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Stockholders' Equity and Stock-based Compensation
 9 Months Ended
Sep. 30, 2022
Share-Based Payment Arrangement [Abstract]  
Stockholders' Equity and Stock-based Compensation STOCKHOLDERS' EQUITY AND STOCK-BASED COMPENSATION
Stockholders’ Equity
On July 16, 2013, the Company’s Board of Directors approved a repurchase program (the “Repurchase Program”) authorizing the repurchase of up to 20 million shares of the Company’s common stock from time to time on the open market or in privately negotiated transactions. On July 22, 2022, the Company repurchased 3,906 shares of the Company’s common stock for $1 million as part of the Repurchase Program. As of September 30, 2022, approximately 20 million shares remained available for repurchase pursuant to the Repurchase Program.
The following table summarizes the Company’s share activity (shares in millions):
Three-Month Period EndedNine-Month Period Ended
September 30, 2022October 1, 2021September 30, 2022October 1, 2021
Preferred stock - shares issued:
Balance, beginning of period1.7 3.4 3.4 3.4 
Conversion of MCPS to common stock— — (1.7)— 
Balance, end of period1.7 3.4 1.7 3.4 
Common stock - shares issued:
Balance, beginning of period868.4 854.4 855.7 851.3 
Common stock-based compensation awards0.5 0.8 2.2 3.0 
Common stock issued in connection with Liquid Yield Option Notes (“LYONs”) conversions— — — 0.9 
Conversion of MCPS to common stock— — 11.0 — 
Balance, end of period868.9 855.2 868.9 855.2 
On April 15, 2022, all outstanding shares of the Company’s 4.75% MCPS Series A converted to common shares at a rate of 6.6632 common shares per share of preferred stock into an aggregate of 11.0 million shares of the Company’s common stock, pursuant to the terms of the Certificate of Designation governing the Series A Preferred Stock. Danaher issued cash in lieu of fractional shares of common stock in the conversion. The final quarterly cash dividend of $11.875 per share was paid on April 15, 2022.
Unless converted earlier in accordance with the terms of the certificate of designations, each share of MCPS Series B mandatorily converts on April 15, 2023 (the Mandatory Conversion Date) into a number of shares of the Company’s common stock between the Minimum Conversion Rate of 5.0143 shares and the Maximum Conversion Rate of 6.1425 shares (subject to further anti-dilution adjustments). The number of shares of the Company’s common stock issued and issuable upon conversion is determined based on the average volume-weighted average price per share of the Company’s common stock over the 20 consecutive trading day period beginning on, and including, the 21st scheduled trading day immediately before the Mandatory Conversion Date. Subject to certain exceptions, at any time prior to the Mandatory Conversion Date, holders may elect to convert the MCPS Series B shares into common stock based on the Minimum Conversion Rate (subject to further anti-dilution adjustments). In the event of a fundamental change, the MCPS Series B shares will convert at the fundamental change rate specified in the certificate of designations, and the holders of MCPS Shares would be entitled to a fundamental change make-whole dividend.
Holders of MCPS Series B are entitled to receive, when and if declared by the Company’s Board of Directors, cumulative dividends at the Annual Cumulative Dividend Rate of 5.00% of the Liquidation Preference of $1,000 per share, payable in cash or, subject to certain limitations, by delivery of shares of the Company’s common stock or any combination of cash and shares of the Company’s common stock, at the Company’s election. If declared, dividends on the MCPS Series B shares are payable quarterly on January 15, April 15, July 15 and October 15 of each year (to, and including, the Mandatory Conversion Date), to the holders of record of the MCPS Series B shares as they appear on the Company’s stock register at the close of business on the immediately preceding December 31, March 31, June 30 and September 30, respectively.
Stock-Based Compensation
For a full description of the Company’s stock-based compensation programs, refer to Note 19 of the Company’s financial statements as of and for the year ended December 31, 2021 included in the Company’s 2021 Annual Report. As of September 30, 2022, approximately 44 million shares of the Company’s common stock were reserved for issuance under the 2007 Omnibus Incentive Plan.
The following summarizes the components of the Company’s stock-based compensation expense ($ in millions):
 Three-Month Period EndedNine-Month Period Ended
 September 30, 2022October 1, 2021September 30, 2022October 1, 2021
Restricted stock units (“RSUs”)/performance stock units (“PSUs”):
Pretax compensation expense$52 $31 $156 $95 
Income tax benefit(11)(6)(32)(19)
RSU/PSU expense, net of income taxes41 25 124 76 
Stock options:
Pretax compensation expense37 21 114 64 
Income tax benefit(7)(4)(23)(13)
Stock option expense, net of income taxes30 17 91 51 
Total stock-based compensation:
Pretax compensation expense89 52 270 159 
Income tax benefit(18)(10)(55)(32)
Total stock-based compensation expense, net of income taxes$71 $42 $215 $127 
Stock-based compensation has been recognized as a component of selling, general and administrative expenses in the accompanying Consolidated Condensed Statements of Earnings. As of September 30, 2022, $239 million of total unrecognized compensation cost related to RSUs/PSUs is expected to be recognized over a weighted average period of approximately two years. As of September 30, 2022, $262 million of total unrecognized compensation cost related to stock options is expected to be recognized over a weighted average period of approximately two years. Future compensation amounts will be adjusted for any changes in estimated forfeitures.
Accumulated Other Comprehensive Income
Accumulated other comprehensive income (loss) refers to certain gains and losses that under U.S. GAAP are included in comprehensive income (loss) but are excluded from net earnings as these amounts are initially recorded as an adjustment to stockholders’ equity. Foreign currency translation adjustments generally relate to indefinite investments in non-U.S. subsidiaries, as well as the impact from the Company’s hedges of its net investment in foreign operations, including the Company’s cross-currency swap derivatives, net of any income tax impacts.
The changes in accumulated other comprehensive income (loss) by component are summarized below ($ in millions).
Foreign Currency Translation AdjustmentsPension and Postretirement Plan Benefit AdjustmentsCash Flow Hedge AdjustmentsAccumulated Comprehensive Income (Loss)
For the Three-Month Period Ended September 30, 2022:
Balance, July 1, 2022$(2,324)$(529)$108 $(2,745)
Other comprehensive income (loss) before reclassifications:
Increase (decrease)(1,008)— 214 (794)
Income tax impact(31)— (51)(82)
Other comprehensive income (loss) before reclassifications, net of income taxes(1,039)— 163 (876)
Reclassification adjustments:
Increase (decrease)— 9 (a)(240)(b)(231)
Income tax impact— (2)— (2)
Reclassification adjustments, net of income taxes— 7 (240)(233)
Net other comprehensive income (loss), net of income taxes(1,039)7 (77)(1,109)
Balance, September 30, 2022$(3,363)$(522)$31 $(3,854)
For the Three-Month Period Ended October 1, 2021:
Balance, July 2, 2021$231 $(907)$1 $(675)
Other comprehensive income (loss) before reclassifications:
Increase (decrease)(387)— 87 (300)
Income tax impact(9)— — (9)
Other comprehensive income (loss) before reclassifications, net of income taxes(396)— 87 (309)
Reclassification adjustments:
Increase (decrease)— 15 (a)(89)(b)(74)
Income tax impact— (3)— (3)
Reclassification adjustments, net of income taxes— 12 (89)(77)
Net other comprehensive income (loss), net of income taxes(396)12 (2)(386)
Balance, October 1, 2021
$(165)$(895)$(1)$(1,061)
Foreign Currency Translation AdjustmentsPension and Postretirement Plan Benefit AdjustmentsCash Flow Hedge AdjustmentsAccumulated Comprehensive Income (Loss)
For the Nine-Month Period Ended September 30, 2022:
Balance, December 31, 2021$(539)$(550)$62 $(1,027)
Other comprehensive income (loss) before reclassifications:
Increase (decrease)(2,729)— 720 (2,009)
Income tax impact(95)— (173)(268)
Other comprehensive income (loss) before reclassifications, net of income taxes(2,824)— 547 (2,277)
Reclassification adjustments:
Increase (decrease)— 37 (a)(578)(b)(541)
Income tax impact— (9)— (9)
Reclassification adjustments, net of income taxes— 28 (578)(550)
Net other comprehensive income (loss), net of income taxes(2,824)28 (31)(2,827)
Balance, September 30, 2022$(3,363)$(522)$31 $(3,854)
For the Nine-Month Period Ended October 1, 2021:
Balance, December 31, 2020$745 $(928)$(185)$(368)
Other comprehensive income (loss) before reclassifications:
Increase (decrease)(886)— 389 (497)
Income tax impact(24)— — (24)
Other comprehensive income (loss) before reclassifications, net of income taxes(910)— 389 (521)
Reclassification adjustments:
Increase (decrease)— 43 (a)(205)(b)(162)
Income tax impact— (10)— (10)
Reclassification adjustments, net of income taxes— 33 (205)(172)
Net other comprehensive income (loss), net of income taxes(910)33 184 (693)
Balance, October 1, 2021
$(165)$(895)$(1)$(1,061)
(a) This accumulated other comprehensive income (loss) component is included in the computation of net periodic benefit cost (refer to Notes 9 and 14 for additional details).
(b) Reflects reclassification to earnings related to cash flow hedges of certain long-term debt (refer to Note 13 for additional details).