Slide 1: Service Solutions Divestiture
Service Solutions Divestiture January 24, 2012 1 January 2012 1
Slide 2: Forward-looking statements
Certain statements contained in this presentation that are not historical facts, including any statements as to future market conditions, results of operations, financial projections and acquisitions, are forward-looking statements and are thus prospective. These forward-looking statements are subje
Slide 3: SPX Transformation
SPX Transformation 2005-2011 2012 & Beyond 1997-2004 Global, Multi-Industry Supplier Global Supplier of Diversified Industrial Manufacturer of Engineered Solutions Flow Technology Solutions Diversification, >100 Acquisitions; Legacy divestitures ClydeUnion Acquisition APV Acquisition Service Solutio
Slide 4: Service Solutions Divestiture: Strategic Rationale
Service Solutions Divestiture Strategic Rationale 1.Narrows 2.Increases 3.Realizes the Value Strategic Focus Financial Flexibilty of Service Solutions Enhances our ability to Accelerates de-levering ~12.7x 2011E EBITDA focus on expanding into the target range Sale price is ~33% of SPX Flow Technolog
Slide 5: SPX Pro Forma Revenue Breakdown
SPX Pro Forma Revenue Breakdown 2012E Pro Forma Revenue Breakdown Food & Beverage Thermal Equipment & Services 28% Flow Technology Power & Energy 53% Industrial Products & Services Industrial Processes 19% Note: 2012E pro forma for Service Solutions divestiture Flow Technology Is Expected to Represe
Slide 6: Key Growth Drivers
Key Growth Drivers Flow Technology: Building global Power & Energy platform: Oil & Gas market growth ClydeUnion integration; revenue & cost synergies Continued growth in Food & Beverage business Additional strategic acquisitions Power transformers: Large power transformer expansion Price recovery in
Slide 7: Financial Review
Financial Review January 2012 7 January 2012 7
Slide 8: Divestiture Overview
Divestiture Overview Divestiture Overview Transaction Terms Service Solutions Sale price: $1.15b 2012 financial projections: After-tax proceeds: ~$1b Revenue: ~$950m Expect to record an after-tax gain of EPS contribution: $0.90 to $1.00 ~$450m or ~$8.65 per share Free Cash Flow*: $60m to $70m Sale s
Slide 9: 2012 Capital Allocation Expectations
2012 Capital Allocation Expectations Capital allocation focus: EPS Accretion Debt repayment Non-leveraging strategic $350m debt reduction ~$0.18 acquisitions using cash on hand Gross Leverage Target: 1.5x to 2.5x Capital allocation focus: Strategic acquisitions $350m share repurchase $0.40 to $0.50
Slide 10: Projected Liquidity
Projected Liquidity ($ millions) Estimated Cash on Hand at 12/31/2011 $537 Available Credit Lines $485 2012E Free Cash Flow (excluding Service Solutions)(1) ~$200 Regular Quarterly Dividend (2) ~($50) After-Tax Proceeds from Sale of Service Solutions ~$1,000 Estimated Debt Repayment ($350) Estimated
Slide 11: Debt Repayment Schedule
Debt Repayment Schedule ($ millions) $600 $600 $500 $500 2012 Debt Repayment Plan $400 $300 $300 Address 2013 debt maturities $300 $200 Intend to repay: $100 $300m Term Loan X $75 $100 $31m of revolver $25 $31 $0 $25m of Term Loan A 2012 2013 2014 2015 2016 2017 $300m Term Loan X $500m Term Loan A 7
Slide 12: Leverage Ratios
Leverage Ratios Debt to EBITDA* Gross Leverage 3.5x Net Leverage 2.5x Gross Leverage Target Range: 1.5x 1.5x to 2.5x 0.5x -0.5x 2007 2008 2009 2010 2011E 2012E *EBITDA is as defined in SPX’s credit facility; see appendix for non-GAAP reconciliations Note: 2011E as of 11/2/2011; 2012E pro forma for S
Slide 13: 2012 Modeling Framework
2012 Modeling Framework ($ millions) Initial 2012 Guidance 2012 Pro Forma Presentation Modeling Framework (1) Revenue $6,000 to $6,250 $5,050 to $5,300 Segment Income % 10.4% to 10.9% 10.9% to 11.4% Tax Rate 28% 28% Share Count 52m 47m Cash on Hand $537 ~$940 Projected Liquidity ~$1,199 ~$1,472 Gros
Slide 14: Future Segment Structure
Future Segment Structure Thermal Equipment Industrial Products Flow Technology & Services & Services 2012E Revenue: ~$2.7b 2012E Revenue: ~$1.5b 2012E Revenue: ~$1.0b Key markets: Key markets: Key markets: Food & Beverage Power Generation Power T&D Power & Energy HVAC Infrastructure Industrial Proce
Slide 15: 2012 Segment Targets
2012 Segment Targets Thermal Equipment Industrial Products Flow Technology & Services & Services Revenue Revenue Revenue +33% to +38% (9%) to (14%) +7% to +12% Segment Income Margin Segment Income Margin Segment Income Margin 11.5% to 12.0% 8.2% to 8.7% 13.2% to 13.7% Note: ~100 points of margin dil
Slide 16: Executive Summary
Executive Summary January 2012 16 January 2012 16
Slide 17: Executive Summary
Executive Summary Infrastructure & Other Flow Technology is the Strategic Foundation of SPX food & beverage power & energy industrial processes Focused on Continuing to Build Our Flow Technology Segment January 2012 17
Slide 18: Appendix
Appendix January 24, 2012 18 January 2012 18
Slide 19: Industrial Products & Services Segment
Industrial Products & Services Segment 2011E Revenue by Product Line GFI Genfare 8% Radiodetection Precision Cable & 10% Pipe Locators Fare Box Systems Note: 2011E as of 1/18/2012 Radiodetection and GFI Business Units to be Reported in Industrial Products and Services Segment Beginning in Q1 2012 Ja
Slide 20: Industrial Products & Services Segment
Industrial Products & Services Segment ($ millions) Revenue Segment Margins ~$945 ~+2% +7% to ~$850 +12% ~21.3% 13.0% to 13.2% to Long-term targets: ~14.9% 13.2% 13.7% Average annual revenue growth: 4% to 6% Segment income margins: 15% to 22% 2009 2010 2011E 2012E Note: Data is unaudited and include
Slide 21: Debt Reconciliations
Debt Reconciliations ($ millions) 2012E Pro Forma 12/31/2011E Modeling Framework Short-term debt $ 86 $ 33 Current maturities of long-term debt - - Long-term debt 1,900 1,575 Gross Debt $ 1,986 $ 1,608 Puchase card program & extended A/P programs $ (39) $ (41) Adjusted Gross Debt $ 1,947 $ 1,567 Les
Slide 22: Bank EBITDA Reconciliations
Bank EBITDA Reconciliations 2012E Pro Forma ($ millions) 2010 2011E Modeling Framework Revenues $4,887 $5,475 $5,175 Net Income $194 $226 $214 Income tax provision (benefit) 53 97 86 Interest expense 82 95 104 Income before interest and taxes $329 $418 $404 Depreciation and intangible amortization e
Slide 23: Pro Forma Calculation
Pro Forma Calculation ($ millions) 2011E Revenue SPX Flow Technology $2,030 ClydeUnion Pumps $430 Pro Forma SPX Flow Technology - ClydeUnion Pumps $2,460 Note: 2011E as of 11/2/2011 Note: ClydeUnion’s financial data is based on IFRS standards and future performance is subject to purchase accounting
Slide 24: Pro Forma Calculation
Pro Forma Calculation ($ millions) 2012E Revenue Range Initial SPX Target $6,000 to $6,250 Service Solutions ($950) ($950) Pro Forma SPX Modeling Framework $5,050 to $5,300 January 2012 24
Slide 25: Free Cash Flow
Free Cash Flow ($ millions) Full Year 2012E Net cash from continuing operations $ 300 $ 340 Capital expenditures (120) (120) Free cash flow from continuing operations $ 180 $ 220 Note: 2012E pro forma for Service Solutions divestiture January 2012 25