Slide 1: Forward-looking statements and non-GAAP disclaimer
February 14, 2019 2 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 within the meaning of Section 21E of the Securities Exchange
Slide 2: Introductory Comments
Introductory Comments Gene Lowe February 14, 2019
Slide 3: Performance Highlights
Full-Year 2018 Adjusted EPS* of $2.20, +26% Adjusted segment income* grew $22 million Robust demand and volumes in HVAC Solid Detection & Measurement margin performance Solid financial condition provides substantial capital for value creation initiatives Adjusted Free Cash Flow* conversion of 125% o
Slide 4: Year-over-Year Analysis Adjusted Results Q4 2018 and Full-Year 2018
Year-over-Year Analysis Adjusted Results Q4 2018 and Full-Year 2018 ($ millions) Adjusted Q4 operating income growth of 52% Adjusted Q4 operating income margin expansion of 350 basis points driven by HVAC and Detection and Measurement Adjusted full-year operating income growth of 22% driven by HVAC
Slide 5: Value Creation Roadmap
Value Creation Roadmap SPX Business System Organic Growth Culture & Values Inorganic Growth New products New channels Adjacent markets Focus in HVAC and D&M Significant capital to deploy Large target pipeline Policy deployment Operational excellence Due diligence/integration Leadership development R
Slide 6: Q4 Financial Review
Q4 Financial Review Scott Sproule February 14, 2019
Slide 7: Earnings Per Share
Earnings Per Share February 14, 2019 8 Full-Year 2018 Adjusted EPS* growth of 26% Q4 and Full-Year 2018 Adjusted EPS Note: Adjusted results are non-GAAP financial measures that exclude, among other items, the results of the South African and Heat Transfer operations categorized as “All Other” in the
Slide 8: Year-over-Year Analysis Adjusted Results Q4 2018 and Full-Year 2018
Year-over-Year Analysis Adjusted Results Q4 2018 and Full-Year 2018 February 14, 2019 9 Full-Year 2018 Increase in Adjusted Segment Income of $22M with 50 Basis Points of Expansion Q4 Adjusted Revenue: 13.0% year-over-year increase: 6.3% acquisition impact 6.7% increase primarily due to strong perfo
Slide 9: Year-over-Year Analysis Detection & Measurement Adjusted Results
Year-over-Year Analysis Detection & Measurement Adjusted Results Q4 2018 and Full-Year 2018 11 Q4 Adjusted Revenue: 28.7% year-over-year increase: 31.9% increase from acquisitions (2.3%) organic decrease* due to timing of project revenues (0.9%) unfavorable currency impact Q4 Adjusted Segment Income
Slide 10: Year-over-Year Analysis Engineered Solutions Results
Year-over-Year Analysis Engineered Solutions Q4 2018 and Full-Year 2018 Results February 14, 2019 12 Strong Process Cooling Components Sales; Anticipate Margin Improvement in 2019 Q4 Revenue: 4.4% year-over-year increase: Higher Process Cooling volumes; modestly higher Transformer revenues Q4 Segmen
Slide 11: Financial Position, Liquidity Review and 2019 Guidance
Financial Position, Liquidity Review and 2019 Guidance Scott Sproule February 14, 2019
Slide 12: Financial Position
Financial Position Year-End Net Leverage Toward Lower End of Target Range of 1.5-2.5x Capital Structure Update ($ millions) 14 February 14, 2019 FYE 2018 Short-term debt $ 31.9 Current maturities of long-term debt 18.0 Long-term debt 331.9 Total Debt $ 381.8 Less: Cash on hand (68.8) Net Debt $ 313.
Slide 13: 2019 Adjusted Guidance Excluding Amortization (Including Sabik)
2019 Adjusted Guidance Excluding Amortization (Including Sabik) Excluding Amortization and Including Sabik Acquisition - Adjusted Operating Income in a Range of $162-172 Million (~11% margin); Adjusted EPS in a Range of $2.50-2.65 Revenue Segment Income Margin HVAC In a range of $570-580 million In
Slide 14: End Market Overview and Closing Remarks
End Market Overview and Closing Remarks February 14, 2019 Gene Lowe
Slide 15: Market Commentary
Market Commentary Core Markets Continue to Perform Well Market Comments Cooling: Commercial and institutional markets remain healthy Heating: 2018 seasonal demand above long-term average Strong project conversion; frontlog activity remains strong Run-rate markets remain solid Key customer activity a
Slide 16: Executive Summary
Executive Summary 18 Continuing to Execute on Plan for Significant Value Creation Operational and cash flow performance remains strong On track for sustainable double digit earnings growth Substantial available capital to deploy by end of 2020 Acquisition integrations going well; M&A pipeline robust
Slide 17: Executive Summary
Executive Summary Bs SPX = Operational and cash flow performance remains strong = On track for sustainable double digit earnings growth Substantial available capital to deploy by end of 2020 = Acquisition integrations going well; M&A pipeline robust Continuing to Execute on Plan for Significant Valu
Slide 18: Appendix
Appendix February 14, 2019
Slide 19: 2019 Adjusted EPS Guidance - Key Drivers
Weaker-Than-Anticipated Price-Cost Tailwind Commercial Growth Decelerates Weaker-Than Normal Seasonal Heating Demand Delayed Project-Related Sales Stronger-Than-Normal Seasonal Heating Demand Commercial Growth Accelerates Greater-Than-Anticipated Price-Cost Tailwinds Accelerated Project-Related Sale
Slide 20: Adjusted Segment Income Phasing
Adjusted* Segment Income Phasing February 14, 2019 22 ($ millions) *Adjusted results are non-GAAP financial measures that exclude, among other items, the results of the South African and Heat Transfer operations categorized as “All Other” in the company’s reporting structure. Reconciliations from US
Slide 21: 2019 Modeling Considerations
2019 Modeling Considerations Metric Commentary/Assumptions Corporate costs Low $40Ms Long-term incentive comp $14-15M Restructuring costs $1M Interest cost $21-22M Equity earnings, other $4-5M Tax rate Approximately 23% Capex $15-17M Cash cost of pension + OPEB Approximately $16M D&A Approximately $
Slide 22: 2018 Engineered Solutions Quarterly Results
2018 Engineered Solutions Quarterly Results February 14, 2019 24 Q1 2018 Q2 2018 Q3 2018 Q4 2018 FY 2018 REVENUE 127.9 $ 135.3 $ 124.7 $ 149.1 $ 537.0 $ INCOME 6.9 $ 10.4 $ 6.4 $ 11.3 $ 35.0 $ as a percent of segment revenue 5.4 % 7.7 % 5.1 % 7.6 % 6.5 %
Slide 23: Q4 2018 U.S GAAP to Adjusted Earnings Per Share Reconciliation
Q4 2018 U.S GAAP to Adjusted Earnings Per Share Reconciliation February 14, 2019 25 ($ millions, except per share values) (1) Adjustment represents the removal of operating losses associated with the South Africa and Heat Transfer businesses, and the inventory step-up charge and backlog amortization
Slide 24: Q4 2017 U.S GAAP to Adjusted Earnings Per Share Reconciliation
Q4 2017 U.S GAAP to Adjusted Earnings Per Share Reconciliation 26 ($ millions, except per share values) February 14, 2019 GAAP Adjustments Adjusted Segment income (1) 24.5 $ 32.6 $ 57.1 $ Corporate expense (12.5) (0.3) (12.8) Long-term incentive compensation expense (5.4) — (5.4) Special charges, ne
Slide 25: FY 2018 U.S GAAP to Adjusted Earnings Per Share Reconciliation
FY 2018 U.S GAAP to Adjusted Earnings Per Share Reconciliation 27 ($ millions, except per share values) February 14, 2019 GAAP Adjustments Adjusted Segment income (1) 178.5 $ 24.8 $ 203.3 $ Corporate expense (2) (48.5) 4.9 (43.6) Long-term incentive compensation expense (15.5) — (15.5) Special charg
Slide 26: FY 2017 U.S GAAP to Adjusted Earnings Per Share Reconciliation
FY 2017 U.S GAAP to Adjusted Earnings Per Share Reconciliation 28 ($ millions, except per share values) February 14, 2019 GAAP Adjustments Adjusted Segment income (1) 124.9 $ 56.8 $ 181.7 $ Corporate expense (46.2) (0.9) (47.1) Long-term incentive compensation expense (15.8) — (15.8) Pension service
Slide 27: Q4 and FY 2018 and 2017 U.S. GAAP to Adjusted Operating Income Reconciliation
Q4 and FY 2018 and 2017 U.S. GAAP to Adjusted Operating Income Reconciliation February 14, 2019 29 ($ millions) December 31, 2018 December 31, 2017 December 31, 2018 December 31, 2017 Operating income 52.2 $ 5.9 $ 107.6 $ 59.9 $ Exclude: Aggregate losses of the South Africa and Heat Transfer busines
Slide 28: Q4 2018 U.S. GAAP Revenue to Organic Revenue Reconciliation
Q4 2018 U.S. GAAP Revenue to Organic Revenue Reconciliation February 14, 2019 30 HVAC Detection & Measurement Net Revenue Growth 13.3 % 28.7 % ** Exclude: Foreign Currency (0.6) % (0.9) % Exclude: Acquisitions — % 31.9 % Organic Revenue Growth (Decline) 13.9 % (2.3) % ** Represents revenue growth ba
Slide 29: U.S. GAAP to Adjusted Revenue and Adjusted Segment Income Reconciliation
Q4 and FY 2018 and 2017 U.S. GAAP to Adjusted Revenue and Adjusted Segment Income Reconciliation February 14, 2019 31 CONSOLIDATED SPX: December 31, 2018 December 31, 2017 December 31, 2018 December 31, 2017 Consolidated revenue 445.0 $ 387.0 $ 1,538.6 $ 1,425.8 $ Exclude: "All Other" operating segm
Slide 30: Adjusted Income Excluding Deal Related Amortization
Q4 and FY 2018 Adjusted Income Excluding Deal Related Amortization ($ millions) February 14, 2019 32 ADJUSTED OPERATING INCOME Q4 2018 FY 2018 Adjusted operating income 59.1 $ 142.9 $ Exclude: Deal related amortization cost 1.5 3.3 Adjusted operating income excluding deal amortization cost 60.5 $ 14
Slide 31: Q4 2018 Debt Reconciliation
Q4 2018 Debt Reconciliation February 14, 2019 33 ($ millions) 1) Excludes unamortized debt issuance costs associated with term loan of $1.9m. Note: Adjusted net debt as defined by SPX's current credit facility agreement. Q4 2018 Short-term debt 31.9 $ Current maturities of long-term debt 18.0 Long-t
Slide 32: FY 2018 Consolidated Adjusted EBITDA Reconciliation
FY 2018 Consolidated Adjusted EBITDA Reconciliation February 14, 2019 34 ($ millions) Note: Consolidated EBITDA as defined by SPX's current credit facility agreement. FY 2018 Net income from continuing operations attributable to SPX Corporation common shareholders 78.2 $ Income tax provision (benefi
Slide 33: FY 2018 U.S. GAAP to Adjusted Free Cash Flow from Continuing Operations
FY 2018 U.S. GAAP to Adjusted Free Cash Flow from Continuing Operations February 14, 2019 35 ($ millions) Note: Adjusted results are non-GAAP financial measures that exclude, among other items, the results of the South African and Heat Transfer operations categorized as “All Other” in the company’s
Slide 34: FY 2018 U.S. GAAP to Adjusted Free Cash Flow from Continuing Operations
FY 2018 U.S. GAAP to Adjusted Free Cash Flow from Continuing Operations Net operating eash flow from continuing operations Capital expenditures - continuing operations, Free cash flow used in continuing operations Adjustment for"Allother" | Adjusted five cash flow from continuing operations Fy 2018