Good day everyone and welcome to the SPX Corporation First Quarter 2009 Earnings Results Conference Call. This call is being recorded. At this time, I would like to turn the call over to the Vice President of Finance Mr. Jeremy Smeltser. Please go ahead sir.

Thanks, Michelle. Good morning everyone. Thank you for joining us. With me on the call this morning are Chris Kearney, Chairman, President and CEO of SPX and Patrick O'Leary, our Chief Financial Officer. This morning's call is being webcast with a slide presentation, which can be accessed on our website at www.spx.com in the Investor Relations section. This webcast will be available until May 13. You may wish to follow along with the webcast as we reference the detailed information on the slides. Please note that this slide presentation also includes supplemental schedules, which provide reconciliations for all non-GAAP financial measures we reference today. Our earnings press release was issued earlier this morning it can also be found on our website. Before we continue, I would like to point out that portions on our presentation and comments are forward-looking and subject to Safe Harbor provisions. The 2009 guidance and targets we discuss today are on a GAAP basis from continuing operations. I would also refer you to the risk factors in our most recent SEC filings. With that, I will turn the call over to Chris.

Thanks, Jeremy, and good morning everyone. Thanks for joining us on the calls morning. As you know the challenging economic conditions we faced at the outset of 2009 deteriorated further during the first quarter. The majority of end markets have been impacted by the global recession. This is particularly true in our short cycle Test and Measurement and Flow Technology businesses, which experienced the significant slowdown in order activity as the first quarter progressed. On April 13, we issued a press release to inform investors that we had lowered revenue expectations for Q1 and for the full-year. Additionally, we lowered our 2009 EPS guidance range to $4.40 to $4.80 per share. We are managing prudently for this recession and we’ve targeted $75 million of restructuring actions for the year. These actions are aimed at aligning our cost structure with end market demand, reducing costs in the near-term, and positioning SPX for long-term of success. In addition to reviewing our Q1 results this morning, we will provide you with more details on the revised guidance and an analysis of the trends in our key end markets. Looking at the results for the quarter, our reported revenue declined 14%. Organic revenues were down 7.5% due to weakness in our short cycle book in turn businesses. Sales for tools and diagnostics were particularly weak declining more than 20% versus Q1 2008. Foreign currency translation was at 7% headwind to reported revenue, primarily due to the dollar strengthening against the euro. Segment income decreased 22% to $126 million. Q1 segment income margins were 10.8% down 110 points from a year ago. The primary drivers were the organic revenue decline, unfavorable project mix in our thermal segment and foreign-currency headwind. This impact was partially offset by cost benefits realized from the APV integration. Earnings per…

Thanks, Chris. Good morning everyone. I will begin with a detailed analysis of Q1 EPS. Earnings per share declined 34% year-over-year in the first quarter, the primary driver as Chris mentioned was the decline in our revenues, lower segment income produced earnings of $0.44. This included the organic decline on a $0.07 win impaired and from foreign currency fluctuations. Q1 restructuring expense was $12 million versus $1 million in the first quarter of last year that is a $0.14 EPS headwind. Our reduced corporate expense and lower stock compensation expense improved earnings by a total of $0.18, below the line variances to last year netted to a $0.03 EPS benefit. Benefits from lower interest expense, discreet tax credit, and the reduced share count were nicely offset by a $0.22 headwind and other expenses. This expense primarily related to currency transaction losses incurred in our thermal employee business during the quarter, compared to gains reported in Q1 last year. We expect these to specialize in Q2 based on actions taken during the quarter to initiate additional hedges and the related hedge accounting treatment. Moving onto the segment results, I'll begin with Flow, for the period Flow reported revenue of $394 million that is down 20% year-over-year. Foreign currency fluctuations, primarily the strengthening dollar versus the Euro and the British pound reduced revenue 10%. Organically, revenue declined 10% versus last year as well. The organic decline was caused by weakness in the majority of our Flow end markets, including dehydration, industrial mining, and food and beverage. These declines offset growth from sales into the oil and gas and power generation markets. Segment income was $50 million versus $47 million in Q1 last year. Last year however, the segment income included $7.5 million charge required by purchase accounting to step-up APV’s inventory. So,…

Thanks, Patrick. Global economic conditions are obviously difficult and in response to the current state of the global economy, the majority of businesses are in the process of restructuring actions this year. As I mentioned earlier we have a dollar per share of $75 million of restructuring actions currently projected in our guidance. These actions are expected to mitigate to some degree the current end market pressures we are experiencing. They also focused on increasing the efficiency and flexibility of our operations over the long-term. In total, we expect to reduce global headcount again by 15% based on the 2008 restructuring and 2009 targeted actions. We expect this will position us to better leverage future revenue growth. If the economy continues to decline, we are prepared to take additional restructuring actions as necessary. Our financial position is strong and we believe we have ample liquidity. We intend to maintain our liquidity given the uncertainty in the global economy. And although the current environment is challenging, we remain confident in our long-term strategy and committed to executing it. Thanks again for joining us and at this time, we are ready to take your questions.

(Operator instructions) And we will go first to John Baliotti with FTN Equity Capital Markets. John Baliotti – FTN Equity Capital Markets: Hi Chris.

Hi John how are you doing? John Baliotti – FTN Equity Capital Markets: I'm well, how or you? I'm just curious, could you kind of may be handicap the trends you're seeing in the first quarter for things like thermal, transformers, food and beverage versus let's say the long-term, you know secular, I guess how much of what you saw in the first quarter maybe with feedback from your operating guys or the customers, do you think is indicative of what's going on currently versus what – if there is any change in the secular expectations?

Yes sure John. There is no question that what we are experiencing in terms of slow down in those segments is reflecting, the global economic condition. As we've said consistently, we positioned this company starting four years ago around three quarter growth areas that have been very, very attracted to it because of the underlying dynamics in those markets and power and energy infrastructure and process equipment particularly in the food, beverage, dairy market. And ultimately we believe in the Test and Measurement segment as well given the evolution in the shift of that business outside the United States to developing markets and to greater relationship with key successful global OEs around the world. So the underlying dynamics were absolutely committed to and we believe – and we think that the things that we are doing in reaction to the slowdowns we are seeing in this market in 2009 are intended to be thoughtful and targeted and to make the organization more lean and efficient going forward, so as those markets begin to recover we are better positioned than we were even going into this downturn. So, yes, there is no doubt that we're – we believe in the growth drivers long-term in this business and I think we will come out of this difficult year hopefully even better positioned.

And it’s certainly worth mentioning John, quarterly order trends particularly in the thermal segment really aren’t meaningful, we have substantial fluctuations in the size and amount of orders, obviously we've got a significant backlog in that segment. But there is still credible quoting activity and you are going to see continued lumpy performance and certainly at this point, it’s not appropriate to conclude that what we saw in Q1 internal is our long term trend. John Baliotti – FTN Equity Capital Markets: Yes, I guess this is a follow-up to that Pete [ph]. It seems like the way the industrials are coming out with commentary is that and the way that markets reacting seems like end markets that are considered highly volatile or sensitive to economic changes or there is more positive tone in – you know the end markets are weaker, because the expectation and things I am going to cover in those end markets are going to take off and I would think that there is going to be some moves in these end markets as well because of credit eases and so on that obviously the long term demand for transformers as they done as an example.

Yes, that's absolutely right. I mean the power grid in this country certainly isn’t getting any younger, it is aged and I think the replacement dynamics along with the reliability standards that have been imposed certainly underscore that. And I think if you look at developing parts of the world, where we are still seeing like in China, where we are still seeing some healthy orders over the last six months and continuing into this year, and you look at South Africa where there is severe under capacity. The only thing that has changed is the current economic environment and the difficulty in terms of financing project short-term, but long-term those dynamics you're right, I mean they haven't changed and would I think support the long term due that we have in the business. John Baliotti – FTN Equity Capital Markets: Okay. Great, thank you Chris.

Next, we’ll go to Jeff Sprague with Citi Investment Research. Jeff Sprague – Citi Investment Research:

That’s a great – that's a great question. I mean, there is obviously a stronger second half of earnings and restructuring is one very important factor, our guidance assumes $75 million of restructuring expense for the year or $1 share as you heard it. Approximately 42 million of that is expected in the first half, so we should have about $10 million benefit in the second half due to lower restructuring expense. The benefits that we're reaping should be greater as well. We're expecting savings from restructuring actions to be about $20 million higher in the second half as compared to the first half. So combined there, you can see $0.40 to $0.50 of EPS benefit in the second half. And then, looking at the businesses, in the second half of 2009, we are forecasting an increase in project work based on orders that are in our backlog both in the thermal and in the flow segments. In thermal, we have a pick up of dry cooling systems are most profitable, profit line in China that we expect we’ll benefit in revenue and margin sequentially. And additionally about 18% of the flow segment is from sales of boiler and other personal copper heating equipment, mostly into the U.S. residential and commercial applications. And this business historically has much higher volumes at significantly better profitability in the second half of the year as customers replace aged equipment in account to the winter season. And you saw quite a lot of over line chart for foreign currency in the first quarter, but obviously will not be continuing in the second half. So we expect the combination of these changes to offset the declines that we expect in the industrial segment due primarily to lower transformer and crystal grower sales in the second half. Jeff Sprague – Citi Investment Research:

I mean basically, yes, there was a gain in the fourth quarter that offset most of it. As we exit Q2, we will have our accounting hedge treatment and I would expect a lot less volatility in that area. Jeff Sprague – Citi Investment Research: And just also on tax Patrick, it’s 32 for the year, but I am thinking your framework here using kind of Q1 24 rate, I do not so – are you expecting tax rate to be much higher in the back half of the year?

No, I mean basically if you look at the core rate, it's 33%, 34%. There are some discrete tax items in Q1 brought the rate down and we're just reflecting those same discrete items in the full year model, which is somewhat brought the weighted tax rate down to 32% that we are using right now. Jeff Sprague – Citi Investment Research: And then just a little more color on transformers, the transformers shipments I guess were roughly flat in the quarter.

In Q1, the orders were down about 22% sequentially from Q4 and we are down year-over-year about 50%. This decline was anticipated in our original guidance and it's the primary driver of the 30% revenue decline that we expect in the industrial segment in the second half. And what’s going on here is our customers are balancing the need to replace aging transformers with managing near-term capital budgets. Pricing, as I mentioned in the prepared remarks, has become more competitive in the marketplace. The decline in the input cost of copper and oil has impacted pricing and the contribution margin has come down after the peak that we saw in the third quarter of last year. I mean, it's too early to predict what next year will look like, but on an annualized basis at current order run rate, we project order shows revenues to be about $350 million annually. And if order rates remains stable as this year continues, we clearly will be looking at pretty tough first half comparisons next year and steady accounts in the second half of the year.

Jeff Sprague – Citi Investment Research: And so the price is coming down more rapidly than your cost inputs, squeezing margins in the business?

On an incremental basis, yes. Jeff Sprague – Citi Investment Research:

We are using a long term investment assumption of 8.5%, so obviously variations of that is going to give us some negative amortization going forward. This kind of rate tapping pretty volatile and I think as you know I mean for us we have a perfect [ph] pension plan where all the participants are best fit and there is no new entrance, so the drivers of our accounting are really, are the investment return and the assumptions that we use. We have been moving to more of an asset liability matching, so we didn't have anything like the investment losses in the portfolio last year you saw across the broad market. So I would say at this point, it's too early to say to give you an EPS estimate. I mean it's looking like it will be what I would describe as a mild negative, I certainly wouldn't expect it to be one of the big drivers of earnings change in 2010. Jeff Sprague – Citi Investment Research: Thank you.

And next, we will go to Shannon O'Callahan with Barclays Capital. Shannon O'Callahan – Barclays Capital: Hi.

Hi, good morning, Shannon. Shannon O'Callahan – Barclays Capital: Just a follow-up a little more on the transformer point, I mean you mentioned the orders down 22% sequentially that was in line with your guidance, we had the big falloff kind of start at the tail end of last year, can you talk about how those orders have been tracking versus kind of the ’08 exit rate?

I think fairly consistent with the exit rate of December is what we experienced in the first quarter, so therefore pretty consistent with our guidance for the year in that segment. Shannon O'Callahan – Barclays Capital: Okay. So you have seen I mean the kind of the short fall off these monthly sequential kind of basing out, so I should mention next year if this continues, you have a tough comp against the backlog in the first half, but you are seeing sort of a monthly sequential basing out here.

Shannon O'Callahan – Barclays Capital: Yes. Although I mean, what do you think about that, I mean – obviously I mean in the last cycle, the volumes got so bad that the pricing got even worse. I mean if things are basing out that, I know you (inaudible) impacting the price pressure, but if demand stabilizes I mean do you expect the industry to behave more reasonably?

I would describe the industry as competitive and I would describe the pricing trend right now to be on its way down. I mean obviously we've only got the build two factories. I think there is an element of opportunism with the customers where they are looking at this overall pricing environment and perhaps will start placing orders for 2010 because they think the prices right now are not sustainable and it's interesting – we are still – I think we explained before that we give customers a choice here, we are still experiencing most customers are (inaudible) to manage the material price risk by paying significant cash deposit. And so in that sense, that’s say the law about how the customers feel about the potential and so we’ve got some higher end electrical grade fields [ph] and despite what you see in the market for the last few months for us, we’ve not experienced substantial declines in the cost of those materials, obviously you see what pattern of the copper as well.

And what we are seeing though I think it’s another underlying dynamics Shan, the investment grade financing is getting better and I think it's a reasonable anticipation that electricity demand will rise as the recession abates. So long term trends I think are good. Shannon O'Callahan – Barclays Capital: Okay. And then just on food and beverage, I mean – as you said you expected it to be more stable and you are seeing some negative impact on the large projects, could you just confine the large projects or are you seeing deferrals of all kinds of smaller projects or replacement activity. I mean can you scope a little bit for us, is this is a re-evaluation of the stability you expected from that market or is it just more of a short-term correction that you expect to normalize?

If you look at how the year ended and the quarter started, there was still was a lot of quoting activity in this market for – particularly for larger projects. A larger project in our flow segment might be between $5 million and $15 million. And so, I think there is number of reasons why customers are more inclined at this point to delay the investment decision and the award, and some of that is the overall environment, some of that is company specific and some of that again is uncertainty about what the material price dynamic will be and what the competitive dynamic will be if the overall market continues to be difficult. So it is mostly in the larger projects, although we are seeing a slowdown in the concerned [ph] business and I think for the short cycle part, I mean clearly we’ve got limited visibility in what we are doing with our forward model is really taking our current run rate and intelligence from the quoting activity married with our expectations for, I will call it a handful of identified larger projects that we expect to execute in the second half and that's been the basis of how we construct for that. Shannon O'Callahan – Barclays Capital: Okay. Thanks guys.

Thanks, Shannon.

And next, we will go to John Inch with Bank of America. And sir, your line is open. And next, we will go to Nigel Coe with Deutsche Bank. Nigel Coe – Deutsche Bank: Good morning.

Good morning, Nigel. Nigel Coe – Deutsche Bank: Obviously, a lot of questions really on (inaudible). We haven’t talked about the stimulus, obviously it’s quite a lot of funds for transmission networks, but have you obviously had a chance to digest clarification – I mean to what extent do you think you will benefit or how – at what time, do you think the funds will benefit the kind of power range that you specialize them.

Well, I think the stimulus fund module are more directed at alternative energy sources and clean energy solutions across the board and that's fine with us because as you know that’s the future orientation of our product development any way, but as alternative sources of power generation become the focus of stimulus R&D funding, whether it will be solar or wind, that creates ultimately for us demand – new demand for the transformer business as new power generation or distribution grids need to be established. And then with respect to our thermal business, I think some of the new technology that we are developing albeit in whether it’s in wet or dry or hybrid cooling solutions, I think that plays very much to our strong hand. So we have been – we have a task force assembled in-house, we’ve been working with some folks in Washington and directly with our customers to try and be in the mainstream of those next-generation product developments where I think the stimulus funding is really focused. Nigel Coe – Deutsche Bank: So would you expect – given your initial comments, would you expect the either ramp up shipments of 100 NVA [ph] plus type transformers and there are CapEx (inaudible).

I don’t think that the – I don’t think the impact ultimately on any of the stimulus activity is going to be – is going to have a real short term impact on the business. I think it helps focus and drive R&D effort more for longer term solutions and so I don’t think it's going to either require additional short term CapEx spending to direct ourselves to that solution. I think it's really more focused over the long term, and I think that’s healthy, I think that’s good, we are excited to participate in it, but I think in terms of our short term planning of the business, we really don’t anticipate that to having a significant effect. Nigel Coe – Deutsche Bank: Okay. And then moving to test and measurement, obviously you’ve taken down the verifications [ph] quite a bit, that’s – how do you handicap everything with GM, Chrysler, the (inaudible) shut down – how do you reflected that within your guidance, do you – I mean is that all within the guidance at this point?

It is and just as kind of reset everybody’s thinking on that in terms of the impact of GM, Chrysler or Ford on our business, it’s not nearly as significant as it has been historically even in the short pass, but right now about 15% of our 2009 revenue target for test and measurement is related to business with the Detroit III and or dealer networks. At the end of March, we had slightly more than $20 million of outstanding receivables from them combined, so our net exposure on the top line and in terms of our cash collection is not anywhere near significant as it has been in the past and so we are monitoring the pending situations with both GM and Chrysler, we are conducting our current business with them carefully given the circumstances. Our strategy for this business has really been focused on globalization and we believe that future growth will come from developing and extending our global partnerships with other global OEMs. And we believe that our partnering with European and Asian OEMs is a key strategic initiative for future growth in this business. And so if you look at the evolution of that business as I have described in the past, its been a tough couple of years and really going back to the second quarter of 2007, and but underwriting all of that as we’ve gone through the painful restructuring in the U.S. particularly, underlying all of that its been a very successful development of these relationship with other global OEs. And so that’s happening, the customer base is shifting, and the nature of the products underlying that business have changed pretty dramatically to some pretty sophisticated electronic diagnostic equipment, a new global platforms for these other OEMs around the world. So we think the evolution of the business has been in the right direction. We think we’ve got in great traction in Europe as a result of the acquisitions we’ve done there over the past several years. We made significant investments in the Asian markets, specifically in China, much of the future R&D effort and current R&D effort is really focused in that geography. So I think this year will continue obviously to be tough. I think when we get out of this year and we somewhere down the road start to see the unit sales increase, I think we positioned ourselves with right players around the world and in the right geographies and will have a much better cost structure going forward, so I think it will – I think we are doing right things. Nigel Coe – Deutsche Bank: Yes, this is the final one. Obviously cost savings are critical to the second half guidance, can you just be little more grammar in sense of how the cost savings from the headcount reductions fulfill through quarter-by-quarter and maybe give a bit more color on cost savings by segment as well.

Well, I don’t have that data right in front of me and obviously these restructuring actions are predominantly headcount reductions and they are taking place in a stage fashion in Europe with a more – with a longer prospect that goes through based on discussions that need to take place in advance with the works councils. So what I would say is, the actions taken with domestic employees’ payback faster than the actions taken with international employees based on overall level of cost. We are taking actions in all poor segments and in various businesses with the segments, and they are progressing according to the overall 15% headcount reduction plan that Chris described. Is there room for volatility on restructuring between quarters based on execution or regulatory issues, yes, absolutely, what we are getting today is our best guess is to how Q2 restructuring will take place. But in terms of the savings I really wouldn’t go any further than I did in response to the earlier question in terms of savings we expect in the second half. Nigel Coe – Deutsche Bank: Understand. Thanks a lot.

Thanks, Nigel.

And next, we will go to Steve Tusa with JP Morgan. Steve Tusa – JP Morgan: Hi, good morning.

Hi, good morning Steve.

Hi, Steve. Steve Tusa – JP Morgan:

It’s basically the run rate suggested by current order levels. In other words, what the business would look like on an annualized basis with the current orders. Steve Tusa – JP Morgan: Okay. And I think from a pricing perspective, I believe one of your competitors talked about push back and kind of the double digit range, so I push back in pricing of I don’t know 10% to 15%, how much of (inaudible) higher than that. Is that in a ballpark of what you guys are seeing or are you seeing something different, I am just trying to – you mentioned prices such a big variable here and obviously you are not going to be laser specific on it, but I am just curious – a range here.

From peak pricing, what you are saying is about right. The problem is in fact that one, there is obviously good post call [ph] information and so you are competing on individual products and then you are looking at whether or not you own the project and you have information – pretty good information about how they are pricing. So what I would say is, we are seeing more variability in certain projects and then the market will respond. As volumes – overall volumes come down, obviously people are trying to absorb their fixed facility cost and they may choose to be a lot more aggressive on an individual quote simply depending on their own needs to absorb cost. So it’s too early to predict how pricing will level out, but it clearly has a downward trend at the moment. Steve Tusa – JP Morgan: So are you talking about these kind of – it’s a different business than it was last cycle and a different dynamics this time, but how do we think about the – what kind of action do we taken or what are the reasons why you should have a higher trough profitability this time around?

Steve Tusa – JP Morgan: So basically your trough volume levels are going to higher this time around?

Potentially, the volumes would never – never necessarily a major issue for us in particular given the strong relationships we have with our key customers. What I think the other interesting thing that is different between now and coming out of ’02, ’03 [ph] and the increased regulation that we see in the U.S. which really didn’t exist in the last downturn. Steve Tusa – JP Morgan: Okay. So but it is similar level of volume or do you assume similar level of margin or is that you are saying no.

Well, I mean that’s going to depend entirely on what raw materials are doing and how long the downturn would last. That’s really too early to call such a trend. Steve Tusa – JP Morgan: Okay. Thanks, I appreciate the color.

Thanks, Steve.

And we will take our final question from Jeff Sprague with Citi Investment Research. Jeff Sprague – Citi Investment Research: Hi, thanks. Just a follow-up on restructuring Patrick, what do you see is the year-over-year carry over benefits from the ’09 actions into 2010?

I mean I think – I mean it’s clearly an important question. I guess I would say I don’t envisage overall that we would have $75 million of restructuring charges next year. I think that will be from (inaudible) honestly given you an estimate of what that is. There will be some incremental payback from the actions that we taken. We started out fairly strongly actions in Q1 and Q2, and so I think that’s going to be more of a factor with sort of the first half of next year versus the second half, but really its way too early to kind of put those kind of estimates out. Jeff Sprague – Citi Investment Research: And just a follow-up on thermal, we expected better project mix that you see in the second half, just – how affirm do you think that is and in other words, is that stuff that could easily slip into the early part of next year or is the –

I think it’s relatively firm in terms of the backlog that we have. We are – we are not experiencing significant changes in firm backlog with respect to subsequent execution. We are experiencing delayed decision making on projects that we are currently negotiating that are potential orders going forward. Jeff Sprague – Citi Investment Research: Okay. Thank you.

Okay. Thanks, Jeff.

Great. Well, thank you everybody for joining us. We’ve actually gone through all the questions. (inaudible) Ryan and I will be available all day in the office today for any additional questions. Thanks and have a great day.

This concludes today’s conference. We thank you for your participation.