EQUITY AND STOCK-BASED COMPENSATION (Tables)

12 Months Ended

Dec. 31, 2019

Schedule of weighted average shares outstanding used in computation of basic and diluted income per share

The following table sets forth the number of weighted-average shares outstanding used in the computation of basic and diluted income (loss) per share:


	Year ended December 31,
	2019	2018	2017
Weighted-average shares outstanding, basic	42.465	42.197	41.799
Dilutive effect of share-based awards	0.221	0.436	0.384
Weighted-average shares outstanding, dilutive⁽¹⁾	42.686	42.633	42.183

(1)For the years ended December 31, 2019 and 2018, 0.119 and 0.041, respectively, of unvested restricted stock shares/units were not included in the computation of diluted income per share because required market thresholds for vesting (as discussed below) were not met. For the years ended December 31, 2019, 2018 and 2017, 0.138, 0.223 and 0.202, respectively, of unvested restricted stock shares/units were not included in the computation of diluted income per share because required internal performance thresholds for vesting (as discussed below) were not met. For the years ended December 31, 2019, 2018 and 2017, 0.342, 0.342 and 0.358, respectively, of stock options were not included in the computation of diluted income per share because their exercise price was greater than the average market price of common shares.

Schedule of compensation expense related to share-based programs recognized in selling, general and administrative expense

For the years ended December 31, 2019, 2018 and 2017, we recognized compensation expense related to share-based programs in “Selling, general and administrative” expense in the accompanying consolidated statements of operations as follows:


	Year ended December 31,
	2019		2018		2017
Stock-based compensation expense - continuing and discontinued operations	$	13.7	$	15.7	$	15.9
Less: stock-based compensation expense recognized in discontinued operations	1.2		1.6		1.3
Stock-based compensation expense recognized in continuing operations	12.5		14.1		14.6
Income tax benefit	(2.9)		(3.4)		(5.2)
Stock-based compensation expense, net of income tax benefit	$	9.6	$	10.7	$	9.4

Schedule of assumptions used to determine fair value of awards granted

The following assumptions were used in determining the fair value of the awards granted on the dates indicated below:


	Annual Expected Stock Price Volatility		Annual Expected Dividend Yield		Risk-free Interest Rate		Correlations Between Total Shareholder Return for SPX FLOW and Individual Companies in the Composite Group
									Minimum		Average	Maximum
March 21, 2019:
SPX FLOW	36.9	%	—	%	2.45	%	0.1274	0.4364		0.7393
Composite Group	28.1	%	n/a		2.45	%
March 6, 2018:
SPX FLOW	42.0	%	—	%	2.36	%	0.1216	0.4193		0.6928
Composite Group	27.9	%	n/a		2.36	%
January 13, 2017:
SPX FLOW	39.4	%	—	%	1.50	%	0.1848	0.3830		0.5057
Composite Group	28.6	%	n/a		1.50	%

In 2019, annual expected stock price volatility was based on the weighted average of SPX FLOW’s historical volatility as of the grant date. In 2018 and 2017, as SPX FLOW shares had been traded only since the Spin-Off in September 2015 (i.e., with less historical performance than the generally three-year vesting period of the related awards), annual expected stock price volatility was based on the weighted average of SPX FLOW’s historical volatility (since the Spin-Off) and the average historical volatility of the Composite Group, as of the grant dates. In all years, an expected annual dividend yield was not assumed as dividends are not currently granted on common shares by SPX FLOW. The average risk-free interest rate was based on an interpolation of the two-year and three-year daily treasury yield curve rate as of the grant dates.

Summary of restricted stock share and restricted stock unit activity

The following table summarizes the unvested restricted stock share and restricted stock unit activity from December 31, 2016 through December 31, 2019:


	Unvested Restricted Stock Shares and Restricted Stock Units	Weighted-Average Grant-Date Fair Value Per Share
Outstanding at December 31, 2016	1.275	$37.89
Granted	0.486	35.18
Vested	(0.358)	42.05
Forfeited and other	(0.271)	49.35
Outstanding at December 31, 2017	1.132	32.65
Granted	0.404	48.63
Vested	(0.312)	39.01
Forfeited and other	(0.048)	33.88
Outstanding at December 31, 2018	1.176	36.40
Granted	0.546	34.51
Vested	(0.462)	32.95
Forfeited and other	(0.261)	31.51
Outstanding at December 31, 2019	0.999	38.24

Schedule of assumptions used to estimate fair value of each option grant

The fair value of each former Parent option grant was estimated using the Black-Scholes option-pricing model with the following assumptions:


Annual expected SPX Corporation stock price volatility	36.53	%
Annual expected SPX Corporation dividend yield	1.75	%
Risk-free interest rate	1.97	%
Expected life of SPX Corporation stock option (in years)	6.0