DOCUMENT AND ENTITY INFORMATION
DOCUMENT AND ENTITY INFORMATION - shares | 9 Months Ended | |
Sep. 30, 2016 | Oct. 21, 2016 | |
Document and Entity Information [Abstract] | ||
Document type | 10-Q | |
Amendment flag | false | |
Document period end date | Sep. 30, 2016 | |
Document fiscal year focus | 2,016 | |
Document fiscal period focus | Q3 | |
Trading symbol | FTV | |
Entity registrant name | Fortive Corp | |
Entity central index key | 1,659,166 | |
Current fiscal year end date | --12-31 | |
Entity filer category | Non-accelerated Filer | |
Entity common stock, shares outstanding | 345,738,553 |
CONSOLIDATED AND COMBINED CONDE
CONSOLIDATED AND COMBINED CONDENSED BALANCE SHEETS - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and equivalents | $ 724.8 | $ 0 |
Trade accounts receivable, net | 972 | 979.3 |
Inventories: | ||
Finished goods | 204.2 | 184.1 |
Work in process | 80.4 | 77.1 |
Raw materials | 273.5 | 261.7 |
Total inventories | 558.1 | 522.9 |
Prepaid expenses and other current assets | 104.3 | 91.9 |
Total current assets | 2,359.2 | 1,594.1 |
Property, plant and equipment, net of accumulated depreciation of $1,006.3 and $976.8, respectively | 538.3 | 514.8 |
Other assets | 412 | 393.7 |
Goodwill | 4,048 | 3,949 |
Other intangible assets, net | 775.8 | 759 |
Total assets | 8,133.3 | 7,210.6 |
Current liabilities: | ||
Trade accounts payable | 619.4 | 657.1 |
Accrued expenses and other current liabilities | 749.6 | 666.4 |
Total current liabilities | 1,369 | 1,323.5 |
Other long-term liabilities | 695.6 | 704.6 |
Long-term debt | 3,509.1 | 0 |
Equity: | ||
Preferred stock: $0.01 par value, 15 million and 100 shares authorized, respectively; and no shares issued or outstanding | 0 | 0 |
Common stock: $0.01 par value, 2.0 billion and 100 shares authorized, respectively; and 345.7 million and 100 shares issued and outstanding, respectively | 3.5 | 0 |
Additional paid-in capital | 2,375.3 | 0 |
Retained earnings | 202.7 | 0 |
Former Parent's investment, net | 0 | 5,193.9 |
Accumulated other comprehensive income (loss) | (25.5) | (14.4) |
Total Fortive stockholders' equity | 2,556 | 5,179.5 |
Noncontrolling interests | 3.6 | 3 |
Total stockholders' equity | 2,559.6 | 5,182.5 |
Total liabilities and equity | $ 8,133.3 | $ 7,210.6 |
CONSOLIDATED AND COMBINED COND3
CONSOLIDATED AND COMBINED CONDENSED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Accumulated depreciation | $ 1,006.3 | $ 976.8 |
Preferred stock par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock authorized (in shares) | 15,000,000 | 100 |
Preferred stock issued (in shares) | 0 | 0 |
Preferred stock outstanding (in shares) | 0 | 0 |
Common stock par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock authorized (in shares) | 2,000,000,000 | 100 |
Common stock issued (in shares) | 345,700,000 | 100 |
Common stock outstanding (in shares) | 345,700,000 | 100 |
CONSOLIDATED AND COMBINED COND4
CONSOLIDATED AND COMBINED CONDENSED STATEMENTS OF EARNINGS - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Oct. 02, 2015 | Sep. 30, 2016 | Oct. 02, 2015 | |
Income Statement [Abstract] | ||||
Sales | $ 1,567.4 | $ 1,524.6 | $ 4,597.2 | $ 4,603 |
Cost of sales | (794.5) | (777.4) | (2,361) | (2,360.3) |
Gross profit | 772.9 | 747.2 | 2,236.2 | 2,242.7 |
Operating costs: | ||||
Selling, general and administrative expenses | (354.5) | (349.7) | (1,042.3) | (1,024.4) |
Research and development expenses | (95.2) | (95.7) | (285.6) | (286.7) |
Operating profit | 323.2 | 301.8 | 908.3 | 931.6 |
Non-operating expense | ||||
Interest expense | (23.4) | 0 | (26.1) | 0 |
Earnings before income taxes | 299.8 | 301.8 | 882.2 | 931.6 |
Income taxes | (72.9) | (105.2) | (234.4) | (303.9) |
Net earnings | $ 226.9 | $ 196.6 | $ 647.8 | $ 627.7 |
Net earnings per share: | ||||
Basic (in dollars per share) | $ 0.66 | $ 0.57 | $ 1.87 | $ 1.82 |
Diluted (in dollars per share) | $ 0.65 | $ 0.57 | $ 1.87 | $ 1.82 |
Average common stock and common equivalent shares outstanding: | ||||
Basic (in shares) | 346 | 345.2 | 345.5 | 345.2 |
Diluted (in shares) | 349.2 | 345.2 | 346.6 | 345.2 |
CONSOLIDATED AND COMBINED COND5
CONSOLIDATED AND COMBINED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Oct. 02, 2015 | Sep. 30, 2016 | Oct. 02, 2015 | |
Statement of Comprehensive Income [Abstract] | ||||
Net earnings | $ 226.9 | $ 196.6 | $ 647.8 | $ 627.7 |
Other comprehensive income (loss), net of income taxes: | ||||
Foreign currency translation adjustments | (25.7) | (9.9) | (14.2) | (99.8) |
Pension adjustments | 1 | (4.3) | 3.1 | 7.7 |
Total other comprehensive income (loss), net of income taxes | (24.7) | (14.2) | (11.1) | (92.1) |
Comprehensive income | $ 202.2 | $ 182.4 | $ 636.7 | $ 535.6 |
CONSOLIDATED AND COMBINED COND6
CONSOLIDATED AND COMBINED CONDENSED STATEMENT OF CHANGES IN EQUITY - USD ($) $ in Millions | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Net Parent Investment [Member] | AOCI Attributable to Parent [Member] | Noncontrolling Interest [Member] |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net earnings | $ 236.1 | ||||||
Common stock outstanding (in shares) at Dec. 31, 2015 | 100 | ||||||
Equity, end of period at Dec. 31, 2015 | $ 5,182.5 | $ 5,193.9 | $ (14.4) | $ 3 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net earnings | 647.8 | $ 226.9 | 420.9 | ||||
Recapitalization (in shares) | 345,200,000 | ||||||
Recapitalization | $ 3.5 | (3.5) | |||||
Cash dividend paid to Former Parent | (3,000) | ||||||
Dividends to shareholders | (24.2) | ||||||
Net Transfers To (From) Parent | (301.4) | ||||||
Noncash adjustment to Net Former Parent's investment | $ 2,344.1 | (2,332.3) | |||||
Other comprehensive income | $ (11.1) | (11.1) | |||||
Fortive common stock-based award activity (in shares) | 500,000 | ||||||
Fortive common stock-based award activity | 31.2 | 22.4 | |||||
Change in noncontrolling interests | 0.6 | ||||||
Common stock outstanding (in shares) at Sep. 30, 2016 | 345,700,000 | 345,700,000 | |||||
Equity, end of period at Sep. 30, 2016 | $ 2,559.6 | $ 3.5 | 2,375.3 | 202.7 | 0 | (25.5) | 3.6 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net earnings | 226.9 | ||||||
Dividends to shareholders | (24.2) | ||||||
Other comprehensive income | $ (24.7) | (24.7) | |||||
Common stock outstanding (in shares) at Sep. 30, 2016 | 345,700,000 | 345,700,000 | |||||
Equity, end of period at Sep. 30, 2016 | $ 2,559.6 | $ 3.5 | $ 2,375.3 | $ 202.7 | $ 0 | $ (25.5) | $ 3.6 |
CONSOLIDATED AND COMBINED STATE
CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2016 | Oct. 02, 2015 | |
Cash flows from operating activities: | ||
Net earnings | $ 647.8 | $ 627.7 |
Noncash items: | ||
Depreciation | 66.7 | 65.7 |
Amortization | 67.2 | 66.5 |
Stock-based compensation expense | 34.4 | 24.3 |
Impairment charge on intangible assets | 3.5 | 12 |
Change in trade accounts receivable, net | 9.9 | (36.2) |
Change in inventories | (34.9) | (52.8) |
Change in trade accounts payable | (37.4) | 0.5 |
Change in prepaid expenses and other assets | (13.3) | (63.1) |
Change in accrued expenses and other liabilities | 75.5 | (23.5) |
Net cash provided by operating activities | 819.4 | 621.1 |
Cash flows from investing activities: | ||
Cash paid for acquisitions | (190.6) | 0 |
Payments for additions to property, plant and equipment | (90) | (87) |
All other investing activities | 4.3 | 3.1 |
Net cash used in investing activities | (276.3) | (83.9) |
Cash flows from financing activities: | ||
Net proceeds from borrowings (maturities of 90 days or less) | 525.6 | 0 |
Proceeds from borrowings (maturities longer than 90 days) | 2,983 | 0 |
Cash dividend paid to Former Parent | (3,000) | 0 |
Payment of cash dividend to shareholders | (24.2) | 0 |
Net transfers to Former Parent | (301.4) | (537.2) |
All other financing activities | (2.2) | 0 |
Net cash provided by (used in) financing activities | 180.8 | (537.2) |
Effect of exchange rate changes on cash and equivalents | 0.9 | 0 |
Net change in cash and equivalents | 724.8 | 0 |
Beginning balance of cash and equivalents | 0 | 0 |
Ending balance of cash and equivalents | $ 724.8 | $ 0 |
BUSINESS OVERVIEW AND BASIS OF
BUSINESS OVERVIEW AND BASIS OF PRESENTATION | 9 Months Ended |
Sep. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BUSINESS OVERVIEW AND BASIS OF PRESENTATION | NOTE 1. BUSINESS OVERVIEW AND BASIS OF PRESENTATION Fortive Corporation is a diversified industrial growth company encompassing businesses that are recognized leaders in attractive markets. Fortive Corporation’s well-known brands hold leading positions in field instrumentation, transportation, sensing, product realization, automation and specialty, and franchise distribution markets. Fortive Corporation's businesses design, develop, manufacture and market professional and engineered products, software and services for a variety of end markets, building upon leading brand names, innovative technology and significant market positions. Fortive Corporation's research and development, manufacturing, sales, distribution, service and administrative facilities are located in more than 40 countries. Fortive Corporation operates in two business segments: Professional Instrumentation and Industrial Technologies. The Professional Instrumentation segment consists of Fortive Corporation's Advanced Instrumentation & Solutions and Sensing Technologies businesses. The Advanced Instrumentation & Solutions business consists of field solutions products and product realization services and products. Field solutions include a variety of compact professional test tools, thermal imaging and calibration equipment for electrical, industrial, electronic and calibration applications, and online condition-based monitoring equipment for critical infrastructure in electrical utility and industrial applications. Product realization services and products help developers and engineers convert concepts into finished products and also include highly-engineered energetic materials components used in specialized vertical applications. The Sensing Technologies business offers devices that sense, monitor and control operational or manufacturing variables, such as temperature, pressure, level, flow, turbidity and conductivity. The Industrial Technologies segment consists of the Fortive Corporation's Transportation Technologies, Automation & Specialty Components and Franchise Distribution businesses. The Transportation Technologies business is a leading worldwide provider of solutions and services focused on fuel dispensing, remote fuel management, point-of-sale and payment systems, environmental compliance, vehicle tracking and fleet management. The Automation & Specialty Components business consists of automation and engine retarder products. The Franchise Distribution business manufactures and distributes professional tools and a full line of wheel service equipment. Separation from Danaher Corporation —Fortive Corporation completed its separation from Danaher Corporation ("Danaher" or "Former Parent") on July 2, 2016, the first day of its fiscal third quarter (the "Separation"). The Separation was completed in the form of a pro rata distribution to Danaher stockholders of record on June 15, 2016 of 100 percent of the outstanding shares of Fortive Corporation held by Danaher. Each Danaher stockholder of record as of the close of business on June 15, 2016 received one share of Fortive Corporation common stock for every two shares of Danaher common stock held on the record date. Fortive Corporation's common stock began “regular way” trading on the New York Stock Exchange under the ticker symbol “FTV” on July 5, 2016. Fortive Corporation and the Fortive businesses (for the periods prior to the Separation) are collectively referred to as "Fortive" or "the Company" herein. Prior to the Separation, the Fortive businesses comprised certain operating units that were included in Danaher’s Test & Measurement segment, Industrial Technologies segment (other than its Product Identification platform) and Retail/Commercial Petroleum platform (collectively the “Fortive Businesses”). On July 1, 2016, Danaher contributed the net assets of the Fortive Businesses to Fortive Corporation, formerly a wholly-owned subsidiary of Danaher. In addition, in connection with the Separation, the Company paid a cash dividend to Danaher in the amount of $3.0 billion and the 100 shares of Fortive common stock held by Danaher were recapitalized into 345,237,561 shares of Fortive common stock held by Danaher 100 percent of which were distributed to Danaher stockholders. Following the Separation, Danaher no longer owned any shares of the Company. Per share amounts in the Consolidated and Combined Condensed Statements of Earnings for periods on or prior to July 1, 2016 have been retroactively adjusted to give effect to this recapitalization. In connection with the Separation, on July 1, 2016, Danaher and Fortive entered into a separation and distribution agreement as well as various other related agreements (collectively the “Agreements”) that govern the Separation and the relationships between the parties going forward, including a transition services agreement, an employee matters agreement, a tax matters agreement, an intellectual property matters agreement, and a Danaher Business System ("DBS") license agreement. Prior to the Separation, the Company was dependent upon Danaher for all of its working capital and financing requirements under Danaher’s centralized approach to cash management and financing of operations of its subsidiaries. With the exception of cash, cash equivalents and borrowings clearly associated with Fortive and related to the Separation, including the financial transactions described below, financial transactions relating to the business operations of the Company during the period prior to the Separation were accounted for through the Former Parent's investment, net ("Former Parent's Investment") account of the Company. Accordingly, none of the Former Parent's cash, cash equivalents or debt at the corporate level was assigned to the Company in the financial statements for the periods prior to the Separation. In June 2016, the Company completed the following financing transactions: • Entered into a credit agreement with a syndicate of banks providing for a three -year $500 million senior term facility (the “Term Facility”) and a five -year $1.5 billion senior unsecured revolving credit facility that expires on June 16, 2021 (the “Revolving Credit Facility,” and together with the Term Facility, the “Credit Agreement”). The Company borrowed the entire $500 million of loans under the Term Facility; • Completed the private placement of $2.5 billion of senior unsecured notes in multiple series (collectively, the “Notes”); and • Established a commercial paper program supported by the Revolving Credit Facility. These financing activities yielded net proceeds of approximately $3.5 billion (including aggregate commercial paper outstanding as of September 30, 2016 of $527 million ), of which $3.0 billion was paid to Danaher in June 2016 as a cash dividend in connection with the Separation. Refer to Note 5 to the Consolidated and Combined Condensed Financial Statements for additional information related to the Company’s financing activities. Basis of Presentation — The accompanying Consolidated and Combined Condensed Financial Statements present the historical financial position, results of operations, changes in equity and cash flows of Fortive in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The combined financial statements for periods prior to the Separation were derived from Danaher's condensed consolidated financial statements and accounting records and prepared in accordance with GAAP for the preparation of carved-out combined financial statements. Through the date of the Separation, all revenues and costs as well as assets and liabilities directly associated with Fortive have been included in the combined financial statements. Prior to the Separation, the combined financial statements also included allocations of certain general, administrative, sales and marketing expenses and cost of sales from Danaher’s corporate office and from other Danaher businesses to the Company and allocations of related assets, liabilities, and the Former Parent’s investment, as applicable. The allocations were determined on a reasonable basis; however, the amounts are not necessarily representative of the amounts that would have been reflected in the financial statements had the Company been an entity that operated independently of Danaher during the applicable periods. Related party allocations prior to the Separation, including the method for such allocation, are discussed further in Note 12 . Following the Separation, the consolidated financial statements include the accounts of Fortive and its wholly-owned subsidiaries and no longer include any allocations of expenses from Danaher to the Company. Accordingly: • The Consolidated and Combined Condensed Balance Sheet at September 30, 2016, consists of the consolidated balances of Fortive, while at December 31, 2015, it consists of the combined balances of Fortive and the Fortive Businesses. • The Consolidated and Combined Condensed Statement of Earnings and Statement of Comprehensive Income for the three months ended September 30, 2016 consists of the consolidated results of Fortive. The Consolidated and Combined Condensed Statement of Earnings and Statement of Comprehensive Income for the nine months ended September 30, 2016 consists of the consolidated results of Fortive for the three months ended September 30, 2016 and the combined results of Fortive and the Fortive Businesses for the six months ended July 1, 2016. The Consolidated and Combined Condensed Statements of Earnings and Statements of Comprehensive Income for the three and nine months ended October 2, 2015 consist of the combined results of the Fortive Businesses. • The Consolidated and Combined Condensed Statement of Changes in Equity for the nine months ended September 30, 2016 consists of the consolidated activity for Fortive for the three months ended September 30, 2016 and the combined activity for Fortive and the Fortive Businesses for the six months ended July 1, 2016. • The Consolidated and Combined Condensed Statement of Cash Flows for the nine months ended September 30, 2016 consists of the consolidated results of Fortive for the three months ended September 30, 2016 and the combined results of Fortive and the Fortive Businesses for the six months ended July 1, 2016. The Consolidated and Combined Condensed Statement of Cash Flows for the nine months ended October 2, 2015 consist of the combined results of the Fortive Businesses. The Consolidated and Combined Condensed Financial Statements of Fortive may not be indicative of the Company's results had it been a separate stand-alone entity throughout the periods presented, nor are the results stated herein indicative of what the Company's financial position, results of operations and cash flows may be in the future . All significant transactions between the Company and Danaher have been included in the accompanying Consolidated and Combined Condensed Financial Statements for all periods presented. Cash transactions with Danaher prior to the Separation are reflected in the accompanying Consolidated and Combined Condensed Statements of Changes in Equity as "Net transfers to Former Parent" and "Cash dividend paid to Former Parent" and in the accompanying Consolidated and Combined Condensed Balance Sheets within "Former Parent's investment, net." Former Parent's Investment, which included retained earnings prior to the Separation, represents Danaher's interest in the recorded net assets of the Company prior to the Separation. In addition, the accumulated net effect of intercompany transactions between the Company and Former Parent or Former Parent affiliates for periods prior to the Separation are included in Former Parent’s Investment. On July 2, 2016, in connection with the Separation, Former Parent's Investment was redesignated within stockholders' equity and allocated between common stock and additional paid-in capital based on the number of shares of the Company's common stock outstanding at the distribution date. The Agreements include a "Wrong-Pockets Provision" that ensures the Separation-related transactions were executed in accordance with the Agreements. In periods subsequent to the Separation the Company and Danaher may make adjustments to balances transferred at the Separation date in accordance with the Wrong-Pockets Provision. Any such adjustments are recorded through the Former Parent’s Investment account. During the three months ended September 30, 2016 , the Company recorded net Wrong-Pockets Provision adjustments of approximately $30 million . The financial statements include the accounts of the Company and its subsidiaries. All intercompany balances and transactions have been eliminated upon consolidation. The Consolidated and Combined Condensed Financial Statements also reflect the impact of non-controlling interests. Non-controlling interests do not have a significant impact on the Company’s consolidated results of operations, therefore net earnings and net earnings per share attributable to non-controlling interests are not presented separately in the Company’s Consolidated and Combined Condensed Statements of Earnings. Net earnings attributable to non-controlling interests have been reflected in selling, general and administrative expenses ("SG&A") and were insignificant in all periods presented. The Consolidated and Combined Condensed Financial Statements included herein have been prepared by the Company without audit, pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the "SEC"). Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations; however, the Company believes that the disclosures are adequate to make the information presented not misleading. The Consolidated and Combined Condensed Financial Statements included herein should be read in conjunction with the audited annual combined financial statements as of and for the year ended December 31, 2015 and the Notes thereto included within the Company’s Information Statement furnished as Exhibit 99.1 to the Company’s Form 8-K filed with the SEC on June 15, 2016 (the “Information Statement”). In the opinion of the Company, the accompanying financial statements contain all adjustments (consisting of only normal recurring accruals) necessary to present fairly the financial position of the Company as of September 30, 2016 and December 31, 2015 , and its results of operations for the three and nine months ended September 30, 2016 and October 2, 2015 and its cash flows for each of the nine months then ended. Revision of Prior Periods —In order to correct immaterial errors in the prior periods presented and thereby facilitate period-to-period comparison, the management of the Company has revised the Combined Condensed Statements of Earnings (the “Carved-Out Earnings Statements”) for the three and nine months ended October 2, 2015 (the “October Periods”) and for the three months and year ended December 31, 2015 (the “December Periods”) of the Fortive Businesses that had been prepared prior to the Separation on a carved-out basis in accordance with GAAP. In preparing the Carved-Out Earnings Statements for the October Periods prior to the Separation, both sales and SG&A included over-allocations from Danaher, in each case, by $14.4 million, which error was corrected prior to the Separation in the Carved-Out Earnings Statements for the December Periods. In effectuating such correction during the December Periods, cost of sales included over-allocations from Danaher and SG&A included under-allocations from Danaher by, in each case, $4.7 million. Both Danaher, prior to the Separation, and the management of the Company, after the Separation, have analyzed the errors both quantitatively and qualitatively, and concluded that they were not material to the periods affected. The effect of the foregoing on specific items of the Carved-Out Earnings Statements for the October Periods and the December Periods is set forth in the table below: Three Months Ended October 2, 2015 Nine Months Ended October 2, 2015 Previously Reported (a) Corrections As Revised Previously Reported Corrections As Revised Sales $ 1,539.0 $ (14.4 ) $ 1,524.6 $ 4,617.4 $ (14.4 ) $ 4,603.0 Cost of sales (777.4 ) — (777.4 ) (2,360.3 ) — (2,360.3 ) Gross profit 761.6 (14.4 ) 747.2 2,257.1 (14.4 ) 2,242.7 Operating costs: Selling, general and administrative expenses (364.1 ) 14.4 (349.7 ) (1,038.8 ) 14.4 (1,024.4 ) Research and development expenses (95.7 ) — (95.7 ) (286.7 ) — (286.7 ) Operating profit $ 301.8 $ — $ 301.8 $ 931.6 $ — $ 931.6 Net earnings $ 196.6 $ — $ 196.6 $ 627.7 $ — $ 627.7 Three Months Ended December 31, 2015 Year Ended December 31, 2015 Previously Reported (a) Corrections As Revised Previously Reported Corrections As Revised Sales $ 1,561.4 $ 14.4 $ 1,575.8 $ 6,178.8 $ — $ 6,178.8 Cost of sales (823.2 ) 4.7 (818.5 ) (3,183.5 ) 4.7 (3,178.8 ) Gross profit 738.2 19.1 757.3 2,995.3 4.7 3,000.0 Operating costs: Selling, general and administrative expenses (309.1 ) (19.1 ) (328.2 ) (1,347.9 ) (4.7 ) (1,352.6 ) Research and development expenses (91.0 ) — (91.0 ) (377.7 ) — (377.7 ) Operating profit $ 338.1 $ — $ 338.1 $ 1,269.7 $ — $ 1,269.7 Net earnings $ 236.1 $ — $ 236.1 $ 863.8 $ — $ 863.8 (a) The Carved-out Earnings Statement for the three months ended October 2, 2015 and December 31, 2015 were previously reported in filings with the SEC only to the extent incorporated into the Carved-out Earnings Statements for the nine months ended October 2, 2015 and the year ended December 31, 2015, respectively. The errors noted above, as well as the associated corrections impacted only the results of the Industrial Technologies segment and did not have any impact on the Professional Instrumentation segment. Cash and Equivalents —The Company considers all highly liquid investments with a maturity of three months or less at the date of purchase to be cash equivalents. Accumulated Other Comprehensive Income (Loss) —The changes in accumulated other comprehensive income (loss) by component are summarized below ($ in millions). Foreign currency translation adjustments are generally not adjusted for income taxes as they relate to indefinite investments in non-U.S. subsidiaries. Foreign currency translation adjustments Pension & post- retirement plan benefit adjustments Total For the Three Months Ended September 30, 2016: Balance, July 1, 2016 $ 62.7 $ (63.5 ) $ (0.8 ) Other comprehensive income (loss) before reclassifications, net of income taxes (25.7 ) — (25.7 ) Amounts reclassified from accumulated other comprehensive income (loss): Increase (decrease) — 1.3 1.3 Income tax impact — (0.3 ) (0.3 ) Amounts reclassified from accumulated other comprehensive income (loss), net of income taxes — 1.0 1.0 Net current period other comprehensive income (loss) (25.7 ) 1.0 (24.7 ) Balance, September 30, 2016 $ 37.0 $ (62.5 ) $ (25.5 ) For the Three Months Ended October 2, 2015: Balance, July 3, 2015 $ 93.0 $ (71.4 ) $ 21.6 Other comprehensive income (loss) before reclassifications: Increase (decrease) (9.9 ) (8.9 ) (18.8 ) Income tax impact — 3.4 3.4 Other comprehensive income (loss) before reclassifications, net of income taxes (9.9 ) (5.5 ) (15.4 ) Amounts reclassified from accumulated other comprehensive income (loss): Increase (decrease) — 1.6 1.6 Income tax impact — (0.4 ) (0.4 ) Amounts reclassified from accumulated other comprehensive income (loss), net of income taxes — 1.2 1.2 Net current period other comprehensive income (loss) (9.9 ) (4.3 ) (14.2 ) Balance, October 2, 2015 $ 83.1 $ (75.7 ) $ 7.4 Foreign currency translation adjustments Pension & post- retirement plan benefit adjustments Total For the Nine Months Ended September 30, 2016: Balance, December 31, 2015 $ 51.2 $ (65.6 ) $ (14.4 ) Other comprehensive income (loss) before reclassifications, net of income taxes (14.2 ) — (14.2 ) Amounts reclassified from accumulated other comprehensive income (loss): Increase (decrease) — 4.1 4.1 Income tax impact — (1.0 ) (1.0 ) Amounts reclassified from accumulated other comprehensive income (loss), net of income taxes — 3.1 3.1 Net current period other comprehensive income (loss) (14.2 ) 3.1 (11.1 ) Balance, September 30, 2016 $ 37.0 $ (62.5 ) $ (25.5 ) For the Nine Months Ended October 2, 2015: Balance, December 31, 2014 $ 182.9 $ (83.4 ) $ 99.5 Other comprehensive income (loss) before reclassifications: Increase (decrease) (99.8 ) 5.2 (94.6 ) Income tax impact — (1.3 ) (1.3 ) Other comprehensive income (loss) before reclassifications, net of income taxes (99.8 ) 3.9 (95.9 ) Amounts reclassified from accumulated other comprehensive income (loss): Increase — 5.0 5.0 Income tax impact — (1.2 ) (1.2 ) Amounts reclassified from accumulated other comprehensive income (loss), net of income taxes — 3.8 3.8 Net current period other comprehensive income (loss) (99.8 ) 7.7 (92.1 ) Balance, October 2, 2015 $ 83.1 $ (75.7 ) $ 7.4 New Accounting Standards - In August 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments , which clarifies the classification and presentation of eight specific cash flow issues in the statement of cash flows. For the Company, this standard is effective beginning January 1, 2018, with early adoption permitted. The standard should be adopted using a retrospective transition approach, unless impracticable. Management has not yet completed its assessment of the impact of the new standard on the Company’s financial statements. In March 2016, the FASB issued ASU No. 2016-09, Compensation—Stock Compensation (Topic 718) , which aims to simplify several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, classification of certain items on the statement of cash flows and accounting for forfeitures. The Company intends to adopt this standard beginning January 1, 2017 on a prospective basis. Management believes the impact of this standard on the Company's future financial statements is inherently uncertain and dependent primarily on the timing and relative value realized for future share-based transactions, and this may cause volatility in earnings after the adoption date. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) , which will require, among other items, lessees to recognize a right-of-use asset and a lease liability for most leases. Extensive quantitative and qualitative disclosures, including significant judgments made by management, will be required to provide greater insight into the extent of revenue and expense recognized and expected to be recognized from existing contracts. The accounting applied by a lessor is largely unchanged from that applied under the current standard. The standard must be adopted using a modified retrospective transition approach and provides for certain practical expedients. For the Company, this standard is effective beginning January 1, 2019, with early adoption permitted. Management has not yet completed its assessment of the impact of the new standard on the Company’s financial statements. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) , which impacts virtually all aspects of an entity’s revenue recognition. The core principle of Topic 606 is that revenue should be recognized to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In July 2015, the FASB deferred the effective date of the standard by one year which results in the new standard being effective for the Company beginning January 1, 2018. In addition, during March, April and May 2016, the FASB issued ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net), ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing and ASU 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients, respectively, which clarified the guidance on certain items such as reporting revenue as a principal versus agent, identifying performance obligations, accounting for intellectual property licenses, assessing collectability and presentation of sales taxes. The Company is currently assessing the impact that the adoption of the new standard will have on its consolidated financial statements and related disclosures, including possible transition alternatives, and expects to adopt this standard in 2018. In April 2015, the FASB issued ASU No. 2015-03, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs |
ACQUISITION (Notes)
ACQUISITION (Notes) | 9 Months Ended |
Sep. 30, 2016 | |
Business Combinations [Abstract] | |
ACQUISITON | NOTE 2. ACQUISITIONS For a full description of the Company’s acquisition activity, reference is made to Note 3 of the Company’s audited annual combined financial statements as of and for the year ended December 31, 2015 included within the Company’s Information Statement. The Company continually evaluates potential acquisitions that either strategically fit with the Company’s existing portfolio or expand the Company’s portfolio into a new and attractive business area. The Company has completed a number of acquisitions that have been accounted for as purchases and have resulted in the recognition of goodwill in the Company’s financial statements. This goodwill arises because the purchase prices for these businesses reflect a number of factors including the future earnings and cash flow potential of these businesses, the multiple to earnings, cash flow and other factors at which similar businesses have been purchased by other acquirers, the competitive nature of the processes by which the Company acquired the businesses, the avoidance of the time and costs which would be required (and the associated risks that would be encountered) to enhance the Company’s existing offerings to key target markets and develop new and profitable businesses, and the complementary strategic fit and resulting synergies these businesses bring to existing operations. The Company makes an initial allocation of the purchase price at the date of acquisition based upon its understanding of the fair value of the acquired assets and assumed liabilities. The Company obtains this information during due diligence and through other sources. In the months after closing, as the Company obtains additional information about these assets and liabilities, including through tangible and intangible asset appraisals, and learns more about the newly acquired business, it is able to refine the estimates of fair value and more accurately allocate the purchase price. Only items identified as of the acquisition date are considered for subsequent adjustment. The Company is in the process of obtaining valuations of certain acquired intangible assets in connection with these acquisitions. The Company will make appropriate adjustments to the purchase price allocation prior to completion of the measurement period, as required. During the first nine months of 2016, the Company acquired three businesses for total consideration of $191 million in cash, net of cash acquired. The businesses acquired complement existing units of the Industrial Technology and Professional Instrumentation segments. The aggregate annual sales of these businesses at the time of their respective acquisitions, in each case based on the company’s revenues for its last completed fiscal year prior to the acquisition, were approximately $47 million . The Company preliminarily recorded an aggregate of $114 million of goodwill related to these acquisitions. The following summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition for all acquisitions consummated during the nine months ended September 30, 2016 ($ in millions): Trade accounts receivable $ 5.2 Inventories 2.2 Property, plant and equipment 0.6 Goodwill 113.9 Other intangible assets, primarily customer relationships, trade names and technology 82.7 Trade accounts payable (1.5 ) Other assets and liabilities, net (12.5 ) Net cash consideration $ 190.6 |
GOODWILL
GOODWILL | 9 Months Ended |
Sep. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL | NOTE 3. GOODWILL The following is a rollforward of the Company’s goodwill ($ in millions): Balance, December 31, 2015 $ 3,949.0 Attributable to 2016 acquisitions 113.9 Foreign currency translation & other (14.9 ) Balance, September 30, 2016 $ 4,048.0 The carrying value of goodwill by segment is summarized as follows ($ in millions): September 30, 2016 December 31, 2015 Professional Instrumentation $ 2,466.4 $ 2,400.6 Industrial Technologies 1,581.6 1,548.4 Total goodwill $ 4,048.0 $ 3,949.0 The Company has not identified any “triggering” events which indicate a potential impairment of goodwill in 2016 |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended |
Sep. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | NOTE 4. FAIR VALUE MEASUREMENTS Accounting standards define fair value based on an exit price model, establish a framework for measuring fair value where the Company’s assets and liabilities are required to be carried at fair value and provide for certain disclosures related to the valuation methods used within a valuation hierarchy as established within the accounting standards. This hierarchy prioritizes the inputs into three broad levels as follows. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets in markets that are not active, or other observable characteristics for the asset or liability, including interest rates, yield curves and credit risks, or inputs that are derived principally from, or corroborated by, observable market data through correlation. Level 3 inputs are unobservable inputs based on the Company’s assumptions. A financial asset or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement in its entirety. A summary of financial liabilities that are measured at fair value on a recurring basis were as follows ($ in millions): Quoted Prices in Active Market (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total September 30, 2016 Deferred compensation liabilities $ — $ 14.1 $ — $ 14.1 December 31, 2015 Deferred compensation liabilities $ — $ 53.7 $ — $ 53.7 Certain management employees of the Company participate in the Company’s nonqualified deferred compensation program, which permits such employees to defer a portion of their compensation, on a pretax basis, until after their termination of employment. All amounts deferred under such plan are unfunded, unsecured obligations of the Company and are presented as a component of the Company’s compensation and benefits accrual included in other long-term liabilities in the accompanying Consolidated and Combined Condensed Balance Sheets. Participants may choose among alternative earning rates for the amounts they defer, which are primarily based on investment options within the Company’s 401(k) program (except that the earnings rates for amounts contributed unilaterally by the Company are entirely based on changes in the value of the Company’s common stock). Changes in the deferred compensation liability under these programs are recognized based on changes in the fair value of the participants’ accounts, which are based on the applicable earnings rates. Prior to the Separation, certain management employees of the Company participated in Danaher's nonqualified deferred compensation programs with similar terms except that earnings rates for amounts contributed unilaterally by Former Parent were entirely based on changes in the value of Danaher's common stock. In connection with the Separation, Fortive established a deferred compensation program which was designed to replicate Danaher’s. Accounts in Danaher’s deferred compensation programs held by Fortive employees at the time of the Separation were converted into accounts in the Fortive deferred compensation program based on the “concentration method” designed to maintain the economic value before and after the Separation date using the relative fair market value of the Danaher and Fortive common stock as of the date of the Separation. Prior to the Separation, the entire value of the Fortive employees’ deferred compensation program accounts in Danaher’s deferred compensation programs was recorded in other long-term liabilities. Upon conversion of these accounts to the Fortive deferred compensation program, $19.2 million of deferred compensation liabilities were reclassified from other long-term liabilities to additional paid-in capital, representing the value of the deferred compensation that will ultimately be settled in Fortive common stock. In addition, Danaher retained a liability of approximately $21.7 million of deferred compensation liabilities related to former employees of Fortive Businesses whose employment terminated prior to the Separation. As a result, the deferred compensation liabilities balance recorded at September 30, 2016 does not include amounts related to such terminated employees. Because this amount had been included in the Company's Combined Condensed Balance Sheet prior to the Separation, Danaher's retention of the liability has been reflected as an adjustment to Former Parent's Investment. This amount is considered a non-cash financing activity for purposes of the Consolidated and Combined Condensed Statements of Cash Flows. Fair Value of Financial Instruments The carrying amounts and fair values of financial instruments were as follows ($ in millions): September 30, 2016 Carrying Amount Fair Value Long-term borrowings $ 3,509.1 $ 3,615.7 As of September 30, 2016 , the long-term borrowings were categorized as Level 1. Long-term borrowings were incurred in June 2016 and as of December 31, 2015, the Company did not have any long-term borrowings. |
FINANCING
FINANCING | 9 Months Ended |
Sep. 30, 2016 | |
Debt Disclosure [Abstract] | |
FINANCING | NOTE 5. FINANCING The carrying value of the components of the Company’s debt as of September 30, 2016 were as follows ($ in millions): September 30, 2016 Commercial paper $ 526.6 Variable interest rate Term Facility 500.0 1.80% senior unsecured notes due 2019 298.1 2.35% senior unsecured notes due 2021 744.5 3.15% senior unsecured notes due 2026 889.9 4.30% senior unsecured notes due 2046 546.8 Other financing 3.2 Long-term debt $ 3,509.1 Credit Facilities As described above in Note 1, on June 16, 2016, the Company entered into the Credit Agreement with a syndicate of banks that provides for: • a $500 million Term Facility that matures on June 16, 2019. The Company borrowed the entire $500 million available under this facility, and • a $1.5 billion Revolving Credit Facility that expires on June 16, 2021. The Company borrowed the entire variable rate loan of $500 million available under the Term Facility. As of September 30, 2016 the borrowing under the Term Facility bore an interest rate of 1.7% per annum. The term loan is pre-payable at the option of the Company. Re-borrowing is not permitted once the term loan is repaid. The Revolving Credit Facility is subject to a one -year extension option at the request of the Company and with the consent of the lenders. The Credit Agreement also contains an option permitting the Company to request an increase in the amounts available under the Credit Agreement of up to an aggregate additional $500 million . The obligations under the Credit Agreement were initially guaranteed on an unsecured, unsubordinated basis by Danaher, which guarantee terminated upon the completion of the Separation on July 2, 2016. Borrowings under the Credit Agreement (other than bid loans under the Revolving Credit Facility) bear interest at a rate equal (at the Company’s option) to either (1) a LIBOR-based rate (the “LIBOR-Based Rate”), or (2) the highest of (a) the Federal funds rate plus 1/2 of 1%, (b) the prime rate and (c) the LIBOR-Based Rate plus 1% , plus in each case a margin that varies according to the Company’s long-term debt credit rating. The Company is obligated to pay an annual facility fee for the Revolving Credit Facility of between 9.0 and 25.0 basis points varying according to the Company's long-term debt credit rating. The Credit Agreement requires the Company to maintain a consolidated net leverage ratio of debt to Consolidated EBITDA (as defined in the Credit Agreement) of less than 3.5 to 1.0 and a consolidated interest coverage ratio of Consolidated EBITDA to interest expense of greater than 3.5 to 1.0 as of the end of any fiscal quarter, beginning with the fiscal quarter ending September 30, 2016 . The Credit Agreement also contains customary representations, warranties, conditions precedent, events of default, indemnities and affirmative and negative covenants. As of September 30, 2016 , the Company was in compliance with all covenants under the Credit Agreement that were in effect and the Company had no borrowings outstanding under the Revolving Credit Facility. Commercial Paper Program The Company generally satisfies any short-term liquidity needs that are not met through operating cash flows and available cash primarily through issuances of commercial paper under its commercial paper program. Under this program, the Company may issue and sell unsecured, short-term promissory notes with maturities not exceeding 397 days . Interest expense on the notes is paid at maturity and is generally based on the short-term ratings assigned to the Company by credit rating agencies at the time of issuance and prevailing market rates measured by reference to LIBOR. As of September 30, 2016 , $527 million of commercial paper was outstanding under this program with a weighted average annual interest rate of 0.9% and a weighted average remaining maturity of approximately 20 days. Credit support for the commercial paper program is provided by the Revolving Credit Facility. The availability of the Revolving Credit Facility as a standby liquidity facility to repay maturing commercial paper is an important factor in maintaining the existing credit ratings of the Company’s commercial paper program. The Company expects to limit any borrowings under the Revolving Credit Facility to amounts that would leave sufficient credit available under the facility to allow the Company to borrow, if needed, to repay all of the outstanding commercial paper as it matures. The Company’s ability to access the commercial paper market, and the related costs of these borrowings, is affected by the strength of the Company's credit rating and market conditions. Any downgrade in the Company’s credit rating would increase the cost of borrowing under the Company’s commercial paper program and the Credit Agreement, and could limit or preclude the Company's ability to issue commercial paper. If the Company’s access to the commercial paper market is adversely affected due to a downgrade, change in market conditions or otherwise, the Company expects it would rely on a combination of available cash, operating cash flow and the Revolving Credit Facility to provide short-term funding. In such event, the cost of borrowings under the Credit Agreement could be higher than the historic cost of commercial paper borrowings. The Company classified its borrowings outstanding under the commercial paper program as of September 30, 2016 as long-term debt in the accompanying Consolidated and Combined Condensed Balance Sheet as the Company has the intent and ability, as supported by availability under the Revolving Credit Facility referenced above, to refinance these borrowings for at least one year from the balance sheet date. Proceeds from borrowings under the commercial paper program are typically available for general corporate purposes, including acquisitions. Long-Term Indebtedness On June 20, 2016, the Company completed the private placement of each of the following series of the Notes to qualified institutional buyers under Rule 144A of the Securities Act of 1933, as amended (the "Securities Act") and outside the United States to non-U.S. persons in compliance with Regulation S under the Securities Act: • $300 million aggregate principal amount of senior notes due June 15, 2019 (the “2019 Notes”). The 2019 Notes were issued at 99.893% of their principal amount and bear interest at the rate of 1.80% per year. • $750 million aggregate principal amount of senior notes due June 15, 2021 (the “2021 Notes”). The 2021 Notes were issued at 99.977% of their principal amount and bear interest at the rate of 2.35% per year. • $900 million aggregate principal amount of senior notes due June 15, 2026 (the “2026 Notes”). The 2026 Notes were issued at 99.644% of their principal amount and bear interest at the rate of 3.15% per year. • $350 million aggregate principal amount of senior notes due June 15, 2046 (the “Initial 2046 Notes”). The Initial 2046 Notes were issued at 99.783% of their principal amount and bear interest at the rate of 4.30% per year. • $200 million aggregate principal amount of senior notes due June 15, 2046 (the “Additional 2046 Notes” and, together with the Initial 2046 Notes, the “2046 Notes”). The Additional 2046 Notes were issued at 101.564% of their principal amount and bear interest at the rate of 4.30% per year. Interest on the Notes is payable semi-annually in arrears on June 15 and December 15 of each year, commencing on December 15, 2016. In connection with the issuance of the Notes, the Company entered into a registration rights agreement, pursuant to which the Company is obligated to use commercially reasonable efforts to file with the SEC, and cause to be declared effective, a registration statement with respect to an offer to exchange each series of Notes for registered notes with terms that are substantially identical to the Notes of such series. Alternatively, if the exchange offers are not available or cannot be completed, the Company would be required to use commercially reasonable efforts to file, and cause to be declared effective, a shelf registration statement to cover resales of the Notes under the Securities Act. If the Company does not comply with these obligations, it will be required to pay additional interest on the Notes. The Company used the net proceeds from the issuance of the Notes and Term Facility to fund a $3.0 billion cash dividend payment to Danaher in connection with the Separation. Net discounts, premiums and issuance costs associated with long-term indebtedness totaled $20.8 million as of September 30, 2016 and has been recorded as an offset to the carrying amount of the related debt in the accompanying Consolidated and Combined Condensed Balance Sheet as of September 30, 2016. Covenants and Redemption Provisions Applicable to Notes The Company may redeem the Notes of the applicable series, in whole or in part, at any time prior to the dates specified in the applicable indentures (the “Call Dates”) by paying the principal amount and the “make-whole” premium specified in the applicable indenture, plus accrued and unpaid interest. Additionally, with the exception of the 2019 Notes, the Company may redeem all or any part of the Notes of the applicable series on or after the Call Dates without paying the “make-whole” premium specified in the applicable indenture. Note Series Call Dates 2019 Notes June 15, 2019 2021 Notes May 15, 2021 2026 Notes March 15, 2026 2046 Notes December 15, 2045 If a change of control triggering event occurs, the Company will, in certain circumstances, be required to make an offer to repurchase the Notes at a purchase price equal to 101% of the principal amount, plus accrued and unpaid interest. A change of control triggering event is defined as the occurrence of both a change of control and a rating event, each as defined in the applicable indenture. Except in connection with a change of control triggering event, the Notes do not have any credit rating downgrade triggers that would accelerate the maturity of the Notes. The Notes contain customary covenants, including limits on the incurrence of certain secured debt and sale/leaseback transactions. None of these covenants are considered restrictive to the Company’s operations and as of September 30, 2016 , the Company was in compliance with all the covenants under the Notes. Minimum Principal Payments There are no minimum principal payments due under the Company's total outstanding debt during the next two years. The principal payments due are presented in the following table: Commercial Paper Term Loan Notes Total 2019 $ — $ 500.0 $ 300.0 $ 800.0 2020 — — — — 2021 — — 750.0 750.0 Thereafter 526.9 — 1,450.0 1,976.9 Total principal payments (a) $ 526.9 $ 500.0 $ 2,500.0 $ 3,526.9 (a) Amount is higher than the carrying value of debt as net discounts, premiums and issuance costs of $21.0 million as of September 30, 2016 are included in the carrying amount of the related debt in the accompanying Consolidated and Combined Condensed Balance Sheet as of September 30, 2016 but excluded from the principal payments disclosed herein. In addition, these amounts exclude other financing balances of $3.2 million. |
PENSION PLANS
PENSION PLANS | 9 Months Ended |
Sep. 30, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
PENSION PLANS | NOTE 6. PENSION PLANS The Company has noncontributory defined benefit pension plans outside of the United States. The following sets forth the components of the Company’s net periodic pension costs associated with these plans ($ in millions): Three Months Ended Nine Months Ended September 30, 2016 October 2, 2015 September 30, 2016 October 2, 2015 Service cost $ 0.9 $ 1.3 $ 2.6 $ 3.7 Interest cost 1.8 2.2 5.6 6.4 Expected return on plan assets (2.0 ) (2.4 ) (6.1 ) (6.7 ) Amortization of net loss 1.3 1.8 4.1 5.2 Net periodic pension cost $ 2.0 $ 2.9 $ 6.2 $ 8.6 Net periodic pension costs are included in cost of sales and SG&A in the accompanying Consolidated and Combined Condensed Statements of Earnings. Effective December 31, 2015 , the Company changed its estimate of the service and interest cost components of net periodic benefit cost for its pension plans. Previously, the Company estimated the service and interest cost components utilizing a single weighted-average discount rate derived from the yield curve used to measure the benefit obligation. The new estimate utilizes a full yield curve approach in the estimation of these components by applying the specific spot rates along the yield curve used in the determination of the benefit obligation to their underlying projected cash flows. The new estimate provides a more precise measurement of service and interest costs recognized by improving the correlation between projected benefit cash flows and their corresponding spot rates. The change is accounted for as a change in accounting estimate that is inseparable from a change in accounting principle, which is applied prospectively. For 2016 , the change in estimate is expected to reduce net periodic pension cost by approximately $1 million when compared to the prior methodology. Employer Contributions During 2016 , the Company’s cash contribution requirements for its defined benefit pension plans are expected to be approximately $11 million |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 7. INCOME TAXES The Company’s effective tax rates for the three and nine months ended September 30, 2016 , were 24.3% and 26.6% respectively, as compared to 34.9% and 32.6% for the three and nine months ended October 2, 2015 . The difference in effective tax rates between the periods primarily involved a higher mix of income in jurisdictions with lower tax rates and higher federal tax benefits. The Company’s effective tax rates for 2016 and 2015 differ from the U.S. federal statutory rate of 35% due principally to the Company’s earnings outside the United States that are indefinitely reinvested and taxed at rates lower than the U.S. federal statutory rate and the impact of credits and deductions provided by law. In connection with the Separation, Danaher and the Company entered into the Agreements, including a tax matters agreement. The tax matters agreement distinguishes between the treatment of tax matters for pre-Separation “Joint” filings compared to pre-Separation “Separate” filings. Joint filings involve legal entities, such as those in the United States, that include operations from both Danaher and the Company. By contrast, Separate filings involve certain entities (primarily outside of the United States), that exclusively include either Danaher’s or the Company’s operations, respectively. Under the tax matters agreement, for pre-Separation Joint filings, Danaher remains liable for and has contractually assumed all income tax liabilities including applicable interest and penalties. Danaher has also indemnified the Company for all tax liabilities for Joint returns related to pre-Separation periods. For the U.S. federal portion of Joint tax liabilities, U.S. Treasury Regulations make each member of prior period U.S. consolidated tax filings severally liable to the U.S. government for any U.S. federal income tax liability incurred by the U.S. consolidated group. As of the Separation date, the amount of uncertain tax positions associated with Fortive Businesses that Danaher has recorded and contractually assumed related to pre-Separation periods is approximately $135 million . Danaher is the primary obligor for such pre-Separation liabilities. The Company believes it is remote that it will have any liability for pre-Separation income tax Joint filings, principally in view of Danaher’s strong financial position. Therefore, the Company has removed the liability from its balance sheet as of the Separation date by adjusting Former Parent’s Investment. This is a non-cash financing activity for purposes of the Consolidated and Combined Condensed Statements of Cash Flows and was offset by other changes in tax attributes associated with the Separation. For the Company’s pre-Separation Separate filings, the Company is fully liable for all income tax liabilities including interest and penalties. As of the Separation date, the Company had approximately $33 million of uncertain tax positions reflected in other long-term liabilities. |
STOCK BASED COMPENSATION
STOCK BASED COMPENSATION | 9 Months Ended |
Sep. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK BASED COMPENSATION | NOTE 8. STOCK-BASED COMPENSATION The Company had no stock-based compensation plans prior to the Separation; however certain Fortive employees participated in Danaher’s stock-based compensation plans ("Danaher Plans"), which provided for the grants of stock options, performance stock units (“PSUs”), and restricted stock units (“RSUs”) among other types of awards. The expense associated with Fortive employees who participated in the Danaher Plans was allocated to the Company in the accompanying Combined Condensed Statements of Earnings for the associated periods prior to the Separation. In connection with the Separation and the employee matters agreement, the Company adopted the 2016 Stock Incentive Plan (the “Stock Plan”) and outstanding equity awards of Danaher held by Fortive employees (the "Converted Awards") were converted into or replaced with equity awards of Fortive (the "Conversion Awards") under the Stock Plan based on the “concentration method,” and as adjusted to maintain the economic value before and after the distribution date using the relative fair market value of the Danaher and Fortive common stock based on the closing prices as of July 1, 2016. There was no significant incremental stock-based compensation expense recorded as a result of the equity award conversion. Outstanding performance-based RSU and PSU of Danaher held by Fortive employees with pending performance goals of Danaher at the Separation date were cancelled and replaced in connection with the Separation with performance-based restricted stock awards ("RSAs") and performance stock awards ("PSAs") of Fortive with comparable value, performance goals and vesting requirements. All other terms of the equity awards continued unchanged following the conversion or replacement. The Stock Plan provides for the grant of stock options, stock appreciation rights, RSUs, PSUs, RSAs and PSAs (collectively, "Stock Awards") or any other stock-based award. A total of 23.0 million shares of Fortive common stock have been authorized for issuance under the Stock Plan. As of September 30, 2016, approximately 22.4 million shares of the Company's common stock remain available for issuance under the Stock Plan. Stock options under the Stock Plan generally vest pro rata over a five year period and terminate 10 years from the grant date, though the specific terms of each grant are determined by the Compensation Committee of the Company's Board of Directors (the "Compensation Committee"). The Company’s executive officers and certain other employees may be awarded options with different vesting criteria, and options granted to non-employee directors are fully vested as of the grant date. Option exercise prices for new options granted by the Company under this plan equal the closing price of the Company’s common stock on the NYSE on the date of grant, while options issued as Conversion Awards were priced to maintain the economic value before and after the Separation. RSUs and RSAs issued under the Stock Plan provide for the issuance of a share of the Company’s common stock at no cost to the holder. RSUs granted to employees under the Stock Plan generally provide for time-based vesting over a five year period, although certain employees may be awarded RSUs with different time-based vesting criteria, and RSAs granted to members of the Company’s senior management are also subject to performance-based vesting criteria. RSUs granted to non-employee directors under the Stock Plan vest on the earlier of the first anniversary of the grant date or the date of, and immediately prior to, the next annual meeting of the Company’s shareholders following the grant date. However, the underlying shares are not issued until the earlier of the director’s death or the first day of the seventh month following the director’s retirement from the Board of Directors (the "Board"). Prior to vesting, RSUs granted under the Stock Plan do not have dividend equivalent rights, do not have voting rights and the shares underlying the RSUs are not considered issued or outstanding. RSAs granted under the Stock Plan have all of the same dividend, voting and other rights corresponding to all other common stock, provided, however, that the dividends payable on the RSAs will accrue and be delivered at the time of delivery of the shares upon vesting of the RSA . As part of the Company's executive equity compensation program, PSUs may be granted under the Stock Plan that vest based on the Company’s total shareholder return ranking relative to the S&P 500 Index over a three year performance period. No PSUs have been issued under the Stock Plan. During the third quarter of 2016, PSAs were granted under the Stock Plan as Conversion Awards that vest based on the Company’s total shareholder return ranking relative to the S&P 500 Index over the performance period remaining on the corresponding Converted Awards. The equity compensation awards granted by the Company generally vest only if the employee is employed by the Company (or in the case of directors, the director continues to serve on the Board) on the vesting date or in other limited circumstances. To cover the exercise of options, vesting of RSUs and PSUs and issuances of RSAs and PSAs, the Company generally issues new shares from its authorized but unissued share pool, although it may instead issue treasury shares in certain circumstances. The Company accounts for stock-based compensation by measuring the cost of employee services received in exchange for all equity awards granted based on the fair value of the award as of the grant date. The Company recognizes the compensation expense over the requisite service period (which is generally the vesting period but may be shorter than the vesting period if the employee becomes retirement eligible before the end of the vesting period). The fair value for RSUs was calculated using the closing price of the Company’s common stock on the date of grant, adjusted for the fact that RSUs do not accrue dividends. The fair value for RSAs was calculated using the closing price of the Company’s common stock on the date of grant. The fair value of the PSUs and PSAs was calculated using a Monte Carlo pricing model. The fair value of the options granted was calculated using a Black-Scholes Merton (“Black-Scholes”) option pricing model. Stock-based Compensation Expense Stock-based compensation has been recognized as a component of SG&A in the accompanying Consolidated and Combined Condensed Statements of Earnings. Prior to the Separation, the Company was allocated stock-based compensation expense by Danaher. Following the Separation, stock-based compensation is recorded based on the provisions of the Stock Plan. Accordingly, the amounts presented for the nine months ended September 30, 2016 and the three and nine months ended October 2, 2015 may not be indicative of the Company's results had it been a separate stand-alone entity throughout the periods presented. The following summarizes the components of the Company’s stock-based compensation expense under the Stock Plan and the Danaher Plans ($ in millions): Three Months Ended Nine Months Ended September 30, 2016 October 2, 2015 September 30, 2016 October 2, 2015 RSUs/PSUs: Pretax compensation expense $ 7.3 $ 5.1 $ 21.5 $ 15.3 Income tax benefit (2.3 ) (1.8 ) (7.1 ) (5.2 ) RSU/PSU expense, net of income taxes 5.0 3.3 14.4 10.1 Stock options: Pretax compensation expense 4.7 3.4 12.9 9.0 Income tax benefit (1.6 ) (1.1 ) (4.4 ) (3.1 ) Stock option expense, net of income taxes 3.1 2.3 8.5 5.9 Total stock-based compensation: Pretax compensation expense 12.0 8.5 34.4 24.3 Income tax benefit (3.9 ) (2.9 ) (11.5 ) (8.3 ) Total stock-based compensation expense, net of income taxes $ 8.1 $ 5.6 $ 22.9 $ 16.0 The following summarizes the unrecognized compensation cost for the Stock Plan awards as of September 30, 2016 which are expected to recognized over a weighted average period of approximately three years. Future compensation amounts will be adjusted for any changes in estimated forfeitures ($ in millions): Stock Awards $ 50.5 Stock options 46.0 Total unrecognized compensation cost $ 96.5 Stock Options The following summarizes the assumptions used in the Black-Scholes model to value options granted during the three months ended September 30, 2016: Risk-free interest rate 1.21% - 1.25% Weighted average volatility (a) 25.0 % Dividend yield (b) 0.6 % Expected years until exercise 5.5 - 8.0 (a) Weighted average volatility was estimated based on an average historical stock price volatility of a group of peer companies, given the Company's limited trading history. (b) The dividend yield is calculated by dividing Fortive's annual dividend, based on the most recent quarterly dividend rate, by the closing Fortive stock price on the grant date. The following summarizes option activity under the Stock Plan and the Danaher Plans for the nine months ended September 30, 2016 (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 December 31, 2015 5.8 Granted 1.6 Exercised (1.4 ) Canceled/forfeited (0.7 ) Aggregate impact of conversion related to the Separation (a) 5.5 Outstanding as of September 30, 2016 10.8 $ 32.96 7 $ 194.1 Vested and expected to vest as of September 30, 2016 (b) 10.4 $ 32.12 7 $ 190.3 Vested as of September 30, 2016 4.9 $ 24.64 5 $ 127.8 (a) The “Aggregate impact of conversion related to the Separation” represents the number of 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 as of the date 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. The weighted average exercise price of stock options outstanding at December 31, 2015, and for stock options granted, exercised, canceled/forfeited is not included in the table above as the nine months ended September 30, 2016 include the conversion of stock option awards under Danaher's Plans into awards under the Stock Plan. The weighted average exercise price of Fortive stock options granted, exercised and canceled/forfeited during the three months ended September 30, 2016 was $50.60 , $27.67 , and $40.27 , respectively. The aggregate intrinsic values in the table above represent the total pretax intrinsic value (the difference between the closing stock price of Fortive's common stock on the last trading day of the third quarter of 2016 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on September 30, 2016 . The amount of aggregate intrinsic value will change based on the price of Fortive’s common stock. The following summarizes aggregate intrinsic value, cash receipts and tax benefits realized related to option exercise activity under the Stock Plan and the Danaher Plans for the three and nine months ended September 30, 2016 and October 2, 2015 (in millions): Three Months Ended Nine Months Ended September 30, 2016 October 2, 2015 September 30, 2016 October 2, 2015 Aggregate intrinsic value of options exercised $ 2.8 $ 18.0 $ 73.7 $ 50.4 Cash receipts from exercise of options $ 3.3 $ 12.7 $ 56.7 $ 35.4 Tax benefit realized related to exercise of options $ 1.0 $ 5.8 $ 25.5 $ 15.8 The net income tax benefit in excess of the expense recorded for financial reporting purposes (the “excess tax benefit”) for the three months ended September 30, 2016 has been recorded as an increase to additional paid-in capital and is reflected as a financing cash inflow in the accompanying Consolidated and Combined Condensed Statements of Cash Flows. The excess tax benefit prior to the Separation was recorded as an increase to Former Parent's Investment. Stock Awards The following summarizes information related to unvested Stock Award activity under the Stock Plan and the Danaher Plans for the nine months ended September 30, 2016 (in millions; except price per share): Number of Stock Awards Weighted Average Grant-Date Fair Value Unvested as of December 31, 2015 1.1 $ 72.24 Granted 0.6 Vested (0.4 ) Forfeited (0.2 ) Aggregate impact of conversion related to the Separation (a) 1.2 Unvested as of September 30, 2016 2.3 $ 38.84 (a) The “Aggregate impact of conversion related to the Separation” represents the number of 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 as of the date of the Separation. The weighted average grant date fair value of Stock Awards outstanding at December 31, 2015, and for Stock Awards granted, vested, canceled/forfeited is not disclosed in the table above as the nine months ended September 30, 2016 include the conversion of Stock Awards under Danaher's Plans into awards under the Stock Plan. The weighted average grant date fair value of Fortive Stock Awards granted, vested and canceled/forfeited during the three months ended September 30, 2016 was $49.39 , $33.11 , and $39.10 , respectively. The Company realized a tax benefit of $5 million and $10 million during the three and nine months ended September 30, 2016 , respectively, related to the vesting of Stock Awards, as compared to realizing a tax benefit of $4 million and $9 million during the three and nine months ended October 2, 2015, respectively. Any excess tax benefit attributable to Stock Awards has been recorded as an increase to additional paid-in capital and is reflected as a financing cash inflow in the accompanying Consolidated and Combined Condensed Statements of Cash Flows. The excess tax benefit prior to the Separation was recorded as an increase to Former Parent's Investment. In connection with the exercise of certain stock options and the vesting of Stock Awards issued under the Stock Plan, a number of shares of Fortive sufficient to fund statutory minimum tax withholding requirements has been withheld from the total shares issued or released to the award holder (though under the terms of the Stock Plan, the shares are considered to have been issued and are not added back to the pool of shares available for grant). During the three months ended September 30, 2016 , approximately 112 thousand shares of Fortive common stock with an aggregate value of $6 million |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 9. COMMITMENTS AND CONTINGENCIES For a description of the Company’s litigation and contingencies, reference is made to Note 14 of the Company’s annual audited combined financial statements as of and for the year ended December 31, 2015 included within the Company’s Information Statement. The Company generally accrues estimated warranty costs at the time of sale. In general, manufactured products are warranted against defects in material and workmanship when properly used for their intended purpose, installed correctly, and appropriately maintained. Warranty period terms depend on the nature of the product and range from ninety days up to the life of the product. The amount of the accrued warranty liability is determined based on historical information such as past experience, product failure rates or number of units repaired, estimated cost of material and labor, and in certain instances estimated property damage. The accrued warranty liability is reviewed on a quarterly basis and may be adjusted as additional information regarding expected warranty costs becomes known. The following is a rollforward of the Company’s accrued warranty liability ($ in millions): Balance, December 31, 2015 $ 61.0 Accruals for warranties issued during the period 44.2 Settlements made (43.6 ) Effect of foreign currency translation 0.3 Balance, September 30, 2016 $ 61.9 |
CAPITAL STOCK AND EARNINGS PER
CAPITAL STOCK AND EARNINGS PER SHARE | 9 Months Ended |
Sep. 30, 2016 | |
Earnings Per Share [Abstract] | |
CAPITAL STOCK AND EARNINGS PER SHARE | NOTE 10. CAPITAL STOCK AND EARNINGS PER SHARE Capital Stock Under Fortive’s amended and restated certificate of incorporation, as of July 1, 2016, Fortive’s authorized capital stock consists of 2.0 billion common shares with a par value of $0.01 per share and 15 million preferred shares with a par value of $0.01 per share. On July 1, 2016, the 100 shares of Fortive common stock held by Danaher were recapitalized into 345,237,561 shares of Fortive common stock held by Danaher. On July 2, 2016, Danaher distributed 100 percent of Fortive’s outstanding common stock to its stockholders. No preferred shares were issued or outstanding on September 30, 2016 . Each share of Fortive common stock entitles the holder to one vote on all matters to be voted upon by common stockholders. Fortive’s Board is authorized to issue shares of preferred stock in one or more series and has discretion to determine the rights, preferences, privileges and restrictions, including voting rights, dividend rights, conversion rights, redemption privileges and liquidation preferences, of each series of preferred stock. The Board’s authority to issue preferred stock with voting rights or conversion rights that, if exercised, could adversely affect the voting power of the holders of common stock, could potentially discourage attempts by third parties to obtain control of Fortive through certain types of takeover practices. In the third quarter of 2016, the Company declared a regular quarterly dividend of $0.07 per share paid on September 30, 2016 to holders of record on August 26, 2016. For the three months ended September 30, 2016 , the $24.2 million was recorded as dividends to shareholders in the Consolidated and Combined Condensed Statement of Changes In Equity. Net earnings per share ("EPS") Basic EPS is calculated by dividing net earnings by the weighted average number of shares of common stock outstanding for the applicable period. Diluted EPS is similarly calculated, except that the calculation includes the dilutive effect of the assumed issuance of shares under stock-based compensation plans except where the inclusion of such shares would have an anti-dilutive impact. The Company was incorporated on November 10, 2015, accordingly, there were no shares or common stock equivalents of the Company outstanding prior to that date. The total number of shares outstanding after the recapitalization described above were 345.2 million and is being utilized for calculation of both basic and diluted EPS for all periods prior to the Separation and specifically for the three and nine months ended October 2, 2015 , and as it relates to the pre-Separation periods included in the nine months ended September 30, 2016. Information related to the calculation of net earnings per share of common stock for the three and nine months ended September 30, 2016 is summarized as follows ($ and shares in millions, except per share amounts): Net Earnings (Numerator) Shares (Denominator) Per Share Amount For the Three Months Ended September 30, 2016: Basic EPS $ 226.9 346.0 $ 0.66 Incremental shares from assumed exercise of dilutive options and vesting of dilutive Stock Awards — 3.2 Diluted EPS $ 226.9 349.2 $ 0.65 For the Three Months Ended October 2, 2015: Basic EPS $ 196.6 345.2 $ 0.57 Incremental shares from assumed issuance of shares under stock-based compensation plans — — Diluted EPS $ 196.6 345.2 $ 0.57 Net Earnings (Numerator) Shares (Denominator) Per Share Amount For the Nine Months Ended September 30, 2016: Basic EPS $ 647.8 345.5 $ 1.87 Incremental shares from assumed exercise of dilutive options and vesting of dilutive Stock Awards — 1.1 Diluted EPS $ 647.8 346.6 $ 1.87 For the Nine Months Ended October 2, 2015: Basic EPS $ 627.7 345.2 $ 1.82 Incremental shares from assumed issuance of shares under stock-based compensation plans — — Diluted EPS $ 627.7 345.2 $ 1.82 |
SEGMENT INFORMATION
SEGMENT INFORMATION | 9 Months Ended |
Sep. 30, 2016 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | NOTE 11. SEGMENT INFORMATION The Company operates and reports its results in two business segments consisting of the Professional Instrumentation and Industrial Technologies segments. As of September 30, 2016 , there have been no material changes in total assets or liabilities by segment since December 31, 2015 . Segment results are shown below ($ in millions): Three Months Ended Nine Months Ended September 30, 2016 October 2, 2015 September 30, 2016 October 2, 2015 Sales: Professional Instrumentation $ 723.5 $ 722.0 $ 2,145.1 $ 2,229.7 Industrial Technologies 843.9 802.6 2,452.1 2,373.3 Total $ 1,567.4 $ 1,524.6 $ 4,597.2 $ 4,603.0 Operating Profit: Professional Instrumentation $ 161.5 $ 157.4 $ 469.9 $ 514.0 Industrial Technologies 180.6 154.9 484.7 449.4 Other (18.9 ) (10.5 ) (46.3 ) (31.8 ) Total $ 323.2 $ 301.8 $ 908.3 $ 931.6 |
RELATED-PARTY TRANSACTIONS
RELATED-PARTY TRANSACTIONS | 9 Months Ended |
Sep. 30, 2016 | |
Related Party Transactions [Abstract] | |
RELATED-PARTY TRANSACTIONS | NOTE 12. RELATED-PARTY TRANSACTIONS Prior to the Separation, transactions with Danaher were considered related party transactions. In connection with the Separation, on July 1, 2016, Danaher and Fortive entered into the Agreements, which govern the Separation and provide a framework for the relationship between the parties going forward, including a transition services agreement, employee matters agreement, tax matters agreement, an intellectual property matters agreement, and a DBS license agreement. Cash Adjustment The Agreements provide for a final cash adjustment mechanism. As of July 1, 2016, $72.3 million , representing the Company's estimate of cash payable to Former Parent under the Agreements, and considered restricted by the Company at July 1, 2016, was reported in prepaid expenses and other current assets with a corresponding liability to Former Parent recorded in accrued expenses and other liabilities on the Combined Condensed Balance Sheet. During the third quarter of 2016, the Company settled this liability by paying $70.7 million to Danaher. Transition Services Agreement The transition services agreement ("TSA") sets forth the terms and conditions pursuant to which the Company and its subsidiaries and Danaher and its subsidiaries will provide to each other various services. The services to be provided include information technology, facilities, certain accounting and other financial functions, and administrative services. The charges for the transition services generally are expected to allow the providing company to fully recover all out-of-pocket costs and expenses it actually incurs in connection with providing the service, plus, in some cases, the allocated indirect costs of providing the services, generally without profit. TSA Payments In accordance with the TSA, the Company made net payments of approximately $15 million during the three months ended September 30, 2016 , for various services provided to the Company by Danaher. Employee Matters Agreement The employee matters agreement sets forth, among other things, the allocation of assets, liabilities and responsibilities relating to employee compensation and benefit plans and programs and other related matters in connection with the Separation, including the treatment of outstanding equity and other incentive awards and certain retirement and welfare benefit obligations. Tax Matters Agreement The tax matters agreement governs the Company’s and Danaher’s respective rights, responsibilities and obligations after the Separation with respect to tax liabilities and benefits, tax attributes, the preparation and filing of tax returns, the control of audits and other tax proceedings and other matters regarding taxes. Refer to Note 7 for further discussion regarding the tax matters agreement. Intellectual Property Matters Agreement The intellectual property matters agreement sets forth the terms and conditions pursuant to which Danaher and the Company have mutually granted certain personal, generally irrevocable, non-exclusive, worldwide, and royalty-free rights to use certain intellectual property. The Company and Danaher are able to sublicense their rights in connection with activities relating to the their businesses, but not for independent use by third parties. DBS License Agreement The DBS license agreement sets forth the terms and conditions pursuant to which Danaher has granted a non-exclusive, worldwide, non-transferable, perpetual license to the Company to use DBS solely in support of its businesses. The Company will be able to sublicense such license solely to direct and indirect, wholly-owned subsidiaries. In addition, each of Danaher and the Company licensed to each other improvements made by such party to DBS during the first two years of the term of the DBS license agreement. Revenue and Other Transactions Entered Into In the Ordinary Course of Business Prior to the Separation, the Company operated as part of Danaher and not as a stand-alone company and certain of the Company’s revenue arrangements related to contracts entered into in the ordinary course of business with Danaher and its affiliates. Following the Separation, the Company continues to have arms-length revenue arrangements entered into in the ordinary course of business with Danaher and its affiliates, although certain agreements were entered into or terminated as a result of the Separation. The Company recorded revenues of $6 million and $10 million from Danaher and its subsidiaries during the three months ended September 30, 2016 and October 2, 2015, respectively. The Company recorded revenues of $25 million and $28 million from Danaher and its subsidiaries during the nine months ended September 30, 2016 and October 2, 2015, respectively. Allocation of Expenses Prior to the Separation Prior to the Separation, the Company operated as part of Danaher and not as a stand-alone company. Accordingly, certain shared costs for management and support functions which were provided on a centralized basis within Danaher were allocated to the Company and are reflected as expenses in these financial statements prior to the date of the Separation. Management considers the allocation methodologies used to be reasonable and appropriate reflections of the related expenses attributable to the Company for purposes of the carved-out financial statements; however, the expenses reflected in these financial statements for periods prior to the date of the Separation may not be indicative of the actual expenses that would have been incurred during the periods presented if the Company had operated as a separate stand-alone entity. In addition, the expenses reflected in the financial statements may not be indicative of expenses that will be incurred in the future by the Company. Expenses allocated to the Company from Danaher and its subsidiaries for the six months ended July 1, 2016 and the nine months ended October 2, 2015 were $117 million and $151 million , respectively. Expenses were not allocated from Danaher to the Company after the Separation. Corporate Expenses Certain corporate overhead and shared expenses incurred by Danaher and its subsidiaries prior to the Separation were allocated to the Company and are reflected in the Consolidated and Combined Condensed Statements of Earnings. These amounts include, but are not limited to, items such as general management and executive oversight, costs to support Danaher's information technology infrastructure, facilities, compliance, human resources, marketing and legal functions and financial management and transaction processing including public company reporting, consolidated tax filings and tax planning, Danaher benefit plan administration, risk management and consolidated treasury services, certain employee benefits and incentives, and stock based compensation administration. These costs were allocated using methodologies that management believes are reasonable for the item being allocated. Allocation methodologies included the Company’s relative share of revenues, headcount, or functional spend as a percentage of the total. Following the Separation, the Company independently incurs corporate overhead costs and no corporate overhead costs are allocated by Danaher. Insurance Programs Administered by Danaher In addition to the corporate allocations discussed above, the Company was allocated expenses related to certain insurance programs Danaher administered on behalf of the Company, including workers compensation, property, cargo, automobile, crime, fiduciary, product, general and directors’ and officers’ liability insurance. These amounts were allocated using various methodologies, as described below. Included within the insurance cost allocation are allocations related to programs for which Danaher was self-insured up to a certain amount. For the self-insured component, costs were allocated to the Company based on its incurred claims. Danaher had premium based policies which covered amounts in excess of the self-insured retentions. The Company was allocated a portion of the total insurance cost incurred by Danaher based on its pro-rata portion of Danaher’s total underlying exposure base. In connection with the Separation, an estimated liability relating to the Company’s known and incurred but not reported claims was transferred to the Company and the Company established similar independent self-insurance processes and insurance programs to support any outstanding claims going forward. Medical Insurance Programs Administered by Danaher In addition to the corporate allocations discussed above, the Company was allocated expenses related to the medical insurance programs Danaher administered on behalf of the Company. These amounts were allocated using actual medical claims incurred during the period for the Company's employees. In connection with the Separation, the Company established independent medical insurance programs similar those previously provided by Danaher. Deferred Compensation Program Administered by Danaher |
BUSINESS OVERVIEW AND BASIS O20
BUSINESS OVERVIEW AND BASIS OF PRESENTATION (Policies) | 9 Months Ended |
Sep. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
New Accounting Standards | New Accounting Standards - In August 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments , which clarifies the classification and presentation of eight specific cash flow issues in the statement of cash flows. For the Company, this standard is effective beginning January 1, 2018, with early adoption permitted. The standard should be adopted using a retrospective transition approach, unless impracticable. Management has not yet completed its assessment of the impact of the new standard on the Company’s financial statements. In March 2016, the FASB issued ASU No. 2016-09, Compensation—Stock Compensation (Topic 718) , which aims to simplify several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, classification of certain items on the statement of cash flows and accounting for forfeitures. The Company intends to adopt this standard beginning January 1, 2017 on a prospective basis. Management believes the impact of this standard on the Company's future financial statements is inherently uncertain and dependent primarily on the timing and relative value realized for future share-based transactions, and this may cause volatility in earnings after the adoption date. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) , which will require, among other items, lessees to recognize a right-of-use asset and a lease liability for most leases. Extensive quantitative and qualitative disclosures, including significant judgments made by management, will be required to provide greater insight into the extent of revenue and expense recognized and expected to be recognized from existing contracts. The accounting applied by a lessor is largely unchanged from that applied under the current standard. The standard must be adopted using a modified retrospective transition approach and provides for certain practical expedients. For the Company, this standard is effective beginning January 1, 2019, with early adoption permitted. Management has not yet completed its assessment of the impact of the new standard on the Company’s financial statements. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) , which impacts virtually all aspects of an entity’s revenue recognition. The core principle of Topic 606 is that revenue should be recognized to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In July 2015, the FASB deferred the effective date of the standard by one year which results in the new standard being effective for the Company beginning January 1, 2018. In addition, during March, April and May 2016, the FASB issued ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net), ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing and ASU 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients, respectively, which clarified the guidance on certain items such as reporting revenue as a principal versus agent, identifying performance obligations, accounting for intellectual property licenses, assessing collectability and presentation of sales taxes. The Company is currently assessing the impact that the adoption of the new standard will have on its consolidated financial statements and related disclosures, including possible transition alternatives, and expects to adopt this standard in 2018. In April 2015, the FASB issued ASU No. 2015-03, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs |
BUSINESS OVERVIEW AND BASIS O21
BUSINESS OVERVIEW AND BASIS OF PRESENTATION (Tables) | 9 Months Ended | |
Sep. 30, 2016 | Oct. 02, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Schedule of Error Corrections | The effect of the foregoing on specific items of the Carved-Out Earnings Statements for the October Periods and the December Periods is set forth in the table below: Three Months Ended October 2, 2015 Nine Months Ended October 2, 2015 Previously Reported (a) Corrections As Revised Previously Reported Corrections As Revised Sales $ 1,539.0 $ (14.4 ) $ 1,524.6 $ 4,617.4 $ (14.4 ) $ 4,603.0 Cost of sales (777.4 ) — (777.4 ) (2,360.3 ) — (2,360.3 ) Gross profit 761.6 (14.4 ) 747.2 2,257.1 (14.4 ) 2,242.7 Operating costs: Selling, general and administrative expenses (364.1 ) 14.4 (349.7 ) (1,038.8 ) 14.4 (1,024.4 ) Research and development expenses (95.7 ) — (95.7 ) (286.7 ) — (286.7 ) Operating profit $ 301.8 $ — $ 301.8 $ 931.6 $ — $ 931.6 Net earnings $ 196.6 $ — $ 196.6 $ 627.7 $ — $ 627.7 Three Months Ended December 31, 2015 Year Ended December 31, 2015 Previously Reported (a) Corrections As Revised Previously Reported Corrections As Revised Sales $ 1,561.4 $ 14.4 $ 1,575.8 $ 6,178.8 $ — $ 6,178.8 Cost of sales (823.2 ) 4.7 (818.5 ) (3,183.5 ) 4.7 (3,178.8 ) Gross profit 738.2 19.1 757.3 2,995.3 4.7 3,000.0 Operating costs: Selling, general and administrative expenses (309.1 ) (19.1 ) (328.2 ) (1,347.9 ) (4.7 ) (1,352.6 ) Research and development expenses (91.0 ) — (91.0 ) (377.7 ) — (377.7 ) Operating profit $ 338.1 $ — $ 338.1 $ 1,269.7 $ — $ 1,269.7 Net earnings $ 236.1 $ — $ 236.1 $ 863.8 $ — $ 863.8 (a) The Carved-out Earnings Statement for the three months ended October 2, 2015 and December 31, 2015 were previously reported in filings with the SEC only to the extent incorporated into the Carved-out Earnings Statements for the nine months ended October 2, 2015 and the year ended December 31, 2015, respectively. | |
Reclassification of Accumulated Other Comprehensive Income | The changes in accumulated other comprehensive income (loss) by component are summarized below ($ in millions). Foreign currency translation adjustments are generally not adjusted for income taxes as they relate to indefinite investments in non-U.S. subsidiaries. Foreign currency translation adjustments Pension & post- retirement plan benefit adjustments Total For the Three Months Ended September 30, 2016: Balance, July 1, 2016 $ 62.7 $ (63.5 ) $ (0.8 ) Other comprehensive income (loss) before reclassifications, net of income taxes (25.7 ) — (25.7 ) Amounts reclassified from accumulated other comprehensive income (loss): Increase (decrease) — 1.3 1.3 Income tax impact — (0.3 ) (0.3 ) Amounts reclassified from accumulated other comprehensive income (loss), net of income taxes — 1.0 1.0 Net current period other comprehensive income (loss) (25.7 ) 1.0 (24.7 ) Balance, September 30, 2016 $ 37.0 $ (62.5 ) $ (25.5 ) For the Three Months Ended October 2, 2015: Balance, July 3, 2015 $ 93.0 $ (71.4 ) $ 21.6 Other comprehensive income (loss) before reclassifications: Increase (decrease) (9.9 ) (8.9 ) (18.8 ) Income tax impact — 3.4 3.4 Other comprehensive income (loss) before reclassifications, net of income taxes (9.9 ) (5.5 ) (15.4 ) Amounts reclassified from accumulated other comprehensive income (loss): Increase (decrease) — 1.6 1.6 Income tax impact — (0.4 ) (0.4 ) Amounts reclassified from accumulated other comprehensive income (loss), net of income taxes — 1.2 1.2 Net current period other comprehensive income (loss) (9.9 ) (4.3 ) (14.2 ) Balance, October 2, 2015 $ 83.1 $ (75.7 ) $ 7.4 Foreign currency translation adjustments Pension & post- retirement plan benefit adjustments Total For the Nine Months Ended September 30, 2016: Balance, December 31, 2015 $ 51.2 $ (65.6 ) $ (14.4 ) Other comprehensive income (loss) before reclassifications, net of income taxes (14.2 ) — (14.2 ) Amounts reclassified from accumulated other comprehensive income (loss): Increase (decrease) — 4.1 4.1 Income tax impact — (1.0 ) (1.0 ) Amounts reclassified from accumulated other comprehensive income (loss), net of income taxes — 3.1 3.1 Net current period other comprehensive income (loss) (14.2 ) 3.1 (11.1 ) Balance, September 30, 2016 $ 37.0 $ (62.5 ) $ (25.5 ) For the Nine Months Ended October 2, 2015: Balance, December 31, 2014 $ 182.9 $ (83.4 ) $ 99.5 Other comprehensive income (loss) before reclassifications: Increase (decrease) (99.8 ) 5.2 (94.6 ) Income tax impact — (1.3 ) (1.3 ) Other comprehensive income (loss) before reclassifications, net of income taxes (99.8 ) 3.9 (95.9 ) Amounts reclassified from accumulated other comprehensive income (loss): Increase — 5.0 5.0 Income tax impact — (1.2 ) (1.2 ) Amounts reclassified from accumulated other comprehensive income (loss), net of income taxes — 3.8 3.8 Net current period other comprehensive income (loss) (99.8 ) 7.7 (92.1 ) Balance, October 2, 2015 $ 83.1 $ (75.7 ) $ 7.4 |
ACQUISITION (Tables)
ACQUISITION (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Business Combinations [Abstract] | |
Schedule of Business Acquisitions | The following summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition for all acquisitions consummated during the nine months ended September 30, 2016 ($ in millions): Trade accounts receivable $ 5.2 Inventories 2.2 Property, plant and equipment 0.6 Goodwill 113.9 Other intangible assets, primarily customer relationships, trade names and technology 82.7 Trade accounts payable (1.5 ) Other assets and liabilities, net (12.5 ) Net cash consideration $ 190.6 |
GOODWILL (Tables)
GOODWILL (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The following is a rollforward of the Company’s goodwill ($ in millions): Balance, December 31, 2015 $ 3,949.0 Attributable to 2016 acquisitions 113.9 Foreign currency translation & other (14.9 ) Balance, September 30, 2016 $ 4,048.0 The carrying value of goodwill by segment is summarized as follows ($ in millions): September 30, 2016 December 31, 2015 Professional Instrumentation $ 2,466.4 $ 2,400.6 Industrial Technologies 1,581.6 1,548.4 Total goodwill $ 4,048.0 $ 3,949.0 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value, Liabilities Measured on Recurring Basis | A summary of financial liabilities that are measured at fair value on a recurring basis were as follows ($ in millions): Quoted Prices in Active Market (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total September 30, 2016 Deferred compensation liabilities $ — $ 14.1 $ — $ 14.1 December 31, 2015 Deferred compensation liabilities $ — $ 53.7 $ — $ 53.7 |
Carrying Amounts and Fair Values of Financial Instruments | The carrying amounts and fair values of financial instruments were as follows ($ in millions): September 30, 2016 Carrying Amount Fair Value Long-term borrowings $ 3,509.1 $ 3,615.7 |
FINANCING (Tables)
FINANCING (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of Carry Value of Debt | The carrying value of the components of the Company’s debt as of September 30, 2016 were as follows ($ in millions): September 30, 2016 Commercial paper $ 526.6 Variable interest rate Term Facility 500.0 1.80% senior unsecured notes due 2019 298.1 2.35% senior unsecured notes due 2021 744.5 3.15% senior unsecured notes due 2026 889.9 4.30% senior unsecured notes due 2046 546.8 Other financing 3.2 Long-term debt $ 3,509.1 |
Schedule of Maturities of Long-term Debt | The Company may redeem the Notes of the applicable series, in whole or in part, at any time prior to the dates specified in the applicable indentures (the “Call Dates”) by paying the principal amount and the “make-whole” premium specified in the applicable indenture, plus accrued and unpaid interest. Additionally, with the exception of the 2019 Notes, the Company may redeem all or any part of the Notes of the applicable series on or after the Call Dates without paying the “make-whole” premium specified in the applicable indenture. Note Series Call Dates 2019 Notes June 15, 2019 2021 Notes May 15, 2021 2026 Notes March 15, 2026 2046 Notes December 15, 2045 |
Schedule of Debt | The principal payments due are presented in the following table: Commercial Paper Term Loan Notes Total 2019 $ — $ 500.0 $ 300.0 $ 800.0 2020 — — — — 2021 — — 750.0 750.0 Thereafter 526.9 — 1,450.0 1,976.9 Total principal payments (a) $ 526.9 $ 500.0 $ 2,500.0 $ 3,526.9 (a) Amount is higher than the carrying value of debt as net discounts, premiums and issuance costs of $21.0 million as of September 30, 2016 are included in the carrying amount of the related debt in the accompanying Consolidated and Combined Condensed Balance Sheet as of September 30, 2016 but excluded from the principal payments disclosed herein. In addition, these amounts exclude other financing balances of $3.2 million. |
PENSION PLANS (Tables)
PENSION PLANS (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
Schedule of Net Periodic Pension Costs | The following sets forth the components of the Company’s net periodic pension costs associated with these plans ($ in millions): Three Months Ended Nine Months Ended September 30, 2016 October 2, 2015 September 30, 2016 October 2, 2015 Service cost $ 0.9 $ 1.3 $ 2.6 $ 3.7 Interest cost 1.8 2.2 5.6 6.4 Expected return on plan assets (2.0 ) (2.4 ) (6.1 ) (6.7 ) Amortization of net loss 1.3 1.8 4.1 5.2 Net periodic pension cost $ 2.0 $ 2.9 $ 6.2 $ 8.6 |
STOCK BASED COMPENSATION (Table
STOCK BASED COMPENSATION (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Stock-Based Compensation Costs | The following summarizes aggregate intrinsic value, cash receipts and tax benefits realized related to option exercise activity under the Stock Plan and the Danaher Plans for the three and nine months ended September 30, 2016 and October 2, 2015 (in millions): Three Months Ended Nine Months Ended September 30, 2016 October 2, 2015 September 30, 2016 October 2, 2015 Aggregate intrinsic value of options exercised $ 2.8 $ 18.0 $ 73.7 $ 50.4 Cash receipts from exercise of options $ 3.3 $ 12.7 $ 56.7 $ 35.4 Tax benefit realized related to exercise of options $ 1.0 $ 5.8 $ 25.5 $ 15.8 Three Months Ended Nine Months Ended September 30, 2016 October 2, 2015 September 30, 2016 October 2, 2015 RSUs/PSUs: Pretax compensation expense $ 7.3 $ 5.1 $ 21.5 $ 15.3 Income tax benefit (2.3 ) (1.8 ) (7.1 ) (5.2 ) RSU/PSU expense, net of income taxes 5.0 3.3 14.4 10.1 Stock options: Pretax compensation expense 4.7 3.4 12.9 9.0 Income tax benefit (1.6 ) (1.1 ) (4.4 ) (3.1 ) Stock option expense, net of income taxes 3.1 2.3 8.5 5.9 Total stock-based compensation: Pretax compensation expense 12.0 8.5 34.4 24.3 Income tax benefit (3.9 ) (2.9 ) (11.5 ) (8.3 ) Total stock-based compensation expense, net of income taxes $ 8.1 $ 5.6 $ 22.9 $ 16.0 |
Schedule of Future Compensation | Future compensation amounts will be adjusted for any changes in estimated forfeitures ($ in millions): Stock Awards $ 50.5 Stock options 46.0 Total unrecognized compensation cost $ 96.5 |
Schedule of Assumptions Used | The following summarizes the assumptions used in the Black-Scholes model to value options granted during the three months ended September 30, 2016: Risk-free interest rate 1.21% - 1.25% Weighted average volatility (a) 25.0 % Dividend yield (b) 0.6 % Expected years until exercise 5.5 - 8.0 (a) Weighted average volatility was estimated based on an average historical stock price volatility of a group of peer companies, given the Company's limited trading history. (b) The dividend yield is calculated by dividing Fortive's annual dividend, based on the most recent quarterly dividend rate, by the closing Fortive stock price on the grant date. |
Schedule of Stock Option Activity | The following summarizes option activity under the Stock Plan and the Danaher Plans for the nine months ended September 30, 2016 (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 December 31, 2015 5.8 Granted 1.6 Exercised (1.4 ) Canceled/forfeited (0.7 ) Aggregate impact of conversion related to the Separation (a) 5.5 Outstanding as of September 30, 2016 10.8 $ 32.96 7 $ 194.1 Vested and expected to vest as of September 30, 2016 (b) 10.4 $ 32.12 7 $ 190.3 Vested as of September 30, 2016 4.9 $ 24.64 5 $ 127.8 (a) The “Aggregate impact of conversion related to the Separation” represents the number of 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 as of the date 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. |
Schedule of Stock Unit Activity | The following summarizes information related to unvested Stock Award activity under the Stock Plan and the Danaher Plans for the nine months ended September 30, 2016 (in millions; except price per share): Number of Stock Awards Weighted Average Grant-Date Fair Value Unvested as of December 31, 2015 1.1 $ 72.24 Granted 0.6 Vested (0.4 ) Forfeited (0.2 ) Aggregate impact of conversion related to the Separation (a) 1.2 Unvested as of September 30, 2016 2.3 $ 38.84 (a) The “Aggregate impact of conversion related to the Separation” represents the number of 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 as of the date of the Separation. |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Accrued Warranty Liability | The following is a rollforward of the Company’s accrued warranty liability ($ in millions): Balance, December 31, 2015 $ 61.0 Accruals for warranties issued during the period 44.2 Settlements made (43.6 ) Effect of foreign currency translation 0.3 Balance, September 30, 2016 $ 61.9 |
CAPITAL STOCK AND EARNINGS PE29
CAPITAL STOCK AND EARNINGS PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share | Information related to the calculation of net earnings per share of common stock for the three and nine months ended September 30, 2016 is summarized as follows ($ and shares in millions, except per share amounts): Net Earnings (Numerator) Shares (Denominator) Per Share Amount For the Three Months Ended September 30, 2016: Basic EPS $ 226.9 346.0 $ 0.66 Incremental shares from assumed exercise of dilutive options and vesting of dilutive Stock Awards — 3.2 Diluted EPS $ 226.9 349.2 $ 0.65 For the Three Months Ended October 2, 2015: Basic EPS $ 196.6 345.2 $ 0.57 Incremental shares from assumed issuance of shares under stock-based compensation plans — — Diluted EPS $ 196.6 345.2 $ 0.57 Net Earnings (Numerator) Shares (Denominator) Per Share Amount For the Nine Months Ended September 30, 2016: Basic EPS $ 647.8 345.5 $ 1.87 Incremental shares from assumed exercise of dilutive options and vesting of dilutive Stock Awards — 1.1 Diluted EPS $ 647.8 346.6 $ 1.87 For the Nine Months Ended October 2, 2015: Basic EPS $ 627.7 345.2 $ 1.82 Incremental shares from assumed issuance of shares under stock-based compensation plans — — Diluted EPS $ 627.7 345.2 $ 1.82 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information | Segment results are shown below ($ in millions): Three Months Ended Nine Months Ended September 30, 2016 October 2, 2015 September 30, 2016 October 2, 2015 Sales: Professional Instrumentation $ 723.5 $ 722.0 $ 2,145.1 $ 2,229.7 Industrial Technologies 843.9 802.6 2,452.1 2,373.3 Total $ 1,567.4 $ 1,524.6 $ 4,597.2 $ 4,603.0 Operating Profit: Professional Instrumentation $ 161.5 $ 157.4 $ 469.9 $ 514.0 Industrial Technologies 180.6 154.9 484.7 449.4 Other (18.9 ) (10.5 ) (46.3 ) (31.8 ) Total $ 323.2 $ 301.8 $ 908.3 $ 931.6 |
BUSINESS OVERVIEW AND BASIS O31
BUSINESS OVERVIEW AND BASIS OF PRESENTATION - Additional Information (Details) | Jul. 02, 2016 | Jul. 01, 2016shares | Jun. 15, 2016 | Jun. 30, 2016USD ($) | Sep. 30, 2016USD ($)countryshares | Sep. 30, 2016USD ($)segmentcountryshares | Oct. 02, 2015USD ($)shares | Dec. 31, 2015USD ($)shares | Nov. 10, 2015shares | Dec. 31, 2014USD ($) |
Debt Instrument [Line Items] | ||||||||||
Number of countries in which the entity operates (more than) | country | 40 | 40 | ||||||||
Number of operating segments | segment | 2 | |||||||||
Common stock, distribution percentage | 100.00% | 100.00% | 100.00% | |||||||
Common stock outstanding (in shares) | shares | 345,700,000 | 345,700,000 | 345,200,000 | 100 | 0 | |||||
Common stock issued (in shares) | shares | 345,700,000 | 345,700,000 | 100 | |||||||
Fortive shares issued to Danaher shareholders per Danaher share | 0.5 | |||||||||
Long-term Debt | $ 3,509,100,000 | $ 3,509,100,000 | ||||||||
Debt | 3,526,900,000 | 3,526,900,000 | ||||||||
Net proceeds of debt, net of issuance costs | 3,500,000,000 | |||||||||
Payments of Dividends | $ 3,000,000,000 | 24,200,000 | $ 0 | |||||||
Cash and equivalents | 724,800,000 | 724,800,000 | $ 0 | $ 0 | $ 0 | |||||
Wrong-Pockets Provision | 30,000,000 | |||||||||
Term Loan [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Senior unsecured revolving credit facility | 500,000,000 | 500,000,000 | ||||||||
Long-term Debt | 500,000,000 | 500,000,000 | ||||||||
Debt | $ 500,000,000 | |||||||||
Debt term | 3 years | |||||||||
Revolving Credit Facility [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Senior unsecured revolving credit facility | $ 1,500,000,000 | 1,500,000,000 | 1,500,000,000 | |||||||
Debt term | 5 years | |||||||||
Senior Notes [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Aggregate principle amount | $ 2,500,000,000 | |||||||||
Commercial Paper [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Long-term Debt | 526,600,000 | 526,600,000 | ||||||||
Debt | $ 526,900,000 | $ 526,900,000 | ||||||||
Debt term | 20 days | |||||||||
Danaher Corporation [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Common stock outstanding (in shares) | shares | 100 | |||||||||
Common Stock [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Common stock outstanding (in shares) | shares | 345,700,000 | 345,700,000 | ||||||||
Recapitalization (shares) | shares | 345,237,561 |
BUSINESS OVERVIEW AND BASIS O32
BUSINESS OVERVIEW AND BASIS OF PRESENTATION - Accounting Changes and Error Corrections (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2016 | Dec. 31, 2015 | Oct. 02, 2015 | Sep. 30, 2016 | Oct. 02, 2015 | Dec. 31, 2015 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||
Sales | $ 1,567.4 | $ 1,575.8 | $ 1,524.6 | $ 4,597.2 | $ 4,603 | $ 6,178.8 |
Cost of sales | (794.5) | (818.5) | (777.4) | (2,361) | (2,360.3) | (3,178.8) |
Gross profit | 772.9 | 757.3 | 747.2 | 2,236.2 | 2,242.7 | 3,000 |
Selling, general and administrative expenses | (354.5) | (328.2) | (349.7) | (1,042.3) | (1,024.4) | (1,352.6) |
Research and development expenses | (95.2) | (91) | (95.7) | (285.6) | (286.7) | (377.7) |
Operating profit | 323.2 | 338.1 | 301.8 | 908.3 | 931.6 | 1,269.7 |
Net earnings | $ 226.9 | 236.1 | 196.6 | $ 647.8 | 627.7 | 863.8 |
Excess Allocation, Excess Allocation Correction and Over Correction [Member] | Scenario, Previously Reported [Member] | ||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||
Sales | 1,561.4 | 1,539 | 4,617.4 | 6,178.8 | ||
Cost of sales | (823.2) | (777.4) | (2,360.3) | (3,183.5) | ||
Gross profit | 738.2 | 761.6 | 2,257.1 | 2,995.3 | ||
Selling, general and administrative expenses | (309.1) | (364.1) | (1,038.8) | (1,347.9) | ||
Research and development expenses | (91) | (95.7) | (286.7) | (377.7) | ||
Operating profit | 338.1 | 301.8 | 931.6 | 1,269.7 | ||
Net earnings | 236.1 | 196.6 | 627.7 | 863.8 | ||
Excess Allocation, Excess Allocation Correction and Over Correction [Member] | Restatement Adjustment [Member] | ||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||
Sales | 14.4 | (14.4) | (14.4) | 0 | ||
Cost of sales | 4.7 | 0 | 0 | 4.7 | ||
Gross profit | 19.1 | (14.4) | (14.4) | 4.7 | ||
Selling, general and administrative expenses | (19.1) | 14.4 | 14.4 | (4.7) | ||
Research and development expenses | 0 | 0 | 0 | 0 | ||
Operating profit | 0 | 0 | 0 | 0 | ||
Net earnings | $ 0 | $ 0 | $ 0 | $ 0 |
BUSINESS OVERVIEW AND BASIS O33
BUSINESS OVERVIEW AND BASIS OF PRESENTATION - Accumulated Other Comprehensive Income (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Oct. 02, 2015 | Sep. 30, 2016 | Oct. 02, 2015 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Parent's equity, beginning of period | $ 5,179.5 | |||
Amounts reclassified from accumulated other comprehensive income (loss): | ||||
Total other comprehensive income (loss), net of income taxes | $ (24.7) | $ (14.2) | (11.1) | $ (92.1) |
Parent's equity, end of period | 2,556 | 2,556 | ||
Accumulated Foreign Currency Adjustment Attributable to Parent [Member] | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Parent's equity, beginning of period | 62.7 | 93 | 51.2 | 182.9 |
Increase (decrease) | (9.9) | (99.8) | ||
Income tax impact | 0 | 0 | ||
Other comprehensive income (loss) before reclassifications, net of income taxes | (25.7) | (9.9) | (14.2) | (99.8) |
Amounts reclassified from accumulated other comprehensive income (loss): | ||||
Increase (decrease) | 0 | 0 | 0 | 0 |
Income tax impact | 0 | 0 | 0 | 0 |
Amounts reclassified from accumulated other comprehensive income (loss), net of income taxes | 0 | 0 | 0 | 0 |
Total other comprehensive income (loss), net of income taxes | (25.7) | (9.9) | (14.2) | (99.8) |
Parent's equity, end of period | 37 | 83.1 | 37 | 83.1 |
Accumulated Defined Benefit Plans Adjustment Attributable to Parent [Member] | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Parent's equity, beginning of period | (63.5) | (71.4) | (65.6) | (83.4) |
Increase (decrease) | (8.9) | 5.2 | ||
Income tax impact | 3.4 | (1.3) | ||
Other comprehensive income (loss) before reclassifications, net of income taxes | 0 | (5.5) | 0 | 3.9 |
Amounts reclassified from accumulated other comprehensive income (loss): | ||||
Increase (decrease) | 1.3 | 1.6 | 4.1 | 5 |
Income tax impact | (0.3) | (0.4) | (1) | (1.2) |
Amounts reclassified from accumulated other comprehensive income (loss), net of income taxes | 1 | 1.2 | 3.1 | 3.8 |
Total other comprehensive income (loss), net of income taxes | 1 | (4.3) | 3.1 | 7.7 |
Parent's equity, end of period | (62.5) | (75.7) | (62.5) | (75.7) |
AOCI Attributable to Parent [Member] | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Parent's equity, beginning of period | (0.8) | 21.6 | (14.4) | 99.5 |
Increase (decrease) | (18.8) | (94.6) | ||
Income tax impact | 3.4 | (1.3) | ||
Other comprehensive income (loss) before reclassifications, net of income taxes | (25.7) | (15.4) | (14.2) | (95.9) |
Amounts reclassified from accumulated other comprehensive income (loss): | ||||
Increase (decrease) | 1.3 | 1.6 | 4.1 | 5 |
Income tax impact | (0.3) | (0.4) | (1) | (1.2) |
Amounts reclassified from accumulated other comprehensive income (loss), net of income taxes | 1 | 1.2 | 3.1 | 3.8 |
Total other comprehensive income (loss), net of income taxes | (24.7) | (14.2) | (11.1) | (92.1) |
Parent's equity, end of period | $ (25.5) | $ 7.4 | $ (25.5) | $ 7.4 |
ACQUISITION - Acquisition's Add
ACQUISITION - Acquisition's Additional Details (Details) $ in Millions | 9 Months Ended | |
Sep. 30, 2016USD ($)business | Oct. 02, 2015USD ($) | |
Business Acquisition [Line Items] | ||
Number of businesses acquired | business | 3 | |
Net cash consideration | $ 190.6 | $ 0 |
Attributable to 2016 acquisitions | 113.9 | |
Acquisitions, 2016 [Member] | ||
Business Acquisition [Line Items] | ||
Net cash consideration | 191 | |
Revenue of prior fiscal year | 47 | |
Attributable to 2016 acquisitions | $ 114 |
ACQUISITION - Fair Values of th
ACQUISITION - Fair Values of the Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
Business Acquisition [Line Items] | ||
Goodwill | $ 4,048 | $ 3,949 |
Acquisitions, 2016 [Member] | ||
Business Acquisition [Line Items] | ||
Trade accounts receivable | 5.2 | |
Inventories | 2.2 | |
Property, plant and equipment | 0.6 | |
Goodwill | 113.9 | |
Other intangible assets, primarily customer relationships, trade names and technology | 82.7 | |
Trade accounts payable | (1.5) | |
Other assets and liabilities, net | (12.5) | |
Net cash consideration | $ 190.6 |
GOODWILL - Rollforward of Good
GOODWILL - Rollforward of Goodwill (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2016USD ($) | |
Goodwill [Roll Forward] | |
Goodwill | $ 3,949 |
Attributable to 2016 acquisitions | 113.9 |
Foreign currency translation & other | (14.9) |
Goodwill | $ 4,048 |
GOODWILL - Goodwill by Segment
GOODWILL - Goodwill by Segment (Details) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
Goodwill [Line Items] | ||
Goodwill | $ 4,048 | $ 3,949 |
Operating Segments [Member] | Professional Instrumentation [Member] | ||
Goodwill [Line Items] | ||
Goodwill | 2,466.4 | 2,400.6 |
Operating Segments [Member] | Industrial Technologies [Member] | ||
Goodwill [Line Items] | ||
Goodwill | $ 1,581.6 | $ 1,548.4 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Deferred compensation liabilities | $ 14.1 | $ 53.7 |
Additional paid-in capital | 2,375.3 | 0 |
Long-term borrowings, carrying value | 3,509.1 | |
Long-term borrowings, fair value | 3,615.7 | |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Deferred compensation liabilities | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Deferred compensation liabilities | 14.1 | 53.7 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Deferred compensation liabilities | 0 | $ 0 |
Danaher Corporation [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Deferred compensation liabilities | 21.7 | |
Conversion of Deferred Compensation Program [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Deferred compensation liabilities | (19.2) | |
Additional paid-in capital | $ 19.2 |
FINANCING - Components of Debt
FINANCING - Components of Debt (Details) | Sep. 30, 2016USD ($) |
Debt Instrument [Line Items] | |
Long-term borrowings, carrying value | $ 3,509,100,000 |
Commercial Paper [Member] | |
Debt Instrument [Line Items] | |
Long-term borrowings, carrying value | 526,600,000 |
1.80% Senior Unsecured Notes due 2019 [Member] | Senior Notes [Member] | |
Debt Instrument [Line Items] | |
Long-term borrowings, carrying value | 298,100,000 |
2.35% Senior Unsecured Notes due 2021 [Member] | Senior Notes [Member] | |
Debt Instrument [Line Items] | |
Long-term borrowings, carrying value | 744,500,000 |
3.15% Senior Unsecured Notes due 2026 [Member] | Senior Notes [Member] | |
Debt Instrument [Line Items] | |
Long-term borrowings, carrying value | 889,900,000 |
4.30% Senior Unsecured Notes due 2046 [Member] | Senior Notes [Member] | |
Debt Instrument [Line Items] | |
Long-term borrowings, carrying value | 546,800,000 |
Other Debt [Member] | |
Debt Instrument [Line Items] | |
Long-term borrowings, carrying value | 3,200,000 |
Term Loan [Member] | |
Debt Instrument [Line Items] | |
Long-term borrowings, carrying value | $ 500,000,000 |
FINANCING - Additional Informa
FINANCING - Additional Information (Details) - USD ($) | 1 Months Ended | 9 Months Ended | ||
Jun. 30, 2016 | Sep. 30, 2016 | Oct. 02, 2015 | Jun. 20, 2016 | |
Debt Instrument [Line Items] | ||||
Payments of Dividends | $ 3,000,000,000 | $ 24,200,000 | $ 0 | |
Long-term borrowings, carrying value | 3,509,100,000 | |||
Cash dividend paid to Former Parent | 3,000,000,000 | $ 0 | ||
Debt discounts, premiums and issuance costs | 21,000,000 | |||
Other Debt [Member] | ||||
Debt Instrument [Line Items] | ||||
Long-term borrowings, carrying value | $ 3,200,000 | |||
Commercial Paper [Member] | ||||
Debt Instrument [Line Items] | ||||
Short-term maturity period (maximum) | 397 days | |||
Long-term borrowings, carrying value | $ 526,600,000 | |||
Weighted average annual interest rate | 0.90% | |||
Debt term | 20 days | |||
Senior Notes [Member] | ||||
Debt Instrument [Line Items] | ||||
Aggregate principle amount | $ 2,500,000,000 | |||
Debt discounts, premiums and issuance costs | $ 20,800,000 | |||
Senior Notes [Member] | 1.80% Senior Unsecured Notes due 2019 [Member] | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 1.80% | |||
Long-term borrowings, carrying value | 298,100,000 | |||
Aggregate principle amount | $ 300,000,000 | |||
Percentage issued | 99.893% | |||
Senior Notes [Member] | 2.35% Senior Unsecured Notes due 2021 [Member] | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 2.35% | |||
Long-term borrowings, carrying value | 744,500,000 | |||
Aggregate principle amount | $ 750,000,000 | |||
Percentage issued | 99.977% | |||
Senior Notes [Member] | 3.15% Senior Unsecured Notes due 2026 [Member] | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 3.15% | |||
Long-term borrowings, carrying value | $ 889,900,000 | |||
Aggregate principle amount | $ 900,000,000 | |||
Percentage issued | 99.644% | |||
Senior Notes [Member] | Initial Senior Unsecured Notes due 2046 [Member] | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 4.30% | |||
Aggregate principle amount | $ 350,000,000 | |||
Percentage issued | 99.783% | |||
Senior Notes [Member] | Additional Senior Unsecured Notes due 2046 [Member] | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 4.30% | |||
Aggregate principle amount | $ 200,000,000 | |||
Percentage issued | 101.564% | |||
Senior Notes [Member] | Change in Control Period [Member] | ||||
Debt Instrument [Line Items] | ||||
Percent of principle owed in change of control | 101.00% | |||
Term Loan [Member] | ||||
Debt Instrument [Line Items] | ||||
Senior unsecured revolving credit facility | $ 500,000,000 | |||
Interest rate | 1.70% | |||
Long-term borrowings, carrying value | $ 500,000,000 | |||
Debt term | 3 years | |||
Revolving Credit Facility [Member] | ||||
Debt Instrument [Line Items] | ||||
Senior unsecured revolving credit facility | $ 1,500,000,000 | $ 1,500,000,000 | ||
Revolving credit facility, extension option | 1 year | |||
Additional increase to the Credit Agreement | $ 500,000,000 | |||
Consolidated net leverage ratio covenant (less than) | 3.5 | |||
Consolidated interest coverage ratio covenant (greater than) | 3.5 | |||
Borrowing under the Revolving Loan Facility | $ 0 | |||
Debt term | 5 years | |||
Federal Funds Effective Swap Rate [Member] | Revolving Credit Facility [Member] | ||||
Debt Instrument [Line Items] | ||||
Spread on variable rate | 0.50% | |||
London Interbank Offered Rate (LIBOR) [Member] | Revolving Credit Facility [Member] | ||||
Debt Instrument [Line Items] | ||||
Spread on variable rate | 1.00% | |||
Net Parent Investment [Member] | ||||
Debt Instrument [Line Items] | ||||
Cash dividend paid to Former Parent | $ 3,000,000,000 | |||
Minimum [Member] | Revolving Credit Facility [Member] | ||||
Debt Instrument [Line Items] | ||||
Line of Credit Facility, Commitment Fee Percentage | 0.09% | |||
Maximum [Member] | Revolving Credit Facility [Member] | ||||
Debt Instrument [Line Items] | ||||
Line of Credit Facility, Commitment Fee Percentage | 0.25% |
FINANCING - Covenants and Rede
FINANCING - Covenants and Redemption Provisions (Details) - Senior Notes [Member] | Jun. 20, 2016 |
1.80% Senior Unsecured Notes due 2019 [Member] | |
Debt Instrument [Line Items] | |
Interest rate | 1.80% |
2.35% Senior Unsecured Notes due 2021 [Member] | |
Debt Instrument [Line Items] | |
Interest rate | 2.35% |
3.15% Senior Unsecured Notes due 2026 [Member] | |
Debt Instrument [Line Items] | |
Interest rate | 3.15% |
4.30% Senior Unsecured Notes due 2046 [Member] | |
Debt Instrument [Line Items] | |
Interest rate | 4.30% |
FINANCING - Minimum Principle
FINANCING - Minimum Principle Payments (Details) | Sep. 30, 2016USD ($) |
Debt Instrument [Line Items] | |
Principle due prior to 2019 | $ 0 |
Principle due in 2019 | 800,000,000 |
Principle due in 2020 | 0 |
Principle due in 2021 | 750,000,000 |
Principle due thereafter | 1,976,900,000 |
Long-term borrowings, carrying value | 3,526,900,000 |
Debt discounts, premiums and issuance costs | 21,000,000 |
Long-term Debt | 3,509,100,000 |
Commercial Paper [Member] | |
Debt Instrument [Line Items] | |
Principle due in 2019 | 0 |
Principle due in 2020 | 0 |
Principle due in 2021 | 0 |
Principle due thereafter | 526,900,000 |
Long-term borrowings, carrying value | 526,900,000 |
Long-term Debt | 526,600,000 |
Term Loan [Member] | |
Debt Instrument [Line Items] | |
Principle due in 2019 | 500,000,000 |
Principle due in 2020 | 0 |
Principle due in 2021 | 0 |
Principle due thereafter | 0 |
Long-term borrowings, carrying value | 500,000,000 |
Notes Payable to Banks [Member] | |
Debt Instrument [Line Items] | |
Principle due in 2019 | 300,000,000 |
Principle due in 2020 | 0 |
Principle due in 2021 | 750,000,000 |
Principle due thereafter | 1,450,000,000 |
Long-term borrowings, carrying value | 2,500,000,000 |
Other Debt [Member] | |
Debt Instrument [Line Items] | |
Long-term Debt | $ 3,200,000 |
PENSION PLANS (Details)
PENSION PLANS (Details) - Foreign Pension Plan [Member] - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2016 | Oct. 02, 2015 | Sep. 30, 2016 | Oct. 02, 2015 | Dec. 31, 2016 | |
Defined Benefit Plan Disclosure [Line Items] | |||||
Service cost | $ 0.9 | $ 1.3 | $ 2.6 | $ 3.7 | |
Interest cost | 1.8 | 2.2 | 5.6 | 6.4 | |
Expected return on plan assets | (2) | (2.4) | (6.1) | (6.7) | |
Amortization of net loss | 1.3 | 1.8 | 4.1 | 5.2 | |
Net periodic pension cost | $ 2 | $ 2.9 | $ 6.2 | $ 8.6 | |
Scenario, Forecast [Member] | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Expected contributions | $ 11 | ||||
Change in Assumptions for Pension Plans [Member] | Scenario, Forecast [Member] | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Net periodic pension cost | $ 1 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2016 | Oct. 02, 2015 | Sep. 30, 2016 | Oct. 02, 2015 | Dec. 31, 2015 | Jul. 02, 2016 | |
Income Tax Disclosure [Abstract] | ||||||
Effective tax rate | 24.30% | 34.90% | 26.60% | 32.60% | ||
U.S. federal statutory rate | 35.00% | 35.00% | ||||
Joint tax liability of Former Parent | $ 135 | |||||
Deferred Tax Liabilities, Basis in Former Parent's Separate Filings | $ 33 |
STOCK BASED COMPENSATION - Add
STOCK BASED COMPENSATION - Additional Information (Details) $ / shares in Units, $ in Millions | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2016USD ($)$ / sharesshares | Oct. 02, 2015USD ($) | Jul. 01, 2016USD ($)shares | Sep. 30, 2016USD ($)shares | Oct. 02, 2015USD ($) | Dec. 31, 2015plan | Jul. 02, 2016shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of stock-based compensation plans | plan | 0 | ||||||
Shares authorized | shares | 22,400,000 | 22,400,000 | 23,000,000 | ||||
Granted (in dollars per share) | $ / shares | $ 50.60 | ||||||
Exercised (in dollars per share) | $ / shares | 27.67 | ||||||
Unrecognized compensation costs, period for recognition | 3 years | ||||||
Canceled/forfeited (in dollars per share) | $ / shares | $ 40.27 | ||||||
Unrecognized compensation cost | $ 96.5 | $ 96.5 | |||||
Income tax benefit, stock awards | $ 3.9 | $ 2.9 | 11.5 | $ 8.3 | |||
Stock Compensation Plan [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Units granted (in dollars per share) | $ / shares | $ 49.39 | ||||||
Units vested (in dollars per share) | $ / shares | 33.11 | ||||||
Units forfeited (in dollars per share) | $ / shares | $ 39.10 | ||||||
Income tax benefit, stock awards | $ 5 | 4 | $ 10 | 9 | |||
Shares withheld to satisfy tax requirement | shares | 112,000 | ||||||
Aggregate value of shares withheld to satisfy tax requirement | $ 6 | ||||||
Employee Stock Option [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting period | 5 years | ||||||
Expiration period | 10 years | ||||||
Unrecognized compensation cost | 46 | $ 46 | |||||
Income tax benefit, stock awards | 1.6 | 1.1 | 4.4 | 3.1 | |||
Restricted Stock Units (RSUs) and Phantom Share Units (PSUs) [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Unrecognized compensation cost | 50.5 | 50.5 | |||||
Income tax benefit, stock awards | $ 2.3 | $ 1.8 | $ 7.1 | $ 5.2 | |||
Restricted Stock Units (RSUs) [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting period | 5 years | ||||||
Phantom Share Units (PSUs) [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting period | 3 years |
STOCK BASED COMPENSATION - Sto
STOCK BASED COMPENSATION - Stock Based Compensation (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Oct. 02, 2015 | Sep. 30, 2016 | Oct. 02, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Pretax compensation expense | $ 12 | $ 8.5 | $ 34.4 | $ 24.3 |
Income tax benefit | (3.9) | (2.9) | (11.5) | (8.3) |
Stock option expense | 8.1 | 5.6 | 22.9 | 16 |
Restricted Stock Units (RSUs) and Phantom Share Units (PSUs) [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Pretax compensation expense | 7.3 | 5.1 | 21.5 | 15.3 |
Income tax benefit | (2.3) | (1.8) | (7.1) | (5.2) |
Stock option expense | 5 | 3.3 | 14.4 | 10.1 |
Employee Stock Option [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Pretax compensation expense | 4.7 | 3.4 | 12.9 | 9 |
Income tax benefit | (1.6) | (1.1) | (4.4) | (3.1) |
Stock option expense | $ 3.1 | $ 2.3 | $ 8.5 | $ 5.9 |
STOCK BASED COMPENSATION - Ass
STOCK BASED COMPENSATION - Assumptions Used (Details) - Employee Stock Option [Member] | 3 Months Ended |
Sep. 30, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Weighted average volatility | 25.00% |
Dividend yield | 0.60% |
Minimum [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Risk-free interest rate | 1.21% |
Expected years until exercise | 5 years 6 months |
Maximum [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Risk-free interest rate | 1.25% |
Expected years until exercise | 8 years |
STOCK BASED COMPENSATION - Opt
STOCK BASED COMPENSATION - Option Activity (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Oct. 02, 2015 | Sep. 30, 2016 | Oct. 02, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||||
Options outstanding, beginning of period (in shares) | 5.8 | |||
Options granted (in shares) | 1.6 | |||
Options exercised (in shares) | (1.4) | |||
Options canceled/forfeited (in shares) | (0.7) | |||
Aggregate impact of conversion related to the Separation (in shares) | 5.5 | |||
Options outstanding, end of period (in shares) | 10.8 | 10.8 | ||
Options vested and expected to vest (in shares) | 10.4 | 10.4 | ||
Options vested (in shares) | 4.9 | 4.9 | ||
Options outstanding (in dollars per share) | $ 32.96 | $ 32.96 | ||
Options vested and expected to vest (in dollars per share) | 32.12 | 32.12 | ||
Options vested (in dollars per share) | $ 24.64 | $ 24.64 | ||
Weighted average remaining contractual term, outstanding | 7 years | |||
Weighted average remaining contractual term, vested and expected to vest | 7 years | |||
Weighted average remaining contractual term, vested | 5 years | |||
Aggregate intrinsic value, outstanding | $ 194.1 | $ 194.1 | ||
Aggregate intrinsic value, vested and expected to vest | 190.3 | 190.3 | ||
Aggregate intrinsic value, vested | 127.8 | 127.8 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | ||||
Aggregate intrinsic value of options exercised | 2.8 | $ 18 | 73.7 | $ 50.4 |
Cash receipts from exercise of options | 3.3 | 12.7 | 56.7 | 35.4 |
Tax benefit realized related to exercise of stock options | $ 1 | $ 5.8 | $ 25.5 | $ 15.8 |
STOCK BASED COMPENSATION - S49
STOCK BASED COMPENSATION - Stock Unit Activity (Details) - Stock Compensation Plan [Member] shares in Millions | 9 Months Ended |
Sep. 30, 2016$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |
Unvested units, beginning of period (in shares) | 1.1 |
Units granted (in shares) | 0.6 |
Units vested (in shares) | (0.4) |
Units forfeited (in shares) | (0.2) |
Units impact of conversion related to the Separation (in shares) | 1.2 |
Unvested units, end of period (in shares) | 2.3 |
Unvested units, beginning of period (in dollars per share) | $ / shares | $ 72.24 |
Unvested units, end of period (in dollars per share) | $ / shares | $ 38.84 |
COMMITMENTS AND CONTINGENCIES50
COMMITMENTS AND CONTINGENCIES (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2016USD ($) | |
Movement in Standard Product Warranty Accrual [Roll Forward] | |
Accrued warranty liability, beginning of period | $ 61 |
Accruals for warranties issued during the period | 44.2 |
Settlements made | (43.6) |
Effect of foreign currency translation | 0.3 |
Accrued warranty liability, end of period | $ 61.9 |
Minimum [Member] | |
Loss Contingencies [Line Items] | |
Warranty Period | 90 days |
CAPITAL STOCK AND EARNINGS PE51
CAPITAL STOCK AND EARNINGS PER SHARE - Additional Information (Details) $ / shares in Units, $ in Millions | Jul. 02, 2016 | Jul. 01, 2016shares | Jun. 15, 2016 | Sep. 30, 2016USD ($)vote$ / sharesshares | Dec. 31, 2015$ / sharesshares | Nov. 10, 2015shares | Oct. 02, 2015shares |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||||
Common stock authorized (in shares) | 2,000,000,000 | 100 | |||||
Common stock par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | |||||
Preferred stock authorized (in shares) | 15,000,000 | 100 | |||||
Preferred stock par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | |||||
Common stock outstanding (in shares) | 345,700,000 | 100 | 0 | 345,200,000 | |||
Common stock, distribution percentage | 100.00% | 100.00% | 100.00% | ||||
Preferred stock outstanding (in shares) | 0 | 0 | |||||
Preferred stock issued (in shares) | 0 | 0 | |||||
Number of votes per share | vote | 1 | ||||||
Quarterly dividend (in dollars per share) | $ / shares | $ 0.07 | ||||||
Dividends paid | $ | $ 24.2 | ||||||
Danaher Corporation [Member] | |||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||||
Common stock outstanding (in shares) | 100 | ||||||
Common Stock [Member] | |||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||||
Common stock outstanding (in shares) | 345,700,000 | ||||||
Recapitalization (shares) | 345,237,561 |
CAPITAL STOCK AND EARNINGS PE52
CAPITAL STOCK AND EARNINGS PER SHARE - Earnings per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Oct. 02, 2015 | Sep. 30, 2016 | Oct. 02, 2015 | |
Earnings Per Share [Abstract] | ||||
Basic EPS | $ 226.9 | $ 196.6 | $ 647.8 | $ 627.7 |
Basic EPS (in shares) | 346 | 345.2 | 345.5 | 345.2 |
Basic EPS (in dollars per share) | $ 0.66 | $ 0.57 | $ 1.87 | $ 1.82 |
Incremental shares from assumed exercise of dilutive options and vesting of dilutive Stock Awards | $ 0 | $ 0 | $ 0 | $ 0 |
Incremental shares from assumed exercise of dilutive options and vesting of dilutive RSUs and PSUs (in shares) | 3.2 | 0 | 1.1 | 0 |
Diluted EPS | $ 226.9 | $ 196.6 | $ 647.8 | $ 627.7 |
Diluted EPS (in shares) | 349.2 | 345.2 | 346.6 | 345.2 |
Diluted EPS (in dollars per share) | $ 0.65 | $ 0.57 | $ 1.87 | $ 1.82 |
SEGMENT INFORMATION (Details)
SEGMENT INFORMATION (Details) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2016USD ($) | Dec. 31, 2015USD ($) | Oct. 02, 2015USD ($) | Sep. 30, 2016USD ($)segment | Oct. 02, 2015USD ($) | Dec. 31, 2015USD ($) | |
Segment Reporting [Abstract] | ||||||
Number of operating segments | segment | 2 | |||||
Segment Reporting Information [Line Items] | ||||||
Sales | $ 1,567.4 | $ 1,575.8 | $ 1,524.6 | $ 4,597.2 | $ 4,603 | $ 6,178.8 |
Operating profit | 323.2 | $ 338.1 | 301.8 | 908.3 | 931.6 | $ 1,269.7 |
Operating Segments [Member] | Professional Instrumentation [Member] | ||||||
Segment Reporting Information [Line Items] | ||||||
Sales | 723.5 | 722 | 2,145.1 | 2,229.7 | ||
Operating profit | 161.5 | 157.4 | 469.9 | 514 | ||
Operating Segments [Member] | Industrial Technologies [Member] | ||||||
Segment Reporting Information [Line Items] | ||||||
Sales | 843.9 | 802.6 | 2,452.1 | 2,373.3 | ||
Operating profit | 180.6 | 154.9 | 484.7 | 449.4 | ||
Corporate, Non-Segment [Member] | ||||||
Segment Reporting Information [Line Items] | ||||||
Operating profit | $ (18.9) | $ (10.5) | $ (46.3) | $ (31.8) |
RELATED-PARTY TRANSACTIONS - R
RELATED-PARTY TRANSACTIONS - Related Party Transactions (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Oct. 02, 2015 | Jul. 01, 2016 | Sep. 30, 2016 | Oct. 02, 2015 | |
Related Party Transaction [Line Items] | |||||
Due to Former Parent | $ 72,300,000 | ||||
Cash transfer to Former Parent | $ 70,700,000 | ||||
Revenue from Former Parent | 6,000,000 | $ 10,000,000 | 25,000,000 | $ 28,000,000 | |
Related-party expenses | $ 117,000,000 | $ 151,000,000 | |||
License agreement term | 2 years | ||||
Corporate Overhead Allocated | 0 | ||||
TSA Expenses [Member] | |||||
Related Party Transaction [Line Items] | |||||
Related-party expenses | $ 15,000,000 |