Slide 1: 2012 Second Quarter Results
2012 Second Quarter Results questions??? AUGUST 1, 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 August 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 26 approval received 15% revenue increase from Q1 to Q2 orders for large power transformers Pending U.S. approval Progress made on impro
Slide 5: End Market Trends
End Market Trends 1. Flow End Markets Food & Beverage: First half order growth driven by large system orders to add new capacity in Asia Pacific and improve efficiency & sustainability in Europe; component orders stable sequentially Power & Energy: Strong global demand for oil & gas components and a
Slide 6: Organic Revenue Development
Organic Revenue Development 15% 12% 11% 10% 11% 9% 10% 7% 7% 5% 5% 3% 2% 0% -6% -5% -11% -10% Q1 2012 Q2 2012 1H 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: 1H 2012 Revenue by Region
1H 2012 Revenue by Region 1H 2012 Year-Over-Year Organic Revenue Change 1H 2012 Revenue +4% (5%) +20% by Geography North America Europe 46% 21% South Asia Pacific America Middle East 21% 2% & Africa 10% +6% Note: See appendix for reconciliation to GAAP 1H 2012 Organic Revenue Increased 5% Globally O
Slide 8: Backlog
Backlog ($ billions) Sequential Change Organic Currency Total SPX Backlog by Quarter Flow Technolgy Segment +1% (3%) (2%) Total (excluding backlog decreased 7.5%: ClydeUnion) $3.1 4.1% organic decline $3.0 $2.9 3.4% currency impact ClydeUnion (7%) (3%) (10%) Segment backlog change: Thermal Segment (
Slide 9: Financial Analysis
Financial Analysis INFRASTRUCTURE X PROCESS SOLUTIONS X DIAGNOSTIC SYSTEMS COMPANY CONFIDENTIAL August 2012 9
Slide 10: Q2 Earnings Per Share
Q2 Earnings Per Share Q2 2011 Q2 2012 Earnings per share $0.67 $0.93 Less: income from discontinued operations ($0.20) ($0.19) Earnings per share from continuing operations $0.47 $0.74 Q2 2011 non-cash asset impairment $0.29 Q2 2012 purchase accounting adjustment* $0.04 Adjusted EPS from continuing
Slide 11: Q2 Adjusted EPS (from continuing operations)
Q2 Adjusted EPS (from continuing operations) Q2 Adjusted EPS* Year-Over-Year Bridge $1 $0.78 Q2 2011 Adjusted EPS* $0.76 $0.76 $1 Segment income +$0.11 $1 Currency ($0.08) $1 Restructuring ($0.06) $1 Taxes & Interest Expense $0.01 $1 $1 Net other items $0.04 Q22011 Q2 2011 Q2 Q22012 2012 Q2 2012 Adj
Slide 12: Consolidated Q2 Financial Analysis
Consolidated Q2 Financial Analysis ($ millions) Revenue Segment Margins Excluding ClydeUnion 11% revenue growth: 13% acquisition growth $1,260 $1,137 3% organic growth (5%) currency impact 10.2% 10.2% Segment income margin: 9.4%* 80 points of margin dilution from ClydeUnion Q2 2011 Q2 2012 *Excludes
Slide 13: Flow Technology Q2 Analysis
Flow Technology Q2 Analysis Revenue ($ millions) $677 $534 37% revenue growth: $493 32% acquisition growth 12% organic growth (6%) currency impact Q2 2011 Q2 2012 Excluding Q2 2012 Clyde Union Segment Income and Margin $73 Segment Income increased 28%* $68 Operating margins, excluding ClydeUnion, $5
Slide 14: ClydeUnion Q2 Financial Analysis
ClydeUnion Q2 Financial Analysis ($ millions) Q1 2012 Q2 2012 Comments improved execution and contract discipline; Ending Backlog $530 $477 $14m of decline due to currency; end market demand remained strong 15% sequential growth; Revenue $125 $144 improved throughput Operating Profit 3% operating ma
Slide 15: ClydeUnion 2012 Financial Targets
ClydeUnion 2012 Financial Targets ($ millions) Updated Full Year Targets 1H vs. 2H 2012 Revenue: $560 to $580 Revenue Operating profit: $35 to $40 Segment Margins EPS accretion: $0.10 to $0.15 $290 to $310 $269 >10% EPS Accretion Bridge Prior EPS accretion target: ~$0.30 1.0%* Restructuring costs ($
Slide 16: Flow Technology Backlog Analysis
Flow Technology Backlog Analysis ($ millions) Quarter End Backlog $1,524 $1,440 $1,450 Sequential Change $542 $579 $567 Components Flow Components & Systems: (2%) (3%) currency impact $415 1% organic increase $388 $406 Systems (2%) ClydeUnion: $510 $530 $477 ClydeUnion (3%) currency impact (10%) (7%
Slide 17: Flow Technology 2012 Financial Targets
Flow Technology 2012 Financial Targets ($ millions) First Half vs. Second Half Full Year Targets 2011 Analysis 2012 Analysis +30% to Revenue +35% Segment Margins Revenue Segment Margins $1,360 to $2,042 $1,450 $1,305 $1,093 13.1% 10.9% to $949 11.4% 12.1% to 14.2% 13.0% 11.9% 9.6% 1H 2011 2H 2011 1H
Slide 18: Thermal Equipment & Services Q2 Analysis
Thermal Equipment & Services Q2 Analysis ($ millions) Revenue Segment Margins (19%) decline in revenue: (11%) organic decline $432 (6%) currency impact (2%) other (1) $350 8.3% 370 points of margin decline: 4.6% Reduction of higher margin cooling system projects Q2 2011 Q2 2012 (1) 2011 revenue rela
Slide 19: Thermal Equipment & Services Backlog Analysis
Thermal Equipment & Services Backlog Analysis ($ millions) Thermal Segment Backlog* Sequential change: Joint Venture (10%) organic decline New Order Backlog (5%) currency impact $1,131 $1,055 Joint venture with Shanghai $959 Electric has received 3 dry cooling orders in China $482 $460 $395 Medupi/K
Slide 20: Thermal Equipment & Services 2012 Financial Targets
Thermal Equipment & Services 2012 Financial Targets ($ millions) First Half vs. Second Half Full Year Targets 2011 Analysis 2012 Analysis Revenue Segment Margins Revenue $1,644 Segment Margins (10%) to (13%) $887 $760 to $805 $757 8.6% $671 7.3% to 10.2% to 7.6% 10.8% 9.6% 7.5% 3.9% 1H 2011 2H 2011*
Slide 21: Industrial Products & Services Q2 Analysis
Industrial Products & Services Q2 Analysis ($ millions) Revenue Segment Margins 11% organic revenue growth: 20% organic growth in power transformer business $233 $212 25% increase in segment income 13.0% 11.4% 160 points of margin improvement: Driven primarily by increased volume and pricing of powe
Slide 22: Industrial Products & Services Backlog Analysis
Industrial Products & Services Backlog Analysis ($ millions) Quarter End Backlog 2% sequential growth $490 $474 $484 Power transformer trends: 11% backlog growth Replacement demand for power transformers remains robust Q4 2011 Q1 2012 Q2 2012 11% Organic Revenue Growth in Q2 with Book-to-Bill of 1.1
Slide 23: Large Power Transformer Expansion
Large Power Transformer Expansion Shipped First Large Power Units From Expanded Capacity in Q2 2012; Hosting Investors and Analysts at SPX Transformer Solutions in Waukesha, WI on September 11th August 2012 23
Slide 24: Industrial Products & Services 2012 Financial Targets
Industrial Products & Services 2012 Financial Targets ($ millions) First Half vs. Second Half Full Year Targets 2011 Analysis 2012 Analysis Revenue Segment Margins Revenue +10% to Segment Margins +13% $500 to $865 $525 13.0% to $449 $449 13.3% 13.5% to 12.7% $416 14.1% 13.0% 12.5% 12.4% 1H 2011 2H 2
Slide 25: 2012 Financial Targets
2012 Financial Targets INFRASTRUCTURE X PROCESS SOLUTIONS X DIAGNOSTIC SYSTEMS COMPANY CONFIDENTIAL August 2012 25
Slide 26: Q3 2012 Targets
Q3 2012 Targets ($ millions) Q3 2012 Q3 2011 Targets comments ~13% acquisition growth; Revenue $1,166 $1,260 to $1,310 ~(4%) impact from currency expect increase in Flow Technology segment to be Segment Income* $138 $135 to $142 offset by a volume decline in Thermal segment Segment Income %* 11.8% 1
Slide 27: 2012 Pro Forma Modeling Framework
2012 Pro Forma Modeling Framework ($ millions) Previous 2012 Pro Forma Updated 2012 Pro Forma Modeling Framework (1) Modeling Framework (1) Revenue $5,150 to $5,400 $5,050 to $5,210 Segment Income % 10.5% to 11.0% 10.3% to 10.7% Interest Expense $105 $105 Tax Rate 28% 28% Share Count ~47m ~47m Cash
Slide 28: Projected Liquidity
Projected Liquidity ($ millions) Cash on Hand at 6/30/2012 $328 Available Credit Lines $392 Estimated 2H 2012 Free Cash Flow ~$300 Quarterly Dividend ~($25) After-Tax Proceeds from Sale of Service Solutions ~$1,000 Estimated Debt Repayment ($350) Estimated Remaining Share Repurchases ($275) 2012 Pro
Slide 29: Leverage and Capital Allocation
Leverage and Capital Allocation Debt to EBITDA* Gross Leverage > 2.5x Gross Leverage Capital allocation focus: Net Leverage 3.5x Debt repayment Non-leveraging strategic 2.5x Gross Leverage acquisitions using cash on hand Target Range: 1.5x 1.5x to 2.5x Capital allocation focus: Strategic acquisition
Slide 30: Executive Summary
Executive Summary INFRASTRUCTURE X PROCESS SOLUTIONS X DIAGNOSTIC SYSTEMS COMPANY CONFIDENTIAL August 2012 30
Slide 31: Executive Summary
Executive Summary 2012 is a year of transition focused on strategic advancements Strong growth in Flow Technology and Infrastructure Industrial Segments in 1H 2012 Targeting improved sequential results in the 2H of 2012 Expect ~$1.4b of liquidity after completing the sale of Service Solutions and ex
Slide 32: Questions?
Questions? INFRASTRUCTURE X PROCESS SOLUTIONS X DIAGNOSTIC SYSTEMS COMPANY CONFIDENTIAL August 2012 32
Slide 33: Appendix
Appendix INFRASTRUCTURE X PROCESS SOLUTIONS X DIAGNOSTIC SYSTEMS COMPANY CONFIDENTIAL August 2012 33
Slide 34: Q1 2012 Organic Revenue Growth Reconciliation
Q1 2012 Organic Revenue Growth Reconciliation Quarter 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 SPX 1
Slide 35: Q2 2012 Organic Revenue Growth Reconciliation
Q2 2012 Organic Revenue Growth Reconciliation Quarter 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% Consolidated SP
Slide 36: 1H 2012 Organic Revenue Growth Reconciliation
1H 2012 Organic Revenue Growth Reconciliation Six Months Ended June 30, 2012 Net Revenue Acquisitions/ By Reporting Segment Change Divestitures Currency Organic Flow Technology 37.6% 30.4% -4.0% 11.2% Thermal Equipment & Services -11.4% -1.3% -4.6% -5.5% Industrial Products & Services 8.1% 0.0% -0.6
Slide 37: Flow Technology Segment Income Reconciliation
Flow Technology Segment Income Reconciliation Quarter Ended June 30, 2012 Flow ClydeUnion Flow Technology Flow Technology Technology As Purchase Acct. Excluding ClydeUnion ClydeUnion Q2 Excluding Reported Adj. Purchase Acct. Adj. Operating Results ClydeUnion Revenues $677.3 $677.3 $143.7 $533.6 Segm
Slide 38: 2H 2012E Free Cash Flow
2H 2012E Free Cash Flow ($ millions) 2H 2012E Net cash from continuing operations $ 370 Capital expenditures (70) Free cash flow from continuing operations $ 300 August 2012 38
Slide 39: Debt Reconciliation
Debt Reconciliation ($ millions) 6/30/2012 Short-term debt $ 237 Current maturities of long-term debt 332 Long-term debt 1,595 Gross Debt $ 2,164 Less: Puchase card program and extended A/P programs $ (43) Adjusted Gross Debt $ 2,121 Less: Cash in excess of $50 $ (278) Adjusted Net Debt $ 1,844 Note
Slide 40: Bank EBITDA Reconciliation
Bank EBITDA Reconciliation ($ millions) LTM Net Income $184 Income tax provision (benefit) 36 Interest expense 106 Income before interest and taxes $326 Depreciation and intangible amortization expense 119 EBITDA from continuing operations $445 Adjustments: Amortization and write-off of intangibles