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Shareholders' Equity and Stock-Based Compensation | 12 Months Ended
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Dec. 31, 2013
Shareholders' Equity and Stock-Based Compensation |
Shareholders' Equity and Stock-Based Compensation | (15) Shareholders' Equity and Stock-Based Compensation Earnings Per Share The following table sets forth the computations of the components used for the calculation of basic and diluted income per share:
|  | Year ended December 31, |
--- | --- | --- | ---
|  | 2013 |  | 2012 |  | 2011 |
Numerator: |  |  |  |  |  |  |  |  |  |
Income (loss) from continuing operations |  | $ | 201.3 |  | $ | (176.6 | ) | $ | 132.7 |
Less: Net income attributable to noncontrolling interests |  |  | 2.2 |  |  | 3.0 |  |  | 5.0 |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Income (loss) from continuing operations attributable to SPX Corporation common shareholders for calculating basic and diluted income per share |  | $ | 199.1 |  | $ | (179.6 | ) | $ | 127.7 |
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Income from discontinued operations |  | $ | 11.3 |  | $ | 359.8 |  | $ | 43.5 |
Less: Net income (loss) attributable to noncontrolling interest |  |  | 0.2 |  |  | (0.2 | ) |  | — |
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Income from discontinued operations attributable to SPX Corporation common shareholders for calculating basic and diluted income per share |  | $ | 11.1 |  | $ | 360.0 |  | $ | 43.5 |
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Denominator: |  |  |  |  |  |  |  |  |  |
Weighted-average number of common shares used in basic income per share |  |  | 45.384 |  |  | 50.031 |  |  | 50.499 |
Dilutive securities — Employee stock options, restricted stock shares and restricted stock units |  |  | 0.622 |  |  | — |  |  | 0.447 |
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Weighted-average number of common shares and dilutive securities used in diluted income per share |  |  | 46.006 |  |  | 50.031 |  |  | 50.946 |
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All stock options were included in the computation of diluted income per share for the year ended December 31, 2013. The total number of stock options not included in the computation of diluted income per share because their exercise price was greater than the average market price of common shares was 0.003 and 0.117 for the years ended December 31, 2012 and 2011, respectively. The total number of unvested restricted stock shares and restricted stock units that were not included in the computation of diluted income per share because required market thresholds for vesting (as discussed below) were not met was 0.647, 1.031, and 0.633 at December 31, 2013, 2012 and 2011, respectively. Common Stock and Treasury Stock At December 31, 2013, we had 200.0 authorized shares of common stock (par value $10.00). Common shares issued, treasury shares and shares outstanding are summarized in the table below.
|  | Common Stock Issued |  | Treasury Stock |  | Shares Outstanding |
--- | --- | --- | --- | --- | --- | --- | ---
Balance at December 31, 2010 |  |  | 98.068 |  |  | (47.774 | ) |  | 50.294 |
Stock options exercised |  |  | 0.154 |  |  | — |  |  | 0.154 |
Restricted stock shares and restricted stock units |  |  | 0.209 |  |  | 0.145 |  |  | 0.354 |
Other |  |  | 0.271 |  |  | — |  |  | 0.271 |
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Balance at December 31, 2011 |  |  | 98.702 |  |  | (47.629 | ) |  | 51.073 |
Stock options exercised |  |  | 0.174 |  |  | — |  |  | 0.174 |
Share repurchases |  |  | — |  |  | (3.606 | ) |  | (3.606 | )
Restricted stock shares and restricted stock units |  |  | 0.311 |  |  | 0.085 |  |  | 0.396 |
Other |  |  | 0.267 |  |  | — |  |  | 0.267 |
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Balance at December 31, 2012 |  |  | 99.454 |  |  | (51.150 | ) |  | 48.304 |
Stock options exercised |  |  | 0.008 |  |  | — |  |  | 0.008 |
Share repurchases |  |  | — |  |  | (3.493 | ) |  | (3.493 | )
Restricted stock shares and restricted stock units |  |  | 0.133 |  |  | 0.123 |  |  | 0.256 |
Other |  |  | 0.206 |  |  | — |  |  | 0.206 |
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Balance at December 31, 2013 |  |  | 99.801 |  |  | (54.520 | ) |  | 45.281 |
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Stock-Based Compensation Under the 2002 Stock Compensation Plan, as amended in 2006, 2011 and 2012, up to 2.684 shares of our common stock were available for grant at December 31, 2013. The 2002 Stock Compensation Plan permits the issuance of new shares or shares from treasury upon the exercise of options, vesting of restricted stock units, or granting of restricted stock shares. Each share of restricted stock and restricted stock unit granted reduces availability by two shares. During the years ended December 31, 2013, 2012 and 2011, we classified excess tax benefits from stock-based compensation of $6.3, $3.8 and $6.6, respectively, as financing cash flows and included such amounts in "Minimum withholdings paid on behalf of employees for net share settlements, net of proceeds from the exercise of employee stock options and other" within our consolidated statements of cash flows. Restricted stock shares or restricted stock units may be granted to certain eligible employees or non-employee directors in accordance with applicable equity compensation plan documents and agreements. Subject to participants' continued employment and other plan terms and conditions, the restrictions lapse and awards generally vest over a period of time, generally one or three years. In some instances, such as death, disability, or retirement, stock may vest concurrently with or following an employee's termination. A substantial portion of the restricted stock shares and restricted stock unit awards vest based on performance thresholds, while the remaining portion vest based on the passage of time since grant date. Eligible employees received a target performance award in 2013 in which the employee can earn between 25% and 125% of the target award in the event the award meets the required vesting criteria. Vesting for the 2013 target performance awards is based on SPX shareholder return versus the S&P Composite 1500 Industrials Index over the three-year period ending December 31, 2015. Each eligible non-officer employee also received an award in both 2013 and 2012 that vests ratably over three years, subject only to the passage of time. Officers received awards in 2013 that vest ratably over three years, subject to an internal performance metric. Vesting for the 2012 and 2011 performance awards is based on the SPX shareholder return versus the S&P 500 Index. On each vesting date, we compare the SPX shareholder return to the performance of the S&P 500 Index for the prior year and for the cumulative period since the date of the grant. If SPX outperforms the S&P 500 Index for the prior year, the one-third portion of the grant associated with that year will vest. If SPX outperforms the S&P 500 Index for the cumulative period, any unvested portion of the grant that was subject to vesting on or prior to the vesting date will vest. We grant restricted stock shares to non-employee directors under the 2006 Non-Employee Directors' Stock Incentive Plan (the "Directors' Plan") and the 2002 Stock Compensation Plan. Under the Directors' Plan, up to 0.018 shares of our common stock were available for grant at December 31, 2013. The 2013 restricted stock grants to the non-employee directors generally vest over a one-year vesting period. The 2012 and 2011 restricted stock grants to the non-employee directors have a three-year vesting period based on SPX shareholder return versus the S&P 500 Index, and are subject to the same company performance thresholds as the employee 2012 and 2011 awards described above. Restricted stock shares and restricted stock units that do not vest within the applicable vesting period are forfeited. Stock options may be granted to key employees in the form of incentive stock options or nonqualified stock options. The option price per share may be no less than the fair market value of our common stock at the close of business the day prior to the date of grant. Upon exercise, the employee has the option to surrender previously owned shares at current value in payment of the exercise price and/or for withholding tax obligations, and, subject to certain restrictions, may receive a reload option having an exercise price equal to the current market value for the number of shares so surrendered. The reload option expires at the same time that the exercised option would have expired. Any future issuances of options under the plan will not have a reload feature, pursuant to the terms of the plan. We have not granted options to any of our employees since 2004, and there were no options outstanding as of December 31, 2013. 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. There was no stock option expense for the years ended December 31, 2013, 2012 and 2011. Compensation expense within income from continuing operations related to restricted stock shares and restricted stock units totaled $32.8, $38.8 and $38.6 for the years ended December 31, 2013, 2012 and 2011, respectively, with the related tax benefit being $12.1, $14.8 and $14.5 for the years ended December 31, 2013, 2012 and 2011, respectively. We use the Monte Carlo simulation model valuation technique to determine fair value of our restricted stock shares and restricted stock units as they contain a "market condition." The Monte Carlo simulation model utilizes multiple input variables that determine the probability of satisfying the market condition stipulated in the award and calculates the fair value of each restricted stock share and restricted stock unit award. We used the following assumptions 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 |  | Correlation between total shareholder return for SPX and the applicable S&P Composite Index |
--- | --- | --- | --- | --- | --- | --- | --- | --- | ---
April 1, 2013: |  |  |  |  |  |  |  |  |  |  |  |  |
SPX Corporation |  |  | 35.5 | % |  | 1.29 | % |  | 0.33 | % |  | 0.7668 |
S&P Composite 1500 Industrials Index |  |  | 21.2 | % |  | n/a |  |  | 0.33 | % |  |  |
January 2, 2013: |  |  |  |  |  |  |  |  |  |  |  |  |
SPX Corporation |  |  | 36.3 | % |  | 1.42 | % |  | 0.37 | % |  | 0.7778 |
S&P Composite 1500 Industrials Index |  |  | 22.4 | % |  | n/a |  |  | 0.37 | % |  |  |
January 3, 2012: |  |  |  |  |  |  |  |  |  |  |  |  |
SPX Corporation |  |  | 44.3 | % |  | 1.60 | % |  | 0.44 | % |  | 0.7365 |
S&P 500 Index |  |  | 23.1 | % |  | n/a |  |  | 0.44 | % |  |  |
Annual expected stock price volatility is based on the three-year historical volatility. The annual expected dividend yield is based on annual expected dividend payments and the stock price on the date of grant. The average risk-free interest rate is based on the one-year through three-year daily treasury yield curve rate as of the grant date. Restricted Stock Share and Restricted Stock Unit Awards The following table summarizes the restricted stock share and restricted stock unit activity from December 31, 2010 through December 31, 2013:
|  | Unvested Restricted Stock Shares and Restricted Stock Units |  | Weighted-Average Grant-Date Fair Value Per Share |
--- | --- | --- | --- | --- | ---
Outstanding at December 31, 2010 |  |  | 1.516 |  | $ | 50.97 |
Granted |  |  | 0.836 |  |  | 62.72 |
Vested |  |  | (0.636 | ) |  | 51.47 |
Forfeited |  |  | (0.276 | ) |  | 67.21 |
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Outstanding at December 31, 2011 |  |  | 1.440 |  |  | 54.38 |
Granted |  |  | 0.823 |  |  | 50.64 |
Vested |  |  | (0.264 | ) |  | 39.75 |
Forfeited |  |  | (0.064 | ) |  | 57.77 |
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Outstanding at December 31, 2012 |  |  | 1.935 |  |  | 54.70 |
Granted |  |  | 0.652 |  |  | 61.66 |
Vested |  |  | (0.754 | ) |  | 54.34 |
Forfeited |  |  | (0.296 | ) |  | 52.20 |
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Outstanding at December 31, 2013 |  |  | 1.537 |  |  | 58.39 |
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As of December 31, 2013, there was $19.8 of unrecognized compensation cost related to restricted stock share and restricted stock unit compensation arrangements. We expect this cost to be recognized over a weighted-average period of 1.8 years. Stock Options The following table shows stock option activity from December 31, 2010 through December 31, 2013:
|  | Shares |  | Weighted- Average Exercise Price |
--- | --- | --- | --- | --- | ---
Options outstanding and exercisable at December 31, 2010 |  |  | 0.635 |  | $ | 63.82 |
Exercised |  |  | (0.154 | ) |  | 65.44 |
Terminated |  |  | (0.117 | ) |  | 89.10 |
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Options outstanding and exercisable at December 31, 2011 |  |  | 0.364 |  |  | 54.87 |
Exercised |  |  | (0.174 | ) |  | 39.58 |
Terminated |  |  | (0.177 | ) |  | 69.42 |
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Options outstanding and exercisable at December 31, 2012 |  |  | 0.013 |  |  | 62.45 |
Exercised |  |  | (0.008 | ) |  | 50.79 |
Terminated |  |  | (0.005 | ) |  | 85.36 |
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Options outstanding and exercisable at December 31, 2013 |  |  | — |  |  | — |
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The aggregate intrinsic value (market value of stock less the option exercise price) of options exercised during the years ended December 31, 2013, 2012 and 2011 was $0.4, $5.9 and $2.5, respectively Accumulated Other Comprehensive Income The changes in the components of accumulated other comprehensive income, net of tax, for the year ended December 31, 2013 were as follows:
|  | Foreign Currency Translation Adjustment |  | Net Unrealized Losses on Qualifying Cash Flow Hedges(1) |  | Net Unrealized Losses on Available-for- Sale Securities |  | Pension and Postretirement Liability Adjustment and Other(2) |  | Total |
--- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ---
Balance at December 31, 2012 |  | $ | 293.8 |  | $ | (3.3 | ) | $ | (3.1 | ) | $ | (2.6 | ) | $ | 284.8 |
Other comprehensive income (loss) before reclassifications |  |  | 3.0 |  |  | (1.0 | ) |  | (0.6 | ) |  | (1.2 | ) |  | 0.2 |
Amounts reclassified from accumulated other comprehensive loss |  |  | — |  |  | 3.5 |  |  | — |  |  | (1.0 | ) |  | 2.5 |
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Current-period other comprehensive income (loss) |  |  | 3.0 |  |  | 2.5 |  |  | (0.6 | ) |  | (2.2 | ) |  | 2.7 |
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Balance at December 31, 2013 |  | $ | 296.8 |  | $ | (0.8 | ) | $ | (3.7 | ) | $ | (4.8 | ) | $ | 287.5 |
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(1) Net of tax benefit of $1.0 and $2.5 as of December 31, 2013 and 2012, respectively. (2) Net of tax benefit of $2.2 and $1.2 as of December 31, 2013 and 2012, respectively. Includes $(5.0) and $(3.8), net of tax, related to our share of the pension liability adjustment for EGS as of December 31, 2013 and 2012, respectively, and $0.2 and $1.2, net of tax, of unamortized prior service credits as of December 31, 2013 and 2012, respectively. The following summarizes amounts reclassified from each component of accumulated comprehensive income for the year ended December 31, 2013:
|  | Amount Reclassified from AOCI |  | Affected Line Item in the Consolidated Statement of Operations
--- | --- | --- | --- | ---
Losses on qualifying cash flow hedges: |  |  |  |  |
FX forward contracts |  | $ | 4.0 |  | Revenues
Commodity contracts |  |  | 1.3 |  | Cost of products sold
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Pre-tax |  |  | 5.3 |  |
Income taxes |  |  | (1.8 | ) |
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|  | $ | 3.5 |  |
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Amortization of pension and postretirement item: |  |  |  |  |
Unrecognized prior service credits |  | $ | (0.1 | ) | Cost of products sold
Unrecognized prior service credits |  |  | (1.3 | ) | Selling, general and administrative
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Pre-tax |  |  | (1.4 | ) |
Income taxes |  |  | 0.4 |  |
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|  | $ | (1.0 | ) |
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Common Stock in Treasury On February 16, 2012, we entered into a written trading plan under Rule 10b5-1 of the Securities and Exchange Act of 1934, as amended, to facilitate the repurchase of up to $350.0 of shares of our common stock on or before February 14, 2013, in accordance with a share repurchase program authorized by our Board of Directors. During 2012, we repurchased 3.606 shares of our common stock for $245.6. During January 2013, we repurchased 1.514 shares of our common stock for $104.4, which completed the repurchases authorized under this trading plan. In addition, we repurchased 1.864 shares of our common stock on the open market for $144.6 during the year ended December 31, 2013. Lastly, on December 18, 2013, we entered into a written trading plan under Rule 10b5-1 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. During December 2013, we repurchased 0.115 shares of our common stock for $11.2 under this trading plan. During the years ended December 31, 2013, 2012 and 2011, "Common stock in treasury" was decreased by the settlement of restricted stock units issued from treasury stock of $14.2, $6.1 and $12.8, respectively, and increased by $11.0, $1.8 and $7.0, respectively, for common stock that was surrendered by recipients of restricted stock as a means of funding the related minimum income tax withholding requirements. Preferred Stock None of our 3.0 shares of authorized no par value preferred stock was outstanding at December 31, 2013, 2012 or 2011.

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- Definition The entire disclosure for accounts comprising shareholders' equity, comprised of portions attributable to the parent entity and noncontrolling interest, if any, including other comprehensive income (as applicable). Also includes disclosure of compensation-related costs for equity-based compensation which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details, and employee stock purchase plan details. + References No definition available. + Details
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