v3.7.0.1

Stock-Based Compensation (Tables)

3 Months Ended

12 Months Ended

Mar. 31, 2017

Dec. 31, 2016

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Schedule of Stock-Based Compensation Costs

The following summarizes the components of our stock-based compensation expense under the Stock Plan and the Danaher Plans ($ in millions):

		Three Months Ended
		March 31, 2017				April 1, 2016
Stock Awards:
Pretax compensation expense		$	7.4			$	7.1
Income tax benefit			(2.5	)			(2.3	)
Stock Award expense, net of income taxes			4.9				4.8
Stock options:
Pretax compensation expense			4.6				4.4
Income tax benefit			(1.6	)			(1.5	)
Stock option expense, net of income taxes			3.0				2.9
Total stock-based compensation:
Pretax compensation expense			12.0				11.5
Income tax benefit			(4.1	)			(3.8	)
Total stock-based compensation expense, net of income taxes		$	7.9			$	7.7

The following summarizes the components of our stock-based compensation expense under the Stock Plan and the Danaher Plans for the years ended December 31 ($ in millions):

		2016				2015				2014
Stock Awards:
Pretax compensation expense		$	28.1			$	22.5			$	19.3
Income tax benefit			(9.3	)			(7.5	)			(6.1	)
Stock Award expense, net of income taxes			18.8				15.0				13.2
Stock options:
Pretax compensation expense			17.2				12.7				11.5
Income tax benefit			(5.8	)			(4.3	)			(3.8	)
Stock option expense, net of income taxes			11.4				8.4				7.7
Total stock-based compensation:
Pretax compensation expense			45.3				35.2				30.8
Income tax benefit			(15.1	)			(11.8	)			(9.9	)
Total stock-based compensation expense, net of income taxes		$	30.2			$	23.4			$	20.9

The following summarizes aggregate intrinsic value, cash receipts and tax benefits realized related to stock option exercise activity under the Stock Plan and the Danaher Plans for the years ended December 31, 2016, 2015 and 2014 (in millions):

		2016				2015				2014
Aggregate intrinsic value of stock options exercised		$	77.5			$	73.4			$	57.4
Cash receipts from stock options exercised(a)		$	59.9			$	51.2			$	43.8
Tax benefit realized related to stock options exercised		$	26.4			$	23.4			$	18.9

^(a)  Cash receipts for periods prior to the Separation were recorded as an increase to Former Parent’s Investment and included $53.3 million in 2016, $51.2 million in 2015 and $43.8 million in 2014.

Schedule of Future Compensation

Stock Awards		$	60.1
Stock options			54.9
Total unrecognized compensation cost		$	115.0

The following summarizes the unrecognized compensation cost for the Stock Plan awards as of December 31, 2016. This compensation cost is expected to be recognized over a weighted average period of approximately three years, representing the remaining service period related to the awards. Future compensation amounts will be adjusted for any changes in estimated forfeitures ($ in millions):

Stock Awards		$	43.3
Stock options			42.3
Total unrecognized compensation cost		$	85.6

Schedule of Assumptions Used

Risk-free interest rate			1.95% - 2.26%
Weighted average volatility (a)			21.0%
Dividend yield			0.5%
Expected years until exercise			5.5 - 8.0

The following summarizes the assumptions used in the Black-Scholes model to value stock options granted under the Stock Plan and the Danaher Plans during the years ended December 31:

		2016				2015				2014
Risk-free interest rate			1.21% - 1.77	%			1.6% - 2.2	%			1.7% - 2.4	%
Volatility (a)			24.3	%			24.3	%			22.4	%
Dividend yield (b)			0.6	%			0.6	%			0.5	%
Expected years until exercise			5.5 - 8.0				5.5 - 8.0				5.5 - 8.0

^(a)  Weighted average volatility post-Separation was estimated based on an average historical stock price volatility of a group of peer companies given our limited trading history. Weighted average volatility for periods prior to the Separation was based on implied volatility from traded options on Danaher’s stock and the historical volatility of Danaher’s stock.

^(b) The dividend yield post-Separation is calculated by dividing our annual dividend, based on the most recent quarterly dividend rate, by Fortive’s closing stock price on the grant date. The dividend yields for periods prior to the Separation were calculated by dividing Danaher’s annual dividend, based on the most recent quarterly dividend rate, by the closing stock price on the grant date.

Schedule of Stock Option Activity

The following summarizes option activity under the Stock Plan for the three months ended March 31, 2017 (in millions, except price per share and numbers of years):

		Options				Weighted Average Exercise Price				Weighted Average Remaining Contractual Term (in years)				Aggregate Intrinsic Value
Outstanding as of December 31, 2016			10.7			$	33.23
Granted			1.8				57.26
Exercised			(0.3	)			25.35
Canceled/forfeited			(0.1	)			39.83
Outstanding as of March 31, 2017			12.1			$	36.86				6.8			$	282.3
Vested and expected to vest as of March 31, 2017 (a)			11.6			$	36.40				6.7			$	276.0
Vested as of March 31, 2017			5.3			$	26.49				4.7			$	180.4

^(a)  The “expected to vest” options are the net unvested options that remain after applying the forfeiture rate assumption to total unvested options.

The following summarizes option activity under the Stock Plan and the Danaher Plans for the years ended December 31, 2016, 2015 and 2014 (in millions, except price per share and numbers of years):

		Options				Weighted Average Exercise Price				Weighted Average Remaining Contractual Term (years)				Aggregate Intrinsic Value
Outstanding as of January 1, 2014			7.0			$	41.81
Granted			0.8				77.63
Exercised			(1.3	)			33.78
Canceled/forfeited			(0.2	)			57.91
Outstanding as of December 31, 2014			6.3				47.66
Granted			0.9				87.96
Exercised			(1.2	)			35.28
Canceled/forfeited			(0.2	)			58.77
Outstanding as of December 31, 2015			5.8				56.00
Granted			1.8
Exercised			(1.6	)
Canceled/forfeited			(0.8	)
Aggregate impact of conversion related to the Separation (a)			5.5
Outstanding as of December 31, 2016			10.7			$	33.23				6			$	218.1
Vested and expected to vest as of December 31, 2016 (b)			10.6			$	32.40				6			$	213.9
Vested as of December 31, 2016			4.8			$	24.79				4			$	139.3

^(a)  The “Aggregate impact of conversion related to the Separation” represents the additional stock options issued as a result of the Separation by applying the “concentration method” to convert employee options based on the ratio of the fair value of Danaher and Fortive common stock calculated using the closing prices as of July 1, 2016.

^(b)  The “expected to vest” options are the net unvested options that remain after applying the forfeiture rate assumption to total unvested options.

Schedule of Stock Options by Exercise Price Range

Options outstanding as of December 31, 2016 are summarized below (in millions; except price per share and numbers of years):

		Outstanding												Vested
Exercise Price		Shares				Average Exercise Price				Average Remaining Life (in years)				Shares				Average Exercise Price
$12.83 - $21.81			2.0			$	17.25				2				2.0			$	17.25
$21.82 - $26.43			1.9				24.97				5				1.5				24.85
$26.44 - $35.44			1.3				31.71				6				0.6				31.97
$35.45 - $40.12			1.4				37.84				7				0.4				38.08
$40.13 - $54.12			4.1			$	43.74				9				0.3			$	43.58
Total shares			10.7												4.8

Schedule of Stock Unit Activity

The following summarizes information related to unvested Stock Award activity under the Stock Plan for the three months ended March 31, 2017 (in millions; except price per share):

		Number of Stock Awards				Weighted Average Grant-Date Fair Value
Unvested as of December 31, 2016			2.2			$	39.20
Granted			0.6				56.69
Vested			(0.4	)			35.88
Unvested as of March 31, 2017			2.4			$	43.83

The following summarizes information related to unvested Stock Award activity under the Stock Plan and the Danaher Plans for the years ended December 31, 2016, 2015 and 2014 (in millions; except price per share):

		Number of Stock Awards				Weighted Average Grant-Date Fair Value
Unvested as of January 1, 2014			1.3			$	50.94
Granted			0.3				76.95
Vested			(0.4	)			42.64
Forfeited			(0.1	)			55.94
Unvested as of December 31, 2014			1.1				61.75
Granted			0.3				86.14
Vested			(0.2	)			51.56
Forfeited			(0.1	)			64.58
Unvested as of December 31, 2015			1.1				72.24
Granted			0.6
Vested			(0.4	)
Forfeited			(0.3	)
Aggregate impact of conversion related to the Separation (a)			1.2
Unvested as of December 31, 2016			2.2			$	39.20

^(a)  The “Aggregate impact of conversion related to the Separation” represents the additional Stock Awards issued as a result of the Separation by applying the “concentration method” to convert Stock Awards based on the ratio of the fair value of Danaher and Fortive common stock calculated using the closing prices as of July 1, 2016.

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- Definition

Tabular disclosure of components of a stock option or other award plan under which equity-based compensation is awarded to employees, typically comprised of the amount of unearned compensation (deferred compensation cost), compensation expense, and changes in the quantity and fair value of the shares (or other type of equity) granted, exercised, forfeited, and issued and outstanding pertaining to that plan. Disclosure may also include nature and general terms of such arrangements that existed during the period and potential effects of those arrangements on shareholders, effect of compensation cost arising from equity-based payment arrangements on the income statement, method of estimating the fair value of the goods or services received, or the fair value of the equity instruments granted, during the period, cash flow effects resulting from equity-based payment arrangements and, for registrants that accelerate vesting of out of the money share options, reasons for the decision to accelerate.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 718
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5070-113901

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Tabular disclosure of option exercise prices, by grouped ranges, including the upper and lower limits of the price range, the number of shares under option, weighted average exercise price and remaining contractual option terms.

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-Publisher FASB
-Name Accounting Standards Codification
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Tabular disclosure of the number and weighted-average exercise prices (or conversion ratios) for share options (or share units) that were outstanding at the beginning and end of the year, vested and expected to vest, exercisable or convertible at the end of the year, and the number of share options or share units that were granted, exercised or converted, forfeited, and expired during the year.

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Tabular disclosure of the significant assumptions used during the year to estimate the fair value of stock options, including, but not limited to: (a) expected term of share options and similar instruments, (b) expected volatility of the entity's shares, (c) expected dividends, (d) risk-free rate(s), and (e) discount for post-vesting restrictions.

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Disclosure of the number and weighted-average grant date fair value for restricted stock and restricted stock units that were outstanding at the beginning and end of the year, and the number of restricted stock and restricted stock units that were granted, vested, or forfeited during the year.

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Tabular disclosure of the total compensation cost related to nonvested awards not yet recognized and the weighted-average period over which it is expected to be recognized.

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