Slide 1: 2012 Third Quarter Results
2012 Third Quarter Results questions??? OCTOBER 31, 2012
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 and financial projections, are forward-looking statements and are thus prospective. These forward-looking statements are subject to risks, u
Slide 3: Introductory Comments
Introductory Comments INFRASTRUCTURE X PROCESS SOLUTIONS X DIAGNOSTIC SYSTEMS COMPANY CONFIDENTIAL October 2012 3
Slide 4: Strategic Update
Strategic Update Flow Power Sale of Service Solutions Technology Infrastructure ClydeUnion integration: Power Transformers: European regulatory Received a total of 34 approval received in Q2 Completed 5% headcount reduction orders for large power transformers U.S. approval process: Profitability con
Slide 5: Capital Allocation
Capital Allocation Debt to EBITDA (1) Capital Allocation Plan Gross Leverage Estimate ~$2b of available liquidity in Q4 (2) Net Leverage 3.5x 1. $350m of Debt Reduction: 2.5x Plan to pay off $300m term loan X Plan to pay down $25m of term loan A 1.5x …and $25m of short-term debt 0.5x 2. $275m of Sha
Slide 6: Organic Revenue Development
Organic Revenue Development 15% 12% 10% 11% 8% 10% 7% 7% 5% 3% 2% 1% 0% -1% -5% -6% -11% -10% Q1 2012 Q2 2012 Q3 2012 Flow Technology Industrial Products & Services Thermal Equipment & Services SPX Consolidated Note: See appendix for reconciliation to GAAP Organic Revenue Growth in Flow Technology a
Slide 7: End Market Trends
End Market Trends Flow Technology Power Transformers (U.S.) Food & Beverage: Replacement demand remains steady for both medium and large power transformers Component demand declined modestly on a sequential basis, but still at a high level Total backlog increased 6% sequentially and 15% over prior y
Slide 8: Backlog
Backlog ($ billions) Sequential Change from Q2 to Q3 SPX Backlog by Quarter Organic Currency Total Change Impact Change $3.2 FlowTechnology (6%) Total backlog decreased +2% 7.5%: (3%) $3.0 $2.9 $2.8 4.1% organic decline Thermal Equipment 3.4% currency core:impact (5%) +2% (7%) & Services South Afric
Slide 9: Financial Analysis
Financial Analysis INFRASTRUCTURE X PROCESS SOLUTIONS X DIAGNOSTIC SYSTEMS COMPANY CONFIDENTIAL October 2012 9
Slide 10: Q3 Consolidated Financial Results
Q3 Consolidated Financial Results EPS from Revenue and Continuing Operations Segment Income Margins Segment Income Margins Excluding ClydeUnion $1.05 $1,249 $0.97 $1,166 11.8% 11.5% 10.8%* Q3 2011 Q3 2012 Q3 2011 Q3 2012 *Excludes $0.8m of backlog step-up charges related to ClydeUnion; see appendix
Slide 11: Flow Technology Q3 Analysis
Flow Technology Q3 Analysis Revenue ($ millions) $649 $528 $522 23% revenue growth: 26% acquisition growth 1% organic growth (4%) currency impact Q3 2011 Q3 2012 Excluding Q3 2012 ClydeUnion Segment Income and Margin $79 Segment Income increased 13%(1) $70 $73 Legacy Flow segment income margins impr
Slide 12: ClydeUnion Financial Analysis
ClydeUnion Financial Analysis ($ millions) Q1 2012 Q2 2012 Q3 2012 Q4 2012E FY 2012E Ending Backlog $556(1) $509(1) $495 Revenue $125 $144 $126 $150 + $545 + Operating Profit(2) ($2) $5 $6 $15m + $24 + Operating Profit %(2) (2%) 3% 5% 10% + 4% + EPS ($0.13) ($0.05) neutral $0.15 + ~ neutral (Dilutio
Slide 13: Flow Technology Backlog Analysis
Flow Technology Backlog Analysis ($ millions) Quarter End Backlog $1,550 $1,482 Flow Components & Systems: $1,434 Sequential Change Slowdown in industrial demand in $579 Europe and Asia Pacific $567 $559 Components (1%) Customers delaying investment on large systems $415 Systems $406 $380 (6%) Clyde
Slide 14: Flow Technology Q4 2012 Targets
Flow Technology Q4 2012 Targets ($ millions) 2012 Sequential Analysis Q4 Targets vs. Prior Year Revenue Revenue Operating Margins Operating Margins $695 to +23% to $745 +33% $677 $649 $628 $565 13% to 12.2% 14% 15.1% 13% to 10.7% 14% 8.4% Q1 2012 Q2 2012 Q3 2012 Q4 2012E Q4 2011 Q4 2012E Note: Figur
Slide 15: Thermal Equipment & Services Q3 Analysis
Thermal Equipment & Services Q3 Analysis ($ millions) Revenue Operating Margins (12%) decline in revenue: (6%) organic decline (4%) currency impact $434 (2%) other (1) $381 150 points of margin decline: 9.4% 7.9% Decline in higher margin power generation projects Q3 2011 Q3 2012 (1) 2011 revenue tra
Slide 16: Thermal Equipment & Services Backlog Analysis
Thermal Equipment & Services Backlog Analysis ($ millions) Quarter End Backlog* Joint Venture with Sequential change: Shanghai Electric YTD Orders $1,131 (7%) decline Joint venture with Shanghai $959 Electric has received 5 dry $890 cooling orders in China $482 $395 Medupi/Kusile $370 $71 Projects $
Slide 17: Thermal Equipment & Services Q4 2012 Targets
Thermal Equipment & Services Q4 2012 Targets ($ millions) 2012 Sequential Analysis Q4 Targets vs. Prior Year Revenue Revenue Operating Margins Operating Margins $400 to $415 $453 (8%) to $381 (12%) $350 $321 9.2% to 9.2% to 9.7% 9.7% 9.7% 7.9% 4.6% 3.2% Q1 2012 Q2 2012 Q3 2012 Q4 2012E Q4 2011 Q4 20
Slide 18: Industrial Products & Services Q3 Analysis
Industrial Products & Services Q3 Analysis ($ millions) Revenue Segment Margins 8% organic revenue growth: Driven by power transformer $220 $204 shipments 140 points of margin dilution: 13.3% 11.9% Decline in higher margin fare collection and communication technologies revenue Dilutive impact from o
Slide 19: Industrial Products & Services Backlog Analysis
Industrial Products & Services Backlog Analysis ($ millions) Quarter End Backlog (1%) sequential decline $474 $484 $481 Power transformer trends: 6% sequential backlog growth Replacement demand for power transformers remains at a high level Q1 2012 Q2 2012 Q3 2012 Backlog has Remained Steady This Ye
Slide 20: Industrial Products & Services Q4 2012 Targets
Industrial Products & Services Q4 2012 Targets ($ millions) 2012 Sequential Analysis Q4 Targets vs. Prior Year Revenue Revenue Operating Margins Operating Margins $255 to +4% to $265 +8% $245 $233 $217 $220 13.5% to 13.5% to 14.0% 12.7% 14.0% 13.0% 11.9% 11.9% Q1 2012 Q2 2012 Q3 2012 Q4 2012E Q4 201
Slide 21: Q4 2012 Consolidated Targets
Q4 2012 Consolidated Targets (from continuing operations) ($ millions) Q4 2012 Full Year Full Year Q4 2011 Targets 2011 2012E +8% to +11% to Revenue $1,264 $4,551 +12% +12% $160 to $503 to Segment Income(1) $160 $520 $175 $518 11.9% to 10.0% to Segment Income %(1) 12.7% 11.4% 12.3% 10.2% $5 to $23 t
Slide 22: 2012 Full Year Segment Targets
2012 Full Year Segment Targets (from continuing operations) ($ millions) Previous 2012 Updated 2012 2011 Targets Targets Revenue $2,042 +30% to +35% +30% to +32% Flow Technology Segment Income % (1) 13.1% 10.9% to 11.4% 11.1% to 11.3% Revenue $1,644 (10%) to (13%) (11%) to (12%) Thermal Equipment &
Slide 23: Executive Summary
Executive Summary INFRASTRUCTURE X PROCESS SOLUTIONS X DIAGNOSTIC SYSTEMS COMPANY CONFIDENTIAL October 2012 23
Slide 24: Executive Summary
Executive Summary 2012 is a year of transition focused on strategic advancements Anticipate sale of Service Solutions to Infrastructure close by early December Expect ~$1.3b of liquidity after completing the sale of Service Solutions and executing stated capital allocation plan 2012 is a Year of Tra
Slide 25: Questions?
Questions? INFRASTRUCTURE X PROCESS SOLUTIONS X DIAGNOSTIC SYSTEMS COMPANY CONFIDENTIAL October 2012 25
Slide 26: Appendix
Appendix INFRASTRUCTURE X PROCESS SOLUTIONS X DIAGNOSTIC SYSTEMS COMPANY CONFIDENTIAL October 2012 26
Slide 27: Q1 2012 Organic Revenue Growth Reconciliation
Q1 2012 Organic Revenue Growth Reconciliation Three Months Ended March 31, 2012 Net Revenue Acquisitions/ Change Divestitures Currency Organic Flow Technology 37.8% 29.2% -1.8% 10.4% Thermal Equipment & Services -1.5% -0.9% -2.3% 1.7% Industrial Products & Services 6.3% 0.0% -0.3% 6.6% Consolidated
Slide 28: Q2 2012 Organic Revenue Growth Reconciliation
Q2 2012 Organic Revenue Growth Reconciliation Three Months Ended June 30, 2012 Net Revenue Acquisitions/ Change Divestitures Currency Organic Flow Technology 37.4% 31.5% -6.0% 11.9% Thermal Equipment & Services -18.9% -1.6% -6.3% -11.0% Industrial Products & Services 9.8% 0.0% -0.8% 10.6% Consolidat
Slide 29: Q3 2012 Organic Revenue Growth Reconciliation
Q3 2012 Organic Revenue Growth Reconciliation Three Months Ended September 29, 2012 Net Revenue Acquisitions/ Change Divestitures Currency Organic Flow Technology 22.9% 26.4% -4.0% 0.5% Thermal Equipment & Services -12.2% -2.4% -4.1% -5.7% Industrial Products & Services 7.6% 0.0% -0.6% 8.2% Consolid
Slide 30: Debt Reconciliation
Debt Reconciliation ($ millions) 9/29/2012 Short-term debt $ 224 Current maturities of long-term debt 331 Long-term debt 1,594 Gross Debt $ 2,149 Less: Puchase card program and extended A/P programs (37) Adjusted Gross Debt $ 2,112 Less: Cash in excess of $50 (296) Adjusted Net Debt $ 1,816 Note: De
Slide 31: Bank EBITDA Reconciliation
Bank EBITDA Reconciliation ($ millions) LTM Net Income $181 Income tax provision (benefit) 53 Interest expense 111 Income before interest and taxes $345 Depreciation and intangible amortization expense 117 EBITDA from continuing operations $462 Adjustments: Amortization and write-off of intangibles
Slide 32: ClydeUnion Adjusted Operating Profit
ClydeUnion Adjusted Operating Profit ClydeUnion Purchase Accounting Reconciliation Nine Months Q1 Q2 Q3 Ended Revenues $124.9 $143.7 $126.5 $395.1 Operating Profit ($8.6) $2.1 $4.9 -$1.6 % of Revenues -6.9% 1.5% 3.9% -0.4% Purchase Accounting Adj. ($6.6) -$2.7 -$0.8 -$10.1 Adjusted Operating Profit
Slide 33: Flow Technology Segment Income Reconciliation
Flow Technology Segment Income Reconciliation Flow Technology Adjusted Segment Income Reconciliation Nine Months Q1 Q2 Q3 Ended Revenues $628.1 $677.3 $648.6 $1,954.0 Segment Income $46.4 $69.8 $78.1 $194.3 % of Revenues 7.4% 10.3% 12.0% 9.9% ClydeUnion Purchase Accounting Adj. ($6.6) -$2.7 -$0.8 -$
Slide 34: SPX Segment Income Reconciliation
SPX Segment Income Reconciliation SPX Adjusted Segment Income Reconciliation Nine Months Q1 Q2 Q3 Ended Revenues $1,165.2 $1,260.3 $1,249.4 $3,674.9 Segment Income $82.5 $116.0 $134.2 $332.7 % of Revenues 7.1% 9.2% 10.7% 9.1% ClydeUnion Purchase Accounting Adj. ($6.6) -$2.7 -$0.8 -$10.1 Adjusted Seg