Spx Technologies, Inc. · NYSE:SPXC

Spx Technologies — Investor Day (January 2012)

85 slides from Spx Technologies's investor day presentation, Jan 18, 2012

1. Slide 1: 2012 Annual Investor Presentation

   2012 Annual Investor Presentation January 18, 2012 1 January 2012 1

2. Slide 2: Forward-looking statements

    Certain statements contained in this presentation that are not historical facts 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 a

3. Slide 3: Agenda and Introductions

   Agenda and Introductions SPX Strategic Review 1.  Chris Kearneyy 2012 Guidance 2.  Patrick O’Leary Free Cash Flow & Capital Allocation 3.  Jeremy Smeltser Segment Analysis 4.  Jeremy Smeltser & Patrick O’Leary E Executive i Summary S 5.  Chris Kearney Q&A to Follow Prepared Remarks January 2012

4. Slide 4: SPX Strategic Review

   SPX Strategic Review FLOW TECHNOLOGYX XPROCESS INFRASTRUCTURE INFRASTRUCTURE X VEHICLE SOLUTIONS SERVICE SOLUTIONS X DIAGNOSTIC SYSTEMS COMPANY CONFIDENTIAL January 2012 4

5. Slide 5: SPX Transformation

   SPX Transformation 1912‐1996 2005‐Today 1997‐2004 U.S. Automotive Global, Multi‐Industry Supplier Supplier Diversified Industrial Manufacturer of Engineered Solutions Cl deUnion ClydeUnion Diversification, Acquisition >100 Acquisitions; Legacy divestitures APV Acquisition Focus on Executing United D

6. Slide 6: 2011 Strategic Highlights

   2011 Strategic Highlights Flow Vehicle Infrastructure Technology Service Solutions  ClydeUnion acquisition  Completed large power  Acquired Teradyne transformer plant Diagnostics  Expanded food & expansion beverage business:  Launched new air  Formed joint venture conditioning testing  Integr

7. Slide 7: SPX Overview

   SPX Overview 2011E Pro Forma Revenue: ~$6b Vehicle Service Solutions: Diagnostic systems, repair 15% tools and equipment, and service solutions supporting OEMs, dealers and aftermarket repair garages Infrastucture: Engineered solutions including cooling systems, power transformers, large scale heat

8. Slide 8: SPX Revenue Breakdown

   SPX Revenue Breakdown ($ millions) 2011E Pro Forma Revenue Breakdown Food & Beverage: ~$940 Infrastructure Markets 37% Flow Power & Energy: Technology ~$805 42% Vehicle Service Other Industrial Processes: Solutions 15% Markets ~$740 6% N t 2011E % estimates Note: ti t as off 1/18/2012; 1/18/2012 201

9. Slide 9: Strategy

   Strategy Growth Initiatives Operating Focus Develop Continue LEAN Innovative Solutions Journey Expand Customer Migrate to Relevance Shared Services g p Broaden Geographic Promote Presence Brand Localize Content One with Global Expertise Global Operating System continuous improvement Focused on Growt

10. Slide 10: SPX Geographic Profile

    SPX Geographic Profile 2011E Pro Forma Emerging Market Revenue % Revenue % by Geography of Total Reported Revenue 46% 24% 29% 25% 22% 23% 17% 15% 14% 17% 2005 2006 2007 2008 2009 2010 2011E 3% 10% Note: 2011E as off 1/18/2012 / / and d pro forma f for f ClydeUnion l d i acquisition iii Globalization

11. Slide 11: Key Business Developments

    Key Business Developments FLOW TECHNOLOGYX XPROCESS INFRASTRUCTURE INFRASTRUCTURE X VEHICLE SOLUTIONS SERVICE SOLUTIONS X DIAGNOSTIC SYSTEMS COMPANY CONFIDENTIAL January 2012 11

12. Slide 12: Flow Technology Development

    Flow Technology Development 2004 ‐2009 2010‐2011 1997‐2003 Consolidated & Integrated Invested for Growth Aquired Niche Flow Product Lines Established Global Food & Beverage Platform Established Global Power & Energy Platform Acquisitions by primary end market 2011E Food & Beverage ~$2.5b Revenue Pow

13. Slide 13: Flow Technology End Market Development

    Flow Technology End Market Development 2011E Pro Forma Revenue by End Market Food & Power & Industrial Beverage: Energy: Processes: 38% 32% 30% ~$0.9 ($ billions) ~$0.8 $ ~$0.7 $0.3 $0.2 $0.2 Food & Beverage Power & Energy Industrial Markets 2005 2011E Pro Forma Note: N t 2011E % estimates ti t as o

14. Slide 14: Food & Beverage Market

    Food & Beverage Market Expected CAGR by Product 2011 New Capacity Between 2011 and 2014 Market Breakdown 7.6% 8% 6.6% Milk 7% Infant Processing 6% 5.4% Formula 4.7% 16% 5% 4 5% 4.5% 13% Dairy 4% Powders Yogurt 3.2% 3.1% 2.8% 20% 11% 3% Cheese 2% 10% 1% Foods/ Beverages 0% Other 8% Flavored Infant Ju

15. Slide 15: Dairy Products Factory Example

    Dairy Products Factory Example Dairy Products Factory Goal 1,000,000 120 Tons 240 Tons 50 Tons 8 Tons 15 Tons liters per day per day per day per day per day per day Milk Juice Yogurt Cheese Butter Whey Powder Acquisitions Have Expanded SPX’s Capabilities as a Full Line Supplier of Dairy, Food & Beve

16. Slide 16: Power Infrastructure Development

    Power Infrastructure Development 2011E ~$300m Revenue $1.3b Revenue 100% North American > 50% International Joint Venture with Shanghai Electric Large Power Transformer Plant Expansion Acquired Balcke Duerr Assets Acquired SPX Heat Transfer Inc. Marley Cooling Tower A i ti Acquistion Acquired Acquir

17. Slide 17: Power Infrastructure Offerings

    Power Infrastructure Offerings Power Generation Plant Goal Coal Nuclear Gas Solar Geothermal Dry Cooling Wet Cooling Stationary Heat Rotating Heat Pollution Control Power Systems Systems Exchangers Exchangers Systems Transformers Thermal Equipment & Industrial Products & Services Segment Services Se

18. Slide 18: Power Generation Investment

    Power Generation Investment Estimated Global Investment in Power Plants 2011 to 2020: $4.5 trillion Key Investment Drivers: Wind  Electricity demand in emerging markets 21% Gas Coal 11%  Retirement and refurbishment of coal 21% plants in the U.S. in response to new EPA Nuclear rules 11%  Investme

19. Slide 19: U.S. Transmission & Distribution

    U.S. Transmission & Distribution ($ billions) Estimated U.S. Investment in T&D Infrastructure 2011 to 2035 2035: $1 trillion $486 Key Investment Drivers: N New R l Replacement t  Aging transmission and distribution grid $210  Need to connect new wind and solar $172 power generation to existing gri

20. Slide 20: Vehicle Service Solutions Development

    Vehicle Service Solutions Development 2011E ~$700m Revenue ~$900m Revenue >90% North American ~50% International OEM Acquired Teradyne Aftermarket Diagnostic Solutions Acquired Johnson Controls Acquired Diagnostics Cartool Acquired Launch Tech Actron Acquired q Alliance Acquired Autoboss Matra Acqui

21. Slide 21: Vehicle Service Solutions

    Vehicle Service Solutions Vehicle Service Solutions Goal Diagnostics & Technical Specialty Service Dealer Equipment Electric Vehicle Aftermarket System Solutions Information Tools & Services Solutions Diagnostics & Tools OEM Dealerships SPX Is a Leading Global Supplier of Specialized Service Solutio

22. Slide 22: Replacement Rate of New Vehicles

    Replacement Rate of New Vehicles % Volume Replaced by New Models 2011 ‐ 2013 2011 2012 2013 100% 89% 90% 83% 75% 80% 24% 69% 70% 58% 33% 60% 11% 60% 31% 48% 52% 50% 40% 9% 10% 27% 40% 38% 56% 27% 9% 44% 23% 30% 33% 30% 18% 20% 12% 32% 10% 18% 21% 23% 13% 15% 7% 5% 10% 9% 2% 0% 2% 3% 3% S Source: M M

23. Slide 23: Vehicle Industry Replacement Rate

    Vehicle Industry Replacement Rate Annual Replacement Rate 32%  On average, the industry replaced ~16% 25% of its volume each year with new models 23% 22% between 1991‐2011 17% 15% 13% 13%  The annual replacement rate is expected to increase to ~26% on average over the next 4 yyears 2008 2009 2010

24. Slide 24: 2012 Guidance

    2012 Guidance FLOW TECHNOLOGYX XPROCESS INFRASTRUCTURE INFRASTRUCTURE X VEHICLE SOLUTIONS SERVICE SOLUTIONS X DIAGNOSTIC SYSTEMS COMPANY CONFIDENTIAL January 2012 24

25. Slide 25: Segment Structure

    Segment Structure Thermall EEquipment Th i t IIndustrial d t i lP Products d t Flow Technology Test & Measurement & Services & Services  2011E Revenue: ~$2.5b $2.5b  2011E Revenue: ~$1 $1.6b 6b  2011E Revenue: ~$1 $1.1b 1b  2011E Revenue: ~$0 $0.7b 7b  Key markets:  Key markets:  Key markets:

26. Slide 26: 2011E Pro Forma Revenue Breakdown

    2011E Pro Forma Revenue Breakdown ffood d&b beverage power & energy iindustrial d ti l 38% 32% 30% power Flow Technology transmission 34% & distribution 42% p power Thermal 66% Industrial & energy infrastructure 24% Equipment & Products & 12% 28% Services Services 18% communications 16% 26% HVAC aer

27. Slide 27: Q4 2011 EPS Update

    Q4 2011 EPS Update Q4 Adjusted Earnings Per Share  Existing Q4 2011 EPS guidance: $1.75 to $1.95 $1.75 to  Expect to report Q4 EPS towards the bottom of $1.95 guidance range and on an adjusted basis excluding certain expected non‐recurring non recurring items $1.13  Notable changes to segment inc

28. Slide 28: Backlog

    Backlog ($ billions) Quarter End Backlog Core Backlog  Q4 2011E ending di b kl reflects: backlog fl t ClydeUnion  Double digit Q4 revenue growth  ClydeUnion acquisition $3.1 $3.0 $3.0 $2.9  14% increase sequentially: $2.8 $0.5  19% acquisition growth  (3%) organic decline $2.6  (2%) currency

29. Slide 29: 2012 Segment Targets

    2012 Segment Targets Thermall EEquipment Th i t IIndustrial d t i lP Products d t Flow Technology Test & Measurement & Services & Services Revenue Revenue Revenue Revenue +33% to +38% (9%) to (14%) 0% to +5% +10% to +15% Segment Income Margin Segment Income Margin Segment Income Margin Segment Incom

30. Slide 30: 2012 Full Year Consolidated Financial Targets

    2012 Full Year Consolidated Financial Targets Revenue $6.00b to $6.25b acquisition growth: 11% to 12% organic growth: 1% to 5% currency: ~(3%) Segment Income Margin 10.4% 10 4% to 10 10.9% 9% 40 points of Excluding ClydeUnion 10.8% to 11.3% acquisition dilution E i Earnings P Sh Per Share $4 70 to $

31. Slide 31: EPS Bridge

    EPS Bridge $4.70 to ~$0.05 $0.05 $5.10 ~$0.30 $0.25 to $0.65 $4.35 ~($0.23) 2011E Currency Segment ClydeUnion Other Items 2012E Adjusted EPS Income Acquisition (net) EPS Note: 2011E adjusted EPS as of 11/2/2011; see appendix for non‐GAAP reconciliations Expect Organic Growth and ClydeUnion Acquisiti

32. Slide 32: EPS Mid-Point Model

    EPS Mid‐Point Model ($ millions, except per share data) 2012E Revenue $6,125 Segment income margin 10.6% Corporate expense (100) Pension / PRHC (39) Stock‐based compensation (43) Special charges (25) Operating Income $443 % off revenues 7 2% 7.2% Equity earnings in J/V 39 Other expense (0) Interest

33. Slide 33: Q1 2012E Consolidated Financial Analysis

    Q1 2012E Consolidated Financial Analysis ($ millions, except per share data) Q1 2012E Year‐Over‐Year EPS Bridge Revenue $1,370 to $1,410 Q1 2011 EPS $0.49 Segment Income  Thermal Segment Income ($0.15) $100 to $107  Q1 2011 insurance recovery (1) ($0.08)  Large Power start start‐up up costs ($0.0

34. Slide 34: 2012 Guidance Upsides & Downsides

    2012 Guidance Upsides & Downsides 2012 Guidance potential negative impacts potential positive impacts earnings per share: – dispositions $4.70 to $5.10 ⁺ acquisitions – end market slowdowns ⁺ transformer pricing – large project timing delays ⁺ increase in utility spending – start‐up execution in lar

35. Slide 35: Capital Structure

    Capital Structure FLOW TECHNOLOGYX XPROCESS INFRASTRUCTURE INFRASTRUCTURE X VEHICLE SOLUTIONS SERVICE SOLUTIONS X DIAGNOSTIC SYSTEMS COMPANY CONFIDENTIAL January 2012 35

36. Slide 36: Free Cash Flow

    Free Cash Flow ($ millions)  2012E Free Cash Flow includes: $240 to $220 to $280  Capital spending at $130m $260  ~$55m $55m of pension funding  ~$25m of restructuring  Expect p quarterly q y trend to follow historical seasonal pattern:  Net cash investment in Q1  Strong second half performan

37. Slide 37: Debt Repayment Schedule

    Debt Repayment Schedule ($ millions) $600 $500 $600  Entered into a new 5‐year $2,600 $500 syndicated credit facility in 2011:  $600 Domestic and global revolver $400  $1,200 Credit instrument facility $300 $300 $300  $500 Term loan A – ClydeUnion  $300 Term loan X – ClydeUnion $200 $100 $  Ba

38. Slide 38: Leverage Ratios

    Leverage Ratios Debt to EBITDA* Gross Leverage > 2 2.5x 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 acquisitions 0.5

39. Slide 39: Projected Liquidity

    Projected Liquidity ($ millions) Estimated cash on hand at 12/31/2011 $537 Available credit lines $485 Estimated liquidity at 12/31/2011 $1,022 2012E free cash flow $260 Minimum debt repayments ($31) Expected dividend payments ($52) Projected liquidity at 12/31/2012 $1,199 Note: Our ability to acces

40. Slide 40: Flow Technology

    FOOD & BEVERAGE POWER & ENERGY INDUSTRIAL PROCESSES Flow Technology GLOBAL INFRASTRUCTURE X PROCESS EQUIPMENT X DIAGNOSTIC TOOLS January 2012 40 January 2012 40

41. Slide 41: ClydeUnion Pumps Overview

    ClydeUnion Pumps Overview Revenue % by Geography  ClydeUnion Pumps is a leading global supplier of Pump Technologies into oil & gas, power generation and industrial markets 22% 20%  Based B d iin th the U U.K. K  Global capabilities with ~2,000 employees:  8 manufacturing plants 25%  25 service

42. Slide 42: ClydeUnion End Markets

    ClydeUnion End Markets Revenue by End Market Applications  Upstream oil & gas Oil & Gas 52%  Downstream oil & gas  Nuclear power generation  Conventional power generation Industrial Power  Water desalination Markets Generation 10% 39%  Mining & minerals  Offshore and marine ClydeUnion Designs

43. Slide 43: ClydeUnion Acquisition Terms

    ClydeUnion Acquisition Terms ClydeUnion Acquisition Terms Final Transaction Terms Financing Structure 2012 A Accretion i A Analysis l i  Purchase Price:  $300m, 18‐month term loan  Net operating profit: $45m to $50m  Interest expense & d b service debt i fees: f ($2 ) ($25m)  £500m (~$800m)  $

44. Slide 44: ClydeUnion Backlog and Revenue

    ClydeUnion Backlog and Revenue ($ millions) Quarterly Backlog* Annual Revenue* 30% to 40% $480 $501 $438 $430 $389 $396 $402 $167 $70 Q2 2010 Q4 2010 Q2 2011 Q4 2011 2007 2008 2009 2010 2011E 2012E * Data for all periods presented is converted using a 1.55 British Pound to U.S. Dollar exchange rate

45. Slide 45: Flow Technology Overview

    Flow Technology Overview 2011E Pro Forma Revenue % by Geography  2011E pro forma revenue: ~$2.5b  SPX Flow Technology is a leading global 29% 29% supplier of custom engineered process solutions  Key markets served:  food & beverage  power & energy 27%  industrial processes  Global capabilitie

46. Slide 46: Flow Technology End Market Structure

    Flow Technology End Market Structure Food & Beverage Power & Energy Industrial Processes  Design, manufacture and  Design and manufacture highly  Supply highly engineered service highly engineered food engineered components and components into various processing components, modular systems used i

47. Slide 47: Flow Technology Customer Examples

    Flow Technology Customer Examples Food & Beverage Power & Energy Industrial Processes Well Recognized, Diverse, and Global Customer Base; Continue to Focus on Expanding Customer Relevance January 2012 47

48. Slide 48: Flow Technology Revenue Analysis

    Flow Technology Revenue Analysis Components/Aftermarket ~60% original equipment Revenue By Product Type (1) ~40% aftermarket & services Components lead times: < 3 months & Aftermarket ~70% sales channels: direct, reps, distributors, OEMs Full Line Systems & Skids ~60% fully integrated Full Line Syst

49. Slide 49: Flow Technology Food & Beverage Business

    Flow Technology Food & Beverage Business Primary Applications 2011E Revenue by End Market liquid dairy products Dairy powder dairy products Products 49% beverages coffee Food & Beverage 46% processed foods Pharma & Personal pharmaceuticals Care 5% Note: 2011E as of 1/18/2012 / / A Global Market Lead

50. Slide 50: Butter Process

    Butter Process SPX Technologies Work Together to Create Full Line System Solutions January 2012 50

51. Slide 51: Low Fat Margarine Process

    Low Fat Margarine Process SPX Technologies Work Together to Create Full Line System Solutions January 2012 51

52. Slide 52: Flow Technology Food & Beverage Systems

    Flow Technology Food & Beverage Systems ($ millions) Annual Systems Revenue ~60%  Integrated technologies have increased our relevance to our customers $270 $293 $232  A record order quarter in Q4 2011 that included 4 large contracts that in aggregate gg g totaled over $130m  Food & beverage syst

53. Slide 53: 2011 Large Food & Beverage System Awards

    2011 Large Food & Beverage System Awards Margarine Whey & Butter Powder Milk Evaporation Milk Powder Butter Food Ingredients Yogurt Milk Dairyy Yogurt Factory Powder Caustic 6 Plants Evaporator Whey Infant Powder Dairy Formula Water Yogurt Yellow Fats Infant Formula Soft Drinks Milk EP Cheese Soft D

54. Slide 54: Flow Technology Power & Energy Business

    Flow Technology Power & Energy Business 2011E Pro Forma Revenue by End Market Primary Applications Downstream Oil & Gas transportation Oil & Gas 35% & di distribution ib i Upstream Oil & Gas 18% Chemical injection for petroleum processing Other 4% Nuclear and conventional Nuclear power generation Co

55. Slide 55: ClydeUnion Oil & Gas Pumps

    ClydeUnion Oil & Gas Pumps Upstream Oil  ClydeUnion provides a comprehensive range of  Exploration & production highly g y engineered g centrifugal and reciprocating  Transportation & storage pumps that are critical to oil extraction from increasingly  Downhole & subsea marginal or difficult fie

56. Slide 56: ClydeUnion Power Generation Pumps

    ClydeUnion Power Generation Pumps Nuclear Power  ClydeUnion is a leading global supplier of diverse pump p p technologies g used in the nuclear power generation process feed water pump residual heat safety injection/ recovery pump containment pump Conventional Power  ClydeUnion is a leading provid

57. Slide 57: Legacy Power & Energy Component Examples

    Legacy Power & Energy Component Examples filtration & valves dryers chemical injection strainers Niche Supplier of Highly Engineered Technologies into Oil & Gas and Power Generation Processes January 2012 57

58. Slide 58: Flow Technology Industrial Business

    Flow Technology Industrial Business 2011E Pro Forma Revenue by End Market Primary Applications Miningg & Marine & mining of minerals Minerals Shipbuilding 28% 28% marine & shipbuilding chemical processing Other 10% Rubber & waste water treatment Plastics 14% Waste Water pulp & paper Treatment Paints

59. Slide 59: Industrial Component Examples

    Industrial Component Examples mixers pumps heat exchangers air treatment Supply Industrial Heat Exchangers, Mixers, Pumps and Air Dehydration Technologies into Mining, Marine, Chemical Processing and Other Industrial Markets January 2012 59

60. Slide 60: Flow Technology Backlog Analysis

    Flow Technology Backlog Analysis ($ millions) Quarter End Backlog 2011 Backlog Commentary Components Systems ClydeUnion $1,429  81% year‐over‐year growth:  67% acquisition $501 $907 $899  16% organic growth $789 $848  (2%) currency impact $292 $318 $308 $388 $ $283  85% of the backlog expected

61. Slide 61: Flow Technology Financial Information

    Flow Technology Financial Information ($ millions) Revenue Segment Margins +33% to Excludingg ClydeUnion y +38%  Target T t revenue growth: th 33% tto 38% +21% to  Acquisition: 30% to 32% +22%  Organic: mid‐to‐high single digits $1,634 $1,662 $ ,  Currency: ~(4%) 13.0% to 12.7% to 12.9% 13.0% 13

62. Slide 62: Thermal Equipment & Services

    Thermal Equipment & Services GLOBAL INFRASTRUCTURE X PROCESS EQUIPMENT X DIAGNOSTIC TOOLS January 2012 62 January 2012 62

63. Slide 63: Thermal Equipment & Services Overview

    Thermal Equipment & Services Overview 2011E Revenue % by Geography  2011E revenue: ~$1.6b 49% 19%  A leading l d global l b l provider d off cooling l systems and heat exchangers for power generation facilities 9%  Markets served:  Power generation  HVAC 3%  Industrial 20% / / ; Geographic Not

64. Slide 64: Thermal Equipment & Services Key Products

    Thermal Equipment & Services Key Products Power Generation Products HVAC & Industrial Products (66% of 2011E Segment Revenue) (34% of 2011E Segment Revenue) Dry Cooling Evaporative Cooling Evaporative (Package) Cooling Heat Exchangers Boilers Residential Heating Products Pollution Control Note: 2011

65. Slide 65: Joint Venture with Shanghai Electric

    Joint Venture with Shanghai Electric Key Joint Venture Terms Strategic Rationale for SPX Ownership Shanghai g Electric: 55%  Enhance competitive position of Dry SPX: 45% Cooling product line in China Term 20 Years  Expandd SPX’s ’ kkey nuclear l h heat exchanger h product line (Moisture Separator

66. Slide 66: SPX Technologies Included in Joint Venture

    SPX Technologies Included in Joint Venture Dry Cooling Systems Moisture Separator Reheater Air Cooled Condenser on a Coal‐Fired Power Plant in China Moisture Separator Reheater for Nuclear Power Plants Indirect Dry Cooling Tower on C l Fi d P Coal‐Fired Power Pl Plants t in i Chi China Joint Venture

67. Slide 67: Thermal Equipment & Services Backlog Analysis

    Thermal Equipment & Services Backlog Analysis ($ millions) Quarter End Backlog Thermal Backlog Medupi/Kusile Project Backlog  Backlog declined 35% year‐over‐year  2011 Book‐to‐Bill of 0.7x $741 $685 $642 $509  ~60% 60% of ending Q4 2011 backlog $460 expected to be converted to revenue in 2012 $88

68. Slide 68: Thermal Equipment & Services Financial Information

    Thermal Equipment & Services Financial Information ($ millions) Revenue Segment Margins 2012E Comments +2% to +3% (9%) to  Expect (9%) to (14%) total revenue decline: $1,601 $1,602 (14%)  organic: (5%) to (10%)  currency: ~(4%) 12.1% 10.7% 8.7% to 8.2% to 8.9%  Key 2012 Drivers: 8.7 %  Expect p

69. Slide 69: Industrial Products & Services

    Industrial Products & Services January 2012 69 January 2012 69

70. Slide 70: Industrial Products & Services Overview

    Industrial Products & Services Overview 2011E Revenue % by Geography 77% 10%  2011E revenue: ~$0.7b  Niche businesses concentrated in the United States with attractive profitability and cash flow characteristics 13%  A leading North American provider of power transformers Note: 2011E as of 11/2/2

71. Slide 71: Industrial Products & Services Overview

    Industrial Products & Services Overview 2011E Revenue by Product Power Hydraulic Transformers Technologies 34% 21% Power Transformers Communications Hydraulic Technologies Aerospace Technologies Components 18% 11% Crystal Growers/ Industrial Ovens 16% Aerospace Components Communications Technologies

72. Slide 72: Medium Power Transformer Business

    Medium Power Transformer Business ($ millions) Quarterly Backlog Value* Full Year Revenue Full Year Operating Margin % $481 $393 $376 $348 ~$300 $283 $250 ~$240 $209 $224 $194 30% 0% 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011E 2012E *2011 backlog figures do not include large power transformer

73. Slide 73: Large Power Transformer Expansion

    Large Power Transformer Expansion Large Power Transformer Facility Expansion Complete and Manufacturing Underway; Received Orders for 19 Large Power Units to be Manufactured in New Facility January 2012 73

74. Slide 74: Industrial Products & Services Backlog Analysis

    Industrial Products & Services Backlog Analysis ($ millions) Quarter End Backlog 2011 Backlog Commentary $494 $490  33% year‐over‐year increase $477 $403 $359  Power transformer trends:  Backlog increased 42% in 2011  Replacement demand for power transformers remains robust  Modest increase in

75. Slide 75: Industrial Products & Services Financial Information

    Industrial Products & Services Financial Information ($ millions) Revenue Segment Margins 2012E Comments +10% to  Targeting 10% to 15% revenue growth $806 +15% +4% to +5% $698  Key 2012 Drivers: 19.1%  Year‐over‐year revenue growth in 8.5% to 9.7% to medium power transformer business: 10.7% 10.2%

76. Slide 76: Test & Measurement

    Test & Measurement January 2012 76 January 2012 76

77. Slide 77: Test & Measurement Overview

    Test & Measurement Overview 2011E Revenue % by Geography  2011E revenue: ~$1.1b 58% 31%  A leading global provider of vehicle diagnostic systems, repair tools and service solutions  Markets served:  Vehicle Service 11%  Telecommunications  Transportation  ~2 2,700 700 employees worldwide Note

78. Slide 78: Test & Measurement End Market Breakdown

    Test & Measurement End Market Breakdown 2011E Revenue % by End Market OEMs & Dealers  47% new vehicle programs 64%  24% daily sales Transportation  16% technical information Vehicle Service  13% dealer equipment 7% 85% Telecom 8% Aftermarket 36%  42% diagnostics  31% air conditioning test unit

79. Slide 79: Service Solutions Customer Examples

    Service Solutions Customer Examples Select OEM Customers Select Aftermarket Customers American Retailers and “Buy to Use” End Users European p National Accounts Asia Pacific Mobile Distributors Well Diversified, Global Customer Base from Automotive, Heavy‐Duty and Recreational Industries January 201

80. Slide 80: Increasing Complexity of Vehicles

    Increasing Complexity of Vehicles Business model has evolved into electronic diagnostics Revenue by Product 10% 10% 13%  Information S i Services 41%  Electronic Diagnostics 77% 49%  Tools & Equipment 1995 2011E Note: 2011E as of 1/18/2012 / / Vehicles Have Become Increasingly Complex Driving Dem

81. Slide 81: New Product: Air Conditioning (AC) Testing Unit

    New Product: Air Conditioning (AC) Testing Unit  New AC unit is an essential tool for OEMs to test vehicles that use R1234yf refrigerant  Beginning B i i JJanuary 1, 1 2012, 2012 allll new vehicles manufactured in Europe must use new refrigerant Launched next generation, globally certified AC test

82. Slide 82: Test & Measurement Financial Information

    Test & Measurement Financial Information ($ millions) Revenue 2012E Comments Segment Margins +16% to +0% to  Targeting 0% to 5% total revenue growth: +5% +17%  low to mid single digit organic growth $924 10.8% to  acquisition: ~1% $810 $ 10.1% 10 1% to 11 3 % 11.3  currency: ~(3%) ( ) 10.3% 8.3%

83. Slide 83: Executive Summary

    Executive Summary FLOW TECHNOLOGYX XPROCESS INFRASTRUCTURE INFRASTRUCTURE X VEHICLE SOLUTIONS SERVICE SOLUTIONS X DIAGNOSTIC SYSTEMS COMPANY CONFIDENTIAL January 2012 83

84. Slide 84: Executive Summary

    Executive Summary  Targeting double‐digit growth in 2012:  9% to 14% revenue growth  ~13% EPS growth  Operational focus on continuous improvement and successfully executing:  ClydeUnion integration  Start‐up of Large Power Transformer plant  Strategic focus on continuing to execute long‐term

85. Slide 85: questions?

    questions? January 2012 85 January 2012 85

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