Capital Stock and Earnings Per Share

12 Months Ended

Dec. 31, 2020

NOTE 19. CAPITAL STOCK AND EARNINGS PER SHARE

Capital Stock

The Company’s authorized capital stock consists of 1,985,000,000 shares of common stock, par value $0.0001 per share, and 15,000,000 shares of preferred stock with no par value, with all shares of preferred stock undesignated.

On August 5, 2019, we issued 1,000 shares of common stock to Fortive pursuant to Section 4(a)(2) of the Securities Act. We did not register the issuance of the issued shares under the Securities Act because the issuance did not constitute a public offering.

On September 28, 2020, Vontier filed a certificate of amendment to the Certificate of Incorporation of Vontier (the “Split Amendment”) with the Secretary of State of the State of Delaware, which became effective as of such date. The Split Amendment effected a stock split whereby each share of Vontier common stock issued and outstanding immediately prior to the Split Amendment was converted into 168,378.946 shares in order to provide sufficient capitalization of Vontier to enable Fortive to complete the Distribution and retain a 19.9% interest in the remaining shares of common stock of Vontier. All per share amounts in the Consolidated and Combined Statements of Earnings and Comprehensive Income have been retroactively adjusted to give effect to this recapitalization.

On October 9, 2020, Fortive distributed 80.1% of Vontier’s outstanding common stock to its stockholders. Refer to Note 1. Business Overview for additional information. Additionally, subsequent to year-end, Fortive divested of its remaining 19.9% ownership in the Company through an underwritten public offering. For additional information regarding the distribution of shares, refer to Note 21. Subsequent Events.

Each share of Vontier common stock entitles the holder to one vote on all matters to be voted upon by common stockholders. Vontier’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 the common stock, could potentially discourage attempts by third parties to obtain control of Vontier 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.

The total number of shares outstanding, including the impact of the Split Amendment, on October 9, 2020 was 168,378,946 which is being utilized for the calculation of both basic and diluted earnings per share for the years ended December 31, 2019 and 2018 as no Vontier common stock equivalents were outstanding prior to October 9, 2020.

Information related to the calculation of net earnings per share of common stock is summarized as follows:


	Year Ended December 31
($ and shares in millions, except per share amounts)	2020		2019		2018
Numerator:
Net earnings	$	342.0	$	436.5	$	385.5

Denominator:
Basic weighted average common shares outstanding	168.4		168.4		168.4
Effect of dilutive stock options and RSUs	1.0		—		—
Diluted weighted average common shares outstanding	169.4		168.4		168.4

Earnings per share:
Basic	$	2.03	$	2.59	$	2.29
Diluted	$	2.02	$	2.59	$	2.29

Anti-dilutive shares	2.7		—		—

The dilutive shares disclosed above were calculated using the treasury stock method. The treasury stock method calculates the dilution assuming the exercise of all in-the-money options and vesting of RSUs, reduced by the repurchase of shares with proceeds from the assumed exercises, and unrecognized compensation expense for outstanding awards.