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SPX Corporation 3rd Quarter 2008 Results
SPX Corporation 3rd Quarter 2008 Results
SPX Corporation 3rd Quarter 2008 Results
SPX Corporation 3rd Quarter 2008 Results
SPX Corporation 3rd Quarter 2008 Results
SPX Corporation 3rd Quarter 2008 Results
SPX Corporation 3rd Quarter 2008 Results
SPX Corporation 3rd Quarter 2008 Results
SPX Corporation 3rd Quarter 2008 Results
SPX Corporation 3rd Quarter 2008 Results
SPX Corporation 3rd Quarter 2008 Results
SPX Corporation 3rd Quarter 2008 Results
SPX Corporation 3rd Quarter 2008 Results
SPX Corporation 3rd Quarter 2008 Results
SPX Corporation 3rd Quarter 2008 Results
SPX Corporation 3rd Quarter 2008 Results
SPX Corporation 3rd Quarter 2008 Results
SPX Corporation 3rd Quarter 2008 Results
SPX Corporation 3rd Quarter 2008 Results
SPX Corporation 3rd Quarter 2008 Results
SPX Corporation 3rd Quarter 2008 Results
SPX Corporation 3rd Quarter 2008 Results
SPX Corporation 3rd Quarter 2008 Results
SPX Corporation 3rd Quarter 2008 Results
SPX Corporation 3rd Quarter 2008 Results
SPX Corporation 3rd Quarter 2008 Results
SPX Corporation 3rd Quarter 2008 Results
SPX Corporation 3rd Quarter 2008 Results
SPX Corporation 3rd Quarter 2008 Results
SPX Corporation 3rd Quarter 2008 Results
SPX Corporation 3rd Quarter 2008 Results
SPX Corporation 3rd Quarter 2008 Results
SPX Corporation 3rd Quarter 2008 Results
SPX Corporation 3rd Quarter 2008 Results
SPX Corporation 3rd Quarter 2008 Results
SPX Corporation 3rd Quarter 2008 Results
SPX Corporation 3rd Quarter 2008 Results
SPX Corporation 3rd Quarter 2008 Results
SPX Corporation 3rd Quarter 2008 Results
SPX Corporation 3rd Quarter 2008 Results
SPX Corporation 3rd Quarter 2008 Results
SPX Corporation 3rd Quarter 2008 Results
SPX Corporation 3rd Quarter 2008 Results
SPX Corporation 3rd Quarter 2008 Results
SPX Corporation 3rd Quarter 2008 Results
SPX Corporation 3rd Quarter 2008 Results
SPX Corporation 3rd Quarter 2008 Results
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SPX Corporation 3rd Quarter 2008 Results

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  • 1. 2008 Third Quarter Results October 29, 2008
  • 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, uncertainties and other factors which could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. Particular risks facing SPX include economic, business and other risks stemming from our international operations, legal and regulatory risks, cost of raw materials, pricing pressures, pension funding requirements, integration of acquisitions and changes in the economy. More information regarding such risks can be found in SPX’s SEC filings. Although SPX believes that the expectations reflected in its forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct. In addition, estimates of future operating results are based on the company’s current complement of businesses, which is subject to change. Statements in this presentation are only as of the time made and SPX does not intend to update any statements made in this presentation except as required by regulatory authorities. This presentation includes non-GAAP financial measures. A copy of this presentation, including a reconciliation of the non-GAAP financial measures with the most comparable measures calculated and presented in accordance with GAAP, is available on our website at www.spx.com. PAGE 2
  • 3. Introduction PAGE 3
  • 4. Changing Economic Environment % Value Decline Foreign exchange rates have changed vs. U.S. Dollar dramatically, impacting SPX’s 2008 outlook and backlog: 10% – % decline from June through October: 0% • Euro: (18%) -10% • British Pound: (18%) -20% • Zar: (28%) -30% -40% Jun-08 Jul-08 Aug-08 Sep-08 Oct-08 EUR GBP ZAR Banking failures and consolidations have impacted credit availability for many companies Global credit crisis has created an uncertain economic environment… …as a result, capital budgets for 2009 are uncertain Recent Foreign Exchange Fluctuations Have Impacted SPX’s 2008 Outlook; Too Early to Predict How Economic Changes Will Impact SPX Customers in 2009 PAGE 4
  • 5. Q3 Financial Highlights ($ millions, except per share data) Q3 2007 Q3 2008 2008 Comments GAAP Earnings Per Share $1.74 $2.01 +16% Adjusted Earnings Per Share (1) $1.39 $1.66 +19% Revenue $1,172 $1,510 6.5% organic growth Segment Income Margin 14.2% 13.8% 120 points of margin expansion excluding APV Free Cash Flow $30 $71 Improved operating income and working capital Q3 2007 EPS excludes $0.35 of tax benefits, Q3 2008 excludes $0.47 of tax benefits and a $0.11 legal charge (1) Note: Data from continuing operations; See appendix for non-GAAP reconciliations 6.5% Organic Revenue Growth; 19% Adjusted Earnings Growth PAGE 5
  • 6. YTD Financial Highlights ($ millions, except per share data) YTD 2007 YTD 2008 2008 Comments GAAP Earnings Per Share $3.43 $4.86 +42% Adjusted Earnings Per Share (1) $3.10 $4.49 +45% Revenue $3,361 $4,426 6% organic growth Segment Income Margin 12.4% 13.1% 240 points of margin expansion excluding APV YTD 2007 EPS excludes $0.33 of tax benefits, YTD 2008 excludes $0.47 of tax benefits and a $0.11 legal charge (1) Note: Data from continuing operations; See appendix for non-GAAP reconciliations 6% Organic Revenue Growth; 45% Adjusted Earnings Growth PAGE 6
  • 7. SPX Global End Markets Pro Forma Revenue Q4 2008E Organic by End Market Growth Expectations Global Infrastructure 53% HVAC, Telecom, Other Power & Energy 20% Power & Energy Tools & 33% Diagnostics 20% Sanitary General Sanitary Industrial 14% (Food, Beverage, Dairy, Pharma 13% and Personal Care Markets) General Industrial Pro Forma Revenue by Geography HVAC, Telecom, Other North America 49% Tools & Diagnostics Europe 32% Double Digit Mid-Single Digit Single Digit ROW Asia-Pacific Flat 4% Growth Growth Decline 15% Note: 2007 data from continuing operations, pro forma for APV acquisition Targeting Q4 Organic Growth Between 8% and 10%; Tools & Diagnostics Declining PAGE 7
  • 8. Backlog Development ($ millions) Q3 ending backlog at $3.6b, Last 3 Quarters Ending Backlog down $120m or 3% from Q2: – Foreign currency fluctuations $2,002 $763 $648 Q3 '08 reduced the backlog value by $108m $2,077 $796 $648 Q3 '08* – Industrial backlog down 10%: $2,003 $782 $721 Q2 '08 • 28% organic growth in Q3 • Distribution transformer orders $1,401 $799 $696 Q1 '08 slowing $0 $1,000 $2,000 $3,000 ~60% of annual revenue from Thermal Flow Industrial short-cycle businesses *Q3 2008 backlog excluding the impact of foreign currency fluctuations No major contract cancellations Backlog Decline Primarily Driven by Foreign Exchange Rate Changes; Total Backlog Down ~$120m or 3% During Q3 PAGE 8
  • 9. Recent Strategic Actions Discontinued 2 non-core product lines: – Flow product line: ~$50m in annual sales – Test and Measurement product line: ~$20m in annual sales Signed definitive agreement to sell LDS, our vibration testing and data acquisition equipment business, for ~$102m: – Expect to complete the sale by the end of 2008 Acquired Autoboss: – Chinese-based manufacturer of diagnostic tools and equipment – ~$10m in annual sales APV integration progressing: – Targeting headcount reduction of ~500 people Announced 10b5-1 share repurchase plan: – Plan becomes active on November 3, 2008 and is designed to facilitate the repurchase of up to 3 million shares Continue to Execute Long-Term Strategy; Consistent Approach to Capital Allocation PAGE 9
  • 10. Financial Position ($ millions) Key Balance Sheet Debt to Capital Accounts at, 44.0% 12/31/07 9/27/08 39.0% Cash $354 $466 Other Current Assets 2,362 2,540 Total Assets 6,237 6,523 Q4 2007 Q3 2008 Debt to EBITDA (1) 2.3x Total Debt $1,569 $1,531 1.9x Other Current Liabilities 1,837 1,842 1.8x 1.4x Shareholders' Equity 2,006 2,361 Q4 2007 Q3 2008 Net Leverage Gross Leverage Consolidated leverage ratios; Net and Gross Debt to EBITDA as defined in the credit facility (1) $466m of Cash on Hand at September 27th; PAGE 10 Gross Leverage Ratio Within Target Range of 1.5x to 2.0x EBITDA
  • 11. Q3 2008 Consolidated Results PAGE 11
  • 12. Q3 Earnings Per Share Q3 Earnings Per Share Year-Over-Year Changes in From Continuing Operations Adjusted Earnings Per Share 16% 16% Q3 2007 Adjusted EPS (1) $1.39 $2.01 $1.74 Segment Income +$0.53 19% 19% Tax Rate ($0.09) $1.66 $1.39 Interest Expense ($0.06) Pension Expense ($0.05) Other Items ($0.05) Q3 2007 Q3 2008 Q3 2008 Adjusted EPS (1) $1.66 (1) Adjusted EPS GAAP EPS Q3 2007 EPS excludes $0.35 of tax benefits, Q3 2008 excludes $0.47 of tax benefits and a $0.11 legal charge (1) Note: Data from continuing operations; See appendix for non-GAAP reconciliations 19% Adjusted Earnings Growth Driven Primarily by Increased Segment Income PAGE 12
  • 13. Q3 Financial Results ($ millions) Segment Income Revenue & Margin $1,510 29% 25% 29% 25% $209 $167 $1,172 15.4% APV Dilution: 160 pts 14.2% 13.8% Q3 2007 Q3 2008 Q3 2007 Q3 2008 25% increase in segment income 20% acquisition growth 120 points of margin expansion 6.5% organic growth excluding the dilutive impact of the APV acquisition 3% benefit from foreign currency Note: Data from continuing operations; see appendix for non-GAAP reconciliations 6.5% Organic Growth; 120 Points of Segment Margin Expansion Excluding APV Dilution PAGE 13
  • 14. Segment Analysis PAGE 14
  • 15. Flow Technology: Q3 Financial Results & Q4 Targets ($ millions) Q3 Revenue and Q4E Revenue and Segment Income Margins Segment Income Margins 92% 92% +58% $493 to 61% $311 $256 14.2% to 16.4% 14.5% 17.2% 11.3% Q3 2007 Q3 2008 Q4 2007 Q4 2008E 83% acquisition growth from APV: APV acquisition expected to drive top- line growth: APV margin dilution: 550 points Cost reduction actions expected to 8% organic growth: benefit margins Strong power, oil and gas and Expect mid-single digit organic growth dehydration sales Negative foreign currency impact Shipping delays caused by Hurricane Note: Data from continuing operations; see appendix for non-GAAP reconciliations 8% Organic Growth in Q3; APV Q3 Margin Dilution: 550 Points PAGE 15
  • 16. Thermal Equipment and Services: Q3 Financial Results & Q4 Targets ($ millions) Q3 Revenue and Q4E Revenue and Segment Income Margins Segment Income Margins +18% 4% 4% to 22% $437 $422 $438 12.6% to 13.4% 13.1% 12.0% 12.0% Q4 2007 Q4 2008E Q3 2007 Q3 2008 2% organic decline: Targeting double-digit organic growth Uneven nature of infrastructure projects Negative foreign currency impact Lower China sales 28% organic growth in Q3 2007 Expect 60 to 110 points of margin 5% foreign exchange benefit expansion Lower mix of higher margin dry cooling sales Note: Data from continuing operations; see appendix for non-GAAP reconciliations 2 Percent Organic Revenue Decline in Q3; Targeting Double Digit Organic Revenue Growth in Q4 PAGE 16
  • 17. Test and Measurement: Q3 Financial Results & Q4 Targets ($ millions) Q3 Revenue and Q4E Revenue and Segment Income Margins Segment Income Margins $315 6% 6% (13%) to (17%) $260 $245 13.0% 11.7% 10.2% to 10.5% 9.0% Q4 2007 Q4 2008E Q3 2007 Q3 2008 7% acquisition growth: JCD & Matra Challenging US tools and diagnostics market 3% organic decline: – Weak U.S. market volume Reduced volume of OE programs in Q4 2008 vs. Q4 2007 270 points of margin expansion: Negative foreign currency impact – $7m write-off in Q3 2007 Note: Data from continuing operations; see appendix for non-GAAP reconciliations US Tools and Diagnostics Market Remains Challenging; Expect Double-Digit Revenue Decline in Q4 PAGE 17
  • 18. Industrial Products and Services: Q3 Financial Results & Q4 Targets ($ millions) Q3 Revenue and Q4E Revenue and Segment Income Margins Segment Income Margins $320 29% 29% +13% to 17% $253 $249 22.0% 19.5% to 20.5% 17.7% 19.7% Q3 2007 Q3 2008 Q4 2007 Q4 2008E 28% organic growth: Targeting double-digit organic growth in Q4 Strong sales for transformers and crystal growers 60% increase in segment income 430 points of margin expansion Note: Data from continuing operations; see appendix for non-GAAP reconciliations 28% Organic Revenue Growth and 22% Segment Income Margins in Q3 PAGE 18
  • 19. 2008 Q4 Targets Q4 2007 Q4 2008E ($ millions, except per share data) Organic Growth Revenue $1,316 +18% to 22% +8% to 10% Segment Income $ $196 $220 to $230 +12% to 17% +12% to 17% Excluding APV Segment Income % 14.9% 14.1% to 14.3% 14.8% to 15.0% (60) to (80) bps (60) to (80) bps EPS $1.67 (1) $1.90 - $2.00 (1) Adjusted EPS, see appendix for reconciliation +14% to 20% +14% to 20% Note: Data from continuing operations 14% to 20% Earnings Growth Expected in Q4 PAGE 19
  • 20. 2008 Full Year Segment Targets July 30th October 29th Primary FY Targets FY Targets Drivers for Change Revenue Growth +91% to 93% +88% to 89% FX fluctuations Flow Flow Operating Margins 11.8% to 12.3% 12.0% to 12.2% Discontinued product line FX fluctuations Revenue Growth +11% to 13% +10% to 11% Thermal Thermal Strong Q3 margin Operating Margins 10.6% to 11.1% 11.7% to 11.9% execution FX fluctuations, Revenue Growth +9% to 11% +3% to 4% Test & Test & Softness in U.S. market Measurement Measurement Operating Margins 10.5% to 11.0% 10.5% to 10.7% Discontinued product line Revenue Growth +18% to 20% +19% to 20% Strong Q3 operating Industrial Industrial execution Operating Margins 20.2% to 20.7% 20.6% to 20.8% Note: All data from continuing operations Targets Have Been Adjusted to Reflect Foreign Currency Fluctuations, Discontinued Operations and Q3 Performance PAGE 20
  • 21. 2008 Financial Targets and Updated Guidance 2008 Target Range ($ millions, except per share data) Comments +28% to 29% Organic: 7% to 8% Revenue 13.2% to 13.4% +10 to 30 bps Segment Income Margin 14.6% to 14.8% +150 to 170 bps Excluding APV $6.40 to $6.50 32% to 34% Adjusted Earnings Per Share $300 to $320 85% to 90% of NI Free Cash Flow $140 to $150 Capacity, Lean Capital Spending & IT Investments Note: Data from continuing operations; see appendix for non-GAAP reconciliations Targeting 7% to 8% Organic Growth and More Than 30% Earnings Growth in 2008 PAGE 21
  • 22. 2008 Guidance Potential 2008 EPS Guidance Upsides/Downsides Additional foreign currency Previous: fluctuations $6.40 to $6.60 Short-cycle end market developments Current: $6.40 to $6.50 Project timing APV integration Effective tax rate change Note: Data from continuing operations; see appendix for non-GAAP reconciliations Updated 2008 EPS Guidance Range of $6.40 to $6.50; Free Cash Flow Guidance Range Unchanged at $300 to $320 PAGE 22
  • 23. Free Cash Flow, Debt Structure and Liquidity PAGE 23
  • 24. Free Cash Flow ($ millions) 1st Nine Months Full Year Free Cash Flow Free Cash Flow $300 to $320 $313 $88 $68 (1) YTD Sept. 2007 YTD Sept. 2008 2007 2008E (1) Includes $30m to $50m of cash restructuring for the APV acquisition and elevated capital spending of $140m to $150m Note: See appendix for non-GAAP reconciliations Strong Q4 Expectations Consistent with Last Year PAGE 24
  • 25. Debt Structure ($ millions) Debt Maturity Schedule Outstanding Debt (1) Term loan $712 Part of Global Domestic revolver $130 $500 Credit Facility $486 Global revolver $0 7.625% Senior Notes $500 7.50% Senior Notes $28 $190 6.25% Senior Notes $21 $75 $75 $19 $28 (2) A/R Securitization $70 Q4 2009 2010 2011 2012 2013 2014 Other indebtedness $69 2008 Total debt $1,531 (1) As of 9/27/2008 (2) One year term Minimal Debt Repayment Requirements for the Next 2 Years PAGE 25
  • 26. Projected Liquidity ($ millions) Amount Cash on hand at 9/27/2008 $466 Expected Expected cash proceeds from the sale of LDS 102 Sources 2008E free cash flow remaining 242 Available, committed credit lines 400 Total Projected Availability $1,210 Remaining dividend payments ($15) Required 2008 minimum remaining debt payments (19) Uses Working capital management needs (200) Projected Liquidity $976 Planned Repurchase 3m shares (based on 10/28 closing stock price of $43.88) ($132) Use Projected Liquidity after Share Repurchases $844 Note: Our ability to access these sources under our various facilities may be limited by the terms of our credit facility and by certain tax regulations that pertain to cash in overseas locations Over $800m of Projected Liquidity After Completing Planned Share Repurchases PAGE 26
  • 27. Summary PAGE 27
  • 28. Current SPX Situation Exceeded Q3 2008 earnings per share guidance Targeting growth in Q4 2008: – Targeting 8% to 10% organic growth – Targeting 14% to 20% earnings growth Solid financial position and liquidity: – Expect to repurchase 3m shares of SPX stock – Significant flexibility in uncertain economic environment Reducing cost through APV integration Evaluating and preparing for 2009 Carefully Monitoring Risks In Uncertain Economic Environment PAGE 28
  • 29. Questions PAGE 29
  • 30. Appendix PAGE 30
  • 31. Balance Sheet ($ millions) 12/31/07 9/27/08 Change Cash $354 $466 $112 Other Current Assets 2,362 2,540 178 Goodwill 1,930 1,921 (9) Other Assets 1,591 1,595 4 Total Assets $6,237 $6,523 $286 Other Current Liabilities $1,838 $1,842 $4 Total Debt 1,568 1,531 (37) Long-Term Liabilities 825 790 (35) Shareholders' Equity 2,006 2,361 355 Total Liabilities and Shareholders' $6,237 $6,523 $286 Equity Debt / Capital Ratio 44% 39% (1) LTM EBITDA $663 $772 (1) Net Debt / EBITDA 1.83x 1.35x Gross Debt / EBITDA (1) 2.29x 1.89x (1) As defined in the SPX credit facility PAGE 31
  • 32. Full Year Financial Model ($ millions, except per share data) 2008E Guidance 2007 Mid-Point Revenue $4,677 $6,000 Segment Income Margin 13.1% 13.3% Corporate overhead (95) (107) Pension / PRHC (44) (37) Stock-based compensation (41) (43) Special charges (5) (16) Operating Income $428 $598 % of revenues 9.1% 10.0% Equity Earnings in J/V 40 46 Other Income/(Expense) (5) (7) Interest Expense (71) (107) Pre-Tax Income from Continuing Operations $392 $530 Tax Provision (126) (178) Income from Continuing Operations $266 $352 Tax Rate 32% 34% Weighted Average Dilutive Shares Outstanding 56 55 EPS from continuing operations $ 4.73 $ 6.45 EPS from businesses discontinued in 2008 $ 0.12 (1) Adjusted EPS $ 4.85 Adjusted EPS Guidance Range $6.40 to $6.50 EBITDA $ 663 $ 800 Note: Data from continuing operations Adjusted EPS, includes businesses discontinued in 2008, see appendix for reconciliation (1) 2008E Mid-Point EPS Guidance is $6.45 Per Share PAGE 32
  • 33. Pro Forma APV Calculation: Q3 2008 Excluding Including APV APV APV SPX Consolidated Q3 2008 Revenue $1,298 $212 $1,510 Segment Income $200 $9 $209 Segment Margin 15.4% 4.2% 13.8% Flow Technology Q3 2008 Revenue $282 $212 $493 Segment Income $47 $9 $56 Segment Margin 16.7% 4.2% 11.3% Note: Data from continuing operations PAGE 33
  • 34. Re-Stated Quarterly Segment Data First Quarter Second Quarter Third Quarter Fourth Quarter Full Year 2007 2008 2007 2008 2007 2008 2007 2007 Flow Technology Revenue $237 $492 $266 $535 $256 $493 $311 $1,070 Segment Income $37 $47 $44 $70 $44 $56 $51 $175 Segment Margins 15.4% 9.5% 16.5% 13.1% 17.2% 11.3% 16.4% 16.4% Test and Measurement Revenue $236 $270 $284 $320 $245 $260 $315 $1,080 Segment Income $24 $24 $32 $37 $22 $30 $41 $118 Segment Margins 10.0% 8.9% 11.2% 11.4% 9.0% 11.7% 13.0% 11.0% Thermal Equipment and Services Revenue $313 $347 $388 $409 $422 $437 $438 $1,561 Segment Income $16 $36 $38 $46 $57 $52 $52 $163 Segment Margins 5.2% 10.5% 9.8% 11.1% 13.4% 12.0% 12.0% 10.4% Industrial Products and Services Revenue $212 $267 $253 $276 $249 $320 $253 $966 Segment Income $26 $54 $34 $57 $44 $70 $52 $156 Segment Margins 12.3% 20.3% 13.5% 20.5% 17.7% 22.0% 20.5% 16.2% Note: Data from continuing operations PAGE 34
  • 35. Non-GAAP Reconciliations PAGE 35
  • 36. Adjusted Q3 Earnings Per Share Q3 Q3 2007 2008 GAAP EPS from continuing operations $1.74 $2.01 Q3 Tax Benefits (0.35) ($0.47) Q3 Legal Settlement (Other Expense) $0.11 Adjusted EPS from continuing operations $1.39 $1.66 Note: Data from continuing operations Adjusted EPS Presented Consistent with 2008 EPS Guidance PAGE 36
  • 37. Adjusted YTD Earnings Per Share Nine Months Ended, Sept. Sept. 2007 2008 GAAP EPS from continuing operations $3.43 $4.86 Q3 Tax Benefits (0.33) (0.47) Q3 Legal Settlement (Other Expense) 0.11 Adjusted EPS from continuing operations $3.10 $4.49 Note: Data from continuing operations Adjusted EPS Presented Consistent with 2008 EPS Guidance PAGE 37
  • 38. Adjusted Full Year Earnings Per Share 2007 2008E GAAP EPS from continuing operations $5.33 $6.81 Q3 Tax Benefits (0.34) (0.47) Q3 Legal Settlement (Other Expense) 0.11 Q4 Tax Benefits (0.25) Q4 Asset Impairment 0.05 Q4 Legacy Legal Matters (Corporate Expense) 0.06 Adjusted EPS from continuing operations $4.85 $6.45 Note: Data from continuing operations PAGE 38
  • 39. Q3 2008 Organic Revenue Growth Reconciliation Quarter Ended September 27, 2008 Net Revenue Acquisitions/ Organic Foreign Growth Divestitures Growth Currency Flow 92.4% 83.1% 1.0% 8.3% Test 6.1% 7.4% 1.8% -3.1% Thermal 3.5% 0.0% 5.3% -1.8% Industrial 28.6% 0.0% 0.4% 28.2% Consolidated 28.8% 19.7% 2.6% 6.5% Note: Data from continuing operations PAGE 39
  • 40. YTD 2008 Organic Revenue Growth Reconciliation YTD September 27, 2008 Net Revenue Acquisitions/ Organic Foreign Growth Divestitures Growth Currency Flow 100.1% 86.9% 3.3% 9.9% Test 11.1% 10.4% 3.7% -3.0% Thermal 6.2% 0.0% 6.1% 0.1% Industrial 21.0% 0.0% 1.1% 19.9% Consolidated 31.7% 22.0% 3.9% 5.8% Note: Data from continuing operations PAGE 40
  • 41. Q3 Free Cash Flow Reconciliation to GAAP Financial Measures SPX Corporation and Subsidiaries Free Cash Flow Reconciliation (unaudited) ($ millions) Q3 2007 Q3 2008 Net cash from continuing operations $ 48 $ 104 Capital expenditures $ (19) $ (33) Free cash flow from continuing operations $ 30 $ 71 PAGE 41
  • 42. Nine Months Free Cash Flow Reconciliation to GAAP Financial Measures SPX Corporation and Subsidiaries Free Cash Flow Reconciliation (unaudited) ($ millions) Nine Months Nine Months Ended Septem ber Ended Septem ber 2007 2008 Net cash from continuing operations $135 $147 Capital expenditures ($47) ($79) Free cash flow from continuing operations $88 $68 PAGE 42
  • 43. Full Year Free Cash Flow Reconciliation to GAAP Financial Measures SPX Corporation and Subsidiaries Free Cash Flow Reconciliation (unaudited) ($ millions) 2006 2007 Net cash from continuing operations $ 49 $ 404 Capital expenditures $ (56) $ (91) Free cash flow from continuing operations $ (7) $ 313 Interst paid on LYONS repurchase $ 84 Taxes paid on LYONs tax recapture $ 91 Adjusted free cash flow from continuing operations $ 168 FCF from operations discontinued in 2007 $ 15 Adjusted free cash flow as reported 2/28/2007 $ 183 PAGE 43
  • 44. 2008E Free Cash Flow Reconciliation to GAAP Financial Measures SPX Corporation and Subsidiaries Free Cash Flow Reconciliation (unaudited) ($ millions) 2008E Guidance Range Net cash from continuing operations $ 440 $ 470 Capital expenditures $ (140) $ (150) Free cash flow from continuing operations $ 300 $ 320 PAGE 44
  • 45. EBITDA Reconciliations LTM Sept. ($ millions) 2006 2007 2008 Revenues $4,313 $4,822 $5,742 Net Income $171 $294 $381 Income tax provision (benefit) 56 90 127 Interest expense 50 77 110 Income before interest and taxes $277 $461 $618 Depreciation and intangible amortization expense 90 83 102 EBITDA from continuing operations $367 $544 $720 Adjustments: Non-cash compensation expense 38 41 43 Extraordinary non-cash charges 41 14 (9) Extraordinary non-recurring cash charges 27 7 11 Excess of JV distributions over JV income (12) 2 3 Loss (Gain) on disposition of assets 56 4 (14) Pro Forma effect of acquisitions and divestitures 53 20 Other 8 0 Adjusted LTM EBITDA from continuing operations $525 $663 $772 Note: EBITDA as defined in the credit facility PAGE 45
  • 46. Debt Reconciliations ($ millions) 12/31/2007 9/27/2008 Short-term debt $ 254 $ 260 Current maturities of long-term debt 79 76 Long-term debt 1,235 1,194 Gross Debt $ 1,568 $ 1,531 Less: Puchase card program and extended A/P programs $ (58) $ (59) Adjusted Gross Debt $ 1,510 $ 1,472 Less: Cash in excess of $50m $ (304) $ (416) Adjusted Net Debt $ 1,206 $ 1,055 Note: Debt as defined in the credit facility PAGE 46
  • 47. PAGE 47

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