions that complement or expand our existing businesses. Each of these transactions involves a number of
risks, including:
• The diversion of our management’s attention from our existing businesses to integrating the operations
and personnel of the acquired or combined business;
•
Possible material adverse effects on business, financial condition, results of operations and cash flows
during the integration process; and
• Our possible inability to achieve the intended objectives of the transaction.
We may hire additional employees in connection with these acquisitions. We may not be able to
successfully integrate all of the newly hired employees, or profitably integrate, operate, maintain and manage our
newly acquired operations in a competitive environment. We may not be able to maintain uniform standards,
controls, procedures and policies, and this may lead to operational inefficiencies.
We may seek to finance an acquisition through borrowings or through the issuance of new debt or equity
securities. If we make a relatively large acquisition, we could deplete a substantial portion of our financial
resources to the possible detriment of our other operations. Any future acquisitions could also dilute the equity
interests of our stockholders, require us to write off assets for accounting purposes or create other undesirable
accounting results, such as significant expenses for amortization or impairment of goodwill or other intangible
assets.
Loss of our key management and other personnel could impact our business.
We depend on our senior executive officers and other key personnel. The loss of any of these officers or key
personnel could materially adversely affect our business, financial condition, results of operations and cash
flows. In addition, competition for skilled and non-skilled employees among companies that rely heavily on
engineering, technology and manufacturing is intense, and the loss of skilled or non-skilled employees or an
inability to attract, retain and motivate additional skilled and non-skilled employees required for the operation
and expansion of our business could hinder our ability to conduct research activities successfully, develop new
products and services and meet customers’ shipments.
The industries in which we operate expose us to potential liabilities arising out of the installation or use of our
systems that could negatively affect our business, financial condition, results of operations and cash flows.
Our businesses supply equipment and systems for use in food processing as well as equipment, systems and
services used in airports all over the world, which creates potential exposure for us to liability for personal injury,
wrongful death, product liability, commercial claims, property damage, pollution and other environmental
damages. Although we have obtained business and related risk insurance, we cannot assure you that our
insurance will be adequate to cover all potential liabilities. Further, we cannot assure you that insurance will
generally be available in the future or, if available, that premiums to obtain such insurance will be commercially
justifiable. If we incur substantial liability and the damages are not covered by insurance or are in excess of
policy limits, or if we were to incur liability at a time when we are not able to obtain liability insurance, our
business, financial condition, results of operations and cash flows could be materially adversely affected.
Environmental protection initiatives may negatively impact the profitability of our business.
Global initiatives to protect and steward the environment have moved to center stage. From global warming
and climate change to urban sprawl and resource depletion, corporations and consumers are becoming more
aware and concerned about the impact of human activity on the environment. Comprehensive global and national
29
greenhouse gas reduction programs have been proposed and are being discussed within legislatures, boardrooms
and households. The ultimate costs, implementation and success of such broad reaching programs will be
dependent on the precise emissions targets, the timing for the reductions and the means of implementation.
Pressures to reduce the footprint of carbon emissions impact the air transportation and manufacturing
sectors. Airports, airlines and air cargo providers are continually looking for new ways to become more energy
efficient and reduce pollutants. Manufacturing plants are seeking means to reduce their heat-trapping emissions
and minimize their energy and water usage. All of the initiatives come at a cost both to our customers’ operations
as well as to our operating costs and therefore may materially adversely impact our business, financial condition,
results of operations and cash flows.
Our operations and industries are subject to a variety of U.S. and international laws, which laws can change.
We therefore face uncertainties with regard to lawsuits, regulations and other related matters.
In the normal course of business, we are subject to proceedings, lawsuits, claims and other matters,
including those that relate to the environment, health and safety, employee benefits, export compliance,
intellectual property, product liability, tax matters and regulatory compliance. For example, we are subject to
changes in foreign laws and regulations that may encourage or require us to hire local contractors or require
foreign contractors to employ citizens of, or purchase supplies from, a particular non-U.S. jurisdiction. In
addition, environmental laws and regulations affect the systems and services we design, market and sell, as well
as the facilities where we manufacture our systems. We are required to invest financial and managerial resources
to comply with environmental laws and regulations and anticipate that we will continue to be required to do so in
the future.
There is an increased focus by the SEC, and Department of Justice on enforcement of the Foreign Corrupt
Practices Act (the “FCPA”). Given the breadth and scope of our international operations, we may not be able to
detect or prevent improper or unlawful conduct by our international partners and employees, despite our ethics,
governance and compliance standards, which could put us at risk regarding possible violations of laws, including
the FCPA.
Considerable management time and resources will be spent to understand and comply with changing laws,
regulations and standards relating to corporate governance, public disclosure (including the Sarbanes-Oxley Act
of 2002), SEC regulations and the rules of the New York Stock Exchange where our shares are listed. Although
we do not believe that any recent regulatory and legal initiatives will result in significant changes to our internal
practices or our operations, rapid changes in accounting standards, taxation requirements, and federal securities
laws and regulations, among others, may substantially increase costs to our organization and could materially
adversely impact our business, financial condition, results of operations and cash flows.
We have a significant amount of indebtedness, which makes us more vulnerable to adverse economic and
competitive conditions.
Relative to our stockholders’ equity, we have a significant amount of indebtedness. As of December 31,
2008, we had $185.6 million of long-term indebtedness outstanding and $8.8 million of stockholders’ deficit.
This amount of debt is substantial and, when coupled with current adverse economic conditions, our debt could:
• make it more difficult of costly for us to obtain financing for our operations or investments or to
refinance our debt in the future;
•
•
•
place us at a competitive disadvantage compared to our less leveraged competitors;
require us to repatriate a substantial portion of our non-U.S. earnings and cash flow from operations for
payments on our indebtedness, thereby increasing our effective tax rate and reducing the availability of
our cash flow to fund working capital, capital expenditures and other general corporate purposes; or
limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we
operate.
30
See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity
and Capital Resources” beginning on page 39.
Risk Factors Relating to the Spin-Off
We may be unable to achieve some or all of the benefits that we expect to achieve from our separation from
FMC Technologies.
As a stand-alone, independent public company, we believe that our business will benefit from, among other
things, allowing our management to design and implement corporate policies and strategies that are based
primarily on the characteristics of our business, to focus our financial resources on our unique operating needs
and to implement and maintain a capital structure best suited for our company. However, we may not be able to
achieve some or all of the benefits expected as a result of the spin-off.
Additionally, by separating from FMC Technologies, there is a risk that our company may be more
susceptible to stock market fluctuations and other adverse events than we would have been were we still a part of
the current FMC Technologies due to a reduction in market diversification. Prior to the spin-off, we have been
able to take advantage of FMC Technologies’ size and purchasing power in procuring goods, technology and
services, including insurance, employee benefit support and audit services. As a separate, stand-alone entity, we
may be unable to continue to access financial and other resources on terms as favorable as those available to us
prior to the separation. Furthermore, as a stand-alone company, we will not be able to enjoy certain benefits from
FMC Technologies’ operating diversity, borrowing leverage and available capital for investments.
If the distribution, together with certain related transactions, were to fail to qualify as a reorganization for
U.S. federal income tax purposes under Sections 368(a)(1)(D) and 355 of the Code, then our stockholders, we
and/or FMC Technologies might be subject to significant tax liability.
FMC Technologies received a private letter ruling from the IRS substantially to the effect that the
distribution, together with certain related transactions, will qualify for tax-free treatment under Sections 355 and
368(a)(1)(D) of the Code. In addition, FMC Technologies obtained an opinion from Kirkland & Ellis LLP,
substantially to the effect that the distribution, together with certain related transactions, will so qualify. Both the
IRS private letter ruling and the opinion of Kirkland & Ellis LLP were based, in part, on certain representations,
assumptions and undertakings, including those relating to the past and future conduct of our business, and neither
the IRS private letter ruling nor the opinion would be valid if such representations, assumptions and undertakings
were incorrect. Therefore, notwithstanding the IRS private letter ruling and opinion, the IRS could later
determine that the distribution should be treated as a taxable transaction if it determines on audit that any of the
representations, assumptions or undertakings that were included in the request for the private letter ruling are
false or have been violated.
If the distribution fails to qualify for tax-free treatment, FMC Technologies would be treated as if it had sold
the common stock of our company for its fair market value, resulting in a taxable gain to the extent of the excess
of such fair market value over its tax basis in the stock. In general, our initial public stockholders would be
treated as if they had received a taxable distribution equal to the fair market value of our common stock that was
distributed to them. Under the tax sharing agreement between FMC Technologies and us, we would generally be
required to indemnify FMC Technologies against any tax owed by FMC Technologies resulting from the
distribution to the extent that such tax resulted from (i) an acquisition of all or a portion of our stock or assets,
whether by merger or otherwise, (ii) other actions or failures to act by us or (iii) any of our representations or
undertakings being incorrect or violated.
31
Our ability to operate our businesses may suffer if we do not, quickly and cost-effectively, establish our own
financial, administrative and other support functions to successfully operate as a stand-alone entity, and we
cannot assure you that the transitional services FMC Technologies has agreed to provide us will be sufficient
for our needs.
Historically, our businesses have relied on financial, administrative and other resources of FMC
Technologies. After the spin-off, we were required to create our own financial, administrative and other support
systems or contract with a third party to replace FMC Technologies’ resources. We entered into an agreement
with FMC Technologies under which FMC Technologies provides us with certain transitional services ,
including services related to information technology systems, treasury, legal, financial and accounting services.
Although FMC Technologies is contractually obligated to provide us with these services, these services may not
be sufficient to meet our needs, and we may not be able to replace these services at all or obtain these services at
prices and on terms as favorable as we currently have them, after our agreement with FMC Technologies expires.
Any failure or significant downtime in our own financial or administrative systems or in FMC Technologies’
financial or administrative systems during the transitional period could prevent us from paying our employees,
billing our customers or performing other administrative services on a timely basis and could materially harm our
business or operations.
The agreements that we have entered into or will enter into with FMC Technologies may involve, or may
appear to involve, conflicts of interest.
Because the spin-off involved the separation of what are currently the FoodTech and Airport Systems
business segments of FMC Technologies into JBT Corporation, we have entered into certain agreements with
FMC Technologies to provide a framework for our initial relationship with FMC Technologies following the
spin-off. We negotiated these agreements with FMC Technologies while we were still business segments of FMC
Technologies. Accordingly, some of the persons who became our officers and directors were employees, officers
or directors of FMC Technologies or its subsidiaries, and, as such, previously had an obligation to serve the
interests of FMC Technologies and its subsidiaries. As a result, they could be viewed as having a conflict of
interest.
We could be liable to FMC Technologies for adverse tax consequences resulting from certain
change-in-control transactions and therefore could be prevented from engaging in strategic or capital raising
transactions.
FMC Technologies could recognize a taxable gain if the spin-off is determined to be part of a plan or series
of related transactions pursuant to which one or more persons acquire, directly or indirectly, stock representing a
50% or greater interest in either FMC Technologies or JBT Corporation. Under the Code, any acquisitions of
FMC Technologies or JBT Corporation within the four-year period beginning two years before the date of the
spin-off are presumed to be part of such a plan. Regulations issued by the IRS, however, provide mitigating rules
in many circumstances. Nonetheless, a merger, recapitalization or acquisition, or issuance or redemption of our
common stock after the spin-off could, in some circumstances, be counted toward the 50% change of ownership
threshold. The tax sharing agreement between FMC Technologies and us precludes us from engaging in some of
these transactions unless we first obtain a tax opinion acceptable to FMC Technologies or an IRS ruling to the
effect that such transactions will not result in additional taxes. The tax sharing agreement further requires us to
indemnify FMC Technologies for any resulting taxes owed by FMC Technologies regardless of whether we first
obtain such opinion or ruling. As a result, we may be unable to engage in strategic or capital raising transactions
that stockholders might consider favorable or to structure potential transactions in the manner most favorable to
us.
32
Our corporate governance documents, our rights plan and Delaware law may delay or discourage takeovers
and business combinations that our stockholders might consider in their best interests.
Provisions in our amended and restated certificate of incorporation and by-laws may make it difficult and
expensive for a third-party to pursue a tender offer, change-in-control or takeover attempt that is opposed by our
management and Board of Directors. These provisions include, among others:
• A Board that is divided into three classes with staggered terms;
• Limitations on the right of stockholders to remove directors;
• The right of our Board to issue preferred stock without stockholder approval;
•
Inability of our stockholders to act by written consent; and
• Rules regarding how stockholders may present proposals or nominate directors at stockholders
meetings.
Public stockholders who might desire to participate in this type of transaction may not have an opportunity
to do so. These anti-takeover provisions could substantially impede the ability of public stockholders to benefit
from a change-in-control or a change in our management or Board and, as a result, may adversely affect the
marketability and market price of our common stock.
In addition, we have adopted a stockholder rights plan intended to deter hostile or coercive attempts to
acquire us. Under the plan, if any person or group acquires, or begins a tender or exchange offer that could result
in such person acquiring 15% or more of our common stock, without approval of our Board under specified
circumstances, our other stockholders will have the right to purchase shares of our common stock, or shares of
the acquiring company, at a substantial discount to the public market price. Therefore, the rights will cause
substantial dilution to a person or group that attempts to acquire us on terms not approved by our Board, except
pursuant to any offer conditioned on a substantial number of rights being acquired.
We are also subject to the provisions of Delaware law described below regarding business combinations
with interested stockholders. Section 203 of the Delaware General Corporation Law applies to a broad range of
business combinations between a Delaware corporation and an interested stockholder. The Delaware law
definition of “business combination” includes mergers, sales of assets, issuances of voting stock and certain other
transactions. An “interested stockholder” is defined as any person who owns, directly or indirectly, 15% or more
of the outstanding voting stock of a corporation.
Section 203 prohibits a corporation from engaging in a business combination with an interested stockholder
for a period of three years following the date on which the stockholder became an interested stockholder, unless:
• The Board approved the business combination before the stockholder became an interested
stockholder, or the Board approved the transaction that resulted in the stockholder becoming an
interested stockholder;
• Upon completion of the transaction which resulted in the stockholder becoming an interested
stockholder, such stockholder owned at least 85% of the voting stock outstanding when the transaction
began other than shares held by directors who are also officers and other than shares held by certain
employee stock plans; or
• The Board approved the business combination after the stockholder became an interested stockholder
and the business combination was approved at a meeting by at least two-thirds of the outstanding
voting stock not owned by such stockholder.
Although we believe these provisions protect our stockholders from coercive or otherwise unfair takeover
tactics and thereby provide for an opportunity to receive a higher bid by requiring potential acquirers to negotiate
with our Board of Directors, these provisions apply even if the offer may be considered beneficial by some
stockholders.
33
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 2. PROPERTIES
We lease executive offices totaling approximately 18,000 square feet in Chicago, Illinois. We believe that
our properties and facilities meet our current operating requirements and are in good operating condition and that
each of our significant manufacturing facilities is operating at a level consistent with the industries in which we
operate. The following are significant production facilities for our JBT FoodTech operations:
LOCATION
United States:
SQUARE
FEET
LEASED OR
OWNED
Madera, California . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Lakeland, Florida . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Sandusky, Ohio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
250,000
225,000
140,000
Owned
Owned
Owned
International:
St. Niklaas, Belgium . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Helsingborg, Sweden . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Araraquara, Brazil . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Parma, Italy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cape Town, South Africa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Ningbo, China . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Owned
289,000
227,000 Owned/Leased
125,000
72,000
38,000
28,000
Owned
Owned
Leased
Leased
The significant production properties for our JBT AeroTech operations are listed below:
LOCATION
United States:
Orlando, Florida . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Ogden, Utah . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Chalfont, Pennsylvania . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
International:
SQUARE
FEET
LEASED OR
OWNED
Owned
253,000
220,000 Owned/Leased
67,000
Leased
Madrid, Spain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Juarez, Mexico . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Leicestershire, UK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
258,000
33,000
15,000
Owned
Leased
Leased
ITEM 3. LEGAL PROCEEDINGS
Pursuant to the Separation Agreement we entered into with FMC Technologies, as of the time of our
separation from FMC Technologies, we have assumed liabilities related to specified legal proceedings arising
from our business prior to separation. Although FMC Technologies may remain the named defendant in certain
of these proceedings, we will manage the litigation and are required to indemnify FMC Technologies for costs,
expenses and judgments arising from this existing litigation. We do not believe that any existing litigation we
have assumed will have a material effect on our results of operations, financial condition or liquidity.
We are involved in other legal proceedings arising in the ordinary course of business. Although the results
of litigation cannot be predicted with certainty, we do not believe that the resolution of the proceedings that we
are involved in, either individually or taken as a whole will have a material adverse effect on our business, results
of operations, cash flows or financial condition.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders during the fourth quarter of fiscal year 2008.
34
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER
PART II
MATTERS
Market Information
Our common stock is listed on the New York Stock Exchange under the symbol JBT. Market information
with respect to the high and low sales price for our common stock on a per share basis for the third and fourth
fiscal quarters of 2008 is incorporated herein by reference from Note 19 to our consolidated financial statements
in Item 8 of this Annual Report on Form 10-K.
As of February 27, 2009, there were 4,231 holders of record of JBT Corporation’s common stock. On
March 10, 2009, the last reported sales price of our common stock on the New York Stock Exchange was $9.76.
Dividends
In the fourth quarter of 2008, we declared a quarterly cash dividend of $0.07 per common share. We expect
to continue our policy of paying regular cash dividends, although there is no assurance as to future dividends
because they are subject to Board of Directors approval and depend on future earnings, financial condition,
capital requirements, financial covenants, industry practice and other factors our Board deems relevant.
35
Performance Graph
The following performance graph compares the cumulative total return on our common stock with the
cumulative total return of the following indices: (i) the S&P SmallCap 600 Stock Index and (ii) the Russell 2000
Index. These indices are included for comparative purposes only and do not necessarily reflect management’s
opinion that such indices are an appropriate measure of the relative performance of the stock involved, and are
not intended to forecast or be indicative of possible future performance of the common stock.
CUMULATIVE TOTAL RETURN
Based upon an initial investment of $100 on July 31, 2008
with dividends reinvested
$120
$100
$80
$60
$40
$20
$0
7/31/08
8/31/08
9/30/08
10/31/08
11/30/08
12/31/08
John Bean Technologies Corporation
S&P SmallCap 600
Russell 2000
John Bean Technologies Corporation . . . . . . . . . . . . . . .
S&P SmallCap 600 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Russell 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$100
$100
$100
$ 90
$104
$104
$87
$97
$95
$58
$78
$76
$61
$69
$67
$57
$73
$70
7/31/08
8/31/08
9/30/08
10/31/08
11/30/08
12/31/08
In accordance with SEC rules, the information contained in the Stock Performance Graph above, shall not
be deemed to be “soliciting material,” or to be “filed” with the SEC or subject to the SEC’s Regulation 14A or
14C, other than as provided under Item 201(e) of Regulation S-K, or to the liabilities of Section 18 of the
Securities Exchange Act of 1934, as amended, except to the extent that the Company specifically requests that
the information be treated as soliciting material or specifically incorporates it by reference into a document filed
under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.
36
Equity Compensation Plan Information
As of December 31, 2008, our securities authorized for issuance under equity compensation plans were as
follows:
Plan Category
Equity compensation plans approved by security
Number of securities
to be issued upon
exercise of outstanding
options, warrants
and rights
Weighted average
exercise price of
outstanding options
warrants and rights
Number of securities
remaining available
for future issuance
under equity
compensation plans
holders (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
175,966
$2.52
3,524,034
Equity compensation plans not approved by
security holders . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
—
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
175,966
$2.52
3,524,034
(1) The JBT Corporation Incentive Compensation and Stock Plan provides for the award of common stock,
stock options, stock appreciation rights, restricted stock and stock units (collectively, “Awards”) to our
officers, employees, directors and consultants. The plan provides for a maximum of 3,700,000 common
shares to be issued as Awards, subject to adjustment as provided under the terms of the plan.
ITEM 6. SELECTED FINANCIAL DATA
The following table presents selected financial and other data about us for the most recent five fiscal years.
The historical financial and other data have been prepared on a consolidated and combined basis derived from
our consolidated and combined financial statements using the historical results of operations and bases of the
assets and liabilities of our businesses and give effect to allocations of expenses from FMC Technologies, our
former parent. For periods prior to the Separation, the historical combined statement of income data set forth
below do not reflect changes that occurred in the operations and funding of our company as a result of our
spin-off from FMC Technologies. The historical consolidated balance sheet data set forth below reflect the assets
and liabilities that existed as of the dates and the periods presented.
The selected consolidated financial data should be read in conjunction with, and are qualified by reference
to, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations and the
historical financial statements and the accompanying notes thereto included elsewhere in this report. The
consolidated statements of operations and cash flow data for each of the three years in the period ended
December 31, 2008 and the consolidated balance sheet data as of December 31, 2008 and 2007 are derived from
our audited consolidated financial statements included elsewhere in this report, and should be read in conjunction
with those consolidated financial statements and the accompanying notes. The consolidated balance sheet data as
of December 31, 2006 and 2005 and the consolidated statement of operations for the year ended December 31,
2005 were derived from audited consolidated financial statements that are not presented in this report. The
consolidated statement of operations for the year ended December 31, 2004 and the consolidated balance sheet
data as of December 31, 2004 were derived from our unaudited financial statements. In management’s opinion,
these unaudited consolidated financial statements have been prepared on substantially the same basis as the
audited financial statements and include all adjustments, consisting only of normal recurring adjustments,
necessary for a fair presentation of the financial data for the periods presented.
37
The financial information presented below may not reflect what our results of operations, cash flows and
financial position would have been had we operated as a separate, stand-alone entity during the periods presented
or what our results of operations, financial position and cash flows will be in the future. In addition, the Risk
Factors section of Item 1A of this report includes a discussion of risk factors that could impact our future results
of operations.
(In millions, except per share data)
Income Statement Data:
Revenue:
JBT FoodTech . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
JBT AeroTech . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other revenue and intercompany eliminations . . . . . . . . . . . . .
Years Ended December 31,
2008
2007
2006
2005
2004
Unaudited
$ 584.0
446.9
(2.8)
$594.1
386.0
(2.1)
$496.2
348.7
(0.6)
$497.4
326.7
(0.8)
$473.7
272.1
(0.6)
Total revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$1,028.1
$978.0
$844.3
$823.3
Cost of sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Selling, general and administrative expense . . . . . . . . . . . . . . .
Research and development expense . . . . . . . . . . . . . . . . . . . . .
Total costs and expenses . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . .
Other (expense) income, net
Income from continuing operations before net interest and
income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net interest (expense) income . . . . . . . . . . . . . . . . . . . . . . . . . .
Income from continuing operations before income taxes . . . . .
Provision for income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income from continuing operations . . . . . . . . . . . . . . . . . . . . . .
Income (loss) from discontinued operations, net of income
$ 776.3
152.9
22.0
951.2
(6.6)
$740.8
153.8
18.7
913.3
(3.6)
$631.1
146.7
16.2
794.0
0.1
$624.8
138.9
18.0
781.7
0.7
70.3
(3.8)
66.5
22.4
44.1
61.1
0.5
61.6
21.5
40.1
50.4
0.4
50.8
16.0
34.8
42.3
0.1
42.4
16.0
26.4
$745.2
$565.2
126.7
17.8
709.7
1.4
36.9
0.1
37.0
16.9
20.1
taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
0.1
(3.7)
(0.2)
(1.9)
(3.8)
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted Earnings Per Share (1):
Income from continuing operations . . . . . . . . . . . . . . . . . .
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted weighted average shares outstanding . . . . . . . . . .
Common Stock Price Range:
High . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Low . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash dividends declared . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance Sheet Data (at period end):
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term debt, less current portion . . . . . . . . . . . . . . . . . . . . .
(In millions)
Other Financial Information:
Capital expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash flows provided by continuing operating activities . . . . . .
Order backlog (unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
$
$
44.2
$ 36.4
$ 34.6
$ 24.5
$ 16.3
1.59
1.59
27.8
$ 1.45
$ 1.32
27.5
$ 1.26
$ 1.26
27.5
$ 0.96
$ 0.89
27.5
$ 0.73
$ 0.59
27.5
$ 14.50
5.86
$
0.07
$
$ — $ — $ — $ —
$ — $ — $ — $ —
$ — $ — $ — $ —
$ 591.3
185.0
$573.9
—
$516.6
—
$493.5
0.2
$493.9
0.3
Years Ended December 31,
2008
2007
2006
2005
2004
Unaudited
22.9
$
$
81.8
$ 295.3
$ 23.0
$ 39.0
$398.4
$ 22.7
$ 96.3
$322.1
$ 21.6
$ 54.0
$227.8
$ 20.7
$ 35.7
$259.3
(1) For all periods prior to July 31, 2008, the date of our spin-off from FMC Technologies, the number of
diluted shares being used is the number of shares outstanding on July 31, 2008, as our common stock was
not traded prior to July 31, 2008 and there were no outstanding equity awards of JBT Corporation in the
prior periods.
38
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Executive Overview
We are a global technology solutions provider for the food processing and air transportation industries. We
design, manufacture, test and service technologically sophisticated systems and products for customers through
our JBT FoodTech and JBT AeroTech segments. We have established a large installed base of food processing
equipment as well as airport equipment and have built a strong global presence with manufacturing, sourcing,
sales and service organizations located on six continents to support our equipment that has been delivered to
more than 100 countries.
We have developed close working relationships with our customers, which we believe enhances our
competitive advantage, strengthens our market position and improves our results. We serve customers from
around the world. During 2008, more than half of our total sales were to locations outside of the United States.
We evaluate international markets and pursue opportunities that fit our technological capabilities and strategies.
The food processing and air transportation industries in which we operate are susceptible to significant
changes in the strength of the global or regional economies and the economic health of companies who make
capital commitments for our products and services. We focus on economic and industry-specific drivers and key
risk factors affecting each of our businesses as we formulate our strategic plans and make decisions related to
allocating capital and human resources. These factors include risks associated with the global economic outlook,
product obsolescence, and the competitive environment.
As part of our core mission of being a leading supplier of customized solutions to the food processing and
air transportation industries, we address these business related risks through our focus on the four critical
strategies of extending our technology leadership; leveraging our installed base; capturing international growth
opportunities; and growing through acquisitions.
As we evaluate our operating results, we consider performance indicators like segment revenue and
operating profit in addition to the level of inbound orders and order backlog.
Separation from FMC Technologies
Prior to our spin-off from FMC Technologies, we were a wholly-owned subsidiary of FMC Technologies
operating under the name of FMC FoodTech, Inc. As part of the plan to separate into two independent publicly-
traded companies, FMC Technologies changed our name to John Bean Technologies Corporation and transferred
to us the equity interests of the entities that held all of the assets and liabilities of its Airport Systems business
and FoodTech related businesses. On July 31, 2008, FMC Technologies distributed all of its shares of JBT
Corporation to its shareholders at a ratio of .216 of a share of JBT Corporation common stock for every share of
FMC Technologies common stock held on the record date of July 22, 2008 (the “Separation”).
Our financial statements reflect the consolidated operations of JBT Corporation as an independent, publicly-
traded company subsequent to the Separation and historical results of operations and basis of the assets and
liabilities of the transferred businesses, including allocations from FMC Technologies, prior to the Separation.
Allocated expenses include general and administrative services such as accounting, treasury, tax, legal, human
resources, information technology and other corporate and infrastructure services. Many assets, liabilities and
expenses could be specifically identified with JBT Corporation businesses or personnel and were directly
allocated. To the extent amounts could not be specifically identified and allocated, we primarily used JBT
Corporation’s proportion of total FMC Technologies’ revenue as a reasonable allocation method. Allocations
have been determined on the basis of assumptions and estimates that management believes to be a reasonable
reflection of JBT Corporation’s utilization of those services. These allocations and estimates, however, are not
necessarily indicative of our actual results had we been operating as a stand-alone company during the periods
presented.
39
Our capital structure and financial condition significantly changed at the date of the Separation. We paid
FMC Technologies $189.4 million in connection with the Separation, which we funded through issuance of
unsecured debt. Additionally, in preparation for the Separation, FMC Technologies remeasured the obligations
and assets of its U.S. pension and postretirement plans as of June 30, 2008 and on the date of the Separation
distributed to us $209.8 million of projected pension and postretirement benefit obligations and $169.0 million of
pension plan assets related to our employees and retirees.
The financial statements prior to the Separation do not reflect the debt or interest expense JBT Corporation
might have incurred if we were a stand-alone company. In addition, the financial statements may not necessarily
reflect what our results of operations, financial position and cash flows will be in the future or would have been
as a stand-alone company during the periods presented.
CONSOLIDATED AND COMBINED RESULTS OF OPERATIONS
Year Ended December 31,
Change
2008
2007
2006
2008
vs.
2007
2007
vs.
2006
($ in millions)
Revenue:
Product revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Service revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 900.8
127.3
$864.6
113.4
$755.4
88.9
$36.2
13.9
$109.2
24.5
Total revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,028.1
978.0
844.3
50.1
133.7
Costs and expenses:
Cost of products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cost of services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Selling, general and administrative expense . . . . . . . . . . . . . .
Research and development expense . . . . . . . . . . . . . . . . . . . .
Total costs and expenses . . . . . . . . . . . . . . . . . . . . . . . . .
Other (expense) income, net . . . . . . . . . . . . . . . . . . . . . . . . . .
Net interest (expense) income . . . . . . . . . . . . . . . . . . . . . . . . .
Income before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provision for income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income from continuing operations . . . . . . . . . . . . . . . . . . . . . . .
Income (loss) from discontinued operations, net of income
683.9
92.4
152.9
22.0
951.2
(6.6)
(3.8)
66.5
22.4
44.1
657.4
83.4
153.8
18.7
913.3
(3.6)
0.5
61.6
21.5
40.1
567.9
63.2
146.7
16.2
794.0
0.1
0.4
50.8
16.0
34.8
26.5
9.0
(0.9)
3.3
37.9
(3.0)
(4.3)
4.9
0.9
4.0
89.5
20.2
7.1
2.5
119.3
(3.7)
0.1
10.8
5.5
5.3
taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
0.1
(3.7)
(0.2)
3.8
(3.5)
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
44.2
$ 36.4
$ 34.6
$ 7.8
$
1.8
2008 Compared with 2007
Our total revenue increased $50.1 million (approximately 5%) in the twelve months ended December 31,
2008 compared to 2007. Higher levels of air traffic in 2007 drove high demand for JBT AeroTech equipment
resulting in a strong backlog at the end of 2007. Increased sales of gate equipment to airlines and airport
authorities and ground support equipment to air freight and ground handling companies contributed
approximately $44.9 million in incremental product revenue. However, the downturn in the economic
environment had a negative impact on sales of our food processing equipment, resulting in a decrease in revenue
of $24.9 million. Lower sales of food processing equipment were primarily due to lower demand for freezing and
protein processing equipment from meat, dairy and other ready-to-eat meal processors, particularly in North
America. Our service revenue increased by $13.9 million in the twelve months ended December 31, 2008
compared to 2007. We executed new contracts with major U.S. airport authorities and expanded services and the
40
amount of aftermarket products and parts we provide to our large base of freezing and protein processing
customers. Favorable changes in foreign currency exchange rates contributed approximately $15.5 million in
increased revenue.
Although cost of sales were higher in the twelve months ended December 31, 2008 compared to 2007, gross
profit (revenue less cost of sales) increased by $14.6 million, as gross profit margins improved slightly from
24.3% in 2007 to 24.5% in 2008.
Selling, general and administrative expenses were $0.9 million lower in the twelve months ended
December 31, 2008 compared to 2007. Excluding the unfavorable impact of foreign currency translation, selling,
general and administrative expenses decreased by $3.6 million. We were able to better leverage selling, general
and administrative expenses as selling, general and administrative expenses decreased as a percentage of revenue
from 15.7% in 2007 to 14.9% in 2008.
Other (expense) income, net, reflects primarily gains and losses related to foreign currency transactions and
gains and losses on investments in our non-qualified deferred compensation plan. In the twelve months ended
December 31, 2008, we had a loss of $3.2 million on the investments. The remaining increase in other expense,
net in 2008 compared to 2007 was driven primarily by the recent strengthening of the U.S. dollar.
Net interest expense was $3.8 million in 2008 compared to net interest income of $0.5 million in 2007. The
expense in 2008 reflects five months of interest expense on senior unsecured notes we issued and the credit
facility we entered into in connection with the Separation. We did not have significant amounts of debt
outstanding in the periods prior to the Separation.
Income tax expense for the year ended December 31, 2008 resulted in an effective income tax rate of 33.7%,
compared to an effective rate of 34.9% for 2007. The decrease in the effective tax rate was primarily attributable
to the geographical mix of earnings in lower taxed jurisdictions.
2007 Compared with 2006
Revenue increased by $133.7 million (more than 15%) in the twelve months ended December 31, 2007
compared to 2006. Increased sales of equipment and services provided to producers of in-container food products
drove revenue higher by approximately $20.0 million. This higher demand was for new efficient solutions for
customers’ increased use of unique product packaging. Increased demand for freezing solutions from bakery
markets and other ready-to-eat meal food processors contributed approximately $17.0 million in higher revenue.
This higher demand was a function of increased demand for frozen ready-to-eat meals, particularly in Europe.
New long-term contracts were executed for a variety of JBT AeroTech equipment and services to commercial
airlines, airport authorities and the U.S. government. Air traffic trended upward compared to 2006, creating
higher demand for loaders and other ground support equipment used by airports and airlines, driving
approximately $33.0 million in higher revenue. Approximately $36.0 million of the increase in sales resulted
from translating foreign currency revenue into U.S. dollars at a different rate in 2007 compared to 2006.
Cost of sales were greater in 2007 compared to 2006, however gross profit (sales less cost of sales)
increased by $24.0 million in 2007 compared to 2006. This was primarily a result of higher demand for
comprehensive food processing solutions with multiple components. However, increased outsourced components
negatively impacted gross profit margins which declined from 25.3% in 2006 to 24.3% in 2007.
Selling, general and administrative expenses grew by 5%, which largely reflected the impact of foreign
currency translation. As a percentage of sales, selling, general and administrative expenses declined from 17.4%
of sales in 2006 to 15.7% of sales in 2007, reflecting leverage from higher sales volume and the absence of
system implementation costs incurred in 2006.
41
Other (expense) income, net, reflected foreign currency related gains and losses. With more than 50% of our
revenue and expenses generated outside of the U.S., we mitigate the impact of currency fluctuations on our
operating results by entering into derivative instruments. Our procedures are designed to mitigate, but not
entirely eliminate, the foreign currency fluctuations. The loss was driven primarily by the weakening of the U.S.
dollar against European currencies.
Income tax expense for the year ended December 31, 2007 resulted in an effective income tax rate of 34.9%,
compared to an effective rate of 31.5% for 2006. The increase in effective tax rate is attributable to changes in
the distribution of global earnings across the jurisdictions in which we operate and also reflects both incremental
tax benefit in 2006 related to the reversal of a valuation allowance and incremental tax expense recorded in 2007
related to the repatriation of foreign earnings.
Discontinued Operations
We have reported two businesses within discontinued operations, one of which was sold in 2007 for a gain,
net of tax, of $3.1 million. Offsetting this gain were operating losses of $7.3 million, including restructuring
expenses and asset valuation provisions of $4.5 million from a second discontinued business which ceased
operations in the first quarter of 2008.
OPERATING RESULTS OF BUSINESS SEGMENTS
Year Ended December 31,
Change
2008
2007
2006
2008
vs.
2007
2007
vs.
2006
($ in millions)
Revenue
JBT FoodTech . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
JBT AeroTech . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other revenue and intercompany eliminations . . . . . . . . . . .
$ 584.0
446.9
(2.8)
$594.1
386.0
(2.1)
$496.2
348.7
(0.6)
$(10.1) $ 97.9
37.3
(1.5)
60.9
(0.7)
Total revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$1,028.1
$978.0
$844.3
$ 50.1
$133.7
Income before income taxes
Segment operating profit:
JBT FoodTech . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
JBT AeroTech . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
Total segment operating profit . . . . . . . . . . . . . . . . . . . .
60.2
38.5
98.7
$ 55.0
32.4
$ 46.3
27.1
$ 5.2
6.1
$
8.7
5.3
87.4
73.4
11.3
14.0
Corporate items:
Corporate expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other expense, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net interest (expense) income . . . . . . . . . . . . . . . . . . . . . . . .
(15.0)
(13.4)
(3.8)
(11.3)
(15.0)
0.5
(12.0)
(11.0)
0.4
Total corporate items . . . . . . . . . . . . . . . . . . . . . . . . . . .
(32.2)
(25.8)
(22.6)
Income from continuing operations before income taxes . . . .
Provision for income taxes . . . . . . . . . . . . . . . . . . . . . . . . . .
Income from continuing operations . . . . . . . . . . . . . . . . . . . . . .
Income (loss) from discontinued operations, net of income
66.5
22.4
44.1
61.6
21.5
40.1
50.8
16.0
34.8
taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
0.1
(3.7)
(0.2)
(3.7)
1.6
(4.3)
(6.4)
4.9
0.9
4.0
3.8
0.7
(4.0)
0.1
(3.2)
10.8
5.5
5.3
(3.5)
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
44.2
$ 36.4
$ 34.6
$ 7.8
$
1.8
42
Segment operating profit is defined as total segment revenue less segment operating expenses. The
following items have been excluded in computing segment operating profit: corporate staff expense, foreign
currency related gains and losses, LIFO provisions, certain employee benefit expenses, interest income and
expense associated with corporate investments and income taxes. During the third quarter of 2008, we changed
the method we use to measure segment operating profit by excluding gains and losses on derivatives related to
foreign currency exposure, which we describe in Note 2 of the notes to our consolidated financial statements
included in Item 8 of this Annual Report. As a result, all prior year measurements of segment operating profit
have been restated for comparative purposes.
JBT FoodTech
2008 Compared with 2007
JBT FoodTech’s revenue decreased by $10.1 million in the twelve months ended December 31, 2008
compared to 2007. Excluding the favorable impact of foreign currency translation, revenue decreased by $24.9
million. The downturn in the economic environment in North America affected the demand for our freezing and
protein processing equipment resulting in a decrease of $31.4 million in sales to customers in all food markets
except the poultry market, where sales increased by $9.0 million. Increased demand for our freezing and protein
processing equipment in Europe partially offset the decrease in North America and contributed $10.0 million in
incremental revenue. Lower demand for our tomato and fruit processing equipment resulted in a decrease in
revenue of $11.4 million, which was partially offset by $7.7 million of incremental revenue due to higher
demand for our citrus processing equipment. Lower demand for our in-container food processing equipment
resulted in a decrease in revenue of $9.6 million.
JBT FoodTech’s operating profit increased by $5.2 million in the twelve months ended December 31, 2008
compared to 2007. Improved gross profit margins contributed $6.9 million in higher profits as we provided more
aftermarket products, parts and services, which were partially offset by $5.1 million due to a decrease in
equipment sales. Additionally, a decrease of $3.2 million in selling, general and administrative expenses was
partially offset by an increase of $1.0 million in research and development costs. Foreign currency translation of
revenue and operating expenses had a favorable impact of $1.1 million.
2007 Compared with 2006
JBT FoodTech’s revenue increased by $97.9 million in the twelve months ended December 31, 2007
compared to 2006. Demand for comprehensive food processing solutions increased, as customers showed a
preference for working with a single supplier offering multiple equipment for an integrated processing line.
There was growing demand from customers in the bakery, ready meal and poultry segments, leading to a $27.3
million increase in revenue for freezing and protein processing equipment. Increased demand for food processing
equipment driven by new products, coupled with increasing acceptance of fruit-based beverages, compared to a
much lower market demand worldwide in 2006, drove $32.5 million in incremental revenue. In addition, foreign
currency translation resulted in $29.6 million in incremental revenue.
JBT FoodTech’s operating profit in the twelve months ended December 31, 2007 increased by $8.7 million
compared to 2006. Higher sales volume contributed $26.8 million in higher profits, which was partially offset by
$13.3 million from margin declines resulting from a change in sales mix. As more customers demanded broader
product offerings from a single supplier, 2007 volume consisted of a higher proportion of outsourced equipment,
which yielded a lower margin than internally manufactured products. In addition, growth in the bakery segment
had a high content of lower margin manufactured equipment. Selling, general and administrative costs increased
$4.8 million in 2007 compared to 2006, most of which represents foreign currency translation.
43
JBT AeroTech
2008 Compared with 2007
JBT AeroTech’s revenue increased by $60.9 million in the twelve months ended December 31, 2008
compared to 2007. Higher levels of air traffic in 2007 drove higher demand for our products, which resulted in a
strong backlog at the end of 2007 compared to year-end 2006. These orders were converted into sales in 2008
which resulted in higher revenue for ground support equipment, contributing $18.3 million of incremental
revenue, and passenger boarding bridges and related gate equipment, contributing $26.6 million in incremental
revenue. Additionally, the continuing trend by airport authorities and airlines to outsource maintenance and other
non-core services contributed $8.5 million of incremental revenue. Increased shipments of our Halvorsen cargo
loaders and services provided to various branches of the U.S. Department of Defense and foreign governments
contributed $7.2 million of incremental revenue in 2008 compared to 2007.
JBT AeroTech’s operating profit increased by $6.1 million in the twelve months ended December 31, 2008
compared to 2007. Higher sales volume contributed $12.7 million in higher profits, which were partially offset
by $2.7 million due to higher steel costs, an increase of $2.1 million in selling costs primarily due to
commissions paid and an increase of $1.8 million in research and development costs, primarily for energy-
efficient improvements. Gross profit margins declined slightly, while operating profit margins improved slightly
as we were able to better leverage selling, general and administrative expenses.
2007 Compared with 2006
JBT AeroTech’s revenue increased by $37.3 million in the twelve months ended December 31, 2007
compared to 2006. Air traffic trended upward, creating higher demand for airline ground support equipment and
increasing revenue by $23.3 million. In addition, the continuing trend by airport authorities and airlines to
outsource maintenance services contributed to a $9.5 million increase in revenue.
JBT AeroTech’s operating profit increased by $5.3 million for the twelve months ended December 31, 2007
compared to 2006. The profit improvement was a result of higher revenue, partly offset by higher warranty and
other product expenses related to the volume increase. Selling, general and administrative expenses increased
from 2006, although at a lower rate than the revenue increase, due to our ability to leverage the higher volumes.
Increased expenses were due to higher commissions on increased sales volumes and higher costs for sales and
administrative staff to support future growth. We also invested more funds in research and development
activities, primarily for improvements to ground support equipment, including development of electric powered
equipment.
Corporate Items
2008 Compared with 2007
Corporate expense increased by $3.7 million in the twelve months ended December 31, 2008 compared to
2007, reflecting higher stand-alone corporate costs since the Separation and onetime costs in establishing the
Corporate office.
Other expense, net, decreased primarily reflecting $3.0 million in lower stand-alone stock-based and other
compensation costs since the Separation which were offset by an increase in $1.4 million in foreign currency
exchange rate losses. With more than 50% of our revenue and expenses generated outside of the U.S., we
mitigate the impact of currency fluctuations on our operating results by entering into derivative instruments. In
the third quarter of 2008, we elected to discontinue designating our new foreign currency derivative instruments
as hedging instruments under the provisions of SFAS No. 133, Accounting for Derivative Instruments and
Hedging Activities. Changes in the fair value of derivative instruments that are not designated as hedging
instruments are recognized in earnings in the periods the change occurs, not necessarily when the underlying
44
transaction impacts earnings. The majority of our derivative instruments hedge revenue denominated in a
currency other than a business unit’s functional currency. Had we applied hedge accounting to these derivatives,
the periodic gains or losses would be deferred until the non-functional-currency revenue was recognized. We
anticipate our earnings will fluctuate as unrealized gains and losses on derivatives may be recognized in a period
other than the period in which the underlying transactions impact earnings. The magnitude of fluctuation will be
dependent upon currency exchange rates, particularly among the U.S. dollar, the euro, the pound sterling, the
Swedish krona, the Brazilian real, and the Australian dollar, and the length of time derivatives are held prior to
completion of the underlying hedged contract.
Net interest expense was $3.8 million in 2008 compared to net interest income of $0.5 million in 2007. The
expense in 2008 reflects five months of interest expense on debt incurred as a result of the Separation.
2007 Compared with 2006
Corporate items increased by $3.2 million for the twelve months ended December 31, 2007 compared to
2006 primarily due to an increase of $2.6 million in foreign currency exchange related losses. With more than
50% of our revenue and expenses generated outside of the U.S, we mitigate the impact of currency fluctuations
on our operating results by entering into derivative instruments. Our procedures are designed to mitigate, but not
entirely eliminate, the foreign currency fluctuations. Partially offsetting these expenses were lower incentive
compensation expenses for corporate staff in 2007 compared to 2006.
Inbound Orders and Order Backlog
Inbound orders represent the estimated sales value of confirmed customer orders received during the
reporting period.
(In millions)
Inbound Orders
Year Ended December 31,
2008
2007
JBT FoodTech . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
JBT AeroTech . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Intercompany eliminations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$570.2
358.8
(3.9)
$ 596.8
457.6
(0.1)
Total inbound orders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$925.1
$1,054.3
Inbound orders in the twelve months ended December 31, 2008 decreased by $129.2 million compared to
the same period in 2007. The decrease was primarily driven by a decrease in orders for our freezing and protein
processing equipment in our JBT FoodTech segment and ground support equipment in our JBT AeroTech
segment in the second half of 2008 compared to the same period in 2007.
Order backlog is calculated as the estimated sales value of unfilled, confirmed customer orders at the
reporting date.
(In millions)
Order Backlog
December 31,
2008
2007
JBT FoodTech . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
JBT AeroTech . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Intercompany eliminations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$152.8
142.6
(0.1)
Total order backlog . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$295.3
$167.3
230.7
0.3
$398.4
45
JBT FoodTech’s order backlog at December 31, 2008 decreased by $14.6 million compared to
December 31, 2007, due to completion of major poultry orders existing at December 31, 2007. We expect to
convert the entire JBT FoodTech backlog at December 31, 2008 into revenue during 2009.
JBT AeroTech’s order backlog at December 31, 2008 decreased by $88.1 million compared to
December 31, 2007. Orders for ground support equipment are down due to industry and economic conditions
facing airline and air freight industries. Orders for our Jetway® passenger boarding bridges are down partially
due to timing of orders, which we received in the first quarter of 2009. We expect to convert approximately 84
percent of the JBT AeroTech backlog at December 31, 2008 into revenue during 2009.
Unaudited Pro Forma Consolidated Financial Data
The unaudited pro forma consolidated financial information presented below has been derived from our
unaudited historical condensed consolidated financial statements as of and for the year ended December 31,
2008. This unaudited pro forma consolidated financial information should be read in conjunction with the
Consolidated Results of Operations and the audited consolidated financial statements and notes thereto included
elsewhere in this Annual Report on Form 10-K.
The pro forma adjustments are based on assumptions that management believes are reasonable. The
unaudited pro forma consolidated financial information is for illustrative and informational purposes only and is
not intended to represent or be indicative of what our results of operations or financial position would have been
had the separation and distribution and related transactions occurred on January 1, 2008. The unaudited pro
forma consolidated financial information also should not be considered representative of our future results of
operations or financial position.
The unaudited pro forma consolidated statement of income for the year ended December 31, 2008 reflects
adjustments to our historical financial statements to present our results as if the spin-off occurred on January 1,
2008. These adjustments include the effect of financing our payment of $189.4 million to FMC Technologies in
connection with our separation from FMC Technologies.
46
Unaudited Pro Forma Consolidated Statement of Income
Year Ended December 31, 2008
Historical Adjustments
Pro Forma
(In millions, except per share data)
Revenue:
Product revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Service revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 900.8
127.3
$—
—
Total revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,028.1
Costs and expenses:
Cost of products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cost of services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Selling, general and administrative expense . . . . . . . . . . . . . . . . . . . . . . .
Research and development expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total costs and expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other (expense) income, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net interest (expense) income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provision for income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income from continuing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income from continuing operations per common share
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
$
$
Weighted average shares outstanding
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
683.9
92.4
152.9
22.0
951.2
(6.6)
(3.8)
66.5
22.4
44.1
1.60
1.59
27.5
27.8
—
—
—
—
—
—
—
(6.4)(1)
(6.4)
(2.4)(1)
$(4.0)
$ 900.8
127.3
1,028.1
683.9
92.4
152.9
22.0
951.2
(6.6)
(10.2)
60.1
20.0
40.1
1.46
1.44
27.5
27.8
$
$
$
Notes to Unaudited Pro Forma Consolidated Statement of Income
(1)
In connection with the Separation, we paid FMC Technologies $189.4 million, which was funded through
issuance of unsecured debt. Pro forma results include an estimate of interest expense that we would have
incurred had the spin-off occurred on January 1, 2008. Interest expense is based on $189.4 million of debt at
the interest rate applicable on July 31, 2008, which includes the interest rate impact of the interest rate swap
and senior unsecured notes we issued in June and July of 2008, or 5.8%, for all periods prior to the
Separation. Related income tax impact has been estimated using a rate of 37%.
Outlook
We anticipate a continued and broad based weakness in worldwide markets through 2009. Although the
impact will not be the same across all of our product lines, the global economic slowdown nonetheless will have
a negative affect on our financial results in 2009. With the highly volatile foreign currency markets and uncertain
worldwide credit markets, it is extremely difficult to provide an accurate estimate.
We expect increased pension expense in 2009 of approximately $2 million. Interest expense for 2009 is
expected to be approximately $10.0 million and our full year effective tax rate is expected to be approximately
34% to 36%.
We have provided an unaudited pro forma consolidated statement of income elsewhere in this report for
comparative purposes. The pro forma statements adjust our historical results to include an estimate of interest
expense we would have incurred had the spin-off occurred on January 1, 2008. The pro forma interest expense
for the seven months ended July 31, 2008 was $6.4 million ($4.0 million after tax). Therefore, including
incremental pro forma interest expense of $6.4 million, our pro forma diluted earnings per share were $1.44.
47
Liquidity and Capital Resources
Our Separation from FMC Technologies was completed on July 31, 2008. As an independent publicly-
owned company, our capital structure and sources of liquidity have changed significantly. Since the Separation,
our primary sources of liquidity have been and will continue to be cash provided from operating activities and
credit facilities. We believe our cash flows from operations and our credit facilities will be sufficient to satisfy
our future working capital, research and development activities, capital expenditures, pension contributions and
other financing requirements. Our ability to generate positive cash flows from operations is dependent on general
economic conditions, competitive pressures, and other business and risk factors.
New Financing Arrangements
On July 31, 2008, we obtained $75 million in proceeds by issuing 6.66% senior unsecured notes. The senior
unsecured notes are due on July 31, 2015 and require us to make semiannual interest payments. The note
purchase agreement contains customary covenants including leverage and interest coverage ratios. The leverage
ratio covenant restricts the amount of Consolidated Total Indebtedness we may have compared to Consolidated
EBITDA, according to the terms defined in the note purchase agreement. The interest coverage ratio covenant
restricts the amount of Consolidated Interest Expense we may have compared to Consolidated EBITDA,
according to the terms defined in the note purchase agreement. We do not have a covenant related to our net
worth.
Additionally, on July 31, 2008, we entered into a $225 million, 5-year revolving credit facility. The
revolving credit facility contains customary covenants including similar leverage and interest coverage ratios and
also limits the annual amounts we may spend on dividends and capital expenditures. We do not expect that these
restrictions will impair or limit our current expectations for dividends and capital expenditures. Borrowings
under the revolving credit facility bear interest, at our option, at LIBOR or an alternative base rate, which is the
greater of JPMorgan Chase, N.A.’s Prime Rate and Federal Funds Rate plus 50 basis points, plus a margin
dependent on our leverage ratio as defined in the credit agreement. We are required to make periodic interest
payments on the borrowed amounts and pay an annual facility fee ranging from 17.5 to 35 basis points,
depending on our leverage ratio. As of December 31, 2008, there was $110 million outstanding and
approximately $95 million available on the revolving credit facility.
As of December 31, 2008, we are in compliance with all restrictive covenants and expect to remain in
compliance in the foreseeable future. However, there can be no assurance that continued or increased volatility in
the global economic conditions will not impair our ability to meet our restrictive covenants, or the volatility in
the capital and credit markets will not impair our ability to access these markets on terms acceptable to us or at
all.
We also have an interest rate swap related to interest payments on $50 million of our variable rate
borrowings from July 31, 2008 to January 29, 2010 and $25 million of our variable rate borrowings from
January 30, 2010 to January 31, 2011. The effect of the interest rate swap, which was acquired on June 30, 2008,
is to fix the effective annual interest rate of these variable rate borrowings at 3.675% plus the margin dependent
on our leverage ratio.
The proceeds from issuance of the notes and the draw on the revolving credit facility were used to fund a
$189.4 million payment to FMC Technologies in conjunction with the Separation.
48
Liquidity
Cash flows for each of the years in the three-year period ended December 31, 2008 were as follows:
(In millions)
Year ended December 31,
2008
2007
2006
Cash provided by continuing operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash required by continuing investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash required by financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash provided (required) by discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of foreign exchange rate changes on cash and cash equivalents . . . . . . . . . . . . . .
$ 81.8
(25.3)
(22.1)
0.7
(1.0)
$ 39.0 $ 96.3
(19.6)
(19.9)
(68.9)
(23.2)
(0.7)
2.5
0.5
0.8
Increase (decrease) in cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 34.1
$ (0.8) $ 7.6
Operating Cash Flows
We generated $81.8 million in cash flows from continuing operating activities during the twelve months
ended December 31, 2008, representing a $42.8 million increase compared to 2007. The increase is primarily
attributable to improved utilization of working capital. Cash outflows for working capital in 2007 were
approximately $41.7 million compared to approximately $1.6 million in 2008. The record high order backlog at
the end of 2007 drove the cash outflows for working capital in 2007 and was the primary driver of cash inflows
due to cash receipts for accounts receivable collections in 2008. Our cash flows from continuing operating
activities in 2007 were $57.3 million lower than in 2006. The decrease was primarily attributable to cash
outflows for working capital.
Investing Cash Flows
Our annual capital spending typically ranges from $20.0 million to $25.0 million. Majority of our spending
supports the maintenance and upgrading of our installed base of leased equipment.
Financing Cash Flows
Cash used in financing activities was $22.1 million, $23.2 million and $68.9 million in each of the twelve
months ended December 31, 2008, 2007 and 2006, respectively. The financing activities in 2008 reflect the
payments made to FMC Technologies in connection with our Separation and the issuances and payments on the
new financing arrangements described above. Prior to the Separation, FMC Technologies managed our financial
resources, including borrowings. As such, our financing activities were limited to capital transactions with FMC
Technologies. Cash from operations were swept to FMC Technologies, and because we had positive operating
cash flows, we had cash outflows as distributions to FMC Technologies for the periods prior to the Separation.
Discontinued Operations Cash Flows
Our discontinued businesses ceased operations in 2007 and were sold in 2007 and 2008. Minimal cash flows
are expected for 2009.
Outlook
We plan to meet our cash requirements in future periods with cash generated from operations and
borrowings under our credit facilities. On February 24, 2009, the Board of Directors approved a quarterly cash
dividend of $0.07 per share of outstanding common stock, or approximately $1.9 million. The dividend will be
paid on March 27, 2009 to stockholders of record at the close of business on March 6, 2009. We estimate that we
will pay $10.0 million in interest under our financing agreements in 2009. We project that we will contribute
approximately $16.5 million in 2009 to our pension plans, although we are not currently required to fund our
U.S. pension plan.
49
We continue to evaluate acquisitions in the normal course of business which we expect to fund with cash
generated from operations or borrowings under our credit agreements.
Contractual Obligations and Off-Balance Sheet Arrangements
The following is a summary of our contractual obligations at December 31, 2008:
(In millions)
Payments due by period
Total
payments
Less than 1
year
1 - 3
years
3-5 years
After 5
years
Contractual Obligations
Long-term debt (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capital leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unconditional purchase obligations (b) . . . . . . . . . . . . . . . . . . . .
Pension and other postretirement benefits (c) . . . . . . . . . . . . . . .
$185.6
16.1
0.4
35.4
16.5
Total contractual obligations . . . . . . . . . . . . . . . . . . . . . . . .
$254.0
$ 0.6
3.9
0.2
30.0
16.5
$51.2
$ — $110.0
3.9
—
—
—
6.2
0.2
5.4
—
$75.0
2.1
—
—
—
$11.8
$113.9
$77.1
(a) Our available long-term debt is dependent upon our compliance with certain customary covenants, including
(b)
leverage and interest coverage ratios. Any violations of covenants or other events of default, which are not
waived or cured, could have a material impact on our ability to maintain our committed financial
arrangements.
In the normal course of business, we enter into agreements with our suppliers to purchase raw materials or
services. These agreements include a requirement that our supplier provide products or services to our
specifications and require us to make a firm purchase commitment to our supplier. As substantially all of
these commitments are associated with purchases made to fulfill our customers’ orders, the costs associated
with these agreements will ultimately be reflected in cost of sales on our combined statements of income.
(c) We expect to make $16.5 million in contributions to our pension and other postretirement benefit plans
during 2009. This amount includes discretionary contributions to our U.S. qualified pension plan. Required
contributions for future years depend on factors that cannot be determined at this time.
The following is a summary of other off-balance sheet arrangements at December 31, 2008:
(In millions)
Other Off-Balance Sheet Arrangements
Letters of credit and bank guarantees . . . . . . . . . . . . . . . . . .
Surety bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total other off-balance sheet arrangements . . . . . . . . . .
Amount of commitment expiration per period
Total
amount
Less than 1
year
1 - 3
years
3-5 years
After 5
years
$29.7
33.0
$62.7
$26.7
28.7
$55.4
$2.3
4.3
$6.6
$ 0.1
—
$ 0.1
$ 0.6
—
$ 0.6
To provide required security regarding our performance on certain contracts, we provide letters of credit,
surety bonds and bank guarantees, for which we are contingently liable. In order to obtain these financial
instruments, we pay fees to various financial institutions in amounts competitively determined in the
marketplace. Our ability to generate revenue from certain contracts is dependent upon our ability to obtain these
off-balance sheet financial instruments.
Our off-balance sheet financial instruments may be renewed, revised or released based on changes in the
underlying commitment. Historically, our commercial commitments have not been drawn upon to a material
extent; consequently, management believes it is not likely that there will be claims against these commitments
that would result in a negative impact on our key financial ratios or our ability to obtain financing.
50
Critical Accounting Estimates
We prepare our consolidated financial statements in conformity with U.S. generally accepted accounting
principles. As such, we are required to make certain estimates, judgments and assumptions about matters that are
inherently uncertain. On an ongoing basis, our management re-evaluates these estimates, judgments and
assumptions for reasonableness because of the critical impact that these factors have on the reported amounts of
assets and liabilities at the dates of the financial statements and the reported amounts of revenue and expenses
during the periods presented. Management has discussed the development and selection of these critical
accounting estimates with the Audit Committee of our Board of Directors and the Audit Committee has reviewed
this disclosure. We believe that the following are the critical accounting estimates used in preparing our financial
statements.
Revenue Recognition
We derive a portion of our revenue from multiple element arrangements. This requires that we determine
whether the deliverables in these arrangements should be treated as separate units of accounting for revenue
recognition purposes and, if so, how the contract price should be allocated to each element. We analyze our
contracts to determine the appropriate accounting. We recognize revenue on separate deliverables under an
arrangement when (a) the undelivered product or service is not essential to the functionality of the delivered
product or service or (b) there is evidence of fair value of each undelivered product or service. Otherwise,
revenue on delivered elements is deferred until undelivered elements are delivered. Our ability to continue to
recognize revenue for separate deliverables may depend on the nature of changes to our products and services, if
any, which may result in different conclusions regarding fair value or importance of undelivered elements to
delivered items’ functionality. The allocation of contract revenue to the various elements does not change the
total revenue recognized from a transaction, but impacts the timing of revenue recognition.
Inventory Valuation
Inventory is recorded at the lower of cost or net realizable value. In order to determine net realizable value,
we evaluate each component of inventory on a regular basis to determine whether it is excess or obsolete. We
record the decline in the carrying value of estimated excess or obsolete inventory as a reduction of inventory and
as an expense included in cost of sales in the period in which it is identified. Our estimate of excess and obsolete
inventory is a critical accounting estimate because it is highly susceptible to change from period to period. In
addition, it requires management to make judgments about the future demand for inventory.
In order to quantify excess or obsolete inventory, we begin by preparing a candidate listing of the
components of inventory that have not demonstrated usage within the most recent two-year period. This list is
then reviewed with sales, production and materials management personnel to determine whether this list of
potential excess or obsolete inventory items is accurate. Management considers as part of this evaluation whether
there has been a change in the market for finished goods, whether there will be future demand for on-hand
inventory items and whether there are components of inventory that incorporate obsolete technology. Then
management assigns a reserve requirement, which is determined based on its assessment of cost recoverability, to
the items on the candidate listing. As a result, our estimate of excess or obsolete inventory is sensitive to changes
in assumptions about future demand for the inventory. Since the determination of the reserve requirement is
based on management judgment rather than a formulaic approach, we are unable to quantify with a high level of
precision the effect that a change in demand assumptions would have on management’s assessment of the excess
and obsolete inventory reserve, although lower demand would result in an increase in excess and obsolete
inventory.
Accounting for Income Taxes
In determining our current income tax provision, we assess temporary differences resulting from differing
treatments of items for tax and accounting purposes. These differences result in deferred tax assets and liabilities,
which are recorded in our combined balance sheets. When we maintain deferred tax assets, we must assess the
51
likelihood that these assets will be recovered through adjustments to future taxable income. To the extent we
believe recovery is not likely, we establish a valuation allowance. We record an allowance reducing the asset to a
value we believe will be recoverable based on our expectation of future taxable income. We believe the
accounting estimate related to the valuation allowance is a critical accounting estimate because it is highly
susceptible to change from period to period as it requires management to make assumptions about our future
income over the lives of the deferred tax assets, and the impact of increasing or decreasing the valuation
allowance is potentially material to our results of operations.
Forecasting future income requires us to use a significant amount of judgment. In estimating future income,
we use our internal operating budgets and long-range planning projections. We develop our budgets and long-
range projections based on recent results, trends, economic and industry forecasts influencing our segments’
performance, our backlog, planned timing of new product launches, and customer sales commitments.
Significant changes in the expected realizability of the net deferred tax assets would require that we adjust the
valuation allowance, resulting in a change to net income.
As of December 31, 2008, we estimated that it is not likely that we will generate future taxable income in
certain foreign jurisdictions in which we have cumulative net operating losses and, therefore, we have provided a
valuation allowance against the related deferred tax assets. We have estimated that it is likely that we will
generate future taxable income in the U.S. and most foreign jurisdictions, and have therefore not provided a
valuation allowance against most of our deferred tax assets.
The deferred tax assets reported in the periods prior to the Separation reflect the tax structure and strategies
implemented by FMC Technologies, which were designed to optimize FMC Technologies’ overall tax positions
and not just the businesses being spun off.
Retirement Benefits
We provide most of our employees with certain retirement (pension) and postretirement (health care and life
insurance) benefits. In order to measure the expense and obligations associated with these retirement benefits,
management must make a variety of estimates, including discount rates used to value certain liabilities, expected
return on plan assets set aside to fund these costs, rate of compensation increase, employee turnover rates,
retirement rates, mortality rates and other factors. We update these estimates on an annual basis or more
frequently upon the occurrence of significant events. These accounting estimates bear the risk of change due to
the uncertainty attached to the estimate as well as the fact that these estimates are difficult to measure. Different
estimates used by management could result in our recognizing different amounts of expense over different
periods of time.
We use third-party specialists to assist management in evaluating our assumptions as well as appropriately
measuring the costs and obligations associated with these retirement benefits. The discount rate and expected
return on plan assets are based primarily on investment yields available and the historical performance of our
plan assets. They are critical accounting estimates because they are subject to management’s judgment and can
materially affect net income.
Pension expense was $6.4 million, $8.1 million and $8.1 million for the years ended December 31, 2008,
2007 and 2006, respectively. Pension expense reported in the periods prior to the Separation includes an
allocation of expense from FMC Technologies.
The discount rate used affects the periodic recognition of the interest cost component of net periodic pension
cost. The discount rate is based on rates at which the pension benefit obligation could effectively be settled on a
present value basis. To determine the weighted average discount rate, we review long-term, high quality
corporate bonds at our determination date and use a model that matches the projected benefit payments for our
plans to coupons and maturities from high quality bonds. Significant changes in the discount rate, such as those
caused by changes in the yield curve, the mix of bonds available in the market, the duration of selected bonds,
and the timing of expected benefit payments may result in volatility in pension expense and pension liabilities.
52
Our pension expense is sensitive to changes in our estimate of discount rate. Holding other assumptions
constant, for a 50 basis point reduction in the discount rate, annual pension expense would increase by
approximately $3.4 million before taxes. Holding other assumptions constant, for a 50 basis point increase in the
discount rate, annual pension expense would decrease by approximately $3.4 million before taxes.
Net periodic pension cost includes an underlying expected long-term rate of asset return. Our estimate of the
expected rate of return on plan assets is based primarily on the historical performance of plan assets, current
market conditions, our asset allocation and long-term growth expectations. Our estimated long-term rate of asset
return at December 31, 2008 was approximately 8.5%. The expected return on plan assets is recognized as part of
the net periodic pension cost. The difference between the expected return and the actual return on plan assets is
amortized over the expected remaining service life of employees, so there is a lag time between the market’s
performance and its impact on plan results.
Our pension expense is sensitive to changes in our estimate of expected rate of return on plan assets.
Holding other assumptions constant, an increase or decrease of 50 basis points in the expected rate of return on
plan assets would increase or decrease annual pension expense by approximately $1.0 million before taxes.
Recently Issued Accounting Pronouncements
The discussion of recently issued accounting pronouncements is incorporated herein by reference from Note
2 of Notes to Consolidated Financial Statements in Item 8 of this Annual Report on Form 10-K.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are subject to financial market risks, including fluctuations in foreign currency exchange rates and
interest rates. In order to manage and mitigate our exposure to these risks, we may use derivative financial
instruments in accordance with established policies and procedures. We do not use derivative financial
instruments where the objective is to generate profits solely from trading activities. At December 31, 2008 and
2007, our derivative holdings consisted of foreign currency forward contracts, foreign currency instruments
embedded in purchase and sale contracts and an interest rate swap agreement.
These forward-looking disclosures address potential impacts from market risks only as they affect our
financial instruments. They do not include other potential effects which could impact our business as a result of
changes in foreign currency exchange rates, interest rates, commodity prices or equity prices.
Foreign Currency Exchange Rate Risk
When we sell or purchase products or services, transactions are frequently denominated in currencies other
than an operation’s functional currency. When foreign currency exposures exist, we may enter into foreign
exchange forward instruments with third parties to economically hedge foreign currency exposures. Our hedging
policy reduces, but does not entirely eliminate, the impact of foreign currency exchange rate movements. We do
not apply hedge accounting for our foreign currency forward instruments.
53
We economically hedge our net recognized foreign currency assets and liabilities to reduce the risk that our
earnings and cash flows will be adversely affected by fluctuations in foreign currency exchange rates. We expect
any gains or losses in the hedging portfolio to be substantially offset by a corresponding gain or loss in the
underlying exposure being hedged. We also economically hedge firmly committed anticipated transactions in the
normal course of business. The majority of these hedging instruments mature during 2009. As of December 31,
2008, the following forward contracts were outstanding, in U.S. dollar equivalent:
(In millions)
Euro . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Swedish Krona . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Japanese Yen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Canadian Dollar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Australian Dollar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Brazilian Real
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
British Pound . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Buy (Sell)
(30.0)
24.0
(17.0)
(7.0)
7.0
(7.0)
2.0
We use a sensitivity analysis to measure the impact of an immediate 10% adverse movement in the foreign
currency exchange rates. This calculation assumes that each exchange rate would change in the same direction
relative to the U.S. dollar and all other variables are held constant. We expect that changes in the fair value of
derivative instruments will offset the changes in fair value of the underlying assets and liabilities on the balance
sheet. To the extent that our derivative instruments are hedging anticipated transactions, a 10% decrease in the
value of the hedged currency would result in a decrease of approximately $4.1 million in net income as of
December 31, 2008.
Interest Rate Risk
Our debt instruments subject us to market risk associated with movements in interest rates. We had $110
million in variable rate debt outstanding at December 31, 2008. We have entered into a floating-to-fixed interest
rate swap related to $50 million of our variable rate debt outstanding from July 31, 2008 to January 29, 2010 and
$25 million of our variable rate debt outstanding from January 30, 2010 to January 31, 2011. The swap provides
for payment at an average fixed interest rate of 3.675% plus a margin dependent on our leverage ratio until its
maturity on January 31, 2011.
We use a sensitivity analysis to measure the impact on fair value of the interest rate swap of an immediate
adverse movement in the interest rates of 50 basis points. This analysis was based on a modeling technique that
measures the hypothetical market value resulting from a 50 basis point change in interest rates. This adverse
change in the applicable interest rates would result in a decrease of $0.4 million in the net fair value of our
interest rate swap at December 31, 2008. We account for the interest rate swap using hedge accounting where the
fair value of the swap is recorded in other accumulated income and is amortized into income as variable interest
expense is recorded.
At December 31, 2008 we had $60 million of unhedged variable rate debt. Using sensitivity analysis to
measure the impact of a 10% adverse movement in the interest rate, or 25 basis points, would result in an
increase to interest expense of $0.2 million annually.
54
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Report of Independent Registered Public Accounting Firm
The Board of Director and Stockholders
John Bean Technologies Corporation:
We have audited the accompanying consolidated and combined balance sheets of John Bean Technologies
Corporation and subsidiaries as of December 31, 2008 and 2007, and the related consolidated and combined
statements of income, changes in stockholders’ equity, and cash flows for each of the years in the three-year
period ended December 31, 2008. These consolidated and combined financial statements are the responsibility of
the Company’s management. Our responsibility is to express an opinion on these consolidated and combined
financial statements based on our audits.
We conducted our audits in accordance with standards of the Public Company Accounting Oversight Board
(United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated and combined financial statements referred to above present fairly, in all
material respects, the financial position of John Bean Technologies Corporation as of December 31, 2008 and
2007, and the results of their operations and their cash flows for each of the years in the three-year period ended
December 31, 2008, in conformity with U.S. generally accepted accounting principles.
/s/ KPMG LLP
Chicago, Illinois
March 11, 2009
55
JOHN BEAN TECHNOLOGIES CORPORATION
CONSOLIDATED AND COMBINED STATEMENTS OF INCOME
(In millions, except per share data)
Revenue:
Year Ended December 31,
2008
2007
2006
Product revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Service revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 900.8
127.3
$864.6
113.4
$755.4
88.9
Total revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,028.1
978.0
844.3
Costs and expenses:
Cost of products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cost of services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Selling, general and administrative expense . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Research and development expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
683.9
92.4
152.9
22.0
657.4
83.4
153.8
18.7
Total costs and expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other (expense) income, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
951.2
(6.6)
913.3
(3.6)
Income before net interest expense and income taxes . . . . . . . . . . . . . . . . . . . . . .
Net interest (expense) income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income from continuing operations before income taxes . . . . . . . . . . . . . . . . . . .
Provision for income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income from continuing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Discontinued operations
Income (loss) from discontinued operations, net of income taxes . . . . . . . . . . .
(Loss) gain on disposition of discontinued operations, net of income taxes . . .
Income (loss) from discontinued operations, net of income taxes . . . . . . . . . . .
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Basic earnings per share:
Income from continuing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income (loss) from discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted earnings per share:
Income from continuing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income (loss) from discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
70.3
(3.8)
66.5
22.4
44.1
0.2
(0.1)
0.1
61.1
0.5
61.6
21.5
40.1
(6.8)
3.1
(3.7)
$
$
$
$
$
44.2
$ 36.4
$ 34.6
1.60
0.01
$ 1.45
$ 1.26
(0.13) —
1.61
$ 1.32
$ 1.26
1.59
—
$ 1.45
$ 1.26
(0.13) —
1.59
$ 1.32
$ 1.26
567.9
63.2
146.7
16.2
794.0
0.1
50.4
0.4
50.8
16.0
34.8
(0.2)
—
(0.2)
Weighted average shares outstanding:
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
27.5
27.8
27.5
27.5
27.5
27.5
The accompanying notes are an integral part of the consolidated and combined financial statements.
56
JOHN BEAN TECHNOLOGIES CORPORATION
CONSOLIDATED AND COMBINED BALANCE SHEETS
(In millions, except per share and number of shares)
Assets
Current Assets:
December 31,
2008
December 31,
2007
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trade receivables, net of allowances of $5.0 and $6.2, respectively . . . . . . . . . . .
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Assets of discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Property, plant and equipment, net of accumulated depreciation of $197.0 and
$208.0, respectively . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Goodwill
Intangible assets, net
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 43.6
159.0
123.0
4.3
6.7
20.4
—
357.0
7.9
119.7
26.7
18.6
51.0
10.4
$ 9.5
179.2
147.2
4.1
6.1
21.3
2.4
369.8
7.2
126.8
23.8
21.2
15.9
9.2
Total Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$591.3
$573.9
Liabilities and Stockholders’ Equity
Current Liabilities:
Accounts payable, trade and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Advance and progress payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued payroll . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income taxes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Liabilities of discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term debt, less current portion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued pension and other postretirement benefits, less current portion . . . . . . . . . . .
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commitments and contingencies (Note 17)
Stockholders’ Equity:
Preferred stock, $0.01 par value; 20,000,000 shares authorized; no shares
$ 67.2
92.9
32.0
6.1
1.7
64.5
—
264.4
185.0
118.3
6.0
26.4
$101.3
105.3
33.7
7.7
1.2
55.0
2.0
306.2
—
19.2
6.9
27.4
issued . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
—
Common stock, $0.01 par value; 120,000,000 shares authorized; 27,594,664
shares issued as of December 31, 2008; 27,539,510 shares outstanding as of
December 31, 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Common stock held in treasury, at cost; 55,154 shares outstanding in 2008 . . . .
Additional paid-in capital
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Parent company investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accumulated other comprehensive loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
0.3
(0.8)
41.9
20.2
—
(70.4)
—
—
—
—
218.3
(4.1)
Total Liabilities and Stockholders’ Equity . . . . . . . . . . . . . . . . . . . . . . . .
$591.3
$573.9
The accompanying notes are an integral part of the consolidated and combined financial statements.
57
JOHN BEAN TECHNOLOGIES CORPORATION
CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS
(In millions)
Cash Flows From Operating Activities:
Year Ended December 31,
2008
2007
2006
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss (income) from discontinued operations, net of income taxes . . . . . . . . . . . .
$ 44.2
(0.1)
$ 36.4 $ 34.6
0.2
3.7
Income from continuing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustments to reconcile income to cash provided (required) by operating
44.1
40.1
34.8
activities of continuing operations:
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stock based compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss (gain) on disposal of assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Changes in operating assets and liabilities, net of effects of acquisitions:
Trade receivables, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounts payable, trade and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Advance payments and progress billings . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other assets and liabilities, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash provided by continuing operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash provided (required) by discontinued operating activities . . . . . . . . . . . . . . . .
Cash provided by operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash Flows From Investing Activities:
Acquisitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capital expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from disposal of assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash required by continuing investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash provided (required) by discontinued investing activities . . . . . . . . . . . . . . . . . . .
20.5
5.0
8.4
0.1
10.6
4.2
17.0
(32.0)
(0.4)
4.3
81.8
—
81.8
19.8
5.3
8.6
0.1
7.4
(17.3)
(32.0)
13.6
(8.4)
1.8
39.0
(5.3)
33.7
(4.5) —
(22.9)
2.1
(23.0)
3.1
(25.3)
0.7
(19.9)
7.8
18.8
4.4
7.8
(1.1)
3.0
14.1
(11.5)
6.4
11.3
8.3
96.3
(0.3)
96.0
—
(22.7)
3.1
(19.6)
(0.4)
Cash required by investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(24.6)
(12.1)
(20.0)
Cash Flows From Financing Activities:
Net proceeds from credit facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Issuance of long-term debt, net of payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Distributions to former parent, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchase of stock held in treasury . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dividends paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
109.4
75.0
(203.9)
0.9
—
(24.1)
(0.7) —
(1.9) —
(0.1)
—
(68.8)
—
—
Cash required by financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(22.1)
(23.2)
(68.9)
Effect of foreign exchange rate changes on cash and cash equivalents . . . . . . . . . . . . .
(1.0)
0.8
Increase (decrease) in cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash and cash equivalents, beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
34.1
9.5
(0.8)
10.3
0.5
7.6
2.7
Cash and cash equivalents, end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 43.6
$ 9.5 $ 10.3
Supplemental Cash Flow Information:
Interest paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income taxes paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
1.6
13.4
$ 0.1 $ 0.3
7.1
10.2
The accompanying notes are an integral part of the consolidated and combined financial statements.
58
JOHN BEAN TECHNOLOGIES CORPORATION
CONSOLIDATED AND COMBINED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
Common
Stock Issued
(In millions)
Shares Amount
December 31,
Common
Stock
Held in
Treasury
Additional
Paid-In
Capital
Retained
Earnings
Parent
Company
Investment
Accumulated
Other
Comprehensive
Income (Loss)
Total
Equity
Comprehensive
Income for the
Year Ended
2005 . . . . . . . . . . . — $— $—
—
—
$—
—
$—
—
$223.9
34.6
$(11.4)
—
$212.5
34.6
$34.6
—
—
—
—
—
1.6
1.6
1.6
—
—
—
—
—
0.5
0.5
0.5
—
—
—
—
—
(0.3)
(0.3)
(0.3)
2006 . . . . . . . . . . . — $— $—
—
—
—
—
—
—
—
—
$—
—
—
—
$—
—
—
(60.9)
2.0
—
2.0
(60.9)
$197.6
$ (7.6)
$190.0
36.4
—
36.4
$36.4
36.4
—
—
—
—
—
5.5
5.5
5.5
—
—
—
—
—
(0.9)
(0.9)
(0.9)
—
—
—
—
—
—
—
—
—
(1.1)
(1.1)
(1.1)
(15.7)
—
(15.7)
2007 . . . . . . . . . . . — $— $—
$—
$—
$218.3
$ (4.1)
$214.2
$39.9
The accompanying notes are an integral part of the consolidated and combined financial statements.
59
Net income . . . . . . . . —
Foreign currency
translation
adjustments . . . . . . —
Net deferral of
hedging losses (net
of income taxes of
$0.2) . . . . . . . . . . . —
Minimum pension
liability adjustment
(net of income
taxes of $.01) . . . . —
Adjustment for
adoption of SFAS
No. 158 (net of
income taxes of
$1.1) . . . . . . . . . . . —
Net transfers to
parent
. . . . . . . . . . —
December 31,
Net income . . . . . . . . —
Foreign currency
translation
adjustments . . . . . . —
Net deferral of
hedging gains (net
of income taxes of
$0.4) . . . . . . . . . . . —
Pension and other
postretirement
liability
adjustments (net of
income taxes of
$0.4) . . . . . . . . . . . —
Net transfers to
parent
. . . . . . . . . . —
December 31,
JOHN BEAN TECHNOLOGIES CORPORATION
CONSOLIDATED AND COMBINED STATEMENTS OF CHANGES IN
STOCKHOLDERS’ EQUITY—(Continued)
Common
Stock Issued
Shares Amount
Common
Stock
Held in
Treasury
Additional
Paid-In
Capital
Retained
Earnings
Parent
Company
Investment
Accumulated
Other
Comprehensive
Income (Loss)
Total
Equity
Comprehensive
Income for
the Year
Ended
(In millions)
December 31,
2007 . . . . . . . . . . . — $— $—
—
—
$ —
—
$ — $ 218.3
$ (4.1)
$ 214.2
22.1
22.1
—
44.2
$ 44.2
Net income . . . . . . . —
Assumption of
pension and other
postretirement
benefit losses (net
of tax benefit of
$15.8)
. . . . . . . . . —
Net distributions to
former parent . . . . —
Issuance of common
Purchase of treasury
stock . . . . . . . . . .
Common stock cash
dividends ($0.07
per share) . . . . . . . —
Foreign currency
translation
adjustments . . . . . —
Net deferral of
hedging losses
(net of tax benefit
of $1.1) . . . . . . . . —
Pension and other
postretirement
liability
adjustments (net
of income taxes of
$23.6)
Stock-based
. . . . . . . . . —
compensation
expense . . . . . . . . —
December 31,
stock . . . . . . . . . . 27.6
0.3
—
—
—
—
—
—
—
38.6
(0.8)
—
—
—
—
—
(0.1) —
(206.6)
(38.9)
—
—
(24.7)
(24.7)
—
—
—
—
(206.6)
—
(0.8)
(1.9)
—
—
—
—
—
—
(1.9)
—
—
—
(2.2)
(2.2)
(2.2)
—
—
—
—
—
(1.8)
(1.8)
(1.8)
—
—
—
—
—
(37.6)
(37.6)
(37.6)
—
—
3.3
—
5.1
—
8.4
2008 . . . . . . . . . . . 27.5
$ 0.3
$(0.8)
$41.9
$20.2
$ —
$(70.4)
$
(8.8)
$ 2.6
The accompanying notes are an integral part of the consolidated and combined financial statements.
60
JOHN BEAN TECHNOLOGIES CORPORATION
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
NOTE 1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION
Background—On October 29, 2007, FMC Technologies, Inc. (“FMC Technologies”) announced an
intention to separate into two independent publicly-traded companies through the spin-off and distribution of
100% of the FoodTech and Airport Systems businesses. On July 31, 2008, FMC Technologies effected the
spin-off of these businesses by distributing all of its holdings of the common stock of John Bean Technologies
Corporation (“JBT Corporation,” the “Company” or “we”) on a pro rata basis to its stockholders. We are now an
independent public company traded on the New York Stock Exchange (symbol “JBT”). Prior to the spin-off,
FMC Technologies received necessary regulatory approvals including a favorable private letter ruling on the
tax-free nature of the transaction from the Internal Revenue Service (“IRS”), as well as a declaration of
effectiveness for our Registration Statement on Form 10, as amended (“Form 10”), as filed with the Securities
and Exchange Commission (“SEC”). Distribution of our common stock to the stockholders of FMC
Technologies occurred on July 31, 2008, at a ratio of .216 of a share of JBT Corporation common stock for every
share of FMC Technologies common stock held by each such holder on the record date of July 22, 2008 (the
“Separation”).
Description of Business—We design, manufacture and service sophisticated machinery and systems for, and
provide services to, customers in the food processing and air transportation industries. We have manufacturing
operations worldwide and are strategically located to facilitate delivery of our products and services to our
customers. We report our results through two business segments—JBT FoodTech and JBT AeroTech.
Basis of Presentation— The accompanying financial statements reflect the consolidated operations of JBT
Corporation as an independent publicly-traded company subsequent to the Separation and a combined reporting
entity comprising the assets and liabilities used in managing and operating the FoodTech and Airport Systems
businesses of FMC Technologies for the periods prior to the Separation.
The financial statements for the periods prior to the Separation have been prepared in accordance with
accounting principles generally accepted in United States (“GAAP”) on a carve-out basis from the consolidated
financial statements of FMC Technologies using the historical results of operations and bases of the assets and
liabilities of the transferred businesses and including allocations from FMC Technologies. This presentation
incorporates the same principles used when preparing consolidated financial statements, including elimination of
intercompany transactions. Allocated expenses include general and administrative services such as accounting,
treasury, tax, legal, human resources, information technology and other corporate and infrastructure services.
Many assets, liabilities and expenses could be specifically identified with our businesses or personnel and were
directly allocated. To the extent amounts could not be specifically identified and allocated, we primarily used our
proportion of FMC Technologies’ total revenue as a reasonable allocation method. Allocations have been
determined on the basis of assumptions and estimates that management believes to be a reasonable reflection of
our utilization of those services. These allocations and estimates, however, are not necessarily indicative of the
assets, liabilities and expenses that would have resulted if we had operated as a separate entity in the past, or that
may result in the future.
Upon the effectiveness of the Separation, we significantly changed our capital structure. The financial
statements prior to the Separation do not reflect the debt or interest expense we might have incurred if we were a
stand-alone entity. In addition, the financial statements may not be indicative of our consolidated financial
position, operating results or cash flows in the future or what our financial position, operating results and cash
flows would have been had we been a separate, stand-alone entity during the periods presented.
Prior to the Separation, our total invested equity represented FMC Technologies’ interest in our recorded net
assets. The net investment balance represented the cumulative net investment by FMC Technologies in the
Company through July 31, 2008, including any prior net income or loss attributed to the Company.
61
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Use of estimates—The preparation of financial statements in conformity with GAAP requires management
to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of
contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and
expenses during the reporting period. Actual results could differ from those estimates. We base our estimates on
historical experience and on other assumptions that we believe to be relevant under the circumstances.
Revenue recognition—Revenue is recognized when all of the following criteria are met:
•
•
•
there is evidence of a customer arrangement with a fixed or determinable value,
delivery has occurred, and
there is reasonable assurance of collectability.
Certain of our product sales recorded in the JBT AeroTech segment relate to long-term construction
contracts and are recognized under the percentage of completion method. Under this method, revenue is
recognized as work progresses on each contract. However, revenue recognition does not begin until a substantial
portion of the labor hours are incurred to ensure that revenue is not accelerated for materials procurement. We
primarily measure progress toward completion by the cost-to-cost method. Any expected losses are charged to
earnings, in total, in the period the losses are identified.
Progress billings generally are issued contingent on completion of certain phases of the work as stipulated in
the contract. Revenue in excess of progress billings on contracts amounted to $32.2 million and $31.0 million at
December 31, 2008 and 2007, respectively. These unbilled receivables are reported in trade receivables on the
consolidated and combined balance sheets. Progress billings and cash collections in excess of revenue recognized
on a contract are classified as advance payments and progress billings within current liabilities on the balance
sheets.
Service revenue is recognized on a straight-line basis over the period of its underlying contract, unless
another systematic and more rational basis is better representative of the pattern in which performance occurs. If
current period revenue is dependent on future obligations, such revenue is deferred until performance is
complete.
Some of our operating lease revenue is earned from full-service leases for which we are paid annual fixed
rates plus, in some cases, payment based on production volumes. Revenue from production volumes is
recognized when determinable and collectible.
Each customer arrangement is evaluated to determine the presence of multiple deliverables that represent
separate elements of revenue recognition. For multiple-element revenue arrangements, such as the sale of
equipment with a service agreement, we generally allocate the contract value to the various elements based on
objective evidence of relative fair value for each element and recognize revenue consistent with the nature of
each deliverable. Where separate deliverables are contractually contingent on future obligations, revenue is
deferred until performance is complete for all contingent elements.
Cash and cash equivalents— Cash and cash equivalents are stated at cost, which approximates fair value.
Cash equivalents consist of highly liquid investments with original maturities of three months or less.
Trade receivables—We provide an allowance for doubtful accounts on trade receivables equal to the
estimated uncollectible amounts. This estimate is based on historical collection experience and a specific review
of each customer’s trade receivable balance.
Inventories—Inventories are stated at the lower of cost or net realizable value, which includes an estimate
for excess and obsolete inventories. Inventory costs include those costs directly attributable to products,
including all manufacturing overhead but excluding costs to distribute. Cost is determined on the last-in, first-out
62
(“LIFO”) basis for all domestic inventories, except certain inventories relating to construction-type contracts,
which are stated at the actual production cost incurred to date, reduced by the portion of these costs identified
with revenue recognized. The first-in, first-out (“FIFO”) method is used to determine the cost for all other
inventories.
Impairment of long-lived and intangible assets—Long-lived assets, including property, plant and
equipment, identifiable intangible assets being amortized and capitalized software costs are reviewed for
impairment whenever events or changes in circumstances indicate that the carrying amount of the long-lived
asset may not be recoverable. The carrying amount of a long-lived asset is not recoverable if it exceeds the sum
of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. If it is
determined that an impairment loss has occurred, the loss is measured as the amount by which the carrying
amount of the long-lived asset exceeds its fair value.
Property, plant, and equipment—Property, plant, and equipment is recorded at cost. Depreciation for
financial reporting purposes is provided principally on the straight-line basis over the estimated useful lives of
the assets (land improvements—20 to 35 years, buildings—20 to 50 years; and machinery and equipment—3 to
20 years). Gains and losses are reflected in income upon the sale or retirement of assets. Expenditures that extend
the useful lives of property, plant, and equipment are capitalized and depreciated over the estimated new
remaining life of the asset.
Capitalized software costs—Other assets include the capitalized cost of internal use software (including
Internet web sites). The assets are stated at cost less accumulated amortization and totaled $4.9 million and $5.6
million at December 31, 2008 and 2007, respectively. These software costs include significant purchases of
software and internal and external costs incurred during the application development stage of software projects.
These costs are amortized on a straight-line basis over the estimated useful lives of the assets. For internal use
software, the useful lives range from three to ten years. For Internet web site costs, the estimated useful lives do
not exceed three years.
Goodwill and other intangible assets—Goodwill is not subject to amortization but is tested for impairment
on an annual basis (or more frequently if impairment indicators arise) under the provisions of Statement of
Financial Accounting Standards (“SFAS”) No. 142, Goodwill and Other Intangible Assets. We have established
October 31 as the date of our annual test for impairment of goodwill. Impairment losses are calculated at the
reporting unit level, and represent the excess of the carrying value of reporting unit goodwill over its implied fair
value. The implied fair value of goodwill is determined by a two-step process. The first compares the fair value
of the reporting unit (measured as the present value of expected future cash flows) to its carrying amount. If the
fair value of the reporting unit is less than its carrying amount, a second step is performed. In this step, the fair
value of the reporting unit is allocated to its assets and liabilities to determine the implied fair value of goodwill,
which is used to measure the impairment loss.
Our acquired intangible assets are being amortized on a straight-line basis over their estimated useful lives,
which generally range from 7 to 40 years. None of our acquired intangible assets have indefinite lives.
Income taxes— For the periods prior to the Separation, our operating results were included in FMC
Technologies’ consolidated U.S. and state income tax returns and in tax returns of certain FMC Technologies
foreign subsidiaries. The provision for income taxes has been computed as if JBT Corporation was a stand-alone
entity and filed separate tax returns. The provision was impacted by FMC Technologies’ tax structure and
strategies, which were designed to optimize an overall tax position and not that of JBT Corporation as part of its
multiple businesses. Deferred tax assets and liabilities were recognized for the expected tax consequences of
temporary differences between the tax bases of assets and liabilities and their reported amounts.
For the periods after the Separation, income tax expense is provided based on income reported for financial
statement purposes, adjusted for permanent differences between financial statement reporting and income tax
regulations. Deferred tax assets and liabilities are measured using enacted tax rates for the expected future tax
63
consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities.
A valuation allowance is established whenever management believes that it is more likely than not that deferred
tax assets may not be realizable.
Income taxes are not provided on the Company’s equity in undistributed earnings of foreign subsidiaries or
affiliates when it is management’s intention that such earnings will remain invested in those companies. Taxes
are provided on such earnings in the year in which the decision is made to repatriate the earnings.
Stock-based employee compensation—For the periods prior to the Separation, stock-based compensation
represents the costs related to FMC Technologies’ share-based awards granted to employees of JBT Corporation.
Prior to October 1, 2005, we applied the fair value recognition provisions of SFAS No. 123, “Accounting for
Stock-Based Compensation.” Under the fair value recognition provisions of SFAS No. 123, stock-based
compensation cost is measured based on the market price at the grant date and the number of shares awarded.
The compensation cost for each award is recognized ratably over the requisite service period. On October 1,
2005, we adopted the provisions of SFAS No. 123R, “Share-Based Payment,” which modified our recognition of
share-based compensation by (i) incorporating an estimate of forfeitures in the calculation of current expense to
record and (ii) adjusting the requisite service period for new awards to reflect the lesser of the stated vesting
period or the period until the employee becomes retirement eligible.
Foreign currency—Financial statements of operations for which the U.S. dollar is not the functional
currency are translated to the U.S. dollar prior to consolidation. Assets and liabilities are translated at the
exchange rate in effect at the balance sheet date, while income statement accounts are translated at the average
exchange rate for each period. For these operations, translation gains and losses are recorded as a component of
accumulated other comprehensive income (loss) in owner’s equity until the foreign entity is sold or liquidated.
Derivative financial instruments—Derivatives are recognized in the consolidated and combined balance
sheets at fair value, with classification as current or non-current based upon the maturity of the derivative
instrument. We do not offset fair value amounts for derivative instruments held with the same counterparty.
Changes in the fair value of derivative instruments are recorded in current earnings or deferred in accumulated
other comprehensive income (loss), depending on the type of hedging transaction and whether a derivative is
designated as, and is effective as, a hedge.
Hedge accounting is only applied when the derivative is deemed to be highly effective at offsetting changes
in anticipated cash flows of the hedged item or transaction. Changes in fair value of derivatives that are
designated as cash flow hedges are deferred in accumulated other comprehensive income (loss) until the
underlying transactions are recognized in earnings. At such time related deferred hedging gains or losses are also
recorded in operating earnings on the same line as the hedged item. Effectiveness is assessed at the inception of
the hedge and on a quarterly basis. Effectiveness of forward contract cash flow hedges are assessed based solely
on changes in fair value attributable to the change in the spot rate. The change in the fair value of the contract
related to the change in forward rates is excluded from the assessment of hedge effectiveness. Changes in this
excluded component of the derivative instrument, along with any ineffectiveness identified, are recorded in
operating earnings as incurred. We document our risk management strategy and hedge effectiveness at the
inception of and during the term of each hedge.
We elected to discontinue the use of hedge accounting for all foreign currency derivative positions entered
into after our Separation from FMC Technologies. Accordingly, the changes in fair value of these contracts are
recognized in earnings as they occur and offset gains or losses on the remeasurement of the related asset or
liability. Earnings from remeasurement of sales related assets, liabilities and contracts are recorded in revenue.
Earnings from remeasurement of purchase related assets, liabilities and contracts are recorded in cost of sales.
Cash flows from derivative contracts are reported in the consolidated and combined statements of cash
flows in the same categories as the cash flows from the underlying transactions.
64
Recently issued accounting pronouncements— In December 2007, the Financial Accounting Standards Board
(“FASB”) issued SFAS No. 141 (revised 2007), Business Combinations (“SFAS 141(R)”), replacing SFAS
No. 141. SFAS 141(R) changes and clarifies the acquisition method of accounting for acquired contingencies,
transaction costs, step acquisitions, restructuring costs and other major areas affecting how the acquirer recognizes
and measures the assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree. In
addition, this pronouncement amends previous interpretations of intangible asset accounting by requiring the
capitalization of in-process research and development and proscribing impacts to current income tax expense (rather
than a reduction to goodwill) for changes in deferred tax benefits related to a business combination. SFAS 141(R)
will be applied prospectively for business combinations occurring after December 31, 2008.
In December 2007, the FASB issued SFAS No. 160, Non-controlling Interests in Consolidated Financial
Statements, an Amendment to ARB No. 51 (“SFAS 160”). This statement applies to all entities that prepare
consolidated financial statements, except not-for-profit organizations, but will affect only those entities that have
an outstanding non-controlling interest in one or more subsidiaries or that deconsolidate a subsidiary. This
statement is effective for fiscal years, and interim periods within those fiscal years, beginning on or after
December 15, 2008 (that is, January 1, 2009, for entities with calendar year-ends). Earlier adoption is prohibited.
The effective date of this statement is the same as that for SFAS 141(R). The adoption of SFAS 160 will not have
a material effect on our results of operations, cash flows or financial position.
In February 2008, the FASB issued Staff Position (“FSP”) FAS 157-2, which delays the effective date of
SFAS No. 157, Fair Value Measurements (“SFAS 157”), for nonfinancial assets and nonfinancial liabilities,
except for items that are recognized or disclosed at fair value in the financial statements on a recurring basis (at
least annually). The delay is intended to allow the FASB and constituents additional time to consider the effect of
various implementation issues that have arisen, or that may arise, from the application of SFAS 157. Examples of
items to which the deferral applies include the following:
• Nonfinancial assets and nonfinancial liabilities initially measured at fair value in a business
combination or other new basis event, but not measured at fair value in subsequent periods
(nonrecurring fair value measurements).
• Reporting units measured at fair value in the first step of a goodwill impairment test (measured at fair
value on a recurring basis, but not necessarily recognized or disclosed in the financial statements at fair
value).
• Nonfinancial assets and nonfinancial liabilities measured at fair value in the second step of a goodwill
impairment test (measured at fair value on a nonrecurring basis to determine the amount of goodwill
impairment, but not necessarily recognized or disclosed in the financial statements at fair value).
• Nonfinancial long-lived assets (asset groups) measured at fair value for an impairment assessment
(nonrecurring fair value measurements).
• Nonfinancial liabilities for exit or disposal activities initially measured at fair value (nonrecurring fair
value measurements).
We have elected to delay the adoption of SFAS 157 related to our nonfinancial assets and nonfinancial
liabilities disclosed herein.
In March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging
Activities—an amendment of FASB Statement No. 133 (“SFAS 161”). SFAS 161 requires enhanced disclosures
regarding derivatives and hedging activities, including enhanced disclosures regarding how: (a) an entity uses
derivative instruments; (b) derivative instruments and related hedged items are accounted for under SFAS
No. 133, Accounting for Derivative Instruments and Hedging Activities; and (c) derivative instruments and
related hedged items affect an entity’s financial position, financial performance, and cash flows. Specifically,
SFAS 161 requires:
• Disclosure of the objectives for using derivative instruments in terms of underlying risk and accounting
designation;
65
• Disclosure of the fair values of derivative instruments and their gains and losses in a tabular format;
• Disclosure of information about credit-risk-related contingent features; and
• Cross-reference from the derivative footnote to other footnotes in which derivative-related information
is disclosed.
SFAS 161 is effective for fiscal years and interim periods beginning after November 15, 2008. Early
application is encouraged, however, at the current time we do not plan to early adopt the standard. The adoption
of SFAS 161 is not expected to have a material impact on our financial position, results of operations or liquidity.
In April 2008, the FASB issued FSP FAS 142-3, Determination of the Useful Life of Intangible Assets
(“FSP FAS 142-3”), which amends the factors that should be considered in developing renewal or extension
assumptions used to determine the useful life of a recognized intangible asset under FASB Statement No. 142,
Goodwill and Other Intangible Assets (“SFAS 142”). The intent of FSP FAS 142-3 is to improve the consistency
between the useful life of a recognized intangible asset under SFAS 142 and the period of expected cash flows
used to measure the fair value of the asset under SFAS 141(R) and other U.S. generally accepted accounting
principles. FSP FAS 142-3 requires an entity to disclose information for a recognized intangible asset that
enables users of the financial statements to assess the extent to which the expected future cash flows associated
with the asset are affected by the entity’s intent and/or ability to renew or extend the arrangement. FSP FAS
142-3 is effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim
periods within those fiscal years. Early adoption is prohibited. The requirements for determining the useful life of
intangible assets apply to intangible assets acquired after January 1, 2009. The disclosure requirements will be
applied prospectively to all intangible assets recognized as of, and subsequent to, the effective date. The adoption
of FSP FAS 142-3 may have a material effect on our results of operations and financial position, to the extent we
have acquisitions.
In June 2008, the FASB issued FSP EITF 03-6-1, Determining Whether Instruments Granted in Share-
Based Payment Transactions Are Participating Securities (“FSP EITF 03-6-1”). The FSP addresses whether
instruments granted in share-based payment transactions are participating securities prior to vesting and therefore
need to be included in the earnings allocation in calculating earnings per share under the two-class method
described in SFAS No. 128, Earnings per Share. The FSP requires companies to treat unvested share-based
payment awards that have non-forfeitable rights to dividend or dividend equivalents as a separate class of
securities in calculating earnings per share. The FSP is effective for fiscal years beginning after December 15,
2008. Earlier application is not permitted. The adoption of FSP EITF 03-6-1 is not expected to have a material
effect on our results of operations or earnings per share as our dividends on unvested share-based payment
awards are forfeitable.
NOTE 3. DISCONTINUED OPERATIONS
We report discontinued operations in accordance with the guidance of SFAS No. 144, Accounting for the
Impairment or Disposal of Long-Lived Assets. Accordingly, we report businesses or asset groups as discontinued
operations when we commit to a plan to divest the business or asset group and the sale of the business or asset
group is deemed probable within the next 12 months.
During the fourth quarter of 2006, our Harvester Systems (“Harvester”) business from the JBT FoodTech
segment met these requirements. The final sale was completed during the first quarter of 2008 at a loss of $0.1
million net of tax. Additionally, our Food Handling Equipment business (“FHE”) from the JBT FoodTech
segment qualified as a discontinued operation upon its sale in the third quarter of 2007. We recorded a gain of
$3.1 million, net of tax of $1.1 million, on the sale of FHE. Proceeds from the sale of FHE totaled $8.0 million.
Both Harvester and FHE results have been reported as discontinued operations for all periods presented.
66
The consolidated and combined statements of income include the following in discontinued operations:
(In millions)
Year Ended December 31,
2008
2007
2006
Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income tax benefit
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(Loss) gain on disposition of discontinued operations, net of taxes . . . . . . . . . . . . . . . . .
$37.2
$23.2
$ 0.6
$(0.1) $ (7.3) $ (0.3)
(0.5)
(0.3)
(0.1)
3.1 —
(0.1)
Income (loss) from discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 0.1
$ (3.7) $ (0.2)
During 2007, we recorded restructuring expense and provisions for doubtful accounts and inventory
obsolescence totaling $4.5 million related to Harvester.
The major classes of assets and liabilities of businesses reported as discontinued operations included in the
accompanying consolidated and combined balance sheets are:
(In millions)
Assets:
Trade receivables, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Assets of discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Liabilities:
Accounts payable, trade and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Advance payments and progress billings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Liabilities of discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
NOTE 4. INVENTORIES
Inventories consisted of the following:
(In millions)
December 31,
2008
2007
$—
—
$—
$—
—
—
$—
$1.5
0.9
$2.4
$0.2
0.1
1.7
$2.0
December 31,
2008
2007
Raw materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Work in process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Finished goods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 71.9
41.2
64.9
$ 63.9
59.1
76.5
Gross inventories before LIFO reserves and valuation adjustments . . . . . . . . . . . . .
LIFO reserves and valuation adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
178.0
(55.0)
199.5
(52.3)
Net inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$123.0
$147.2
Inventories accounted for under the LIFO method totaled $109.2 million and $105.6 million at
December 31, 2008 and 2007, respectively. The current replacement costs of LIFO inventories exceeded their
recorded values by $43.5 million and $40.4 million at December 31, 2008 and 2007, respectively. During 2008,
certain inventory quantity deductions caused a liquidation of LIFO layers resulting in a $0.8 million benefit to
our net income.
67
NOTE 5. PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment consisted of the following:
(In millions)
December 31,
2008
2007
Land and land improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Machinery and equipment
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Construction in process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
6.4
55.4
246.7
8.2
$
6.1
55.5
264.4
8.8
Accumulated depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
316.7
(197.0)
334.8
(208.0)
Property, plant and equipment, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 119.7
$ 126.8
Depreciation expense was $20.5 million, $19.8 million and $18.8 million in 2008, 2007 and 2006,
respectively.
NOTE 6. GOODWILL AND INTANGIBLE ASSETS
Goodwill—The carrying amount of goodwill by business segment was as follows:
(In millions)
JBT FoodTech . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
JBT AeroTech . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
December 31,
2008
2007
$18.7
8.0
$26.7
$15.7
8.1
$23.8
In 2008, we recorded $4.0 million of goodwill in connection with an acquisition of a business recorded
within the JBT FoodTech business segment. Certain of our goodwill balances are subject to foreign currency
translation adjustments. Fluctuations in exchange rates reduced the total goodwill balance by $1.1 million in
2008.
Intangible assets—The components of intangible assets were as follows:
(In millions)
Customer lists . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Patents and acquired technology . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trademarks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gross
carrying
amount
$14.5
23.3
14.2
1.9
Total intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$53.9
December 31,
2008
2007
Accumulated
amortization
Gross
carrying
amount
Accumulated
amortization
6.6
21.9
5.4
1.4
35.3
$15.2
24.3
16.3
—
$55.8
$ 6.6
21.8
6.2
—
$34.6
All of our acquired identifiable intangible assets are subject to amortization and, where applicable, foreign
currency translation adjustments. We recorded an amortization expense related to acquired intangible assets of
$2.5 million, $2.6 million and $2.6 million during the years ended on December 31, 2008, 2007 and 2006,
respectively. Annual amortization expense is expected to be $1.1 million during the years 2009 through 2013.
68
We have not recognized any impairment for the years ended December 31, 2008 or 2007 as the fair values
of our reporting units with goodwill balances exceed the carrying amounts. However, due to the uncertainty of
future economic conditions and their impact on our financial performance, it is possible we could experience a
decline in fair value of certain of our reporting units. A significant decline could result in a future impairment
charge.
NOTE 7. DEBT
On July 31, 2008, we issued 6.66% senior unsecured notes and entered into a $225 million, 5-year revolving
credit facility. The senior unsecured notes are due on July 31, 2015 and require us to make semiannual interest
payments. The note purchase agreement contains customary covenants including leverage and interest coverage
ratios. The leverage ratio covenant restricts the amount of Consolidated Total Indebtedness we may have
compared to Consolidated EBITDA, according to the terms defined in the note purchase agreement. The interest
coverage ratio covenant restricts the amount of Consolidated Interest Expense we may have compared to
Consolidated EBITDA, according to the terms defined in the note purchase agreement. The revolving credit
facility similarly contains certain customary covenants including similar leverage and interest coverage ratios and
also limits the annual amounts we may spend on dividends and capital expenditures. We do not have any
covenants related to our net worth. Borrowings under the revolving credit facility bear interest, at our option, of
London Interbank Offered Rate or an alternative base rate, which is the greater of JPMorgan Chase Bank, N.A.’s
Prime Rate and Federal Funds Rate plus 50 basis points, plus a margin dependent on our leverage ratio as defined
in the credit agreement. We are required to make periodic interest payments on the borrowed amounts and pay an
annual facility fee ranging from 17.5 to 35 basis points, depending on our leverage ratio. Borrowings on the
revolving credit facility are shown as a long-term obligation on the consolidated balance sheets because we have
both the ability and the intent to refinance these obligations on a long-term basis under the credit agreement. At
December 31, 2008, there was $110 million outstanding and an additional $95 million available on the revolving
credit facility. As of December 31, 2008, we are in compliance with all restrictive covenants and expect to
remain in compliance in the foreseeable future. However, there can be no assurance that continued or increased
volatility in the global economic conditions will not impair our ability to meet our restrictive covenants, or the
volatility in the capital and credit markets will not impair our ability to access these markets on terms acceptable
to us or at all.
Long-term debt —Long-term debt consisted of the following:
(In millions)
6.66% senior unsecured notes due July 31, 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Revolving credit facility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other
December 31,
2008
$ 75.0
110.0
0.6
2007
$—
—
1.1
Total long-term debt
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less: current portion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
185.6
(0.6)
1.1
(1.1)
Long-term debt, less current portion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$185.0
$—
The fair value of the $75 million 6.66% senior unsecured notes at December 31, 2008 was $68.1 million due
to the long-term duration and fixed interest rates associated with this debt obligation. There is no active or
observable market for our private placement long-term debt. Therefore, the estimated fair value of this debt is
based on discounted cash flows using current interest rates available for debt with similar terms and remaining
maturities. To estimate an all-in interest rate of discounting, a broker quote was obtained for notes with the same
terms as our notes. We have no rate adjustment for the risk profile changes, covenant issues or credit rating
changes, therefore the broker quote is deemed to be the closest approximation of current market rates. The fair
value of the remaining borrowings approximates their carrying value due to their variable interest rates.
69
Maturities of total long-term debt as of December 31, 2008, are payable as follows: $0.6 million in 2009,
$110 million in 2013 and $75 million in 2015.
Interest rate swap— We have an interest rate swap related to interest payments on $50 million of our
variable rate borrowings from July 31, 2008 to January 29, 2010 and $25 million of our variable rate borrowings
from January 30, 2010 to January 31, 2011 on our $225 million revolving credit facility. The effect of the interest
rate swap, which was acquired on June 30, 2008, is to fix the effective annual interest rate of these variable rate
borrowings at 3.675% plus a margin dependent on our leverage ratio. The swap was designated as a hedge of the
interest payments. The swap is accounted for as a cash flow hedge and is included at its fair value of $1.8 million
in other liabilities on the consolidated balance sheet at December 31, 2008.
NOTE 8. INCOME TAXES
Domestic and foreign components of income before income taxes are shown below:
(In millions)
Year Ended December 31,
2008
2007
2006
Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$37.4
29.1
$16.0
45.6
$11.4
39.4
Income before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$66.5
$61.6
$50.8
The provision for income taxes consisted of:
(In millions)
Current:
Year Ended December 31,
2008
2007
2006
Federal
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 7.9
1.8
14.1
$ — $ —
0.8
9.5
0.5
15.7
Total current . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
23.8
16.2
10.3
Deferred:
(Decrease) increase in the valuation allowance for deferred tax assets . . . . . . . . . . . .
Other deferred tax (benefit) expense, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total deferred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(0.6)
(0.8)
(1.4)
(0.2)
5.5
5.3
(0.5)
6.2
5.7
Provision for income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$22.4
$21.5
$16.0
70
Significant components of our deferred tax assets and liabilities were as follows:
(In millions)
Deferred tax assets attributable to:
Accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign tax credit carryforward . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued pension and and other postretirement benefits . . . . . . . . . . . . . . . . . . . .
Stock-based compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net operating loss carryforwards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred tax asset
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred tax assets, net of valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred tax liabilities attributable to:
Liquidation of subsidiary for income tax purposes . . . . . . . . . . . . . . . . . . . . . . . .
Property, plant and equipment, goodwill and other assets . . . . . . . . . . . . . . . . . .
Deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
December 31,
2008
2007
$20.0
4.5
40.0
3.6
3.0
5.0
4.5
80.6
(3.2)
77.4
13.3
14.1
27.4
$16.6
10.9
2.6
3.3
0.5
3.7
4.1
41.7
(3.8)
37.9
12.7
11.3
24.0
Net deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$50.0
$13.9
For periods prior to the Separation, the deferred tax assets and liabilities presented have been determined as
if JBT Corporation was a stand-alone entity and filed separate tax returns. However, certain deferred tax assets
and liabilities, such as foreign tax credit carry forwards, have actually been utilized in consolidated or combined
filings made with FMC Technologies and therefore may not represent the balances of deferred tax assets and
liabilities that were actually distributed to us at the date of the spin-off, July 31, 2008.
Net operating loss carry forwards are related to our foreign operations. At December 31, 2008, total foreign
net operating losses were $8.6 million, of which $7.7 million may be carried forward indefinitely, and $0.5
million will expire in 2013 and 2015 if unused. Foreign tax credit carry forwards of $4.0 million at December 31,
2008 will expire in 2014 through 2018 if unused.
SFAS 109, Accounting for Income Taxes, requires that a valuation allowance be established when it is more
likely than not that all or a portion of a deferred tax asset will not be realized. In making this assessment,
management considers the level of historical taxable income, scheduled reversal of deferred tax liabilities, tax
planning strategies and projected future taxable income. As of December 31, 2008, we estimated that it is not
likely that we will generate future taxable income in certain foreign jurisdictions in which we have cumulative
net operating losses and, therefore, we have provided a valuation allowance of $3.2 million against the related
deferred tax assets. We have estimated that it is likely that we will generate future taxable income in the U.S. and
most foreign jurisdictions, and have therefore not provided a valuation allowance against most of our deferred
tax assets.
71
The effective income tax rate was different from the statutory U.S. federal income tax rate due to the
following:
(In millions)
Statutory U.S. federal tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net difference resulting from:
Year Ended December 31,
2008
2007
2006
35% 35% 35%
Foreign earnings subject to different tax rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax on foreign intercompany dividends and deemed dividends for tax purposes . . .
Export tax benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . —
Nondeductible expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
State income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign tax credits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of change in state effective tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Change in valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . —
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . —
—
1
1
2 —
(1) —
(1) —
—
(1)
(3)
1
(2)
(1)
1 —
Total difference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(1) —
(1)
1
—
—
—
(1)
(1)
(4)
Effective income tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
34% 35% 31%
U.S. income taxes have not been provided on $70.8 million of undistributed earnings of foreign subsidiaries
at December 31, 2008 as these amounts are considered permanently invested. A liability could arise if our
intention to permanently invest such earnings were to change and amounts are distributed by such subsidiaries or
if such subsidiaries are ultimately disposed. It is not practicable to estimate the additional income taxes related to
permanently invested earnings.
In June 2006, the FASB issued Interpretation No. 48, Accounting for Uncertainty in Income Taxes” (“FIN
48”), which changes the threshold for recognizing the benefit of an uncertain tax position, prescribes a method
for measuring the tax benefit to be recorded and requires incremental quantitative and qualitative disclosures
about uncertain tax positions. Under FIN 48, a tax position that meets a more likely than not recognition
threshold, based solely on the technical merits of the position, will be recognized in the financial statements. The
tax position is measured at the largest amount of benefit that is more likely than not to be realized upon ultimate
settlement. The guidance was effective for the first fiscal year beginning after December 15, 2006. As of
December 31, 2008, we had no unrecognized tax benefits. This includes consideration of obligation to FMC
Technologies under a Tax Sharing Agreement (described elsewhere in this report) whereby we have agreed to
indemnify FMC Technologies for any additional tax liability resulting from JBT Corporation businesses.
The following tax years remain subject to examination in the following jurisdictions:
United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Brazil . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Sweden . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Belgium . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Spain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Italy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2008
2008
2003 – 2008
2005 – 2008
2004 – 2008
2004 – 2008
NOTE 9. PENSION AND POSTRETIREMENT AND OTHER BENEFIT PLANS
We sponsor qualified and nonqualified defined benefit pension plans that together cover substantially all of
our U.S. employees. The plans provide defined benefits based on years of service and final average salary. In
addition, we sponsor postretirement health care and life insurance benefit plans that cover substantially all of our
U.S. employees. The postretirement health care plans are contributory while the postretirement life insurance
72
plans are noncontributory. Foreign-based employees are eligible to participate in JBT Corporation-sponsored or
government sponsored benefit plans to which we contribute. We also sponsor a separate defined contribution
pension plan that covers substantially all of our U.S. employees.
Prior to the Separation, our employees were eligible to participate in pension and other postretirement
benefit plans sponsored by FMC Technologies. Accordingly, we accounted for our pension and other
postretirement benefit costs prior to the Separation in our carved out financial statements under the
multiemployer plan approach, and have recognized the pension and other postretirement costs allocated to us by
FMC Technologies as expense, with a corresponding contribution in parent company investment. Pension and
other postretirement benefit costs were allocated to us based on the projected benefit obligation associated with
JBT Corporation-specific employees. In conjunction with the Separation, FMC Technologies distributed to us
$209.8 million of pension and other postemployment benefit obligations and $169.0 million of plan assets related
to our employees and retirees, along with $15.8 million of the related deferred income tax assets.
The funded status of our U.S. qualified and nonqualified pension plans, certain foreign pension plans and
U.S. postretirement health care and life insurance benefit plans, together with the associated balances recognized
in our consolidated and combined financial statements as of December 31, 2008 and 2007, were as follows:
(In millions)
Pensions
Other
postretirement
benefits
2008
2007
2008
2007
Accumulated benefit obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 223.3
$ 24.1
Projected benefit obligation at January 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 25.8
4.4
8.1
16.2
203.2
—
0.2
(5.0)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Service cost
Interest cost
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Actuarial loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net transfers in (spin-off)
Foreign currency exchange rate changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Plan participants’ contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Benefits paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$— $—
$ 24.3
0.1 —
0.8
0.2 —
1.2
0.5 —
1.4
6.6 —
—
1.8 — —
0.1 — —
(1.1) — —
Projected benefit obligation at December 31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 252.9
$ 28.5
$ 7.4 $—
Fair value of plan assets at January 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Net transfers in (spin-off)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Company contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Actual return on plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency exchange rate changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Plan participants’ contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Benefits paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8.9
169.0
0.9
(34.5)
(0.4)
0.2
(5.0)
$— $—
$ 7.0
—
— —
1.7 — —
0.2 — —
0.9 — —
0.1 — —
(1.1) — —
$— $—
Funded status of the plans (liability) at December 31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $(113.8) $(19.7) $(7.4) $—
Fair value of plan assets at December 31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 139.1
$ 8.8
Current portion of accrued pension and other postretirement benefits* . . . . . . . . . . . . . . . . . . $
Accrued pension and other postretirement benefits, net of current portion . . . . . . . . . . . . . . . .
(2.5) $ (0.5) $(0.4) $—
(7.0) —
(19.2)
(111.3)
Funded status recognized in the consolidated balance sheet at December 31, 2008
and combined balance sheet at December 31, 2007 . . . . . . . . . . . . . . . . . . . . . . . $(113.8) $(19.7) $(7.4) $—
Amounts recognized in accumulated other comprehensive (income) loss:
Unrecognized actuarial loss (gain)
Unrecognized prior service credit
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 108.5
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 2.5
(0.5) —
$(0.5) $—
(3.8) —
Accumulated other comprehensive loss (income) at December 31 . . . . . . . . . . . . . . $ 108.0
$ 2.5
$(4.3) $—
Plans with underfunded or non-funded projected benefit obligation:
Aggregate projected benefit obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 252.9
139.1
Aggregate fair value of plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 28.5
$ 7.4 $—
8.8 — —
Plans with underfunded or non-funded accumulated benefit obligation:
Aggregate accumulated benefit obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 223.3
139.1
Aggregate fair value of plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 24.1
8.8
73
* Included in other current liabilities in the consolidated and combined balance sheets
Pension and other postretirement benefit costs associated with our employees participating in plans of FMC
Technologies prior to the Separation and our plans after the Separation were as follows for each of the three years
ended December 31, 2008:
(In millions)
Plans sponsored by FMC Technologies . . . . . . . . . . . . . . . . . . . . . . . .
Plans sponsored by JBT Corporation . . . . . . . . . . . . . . . . . . . . . . . . . .
Total net annual benefit cost (income) . . . . . . . . . . . . . . . . . . . . .
Pensions
Other
postretirement
benefits
2008
2007
2006
2008
2007
2006
$2.8
3.6
$6.4
$6.5
1.6
$8.1
$6.6
1.5
$8.1
$(0.2) $(0.4) $(0.4)
(0.3) —
—
$(0.5) $(0.4) $(0.4)
The following table summarizes the components of net periodic benefit cost of our plans:
(In millions)
Components of net annual benefit cost:
Pensions
Other
postretirement
benefits
2008
2007
2006
2008
2007
2006
Service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expected return on plan assets . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of prior service cost (credit) . . . . . . . . . . . . . . . . —
Amortization of net actuarial loss (gain) . . . . . . . . . . . . . . . . . .
$ 0.8
1.2
(0.4)
—
0.2 —
$ 4.4
8.1
(9.1)
$ 0.1
$ 0.8
1.0
(0.3) —
—
—
$— $—
—
—
—
—
0.2 —
—
(0.5) —
(0.1) —
Net annual benefit cost (income)
. . . . . . . . . . . . . . . . . . .
$ 3.6
$ 1.6
$ 1.5
$(0.3) $— $—
Other changes in plan assets and benefit obligations recognized in
other comprehensive income:
Net actuarial loss arising during period . . . . . . . . . . . . . . . . . .
Amortization of net actuarial loss . . . . . . . . . . . . . . . . . . . . . . .
Amortization of prior service credit
. . . . . . . . . . . . . . . . . . . . . —
$59.8
(0.1)
Total recognized in other comprehensive income . . . . . .
59.7
Total recognized in net periodic benefit cost and other
comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . .
$63.3
$ 0.5
0.1
0.5
1.1
$ 0.8
The estimated net actuarial loss and prior service credit for the defined benefit pension plans that will be
amortized from accumulated other comprehensive income into net periodic benefit cost over the next fiscal year
are $2.3 million and $0.1 million, respectively. The estimated prior service credit for the other postretirement
benefit plans that will be amortized from accumulated other comprehensive income into net periodic benefit cost
over the next fiscal year is $0.9 million. Prior service costs and the unrecognized actuarial losses are amortized
on a straight-line basis over the average remaining service period of employees eligible to receive benefits under
the plan.
Key assumptions—The following weighted-average assumptions were used to determine the benefit
obligations:
Discount rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Rate of compensation increase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6.05% 4.86% 6.35% —
—
3.94% 3.46% —
74
Pensions
Other
postretirement
benefits
2008
2007
2008
2007
The weighted average discount rate for pensions rose from 4.86% in 2007 to 6.05% in 2008, which resulted
from including the discount rates used in determining the pension benefits for the U.S. plans that were accounted
for under the multiemployer approach in 2007. The discount rate used for determining the U.S. pension benefit
obligations was 6.20% in 2008.
The following weighted-average assumptions were used to determine net periodic benefit cost:
Pensions
Other
postretirement
benefits
2008
2007
2006
2008
2007
2006
Discount rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Rate of compensation increase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expected rate of return on plan assets . . . . . . . . . . . . . . . . . . . . . . . .
6.51% 4.63% 4.35% 6.75% — —
— —
3.94% 3.36% 3.42% —
— —
8.55% 4.50% 4.00% —
The estimate of expected rate of return on plan assets is based primarily on the historical performance of
plan assets, current market conditions and long-term growth expectations. The increase in the expected rate of
return on plan assets in 2008 is due to inclusion of the U.S. pension plan assets, the majority of which are equity
securities that have historically performed higher than the insurance contracts in the foreign plans upon which the
assumptions were based in 2006 and 2007.
Assumed health care cost trend rates for future periods will not have an effect on the amounts reported for
the postretirement health care plan since our benefit obligation under the plan was fully capped at the 2002
benefit level. Accordingly, a one percentage point change in the assumed health care cost trend rates would not
have a significant effect on total service and interest costs or on our postretirement health care obligation under
this plan.
Plan assets—The pension plan asset allocation, by asset category, was as follows:
(Percent of plan assets)
December 31,
2008
2007
Equity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Insurance contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
80.6% — %
6.3
13.1
100.0
—
Total
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
100.0% 100.0%
Our pension investment strategy emphasizes maximizing returns, consistent with ensuring that sufficient
assets are available to meet liabilities, and minimizing corporate cash contributions. Investment managers are
retained to invest 100% of discretionary funds and are provided a high level of freedom in asset allocation.
Targets include: exceeding relevant equity indices, performing in the top quartile of all large U.S. pension plans
and obtaining an absolute rate of return at least equal to the discount rate used to value plan liabilities.
Contributions— We expect to contribute approximately $16.5 million to our pension and other
postretirement benefit plans in 2009. The pension contributions will be primarily for the U.S. qualified pension
plan. All of the contributions are expected to be in the form of cash.
75
Estimated future benefit payments— The following table summarizes expected benefit payments from our
various pension and postretirement benefit plans through 2017. Actual benefit payments may differ from
expected benefit payments.
(In millions)
2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2014-2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other
postretirement
benefits
$0.5
0.5
0.5
0.6
0.6
3.4
Pensions
$11.3
10.2
11.4
13.1
13.4
76.8
Savings Plans— Our U.S. and some international employees participate in defined contribution savings
plans that we sponsor. These plans generally provide either a specified percent of pay or a matching contribution
on participating employees’ voluntary contributions. Additionally, certain highly compensated employees
participate in a non-qualified deferred compensation plan, which also allows for company matching contributions
up to predetermined limits. Prior to the Separation, our employees participated in similar plans sponsored by
FMC Technologies. Expenses from the defined contribution savings plans prior to the Separation were allocated
to us by FMC Technologies. The expense for matching contributions, including allocated amounts, was $4.5
million, $4.4 million and $4.1 million in 2008, 2007 and 2006, respectively. As of December 31, 2008 and 2007,
we had investments for a non-qualified deferred compensation plan totaling $7.9 million and $7.0 million,
respectively, recorded at their fair market value.
NOTE 10. STOCK-BASED COMPENSATION
Stock-based compensation expense includes awards for JBT Corporation and FMC Technologies nonvested
stock units (also known as restricted stock units), and an allocation of the expense from awards granted to FMC
Technologies’ corporate staff and directors prior to the Separation. The compensation expense for each of the
years in the three year period ended December 31, 2008 is as follows:
(In millions)
Year Ended
December 31,
2008
2007
2006
Plans sponsored by FMC Technologies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
JBT Corporation Incentive Compensation and Stock Plan . . . . . . . . . . . . . . . . . . . . . . . . . . .
$5.8
$ 8.6
2.6 —
$ 7.8
—
Total stock-based compensation expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$8.4
$ 8.6
$ 7.8
Income tax benefits related to stock-based compensation expense . . . . . . . . . . . . . . . . . . . . .
$3.2
$ 3.2
$ 3.0
Equity Awards Converted from Previously Issued FMC Technologies Awards
Prior to the Separation all employee incentive equity awards were granted by FMC Technologies. At the
time of the Separation, restricted stock awards held by our employees were converted into new restricted stock
awards with the number of shares adjusted to preserve the intrinsic value of the award as immediately prior to the
Separation. The awards were converted into restricted stock awards convertible into 697,177 shares of our
common stock and 233,536 shares of FMC Technologies’ common stock. All stock option awards held by our
employees were converted into JBT Corporation stock options with the number of shares and the exercise price
adjusted to preserve the intrinsic value of the award as immediately prior to the Separation. A summary of the
restricted stock awards granted since the Separation and stock options held by our employees is provided in the
Restricted Stock and Stock Options sections below.
76
Incentive Compensation and Stock Plan
Prior to the Separation, we adopted the John Bean Technologies Corporation Incentive Compensation and
Stock Plan (“JBT Corporation Incentive Compensation and Stock Plan”). The JBT Corporation Incentive
Compensation and Stock Plan provides certain incentives and awards to our officers, employees, directors and
consultants. The JBT Corporation Incentive Compensation and Stock Plan allows our Board of Directors (the
“Board”) to make various types of awards to non-employee directors and the Compensation Committee (the
“Committee”) of the Board to make various types of awards to other eligible individuals. Awards that may be
issued include common stock, stock options, stock appreciation rights, restricted stock and stock units.
Grants of common stock options may be incentive and/or nonqualified stock options. Under the JBT
Corporation Incentive Compensation and Stock Plan, the exercise price for options cannot be less than the market
value of our common stock at the date of grant. Options vest in accordance with the terms of the award as
determined by the Committee, which is generally after three years of service, and expire not later than 10 years
after the grant date. Restricted stock grants specify any applicable performance goals, the time and rate of vesting
and such other provisions as determined by the Committee. Restricted stock grants generally vest after three to
four years of service. Additionally, most awards vest immediately upon a change of control as defined in the JBT
Corporation Incentive Compensation and Stock Plan agreement. A change of control is deemed to have occurred
if (i) an individual or group acquires ownership of our stock that constitutes more than 50% of the total fair
market value of the Company, (ii) an individual or group acquires ownership of our stock possessing 30% or
more of the total voting power or the stock of our Company, (iii) an individual or group acquires assets from the
Company that have a total gross fair market value equal to or more than 40% of the total gross fair market value
of all of the assets of the Company immediately prior to such acquisition or (iv) a majority of the Board is
replaced by means of an appointment or election not endorsed by a majority of the members of the Board.
An aggregate of 3.7 million shares of our common stock were authorized for awards under the JBT
Corporation Incentive Compensation and Stock Plan.
Restricted Stock—A summary of the nonvested restricted stock awards of JBT Corporation as of
December 31, 2008 and changes during the year since the Separation are presented below:
Nonvested at July 31, 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Shares
697,177
793,785
3,550
Nonvested at December 31, 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,494,512
Weighted-Average
Grant-Date
Fair Value
$ 7.69
$12.02
$11.99
$ 9.94
We granted time-based restricted stock awards that vest after three years. The fair value of these time-based
awards was determined using the market value of our common stock on the grant date. Compensation cost is
recognized over the lesser of the stated vesting period or the period until the employee reaches age 62, the
retirement eligible age under the plan. We also granted restricted stock awards with performance-based
conditions. The vesting period for these awards is three years.
For current year performance-based awards, the payout was dependent upon our performance relative to
prior year with respect to earnings growth and return on investment for the year ending December 31, 2008.
Based on results for the performance period, the payout will be 217,442 shares at the vesting date in January
2011. Compensation cost has been measured for 2008 based on the actual outcome of the performance
conditions.
77
Stock Options—We have not granted any stock options. Outstanding options held by employees prior to the
Separation are still outstanding and are all exercisable. A summary of the stock options held by our employees as
of December 31, 2008 is presented below:
(Intrinsic value in millions)
Shares
Under
Option
Weighted-
Average
Exercise
Price
Weighted-
Average
Remaining
Contractual
Term (Years)
Aggregate
Intrinsic
Value
Outstanding and exercisable at July 31, 2008 . . . . . . . . . . . . . . . . .
Exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
207,751
31,784
Outstanding and exercisable at December 31, 2008 . . . . . . . . . . . .
175,967
$2.47
$2.17
$2.52
4.4
$1.0
The aggregate intrinsic value reflects the value to the option holders, or the difference between the market
price as of December 31, 2008 and the exercise price of the option, which would have been received by the
option holders had all options been exercised as of that date. While the intrinsic value is representative of the
value to be gained by the option holders, this value is not indicative of our compensation expense. Compensation
expense on stock options was calculated on the date of grant using the fair value of the options, as determined by
a Black-Scholes option pricing model and the number of options granted, reduced by estimated forfeitures.
As of December 31, 2008, there was $10.8 million of unrecognized stock-based compensation expense for
outstanding awards expected to be recognized over a weighted average of 1.9 years. $10.3 million of the
compensation expense is related to awards of our common stock and $0.5 million is related to awards for FMC
Technologies’ common stock.
NOTE 11. STOCKHOLDERS’ EQUITY
Capital stock—The following is a summary of our capital stock activity since the Separation:
July 31, 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stock awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Treasury stock purchases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net stock purchased for employee benefit trust . . . . . . . . . . . . . . . . . .
Common
stock issued
27,562,880
31,784
—
—
December 31, 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
27,594,664
Common
stock held in
treasury
3,001
—
52,153
—
55,154
Repurchased shares are held in treasury for general corporate purposes, including issuances under the JBT
Corporation Incentive Compensation and Stock Plan. The treasury shares are accounted for using the cost
method.
On July 31, 2008, our Board declared a dividend distribution to each recordholder of common stock of one
Preferred Share Purchase Right for each share of common stock outstanding on that date. Each right entitles the
holder to purchase, under certain circumstances related to a change in control of the Company, one
one-hundredth of a share of Series A Junior Participating Preferred Stock, par value $0.01, at a price of $72 per
share (subject to adjustment), subject to the terms and conditions of a Rights Agreement dated July 31, 2008. The
rights expire on July 31, 2018, unless redeemed by us at an earlier date. The redemption price of $0.01 per right
is subject to adjustment to reflect stock splits, stock dividends or similar transactions. We have reserved
1,500,000 shares of Series A Junior Participating Preferred Stock for possible issuance under the agreement.
78
Accumulated other comprehensive income (loss)—Accumulated other comprehensive income (loss)
consisted of the following:
(In millions)
Cumulative foreign currency translation adjustments . . . . . . . . . . . . . . . . . . . . . . . . .
Cumulative deferral of hedging net losses, net of tax of $1.2 in 2008 and $0.1 in
December 31,
2008
2007
$ (4.3)
$(2.1)
2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(2.0)
(0.2)
Cumulative deferral of pension net losses, net of tax of $40.1 in 2008 and $0.7 in
2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(64.1)
(1.8)
Accumulated other comprehensive loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$(70.4)
$(4.1)
NOTE 12. WARRANTY OBLIGATIONS
We provide warranties of various lengths and terms to certain of our customers based on standard terms and
conditions and negotiated agreements. We provide for the estimated cost of warranties at the time revenue is
recognized for products where reliable, historical experience of warranty claims and costs exists. We also
provide warranty liability when additional specific obligations are identified. The obligation reflected in other
current liabilities in the balance sheets is based on historical experience by product and considers failure rates
and the related costs in correcting a product failure. Warranty cost and accrual information is as follows:
(In millions)
December 31,
2008
2007
Balance at beginning of year
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expenses for new warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustments to existing accruals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Claims paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 12.3
13.4
(3.3)
(12.6)
$ 8.7
14.4
0.8
(11.6)
Balance at end of year
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 9.8
$ 12.3
NOTE 13. EARNINGS PER SHARE
Basic earnings per share (“EPS”) is computed by dividing income from continuing operations by the
weighted average number of common shares outstanding for the period. Diluted EPS reflects the assumed
conversion of all dilutive securities.
As discussed in Note 1, in connection with the Separation, on July 31, 2008 FMC Technologies distributed
to its shareholders 27.5 million shares of our common stock. This share amount is being utilized for the
calculation of basic and diluted EPS for all periods presented prior to the Separation as our common stock was
not traded prior to July 31, 2008 and there were no outstanding equity awards of JBT Corporation in the prior
periods.
79
The following table sets forth the computation of basic and diluted EPS utilizing the income from
continuing operations for the respective periods and our basic and dilutive shares outstanding:
(In millions, except per share data)
Basic earnings per share:
Year Ended December 31,
2008
2007
2006
Income from continuing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$44.1
$40.1
$34.8
Weighted average number of shares outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
27.5
27.5
27.5
Basic earnings per share from continuing operations . . . . . . . . . . . . . . . . . . . . . . . . .
$1.60
$1.45
$1.26
Diluted earnings per share:
Income from continuing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$44.1
$40.1
$34.8
Weighted average number of shares outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of dilutive securities:
27.5
27.5
27.5
Options on common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Restricted stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
0.1 —
0.2 —
—
—
Total shares and dilutive securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
27.8
27.5
27.5
Diluted earnings per share from continuing operations . . . . . . . . . . . . . . . . . . . . . . . .
$1.59
$1.45
$1.26
NOTE 14. DERIVATIVE FINANCIAL INSTRUMENTS AND RISK MANAGEMENT
Derivative financial instruments—We hold derivative financial instruments for the purpose of hedging
foreign currency risks and interest rate risks of certain identifiable and anticipated transactions.
We manufacture and sell our products in a number of countries throughout the world and, as a result, are
exposed to movements in foreign currency exchange rates. Our major foreign currency exposures involve the
markets in Western and Eastern Europe, South America, and Asia. The purpose of our foreign currency hedging
activities is to manage the economic impact of exchange rate volatility associated with anticipated foreign
currency purchases and sales created in the normal course of business. We primarily utilize forward exchange
contracts with maturities of less than 3 years. Many of our sales and purchase contracts are written contemplating
this risk and therefore contain embedded derivatives, which we consider part of our risk management policy.
Additionally, we have entered into an interest rate swap to hedge a portion of our variable rate debt.
Our policy is to hold derivatives only for the purpose of hedging risks and not for trading purposes where
the objective is solely to generate profit. Generally, we enter into hedging relationships such that changes in the
fair values or cash flows of items and transactions being hedged are expected to be offset by corresponding
changes in the fair value of the derivatives.
(In millions)
December 31, 2008
December 31, 2007
Current Non-Current Current Non-Current
Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 4.2
Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$13.8
1.6
4.8
$5.4
$3.9
$1.4
$3.7
Most of our derivatives are not designated for hedge accounting. However, approximately $2.0 million in
short-term liabilities reflect unrealized losses on effective cash flow hedges which we expect to record in
earnings during 2009 in the periods during which the underlying sales transactions are forecasted to occur. As of
December 31, 2008, this amount is reflected in accumulated other comprehensive loss along with $1.8 million
loss on an interest rate swap that is designated as a cash flow hedge. We expect to amortize the loss on the
interest rate swap into income as variable interest expense is recorded on the underlying debt until the maturity of
the interest rate swap on January 31, 2011. All forecasted transactions currently being hedged are expected to
occur by 2015.
80
The gains and losses, net of remeasurement of assets and liabilities, recorded in earnings for instruments not
designated as hedging instruments were a loss of $5.8 million, $4.4 million and $1.0 million for the years ending
December 31, 2008, 2007 and 2006, respectively. These gains and losses are recorded in product and service
revenue, cost of products and services and other income (expense), net on the statements of income and in other
expense, net in the reconciliation of segment operating profit to income before income taxes.
Fair value disclosures—The carrying amounts of cash and cash equivalents, trade receivables and accounts
payable, as well as amounts included in other current assets and other current liabilities that meet the definition
of financial instruments, approximate fair value because of their short-term maturities. Investments and
derivative financial instruments are carried at fair value, determined using available market information.
Credit risk—By their nature, financial instruments involve risk including credit risk for non-performance by
counterparties. Financial instruments that potentially subject us to credit risk primarily consist of trade
receivables and derivative contracts. We manage the credit risk on financial instruments by transacting only with
financially secure counterparties, requiring credit approvals and credit limits, and monitoring counterparties’
financial condition. Our maximum exposure to credit loss in the event of non-performance by the counterparty is
limited to the amount drawn and outstanding on the financial instrument. Allowances for losses are established
based on collectability assessments.
NOTE 15. FAIR VALUE OF FINANCIAL INSTRUMENTS
In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements (“SFAS 157”), which
defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles,
and expands disclosures about fair value measurements. In February 2008, the FASB issued FASB Staff Position
No. FAS 157-2, Effective Date of FASB Statement No. 157, which provides a one year deferral of the effective
date of SFAS 157 for non-financial assets and non-financial liabilities, except for items that are recognized or
disclosed at fair value in the financial statements on a recurring basis (at least annually). We adopted SFAS 157
on January 1, 2008 with respect to financial assets and financial liabilities that are measured at fair value within
the consolidated and combined financial statements and deferred the adoption for non-financial assets and
non-financial liabilities until January 1, 2009. Accordingly, the provisions of SFAS 157 were not applied to long-
lived assets, assets and liabilities held for sale, goodwill and other intangible assets measured for impairment
testing purposes.
The fair value framework requires the categorization of assets and liabilities into three levels based upon the
assumptions (inputs) used to price the assets or liabilities. Level 1 provides the most reliable measure of fair
value, whereas Level 3 generally requires significant management judgment. The three levels are defined as
follows:
•
•
•
Level 1: Unadjusted quoted prices in active markets for identical assets and liabilities.
Level 2: Observable inputs other than those included in Level 1. For example, quoted prices for similar
assets or liabilities in active markets or quoted prices for identical assets or liabilities in inactive
markets.
Level 3: Unobservable inputs reflecting management’s own assumptions about the inputs used in
pricing the asset or liability.
Financial assets and financial liabilities measured at fair value on a recurring basis are as follows:
(In millions)
Assets
December 31, 2008 Level 1 Level 2 Level 3
Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 7.9
5.8
$13.7
$ 7.9
—
$ 7.9
$ — $—
5.8 —
$ 5.8
$—
Liabilities
Derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
18.6
$— $18.6
$—
81
Investments are valued based on quoted prices in active markets for identical assets or liabilities that we
have the ability to access. We use the income approach as the valuation technique to measure the fair value of
derivative instruments on a recurring basis. This approach calculates the present value of the future cash flow by
measuring the change from the derivative contract rate and the published market indicative currency and interest
rates, multiplied by the contract notional values, and includes a factor of credit risk.
NOTE 16. RELATED PARTY TRANSACTIONS
In connection with our spin-off from FMC Technologies, we entered into certain agreements which defined
key provisions related to the spin-off and the relationship between the two companies after the spin-off,
including, among others, a separation and distribution agreement between JBT Corporation and FMC
Technologies (the “Separation and Distribution Agreement”) and a tax sharing agreement between JBT
Corporation and FMC Technologies (the “Tax Sharing Agreement”). The Separation and Distribution Agreement
required FMC Technologies to contribute certain business segments and their associated assets and liabilities to
us. As a result of the contribution, FMC Technologies has no interest in our assets and business and generally has
no obligation with respect to our liabilities. Similarly, we have no interest in FMC Technologies’ assets and
generally have no obligation with respect to FMC Technologies’ liabilities. Based on the provisions of the
Separation and Distribution Agreement, we paid FMC Technologies $189.4 million to finalize the Separation.
The Tax Sharing Agreement sets forth the responsibilities of the parties with respect to, among other things,
liabilities for federal, state, local and foreign taxes for periods before and including the spin-off, the preparation
and filing of tax returns for such periods, and disputes with taxing authorities regarding taxes for such periods.
After the spin-off, we paid FMC Technologies $7.3 million reflecting income tax liabilities generated in pre-spin
periods by JBT Corporation businesses. The Tax Sharing Agreement also provides that we will indemnify FMC
Technologies for any tax liability FMC Technologies may incur as a result of any action taken by us after the
spin-off which causes the distribution to not qualify as tax-free for U.S. federal income tax purposes under the
terms of the private letter ruling received from the IRS. FMC Technologies will indemnify us against any tax
liability in the case any action taken by FMC Technologies causes the distribution to not qualify as tax-free.
After the spin-off, we received $5.0 million from FMC Technologies for settlement of an existing
intercompany receivable.
Prior to the Separation, FMC Technologies allocated to us, among other things, $12.6 million, $11.3 million
and $12.0 million for the years ended December 31, 2008, 2007 and 2006, respectively, of expenses incurred by
FMC Technologies for providing us with the following services: legal, tax, general accounting, communications,
corporate development, benefits and human resources, information systems, payroll services, web hosting
services and other public company costs.
NOTE 17. COMMITMENTS AND CONTINGENT LIABILITIES
Commitments—We lease office space, manufacturing facilities and various types of manufacturing and data
processing equipment. Leases of real estate generally provide for payment of property taxes, insurance and
repairs by us. Substantially all leases are classified as operating leases for accounting purposes. Rent expense
under operating leases amounted to $9.3 million, $7.5 million and $6.0 million in 2008, 2007 and 2006,
respectively.
Minimum future rental payments under noncancelable operating leases amounted to $16.1 million as of
December 31, 2008, and are payable as follows: $3.9 million in 2009, $3.7 million in 2010, $2.5 million in 2011,
$2.0 million in 2012, $1.9 million in 2013 and $2.1 million thereafter. Minimum future rental payments to be
received under noncancelable subleases totaled $0.1 million at December 31, 2008. Minimum future rental
payments under noncancelable capital leases amounted to $0.4 million as of December 31, 2008, and are payable
as follows: $0.2 million in 2009, $0.1 million in 2010 and $0.1 million in 2011.
82
Contingent liabilities associated with guarantees—In the ordinary course of business with customers,
vendors and others, we issue standby letters of credit, performance bonds, surety bonds and other guarantees.
These financial instruments, which totaled approximately $57.9 million at December 31, 2008, represent
guarantees of our future performance. We also have provided approximately $3.9 million of bank guarantees and
letters of credit to secure a portion of our existing financial obligations. The majority of these financial
instruments expire within two years; we expect to replace them through the issuance of new or the extension of
existing letters of credit and surety bonds.
Under the Separation and Distribution Agreement with FMC Technologies, we have assumed an
indemnification and guarantee for an Industrial Development Revenue Bond payable to Franklin County, Ohio.
Our former parent was primarily liable for the Industrial Development Revenue Bond until the property securing
the bond was sold and the obligations under the bond were assigned to a third party in 1979. At December 31,
2008, the maximum potential amount of undiscounted future payments that we could be required to make under
this bond was $0.9 million through final maturity in October 2009. In October 2008, we were required to pay
$0.9 million under the bond after the assignee failed to make the annual principal payment due in October 2008.
We have recorded this amount as a receivable from the assignee in other assets on our consolidated balance
sheet. This receivable is recoverable either by payment from the assignee or from proceeds from the sale of the
property, which we may recover from the current owner and sell. Management believes that proceeds from the
sale of the property would satisfy our existing receivable and cover any potential future payments required.
Management believes that the ultimate resolution of our known contingencies will not materially affect our
financial position or results of operations.
Contingent liabilities associated with legal matters—Under the Separation and Distribution Agreement with
FMC Technologies, we have assumed liabilities related to specified legal proceedings arising from our business
prior to separation. As a result, although FMC Technologies will remain the named defendant, we will manage
the litigation and indemnify FMC Technologies for costs, expenses and judgments arising from this existing
litigation. We do not believe that any existing litigation we have assumed will have a material effect on our
results of operations, financial condition or liquidity.
We are involved in legal proceedings arising in the ordinary course of business. Although the results of
litigation cannot be predicted with certainty, we do not believe that the resolution of the proceedings that we are
involved in, either individually or taken as a whole, will have a material adverse effect on our business, results of
operations or financial condition.
NOTE 18. BUSINESS SEGMENTS
Our determination of the two reportable segments was made on the basis of the Company’s strategic
business units and the commonalities among the products and services within each segment, and corresponds to
the manner in which management reviews and evaluates operating performance. Certain similar operating
segments that meet applicable criteria established under SFAS No. 131, Disclosures about Segments of an
Enterprise and Related Information, have been combined.
Our reportable segments are:
•
•
JBT FoodTech—designs, manufactures and services technologically sophisticated food processing
systems used for, among other things, fruit juice production, frozen food production, in-container food
production and convenience food preparation by the food industry.
JBT AeroTech—designs, manufactures and services technologically sophisticated ground support
equipment, airport gate equipment, automated systems and services for airport authorities, airlines, air
freight, ground handling companies, the military and other industries.
83
Total revenue by segment includes intersegment sales, which are made at prices approximating those that
the selling entity is able to obtain on external sales. Segment operating profit is defined as total segment revenue
less segment operating expenses. The following items have been excluded in computing segment operating
profit: corporate staff expense, foreign currency related gains and losses, LIFO provisions, certain employee
benefit expenses, interest income and expense associated with corporate investments and income taxes. In the
third quarter of 2008, we changed our method used to measure segment operating profit by excluding gains and
losses on derivatives related to foreign currency exposure. As a result, all prior year measurements of segment
operating profit have been restated for comparative purposes.
Segment revenue and segment operating profit
(In millions)
Revenue
Year Ended December 31,
2008
2007
2006
JBT FoodTech . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
JBT AeroTech . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other revenue (1) and intercompany eliminations . . . . . . . . . . . . . . . . . . . . . . .
$ 584.0
446.9
(2.8)
$594.1
386.0
(2.1)
$496.2
348.7
(0.6)
Total revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$1,028.1
$978.0
$844.3
Income before income taxes
Segment operating profit:
JBT FoodTech . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
JBT AeroTech . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
Total segment operating profit
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
60.2
38.5
98.7
$ 55.0
32.4
$ 46.3
27.1
87.4
73.4
Corporate items:
Corporate expense (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other expense, net (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net interest (expense) income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(15.0)
(13.4)
(3.8)
(11.3)
(15.0)
0.5
(12.0)
(11.0)
0.4
Total corporate items . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(32.2)
(25.8)
(22.6)
Income from continuing operations before income taxes . . . . . . . . . . . . . . . . . . .
Provision for income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income from continuing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gain (loss) from discontinued operations, net of income taxes . . . . . . . . . . . . .
66.5
22.4
44.1
0.1
61.6
21.5
40.1
(3.7)
50.8
16.0
34.8
(0.2)
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
44.2
$ 36.4
$ 34.6
(1) Other revenue comprises certain gains and losses on derivatives related to foreign exchange exposure. Other
expense, net, generally includes stock-based compensation, other employee benefits, LIFO adjustments,
foreign exchange gains and losses, and the impact of unusual or strategic transactions not representative of
segment operations.
(2) Corporate expense primarily includes corporate staff expenses.
84
Segment operating capital employed and segment assets
(In millions)
Segment operating capital employed (1):
JBT FoodTech . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
JBT AeroTech . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total segment operating capital employed . . . . . . . . . . . . . . . . . . . . . . . .
Segment liabilities included in total segment operating capital
employed (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Corporate (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Assets of discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
December 31,
2008
2007
$153.4
126.0
279.4
233.8
78.1
—
$164.6
112.1
276.7
286.4
8.4
2.4
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$591.3
$573.9
Segment assets:
JBT FoodTech . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
JBT AeroTech . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Intercompany eliminations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$324.3
189.3
(0.4)
$365.0
198.8
(0.7)
Total segment assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Corporate (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Assets of discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
513.2
78.1
—
563.1
8.4
2.4
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$591.3
$573.9
(1) Management views segment operating capital employed, which consists of assets, net of its liabilities, as the
primary measure of segment capital. Segment operating capital employed excludes debt, pension liabilities,
income taxes and LIFO inventory reserves.
(2) Segment liabilities included in total segment operating capital employed consist of trade and other accounts
payable, advance payments and progress billings, accrued payroll and other liabilities.
(3) Corporate includes cash, LIFO inventory reserves, deferred income tax balances, property, plant and
equipment not associated with a specific segment, pension assets and the fair value of derivatives.
Geographic segment information
Geographic segment sales were identified based on the location where our products and services were
delivered. Geographic segment long-lived assets include investments; property, plant and equipment, net;
goodwill; intangible assets, net; and certain other non-current assets.
(In millions)
Revenue (by location of customers):
Year Ended December 31,
2008
2007
2006
United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
All other countries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 485.5
542.6
$477.3
500.7
$418.6
425.7
Total revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$1,028.1
$978.0
$844.3
(In millions)
Long-lived assets:
Year Ended December 31,
2008
2007
2006
United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Sweden . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Brazil . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
All other countries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 105.3
17.0
10.3
36.9
$101.5
23.8
21.9
37.4
$105.8
23.0
18.4
32.4
Total long-lived assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 169.5
$184.6
$179.6
85
Other business segment information
Capital Expenditures
Year Ended
December 31,
Depreciation and
Amortization
Year Ended
December 31,
Research and
Development Expense
Year Ended
December 31,
(In millions)
2008
2007
2006
2008
2007
2006
2008
2007
2006
JBT FoodTech . . . . . . . . . . . . . . . . . . . .
JBT AeroTech . . . . . . . . . . . . . . . . . . . .
Corporate . . . . . . . . . . . . . . . . . . . . . . . .
$19.4
2.5
1.0
$21.3
1.2
0.5
$21.1
1.3
0.3
$22.6
2.4
0.5
$22.1
2.6
0.4
$13.4
$20.2
2.6
8.6
0.4 —
$12.0
6.7
—
$10.6
5.6
—
Total . . . . . . . . . . . . . . . . . . . . . . . .
$22.9
$23.0
$22.7
$25.5
$25.1
$23.2
$22.0
$18.7
$16.2
NOTE 19. QUARTERLY INFORMATION (UNAUDITED)
2008
2007
(In millions, except per share data
and common stock prices)
Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $234.5 $256.6 $276.8 $260.2 $290.6 $254.7 $237.9 $194.8
146.5
Cost of sales . . . . . . . . . . . . . . . . . . . . . . . . . . 173.8
Net income from continuing operations . . . .
4.0
10.3
Income (loss) from discontinued operations,
4th Qtr. 3rd Qtr. 2nd Qtr. 1st Qtr. 4th Qtr. 3rd Qtr. 2nd Qtr. 1st Qtr.
190.8
13.4
183.1
8.0
195.2
8.8
198.3
12.0
220.4
14.7
209.0
13.0
net of tax . . . . . . . . . . . . . . . . . . . . . . . . . .
(0.2) —
—
0.3
(2.0)
(0.7)
Net income . . . . . . . . . . . . . . . . . . . $ 10.1 $
8.8 $ 13.0 $ 12.3 $ 12.7 $ 12.7 $
(0.2)
7.8 $
(0.8)
3.2
Basic earnings per share:
Income from continuing operations . . . . $ 0.37 $ 0.32 $ 0.47 $ 0.43 $ 0.53 $ 0.49 $ 0.29 $ 0.14
Income (loss) from discontinued
operations, net of tax . . . . . . . . . . . . . —
—
—
0.02
(0.07)
(0.03) — (0.03)
Net income . . . . . . . . . . . . . . . . . . . . . . . $ 0.37 $ 0.32 $ 0.47 $ 0.45 $ 0.46 $ 0.46 $ 0.29 $ 0.11
Diluted earnings per share:
Income from continuing operations . . . . $ 0.37 $ 0.31 $ 0.47 $ 0.43 $ 0.53 $ 0.49 $ 0.29 $ 0.14
Income (loss) from discontinued
operations, net of tax . . . . . . . . . . . . .
(0.01) —
—
0.02
(0.07)
(0.03) — (0.03)
Net income . . . . . . . . . . . . . . . . . . . . . . . $ 0.36 $ 0.31 $ 0.47 $ 0.45 $ 0.46 $ 0.46 $ 0.29 $ 0.11
Weighted average shares outstanding
Basic (1) . . . . . . . . . . . . . . . . . . . . .
Diluted (1) . . . . . . . . . . . . . . . . . . .
27.5
28.1
27.5
28.1
27.5
27.5
27.5
27.5
27.5
27.5
27.5
27.5
27.5
27.5
27.5
27.5
Common stock price
High . . . . . . . . . . . . . . . . . . . . . . . . $12.37 $14.50 $ — $ — $ — $ — $ — $ —
Low . . . . . . . . . . . . . . . . . . . . . . . . $ 5.86 $11.05 $ — $ — $ — $ — $ — $ —
(1) For all periods prior to the Separation, the number of basic and diluted shares being used is the number of
shares outstanding on July 31, 2008, as no common stock of the Company was traded prior to July 31, 2008
and no JBT Corporation equity awards were outstanding for the prior periods.
NOTE 20. SUBSEQUENT EVENTS
On February 24, 2009, the Board of Directors approved a quarterly cash dividend of $0.07 per share of
outstanding common stock. The dividend will be paid on March 27, 2009 to stockholders of record at the close of
business on March 6, 2009.
86
Report of Independent Registered Public Accounting Firm
The Board of Director and Stockholders
John Bean Technologies Corporation:
Under the date of March 11, 2009, we reported on the consolidated and combined balance sheets of John
Bean Technologies Corporation and subsidiaries as of December 31, 2008 and 2007, and the related consolidated
and combined statements of income, changes in stockholders’ equity, and cash flows for each of the years in the
three-year period ended December 31, 2008, which are included in the annual report on Form 10-K. In
connection with our audits of the aforementioned consolidated and combined financial statements, we also
audited the related consolidated and combined financial statement schedule, Schedule II – Valuation and
Qualifying Accounts. This financial statement schedule is the responsibility of the Company’s management. Our
responsibility is to express an opinion on this financial statement schedule based on our audits.
In our opinion, such financial statement schedule, when considered in relation to the basic consolidated and
combined financial statements taken as a whole, presents fairly, in all material respects, the information set forth
therein.
/s/ KPMG LLP
Chicago, Illinois
March 11, 2009
87
Schedule II—Valuation and Qualifying Accounts
(In thousands)
Description
Year ended December 31, 2006:
Allowance for doubtful accounts . . . . . .
Valuation allowance for deferred tax
Additions
Balance at
beginning of
period
charged to
costs and
expenses
charged to other
accounts (a)
Deductions and
other (b)
Balance at
end of
period
$6,038
$ 194
$ 293
$ 600
$5,925
asset . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 816
$ —
$ —
$ 289
$ 527
Year ended December 31, 2007:
Allowance for doubtful accounts . . . . . .
Valuation allowance for deferred tax
$5,925
$ 396
$ 613
$ 734
$6,200
asset . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 527
$ —
$3,311
$ —
$3,838
Year ended December 31, 2008:
Allowance for doubtful accounts . . . . . .
Valuation allowance for deferred tax
$6,200
$1,200
$1,148
$3,506
$5,042
asset . . . . . . . . . . . . . . . . . . . . . . . . . .
$3,838
$ —
$ —
$ 659
$3,179
(a) – “Additions charged to other accounts” includes translation adjustments and allowances acquired through
business combinations.
(b) – “Deductions and other” includes write-offs, net of recoveries, and reductions in the allowances credited to
expense.
See accompanying Report of Independent Registered Public Accounting Firm.
88
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
ITEM 9A. CONTROLS AND PROCEDURES
As of the end of the period covered by this Annual Report on Form 10-K, we carried out an evaluation of
the effectiveness of the design and operation of our disclosure controls and procedures. Based upon that
evaluation, the Chief Executive Officer and the Chief Financial Officer have each concluded that our disclosure
controls and procedures were effective in timely alerting them to material information relating to our Company
and our consolidated subsidiaries required to be included in our periodic SEC filings. There were no changes in
our internal control over financial reporting identified during the last fiscal quarter that have materially affected,
or are reasonably likely to materially affect, our internal control over financial reporting.
This annual report does not include a report of management’s assessment regarding internal control over
financial reporting or an attestation report of our independent registered public accounting firm due to a transition
period established by rules of the SEC for newly public companies.
ITEM 9B. OTHER INFORMATION
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers;
Compensatory Arrangements of Certain Officers
The Company intends to enter into new change-in-control agreements, also known as executive severance
agreements (the “Executive Severance Agreements”), with each of the Company’s executive officers (each such
executive officer referred to in this Form 10-K as the “Executive”) who is presently a party to a
change-in-control agreement with the Company. Each such existing agreement will be replaced with a new
Executive Severance Agreement. Unless otherwise disclosed at any time, upon replacement of the existing
change-in-control agreements with agreements in the form of Executive Severance Agreement hereto as Exhibit
10.12, the form of change-in-control agreement previously used and attached hereto as Exhibit 10.11 will no
longer be used by the Company. Capitalized terms used in Item 9B of this annual report on Form 10-K but not
otherwise defined herein shall have the meaning set forth in the Executive Severance Agreement, which is
attached hereto as Exhibit 10.12.
The following description of the Executive Severance Agreements briefly summarizes the material terms
and conditions and is qualified in its entirety by reference to the full text of the Form of Executive Severance
Agreement, which is attached hereto as Exhibit 10.12.
The Executive Severance Agreements will provide the Executive with severance benefits if the Executive is
terminated within 24 months following a Change in Control of the Company; provided that no such severance
benefits will be payable if the Executive’s termination is for Cause, due to a voluntary termination by the
Executive without Good Reason or due to the Executive’s death or Disability. The Executive Severance
Agreements will expire 3 years after the applicable Effective Date, with such term automatically extended for
additional one-year periods at each anniversary date unless the Company’s Compensation Committee delivers
written notice to the Executive of its decision not to extend the Executive Severance Agreement at least 6 months
prior to any such anniversary.
89
The Severance Benefits provided to the Executive will include the following cash amounts, in each case
payable as soon as practicable following the Executive’s Effective Date of Termination, but not later than 30
days after such date:
•
•
•
an amount equal to up to 3 times (as determined by the Company’s Compensation Committee) the
highest rate of the Executive’s annualized Base Salary in effect at any time up to and including the
Executive’s Effective Date of Termination;
an amount equal to up to 3 times (as determined by the Company’s Compensation Committee) the
greater of (i) the Executive’s highest annualized target total cash Management Incentive Award granted
under the John Bean Technologies Corporation Incentive Compensation and Stock Plan for any plan
year up to and including the plan year in which the Executive’s Effective Date of Termination occurs,
and (ii) the average of the actual total cash Management Incentive Awards paid (or payable) to the
Executive for the two plan years immediately preceding the Effective Date of Termination, or for such
lesser number of such plan years for which the Executive was eligible to earn a cash Management
Incentive Award, annualized for any year that the Executive was not employed by the Company for the
entire plan year; and
an amount equal to the target total cash Management Incentive Award established for the plan year in
which the Executive’s Effective Date of Termination occurred, prorated through the Effective Date of
Termination.
In addition to the cash payments described above, the Severance Benefits will also include, subject to
applicable law and regulation as of the Effective Date of Termination, a continuation of the Company’s welfare
benefits of health care, life and accidental death and dismemberment, and disability insurance coverage for
eighteen (18) months after the Effective Date of Termination, which benefits will be provided to the Executive
(and to the Executive’s covered spouse and dependents) at the same premium cost, and at the same coverage
level, as in effect as of the date of the Change in Control. The continuation of these welfare benefits will be
discontinued prior to the end of the eighteen (18) month period if the Executive has available substantially
similar benefits at a comparable cost from a subsequent employer, as determined by the Committee. In addition,
the Company will make available for purchase by the Executive continued health care, life and accidental death
and dismemberment, and disability insurance coverage at the same coverage level as in effect as of the date of
the Change in Control for a period of eighteen (18) months beginning immediately upon the end of the coverage
period provided in this paragraph.
The Executive will also be entitled to receive certain Gross-Up Payments with respect to any Excise Tax
payable under the Executive Severance Agreement or any other agreement or plan with the Company. Such
amounts, if any, shall be payable by the Company to the Executive in cash within 60 days after the Executive
remits to the various taxing authorities the taxes which gave rise to the Gross-Up Payment.
As soon as practicable after the Company has knowledge that a Change in Control is imminent, but no later
than the day immediately preceding the date of the Change in Control, the Company will deposit assets in a Trust
in an amount equal to the estimated aggregate Severance Benefits which may become due to the Executive under
the Executive Severance Agreement.
The Executive will also agree, as described in detail in the Executive Severance Agreement, to 2-year
non-compete and non-solicitation provisions, which if violated shall allow the Company to cease the payment of
the Severance Benefits. The Executive will also agree to confidentiality provisions, as well as a general release of
claims against the Company.
90
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
We have adopted a code of ethics entitled the “Code of Business Conduct and Ethics” that applies to our
principal executive and financial officers (including our principal accounting officer, principal financial officer
and principal accounting officer) as well as our directors. A copy of our Code of Business Conduct and Ethics
may be found on our website at www.jbtcorporation.com under “Investor Relations – Corporate Governance”
and is available in print to stockholders without charge by submitting a request to James L. Marvin, Assistant
General Counsel and Secretary, JBT Corporation, 200 East Randolph Drive, Suite 6600, Chicago, Illinois 60601.
We also elect to disclose the information required by Form 8-K, Item 5.05, “Amendments to the registrant’s
code of ethics, or waiver of a provision of the code of ethics,” through our website, and such information will
remain available on our website for at least a twelve-month period.
Information regarding our executive officers is presented in the section entitled “Executive Officers of the
Registrant” in Part I of this Annual Report on Form 10-K.
Other information required by this Item is incorporated herein by reference to the similarly named section of
our definitive Proxy Statement for our 2009 Annual Meeting of Stockholders.
ITEM 11. EXECUTIVE COMPENSATION
Information required by this item is incorporated herein by reference from the sections entitled “Director
Compensation,” “Compensation Committee Interlocks and Insider Participation in Compensation Decisions” and
“Executive Compensation” of the Proxy Statement for our 2009 Annual Meeting of Stockholders.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
AND RELATED STOCKHOLDER MATTERS
Information required by this item is incorporated herein by reference from the section entitled “Security
Ownership of FMC Technologies” of the Proxy Statement for the 2009 Annual Meeting of Stockholders.
Additionally, Equity Plan Compensation Information is presented in Item 5 of Part II of this Annual Report on
Form 10-K.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
Information required by this item is incorporated herein by reference from the sections entitled
“Transactions with Related Persons” and “Director Independence” of the Proxy Statement for our 2009 Annual
Meeting of Stockholders.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Information required by this item is incorporated herein by reference from the section entitled “Relationship
with Independent Public Accountants” of the Proxy Statement for our 2009 Annual Meeting of Stockholders.
91
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) The following documents are filed as part of this Report:
PART IV
1. Financial Statements: The consolidated and combined financial statements required to be filed in this
Annual Report on Form 10-K are listed below and appear on pages 55 through 86 herein:
INDEX TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
Report of Independent Registered Public Accounting Firm . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated and Combined Statements of Income for the Years Ended December 31, 2008,
2007 and 2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated and Combined Balance Sheets as of December 31, 2008 and 2007 . . . . . . . . . . . .
Consolidated and Combined Statements of Cash Flows for the Years Ended December 31,
2008, 2007 and 2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated and Combined Statements of Changes in Stockholders’ Equity for the Years
Ended December 31, 2008, 2007 and 2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Notes to Consolidated and Combined Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Page
55
56
57
58
59
61
2. Financial Statement Schedule: Schedule II—Valuation and Qualifying Accounts is included in this Annual
Report on Form 10-K on page 88. All other schedules are omitted because of the absence of conditions
under which they are required or because information called for is shown in the consolidated and combined
financial statements and notes thereto in Item 8 of this Annual Report on Form 10-K.
3. Exhibits:
See Index of Exhibits below for a list of the exhibits being filed or furnished with or incorporated by
reference to this Annual Report on Form 10-K.
INDEX OF EXHIBITS
Exhibit
Number
2.1
3.1*
3.2
3.3*
4.1
4.2
4.3
Exhibit Description
Separation and Distribution Agreement between FMC Technologies, Inc. and John Bean
Technologies Corporation (“JBT Corporation”), incorporated by reference to Exhibit 2.1 to our
Current Report on Form 8-K filed with the SEC on August 6, 2008.
Amended and Restated Certificate of Incorporation of JBT Corporation.
Certificate of Designations of Series A Junior Participating Preferred Stock of JBT Corporation,
incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K filed with the SEC on
August 6, 2008.
Amended and Restated By-Laws of JBT Corporation.
Specimen common stock certificate of JBT Corporation, incorporated by reference to Exhibit 4.1 to
Amendment No. 3 to our Form 10 filed with the SEC on July 14, 2008.
Rights Agreement between JBT Corporation and National City Bank, as rights agent, incorporated by
reference to Exhibit 4.2 to our Current Report on Form 8-K filed with the SEC on August 6, 2008.
Note Purchase Agreement between JBT Corporation, incorporated by reference to Exhibit 4.1 to our
Current Report on Form 8-K filed with the SEC on August 6, 2008.
92
Exhibit
Number
10.1
10.3
10.4
10.5
10.6
10.6A
10.6B
10.6C
10.6D
10.6E
10.6F
10.6G
10.7
10.8
10.9
10.10
10.11
Exhibit Description
Credit Agreement, incorporated by reference to Exhibit 10.8 to our Current Report on Form 8-K filed
with the SEC on August 6, 2008.
Tax Sharing Agreement between JBT Corporation and FMC Technologies, Inc. incorporated by
reference to Exhibit 10.1 to our Current Report on Form 8-K filed with the SEC on August 6, 2008.
Trademark License Agreement between JBT Corporation and FMC Technologies, Inc., incorporated
by reference to Exhibit 10.2 to our Current Report on Form 8-K filed with the SEC on August 6,
2008.
Trademark Assignment and Coexistence Agreement between JBT Corporation and FMC
Technologies, Inc., incorporated by reference to Exhibit 10.3 to our Current Report on Form 8-K
filed with the SEC on August 6, 2008.
JBT Corporation Incentive Compensation and Stock Plan, incorporated by reference to Exhibit 10.4
to our Current Report on Form 8-K filed with the SEC on August 6, 2008.
Form of Nonqualified Stock Option Agreement, incorporated by reference to Exhibit 10.4A to our
Current Report on Form 8-K filed with the SEC on August 6, 2008.
Form of [International] Nonqualified Stock Option Agreement, incorporated by reference to
Exhibit 10.4B to our Current Report on Form 8-K filed with the SEC on August 6, 2008.
Form of Long-Term Incentive Performance Share Restricted Stock Agreement, incorporated by
reference to Exhibit 10.4C to our Current Report on Form 8-K filed with the SEC on August 6, 2008.
Form of Key Managers Restricted Stock Agreement, incorporated by reference to Exhibit 10.4D to
our Current Report on Form 8-K filed with the SEC on August 6, 2008.
Form of Restricted Stock Agreement for Non-Employee Directors, incorporated by reference to
Exhibit 10.4E to our Current Report on Form 8-K filed with the SEC on August 6, 2008.
Form of Performance Units Award Agreement, incorporated by reference to Exhibit 10.4F to our
Current Report on Form 8-K filed with the SEC on August 6, 2008.
Form of Long-Term Incentive Restricted Stock Agreement, incorporated by reference to
Exhibit 10.4G to our Current Report on Form 8-K filed with the SEC on August 6, 2008.
Amendment No. 1 to JBT Corporation Incentive Compensation and Stock Plan, incorporated by
reference to Exhibit 10.2 to our Quarterly Report on Form 10-Q filed with the SEC on November 14,
2008.
JBT Corporation Non-Qualified Savings and Investment Plan, incorporated by reference to
Exhibit 10.5 to our Current Report on Form 8-K filed with the SEC on August 6, 2008.
International Non-Qualified Savings and Investment Plan, incorporated by reference to Exhibit 10.6
to our Current Report on Form 8-K filed with the SEC on August 6, 2008.
JBT Corporation Salaried Employees’ Equivalent Retirement Plan, incorporated by reference to
Exhibit 10.7 to our Current Report on Form 8-K filed with the SEC on August 6, 2008.
Form of JBT Corporation Executive Severance Agreement, incorporated by reference to Exhibit 10.1
to our Quarterly Report on Form 10-Q filed with the SEC on November 14, 2008.
10.12*
Form of JBT Corporation Executive Severance Agreement
21.1*
23.1*
List of Subsidiaries of JBT Corporation.
Consent of Independent Registered Public Accounting Firm.
93
Exhibit
Number
31.1*
31.2*
32.1*
32.2*
Exhibit Description
Certification of Principal Executive Officer Pursuant to Rule 13a-14(a).
Certification of Principal Financial Officer Pursuant to Rule 13a-14(a).
Certification of Principal Executive Officer Pursuant to 18 U.S.C. 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.
Certification of Principal Financial Officer Pursuant to 18 U.S.C. 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.
* Filed herewith
94
Pursuant 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 signed on its behalf by the undersigned, thereunto duly authorized.
SIGNATURES
John Bean Technologies Corporation
(Registrant)
By:
/s/ CHARLES H. CANNON, JR.
Charles H. Cannon, Jr.
President and Chief Executive Officer
(Principal Executive Officer)
Date: March 11, 2009
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by
the following persons on behalf of the registrant and in the capacities and on the date indicated.
Signature
Title
Date
/s/ CHARLES H. CANNON, JR.
Charles H. Cannon, Jr.
President, Chief Executive Officer,
Chairman and Director
(Principal Executive Officer)
March 11, 2009
/s/ RONALD D. MAMBU
Ronald D. Mambu
Vice President and
Chief Financial Officer
(Principal Financial Officer)
March 11, 2009
/s/ MEGAN J. DONNELLY
Megan J. Donnelly
Chief Accounting Officer
(Principal Accounting Officer)
March 11, 2009
/s/ C. MAURY DEVINE
C. Maury Devine
/s/ ALAN D. FELDMAN
Alan D. Feldman
/s/
JAMES E. GOODWIN
James E. Goodwin
/s/ POLLY B. KAWALEK
Polly B. Kawalek
/s/
JAMES M. RINGLER
James M. Ringler
/s/
JAMES R. THOMPSON
James R. Thompson
Director
March 11, 2009
Director
March 11, 2009
Director
March 11, 2009
Director
March 11, 2009
Director
March 11, 2009
Director
March 11, 2009
95
[THIS PAGE INTENTIONALLY LEFT BLANK]
jbt: about the cover
680,000 chicken nuggets cooked: A global leader in Freezing & Chilling and Protein
Processing, JBT FoodTech products and services deliver high-throughput performance
for the world’s best-known food and food service brands. JBT’s Stein THERMoFIN®
Fryer (shown) is the market’s leading large-volume performer for high product
quality and low operating cost.
186,000 cans of ready meals sterilized: JBT FoodTech serves the world’s most trusted
names in the food industry through its In-Container Processing and Fruit Process-
ing product lines. JBT FoodTech sterilization equipment like the JBT SuperAgi™
Agitating Batch Retort system (shown) delivers high-capacity performance for lead-
ing processors of shelf stable ready meals, soups and sauces.
5,500 airline passengers boarded: JBT AeroTech provides market-leading equipment
and support services through its Ground Support Equipment, Gate Equipment,
Military Equipment, Airport Services and Automatic Guided vehicles product lines.
JBT’s Jetway Systems® products (shown) are one of the leaders in the global air
transportation industry for maximum passenger comfort, faster turn times and
reduced operating costs.
EACH OF THE HOURLY FIGURES ABOvE AND ON PAGES 7, 9 AND 11 IS BASED UPON EITHER THE AvERAGE HOURLY CAPACITY OF OUR INSTALLED EqUIPMENT,
OR AvERAGE HOURLY PRODUCTION UTILIzING OUR EqUIPMENT, AT AN ACTUAL JBT CORPORATION CUSTOMER FACILITY.
financial highlights
(In millions, except per share and return on invested capital data)
2008
2007
% change
Revenue
Income from continuing operations
Net income
Pro forma income from continuing operations 1
per share of common stock 2
$1,028.1
$ 44.1
$ 44.2
$ 40.1
$ 978.0
$ 40.1
$ 36.4
$ 33.2
Income from continuing operations per share, diluted
Pro forma income from continuing operations per share, diluted
$ 1.59
$ 1.44
$ 1.45
$ 1.20
5.1%
10.0%
21.4%
20.8%
9.7%
20.0%
other information
Inbound orders
Backlog
Cash flows from continuing operating activities
Return on invested capital 3
reconciliation of non-gaap measures (as required by regulation g)
$ 925.1
$ 295.3
$ 81.8
$ 1,054.3
$ 398.3
$ 39.0
24.0%
19.8%
-12.3%
-25.9%
109.7%
21.2%
1 Pro forma income from continuing operations results include an estimate of interest expense of $6.4 million in 2008 and $11.0 million in 2007 that would have been incurred
had the spin-off of JBT Corporation from its former parent, FMC Technologies, Inc., occurred on January 1, 2007. Interest expense is based on $189.4 million of debt at the interest
rate applicable on July 31, 2008, or 5.8%, for all periods prior to the date of our spin-off from FMC Technologies, Inc. Related income tax was estimated using a tax rate of 37%,
or $2.4 million in 2008 and $4.1 million in 2007.
2 The number of shares used to compute diluted and diluted pro forma earnings per share for the period ending December 31, 2007 is based on the number of shares outstanding
on July 31, 2008, the distribution date of our shares following our spin-off from FMC Technologies, Inc., or 27.5 million shares, as our common stock was not publicly traded
prior to July 31, 2008 and we had no outstanding equity awards in that period.
3 Return on invested capital is calculated as net income from continuing operations plus after tax interest expense as a percentage of average owner’s equity and long term debt.
executive officers
annual Meeting
stocK exchange
JBT Corporation is listed on the
New York Stock Exchange under
the symbol JBT.
auditors
KPMG LLP
303 East Wacker Drive
Chicago, Illinois 60601
stocK transfer agent
Address stockholder inquiries, including
requests for stock transfers, to:
National City Bank
Shareholder Services Operations
P.O. Box 92301
Cleveland, Ohio 44193-0900
Phone: 800.622.6757
E-mail:
shareholder.inquiries@nationalcity.com
additional inforMation
Additional information about JBT
Corporation, including news and
financial data, is available by visiting
the company’s website:
www.jbtcorporation.com
An e-mail alert service is available by
request under the Investor Relations
section of the site. This service will
provide an automatic alert, via e-mail,
each time a news release is posted to
the site or a new filing is made with
the U.S. Securities and Exchange
Commission.
Information may be also be obtained
by writing to Corporate Communica-
tions in Chicago, Illinois.
Charles H. Cannon, Jr.
Chairman, Chief Executive Officer and
President
Ronald D. Mambu
Vice President, Chief Financial Officer,
Treasurer and Controller
Torbjörn Arvidsson
Vice President and Division Manager,
Food Solutions and Services
Juan C. Podestá
Vice President and Division Manager,
Food Processing Systems
John Lee
Vice President and Division Manager,
JBT AeroTech
Kenneth C. Dunn
Vice President and General Counsel
Mark K. Montague
Vice President, Human Resources
Megan J. Donnelly
Chief Accounting Officer
corporate office
John Bean Technologies Corporation
200 East Randolph Drive
Suite 6600
Chicago, Illinois 60601
Phone: 312.861.5900
investor relations
John Bean Technologies Corporation
Investor Relations
Cindy Shiao
200 East Randolph Drive
Suite 6600
Chicago, Illinois 60601
Phone: 312.861.5931
http://ir.jbtcorporation.com
The Annual Meeting will be held
at 2:15 p.m. EDT on Thursday, May 7,
2009 at 1622 First Street, Sandusky,
Ohio 44870. Notice of the meeting,
together with proxy materials, will be
delivered to stockholders in advance
of the meeting.
forM 10-K
A copy of the company’s 2008 Annual
Report on Form 10-K, as filed with the
U.S. Securities and Exchange Commis-
sion, is included within this Annual
Report to Shareholders, and is also
available at http://ir.jbtcorporation.com.
Additional copies of the company’s
Annual Report on Form 10-K are
available upon written request to:
JBT Corporation
Corporate Communications
200 East Randolph Drive
Suite 6600
Chicago, Illinois 60601
However, certain information required
under Part III of the company’s 2008
Annual Report on Form 10-K has been
incorporated by reference from the
company’s Proxy Statement for its 2009
Annual Meeting of Stockholders.
Certifications required by Section 302
of the Sarbanes-Oxley Act of 2002,
as amended, were filed as Exhibits to
the company’s 2008 Annual Report on
Form 10-K. Since the company listed
with the New York Stock Exchange
(NYSE) in 2008, we were not required
to file the CEO certification required by
Section 303A.12(a) of the NYSE’s Listed
Company Manual with respect to fiscal
year 2007. Instead, in connection with
our listing, we submitted letters to the
NYSE in August and October of 2008
confirming our compliance with all
applicable requirements of Section 303A
of the NYSE’s Listed Company Manual.
JBT Corporation was originally incor-
porated as Frigoscandia, Inc. in the
State of Delaware in May 1994.
.
c
n
I
,
s
k
r
e
w
u
a
B
,
c
i
v
o
k
a
v
o
N
a
k
n
a
v
o
J
:
)
2
1
,
3
.
p
p
(
y
h
p
a
r
g
o
t
o
h
P
s
n
o
i
t
a
c
i
n
u
m
m
o
C
l
i
a
t
e
v
o
D
,
k
i
o
t
S
d
e
T
:
l
a
i
r
o
t
i
d
E
o
g
a
c
i
h
C
,
n
g
i
s
e
D
n
a
m
l
e
d
E
:
n
g
i
s
e
D
JBT Corporation
200 East Randolph Drive
Suite 6600
Chicago, Illinois 60601
www.jbtcorporation.com
2008 Annual Report
J
B
T
C
o
r
p
o
r
a
t
i
o
n
2
0
0
8
A
n
n
u
a
l
R
e
p
o
r
t
w
chicken nuggets cooked.
680,000
186,000
5,500
cans of ready meals sterilized.
airline passengers boarded.
ALL IN ONE HOUR’S WORK.