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Stockholders' Equity and Stock-Based Compensation (Tables) | 12 Months Ended
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Dec. 31, 2023
Share-Based Payment Arrangement, Noncash Expense [Abstract] |
Summary of Share Activity | The following table summarizes the Company’s share activity for the years ended December 31 (shares in millions):
| 2023 |  | 2022 |  | 2021
Preferred stock - shares issued: |  |  |  |  |
Balance, beginning of period | 1.7 |  |  | 3.4 |  |  | 3.4 |
Conversion of MCPS to common stock | (1.7) |  |  | (1.7) |  |  | — |
Balance, end of period | — |  |  | 1.7 |  |  | 3.4 |
Common stock - shares issued: |  |  |  |  |
Balance, beginning of period | 869.3 |  |  | 855.7 |  |  | 851.3 |
Issuance of common stock attributable to stock-based compensation | 2.6 |  |  | 2.6 |  |  | 3.4 |
Conversion of MCPS to common stock | 8.6 |  |  | 11.0 |  |  | — |
Common stock issued in connection with acquisitions | — |  |  | — |  |  | 0.1 |
Common stock issued in connection with LYONs’ conversions | — |  |  | — |  |  | 0.9 |
Balance, end of period | 880.5 |  |  | 869.3 |  |  | 855.7 |
Assumptions Used in the Black-Scholes Model to Value Options Granted | The following summarizes the assumptions used in the Black-Scholes model to value options granted during the years ended December 31:
| 2023 |  | 2022 |  | 2021
Risk-free interest rate | 3.5 – 4.5% |  | 1.8 – 4.0% |  | 0.6 – 1.5%
Weighted average volatility | 27.8 | % |  | 30.3 | % |  | 29.8 | %
Dividend yield | 0.5 | % |  | 0.4 | % |  | 0.3 | %
Expected years until exercise | 5.0 – 7.0 |  | 5.0 – 7.5 |  | 5.0 – 7.5
Components of Share-Based Compensation Program | The following summarizes the components of the Company’s continuing operations stock-based compensation expense for the years ended December 31 ($ in millions):
| 2023 |  | 2022 |  | 2021
RSUs/PSUs: |  |  |  |  |
Pretax compensation expense | $ | 173 |  |  | $ | 172 |  |  | $ | 109 |
Income tax benefit | (38) |  |  | (36) |  |  | (23) |
RSU/PSU expense, net of income taxes | 135 |  |  | 136 |  |  | 86 |
Stock options: |  |  |  |  |
Pretax compensation expense | 133 |  |  | 123 |  |  | 75 |
Income tax benefit | (27) |  |  | (25) |  |  | (16) |
Stock option expense, net of income taxes | 106 |  |  | 98 |  |  | 59 |
Total stock-based compensation: |  |  |  |  |
Pretax compensation expense | 306 |  |  | 295 |  |  | 184 |
Income tax benefit | (65) |  |  | (61) |  |  | (39) |
Total stock-based compensation expense, net of income taxes | $ | 241 |  |  | $ | 234 |  |  | $ | 145 |
Option Activity Under the Company's Stock Plans | The following summarizes option activity under the Company’s stock plans (in millions, except weighted exercise price and number of years):
| Options |  | Weighted Average Exercise Price |  | Weighted Average Remaining Contractual Term (in years) |  | Aggregate Intrinsic Value
Outstanding as of January 1, 2021 | 17.9 |  |  | $ | 89.40 |  |  |  |  |
Granted | 3.1 |  |  | 213.85 |  |  |  |  |
Exercised | (2.7) |  |  | 66.25 |  |  |  |  |
Cancelled/forfeited | (0.8) |  |  | 135.49 |  |  |  |  |
Outstanding as of December 31, 2021 | 17.5 |  |  | 112.91 |  |  |  |  |
Granted | 2.6 |  |  | 236.68 |  |  |  |  |
Exercised | (1.8) |  |  | 77.27 |  |  |  |  |
Cancelled/forfeited | (0.7) |  |  | 184.80 |  |  |  |  |
Outstanding as of December 31, 2022 | 17.6 |  |  | 131.98 |  |  |  |  |
Granted | 2.8 |  |  | 218.69 |  |  |  |  |
Exercised | (1.7) |  |  | 83.13 |  |  |  |  |
Cancelled/forfeited | (0.9) |  |  | 178.71 |  |  |  |  |
Adjustment due to Separation(a) | (2.1) |  |  | 154.67 |  |  |  |  |
Outstanding as of December 31, 2023 | 15.7 |  |  | 147.02 |  |  | 6 |  | $ | 1,351 |
Vested and expected to vest as of December 31, 2023(b) | 15.4 |  |  | $ | 145.89 |  |  | 6 |  | $ | 1,345 |
Vested as of December 31, 2023 | 9.0 |  |  | $ | 108.26 |  |  | 4 |  | $ | 1,122 |
(a) The “Adjustment due to Separation” reflects the cancellation of stock options which were outstanding as of September 30, 2023 and held by Veralto employees which have been terminated and replaced by Veralto with Veralto equity awards as part of the Separation. (b) The “expected to vest” options are the net unvested options that remain after applying the forfeiture rate assumption to total unvested options.
Summary of Options Outstanding | Options outstanding as of December 31, 2023 are summarized below (in millions, except price per share and number of years):
| Outstanding |  | Exercisable
Exercise Price | Shares |  | Average Exercise Price |  | Average Remaining Life (in years) |  | Shares |  | Average Exercise Price
$50.37 to $70.73 | 1.7 |  |  | $ | 58.40 |  |  | 2 |  | 1.7 |  |  | $ | 58.40 |
$70.74 to $100.80 | 3.5 |  |  | 82.43 |  |  | 3 |  | 3.5 |  |  | 82.43 |
$100.81 to $167.29 | 4.1 |  |  | 120.82 |  |  | 5 |  | 2.5 |  |  | 117.47 |
$167.30 to $221.34 | 3.8 |  |  | 209.86 |  |  | 8 |  | 0.5 |  |  | 196.95 |
$221.35 to $266.20 | 2.6 |  |  | 242.31 |  |  | 8 |  | 0.8 |  |  | 245.07 |
RSU and PSU Activity | The following summarizes information on unvested RSU and PSU activity (in millions, except weighted average grant-date fair value):
| Number of RSUs/PSUs |  | Weighted Average Grant-Date Fair Value
Unvested as of January 1, 2021 | 3.8 |  |  | $ | 103.07 |
Granted | 1.0 |  |  | 208.33 |
Vested | (1.1) |  |  | 87.37 |
Forfeited | (0.2) |  |  | 140.85 |
Unvested as of December 31, 2021 | 3.5 |  |  | 135.92 |
Granted | 1.2 |  |  | 235.47 |
Vested | (1.1) |  |  | 121.04 |
Forfeited | (0.3) |  |  | 235.47 |
Unvested as of December 31, 2022 | 3.3 |  |  | 168.03 |
Granted | 1.2 |  |  | 219.29 |
Vested | (0.9) |  |  | 148.90 |
Forfeited | (0.3) |  |  | 204.97 |
Adjustment due to Separation(a) | (0.4) |  |  | 211.14 |
Unvested as of December 31, 2023 | 2.9 |  |  | 185.41 |
(a) The “Adjustment due to Separation” reflects the cancellation of RSUs and PSUs which were outstanding as of September 30, 2023 and held by Veralto employees which have been terminated and replaced by Veralto with Veralto equity awards as part of the Separation.
Schedule of Accumulated Other Comprehensive Income (Loss) | The changes in accumulated other comprehensive income (loss) by component are summarized below ($ in millions).
| Foreign Currency Translation Adjustments |  | Pension and Postretirement Plan Benefit Adjustments |  |  |  | Cash Flow Hedge Adjustments |  | Accumulated Comprehensive Income (Loss)
Balance, January 1, 2021 | $ | 745 |  |  | $ | (928) |  |  |  |  | $ | (185) |  |  | $ | (368) |
Other comprehensive income (loss) before reclassifications: |  |  |  |  |  |  |  |  |
Increase (decrease) | (1,277) |  |  | 436 |  |  |  |  | 523 |  |  | (318) |
Income tax impact | (7) |  |  | (102) |  |  |  |  | 5 |  |  | (104) |
Other comprehensive income (loss) before reclassifications, net of income taxes | (1,284) |  |  | 334 |  |  |  |  | 528 |  |  | (422) |
Reclassification adjustments |  |  |  |  |  |  |  |  |
Increase (decrease) | — |  |  | 58 |  | (a) |  |  | (280) |  | (b) | (222) |
Income tax impact | — |  |  | (14) |  |  |  |  | (1) |  |  | (15) |
Reclassification adjustments, net of income taxes | — |  |  | 44 |  |  |  |  | (281) |  |  | (237) |
Net other comprehensive income (loss), net of income taxes | (1,284) |  |  | 378 |  |  |  |  | 247 |  |  | (659) |
Balance, December 31, 2021 | (539) |  |  | (550) |  |  |  |  | 62 |  |  | (1,027) |
Other comprehensive income (loss) before reclassifications: |  |  |  |  |  |  |  |  |
Increase (decrease) | (2,051) |  |  | 233 |  |  |  |  | 378 |  |  | (1,440) |
Income tax impact | (54) |  |  | (56) |  |  |  |  | (91) |  |  | (201) |
Other comprehensive income (loss) before reclassifications, net of income taxes | (2,105) |  |  | 177 |  |  |  |  | 287 |  |  | (1,641) |
Reclassification adjustments |  |  |  |  |  |  |  |  |
Increase (decrease) | — |  |  | 42 |  | (a) |  |  | (235) |  | (b) | (193) |
Income tax impact | — |  |  | (10) |  |  |  |  | (1) |  |  | (11) |
Reclassification adjustments, net of income taxes | — |  |  | 32 |  |  |  |  | (236) |  |  | (204) |
Net other comprehensive income (loss), net of income taxes | (2,105) |  |  | 209 |  |  |  |  | 51 |  |  | (1,845) |
Balance, December 31, 2022 | (2,644) |  |  | (341) |  |  |  |  | 113 |  |  | (2,872) |
Other comprehensive income (loss) before reclassifications: |  |  |  |  |  |  |  |  |
Increase (decrease) | 181 |  |  | (70) |  |  |  |  | (214) |  |  | (103) |
Income tax impact | 34 |  |  | 18 |  |  |  |  | 91 |  |  | 143 |
Other comprehensive income (loss) before reclassifications, net of income taxes | 215 |  |  | (52) |  |  |  |  | (123) |  |  | 40 |
Reclassification adjustments |  |  |  |  |  |  |  |  |
Increase (decrease) | — |  |  | 2 |  | (a) |  |  | 110 |  | (b) | 112 |
Income tax impact | — |  |  | (1) |  |  |  |  | (1) |  |  | (2) |
Reclassification adjustments, net of income taxes | — |  |  | 1 |  |  |  |  | 109 |  |  | 110 |
Net other comprehensive income (loss), net of income taxes | 215 |  |  | (51) |  |  |  |  | (14) |  |  | 150 |
Distribution of Veralto Corporation | 983 |  |  | (9) |  | (c) |  |  | — |  |  | 974 |
Balance, December 31, 2023 | $ | (1,446) |  |  | $ | (401) |  |  |  |  | $ | 99 |  |  | $ | (1,748) |
(a) This accumulated other comprehensive income (loss) component is included in the computation of net periodic pension and postretirement cost (refer to Note 16 for additional details). (b) Reflects reclassification to earnings related to remeasurement of certain long-term debt (refer to Note 15 for additional details). (c) This accumulated other comprehensive income (loss) component included an income tax impact of $2 million.

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