XML 67 R22.htm IDEA: XBRL DOCUMENT v3.23.3
Stockholders' Equity and Stock-based Compensation
 9 Months Ended
Sep. 29, 2023
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. As of September 29, 2023, 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 29, 2023September 30, 2022September 29, 2023September 30, 2022
Preferred stock - shares issued:
Balance, beginning of period— 1.7 1.7 3.4 
Conversion of MCPS to common stock— — (1.7)(1.7)
Balance, end of period— 1.7 — 1.7 
Common stock - shares issued:
Balance, beginning of period879.5 868.4 869.3 855.7 
Common stock-based compensation awards0.7 0.5 2.3 2.2 
Conversion of MCPS to common stock— — 8.6 11.0 
Balance, end of period880.2 868.9 880.2 868.9 
As of April 17, 2023, all outstanding shares of the Company’s 5.00% MCPS Series B converted to common shares at a rate of 5.0175 common shares per share of preferred stock into an aggregate of 8.6 million shares of the Company’s common stock, pursuant to the terms of the Certificate of Designation governing the Series B Preferred Stock. 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. For additional information on the MCPS, refer to Note 19 in the Company’s 2022 Annual Report.
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, 2022 included in the Company’s 2022 Annual Report. As of September 29, 2023, approximately 41 million shares of the Company’s common stock were reserved for issuance under the 2007 Omnibus Incentive Plan.
The following information about the Company's stock-based compensation programs includes amounts for both the Company's and Veralto's employees. In connection with the Separation and in accordance with the employee matters agreement Danaher and Veralto have entered into, the Company has made certain adjustments to the exercise price and the number of stock-based compensation awards with the intention of preserving the intrinsic value of the awards immediately prior to the Separation. Stock-based compensation awards have been converted into awards of the company that employs the employee post-separation, and Veralto has responsibility for the awards that were converted into Veralto awards. The adjustment to the Company’s stock-based compensation awards as a result of the Separation is not expected to have a significant impact to the Company’s stock compensation expense. Stock-based compensation disclosures reflecting the impact of the Separation will be included in the Company's Annual Report on Form 10-K for the year ending December 31, 2023.
The following summarizes the components of the Company’s stock-based compensation expense ($ in millions):
 Three-Month Period EndedNine-Month Period Ended
 September 29, 2023September 30, 2022September 29, 2023September 30, 2022
RSUs/PSUs:
Pretax compensation expense$51 $52 $157 $156 
Income tax benefit(11)(11)(32)(32)
RSU/PSU expense, net of income taxes40 41 125 124 
Stock options:
Pretax compensation expense41 37 123 114 
Income tax benefit(8)(7)(25)(23)
Stock option expense, net of income taxes33 30 98 91 
Total stock-based compensation:
Pretax compensation expense92 89 280 270 
Income tax benefit(19)(18)(57)(55)
Total stock-based compensation expense, net of income taxes$73 $71 $223 $215 
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 29, 2023, $222 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 29, 2023, $269 million of total unrecognized compensation cost related to stock options is expected to be recognized over a weighted average period of approximately two years. Future compensation amounts will be adjusted for any changes in estimated forfeitures.
Accumulated Other Comprehensive Income
Accumulated other comprehensive income (loss) refers to certain gains and losses that under U.S. GAAP are included in comprehensive income (loss) but are excluded from net earnings as these amounts are initially recorded as an adjustment to stockholders’ equity. Foreign currency translation adjustments generally relate to indefinite investments in non-U.S. subsidiaries, as well as the impact from the Company’s hedges of its net investment in foreign operations, including the Company’s cross-currency swap derivatives, net of any income tax impacts.
The changes in accumulated other comprehensive income (loss) by component are summarized below ($ in millions).
Foreign Currency Translation AdjustmentsPension and Postretirement Plan Benefit AdjustmentsCash Flow Hedge AdjustmentsAccumulated Comprehensive Income (Loss)
For the Three-Month Period Ended September 29, 2023:
Balance, June 30, 2023$(3,323)$(341)$88 $(3,576)
Other comprehensive income (loss) before reclassifications:
Increase (decrease)(296)— 22 (274)
Income tax impact(7)— — (7)
Other comprehensive income (loss) before reclassifications, net of income taxes(303)— 22 (281)
Reclassification adjustments:
Increase (decrease)— 1 (a)(102)(b)(101)
Income tax impact— — (1)(1)
Reclassification adjustments, net of income taxes— 1 (103)(102)
Net other comprehensive income (loss), net of income taxes(303)1 (81)(383)
Balance, September 29, 2023$(3,626)$(340)$7 $(3,959)
For the Three-Month Period Ended September 30, 2022:
Balance, July 1, 2022$(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 $(3,854)
Foreign Currency Translation AdjustmentsPension and Postretirement Plan Benefit AdjustmentsCash Flow Hedge AdjustmentsAccumulated Comprehensive Income (Loss)
For the Nine-Month Period Ended September 29, 2023:
Balance, December 31, 2022$(2,644)$(341)$113 $(2,872)
Other comprehensive income (loss) before reclassifications:
Increase (decrease)(991)— (68)(1,059)
Income tax impact9 — — 9 
Other comprehensive income (loss) before reclassifications, net of income taxes(982)— (68)(1,050)
Reclassification adjustments:
Increase (decrease)— 1 (a)(37)(b)(36)
Income tax impact— — (1)(1)
Reclassification adjustments, net of income taxes— 1 (38)(37)
Net other comprehensive income (loss), net of income taxes(982)1 (106)(1,087)
Balance, September 29, 2023$(3,626)$(340)$7 $(3,959)
For the Nine-Month Period Ended September 30, 2022:
Balance, December 31, 2021$(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)
(a) This accumulated other comprehensive income (loss) component is included in the computation of net periodic benefit cost (refer to Notes 8 and 13 for additional details).
(b) Reflects reclassification to earnings related to cash flow hedges of certain long-term debt (refer to Note 12 for additional details).