CAPITAL STOCK AND EARNINGS PER SHARE

6 Months Ended

Jul. 01, 2016

Earnings Per Share [Abstract]

CAPITAL STOCK AND EARNINGS PER SHARE

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 billion common shares with par value $0.01 per share and 15 million preferred shares with par value $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 July 1, 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 of Directors (the “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.

Earnings per share

Basic earnings per share is calculated by dividing net earnings by the weighted average number of shares of common stock outstanding. Diluted earnings per share 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.

On July 2, 2016, Parent distributed 100 percent of Fortive’s outstanding common stock to its stockholders. The total number of shares outstanding on July 1, 2016 was 345.2 million, which is being utilized for the calculation of both basic and diluted earnings per share for the three and six months ended July 1, 2016, as no Fortive common stock equivalents were outstanding prior to July 2, 2016. In addition, because the Company was incorporated on November 10, 2015, there were no shares of the Company outstanding as of July 3, 2015. The total number of shares outstanding at July 1, 2016, or 345.2 million, is being utilized for calculation of both basic and diluted earnings per share for the three and six months ended July 3, 2015.