Slide 1: Second Quarter 2016 Earnings Release
Second Quarter 2016 Earnings Release August 2, 2016
Slide 2: Forward-Looking Statements
Forward-Looking Statements Statements in this presentation that are not strictly historical, statements regarding the Company's anticipated earnings, business and acquisition opportunities, anticipated revenue growth, anticipated operating margin expansion, anticipated cash flow, and any other state
Slide 3: Non-GAAP Financial Measures
Non-GAAP Financial Measures This presentation contains references to “adjusted net earnings”, “adjusted diluted net earnings per share”, “core revenue growth”, “adjusted operating profit”, “core operating margin expansion (core OMX),” “adjusted gross margin,” “adjusted selling, general, and administ
Slide 4: Second Quarter 2016 Performance Summary
Second Quarter 2016 Performance Summary ADJUSTED NET NON-GAAP ADJUSTED EARNINGS REVENUE* (non-GAAP) -0.5% Core -0.5% +0.4% Acquisitions +0.5% FX -0.5% $218.9 $219.8 $1,556.0 $1,544.5 Q2 2015 Q2 2016 Q2 2015 Q2 2016 * GAAP revenue adjusted for certain agreements with Danaher that will be entered into
Slide 5: Second Quarter 2016 Performance Summary
Second Quarter 2016 Performance Summary Non-GAAP Adjusted Non-GAAP Adjusted Gross Margins Operating Profit Q2 2015 – 49.09% +53bps Q2 2016 – 49.62% +4 bps Core +9bps Acquisitions -5bps Non-GAAP Adjusted SG&A (as a % of Adjusted Revenue) Q2 2015 – 22.21% +39bps Q2 2016 – 22.60% 20.72% 20.76% R&D (as
Slide 6: Second Quarter 2016 Performance Summary
Second Quarter 2016 Performance Summary $M FY 2014 FY 2015 Q2 2015 Q2 2016 YTD 2015 YTD 2016 Operating Cash $947 $1,009 $290 $311 $385 $488 Flow Cap Ex 103 120 28 33 52 61 Free Cash Flow $844 $889 $262 $278 $333 $427
Slide 7: Second Quarter 2016 Professional Instrumentation
Second Quarter 2016 Professional Instrumentation Non-GAAP Adjusted Non-GAAP Adjusted Revenue* Operating Profit -5.0% Core -5.0% -189 bps Acquisitions +0.5% Core -177 bps FX -0.5% Acquisitions -12 bps $752.4 $713.6 24.44% 22.55% Q2 2015 Q2 2016 Q2 2015 Q2 2016 * GAAP revenue adjusted for certain agre
Slide 8: Second Quarter 2016 Industrial Technologies
Second Quarter 2016 Industrial Technologies Non-GAAP Adjusted Non-GAAP Adjusted Revenue* Operating Profit +3.5% +166 bps Core +3.5% Core +166 bps Acquisitions +0.5% FX -0.5% $803.6 $830.9 20.87% 19.21% Q2 2015 Q2 2016 Q2 2015 Q2 2016 * No adjustments were required in Industrial Technologies for agre
Slide 9: 2016 Outlook Guidance
2016 Outlook (@ FORTIVE GUIDANCE
Slide 10: Q&A
2016 Outlook (@ FORTIVE Q&A
Slide 11: Fortive
(2) FORTIVE
Slide 12: Reconciliation of GAAP to Non-GAAP Financial Measures
FORTIVE CORPORATION RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES Adjusted Net Earnings, Adjusted Diluted Net Earnings per Share, Adjusted Sales, and Adjusted Operating Profit We disclose the non-GAAP measures of historical adjusted net earnings and forecasted adjusted diluted net earnings p
Slide 13: Tax Effect and Core Financial Measures
The Company estimates the tax effect of the items identified in the reconciliation schedule below by applying the Company’s statutory tax rate to the pretax amount of the adjustment, unless the nature of the item and/or the tax jurisdiction in which the item has been recorded requires application of
Slide 14: Section 1: Sales
SECTION 1 Sales Total Fortive Three Months Ended ($ in millions) July 1, 2016 July 3, 2015 Sales (GAAP) $ 1,555.1 $ 1,564.9 Net Sales Adjustments (10.6) (8.9) Adjusted Sales (Non-GAAP) $ 1,544.5 $ 1,556.0 Professional Instrumentation Three Months Ended ($ in millions) July 1, 2016 July 3, 2015 Sales
Slide 15: Section 2: Operating Profit
SECTION 2 Operating Profit Total Fortive Three Months Ended ($ in millions) July 1, 2016 July 3, 2015 Operating Profit (GAAP) $ 322.1 $ 335.7 Net Sales Adjustments (1.5) (0.8) Estimated SG&A Level adjustments — (12.6) Adjusted Operating Profit (Non-GAAP) $ 320.6 $ 322.3 Professional Instrumentation
Slide 16: Section 3: Operating Profit Margins
SECTION 3 Operating Profit Margins Total Fortive Three Months Ended July 1, 2016 July 3, 2015 Operating Profit % (GAAP) 20.7% 21.5 % Net Sales Adjustments 0.1 % —% Estimated SG&A Level adjustments —% (0.8)% Adjusted Operating Profit as a % of Adjusted GAAP Sales (Non-GAAP) 20.8% 20.7 % Professional
Slide 17: Section 4: Net Earnings
SECTION 4 Net Earnings Three Months Ended ($ in millions) July 1, 2016 July 3, 2015 Net Earnings (GAAP) $ 238.9 $ 227.4 Pretax amortization of acquisition-related intangible assets in the three months ($22 million pretax as reported in this line item, $16 million after tax) and in the three months (
Slide 18: Section 5: Forecasted Adjusted Diluted Net Earnings Per Share
SECTION 5 Forecasted Adjusted Diluted Net Earnings Per Share Three Months Ending Six Months Ending September 30, 2016 December 31, 2016 Low End High End Low End High End Forecasted Diluted Net Earnings Per Share $ 0.50 $ 0.54 $ 1.11 $ 1.19 Pretax amortization of acquisition-related intangible assets
Slide 19: Section 7: Year-over-Year Operating Profit Margins
SECTION 7 Year-over-Year Operating Profit Margins Segments Professional Industrial Total Fortive Instrumentation Technologies Three Month Period ended July 3, 2015 21.45 % 24.70 % 19.67% Operating Profit Margins (GAAP) Second quarter 2016 impact from operating profit margins of businesses that have
Slide 20: Section 8: Free Cash Flow
SECTION 8 Free Cash Flow Three Month Period Ended Six Month Period Ended April 1, April 3, July 1, July 3, July 1, July 3, 2016 2015 2016 2015 2016 2015 Free Cash Flow ($ in millions): Cash Flows from Operations $ 177.2 $ 94.6 $ 310.6 $ 290.2 $ 487.8 $ 384.8 (GAAP) Less: purchases of property, plant
Slide 21: Section 9: Gross Profit and Operating Expenses
SECTION 9 Gross Profit and Operating Expenses Gross Margin Three Months Ended July 1, 2016 July 3, 2015 Gross margin (GAAP) 49.39% 48.87% Net Sales Adjustments (Non-GAAP) 0.23 % 0.22 % Estimated SG&A Level adjustment (Non-GAAP) —% —% Adjusted gross margin (Non-GAAP) 49.62% 49.09% SG&A as a % of Reve