Stock Based Compensation (Tables)

12 Months Ended

Dec. 31, 2019

Share-based Payment Arrangement [Abstract]

Schedule of Stock-Based Compensation Costs

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

	2019			2018			2017
Stock Awards:
Pretax compensation expense	$	39.5		$	30.5		$	26.9
Income tax benefit	(7.5		)	(6.3		)	(8.7		)
Stock Award expense, net of income taxes	32.0			24.2			18.2
Stock options:
Pretax compensation expense	21.9			20.3			17.3
Income tax benefit	(3.3		)	(4.2		)	(5.7		)
Stock option expense, net of income taxes	18.6			16.1			11.6
Total stock-based compensation:
Pretax compensation expense	61.4			50.8			44.2
Income tax benefit	(10.8		)	(10.5		)	(14.4		)
Total stock-based compensation expense, net of income taxes	$	50.6		$	40.3		$	29.8

Schedule of Future Compensation

The following summarizes the unrecognized compensation cost for the Stock Plan awards as of December 31, 2019. This compensation cost is expected to be recognized over a weighted average period of approximately three years, representing the remaining service period related to the awards. Future compensation amounts will be adjusted for any changes in estimated forfeitures ($ in millions):

Stock Awards	$	61.2
Stock options	55.4
Total unrecognized compensation cost	$	116.6

Schedule of Assumptions Used

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

	2019			2018			2017
Risk-free interest rate	1.43% - 2.6%			2.71% - 2.96%			1.9% - 2.26%
Volatility (a)	19.9		%	18.8		%	20.9		%
Dividend yield (b)	0.4		%	0.4		%	0.5		%
Expected years until exercise	5.5 - 8.0			5.5 - 8.0			5.5 - 8.0
Weighted average fair value at date of grant	$	19.38		$	18.67		$	13.43
(a) Beginning August 2018, expected volatility was based on a weighted average blend of the company’s historical stock price volatility from July 2, 2016 (the date of Separation) through the stock option grant date and the average historical stock price volatility of a group of peer companies for the expected term of the options. The weighted average volatility from July 2, 2016 to July 2018 was estimated based on an average historical stock price volatility of a group of peer companies given our limited trading history.
(b) The dividend yield is calculated by dividing our annual dividend, based on the most recent quarterly dividend rate, by Fortive’s closing stock price on the grant date.

Schedule of Stock Option Activity

The following summarizes option activity under the Stock Plan for the years ended December 31, 2019, 2018, and 2017 (in millions, except price per share and numbers of years):

	Options		Weighted Average Exercise Price		Weighted  Average Remaining Contractual Term (years)	Aggregate Intrinsic Value
Outstanding as of January 1, 2017	9.4		$	33.23
Granted	1.7		58.07
Exercised	(1.0	)	24.77
Canceled/forfeited	(0.4	)	45.12
Outstanding as of December 31, 2017	9.7		38.09
Granted	1.7		76.67
Exercised	(1.4	)	28.99
Canceled/forfeited	(0.3	)	54.13
Outstanding as of December 31, 2018	9.7		46.25
Granted	2.2		79.61
Exercised	(1.2	)	33.84
Canceled/forfeited	(0.5	)	66.16
Outstanding as of December 31, 2019	10.2		$	53.64	6.2	$	242.0
Vested and expected to vest as of December 31, 2019 (a)	10.0		$	53.12	6.1	$	240.5
Vested as of December 31, 2019	4.8		$	38.14	4.2	$	184.5
(a) The “expected to vest” options are the net unvested options that remain after applying the forfeiture rate assumption to total unvested options.

Schedule of Stock Options by Exercise Price Range

Options outstanding as of December 31, 2019 are summarized below (in millions; except price per share and number of years):

	Outstanding				Vested
Exercise Price	Shares	Average Exercise Price		Average Remaining Life (in years)	Shares	Average Exercise Price
$18.21 - $26.10	1.3	$	23.27	1	1.3	$	23.27
$26.11 - $40.12	1.5	34.45		4	1.5	34.45
$40.13 - $45.64	2.1	42.69		6	1.2	42.74
$45.65 - $54.12	0.4	49.83		7	0.2	50.06
$54.13 - $76.05	2.0	63.23		8	0.4	61.74
$76.06 - $86.03	2.9	79.47		9	0.2	76.97
Total shares	10.2				4.8

Schedule of Aggregate Intrinsic Value and Cash Receipts

The following summarizes aggregate intrinsic value and cash receipts related to stock option exercise activity under the Stock Plans for the years ended December 31 ($ in millions):

	2019		2018		2017
Aggregate intrinsic value of stock options exercised	$	52.5	$	68.7	$	42.3
Cash receipts from stock options exercised	$	40.0	$	39.3	$	26.0

Schedule of Stock Unit Activity

The following summarizes information related to Stock Award activity under the Stock Plan for the years ended December 31, 2019, 2018, and 2017 (in millions; except price per share):

	Number of Stock Awards (a)		Weighted Average Grant-Date Fair Value
Unvested as of January 1, 2017	2.1		$	39.20
Granted	0.5		57.79
Vested	(0.6	)	35.96
Forfeited	(0.1	)	43.94
Unvested as of December 31, 2017	1.9		45.92
Granted	0.6		77.78
Vested	(0.6	)	41.28
Forfeited	(0.1	)	53.23
Unvested as of December 31, 2018	1.8		57.63
Granted	0.9		80.44
Vested	(0.5	)	48.90
Forfeited	(0.2	)	66.64
Unvested as of December 31, 2019	2.0		69.37
(a) For the year ended December 31, 2017, the table excludes the stock award activity for employees of the A&S Business that was divested on October 1, 2018.