INDEBTEDNESS

The following summarizes our debt activity (both current and non-current) for the nine months ended September 26, 2015:



	December 31, 2014			Borrowings		Repayments			Spin-Off ⁽⁶⁾			Other ⁽⁷⁾			September 26, 2015
Revolving loans:
Prior SPX facilities ⁽¹⁾	$	133.0		$	430.0	$	(563.0	)	$	—		$	—		$	—
Current SPX facilities	—			—		—			—			—			—
Current SPX FLOW facilities	—			55.0		—			(55.0		)	—			—
Term loans:
Prior SPX facilities ⁽¹⁾	575.0			—		(575.0		)	—			—			—
Current SPX facilities ⁽²⁾	—			350.0		—			—			—			350.0
Current SPX FLOW facilities	—			400.0		—			(400.0		)	—			—
6.875% senior notes ⁽³⁾	600.0			—		—			(600.0		)	—			—
Trade receivables financing arrangement ⁽⁴⁾	10.0			154.0		(122.0		)	—			—			42.0
Other indebtedness ⁽⁵⁾	51.7			10.1		(7.3		)	(22.8		)	(1.7		)	30.0
Total debt	1,369.7			$	1,399.1	$	(1,267.3	)	$	(1,077.8	)	$	(1.7	)	422.0
Less: Amounts included in discontinued operations ⁽³⁾	(636.6		)												—
Total debt - continuing operations	733.1														422.0
Less: short-term debt	156.5														70.2
Less: current maturities of long-term debt	29.1														4.8
Total long-term debt - continuing operations	$	547.5													$	347.0

___________________________

⁽¹⁾

As noted below, both SPX and SPX FLOW entered into separate credit agreements in connection with the Spin-Off. On September 24, 2015, the lenders provided the initial funding under each of these credit agreements. The proceeds from the initial funding were used in part to repay indebtedness under SPX’s prior credit facilities, with such repayments totaling $224.0 for the revolving loans and $560.6 for the term loan.


⁽²⁾	The term loan is repayable in quarterly installments of 5.0% annually, beginning in the third fiscal quarter of 2016. The remaining balance is repayable in full on September 24, 2020.

⁽³⁾

In connection with the Spin-Off, the 6.875% senior notes became an obligation of SPX FLOW. Accordingly, the related balance of $600.0 has been reflected in “Liabilities of discontinued operations - non current” in the condensed consolidated balance sheet as of December 31, 2014. In addition, there is Other indebtedness related to SPX FLOW totaling $36.6 at December 31, 2014, with such balance reflected in “Liabilities of discontinued operations - current” and “Liabilities of discontinued operations - non current” in the condensed consolidated balance sheet.


⁽⁴⁾	Under this arrangement, we can borrow, on a continuous basis, up to $50.0, as available. At September 26, 2015, we had $3.3 of available borrowing capacity under this facility after giving effect to outstanding borrowings of $42.0.

⁽⁵⁾

Primarily includes balances under a purchase card program of $19.5 and $32.1 and capital lease obligations of $1.8 and $13.6 at September 26, 2015 and December 31, 2014, respectively. The purchase card program allows for payment beyond the normal payment terms for goods and services acquired under the program. As this arrangement extends the payment of these purchases beyond their normal payment terms through third-party lending institutions, we have classified these amounts as short-term debt.


⁽⁶⁾	Represents debt of SPX FLOW that is no longer an obligation of SPX as a result of the Spin-Off.


⁽⁷⁾	“Other” primarily includes debt assumed and foreign currency translation on any debt instruments denominated in currencies other than the U.S. dollar.

Senior Credit Facilities

In connection with the Spin-Off, we entered into a credit agreement (the "Credit Agreement"), dated September 1, 2015, ("Effective Date") with a syndicate of lenders that provided for committed senior secured financing in the aggregate amount of $1,200.0, consisting of the following (each with a final maturity of September 24, 2020):

•A term loan facility in an aggregate principal amount of $350.0;


•	A domestic revolving credit facility, available for loans and letters of credit, in an aggregate principal amount up to $200.0;


•	A global revolving credit facility, available for loans in Euros, GBP and other currencies, in an aggregate principal amount up to the equivalent of $150.0;


•	A participation foreign credit instrument facility, available for performance letters of credit and guarantees, in an aggregate principal amount up to the equivalent of $300.0; and


•	A bilateral foreign credit instrument facility, available for performance letters of credit and guarantees, in an aggregate principal amount up to the equivalent of $200.0.

In addition, SPX FLOW entered into a credit agreement, dated September 1, 2015, with a syndicate of lenders that provided for committed senior secured financing in the aggregate amount of $1,350.0 (the “SPX FLOW Credit Agreement”). As a result of the Spin-Off, we have no obligations under the SPX FLOW Credit Agreement.

On September 24, 2015, the lenders provided the initial funding under the Credit Agreement and the SPX FLOW Credit Agreement. The proceeds of the initial borrowings were used in part to repay indebtedness outstanding under our amended and restated credit agreement, dated December 23, 2013 (the “December 2013 Credit Agreement”). The December 2013 Credit Agreement terminated on September 24, 2015 upon the repayment of such indebtedness.

The term loan under the Credit Agreement is repayable in quarterly installments (with annual aggregate repayments, as a percentage of the initial principal amount of $350.0, of 5.0%, beginning in the third calendar quarter of 2016), with the remaining balance repayable in full on September 24, 2020.

We also may seek additional commitments, without consent from the existing lenders, to add an incremental term loan facility and/or increase the commitments in respect of the domestic revolving credit facility, the global revolving credit facility, the participation foreign credit instrument facility and/or the bilateral foreign credit instrument facility by an aggregate principal amount not to exceed (i) $300.0 plus (ii) an unlimited amount so long as, immediately after giving effect thereto, our Consolidated Senior Secured Leverage Ratio (as defined in the Credit Agreement generally as the ratio of consolidated total debt (excluding the face amount of undrawn letters of credit, bank undertakings, or analogous instruments and net of cash and cash equivalents in excess of $50.0) at the date of determination secured by liens to consolidated adjusted EBITDA for the four fiscal quarters ended most recently before such date) does not exceed 2.75:1.00 plus (iii) an amount equal to all voluntary prepayments of the term loan facility and voluntary prepayments accompanied by permanent commitment reductions of the revolving credit facilities and foreign credit instrument facilities.

We are the borrower under each of the above facilities, and certain of our foreign subsidiaries are (and we may designate other foreign subsidiaries to be) borrowers under the global revolving credit facility and the foreign credit instrument facilities. All borrowings and other extensions of credit under the Credit Agreement are subject to the satisfaction of customary conditions, including absence of defaults and accuracy in material respects of representations and warranties.

The letters of credit under the domestic revolving credit facility are stand-by letters of credit requested by SPX on behalf of any of our subsidiaries or certain joint ventures. The foreign credit instrument facility is used to issue foreign credit instruments, including bank undertakings to support our foreign operations.

The interest rates applicable to loans under the Credit Agreement are, at our option, equal to either (i) an alternate base rate (the highest of (a) the federal funds effective rate plus 0.5%, (b) the prime rate of Bank of America, N.A., and (c) the one-month LIBOR rate plus 1.0%) or (ii) a reserve-adjusted LIBOR rate for dollars (Eurodollar) plus, in each case, an applicable margin percentage, which varies based on our Consolidated Leverage Ratio (as defined in the Credit Agreement generally as the ratio of consolidated total debt (excluding the face amount of undrawn letters of credit, bank undertakings or analogous instruments and net of cash and cash equivalents in excess of $50.0) at the date of determination to consolidated adjusted EBITDA for the four fiscal quarters ended most recently before such date). We may elect interest periods of one, two, three, or six months (and, if consented to by all relevant lenders, twelve months) for Eurodollar borrowings. The per annum fees charged and the interest rate margins applicable to Eurodollar and alternate base rate loans are as follows:



Consolidated Leverage Ratio	Domestic Revolving Commitment Fee		Global Revolving Commitment Fee		Letter of Credit Fee		Foreign Credit Commitment Fee		Foreign Credit Instrument Fee		LIBOR Rate Loans		ABR Loans
Greater than or equal to 3.00 to 1.0	0.350	%	0.350	%	2.000	%	0.350	%	1.250	%	2.000	%	1.000	%
Between 2.00 to 1.0 and 3.00 to 1.0	0.300	%	0.300	%	1.750	%	0.300	%	1.000	%	1.750	%	0.750	%
Between 1.50 to 1.0 and 2.00 to 1.0	0.275	%	0.275	%	1.500	%	0.275	%	0.875	%	1.500	%	0.500	%
Between 1.00 to 1.0 and 1.50 to 1.0	0.250	%	0.250	%	1.375	%	0.250	%	0.800	%	1.375	%	0.375	%
Less than 1.00 to 1.0	0.225	%	0.225	%	1.250	%	0.225	%	0.750	%	1.250	%	0.250	%

The fees for bilateral foreign credit commitments are as specified above for foreign credit commitments unless otherwise agreed with the bilateral foreign issuing lender. We also pay fronting fees on the outstanding amounts of letters of credit and foreign credit instruments (in the participation facility) at the rates of 0.125% per annum and 0.25% per annum, respectively.

The Credit Agreement requires mandatory prepayments in amounts equal to the net proceeds from the sale or other disposition of, including from any casualty to, or governmental taking of, property in excess of specified values (other than in the ordinary course of business and subject to other exceptions) by SPX or our subsidiaries. Mandatory prepayments will be applied to repay, first, amounts outstanding under any term loans and, then, amounts (or cash collateralize letters of credit) outstanding under the global revolving credit facility and the domestic revolving credit facility (without reducing the commitments thereunder). No prepayment is required generally to the extent the net proceeds are reinvested (or committed to be reinvested) in permitted acquisitions, permitted investments or assets to be used in our business within 360 days (and if committed to be reinvested, actually reinvested within 180 days after the end of such 360-day period) of the receipt of such proceeds.

We may voluntarily prepay loans under the Credit Agreement, in whole or in part, without premium or penalty. Any voluntary prepayment of loans will be subject to reimbursement of the lenders’ breakage costs in the case of a prepayment of Eurodollar rate borrowings other than on the last day of the relevant interest period. Indebtedness under the Credit Agreement is guaranteed by:


•	Each existing and subsequently acquired or organized domestic material subsidiary with specified exceptions; and


•	SPX with respect to the obligations of our foreign borrower subsidiaries under the global revolving credit facility, the participation foreign credit instrument facility and the bilateral foreign credit instrument facility.

Indebtedness under the Credit Agreement is secured by a first priority pledge and security interest in 100% of the capital stock of our domestic subsidiaries (with certain exceptions) held by SPX or our domestic subsidiary guarantors and 65% of the capital stock of our material first-tier foreign subsidiaries (with certain exceptions). If SPX obtains a corporate credit rating from Moody’s and S&P and such corporate credit rating is less than “Ba2” (or not rated) by Moody’s and less than “BB” (or not rated) by S&P, then SPX and our domestic subsidiary guarantors are required to grant security interests, mortgages and other liens on substantially all of their assets. If SPX’s corporate credit rating is “Baa3” or better by Moody’s or “BBB-” or better by S&P and no defaults would exist, then all collateral security will be released and the indebtedness under the Credit Agreement will be unsecured.

The Credit Agreement requires that SPX maintain:


•	A Consolidated Interest Coverage Ratio (as defined in the Credit Agreement generally as the ratio of consolidated adjusted EBITDA for the four fiscal quarters ended on such date to consolidated cash interest expense for such period) as of the last day of any fiscal quarter of at least 3.50 to 1.00; and


•	A Consolidated Leverage Ratio as of the last day of any fiscal quarter of not more than 3.25 to 1.00 (or 3.50 to 1.00 for the four fiscal quarters after certain permitted acquisitions).

The Credit Agreement also contains covenants that, among other things, restrict our ability to incur additional indebtedness, grant liens, make investments, loans, guarantees, or advances, make restricted junior payments, including dividends, redemptions of capital stock, and voluntary prepayments or repurchase of certain other indebtedness, engage in mergers, acquisitions or sales of assets, enter into sale and leaseback transactions, or engage in certain transactions with affiliates, and otherwise restrict certain corporate activities. The Credit Agreement contains customary representations, warranties, affirmative covenants and events of default.

We are permitted under the Credit Agreement to repurchase our capital stock and pay cash dividends in an unlimited amount if our Consolidated Leverage Ratio is (after giving pro forma effect to such payments) less than 2.50 to 1.00. If our Consolidated Leverage Ratio is (after giving pro forma effect to such payments) greater than or equal to 2.50 to 1.00, the aggregate amount of such repurchases and dividend declarations cannot exceed (A) $50 in any fiscal year plus (B) an additional amount for all such repurchases and dividend declarations made after the Effective Date equal to the sum of (i) $100 plus (ii) a positive amount equal to 50% of cumulative Consolidated Net Income (as defined in the Credit Agreement generally as consolidated net income subject to certain adjustments solely for the purposes of determining this basket) during the period from the Effective Date to the end of the most recent fiscal quarter preceding the date of such repurchase or dividend declaration for which financial statements have been (or were required to be) delivered (or, in case such Consolidated Net Income is a deficit, minus 100% of such deficit) plus (iii) certain other amounts.

At September 26, 2015, we had $49.5 and $319.1 of outstanding letters of credit issued under our revolving credit and our foreign credit instrument facilities of our Credit Agreement, respectively.

The weighted-average interest rate of outstanding borrowings under our Credit Agreement was approximately 1.9% at September 26, 2015.

At September 26, 2015, we were in compliance with all covenants of our Credit Agreement.