Danaher Reports Third Quarter 2017 Results

Thursday, October 19, 2017 General News
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B   

Gain on sale of investments in nine-month period ended September 30, 2016 ($223 million pretax as presented in this line item, $140 million after-tax).

C 

Charge for early extinguishment of borrowings for the nine-month period ended September 30, 2016 ($179 million pretax as presented in this line item, $112 million after-tax).

D 

Gain on resolution of acquisition-related matters for the nine-month period ended September 30, 2016  ($18 million pretax as presented in this line item, $14 million after-tax).

E 

During the nine-month period ended September 29, 2017, the Company recorded $76 million of pretax restructuring, impairment and other related charges ($51 million after-tax) primarily related to the Company's strategic decision to discontinue a molecular diagnostic product line in its Diagnostics segment.  As a result, the Company incurred noncash charges for the impairment of certain technology-related intangibles as well as related inventory and plant, property and equipment with no further use totaling $49 million.  In addition, the Company incurred cash restructuring costs primarily related to employee severance and related charges totaling $27 million.  This is addressed in more detail in the "Statement Regarding Non-GAAP Measures."

F 

This line item reflects the aggregate tax effect of all nontax adjustments reflected in the table above.  In addition, the footnotes above indicate the after-tax amount of each individual adjustment item.  Danaher estimates the tax effect of the adjustment items identified in the reconciliation schedule above by applying Danaher's overall estimated effective tax rate to the pretax amount, unless the nature of the item and/or the tax jurisdiction in which the item has been recorded requires application of a specific tax rate or tax treatment, in which case the tax effect of such item is estimated by applying such specific tax rate or tax treatment.

G 

Represents (1) discrete income tax gains, primarily related to expiration of statute of limitations ($35 million in the nine-month period ended September 29, 2017), (2) equity compensation-related excess tax benefits ($16 million in the nine-month period ended September 29, 2017) and (3) Fortive separation-related tax costs related to repatriation of earnings, legal entity realignments and other discrete matters ($99 million in the nine-month period ended September 30, 2016).  On January 1, 2017, Danaher adopted the updated accounting guidance required by ASU 2016-09, Compensation—Stock Compensation, which requires income statement recognition of all excess tax benefits and deficiencies related to equity compensation.  We exclude from Adjusted Diluted Net EPS any excess tax benefits that exceed the levels we believe are representative of historical experience.  In the first quarter of 2017, we anticipated $10 million of equity compensation-related excess tax benefits and realized $26 million of excess tax benefits, and therefore we have excluded $16 million of these benefits in the calculation of Adjusted Diluted Net Earnings per Share.  In the second and third quarters of 2017, realized equity compensation-related excess tax benefits approximated the anticipated benefit and no adjustments were required.



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