SHAREHOLDERS’ EQUITY AND STOCK-BASED COMPENSATION

Income Per Share

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



	Three months ended		Nine months ended
	September 26, 2015	September 27, 2014	September 26, 2015	September 27, 2014
Weighted-average number of common shares used in basic income per share	40.663	41.796	40.590	43.024
Dilutive securities — Restricted stock shares and restricted stock units	—	—	—	0.748
Weighted-average number of common shares and dilutive securities used in diluted income per share	40.663	41.796	40.590	43.772

For the three and nine months ended September 26, 2015, 0.342 and 0.315 of unvested restricted stock shares/units, respectively, were not included in the computation of diluted earnings per share as we incurred losses from continuing operations during the periods. In addition, 0.536 and 0.541, respectively, did not meet the required market thresholds for vesting (as discussed in our 2014 Annual Report on Form 10-K). For the three and nine months ended September 26, 2015, 0.323 of outstanding stock options were not included in the computation of diluted earnings per share as we incurred losses from continuing operations during the periods. In addition, the exercise price for all of these stock options was greater than the average market price of our common shares during the periods.

For the three months ended September 27, 2014, 0.568 of unvested restricted stock shares/units were not included in the computation of diluted earnings per share as we incurred losses from continuing operations during the period. In addition, 0.173 did not meet the required market thresholds for vesting. For the nine months ended September 27, 2014, 0.058 of unvested restricted stock shares/units were not included in the computation of diluted earnings per share as the required market thresholds for vesting were not met. There were no stock options outstanding during the three and nine months ended September 27, 2014.

Stock-based Compensation

Stock-based compensation awards may be granted to certain eligible employees or non-employee directors under the 2002 Stock Compensation Plan, as amended, or to non-employee directors under the 2006 Non-Employee Directors’ Stock Incentive Plan. A detailed description of the awards granted under these plans is included in our 2014 Annual Report on Form 10-K.

The recognition of compensation expense for share-based awards, including stock options, is based on their grant-date fair values. The fair value of each award is amortized over the lesser of the award’s requisite or derived service period, which is generally up to three years. Compensation expense within income from continuing operations related to restricted stock shares, restricted stock units, and stock options totaled $5.5 and $3.6 for the three months ended September 26, 2015 and September 27, 2014, respectively, and $30.5 and $29.8 for the nine months ended September 26, 2015 and September 27, 2014, respectively. The related tax benefit was $2.1 and $1.4 for the three months ended September 26, 2015 and September 27, 2014, respectively, and $11.4 and $10.8 for the nine months ended September 26, 2015 and September 27, 2014, respectively. In connection with the Spin-Off, we modified certain outstanding restricted stock unit awards with a market condition. As a result of the modification, we recorded additional compensation expense during the third quarter of 2015 of $0.9.

Accumulated Other Comprehensive Income (Loss)

The changes in the components of accumulated other comprehensive income (loss), net of tax, for the three months ended September 26, 2015 were as follows:



	Foreign Currency Translation Adjustment			Net Unrealized Gains(Losses) on Qualifying Cash Flow Hedges (1)			Pension and Postretirement Liability Adjustment (2)			Total
Balance at beginning of period	$	(30.4	)	$	(1.4	)	$	4.6		$	(27.2	)
Other comprehensive income (loss) before reclassifications	(41.5		)	(0.5		)	0.5			(41.5		)
Amounts reclassified from accumulated other comprehensive loss	—			0.8			(0.1		)	0.7
Current-period other comprehensive income (loss)	(41.5		)	0.3			0.4			(40.8		)
Spin-Off of FLOW Business	354.5			0.1			—			354.6
Balance at end of period	$	282.6		$	(1.0	)	$	5.0		$	286.6

__________________________


⁽¹⁾	Net of tax benefit of $0.8 and $0.4 as of September 26, 2015 and June 27, 2015, respectively.


⁽²⁾	Net of tax provision of $3.2 and $2.9 as of September 26, 2015 and June 27, 2015, respectively. The balances as of September 26, 2015 and June 27, 2015 include net unamortized prior service credits. The current period other comprehensive income relates to prior service credits that resulted from the amendment to the U.S. Plan and SIARP (see Note 9 for additional details).

The changes in the components of accumulated other comprehensive income, net of tax, for the nine months ended September 26, 2015 were as follows:



	Foreign Currency Translation Adjustment			Net Unrealized Gains (Losses) on Qualifying Cash Flow Hedges (1)			Pension and Postretirement Liability Adjustment (2)			Total
Balance at beginning of year	$	59.0		$	(1.3	)	$	4.9		$	62.6
Other comprehensive income (loss) before reclassifications	(130.9		)	(0.4		)	0.5			(130.8		)
Amounts reclassified from accumulated other comprehensive income	—			0.6			(0.4		)	0.2
Current-period other comprehensive loss	(130.9		)	0.2			0.1			(130.6		)
Spin-Off of FLOW Business	354.5			0.1			—			354.6
Balance at end of period	$	282.6		$	(1.0	)	$	5.0		$	286.6

________________________


⁽¹⁾	Net of tax benefit of $0.8 and $1.1 as of September 26, 2015 and December 31, 2014, respectively.


⁽²⁾	Net of tax provision of $3.2 and $3.0 as of September 26, 2015 and December 31, 2014, respectively. The balances as of September 26, 2015 and December 31, 2014 include net unamortized prior service credits. The current period other comprehensive income relates to prior service credits that resulted from the amendment to the U.S. Plan and SIARP (see Note 9 for additional details).

The changes in the components of accumulated other comprehensive income, net of tax, for the three months ended September 27, 2014 were as follows:



	Foreign Currency Translation Adjustment			Net Unrealized Losses on Qualifying Cash Flow Hedges (1)			Pension and Postretirement Liability Adjustment (2)			Total
Balance at beginning of period	$	285.3		$	(0.9	)	$	0.3		$	284.7
Other comprehensive loss before reclassifications	(115.3		)	(0.5		)	—			(115.8		)
Amounts reclassified from accumulated other comprehensive income	—			0.2			(0.1		)	0.1
Current-period other comprehensive loss	(115.3		)	(0.3		)	(0.1		)	(115.7		)
Balance at end of period	$	170.0		$	(1.2	)	$	0.2		$	169.0

___________________________


⁽¹⁾	Net of tax benefit of $1.0 and $0.9 as of September 27, 2014 and June 28, 2014, respectively.


⁽²⁾	Net of tax provision of $0.1 as of September 27, 2014 and June 28, 2014.

The changes in the components of accumulated other comprehensive income, net of tax, for nine months ended September 27, 2014 were as follows:



	Foreign Currency Translation Adjustment			Net Unrealized Losses on Qualifying Cash Flow Hedges (1)			Net Unrealized Gains (Losses) on Available-for-Sale Securities			Pension and Postretirement Liability Adjustment (2)			Total
Balance at beginning of year	$	296.8		$	(0.8	)	$	(3.7	)	$	(4.8	)	$	287.5
Other comprehensive income (loss) before reclassifications	(126.8		)	(0.8		)	3.6			0.2			(123.8		)
Amounts reclassified from accumulated other comprehensive income	—			0.4			0.1			4.8			5.3
Current-period other comprehensive income (loss)	(126.8		)	(0.4		)	3.7			5.0			(118.5		)
Balance at end of period	$	170.0		$	(1.2	)	$	—		$	0.2		$	169.0

________________________


⁽¹⁾	Net of tax benefit of $1.0 as of September 27, 2014 and December 31, 2013, respectively.

⁽²⁾

Net of tax (provision) benefit of $(0.1) and $2.2 as of September 27, 2014 and December 31, 2013, respectively. The balance as of December 31, 2013 primarily included $(5.0), net of tax, related to our share of the pension liability adjustment for EGS as of December 31, 2013. In connection with the sale of our interest in EGS during the first quarter of 2014, as described in Note 1, we recognized our share of the pension liability adjustment for EGS as a component of the gain on sale of our investment interest.

The following summarizes amounts reclassified from each component of accumulated comprehensive income (loss) for the three months ended September 26, 2015 and September 27, 2014:



	Amount Reclassified from AOCI
	Three months ended
	September 26, 2015			September 27, 2014			Affected Line Item in the Condensed Consolidated Statements of Operations
(Gains) losses on qualifying cash flow hedges:
FX forward contracts	$	0.2		$	—		Revenues
Commodity contracts	0.9			0.3			Cost of products sold
Pre-tax	1.1			0.3
Income taxes	(0.3		)	(0.1		)
	$	0.8		$	0.2

Gains on pension and postretirement items:
Amortization of unrecognized prior service credits	$	(0.2	)	$	(0.1	)	Selling, general and administrative
Pre-tax	(0.2		)	(0.1		)
Income taxes	0.1			—
	$	(0.1	)	$	(0.1	)

The following summarizes amounts reclassified from each component of accumulated comprehensive income (loss) for the nine months ended September 26, 2015 and September 27, 2014:



	Amount Reclassified from AOCI
	Nine months ended
	September 26, 2015			September 27, 2014			Affected Line Item in the Condensed Consolidated Statements of Operations
(Gains) losses on qualifying cash flow hedges:
FX forward contracts	$	(0.9	)	$	—		Revenues
Commodity contracts	2.1			0.5			Cost of products sold
Pre-tax	1.2			0.5
Income taxes	(0.6		)	(0.1		)
	$	0.6		$	0.4

(Gains) losses on pension and postretirement items:
Recognition of our share of the pension liability adjustment for EGS	$	—		$	7.4		Other income (expense), net
Amortization of unrecognized prior service credits	(0.6		)	(0.2		)	Selling, general and administrative
Pre-tax	(0.6		)	7.2
Income taxes	0.2			(2.4		)
	$	(0.4	)	$	4.8

Common Stock in Treasury

On December 18, 2013, we entered into a written trading plan under Rule 10b5-1 of the Securities Exchange Act of 1934 to facilitate the repurchase of up to $500.0 of shares of our common stock on or before December 31, 2014, in accordance with a share repurchase program authorized by our Board of Directors. We repurchased 0.115 shares of our common stock for $11.2 under this trading plan during December 2013. During the first nine months of 2014, we repurchased 4.029 shares of our common stock for $414.3 under this trading plan. During the remainder of 2014, we repurchased 0.823 shares of our common stock for $74.5, which completed the repurchases authorized under this trading plan. There were no common stock repurchases during the first nine months of 2015.

During the nine months ended September 26, 2015 and September 27, 2014, “Common stock in treasury” was decreased by the settlement of restricted stock units issued from treasury stock of $6.6 and $13.6, respectively, and increased by $1.2 and $7.9, respectively, for common stock that was surrendered by recipients of restricted stock as a means of funding the related minimum income tax withholding requirements.

Dividends

In connection with the Spin-Off, we discontinued dividend payments immediately following the second quarter dividend payment for 2015. The dividends declared for the first nine months of 2015 totaled $30.9 while dividends paid during the period were $30.6. Dividends declared in the first, second and third quarters of 2014 totaled $16.3, $16.1 and $15.9, respectively, while dividends paid during these periods were $11.7, $16.9 and $16.1, respectively.

Changes in Equity

A summary of the changes in equity for the three months ended September 26, 2015 and September 27, 2014 is provided below:



	September 26, 2015									September 27, 2014
	SPX Corporation Shareholders’ Equity			Noncontrolling Interests			Total Equity			SPX Corporation Shareholders’ Equity			Noncontrolling Interests			Total Equity
Equity, beginning of period ⁽¹⁾	$	1,752.1		$	(2.2	)	$	1,749.9		$	2,236.4		$	12.6		$	2,249.0
Net income (loss)	(105.0		)	(25.6		)	(130.6		)	63.3			0.3			63.6
Net unrealized gains (losses) on qualifying cash flow hedges, net of tax benefit of $0.4 and $0.1 for the three months ended September 26, 2015 and September 27, 2014, respectively	0.3			—			0.3			(0.3		)	—			(0.3		)
Pension and postretirement liability adjustment, net of tax provision of $0.3 for the three months ended September 26, 2015	0.4			—			0.4			(0.1		)	—			(0.1		)
Foreign currency translation adjustments	(41.5		)	0.9			(40.6		)	(115.3		)	(0.2		)	(115.5		)
Total comprehensive income (loss), net	(145.8		)	(24.7		)	(170.5		)	(52.4		)	0.1			(52.3		)
Dividends declared	—			—			—			(15.9		)	—			(15.9		)
Incentive plan activity	3.8			—			3.8			3.8			—			3.8
Stock-based compensation expense (includes amounts recorded to discontinued operations of $1.3 and $1.1 for the three months ended September 26, 2015 and September 27, 2014, respectively)	6.8			—			6.8			4.7			—			4.7
Restricted stock and restricted stock unit vesting, net of tax withholdings, and related tax (provision) benefit of $0.0 and $0.3 for the three months ended September 26, 2015 and September 27, 2014, respectively)	(0.4		)	—			(0.4		)	(1.0		)	—			(1.0		)
Common stock repurchases	—			—			—			(139.9		)	—			(139.9		)
Other changes in noncontrolling interests	—			—			—			—			(0.8		)	(0.8		)
Spin-Off of FLOW Business	(1,259.8		)	(10.7		)	(1,270.5		)	—			—			—
Equity, end of period	$	356.7		$	(37.6	)	$	319.1		$	2,035.7		$	11.9		$	2,047.6


⁽¹⁾	As indicated in Notes 1 and 16, we have corrected certain prior year misstatements in the accompanying condensed consolidated financial statements. As a result of such corrections, “SPX Corporation Shareholders’ Equity” and “Total Equity” have been reduced by $9.2 and $7.4 as of June 27, 2015 and June 28, 2014, respectively, when compared to the related amounts previously reported.

A summary of the changes in equity for the nine months ended September 26, 2015 and September 27, 2014 is provided below:



	September 26, 2015									September 27, 2014
	SPX Corporation Shareholders’ Equity			Noncontrolling Interests			Total Equity			SPX Corporation Shareholders’ Equity			Noncontrolling Interests			Total Equity
Equity, beginning of year ⁽¹⁾	$	1,808.7		$	3.2		$	1,811.9		$	2,153.3		$	14.0		$	2,167.3
Net income (loss)	(73.2		)	(31.1		)	(104.3		)	430.0			(1.3		)	428.7
Net unrealized gains (losses) on qualifying cash flow hedges, net of tax provision of $0.3 and $0.0 for the nine months ended September 26, 2015 and September 27, 2014, respectively	0.2			—			0.2			(0.4		)	—			(0.4		)
Net unrealized gains on available-for-sale securities	—			—			—			3.7			—			3.7
Pension and postretirement liability adjustment, net of tax provision of $0.2 and $2.3 for the nine months ended September 26, 2015 and September 27, 2014, respectively	0.1			—			0.1			5.0			—			5.0
Foreign currency translation adjustments	(130.9		)	1.2			(129.7		)	(126.8		)	0.4			(126.4		)
Total comprehensive income (loss), net	(203.8		)	(29.9		)	(233.7		)	311.5			(0.9		)	310.6
Dividends declared	(30.9		)	—			(30.9		)	(48.3		)	—			(48.3		)
Incentive plan activity	12.8			—			12.8			21.9			—			21.9
Stock-based compensation expense (includes amounts recorded to discontinued operations of $5.4 and $4.2 for the nine months ended September 26, 2015 and September 27, 2014, respectively)	35.9			—			35.9			34.0			—			34.0
Restricted stock and restricted stock unit vesting, net of tax withholdings, and related tax benefit of $0.3 and $9.5 for the nine months ended September 26, 2015 and September 27, 2014, respectively	(6.2		)	—			(6.2		)	(22.4		)	—			(22.4		)
Common stock repurchases	—			—			—			(414.3		)	—			(414.3		)
Dividends attributable to noncontrolling interests	—			(0.2		)	(0.2		)	—			—			—
Other changes in noncontrolling interests	—			—			—			—			(1.2		)	(1.2		)
Spin-Off of FLOW Business	(1,259.8		)	(10.7		)	(1,270.5		)	—			—			—
Equity, end of period	$	356.7		$	(37.6	)	$	319.1		$	2,035.7		$	11.9		$	2,047.6


⁽¹⁾	As indicated in Notes 1 and 16, we have corrected certain prior year misstatements in the accompanying condensed consolidated financial statements. As a result of such corrections, “SPX Corporation Shareholders’ Equity” and “Total Equity” have been reduced by $9.2 and $4.7 as of December 31, 2014 and 2013, respectively, when compared to the related amounts previously reported.