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1 SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): April 13, 2001 SPX CORPORATION --------------------------- (Exact Name of Registrant as Specified in its Charter) Delaware 1-6948 38-1016240 - ---------------------------- ------------------------ ----------------- (State or Other Jurisdiction (Commission File Number) (I.R.S. Employer of Incorporation) Identification No.) 700 Terrace Point Drive Muskegon, Michigan 49443-3301 ------------------------------------------------- (Address of Principal Executive Offices) (Zip Code) (231) 724-5000 ------------------------------------------------------------------- (Registrant's Telephone Number, Including Area Code) Not Applicable ----------------------------------------------------------------- (Former name or address, if changed from last report)

2 Item 5. On March 12, 2001, SPX Corporation ("SPX") and United Dominion Industries Limited ("UDI") announced that they entered into a definitive agreement for SPX to acquire UDI in an all-stock transaction (the "Merger"). The Board of Directors of both companies unanimously approved the agreement. UDI shareholders will receive SPX shares based on a fixed exchange ratio of 0.2353 of an SPX share per UDI share. There is no collar on the fixed exchange ratio. SPX will also assume or refinance UDI debt. The transaction is expected to close during the second quarter of 2001. Item 7. Financial Statements, Pro Forma Financial Information and Exhibits (a) Financial Statements The Report of Independent Auditors and the accompanying Financial Statements set forth in United Dominion Industries Limited's Annual Report on Form 40-F for the fiscal year ended December 31, 2000 are attached hereto as Exhibit 99.1 and are incorporated herein by reference. (b) Pro Forma Financial Information The unaudited pro forma combined condensed financial statements and other financial data of SPX are attached hereto as Exhibit 99.2 and are incorporated herein by reference. (c) Exhibits The following Exhibits are included herein: Exhibit 23.1 Consent of Arthur Andersen LLP Exhibit 23.2 Consent of KPMG LLP Exhibit 99.1 Report of Independent Auditors and the accompanying Financial Statements set forth in United Dominion Industries Limited's Annual Report on Form 40-F for the fiscal year ended December 31, 2000. Exhibit 99.2 Unaudited pro forma combined condensed financial statements and other financial data of SPX. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Date: April 13, 2001 SPX CORPORATION By: /s/ Christopher J. Kearney ---------------------------------- Christopher J. Kearney Vice President, Secretary and General Counsel

   1


Exhibit 23.1

                    CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As Independent public accountants, we hereby consent to the incorporation by
reference in this Form 8-K of our report dated February 9, 2001, on the
Company's consolidated financial statements as of December 31, 2000 and 1999 and
for each of the three years in the period ending on December 31, 2000 included
in the Company's Form 10-K/A for the year ended December 31, 2000 into the
Company's previously filed registration statements on Form S-3 (No. 333-56364)
and on Form S-8 (Nos. 33-24043, 333-29843, 333-29851, 333-29857, 333-29855,
333-38443, 333-70245, 333-82645, and 333-82647).


Arthur Andersen LLP

Chicago, Illinois
April 13, 2001

1 Exhibit 23.2 CONSENT OF INDEPENDENT AUDITORS The Board of Directors United Dominion Industries Limited We consent to the incorporation by reference in the Registration Statements on Form S-8 (Nos. 33-24043, 333-29843, 333-29851, 333-29857, 333-29855, 333-38443, 333-70245, 333-82645, and 333-82647) and on Form S-3 (No. 333-56364) of SPX Corporation of our report dated January 25, 2001, except as to note 14 which is as of March 11, 2001, with respect to the consolidated statements of financial position of United Dominion Industries Limited as at December 31, 2000 and 1999 and the related consolidated statements of income, cash flows and changes in shareholders' equity for each of the years in the three-year period ended December 31, 2000, which report appears in the December 31, 2000 annual report on Form 40-F of United Dominion Industries Limited, which report also appears in and is incorporated by reference in this Current Report on Form 8-K filed by SPX Corporation. KPMG LLP Chartered Accountants Toronto, Canada April 13, 2001

1 Exhibit 99.1 Financial Statements AUDITORS' REPORT To the Shareholders of United Dominion Industries Limited We have audited the consolidated statements of financial position of United Dominion Industries Limited as at December 31, 2000 and 1999 and the related consolidated statements of income, cash flows and changes in shareholders' equity for each of the years in the three-year period ended December 31, 2000. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with Canadian and United States generally accepted auditing standards. Those standards require that we plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. In our opinion, these consolidated financial statements present fairly, in all material respects, the financial position of the Company as at December 31, 2000 and 1999 and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2000 in accordance with Canadian generally accepted accounting principles which are in conformity with accounting principles generally accepted in the United States except as indicated in Note 13. Chartered Accountants Toronto, Canada January 25, 2001, except as to note 14 which is as of March 11, 2001

2 UNITED DOMINION INDUSTRIES LIMITED Consolidated Statements of Financial Position, Restated (note 2) December 31, 2000 and 1999 (Amounts in Thousands of U.S. Dollars) 2000 1999 ----------- ----------- Assets Current assets Cash and short-term investments $ 101,369 $ 108,940 Accounts and notes receivable, less allowance for doubtful Accounts of $11,082 in 2000 and $9,645 in 1999 (note 11) 376,108 334,398 Inventories (note 5) 404,772 390,654 Other current assets 60,375 64,136 ----------- ----------- Total current assets 942,624 898,128 Fixed assets (note 6) 342,267 350,901 Goodwill (notes 1 and 3) 888,804 836,497 Other intangible assets (note 1) 40,572 43,547 Other assets (note 4) 111,110 101,110 ----------- ----------- $ 2,325,377 $ 2,230,183 =========== =========== Liabilities and Shareholders' Equity Current liabilities Notes payable to banks (note 7) $ 102,987 $ 103,544 Current portion of long-term debt (note 7) 49,898 46,082 Accounts payable 171,267 169,362 Accrued liabilities 204,080 192,618 Customer advances 17,247 15,440 ----------- ----------- Total current liabilities 545,479 527,046 Long-term debt (notes 1, 7 and 11) 658,267 591,506 Other liabilities 199,856 209,299 ----------- ----------- 1,403,602 1,327,851 ----------- ----------- Shareholders' equity (note 9) Common shares - outstanding 39,124,539 shares in 2000 and 39,047,937 shares in 1999 540,209 537,355 Contributed surplus 4,313 4,283 Retained earnings 444,345 404,224 ----------- ----------- 988,867 945,862 Equity adjustment from foreign currency translation (notes 1 and 7) (67,092) (43,530) ----------- ----------- Total shareholders' equity 921,775 902,332 ----------- ----------- $ 2,325,377 $ 2,230,183 =========== =========== See accompanying notes to consolidated financial statements. On behalf of the Board - William W. Stinson, Director; George S. Taylor, Director.

3 UNITED DOMINION INDUSTRIES LIMITED Consolidated Statements of Income, Restated (note 2) Years Ended December 31, 2000, 1999 and 1998 (Amounts in Thousands of U.S. Dollars, Except Per Share Data) 2000 1999 1998 ----------- ----------- ----------- Sales $ 2,366,224 $ 2,148,338 $ 2,020,374 ----------- ----------- ----------- Costs and expenses Cost of sales 1,645,539 1,484,664 1,404,840 Restructuring charges - inventory (note 3) 3,061 5,153 -- ----------- ----------- ----------- Total cost of sales 1,648,600 1,489,817 1,404,840 Selling, general and administrative expenses 495,627 448,092 430,005 Restructuring and other charges (note 3) 43,813 15,351 16,336 ----------- ----------- ----------- Total costs and expenses 2,188,040 1,953,260 1,851,181 ----------- ----------- ----------- Operating income 178,184 195,078 169,193 Other income (expense) Interest - net (note 8) (50,019) (40,178) (35,750) Gain (loss) on sale of businesses (note 3) (1,147) -- 11,285 Other (note 3) (8,706) (1,500) (6,852) ----------- ----------- ----------- Income before income taxes and goodwill charges 118,312 153,400 137,876 Income tax provision (note 4) (38,772) (45,428) (22,766) ----------- ----------- ----------- Income before goodwill charges 79,540 107,972 115,110 Goodwill charges, net of applicable income tax benefit of $1,556 in 2000, $1,422 in 1999 and $1,278 in 1998 (note 3) (22,990) (21,646) (17,493) ----------- ----------- ----------- Net income $ 56,550 $ 86,326 $ 97,617 =========== =========== =========== Earnings per common share (note 1): Income before goodwill charges $ 2.03 $ 2.72 $ 2.82 =========== =========== =========== Net income $ 1.45 $ 2.18 $ 2.40 =========== =========== =========== See accompanying notes to consolidated financial statements.

4 UNITED DOMINION INDUSTRIES LIMITED Consolidated Statements of Changes in Shareholders' Equity, Restated (note 2) Years Ended December 31, 2000, 1999 and 1998 (Amounts in Thousands of U.S. Dollars) Common Shares ------------------------- Equity Unamortized Adjustment/ Total Shares Restricted Contributed Retained Currency Shareholders' Issued Stock Surplus Earnings Translation Equity --------- --------- --------- --------- ----------- ------------- Balance, December 31, 1997 $ 595,383 $ (3,881) $ 1,859 $ 302,596 $ (35,666) $ 860,291 Repurchase of 3,250,000 shares (44,433) -- -- (39,132) -- (83,565) Stock options exercised (445,422 shares) 7,302 -- 2,198 -- -- 9,500 Incentive share election (43,845 shares) 1,219 -- -- -- -- 1,219 Amortization of restricted stock grants -- 1,984 -- -- -- 1,984 Net income for the year -- -- -- 97,617 -- 97,617 Cash dividends - $.36 per share -- -- -- (14,614) -- (14,614) Net effect of currency translation Adjustments -- -- -- -- (3,432) (3,432) Effect of hedging transactions -- -- -- -- 2,501 2,501 --------- --------- --------- --------- --------- --------- Balance, December 31, 1998 559,471 (1,897) 4,057 346,467 (36,597) 871,501 Repurchase of 1,745,000 shares (24,065) -- -- (14,411) -- (38,476) Stock options exercised (103,400 shares) 1,537 -- 226 -- -- 1,763 Incentive share election (55,365 shares) 1,105 -- -- -- -- 1,105 Restricted stock issued (113,190 shares) 2,263 (2,263) -- -- -- -- Amortization of restricted stock grants -- 1,204 -- -- -- 1,204 Net income for the year -- -- -- 86,326 -- 86,326 Cash dividends - $.36 per share -- -- -- (14,158) -- (14,158) Net effect of currency translation Adjustments -- -- -- -- (12,688) (12,688) Effect of hedging transactions -- -- -- -- 5,755 5,755 --------- --------- --------- --------- --------- --------- Balance, December 31, 1999 540,311 (2,956) 4,283 404,224 (43,530) 902,332 Stock options exercised (13,984 shares) 201 -- 30 -- -- 231 Incentive share election (46,775 shares) 923 -- -- -- -- 923 Restricted stock issued (25,000 shares) 499 (499) -- -- -- -- Shares cancelled (9,157 shares) (184) -- -- -- -- (184) Amortization of restricted stock grants -- 1,914 -- -- -- 1,914 Net income for the year -- -- -- 56,550 -- 56,550 Cash dividends - $.42 per share -- -- -- (16,429) -- (16,429) Net effect of currency translation Adjustments -- -- -- -- (26,210) (26,210) Effect of hedging transactions -- -- -- -- 2,648 2,648 --------- --------- --------- --------- --------- --------- Balance, December 31, 2000 $ 541,750 $ (1,541) $ 4,313 $ 444,345 $ (67,092) $ 921,775 ========= ========= ========= ========= ========= ========= See accompanying notes to consolidated financial statements.

5 UNITED DOMINION INDUSTRIES LIMITED Consolidated Statements of Cash Flows, Restated (note 2) Years Ended December 31, 2000, 1999 and 1998 (Amounts in Thousands of U.S. Dollars) 2000 1999 1998 --------- --------- --------- Cash provided from operating activities Net income $ 56,550 $ 86,326 $ 97,617 Add (deduct) items not affecting cash Depreciation 49,737 46,341 41,747 Amortization 32,184 28,376 23,118 Loss (gain) on sale of businesses 1,147 -- (11,285) Deferred income taxes 6,010 2,839 (5,899) Other 2,187 1,474 2,358 Net decrease (increase) in working capital other than cash (note 13) (62,896) 13,737 (34,187) Asset securitization 2,100 900 (6,100) --------- --------- --------- 87,019 179,993 107,369 --------- --------- --------- Cash used by investing activities Additions to fixed assets (53,784) (61,278) (51,741) Acquisitions of businesses, net of cash balances (123,003) (155,416) (172,181) Net proceeds from disposal of businesses 15,998 -- 25,008 Proceeds from (investments in) other assets 1,582 (9,952) 10,354 Other (1,337) (874) (8,040) --------- --------- --------- (160,544) (227,520) (196,600) --------- --------- --------- Cash provided from financing activities Additional borrowings 213,090 155,597 331,907 Repayments of borrowings (130,908) (71,488) (92,931) Issuance of common shares 201 1,537 7,302 Repurchase of common shares -- (38,476) (83,565) Dividends (16,429) (14,158) (14,614) --------- --------- --------- 65,954 33,012 148,099 --------- --------- --------- Net increase (decrease) in cash and short-term investments (7,571) (14,515) 58,868 Cash and short-term investments at beginning of year 108,940 123,455 64,587 --------- --------- --------- Cash and short-term investments at end of year $ 101,369 $ 108,940 $ 123,455 ========= ========= ========= See accompanying notes to consolidated financial statements.

6 6 UNITED DOMINION INDUSTRIES LIMITED Notes to Consolidated Financial Statements, Restated (note 2) December 31, 2000, 1999 and 1998 (Amounts in Thousands of U.S. Dollars) 1. Summary of Significant Accounting Policies General The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in Canada. These accounting principles are in conformity with accounting principles generally accepted in the United States except as indicated in note 13. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Consolidation All subsidiary companies are consolidated and all significant intercompany accounts and transactions have been eliminated in consolidation. Revenue Recognition The company generally recognizes sales upon shipment of its products, net of applicable provisions for discounts and allowances. In addition, provisions for potential warranty claims and bad debts are recorded based on warranty terms and past experience. Service revenue is recognized when the service is performed. Consolidated Statements of Cash Flows Cash and short-term investments include highly liquid investments with a maturity of three months or less. Inventories Inventories are stated at the lower of cost (average or first-in, first-out) or net realizable value. Fixed Assets Property, plant and equipment are recorded at cost. Major renewals and betterments are capitalized; whereas, maintenance and repairs are expensed as incurred. Cost of property sold or otherwise disposed and related accumulated depreciation are removed from the accounts at the time of disposal and any resulting gain or loss is included in income. Depreciation of plant and equipment is determined on the straight-line method over the estimated useful lives of the assets. The average annual rates of depreciation range from 4% for buildings to 9% for machinery and equipment. Goodwill Goodwill, which represents the excess of purchase price over fair value of net identifiable assets acquired, is amortized on the straight-line method over the expected periods to be benefited, generally 40 years. The company assesses the recoverability of this intangible asset based primarily upon an analysis of undiscounted future operating cash flows from the acquired operations. Accumulated amortization was $114,308 and $90,309 at December 31, 2000 and 1999, respectively.

7 7 UNITED DOMINION INDUSTRIES LIMITED Notes to Consolidated Financial Statements, Restated (note 2) December 31, 2000, 1999 and 1998 (Amounts in Thousands of U.S. Dollars) Other Intangible Assets Amounts assigned to other intangible assets, primarily trademarks and patents, are based on independent appraisals and are amortized on the straight-line method over periods ranging from five to forty years. Accumulated amortization was $19,458 and $16,565 at December 31, 2000 and 1999, respectively. Income Taxes The company uses the asset and liability method of accounting for income taxes. Temporary differences arising from the difference between the tax basis of an asset or liability and its carrying amount on the statement of financial position are used to calculate future income tax assets or liabilities. This method also requires the recognition of future tax benefits such as net operating loss carryforwards, to the extent that realization of such benefits is more likely than not. Deferred tax assets and liabilities are measured using substantively enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the substantive enactment date. Foreign Currency Translation The financial statements of those operations whose functional currency is a foreign currency are translated into U.S. dollars using the current rate method. Under this method, all assets and liabilities are translated into U.S. dollars using current exchange rates and income statement items are translated using weighted average exchange rates. The translation adjustment is included as a component of shareholders' equity; whereas, gains and losses on foreign currency transactions are included in income. Foreign currency transaction losses totaled $866, $2,768 and $3,530 for 2000, 1999 and 1998, respectively. Derivative Financial Instruments The company is party to certain derivative financial instruments, principally forward exchange contracts used to manage foreign currency exposures. Gains and losses on forward foreign exchange contracts are recognized in income in the same period as the foreign currency transactions to which they relate. Fair Values The carrying values of cash and short-term investments, accounts receivable, accounts payable and accrued liabilities approximate their fair value due to the relatively short periods to maturity of the instruments. The fair value of the company's long-term debt is estimated based on the current rates available to the company for debt of the same remaining maturities. Since the company's fixed rate debt carries interest rates which are different than current market rates, the estimated fair value of the company's long-term debt was approximately $723,000 and $634,000 at December 31, 2000 and 1999, respectively. Earnings Per Common Share Earnings per common share are calculated by dividing net income by the weighted average number of common shares outstanding during the year (39,114,961 shares for 2000, 39,641,606 shares for 1999 and 40,755,170 shares for 1998). The assumed exercise of outstanding stock options would not have a materially dilutive effect on reported earnings per common share.

8 8 UNITED DOMINION INDUSTRIES LIMITED Notes to Consolidated Financial Statements, Restated (note 2) December 31, 2000, 1999 and 1998 (Amounts in Thousands of U.S. Dollars) 2. Restatement Related to Adoption of New Accounting Pronouncement Effective January 1, 2000, the company adopted the Canadian Institute of Chartered Accountants (CICA) Handbook Section 3461, Employee Future Benefits. This adoption has been retroactively applied to all years presented in the accompanying consolidated financial statements. The new standard requires accruing the cost of providing postretirement health care benefits during the years that the employee renders the necessary service. The company had previously recorded health care benefits on a "pay-as-you-go" basis for benefits paid on behalf of active and retired employees. Additionally, Handbook Section 3461 requires that for purposes of determining the pension liability, the discount rate must be based on current bond market yields rather than management's best estimate of the plan's long-term returns. For the years ended December 31, 1999 and 1998, the adoption resulted in a decrease in net income of $2,584 and $2,071, respectively, or $.07 and $.05 per share, respectively. At December 31, 1999, the adoption resulted in increases in other current assets of $2,750 and accrued liabilities of $6,876 and decreases in other (non-current) assets of $14,142, other (non-current) liabilities of $1,355 and retained earnings of $16,913. As of December 31, 1998 and 1997, the adoption of Handbook Section 3461 resulted in a reduction in retained earnings and total shareholders' equity of $14,329 and $12,258, respectively, in the Consolidated Statement of Changes in Shareholders' Equity. 3. Acquisitions, Divestitures and Restructuring and Other Charges Acquisitions In January 2000, the company acquired Kelley Company, Inc., a manufacturer of dock levelers, vehicle restraints and dock accessories. In April 2000, the company acquired an additional 80% interest in Nippon BOMAG Co., Ltd., an assembler and distributor of light compaction equipment. The company previously held a 10% stake in Nippon BOMAG Co., Ltd. In October 2000, the company acquired Pearpoint Limited, a manufacturer of high-end cameras for pipeline inspection. The cost of these and other smaller acquisitions totaled approximately $123,000 and resulted in an increase in working capital of approximately $27,000, an increase in fixed assets of approximately $11,000, an increase in goodwill of approximately $85,000, an increase in other assets of approximately $2,000 and an increase in other liabilities of approximately $2,000. In February 1999, the company acquired Riser-Bond Instruments which designs and manufactures cable fault locators principally used by the telecommunications industry. In July 1999, the company acquired TKO Doors, a manufacturer of loading dock doors. In August 1999, the company acquired Bran + Luebbe, a manufacturer of precision metering pumps, analyzing equipment and integrated blending systems for a broad range of process industries. In October 1999, the company acquired S.W. Fleming Limited, a manufacturer of commercial side-hinged steel doors and frames. The cost of these and other smaller acquisitions totaled approximately $155,000 and resulted in an increase in working capital of approximately $17,000, an increase in fixed assets of approximately $24,000, an increase in goodwill of approximately $129,000 and an increase in other liabilities of approximately $15,000. In February 1998, the company acquired Radiodetection which designs and manufactures portable pipe and cable locators and related equipment used in the utility and telecommunication industries. In March 1998, the company acquired Tex-Steel Corporation, a manufacturer of custom steel doors and frames for commercial and detention markets. In April 1998, the company acquired APV Ice Cream, a manufacturer of industrial ice cream production equipment. In May 1998, the company acquired Leading Edge, Inc. which manufactures ceiling fans, air curtains and air circulators supplied to the industrial and electrical distributor markets. In

9 9 UNITED DOMINION INDUSTRIES LIMITED Notes to Consolidated Financial Statements, Restated (note 2) December 31, 2000, 1999 and 1998 (Amounts in Thousands of U.S. Dollars) July 1998, the company acquired C&M, Inc., a manufacturer of powered roller conveyor systems primarily servicing the corrugated and solid fiber carton industry. In August 1998, the company acquired Ling Dynamic Systems Limited which designs and builds vibration test systems and related equipment. The cost of these and other smaller acquisitions totaled approximately $172,000. The above mentioned acquisitions have been accounted for by the purchase method and earnings have been included in the results of operations from the dates of the acquisitions. Divestitures In May 2000, the company sold its Lee Engineering operations and in October 2000, the company sold its Tom Miller operations. The proceeds from these two sales totaled approximately $16,000 and a loss of $1,147 was recognized which is included in "Other income (expense)" in the Consolidated Statements of Income. Lee Engineering was part of the Dock Products Division in the Specialty Engineered Products segment and Tom Miller was part of the Atmospheric Air Division in the Test Instrumentation segment. In January 1998, the company sold its Little Falls Tank division of Waukesha Cherry-Burrell for approximately $4,000 which equaled its book value. In December 1998, the company sold the assets of its Marley Pump motor product line and entered into various consulting and supply arrangements for total proceeds of $17,500. The company recognized a pre-tax gain on the sale of $11,285 which is included in "Other income (expense)" in the Consolidated Statements of Income. In 1999 and 1998, the company incurred charges of $1,500 and $6,852, respectively, related primarily to the settlement of legal claims and the write-down of assets to be realized from prior years' divestiture activities to their estimated net realizable value. These charges are included in "Other income (expense)" in the Consolidated Statements of Income. Restructuring Charges In 1998, the company announced a company-wide cost reduction plan. The plan included the net reduction of its global workforce by over 500 positions, principally administrative personnel, rationalizations involving twelve facilities and reduced discretionary spending. The company recorded a pre-tax charge to earnings in 1998 of $16,336 related to the plan. The company expanded the restructuring program in 1999 to include the rationalization of eleven additional facilities including the shutdown of four manufacturing and one administrative facility, the transition of the manufacturing of several product lines to different sites and the discontinuation of several unprofitable product lines. Additional workforce reductions of approximately 500 positions were announced and the company reported a pre-tax charge to earnings of $22,198 related to these initiatives. In 2000, the company continued many of the programs begun in 1999 and additionally shut down two manufacturing and two administrative facilities and discontinued an additional number of unprofitable product lines. Workforce reductions announced in 2000 totaled approximately 300 positions of which approximately 190 had actually been terminated by December 31, 2000. The company recorded a pre-tax charge to earnings in 2000 of $32,791 related to these initiatives.

10 10 UNITED DOMINION INDUSTRIES LIMITED Notes to Consolidated Financial Statements, Restated (note 2) December 31, 2000, 1999 and 1998 (Amounts in Thousands of U.S. Dollars) Selected financial information relating to the restructuring charges is as follows: Accrual at Paid or Accrual at Paid or Accrual at December 31, Expensed Incurred December 31, Expensed Incurred December 31, 1998 in 1999 in 1999 1999 in 2000 in 2000 2000 ----------- -------- --------- ----------- -------- --------- ----------- Severance and other employee costs $ 7,975 $ 5,785 $ (6,990) $ 6,770 $ 13,553 $(11,313) $ 9,010 Facilities costs 417 5,791 (5,918) 290 10,275 (9,157) 1,408 Write-down of inventory and other assets -- 8,693 (8,693) -- 5,115 (5,115) -- Other costs 932 1,929 (2,522) 339 3,848 (3,270) 917 -------- -------- --------- -------- -------- --------- -------- Total $ 9,324 $ 22,198 $(24,123) $ 7,399 $ 32,791 $(28,855) $ 11,335 ======== ======== ======== ======== ======== ======== ======== All costs are included in "Restructuring charges" in the Consolidated Statements of Income with the exception of $126 and $1,694 of goodwill impairment charges which were recorded in 2000 and 1999, respectively, and are included in "Goodwill charges". The majority of the remaining restructuring activities should be completed during the first half of 2001. Other Charges In September 2000, the company announced that it was in discussions with several parties regarding the possible sale of the company. After several months of extensive discussions and negotiations, the company announced in December 2000 that all talks had been terminated. The company incurred $5,651 of expenses related to this potential transaction. These costs as well as $3,055 from a one-time charge resulting primarily from an unfavorable tax ruling are reported in "Other income (expense)" in the Consolidated Statements of Income for the year ended December 31, 2000. Also included in "Restructuring and other charges" in the Consolidated Statements of Income for the year ended December 31, 2000 are $8,595 of expenses related to the early retirement of the company's Chief Executive Officer and $5,614 of charges arising primarily from a product replacement program and a product liability claim.

11 11 UNITED DOMINION INDUSTRIES LIMITED Notes to Consolidated Financial Statements, Restated (note 2) December 31, 2000, 1999 and 1998 (Amounts in Thousands of U.S. Dollars) 4. Income Taxes The provision for income taxes on income before goodwill charges is comprised of the following: 2000 1999 1998 ------------ ------------ ------------ Current Canada $ 4,391 $ (954) $ 3,264 United States (720) 10,386 24,094 Other countries 26,259 30,226 2,688 ------------ ------------ ------------ 29,930 39,658 30,046 ------------ ------------ ------------ Deferred Canada (539) (5,148) (7,241) United States 9,210 13,476 8,305 Other countries 171 (2,558) (8,344) ------------ ------------ ------------ 8,842 5,770 (7,280) ------------ ------------ ------------ $ 38,772 $ 45,428 $ 22,766 ============ ============ ============ The related net income (loss) before income taxes and goodwill charges is as follows: 2000 1999 1998 ------------ ------------ ------------ Canada $ (3,360) $ (8,835) $ (13,491) United States 24,416 57,933 74,988 Other countries 97,256 104,302 76,379 ------------ ------------ ------------ $ 118,312 $ 153,400 $ 137,876 ============ ============ ============

12 12 UNITED DOMINION INDUSTRIES LIMITED Notes to Consolidated Financial Statements, Restated (note 2) December 31, 2000, 1999 and 1998 (Amounts in Thousands of U.S. Dollars) The tax effects of temporary differences that give rise to deferred tax assets and deferred tax liabilities at December 31, 2000 and 1999 are as follows: 2000 1999 --------- --------- Deferred tax assets: Net operating loss carryforwards $ 25,355 $ 22,909 Difference between tax on distributed and undistributed earnings 5,549 4,580 Accrued expenses not currently deductible 86,523 81,683 Other 2,913 2,975 --------- --------- 120,340 112,147 Less: valuation allowance (5,755) (4,080) --------- --------- Total deferred tax assets 114,585 108,067 --------- --------- Deferred tax liabilities: Plant and equipment, principally due to differences in basis and depreciation (36,559) (35,081) Intangible assets, principally due to differences in basis and amortization (16,597) (13,601) Inventory, principally due to differences in basis (9,733) (6,427) Other (7,160) (15,954) --------- --------- Total deferred tax liabilities (70,049) (71,063) --------- --------- Net deferred tax asset $ 44,536 $ 37,004 ========= ========= Subsequently recognized tax benefits relating to the valuation allowance for deferred tax assets as of December 31, 2000 will be recorded in income. Based on the company's historical and current earnings, management believes it is more likely than not that the company will realize the benefit of the remaining deferred tax assets that are not subject to the valuation allowance. The difference between the company's effective income tax rate and the statutory rate on net income before goodwill charges is reconciled below. 2000 1999 1998 -------- -------- -------- Income tax expense at U.S. statutory rate of 35% $ 41,409 $ 53,690 $ 48,257 State income taxes 1,725 2,792 3,563 Canadian tax rate changes 3,056 -- -- Canadian and foreign tax refunds and tax settlements (1,917) (4,984) (23,838) Canadian and foreign income taxes at less than U.S. statutory rate (7,924) (6,962) (7,806) Other 2,423 892 2,590 -------- -------- -------- $ 38,772 $ 45,428 $ 22,766 ======== ======== ========

13 13 UNITED DOMINION INDUSTRIES LIMITED Notes to Consolidated Financial Statements, Restated (note 2) December 31, 2000, 1999 and 1998 (Amounts in Thousands of U.S. Dollars) The company has Canadian net operating loss carryforwards for income tax purposes of approximately $49,000 which expire in 2003 through 2007. "Other Assets" in the Consolidated Statements of Financial Position include $5,549 and $4,580 at December 31, 2000 and 1999, respectively, primarily representing German taxes refundable to the company when German earnings are repatriated. Income taxes paid totaled $37,096, $2,224 and $53,085 for 2000, 1999 and 1998, respectively. 5. Inventories Inventories at December 31, 2000 and 1999 are summarized as follows: 2000 1999 -------- -------- Raw materials $145,662 $131,444 Work-in-process 95,093 101,122 Finished products 164,017 158,088 -------- -------- $404,772 $390,654 ======== ======== 6. Fixed Assets Fixed assets are summarized as follows: Accumulated Cost Depreciation Net -------- ------------- ----------- December 31, 2000: Land $ 15,650 $ -- $ 15,650 Plant 151,898 58,348 93,550 Machinery and equipment 465,330 250,917 214,413 Construction in progress 18,654 -- 18,654 -------- -------- -------- $651,532 $309,265 $342,267 ======== ======== ======== December 31, 1999: Land $ 12,385 $ -- $ 12,385 Plant 143,508 50,479 93,029 Machinery and equipment 431,743 216,112 215,631 Construction in progress 29,856 -- 29,856 -------- -------- -------- $617,492 $266,591 $350,901 ======== ======== ========

14 14 UNITED DOMINION INDUSTRIES LIMITED Notes to Consolidated Financial Statements, Restated (note 2) December 31, 2000, 1999 and 1998 (Amounts in Thousands of U.S. Dollars) 7. Debt Short-term At December 31, 2000 and 1999, the company's notes payable to banks totaled $102,987 and $103,544, respectively, with weighted average interest rates of 6.5% and 6.7%, respectively. At December 31, 2000, the company had available approximately $92,000 of unused short-term borrowing facilities. Long-term The company's long-term debt at December 31, 2000 and 1999 is summarized as follows: 2000 1999 -------- -------- Revolving credit bank notes $275,289 $101,192 Senior notes due 2002 - 6.80% 46,800 70,200 Senior notes due 2002 - 8.25% 25,000 37,500 Senior notes due 2007 - 7.67% 50,000 50,000 Senior notes due 2008 - 6.64% 110,000 110,000 Commercial paper 134,358 172,470 Multi-currency revolving notes 15,477 36,375 Other notes payable in installments Through 2020 at interest rates varying From 2.1% to 10.0% 51,241 59,851 -------- -------- 708,165 637,588 Less current portion of long-term debt 49,898 46,082 -------- -------- $658,267 $591,506 ======== ======== The company has a revolving credit agreement (revolver) with a group of banks. This agreement gives the company the ability to borrow up to $450,000 through July 2002. Borrowings under the revolver are available in U.S. dollars and Deutsche Marks (DM) at the U.S. prime interest rate or LIBOR plus a margin. The margin ranges from 0.170% to 0.325% and is determined by a leverage ratio and the amount of utilization under the credit facility. The weighted average interest rates on the borrowings under this agreement were 6.3% and 4.6% during 2000 and 1999, respectively. At December 31, 2000, $45,289 of the revolver borrowings were denominated in DM. The DM borrowings are designated as a hedge of the company's net investment in German subsidiaries and foreign exchange gains and losses on these borrowings are reflected in "Equity adjustment from foreign currency translation" in the Consolidated Statements of Financial Position. The company also pays an annual facility fee on the amount of this facility ranging from 0.080% to 0.125%, depending upon a leverage ratio. The company further pays an annual utilization fee on the amount of loans outstanding of up to 0.05%, depending on leverage and amount of utilization. At December 31, 2000, the margin, facility fee and utilization fee were 0.25%, 0.10% and 0%, respectively. The 6.80% senior notes are currently payable in annual installments of $23,400. The 8.25% senior notes are currently payable in annual installments of $12,500. The 7.67% senior notes are payable in annual installments of $10,000 beginning in 2003. The 6.64% senior notes are payable in full in 2008. During 1998, the company entered into an open-ended program whereby up to Cdn $250,000 of commercial paper can be issued. While the commercial paper is typically due in 30 - 60 days, with a maximum maturity

15 15 UNITED DOMINION INDUSTRIES LIMITED Notes to Consolidated Financial Statements, Restated (note 2) December 31, 2000, 1999 and 1998 (Amounts in Thousands of U.S. Dollars) of one year, it is the company's intention to continually refinance these borrowings. The company maintains unutilized long-term committed credit facilities under the revolver sufficient to refinance the commercial paper outstanding. Therefore, the amounts outstanding at December 31, 2000 (U.S. $134,358) are included in long-term debt in the Consolidated Statements of Financial Position. Interest rates on the commercial paper ranged from 5.9% to 6.2%, 5.1% to 5.7% and 4.7% to 6.1% with a weighted average of 5.9%, 5.3% and 5.2% in 2000, 1999 and 1998, respectively. The company has a $40,000 multi-currency revolving credit agreement with a bank which expires in March 2001. The agreement allows the company to designate subsidiaries to borrow under the facility at LIBOR plus a margin and facility fees ranging from 0.70% to 1.05%, depending upon a leverage ratio. At December 31, 2000, $15,477 had been borrowed under this facility. This amount is included in long-term debt since the company has the capacity and intention to refinance this facility and extend its term prior to the expiration of the agreement. At December 31, 2000, the company had available approximately $30,000 of unused long-term revolving credit commitments. Various loan agreements contain covenants with respect to net worth, indebtedness and other items. The company has complied with all provisions of these agreements at December 31, 2000. Future principal payments on long-term debt are as follows: 2001 $ 49,898 2002 464,012 2003 11,245 2004 10,940 2005 14,690 Thereafter 157,380 ---------- $ 708,165 ========== 8. Interest Expense - Net Net interest expense is composed of the following: 2000 1999 1998 -------- -------- -------- Interest on long-term debt $ 46,258 $ 38,217 $ 35,749 Other interest expense 7,602 5,319 3,117 Interest income (3,841) (3,358) (3,116) -------- -------- -------- $ 50,019 $ 40,178 $ 35,750 ======== ======== ======== Net interest paid totaled $49,461, $43,018, and $33,082 for 2000, 1999 and 1998, respectively.

16 16 UNITED DOMINION INDUSTRIES LIMITED Notes to Consolidated Financial Statements, Restated (note 2) December 31, 2000, 1999 and 1998 (Amounts in Thousands of U.S. Dollars) 9. Capital Stock The company is incorporated under the Canada Business Corporations Act and is authorized to issue an unlimited number of common and preferred shares of no par value. The company has a stock option and restricted stock plan under which options for a term not exceeding 10 years may be granted to key employees and directors to purchase common shares of the company at a price not less than 100% of their fair market value at the date of grant. Common shares reserved for exercise of these options or the issuance of restricted stock may not at any time exceed 10% of the number of common shares then outstanding. Transactions involving the plan are summarized below. Options ----------------------------------- Shares Option Weighted- Available for Shares Option Price Average Future Grant Outstanding Per Share Exercise Price ---------------------------------- ---------------------------------- (Cdn.) (Cdn.) Balance at December 31, 1997 1,083,222 2,129,720 $9.375 - $38.87 $ 28.02 Exercised -- (445,422) 9.375 - 36.65 23.60 Granted (435,250) 435,250 28.95 - 40.00 35.26 Expired 21,100 (21,100) 26.375 - 36.65 29.76 --------- --------- Balance at December 31, 1998 669,072 2,098,448 9.375 - 40.00 30.44 Exercised -- (103,400) 12.75 - 26.625 22.26 Granted (589,625) 589,625 29.80 - 32.775 30.03 Restricted stock issued (113,190) -- Additional shares authorized 1,197,493 -- --------- --------- Balance at December 31, 1999 1,163,750 2,584,673 9.375 - 40.00 30.67 Exercised -- (13,984) 19.75 - 29.80 21.00 Granted (616,500) 616,500 28.95 - 28.95 28.95 Restricted stock issued (25,000) -- Options cancelled 137,169 (137,169) --------- --------- Balance at December 31, 2000 659,419 3,050,020 9.375 - 40.00 30.31 ========= ========= Exercisable at December 31, 2000 2,142,002 $9.375 - $40.00 $ 30.47 ========= The following table provides certain information with respect to stock options outstanding at December 31, 2000. Weighted- Weighted- average Stock options average remaining Range of exercise price Outstanding exercise price contractual life ----------------------- ------------- -------------- ---------------- (Cdn.) (years) Under $20.00 (Cdn.) 111,550 $ 12.71 1.6 $20.00 to $30.00 (Cdn.) 1,977,142 28.36 6.9 Over $30.00 (Cdn.) 961,328 36.36 6.2 --------- -------- --- 3,050,020 $ 30.31 6.5 ========= ======== ===

17 17 UNITED DOMINION INDUSTRIES LIMITED Notes to Consolidated Financial Statements, Restated (note 2) December 31, 2000, 1999 and 1998 (Amounts in Thousands of U.S. Dollars) The following table provides certain information with respect to stock options exercisable at December 31, 2000. Weighted- Stock options average Range of exercise price exercisable exercise price ----------------------- ------------- -------------- (Cdn.) Under $20.00 (Cdn.) 111,550 $ 12.71 $20.00 to $30.00 (Cdn.) 1,147,864 27.71 Over $30.00 (Cdn.) 882,588 36.31 --------- ------- 2,142,002 $ 30.47 ========= ======= The restricted stock issued during 2000 had a fair value at the date of grant of $499 or U.S. $19.97 per share. The sale of this stock is restricted for five years from the date of grant. Restricted stock was also issued during 1999 and 1996 which is restricted for periods up to six and five years, respectively, from the date of the grant. Compensation expense related to all restricted shares is recorded over the applicable restriction period and amounted to $1,914, $1,204 and $1,984 in 2000, 1999 and 1998, respectively. The company's management incentive plans contain a feature that allows participants the opportunity to elect to receive restricted common shares in lieu of a portion of their cash bonuses. The number of shares issued is increased by a multiple in order to provide participants an incentive to elect to receive shares. A total of 46,775, 55,365 and 43,845 shares were issued in 2000, 1999 and 1998, respectively, to participants who made such share elections. 10. Benefit Plans The company and its subsidiaries have defined benefit pension plans covering approximately one half of all employees. Plans covering eligible salaried employees call for benefits to be paid at retirement based primarily upon years of service and their compensation rates near retirement. Plans covering hourly employees generally provide benefits of stated amounts for each year of service. Contributions to the plans reflect benefits attributed to employees' services to date and also for benefits expected to be earned in the future. Assets of the plans consist primarily of cash and cash equivalents, common and preferred stocks, government bonds, investment-grade corporate bonds and other fixed income investments. The company provides, through non-qualified plans, supplemental pension payments in excess of the qualified plan limits imposed by income tax regulations. The company also provides certain postretirement health care and life insurance benefits to a limited number of employees. These non-qualified and other postretirement plans are unfunded.

18 18 UNITED DOMINION INDUSTRIES LIMITED Notes to Consolidated Financial Statements, Restated (note 2) December 31, 2000, 1999, and 1998 (Amounts in Thousands of U.S. Dollars) The following tables set forth the change in projected benefit obligation, change in plan assets and the funded status of the company's North American benefit plans as of December 31, 2000 and 1999. Pension Benefits Other Benefits ---------------------- ------------------------ 2000 1999 2000 1999 --------- --------- --------- ----------- Change in benefit obligation Benefit obligation at beginning of year $ 199,515 $ 192,615 $ 54,571 $ 51,144 Service cost 4,816 4,982 1,113 974 Interest cost 16,100 14,213 4,201 3,636 Plan participants' contributions -- 5 -- -- Plan amendments 17 -- 3,285 799 Actuarial (gain) loss 1,635 (1,750) 4,226 473 Acquisition 6,638 -- -- -- Benefits paid (11,601) (10,550) (2,641) (2,455) --------- --------- --------- --------- Benefit obligation at end of year 217,120 199,515 64,755 54,571 --------- --------- --------- --------- Change in plan assets Fair value of plan assets at beginning of year 230,925 212,175 Return on plan assets (9,348) 27,541 Acquisition 10,729 -- Employer contribution 2,492 1,754 Plan participants' contributions -- 5 Benefits paid (11,601) (10,550) --------- --------- Fair value of plan assets at end of year 223,197 230,925 --------- --------- Funded status 6,077 31,410 (64,755) (54,571) Unrecognized net actuarial (gain) loss (1,696) (33,668) 8,710 9,617 Unrecognized prior service cost 2,807 3,220 3,740 3,733 Unrecognized net transition obligation (194) 18 1,168 1,335 --------- --------- --------- --------- Prepaid (accrued) benefit cost $ 6,994 $ 980 $ (51,137) $ (39,886) ========= ========= ========= ========= The weighted-average discount rate used to measure the projected benefit obligation is 7.75% and 7% for 2000 and 1999, respectively, the average rate of increase in future compensation levels is approximately 4% for 2000 and 1999 and the expected long-term rate of return on assets is 9.5% and 8.5% for 2000 and 1999, respectively. The annual rate of increase in the per capita cost of covered postretirement benefits (health care cost trend rate) is assumed to be 5.5% in 2000 with a decrease to 5% for 2001 and all future years. The company amortizes prior service cost and unrecognized gains and losses using the straight-line method over the average future service life of active participants.

19 19 UNITED DOMINION INDUSTRIES LIMITED Notes to Consolidated Financial Statements, Restated (note 2) December 31, 2000, 1999 and 1998 (Amounts in Thousands of U.S. Dollars) The components of net periodic benefit cost are as follows: Pension Benefits Other Benefits -------------------------------- ------------------------------ 2000 1999 1998 2000 1999 1998 -------- -------- -------- -------- -------- -------- Service cost $ 4,816 $ 4,982 $ 4,492 $ 1,113 $ 974 $ 1,011 Interest cost 16,100 14,213 13,993 4,201 3,636 3,200 Expected return on assets (20,858) (17,416) (16,067) -- -- -- Amortization (2,834) 956 916 2,129 2,302 1,933 -------- -------- -------- -------- -------- -------- Net periodic benefit cost $ (2,776) $ 2,735 $ 3,334 $ 7,443 $ 6,912 $ 6,144 ======== ======== ======== ======== ======== ======== Excluded from the other benefits net periodic cost for the year ended December 31, 2000 is $6,448 of charges related to the settlement of Supplemental Executive Retirement Plan liabilities resulting from the early retirement of the company's Chief Executive Officer (note 3). A number of the company's operating units have defined contribution plans pursuant to Section 401(k) of the U.S. Internal Revenue Code. The total expense of these plans was $6,094, $5,522 and $5,475 for the years ended December 31, 2000, 1999 and 1998, respectively. The company's German operations have pension plans, which in accordance with applicable laws, are unfunded. The weighted average discount rate used to measure the projected benefit obligation of the German plans is 6% and 7% for 2000 and 1999, respectively, and the rate of increase in future compensation levels is 3.5% for 2000 and 1999. The status of the German plans at December 31, 2000 and 1999 as reflected in the Consolidated Statements of Financial Position is as follows: 2000 1999 -------- -------- Benefit obligation at beginning of year $ 24,966 $ 17,992 Service cost 492 433 Interest cost 1,379 1,291 Actuarial loss 139 1,138 Acquisition -- 7,330 Settlements (9) (56) Benefits paid (701) (687) Foreign exchange rate changes (4,349) (2,475) -------- -------- Benefit obligation at end of year $ 21,917 $ 24,966 ======== ======== Funded status $(21,917) $(24,966) Unrecognized net actuarial loss 190 69 Unrecognized net transition obligation 1,297 1,692 -------- -------- Accrued benefit cost $(20,430) $(23,205) ======== ========

20 20 UNITED DOMINION INDUSTRIES LIMITED Notes to Consolidated Financial Statements, Restated (note 2) December 31, 2000, 1999 and 1998 (Amounts in Thousands of U.S. Dollars) The components of net periodic benefit cost for the German plans are as follows: 2000 1999 1998 ------ ------ ------ Service cost $ 492 $ 433 $ 376 Interest cost 1,379 1,291 1,126 Amortization of prior service cost 101 128 134 ------ ------ ------ Net periodic benefit cost $1,972 $1,852 $1,636 ====== ====== ====== The company has a number of other benefit plans, primarily foreign, that are not significant individually or in the aggregate. 11. Commitments and Contingencies The company is involved in a number of pending legal proceedings in which damages and other relief are sought. It is impossible at this time for the company to predict with any certainty the outcome of such litigation. However, management is of the opinion, based upon information presently available, that it is unlikely that any liability, to the extent not provided for through insurance or otherwise, would be material in relation to the company's consolidated financial position. The company has been named along with many other parties in a number of proceedings arising out of alleged releases or contributions of hazardous substances into the environment. Those proceedings include lawsuits alleging asbestos related personal injury and administrative proceedings maintained by federal and state agencies involving environmental remediation of real property. None of the proceedings is, in the opinion of management, either individually or viewed in connection with all the proceedings, material to the company's liquidity, consolidated operating results, or consolidated financial position. While the company has participated and in the future will continue to participate in remediation efforts at a number of locations in connection with certain of the administrative proceedings, it does not believe that material monetary sanctions will be imposed against it as a result of any of the proceedings. The company has an agreement to sell certain qualifying accounts receivable to a financial institution on a revolving basis. The amount sold as of December 31, 2000 and 1999 was $65,000 and $62,900, respectively. Fifty percent of the amount sold at any time must be supported by available credit under the revolver. This program was terminated in January 2001 and the company repurchased the related receivables using borrowings under its existing credit facilities. Certain of the company's operations have entered into agreements with third party finance companies to provide wholesale financing of their product to distributors. The company is responsible for the repurchase of new product in the event it is acquired by the finance companies through repossession. At December 31, 2000, the total amount of new product financed under these agreements is approximately $19,000. At December 31, 2000, the company also has sold approximately $12,000 of receivables under recourse agreements. Reserves have been provided for any anticipated losses under these agreements. In the normal course of business, letters of credit and bank guarantees are issued by banks for account of the company, which in the opinion of management, have no material effect on the company's financial position. At December 31, 2000, the company was contingently liable for $96,000 under these arrangements. The company does not trade in financial instruments and does not engage in speculation. However, it does enter into a limited range and number of derivative financial instrument contracts. The company has a program in place to manage foreign currency risk. As part of that program, the company has entered into a

21 21 UNITED DOMINION INDUSTRIES LIMITED Notes to Consolidated Financial Statements, Restated (note 2) December 31, 2000, 1999 and 1998 (Amounts in Thousands of U.S. Dollars) limited number of foreign currency forward exchange contracts to hedge foreign currency transactions or intercompany loan payments. The company's foreign exchange contracts do not subject the company to risk due to exchange rate movements because gains and losses on these contracts offset losses and gains on the transactions being hedged. As of December 31, 2000, several of the company's foreign operations had approximately $83,000 of forward exchange contracts outstanding which are designed to convert the receipt of foreign currencies from third party and intercompany sales into their functional currency. The forward exchange contracts generally have maturities which do not exceed one year and exchange rates are agreed to at the inception of the contracts. The company has operating leases covering machinery, equipment, office, warehouse and manufacturing facilities. Future minimum lease payments under operating leases at December 31, 2000 are as follows: 2001 $ 19,413 2002 15,841 2003 9,213 2004 5,699 2005 3,946 Thereafter 6,652 --------- $ 60,764 =========

22 22 UNITED DOMINION INDUSTRIES LIMITED Notes to Consolidated Financial Statements, Restated (note 2) December 31, 2000, 1999 and 1998 (Amounts in Thousands of U.S. Dollars) 12. Business Segments The company operates in the following industry segments: Flow Technology - air dehydration and filtration equipment and related parts and services for compressed air systems; valves, strainers and back flow prevention products; water system and submersible petroleum pumps; leak detection equipment; rotary positive displacement pumps and related fluid handling equipment for sanitary and industrial markets; ice cream equipment; high precision metering pumps, analyzing equipment and integrated blending systems for process industries; water cooling towers and related components; fiberglass panels and pultruded products and cast-iron boilers. Machinery - light and heavy duty soil, sanitary landfill and asphalt compaction equipment; asphalt recyclers; graders; concrete placement and treatment equipment; light construction equipment; tillage equipment; foraging wagons; and grain drills and augers. Specialty Engineered Products - steel doors and frames; electric resistance heating products; commercial/industrial fans, air curtains and building products; machined critical parts for aerospace markets; metal forming equipment; powered roller conveyor systems; dock levelers, truck restraints and dock seals and shelters. Test Instrumentation - heat process and environmental conditioning equipment; electrical test and measurement equipment; refrigerant leak detection and recovery systems; vibration test systems; portable pipe and cable locators; horizontal boring guidance systems; inspection cameras for pipes and ducts; integrated assembly systems used in automobile and other manufacturing applications; scales; high precision carbide tooling and process controls, tools and equipment for measurement, gauging and inspection. The significant accounting policies of the above segments are the same as those described in note 1. Intersegment sales are recorded at current market prices. The company does not include income taxes or net interest expense in the determination of segment profit. Information about the company's segments, certain geographic information and a reconciliation of segment profit to net income is shown below.

23 23 UNITED DOMINION INDUSTRIES LIMITED Notes to Consolidated Financial Statements, Restated (note 2) December 31, 2000, 1999 and 1998 (Amounts in Thousands of U.S. Dollars) Year ended December 31, 2000 ------------------------------------------------------------------------------------------ (3) Sales (2) (3) Depreciation (1) ------------------------------------- Segment Capital and Assets Gross Intersegment Net Profit Expenditures Amortization ------------------------------------------------------------------------------------------ Industry Segment Flow Technology $1,022,523 $1,047,756 $ -- $1,047,756 $ 69,181 $ 20,060 $ 44,229 Machinery 263,403 471,948 -- 471,948 50,625 10,910 9,734 Specialty Engineered 424,982 511,848 32 511,816 54,826 13,105 16,371 Products Test Instrumentation 356,610 302,477 -- 302,477 15,570 7,261 9,938 ------------------------------------------------------------------------------------------ 2,067,518 2,334,029 32 2,333,997 190,202 51,336 80,272 Divested businesses -- 32,365 138 32,227 982 175 542 ------------------------------------------------------------------------------------------ $2,067,518 $2,366,394 $ 170 $2,366,224 $ 191,184 $ 51,511 $ 80,814 ========================================================================================== (4) (6) Long-lived (5) Segment Assets Net Sales Profit ------------------------------------ Geographic Information United States $ 972,363 $ 1,583,947 $ 128,021 Europe 246,869 431,960 35,690 Other Countries 52,411 318,090 26,491 Divested Businesses -- 32,227 982 ------------------------------------ $ 1,271,643 $ 2,366,224 $ 191,184 ==================================== Reconciliation of segment profit to net income Segment profit $ 191,184 Corporate expenses (23,147) Interest - net (50,019) Loss on sale of businesses (1,147) Other expense (23,105) ----------- Income before income taxes (7) 93,766 Income tax provision (7) (37,216) ----------- Net income $ 56,550 =========== (1) Assets exclude $257,859 of corporate amounts. (2) Includes restructuring costs of $16,719, $350, $3,338, and $12,564 for the Flow Technology, Machinery Specialty Engineered Products and Test Instrumentation segments, respectively (note 3). Flow Technology also includes $3,700 of charges primarily related to a product replacement program while Specialty Engineered Products includes a $1,914 charge resulting from a product liability claim (note 3). (3) Capital expenditures and depreciation and amortization exclude $2,273 and $1,107, Respectively, of corporate amounts. (4) Long-lived assets consist of fixed assets, goodwill and other intangible assets. (5) Attributed to countries based on location of customer. (6) Attributed to countries based on location of customer. Includes restructuring costs of $28,048, $4,260 and $663 in the United States, Europe and other countries, respectively (note 3). (7) In the Consolidated Statements of Income, goodwill charges, net of tax, are shown separately while for Segment reporting purposes the goodwill charges are included in segment profit and the related tax Benefit is included in the income tax provision.

24 24 UNITED DOMINION INDUSTRIES LIMITED Notes to Consolidated Financial Statements, Restated (note 2) December 31, 2000, 1999 and 1998 (Amounts in Thousands of U.S. Dollars) Year ended December 31, 1999 ------------------------------------------------------------------------------------ (3) Sales (2) (3) Depreciation (1) ----------------------------------- Segment Capital and Assets Gross Intersegment Net Profit Expenditures Amortization ------------------------------------------------------------------------------------------ Industry Segment Flow Technology $1,041,831 $ 992,466 $ -- $ 992,466 $ 91,682 $ 22,404 $ 42,499 Machinery 274,544 456,348 -- 456,348 50,423 13,952 8,802 Specialty Engineered 313,761 370,914 -- 370,914 42,312 14,773 12,491 Products Test Instrumentation 307,020 278,651 -- 278,651 15,327 8,894 8,803 ---------------------------------------------------------------------------------------- 1,937,156 2,098,379 -- 2,098,379 199,744 60,023 72,595 Divested businesses 22,089 52,560 2,601 49,959 1,838 939 789 ---------------------------------------------------------------------------------------- $1,959,245 $2,150,939 $ 2,601 $2,148,338 $ 201,582 $ 60,962 $ 73,384 ======================================================================================== (4) (6) Long-lived (5) Segment Assets Net Sales Profit ------------------------------------ Geographic Information United States $ 938,910 $1,391,109 $ 126,998 Europe 241,577 424,559 49,051 Other Countries 41,170 282,711 23,695 Divested Businesses 9,288 49,959 1,838 ---------- ---------- ---------- $1,230,945 $2,148,338 $ 201,582 ========== ========== ========== Reconciliation of segment profit to net income Segment profit $ 201,582 Corporate expenses (24,517) Interest - net (40,178) Other expense (6,555) ---------- Income before income taxes (7) 130,332 Income tax provision (7) (44,006) ---------- Net income $ 86,326 ========== (1) Assets exclude $270,938 of corporate amounts. (2) Includes restructuring costs of $7,712, $4,620, $9,084 and $782 for the Flow Technology, Specialty Engineered Products and Test Instrumentation segments and divested businesses, respectively (note 3). (3) Capital expenditures and depreciation and amortization exclude $316 and $1,333, Respectively, of corporate amounts. (4) Long-lived assets consist of fixed assets, goodwill and other intangible assets. (5) Attributed to countries based on location of customer. (6) Attributed to countries based on location of customer. Includes restructuring costs of $20,879, $273, $264 and $782 in the United States, Europe, other countries and divested businesses, respectively (note 3). (7) In the Consolidated Statements of Income, goodwill charges, net of tax, are shown separately while for segment reporting purposes the goodwill charges are included in segment profit and the related tax benefit is included in the income tax provision.

25 25 UNITED DOMINION INDUSTRIES LIMITED Notes to Consolidated Financial Statements, Restated (note 2) December 31, 2000, 1999 and 1998 (Amounts in Thousands of U.S. Dollars) Year ended December 31, 1998 -------------------------------------------------------------------------------------------- (3) Sales (2) (3) Depreciation (1) ------------------------------------- Segment Capital and Assets Gross Intersegment Net Profit Expenditures Amortization -------------------------------------------------------------------------------------------- Industry Segment Flow Technology $ 943,703 $ 945,828 $ 16 $ 945,812 $ 94,702 $ 21,145 $ 38,161 Machinery 272,115 454,460 -- 454,460 50,804 12,270 7,287 Specialty Engineered Products 250,086 331,332 30 331,302 38,031 10,355 10,295 Test Instrumentation 290,197 242,834 -- 242,834 18,473 4,168 7,319 ---------------------------------------------------------------------------------------- 1,756,101 1,974,454 46 1,974,408 202,010 47,938 63,062 Divested businesses 24,487 45,966 -- 45,966 2,601 496 672 ---------------------------------------------------------------------------------------- $1,780,588 $2,020,420 $ 46 $2,020,374 $ 204,611 $ 48,434 $ 63,734 ======================================================================================== (4) (6) Long-lived (5) Segment Assets Net Sales Profit -------------------------------------- Geographic Information United States $ 921,415 $1,334,189 $ 148,758 Europe 151,292 371,469 29,596 Other Countries 10,804 268,750 23,656 Divested businesses 9,162 45,966 2,601 ------------------------------------ $1,092,673 $2,020,374 $ 204,611 ==================================== Reconciliation of segment profit to net income Segment profit $204,611 Corporate expenses (30,920) Corporate restructuring charges (6,788) Interest - net (35,750) Other expense (12,048) -------- Income before income taxes (7) 119,105 Income tax provision (7) (21,488) -------- Net income $ 97,617 ======== (1) Assets exclude $294,271 of corporate amounts. (2) Includes restructuring costs of $7,786, $275, $443, and $1,044 for the Flow Technology, Machinery, Specialty Engineered Products and Test Instrumentation segments, respectively. Flow Technology also includes an $11,285 gain on sale of a product line (note 3) while Specialty Engineered Products includes a $6,000 charge related to settlement of litigation. (3) Capital expenditures and depreciation and amortization exclude $3,307 and $1,131, respectively, of corporate amounts. (4) Long-lived assets consist of fixed assets, goodwill and other intangible assets. (5) Attributed to countries based on location of customer. (6) Attributed to countries based on location of customer. Includes restructuring costs of $6,614, $2,346 and $588 in the United States, Europe and other countries, respectively (note 3). (7) In the Consolidated Statements of Income, goodwill charges, net of tax, are shown separately while for segment reporting purposes the goodwill charges are included in segment profit and the related tax benefit is included in the income tax provision.

26 26 UNITED DOMINION INDUSTRIES LIMITED Notes to Consolidated Financial Statements, Restated (note 2) December 31, 2000, 1999 and 1998 (Amounts in Thousands of U.S. Dollars) 13. Differences Between Canadian and United States Accounting Principles Existing United States Accounting Differences Generally accepted accounting principles (GAAP) in Canada allow for the reduction of stated capital of outstanding common shares with a corresponding offset to deficit. This reclassification, which the company made in 1990, is not permitted by United States GAAP and would result in an increase in capital stock and a reduction in retained earnings at December 31, 2000 and 1999 of $128,093. Canadian GAAP also permits expenses related to the issue of capital stock, net of income taxes, to be deducted from retained earnings while United States GAAP requires such expenses to be deducted from the proceeds of stock issuances credited to capital stock. This reclassification would reduce capital stock and increase retained earnings by $20,905 at December 31, 2000 and 1999. Canadian GAAP requires the measurement of income tax liabilities and assets using substantively enacted tax rates and laws. A Canadian Federal income tax rate change has been proposed effective January 1, 2001. Since this rate change is considered substantively enacted, it results in a $2,422 increase in income tax expense and a corresponding decrease in other (non-current) assets as of December 31, 2000. Under United States GAAP, this rate change would not impact the measurement of tax balances until it is passed into law. Canadian GAAP allows for the capitalization and subsequent amortization of start-up costs for new facilities and joint ventures. Effective January 1, 1999, United States GAAP requires the expensing of these costs as incurred as well as the expensing of any previously capitalized costs. Under United States GAAP, if the accumulated benefit obligation exceeds the fair value of benefit plan assets, a liability must be recognized in the statement of financial position that is at least equal to the unfunded accumulated benefit obligation. To the extent that the additional minimum liability is created by a plan improvement, an intangible asset can be established. Any additional minimum liability not covered by an intangible asset will cause a net of tax reduction in accumulated other comprehensive income. Application of United States GAAP would require recording approximately $7,000 and $11,000 of additional minimum liability as of December 31, 2000 and 1999, respectively, with an offsetting intangible asset of approximately $5,000 in both years. The application of United States GAAP previously discussed would result in increases in other intangible assets of approximately $5,000, other (non-current) assets of approximately $2,000, other (non-current) liabilities of approximately $6,000 and common shares of approximately $107,000 and decreases in goodwill of approximately $2,000, accrued liabilities of approximately $1,000, retained earnings of approximately $106,000 and accumulated other comprehensive income of approximately $1,000 as of December 31, 2000. At December 31, 1999, the application of United States GAAP would result in increases in other intangible assets of approximately $5,000, other (non-current) liabilities of approximately $8,000 and common shares of approximately $107,000 and decreases in other (non-current) assets of approximately $1,000, goodwill of approximately $2,000, accrued liabilities of approximately $1,000, retained earnings of approximately $109,000 and accumulated other comprehensive income of approximately $3,000.

27 27 UNITED DOMINION INDUSTRIES LIMITED Notes to Consolidated Financial Statements, Restated (note 2) December 31, 2000, 1999 and 1998 (Amounts in Thousands of U.S. Dollars) The income statement format presented by the company as permitted by CICA Handbook Section 1580, Business Combinations is not allowed under United States GAAP. Presentation under United States GAAP requires that the gross goodwill charges be included as a component of operating income and the associated income tax benefit be included as a component of the income tax provision. This reclassification does not affect reported net income. United States GAAP requires the dual presentation of basic and diluted earnings per share. Diluted earnings per share reflects the assumed exercise of dilutive securities such as the company's stock options. The following table reflects the impact on net income, weighted average shares outstanding and net earnings per share of complying with United States GAAP as it pertains to the items noted above. 2000 1999 1998 -------- -------- -------- Net income under Canadian GAAP $ 56,550 $ 86,326 $ 97,617 Increased (decreased) by: Canadian tax rate change 2,422 -- -- Start-up costs 273 (729) -- Other 31 31 31 -------- -------- -------- Net income under United States GAAP $ 59,276 $ 85,628 $ 97,648 ======== ======== ======== Weighted average shares outstanding (000's) Canadian GAAP 39,115 39,642 40,755 Less restricted stock outstanding (198) (177) (123) -------- -------- -------- United States GAAP - Basic 38,917 39,465 40,632 Effect of dilutive securities: Restricted stock 198 177 123 Employee stock options 93 176 281 -------- -------- -------- United States GAAP - Diluted 39,208 39,818 41,036 ======== ======== ======== Net earnings per share Canadian GAAP $ 1.45 $ 2.18 $ 2.40 ======== ======== ======== United States GAAP - Basic $ 1.52 $ 2.17 $ 2.40 ======== ======== ======== United States GAAP - Diluted $ 1.51 $ 2.15 $ 2.38 ======== ======== ========

28 28 UNITED DOMINION INDUSTRIES LIMITED Notes to Consolidated Financial Statements, Restated (note 2) December 31, 2000, 1999, and 1998 (Amounts in Thousands of U.S. Dollars) Impending United States Accounting Differences Effective January 1, 2001, United States GAAP will standardize the accounting for all derivative instruments. Under the new rules, entities are required to carry all derivative instruments in the statement of financial position at fair value. The accounting for changes in the fair value of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship and, if so, on the reason for holding it. The company has a program in place to manage foreign currency risk. As part of that program, the company has entered into a limited number of foreign currency forward exchange contracts to act as a hedge of foreign currency denominated transactions (note 11). Adoption of these new rules would result in increases in other current assets of approximately $1,000 and accrued liabilities of approximately $2,000 and a decrease in accumulated other comprehensive income of approximately $1,000 as of December 31, 2000. Additional United States Disclosure Requirements United States GAAP requires reporting on comprehensive income. For the years ended December 31, 2000, 1999 and 1998, comprehensive income, as defined under United States GAAP, is as follows. 2000 1999 1998 -------- -------- -------- Net income under United States GAAP $ 59,276 $ 85,628 $ 97,648 Minimum pension liability adjustment, net of tax 1,991 250 1,039 Foreign currency translation adjustments (23,562) (6,933) (931) -------- -------- -------- Comprehensive income under United States GAAP $ 37,705 $ 78,945 $ 97,756 ======== ======== ======== Income taxes have not been provided on foreign currency translation adjustments because the net assets invested in the company's foreign operations are considered to be permanently invested. The company's accounting for stock options is essentially the same as the intrinsic value method prescribed by existing accounting pronouncements effective in the United States. United States GAAP encourages, but does not require companies to record compensation cost for stock option plans at fair value and requires the disclosure of pro forma net income and earnings per share information as if the company had accounted for its employee stock options under the fair value method. Accordingly, the fair value of the options issued have been estimated at the date of grant using a Black-Scholes option pricing model with the following assumptions for 2000, 1999 and 1998, respectively: risk-free interest rates of 6.8%, 5.2% and 5.1%; dividend yields of 1.8%, 1.8% and 1.6%; volatility factors of the expected market price of the company's common stock of .36, .37 and .39; and a weighted-average expected life of the options of eight years. The weighted-average grant-date fair values of options issued in 2000, 1999 and 1998 was $8.72, $8.28 and $12.60, respectively. For purposes of pro forma disclosures, the estimated fair value of the options is amortized to expense over the options' vesting period that ranges from six months to three years. Assuming the company had accounted for its stock options issued under the fair value method, United States GAAP pro forma net income and basic and diluted earnings per share for the years ended December 31, 2000, 1999 and 1998 would have been $56,100, $1.44 and $1.43; $82,556, $2.09 and $2.07; and $94,486, $2.33 and $2.30, respectively.

29 29 UNITED DOMINION INDUSTRIES LIMITED Notes to Consolidated Financial Statements, Restated (note 2) December 31, 2000, 1999 and 1998 (Amounts in Thousands of U.S. Dollars) United States GAAP requires disclosure of changes during the year in non-cash working capital balances pertaining to operating activities. The following table reflects such changes for the years ended December 31, 2000, 1999 and 1998. 2000 1999 1998 -------- -------- -------- Decrease (increase) in current assets Accounts and notes receivable $(38,127) $ 19,677 $(39,063) Inventories (21,251) (16,677) (21,184) Other current assets 3,642 23,249 (9,359) Increase (decrease) in current liabilities Accounts payable and accrued liabilities (9,857) (3,683) 29,219 Customer advances 2,697 (8,829) 6,200 -------- -------- -------- $(62,896) $ 13,737 $(34,187) ======== ======== ======== United States GAAP requires disclosure of the effect of a one-percentage point increase or decrease in the assumed health care cost trend rates on the aggregate of the service and interest cost components of net periodic postretirement health care benefit cost and the accumulated postretirement benefit obligation for health care benefits. The following table reflects such effects. 1-Percentage 1-Percentage Point Increase Point Decrease -------------- -------------- Effect on total of service and interest cost components $ 77 $ (72) Effect on postretirement benefit obligation 1,157 (1,072) 14. Subsequent Event On March 11, 2001, the company and SPX Corporation (SPX) entered into a definitive agreement for SPX to acquire all of the company's outstanding shares in an all-stock transaction. The transaction, which is to be implemented as a court-approved plan of arrangement under Canadian corporate law, is subject to approval by the company's shareholders, antitrust clearance and customary closing conditions.

30 30 UNITED DOMINION INDUSTRIES LIMITED Notes to Consolidated Financial Statements, Restated (note 2) December 31, 2000, 1999 and 1998 (Amounts in Thousands of U.S. Dollars) 15. Quarterly Financial Information (Unaudited) Net Net Earnings Sales Gross Profit * Income Per Share -------------------------- ----------------------- ----------------------- ----------------------- 2000 1999 2000 1999 2000 1999 2000 1999 ------------ ------------ ----------- ----------- ---------- ----------- ---------- ----------- First Quarter $ 558,503 $ 478,404 $ 165,833 $ 141,639 $ 7,243 $ 13,342 $ 0.19 $ 0.33 Second Quarter 626,942 549,272 192,328 164,983 14,262 26,702 0.36 0.67 Third Quarter 588,287 546,998 180,176 169,837 24,880 27,309 0.64 0.69 Fourth Quarter 592,492 573,664 179,287 182,062 10,165 18,973 0.26 0.49 ------------ ------------ ----------- ----------- ---------- ----------- ---------- ----------- Total $ 2,366,224 $ 2,148,338 $ 717,624 $ 658,521 $ 56,550 $ 86,326 $ 1.45 $ 2.18 ============ ============ =========== =========== ========== =========== ========== =========== *Represents sales less cost of sales

1 Exhibit 99.2 Pro Forma Financial Information PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS AND DATA OF SPX (unaudited) (in millions of U.S. dollars, except per share data) The following tables present pro forma combined condensed financial statements and data of SPX after giving effect to the Merger. The information is presented as if the Merger had occurred on January 1, 2000 for the statement of income and related data and on December 31, 2000 for the balance sheet. The pro forma financial statements and data assume that the Merger is effected by the exchange of 0.2353 of a share of SPX common stock for each UDI common share outstanding and assumes that existing UDI stock options will be exchanged for options of SPX. Additionally, the pro forma combined condensed financial statements and data assume that existing UDI indebtedness is refinanced (the "Refinancing"). The Refinancing assumes that all of UDI's existing debt will be retired at closing and that SPX will obtain incremental term facilities on its credit agreement. The estimated purchase price was allocated to the assets and liabilities assumed of UDI based on SPX management's current estimate of their fair market values. The final allocation of the purchase price to the assets and liabilities assumed will not be completed until after the Merger is completed and will include independent appraisals and the results of SPX's strategic review to determine fair values. SPX management believes the preliminary allocations of the purchase price are reasonable based upon currently available information, but the allocations could change materially upon completion of the appraisals and strategic review. UDI's financial position and results of operations will not be included in SPX's consolidated financial statements prior to the date the Merger is completed. Following the consummation of the Merger, SPX will be finalizing its strategic review of UDI's businesses and its plans to integrate the operations of UDI. The pro forma combined condensed financial statements and data do not give effect to any additional integration or restructuring costs that could result from that review and the finalization of those plans. Any integration and rationalization of the operations of UDI may include certain costs that in turn would result in additional purchase accounting consideration or in a charge to earnings. Such additional purchase accounting consideration or a charge to operations, which cannot now be quantified fully, may be material and would either adjust the purchase accounting or be recognized as a charge to earnings in the period in which such a charge occurs. The costs may include severance and related employee benefits costs, costs to close or consolidate facilities, integration costs, relocation and moving costs, training costs, and gains or losses on business divestitures, among others. Additionally, the pro forma combined condensed financial statements and data do not give effect to any cost savings that could result from the combination of SPX and UDI. The pro forma combined condensed balance sheet includes the estimated costs associated with change of control agreements associated with UDI management. The pro forma combined condensed income statement does not reflect a charge for this cost as it is non-recurring and has no continuing impact. The pro forma combined condensed financial statements and data are intended for information purposes only, and do not purport to represent what SPX's results of continuing operations or financial position would actually have been had the Merger in fact occurred on January 1, 2000 for the statement of income and related data and on December 31, 2000 for the balance sheet, or project the results for any future date or period. Upon completion of the Merger, the actual financial position and results of operations of SPX may differ, perhaps significantly, from the pro forma amounts reflected herein due to a variety of factors, including changes in operating results between the date of the pro forma combined condensed financial statements and data and the date on which the Merger is completed and thereafter. In the pro forma combined condensed financial statements and data, SPX's historical information for the year ended December 31, 2000 was derived from SPX's Annual Report on Form 10-K/A for the year ended December 31, 2000 as filed with the U.S. Securities and Exchange Commission. UDI's historical information for the year ended December 31, 2000 was derived from UDI's Form 40-F as filed with the U.S. Securities and Exchange Commission for the year ended December 31, 2000. 1

2 PRO FORMA COMBINED CONDENSED BALANCE SHEET OF SPX AS OF DECEMBER 31, 2000 (unaudited) (in millions of US dollars) UDI Adjust UDI SPX Historical UDI to Historical Pro Forma Historical (Canadian GAAP) U.S. GAAP(a) (U.S. GAAP) Adjustments Pro Forma ---------- --------------- ------------ ----------- ------------- ----------- ASSETS: Cash and equivalents $ 73.7 $ 101.4 $ -- $ 101.4 $ -- $ 175.1 Other current assets 989.2 841.2 -- 841.2 65.0 (c) 1,895.4 Fixed assets, net 492.0 342.3 -- 342.3 124.0 (b) 958.3 Goodwill and other intangible assets, net 1,211.8 929.4 3.0 932.4 (932.4)(b) 2,334.1 1,122.3 (b) Other assets 397.9 111.1 2.0 113.1 2.3 (b) 513.3 -------- -------- -------- -------- -------- --------- Total assets $3,164.6 $2,325.4 $ 5.0 $2,330.4 $ 381.2 $ 5,876.2 ======== ======== ======== ======== ======== ========= LIABILITIES AND SHAREHOLDERS' EQUITY Notes payable and current portion of long-term debt $ -- $ 152.9 $ -- $ 152.9 $ (152.9)(d) $ -- Other current liabilities 637.1 392.6 (1.0) 391.6 -- 1,028.7 Other long-term liabilities 623.7 199.8 6.0 205.8 173.1 (b) 1,002.6 Long-term debt 1,295.6 658.3 -- 658.3 132.2 (b) 2,304.0 65.0 (c) 152.9 (d) Total Shareholders' equity 608.2 921.8 -- 921.8 (921.8)(b) 1,540.9 -- -- -- -- 932.7 (b) -- -------- -------- -------- -------- -------- --------- Total liabilities and shareholders' equity $3,164.6 $2,325.4 $ 5.0 $2,330.4 $ 381.2 $ 5,876.2 ======== ======== ======== ======== ======== ========= Note: The accompanying notes are an integral part of the pro forma combined condensed balance sheet. 2

3 PRO FORMA COMBINED CONDENSED STATEMENT OF INCOME AND OTHER FINANCIAL DATA OF SPX FOR THE YEAR ENDED DECEMBER 31, 2000 (unaudited) (in millions of US dollars, except per share data) UDI Adjust UDI SPX Historical UDI to Historical Pro Forma Historical (Canadian GAAP) U.S. GAAP (a) (U.S. GAAP) Adjustments Pro Forma ---------- --------------- ------------- ----------- ----------- --------- STATEMENT OF INCOME DATA: Revenues $2,678.9 $2,366.2 $ -- $2,366.2 $ -- $5,045.1 Cost of sales 1,776.7 1,648.6 -- 1,648.6 5.0 (e) 3,430.3 Selling, general and administrative expenses 495.2 492.4 (0.4) 492.0 2.8 (e) 985.7 (4.3)(c) Goodwill/intangible amortization 40.0 27.7 -- 27.7 16.8 (e) 80.5 (4.0)(e) Restructuring and other charges 90.9 43.8 -- 43.8 -- 134.7 -------- -------- ------ -------- -------- ------- Operating income $ 276.1 $ 153.7 $ 0.4 $ 154.1 $ (16.3) $ 413.9 Interest expense - net (95.0) (50.0) -- (50.0) (46.5)(f) (191.5) Loss on sale of businesses -- (1.2) -- (1.2) -- (1.2) Other income (expense) 22.2 (8.7) -- (8.7) -- 13.5 Gain on issuance of Inrange stock 98.0 -- -- -- -- 98.0 Equity in earnings of EGS 34.3 -- -- -- -- 34.3 -------- -------- ------ -------- -------- ------- Income before income taxes $ 335.6 $ 93.8 $ 0.4 94.2 $ (62.8) $ 367.0 Income tax (expense) benefit (137.3) (37.3) 2.4 (34.9) 7.2 (165.0)(g) -------- -------- ------ -------- -------- ------- Income before extraordinary item $ 198.3 $ 56.5 $ 2.8 $ 59.3 $ (55.6) $ 202.0 ======== ======== ====== ======== ======== ======= Basic earnings per common share: Income before extraordinary item $ 6.44 $ 5.05 Diluted earnings per common share: Income before extraordinary item $ 6.25 $ 4.93 Weighted average number of common shares Outstanding: Basic 30.796 9.208 40.004 Diluted 31.751 9.226 40.977 OTHER FINANCIAL DATA: Capital expenditures $ 123.3 $ 53.8 $ -- $ 53.8 $ -- $ 177.1 Depreciation and amortization 110.9 81.9 -- 81.9 20.0 212.8 Note: The accompanying notes are an integral part of the pro forma combined condensed statement of income and other financial data. 3

4 NOTES TO PRO FORMA COMBINED CONDENSED BALANCE SHEET AND STATEMENT OF INCOME AND OTHER FINANCIAL DATA OF SPX (unaudited) (in millions, except per share data) (a) Reflects adjustments to UDI's Canadian GAAP-based financial statements to U.S. GAAP (see note 13 to UDI's Consolidated Financial Statements). (b) This pro forma adjustment reflects the purchase price of UDI and the estimated allocation of the excess purchase price to the assets and liabilities assumed of UDI. The purchase price was computed as follows: UDI's Market Value: Shares of UDI Outstanding 39.135 Exchange ratio 0.2353 ------ SPX common stock to be issued 9.208 Market Value per share of SPX common stock $96.44 ------ Market Value of SPX common stock to be issued $888.1 Market Value of SPX options to be issued 44.6 ------ UDI Market Value (to Shareholders' Equity) $932.7 UDI Shareholders' equity at December 31, 2000 (921.8) Estimated transaction fees, Refinancing related fees, and change of control payments, net of tax (included as incremental borrowings in pro forma) 132.2 ------ Excess purchase price $143.1 ====== The estimated excess purchase price has been allocated to the assets and liabilities assumed of UDI as follows: Fixed assets, net $124.0 Other assets (pension, deferred financing fees, deferred tax assets) 2.3 Goodwill and intangible assets (previously recorded) (932.4) Goodwill 822.3 Other intangible assets 300.0 Other long-term liabilities (other benefit obligations, deferred tax liabilities) (173.1) ------ Excess Purchase Price $143.1 ====== The estimated purchase price was allocated to the assets and liabilities assumed of UDI based on SPX management's current estimate of their fair market values. The final allocation of the purchase price to the assets and liabilities assumed will not be completed until after the Merger is completed and will include independent appraisals and the results of SPX's strategic review to determine fair values. SPX management believes the preliminary allocations of the purchase price are reasonable based upon currently available information, but the allocations could change materially upon completion of the appraisals and strategic review. Fixed assets, net, reflects the adjustment to estimated fair value of these assets. Other assets represents the adjustment of pension assets to the fair market value of plan assets less the projected benefit obligation, adjusting deferred financing costs due to the Refinancing, and adjusting deferred tax assets affected by the Merger. Goodwill and intangible assets (previously recorded) reflects the elimination of goodwill and intangible assets included in UDI's historical balance sheet. Goodwill reflects the amount of excess purchase price remaining after allocations to all other assets and liabilities. Other intangible assets reflects the estimated fair value of intangibles such as patents, trademarks, assembled workforce, and acquired technology. Other long-term liabilities reflects the adjustment of other benefit liabilities to the projected benefit obligation and adjusting deferred tax liabilities related to the purchase price allocations. 4

5 (c) This pro forma adjustment reflects the elimination in the Refinancing of UDI's sale of certain qualifying accounts receivable to a financial institution. (d) Adjustment to reclassify UDI's short-term debt to long-term debt. Any principal payments on borrowings due within one year are classified as long-term debt as it is assumed that these payments will be financed with excess revolving loan capacity. (e) These pro forma adjustments reflect the impact of the allocation of the excess purchase price to the assets and liabilities of UDI. The following table reflects the pro forma impact of the purchase accounting adjustments on the pro forma combined condensed financial statements and data: Selling, Cost of general & Intangible Goodwill sales admin. amortization charges ------ --------- ------------ -------- Additional depreciation $ 5.0 $ 2.2 $ -- $ -- Pension and other benefits expense adjustment -- 0.6 -- -- Intangible amortization - previously recorded -- -- (3.2) -- Intangible amortization on transaction -- -- 20.0 -- Goodwill charges - previously recorded -- -- -- (24.5) Goodwill charges on transaction -- -- -- 20.5 ----- ----- ----- ------ Pro forma adjustment year ended December 31, 2000 $ 5.0 $ 2.8 $16.8 $ (4.0) ===== ===== ===== ====== The pro forma assumes the following lives for each of the purchase accounting adjustments; fixed assets from 10 to 25 years, intangible assets over an average of 15 years, and goodwill as 40 years. (f) This pro forma adjustment reflects the amount necessary to estimate consolidated interest expense, net, as if the Refinancing and the elimination of UDI's agreement to sell accounts receivable had occurred as of January 1, 2000. The consolidated interest expense has been computed on an assumption that the Refinancing will occur entirely under the credit agreement and not through the issuance of publicly traded or privately placed notes, and that borrowings under the credit agreement will bear interest at LIBOR plus a weighted average premium of 1.9% (8.4% was used in these pro forma financial statements). Interest income was not changed from historical amounts and debt issuance costs are amortized over approximately five years. In addition to the incremental borrowings of $132.2 and the $65.0 increase in debt assuming the elimination of UDI's agreement to sell certain accounts receivable, average combined historical outstanding debt of SPX and UDI, as used in this pro forma presentation, was $2,022.9. If the interest rate used in the pro forma financial data were assumed to increase by 1/8%, the impact would decrease net income by $1.7 ($0.04 per share) for the year ended December 31, 2000. (g) The pro forma consolidated effective income tax rate is estimated to be 45%. The pro forma consolidated effective income tax rate is higher than either of the combined companies due to the impact of estimated non-deductible goodwill amortization and increases in foreign income tax rates due to the Merger. 5