Elevate
JBT Corporation
2017 Annual Report
Elevate
life.
All over the world,
people need to eat.
JBT is there.
If you ate or drank
something today,
there’s a good
chance that JBT
technology played
a critical role in its
preparation.
John Bean Technologies
Corporation (JBT) is
a leading global
technology provider.
We develop, manufacture
and service solutions
for high-value segments
of the food production
industry with a focus on
proteins, liquid foods and
automated systems.
JBT | 2017 Annual Report
Elevate
performance.
The opportunity for
growth is real.
JBT is just getting started.
2
We are well
positioned and
executing strongly in
a global marketplace
where demand
trends for higher-
quality foods are
robust and growing.
Through our Elevate
strategy, we are
accelerating growth
and improving
margins through a
clear focus on four key
areas: new product
development, recurring
revenue, organic
growth/effi ciency, and
acquisitions – with
signifi cant potential
in front of us.
3
Pictured from left to right: Theresa Pointer, Ralf Ludwig, Thomas Giacomini and Thierno Balde — JBT Facility, Kingston, New York
2017: A Strong Start for the Elevate Strategy
(in millions, except EPS)
2016
2017
Increase
Revenue
$ 1,350.5
$ 1,635.1
21%
Adjusted EBITDA*
$
154.2
$
199.2
29%
Adjusted Diluted Earnings Per
Share from Continuing Operations*
$
2.56
$
3.10
21%
*
Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) and Diluted Earnings
Per Share (EPS) fi gures above are adjusted to remove the effect of our restructuring costs
in 2016 and 2017, as well as the effect from the new tax law in 2017 on EPS. See page 30 of the
attached Form 10-K report for a reconciliation from GAAP to adjusted numbers.
4
Dear Fellow Stockholders:
2017 was a very encouraging start
for our Elevate strategy. We are
well on our way to achieving the
Elevate framework objectives,
and we expect to see continued
progress in 2018 and beyond.
JBT’s Elevate strategy, year one
We delivered strong performance across the company in the
fi rst year of our Elevate strategy, focusing on new product
development, recurring revenue, organic growth and effi ciency,
and acquisitions to drive profi t and long-term growth. We met
or surpassed many of the objectives for 2017 and are on track
to meet our Elevate framework for 2019.
2017: Another solid year for JBT
Through the Elevate plan and its predecessor Next Level strategy,
we have built a One JBT culture, improved our ability to operate
profi tably, expanded our capabilities and increased our growth
focus over the past four-plus years. Our 2017 fi nancial results are
a direct refl ection of this work.
JBT revenues for the year were $1.6 billion, an increase of
21% over the $1.3 billion we reached in 2016. We again posted
improvements in segment organic operating profi t and margins
and delivered a strong 29% increase in adjusted EBITDA
versus 2016.
JBT’s FoodTech and AeroTech segments both had a great 2017.
Full-year Food revenues were up by 26% year over year, with an
operating profi t increase of 23% over last year. Aero continued
its trajectory of strong top- and bottom-line growth, with full-year
revenues and segment operating profi t that surpassed 2016
performance by 10% and 12% respectively.
Elevating JBT growth capacity
Acquisitions are an important part of our strategy to elevate
JBT performance. Strategic additions to our portfolio of
businesses do more than increase revenue – they broaden and
deepen our capacity to offer value-creating, integrated solutions
to our customers.
JBT completed three acquisitions in 2017: Avure, a leading
provider of high-pressure cold processing (HPP) technology;
PLF International, a global leader in powder fi lling systems; and
Aircraft Maintenance Support Services (AMSS), a U.K.-based
manufacturer of military aviation equipment. All three of these
acquisitions expand our capabilities and offer each business
increased growth opportunities through our global sales force
and customer relationships.
JBT | 2017 Annual Report
We’re particularly excited about adding HPP to our offerings.
Because it is a cold pasteurization process, HPP enhances food
safety and quality without heat or artifi cial preservatives, leaving
fl avor and nutritional value intact as it extends shelf life. With
consumer preferences trending toward clean-label, preservative-
free foods, we expect the current rapid market adoption of this
innovative process to continue.
JBT also elevated its fi nancial capacity through a successful
public equity offering in 2017. We used a portion of the net
proceeds to pay down the revolving credit facility, strengthening
our balance sheet for future acquisitions and growth investments.
As we grew our business and fi nancial capacity, JBT also
increased the capacity of the executive management team.
We created new executive positions to oversee our liquid foods
and protein focus areas, expanding the team to drive future
opportunities for our food business to continue its growth in
scope and scale.
Elevating long-term business performance
and investment value
JBT’s fi nancial performance is demonstrating our ongoing
ability to expand margins. We see margin improvement as a
fundamental component of durable shareholder value creation,
the beginning of a virtuous circle. We reinvest a portion of
our margin improvement, driving growth and generating returns
that we continue to invest back in the business to sustain an
ongoing cycle of further growth and returns.
I am highly committed to our virtuous circle, which will allow us
to grow JBT sustainably for many years. I’m encouraged by
the progress made in the fi rst year of our Elevate strategy and
see meaningful opportunities looking forward. We have identifi ed
and are focused on signifi cant actions to improve the effi ciency
of our operations, expand recurring revenue, increase our rate of
organic growth and build our capabilities through acquisition.
Positive long-term global macroeconomic trends favor JBT’s
businesses, and we continue to strengthen our customer
relationships, teams, products and service to take advantage
of these trends. We are excited at the potential ahead—
JBT is well positioned for 2018 and beyond.
Sincerely,
Thomas W. Giacomini
Chairman of the Board,
President and Chief Executive Offi cer
JBT Corporation
5
JBT | 2017 Annual Report
Elevate strategy
Four key focus areas to drive consistent, profi table long-term growth
accelerate
grow
execute
advance
Accelerate New
Product
Development
Develop comprehensive
solutions that enhance
customer profi tability
Grow Recurring
Revenue
Capitalize on an
extensive installed
base to strengthen
customer relationships
Execute Impact
Initiatives
Pursue selected
organic growth and
effi ciency initiatives
that move the needle
Advance Our
Disciplined
Acquisition Program
Continue to grow through
a highly strategic, metrics-
driven M&A approach
6
JBT | 2017 Annual Report
Elevate framework
Elevating food equipment solutions leadership, capability and performance
Goals Each Year, Through 2019:
3–5%
Annualized Organic
Revenue Growth
6–7%
Annual Revenue Growth
Through Acquisition
~15%
Earnings Per Share (EPS)
Growth
2017 results:
8%
Organic
Revenue Growth
Goals by 2019:
13%
Revenue Growth
Through Acquisition
21%
Earnings Per Share (EPS)
Growth
$1.7-$1.8B
Total Revenue
11%+
EBIT Margin
~15%
Return on Invested
Capital (ROIC)
7
JBT | 2017 Annual Report
Elevate value
THE JBT V IRTUOUS C IRCLE O F
DUR A B LE VA LUE CRE ATI O N
margins
returns
Durable
Value
reinvest
growth
At JBT, margins drive durable shareholder
value creation and company sustainability
in a virtuous circle. We reinvest a portion of
our margin expansion in growth initiatives
that create customer value and drive further
organic growth, generating strong returns.
And the cycle continues.
8
NE W PRO DUCTS
DSI™: Making a Great
Product Better
JBT’s advanced DSI system uses vision
technology and software to maximize
productivity and yield by automating labor-
intensive protein portioning processes. DSI
uses ultrathin high-velocity water streams
to make more than 60 million cuts a day for
JBT poultry customers. The latest model, the
DSI 800 S, offers a multitude of updates to
improve this already industry-leading product.
JBT | 2017 Annual Report
Our focus on creating value for customers
ultimately delivers value to shareholders.
NE W PRO DUCTS
HPP: Fresher Under Pressure
JBT high pressure processing (HPP)
is an advanced food technology
that eliminates the need for heat
pasteurization or artifi cial preservatives.
HPP uses cool water at high pressures
to help neutralize pathogens without
altering food taste, texture or quality,
and can double or even triple shelf life.
The process is extremely versatile,
effective in beverages, proteins, salsa and
guacamole, fruits and vegetables, dairy,
grains and much more.
NE W PRO DUCTS / RECURRING RE V ENUE
iOPS™: Relationship-Building
Technology
JBT is beginning early-stage implementation
of its new iOPS technology, which uses data
collection and advanced algorithms to automate
device monitoring, customer process analysis
and fault notifi cation on JBT equipment. iOPS
leverages our deep process knowledge and
technical expertise to reduce downtime and
cost of ownership, and reduces the need for
customers to monitor equipment, freeing them
for more valuable activities.
9
JBT | 2017 Annual Report
We’re executing the Elevate strategy to
realize opportunities for accelerated growth
and continuous improvement.
O RG A NIC GROW TH DRI V ERS
Asia: Strong Growth
and Potential
With an exploding middle class, China
and other Asian countries represent a key
growth market for food production. Growing
household incomes are driving increased
consumption of higher-quality foods,
including proteins and liquid foods, and JBT is
there. We have tailored many of our products
to the market, and our Technology Center
in Kunshan, China, is helping us build closer
relationships with local JBT customers and
win new ones in the region.
90% of growth in the world’s
middle class—expected
to be 160 million people
per year by 2024—
will come from Asia.1
O RG A NIC GROW TH DRI V ERS
Automation: AGVs and More
Tight labor availability is one of the forces
driving increased demand for automation
by industrial customers worldwide. At JBT,
we’re meeting the need with solutions that
include expanded use of our line of automated
guided vehicles (AGVs) for functions such
as repetitive forklift work, and new food
equipment technologies that automate
traditionally manual roles in food production
facilities for next-level speed, accuracy, food
safety and process productivity.
10
1 Brookings Global Economy & Development Working Paper 100, February 2017
JBT | 2017 Annual Report
And we see meaningful opportunities ahead.
GROW ING THROUGH AC QUISITIO N
M&A: Active, Strategic
Expansion
JBT continued to add and expand capability
through acquisitions in 2017. Our approach is
disciplined and strategic, aimed primarily at
fi lling gaps to increase JBT’s presence in the
food value chain in order to bolster our ability to
provide integrated, higher-value solutions.
+6
six acquisitions in
24 months
THREE ACQUISITIONS COMPLETED IN 2017
» Avure adds advanced HPP food preservative technology
» PLF International brings powder fi lling capability to JBT
» AMSS strengthens Aero presence in military markets
11
Peter Monte at JBT Facility,
Kingston, New York
M OV ING THE NEEDLE
RCI: A Culture of Improvement
JBT’s Relentless Continuous Improvement
(RCI) is not a program. It’s a cultural
transformation. RCI drives customer
satisfaction and business results by guiding
a continuous improvement process in
everything we do. RCI impacts quality,
delivery, cost and safety – and mobilizes
the most important driver of the Elevate
strategy – people.
JBT 2017 Board of Directors
Pictured (left to right):
JAMES M. RINGLER
C. MAURY DEVINE
Has served as Chairman of Teradata Corporation since 2007;
previously held senior management positions with Illinois Tool
Works, Inc., Premark International, Inc., White Consolidated
Industries and The Tappan Company; currently a Board
Member of TechnipFMC, DowDuPont Inc. and Autoliv, Inc.
POLLY B. KAWALEK
Served as President of PepsiCo’s Quaker Foods Division
from 2002 to 2004; previously held various positions for 25
years within Quaker Oats; currently a Board Member of Elkay
Manufacturing Company.
ALAN D. FELDMAN
Served as the President and Chief Executive Offi cer of Midas,
Inc. from 2003 to 2012 and as its Chairman from 2006 to
2012; previously held senior management positions within
McDonald’s and PepsiCo; currently a Board Member of Foot
Locker, Inc. and GNC Holdings, Inc.
THOMAS W. GIACOMINI
Became the President and Chief Executive Offi cer of JBT
Corporation as well as a member of the JBT Board of
Directors in September 2013. In May 2014, Mr. Giacomini was
elected Chairman of the Board. Prior to joining JBT, served
as Vice President of Dover Corporation and the President
and Chief Executive Offi cer of Dover Engineered Systems.
Previously, served as President and Chief Executive Offi cer
of Dover Industrial Products and President of Dover’s
Material Handling Platform. Joined Dover in 2003 following
its acquisition of Warn Industries. During 12 year tenure at
Warn Industries held a variety of leadership roles including
President and Chief Operating Offi cer. Currently a Board
Member of MSA Safety Incorporated.
Served in various positions within Exxon Mobil
Corporation from 1988 to 2000 including
President and Managing Director of Exxon Mobil
Norway and Secretary of Mobil Corporation;
previously held positions within the U.S.
Government; currently a Board Member of
Valeo and Conoco Phillips.
EDWARD L. DOHENY
Was named President and Chief Executive Offi cer
of Sealed Air Corporation effective January 1,
2018. Previously was President and Chief
Executive Offi cer of Joy Global, Inc. and served
as an Executive Vice President of Joy Global, Inc.
and President and Chief Operating Offi cer of Joy
Mining Machinery since 2006; prior to joining
Joy Global, Mr. Doheny spent 21 years with
Ingersoll-Rand Corporation, where he held a
variety of senior executive positions domestically
and internationally.
JAMES E. GOODWIN
Served as Chairman and Chief Executive Offi cer
of UAL Corporation and United Airlines from
1999 to 2001; currently a Board Member of AAR
Corporation and Federal Signal Corporation.
JBT | 2017 Annual Report
JBT: Committed
to growing
the right way.
At JBT, we are
committed to sustainable
growth, with a focus
on environmentally
responsible, energy-
effi cient operations – and,
through our products
and service, contributing
meaningfully to customer
sustainability – while
delivering higher-quality
foods as the world grows.
With a culture of
continuous improvement,
JBT is dedicated to
maintaining a safe,
diverse and professional
workplace and to
upholding the highest
standards of good
governance and
corporate citizenship to
benefi t all stakeholders.
JBT is proud to serve a
higher purpose: to help
feed the world and
make better use of its
precious resources.
12
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2017
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)
70 West Madison Street
Chicago, IL 60602
(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
Common Stock, $0.01 par value
Preferred Share Purchase Rights
Name of Exchange on Which Registered
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
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
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes
No
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File
required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files). Yes
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, smaller reporting company, or an
emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth
company" in Rule 12b-2 of the Exchange Act.
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
No
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: $3,034,429,468.
At February 26, 2018, there were 31,577,182 shares of the registrant’s common stock outstanding.
TABLE OF CONTENTS
Page
PART I
Item 1. Business
Item 1A. Risk Factors
Item 1B. Unresolved Staff Comments
Item 2. Properties
Item 3. Legal Proceedings
Item 4. Mine Safety Disclosures
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
Item 8. Financial Statements and Supplementary Data
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
Item 16. Form 10-K Summary
Signatures
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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. All statements that are not historical facts, including statements about our beliefs or expectations
regarding future performance, strategic plans, income, earnings, cash flows, restructuring and optimization plans and related cost
savings, operating improvements, and covenant compliance 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. There are factors that could cause our actual results to differ materially from these forward-
looking statements, including but 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,” and the following factors:
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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;
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;
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;
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; and
Availability and access to financial and other resources.
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.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant’s Proxy Statement for the 2018 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.
3
PART I
Unless otherwise specified or indicated by the context, JBT Corporation, JBT, we, us, our and the Company refer to John Bean
Technologies Corporation and its subsidiaries.
ITEM 1.
BUSINESS
We are a leading global technology solutions provider to high-value segments of the food and beverage industry with focus on
proteins, liquid foods and automated system solutions. JBT designs, produces and services sophisticated products and systems for
multi-national and regional customers through its FoodTech segment. JBT also sells critical equipment and services to domestic
and international air transportation customers through its AeroTech segment.
The product offerings of our FoodTech businesses include:
• Protein. Providing comprehensive solutions to our customers, our Protein technology offerings include chilling,
mixing/grinding, injecting, marinating, tumbling, portioning, packaging, coating, frying, freezing, weighing, X-ray
food inspection, and packaging systems for poultry, beef, pork and seafood, as well as ready-to-eat meals, fruits,
vegetables, dairy, and bakery products.
• Liquid Foods. Our Liquid Foods portfolio includes fruit and juice solutions that extract, concentrate and aseptically
process citrus, tomato and other fruits, vegetables, and juices. It also includes in-container solutions for the filling,
closing and preservation of fruits, vegetables, soups, sauces, dairy, and pet food products as well as ready-to-eat
meals in a wide variety of modern packages. Strategic acquisitions completed in 2017 added significant capabilities
in the powder filling and high pressure processing segments to our product portfolio.
• Automated Systems. We also provide stand-alone, fully-integrated, and dual-mode robotic automated guided vehicle
systems for material movement requirements with a wide variety of applications including manufacturing and
warehouse facilities.
JBT AeroTech markets its solutions and services to domestic and international airport authorities, passenger airlines, airfreight and
ground handling companies, military forces and defense contractors. The product offerings of our AeroTech businesses include:
• Mobile Equipment. JBT AeroTech’s portfolio of mobile air transportation equipment includes commercial and
military cargo loading, aircraft deicing, aircraft towing, and aircraft ground power and cooling systems.
• Fixed Equipment. JBT AeroTech provides gate equipment for passenger boarding.
• Airport Services. JBT AeroTech also maintains the maintenance of airport equipment, systems, and facilities.
For financial information about our business segments see Note 16. Business Segments of our Consolidated Financial Statements
included in Item 8. Financial Statements and Supplementary Data of this Annual Report on Form 10-K.
We were originally incorporated as Frigoscandia, Inc. in Delaware in May 1994. Our principal executive offices are located at 70
West Madison, Suite 4400, Chicago, Illinois 60602.
BUSINESS SEGMENTS
JBT FoodTech
JBT FoodTech supplies both customized industrial and turnkey solutions and services used in the food and beverage industry. We
design, manufacture and service technologically sophisticated food processing systems for the preparation of meat, seafood and
poultry products, ready-to-eat meals, shelf stable packaged foods, bakery products, juice and dairy products, and fruit and
vegetable products.
We believe our success is derived from our continued innovation, applying our differentiated and proprietary technologies to meet
our customers’ food processing needs. We continually strive to improve our existing solutions and develop new solutions by
working closely with our customers to meet their evolving needs.
Our historically strong position in the markets we serve has provided us with a large installed base of systems and equipment. We
deliver industrial capacity equipment which includes freezers, citrus juice extractors, preservation systems, coating systems and
4
packaging systems. The installed base of our equipment provides a stream of recurring revenue from aftermarket products, parts,
services, and lease arrangements. Recurring revenue accounted for 41.5% of our FoodTech total revenue in 2017. 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 also provide stand-alone and fully integrated
automated guided vehicle systems for repetitive material handling requirements, for example in manufacturing and warehouse
facilities.
We have operations strategically positioned around the world to serve our existing JBT FoodTech equipment base located in more
than 100 countries. Our principal production facilities are located in the United States (Arkansas, California, Florida, New York,
North Carolina, Ohio, and Wisconsin), Brazil, Belgium, Germany, Italy, Sweden, the Netherlands, the United Kingdom, South
Africa and China. 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 testing of their current applications through eleven
technical centers located in the United States (California, Florida, and Ohio), Mexico, Brazil, Belgium, Italy, Spain, Sweden, the
Netherlands 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.
Protein. Our fully integrated processing lines often span from the initial point of entry of raw products through further processing.
Our Protein systems include Wolf-Tec Polar Dissolver brine preparation, IMAX injection, Polar Massager marination, Polar Flex
Carve maceration, TMAX tenderization, TVI portion cutting systems, the DSI™ waterjet portioners, slicers and attribute scanner/
sorters; the Stein™ coating and seasoning applicators, teflon coated Formcook Contact and Combi Cookers, THERMoFIN®
fryers, GYRoCOMPACT® spiral ovens, JSO Jet Stream® ovens; Double D™ Revoband™ linear ovens and cooking systems;
Novus X-ray systems; C.A.T. FATCAT chillers, ULTRACAT injectors, scales and weighing systems, GLACIERCAT freezers and
Tipper Tie Clip packaging systems. Although our solutions are primarily used in the processing of meat and poultry (including
nuggets, strips, and wings), we also provide systems that portion, coat or cook other food products ranging from breads and pizzas,
seafood, and ready-to-eat meals to pet food. Through our acquisition of Tipper Tie, Inc. we also serve industrial, non-food
customers, primarily in the adhesives, glues, silicone and industrial explosives industries.
With our first commercial food processing developed in the 1960s, we remain a leading supplier of freezing and chilling solutions
to the food processing industry. We design, assemble, test, and install industry-leading technologies under the Frigoscandia®
brand, which include the GYRoCOMPACT® self-stacking spiral, the FLoFREEZE® individual quick freezing (IQF) system, and
the ADVANTEC™ linear/impingement freezing system, as well as flat product and contact freezers, chillers and proofers. We also
offer a structure-supported Northfield SuperTRAK® spiral freezer for high volume, large packaged products. Our freezers are
designed to meet the most stringent demands for quality, economy, food safety and user-friendliness. Our industrial freezers can be
found in plants processing food products ranging from meat, seafood, and poultry to bakery products and ready-to-eat meals, fruits,
vegetables, and dairy products.
Protein technology offerings accounted for 34% of our total revenue in 2017.
Liquid Foods. We offer comprehensive processing lines from primary juice extraction through end of line packaging. In the
primary space, we supply industrial citrus, tropical and temperate fruit processing equipment. Our citrus processing solutions
include citrus extractors, finishers, pulp systems, evaporators, and citrus ingredient recovery systems as well as aseptic systems
(including sterilizers, fillers, and controls) integrated with bulk aseptic storage systems for not-from-concentrate orange juice. Our
READYGo™ family of skid-mounted products includes solutions for aseptic sterilization and bulk filling, as well as ingredients
and by-products recovery and clean-up systems. In addition to our high capacity industrial extractors, we also offer point of use
Fresh’n Squeeze® produce juicers. These juicers are used around the world in hotels, restaurants, coffee shops, grocery stores,
convenience stores, quick service restaurants, and juice bars.
We are among the leading worldwide suppliers of fruit, vegetable, and juice processing equipment and aseptic sterilization and
bulk filling systems. Our fruit, vegetable, and juice processing lines are comprised of extraction, finishing, heating and mixing
equipment, enzyme inactivators, evaporators, flash coolers, sterilizers, and aseptic fillers. Our equipment is primarily sold as an
integrated processing line, but can also satisfy a specific need within a line. Our tomato processing lines are installed with
processors throughout the world’s key tomato growing regions and produce a range of finished tomato products including tomato
paste, concentrates, peeled tomato products, diced tomatoes, salsa, pizza sauce, ketchup, and pureed and crushed tomatoes. Our
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aseptic processing lines are used in the bulk processing of a wide range of temperate and tropical fruits into juices, particulates,
purees, and concentrates. These fruit products are used as ingredients for dairy products (yogurts, smoothies, flavored milk, and ice
cream), bakery products, and fruit-based beverages.
We provide technology solutions and products to extend the life, improve the appearance and preserve the taste of fresh fruits and
vegetables. Once protected, fresh fruits and vegetables can be individually labeled by our fast and efficient produce labeling
systems. We also provide an integrated equipment and aftermarket service program, including the patented Bin Scrubber System,
the Single Pass Dryer and Smart Dryer System, and additional ancillary produce processing technologies.
We are a global supplier of fully integrated industrial preservation systems that enable production of shelf stable foods in a wide
variety of flexible, rigid, and semi-rigid packages. These integrated solutions for the processing of shelf-stable food and liquid
products include a line of continuous hydrostatic sterilizers, our continuous rotary sterilizers, Steam Water Spray static and
SuperAgi™ batch retorts, XL-series fillers, SeamTec™ and X-series closers, material handling systems and LOG-TEC® thermal
process controls. We are a recognized U.S. Department of Agriculture (USDA) and Food and Drug Administration (FDA) Food
Process Authority and offer the largest selection of preservation products in the industry. We offer consulting services to help
design food production processes in accordance with USDA and FDA's stringent requirements. Our automated batch retorts can
handle an array of flexible and rigid packages such as plastic pouches, cartons, glass and cans. Our solutions also include
specialized material handling systems to automate the handling and tracking of processed and unprocessed containers.
Additionally, we offer modeling software as well as thermal processing controls that help our customers optimize and track their
cooking processes to allow real time modifications in the case of process deviations.
In 2017, we acquired the Avure Technologies and PLF International businesses, adding capabilities in the high pressure processing
space for a broad array of market segments, and powdered product filling and handling systems, respectively.
Liquid Foods solution offerings accounted for 34% of our total revenue in 2017.
Automated Systems. We are a leading global supplier of robotic automated guided vehicle systems for material movement in
manufacturing and warehouse facilities. We provide engineering services and simulations to evaluate the material handling
requirements, standard and custom automated guided vehicle hardware and software, and stand-alone (JayBoT®) and fully-
integrated system hardware and software for a scalable solution that can be applied individually or across the entire customer
enterprise.
Aftermarket Products, Consumables, Parts, and Services. We provide aftermarket products, parts, and services for all of our
integrated food processing systems and equipment. We provide retrofits and refurbishments to accommodate changing operational
requirements, and we supply our own brand of food grade lubricants and cleaners designed specifically for our equipment. We
supply packaging material components for our clip packaging customers in the form of metal clips and hanging loops. We also
provide continuous, proactive service to our customers including the fulfillment of preventative maintenance agreements,
consulting services such as water treatment, corrosion monitoring control, food safety and process auditing, and the expertise of
on-site technical personnel. In addition to helping our customers reduce their operating costs and improve efficiencies, our
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, provide us with a strong base for
growing recurring revenue. Sales of aftermarket products, parts and services are consolidated within the total revenue of their
related JBT FoodTech businesses. As part of our aftermarket program we also offer technology for enterprise asset management
and real-time operations monitoring with our patented iOPS™ suite.
JBT AeroTech
JBT AeroTech supplies customized solutions and services used for applications in the air transportation industry, including airport
authorities, airlines, airfreight, ground handling companies, the military and defense contractors. 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 well established customer base.
There is a significant installed base of our airport and airline equipment around the world. We are a leading supplier of cargo
loaders, passenger boarding bridges, and aircraft deicers. We have also sold a significant number of mobile passenger steps, cargo
transporters, and tow tractors that are operating at airports around the world. This installed base provides a stream of recurring
revenue from aftermarket parts, products, and services. Recurring revenue accounted for 36% of AeroTech total revenue in 2017.
Our installed base also offers continuous access to customer feedback for improvements and new product development.
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JBT AeroTech products have been delivered to more than 100 countries. To support this equipment, we have operations located
throughout the world. Our principal production facilities are located in the United States (Florida and Utah), China, Mexico, the
United Kingdom and Spain. We also have sales and service offices located in nine countries and collaborative relationships with
independent sales representatives, distributors, and service providers in over thirty additional countries.
Solutions, Products, and Services
We offer a broad portfolio of systems, equipment, and services to airport authorities, airlines, air cargo handlers, ground handling
companies, military customers and defense contractors.
Mobile Equipment. We supply air cargo loaders, aircraft deicers, mobile power and environmental air conditioning systems, and
other mobile ground support equipment to commercial air passenger and freight carriers, ground handlers, military customers and
defense contractors.
Our Commander™ and Ranger™ loaders service containerized narrow-body and wide-body jet aircraft and are available in a wide
range of configurations. Our Tempest™ aircraft deicers offer a broad range of options that can be configured to meet customers’
specific and regional need to provide efficient aircraft deicing while on the tarmac. We manufacture and supply a full array of B-
series conventional aircraft tow tractors for moving aircraft without consumption of jet fuel, mobile passenger steps for tarmac
boarding and deplaning, belt loaders, and self-propelled transporters for pallet and container handling.
Airlines and ground handling companies face increased pressure to reduce 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 electric powered product offering includes Commander cargo loaders, cargo transporters,
conventional aircraft pushback tractors, belt loaders, and passenger boarding steps. We also offer electric retrofit kits for our
existing delivered base of diesel powered Commander cargo loaders.
We manufacture a variety of sizes and configurations of auxiliary equipment including 400 Hertz ground power and
preconditioned air units that supply aircraft requirements for electrical power and cooled air circulation for the environmental
control system (air-conditioning) and main engine starting during ground operations.
Within mobile equipment, we also have a portfolio of military equipment, including a wide range of cargo loaders, ground power
air conditioning, aircraft air compressors, air start, and bleed air units for the U.S. Air Force, the U.S. Navy, international military
forces, airframe manufacturers and defense contractors. Mobile equipment technology offerings accounted for 12% of our total
revenue in 2017.
In 2017, we acquired Aircraft Maintenance Support Services, Ltd. (AMSS), a manufacturer of military and commercial aviation
equipment that enhances our offerings and expands our access to foreign customers with our existing products.
Fixed Equipment. We supply airport gate equipment. Our Jetway® passenger boarding bridges have set the standard for airlines
and airport authorities to move passengers between the terminal building and the aircraft since 1959. Our passenger boarding
bridges support a range of aircraft types, from regional aircraft up to the Airbus A380. Within fixed equipment, we also supply
point-of-use and mobile 400 Hertz and pre-conditioned air units that enable our customers to reduce fuel consumption and
emissions by minimizing requirements to use auxiliary power units or aircraft engines while parked at the gate, as well as remote
gate monitoring equipment to improve equipment availability and reduce turn times. We also offer aircraft in-ground service pits to
provide utility access on airport ramps, hangars and remote parking areas. Fixed equipment accounted for 10% of our total revenue
in 2017.
Airport Services. We are an industry provider for the design and management of technical support programs supplied to airlines
and airports at over 20 major locations most of which are in the continental United States. Our specialty services extend to
expertise in the development of sustainable and value orientated operation, maintenance, and repair of sophisticated in-line
baggage handling systems, gate equipment, facilities, and ground support equipment.
Aftermarket Products, Parts, and Services. We provide aftermarket products, parts, and services for our installed base of JBT
AeroTech equipment. We also provide retrofits to accommodate changing operational requirements and continuous, proactive
service, including, in some cases, on-site technical 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
7
requirements and strategic initiatives through our strong customer relations. Sales of aftermarket products, parts and services are
consolidated within the total revenue of their associated JBT AeroTech businesses.
In support of our focus and strategy of meeting our customers’ needs, we have developed a global parts service network to enable
us to market with confidence our ability 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.
OTHER BUSINESS INFORMATION RELEVANT TO ALL OF OUR BUSINESS SEGMENTS
Order Backlog
For information regarding order backlog, refer to the section entitled “Inbound Orders and Order Backlog” in Item 7.
Management's Discussion and Analysis of Financial Condition and Results of Operations 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/or 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.
For additional financial information about our research and development activities, refer to Note 1. Summary of Significant
Accounting Policies and Note 16. Business Segments to our Consolidated Financial Statements included in Item 8. Financial
Statements and Supplementary Data of this Annual Report on Form 10-K.
Sales and Marketing
We sell and market our products and services predominantly through a 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 programs to inform and educate customers, the media, industry analysts, and academia through
targeted newsletters, our web site, seminars, trade shows, user groups, and conferences.
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 725 United States and foreign issued patents and have approximately 240 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 820 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 large multinational companies as well as a variety of local and regional
companies, which typically are focused on a specific application, technology or geographical area.
We compete by leveraging our industry expertise to provide differentiated and proprietary technology, integrated systems, high
product quality and reliability, and comprehensive aftermarket service. We strive to provide our customers with equipment that
delivers a lower total cost of ownership, distinguishing ourselves by providing excellent equipment uptime and increased yields
with improved final product quality.
JBT FoodTech’s major competitors include Advanced Equipment Inc.; Alit SRL; Allpax Products, Inc.; Atlas Pacific Engineering
Company, Inc.; Barry-Wehmiller Companies, Inc.; Brown International Corp.; CFT S.p.A.; Egemin Automation Inc.; Elettric 80
S.p.a. Italia; Ferrum; Food Processing Equipment Company; FPS Process Foods Solutions; GEA Group AG; Marel hf.;
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METALQUIMIA, S.A.; Mettler-Toledo International, Inc.; Morris & Associates, Inc.; MYCOM; Middleby Corporation; Nantong
Freezing Equipment Company, Ltd.; Poly-clip system GmbH & Co. KG; Provisur Technologies, Inc.; Scanico A/S; Shibuya
Corporation; Starfrost; Statco Engineering; Steriflow SAS.; Tetra Laval; and Tecnopool S.p.A.
JBT AeroTech’s major competitors include Cavotec SA; Elite Line Services Inc.; ERMC; Global Ground Support LLC; Goldhofer
AG; Illinois Tool Works Inc.; Mallaghan Engineering Ltd; Shenzhen CIMC - Tianda Airport Support CO. LTD.;
ThyssenKrupp AG; TLD Group SAS; Trepel Airport Equipment GmbH; Textron Inc.; TwistAero; Vanderlande Industries B.V.;
Vestergaard Company A/S; and Weihai Guangtai Airport Equipment Co., LTD.
Employees
We have approximately 5,800 employees with approximately 3,600 located in the United States. Approximately 7% of our
employees in the United States are represented by two collective bargaining agreements.
Outside the United States, we enter 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 62% 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.
Government Contracts
We supply equipment and logistics support to the U.S. Department of Defense and international forces. The amount of equipment
and parts supplied to 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 and defense contractors 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,
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.
Many 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 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.
We are also subject to laws and regulations related to conflict minerals, export compliance, local hiring and anti-corruption, and we
have adopted policies, procedures and employee training programs that are designed to facilitate compliance with those laws and
regulations.
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Financial Information about Geographic Areas
A significant portion of our consolidated revenue is generated in markets outside of the United States. For financial information
about geographic areas see Note 16. Business Segments of our Consolidated Financial Statements in Item 8. Financial Statements
and Supplementary Data of this Annual Report on Form 10-K.
Available Information
All periodic and current reports, registration statements, and other filings that we are required to make 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 1934,
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.jbtc.com, under “Investor Relations – 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.jbtc.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 OF THE REGISTRANT
The executive officers of JBT Corporation, together with the offices currently held by them, their business experience and their
ages as of February 19, 2018, are as follows:
Name
Thomas W. Giacomini
Brian A. Deck
Paul Sternlieb
Carlos Fernandez
David C. Burdakin
Steven R. Smith
James L. Marvin
Jason T. Clayton
Debarshi Sengupta
Megan J. Rattigan
Age Office
52
Chairman, President and Chief Executive Officer
49
45
48
62
57
57
41
41
49
Executive Vice President and Chief Financial Officer
Executive Vice President and President, Protein
Executive Vice President and President, Liquid Foods
Executive Vice President and President, JBT AeroTech
Executive Vice President
Executive Vice President, General Counsel and Secretary
Executive Vice President, Human Resources
Executive Vice President, Business Development
Vice President and Controller
THOMAS W. GIACOMINI became the President and Chief Executive Officer of JBT Corporation as well as a member of the JBT
Board of Directors in September 2013. In May 2014, Mr. Giacomini was elected Chairman of the Board. Prior to joining JBT, he
served as Vice President (since February 2008) of Dover Corporation, a diversified global manufacturer, and President and Chief
Executive Officer (since November 2011) of Dover Engineered Systems. Prior to serving in these roles, Mr. Giacomini served as
President (from April 2009 to November 2011) and Chief Executive Officer (from July 2009 to November 2011) of Dover
Industrial Products and President (from October 2007 to July 2009) of Dover's Material Handling Platform. Mr. Giacomini joined
Dover in 2003 following its acquisition of Warn Industries, an industrial manufacturer specializing in vehicle performance
enhancing equipment. During his 12 year tenure at Warn Industries he held a variety of leadership roles including President and
Chief Operating Officer. Prior to joining Warn Industries, Mr. Giacomini held various positions at TRW, Inc. Since June 2017, Mr.
Giacomini has served as a director of MSA Safety Incorporated, a global safety equipment manufacturer.
BRIAN A. DECK became the Vice President and Chief Financial Officer of JBT Corporation in February 2014. In May 2014, Mr.
Deck’s title changed to Executive Vice President and Chief Financial Officer, and he was appointed Treasurer. In December 2014,
Mr. Deck appointed a Treasurer and resigned from that position. Prior to joining JBT, he served as Chief Financial Officer (since
May 2011) of National Material L.P., a private diversified industrial holding company. Mr. Deck served as Vice President of
Finance and Treasury (from November 2007 to May 2011) and as Director, Corporate Financial Planning and Analysis (from
August 2005 to November 2007) of Ryerson Inc., a metals distributor and processor. Prior to his service with Ryerson, Mr. Deck
had increasing responsibilities with General Electric Capital, Bank One (now JPMorgan Chase & Co.), and Cole Taylor Bank.
PAUL STERNLIEB became the Executive Vice President and President, Protein in October 2017. Prior to joining JBT, he was
Group President, Global Cooking (since 2014) of Illinois Tool Works (ITW). Prior to ITW, he served as a Vice President and
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General Manager (2011 to 2014) for Danaher. Prior to that, he held management roles with H.J. Heinz Company and was a
consultant with McKinsey & Company leading consulting engagements for global food and beverage clients.
CARLOS FERNANDEZ became the Executive Vice President and President, Liquid Foods in August 2017. Previously, Mr.
Fernandez served as a Vice President of JBT (since 2014) and President, Liquid Foods (since 2016). He joined FMC Corporation
in 1996 as a Financial Analyst in Madrid, Spain. Since then Mr. Fernandez served in a variety of finance and general manager
roles with FMC Corporation and FMC Technologies, Inc., JBT’s previous parent company, as well as with JBT FoodTech,
including serving as the General Manager of Fruit and Juice Solutions from 2012 to 2014.
DAVID C. BURDAKIN became the Executive Vice President and President, JBT AeroTech in May 2014. Previously, Mr.
Burdakin was Vice President and Division Manager-JBT AeroTech beginning in January 2014. Prior to joining JBT, he worked as
an independent consultant and as Non-Executive Chairman of Mayline Corporation, a private equity owned industrial company
(2012 to 2013). Prior to Mayline, he served as President and Chief Executive Officer (2007 to 2012) of Paladin Brands, a leading
independent manufacturer of attachment tools for construction equipment including mobile aviation support equipment. Prior to
that, Mr. Burdakin progressed through various leadership roles at HNI Corporation (1993 to 2007), including seven years as
President of The HON Company, HNI's largest operating company. Prior to joining HNI, he held various positions at Illinois Tool
Works Inc. and Bendix Industrial Group.
STEVEN R. SMITH became the Vice President and Division Manager-JBT FoodTech in December 2013. In May 2014, Mr.
Smith’s title changed to Executive Vice President and Division President- JBT FoodTech. It was announced in August 2017 that
Mr. Smith's title would change to Executive Vice President, and would plan to retire in the 2nd quarter of 2018. Previously Mr.
Smith served as our Vice President and Division Manager-Food Processing Systems (since October 2011). Mr. Smith joined FMC
Corporation in 1989 as a Business Planner with FMC's Petroleum Equipment Group in Houston, Texas. Since then, he has served
in a variety of sales, marketing, and line management roles within FMC Corporation and FMC Technologies, Inc., JBT's previous
parent companies, as well as with JBT FoodTech, including most recently serving as the General Manager for the America's
Operations of FoodTech's Food Solutions and Services Division from 2003 to 2011.
JAMES L. MARVIN became our Executive Vice President and General Counsel in May 2014, and has served as Secretary since
July 2008. From July 2008 until May 2014, Mr. Marvin served as Deputy General Counsel and Secretary, acting as Division
Counsel for JBT AeroTech and managing corporate legal matters. Mr. Marvin joined FMC Technologies, Inc. in April 2003,
serving as Assistant General Counsel and Assistant Secretary, acting as Division Counsel for FMC Technologies’ Airport Systems
Division and managing corporate legal matters. Before joining FMC Technologies in 2003, Mr. Marvin served in the roles of Chief
Corporate Counsel and Division Counsel for Corporate Finance at Heller Financial, Inc., a publicly-traded middle-market financial
services business. Mr. Marvin was previously a partner with the Chicago-based law firm Katten Muchin Zavis, with a practice
focused in commercial financial transactions. Mr. Marvin was a corporate securities attorney with O’Connor Cavanagh Anderson
Westover Killingsworth & Beshears in Phoenix, Arizona.
JASON T. CLAYTON became our Executive Vice President, Human Resources in September 2016. Prior to joining us, Mr.
Clayton served as the Vice President, Human Resources for Signode Industrial Group LLC., From 2010 to 2015, Mr. Clayton
worked in various Human Resources roles with IDEX Corporation, most recently as Vice President, Human Resources. Mr.
Clayton worked for Pepsi Beverages Company/Pepsico from 2004 to 2010 in various positions, most recently as Director, Human
Resources, Chicagoland/Wisconsin Market Unit. Mr. Clayton worked for Newell Rubbermaid from 2001 to 2004, where he served
in various positions, most recently as Human Resources Manager, Sanford North America Division. Mr. Clayton worked for
Burlington Industries, Inc. from 2000 to 2001.
DEBARSHI SENGUPTA was named our Executive Vice President, Corporate Development in March 2016. Mr. Sengupta
assumed our Corporate Development portfolio in 2014 as Vice President, Corporate Development and Investor Relations. From
2011 to 2014, Mr. Sengupta led Investor Relations and Financial Planning and Analysis. Mr. Sengupta joined us in 2009 as a
Business Planner. From 2007 to 2009, Mr. Sengupta worked as a consumer & retail investment banker at Banc of America
Securities.
MEGAN J. RATTIGAN became a Vice President in August 2014 and has served as our Controller since December 2013.
Previously, Ms. Rattigan served as our Chief Accounting Officer (since November 2008) and Director of Financial Control (since
July 2008). Ms. Rattigan was FMC Technologies’ Manager of Financial Reporting and Accounting Research from April 2005 until
July 2008. Prior to that, Ms. Rattigan served as a consultant to FMC Technologies from January 2002 until April 2005. From July
1998 until December 2001, Ms. Rattigan was Director of Finance for Chart House Enterprises, Inc. Ms. Rattigan is a certified
public accountant and began her professional career in the Assurance practice of Ernst & Young LLP in 1992.
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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.
Our financial results are subject to fluctuations caused by many factors that could result in our failing to achieve anticipated
financial results and cause a drop in our stock price.
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 contractual terms and the number and size of orders in the capital
goods industries in which we compete vary significantly over time. The timing of our sales cycle from receipt of orders to shipment of
the products or provision of services can significantly impact our sales and income in any given fiscal 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 in any
given period and the resulting failure to meet such expectations could cause a drop in our stock price:
•
•
•
•
•
•
•
•
•
•
•
•
volatility in demand for our products and services, including volatility 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 conduct substantial business;
increases in commodity prices resulting in increased manufacturing costs, such as petroleum-based products, metals or
other raw materials we use in significant quantities;
supply chain interruptions;
changes in pricing policies resulting from competitive pressures, including 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;
changes in foreign currency rates;
seasonal fluctuations in buying patterns; and
future acquisitions and divestitures of technologies, products, and businesses.
Variability in the length of our sales cycles makes accurate estimation of our revenue in any single period difficult and can 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 during our selling process, and our current and
potential customers’ internal budgeting and approval process. Many of our sales are subject to an extended sales cycle. As a result, we
may expend significant effort and resources over a significant period of time in an attempt to obtain an order, but ultimately not obtain
the order, or obtain an order that is smaller than we anticipated. Revenue generated by any one of our customers may vary from
quarter to quarter, and a customer who places a large order in one quarter may generate significantly lower revenue in subsequent
quarters. Due to the length and uncertainty of our sales cycle, and the variability of orders from period to period, we believe that
quarter-to-quarter comparisons of our revenue and operating results may not be an accurate indicator of our short term or future
performance.
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We face risks associated with current and future acquisitions.
To achieve our strategic objectives, we have pursued and expect to continue to pursue expansion opportunities such as acquiring other
businesses or assets. Expanding through acquisitions involves risks such as:
•
•
•
•
•
•
•
•
•
the incurrence of additional debt to finance the acquisition or expansion;
additional liabilities (whether known or unknown), including environmental or pension liabilities of the acquired
business or assets;
risks and costs associated with integrating the acquired business or new facility into our operations;
the need to retain and assimilate key employees of the acquired business or assets;
unanticipated demands on our management, operational resources and financial and internal control systems;
unanticipated regulatory risks;
the risk of being denied the necessary licenses, permits and approvals from state, local and foreign governments, and the
costs and time associated with obtaining such licenses, permits and approvals;
risks that we do not achieve anticipated operating efficiencies, synergies and economies of scale; and
risks in retaining the existing customers and contracts of the acquired business or assets.
If we are unable to effectively integrate acquired businesses or newly formed operations, or if such acquired businesses underperform
relative to our expectations, such an expansion may have a material adverse effect on our business, financial position, and results of
operations.
Deterioration of economic conditions could adversely impact our business.
Our business may be adversely affected by changes in current or future national or global economic conditions, including lower
growth rates or recession, high unemployment, rising interest rates, limited availability of capital, decreases in consumer spending
rates, the availability and cost of energy, and the effect of government deficit reduction, sequestration, and other austerity measures
impacting the markets we serve. Any such changes could adversely affect the demand for our products or the cost and availability of
our required raw materials, which can have a material adverse effect on our financial results. Adverse national and global economic
conditions could, among other things:
• make it more difficult or costly for us to obtain necessary financing for our operations, our investments and our
acquisitions, or to refinance our debt;
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cause our lenders or other financial instrument counterparties to be unable to honor their commitments or otherwise
default under our financing arrangements;
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;
cause customers to forgo or postpone new purchases in favor of repairing existing equipment and machinery, and delay
or reduce preventative maintenance, thereby reducing our revenue and/or profits;
negatively impact our customers’ ability to raise pricing to counteract increased fuel, labor, and other costs, making it
less likely that they will expend the same capital and other resources on our equipment as they have in the past;
impair the financial condition of some of our suppliers thereby potentially increasing both the likelihood of our having to
renegotiate supply terms on terms that may not be as favorable to us and the risk of non-performance by suppliers;
negatively impact global demand for air transportation services as well as the food preparation industry, which could
result in a reduction of sales, operating income, and cash flows in our JBT AeroTech and JBT FoodTech segments;
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negatively affect the rates of expansion, consolidation, renovation, and equipment replacement within the air
transportation industry and within the food processing industry, which may adversely affect the results of operations of
our JBT AeroTech and JBT FoodTech segments; and
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impair the financial viability of our insurers.
Disruptions in the political, regulatory, economic and social conditions of the foreign countries in which we conduct business
could negatively affect our business, financial condition, and results of operations.
We operate manufacturing facilities in eleven countries other than the United States, the largest of which are located in Belgium,
China, Sweden, Brazil, Italy, Spain, United Kingdom, the Netherlands and Germany. Our international sales accounted for 40% of our
2017 revenue. Multiple factors relating to our international operations and to those particular countries in which we operate or seek to
expand our operations could have an adverse effect on our financial condition or results of operations. These factors include, among
others:
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economic downturns, inflationary and recessionary markets, including in capital and equity markets;
civil unrest, political instability, terrorist attacks, and wars;
nationalization, expropriation, or seizure of assets;
potentially burdensome taxation in other jurisdictions;
changes in the mix of our international business operations and revenue relative to our domestic operations, resulting in
increasing tax liabilities resulting from repatriation of income generated outside of the United States;
inability to repatriate income or capital;
foreign ownership restrictions;
export regulations that could erode profit margins or restrict exports, including import or export licensing regulations;
trade restrictions, trade protection measures, or price controls;
restrictions on operations, trade practices, trade partners, and investment decisions resulting from domestic and foreign
laws and regulations;
compliance with the U.S. Foreign Corrupt Practices Act and other similar laws;
burden and cost of complying with foreign laws, treaties, and technical standards and changes in those regulations;
transportation delays and interruptions; and
reductions in the availability of qualified personnel.
Changes to trade regulation, quotas, duties or tariffs, caused by the changing U.S. and geopolitical environments or otherwise, may
increase our costs or limit the amount of raw materials and products that we can import.
The current U.S. administration has voiced strong concerns about imports from countries that it perceives as engaging in unfair trade
practices, and may decide to impose import duties or other restrictions on products or raw materials sourced from those countries,
which may include China and other countries from which we import raw materials or in which we manufacture our products. Any
such duties or restrictions could have a material adverse effect on our business, results of operations or financial condition.
The result of the Referendum of the United Kingdom’s Membership in the European Union have created uncertainties that could
have negative effects on us.
The announcement of the Referendum of the United Kingdom’s (or the U.K.) Membership in the European Union (E.U.) (referred to
as Brexit), advising for the exit of the United Kingdom from the European Union, has resulted in significant volatility in global stock
markets and currency exchange rate fluctuations that resulted in the strengthening of the U.S. dollar against certain foreign currencies
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in which we conduct business. As described in Item 7A. Quantitative and Qualitative Disclosures About Market Risk - Foreign
Currency Exchange Rate Risk, we translate revenue denominated in foreign currency into U.S. dollars for our financial statements.
During periods of a strengthening dollar, our reported international revenue is reduced because foreign currencies translate into fewer
U.S. dollars.
The effects of Brexit will depend on any agreements the U.K. makes to retain access to E.U. markets either during a transitional period
or more permanently. The measures could potentially disrupt the markets we serve and may cause us to lose customers and employees.
In addition, Brexit could lead to legal uncertainty and potentially divergent national laws and regulations as the U.K. determines which
E.U. laws to replace or replicate. These uncertainties may cause our customers to closely monitor their costs and reduce their
spending budget on our products and services.
Any of these effects of Brexit, among others, could materially adversely affect our business, results of operations and financial
condition.
Fluctuations in currency exchange rates could negatively affect our business, financial condition, and results of operations.
A significant portion of our revenue and expenses are realized in foreign currencies. As a result, changes in exchange rates will result
in increases or decreases in our costs and earnings and may adversely affect our Consolidated Financial Statements, which are stated
in U.S. dollars. Although we may seek to minimize currency exchange risk by engaging in hedging transactions where we deem
appropriate, we cannot be assured that our efforts will be successful. Currency fluctuations may also result in our systems and services
becoming more expensive and less competitive than those of other suppliers in the foreign countries in which we sell our systems and
services.
We have invested substantial resources in certain markets where we expect growth, and our business may suffer if we are unable to
achieve the growth we expect.
As part of our strategy to grow, we are expanding our operations in certain emerging or developing markets, and accordingly have
made and expect to continue to make substantial investments to support anticipated growth in those regions. We may fail to realize
expected rates of return on our existing investments or incur losses on such investments, and we may be unable to redeploy capital to
take advantage of other markets. Our results will also suffer if these regions do not grow as quickly as we anticipate.
Our restructuring initiatives may not achieve the expected cost reductions or other anticipated benefits.
We regularly evaluate our existing operations, service capacity, and business efficiencies to determine if a realignment or restructuring
could improve our results of operations or achieve some other business goal. Our realignment and restructuring initiatives are
designed to result in more efficient and increasingly profitable operations. Our ability to achieve the anticipated cost savings and other
benefits from these initiatives within the expected time frame is subject to many estimates and assumptions. These estimates and
assumptions are subject to significant economic, competitive, and other uncertainties, some of which are beyond our control. In 2016,
we implemented an optimization program to realign FoodTech’s Protein business in North America and Liquid Foods business in
Europe, accelerate our strategic sourcing initiatives, and consolidate smaller facilities, and have incurred restructuring charges of
$12.0 million related to this plan to date. We may incur similar charges in the future. Failure to achieve the expected cost reductions
related to these restructuring initiatives could have a material adverse effect on our business and results of operations.
Our inability to obtain raw materials, component parts, and/or finished goods in a timely and cost-effective manner from suppliers
would adversely affect our ability to manufacture and market our products.
We purchase raw materials and component parts from suppliers for use in manufacturing our products. We also purchase certain
finished goods from suppliers. Changes in our relationships with suppliers or increases in our costs for raw materials, component
parts, or finished goods we purchase could result in manufacturing interruptions, delays, inefficiencies, or our inability to market
products if we cannot timely and efficiently manufacture them. In addition, our gross margins could decrease if prices of purchased
raw materials, component parts, or finished goods increase and we are unable to pass on such price increases to customers.
Regulations related to conflict minerals could adversely impact our business.
The Dodd-Frank Wall Street Reform and Consumer Protection Act contains provisions to improve transparency and accountability
concerning the supply of certain minerals, known as “conflict minerals”, originating from the Democratic Republic of Congo (DRC)
and adjoining countries. To implement this legislation, the SEC adopted annual disclosure and reporting requirements for those
companies that use conflict minerals mined from the DRC and adjoining countries in their products. We will continue to incur costs
associated with complying with these annual disclosure requirements, including those incurred to conduct diligence to determine the
sources of conflict minerals used in our products and other potential changes to products, processes, or sources of supply as a
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consequence of such verification activities. These rules could adversely affect the sourcing, supply and pricing of materials used in our
products. As there may be only a limited number of suppliers offering “conflict free” conflict minerals of certain types, we cannot be
certain that we will continue to be able to obtain necessary conflict minerals from such suppliers in sufficient quantities or at
competitive prices. Also, we may face reputational challenges if we determine that certain of our products contain minerals not
determined to be conflict free or if we are unable to sufficiently verify the origins for all conflict minerals used in our products.
An 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.
Energy prices are volatile and have been historically high. High energy prices have a negative trickledown effect on our customers’
business operations by reducing their profitability because of increased operating costs. Our customers require large amounts of
energy to run their businesses, particularly in the air transportation industry. Higher energy prices can reduce passenger and cargo air
carrier profitability as a result of increased jet and ground support equipment fuel prices. Higher energy prices also increase food
processors’ operating costs through increased energy and utility costs to run their plants, higher priced chemical and petroleum based
raw materials used in food processing, and higher fuel costs to run their logistics and service fleet vehicles.
Food processors are also affected by the cost and availability of raw materials such as feed grains, livestock, produce, and dairy
products. Increases in the cost of and limitations in the availability of such raw materials can negatively affect the profitability of food
processors’ operations.
Any reduction in our customers’ profitability due to higher energy or raw material costs or otherwise may reduce their future
expenditures in the food processing equipment or airport equipment that we provide. This reduction may have a material adverse
effect on our business, financial condition, results of operations, and cash flows.
Changes in food consumption patterns due to dietary trends or economic conditions may adversely affect our business, financial
condition, results of operations, and cash flows.
Dietary trends can create demand for protein food products but negatively impact demand for high-carbohydrate foods, or create
demand for easy to prepare, transportable meals but negatively impact traditional canned food products. Because different food types
and food packaging can quickly go in and out of style as a function of dietary, health, or convenience trends, food processors can be
challenged in accurately forecasting their needed manufacturing capacity and the related investment in equipment and services.
During periods of economic uncertainty, consumer demand for protein products or processed food products may be negatively
impacted by increases in food prices. A demand shift away from protein products or processed foods could 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), citrus tree diseases, or
food borne illnesses or other food safety or quality concerns may negatively affect our business, financial condition, results of
operations, and cash flows.
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. Any
limitation on the availability of such raw materials could discourage food producers from making additional capital investments in
processing equipment, aftermarket products, parts, and services that our JBT FoodTech business provides. 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.
The success of our business that serves the citrus food processing industry 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 harvest productivity 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. Reduced amounts of available fruit for the processed or fresh food markets could
materially adversely affect our business, financial condition, results of operations, and cash flows.
In the event an E. coli or other food borne illness causes a recall of meat or produce, the companies supplying those fresh, further
processed or packaged forms of those products could be severely adversely affected. Any negative impact on the financial viability of
our fresh or processed food provider customers could adversely affect our immediate and recurring revenue base.
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Freezes, hurricanes, droughts, or other natural disasters may negatively affect our business, financial condition, results of
operations, and cash flows.
In the event a natural disaster negatively affects growers or farm production, the food processing industry may not have the fresh food
raw materials necessary to meet consumer demand. Crops of entire groves or fields can be severely damaged by a drought, freeze, or
hurricane. An extended drought or freeze or a high category hurricane could permanently damage or destroy a tree crop area. If
orchards have to be replanted, trees may not produce viable product for several years. Since our recurring revenue is dependent on
growers’ and farmers’ ability to provide high quality crops to certain of our customers, our business, financial condition, results of
operations, and cash flows could be materially adversely impacted in the event of a freeze, hurricane, drought, or other natural
disaster.
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 U.S. government represented approximately 2% of our 2017 revenue, directly or through subcontracts. Our JBT AeroTech
business contracts with the U.S. government and subcontracts with defense contractors conducting business with U.S. government. 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 company contracts.
Government contracts are highly regulated to curb misappropriation of funds and to ensure uniform policies and practices across
various governmental agencies. Funding for such contracts is tied to National Defense Budgets and Procurement Programs that are
annually negotiated and approved or disapproved by the U.S. Department of Defense, the Executive Branch, and the Congress. For
example, if there were any shifts in spending priorities or if funding for the military aircraft programs were reduced or canceled as a
result of the sequestration, policy changes, or for other reasons, the resulting loss of revenue could 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. In particular, U.S. defense contracts are unilaterally terminable at the option of the U.S. government with compensation only
for work completed and costs incurred to date. In addition, any deliverable delays under such contracts as a result of our non-
performance could also have a negative impact on these contracts.
Non-compliance with the laws and regulations governing U.S. government contracts or subcontracts may result in significant
sanctions such as debarment (restrictions from future business with the government). If we were found not to be in compliance now or
in the future with any such laws or regulations, our results of operations could be adversely impacted.
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 delays in payments by 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. Our airport authority, airline, air cargo and
ground handling customers are particularly sensitive to safety concerns, and their businesses may decline after terrorist attacks or
threats or during periods of political instability when travelers are concerned about safety issues. A decline in these customers’
businesses could have a negative impact on their demand for our products. 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.
The cumulative loss of several significant 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 significant agreements and if
we were to fail to develop alternative business opportunities, we could experience a material adverse effect on our business, financial
condition, results of operations, and cash flows.
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We may lose money or not achieve our expected profitability on fixed-price contracts.
As is customary for several of the business areas in which we operate, we may provide products and services under fixed-price
contracts. Under such contracts, we are typically responsible for cost overruns. Our actual costs and any gross profit realized on these
fixed-price contracts may vary from our estimates on which the pricing for such contracts was based. There are inherent risks and
uncertainties in the estimation process, including those arising from unforeseen technical and logistical challenges or longer than
expected lead times for sourcing raw materials and assemblies. A fixed-price contract may significantly limit or prohibit our ability to
mitigate the impact of unanticipated increases in raw material prices (including the price of steel and other significant raw materials)
by passing on such price increases. Depending on the volume of our work performed under fixed-price contracts at any one time,
differences in actual versus estimated performance could have a material adverse impact on our business, financial condition, results
of operations, and cash flows.
Customer sourcing initiatives may adversely affect our new equipment and aftermarket businesses.
Many multi-national companies, including our customers and prospective customers, have undertaken supply chain integration to
provide a sustainable competitive advantage against their competitors. Under continued price pressure from consumers, wholesalers
and retailers, our manufacturer customers are focused on controlling and reducing cost, enhancing their sourcing processes, and
improving their profitability.
A key value proposition of our equipment and services is low total cost of ownership. If our customers implement sourcing initiatives
that focus solely on immediate cost savings and not on total cost of ownership, our new equipment and aftermarket sales could be
adversely affected.
To remain competitive, we need to rapidly and successfully develop and introduce complex new solutions in a global, competitive,
demanding, and changing environment.
If we lose our significant technology advantage in our products and services, 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 material adverse effect on our reputation and business. Significant investments in
research and development efforts that do not lead to successful products, features, and functionality, could also materially adversely
affect our business, financial condition, and results of operations.
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 more directly on products and services for those areas than we may be able to.
High capacity products or products with new technology may be more likely to experience reliability, quality, or operability
problems.
Even with rigorous testing prior to release and investment on product quality processes, problems may be found in newly developed or
enhanced products after such products are launched and shipped to customers. Resolution of such issues may cause project delays,
additional development costs, and deferred or lost revenue.
New products and enhancements of our existing products may also reduce demand for our existing products or could delay purchases
by customers who instead decide to wait for our new or enhanced products. Difficulties that arise in our managing the transition from
our older products to our new or enhanced products could result in additional costs and deferred or lost revenue.
We may need to make significant capital and operating expenditures to keep pace with technological developments in our industry.
The industries in which we participate are constantly undergoing development and change, and it is likely that new products,
equipment, and service methods will be introduced in the future. We may need to make significant expenditures to purchase new
equipment and to train our employees to keep pace with any new technological developments. These expenditures could adversely
affect our results of operations and financial condition.
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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.
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 and operating policies and procedures. 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 from 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 others. 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.
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 product functionality in our industry
increasingly overlaps and the number 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:
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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 and costly to defend or settle and can harm our business
and reputation.
Infrastructure failures or catastrophic loss at any of our facilities could lead to production or service curtailments or shutdowns.
We manufacture our products at facilities in the United States, Belgium, China, Sweden, Brazil, Italy, Spain, United Kingdom, the
Netherlands and Germany. An interruption in production or service capabilities at any of our facilities as a result of equipment failure
or other reasons could result in our inability to manufacture our products. In the event of a stoppage in production at any of our
facilities, even if only temporary, or if we experience delays as a result of events that are beyond our control, delivery times to our
customers could be severely affected. Any significant delay in deliveries to our customers could lead to cancellations. Our facilities are
also subject to the risk of catastrophic loss due to unanticipated events such as earthquake, fire, natural disaster, explosions, power
loss, unauthorized intrusions, and other catastrophic events. We may also experience plant shutdowns or periods of reduced production
as a result of equipment failure, delays in deliveries or catastrophic loss, which could have a material adverse effect on our business,
financial condition, results of operations, and cash flows.
The business continuity of 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 earthquakes and other
natural disasters, while another part of our operations is based in an area of Florida that has experienced hurricanes and other natural
disasters. 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. For example we are currently
in the process of implementing common Enterprise Resource Planning (ERP) systems across the majority of our businesses. 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.
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We are subject to cyber-security risks arising out of breaches of security relating to sensitive company, client, and employee
information and to the technology that manages our operations and other business processes.
Our business operations rely upon secure information technology systems for data capture, processing, storage, and reporting.
Notwithstanding careful security and controls design, our information technology systems, and those of our third-party providers
could become subject to cyber-attacks. Network, system, application, and data breaches could result in operational disruptions or
information misappropriation, including, but not limited to, interruptions to systems availability and denial of access to and misuse of
applications required by our clients to conduct business with us. Phishing and other forms of electronic fraud may also subject us to
risks associated with improper access to financial assets and customer information. Theft of intellectual property or trade secrets and
inappropriate disclosure of confidential information could stem from such incidents. Any such operational disruption and/or
misappropriation of information could result in lost sales, negative publicity or business delays and could have a material adverse
effect on our business.
Our business success depends on retaining our senior management and other key personnel and attracting and retaining other
qualified employees.
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 our customers’ requirements.
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 equipment, systems and services create potential exposure for us for personal injury, wrongful death, product liability, commercial
claims, product recalls, production loss, property damage, pollution, and other environmental damages. In the event that a customer
who purchases our equipment becomes subject to claims relating to food borne illnesses or other food safety or quality issues relating
to food processed through the use of our equipment, we could be exposed to significant claims from our customers. 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 reasonable. If we incur substantial liability and damages arising from such liability 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.
Future environmental regulatory developments in the United States and abroad concerning environmental issues, such as climate
change, could adversely affect our operations and increase operating costs and, through their impact on our customers, reduce demand
for our products and services. Actions may be taken in the future by the U.S. government, state governments within the United States,
foreign governments, or by signatory countries through a new global climate change treaty to regulate the emission of greenhouse
gases. 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. The precise nature of any
such future environmental regulatory requirements and their applicability to us and our customers are difficult to predict, but the
impact to us and the industries that we serve would likely be adverse and could be significant, including the potential for increased
fuel costs, carbon taxes or fees, or a requirement to purchase carbon credits.
Our operations and industries are subject to a variety of U.S. and international laws, which 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, import and export compliance, intellectual property, product liability, tax matters,
securities regulation, 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.
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We could be adversely affected by violations of the U.S. Foreign Corrupt Practices Act and similar worldwide anti-bribery laws.
The U.S. Foreign Corrupt Practices Act (FCPA), the U.K. Bribery Act of 2010 (the U.K. Bribery Act), and similar anti-bribery laws in
other jurisdictions generally prohibit companies and their intermediaries from making improper payments for the purpose of obtaining
or retaining business. Our policies mandate compliance with these anti-bribery laws. We operate in many parts of the world that have
experienced governmental corruption to some degree and, in certain circumstances, strict compliance with anti-bribery laws may
conflict with local customs and practices. Despite our training and compliance programs, there is no assurance that our internal control
policies and procedures will protect us from acts committed by our employees or agents. If we are found to be liable for FCPA, the
U.K. Bribery Act or other similar violations (either due to our own acts or our inadvertence, or due to the acts or inadvertence of
others), we could suffer from civil and criminal penalties or other sanctions, which could have a material adverse impact on our
business, financial condition, and results of operations.
We are subject to governmental export controls and economic sanctions laws that could impair our ability to compete in
international markets and subject us to liability if we are not in full compliance with applicable laws.
Our business activities are subject to various restrictions under U.S. export controls and trade and economic sanctions laws, including
the U.S. Commerce Department’s Export Administration Regulations (EAR), the International Traffic in Arms Regulations (ITAR),
and economic and trade sanctions regulations maintained by the U.S. Treasury Department’s Office of Foreign Assets Control
(OFAC). We are subject to similar laws and regulations in other countries in which we operate or make sales. If we fail to comply with
these laws and regulations, we and certain of our employees could be subject to civil or criminal penalties and reputational harm.
Obtaining the necessary authorizations, including any required license, for a particular transaction may be time-consuming, is not
guaranteed, and may result in the delay or loss of sales opportunities. Furthermore, U.S. export control laws and economic sanctions
laws in the U.S. and other countries prohibit certain transactions with U.S. embargoed or sanctioned countries, governments, persons
and entities. Although we take precautions to prevent transactions with sanction targets, the possibility exists that we could
inadvertently provide our products or services to persons prohibited by sanctions. This could result in negative consequences to us,
including government investigations, penalties, and reputational harm.
Unfavorable tax law changes and tax authority rulings may adversely affect results.
We are subject to income taxes in the United States and in various foreign jurisdictions. Domestic and international tax liabilities are
subject to the allocation of income among various tax jurisdictions. Our effective tax rate could be adversely affected by changes in
the mix of earnings among countries with differing statutory tax rates, changes in the valuation allowance of deferred tax assets, or tax
laws. The amount of income taxes and other taxes are subject to ongoing audits by U.S. federal, state, and local tax authorities and by
non-U.S. authorities. If these audits result in assessments different from amounts we record, future financial results may include
unfavorable tax adjustments.
If we repatriate any cash and cash equivalents from our foreign subsidiaries back to the U.S., we could be subject to significant tax
liabilities.
As of December 31, 2017, our foreign subsidiaries held $29.8 million, or 88%, of our cash and cash equivalents. While we currently
intend that cash and cash equivalents held by these foreign subsidiaries will be indefinitely reinvested in foreign jurisdictions in order
to fund working capital requirements, make investments, and repay debt (primarily inter-company), if, in the future, cash and cash
equivalents held by foreign subsidiaries are needed to fund our operations in the United States or for the purpose of making certain
strategic investments in the United States or otherwise, the repatriation of such amounts to the United States could result in a
significant incremental tax liability in the period in which the decision to repatriate occurs. Payment of any incremental tax liability
would reduce the cash available to us to fund our operations or to make such strategic investment in the United States or otherwise.
Our business could suffer in the event of a work stoppage by our unionized or non-union labor force.
A portion of our employees in the United States are represented by collective bargaining agreements. Outside the United States, we
enter into employment contracts and agreements in those countries in which such relationships are mandatory or customary, such as in
Belgium, Sweden, Spain, Italy, the Netherlands and China.
Any future strikes, employee slowdowns, or similar actions by one or more unions, in connection with labor contract negotiations or
otherwise, could have a material adverse effect on our ability to operate our business.
21
Our existing financing agreements include restrictive and financial covenants.
Certain of our loan agreements require us to comply with various restrictive covenants and some contain financial covenants that
require us to comply with specified financial ratios and tests. Our failure to meet these covenants could result in default under these
loan agreements and would result in a cross-default under other loan agreements. In the event of a default and our inability to obtain a
waiver of the default, all amounts outstanding under loan agreements could be declared immediately due and payable. Our failure to
comply with these covenants could adversely affect our results of operations and financial condition.
Significant changes in actual investment return on pension assets, discount rates, and other factors could affect our results of
operations, equity, and pension contributions in future periods.
Our results of operations may be positively or negatively affected by the amount of income or expense we record for our defined
benefit pension plans. U.S. generally accepted accounting principles (GAAP) require that we calculate income or expense for the
plans using actuarial valuations. These valuations reflect assumptions about financial market and other economic conditions, which
may change based on changes in key economic indicators. The most significant year-end assumptions we use to estimate pension
income or expense are the discount rate and the expected long-term rate of return on plans assets. In addition, we are required to make
an annual measurement of plan assets and liabilities, which may result in a significant change to equity through a reduction or increase
to accumulated other comprehensive income. For a discussion regarding how our financial statements can be affected by pension plan
accounting policies, see Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations -
Critical Accounting Estimates – Defined Benefit Pension and Other Post-retirement Plans and Note 8. Pension and Post-Retirement
and Other Benefit Plans to the Consolidated Financial Statements in Part II, Item 8. Financial Statements and Supplementary Data of
this Annual Report on Form 10-K. Although GAAP expense and pension funding contributions are not directly related, key economic
factors that affect GAAP expense would also likely affect the amount of cash we would contribute to pension plans as required under
the Employee Retirement Income Security Act.
As a publicly traded company, we incur regulatory costs that reduce profitability.
As a publicly traded corporation, we incur certain costs to comply with regulatory requirements of the NYSE and of the federal
securities laws. If regulatory requirements were to become more stringent or if accounting or other controls thought to be effective
later fail, we may be forced to make additional expenditures, the amounts of which could be material. Many of our competitors are
privately owned, so our accounting and control costs can be a competitive disadvantage.
Our share repurchase program could increase the volatility of the price of our common stock.
On December 2, 2015, the Board authorized a share repurchase program for up to $30 million of our common stock beginning
January 1, 2016 and continuing through December 31, 2018. We have funded the repurchases through cash flows generated by our
operations. The amount and timing of share repurchases was based on a variety of factors. Important factors that could cause us to
limit, suspend or delay the Company’s stock repurchases include unfavorable market conditions, the trading price of the
Company’s common stock, the nature of other investment opportunities presented to us from time to time, the ability to obtain
financing at attractive rates, and the availability of U.S. cash. Repurchases of our shares will reduce the number of outstanding
shares of our common stock and might incrementally increase the potential for volatility in our common stock by reducing the
potential volumes at which our common stock may trade in the public market.
Our actual operating results may differ significantly from our guidance.
We regularly release guidance regarding our future performance that represents our management’s estimates as of the date of
release. This guidance, which consists of forward-looking statements, is prepared by our management and is qualified by, and
subject to, the assumptions and the other information contained or referred to in the release or report in which guidance is given.
Our guidance is not prepared with a view toward compliance with published guidelines of the American Institute of Certified
Public Accountants, and neither our independent registered public accounting firm nor any other independent expert or outside
party compiles or examines the guidance and, accordingly, no such person expresses any opinion or any other form of assurance
with respect thereto.
Guidance is based upon a number of assumptions and estimates that, while presented with numerical specificity, are inherently
subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control
and are based upon specific assumptions with respect to future business decisions, some of which will change. We generally state
possible outcomes as high and low ranges which are intended to provide a sensitivity analysis as variables are changed, but are not
intended to represent that actual results could not fall outside of the suggested ranges. The principal reason that we release this data
is to provide a basis for our management to discuss our business outlook with analysts and investors. We do not accept any
responsibility for any projections or reports published by any such persons.
22
Guidance is necessarily speculative in nature, and it can be expected that some or all of the assumptions of the guidance furnished
by us will not materialize or will vary significantly from actual results. Accordingly, our guidance is only an estimate of what
management believes is realizable as of the date of release. Actual results will vary from the guidance and the variations may be
material. Investors should also recognize that the reliability of any forecasted financial data diminishes the farther in the future that
the data are forecast. In light of the foregoing, investors are urged to put the guidance in context and not to place undue reliance on
it.
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 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 of Directors that is divided into three classes with staggered terms;
• Limitations on the right of stockholders to remove directors;
• The right of our Board of Directors to issue preferred stock without stockholder approval;
• The inability of our stockholders to act by written consent; and
• Rules and procedures 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 of Directors 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 of Directors 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 of Directors, except pursuant to any offer conditioned on a substantial number of rights being acquired. 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. The stockholders rights plan will expire in July 2018, and our Board of Directors
does not currently intend to replace it.
ITEM 1B.
UNRESOLVED STAFF COMMENTS
None.
23
ITEM 2.
PROPERTIES
We lease executive offices totaling approximately 24,000 square feet in Chicago, Illinois. We believe that our properties and facilities
meet our current operating requirements and are in good operating condition. We believe 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 operations:
LOCATION
United States:
Madera, California
Orlando, Florida
Ogden, Utah
Lakeland, Florida
Stratford, Wisconsin
Sandusky, Ohio
Kingston, New York
Chalfont, Pennsylvania
Apex, North Carolina
Middletown, Ohio
Russellville, Arkansas
Riverside, California
International:
Sint Niklaas, Belgium
Helsingborg, Sweden
Araraquara, Brazil
Amsterdam, The Netherlands
Madrid, Spain
Livingston, Scotland
Kunshan, China
Parma, Italy
Bridgend, Wales
Glinde, Germany
Harwich, England
Cape Town, South Africa
Juarez, Mexico
SEGMENT
JBT FoodTech
JBT AeroTech
JBT AeroTech
JBT FoodTech
JBT FoodTech
JBT FoodTech
JBT FoodTech
JBT FoodTech
JBT FoodTech
JBT FoodTech
JBT FoodTech
JBT FoodTech
JBT FoodTech
JBT FoodTech
JBT FoodTech
JBT FoodTech
JBT FoodTech, JBT AeroTech
JBT FoodTech
JBT FoodTech, JBT AeroTech
JBT FoodTech
JBT AeroTech
JBT FoodTech
JBT FoodTech
JBT FoodTech
JBT AeroTech
SQUARE FEET
(approximate)
LEASED OR
OWNED
271,000
248,000
240,000
200,000
160,000
140,000
133,000
67,000
65,000
65,000
65,000
50,000
289,000
227,000
128,000
105,000
88,000
87,000
80,000
72,000
58,000
41,000
40,000
38,000
27,000
Owned
Owned
Owned/Leased
Owned
Owned
Owned
Owned
Leased
Owned
Leased
Owned
Leased
Owned
Owned/Leased
Owned
Leased
Owned
Owned
Leased
Owned
Owned
Leased
Leased
Leased
Leased
24
ITEM 3.
LEGAL PROCEEDINGS
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, cash flows or financial condition.
In the normal course of our business, we are at times subject to pending and threatened legal actions, some for which the relief or
damages sought may be substantial. Although we are not able to predict the outcome of such actions, after reviewing all pending and
threatened actions with counsel and based on information currently available, management believes that the outcome of such actions,
individually or in the aggregate, will not have a material adverse effect on the results of operations or financial position of our
Company. However, it is possible that the ultimate resolution of such matters, if unfavorable, may be material to the results of
operations in a particular future period as the time and amount of any resolution of such actions and its relationship to the future
results of operations are not currently known.
Liabilities are established for pending legal claims only when losses associated with the claims are judged to be probable, and the loss
can be reasonably estimated. In many lawsuits and arbitrations, it is not considered probable that a liability has been incurred or not
possible to estimate the ultimate or minimum amount of that liability until the case is close to resolution, in which case no liability
would be recognized until that time.
ITEM 4.
MINE SAFETY DISCLOSURES
Not applicable.
25
PART II
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Our common stock is listed on the New York Stock Exchange under the symbol JBT. As of February 26, 2018, there were 1,543
holders of record of our common stock. Information regarding the market prices of our common stock and dividends declared for the
two most recent fiscal years is provided in Note 18. Quarterly Information to our Consolidated Financial Statements.
The following graph shows the cumulative total return of an investment of $100 (and reinvestment of any dividends thereafter) on
December 31, 2012 in: (i) our common stock, (ii) the S&P Smallcap 600 Stock Index and (iii) 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.
Issuer purchases of Equity Securities
The following table includes information about the Company’s stock repurchases during the three months ended December 31, 2017:
(Dollars in millions, except per share amounts)
Period
October 1, 2017 through October 31, 2017
November 1, 2017 through November 30,
2017
December 1, 2017 through December 31,
2017
Total Number of
Shares Purchased
Average Price
Paid per Share
Total Number of
Shares Purchased
as part of
Publicly
Announced
Program(1)
Approximate
Dollar Value of
Shares that may
yet be Purchased
under the
Program
— $
—
—
— $
—
—
—
—
— $
—
—
— $
20.7
20.7
20.7
20.7
(1)
On December 2, 2015, the Board authorized a share repurchase program for up to $30 million of our common stock
beginning on January 1, 2016 and continuing through December 31, 2018.
26
ITEM 6.
SELECTED FINANCIAL DATA
The following table presents selected financial and other data about us for the most recent five fiscal years. The data has been derived
from our Consolidated Financial Statements. The historical Consolidated Balance Sheet data set forth below reflects the assets and
liabilities that existed as of the dates presented.
The selected 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. The income statement and cash flow data for the three years ended
December 31, 2017, 2016 and 2015 and the balance sheet data as of December 31, 2017 and 2016 are derived from our audited
Consolidated Financial Statements included elsewhere in this report, and should be read in conjunction with those financial statements
and the accompanying notes. The balance sheet data as of December 31, 2015, 2014, 2013 and the income statement and cash flow
data for the years ended December 31, 2014 and 2013 were derived from audited financial statements that are not presented in this
report.
The following financial information may not reflect what our results of operations, financial position and cash flows will be in the
future. In addition, Item 1A. Risk Factors of this report includes a discussion of risk factors that could impact our future results of
operations.
27
(In millions, except per share data)
Income Statement Data:
2017
Year Ended December 31,
2015
2014
2016
Revenue:
JBT FoodTech
JBT AeroTech
Other revenue and intercompany eliminations
Total revenue
Operating expenses:
Cost of sales
Selling, general and administrative expense
Research and development expense
Restructuring expense
Other (income) expense, net
Operating income
Interest income
Interest expense
Income from continuing operations before income taxes
Provision for income taxes
Income from continuing operations
Loss from discontinued operations, net of income taxes
Net income
Diluted earnings per share:
Income from continuing operations
Net income
Diluted weighted average shares outstanding
Cash dividends declared per common share
Common Stock Data:
Common stock sales price range:
High
Low
(In millions)
Balance Sheet Data:
Total assets
$
$
$
$
$
$
$
$
$
1,171.9
$
928.0
$
725.1
$
634.7
$
$
$
463.0
0.2
1,635.1
1,164.4
294.4
28.7
1.7
0.1
145.8
0.7
14.3
132.2
50.1
82.1
1.6
$
$
422.5
—
1,350.5
969.8
236.7
23.6
12.3
4.7
103.4
1.6
11.0
94.0
26.0
68.0
0.4
383.1
(0.9)
1,107.3
790.4
207.0
18.2
—
2.7
89.0
1.1
7.9
82.2
26.2
56.0
0.1
350.2
(0.7)
984.2
719.5
183.3
$
$
$
$
14.6
14.5
1.6
50.7
1.6
7.6
44.7
13.9
30.8
—
80.5
$
67.6
$
55.9
$
30.8
$
$
$
2.58
2.53
31.9
$
$
2.28
2.27
29.8
$
$
1.88
1.88
29.8
$
$
1.03
1.03
29.9
0.40
$
0.40
$
0.37
$
0.36
$
0.34
120.55
80.70
$
$
93.55
41.35
$
$
51.34
29.69
$
$
33.99
25.52
$
$
30.00
17.78
2017
2016
At December 31,
2015
2014
2013
Long-term debt, less current portion
372.7
491.6
280.6
173.8
$
1,391.4
$
1,187.4
$
876.1
$
697.8
$
(In millions)
Other Financial Information:
Capital expenditures
Cash flows provided by continuing operating activities
Order backlog (unaudited)
2017
$
37.9
$
106.3
625.2
28
Year Ended December 31,
2015
2014
2016
37.1
67.9
557.0
$
37.7
$
112.2
520.7
$
36.7
78.0
366.7
29.2
63.1
376.5
2013
611.1
323.6
(0.5)
934.2
699.0
166.6
14.0
1.6
(0.2)
53.2
2.2
7.6
47.8
13.8
34.0
0.9
33.1
1.15
1.11
29.7
621.2
94.1
2013
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
Executive Overview
We are a leading global technology solutions provider to high-value segments of the food and beverage industry with focus on
proteins, liquid foods and automated system solutions. JBT designs, produces and services sophisticated products and systems for
multi-national and regional customers through its FoodTech segment. JBT also sells critical equipment and services to domestic and
international air transportation customers through its AeroTech segment.
In 2017 we began to implement our Elevate plan that was developed in 2016 to capitalize on the leadership position of our businesses
and favorable macroecomonic trends. The Elevate plan is based on a four-pronged approach to deliver continued growth and margin
expansion.
• Accelerate New Product & Service Development. JBT is accelerating the development of innovative products and
services to provide customers with solutions that enhance yield and productivity and reduce lifetime cost of ownership.
• Grow Recurring Revenue. JBT is capitalizing on its extensive installed base to expand recurring revenue from
aftermarket parts and services, equipment leases, consumables and airport services.
• Execute Impact Initiatives. JBT is enhancing organic growth through initiatives that enable us to sell the entire
FoodTech portfolio globally, including enhancing our international sales and support infrastructure, localizing targeted
products for emerging markets, and strategic cross selling of Protein and Liquid Foods products. Additionally, our
impact initiatives are designed to support the reduction in operating cost including strategic sourcing, relentless
continuous improvement (lean) efforts, and the optimization of organization structure. In AeroTech, we plan to continue
to develop advanced military product offering and customer support capability to service global military customers.
• Maintain Disciplined Acquisition Program. We are also continuing our strategic acquisition program focused on
companies that add complementary products, which enable us to offer more comprehensive solutions to customers, and
meet our strict economic criteria for returns and synergies.
As we evaluate our operating results, we consider our key performance indicators of segment revenue, segment operating profit, the
level of inbound orders and order backlog.
We continue to enhance our comprehensive approach to Corporate Social Responsibility (CSR), building on our culture and long
tradition of concern for our employees’ health, safety, and well-being; partnering with our customers to improve their operations; and
giving back to the communities where we live and work. Our equipment and technology continue to deliver quality performance while
striving to minimize waste and maximize efficiency in order to create shared value for both our food processing and beverage and air
transportation customers. A key CSR objective is to further align our business with our customers in order to support their ambitious
quality, financial, and CSR goals.
29
Non-GAAP Financial Measures
The results for the periods ended December 31, 2017, 2016 and 2015 include several items that affect the comparability of our results.
These include significant expenses that are not indicative of our ongoing operations as detailed in the table below:
(In millions)
Year Ended December 31,
2016
2015
2017
Income from continuing operations as reported
$
82.1
$
68.0
$
56.0
Non-GAAP adjustments
Restructuring expense
Impact on tax provision from restructuring expense(1)
Impact on tax provision from mandatory repatriation tax
Impact on tax provision from tax law changes to deferred taxes
Adjusted income from continuing operations
(In millions, except per share data)
Income from continuing operations as reported
Total shares and dilutive securities
Diluted earnings per share from continuing operations
Adjusted income from continuing operations
Total shares and dilutive securities
Adjusted diluted earnings per share from continuing operations
1.7
(0.5)
7.7
7.8
12.3
(3.9)
—
—
—
—
—
—
98.8
$
76.4
$
56.0
82.1
31.9
2.58
98.8
31.9
3.10
$
$
$
68.0
29.8
2.28
76.4
29.8
2.56
$
$
$
56.0
29.8
1.88
56.0
29.8
1.88
$
$
$
$
(1)
2017, 2016 and 2015.
Impact on tax provision was calculated using the actual rate for the relevant jurisdiction for the years ended December 31,
The above table contains adjusted income from continuing operations and adjusted diluted earnings per share from continuing
operations, which are non-GAAP financial measures, and are intended to provide an indication of our underlying ongoing operating
results and to enhance investors’ overall understanding of our financial performance by eliminating the effects of certain items that are
not comparable from one period to the next. In addition, this information is used as a basis for evaluating our performance and for the
planning and forecasting of future periods.
The table below provides a reconciliation of net income to EBITDA to Adjusted EBITDA:
(In millions)
Net income
Loss from discontinued operations, net of taxes
Income from continuing operations as reported
Provision for income taxes
Net interest expense
Depreciation and amortization
EBITDA
Restructuring expense
Adjusted EBITDA
Year Ended December 31,
2017
2016
$
80.5
$
1.6
82.1
50.1
13.6
51.7
197.5
1.7
$
199.2
$
67.6
0.4
68.0
26.0
9.4
38.5
141.9
12.3
154.2
The above table provides net income as adjusted by income taxes, net interest expense and depreciation and amortization expense
recorded during the period to arrive at EBITDA. Further, we add back to EBITDA significant expenses that are not indicative of our
30
ongoing operations to calculate an Adjusted EBITDA for the periods reported. Given our focus on growth through strategic
acquisitions, management considers Adjusted EBITDA to be an important non-GAAP financial measure. This measure allows us to
monitor business performance while excluding the impact of amortization of intangible assets, and the depreciation of fixed assets. We
use Adjusted EBITDA internally to make operating decisions and believe this information is helpful to investors because it allows
more meaningful period-to-period comparisons of our ongoing operating results.
We evaluate our results of operations on both an as reported and a constant currency basis. The constant currency presentation is a
non-GAAP financial measure, which excludes the impact of fluctuations in foreign currency exchange rates. We believe providing
constant currency information provides valuable supplemental information regarding our results of operations, consistent with how we
evaluate our performance. We calculate constant currency percentages by converting our financial results in local currency for a period
using the average exchange rate for the prior period to which we are comparing. This calculation may differ from similarly-titled
measures used by other companies.
The non-GAAP financial measures disclosed in this Annual Report on Form 10-K are not intended to nor should they be considered in
isolation or as a substitute for financial measures prepared in accordance with U.S. GAAP.
CONSOLIDATED RESULTS OF OPERATIONS
Year Ended December 31,
Favorable / (Unfavorable)
2017
2016
2015
$
1,635.1
$
1,350.5
$
1,107.3
$
(in millions)
Revenue
Cost of sales
Gross profit
Gross profit %
Selling, general and administrative expense
Research and development expense
Restructuring expense
Other expense, net
Operating income
Operating income %
Interest expense, net
Income from continuing operations before
income taxes
Provision for income taxes
Income from continuing operations
Loss from discontinued operations, net of income taxes
Net income
2017 Compared With 2016
1,164.4
470.7
28.8%
294.4
28.7
1.7
0.1
145.8
8.9%
13.6
132.2
50.1
82.1
1.6
80.5
$
$
969.8
380.7
28.2%
236.7
23.6
12.3
4.7
103.4
7.7%
9.4
94.0
26.0
68.0
0.4
67.6
$
2017
vs.
2016
2016
vs.
2015
790.4
316.9
28.6%
207.0
18.2
—
2.7
89.0
$
284.6
(194.6)
90.0
60 bps
(57.7)
(5.1)
10.6
4.6
42.4
8.0%
6.8
120 bps
(4.2)
82.2
26.2
56.0
0.1
55.9
$
38.2
(24.1)
14.1
(1.2)
12.9
$
243.2
(179.4)
63.8
-40 bps
(29.7)
(5.4)
(12.3)
(2.0)
14.4
-30 bps
(2.6)
11.8
0.2
12.0
(0.3)
11.7
Total revenue increased $284.6 million, or $272.8 million in constant currency, in 2017 compared to 2016. The increase was driven by
revenue from acquired companies, which added $175.0 million, organic growth of $97.8 million and $11.7 million due to currency
translation.
Operating income margin was 8.9% in 2017 compared to 7.7% in the same period in 2016, an increase of 120 bps, as a result of the
following items:
• Gross profit margin increased 60 bps to 28.8% compared to 28.2% in the same period last year. This increase was primarily
•
the result of acquisitions.
Selling, general and administrative (SG&A) increased both in dollars and as a percentage of revenue. These increases are a
result of higher relative SG&A expenses from recently acquired companies, including higher amortization costs of acquired
31
intangible assets in 2017 compared to 2016. Additionally, FoodTech, which carries a higher SG&A expense rate than
AeroTech represented a larger mix of JBT revenue at 72% compared to 69% in 2016.
• Research and development expense increased by $5.1 million as we continue to invest in Elevate new product development
initiatives. As a percent of revenues, these expenses have increased slightly to 1.8% in 2017 compared to 1.7% in the same
period last year as we continue to support Elevate growth initiatives.
• Restructuring expense decreased $10.6 million. In the prior year we recorded restructuring expense of $12.3 million in
connection with our plan to realign portions of the FoodTech business, accelerate sourcing initiatives and consolidate smaller
facilities.
• Other expense, net, decreased by $4.6 million, primarily due to foreign currency gains, gains on disposals of assets, and
lower acquisition costs in the year.
Net interest expense increased by $4.2 million as a result of higher average debt balances incurred to acquire new businesses and
increased interest rates.
Income tax expense for 2017 reflects an effective income tax rate of 37.9% compared to 27.6% in 2016. We recognized $15.5 million,
or 11.7%, in income tax provision resulting from the enactment of the Tax Act in December 2017. See Tax Cuts and Jobs Act section
below for further detail. The rate in 2017 also includes a $6.4 million favorable impact, or 4.8%, resulting from the adoption of new
stock-based compensation guidance in 2017 requiring excess tax benefits to be recorded directly in earnings. The remaining
unfavorable impact on our rate in 2017 reflects an increase in the mix of U.S. taxable income to our global earnings.
2016 Compared With 2015
Total revenue increased $243.2 million, or $250.4 million in constant currency, in 2016 compared to 2015. The increase was largely
driven by revenue from acquisitions of $143.3 million. Organic growth of $107.1 million was also substantial with both FoodTech and
AeroTech contributing organic growth rates of 10%, a reflection of higher demand for equipment and services across our businesses,
success in accessing new sales opportunities with the integration of acquired businesses, and strategic value selling. Operating income
increased $14.4 million, or $16.5 million in constant currency, in 2016 compared to 2015. Factors impacting operating income
include:
• Gross profit increased $63.8 million, or $67.3 million in constant currency, but declined as a percentage of revenue from
•
28.6% to 28.2%. The decrease in profit margins reflect lower gross profit margins contributed from businesses acquired in
2015 and 2016 which was somewhat offset by higher margins from strategic value selling.
Selling, general and administrative (SG&A) expenses increased by $29.7 million, or $33.0 million in constant currency, but
declined as a percentage of revenue from 18.7% to 17.5%. The increase was primarily a result of higher corporate expenses
of $8.0 million including costs incurred in preparation for the implementation of a new global ERP system, and investments
in Next Level initiatives including global sourcing initiatives and continuous improvement projects. In addition, we incurred
$8.6 million in incremental SG&A from businesses acquired during 2015 and 2016.
• Research and development expense increased by $5.4 million from new product development primarily in newly acquired
businesses, higher spend on new technology and product upgrades.
• Restructuring expense increased $12.3 million. We initiated an optimization program in early 2016 designed to realign
certain FoodTech businesses.
• Other expense, net, increased by $2.0 million, primarily due to higher acquisition costs incurred on acquisitions pursued or
completed in 2016.
Net interest expense increased by $2.6 million as a result of higher average debt balances incurred to acquire new businesses.
Income tax expense for 2016 reflects an income tax rate of 27.6% compared to 31.9% in 2015. The decrease was driven by an increase
in the R&D tax credit in 2016 compared to 2015. In addition, in 2016 we recorded $1.5 million of favorable discrete adjustments to
the income tax provision, primarily reflecting a lower tax liability for fiscal year 2015.
Restructuring
In the first quarter of 2016, we implemented our optimization program to realign FoodTech’s Protein business in North America and
Liquid Foods business in Europe, accelerate JBT’s strategic sourcing initiatives, and consolidate smaller facilities. The total estimated
cost in connection with this plan is approximately $12.0 million.
During the fourth quarter of 2016, in connection with our acquisition of Tipper Tie, we implemented a restructuring plan to
consolidate certain facilities and optimize our general and administrative infrastructure subsequent to a FoodTech acquisition. The
total estimated cost in connection with this plan is approximately $4.0 million.
32
The following table shows the cumulative cost savings (annualized) to date from inception of the plans through December 31, 2017,
and expected through the duration of the plans:
(In millions)
Cost of Sales
Selling, General and Administrative Expense
Total
Cumulative to Date
2018
$
$
1.8
5.3
7.1
$
$
0.5
0.6
1.1
The amount and timing of these cost savings were generally consistent with our expectations. A portion of the $7 million in savings
was used to fund our JBT Elevate growth initiatives.
Tax Cuts and Job Act
Our effective tax rate was 37.9% compared to 27.6% in 2016. The higher rate in 2017 includes a $15.5 million unfavorable impact, or
11.7%, resulting from the enactment of the Tax Cuts and Jobs Act on December 22, 2017. Various provisions of the Tax Act have an
impact on the 2017 results. We recorded a $7.0 million tax provision by remeasuring our U.S. net deferred tax assets to the new lower
U.S. corporate tax rate. Additionally, we recorded a provisional $7.7 million one-time tax expense related to the deemed repatriation of
foreign unremitted earnings and a provisional $0.8 million one-time tax expense related to executive compensation.
33
OPERATING RESULTS OF BUSINESS SEGMENTS
Year Ended December 31,
Favorable / (Unfavorable)
2017
2016
2015
2017
vs.
2016
2016
vs.
2015
(in millions)
Revenue
JBT FoodTech
JBT AeroTech
Other revenue and intercompany eliminations
Total revenue
Income before income taxes
Segment operating profit:
JBT FoodTech
JBT FoodTech segment operating profit %
JBT AeroTech
JBT AeroTech segment operating profit %
Total segment operating profit
Total segment operating profit %
Corporate items:
Corporate expense
Restructuring expense
Net interest expense
Total corporate items
Income from continuing operations before income
taxes
Provision for income taxes
Income from continuing operations
$
1,171.9
$
463.0
0.2
928.0
422.5
—
$
1,635.1
$
1,350.5
$
$
$
139.1
11.9%
$
113.2
12.2%
$
725.1
$
243.9
$
$
$
383.1
(0.9)
1,107.3
85.4
11.8%
38.2
10.0%
123.6
11.2%
40.5
0.2
284.6
$
$
25.9
-30 bps
5.6
30 bps
31.5
-10 bps
34.6
—
6.8
41.4
82.2
26.2
56.0
0.1
55.9
0.3
10.6
(4.2)
6.7
38.2
(24.1)
14.1
(1.2)
12.9
$
$
45.1
10.7%
158.3
11.7%
42.6
12.3
9.4
64.3
94.0
26.0
68.0
0.4
67.6
$
202.9
39.4
0.9
243.2
27.8
40 bps
6.9
70 bps
34.7
60 bps
(8.0)
(12.3)
(2.6)
(22.9)
11.8
0.2
12.0
(0.3)
11.7
50.7
11.0%
189.8
11.6%
42.3
1.7
13.6
57.6
132.2
50.1
82.1
Loss from discontinued operations, net of income
taxes
Net income
1.6
80.5
$
$
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, stock-based compensation, LIFO provisions, restructuring
costs, certain employee benefit expenses, interest income and expense and income taxes.
JBT FoodTech
2017 Compared With 2016
JBT FoodTech’s revenue increased by $243.9 million, or $232.4 million in constant currency, in 2017 compared to 2016. North
American customers drove the majority of this growth, with the remaining growth primarily driven by customers in Europe.
Acquisitions contributed $166.6 million in revenue, and the remaining FoodTech business contributed $77.3 million in revenue
growth, $11.6 million of which was from foreign currency translation.
JBT FoodTech's operating profit margin for the year ended December 31, 2017 was 11.9% compared to 12.2% in prior year, a
decrease of 30 bps. Gross profit margins increased 20 bps year-over-year driven by acquisitions. This was more than offset by higher
selling, general and administrative costs primarily attributable to recently acquired businesses and higher amortization costs in 2017
compared to 2016.
Currency translation did not have a significant impact on our operating profit comparative results for FoodTech.
34
2016 Compared With 2015
JBT FoodTech’s revenue increased by $202.9 million, or $210.4 million in constant currency, in 2016 compared to 2015. Acquisitions
contributed $143.3 million in revenue, and the remaining FoodTech business contributed $67.1 million in revenue growth, which was
partially offset by $7.5 million of foreign currency translation. The key driver of organic revenue performance was higher Protein
equipment and aftermarket sales and higher Liquid Foods equipment sales across all regions.
JBT FoodTech's operating profit increased by $27.8 million, or $29.2 million in constant currency, in 2016 compared to 2015. The
increase was driven by higher volume, acquisitions and increased profitability. Strategic value selling, sourcing savings, and other cost
reduction initiatives helped drive operating profit improvement, partially offset by increased selling, general and administrative costs
of $20.0 million from acquisitions and Next Level initiatives. Operating profit margin increased from 11.8% to 12.2%.
JBT AeroTech
2017 Compared With 2016
JBT AeroTech's revenue increased $40.5 million, or $40.4 million in constant currency, in 2017 compared to 2016. Acquisitions
contributed $8.4 million, $32.0 million was from organic growth and $0.1 million in currency translation. Revenues from our fixed
equipment business increased $16.5 million mainly due to higher shipments of passenger boarding bridges to domestic airports.
Service revenues increased by $17.8 million driven by higher revenues from new maintenance contracts. Our organic mobile
equipment revenue declined $2.3 million resulting mainly from decreased sales to military customers.
JBT AeroTech's operating profit margin was 11.0% compared to 10.7% in the prior year, reflecting an increase of 30 bps. Gross profit
margins increased by 30 bps driven primarily by our value based selling and material sourcing savings Elevate initiatives. In addition,
SG&A as a percent of sales decreased due to improved leveraging of fixed costs. These improvements were partially offset by higher
operating expenses in 2017 driven by investment in research and development to support Elevate growth initiatives and acquisition
related items.
Currency translation did not have a significant impact on our operating profit comparative results for AeroTech.
2016 Compared With 2015
JBT AeroTech's revenue increased $39.4 million, or $41.0 million in constant currency, in 2016 compared to 2015. Revenues from
our fixed equipment business increased $15.3 million mainly due to higher deliveries of passenger boarding bridges and related
equipment to domestic airports. Revenues from our mobile equipment business increased $11.6 million primarily due to higher
deliveries of ground support equipment to domestic and foreign military customers and domestic ground handlers. Revenues from our
airport services business improved by $14.1 million as a result of higher revenues from new and existing maintenance contracts.
JBT AeroTech's operating profit increased $6.9 million, or $7.2 million in constant currency, in 2016 compared to 2015. Higher sales
volume accounted for $8.6 million of improved profit. Lower gross profit margins resulted in a decline of $1.2 million driven largely
by the absence of higher than average margins on parts and services to military customers in the prior period and a lower mix of
higher margin products partly offset by improved value selling. Selling, administrative and research and development costs were flat
from the prior period.
Corporate Items
2017 Compared With 2016
Corporate items decreased by $6.7 million compared to 2016, driven primarily by a $10.6 million reduction in restructuring expense
year-over-year, offset by $4.2 million higher net interest expense due to increased borrowings to fund acquisitions. Corporate expense
as a percent of revenues decreased to 2.6% in 2017 compared to 3.1% in 2016, a decrease of 50 bps driven by increased leveraging of
fixed costs.
2016 Compared With 2015
Corporate items increased by $22.9 million compared to 2015 driven by $12.3 million in restructuring expense incurred in 2016, $2.6
million in higher net interest expense resulting from increased borrowings, and $8.0 million in higher corporate expenses. Significant
increases in corporate costs include $3.1 million in higher incentive compensation charges and $3.2 million in investments in
initiatives including sourcing and continuous improvement initiatives as well as preparation for the implementation of a new global
ERP system.
35
Inbound Orders and Order Backlog
Inbound orders represent the estimated sales value of confirmed customer orders received during the years ended December 31, 2017
and 2016.
(In millions)
JBT FoodTech
JBT AeroTech
Total inbound orders
2017
2016
$
$
1,184.4
481.7
1,666.1
$
$
915.6
442.0
1,357.6
Order backlog is calculated as the estimated sales value of unfilled, confirmed customer orders as of December 31, 2017 and 2016.
(In millions)
JBT FoodTech
JBT AeroTech
Total order backlog
2017
2016
$
$
371.2
254.0
625.2
$
$
325.5
231.5
557.0
Order backlog in our JBT FoodTech segment at December 31, 2017 increased by $17.4 million compared to December 31, 2016.
Excluding the effect of foreign exchange, FoodTech backlog increased by $23.1 million due to higher demand across all regions. We
expect to convert almost all of JBT FoodTech backlog at December 31, 2017 into revenue during 2018.
Order backlog in our JBT AeroTech segment at December 31, 2017 increased by $18.9 million compared to December 31, 2016. The
increase was due to $6.4 million from acquisitions and an increase in both fixed and mobile equipment orders. We expect to convert
approximately 70% of the JBT AeroTech backlog at December 31, 2017 into revenue during 2018.
Seasonality
We experience seasonality in our operating results. Historically, our revenues and operating income have been lower in the first
quarter and highest in the fourth quarter as a result of our customers' purchasing trends.
Liquidity and Capital Resources
Our primary sources of liquidity are cash provided by operating activities of our U.S. and foreign operations and borrowings from our
credit facility. Our liquidity as of December 31, 2017, or cash plus borrowing capacity under our credit facilities was $367.3 million.
The cash flows generated by our operations and the credit facility are expected to be sufficient to satisfy our working capital needs,
research and development activities, restructuring costs, capital expenditures, pension contributions, anticipated share repurchases,
acquisitions and other financing requirements.
As of December 31, 2017, we had $34.0 million of cash and cash equivalents, $29.8 million of which was held by our foreign
subsidiaries. Although these funds are considered permanently invested in our foreign subsidiaries, we are not presently aware of any
restriction on the repatriation of these funds. We maintain significant operations outside of the U.S., and many of our uses of cash for
working capital, capital expenditures and business acquisitions arise in these foreign jurisdictions. If these funds were needed to fund
our operations or satisfy obligations in the U.S., they could be repatriated and their repatriation into the U.S. could cause us to incur
additional U.S. income taxes and foreign withholding taxes. Any additional taxes could be offset, in part or in whole, by foreign tax
credits. The amount of such taxes and application of tax credits would be dependent on the income tax laws and other circumstances at
the time any of these amounts were repatriated.
As noted above, funds held outside of the U.S. are considered permanently invested in our non-U.S. subsidiaries. At times, these
foreign subsidiaries have cash balances that exceed their immediate working capital or other cash needs. In these circumstances, the
foreign subsidiaries may loan funds to the U.S. parent company on a temporary basis; the U.S. parent company has in the past and
may in the future use the proceeds of these temporary intercompany loans to reduce outstanding borrowings under our committed
credit facilities. By using available non-U.S. cash to repay our debt on a short-term basis, we can optimize our leverage ratio, which
has the effect of lowering our interest costs.
36
Under Internal Revenue Service (IRS) guidance, no incremental tax liability is incurred on the proceeds of these loans as long as each
individual loan has a term of 30 days or less and all such loans from each subsidiary are outstanding for a total of less than 60 days
during the year. As of December 31, 2017 there were no amounts outstanding subject to this IRS guidance. During 2017, each such
loan was outstanding for less than 30 days, and all such loans were outstanding for less than 60 days in the aggregate. We used the
proceeds of these intercompany loans to reduce outstanding borrowings under our revolving credit facility. We may choose to access
such funds again in the future to the extent they are available and can be transferred without significant cost, and use them on a
temporary basis to repay outstanding borrowings or for other corporate purposes, but intend to do so only as allowed under this IRS
guidance.
On December 2, 2015, the Board authorized a share repurchase program for up to $30 million of our common stock beginning January
1, 2016 and continuing through December 31, 2018. Shares may be purchased from time to time in open market transactions, subject
to market conditions. Repurchased shares become treasury shares, which are accounted for using the cost method and are used for
future equity compensation awards. The timing, price and volume of future repurchases will be based on market conditions, relevant
securities laws and other factors. As of December 31, 2017, $20.7 million was still available under the program. Refer to Note 11.
Stockholders' Equity for further details.
Contractual Obligations and Off-Balance Sheet Arrangements
The following is a summary of our contractual obligations at December 31, 2017:
(In millions)
Long-term debt(a)
Interest payments on long-term debt(b)
Operating leases
Amounts due sellers from acquisitions(c)
Unconditional purchase obligations(d)
Pension and other post-retirement benefits(e)
Transition tax due under Tax Act(f)
Total contractual obligations
Total
payments
Payments due by period
1 - 3
years
Less than 1
year
3-5
years
After 5
years
$
383.5
$
10.5
$
373.0
$
— $
17.5
41.4
13.8
74.3
15.3
7.7
8.1
11.6
6.1
74.2
15.3
1.0
9.4
13.8
7.7
0.1
—
1.2
—
9.8
—
—
—
1.2
$
553.5
$
126.8
$
405.2
$
11.0
$
—
—
6.2
—
—
—
4.3
10.5
(a)
(b)
(c)
(d)
(e)
(f)
Our available long-term debt is dependent upon our compliance with covenants described under the heading “Financing
Arrangements” later in Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations. 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 and could accelerate our obligation to repay the amount due. We were in
compliance with all debt covenants as of December 31, 2017.
Interest payments were determined using the weighted average rates for all debt outstanding as of December 31, 2017.
See Note 2. Acquisitions for further details on our recent acquisitions.
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
consolidated statements of income.
This amount reflects planned contributions in 2018 to our pension plans. Required contributions for future years depend on
factors that cannot be determined at this time.
This amount reflects the provisional transition tax on the previously untaxed and unrepatriated current and accumulated
post-1986 foreign earnings of certain foreign subsidiaries as required by the Tax Act.
37
The following is a summary of other off-balance sheet arrangements at December 31, 2017:
(In millions)
Letters of credit and bank guarantees
Surety bonds
Total other off-balance sheet arrangements
Total
amount
Amount of commitment expiration per period
1 - 3
years
Less than 1
year
3-5
years
After 5
years
$
$
43.6
158.2
201.8
$
$
39.6
44.9
84.5
$
$
3.6
87.5
91.1
$
$
— $
25.8
25.8
$
0.4
—
0.4
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.
Cash Flows
Cash flows for each of the three year periods ended on December 31, were as follows:
(In millions)
Cash provided by continuing operating activities
Cash required by continuing investing activities
Cash provided by financing activities
Cash required by discontinued operations
Effect of foreign exchange rate changes on cash and cash
equivalents
Increase (decrease) in cash and cash equivalents
2017
2016
2015
$
$
$
106.3
(139.9)
34.7
(1.7)
1.4
0.8
$
$
67.9
(266.8)
194.9
(0.5)
0.5
(4.0) $
112.2
(185.1)
83.9
(0.3)
(6.8)
3.9
2017 Compared with 2016
Cash provided by continuing operating activities in 2017 were $106.3 million, representing a $38.4 million increase compared to
2016. The increase in the operating cash flows is driven by higher income in 2017 compared to 2016 offset by higher investments in
working capital in 2017 compared to 2016.
Cash required by investing activities during 2017 was $139.9 million, representing a $126.9 million decrease compared to 2016. The
change was due primarily to a lower level of investments in acquired companies, where we invested $104.2 million on acquisitions
completed during 2017 compared to an investment in 2016 of $232.0 million.
Cash provided by financing activities in 2017 were $34.7 million, representing a $160.2 million decrease compared to 2017. On
March 6, 2017 we issued 2.3 million shares of common stock which resulted in net proceeds of $184.1 million. We used the net
proceeds from this offering to repay a portion of our outstanding borrowings under our revolving credit facility and for general
corporate purposes. Higher operating cash flows and lower investments in acquisitions allowed for significant reduction in
borrowings under our revolving credit facility.
2016 Compared with 2015
Cash flows provided by continuing operating activities in 2016 were $67.9 million, representing a $44.3 million decrease compared to
2015. The change in the operating cash flows is driven primarily by a decrease in advance payments and progress billings, an increase
in inventory, as well as an increase in trade receivables due to timing of customer payments. These decreases in operating cash flow
were partially offset by higher income in 2016 compared to 2015.
38
Cash required by investing activities during 2016 was $266.8 million, representing a $81.7 million increase compared to 2015. The
change was due primarily to larger investments in acquired companies, where we invested $232.0 million on acquisitions completed
during 2016 compared to acquisition costs in 2015 of $150.9 million.
Cash flows provided by financing activities in 2016 were $194.9 million, representing a $111.0 million increase compared to 2015.
The change in financing cash flows was primarily driven by borrowings against our revolving credit facility to provide the funding
required for the acquisitions completed during 2016.
Financing Arrangements
We have a $600.0 million revolving credit facility, with Wells Fargo Bank, N.A. as administrative agent, that matures in February
2020. This revolving credit facility permits borrowings in the U.S. and in the Netherlands. Borrowings bear interest, at our option, at
U.S. LIBOR subject to a floor rate of zero or an alternative base rate, which is the greater of Wells Fargo’s Prime Rate, the Federal
Funds Rate plus 50 basis points, and LIBOR plus 1%, plus, in each case, a margin dependent on our leverage ratio. We must also pay
an annual commitment fee of 15.0 to 30.0 basis points dependent on our leverage ratio. The Credit Agreement evidencing the facility
contains customary representations, warranties, and covenants, including a maximum interest coverage ratio and maximum leverage
ratio, as well as certain events of default.
We have an incremental term loan in the amount of $150.0 million which bears interest on the same fully funded terms as the
revolving credit facility and matures in February 2020. We are required to make mandatory prepayments, subject to certain
exceptions, of the term loan with the net cash proceeds of (i) any issuance or other incurrence of indebtedness not otherwise permitted
under the Credit Agreement and (ii) certain sales or other dispositions of assets subject to certain exceptions and thresholds. We are
required to repay the term loan in quarterly principal installments of $1.9 million beginning on March 31, 2018, with a balloon
payment at maturity to pay the remaining outstanding balance.
As of December 31, 2017 we had $150.0 million outstanding under the term loan within the credit facility, $230.5 million drawn on
and $354.7 million of availability under the revolving credit facility. Our ability to use this availability is limited by the leverage ratio
covenant described below.
The Credit Agreement includes covenants that, if not met, could lead to a renegotiation of our credit lines, a requirement to repay our
borrowings and/or a significant increase in our cost of financing. As of December 31, 2017, we were in compliance with all covenants
in the Credit Agreement. We expect to remain in compliance with all covenants in the foreseeable future. However, there can be no
assurance that continued or increased volatility in global economic conditions will not impair our ability to meet our covenants, or that
we will continue to be able to access the capital and credit markets on terms acceptable to us or at all. In February 2017, we exercised
our option to temporarily increase the maximum allowable leverage ratio under the Credit Agreement from 3.5x to 4.0x, for the
quarter ended December 31, 2016 and the following three quarters. The leverage ratio increase option is available for the first quarter
end after we complete a permitted acquisition with a purchase price in excess of $100 million. Our exercise of the leverage ratio
increase option has the effect of temporarily increasing the amount we are able to borrow under the revolving credit facility.
In May 2017, we entered into a fourth amendment to the Credit Agreement. This amendment revoked the leverage ratio increase
period and returned us to the original maximum leverage ratio of 3.5x, as well as immediately reset the leverage ratio increase option
so it would be available to us without a waiting period that would otherwise apply. The amendment expanded the qualifying event to
allow for the option to be exercised if any permitted acquisition, or a series of permitted acquisitions occurring within any consecutive
twelve (12) month period following the first such permitted acquisition, had aggregate consideration in excess of $100.0 million. It
also provided flexibility to JBT in determining the length of the leverage ratio increase period, but not to exceed four quarters.
We have entered into interest rate swaps to fix the interest rate applicable to certain of our variable-rate debt. The agreements swap
one-month LIBOR for fixed rates. We have designated these swaps as cash flow hedges and all changes in fair value of the swaps are
recognized in Accumulated other comprehensive income (loss). As a result, as of December 31, 2017, some of our debt was
effectively fixed rate debt while approximately $155.9 million, or 40.7%, was subject to floating, or market, rates. To the extent
interest rates increase in future periods, our earnings could be negatively impacted by higher interest expense.
As part of our strategy to grow in Asia, we are expanding our operations in China and India. Due to greater restrictions on foreign
currency exchange in these regions, we have established credit facilities to fund some of the local working capital requirements in
these markets. Four of our wholly owned subsidiaries have short term credit facilities that allow us to borrow up to $12 million in
China, which mature on June 30, 2018. We had $2.7 million in borrowings under the credit facilities in China as of December 31,
2017. Our wholly-owned subsidiary in India has a short term credit facility that allows us to borrow up to $1.4 million. As of
December 31, 2017, we had no outstanding amount borrowed under this credit facility.
39
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.
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 estimated decline in the
carrying value of 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 three-year period. This list is then reviewed by management personnel to determine
whether this list of potential excess or obsolete inventory items have orders or expected demand in the near term. The remaining items
on the candidate listing are written down to their estimated net realizable value. Inherent in the estimates of net realizable value are
estimates related to our future manufacturing schedules, customer demand, possible alternative uses, and ultimate realization of
potentially excess inventory.
Goodwill
Goodwill represents the excess of the cost of an acquired business over the amounts assigned to the identifiable net assets. Goodwill is
not amortized but is tested for impairment at a reporting unit level on an annual basis, or whenever an event occurs or circumstances
change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. We are required to make
certain subjective and complex judgments in assessing whether an event that could indicate an impairment of goodwill has occurred,
and must make assumptions and estimates to determine the fair value of our reporting units. We may first assess qualitative factors to
make this determination. If we conclude that it is not more likely than not that the fair value of a reporting unit is less than its carrying
amount based on our qualitative assessment, then a quantitative test is not necessary.
We may also choose to bypass the qualitative assessment and perform the quantitative test. In performing the quantitative test, we
determine the fair value of a reporting unit using the “income approach” valuation method. We use a discounted cash flow model in
which cash flows anticipated over several periods, plus a terminal value at the end of that time horizon, are discounted to their present
value using an appropriate cost of capital rate. Judgment is required in developing the assumptions for the discounted cash flow
model. These assumptions include revenue growth rates, profit margin percentages, discount rates, perpetuity growth rates, future
capital expenditures, and working capital requirements, among others. If the estimated fair value of a reporting unit exceeds its
carrying value, we consider that goodwill is not impaired. If the carrying value exceeds estimated fair value, there is an indication of
potential impairment, and an impairment loss is recorded. We calculate the impairment loss by comparing the fair value of the
reporting unit less its carrying amount, including goodwill.
We completed our annual goodwill impairment test as of October 31, 2017 using a quantitative assessment approach. As a result of
this assessment we noted that the fair value of each reporting unit substantially exceeds its carrying value and therefore none of our
goodwill was impaired.
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 consolidated balance
sheets. When we maintain deferred tax assets, we must assess the likelihood that these assets will be recovered through adjustments to
future taxable income. To the extent we believe, based on available evidence, it is more likely than not that all or some portion of the
asset will not be realized, we establish a valuation allowance. We record an allowance reducing the asset to a value we believe is more
likely than not of being realized 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.
40
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 realization of the net deferred tax assets would require that we
adjust the valuation allowance, resulting in a change to net income.
On December 22, 2017, Congress passed, and the President signed, the Tax Cuts and Jobs Act (the “Tax Act”). The Tax Act makes
broad and complex changes to the U.S. tax Code, including, but not limited to, (1) reducing the U.S. federal corporate income tax rate
from 35.0 percent to 21.0 percent; (2) requiring companies to pay a one-time transitional tax on certain un-repatriated earnings of
foreign subsidiaries; (3) generally eliminating U.S. federal income tax on dividends from foreign subsidiaries of U.S. corporations; (4)
repealing the domestic production activity deduction; (5) providing for the full expensing of qualified property; (6) adding a new
provision designed to tax global intangible low-taxed income (“GILTI”); (7) revising the limitation imposed on deductions for
executive compensation paid by publicly-traded companies; (8) eliminating the corporate alternative minimum tax (“AMT”) and
changing how existing AMT credits can be utilized; (9) creating a base erosion-anti-abuse tax (“BEAT”), a new minimum tax on
payments made by certain U.S. corporations to related foreign parties; (10) imposing a new limitation on the deductibility of interest
expense; (11) allowing for a deduction related to foreign-derived intangible income (“FDII”); and (12) changing the rules related to
the uses and limitations of net operating loss carryforwards generated in tax years beginning after December 31, 2017. See Note. 7
Income Taxes for further details on the impacts of these changes to the Company.
Defined Benefit Pension and Other Post-retirement Plans
The measurement of pension and other post-retirement plans’ costs requires the use of assumptions for discount rates, investment
returns, employee turnover rates, retirement rates, mortality rates and other factors. The actuarial assumptions used in our pension and
post-retirement benefit reporting are reviewed annually and compared with external benchmarks to ensure that they appropriately
account for our future pension and post-retirement benefit obligations. While we believe that the assumptions used are appropriate,
differences between assumed and actual experience may affect our operating results.
Our accrued pension and other post-retirement benefits liability reflects the funded status of our worldwide plans, or the projected
benefit obligation net of plan assets. Our discount rate assumption is determined by developing a yield curve based on high quality
corporate bonds with maturities matching the plan’s expected benefit payment streams. The plans’ expected cash flows are then
discounted by the resulting year-by-year spot rates. The projected benefit obligation is sensitive to changes in our estimate of the
discount rate. The discount rate used in calculating the projected benefit obligation for the U.S. pension plan, which represents 85% of
all pension plan obligations, was 3.73% in 2017, 4.30% in 2016 and 4.60% in 2015. A decrease of 50 basis points in the discount rate
used in our calculation would increase our projected benefit obligation by $19.8 million.
Our pension expense is sensitive to changes in our estimate of the expected rate of return on plan assets. The expected return on assets
used in calculating the pension expense for the U.S. pension plan, which represents 96% of all pension plan assets, was 6.75% for
2017, 7.00% for 2016 and 7.25% for 2015. For 2018, the rate is expected to be 6.50%. A change of 50 basis points in the expected
return on assets assumption would impact pension expense by $1.3 million (pre-tax).
See Note 8. Pension and Post-Retirement and Other Benefit Plans of the notes to Consolidated Financial Statements in Item 8.
Financial Statements and Supplementary Data for additional discussion of our assumptions and the amounts reported in the
Consolidated Financial Statements.
Recently Adopted Accounting Standards
In July 2015, the FASB issued ASU No. 2015-11, Inventory (Topic 330) – Simplifying the Measurement of Inventory. The core
principle of the ASU is that entities that historically used the lower of cost or market in the subsequent measurement of inventory will
instead be required to measure inventory at the lower of cost and net realizable value. The guidance will not change U.S. GAAP for
inventory measured using LIFO or the retail inventory method. The ASU is effective for annual reporting periods, including interim
periods within those annual periods, beginning after December 15, 2016. This guidance became effective for us as of January 1, 2017
and there was no effect on our consolidated financial statements and related disclosures.
In March 2016, the FASB issued ASU No. 2016-09, Stock Compensation (Topic 718) - Improvements to Employee Share-Based
Payment Accounting. The new guidance was developed as part of the FASB’s simplification initiative. The core principle of the ASU
requires income tax effects of awards to be recognized in the income statement when the awards vest or are settled, and eliminates the
requirement to report excess tax benefits in additional paid-in capital (APIC pool). It also allows an employer to repurchase more of an
employee’s shares for tax withholding purposes without triggering liability accounting, and allows an employer to make a policy
election to account for forfeitures as they occur. The new standard became effective for us as of January 1, 2017. During 2017,
41
296,608 awards vested, and resulted in a $6.4 million tax benefit reported in earnings, and is classified as an operating activity within
the condensed consolidated Statements of Cash Flows. The elimination of the APIC pool affects the treasury stock method used to
calculate weighted average shares outstanding; however, the impact was not material. We elected to change our policy surrounding
forfeitures, and beginning January 2017 we no longer estimate the number of awards expected to be forfeited but rather account for
them as they occur. We are required to implement this portion of the guidance using a modified retrospective approach, and as such
have recorded a cumulative adjustment of $0.6 million in retained earnings as of January 1, 2017.
We also amended our incentive compensation and stock plan to allow JBT to have the discretion to withhold up to the maximum
statutory rates on an individual tax basis. A liability was not established as the withholding limits do not exceed the maximum. Cash
paid for tax withholdings are classified as financing activity on the condensed consolidated Statement of Cash Flows, consistent with
prior years.
In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230) Classification of Certain Cash Receipts and
Cash Payments and Restricted Cash. The new guidance is intended to reduce the existing diversity in practice in how certain cash
receipts and cash payments are presented and classified in the statement of cash flows. The core principle of the ASU requires the
classification of eight specific cash flow issues identified under ASC 230 to be presented as either financing, investing or operating, or
some combination thereof, depending upon the nature of the issue. Entities are required to use a retrospective transition approach for
all of the issues identified for each period presented. The Company adopted the new ASU as of September 30, 2017. There was no
impact on our consolidated financial statements and related disclosures as a result of adopting the ASU.
In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805) - Clarifying the Definition of a Business.
The core principle of the ASU is to clarify the definition of a business to require certain transactions to be accounted for as business
combinations versus an acquisition of assets. The Company adopted the new ASU as of September 30, 2017. There was no impact on
our consolidated financial statements and related disclosures as a result of adopting the ASU.
In January 2017, the FASB issued ASU No. 2017-04, Intangibles - Goodwill and Other (Topic 350) - Simplifying the Test for Goodwill
Impairment. The new guidance will simplify the accounting for goodwill impairment. The core principle of the ASU is to remove the
requirement to calculate an implied fair value to determine impairment (Step 2 of the goodwill impairment test) and allow instead for
goodwill impairment to equal the amount by which a reporting unit's carrying value exceeds its fair value, not to exceed the carrying
amount of goodwill. The Company early adopted the new ASU as of September 30, 2017, prior to our 2017 annual testing of goodwill
impairment, performed as of October 31st. There was no impact on our consolidated financial statements and related disclosures as a
result of adopting the ASU.
In May 2017, the FASB issued ASU No. 2017-09, Compensation - Stock Compensation (ASC 718) - Scope of Modification
Accounting. The amendments provide guidance as to how an entity should account for a change in the terms and conditions of its
share-based payment awards. The core principle of the ASU is to provide clarity, and reduce the variation in applied practice, as well
as, cost and complexity in accounting for a change in the terms and conditions in an entity's share-based payment awards. The
Company adopted the new ASU as of September 30, 2017. There was no impact on our consolidated financial statements and related
disclosures as a result of adopting the ASU.
Recently Issued Accounting Standards Not Yet Adopted
Beginning in 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), plus a number of related
ASU’s designed to clarify and interpret Topic 606. The new standard will replace most existing revenue recognition guidance in U.S.
GAAP. The core principle of the ASU requires companies to reevaluate when revenue is recorded based upon newly defined criteria,
either at a point in time or over time as goods or services are delivered. The ASU requires additional disclosure about the nature,
amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and
estimates, and changes in those estimates. The new standard became effective for us as of January 1, 2018. As previously disclosed,
we will adopt Topic 606 on a modified-retrospective basis.
In 2017, we completed our gap assessment and determined that in certain contracts, we will qualify for over time recognition for our
manufactured equipment that is highly engineered to unique customer specifications. In addition, we expect that due to the nature of
our equipment and installation contracts that we will combine these into one performance obligation. Under Topic 606, revenue
recognized for contracts that meet certain criteria will result in revenue being recognized as the equipment is being manufactured
which is an acceleration of revenue as compared to our current revenue recognition methodology of recognizing revenue, generally
when the equipment is shipped to the customer. This conclusion, specific to equipment contracts for which the equipment is highly
engineered to unique customer specifications, is dependent on whether our contract with the customer provides us, upon customer
cancellation, with an enforceable right to payment for performance completed to date. Where the contract does not provide explicit
language regarding cancellation payments, revenue will be recognized at a point in time, usually upon completion of the installation of
the equipment. Therefore, some revenue will be deferred and recognized at a later date. This impacts both equipment contracts with
42
installation that qualify as one performance obligation, and that were previously recognized upon shipment, as well as certain
equipment contracts for which revenue was recognized under percentage of completion accounting under legacy GAAP.
We continue to execute our implementation plan and have developed new revenue accounting policies and processes; changed our
internal controls over revenue recognition; created pro forma disclosures; and continue to implement system changes and
enhancements. We are in the process of evaluating all contracts not completed on January 1, 2018 and have preliminarily determined
the net impact of adopting this standard will be a reduction to retained earnings within the range of $25 million to $30 million. This
differs significantly from the expected impact previously disclosed and is due solely due to interpretations published subsequent to our
previous disclosure regarding what constitutes an enforceable right to payment. For full year 2018 results, we expect the financial
statement impact of this deferral will be substantially offset by the requirement to defer revenue on contracts that, under legacy GAAP,
would have been recognized in 2018, but will be deferred until 2019 under the new standard. Our assessment of the foregoing is
ongoing and subject to finalization, such that the actual impact of the adoption may differ materially from the estimated ranges
described above.
Upon adoption of the new revenue standard in the first quarter of 2018, the timing of revenue recognition for certain projects will vary
and may be recorded upon shipment based on contract terms, when previously such projects were recorded over time. The impact to
future revenue trends is uncertain as it will depend on future orders and contract terms. However, cash flows and overall profitability of
a contract at completion are unchanged by the new standard.
In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). The new standard will replace most existing lease guidance
in U.S. GAAP. The core principle of the ASU is the requirement for lessees to report a right to use asset and a lease payment
obligation on the balance sheet, but recognize expenses on their income statements in a manner similar to today’s accounting.
Accounting for lessors will remains substantially similar to current U.S. GAAP. The ASU is effective for annual reporting periods,
including interim periods within those annual periods, beginning after December 15, 2018. However, early adoption is permitted.
Entities are required to use a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest
comparative period in the financial statements. We are in the process of evaluating the impact this standard will have on our
consolidated financial statements and related disclosures.
In October 2016, the FASB issued ASU 2016-16, Income Taxes: Intra-Entity Transfers of Assets Other Than Inventory. The new
guidance is intended to simplify the accounting for intercompany asset transfers. The core principle requires an entity to immediately
recognize the tax consequences of intercompany asset transfers. The ASU is effective for annual reporting periods, including interim
periods within those annual periods, beginning after December 15, 2017. However, early adoption is permitted only at the beginning
of an annual period for which no financial statements (interim or annual) have already been issued. The Company will adopt this
standard in the effective period. The impact to our consolidated financial statements and related disclosures will be immaterial.
In March 2017, the FASB issued ASU No. 2017-07, Compensation - Retirement Benefits (ASC 715) - Improving the Presentation of
Net Periodic Pension Costs and Net Periodic Postretirement Benefit Cost. The new guidance will change the presentation of pension
cost by providing additional guidance on the presentation of net benefit cost in the income statement and on the components eligible
for capitalization in assets. The core principle of the ASU is to provide more transparency in the presentation of these costs by
requiring the service cost component to be reported in the same line item as other compensation costs arising from services rendered
by the pertinent employees during the period. The other components of net benefit cost are required to be presented separately from
the service cost component and outside a subtotal of income from operations. The amendments require that the Statements of Income
impacts be applied retrospectively, while Balance Sheet changes should be applied prospectively. As such, upon adoption in 2018, the
Company expects to reduce operating income for fiscal year 2017 by $2.0 million, and report this income in non operating income.
Operating income for the fiscal year 2016 will be reduced by $2.3 million. There will be no impact to net income or to the Balance
Sheet or Statement of Cash Flows.
The ASU is effective for annual reporting periods, including interim periods within those annual periods, beginning after December
15, 2017. However, early adoption is permitted as of the beginning of an annual period for which financial statements (interim or
annual) have not been issued or made available for issuance. The Company will adopt the newly issued ASU as of January 1, 2018.
In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging (ASC 815) - Targeted Improvements to Accounting for
Hedging Activities. The core of the principle is to simplify hedge accounting, as well as improve the financial reporting of hedging
results, for both financial and commodity risks, in the financial statements and related disclosures. The ASU is effective for annual
reporting periods, including interim periods within those annual periods, beginning after December 15, 2018. Early adoption is
permitted in any interim period after the issuance of the amendment, however, any adjustments should be made as of the beginning of
the fiscal year in which the interim period occurred. The Company is currently evaluating the effect, if any, that the ASU will have on
our consolidated financial statements and related disclosures.
43
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, 2017 and 2016, our derivative holdings consisted of foreign currency forward contracts and foreign currency
instruments embedded in purchase and sale contracts and interest rate swap contracts.
These forward-looking disclosures address potential impacts from market risks only as they affect our financial instruments. They do
not include other potential effects resulting from changes in foreign currency exchange rates, interest rates, commodity prices or
equity prices that could impact our business..
Foreign Currency Exchange Rate Risk
During 2017, our foreign subsidiaries generated 31.4% of our revenue, the largest component of which was our operations in Sweden
which generated 8.3% of our revenue. Financial statements of our foreign subsidiaries for which the U.S. dollar is not the functional
currency are translated into U.S. dollars. As a result, we are exposed to foreign currency translation risk.
When we sell or purchase products or services, transactions are frequently denominated in currencies other than an operation’s
functional currency. As a result, we are exposed to foreign currency transaction risk. 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.
We economically hedge our 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 exposures being hedged. We also economically hedge firmly
committed anticipated transactions in the normal course of business. As these are not offset by an underlying balance sheet position
being hedged, our earnings can be significantly impacted on a periodic basis by the change in unrealized value of these hedges.
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. A 10% adverse movement in the foreign currency exchange rates would have an
immaterial impact on the value of our derivative instruments as of December 31, 2017. This amount would be reflected in our net
income but would be significantly offset by the changes in the fair value of the underlying hedged assets and liabilities.
Interest Rate Risk
Our debt instruments subject us to market risk associated with movements in interest rates. We had $383.3 million in variable rate debt
outstanding at December 31, 2017. A hypothetical 10% adverse movement in the interest rate would not significantly impact the
annual interest expense.
We have entered into interest rate swaps to fix the interest rate applicable to certain of our variable-rate debt. The agreements swap
one-month LIBOR for fixed rates. We have designated these swaps as cash flow hedges and all changes in fair value of the swaps are
recognized in accumulated other comprehensive income. We use a sensitivity analysis to measure the impact on fair value of the
interest rate swaps 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 an increase of $2.5 million in the net fair value of our interest rate swaps at December 31,
2017.
44
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Report of Independent Registered Public Accounting Firm
The Stockholders and Board of Directors
John Bean Technologies Corporation:
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated balance sheets of John Bean Technologies Corporation and subsidiaries (the
“Company”) as of December 31, 2017 and 2016, the related consolidated statements of income, comprehensive income (loss),
changes in stockholders’ equity, and cash flows for each of the years in the three year period ended December 31, 2017, and the
related notes and financial statement schedule II (collectively, the “consolidated financial statements”). In our opinion, the
consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31,
2017 and 2016, and the results of its operations and its cash flows for each of the years in the three year period ended December 31,
2017, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)
(“PCAOB”), the Company’s internal control over financial reporting as of December 31, 2017, based on criteria established in
Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission,
and our report dated February 28, 2018 expressed an unqualified opinion on the effectiveness of the Company’s internal control over
financial reporting.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB
and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable
rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to
error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial
statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining,
on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included
evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall
presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
/s/ KPMG LLP
We have served as the Company's auditor since 2007.
Chicago, Illinois
February 28, 2018
45
JOHN BEAN TECHNOLOGIES CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(In millions, except per share data)
Revenue:
Product revenue
Service revenue
Total revenue
Operating expenses:
Cost of products
Cost of services
Selling, general and administrative expense
Research and development expense
Restructuring expense
Other expense, net
Operating income:
Interest expense, net
Income from continuing operations before income taxes
Provision for income taxes
Income from continuing operations
Loss from discontinued operations, net of income taxes
Net income
Basic earnings per share:
Income from continuing operations
Loss from discontinued operations
Net income
Diluted earnings per share:
Income from continuing operations
Loss from discontinued operations
Net income
Dividends declared per share
Weighted average shares outstanding:
Basic
Diluted
Year Ended December 31,
2016
2015
2017
$
1,376.8
$
1,133.1
$
258.3
1,635.1
217.4
1,350.5
957.8
149.5
1,107.3
961.1
203.3
294.4
28.7
1.7
0.1
145.8
13.6
132.2
50.1
82.1
1.6
803.8
166.0
236.7
23.6
12.3
4.7
103.4
9.4
94.0
26.0
68.0
0.4
$
$
$
$
$
$
80.5
$
67.6
$
$
$
$
$
$
2.61
(0.05)
2.56
2.58
(0.05)
2.53
0.40
31.4
31.9
$
$
$
$
$
2.31
(0.01)
2.30
2.28
(0.01)
2.27
0.40
29.4
29.8
676.2
114.2
207.0
18.2
—
2.7
89.0
6.8
82.2
26.2
56.0
0.1
55.9
1.90
(0.01)
1.89
1.88
—
1.88
0.37
29.5
29.8
The accompanying notes are an integral part of the consolidated financial statements.
46
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(In millions)
Net income
Other comprehensive income
Foreign currency translation adjustments
Pension and other post-retirement benefits adjustments, net of tax
Derivatives designated as hedges, net of tax
Other comprehensive income (loss)
Comprehensive income
Year Ended December 31,
2016
2015
2017
80.5
$
67.6
$
55.9
20.5
(5.2)
1.5
16.8
97.3
$
(5.7)
(4.8)
0.7
(9.8)
57.8
$
(21.9)
(7.4)
(0.8)
(30.1)
25.8
$
$
The accompanying notes are an integral part of the consolidated financial statements.
47
JOHN BEAN TECHNOLOGIES CORPORATION
CONSOLIDATED BALANCE SHEETS
(In millions, except per share and number of shares)
December 31,
2017
December 31,
2016
Assets
Current Assets:
Cash and cash equivalents
Trade receivables, net of allowances of $3.2 and $3.1, respectively
Inventories
Other current assets
Total current assets
Property, plant and equipment, net of accumulated depreciation of $273.3 and $238.0,
respectively
Goodwill
Intangible assets, net
Deferred income taxes
Other assets
Total Assets
Liabilities and Stockholders' Equity
Current Liabilities:
Short-term debt and current portion of long-term debt
Accounts payable, trade and other
Advance and progress payments
Accrued payroll
Other current liabilities
Total current liabilities
Long-term debt, less current portion
Accrued pension and other post-retirement benefits, less current portion
Other liabilities
Commitments and contingencies (Note 15)
Stockholders' Equity:
Preferred stock, $0.01 par value; 20,000,000 shares authorized; no shares issued in 2017 or
2016
Common stock, $0.01 par value; 120,000,000 shares authorized; 2017: 31,623,079 issued,
and 31,577,182 outstanding; 2016: 29,316,041 issued and 29,156,847 outstanding
Common stock held in treasury, at cost; 2017: 45,897; and 2016: 159,194 shares
Additional paid-in capital
Retained earnings
Accumulated other comprehensive loss
Total Stockholders' Equity
Total Liabilities and Stockholders' Equity
The accompanying notes are an integral part of the consolidated financial statements.
$
34.0
$
316.4
190.2
48.0
588.6
233.0
301.8
216.8
13.1
38.1
33.2
260.5
139.6
51.7
485.0
210.2
239.5
186.0
35.0
31.7
$
$
1,391.4
$
1,187.4
10.5
$
157.1
127.6
49.8
96.4
441.4
372.7
85.9
49.5
—
0.3
(4.0)
252.2
333.7
(140.3)
441.9
7.1
135.7
110.5
49.1
90.6
393.0
491.6
86.1
36.8
—
0.3
(7.2)
77.2
266.6
(157.0)
179.9
$
1,391.4
$
1,187.4
48
JOHN BEAN TECHNOLOGIES CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
Cash Flows From Operating Activities:
Year Ended December 31,
2016
2015
2017
Net income
Loss from discontinued operations, net
Income from continuing operations
Adjustments to reconcile net income from continuing operations to cash provided
by operating activities of continuing operations:
$
$
80.5
1.6
82.1
$
67.6
0.4
68.0
Depreciation
Amortization
Stock-based compensation
Pension and other post-retirement benefits expense
Deferred income taxes
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
Accrued pension and other post-retirement benefits, net
Other assets and liabilities, net
Cash provided by continuing operating activities
Net cash required by discontinued operating activities
Cash provided by operating activities
Cash Flows From Investing Activities:
Acquisitions, net of cash acquired
Capital expenditures
Proceeds from disposal of assets
Proceeds from property available for sale
Cash required by investing activities
Cash Flows From Financing Activities:
Net proceeds (payments) on short-term debt
Proceeds from short-term foreign credit facilities
Payments of short-term foreign credit facilities
Net proceeds (payments) from domestic credit facilities
Issuance of long-term debt
Cash payments to settle private placement debt
Repayment of long-term debt
Proceeds from stock issuance, net of stock issuance costs
Excess tax benefits
Settlement of taxes withheld on equity compensation awards
Purchase of treasury stock
Dividends
Deferred acquisition payments
Cash provided by financing activities
Effect of foreign exchange rate changes on cash and cash equivalents
Increase (decrease) in cash and cash equivalents
Cash and cash equivalents, beginning of period
Cash and cash equivalents, end of period
Supplemental Cash Flow Information:
Interest paid
Income taxes paid
Acquisition - deferred consideration (non-cash)
The accompanying notes are an integral part of the consolidated financial statements.
49
29.7
22.0
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T
JOHN BEAN TECHNOLOGIES CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Consolidation
The consolidated financial statements include the accounts of John Bean Technologies Corporation (JBT, we, or the Company) and all
wholly-owned subsidiaries. All intercompany investments, accounts, and transactions have been eliminated.
Use of estimates
Preparation of financial statements that follow accounting principles generally accepted in the U.S. (U.S. GAAP) requires
management to make estimates and judgments that affect the reported amounts of assets and liabilities and the disclosure of contingent
assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting
period. Actual results could differ from these estimates.
Cash and cash equivalents
Cash and cash equivalents consist of cash and highly liquid investments with original maturities of three months or less.
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 (“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.
Property, plant, and equipment
Property, plant, and equipment are 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 other expense, net on the consolidated statements of
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 were $16.7 million and $12.3 million at December 31, 2017 and 2016, respectively. These software
costs include the amount paid for 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
We test goodwill for impairment annually during the fourth quarter and whenever events occur or changes in circumstances indicate
that impairment may have occurred. Impairment testing is performed for each of our reporting units by first assessing qualitative
factors to see if further testing of goodwill is required. If we conclude that it is more likely than not that a reporting unit’s fair value is
less than its carrying amount based on our qualitative assessment, then a quantitative test is required. We may also choose to bypass
the qualitative assessment and perform the quantitative test. In performing the quantitative test, we determine the fair value of a
reporting unit using the “income approach” valuation method. We use a discounted cash flow model in which cash flows anticipated
over several periods, plus a terminal value at the end of that time horizon, are discounted to their present value using an appropriate
cost of capital rate. Judgment is required in developing the assumptions for the discounted cash flow model. These assumptions
include revenue growth rates, profit margin percentages, discount rates, perpetuity growth rates, future capital expenditures, and
working capital requirements, among others. If the estimated fair value of a reporting unit exceeds its carrying value, we consider that
goodwill is not impaired. If the carrying value exceeds estimated fair value, there is an indication of potential impairment, and an
51
impairment loss is recorded. We calculate the impairment loss by comparing the fair value of the reporting unit less its carrying
amount, including goodwill. Impairment would be limited to the carrying value of the goodwill.
We completed our annual goodwill impairment test as of October 31, 2017 using a quantitative assessment approach. As a result of
this assessment we noted that the fair value of each reporting unit exceeds its carrying value and therefore we determined that none of
our goodwill was impaired.
Acquired intangible assets
Our acquired intangible assets are being amortized on a straight-line basis over their estimated useful lives, which range from less than
1 year to 15 years. We have determined the trade names for our 2017 and 2016 acquired businesses of Avure, Tipper Tie, C.A.T. and
PLF have indefinite lives.
The carrying values of intangible assets with indefinite lives are reviewed for recoverability on an annual basis, and whenever events
occur or changes in circumstances indicate that impairment may have occurred. The facts and circumstances considered include an
assessment of the recoverability of the cost of intangible assets from future cash flows to be derived from the use of the asset. It is not
possible for us to predict the likelihood of any possible future impairments or, if such an impairment were to occur, the magnitude of
any impairment. However, any potential impairment would be limited to the carrying value of the indefinite-lived intantigible asset.
Intangible assets with finite useful lives are subject to amortization over the expected period of economic benefit to us. We evaluate
whether events or circumstances have occurred that warrant a revision to the remaining useful lives of intangible assets. In cases
where a revision is deemed appropriate, the remaining carrying amounts of the intangible assets are amortized over the revised
remaining useful life.
Impairment of long-lived assets
Our long-lived assets other than goodwill and acquired intangible assets 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.
Revenue recognition
Refer to the Recently Issued Accounting Standards Not Yet Adopted section below for discussion of the impacts to revenue
recognition resulting from the new revenue guidance effective January 1, 2018. The following discussion focuses on the revenue
recognition methodology in place as of December 31, 2017.
For most of our products we recognize revenue when the following criteria are met: we have an agreement with the customer, the
product has been delivered to the customer, the sales price is fixed or determinable and collectability is reasonably assured.
Each customer arrangement is evaluated to determine the presence of multiple deliverables. For multiple-element revenue
arrangements, such as the sale of equipment with a service agreement, we allocate the contract value to the various elements based on
relative selling price for each element and recognize revenue consistent with the nature of each deliverable.
Our standard agreements generally do not include customer acceptance provisions. However, if there is a customer-specific acceptance
provision, the associated revenue is deferred until we have satisfied the acceptance provision.
Certain of our product sales are generated from construction-type contracts and revenue is 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 recognized based solely upon
materials procurement. Depending upon the product, we measure progress using an input method, such as costs incurred, or an output
method, such as units completed or milestones achieved. Any expected losses are charged to earnings, in total, in the period the losses
are identified.
Progress billings generally are issued upon the completion of certain phases of the work as stipulated in the contract. Revenue in
excess of progress billings on contracts amounted to $90.6 million and $63.0 million at December 31, 2017 and 2016, respectively.
These unbilled receivables are reported in trade receivables on the consolidated balance sheets. Progress billings and cash collections
in excess of revenue recognized on a contract are classified as advance and progress payments on the consolidated balance sheets. All
52
unbilled trade payables are accrued in other current liabilities when revenue is recognized. Unbilled trade payables were $13.3 million
and $8.3 million at December 31, 2017 and 2016, respectively.
Service revenue is recognized either when performance is complete or proportionately over the period of the underlying contract,
depending on the terms of the arrangement.
Some of our operating lease revenue is earned from full-service leases for which we are paid annual fixed rates plus, in some cases, an
additional amount based on production volumes. Revenue from production volumes is recognized when determinable and collectible.
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.
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. Research and development costs are expensed as incurred.
Income taxes
Income taxes are provided 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, and reflect the
expected future tax 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.
A liability for uncertain tax positions is recorded whenever management believes it is not likely that the position will be sustained on
examination based solely on its technical merits. Interest and penalties related to underpayment of income taxes are classified as
income tax expense.
Income taxes are not provided on 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
We measure compensation cost on restricted stock awards based on the market price of our common stock at the grant date and the
number of shares awarded. The compensation cost for each award is recognized ratably over the lesser of the stated vesting period or
the period until the employee becomes retirement eligible, after taking into account forfeitures.
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 loss in stockholders’ equity until the foreign entity is sold or liquidated.
Derivative financial instruments
Derivatives are recognized in the consolidated 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
loss, depending on the type of hedging transaction and whether a derivative is designated as, and is effective as, a hedge.
In the consolidated statements of income, earnings from foreign currency derivatives related to sales and remeasurement of sales-
related assets, liabilities and contracts are recorded in revenue, while earnings from foreign currency derivatives related to purchases
and remeasurement of purchase-related assets, liabilities and contracts are recorded in cost of products. Earnings from foreign
currency derivatives related to cash management of foreign currencies throughout the world and remeasurement of cash are recorded
in other expense, net.
53
When hedge accounting is applied, we ensure that the derivative is 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 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 is assessed 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 earnings as incurred. We document our risk management strategy and method for
assessing hedge effectiveness at the inception of and throughout the term of each hedge.
Cash flows from derivative contracts are reported in the consolidated statements of cash flows in the same categories as the cash flows
from the underlying transactions.
Recently Adopted Accounting Standards
In July 2015, the FASB issued ASU No. 2015-11, Inventory (Topic 330) – Simplifying the Measurement of Inventory. The core
principle of the ASU is that entities that historically used the lower of cost or market in the subsequent measurement of inventory will
instead be required to measure inventory at the lower of cost and net realizable value. The guidance will not change U.S. GAAP for
inventory measured using LIFO or the retail inventory method. The ASU is effective for annual reporting periods, including interim
periods within those annual periods, beginning after December 15, 2016. This guidance became effective for us as of January 1, 2017
and there was no effect on our consolidated financial statements and related disclosures.
In March 2016, the FASB issued ASU No. 2016-09, Stock Compensation (Topic 718) - Improvements to Employee Share-Based
Payment Accounting. The new guidance was developed as part of the FASB’s simplification initiative. The core principle of the ASU
requires income tax effects of awards to be recognized in the income statement when the awards vest or are settled, and eliminates the
requirement to report excess tax benefits in additional paid-in capital (APIC pool). It also allows an employer to repurchase more of an
employee’s shares for tax withholding purposes without triggering liability accounting, and allows an employer to make a policy
election to account for forfeitures as they occur. The new standard became effective for us as of January 1, 2017. During 2017,
296,608 awards vested, and resulted in a $6.4 million tax benefit reported in earnings, and is classified as an operating activity within
the condensed consolidated Statements of Cash Flows. The elimination of the APIC pool affects the treasury stock method used to
calculate weighted average shares outstanding; however, the impact was not material. We elected to change our policy surrounding
forfeitures, and beginning January 2017 we no longer estimate the number of awards expected to be forfeited but rather account for
them as they occur. We are required to implement this portion of the guidance using a modified retrospective approach, and as such
have recorded a cumulative adjustment of $0.6 million in retained earnings as of January 1, 2017.
We also amended our incentive compensation and stock plan to allow JBT to have the discretion to withhold up to the maximum
statutory rates, on an individual tax basis. A liability was not established as the withholding limits do not exceed the maximum. Cash
paid for tax withholdings are classified as financing activity on the condensed consolidated Statement of Cash Flows, consistent with
prior years.
In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230) Classification of Certain Cash Receipts and
Cash Payments and Restricted Cash. The new guidance is intended to reduce the existing diversity in practice in how certain cash
receipts and cash payments are presented and classified in the statement of cash flows. The core principle of the ASU requires the
classification of eight specific cash flow issues identified under ASC 230 to be presented as either financing, investing or operating, or
some combination thereof, depending upon the nature of the issue. Entities are required to use a retrospective transition approach for
all of the issues identified for each period presented. The Company adopted the new ASU as of September 30, 2017. There was no
impact on our consolidated financial statements and related disclosures as a result of adopting the ASU.
In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805) - Clarifying the Definition of a Business.
The core principle of the ASU is to clarify the definition of a business to require certain transactions to be accounted for as business
combinations versus an acquisition of assets. The Company adopted the new ASU as of September 30, 2017. There was no impact on
our consolidated financial statements and related disclosures as a result of adopting the ASU.
In January 2017, the FASB issued ASU No. 2017-04, Intangibles - Goodwill and Other (Topic 350) - Simplifying the Test for Goodwill
Impairment. The new guidance will simplify the accounting for goodwill impairment. The core principle of the ASU is to remove the
requirement to calculate an implied fair value to determine impairment (Step 2 of the goodwill impairment test) and allow instead for
goodwill impairment to equal the amount by which a reporting unit's carrying value exceeds its fair value, not to exceed the carrying
amount of goodwill. The Company early adopted the new ASU as of September 30, 2017, prior to our 2017 annual testing of goodwill
impairment, to be performed as of October 31st. There was no impact on our consolidated financial statements and related disclosures
as a result of adopting the ASU.
54
In May 2017, the FASB issued ASU No. 2017-09, Compensation - Stock Compensation (ASC 718) - Scope of Modification
Accounting. The amendments provide guidance as to how an entity should account for a change in the terms and conditions of its
share-based payment awards. The core principle of the ASU is to provide clarity, and reduce the variation in applied practice, as well
as, cost and complexity in accounting for a change in the terms and conditions in an entity's share-based payment awards. The
Company adopted the new ASU as of September 30, 2017. There was no impact on our consolidated financial statements and related
disclosures as a result of adopting the ASU.
Recently Issued Accounting Standards Not Yet Adopted
Beginning in 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), plus a number of related
ASU’s designed to clarify and interpret Topic 606. The new standard will replace most existing revenue recognition guidance in U.S.
GAAP. The core principle of the ASU requires companies to reevaluate when revenue is recorded based upon newly defined criteria,
either at a point in time or over time as goods or services are delivered. The ASU requires additional disclosure about the nature,
amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and
estimates, and changes in those estimates. The new standard became effective for us as of January 1, 2018. As previously disclosed,
we will adopt Topic 606 on a modified-retrospective basis.
In 2017, we completed our gap assessment and determined that in certain contracts, we will qualify for over time recognition for our
manufactured equipment that is highly engineered to unique customer specifications. In addition, we expect that due to the nature of
our equipment and installation contracts that we will combine these into one performance obligation. Under Topic 606, revenue
recognized for contracts that meet certain criteria will result in revenue being recognized as the equipment is being manufactured
which is an acceleration of revenue as compared to our current revenue recognition methodology of recognizing revenue, generally
when the equipment is shipped to the customer. This conclusion, specific to equipment contracts for which the equipment is highly
engineered to unique customer specifications, is dependent on whether our contract with the customer provides us, upon customer
cancellation, with an enforceable right to payment for performance completed to date. Where the contract does not provide explicit
language regarding cancellation payments, revenue will be recognized at a point in time, usually upon completion of the installation of
the equipment. Therefore, some revenue will be deferred and recognized at a later date. This impacts both equipment contracts with
installation that qualify as one performance obligation, and that were previously recognized upon shipment, as well as certain
equipment contracts for which revenue was recognized under percentage of completion accounting under legacy GAAP.
We continue to execute our implementation plan and have developed new revenue accounting policies and processes; changed our
internal controls over revenue recognition; created pro forma disclosures; and continue to implement system changes and
enhancements. We are in the process of evaluating all contracts not completed on January 1, 2018 and have preliminarily determined
the net impact of adopting this standard will be a reduction to retained earnings within the range of $25 million to $30 million. This
differs significantly from the expected impact previously disclosed and is due solely due to interpretations published subsequent to our
previous disclosure regarding what constitutes an enforceable right to payment. For full year 2018 results, we expect the financial
statement impact of this deferral will be offset by the requirement to defer revenue on contracts that, under legacy GAAP, would have
been recognized in 2018, but will be deferred until 2019 under the new standard. Our assessment of the foregoing is ongoing and
subject to finalization, such that the actual impact of the adoption may differ materially from the estimated ranges described above.
In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). The new standard will replace most existing lease guidance
in U.S. GAAP. The core principle of the ASU is the requirement for lessees to report a right to use asset and a lease payment
obligation on the balance sheet but recognize expenses on their income statements in a manner similar to today’s accounting, and for
lessors the guidance remains substantially similar to current U.S. GAAP. The ASU is effective for annual reporting periods, including
interim periods within those annual periods, beginning after December 15, 2018. However, early adoption is permitted. Entities are
required to use a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest
comparative period in the financial statements. We are in the process of evaluating the impact this standard will have on our
consolidated financial statements and related disclosures.
In October 2016, the FASB issued ASU 2016-16, Income Taxes: Intra-Entity Transfers of Assets Other Than Inventory. The new
guidance is intended to simplify the accounting for intercompany asset transfers. The core principle requires an entity to immediately
recognize the tax consequences of intercompany asset transfers. The ASU is effective for annual reporting periods, including interim
periods within those annual periods, beginning after December 15, 2017. However, early adoption is permitted only at the beginning
of an annual period for which no financial statements (interim or annual) have already been issued. The Company anticipates the
adoption in the effective period and we are currently evaluating the effect, if any, that the ASU will have on our consolidated financial
statements and related disclosures.
In March 2017, the FASB issued ASU No. 2017-07, Compensation - Retirement Benefits (ASC 715) - Improving the Presentation of
Net Periodic Pension Costs and Net Periodic Postretirement Benefit Cost. The new guidance will improve the presentation of pension
55
cost by providing additional guidance on the presentation of net benefit cost in the income statement and on the components eligible
for capitalization in assets. The core principle of the ASU is to provide more transparency in the presentation of these costs by
requiring the service cost component to be reported in the same line item as other compensation costs arising from services rendered
by the pertinent employees during the period. The other components of net benefit cost are required to be presented separately from
the service cost component and outside a subtotal of income from operations. The amendments require that the Consolidated
Statements of Income impacts be applied retrospectively, while Balance Sheet changes should be applied prospectively. As such, upon
adoption in 2018, the Company expects to revise operating income for fiscal year 2017 by $1.1 million, and report this income in non
operating income. Operating income for the fiscal year 2016 will be reduced by $2.3 million and operating income for 2015 will be
revised by $0.6 million. There will be no impact to net income or to the Balance Sheet or Statement of Cash Flows.
The ASU is effective for annual reporting periods, including interim periods within those annual periods, beginning after December
15, 2017. However, early adoption is permitted as of the beginning of an annual period for which financial statements (interim or
annual) have not been issued or made available for issuance. The Company will adopt the newly issued ASU as of January 1, 2018.
In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging (ASC 815) - Targeted Improvements to Accounting for
Hedging Activities. The core of the principle is to simplify hedge accounting, as well as improve the financial reporting of hedging
results, for both financial and commodity risks, in the financial statements and related disclosures. The ASU is effective for annual
reporting periods, including interim periods within those annual periods, beginning after December 15, 2018. Early adoption is
permitted in any interim period after the issuance of the amendment, however, any adjustments should be made as of the beginning of
the fiscal year in which the interim period occurred. The Company is currently evaluating the effect, if any, that the ASU will have on
our consolidated financial statements and related disclosures.
56
NOTE 2. ACQUISITIONS
During 2017 and 2016 the Company acquired six businesses for an aggregate consideration of $354.4 million, net of cash acquired. A
summary of the acquisitions made during the period is as follows:
Date
July 31, 2017
Type
Stock
Company/Product
Line
Location
Segment
PLF International Ltd.
Harwich (Sussex),
England
FoodTech
Manufacturer and leading provider of powder filling systems for global food and beverage, and nutraceutical markets
headquartered in Harwich (Essex), England.
July 3, 2017
Stock
Aircraft Maintenance
Support Services, Ltd.
(AMSS)
Mid Glamorgan,
England
AeroTech
Manufacturer of military and commercial aviation equipment.
February 24, 2017
Stock
Avure Technologies,
Inc.
Middletown, OH
FoodTech
Manufacturer of high pressure processing (HPP) systems. HPP is a cold pasteurization technology that ensures food safety
without heat or preservatives, maintaining fresh food characteristics such as flavor and nutritional value, while extending
shelf life.
February 17, 2016
Asset
Novus X-Ray LLC
Doylestown, PA
FoodTech
Manufacturer of modular X-Ray systems for the automated food inspection industry.
November 1, 2016
Stock
Tipper Tie, Inc.
Apex, NC
FoodTech
Manufacturer of engineered processing and packaging solutions, and related consumables to the food industry.
October 14, 2016
Asset
Cooling Applied
Technologies, Inc.
(C.A.T.)
Russellville, AR
FoodTech
Manufacturer of value-added food solutions primarily for the poultry industry.
Each acquisition has been accounted for as a business combination. For stock acquisitions, 100% of the equity interests were acquired.
Tangible and identifiable intangible assets acquired and liabilities assumed were recorded at their respective estimated fair values. The
excess of the consideration transferred over the estimated fair value of the net assets received has been recorded as goodwill. The
factors that contributed to the recognition of goodwill primarily relate to acquisition-driven anticipated cost savings and revenue
enhancement synergies coupled with the assembled workforce acquired.
57
The following presents the purchase price allocation of the assets acquired and the liabilities assumed, based on their estimated values:
PLF(1)
Avure(2)
Tipper Tie(2)
C.A.T.(2)
Other (3)(1)
Total
(In millions)
Financial assets
Inventories
Property, plant and equipment
Other intangible assets(4)
Deferred taxes
Financial liabilities
Total identifiable net assets
Cash consideration paid
Holdback payments due to seller
Total consideration
Cash acquired
Net consideration
Goodwill
$
20.8
$
1.0
2.2
17.9
(3.4)
(5.5)
33.0
46.1
5.5
51.6
15.5
36.1
18.6
$
$
$
$
$
$
$
$
4.3
14.4
4.5
20.8
(3.6)
(10.5)
29.9
58.9
—
58.9
—
58.9
29.0
27.8
17.2
17.2
66.3
(4.9)
(21.2)
102.4
160.6
160.6
2.4
158.2
58.2
$
3.3
$
16.4
2.9
48.0
—
(14.9)
55.7
78.4
6.0
84.4
—
84.4
28.7
$
$
$
$
$
$
$
$
7.8
2.5
2.6
7.1
(0.7)
(4.4)
14.9
15.6
1.9
17.5
0.7
16.8
2.6
$
$
$
$
$
64.0
51.5
29.4
160.1
(12.6)
(56.5)
235.9
359.6
13.4
373.0
18.6
354.4
137.1
(1)
(2)
(3)
(4)
The purchase accounting for these acquisitions is provisional. For PLF and AMSS the valuation of certain working capital
balances, intangibles, income tax balances and residual goodwill related to each is not complete. These amounts are subject to
adjustment as additional information is obtained within the measurement period (not to exceed 12 months from the
acquisition date). During the quarter ended December 31, 2017, we revalued the net assets acquired, and the net
consideration, to reflect the accurate foreign currency rate on the date of the acquisition. In addition we increased the cash
consideration paid by $0.5 million, reflecting a working capital adjustment required by the purchase agreement. The impact
of these adjustments was reflected as a net increase in goodwill of $1.4 million. These adjustments resulted in an immaterial
impact to the consolidated statement of income. All other measurement period adjustments in the quarter and twelve months
ended December 31, 2017 were not material.
The amounts shown represent final allocation of the purchase price for these acquisitions. For Avure, during the quarter
ended December 31, 2017, we adjusted deferred tax liabilities by ($0.8) million, with an offset to goodwill for the same
amount. During the quarter ended September 30, 2017 we refined our estimates of deferred tax assets for Avure by ($1.8)
million and deferred tax liabilities by $0.7 million. The impact of these adjustments was reflected as a decrease in goodwill
of $1.1 million. During the quarter ended June 30, 2017 we refined our other intangible asset estimates for Avure by $2.6
million, deferred taxes by ($0.7) million and inventory by ($0.7) million. The impact of these adjustments was reflected as a
decrease in goodwill of $1.2 million. All adjustments in the year resulted in an immaterial impact to the consolidated
statement of income. All other measurement period adjustments in the quarter and twelve months ended December 31, 2017
related to Tipper Tie and Avure were not material.
Of the $137.1 million in goodwill reported, $71.6 million is expected to be tax deductible.
The CAT purchase agreement required an additional payment of $6.0 million in October 2017. This payment was reflected
as cash consideration paid in the purchase price allocation above. There is a remaining $6.0 million payment due in October
2018.
Other includes Novus and AMSS. The purchase price allocation for AMSS is provisional, refer to Note (1).
The acquired intangible assets with definite lives are being amortized on a straight-line basis over their estimated useful lives,
which range from five to nineteen years. The intangible assets acquired in 2017 include customer relationships totaling $14.5
million (10- year weighted average useful life), technology totaling $21.8 million (10-year weighted average useful life). The
tradenames for Avure, Tipper Tie, C.A.T. and PLF have been determined to have indefinite lives and are reviewed annually
for impairment.
58
During the twelve months ended December 31, 2017, PLF, AMSS and Avure had revenue and earnings (losses) of, $7.5 million and
($0.9) million, $8.9 million and $0.2 million, and $50.1 million and $1.7 million, respectively.
NOTE 3. INVENTORIES
Inventories as of December 31, consisted of the following:
(In millions)
Raw materials
Work in process
Finished goods
Gross inventories before LIFO reserves and valuation adjustments
LIFO reserves and valuation adjustments
Net inventories
2017
2016
72.6
73.7
109.2
255.5
(65.3)
190.2
$
$
62.9
57.3
86.2
206.4
(66.8)
139.6
$
$
Inventories accounted for under the LIFO method totaled $124.2 million and $119.1 million at December 31, 2017 and 2016,
respectively. The current replacement costs of LIFO inventories exceeded their recorded values by $48.9 million at December 31,
2017 and $47.9 million at December 31, 2016.
NOTE 4. PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment as of December 31, consisted of the following:
(In millions)
Land and land improvements
Buildings
Machinery and equipment
Construction in process
Accumulated depreciation
Property, plant and equipment, net
2017
2016
17.2
$
101.5
366.5
21.1
506.3
(273.3)
233.0
$
14.7
92.7
326.0
14.8
448.2
(238.0)
210.2
$
$
NOTE 5. GOODWILL AND INTANGIBLE ASSETS
The changes in the carrying amount of goodwill by business segment were as follows:
(In millions)
Balance as of January 1, 2016
Acquisitions
Currency translation
Balance as of December 31, 2016
Acquisitions
Currency translation
Balance as of December 31, 2017
JBT FoodTech
144.8
90.1
(3.1)
231.8
51.4
7.6
290.8
$
$
$
$
JBT AeroTech
Total
7.7
—
—
7.7
3.1
0.2
11.0
$
$
152.5
90.1
(3.1)
239.5
54.5
7.8
301.8
59
The components of intangible assets as of December 31, were as follows:
2017
2016
(In millions)
Customer relationships
Patents and acquired technology
Tradenames
Indefinite lived intangible assets
Other
Total intangible assets
$
$
Gross carrying amount
Accumulated
amortization
158.8
$
92.1
20.0
15.9
14.5
33.5
32.1
9.5
—
9.4
Gross carrying amount
$
141.5
$
Accumulated
amortization
64.8
18.1
9.5
14.8
21.5
24.5
8.4
—
8.3
62.7
301.3
$
84.5
$
248.7
$
Intangible asset amortization expense was $19.6 million, $10.9 million, and $7.1 million for 2017, 2016 and 2015, respectively.
Annual amortization expense for intangible assets is estimated to be $21.7 million in 2018, $21.6 million in 2019, $21.3 million in
2020, $20.9 million in 2021 and $20.3 million in 2022.
NOTE 6. DEBT
Our short-term debt consists of borrowings under short-term credit facilities entered into by our wholly-owned subsidiaries in China
and India. The Chinese short-term credit facilities, which mature on June 30, 2018, allow us to borrow up to a total of $12.0 million.
We had $2.7 million and $4.4 million in borrowings under the credit facilities in China as of December 31, 2017, and 2016,
respectively. The Indian credit facility allows us to borrow up to a total of $1.4 million and $2.3 million; and we had no borrowings
outstanding as of December 31, 2017 and 2016, respectively.
Five-year Revolving Credit Facility and Term Loan
We have a five-year $600.0 million revolving credit facility, which matures in February 2020, with Wells Fargo Bank, N.A. as
administrative agent. This revolving credit facility permits borrowings in the U.S. and in The Netherlands. Borrowings bear interest, at
our option, at one month U.S. LIBOR subject to a floor rate of zero or an alternative base rate, which is the greater of Wells Fargo’s
Prime Rate, the Federal Funds Rate plus 50 basis points, and LIBOR plus 1%, plus, in each case, a margin dependent on our leverage
ratio. We are required to make periodic interest payments on the borrowed amounts and to pay an annual facility fee ranging from
15.0 to 30.0 basis points, depending on our leverage ratio.
We have an incremental term loan in the amount of $150.0 million which bears interest on the same fully funded terms as the
revolving credit facility and matures in February 2020. We are required to make mandatory prepayments, subject to certain
exceptions, of the term loan with the net cash proceeds of (i) any issuance or other incurrence of indebtedness not otherwise permitted
under the Credit Agreement and (ii) certain sales or other dispositions of assets subject to certain exceptions and thresholds. We are
required to repay the term loan in quarterly principal installments of $1.9 million beginning on March 31, 2018, with a balloon
payment at maturity to pay the remaining outstanding balance.
As of December 31, 2017 we had $150.0 million outstanding under the term loan within the credit facility, $230.5 million drawn on
and $354.7 million of availability under the revolving credit facility. Our ability to use this availability is limited by the leverage ratio
covenant described below.
Our credit facility includes restrictive covenants that, if not met, could lead to renegotiation of our credit facility, a requirement to
repay our borrowings, and/or a significant increase in our cost of financing. Restrictive covenants include a minimum interest
coverage ratio, a maximum leverage ratio, and limitations on payments made to stockholders. For information, refer to the section
entitled “Contractual Obligations and Off-Balance Sheet Arrangements” in Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations of this Annual Report on Form 10-K.
60
Our debt as of December 31, consisted of the following:
(In millions)
Short-term borrowings
Foreign credit facilities
Other
Total short-term borrowings
Long-term debt
Revolving credit facility
Term loan
Brazilian Real Loan
Total long-term debt
Less: current portion
Long-term debt, less current portion
Less: unamortized debt issuance
costs - term loan
Long-term debt, net
Interest Rate at
December 31, 2017
Maturity
Date
2017
2016
5.2%
0.1%
2.1%
2.1%
8.0%
February 10, 2020
February 10, 2020
October 16, 2017
$
$
$
$
$
$
$
2.8
0.2
3.0
230.5
150.0
—
380.5
(7.5)
373.0
(0.4)
372.6
$
4.4
1.2
5.6
342.1
150.0
1.5
493.6
(1.5)
492.1
(0.5)
491.6
Scheduled maturities of long-term debt for the years ending December 31, are as follows:
(In millions)
2018
2019
2020
Total
NOTE 7. INCOME TAXES
Maturities of Long-term debt
$
$
7.5
7.5
365.5
380.5
Domestic and foreign components of income from continuing operations before income taxes for the years ended on December 31, are
shown below:
(In millions)
Domestic
Foreign
Income before income taxes
2017
2016
2015
$
$
72.8
59.4
132.2
$
$
43.6
50.4
94.0
$
$
38.2
44.0
82.2
61
The provision for income taxes related to income from continuing operations for the years ended on December 31, consisted of:
(In millions)
Current:
Federal
State
Foreign
Total current
Deferred:
Federal
State
Foreign
2017
2016
2015
$
13.2
$
1.0
17.6
31.8
16.6
1.6
(1.0)
0.4
0.3
0.4
18.3
50.1
$
$
7.8
2.2
16.1
26.1
1.0
0.3
(0.9)
—
—
(0.5)
(0.1)
26.0
$
$
2017
2016
$
20.5
13.6
5.9
5.5
5.4
3.4
0.3
54.6
(2.7)
51.9
13.3
11.6
24.3
0.6
49.8
6.0
1.2
13.2
20.4
4.8
0.9
(0.8)
—
0.4
0.5
5.8
26.2
30.1
20.5
2.3
9.0
8.4
1.5
0.2
72.0
—
72.0
13.3
14.1
15.5
0.2
43.1
28.9
$
2.1
$
Change in the valuation allowance for deferred tax assets
Change in deferred tax liabilities due to foreign tax rate change
Benefits of operating loss carryforward
Total deferred
Provision for income taxes
$
Significant components of our deferred tax assets and liabilities at December 31, were as follows:
(In millions)
Deferred tax assets attributable to:
Accrued pension and other post-retirement benefits
Accrued expenses and accounts receivable allowances
Net operating loss carryforwards
Inventories
Stock-based compensation
Research and development credit carryforwards
Foreign tax credit carryforward
Total deferred tax assets
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 amortization
Other
Total deferred tax liabilities
Net deferred tax assets
Included in our deferred tax assets are tax benefits related to net operating loss carryforwards attributable to our foreign and domestic
operations. At December 31, 2017, we had $7.8 million of net operating losses that are available to offset future taxable income in
several foreign jurisdictions indefinitely, and $18.5 million of net operating losses that are available to offset future taxable income
through 2034. Of the $18.5 million, approximately $14.1 million of net operating losses in Switzerland are subject to a full valuation
allowance. During 2017, we expect to use $3.6 million of net operating losses relating to prior years in the filing of our 2017 corporate
income tax returns.
Also included in our deferred tax assets at December 31, 2017 are $2.5 million of U.S. research and development credit carryforwards,
which will expire beginning in 2022, if unused.
62
The effective income tax rate was different from the statutory U.S. federal income tax rate due to the following:
Statutory U.S. federal tax rate
Net difference resulting from:
Research and development tax credit
Foreign earnings subject to different tax rates
Tax on foreign intercompany dividends and deemed dividends for tax purposes
Nondeductible expenses
State income taxes
Foreign tax credits
Foreign withholding taxes
Effect of US Law Change
Stock Based Compensation - Excess Tax Benefit under ASC 2016-09
Other
Total difference
Effective income tax rate
2017
2016
2015
35%
35%
35%
(4)
(2)
—
1
2
(1)
1
12
(5)
(1)
3
38%
(4)
(3)
—
—
2
(1)
—
—
—
(1)
(7)
28%
(2)
(3)
6
—
2
(7)
1
—
—
—
(3)
32%
U.S. income taxes have not been provided on $15.4 million of undistributed earnings of foreign subsidiaries at December 31, 2017 as
these amounts are considered permanently invested under ASC 740-30-25-17 [formerly known as APB 23]. 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 the hypothetical distribution
of permanently invested earnings.
Additionally, in accordance with guidance as set-forth in SEC Staff Accounting Bulletin No. 118 ("SAB 118") other than the amount
accrued for the Transition Tax per IRC 965, the company does not include a provisional amount related to any of the impacted items
covered under APB 23, as we have not performed sufficient analysis to make a determination as to the appropriateness and resulting
tax effects.
The following tax years remain subject to examination in the following significant jurisdictions:
Belgium
Brazil
Italy
Netherlands
Sweden
United States
Income Tax Reform Disclosures
2014-2017
2012-2017
2014-2017
2012-2017
2011-2017
2016-2017
On December 22, 2017, Congress passed, and the President signed, the Tax Cuts and Jobs Act (the “Tax Act”). The Tax Act makes
broad and complex changes to the U.S. tax Code, including, but not limited to, (1) reducing the U.S. federal corporate income tax rate
from 35.0 percent to 21.0 percent; (2) requiring companies to pay a one-time transitional tax on certain un-repatriated earnings of
foreign subsidiaries; (3) generally eliminating U.S. federal income tax on dividends from foreign subsidiaries of U.S. corporations; (4)
repealing the domestic production activity deduction; (5) providing for the full expensing of qualified property; (6) adding a new
provision designed to tax global intangible low-taxed income (“GILTI”); (7) revising the limitation imposed on deductions for
executive compensation paid by publicly-traded companies; (8) eliminating the corporate alternative minimum tax (“AMT”) and
changing how existing AMT credits can be utilized; (9) creating a base erosion-anti-abuse tax (“BEAT”), a new minimum tax on
payments made by certain U.S. corporations to related foreign parties; (10) imposing a new limitation on the deductibility of interest
expense; (11) allowing for a deduction related to foreign-derived intangible income (“FDII”); and (12) changing the rules related to
the uses and limitations of net operating loss carryforwards generated in tax years beginning after December 31, 2017. Some of the
changes that are material to the company are discussed below in more detail.
63
The SEC recently issued SAB 118 which provides guidance on how companies should account for the tax effects related to the Tax
Act. According to SAB 118, companies should make a good faith effort to compute the impact of the Tax Act in a timely manner once
the company has obtained, prepared, and analyzed the information needed in order to complete their accounting requirements under
ASC 740, which in no circumstances should extend beyond one year from the enactment date. However, in situations when the
company’s accounting is incomplete, SAB 118 authorizes companies to record a reasonable provisional estimate of the tax impact
resulting from the Tax Act.
The Tax Act imposed a one-time deemed repatriation transition tax on the previously untaxed and un-repatriated current and
accumulated post-1986 foreign earnings of certain foreign subsidiaries. The Tax Act further provides for a deduction to offset a portion
of the deemed repatriated earnings such that taxpayers are effectively taxed at a reduced tax rate of 15.5 percent to the extent that the
earnings are held in cash or cash equivalents, and 8.0 percent on all other earnings. In order to compute the tax impact of this deemed
repatriation for the Company’s taxable year ending December 31, 2017, the applicable amount of un-repatriated earnings and foreign
taxes paid by each relevant foreign subsidiary must be determined. We have computed a reasonable estimate of the tax impact related
to this deemed repatriation in accordance with SAB 118 and recorded a provisional tax obligation because the Company is still
collecting and analyzing the necessary information and will reflect any changes to this calculation in a subsequent reporting period.
Due to the timing of the Tax Act and related changes we will update our computations as information becomes available with regard to
the 2017 tax return filings and as tax technical guidance on remaining items is issued at the federal and state level.
The Tax Act also revised the definition of “covered employees” who are subject to the $1.0 million limitation imposed on deductions
for executive compensation paid by publicly-traded corporations. As a result, the limitation now applies to the Company’s CEO, CFO
and the 3 highest paid employees. The Tax Act also eliminated the exception to this rule for commission or performance-based
compensation paid to these covered employees. This new provision is effective for contracts executed on or after November 3, 2017.
Based on this new provision, the Company adjusted its deferred tax asset related to future stock compensation deductions for amounts
that it does not expect it will be able to deduct in the future. We will continue to analyze executive compensation in future periods and
adjust our Deferred Tax Asset for future stock compensation deductions as information becomes available.
The Tax Act reduces the corporate tax rate to 21.0 percent, effective January 1, 2018. For certain deferred taxes, we have recorded a
provisional adjustment to decrease net deferred tax assets by $7.0 million, with a corresponding net adjustment to deferred tax expense
of $7.0 million for the year ended December 31, 2017. We made a reasonable estimate of the impact of the reduction in the corporate
tax rate under the Tax Act, but the analysis will continue during 2018 and will be completed once the Company files its income tax
returns in 2018.
The Tax Act changes also require JBT to analyze other areas including, but not limited to, interest deductibility, accelerated cost
recovery of fixed assets, GILTI, BEAT, FDII, and stranded tax effects within Accumulated other comprehensive income. The
Company has not made any policy decisions as to how to account for the tax effects of these items and will continue to analyze the
impact during 2018 as more information is available and more technical guidance is issued at the federal and state levels.
(in millions)
Tax Act Provision
Increase (Decrease)(a)
Income Tax
Provision
Income Taxes
Payable
Deferred Tax Assets
and Liabilities
Other Long-term
Liabilities
Reduction in U.S. Federal corporate rate
One-time repatriation transition tax
$
Revision to deduction for executive
compensation
7.0 $
7.7
0.8
— $
1.0
—
Tax Act impact as of and for the year ended
December 31, 2017
$
15.5 $
1.0 $
(7.0) $
—
(0.8)
(7.8) $
—
6.7
—
6.7
(a)
Reflects provisional amounts reported in results until full accounting for the income tax effect is complete.
NOTE 8. PENSION AND POST-RETIREMENT AND OTHER BENEFIT PLANS
We sponsor qualified and nonqualified defined benefit pension plans that together cover many of our U.S. employees. The plans
provide defined benefits based on years of service and final average salary. We also sponsor a noncontributory plan that provides post-
retirement life insurance benefits to some of our U.S. employees. Foreign-based employees are eligible to participate in either
Company-sponsored or government-sponsored benefit plans to which we contribute. We also sponsor separate defined contribution
plans that cover substantially all of our U.S. employees and some international employees.
64
The funded status of our pension and post-retirement benefit plans, together with the associated balances recognized in our
consolidated financial statements as of December 31, 2017 and 2016, were as follows:
(In millions)
Pensions
Other post-retirement
benefits
2017
2016
2017
2016
Projected benefit obligation at January 1
$
317.4
$
316.3
$
Service cost
Interest cost
Actuarial (gain) loss
Plan participants' contributions
Business combinations
Benefits paid
Currency translation adjustments
Projected benefit obligation at December 31
Fair value of plan assets at January 1
Company contributions
Actual return (loss) on plan assets
Plan participants' contributions
Benefits paid
Currency translation adjustments
Fair value of plan assets at December 31
Funded status of the plans (liability) at December 31
Amounts recognized in the Consolidated Balance Sheets at December 31
Other current liabilities
Accrued pension and other post-retirement benefits, less current
portion
Net amount recognized
$
$
$
$
$
1.7
10.7
23.9
0.1
—
(13.8)
4.9
344.9
233.0
11.1
29.8
0.1
(13.8)
1.3
$
$
$
261.5
(83.4) $
1.4
11.4
11.4
0.2
2.1
(23.2)
(2.2)
317.4
227.3
10.3
18.8
0.2
(23.2)
(0.4)
$
233.0
(84.4) $
$
3.3
—
0.1
0.3
—
—
(0.2)
—
0.2
—
—
(0.2)
—
— $
(3.5) $
$
$
3.5
$
— $
(0.9)
(1.3)
(0.3)
(82.5)
(83.4) $
(83.1)
(84.4) $
(3.2)
(3.5) $
Amounts recognized in accumulated other comprehensive loss at December 31, 2017 and 2016 were $182.4 million and $174.1
million, respectively for pensions and $.2 million and $(0.1) million for other post-retirement benefits, respectively. These amounts
were primarily unrecognized actuarial gains and losses.
The accumulated benefit obligation for all pension plans was $336.2 million and $310.3 million at December 31, 2017 and 2016,
respectively. All pension plans had accumulated benefit obligations in excess of plan assets as of December 31.
Pension and other post-retirement benefit costs (income) for the years ended December 31, were as follows:
(In millions)
Service cost
Interest cost
Expected return on plan assets
Settlement charge
Amortization of prior service credit
Amortization of net actuarial loss
Total (income) costs
$
(0.4) $
2017
Pensions
2016
2015
Other post-retirement benefits
2015
2016
2017
$
1.7
$
1.4
$
1.5
$
— $
— $
10.7
(17.1)
—
—
4.3
11.4
(18.0)
0.1
—
4.1
(1.0) $
13.7
(19.1)
0.3
—
4.5
0.9
0.1
—
—
—
—
0.1
—
—
—
—
$
0.1
$
0.1
$
65
3.2
—
0.1
0.4
—
—
(0.4)
—
3.3
—
0.4
—
—
(0.4)
—
—
(3.3)
(0.2)
(3.1)
(3.3)
—
0.2
—
—
(2.5)
—
(2.3)
Pre-tax changes in projected benefit obligations and plan assets recognized in other comprehensive income during 2017 were as
follows:
(In millions)
Actuarial loss
Amortization of net actuarial loss
Net loss recognized in other comprehensive income
$
$
Total recognized in net periodic benefit cost and other comprehensive income $
Pensions
Other post-
retirement benefits
12.1
(5.1)
7.0
6.6
$
$
$
0.3
—
0.3
0.4
The Company uses a corridor approach to recognize actuarial gains and losses that result from changes in actuarial assumptions. The
corridor approach defers all actuarial gains and losses resulting from changes in assumptions in other accumulated other
comprehensive income (loss), such as those related to changes in the discount rate and differences between actual and expected returns
on plan assets. These unrecognized gains and losses are amortized when the net gains and losses exceed 10% of the higher of the
market-related value of the assets or the projected benefit obligation for each respective plan. The amortization is on a straight-line
basis over the life expectancy of the plan’s participants for the frozen plans and the expected remaining service periods for the other
plans. We expect to amortize $6.3 million of net actuarial loss from accumulated other comprehensive income (loss) into net periodic
benefit cost in 2018.
Beginning in 2010, the U.S. defined benefit plans were frozen to new entrants and future benefit accruals for non-union participants
were discontinued.
On August 31, 2015, JBT amended the Retiree Welfare Benefits Plan to terminate future healthcare benefits effective January 1, 2016,
which resulted in a release of $1.2 million of other post-retirement benefit liability into other comprehensive income. The resulting
negative prior service cost of $1.8 million was amortized out of accumulated other comprehensive income into net income over the
remaining life of the plan (through January 1, 2016).
The following weighted-average assumptions were used to determine the benefit obligations:
Discount rate
Rate of compensation increase
Pensions
2016
2015
2017
Other post-retirement
benefits
2016
2015
4.00%
3.09%
4.40%
3.19%
3.73%
—
4.30%
—
4.60%
—
2017
3.48%
3.10%
The following weighted-average assumptions were used to determine net periodic benefit cost:
Discount rate
Rate of compensation increase
Expected rate of return on plan assets
2017
3.98%
3.10%
6.58%
Pensions
2016
4.34%
3.09%
6.83%
2015
2017
Other post-retirement
benefits
2016
2015
4.03%
3.19%
7.08%
4.30%
4.60%
4.25%
—
—
—
—
—
—
The estimate of the expected rate of return on plan assets is based primarily on the historical performance of plan assets, asset
allocation, current market conditions and long-term growth expectations.
Plan assets
Our pension investment strategy balances the requirements to generate returns using higher-returning assets, such as equity securities,
with the need to control risk in the pension plan with less volatile assets, such as fixed-income securities. Risks include, among others,
the likelihood of the pension plans being underfunded, thereby increasing their dependence on Company contributions. The assets are
managed by professional investment firms and performance is evaluated against specific benchmarks.
66
Our target asset allocations and actual allocations as of December 31, 2017 and 2016 were as follows:
Equity
Fixed income
Real estate and other
Cash
Target
30% - 70%
20% - 40%
10% - 30%
0% - 10%
2017
54%
29%
16%
1%
100%
2016
50%
30%
19%
1%
100%
Our actual pension plans’ asset holdings by category and level within the fair value hierarchy are presented in the following table:
(In millions)
Total
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
As of December 31, 2017
As of December 31, 2016
Cash and cash equivalents
$
2.7
$
2.7
$
— $
— $
3.4
$
3.4
$
— $
Equity securities:
Large cap (1)
Small cap (2)
International (3)
Fixed income securities:
Government securities (4)
Corporate bonds (5)
Real estate and other investments (6)
Total assets at fair value
53.5
48.8
39.9
9.0
61.5
46.1
—
48.8
39.9
—
49.0
19.0
53.5
—
—
9.0
12.5
27.1
—
—
—
—
—
—
44.0
71.1
—
8.8
57.4
48.3
—
71.1
—
—
46.2
19.3
$ 261.5
$ 159.4
$ 102.1
$
— $ 233.0
$ 140.0
$
44.0
—
—
8.8
11.2
29.0
93.0
$
—
—
—
—
—
—
—
—
(1)
(2)
(3)
(4)
(5)
(6)
Includes funds that invest primarily in large cap equity securities.
Includes small cap equity securities and funds that invest primarily in small cap equity securities.
Includes funds that invest primarily in international equity securities.
Includes U.S. government securities and funds that invest primarily in U.S. government bonds, including treasury inflation
protected securities.
Includes investment grade bonds, high yield bonds and mortgage-backed fixed income securities and funds that invest in such
securities.
Includes funds that invest primarily in REITs, funds that invest in commodities and investments in insurance contracts held
by our foreign pension plans.
The fair value of assets classified as Level 1 is based on unadjusted quoted prices in active markets for identical assets. The fair value
of assets classified as Level 2 is based on quoted prices for similar assets or based on valuations made using inputs that are either
directly or indirectly observable as of the reporting date. Such inputs include net asset values reported at a minimum on a monthly
basis by investment funds or contract values provided by the issuing insurance company. We are able to sell any of our investment
funds with notice of no more than 30 days. For more information on the fair value hierarchy, see Note 14. Fair Value of Financial
Instruments.
Contributions
We expect to contribute $15.3 million to our pension and other post-retirement benefit plans in 2018. 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.
67
Estimated future benefit payments
The following table summarizes expected benefit payments from our various pension and post-retirement benefit plans through 2027.
Actual benefit payments may differ from expected benefit payments.
(In millions)
2018
2019
2020
2021
2022
2023-2027
Pensions
$
$
15.3
15.6
18.6
16.9
17.5
99.2
Other post-
retirement benefits
0.2
0.2
0.2
0.2
0.2
1.0
Savings Plans
Our U.S. and some international employees participate in defined contribution savings plans that we sponsor. These plans generally
provide company matching contributions on participants’ voluntary contributions and/or company non-elective contributions.
Additionally, certain highly compensated employees participate in a non-qualified deferred compensation plan, which also allows for
company matching contributions and company non-elective contributions on compensation in excess of the Internal Revenue Code
Section 401(a) (17) limit. The expense for matching contributions was $13.5 million, $11.3 million and $9.0 million in 2017, 2016 and
2015, respectively.
NOTE 9. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
Accumulated other comprehensive income or loss (“AOCI”) represents the cumulative balance of other comprehensive income, net of
tax, as of the balance sheet date. For JBT, AOCI is primarily composed of adjustments related to pension and other post-retirement
benefits plans, derivatives designated as hedges and foreign currency translation adjustments. Changes in the AOCI balances for the
years ended December 31, 2017 and 2016 by component are shown in the following table:
Pension and
Other Post-
retirement
Benefits
Derivatives
Designated as
Hedges
Foreign
Currency
Translation
Total
(In millions)
Balance as of January 1, 2016
Other comprehensive gain (loss) before reclassification
Amounts reclassified from accumulated other comprehensive
income
Balance as of December 31, 2016
Other comprehensive gain (loss) before reclassification
Amounts reclassified from accumulated other comprehensive
income
$
(103.8) $
(0.8) $
(42.6) $
(7.3)
2.5
(108.6)
(8.1)
2.8
(0.1)
0.8
(0.1)
0.4
1.1
1.4
(5.7)
—
(48.3)
20.5
—
(147.2)
(13.1)
3.3
(157.0)
12.8
3.9
Balance as of December 31, 2017
$
(113.9) $
$
(27.8) $
(140.3)
Reclassification adjustments from AOCI into earnings for pension and other post-retirement benefits plans for the year ended
December 31, 2017 were $4.8 million of charges in selling, general and administrative expenses net of $2.0 million in provision for
income taxes. Reclassification adjustments for derivatives designated as hedges for the same period were $1.2 million of charges in
interest expense, net of $0.5 million in provision for income taxes.
Reclassification adjustments from AOCI into earnings for pension and other post-retirement benefits plans for the year ended
December 31, 2016 were $4.1 million of charges in selling, general and administrative expenses net of $1.6 million in provision for
income taxes. Reclassification adjustments for derivatives designated as hedges for the same period were $1.3 million of charges in
interest expense, net of $0.5 million in provision for income taxes.
68
NOTE 10. STOCK-BASED COMPENSATION
We recorded stock-based compensation expense and related income tax effects for the years ended December 31, as follows:
(In millions)
Stock-based compensation expense
Tax benefit recorded in consolidated statements of income
2017
2016
2015
$
$
9.0
9.9
$
$
9.9
3.9
$
$
7.2
2.9
As of December 31, 2017, there was $13.3 million of unrecognized stock-based compensation expense for outstanding awards
expected to be recognized over a weighted average period of 1.6 years.
Incentive Compensation Plan
We sponsor a stock-based compensation plan (the “Incentive Compensation Plan”) that provides certain incentives and awards to our
officers, employees, directors and consultants. The Incentive Compensation Plan allows the Compensation Committee (the
“Committee”) of our Board of Directors to make various types of awards to eligible individuals. Awards that may be issued include
common stock, stock options, stock appreciation rights, restricted stock and stock units.
Restricted stock unit awards specify any applicable performance goals, the time and rate of vesting and such other provisions as
determined by the Committee. Restricted stock units generally vest after 3 years of service, but may also vest upon a change of control
as defined in the Incentive Compensation Plan. The 2017 Incentive Compensation Plan was approved by stockholders in May 2017.
The 2017 Incentive Compensation Plan replaced the our prior incentive compensation plan (the “2008 Incentive Compensation Plan”),
which remains in existence solely for the purpose of governing the terms of awards that had been granted under the 2008 Incentive
Compensation Plan prior to May 2017. The aggregate number of shares of common stock that are authorized for issuance under the
2017 Incentive Compensation Plan is (i) 1,000,000 shares, plus (ii) the number of shares of common stock that remained available for
issuance under the 2008 Incentive Compensation Plan on the effective date of the 2017 Incentive Compensation Plan, plus (iii) the
number of shares of common stock that were subject to outstanding awards under the 2008 Incentive Compensation Plan on the
effective date of the 2017 Incentive Compensation Plan that are canceled, forfeited, returned or withheld without the issuance of
shares thereunder.
Impact of Retirement on Outstanding LTIP Awards
In the event of a named executive officer’s retirement from the Company upon or after attaining age 62 and a specified number of
years of service, any unvested long-term incentive plan (LTIP) equity or cash awards remain outstanding after retirement and vest on
the originally scheduled vesting date. This permits flexibility in retirement planning, permits us to provide an incentive for the vesting
period and does not penalize our employees who receive long-term cash and equity awards as incentive compensation when they
retire. For awards granted prior to 2016, separation prior to attaining age 62 and 10 years of service will result in the forfeiture of
unvested awards. In 2016, the Committee approved a variation to these terms, permitting the Committee to selectively grant awards
that will permit unvested equity awards outstanding after retirement to vest on their originally scheduled vesting date following a
retirement upon or after attaining the age of 62 and 5 years of service. This variation was approved to allow the Company the option to
offer long term equity incentive compensation as a means of attracting and retaining personnel hired near their retirement or to
incentivize existing employees who are nearing retirement, but who have not been with the Company for a full ten year period.
Restricted Stock Units
A summary of the non-vested restricted stock units as of December 31, 2017 and changes during the year is presented below:
Nonvested at December 31, 2016
Granted
Vested
Forfeited
Nonvested at December 31, 2017
Shares
Weighted-Average
Grant-Date
Fair Value
1,066,207
$
129,569
$
(296,608) $
(47,271) $
$
851,897
32.21
88.02
30.03
47.49
40.61
We grant time-based and performance-based restricted stock units that typically vest after three years, but can vary based on the
discretion of the Committee. The fair value of these awards is determined using the market value of our common stock on the grant
69
date. Compensation cost is recognized over the lesser of the stated vesting period or the period until the employee meets the retirement
eligible age and service requirements under the plan.
For performance-based restricted stock units awards made in 2017, 2016 and 2015; the number of shares to be issued is dependent
upon our performance over the three year period ending December 31st of the respective term, with respect to cumulative diluted
earnings per share from continuing operations and average operating return on invested capital (ROIC). ROIC is defined as net
income plus after tax net interest expense divided by average invested capital, which is an average of total shareholders equity plus
debt plus future pension expenses held in AOCI less cash and cash equivalents. Based on results achieved in 2017, 2016 and 2015, and
the forecasted amounts over the remainder of the performance period, we expect to issue a total of 65,073, 134,139 and 188,787 shares
at the vesting dates in April 2020, April 2019 and April 2018, respectively. Compensation cost has been measured in 2017 based on
the projected performance values calculated against the established target.
The following summarizes values for restricted stock activity in each of the years in the three year period ended December 31:
Weighted-average grant-date fair value of restricted stock units granted (per
share)
Fair value of restricted stock vested (in millions)
$
$
88.02
25.8
$
$
45.18
7.0
$
$
35.48
14.9
2017
2016
2015
NOTE 11. STOCKHOLDERS’ EQUITY
The following is a summary of our capital stock activity (in shares) for the year ended December 31, 2017:
December 31, 2016
Stock awards issued
Treasury stock purchases
Common stock issued
December 31, 2017
Common
stock outstanding
Common
stock held in
treasury
29,156,847
170,270
(56,973)
2,307,038
31,577,182
159,194
(170,270)
56,973
—
45,897
On March 13, 2017 we issued 2.3 million shares of common stock in an underwritten public offering which resulted in proceeds of
$184.1 million, net of underwriting discounts and offering expenses. We used the net proceeds from this offering to repay a portion of
our outstanding borrowings under our revolving credit facility and for general corporate purposes.
On December 2, 2015, the Board authorized a share repurchase program for up to $30 million of our common stock beginning January
1, 2016 and continuing through December 31, 2018. Shares may be purchased from time to time in open market transactions, subject
to market conditions. Repurchased shares become treasury shares, which are accounted for using the cost method and are used for
future awards under the Incentive Compensation Plan. We repurchased $5.0 million of common stock in 2017 and $4.3 million of
common stock in 2016.
On October 27, 2011, the Board authorized a share repurchase program for up to $30 million of our common stock, which expired on
December 31, 2015. We repurchased $7.7 million of common stock in 2015.
On July 31, 2008, our Board declared a dividend distribution to each record holder 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.
70
NOTE 12. EARNINGS PER SHARE
Basic earnings per share (“EPS”) is computed by dividing net income by the weighted average number of common shares outstanding
for the period. Diluted EPS reflects the assumed conversion of all dilutive securities.
The following table sets forth the computation of basic and diluted EPS utilizing 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:
Income from continuing operations
Weighted average number of shares outstanding
Basic earnings per share from continuing operations
Diluted earnings per share:
Income from continuing operations
Weighted average number of shares outstanding
Effect of dilutive securities:
Restricted stock units
Total shares and dilutive securities
Diluted earnings per share from continuing operations
2017
2016
2015
$
$
$
$
82.1
31.4
2.61
82.1
31.4
0.5
31.9
2.58
$
$
$
$
68.0
29.4
2.31
68.0
29.4
0.4
29.8
2.28
$
$
$
$
55.9
29.5
1.90
55.9
29.5
0.3
29.8
1.88
NOTE 13. DERIVATIVE FINANCIAL INSTRUMENTS AND CREDIT RISK
Derivative financial instruments
All derivatives are recorded as other assets or liabilities in the Consolidated Balance Sheets at their respective fair values. For
derivatives designated as cash flow hedges, the effective portion of the unrealized gain or loss related to the derivatives are recorded in
other comprehensive income (loss) until the transaction affects earnings. We assess both at inception of the hedge and on an ongoing
basis, whether the derivative in the hedging transaction has been, and will continue to be, highly effective in offsetting changes in cash
flows of the hedged item. The impact of any ineffectiveness is recognized in the Consolidated Statements of Income. Changes in the
fair value of derivatives that do not meet the criteria for designation as a hedge are recognized in earnings.
Foreign Exchange: 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 Europe,
South America and Asia. Some of our sales and purchase contracts contain embedded derivatives due to the nature of doing business
in certain jurisdictions, which we take into consideration as part of our risk management policy. 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 made in the normal course of business. We primarily utilize forward foreign exchange contracts with maturities of less than 2
years in managing this foreign exchange rate risk. We have not designated these forward foreign exchange contracts, which have a
notional value at December 31, 2017 of $421.2 million, as hedges and therefore do not apply hedge accounting.
The following table presents the fair value of foreign currency derivatives, including embedded derivatives, included within the
consolidated balance sheets:
(In millions)
Derivative Assets
Derivative Liabilities
Derivative Assets
Derivative Liabilities
Other current assets / liabilities $
3.3
$
5.7
$
7.2
$
4.8
As of December 31, 2017
As of December 31, 2016
A master netting arrangement allows counterparties to net settle amounts owed to each other as a result of separate offsetting
derivative transactions. We enter into master netting arrangements with our counterparties when possible to mitigate credit risk in
derivative transactions by permitting us to net settle for transactions with the same counterparty. However, we do not net settle with
such counterparties. As a result, we present derivatives at their gross fair values in the consolidated balance sheets.
71
As of December 31, 2017 and 2016, information related to these offsetting arrangements was as follows:
(in millions)
Offsetting of Assets
Derivatives
Offsetting of Liabilities
Derivatives
(in millions)
Offsetting of Assets
Derivatives
Offsetting of Liabilities
Derivatives
$
$
$
$
As of December 31, 2017
Gross Amounts of
Recognized Assets
Gross Amounts
Offset in the
Consolidated
Balance Sheets
Amount Presented
in the Consolidated
Balance Sheets
Amount Subject to
Master Netting
Agreement
Net Amount
5.2
$
— $
5.2
$
(1.3) $
3.9
As of December 31, 2017
Gross Amounts of
Recognized
Liabilities
Gross Amounts
Offset in the
Consolidated
Balance Sheets
Amount Presented
in the Consolidated
Balance Sheets
Amount Subject to
Master Netting
Agreement
Net Amount
5.5
$
— $
5.5
$
(1.3) $
4.2
As of December 31, 2016
Gross Amounts of
Recognized Assets
Gross Amounts
Offset in the
Consolidated
Balance Sheets
Amount Presented
in the Consolidated
Balance Sheets
Amount Subject to
Master Netting
Agreement
Net Amount
7.2
$
— $
7.2
$
(4.3) $
2.9
As of December 31, 2016
Gross Amounts of
Recognized
Liabilities
Gross Amounts
Offset in the
Consolidated
Balance Sheets
Amount Presented
in the Consolidated
Balance Sheets
Amount Subject to
Master Netting
Agreement
Net Amount
5.0
$
— $
5.0
$
(4.3) $
0.7
The following table presents the location and amount of the gain (loss) on foreign currency derivatives and on the remeasurement of
assets and liabilities denominated in foreign currencies, as well as the net impact recognized in the consolidated statements of income:
Derivatives not designated as hedging instruments
(In millions)
Foreign exchange contracts
Foreign exchange contracts
Foreign exchange contracts
Total
Remeasurement of assets and liabilities in foreign currencies
Net loss on foreign currency transactions
Location of Gain (Loss)
Recognized in Income
Amount of Gain (Loss) Recognized in
Income
2017
2016
2015
Revenue
Cost of products
Other expense, net
$
$
0.2
0.8
1.0
2.0
$
(0.5) $
(0.5)
(1.0)
(2.0)
(2.6)
(0.6) $
0.4
(1.6) $
0.8
(0.3)
(0.1)
0.4
(1.3)
(0.9)
Interest Rates: We have entered into three interest rate swaps to fix the interest rate applicable to certain of our variable-rate debt. The
agreements swap one-month LIBOR for fixed rates. We have designated these swaps as cash flow hedges and all changes in fair value
of the swaps are recognized in Accumulated other comprehensive income (loss).
At December 31, 2017, the fair value recorded in other assets on the Consolidated Balance Sheet is $2.0 million. The effective portion
of these derivatives designated as cash flow hedges of $1.3 million has been reported in other comprehensive loss on the Consolidated
Statements of Comprehensive Income (Loss) as of December 31, 2017.
Ineffectiveness from cash flow hedges, all of which are interest rate swaps, was immaterial as of December 31, 2017.
72
Refer to Note 14. Fair Value of Financial Instruments, for a description of how the values of the above financial instruments are
determined.
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 establishing 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 14. FAIR VALUE OF FINANCIAL INSTRUMENTS
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 that the Company can assess at the
measurement date.
• Level 2: Observable inputs other than those included in Level 1 that are observable for the asset or liability, either directly or
indirectly. 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:
Investments
Derivatives
Total assets
Liabilities:
Derivatives
Contingent
Consideration
Total liabilities
$
$
$
$
As of December 31, 2017
As of December 31, 2016
Total
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
13.1
5.2
18.3
$
$
13.1
—
13.1
$
$
— $
— $
5.2
5.2
—
$
— $
11.9
7.2
19.1
$
$
11.9
—
11.9
$
$
— $
7.2
7.2
$
5.5
$
— $
5.5
$
— $
5.0
$
— $
5.0
$
—
5.5
$
—
— $
—
5.5
—
$
— $
0.8
5.8
$
—
— $
—
5.0
$
—
—
—
—
0.8
0.8
Investments represent securities held in a trust for the non-qualified deferred compensation plan. Investments are classified as trading
securities and are valued based on quoted prices in active markets for identical assets that we have the ability to access. Investments
are reported separately on the consolidated balance sheet. Investments include an unrealized gain of $0.5 million as of December 31,
2017 and an unrealized gain of $0.6 million as of December 31, 2016.
We use the income approach 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 between the derivative contract rate and the published market indicative
currency rate, multiplied by the contract notional values, and applying an appropriate discount rate as well as a factor of credit risk.
The carrying amounts of cash and cash equivalents, trade receivables and payables, as well as financial instruments included in other
current assets and other current liabilities, approximate fair values because of their short-term maturities.
73
The carrying values and the estimated fair values of our debt financial instruments as of December 31 are as follows:
(In millions)
2017
2016
Carrying
Value
Estimated
Fair Value
Carrying
Value
Estimated
Fair Value
Revolving credit facility, expires February 10, 2020
$
230.5
$
230.5
$
342.1
$
Term loan due February 10, 2020
Brazilian loan due October 16, 2017
Foreign credit facilities
Other
150.0
150.0
150.0
—
2.7
0.2
—
2.7
0.2
1.5
4.4
1.2
342.1
150.0
1.4
4.4
1.2
There was no active or observable market for our fixed rate Brazilian loans. Therefore, the estimated fair value was based on
discounted cash flows using current interest rates available for debt with similar terms and remaining maturities. The estimates of the
all-in interest rate for discounting the loans are based on a broker quote for loans with similar terms. We do not have a rate adjustment
for 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 carrying values of the remaining borrowings approximate their fair values due to their variable interest
rates.
NOTE 15. COMMITMENTS AND CONTINGENCIES
In the normal course of our business, we are at times subject to pending and threatened legal actions, some for which the relief or
damages sought may be substantial. Although we are not able to predict the outcome of such actions, after reviewing all pending and
threatened actions with counsel and based on information currently available, management believes that the outcome of such actions,
individually or in the aggregate, will not have a material adverse effect on the results of operations or financial position of our
Company. However, it is possible that the ultimate resolution of such matters, if unfavorable, may be material to the results of
operations in a particular future period as the time and amount of any resolution of such actions and its relationship to the future
results of operations are not currently known.
Liabilities are established for pending legal claims only when losses associated with the claims are judged to be probable, and the loss
can be reasonably estimated. In many lawsuits and arbitrations, it is not considered probable that a liability has been incurred or not
possible to estimate the ultimate or minimum amount of that liability until the case is close to resolution, in which case no liability
would be recognized until that time.
In 2013, we received a notice of examination from the Delaware Department of Finance commencing an examination of our books
and records to determine compliance with Delaware unclaimed property law. The examination was not complete when, in 2017,
Delaware promulgated a law which permitted companies an election to convert an examination to a review under the Secretary of
State’s voluntary disclosure agreement program. In December 2017, we elected this alternative and are in the process of meeting the
requirements under the voluntary disclosure agreement program. The requirements include reviewing our books and records and filing
any previously unfiled reports for all unclaimed property presumed unclaimed, under the law, from 2003.
We are required to work with the Secretary of State to complete this exercise by December 2019. We are not able to estimate whether
we have significant unclaimed property obligations at this time.
Guarantees and Product Warranties
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 $175.8 million at December 31, 2017, represent
guarantees of our future performance. We also have provided approximately $10.5 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.
In some instances, we guarantee our customers’ financing arrangements. We are responsible for payment of any unpaid amounts but
will receive indemnification from third parties for between seventy-five and ninety-five percent of the contract values. In addition, we
generally retain recourse to the equipment sold. As of December 31, 2017, the gross value of such arrangements was $7.7 million, of
which our net exposure under such guarantees was $0.6 million.
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
74
experience of warranty claims and costs exists. We also provide specific warranty for significant claims for which initial estimates are
not likely to be sufficient. The warranty obligation reflected in other current liabilities in the consolidated 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)
Balance at beginning of year
Expenses for new warranties
Adjustments to existing accruals
Claims paid
Added through acquisition
Translation
Balance at end of year
2017
2016
14.5
12.7
(0.4)
(15.2)
2.4
0.5
14.5
$
$
12.5
13.4
(0.3)
(11.2)
0.3
(0.2)
14.5
$
$
Leases
We lease office space, manufacturing facilities and various types of manufacturing and data processing equipment. Leases of real
estate generally provide that we pay for repairs, property taxes and insurance. Substantially all leases are classified as operating leases
for accounting purposes. Rent expense under operating leases amounted to $5.3 million, $6.2 million and $8.9 million in 2017, 2016
and 2015, respectively.
Future minimum lease payments under non-cancelable operating leases as of December 31, 2017, for the following fiscal years were:
(In millions)
Total
Amount
2018
2019
2020
2021
2022
After
2023
Operating lease obligations
$
41.4
$
11.6
$
7.4
$
6.4
$
5.7
$
4.1
$
6.2
NOTE 16. BUSINESS SEGMENTS
Operating segments for the Company are determined based on information used by the chief operating decision maker (CODM) in
deciding how to evaluate performance and allocate resources to each of the segments. JBT’s CODM is the Chief Executive Officer
(CEO). While there are many measures the CEO reviews in this capacity, the key segment measures reviewed include operating
profit, operating income margin, and EBITDA.
In the third quarter of 2017, we changed the internal structure of our management team; insofar that it increased the number of
operating segments, as defined by ASC 280, Segment Reporting, for the Company. Although the number of operating segments has
increased from prior periods, we have aggregated multiple operating segments into one reportable segment, FoodTech, as they
exhibit similar long-term operational, financial and economic characteristics. As such, our reportable segments remain the same
and prior period disclosures are still comparable.
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, automated
systems and convenience food preparation by the food industry.
JBT AeroTech—designs, manufactures and services technologically sophisticated airport ground support and
gate equipment and provides services for airport authorities; airlines, airfreight, and ground handling companies;
the defense contractors and other industries.
Total revenue by segment includes intersegment sales, which are made at prices that reflect, as nearly as practicable, the market
value of the transaction. 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 expense, restructuring costs, interest income
and expense, and income taxes. See the table below for further details on corporate expense.
75
$
$
$
Segment revenue and segment operating profit
(In millions)
Revenue
JBT FoodTech
JBT AeroTech
Intercompany eliminations
Total revenue
Income before income taxes
Segment operating profit:
JBT FoodTech
JBT AeroTech
Total segment operating profit
Corporate items:
Corporate expense(1)
Restructuring expense(2)
Net interest expense
Total corporate items
Income from continuing operations before income taxes
Provision for income taxes
Income from continuing operations
Loss from discontinued operations, net of income taxes
2017
2016
2015
1,171.9
$
928.0
$
463.0
0.2
422.5
—
725.1
383.1
(0.9)
1,635.1
$
1,350.5
$
1,107.3
139.1
$
113.2
$
50.7
189.8
42.3
1.7
13.6
57.6
132.2
50.1
82.1
1.6
45.1
158.3
42.6
12.3
9.4
64.3
94.0
26.0
68.0
0.4
85.4
38.2
123.6
34.6
—
6.8
41.4
82.2
26.2
56.0
0.1
55.9
Net income
$
80.5
$
67.6
$
(1)
Corporate expense generally includes corporate staff-related expense, stock-based compensation, pension and other post-
retirement benefits expenses not related to service, LIFO adjustments, certain foreign currency-related gains and losses,
and the impact of unusual or strategic transactions not representative of segment operations.
(2)
Refer to Note 17. Restructuring for further information on restructuring expense.
76
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)
Total assets
Segment assets:
JBT FoodTech
JBT AeroTech
Intercompany eliminations
Total segment assets
Corporate(3)
Total assets
2017
2016
2015
$
802.2
$
654.2
$
$
$
157.5
959.7
405.6
26.1
125.9
780.1
365.2
42.1
1,391.4
$
1,187.4
$
1,134.7
$
950.5
$
230.6
—
1,365.3
26.1
194.8
—
1,145.3
42.1
$
1,391.4
$
1,187.4
$
414.7
114.1
528.8
322.6
24.7
876.1
663.1
188.9
(0.6)
851.4
24.7
876.1
(1)
(2)
(3)
Management views segment operating capital employed, which consists of segment assets, net of its liabilities, as the
primary measure of segment capital. Segment operating capital employed excludes debt, pension liabilities, restructuring
reserves, income taxes and LIFO inventory reserves.
Segment liabilities included in total segment operating capital employed consist of trade and other accounts payable,
advance and progress payments, accrued payroll and other liabilities.
Corporate includes cash, LIFO inventory reserves, income tax balances, investments, and property, plant and equipment
not associated with a specific segment.
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 property, plant and equipment, net and certain other non-current assets.
(In millions)
Revenue (by location of customers):
United States
All other countries
Total revenue
(In millions)
Long-lived assets:
United States
Brazil
All other countries
Total long-lived assets
2017
2016
2015
967.1
668.0
1,635.1
$
$
807.7
542.8
1,350.5
$
$
600.9
506.4
1,107.3
2017
2016
2015
161.6
$
154.1
$
13.9
75.7
12.6
57.8
251.2
$
224.5
$
132.7
9.5
49.1
191.3
$
$
$
$
77
Other business segment information
(In millions)
Capital Expenditures
2016
2015
2017
Depreciation and Amortization
2016
2015
2017
Research and Development
Expense
2016
2017
2015
JBT FoodTech
$
34.6
$
30.7
$
31.9
$
46.8
$
34.6
$
25.5
$
21.8
$
18.0
$
13.5
JBT AeroTech
Corporate
Total
2.6
0.7
3.9
2.5
3.5
2.3
2.5
2.4
2.2
1.7
2.0
2.1
6.9
—
5.6
—
4.7
—
$
37.9
$
37.1
$
37.7
$
51.7
$
38.5
$
29.6
$
28.7
$
23.6
$
18.2
NOTE 17. RESTRUCTURING
Restructuring costs primarily consist of employee separation benefits under our existing severance programs, foreign statutory
termination benefits, certain one-time termination benefits, contract termination costs, asset impairment charges and other costs that
are associated with restructuring actions. Certain restructuring charges are accrued prior to payments made in accordance with
applicable guidance. For such charges, the amounts are determined based on estimates prepared at the time the restructuring actions
were approved by management.
In the first quarter of 2016, we implemented our optimization program to realign FoodTech’s Protein business in North America and
Liquid Foods business in Europe, accelerate JBT’s strategic sourcing initiatives, and consolidate smaller facilities. The total estimated
cost in connection with this plan is approximately $12.0 million.
During the fourth quarter of 2016, in connection with our acquisition of Tipper Tie, we implemented a restructuring plan to
consolidate certain facilities and optimize our general and administrative infrastructure subsequent to a FoodTech acquisition. The
total estimated cost in connection with this plan is approximately $4.0 million.
The following table details the amounts reported in Restructuring expense on the consolidated statement of income since the
implementation of these plans:
Cumulative
Amount
As of
December 31,
2016
For the Quarter Ended
March 31,
2017
June 30,
2017
September 30,
2017
December 31,
2017
Cumulative
Amount
As of
December 31,
2017
(In millions)
Severance and related expense $
Other
Total restructuring charges
$
6.1
6.2
12.3
$
$
0.5
0.2
0.7
$
$
0.1
0.6
0.7
$
$
— $
0.3
0.3
$
— $
0.6
0.6
$
6.7
7.9
14.6
The restructuring expense is associated with the FoodTech segment, and is excluded from our calculation of segment operating profit.
Expenses incurred during the three months ended December 31, 2017 primarily relate to costs to streamline operations and consolidate
facilities as a direct result of our plan.
78
Liability balances for restructuring activities are included in other current liabilities in the accompanying consolidated balance sheets.
The table below details the activity in 2017:
(In millions)
Severance and related expense
Other
Total
Balance as of
December 31,
2016
$
$
8.3
0.6
8.9
$
$
Charged to
Earnings
Payments
Made
Release of
Liability
Balance as of
December 31,
2017
0.5
1.8
2.3
$
$
(4.9) $
(2.4)
(7.3) $
(0.7) $
—
(0.7) $
3.2
—
3.2
We released $0.7 million of the liability during the year ended December 31, 2017 which we no longer expect to pay in connection
with this plan due to actual severance payments differing from the original estimates and natural attrition of employees.
NOTE 18. QUARTERLY INFORMATION (UNAUDITED)
(In millions, except per share data and
common stock prices)
Revenue
Cost of sales
Income from continuing operations
Loss from discontinued operations, net of tax
Net income
Basic earnings per share(1):
Income from continuing operations
Loss from discontinued operations, net of tax
Net income
Diluted earnings per share(1):
Income from continuing operations
Loss from discontinued operations, net of tax
Net income
Dividends declared per share
Weighted average shares outstanding
Basic
Diluted
Common stock sales price
High
Low
2017
2016
4th
Qtr.
3rd
Qtr.
2nd
Qtr.
1st
Qtr.
4th
Qtr.
3rd
Qtr.
2nd
Qtr.
1st
Qtr.
$
483.7
$
420.8
$
386.1
$
344.5
$
405.0
$
349.6
$
328.8
$
267.1
346.9
19.8
0.4
19.4
0.62
(0.01)
0.61
0.61
(0.01)
0.60
0.10
31.9
32.3
$
$
$
$
$
$
299.3
26.4
0.6
25.8
0.83
(0.02)
0.81
0.82
(0.02)
0.80
0.10
31.9
32.3
$
$
$
$
$
$
271.3
18.3
0.4
17.9
0.57
(0.01)
0.56
0.57
(0.01)
0.56
0.10
31.9
32.3
$
$
$
$
$
$
246.9
17.6
0.2
17.4
0.59
(0.01)
0.58
0.58
(0.01)
0.57
0.10
30.0
30.4
$
$
$
$
$
$
291.0
23.4
0.3
23.1
0.79
(0.01)
0.78
0.78
(0.01)
0.77
0.10
29.4
29.9
$
$
$
$
$
$
$
$
$
$
$
$
255.5
20.6
233.0
18.8
$
$
$
$
$
$
—
20.6
0.70
—
0.70
0.69
—
0.69
0.10
29.4
29.8
$
$
$
$
$
$
—
18.8
0.64
—
0.64
0.63
—
0.63
0.10
29.4
29.8
190.3
5.2
0.1
5.1
0.18
(0.01)
0.17
0.17
—
0.17
0.10
29.5
29.8
$ 120.55
$ 101.40
$
99.09
$
85.09
$
$
99.15
82.45
$
$
92.05
80.70
$
$
93.55
70.55
$
$
71.00
59.90
$
$
65.67
51.20
$
$
57.48
41.35
(1)
Basic and diluted earnings per share (EPS) are computed independently for each of the periods presented. Accordingly, the
sum of the quarterly EPS amounts may not agree to the annual total.
NOTE 19. SUBSEQUENT EVENTS
On February 22, 2018, the Board of Directors approved a quarterly cash dividend of $0.10 per share of outstanding common stock.
The dividend will be paid on March 19, 2018 to stockholders of record at the close of business on March 5, 2018.
79
Schedule II—Valuation and Qualifying Accounts
(In thousands)
Additions
Description
Year ended December 31, 2015:
Allowance for doubtful accounts
Valuation allowance for deferred tax assets
Year ended December 31, 2016:
Allowance for doubtful accounts
Valuation allowance for deferred tax assets
Year ended December 31, 2017:
Allowance for doubtful accounts
Valuation allowance for deferred tax assets
Balance at
beginning
of period
Charged to
costs and
expenses
Charged to
other
accounts(a)
Deductions
and other(a)
Balance
at end
of period
$
$
$
$
$
$
3,042
$
— $
2,063
$
— $
3,069
$
— $
471
$
— $
2,060
$
— $
— $
— $
— $
— $
288
$
— $
— $
2,654
$
1,450
$
— $
1,054
$
— $
147
$
— $
2,063
—
3,069
—
3,210
2,654
(a)
"Additions charged to other accounts" includes allowances added through business combinations.
(b)
credited to expense.
“Deductions and other” includes translation adjustments, write-offs, net of recoveries, and reductions in the allowances
See accompanying Report of Independent Registered Public Accounting Firm.
80
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
ITEM 9.
DISCLOSURE
None.
ITEM 9A.
CONTROLS AND PROCEDURES
(a)
(b)
Disclosure 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, our Chief Executive
Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective to ensure that
information required to be disclosed by us in reports we file or submit under the Exchange Act is (1) recorded, processed,
summarized and reported within the time periods specified in SEC rules and forms, and (2) accumulated and
communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely
decisions regarding required disclosure.
Management’s Annual Report on Internal Control over Financial Reporting
Internal control over financial reporting is defined in Rule 13a-15(f) promulgated under the Securities Exchange Act of
1934, as a process designed by, or under the supervision of, the Company’s principal executive and principal financial
officers and effected by the Company’s Board, management and other personnel, to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with U.S. generally accepted accounting principles (GAAP) and includes those policies and procedures that:
(i)
(ii)
(iii)
pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions
and dispositions of assets of the Company;
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial
statements in accordance with GAAP, and that receipts and expenditures of the Company are being made
only in accordance with authorizations of management and directors of the Company; and
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or
disposition of the Company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may
deteriorate. Management’s report on internal control over financial reporting is set forth below and should be read with
these limitations in mind.
Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Under
the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial
Officer, we conducted an evaluation of the effectiveness of the Company’s internal control over financial reporting based
upon the framework in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring
Organizations of the Treadway Commission. Based on that evaluation, our management concluded that the Company’s
internal control over financial reporting is effective as of December 31, 2017.
During 2017, the Company completed the acquisitions of Avure Technologies, Inc., Aircraft Maintenance Support
Services, Ltd., and PLF International Ltd. The net assets acquired in these transactions reflected less than 10% of the
consolidated assets of JBT Corporation as of December 31, 2017. The total revenue generated by these acquired
businesses since the dates of acquisition totaled less than 5% of the consolidated revenue of JBT Corporation for the year
ended December 31, 2017. Management’s assessment of the Company’s internal control over financial reporting as of
December 31, 2017 excluded the internal control over financial reporting of these businesses during this period while we
integrated the acquirees’ existing internal control structure with JBT policies and procedures.
Attestation Report of the Registered Public Accounting Firm
KPMG LLP, the Company’s independent registered public accounting firm, has issued their report, included herein on
page 82, on the effectiveness of the Company’s internal control over financial reporting.
(c)
Changes in Internal Control over Financial Reporting
In the ordinary course of business, we review our system of internal control over financial reporting and make changes to
our systems and processes to improve such controls and increase efficiency, while ensuring that we maintain an effective
internal control environment. Changes may include such activities as implementing new, more efficient systems,
81
automating manual processes and updating existing systems. For example, we centralized certain administrative and
transaction functions in Europe to leverage a shared services model. As a result of the transition of these accounting
operations to a central location, the personnel responsible for executing controls over the processing of transactions in
certain processes changed. This transition process continued throughout 2017. Management believes it took the necessary
steps to maintain appropriate internal controls and to monitor their operation during the period of change. The
implementation of shared services will allow us to be more efficient and further enhance our internal control over
financial reporting.
We acquired multiple businesses during 2017. Our integration process includes evaluating the internal control structure,
including information technology, to change certain systems, controls and/or procedures to align each business with JBT
systems, controls and procedures.
Other than as noted above, there were no changes in controls identified in the evaluation for the quarter ended
December 31, 2017 that have materially affected, or are reasonably likely to materially affect, our internal control over
financial reporting, as defined in Rule 13a-15(f) under the Exchange Act.
82
Report of Independent Registered Public Accounting Firm
To the Stockholders and Board of Directors
John Bean Technologies Corporation:
Opinion on Internal Control Over Financial Reporting
We have audited John Bean Technologies Corporation and subsidiaries (the “Company”) internal control over financial reporting as of
December 31, 2017, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of
Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in all material respects, effective
internal control over financial reporting as of December 31, 2017, based on criteria established in Internal Control - Integrated
Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)
(“PCAOB”), the consolidated balance sheets of the Company as of December 31, 2017 and 2016, the related consolidated statements
of income, comprehensive income (loss), changes in stockholders’ equity, and cash flows for each of the years in the three-year period
ended December 31, 2017, and the related notes and financial statement schedule II (collectively, the consolidated financial
statements), and our report dated February 28, 2018 expressed an unqualified opinion on those consolidated financial statements.
The Company acquired Avure Technologies, Inc., Aircraft Maintenance Support Services, Ltd., and PLF International Ltd. during
2017, and management excluded from its assessment of the effectiveness of the Company’s internal control over financial reporting as
of December 31, 2017, Avure Technologies, Inc.’s, Aircraft Maintenance Support Services, Ltd.’s, and PLF International Ltd.’s
internal control over financial reporting associated with total assets of less than 10% of consolidated assets and total revenues of less
than 5% of consolidated revenues in the consolidated financial statements of the Company as of and for the year ended December 31,
2017. Our audit of internal control over financial reporting of the Company also excluded an evaluation of the internal control over
financial reporting of Avure Technologies, Inc., Aircraft Maintenance Support Services, Ltd., and PLF International Ltd.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of
the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal
Control over Financial Reporting in Item 9A: Controls and Procedures. Our responsibility is to express an opinion on the Company’s
internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are
required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules
and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.
Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting,
assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control
based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances.
We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting
principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the
maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the
company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in
accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect
on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections
of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in
conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ KPMG LLP
Chicago, Illinois
February 28, 2018
83
ITEM 9B.
OTHER INFORMATION
None.
ITEM 10.
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
PART III
We have a code of ethics entitled the “Code of Business Conduct and Ethics” that applies to our employees, including our principal
executive and financial officers (including our principal executive 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
the General Counsel and Secretary of JBT Corporation, 70 West Madison Street, Suite 4400, Chicago, Illinois 60602.
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 can be found in the Proxy Statement for our 2018 Annual Meeting of Stockholders and is
incorporated herein by reference.
ITEM 11.
EXECUTIVE COMPENSATION
Information required by this item can be found in the sections entitled “Director Compensation,” “Compensation Committee
Interlocks and Insider Participation in Compensation Decisions,” “Executive Compensation” and "Compensation Tables and
Explanatory Information" of the Proxy Statement for our 2018 Annual Meeting of Stockholders and is incorporated herein by
reference.
ITEM 12.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS
Information required by this item can be found in the sections entitled “Security Ownership of John Bean Technologies Corporation”
and "Compensation Tables and Explanatory Information - Securities Authorized for Issuance Under Equity Compensation Plans
Table" of the Proxy Statement for our 2018 Annual Meeting of Stockholders and is incorporated herein by reference.
ITEM 13.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
Information required by this item can be found in the sections entitled “Transactions with Related Persons” and “Director
Independence” of the Proxy Statement for our 2018 Annual Meeting of Stockholders and is incorporated herein by reference.
ITEM 14.
PRINCIPAL ACCOUNTANT FEES AND SERVICES
Information required by this item can be found in the section entitled “Ratification of Appointment of Independent Registered Public
Accounting Firm” of the Proxy Statement for our 2018 Annual Meeting of Stockholders and is incorporated herein by reference.
84
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 financial statements required to be filed in this Annual Report on Form 10-K
are listed below and appear on pages 46 through 79 herein:
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Report of Independent Registered Public Accounting Firm
Consolidated Statements of Income for the Years Ended December 31, 2017, 2016 and 2015
Consolidated Statements of Comprehensive Income (Loss) for the Years Ended December 31,
2017, 2016 and 2015
Consolidated Balance Sheets as of December 31, 2017 and 2016
Consolidated Statements of Cash Flows for the Years Ended December 31, 2017, 2016 and 2015
Consolidated Statements of Changes in Stockholders’ Equity for the Years Ended December 31,
2017, 2016 and 2015
Notes to Consolidated Financial Statements
45
46
47
48
49
50
51
2. Financial Statement Schedule: Schedule II—Valuation and Qualifying Accounts is included in this Annual Report on
Form 10-K on page 80. 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 financial statements and notes thereto in Item 8.
Financial Statements and Supplementary Data 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
Exhibit Description
2.1
2.1A
3.1
3.2
3.3
3.4
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.
Amendment to Separation and Distribution Agreement between FMC Technologies, Inc. and John Bean
Technologies Corporation, incorporated by reference to Exhibit 2.1 to our Quarterly Report on Form 10-Q
filed with the SEC on November 4, 2010.
Amended and Restated Certificate of Incorporation of JBT Corporation, incorporated by reference to
Exhibit 3.1 to our Annual Report on Form 10-K filed with the SEC on March 11, 2009.
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 John Bean Technologies Corporation, incorporated by reference to
Exhibit 3.3 to our Annual Report on Form 10-K filed with the SEC on March 11, 2009.
First Amendment to Amended and Restated By-Laws of John Bean Technologies Corporation,
incorporated by reference to Exhibit 3.2 to our Quarterly Report on Form 10-Q filed with the SEC on May
8, 2009.
85
3.5
3.6
3.7
4.1
4.2
10.1
10.1A
10.1B
10.1C
10.1D
10.2
10.3
10.4
10.5
Second Amendment to Amended and Restated Bylaws of John Bean Technologies Corporation,
incorporated by reference to Exhibit 3.1 of the registrant’s Quarterly Report on Form 10-Q filed on August
8, 2014.
Second Amended and Restated Bylaws of John Bean Technologies Corporation. incorporated by reference
to Exhibit 3.1 of the registrant’s Current Report on Form 8-K filed on August 19, 2014.
Third Amended and Restated Bylaws of John Bean Technologies Corporation incorporated by reference to
Exhibit 3.7 of the registrant’s Current Report on Form 8-K filed on December 6, 2016.
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 3, 2008.
Rights Agreement between John Bean Technologies 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.
Credit Agreement dated February 10, 2015, among John Bean Technologies Corporation, John Bean
Technologies, B.V., Wells Fargo Bank, National Association, and the other lenders and parties signatories
thereto, incorporated by reference to our Quarterly Report on Form 10-Q filed with the SEC on April 30,
2015.
First Amendment to the Credit Agreement, dated as of September 15, 2015, by and among John Bean
Technologies Corporation and John Bean Technologies, B.V., as borrowers, Wells Fargo Bank, National
Association, as administrative agent, and the other lenders signatory thereto, incorporated by reference to
Exhibit 10.1 to our Current Report on Form 8-K filed with the SEC on September 16, 2015.
Second Amendment to the Credit Agreement, dated as of March 18, 2016, by and among John Bean
Technologies Corporation and John Bean Technologies, B.V., as borrowers, Wells Fargo Bank, National
Association, as administrative agent, and the other lenders signatory thereto, incorporated by reference to
Exhibit 10.1 to our Quarterly Report on Form 10-Q filed with the SEC on April 29, 2016.
Third Amendment to the Credit Agreement, dated as of October 20, 2016, by and among John Bean
Technologies Corporation and John Bean Technologies, B.V., as borrowers, Wells Fargo Bank, National
Association, as administrative agent and incremental Term-1 lender, and the other incremental Term-1
lenders signatory thereto, incorporated by reference to Exhibit 10.1C to our Annual Report on Form 10-K
filed with the SEC on February 28, 2017.
Fourth Amendment to the Credit Agreement, dated as of May 9, 2017, by and among John Bean
Technologies Corporation and John Bean Technologies B.V., as borrowers, Wells Fargo Bank, National
Association, as administrative agent, and the other lenders signatory thereto, incorporate by reference to
Exhibit 10.1 to our Current Report on Form 8-K filed with the SEC on May 15, 2017.
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.
John Bean Technologies 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, 2008.1
10.5A
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, 2008.1
86
10.5B
10.5C
10.5D
10.5E
10.5F
10.5G
10.5H
10.5I
10.5J
10.5K
10.5L
10.5M
10.5N
10.5O
10.5P
10.5Q
10.5R
10.5S
10.5T
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, 2008.1
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, 2008.1
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, 2008.1
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, 2008.1
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, 2008.1
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, 2008.1
Form of Long-Term Incentive Restricted Stock Unit Agreement, incorporated by reference to Exhibit
10.5H to our Annual Report on Form 10-K filed with the SEC on March 3, 2011.1
Form of Long-Term Incentive Performance Share Restricted Stock Unit Agreement, incorporated by
reference to Exhibit 10.5I to our Annual Report on Form 10-K filed with the SEC on March 3, 2011.1
Updated Form of Long-Term Incentive Restricted Stock Unit Agreement, incorporated by reference to our
Annual Report on Form 10-K filed with the SEC on March 7, 2013.1
Updated Form of Long-Term Incentive Performance Share Restricted Stock Unit Agreement, incorporated
by reference to our Annual Report on Form 10-K filed with the SEC on March 7, 2013.1
Form of Long-Term Incentive Performance Cash Award Agreement, incorporated by reference to our
Annual Report on Form 10-K filed with the SEC on March 7, 2013.1
Updated Form of Long-Term Incentive Restricted Stock Unit Agreement, incorporated by reference to our
Annual Report on Form 10-K filed with the SEC on March 2, 2015.1
Updated Form of Long-Term Incentive Performance Restricted Stock Unit Agreement, incorporated by
reference to our Annual Report on Form 10-K filed with the SEC on March 2, 2015.1
Updated Form of Long-Term Incentive Restricted Stock Unit Agreement – Executive Officer,
incorporated by reference to our Annual Report on Form 10-K filed with the SEC on March 2, 2015.1
Updated Form of Long-Term Incentive Performance Restricted Stock Unit Agreement – Executive
Officer, incorporated by reference to our Annual Report on Form 10-K filed with the SEC on March 2,
2015.1
Updated Form of Long-Term Incentive Restricted Stock Unit Agreement, incorporated by reference to our
Annual Report on Form 10-K filed with the SEC on February 29, 2016.1
Updated Form of Long-Term Incentive Performance Restricted Stock Unit Agreement, incorporated by
reference to our Annual Report on Form 10-K filed with the SEC on February 29, 2016.1
Updated Form of Long-Term Incentive Restricted Stock Unit Agreement - Executive Officer, incorporated
by reference to our Annual Report on Form 10-K filed with the SEC on February 29, 2016.1
Updated Form of Long-Term Incentive Performance Restricted Stock Unit Agreement - Executive Officer,
incorporated by reference to our Annual Report on Form 10-K filed with the SEC on February 29, 2016.1
87
10.5U
10.5V
10.6
10.6A
10.6B
10.6C
10.6D
10.6E
10.6F
10.7
10.7A
10.7B
10.7C
10.8
10.9
10.9A
Updated Form of Non-Employee Director Long-Term Incentive Restricted Stock Unit Agreement - Vests,
incorporated by reference to our Annual Report on Form 10-K filed with the SEC on February 28, 2017.1
Updated Form of Non-Employee Director Long-Term Incentive Restricted Stock Unit Agreement -
Separation, incorporated by reference to our Annual Report on Form 10-K filed with the SEC on February
28, 2017.1
Amendment No. 1 to John Bean Technologies 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, 2008.1
Amendment No. 2 to John Bean Technologies Corporation Incentive Compensation and Stock Plan,
incorporated by reference to Exhibit 10.6A to our Current Report on Form 8-K filed with the SEC on
March 1, 2010.1
Amendment No. 3 to John Bean Technologies Corporation Incentive Compensation and Stock Plan,
incorporated by reference to Exhibit 10.6B to our Annual Report on Form 10-K filed with the SEC on
March 7, 2014.1
Amendment No. 4 to John Bean Technologies Corporation Incentive Compensation and Stock Plan,
incorporated by reference to Exhibit 10.6C to our Annual Report on Form 10-K filed with the SEC on
March 2, 2015.1
Amendment No. 5 to John Bean Technologies Corporation Incentive Compensation and Stock Plan,
incorporated by reference to Exhibit 10.6D to our Annual Report on Form 10-K filed with the SEC on
February 29, 2016.1
Amendment No. 6 to John Bean Technologies Corporation Incentive Compensation and Stock Plan,
incorporated by reference to Exhibit 10.3 to our Quarterly Report on Form 10-Q filed with the SEC on
October 28, 2016.1
Amendment No. 7 to John Bean Technologies Corporation Incentive Compensation and Stock Plan,
incorporated by reference to Exhibit 10.6F to our Annual Report on Form 10-K filed with the SEC on
February 28, 2017.1
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, 2008.1
First Amendment of JBT Corporation Non-Qualified Savings and Investment Plan, incorporated by
reference to Exhibit 10.1 to our Current Report on Form 8-K filed with the SEC on September 18, 2009.1
Second Amendment of JBT Corporation Non-Qualified Savings and Investment Plan, incorporated by
reference to Exhibit 10.5 to our Quarterly Report on Form 10-Q filed with the SEC on November 6,
2009.1
Third Amendment of JBT Corporation Non-Qualified Savings and Investment Plan, incorporated by
reference to Exhibit 10.7C to our Annual Report on Form 10-K filed with the SEC on March 2, 2015.1
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, 2008.1
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, 2008.1
First Amendment of JBT Corporation Salaried Employees’ Equivalent Retirement Plan, incorporated by
reference to Exhibit 10.1 to our Current Report on Form 8-K filed with the SEC on September 15, 2009.1
88
10.9B
10.10
10.10A
10.10B
10.11
10.11A
10.11B
10.11C
10.11D
10.11E
10.11F
10.11G
10.11H
10.11I
10.11J
Second Amendment of JBT Corporation Salaried Employees’ Equivalent Retirement Plan, incorporated
by reference to Exhibit 10.6 to our Quarterly Report on Form 10-Q filed with the SEC on November 6,
2009.1
Form of JBT Corporation Executive Severance Agreement, incorporated by reference to Exhibit 10.12 to
our Annual Report on Form 10-K filed with the SEC on March 11, 2009.1
Form of Amended and Restated JBT Corporation Executive Severance Agreement, incorporated by
reference to Exhibit 10.1 to our Current Report on Form 8-K filed with the SEC on December 21, 2011.1
Form of First Amendment to John Bean Technologies Corporation Amended and Restated Executive
Severance Agreement, incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed
with the SEC on January 2, 2013.1
JBT Corporation Employees’ Retirement Program - Part I Salaried and Nonunion Hourly Employees
Retirement Program and Part II Union Hourly Employees’ Retirement Plan, incorporated by reference to
Exhibit 10.5 to Amendment No. 3 to our Form 10/A filed with the SEC on July 3, 2008.1
First Amendment of JBT Corporation Employees’ Retirement Program - Part I Salaried and Nonunion
Hourly Employees Retirement Program, incorporated by reference to Exhibit 10.2 to our Current Report
on Form 8-K filed with the SEC on September 15, 2009.1
Second Amendment of JBT Corporation Employees’ Retirement Program - Part I Salaried and Nonunion
Hourly Employees Retirement Plan, incorporated by reference to Exhibit 10.11B to our Annual Report on
Form 10-K filed with the SEC on March 4, 2010.1
First Amendment of JBT Corporation Employees’ Retirement Program – Part II Union Hourly Employees
Retirement Plan, incorporated by reference to Exhibit 10.11C to our Annual Report on Form 10-K filed
with the SEC on March 4, 2010.1
Second Amendment of JBT Corporation Employees’ Retirement Program – Part II Union Hourly
Employees Retirement Plan, incorporated by reference to Exhibit 10.11D to our Quarterly Report on Form
10-Q filed with the SEC on November 3, 2011.1
Third Amendment of JBT Corporation Employees’ Retirement Program – Part II Union Hourly
Employees Retirement Plan, incorporated by reference to Exhibit 10.11E to our Quarterly Report on Form
10-Q filed with the SEC on November 3, 2011.1
Amended and Restated John Bean Technologies Corporation Employees’ Retirement Program - Part I
Salaried and Nonunion Hourly Employees’ Retirement Program - Part II Union Hourly Employees’
Retirement Program incorporated by reference to Exhibit 10.11F to our Quarterly Report on Form 10-Q
filed with the SEC on August 8, 2012.1
First Amendment of Amended and Restated John Bean Technologies Corporation Employees’ Retirement
Program - Part I Salaried and Nonunion Hourly Employees’ Retirement Program incorporated by
reference to Exhibit 10.11G to our Annual Report on Form 10-K filed with the SEC on March 7, 2014.1
First Amendment of Amended and Restated John Bean Technologies Corporation Employees’ Retirement
Program - Part II Union Hourly Employees’ Retirement Program incorporated by reference to Exhibit
10.11H to our Annual Report on Form 10-K filed with the SEC on March 7, 2014.1
Second Amendment of Amended and Restated John Bean Technologies Corporation Employees’
Retirement Program - Part II Union Hourly Employees’ Retirement Program incorporated by reference to
Exhibit 10.11I to our Annual Report on Form 10-K filed with the SEC on March 2, 2015.1
Second Amendment of John Bean Technologies Corporation Employee's Retirement Program - Part I
Salaried and Nonunion Hourly Employees' Retirement Plan (as Amended and Restated Effective as of
January 1, 2012) incorporated by reference to Exhibit 10.1 in our Quarterly Report on Form 10-Q filed
with the SEC on October 29, 2015.1
89
10.11K
10.11L
10.11M
Third Amendment of John Bean Technologies Corporation Employee's Retirement Program - Part II
Union Hourly Employees' Retirement Plan (as Amended and Restated Effective as of January 1, 2012)
incorporated by reference to our Exhibit 10.2 in our Quarterly Report on Form 10-Q filed with the SEC on
October 29, 2015.1
Third Amendment of John Bean Technologies Corporation Employees' Retirement Program Part I
Salaried and Nonunion Hourly Employees’ Retirement Plan (as Amended and Restated Effective as of
January 1, 2012) incorporated by reference to Exhibit 10.1 in our Quarterly Report on Form 10-Q filed
with the SEC on October 28, 2016.1
Fourth Amendment of John Bean Technologies Corporation Employees' Retirement Program Part II
Union Hourly Employees’ Retirement Plan (as Amended and Restated Effective as of January 1, 2012)
incorporated by reference to Exhibit 10.2 in our Quarterly Report on Form 10-Q filed with the SEC on
October 28, 2016.
10.12
JBT Corporation Savings and Investment Plan incorporated by reference to Exhibit 10.6 to Amendment
No. 3 to our Form 10/A filed with the SEC on July 3, 2008.1
10.12A
First Amendment of JBT Corporation Savings and Investment Plan, incorporated by reference to Exhibit
10.6.1 to our Quarterly Report on Form 10-Q filed with the SEC on August 5, 2009.1
10.12B
Second Amendment of JBT Corporation Savings and Investment Plan, incorporated by reference to
Exhibit 10.3 to our Current Report on Form 8-K filed with the SEC on September 15, 2009.1
10.12C
Third Amendment of JBT Corporation Savings and Investment Plan, incorporated by reference to Exhibit
10.12C to our Annual Report on Form 10-K filed with the SEC on March 4, 2010.1
10.12D
Fourth Amendment of JBT Corporation Savings and Investment Plan, incorporated by reference to Exhibit
10.12D to our Annual Report on Form 10-K filed with the SEC on March 4, 2010.1
10.12E
Fifth Amendment of JBT Corporation Savings and Investment Plan, incorporated by reference to Exhibit
10.12E to our Annual Report on Form 10-K filed with the SEC on March 3, 2011.1
10.12F
10.12G
10.12H
10.12I
10.12J
10.12K
10.12L
Amended and Restated John Bean Technologies Corporation Savings and Investment Plan incorporated
by reference to Exhibit 10.12F to our Quarterly Report on Form 10-Q filed with the SEC on August 8,
2012.1
First Amendment of Amended and Restated John Bean Technologies Corporation Savings and Investment
Plan, incorporated by reference to Exhibit 10.12G to our Quarterly Report on Form 10-Q filed with the
SEC on August 8, 2012.1
Second Amendment of Amended and Restated John Bean Technologies Corporation Savings and
Investment Plan, incorporated by reference to Exhibit 10.12H to our Annual Report on Form 10-K filed
with the SEC on March 7, 2014.1
Third Amendment of Amended and Restated John Bean Technologies Corporation Savings and
Investment Plan, incorporated by reference to Exhibit 10.12I to our Annual Report on Form 10-K filed
with the SEC on March 7, 2014.1
Fourth Amendment of Amended and Restated John Bean Technologies Corporation Savings and
Investment Plan, incorporated by reference to Exhibit 10.12J to our Annual Report on Form 10-K filed
with the SEC on March 7, 2014.1
Fifth Amendment of Amended and Restated John Bean Technologies Corporation Savings and Investment
Plan, incorporated by reference to Exhibit 10.12K to our Quarterly Report on Form 10-Q filed with the
SEC on August 8, 2014.1
Sixth Amendment of Amended and Restated John Bean Technologies Corporation Savings and Investment
Plan, incorporated by reference to Exhibit 10.12L to our Quarterly Report on Form 10-Q filed with the
SEC on August 8, 2014.1
90
10.12M
10.12N
10.12O
10.12P
10.12Q
10.12R
10.12S
10.12T
10.12U
10.12V
10.12W
10.12X
10.13
10.14
10.14A
10.15
10.16
Seven Amendment of Amended and Restated John Bean Technologies Corporation Savings and
Investment Plan, incorporated by reference to Exhibit 10.12M to our Quarterly Report on Form 10-Q filed
with the SEC on August 8, 2014.1
Eighth Amendment of Amended and Restated John Bean Technologies Corporation Savings and
Investment Plan, incorporated by reference to Exhibit 10.12N to our Annual Report on Form 10-K filed
with the SEC on March 2, 2015.1
Ninth Amendment of Amended and Restated John Bean Technologies Corporation Savings and
Investment Plan, incorporated by reference to Exhibit 10.12O to our Annual Report on Form 10-K filed
with the SEC on March 2, 2015.1
Tenth Amendment of JBT Corporation Savings and Investment Plan, incorporated by reference to Exhibit
10.12P to our Annual Report on Form 10-K filed with the SEC on February 28, 2017.1
Eleventh Amendment of JBT Corporation Savings and Investment Plan, incorporated by reference to
Exhibit 10.12Q to our Annual Report on Form 10-K filed with the SEC on February 28, 2017.1
Twelfth Amendment of JBT Corporation Savings and Investment Plan, incorporated by reference to
Exhibit 10.12R to our Annual Report on Form 10-K filed with the SEC on February 28, 2017.1
Thirteenth Amendment of JBT Corporation Savings and Investment Plan, incorporated by reference to
Exhibit 10.12S to our Annual Report on Form 10-K filed with the SEC on February 28, 2017.1
Fourteenth Amendment of JBT Corporation Savings and Investment Plan, incorporated by reference to
Exhibit 10.12T to our Annual Report on Form 10-K filed with the SEC on February 28, 2017.1
Fifteenth Amendment of JBT Corporation Savings and Investment Plan, incorporated by reference to
Exhibit 10.12U to our Annual Report on Form 10-K filed with the SEC on February 28, 2017.1
Sixteenth Amendment of JBT Corporation Savings and Investment Plan, incorporate by reference to
Exhibit 10.1 to our Quarterly Report on Form 10-Q filed with the SEC on April 27, 2017.1
Seventeenth Amendment to JBT Corporation Savings and Investment Plan, incorporate by reference to
Exhibit 10.2 to our Quarterly Report on Form 10-Q filed with the SEC on April 27, 2017.1
Eighteenth Amendment to JBT Corporation Savings and Investment Plan, incorporate by reference to
Exhibit 10.3 to our Quarterly Report on Form 10-Q filed with the SEC on April 27, 2017.1
Employment Agreement dated August 22, 2013, between JBT Corporation and Thomas W. Giacomini,
incorporated by reference to Exhibit 10.1 to our Quarterly Report on Form10-Q filed with the SEC on
November 1, 2013.1
Executive Severance Plan, incorporated by reference to Exhibit 10.14 to our Annual Report on Form 10-K
filed with the SEC on March 4, 2010.1
Amended and Restated Executive Severance Plan, incorporated by reference to Exhibit 10.14A to our
Annual Report on Form 10-K filed with the SEC on March 7, 2014.1
Long Term Incentive Restricted Stock Unit Purchase Agreement pursuant to the JBT Corporation
Incentive Compensation and Stock Plan issued to Thomas W. Giacomini on September 10, 2013,
incorporated by reference to Exhibit 10.3 to our Quarterly Report on Form 10-Q filed with the SEC on
November 1, 2013.1
Long Term Incentive Restricted Stock Unit Purchase Agreement pursuant to the JBT Corporation
Incentive Compensation and Stock Plan issued to Thomas W. Giacomini on September 10, 2013,
incorporated by reference to Exhibit 10.4 to our Quarterly Report on Form 10-Q filed with the SEC on
November 1, 2013.1
91
10.17
Offer Letter to Brian A. Deck, incorporated by reference to Exhibit 10.18 to our Annual Report on Form
10-K filed with the SEC on March 7, 2014.1
10.17A*
Offer Letter to Paul Sternlieb.1
10.18
10.19
10.20
10.20A
10.20B
10.20C
10.20D
10.20E
10.20F
10.20G
10.20H
10.20I
10.20J
21.1*
23.1*
John Bean Technologies Corporation Retiree Welfare Benefits Plan (as amended and restated, Effective
January 1, 2016), incorporated by reference to Exhibit 10.3 to our Quarterly report Form 10-Q filed with
the SEC on October 29, 2015.1
Separation and General Release Agreement - Steven Smith, incorporated by reference to Exhibit 10.1 to
our Quarterly report Form 10-Q filed with the SEC on October 30, 2017.
John Bean Technology Corporation 2017 Incentive Compensation and Stock Plan, incorporated by
reference to Exhibit 10.1 to our Current Report on Form 8-K filed with the SEC on May 18, 2017.1
Form of Performance-Based Restricted Stock Unit Grant Agreement ELT Version 5 year Retirement
Vesting, incorporated by reference to Exhibit 10.2 to our Current Report on Form 8-K filed with the SEC
on May 18, 2017.1
Form of Performance-Based Restricted Stock Unit Grant Agreement ELT Version 10 year Retirement
Vesting, incorporated by reference to Exhibit 10.3 to our Current Report on Form 8-K filed with the SEC
on May 18, 2017.1
Form of Performance-Based Restricted Stock Unit Grant Agreement Non-ELT Version 5 year Retirement
Vesting, incorporated by reference to Exhibit 10.4 to our Current Report on Form 8-K filed with the SEC
on May 18, 2017.1
Form of Performance-Based Restricted Stock Unit Grant Agreement Non-ELT Version 10 year Retirement
Vesting, incorporated by reference to Exhibit 10.5 to our Current Report on Form 8-K filed with the SEC
on May 18, 2017.1
Form of Time-Based Restricted Stock Unit Grant Agreement ELT Version 5 year Retirement Vesting,
incorporated by reference to Exhibit 10.6 to our Current Report on Form 8-K filed with the SEC on May
18, 2017.1
Form of Time-Based Restricted Stock Unit Grant Agreement ELT Version 10 year Retirement Vesting,
incorporated by reference to Exhibit 10.7 to our Current Report on Form 8-K filed with the SEC on May
18, 2017.1
Form of Time-Based Restricted Stock Unit Grant Agreement Non-ELT Version 5 year Retirement Vesting,
incorporated by reference to Exhibit 10.8 to our Current Report on Form 8-K filed with the SEC on May
18, 2017.1
Form of Time-Based Restricted Stock Unit Grant Agreement Non-ELT Version 10 year Retirement
Vesting, incorporated by reference to Exhibit 10.9 to our Current Report on Form 8-K filed with the SEC
on May 18, 2017.1
Form of Non-Employee Director Long-Term Incentive Restricted Stock Unit Agreement - Vests,
incorporated by reference to Exhibit 10.10 to our Current Report on Form 8-K filed with the SEC on May
18, 2017.1
Form of Non-Employee Director Long-Term Incentive Restricted Stock Unit Agreement - Separation,
incorporated by reference to Exhibit 10.11 to our Current Report on Form 8-K filed with the SEC on May
18, 2017.1
List of Subsidiaries of JBT Corporation.
Consent of Independent Registered Public Accounting Firm.
92
31.1*
31.2*
32.1*
32.2*
101*
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.
The following materials from John Bean Technologies Corporation’s Annual Report on Form 10-K for the
year ended December 31, 2017, formatted in XBRL (eXtensible Business Reporting Language): (i)
Consolidated Statements of Income, (ii) Consolidated Balance Sheets, (iii) Consolidated Statements of
Cash Flows, and (iv) Notes to Consolidated Financial Statements.
1
*
A management contract or compensatory plan required to be filed with this report.
Filed herewith
93
ITEM 16.
FORM 10-K SUMMARY
None.
SIGNATURES
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.
John Bean Technologies Corporation
(Registrant)
By:
/s/ THOMAS W. GIACOMINI
Thomas W. Giacomini
President and Chief Executive Officer
(Principal Executive Officer)
Date: February 28, 2018
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.
94
Signature
Title
/s/ THOMAS W. GIACOMINI
Thomas W. Giacomini
/s/ Brian A. Deck
Brian A. Deck
/s/ MEGAN J. Rattigan
Megan J. Rattigan
President, Director and
Chief Executive Officer
(Principal Executive Officer)
Executive Vice President and
Chief Financial Officer
(Principal Financial Officer)
Vice President and Controller
(Principal Accounting Officer)
Date
February 28, 2018
February 28, 2018
February 28, 2018
/s/ C. MAURY DEVINE
Director
February 28, 2018
C. Maury Devine
/s/ EDWARD L. DOHENY, II
Director
February 28, 2018
Edward L. Doheny, II
/s/ ALAN D. FELDMAN
Director
February 28, 2018
Alan D. Feldman
/s/ JAMES E. GOODWIN
Director
February 28, 2018
James E. Goodwin
/s/ POLLY B. KAWALEK
Director
February 28, 2018
Polly B. Kawalek
/s/ JAMES M. RINGLER
Director
February 28, 2018
James M. Ringler
95
Executive Offi cers
Annual Meeting
Stock Transfer Agent
Thomas W. Giacomini
Chairman of the Board, President
and Chief Executive Offi cer
Brian A. Deck
Executive Vice President and
Chief Financial Offi cer
Carlos Fernandez
Executive Vice President and
President, Liquid Foods
Paul Sternlieb
Executive Vice President and
President, Protein
David C. Burdakin
Executive Vice President and
President, AeroTech
James L. Marvin
Executive Vice President,
General Counsel and Secretary
Jason T. Clayton
Executive Vice President,
Human Resources
Debarshi Sengupta
Executive Vice President,
Corporate Development
Steven R. Smith
Executive Vice President
Megan J. Rattigan
Vice President and Controller
Corporate Offi ce
John Bean Technologies Corporation
70 West Madison Street
Suite 4400
Chicago, Illinois 60602
+1.312.861.5900
Investor Relations
John Bean Technologies Corporation
Investor Relations
Jeff Scipta
70 West Madison Street
Suite 4400
Chicago, Illinois 60602
+1.312.861.5930
jbtc.com/investors
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The Annual Meeting will be held at
9:30am Central Time on Friday, May 11,
2018 at 70 West Madison Street,
Suite 450, Chicago, IL 60602. Notice
of the meeting, together with proxy
materials, will be mailed to stockholders
in advance of the meeting.
Address stockholder inquiries, including
requests for stock transfers, to:
First Class/Registered/Certifi ed Mail:
Computershare
PO Box 505000
Louisville, KY 40233-5000
Form 10-K
A copy of the company’s 2017 Annual
Report on Form 10-K, as fi led with the
U.S. Securities and Exchange Commission,
is available at jbtc.com/investors or
upon written request to:
Courier Services:
Computershare
462 South 4th Street, Suite 1600
Louisville, KY 40202
Shareholder Services Number(s):
JBT Corporation
Investor Relations
70 West Madison Street
Suite 4400
Chicago, Illinois 60602
However, certain information required
under Parts II and III of the company’s
2017 Annual Report on Form 10-K has
been incorporated by reference from
the company’s Proxy Statement for its
2018 Annual Meeting of Stockholders.
JBT Corporation was originally
incorporated as Frigoscandia, Inc. in the
State of Delaware in May 1994.
Stock Exchange
John Bean Technologies Corporation
is listed on the New York Stock Exchange
under the symbol JBT.
Auditors
KPMG LLP
200 East Randolph Street
Suite 5500
Chicago, IL 60601
+1.800.368.5948
E-Mail:
web.queries@computershare.com
Investor Centre™ portal:
www.computershare.com/investor
Additional Information
Additional information about JBT
Corporation, including news and
fi nancial data, is available by visiting
the company’s website:
www.jbtc.com
An email alert service is available by
request under the Investor Relations
section of the website. This service will
provide an automatic alert, via email,
each time a news release is posted to the
site or a new fi ling is made with the U.S.
Securities and Exchange Commission.
This report is printed on FSC® Certifi ed
paper, SFI® Certifi ed Sourcing and
Rainforest Alliance Certifi ed™. Featuring
10% post consumer recycled content
and certifi ed fi ber.
70 West Madison Street
Suite 4400
Chicago, IL 60602
www.jbtc.com
®