Slide 1: 2010 Third Quarter Results
2010 Third Quarter Results GLOBAL INFRASTRUCTURE X PROCESS EQUIPMENT X DIAGNOSTIC TOOLS November 3, 2010 1
Slide 2: Forward Looking Statements
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 and financial projections, are forward-looking statements and are thus prospective. These forward-looking
Slide 3: Introductory Comments
Introductory Comments GLOBAL INFRASTRUCTURE X PROCESS EQUIPMENT X DIAGNOSTIC TOOLS November 3, 2010 3
Slide 4: Q3 Financial Results
Q3 Financial Results ($ millions, except per share data) Q3 2009 Q3 2010 2010 vs. 2009 Revenue $1,174 $1,290 7% organic growth Segment Income $156 $158 +1% Segment Income Margin 13.3% 12.2% (110) points (1) Earnings Per Share $0.98 $1.11 +13% Q3 2010 EPS adjusted dj t d (1) Adjusted EPS excludes $0.
Slide 5: Backlog
Backlog Q3 2010 Backlog Aging Quarterly Backlog ($ millions) 2010 31% +5% currencyy benefit 2011 +8% +3% acquisition growth 46% $3,086 $2,917 $2,955 $2,745 2012 and Beyond 23% Q3 2010 Backlog by Geography South Americas Africa 33% 25% Q4 2009 Q1 2010 Q2 2010 Q3 2010 Middle East 4% Europe Asia- 2
Slide 6: Projects > $15m Awarded in 2H 2010
Projects > $15m Awarded in 2H 2010 Coal Power: Food & Beverage: Dry Cooling System Retrofit Butter Processing System Natural Gas: Dry Cooling System Coal Power: Evaporative Cooling Retrofits Coal Power: Solar Power: Feedwater Heaters Dry Cooling System & Feedwater Heaters Combined Cycle Power: Dry C
Slide 7: Food & Beverage System Overview
Food & Beverage System Overview 2010E SPX Food & Beverage System Revenue Dairy (Powder) 18% % Dairy Fats & Oils Continuous Butter Making Machine (Liquid) 12% 52% Beverage 12% Brewery & Other 6% Butter Blend System Note: Data from continuing operations and pro forma for acquisitions; 2010E as of 11/3
Slide 8: 2010 Full Year Guidance
2010 Full Year Guidance 2010E Adjusted EPS Guidance Bridge Adjusted Earnings Per Share: Previous adjusted EPS mid-point guidance $3.40 Previous: $3.30 to $3.50 Segment Income: Operations $0.11 Updated: $3.45 to $3.60 Foreign currency $0.08 Adjusted Free Cash Flow: Other expense ($0.10) $180m
Slide 9: Balance Sheet and Debt Ratios
Balance Sheet and Debt Ratios ($ millions) Debt to Capital Key Balance Sheet Accounts 41% 39% 7/3/10 10/2/10 Cash $408 $391 Total Assets $5 558 $5,558 $5 912 $5,912 Q2 2010 Q3 2010 Debt to Bank EBITDA (1) 23 2.3x Total Debt $1,282 $1,310 2.2x Net Leverage Gross Leverage Total Equity $1,845 $2,034 1.
Slide 10: Q3 Refinancing
Q3 Refinancing ($ millions) Debt Repayment Schedule Re-Financing Actions: Term Loan A paid down with proceeds of 6.875% senior notes p Completed issuance of $ $600,, 7-year y U.S. $563 Senior Notes at 6.875% $600 $500 Net proceeds used to repay $563 Term Loan A and unwind interest rate swap ag
Slide 11: Q3 2010 Adjusted EPS
Q3 2010 Adjusted EPS Q3 2010 GAAP EPS from continuing operations $ 0.78 Q3 Refinancing Charges 0.33 Adjusted EPS from continuing operations $ 1.11 Note: Q3 refinancing charges relate to $26m of one-time charges associated with the early termination of debt and related interest rate swap agreements Q
Slide 12: Earnings Per Share
Earnings Per Share Year-Over-Year Changes to EPS Q3 EPS Q3 2009 EPS $0 98 $0.98 13% $1.11 $0.98 Segment Income $0.26 (excluding income from transformers) Power transformer operating profit ($0.24) Lower restructuring expense $0.13 Q3 2009 Q3 2010 (1) Other items, net ($0.02) Adjusted Q3
Slide 13: Q3 Consolidated Results
Q3 Consolidated Results ($ millions) Revenue Segment Income $1,290 10% 1% $1,174 $1 174 $158 $156 13.3% 12 2% 12.2% Q3 2009 Q3 2010 Q3 2009 Q3 2010 7% organic growth Margin decline due to: 5% acquisition q g growth Lower p pricing g on transformer shipments p (2%) currency impact Dilutio
Slide 14: Flow Technology Q3 Financial Results
Flow Technology Q3 Financial Results ($ millions) Q3 Revenue and Segment Income Margins 8% acquisition growth: Gerstenberg Schroeder & Anhydro 8% $439 $406 1% organic revenue growth 13.3% (1%) currency impact 12.2% 110 points of margin expansion: Execution on highly complex engineering p
Slide 15: Flow Technology Backlog
Flow Technology Backlog ($ millions) Sequential Backlog 12% increase from Anhydro acquisition $772 21% $636 5% organic backlog growth: Short cycle aftermarket orders increased : Industrial markets Food & Beverage components Modest increase in food & beverage Q2 2010 Q3 2010 system orders
Slide 16: Thermal Q3 Financial Results
Thermal Q3 Financial Results ($ millions) 7% organic revenue growth: Q3 Revenue and Segment g Income Margins g Increased sales of cooling g systems y and heat exchangers supporting new power generation expansion in emerging markets $440 10% $401 5% acquisition growth: SPX Heat Transfer Inc.
Slide 17: Thermal Backlog
Thermal Backlog ($ millions) Sequential Backlog $1,666 4% $1,597 7% increase from currency: Primarily the South African Rand $730 $749 3% organic decline: $917 $867 Backlog g execution during gQQ3 Orders for large power projects increased Q2 2010 Q3 2010 South Africa Rest of World Note: Da
Slide 18: Test & Measurement: Q3 Financial Results
Test & Measurement: Q3 Financial Results ($ millions) Q3 Revenue and Segment Income Margins 21% revenue growth: 24% organic revenue growth: $228 21% Increased OEM program sales $188 were the primary driver Aftermarket sales also increased 6.9% 7.8% (2%) currency impact 90 points of margi
Slide 19: Electric Vehicle Program
Electric Vehicle Program SPX Charge Station SPX Service Solutions selected by GM as home charging installation partner for the new Chevrolet Volt In conjunction with this program program, SPX is also introducing a new, 240 volt charging station Role on Electric Vehicle Launch and New Product Int
Slide 20: Industrial: Q3 Financial Results
Industrial: Q3 Financial Results ($ millions) Q3 Revenue and Segment Income Margins 2% organic growth: Execution of large orders for crystal growers and hi-tech communication equipment $184 3% $179 Increased sales of hydraulic y tools 19.4% 1% acquisition growth: Torque Tension Systems y 1
Slide 21: Industrial Backlog
Industrial Backlog ($ millions) Sequential Backlog 3% $369 3% organic backlog decline: $359 Q3 large order execution 14% increase in transformer backlog: Driven by increase in volume Pricing remained challenging, but stable Q2 2010 Q3 2010 Note: Data from continuing operations 14% Increase
Slide 22: Equity Earnings
Equity Earnings ($ millions) Q3 Equity Earnings Full Year Equity Earnings 14% 2% $6.4 $29 $30 $5.6 Q3 2009 Q3 2010 2009 2010E Note: SPX reports its portion of the EGS joint venture financial results on a one one-quarter quarter lag Equity Earnings Represents ~10% of Consolidated Pre-tax Income Novem
Slide 23: Free Cash Flow
Free Cash Flow ($ $ millions) Free Cash Flow Organic Revenue Change $250 10% 7% $194 $193 $200 $145 to 5% $185 $150 -2% 2% 0% $100 -7% -5% $50 $32 $36 $33 -12% -10% $0 -15% ($50) ($37) ($50) -15% -17% 17% ($100) -19% -20% Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010* Q4 2010E * Q3 2010 fr
Slide 24: 2010 Financial Targets
2010 Financial Targets GLOBAL INFRASTRUCTURE X PROCESS EQUIPMENT X DIAGNOSTIC TOOLS November 3, 2010 24
Slide 25: Q4 2010 Targets
Q4 2010 Targets Q4 2009 Q4 2010E ($ millions, except per share data) R Revenue $1 324 $1,324 0% to t +4% 4% Segment Income $ $169 $147 to $157 Segment Income % 12.7% 11.0% to 11.5% EPS $1.35 (1) $0.95 to $1.10 (1) Q4 2009 EPS adjusted to exclude a $3.39 per share non-cash asset impairment charge, $0
Slide 26: Full Year Segment Targets
Full Year Segment Targets P Previous i Targets T t U d t d Targets Updated T t Flow Technology Revenue +1% to +3% +2% to +3% S Segment t Income I % 12 6% tto 13 12.6% 13.0% 0% 12 6% to 12.6% t 12.8% 12 8% Thermal Equipment Revenue 0% to +2% +1% to +2% Segment Income % 10.7% to 11.1% 11.7% to 11.9% T
Slide 27: Consolidated 2010 Full Year Financial Targets
Consolidated 2010 Full Year Financial Targets 2010 ($ millions, except per share data) Target Range Comments Revenue +1% to +2% Organic: (1%) to (3%) FX: ~(1%) Acquisition: +4% Segment Income Margin 11.1% to 11.3% ~(90) points vs. 2009 Adjusted EPS $3.45 to $3.60 ~(10%) vs. 2009 EPS Mid-Point: $ $3.
Slide 28: 2010 Full Year Guidance
2010 Full Year Guidance Potential Positive Impacts Stronger organic revenue Lower tax rate Adjusted EPS: Foreign exchange fluctuations $3.45 to $3.60 Adjusted Free Cash Flow: Potential Negative Impacts Softer organic revenue $180m to $220m Higher tax rate Foreign exchange fluctuations N
Slide 29: Executive Summary
Executive Summary GLOBAL INFRASTRUCTURE X PROCESS EQUIPMENT X DIAGNOSTIC TOOLS COMPANY CONFIDENTIAL November 3, 2010 29
Slide 30: Executive Summary
Executive Summary Solid execution in the third quarter: 7% organic revenue growth was broad-based across all four segments and major geographic hi regions i Adjusted EPS increased 13% year-over-year Orders increased sequentially and year-over-year; backlog increased 8% Increased full year
Slide 31: Executive Summary
Executive Summary 2010E Revenue Early, short-cycle businesses growing at various levels: • Diagnostic tools & equipment for vehicle service Early Cycle • General industrial • Food & beverage: components $4.9B Mid-to-late cycle businesses still depressed, however, showing modest signs of order re
Slide 32: Questions
Questions GLOBAL INFRASTRUCTURE X PROCESS EQUIPMENT X DIAGNOSTIC TOOLS November 3, 2010 32
Slide 33: Appendix
Appendix GLOBAL INFRASTRUCTURE X PROCESS EQUIPMENT X DIAGNOSTIC TOOLS November 3, 2010 33
Slide 34: Full Year Mid-Point Target Financial Model
Full Year Mid-Point Target Financial Model ($ millions millions, except per share data) 2009 Adjusted 2010E Adjusted Earnings Earnings Revenue $4,851 $4,913 Segment income margin 12.1% 11.2% Corporate expense (84) (90) Pension / PRHC (38) (53) Stock-based compensation (28) (31) Special charges (73)
Slide 35: Non-GAAP Reconciliations
Non-GAAP Reconciliations GLOBAL INFRASTRUCTURE X PROCESS EQUIPMENT X DIAGNOSTIC TOOLS November 3, 2010 35
Slide 36: Q3 2010 Organic Revenue Growth Reconciliation
Q3 2010 Organic Revenue Growth Reconciliation Quarter Ended October 2, 2010 Net Revenue Acquisitions/ Foreign Change Divestitures Currency Organic Flow 8.0% 8.3% -1.5% 1.2% Test 21.3% 0.0% -2.2% 23.5% Thermal 9.6% 5.1% -2.1% 6.6% Industrial 2.7% 0.8% -0.3% 2.2% Consolidated 9.9% 4.8% -1.7% 6.8% Note
Slide 37: Q3 Free Cash Flow Reconciliation
Q3 Free Cash Flow Reconciliation SPX Corporation and Subsidiaries Free Cash Flow Reconciliation (unaudited) ($ millions) Q3 2009 Q3 2010 Net cash from continuing operations $ 209 $ 21 Capital expenditures $ (15) $ (12) Free cash flow from continuing operations $ 194 $ 8 Add back: Payments on early t
Slide 38: Full Year Free Cash Flow Reconciliation
Full Year Free Cash Flow Reconciliation SPX Corporation and Subsidiaries Free Cash Flow Reconciliation ($ millions) (unaudited) 2009 2010E Guidance Range Net cash from continuing operations $ 462 $ 246 to $ 286 Capital expenditures $ (93) $ (90) $ (90) Free cash flow from continuing operations $ 369
Slide 39: Bank EBITDA Reconciliations
Bank EBITDA Reconciliations ($ millions) 2008 2009 LTM 2010E Revenues $5,838 $4,851 $4,889 $4,913 Net Income $248 $33 $69 $177 Income tax provision (benefit) 153 47 23 90 Interest expense 116 92 87 82 Income before interest and taxes $517 $172 $179 $349 Depreciation and intangible amortization expen
Slide 40: Debt Reconciliations
Debt Reconciliations ($ millions) 7/3/2010 10/2/2010 Short-term debt $ 77 $ 133 Current maturities of long-term debt 98 23 Long-term debt 1,107 1,155 Gross Debt $ 1,282 $ 1,310 Less: Puchase card program and extended A/P programs $ (32) $ (30) j Adjusted Gross Debt $ 1,250 $ 1,280 Less: Cash in exce
Slide 41: 2010E Adjusted EPS Guidance
2010E Adjusted EPS Guidance 2010E Adjusted EPS Guidance Range GAAP EPS from continuing operations $ 3.52 $ 3.67 Q2 tax benefits (0.40) (0.40) Q3 refinancing charges 0.33 0.33 Adjusted EPS from continuing operations $ 3.45 $ 3.60 Note: Data from continuing operations November 3, 2010 41
Slide 42: 2009 Adjusted EPS
2009 Adjusted EPS Q4 2009 FY 2009 (1) GAAP EPS from continuing operations $ (1.63) $ 0.93 Q4 asset impairments $ 3.39 $ 3.40 Q4 tax benefits (0.43) (0.43) Q4 anti-dilutive earnings g impact p on share calculation 0.02 - Adjusted EPS from continuing operations $ 1.35 $ 3.90 (1) Diluted loss per share
Slide 43: November 3, 2010
November 3, 2010 43