UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

________________________________________________________

FORM 10-Q

________________________________________________________

(Mark One)



ý	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September ~~29, 2017~~28, 2018



¨	TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 1-8089

DANAHER CORPORATION

(Exact name of registrant as specified in its charter)



Delaware		59-1995548
(State of Incorporation)		(I.R.S. Employer Identification number)

2200 Pennsylvania Avenue, N.W., Suite 800W Washington, D.C.		20037-1701
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s telephone number, including area code: 202-828-0850

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes ý No ¨

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files). Yes ý No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):



Large accelerated filer	ý	Accelerated filer	¨

Non-accelerated filer	¨ ~~(Do not check if a smaller reporting company)~~	Smaller reporting company	¨

Emerging growth company	¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes ¨ No ý

The number of shares of common stock outstanding at October ~~13, 2017~~12, 2018 was ~~695,605,257.~~700,902,703.

DANAHER CORPORATION

INDEX

FORM 10-Q



		Page
PART I -	FINANCIAL INFORMATION

Item 1.	Financial Statements

	Consolidated Condensed Balance Sheets	1

	Consolidated Condensed Statements of Earnings	2

	Consolidated Condensed Statements of Comprehensive Income	3

	Consolidated Condensed Statement of Stockholders’ Equity	4

	Consolidated Condensed Statements of Cash Flows	5

	Notes to Consolidated Condensed Financial Statements	6

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2226

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	4045

Item 4.	Controls and Procedures	4045

PART II -	OTHER INFORMATION

Item 1.	Legal Proceedings	46

Item 1A.	Risk Factors	4146

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	4146

Item 6.	Exhibits	4247

	Signatures	4348

DANAHER CORPORATION AND SUBSIDIARIES

CONSOLIDATED CONDENSED BALANCE SHEETS

($ and shares in millions, except per share amount)

(unaudited)


	September 29, 2017			December 31, 2016			September 28, 2018			December 31, 2017
ASSETS
Current assets:
Cash and equivalents	$	648.6		$	963.7		$	776.2		$	630.3
Trade accounts receivable, net	3,254.6			3,186.1			3,323.1			3,521.8
Inventories:
Finished goods	1,007.3			884.4			1,110.1			982.5
Work in process	325.1			299.4			331.4			309.7
Raw materials	559.9			525.6			587.9			548.6
Total inventories	1,892.3			1,709.4			2,029.4			1,840.8
Prepaid expenses and other current assets	464.7			805.9			701.8			857.1
Total current assets	6,260.2			6,665.1			6,830.5			6,850.0
Property, plant and equipment, net of accumulated depreciation of $2,373.3 and $1,963.3, respectively	2,424.9			2,354.0
Property, plant and equipment, net of accumulated depreciation of $2,739.6 and $2,519.4, respectively							2,462.3			2,454.6
Other long-term assets	689.1			631.3			577.3			538.3
Goodwill	24,783.8			23,826.9			26,035.0			25,138.6
Other intangible assets, net	11,693.3			11,818.0			11,814.4			11,667.1
Total assets	$	45,851.3		$	45,295.3		$	47,719.5		$	46,648.6
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Notes payable and current portion of long-term debt	$	182.2		$	2,594.8		$	59.8		$	194.7
Trade accounts payable	1,501.8			1,485.0			1,569.6			1,509.9
Accrued expenses and other liabilities	2,703.5			2,794.2			2,835.9			3,087.7
Total current liabilities	4,387.5			6,874.0			4,465.3			4,792.3
Other long-term liabilities	5,356.4			5,670.3			5,011.0			5,161.1
Long-term debt	10,726.8			9,674.2			10,558.0			10,327.4
Stockholders’ equity:
Common stock - $0.01 par value, 2.0 billion shares authorized; 811.4 and 807.7 issued; 695.5 and 692.2 outstanding, respectively	8.1			8.1
Common stock - $0.01 par value, 2.0 billion shares authorized; 817.2 and 812.5 issued; 700.8 and 696.6 outstanding, respectively							8.2			8.1
Additional paid-in capital	5,472.0			5,312.9			5,772.2			5,538.2
Retained earnings	22,047.1			20,703.5			24,528.7			22,806.1
Accumulated other comprehensive income (loss)	(2,151.8		)	(3,021.7		)	(2,635.7		)	(1,994.2		)
Total Danaher stockholders’ equity	25,375.4			23,002.8			27,673.4			26,358.2
Noncontrolling interests	5.2			74.0			11.8			9.6
Total stockholders’ equity	25,380.6			23,076.8			27,685.2			26,367.8
Total liabilities and stockholders’ equity	$	45,851.3		$	45,295.3		$	47,719.5		$	46,648.6

See the accompanying Notes to the Consolidated Condensed Financial Statements.

DANAHER CORPORATION AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS

($ and shares in millions, except per share amounts)

(unaudited)

Three-Month Period Ended Nine-Month Period Ended
September 29, 2017 September 30, 2016 September 29, 2017 September 30, 2016
Sales $ 4,528.2
$ 4,132.1
$ 13,244.0
$ 12,298.1

Cost of sales (1,991.4 ) (1,846.1 ) (5,890.6 ) (5,463.5 )
Gross profit 2,536.8
2,286.0
7,353.4
6,834.6

Operating costs:
Selling, general and administrative expenses (1,490.1 ) (1,345.8 ) (4,448.4 ) (4,105.2 )
Research and development expenses (279.2 ) (241.1 ) (829.9 ) (707.1 )
Operating profit 767.5
699.1
2,075.1
2,022.3

Nonoperating income (expense):
Other income —
—
—
223.4

Loss on early extinguishment of borrowings —
(178.8 ) —
(178.8 )
Interest expense (39.9 ) (43.7 ) (120.9 ) (152.1 )
Interest income 2.2
0.1
5.6
0.1

Earnings from continuing operations before income taxes 729.8
476.7
1,959.8
1,914.9

Income taxes (157.7 ) (74.1 ) (346.6 ) (508.5 )
Net earnings from continuing operations 572.1
402.6
1,613.2
1,406.4

Earnings from discontinued operations, net of income taxes —
(11.0 ) 22.3
400.3

Net earnings $ 572.1
$ 391.6
$ 1,635.5
$ 1,806.7

Net earnings per share from continuing operations:
Basic $ 0.82
$ 0.58
$ 2.32
$ 2.04

Diluted $ 0.81
$ 0.57
$ 2.29
$ 2.01

Net earnings per share from discontinued operations:
Basic $ —
$ (0.02 ) $ 0.03
$ 0.58

Diluted $ —
$ (0.02 ) $ 0.03
$ 0.57

Net earnings per share:
Basic $ 0.82
$ 0.57
* $ 2.35
$ 2.62

Diluted $ 0.81
$ 0.56
* $ 2.32
$ 2.59
*
Average common stock and common equivalent shares outstanding:
Basic 696.2
692.2
695.3
690.6

Diluted 705.6
701.3
705.5
699.1

* Net earnings per share amounts do not add due to rounding.



	Three-Month Period Ended						Nine-Month Period Ended
	September 28, 2018			September 29, 2017			September 28, 2018			September 29, 2017
Sales	$	4,853.1		$	4,528.2		$	14,529.5		$	13,244.0
Cost of sales	(2,162.6		)	(1,991.4		)	(6,378.3		)	(5,890.6		)
Gross profit	2,690.5			2,536.8			8,151.2			7,353.4
Operating costs:
Selling, general and administrative expenses	(1,558.6		)	(1,498.4		)	(4,798.4		)	(4,470.6		)
Research and development expenses	(301.2		)	(279.2		)	(911.6		)	(829.9		)
Operating profit	830.7			759.2			2,441.2			2,052.9
Nonoperating income (expense):
Other income, net	9.1			8.3			25.2			22.2
Interest expense	(41.3		)	(39.9		)	(123.6		)	(120.9		)
Interest income	2.8			2.2			6.7			5.6
Earnings from continuing operations before income taxes	801.3			729.8			2,349.5			1,959.8
Income taxes	(137.6		)	(157.7		)	(445.4		)	(346.6		)
Net earnings from continuing operations	663.7			572.1			1,904.1			1,613.2
Earnings from discontinued operations, net of income taxes	—			—			—			22.3
Net earnings	$	663.7		$	572.1		$	1,904.1		$	1,635.5
Net earnings per share from continuing operations:
Basic	$	0.95		$	0.82		$	2.72		$	2.32
Diluted	$	0.93		$	0.81		$	2.68		$	2.29
Net earnings per share from discontinued operations:
Basic	$	—		$	—		$	—		$	0.03
Diluted	$	—		$	—		$	—		$	0.03
Net earnings per share:
Basic	$	0.95		$	0.82		$	2.72		$	2.35
Diluted	$	0.93		$	0.81		$	2.68		$	2.32
Average common stock and common equivalent shares outstanding:
Basic	701.4			696.2			700.1			695.3
Diluted	710.6			705.6			709.9			705.5

See the accompanying Notes to the Consolidated Condensed Financial Statements.

DANAHER CORPORATION AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME

($ in millions)

(unaudited)


	Three-Month Period Ended					Nine-Month Period Ended					Three-Month Period Ended						Nine-Month Period Ended
	September 29, 2017			September 30, 2016		September 29, 2017		September 30, 2016			September 28, 2018			September 29, 2017			September 28, 2018			September 29, 2017
Net earnings	$	572.1		$	391.6	$	1,635.5	$	1,806.7		$	663.7		$	572.1		$	1,904.1		$	1,635.5
Other comprehensive income (loss), net of income taxes:
Foreign currency translation adjustments	260.0			275.6		839.2		314.8			(162.4		)	260.0			(509.4		)	839.2
Pension and postretirement plan benefit adjustments	4.6			4.7		14.4		15.8			5.9			4.6			19.7			14.4
Unrealized gain (loss) on available-for-sale securities adjustments	(1.9		)	8.8		16.3		(121.5		)
Unrealized (loss) gain on available-for-sale securities adjustments											—			(1.9		)	(0.6		)	16.3
Total other comprehensive income (loss), net of income taxes	262.7			289.1		869.9		209.1			(156.5		)	262.7			(490.3		)	869.9
Comprehensive income	$	834.8		$	680.7	$	2,505.4	$	2,015.8		$	507.2		$	834.8		$	1,413.8		$	2,505.4

See the accompanying Notes to the Consolidated Condensed Financial Statements.

DANAHER CORPORATION AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENT OF STOCKHOLDERS’ EQUITY

($ and shares in millions)

(unaudited)

Common Stock Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Noncontrolling Interests
Shares Amount
Balance, December 31, 2016 807.7
$ 8.1
$ 5,312.9
$ 20,703.5
$ (3,021.7 ) $ 74.0
Net earnings for the period —
—
—
1,635.5
—
—
Other comprehensive income —
—
—
—
869.9
—
Dividends declared —
—
—
(291.9 ) —
—
Common stock-based award activity 3.7
—
159.3
—
—
—
Common stock issued in connection with LYONs’ conversions, including tax benefit —
—
1.0
—
—
—
Change in noncontrolling interests —
—
(1.2 ) —
—
(68.8 )
Balance, September 29, 2017 811.4
$ 8.1
$ 5,472.0
$ 22,047.1
$ (2,151.8 ) $ 5.2



	Common Stock			Additional Paid-in Capital		Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Noncontrolling Interests
	Shares	Amount		Additional Paid-in Capital		Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Noncontrolling Interests
Balance, December 31, 2017	812.5	$	8.1	$	5,538.2	$	22,806.1		$	(1,994.2	)	$	9.6
Adoption of accounting standards	—	—		—		154.5			(151.2		)	—
Balance, January 1, 2018	812.5	8.1		5,538.2		22,960.6			(2,145.4		)	9.6
Net earnings	—	—		—		1,904.1			—			—
Other comprehensive income (loss)	—	—		—		—			(490.3		)	—
Dividends declared	—	—		—		(336.0		)	—			—
Common stock-based award activity	4.0	0.1		194.0		—			—			—
Common stock issued in connection with acquisitions	0.2	—		23.9		—			—			—
Common stock issued in connection with LYONs’ conversions, including tax benefit of $4.2	0.5	—		16.1		—			—			—
Change in noncontrolling interests	—	—		—		—			—			2.2
Balance, September 28, 2018	817.2	$	8.2	$	5,772.2	$	24,528.7		$	(2,635.7	)	$	11.8

See the accompanying Notes to the Consolidated Condensed Financial Statements.

DANAHER CORPORATION AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

($ in millions)

(unaudited)


	Nine-Month Period Ended						Nine-Month Period Ended
	September 29, 2017			September 30, 2016			September 28, 2018			September 29, 2017
Cash flows from operating activities:
Net earnings	$	1,635.5		$	1,806.7		$	1,904.1		$	1,635.5
Less: earnings from discontinued operations, net of income taxes	22.3			400.3			—			22.3
Net earnings from continuing operations	1,613.2			1,406.4			1,904.1			1,613.2
Noncash items:
Depreciation	427.3			395.9			449.4			427.3
Amortization	492.9			426.6			527.5			492.9
Stock-based compensation expense	104.8			96.3			111.6			104.8
Restructuring and impairment charges	49.3			—			—			49.3
Pretax loss on early extinguishment of borrowings	—			178.8
Pretax gain on sale of investments	—			(223.4		)
Change in trade accounts receivable, net	74.6			(94.8		)	128.6			74.6
Change in inventories	(98.2		)	(138.5		)	(255.4		)	(98.2		)
Change in trade accounts payable	(48.5		)	(38.1		)	71.5			(48.5		)
Change in prepaid expenses and other assets	242.3			171.9			245.6			242.3
Change in accrued expenses and other liabilities	(214.6		)	257.4			(398.5		)	(214.6		)
Total operating cash provided by continuing operations	2,643.1			2,438.5
Total operating cash provided by discontinued operations	—			434.3
Net cash provided by operating activities	2,643.1			2,872.8
Net operating cash provided by continuing operations							2,784.4			2,643.1
Cash flows from investing activities:
Cash paid for acquisitions	(112.0		)	(99.6		)	(2,173.3		)	(112.0		)
Payments for additions to property, plant and equipment	(445.8		)	(422.1		)	(441.3		)	(445.8		)
Proceeds from sales of property, plant and equipment	32.3			7.2			1.6			32.3
Proceeds from sale of investments	—			264.8			22.1			—
All other investing activities	(2.4		)	—			(61.1		)	(2.4		)
Total investing cash used in continuing operations	(527.9		)	(249.7		)
Total investing cash used in discontinued operations	—			(69.8		)
Net cash used in investing activities	(527.9		)	(319.5		)
Net operating cash used in investing activities							(2,652.0		)	(527.9		)
Cash flows from financing activities:
Proceeds from the issuance of common stock	49.0			156.6			77.3			49.0
Payment of dividends	(281.0		)	(313.3		)	(321.2		)	(281.0		)
Payment for purchase of noncontrolling interests	(64.4		)	—			—			(64.4		)
Make-whole premiums to redeem borrowings prior to maturity	—			(188.1		)
Net repayments of borrowings (maturities of 90 days or less)	(3,319.1		)	(2,334.2		)
Net proceeds from (repayments of) borrowings (maturities of 90 days or less)							882.1			(3,319.1		)
Proceeds from borrowings (maturities longer than 90 days)	1,684.0			3,240.9			—			1,684.0
Repayments of borrowings (maturities longer than 90 days)	(562.4		)	(2,354.2		)	(503.9		)	(562.4		)
All other financing activities	(50.7		)	(26.7		)	(16.6		)	(50.7		)
Total financing cash used in continuing operations	(2,544.6		)	(1,819.0		)
Cash distributions to Fortive, net	—			(485.3		)
Net cash used in financing activities	(2,544.6		)	(2,304.3		)
Net operating cash provided by (used in) financing activities							117.7			(2,544.6		)
Effect of exchange rate changes on cash and equivalents	114.3			(68.4		)	(104.2		)	114.3
Net change in cash and equivalents	(315.1		)	180.6			145.9			(315.1		)
Beginning balance of cash and equivalents	963.7			790.8			630.3			963.7
Ending balance of cash and equivalents	$	648.6		$	971.4		$	776.2		$	648.6

Supplemental disclosures:
Cash interest payments	$	117.4		$	199.4		$	129.0		$	117.4
Cash income tax payments	378.3			330.8			502.0			378.3
Distribution of noncash net assets to Fortive Corporation	—			(1,983.6		)

See the accompanying Notes to the Consolidated Condensed Financial Statements.

DANAHER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(unaudited)

NOTE 1. GENERAL

The consolidated condensed financial statements included herein have been prepared by Danaher Corporation (“Danaher” or the “Company”) without audit, pursuant to the rules and regulations of the Securities and Exchange ~~Commission.~~Commission (“SEC”). In this quarterly report, the terms “Danaher” or the “Company” refer to Danaher Corporation, Danaher Corporation and its consolidated subsidiaries or the consolidated subsidiaries of Danaher Corporation, as the context requires. Unless otherwise indicated, all amounts in this quarterly report refer to continuing operations. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) have been condensed or omitted pursuant to such rules and regulations; however, the Company believes that the disclosures are adequate to make the information presented not misleading. The ~~consolidated condensed financial statements~~Consolidated Condensed Financial Statements included herein should be read in conjunction with the financial statements as of and for the year ended December 31, ~~2016~~2017 and the Notes thereto included in the Company’s ~~Current Report on Form 8-K filed on June 19,~~ 2017 ~~and the 2016~~ Annual Report on Form 10-K filed on February ~~22, 2017 (collectively, the “2016 Annual Report”).~~21, 2018.

In the opinion of the Company, the accompanying financial statements contain all adjustments (consisting of only normal recurring accruals) necessary to present fairly the financial position of the Company as of September ~~29, 2017~~28, 2018 and December 31, ~~2016,~~2017, its results of operations for the three and nine-month periods ended September ~~29, 2017~~28, 2018 and September ~~30, 2016~~29, 2017 and its cash flows for each of the nine-month periods then ended. Reclassifications of certain prior year amounts have been made to conform to the current year presentation.

Accounting Standards Recently Adopted

~~Accumulated Other Comprehensive Income (Loss)~~—The changes in accumulated other comprehensive income (loss) by component are summarized below ($ in millions). Foreign currency translation adjustments are generally not adjusted for income taxes as they relate to indefinite investments in non-U.S. subsidiaries.

^(a) ~~This accumulated other comprehensive income (loss) component is included in the computation of net periodic pension cost. Refer to Note 7 for additional details.~~

Foreign Currency Translation Adjustments Pension & Postretirement Plan Benefit Adjustments Unrealized Gain (Loss) on Available-For-Sale Securities Adjustments Total
For the Three-Month Period Ended September 30, 2016:
Balance, July 1, 2016 $ (1,758.2 ) $ (636.2 ) $ 3.2
$ (2,391.2 )
Other comprehensive income (loss) before reclassifications:
Increase 275.6
—
13.9
289.5
Income tax impact —
—
(5.1 ) (5.1 )
Other comprehensive income (loss) before reclassifications, net of income taxes 275.6
—
8.8
284.4
Amounts reclassified from accumulated other comprehensive income (loss):
Increase —
7.2
(a) —
7.2
Income tax impact —
(2.5 ) —
(2.5 )
Amounts reclassified from accumulated other comprehensive income (loss), net of income taxes —
4.7
—
4.7
Net current period other comprehensive income (loss), net of income taxes 275.6
4.7
8.8
289.1
Distribution of Fortive Corporation (83.5 ) 63.3
(c) —
(20.2 )
Balance, September 30, 2016 $ (1,566.1 ) $ (568.2 ) $ 12.0
$ (2,122.3 )
For the Nine-Month Period Ended September 29, 2017:
Balance, December 31, 2016 $ (2,398.2 ) $ (642.2 ) $ 18.7
$ (3,021.7 )
Other comprehensive income (loss) before reclassifications:
Increase 839.2
—
26.1
865.3
Income tax impact —
—
(9.8 ) (9.8 )
Other comprehensive income (loss) before reclassifications, net of income taxes 839.2
—
16.3
855.5
Amounts reclassified from accumulated other comprehensive income (loss):
Increase —
22.2
(a) —
22.2
Income tax impact —
(7.8 ) —
(7.8 )
Amounts reclassified from accumulated other comprehensive income (loss), net of income taxes —
14.4
—
14.4
Net current period other comprehensive income (loss), net of income taxes 839.2
14.4
16.3
869.9
Balance, September 29, 2017 $ (1,559.0 ) $ (627.8 ) $ 35.0
$ (2,151.8 )
For the Nine-Month Period Ended September 30, 2016:
Balance, December 31, 2015 $ (1,797.4 ) $ (647.3 ) $ 133.5
$ (2,311.2 )
Other comprehensive income (loss) before reclassifications:
Increase 314.8
—
28.8
343.6
Income tax impact —
—
(10.7 ) (10.7 )
Other comprehensive income (loss) before reclassifications, net of income taxes 314.8
—
18.1
332.9
Amounts reclassified from accumulated other comprehensive income (loss):
Increase (decrease) —
23.6
(a) (223.4 ) (b) (199.8 )
Income tax impact —
(7.8 ) 83.8
76.0
Amounts reclassified from accumulated other comprehensive income (loss), net of income taxes —
15.8
(139.6 ) (123.8 )
Net current period other comprehensive income (loss), net of income taxes 314.8
15.8
(121.5 ) 209.1
Distribution of Fortive Corporation (83.5 ) 63.3
(c) —
(20.2 )
Balance, September 30, 2016 $ (1,566.1 ) $ (568.2 ) $ 12.0
$ (2,122.3 )

^(a) ~~This accumulated other comprehensive income (loss) component is included in the computation of net periodic pension cost. Refer to Note 7 for additional details.~~

^(b) ~~Included in other income in the accompanying Consolidated Condensed Statement of Earnings. Refer to Note 10 for additional details.~~

^(c) ~~This accumulated other comprehensive income (loss) component included an income tax impact of $21 million.~~

~~New Accounting Standards~~—In May ~~2017,~~2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. ~~2017-09,~~2014-09, ~~Compensation—Stock Compensation~~Revenue from Contracts with Customers (Topic ~~718): Scope of Modification Accounting,~~606) which ~~provided clarity on which changes~~supersedes nearly all existing revenue recognition guidance. Subsequent to the ~~terms~~issuance of Topic 606, the FASB clarified the guidance through several ASUs; hereinafter the collection of revenue guidance is referred to as “ASC 606”. The core principle of ASC 606 is that revenue should be recognized to depict the transfer of promised goods or ~~conditions of share-based payment awards require~~services to customers in an amount that reflects the consideration to which the entity expects to ~~apply~~be entitled in exchange for those goods or services.

On January 1, 2018, the ~~modification accounting provisions required in Topic 718. The standard is effective~~Company adopted ASC 606 using the modified retrospective method for all ~~entities~~contracts. Results for ~~annual~~reporting periods beginning January 1, 2018 are presented under ASC 606, while prior period amounts were not adjusted and continue to be reported in accordance with the Company’s historic accounting under Topic 605, Revenue Recognition.

The Company recorded a net increase to beginning retained earnings of $3 million as of January 1, 2018 due to the cumulative impact of adopting ASC 606. The impact to beginning retained earnings was primarily driven by the capitalization of certain costs to obtain a contract, primarily sales-related commissions, partially offset by the deferral of revenue for unfulfilled performance obligations. The adoption of ASC 606 did not have a significant impact on the Company’s Consolidated Condensed Financial Statements as of and for the three and nine-month periods ended September 28, 2018 and, as a result, comparisons of revenues and operating profit performance between periods are not affected by the adoption of this ASU. Refer to Note 2 for additional disclosures required by ASC 606.

The Company derives revenues primarily from the sale of Life Sciences, Diagnostics, Dental and Environmental & Applied Solutions products and services. Revenue is recognized when control of the promised products or services is transferred to the Company’s customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those products or services (the transaction price). A performance obligation is a promise in a contract to transfer a distinct product or service to a customer and is the unit of account under ASC 606. For equipment, consumables, spare parts and most software licenses sold by the Company, control transfers to the customer at a point in time. To indicate the transfer of control, the Company must have a present right to payment, legal title must have passed to the customer, the customer must have the significant risks and rewards of ownership, and where acceptance is not a formality, the customer must have accepted the product or service. The Company’s principal terms of sale are FOB Shipping Point, or equivalent, and, as such, the Company primarily transfers control and records revenue for product sales upon shipment. Sales arrangements with delivery terms that are not FOB Shipping Point are not recognized upon shipment and the transfer of control for revenue recognition is evaluated based on the associated shipping terms and customer obligations. If a performance obligation to the customer with respect to a sales transaction remains to be fulfilled following shipment (typically installation or acceptance by the customer), revenue recognition for that performance obligation is deferred until such commitments have been fulfilled. Returns for products sold are estimated and recorded as a reduction of revenue at the time of sale. Customer allowances and rebates, consisting primarily

of volume discounts and other short-term incentive programs, are recorded as a reduction of revenue at the time of sale because these allowances reflect a reduction in the transaction price. Product returns, customer allowances and rebates are estimated based on historical experience and known trends. For extended warranty, service, post contract support (“PCS”), software-as-a-service (“SaaS”) and other long-term contracts, control transfers to the customer over the term of the arrangement. Revenue for extended warranty, service, PCS, SaaS and certain software licenses is recognized based upon the period of time elapsed under the arrangement. Revenue for other long-term contracts is generally recognized based upon the cost-to-cost measure of progress, provided that the Company meets the criteria associated with transferring control of the good or service over time.

Certain of the Company’s revenues relate to operating-type lease (“OTL”) arrangements. Leases are outside the scope of ASC 606 and are therefore accounted for in accordance with ASC 840, Leases. Instrument lease revenue for OTL agreements is recognized on a straight-line basis over the life of the lease, and the costs of customer-leased instruments are recorded within property, plant and equipment in the accompanying Consolidated Condensed Balance Sheets and depreciated over the instrument’s estimated useful life. The depreciation expense is reflected in cost of sales in the accompanying Consolidated Condensed Statements of Earnings. The OTLs are generally not cancellable until after ~~December 15, 2017,~~an initial term and may or may not require the customer to purchase a minimum number of consumables or tests throughout the contract term. Certain of the Company’s lease contracts are customized for larger customers and often result in complex terms and conditions that typically require significant judgment in applying the criteria used to evaluate whether the arrangement should be considered an OTL or a sales-type lease (“STL”). A sales-type lease would result in earlier recognition of instrument revenue as compared to an OTL.

For contracts with ~~early adoption permitted, including adoption~~multiple performance obligations, the Company allocates the contract’s transaction price to each performance obligation on a relative standalone selling price basis using the Company’s best estimate of the standalone selling price of each distinct product or service in ~~any interim period~~the contract. The primary method used to estimate standalone selling price is the price observed in standalone sales to customers; however, when prices in standalone sales are not available the Company may use third-party pricing for ~~which financial statements have not yet been issued.~~similar products or services or estimate the standalone selling price. Allocation of the transaction price is determined at the contracts’ inception. The Company does not ~~expect~~adjust transaction price for the effects of a significant financing component when the period between the transfer of the promised good or service to the customer and payment for that good or service by the customer is expected to be one year or less. This allocation approach also applies to contracts that include a lease component.

In January 2016, the FASB issued ASU No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities. The ASU amends guidance on the classification and measurement of financial instruments, including significant revisions in accounting related to the classification and measurement of investments in equity securities and presentation of certain fair value changes for financial liabilities when the fair value option is elected. The ASU requires equity securities to be measured at fair value with changes in fair value recognized through net earnings and amends certain disclosure requirements associated with the fair value of financial instruments. In the period of adoption, the Company is required to reclassify the unrealized gains/losses on equity securities within accumulated other comprehensive income (loss) to retained earnings. In February 2018, the FASB issued ASU No. 2018-03, Technical Corrections and Improvements to Financial Instruments—Overall (Subtopic 825-10), which clarified certain aspects of ~~this~~the previously issued ASU. The ASU ~~will~~was adopted by the Company on January 1, 2018 and did not have a material ~~impact~~effect on ~~its consolidated financial statements.~~the Company’s Consolidated Condensed Financial Statements.

In March 2017, the FASB issued ASU No. 2017-07, Compensation—Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, which requires employers to disaggregate the service cost component from other components of net periodic benefit costs and to disclose the amounts of net periodic benefit costs that are included in each income statement line item. The standard requires employers to report the service cost component in the same line item as other compensation costs and to report the other components of net periodic benefit costs (which include interest costs, expected return on plan assets, amortization of prior service cost or credits and actuarial gains and losses) separately and outside a subtotal of operating income. The income statement guidance requires application on a retrospective basis. The ASU was adopted by the Company on January 1, 2018 and as a result operating profit decreased and other income, net increased by $8.3 million and $22.2 million for the three and nine-month periods ended September 29, 2017, respectively. Refer to Note 8 for further information on the implementation of this ASU.

The Company measures its pension and postretirement plans’ assets and its obligations that determine the respective plan’s funded status as of the end of the Company’s fiscal year, and recognizes an asset for a plan’s overfunded status or a liability for a plan’s underfunded status in its balance sheet. Changes in the funded status of the plans are recognized in the year in which the changes occur and reported in other comprehensive income (loss). The service cost component of net periodic pension cost is included in cost of sales and selling, general and administrative expenses in the accompanying Consolidated Condensed Statements of Earnings and the other components of net periodic pension cost are included in nonoperating income (expense).

In February 2018, the FASB issued ASU No. 2018-02, Income Statement—Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, to address a specific consequence of the Tax Cuts and Jobs Act (“TCJA”) by allowing a reclassification from accumulated other comprehensive income (loss) to retained earnings for stranded tax effects resulting from the TCJA’s reduction of the U.S. federal corporate income tax rate. The standard is effective for ~~public~~all entities for annual periods beginning after December 15, ~~2017, including interim periods,~~2018, with early adoption ~~permitted.~~permitted, and is to be applied either in the period of adoption or retrospectively to each period in which the effect of the change in the U.S. federal corporate income tax rate in the TCJA is recognized. The Company ~~does not expect the adoption of~~early adopted this ASU ~~will~~on January 1, 2018 and as a result recorded a net increase to beginning retained earnings and decrease to accumulated other comprehensive income (loss) of $151 million to reclassify the income tax effects of the TCJA on the Company’s U.S. pension plans, available-for-sale debt securities and certain foreign currency losses. The ASU also requires the Company to disclose its policy on accounting for income tax effects in accumulated other comprehensive income (loss). In general, the Company applies the individual item approach with respect to available-for-sale debt securities and the portfolio approach with respect to pension, postretirement benefit plan obligations and currency translation matters.

In March 2018, the FASB issued ASU No. 2018-05, Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118, which allowed SEC registrants to record provisional amounts in earnings for the year ended December 31, 2017 due to the complexities involved in accounting for the enactment of the TCJA. The Company recognized the estimated income tax effects of the TCJA in its 2017 Consolidated Financial Statements in accordance with SEC Staff Accounting Bulletin No. 118 (“SAB No. 118”). Refer to Note 9 for further information regarding the provisional amounts recorded by the Company as of December 31, 2017.

Except for the above accounting policy for revenue recognition that was updated as a result of adopting ASC 606 and the policy for pension and postretirement benefit plans that was updated as a result of adopting ASU 2017-07, there have ~~a material impact~~been no significant changes to the Company’s accounting policies described in the Annual Report on ~~its consolidated financial statements.~~Form 10-K for the year ended December 31, 2017.

Accounting Standards Not Yet Adopted

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which amends the impairment model by requiring entities to use a forward-looking approach based on expected losses rather than incurred losses to estimate credit losses on certain types of financial instruments, including trade receivables. This may result in the earlier recognition of allowances for losses. The ASU is effective for public entities for fiscal years beginning after December 15, 2019, with early adoption permitted. Management has not yet completed its assessment of the impact of the new standard on the Company’s ~~consolidated financial statements.~~

~~In March 2016,~~Consolidated Financial Statements. Currently, the ~~FASB issued~~Company believes that the most notable impact of this ASU ~~No. 2016-09,~~ ~~Compensation—Stock Compensation (Topic 718), which simplifies several aspects~~will relate to its processes around the assessment of the ~~accounting~~adequacy of its allowance for ~~share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, classification of certain items~~doubtful accounts on the statement of cash flows and accounting for forfeitures. The Company has adopted this standard effective January 1, 2017. The ASU requires that the difference between the actual tax benefit realized upon exercise or vesting, as applicable,trade accounts receivable and the ~~tax benefit recorded based on the fair value~~recognition of the stock award at the time of grant (the “excess tax benefits”) be reflected as a reduction of the current period provision for income taxes with any shortfall recorded as an increase in the tax provision rather than as a component of changes to additional paid-in capital. The ASU also requires the excess tax benefit realized be reflected as operating cash flow rather than a financing cash flow. For the three and nine-month periods ended September 29, 2017, the provision for income taxes from continuing operations was reduced and operating cash flow from continuing operations was increased by $7 million and $40 million, respectively, reflecting the impact of adopting this standard. Had this ASU been adopted at January 1, 2016, the provision for income taxes from continuing operations would have been reduced and operating cash flow from continuing operations would have been increased by $8 million and $34 million from the amounts reported for the three and nine-month periods ended September 30, 2016, respectively. The actual benefit to be realized in future periods is inherently uncertain and will vary based on the price of the Company’s common stock as well as the timing of and relative value realized for future share-based transactions.credit losses.

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which requires lessees to recognize a right-of-use asset and a lease liability for all leases with terms greater than 12 months. The standard also requires disclosures by lessees and lessors about the amount, timing and uncertainty of cash flows arising from leases. The accounting applied by a lessor is largely unchanged from that applied under the current standard. The standard must be adopted using a modified retrospective transition approach and provides for certain practical expedients. The ASU is effective for public entities for fiscal years beginning after December 15, 2018, with early adoption permitted. In September 2017, January 2018 and July 2018 the FASB issued ASU No. 2017-13, Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842), ASU No. 2018-01, Leases (Topic 842), Land Easement Practical Expedient for Transition to Topic 842, ASU No. 2018-10, Codification Improvements to Topic 842, Leases and ASU No. 2018-11, Leases (Topic 842), Targeted Improvements,which provided additional implementation guidance on the previously issued ASU.Management has not yet completed its assessment of the impact of the new standard on the Company’s ~~consolidated~~Consolidated Financial Statements. The Company is in the process of implementing a new lease system and the related processes and controls for the accounting for leases in accordance with the ASU. Management currently believes that the most notable impact to its financial ~~statements.~~statements upon the adoption of this ASU will be the recognition of a material right-of-use asset and a lease liability for its real estate and automobile leases.

In ~~January 2016,~~August 2018, the FASB issued ASU No. ~~2016-01,~~2018-13, ~~Recognition and~~Fair Value Measurement ~~of Financial Assets and Financial Liabilities~~(Topic 820)~~. The ASU amends guidance~~, which modifies the disclosures on the classification and measurement of financial instruments, including significant revisions in accounting related to the classification and measurement of investments in equity securities and presentation of certain fair value ~~changes~~measurements by removing the requirement to disclose the amount and reasons for ~~financial liabilities when~~transfers between Level 1 and Level 2 of the fair value ~~option is elected.~~hierarchy and the policy for timing of such transfers. The ASU ~~requires equity securities to be measured at~~expands the disclosure requirements for Level 3 fair value ~~with~~measurements, primarily focused on changes in ~~fair value recognized through net earnings~~unrealized gains and ~~amends certain disclosure requirements associated with the fair value of financial instruments.~~losses included in other comprehensive income. The ASU is effective for ~~the Company on January 1, 2018. In the period of~~public entities for fiscal years beginning after December 15, 2019, with early adoption ~~the Company is required to reclassify the unrealized gains/losses on equity securities within accumulated~~

~~other comprehensive income (loss) to retained earnings, which is~~permitted. Management has not ~~expected to be material to the Company’s consolidated financial statements.~~

~~In May 2014, the FASB issued ASU No. 2014-09,~~ ~~Revenue from Contracts with Customers (Topic 606)~~, which supersedes nearly all existing revenue recognition guidance. The core principle of Topic 606 is that revenue should be recognized to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In July 2015, the FASB deferred the effective date of the standard by one year which results in the new standard being effective for the Company at the beginning of its first quarter of fiscal year 2018. In addition, during March, April, May and December 2016 and September 2017, the FASB issued ASU No. 2016-08, ~~Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net),~~ ~~ASU No. 2016-10,~~ ~~Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing,~~ ~~ASU No. 2016-12,~~ ~~Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients,~~ ~~ASU No. 2016-20,~~ ~~Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers, and~~ ~~ASU No. 2017-13,~~ ~~Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842),~~ respectively, which clarified the guidance on certain items such as reporting revenue as a principal versus agent, identifying performance obligations, accounting for intellectual property licenses, assessing collectability, presentation of sales taxes, impairment testing for contract costs, disclosure of performance obligations, and provided additional implementation guidance. The Company plans to adopt the new standard on January 1, 2018. The Company hasyet completed its ~~initial~~ assessment of ~~the effect of adoption. Based on this assessment, the Company expects~~ the impact of the new standard on the Company’s Consolidated Financial Statements.

In August 2018, the FASB issued ASU No. 2018-14, Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans, which amends ASC 715 to add, remove, and clarify disclosure requirements related to defined benefit pension and other postretirement plans. The ASU is effective for public entities for fiscal years beginning after December 15, 2020, with early adoption permitted. Management has not yet completed its assessment of the impact of the new standard on the Company’s Consolidated Financial Statements.

Accumulated Other Comprehensive Income (Loss)—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. The changes in accumulated other comprehensive income (loss) by component are summarized below ($ in millions). Foreign currency translation adjustments are generally not adjusted for income taxes as they relate to indefinite investments in non-U.S. subsidiaries.



	Foreign Currency Translation Adjustments			Pension & Postretirement Plan Benefit Adjustments				Unrealized Gain (Loss) on Available-For-Sale Securities Adjustments			Total
For the Three-Month Period Ended September 28, 2018:
Balance, June 29, 2018	$	(1,812.9	)	$	(664.6	)		$	(1.7	)	$	(2,479.2	)
Other comprehensive income (loss) before reclassifications:
Decrease	(162.4		)	—				—			(162.4		)
Other comprehensive income (loss) before reclassifications, net of income taxes	(162.4		)	—				—			(162.4		)
Amounts reclassified from accumulated other comprehensive income (loss):
Increase	—			7.7			(a)	—			7.7
Income tax impact	—			(1.8		)		—			(1.8		)
Amounts reclassified from accumulated other comprehensive income (loss), net of income taxes	—			5.9				—			5.9
Net current period other comprehensive income (loss), net of income taxes	(162.4		)	5.9				—			(156.5		)
Balance, September 28, 2018	$	(1,975.3	)	$	(658.7	)		$	(1.7	)	$	(2,635.7	)
For the Three-Month Period Ended September 29, 2017:
Balance, June 30, 2017	$	(1,819.0	)	$	(632.4	)		$	36.9		$	(2,414.5	)
Other comprehensive income (loss) before reclassifications:
Increase (decrease)	260.0			—				(3.0		)	257.0
Income tax impact	—			—				1.1			1.1
Other comprehensive income (loss) before reclassifications, net of income taxes	260.0			—				(1.9		)	258.1
Amounts reclassified from accumulated other comprehensive income (loss):
Increase	—			7.0			(a)	—			7.0
Income tax impact	—			(2.4		)		—			(2.4		)
Amounts reclassified from accumulated other comprehensive income (loss), net of income taxes	—			4.6				—			4.6
Net current period other comprehensive income (loss), net of income taxes	260.0			4.6				(1.9		)	262.7
Balance, September 29, 2017	$	(1,559.0	)	$	(627.8	)		$	35.0		$	(2,151.8	)

^(a) This accumulated other comprehensive income (loss) component is included in the computation of net periodic pension cost. Refer to Note 8 for additional details.



	Foreign Currency Translation Adjustments			Pension & Postretirement Plan Benefit Adjustments				Unrealized Gain (Loss) on Available-For-Sale Securities Adjustments			Total
For the Nine-Month Period Ended September 28, 2018:
Balance, December 31, 2017	$	(1,422.1	)	$	(571.2	)		$	(0.9	)	$	(1,994.2	)
Adoption of accounting standards	(43.8		)	(107.2		)		(0.2		)	(151.2		)
Balance, January 1, 2018	(1,465.9		)	(678.4		)		(1.1		)	(2,145.4		)
Other comprehensive income (loss) before reclassifications:
Decrease	(509.4		)	—				(0.8		)	(510.2		)
Income tax impact	—			—				0.2			0.2
Other comprehensive income (loss) before reclassifications, net of income taxes	(509.4		)	—				(0.6		)	(510.0		)
Amounts reclassified from accumulated other comprehensive income (loss):
Increase	—			25.8			(a)	—			25.8
Income tax impact	—			(6.1		)		—			(6.1		)
Amounts reclassified from accumulated other comprehensive income (loss), net of income taxes	—			19.7				—			19.7
Net current period other comprehensive income (loss), net of income taxes	(509.4		)	19.7				(0.6		)	(490.3		)
Balance, September 28, 2018	$	(1,975.3	)	$	(658.7	)		$	(1.7	)	$	(2,635.7	)
For the Nine-Month Period Ended September 29, 2017:
Balance, December 31, 2016	$	(2,398.2	)	$	(642.2	)		$	18.7		$	(3,021.7	)
Other comprehensive income (loss) before reclassifications:
Increase	839.2			—				26.1			865.3
Income tax impact	—			—				(9.8		)	(9.8		)
Other comprehensive income (loss) before reclassifications, net of income taxes	839.2			—				16.3			855.5
Amounts reclassified from accumulated other comprehensive income (loss):
Increase	—			22.2			(a)	—			22.2
Income tax impact	—			(7.8		)		—			(7.8		)
Amounts reclassified from accumulated other comprehensive income (loss), net of income taxes	—			14.4				—			14.4
Net current period other comprehensive income (loss), net of income taxes	839.2			14.4				16.3			869.9
Balance, September 29, 2017	$	(1,559.0	)	$	(627.8	)		$	35.0		$	(2,151.8	)

^(a) This accumulated other comprehensive income (loss) component is included in the computation of net periodic pension cost. Refer to Note 8 for additional details.

NOTE 2. REVENUE

The following tables present the Company’s revenues disaggregated by geographical region and revenue type for the three and nine-month periods ended September 28, 2018 ($ in millions). Sales taxes and other usage-based taxes are excluded from revenues. The Company defines high-growth markets as developing markets of the world experiencing extended periods of accelerated growth in gross domestic product and infrastructure which includes Eastern Europe, the Middle East, Africa, Latin America and Asia (with the exception of Japan and Australia). The Company defines developed markets as all markets of the world that are not high-growth markets.



	Three-Month Period Ended September 28, 2018
	Life Sciences		Diagnostics		Dental		Environmental & Applied Solutions		Total
Geographical region:
North America	$	584.0	$	574.0	$	339.8	$	439.7	$	1,937.5
Western Europe	447.1		262.3		137.2		257.5		1,104.1
Other developed markets	134.5		91.8		42.5		31.0		299.8
High-growth markets	431.1		574.4		160.0		346.2		1,511.7
Total	$	1,596.7	$	1,502.5	$	679.5	$	1,074.4	$	4,853.1

Revenue type:
Recurring	$	1,030.9	$	1,273.3	$	478.2	$	571.1	$	3,353.5
Nonrecurring	565.8		229.2		201.3		503.3		1,499.6
Total	$	1,596.7	$	1,502.5	$	679.5	$	1,074.4	$	4,853.1



	Nine-Month Period Ended September 28, 2018
	Life Sciences		Diagnostics		Dental		Environmental & Applied Solutions		Total
Geographical region:
North America	$	1,642.4	$	1,760.1	$	977.2	$	1,308.7	$	5,688.4
Western Europe	1,346.5		861.4		483.3		785.5		3,476.7
Other developed markets	417.9		275.3		133.5		94.9		921.6
High-growth markets	1,271.1		1,676.3		491.5		1,003.9		4,442.8
Total	$	4,677.9	$	4,573.1	$	2,085.5	$	3,193.0	$	14,529.5

Revenue type:
Recurring	$	3,057.3	$	3,892.8	$	1,513.5	$	1,702.7	$	10,166.3
Nonrecurring	1,620.6		680.3		572.0		1,490.3		4,363.2
Total	$	4,677.9	$	4,573.1	$	2,085.5	$	3,193.0	$	14,529.5

The Company sells equipment to customers as well as consumables, spare parts, software licenses and services that customers purchase on a recurring basis. Consumables are typically critical to the use of the equipment and are used on a one-time or limited basis, requiring frequent replacement in the customer’s operating cycle. Examples of these consumables include reagents used in diagnostic tests, filters used in filtration, separation and purification processes and cartridges for marking and coding equipment. Additionally, some of the Company’s consumables are used on a standalone basis, such as dental implants and water treatment solutions. The Company separates its goods and services between those sold on a recurring basis and those sold on a nonrecurring basis. Recurring revenue includes revenue from consumables, services, spare parts, software licenses recognized over time, SaaS, sales-and-usage based royalties and OTLs. Nonrecurring revenue includes sales from equipment, software licenses recognized at a point in time and STLs. OTLs and STLs are included in the above revenue amounts. For the three and nine-month periods ended September 28, 2018, revenue accounted for under Topic 840, Leases was $115 million and $308 million, respectively.

Remaining Performance Obligations

Remaining performance obligations related to ASC 606 represent the aggregate transaction price allocated to performance obligations with an original contract term greater than one year which are fully or partially unsatisfied at the end of the period. Remaining performance obligations include noncancelable purchase orders, the non-lease portion of minimum purchase commitments under long-term consumable supply arrangements, extended warranty, service and PCS contracts, SaaS and other long-term contracts. Remaining performance obligations do not include revenue from contracts with customers with an original term of one year or less, revenue from long-term consumable supply arrangements with no minimum purchase requirements or revenue expected from purchases made in excess of the minimum purchase requirements or revenue from equipment leased to customers. While the remaining performance obligation disclosure is similar in concept to backlog, the definition of remaining performance obligations excludes leases and contracts that provide the customer with the right to cancel or terminate for convenience with no substantial penalty, even if historical experience indicates the likelihood of cancellation or termination is remote. Additionally, the Company has elected to exclude contracts with customers with an original term of one year or less from remaining performance obligations while these contracts are included within backlog.

As of September 28, 2018, the aggregate amount of the transaction price allocated to remaining performance obligations was approximately $1.8 billion. The Company expects to recognize revenue on approximately 44% of the remaining performance obligations over the next 12 months, 26% recognized over the subsequent 12 months, and the remainder recognized thereafter.

Contract Balances

The timing of revenue recognition, ~~to be insignificant. The new standard will require certain costs, primarily sales-related commissions on contracts greater than one year~~billings and cash collections results in ~~duration, to be capitalized rather than expensed currently. The new standard will also require additional disclosure about the nature, amount, timing~~billed accounts receivable, unbilled receivables (contract assets) and ~~uncertainty~~deferred revenue, customer deposits and billings in excess of revenue ~~and cash flows from customer contracts, including judgments and changes in judgments and assets~~ recognized ~~from~~(contract liabilities) on the Consolidated Condensed Balance Sheets. In addition, the Company defers certain costs incurred to obtain a contract (contract costs).

Contract assets—Most of the Company’s long-term contracts are billed as work progresses in accordance with the contract terms and conditions, either at periodic intervals or ~~fulfill a contract.~~ upon achievement of certain milestones. Often this results in billing occurring subsequent to revenue recognition resulting in contract assets. Contract assets are generally classified as other current assets in the Consolidated Condensed Balance Sheet. The balance of contract assets as of September 28, 2018 and at the date of adoption of ASC 606 were $97 million and $114 million, respectively.

Contract liabilities—The Company ~~has identified, and is~~often receives cash payments from customers in advance of the Company’s performance resulting in contract liabilities. These contract liabilities are classified as either current or long-term in the ~~process~~Consolidated Condensed Balance Sheet based on the timing of ~~implementing, appropriate changes to its business processes, systems and controls to support recognition and disclosure under~~when the ~~new standard. The~~ Company expects to ~~use~~recognize revenue. As of September 28, 2018 and at the ~~modified retrospective method~~date of adoption ~~reflecting the cumulative effect~~ of ~~initially applying the new standard to revenue recognition~~ASC 606, contract liabilities were $787 million and $783 million, respectively, and are included within accrued expenses and other liabilities and other long-term liabilities in the ~~first quarter~~accompanying Consolidated Condensed Balance Sheet. The increase in the contract liability balance during the nine-month period ended September 28, 2018 is primarily as a result of ~~2018.~~cash payments received in advance of satisfying performance obligations and acquisitions, partially offset by revenue recognized during the period that was included in the contract liability balance at the date of adoption and foreign currency exchange. Revenue recognized during the three and nine-month periods ended September 28, 2018 that was included in the contract liability balance at the date of adoption was $144 million and $568 million, respectively.

Contract costs—The Company capitalizes certain direct incremental costs incurred to obtain a contract, typically sales-related commissions, where the amortization period for the related asset is greater than one year. These costs are amortized over the contract term or a longer period, generally the expected life of the customer relationship if renewals are expected and the renewal commission is not commensurate with the initial commission. Contract costs are classified as current or long-term other assets in the Consolidated Condensed Balance Sheet based on the timing of when the Company expects to recognize the expense and are generally amortized into earnings on a straight-line basis (which is consistent with the transfer of control for the related goods or services). Management assesses these costs for impairment at least quarterly and as “triggering” events occur that indicate it is more likely than not that an impairment exists. The balance of contract costs as of September 28, 2018 and at the date of adoption were not significant. Amortization expense for the three and nine-month periods ended September 28, 2018, was also not significant. The costs to obtain a contract where the amortization period for the related asset is one year or less are expensed as incurred and recorded within selling, general and administrative expenses in the accompanying Consolidated Condensed Statements of Earnings.

Contract assets, liabilities and costs are reported on the accompanying Consolidated Condensed Balance Sheet on a contract-by-contract basis.

NOTE 2. 3. ACQUISITIONS

For a description of the Company’s acquisition activity for the year ended December 31, ~~2016~~2017 reference is made to the financial statements as of and for the year ended December 31, ~~2016~~2017 and Note 2 thereto included in the Company’s ~~2016~~2017 Annual Report.

The Company continually evaluates potential acquisitions that either strategically fit with the Company’s existing portfolio or expand the Company’s portfolio into a new and attractive business area. The Company has completed a number of acquisitions that have been accounted for as purchases and have resulted in the recognition of goodwill in the Company’s financial statements. This goodwill arises because the purchase prices for these businesses reflect a number of factors including the future earnings and cash flow potential of these businesses, the multiple to earnings, cash flow and other factors at which similar businesses have been purchased by other acquirers, the competitive nature of the processes by which the Company acquired the businesses, avoidance of the time and costs which would be required (and the associated risks that would be encountered) to enhance the Company’s existing product offerings to key target markets and enter into new and profitable businesses, anticipated opportunities for synergies from the elimination of redundant facilities and staffing and use of each party’s respective, existing commercial infrastructure to cost-effectively expand sales of the other party’s products and services, and the complementary strategic fit and resulting synergies these businesses bring to existing operations.

The Company makes an initial allocation of the purchase price at the date of acquisition based upon its understanding of the fair value of the acquired assets and assumed liabilities. The Company obtains this information during due diligence and through other sources. In the months after closing, as the Company obtains additional information about these assets and liabilities, including through tangible and intangible asset appraisals, and learns more about the newly acquired business, it is able to refine the estimates of fair value and more accurately allocate the purchase price. Only items identified as of the acquisition date are considered for subsequent adjustment. The Company is continuing to evaluate certain pre-acquisition contingencies associated with certain of its 2017 and ~~2016~~2018 acquisitions and is also in the process of obtaining valuations of certain property, plant and equipment, acquired intangible assets and certain acquisition-related liabilities in connection with these acquisitions. The Company will make appropriate adjustments to the purchase price allocation prior to completion of the measurement period, as required.

~~During~~On April 13, 2018, the Company acquired Integrated DNA Technologies, Inc. (“IDT”), a privately-held manufacturer of custom DNA and RNA oligonucleotides serving customers in the academic and biopharmaceutical research, biotechnology, agriculture, clinical diagnostics and pharmaceutical development end-markets, for a purchase price of approximately $2.1 billion, net of cash acquired. IDT had revenues of approximately $260 million in 2017, and is now part of the Company’s Life Sciences segment.

The Company financed the acquisition of IDT with available cash and proceeds from the issuance of commercial paper. The Company preliminarily recorded approximately $1.2 billion of goodwill related to the IDT acquisition. The acquisition of IDT provides additional sales and earnings growth opportunities for the Company’s Life Sciences segment by expanding the segment’s product line diversity, including new product and service offerings in the area of genomics consumables, and through the potential future acquisition of complementary businesses.

In addition to the IDT acquisition, during the first nine months of ~~2017,~~2018, the Company acquired ~~five businesses~~one other business for total consideration of ~~$112~~$95 million in cash, net of cash acquired. The ~~businesses~~business acquired ~~complement~~complements existing units of the ~~Life Sciences and~~ Environmental & Applied Solutions ~~segments.~~segment. The aggregate annual sales of ~~these five businesses~~this business at the time of ~~their respective acquisitions, in each~~

~~case~~its acquisition, based on the company’s revenues for its last completed fiscal year prior to the acquisition, were approximately ~~$70~~$26 million. The Company preliminarily recorded an aggregate of ~~$73~~$71 million of goodwill related to ~~these acquisitions.~~this acquisition.

The following summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition for all acquisitions consummated during the nine-month period ended September ~~29, 2017~~28, 2018 ($ in millions):

Trade accounts receivable $ 8.7
Inventories 13.2
Property, plant and equipment 4.9
Goodwill 73.2
Other intangible assets, primarily customer relationships, trade names and technology 52.5
Trade accounts payable (4.1 )
Other assets and liabilities, net (36.4 )
Net cash consideration $ 112.0

~~Acquisition of Noncontrolling Interest~~

In the first quarter of 2017, Danaher acquired the remaining noncontrolling interest associated with one of its prior business combinations for consideration of $64 million. Danaher recorded the increase in ownership interests as a transaction within stockholders’ equity. As a result of this transaction, noncontrolling interests were reduced by $63 million reflecting the carrying value of the interest with the $1 million difference charged to additional paid-in capital.



	IDT			Others			Total
Trade accounts receivable	$	36.0		$	5.3		$	41.3
Inventories	15.1			—			15.1
Property, plant and equipment	88.6			0.4			89.0
Goodwill	1,239.9			70.5			1,310.4
Other intangible assets, primarily customer relationships, trade names and technology	759.0			30.0			789.0
Trade accounts payable	(5.5		)	(2.7		)	(8.2		)
Other assets and liabilities, net	(31.0		)	(8.4		)	(39.4		)
Net assets acquired	2,102.1			95.1			2,197.2
Less: noncash consideration	(23.9		)	—			(23.9		)
Net cash consideration	$	2,078.2		$	95.1		$	2,173.3

Pro Forma Financial Information

The unaudited pro forma information for the periods set forth below gives effect to the ~~2017~~2018 and ~~2016~~2017 acquisitions as if they had occurred as of January 1, ~~2016.~~2017. The pro forma information is presented for informational purposes only and is not necessarily indicative of the results of operations that actually would have been achieved had the acquisitions been consummated as of that time ($ in millions, except per share amounts):


	Three-Month Period Ended				Nine-Month Period Ended				Three-Month Period Ended				Nine-Month Period Ended
	September 29, 2017		September 30, 2016		September 29, 2017		September 30, 2016		September 28, 2018		September 29, 2017		September 28, 2018		September 29, 2017
Sales	$	4,528.5	$	4,327.2	$	13,269.4	$	12,883.7	$	4,855.6	$	4,629.4	$	14,632.2	$	13,572.1
Net earnings from continuing operations	572.1		367.8		1,613.2		1,287.2		663.8		561.2		1,906.1		1,581.1
Diluted net earnings per share from continuing operations	0.81		0.53		2.29		1.84		0.93		0.80		2.69		2.24

In the nine-month period ended September ~~30, 2016,~~28, 2018, unaudited pro forma earnings set forth above were adjusted to exclude the $1 million pretax impact of nonrecurring acquisition date fair value adjustments to inventory related to the 2018 acquisition of IDT and in the nine-month period ended September 29, 2017 unaudited pro forma earnings set forth above were adjusted to include the ~~$23 million pretax~~ impact of ~~nonrecurring acquisition date~~this same fair value ~~adjustments to inventory~~adjustment as if the acquisition had occurred on January 1, 2017.

In addition, acquisition-related transaction costs of $15 million in 2018 associated with the IDT acquisition were excluded from pro forma earnings in both 2018 and ~~deferred revenue primarily related to the 2016 acquisition of Cepheid.~~2017.

NOTE 3. 4. DISCONTINUED OPERATIONS AND DENTAL SEPARATION

~~Fortive Corporation Separation~~Discontinued Operations

On July 2, 2016 (the “Distribution Date”), ~~Danaher~~the Company completed the separation (the ~~“Separation”~~“Fortive Separation”) of Fortive Corporation (“Fortive”). For additional details on the Fortive Separation reference is made to the financial statements as of and for the year ended December 31, ~~2016~~2017 and Note 3 thereto included in the Company’s ~~2016~~2017 Annual Report. The accounting requirements for reporting the Fortive Separation ~~of Fortive~~ as a discontinued operation were met when the Fortive Separation was completed. Accordingly, the accompanying ~~consolidated condensed financial statements~~Consolidated Condensed Financial Statements for all periods presented reflect this business as a discontinued operation.

In connection with the Separation, Danaher and Fortive entered into various agreements to effect the Separation and provide a framework for their relationship after the Separation, including a transition services agreement, an employee matters agreement, a tax matters agreement, an intellectual property matters agreement and a Danaher Business System (“DBS”) license agreement. These agreements provide for the allocation between Danaher and Fortive of assets, employees, liabilities and obligations (including investments, property and employee benefits and tax-related assets and liabilities) attributable to periods prior to, at and after Fortive’s separation from Danaher and govern certain relationships between Danaher and Fortive

after the Separation. In addition, Danaher is party to various commercial agreements with Fortive entities. The amounts billed for transition services provided under the above agreements as well as commercial sales and purchases to and from Fortive were not material to the Company’s results of operations for the three or nine-month periods ended September 29, 2017.

In the nine-month period ended September 29, 2017, ~~Danaher~~the Company recorded a $22 million income tax benefit related to the release of previously provided reserves associated with uncertain tax positions on certain Danaher tax returns which were jointly filed with Fortive entities. These reserves were released due to the expiration of statutes of limitations for those returns. ~~All Fortive entity-related balances were included in the~~This income tax benefit ~~related to discontinued operations.~~

~~The key components of income~~was included in earnings from discontinued operations in the accompanying Consolidated Condensed Statement of Earnings.

Dental Separation

In July 2018, the Company announced its intention to spin-off its Dental business into an independent publicly traded company (the “Dental Separation”). The Dental business had sales for the ~~three-month period ended September 30, 2016~~year-ended December 31, 2017 of $2.8 billion. The transaction is expected to be tax-free to the Company’s shareholders. The Company is targeting to complete the Dental Separation in the second half of 2019, subject to the satisfaction of certain conditions, including obtaining final approval from the Danaher Board of Directors, satisfactory completion of financing, receipt of tax opinions, receipt of favorable rulings from the IRS and ~~the nine-month periods ended September 29, 2017 and September 30, 2016 were as follows ($ in millions):~~

Three-Month Period Ended Nine-Month Period Ended
September 30, 2016 September 29, 2017 September 30, 2016
Sales $ —
$ —
$ 3,029.8
Cost of sales —
—
(1,566.4 )
Selling, general and administrative expenses (16.4 ) —
(696.0 )
Research and development expenses —
—
(190.4 )
Interest expense —
—
(19.7 )
Earnings from discontinued operations before income taxes (16.4 ) —
557.3
Income taxes 5.4
22.3
(157.0 )
Earnings from discontinued operations, net of income taxes $ (11.0 ) $ 22.3
$ 400.3
receipt of other regulatory approvals.

NOTE 4. 5. GOODWILL

The following is a rollforward of the Company’s goodwill ($ in millions):

Balance, December 31, 2016 $ 23,826.9
Attributable to 2017 acquisitions 73.2
Adjustments due to finalization of purchase price allocations (71.3 )
Foreign currency translation and other 955.0
Balance, September 29, 2017 $ 24,783.8



Balance, December 31, 2017	$	25,138.6
Attributable to 2018 acquisitions	1,310.4
Adjustments due to finalization of purchase price allocations	7.6
Foreign currency translation and other	(421.6		)
Balance, September 28, 2018	$	26,035.0

The carrying value of goodwill by segment is summarized as follows ($ in millions):


	September 29, 2017		December 31, 2016		September 28, 2018		December 31, 2017
Life Sciences	$	12,153.9	$	11,610.3	$	13,378.9	$	12,335.5
Diagnostics	7,049.0		6,903.0		6,952.4		7,079.5
Dental	3,341.1		3,215.6		3,331.5		3,370.0
Environmental & Applied Solutions	2,239.8		2,098.0		2,372.2		2,353.6
Total	$	24,783.8	$	23,826.9	$	26,035.0	$	25,138.6

The Company has not identified any “triggering” events which indicate ~~a potential~~an impairment of goodwill in the nine-month period ended September ~~29, 2017.~~28, 2018.

NOTE 5. 6. FAIR VALUE MEASUREMENTS

Accounting standards define fair value based on an exit price model, establish a framework for measuring fair value where the Company’s assets and liabilities are required to be carried at fair value and provide for certain disclosures related to the valuation methods used within a valuation hierarchy as established within the accounting standards. This hierarchy prioritizes

the inputs into three broad levels as follows. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets in markets that are not active, or other observable characteristics for the asset or liability, including interest rates, yield curves and credit risks, or inputs that are derived principally from, or corroborated by, observable market data through correlation. Level 3 inputs are unobservable inputs based on the Company’s assumptions. A financial asset or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement in its entirety.

~~A summary of financial~~

Financial assets and liabilities that are measured at fair value on a recurring basis were as follows ($ in millions):


	Quoted Prices in Active Market (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total		Quoted Prices in Active Market (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
September 29, 2017:
September 28, 2018:
Assets:
Available-for-sale securities	$	143.6	$	47.1	$	—	$	190.7
Available-for-sale debt securities									$	—	$	40.3	$	—	$	40.3
Liabilities:
Deferred compensation plans	—		59.3		—		59.3		—		65.4		—		65.4

December 31, 2016:
December 31, 2017:
Assets:
Available-for-sale securities	$	117.8	$	52.3	$	—	$	170.1
Available-for-sale debt securities									$	—	$	45.4	$	—	$	45.4
Liabilities:
Deferred compensation plans	—		52.2		—		52.2		—		62.9		—		62.9

Available-for-sale debt securities, which are included in other long-term assets in the accompanying Consolidated Condensed Balance Sheets, are ~~either~~ measured ~~at fair value using quoted market prices in an active market or if they are not traded on an active market are valued~~ at quoted prices reported by investment brokers and dealers based on the underlying terms of the security and comparison to similar securities traded on an active market.

The Company has established nonqualified deferred compensation programs that permit officers, directors and certain management employees to defer a portion of their compensation, on a pretax basis, until at or after their termination of employment (or board service, as applicable). All amounts deferred under such plans are unfunded, unsecured obligations of the Company and are presented as a component of the Company’s compensation and benefits accrual included in other long-term liabilities in the accompanying Consolidated Condensed Balance Sheets. Participants may choose among alternative earning rates for the amounts they defer, which are primarily based on investment options within the Company’s 401(k) program (except that the earnings rates for amounts deferred by the Company’s directors and amounts contributed unilaterally by the Company are entirely based on changes in the value of the Company’s common stock).program. Changes in the deferred compensation liability under these programs are recognized based on changes in the fair value of the participants’ accounts, which are based on the applicable earnings rates. Amounts unilaterally contributed to participant accounts by the Company are based on the value of the Company’s common stock and future distributions of such contributions will be made solely in shares of common stock. As a result, Company contributions to this program are not reflected in the above amounts.

Fair Value of Financial Instruments

The carrying amounts and fair values of the Company’s financial instruments were as follows ($ in millions):


	September 29, 2017				December 31, 2016				September 28, 2018				December 31, 2017
	Carrying Amount		Fair Value		Carrying Amount		Fair Value		Carrying Amount		Fair Value		Carrying Amount		Fair Value
Assets:
Available-for-sale securities	$	190.7	$	190.7	$	170.1	$	170.1
Available-for-sale debt securities									$	40.3	$	40.3	$	45.4	$	45.4
Liabilities:
Notes payable and current portion of long-term debt	182.2		182.2		2,594.8		2,594.8		59.8		59.8		194.7		194.7
Long-term debt	10,726.8		11,181.4		9,674.2		10,095.1		10,558.0		10,893.3		10,327.4		10,847.1

As of September ~~29, 2017~~28, 2018 and December 31, ~~2016,~~2017, available-for-sale debt securities were categorized as ~~Level 1 and~~ Level 2, as indicated above, and short and long-term borrowings were categorized as Level 1.

The fair value of long-term borrowings was based on quoted market prices. The difference between the fair value and the carrying amounts of long-term borrowings (other than the Company’s Liquid Yield Option Notes due 2021 (the “LYONs”)) is attributable to changes in market interest rates and/or the Company’s credit ratings subsequent to the incurrence of the borrowing. In the case of the LYONs, differences in the fair value from the carrying value are attributable to changes in the price of the Company’s common stock due to the LYONs’ conversion features. The fair values of borrowings with original maturities of one year or less, as well as cash and cash equivalents, trade accounts receivable, net and trade accounts payable approximate their carrying amounts due to the short-term maturities of these instruments.

NOTE 6. 7. FINANCING

As of September ~~29, 2017,~~28, 2018, the Company was in compliance with all of its debt covenants. The components of the Company’s debt were as follows ($ in millions):


	September 29, 2017		December 31, 2016		September 28, 2018		December 31, 2017
U.S. dollar-denominated commercial paper	$	190.0	$	2,733.5	$	—	$	436.9
Euro-denominated commercial paper (€2.3 billion and €3.0 billion, respectively)	2,692.1		3,127.6
Floating rate senior unsecured notes due 2017 (€500.0 million aggregate principal amount) (the “2017 Euronotes”)	—		526.0
0.0% senior unsecured bonds due 2017 (CHF 100.0 million aggregate principal amount) (the “2017 CHF Bonds”)	103.1		98.0
1.65% senior unsecured notes due 2018	499.0		498.1
Euro-denominated commercial paper (€2.9 billion and €1.7 billion, respectively)					3,324.3		1,993.9
1.65% senior unsecured notes due 2018 (the “2018 U.S. Notes”)					—		499.2
1.0% senior unsecured notes due 2019 (€600.0 million aggregate principal amount) (the “2019 Euronotes”)	706.9		628.6		695.6		718.4
2.4% senior unsecured notes due 2020	497.5		496.8		498.3		497.7
5.0% senior unsecured notes due 2020	398.5		402.6
5.0% senior unsecured notes due 2020 (the “2020 Assumed Pall Notes”)					390.5		394.6
Zero-coupon Liquid Yield Option Notes (LYONs) due 2021	68.7		68.1		58.3		69.1
0.352% senior unsecured notes due 2021 (¥30.0 billion aggregate principal amount) (the “2021 Yen Notes”)	265.7		255.6		263.5		265.5
1.7% senior unsecured notes due 2022 (€800.0 million aggregate principal amount) (the “2022 Euronotes”)	940.5		836.5		924.8		955.6
Floating rate senior unsecured notes due 2022 (€250.0 million aggregate principal amount) (the “Floating Rate 2022 Euronotes”)	294.4		—		289.4		299.1
0.5% senior unsecured bonds due 2023 (CHF 540.0 million aggregate principal amount) (the “2023 CHF Bonds”)	559.6		532.3		551.8		555.5
2.5% senior unsecured notes due 2025 (€800.0 million aggregate principal amount) (the “2025 Euronotes”)	940.5		836.8		924.4		955.6
3.35% senior unsecured notes due 2025	496.2		495.8		496.7		496.3
0.3% senior unsecured notes due 2027 (¥30.8 billion aggregate principal amount) (the “2027 Yen Notes”)	272.5		—		270.1		272.2
1.2% senior unsecured notes due 2027 (€600.0 million aggregate principal amount) (the “2027 Euronotes”)	702.8		—		690.8		714.1
1.125% senior unsecured bonds due 2028 (CHF 110.0 million aggregate principal amount) (the “2028 CHF Bonds”)	114.4		108.8
1.125% senior unsecured bonds due 2028 (CHF 210.0 million aggregate principal amount) (the “2028 CHF Bonds”)					218.6		220.3
0.65% senior unsecured notes due 2032 (¥53.2 billion aggregate principal amount) (the “2032 Yen Notes”)	470.6		—		466.4		470.2
4.375% senior unsecured notes due 2045	499.3		499.3		499.3		499.3
Other	196.7		124.6		55.0		208.6
Total debt	10,909.0		12,269.0		10,617.8		10,522.1
Less: currently payable	182.2		2,594.8		59.8		194.7
Long-term debt	$	10,726.8	$	9,674.2	$	10,558.0	$	10,327.4

For additional details regarding the Company’s debt financing, reference is made to Note 9 of the Company’s financial statements as of and for the year ended December 31, ~~2016~~2017 included in the Company’s ~~2016~~2017 Annual Report.

The Company satisfies any short-term liquidity needs that are not met through operating cash flow and available cash primarily through issuances of commercial paper under its U.S. dollar and euro-denominated commercial paper programs. Credit support for the commercial paper programs is generally provided by the Company’s $4.0 billion unsecured, multi-year revolving credit facility with a syndicate of banks that expires on July 10, 2020 (the “Credit Facility”), which can also be used for working

capital and other general corporate purposes. In October 2016, the Company expanded its borrowing capacity by entering into a $3.0 billion 364-day unsecured revolving credit facility with a syndicate of banks that expires on October 23, 2017 (the “364-Day Facility”purposes, and ~~together with the Credit Facility, the “Credit Facilities”), to provide additional liquidity support for issuances under the Company’s U.S. dollar and euro-denominated commercial paper programs.~~

~~Effective April 21, 2017, the Company reduced the commitment amount under~~ the 364-Day Facility ~~from $3.0 billion to $2.3 billion, and effective June 23, 2017, the Company further reduced the commitment amount under the facility to $1.0 billion, as permitted by the facility.~~described below. As of September ~~29, 2017,~~28, 2018, no borrowings were outstanding under the Credit ~~Facilities,~~Facility or the 364-Day Facility, and the Company was in compliance with all covenants thereunder. In addition to the Credit ~~Facilities,~~Facility and the 364-Day Facility, the Company has also entered into reimbursement agreements with various commercial banks to support the issuance of letters of credit.

As of September ~~29, 2017,~~28, 2018, borrowings outstanding under the Company’s ~~U.S. dollar and~~ euro-denominated commercial paper ~~programs~~program had a weighted average annual interest rate of negative ~~0.2%~~0.3% and a weighted average remaining maturity of approximately ~~64 days.~~45 days and no borrowings were outstanding under the Company’s U.S. dollar denominated paper program.

The Company has classified the €600 million of 2019 Euronotes and approximately ~~$2.9~~$3.3 billion of its borrowings outstanding under the commercial paper programs as of September ~~29, 2017~~28, 2018 as long-term debt in the accompanying Consolidated Condensed Balance Sheet as the Company had the intent and ability, as supported by availability under the Credit Facility, to refinance these borrowings for at least one year from the balance sheet date.

Debt discounts, premiums and debt issuance costs totaled ~~$31~~$20 million and $25 million as of September ~~29, 2017~~28, 2018 and December 31, ~~2016,~~2017, respectively, and have been netted against the aggregate principal amounts of the related debt in the components of debt table above.

~~2017 Long-Term Debt Issuances~~364-Day Revolving Credit Facility

On ~~May 11, 2017, DH Japan Finance S.A. (“Danaher Japan”),~~March 23, 2018, the Company entered into a ~~wholly-owned finance subsidiary~~$1.0 billion 364-day revolving credit facility (the “364-Day Facility”) to provide liquidity support for the issuance of additional commercial paper to fund a portion of the ~~Company, completed~~IDT acquisition (refer to Note 3 for information about the ~~private placement of ¥30.8 billion aggregate principal amount of 0.3% senior unsecured notes due May 11, 2027~~acquisition). The 364-Day Facility expires on March 22, 2019 (the ~~“2027 Yen Notes”) and ¥53.2 billion aggregate principal amount of 0.65% senior unsecured notes due May 11, 2032 (the “2032 Yen Notes” and together with the 2027 Yen Notes, the “Yen Notes”~~“Scheduled Termination Date”). The ~~Yen Notes were issued at 100%~~Company may elect, upon the payment of ~~their principal amount.~~

The Yen Notes are fully and unconditionally guaranteed by the Company. The Company received net proceeds, after offering expenses, of approximately ¥83.6 billion (approximately $744 million based on currency exchange rates as of the date of the pricing of the notes) and used the net proceeds from the offering to partially repay commercial paper borrowings. Interest on the Yen Notes is payable semiannually in arrears on May 11 and November 11 of each year, commencing on November 11, 2017.

~~On June 30, 2017, DH Europe Finance S.A. (“Danaher International”),~~ a wholly-owned finance subsidiary of the Company, completed the underwritten public offering of €250 million aggregate principal amount of floating rate, senior unsecured notes due 2022 (the “2022 Floating Rate Euronotes”) and €600 million aggregate principal amount of 1.2% senior unsecured notes due 2027 (the “2027 Euronotes” and together with the 2022 Floating Rate Euronotes, the “Euronotes”). The 2022 Floating Rate Euronotes were issued at 100.147% of their principal amount, will mature on June 30, 2022 and bear interest at a floating ratefee equal to three-month EURIBOR plus 0.3% per year (provided that the minimum interest rate is zero). The 2027 Euronotes were issued at 99.682% of their principal amount, will mature on June 30, 2027 and bear interest at the rate of 1.2% per year.

The Euronotes are fully and unconditionally guaranteed by the Company. The Company received net proceeds, after underwriting discounts and commissions and offering expenses, of €843 million (approximately $940 million based on currency exchange rates as of the date of the pricing of the notes) and used the net proceeds from the offering to repay the €500 million aggregate principal amount of floating rate senior unsecured notes which matured on June 30, 2017 as well as to repay commercial paper borrowings. Interest on the 2022 Floating Rate Euronotes is payable quarterly in arrears on March 31, June 30, September 30 and December 31 of each year, commencing on September 30, 2017. Interest on the 2027 Euronotes is payable annually in arrears on June 30 of each year, commencing on June 30, 2018.

The note purchase agreement under which the Yen Notes were issued, and the indenture under which the Euronotes were issued, each contain customary covenants, all of which the Company was in compliance with as of September 29, 2017.

If a change of control triggering event occurs with respect to the Euronotes or the Yen Notes, each holder of such notes may require the Company to repurchase some or all of its notes at a purchase price equal to 101% (in the case of the Euronotes) or 100% (in the case of the Yen Notes)0.75% of the principal amount of the ~~notes,~~loans then outstanding and, upon the satisfaction of certain conditions, to convert any loans outstanding on the Scheduled Termination Date into term loans that are due and payable one year following the Scheduled Termination Date.

Borrowings under the 364-Day Facility bear interest as follows: (1) Eurodollar Rate Loans bear interest at a variable rate per annum equal to the London inter-bank offered rate plus ~~accrued~~81.5 basis points; and ~~unpaid~~(2) Base Rate Loans bear interest ~~(and~~at a variable rate per annum equal to the highest of (a) the Federal funds rate (as published by the Federal Reserve Bank of New York from time to time) plus 0.5%, (b) the rate of interest in effect for such day as publicly announced by Bank of America, N.A. as its “prime rate,” and (c) the ~~case~~Eurodollar Rate plus 1.0%. In addition, the Company is required to pay a per annum facility fee of six basis points based on the ~~Yen Notes, certain swap-related losses as applicable). A change~~aggregate commitments under the 364-Day Facility, regardless of ~~control triggering event means~~usage.

The 364-Day Facility requires the ~~occurrence of both~~Company to maintain a ~~change of control and a rating event, each as~~consolidated leverage ratio (as defined in the ~~applicable indenture~~facility) of .65 to 1.00 or ~~note purchase agreement. Each holder of~~less. Borrowings under the ~~Yen Notes may also require~~364-Day Facility are prepayable at the ~~Company to repurchase some or all of its notes~~Company’s option at a purchase price equal to 100% of the principal amount of the notes, plus accrued and unpaid interest and certain swap-related losses as applicable, in certain circumstances whereby such holder comes into violation of economic sanctions laws as a result of holding such notes.

At any time ~~and from time to time prior to March 30, 2027 (three months prior to the maturity date of the 2027 Notes), the Company may redeem the 2027 Notes,~~ in whole or in part ~~by paying~~without premium or penalty.

The Company’s obligations under the principal amount and a “make-whole” premium, plus accrued and unpaid interest. In addition, on or after March 30, 2027, the Company will have the right, at its option, to redeem the 2027 Notes, in whole or in part, at any time and from time to time, by paying the principal amount plus accrued and unpaid interest. At any time and from time to time, the Company may redeem the Yen Notes, in whole or in part, by paying the principal amount and a “make-whole” premium, plus accrued and unpaid interest and net of certain swap-related gains or losses as applicable.364-Day Facility are unsecured. The Company ~~may also redeem~~has unconditionally and irrevocably guaranteed the ~~Euronotes~~obligations of each of its subsidiaries in the event a subsidiary is named a borrower under the 364-Day Facility. The 364-Day Facility contains customary representations, warranties, conditions precedent, events of default, indemnities and ~~the Yen Notes upon the occurrence of specified, adverse changes in tax laws, or interpretations under such laws, at a redemption price equal to the principal amount of the notes to be redeemed.~~affirmative and negative covenants.

~~2017~~2018 Long-Term Debt Repayments

The ~~€500~~$500 million ~~aggregate principal amount~~ of ~~floating rate senior unsecured notes due in 2017~~2018 U.S. Notes were repaid with accrued interest upon their maturity in ~~June 2017.~~September 2018 using available cash and proceeds from commercial paper borrowings.

Guarantors of Debt

~~Danaher~~The Company has guaranteed long-term debt and commercial paper issued by certain of its wholly-owned subsidiaries. The ~~2017 Euronotes,~~ 2019 Euronotes, 2022 Euronotes, ~~2022~~ Floating Rate 2022 Euronotes, 2025 Euronotes and 2027 Euronotes were issued by DH Europe Finance S.A. (“Danaher ~~International.~~International”). The ~~2017 CHF Bonds,~~ 2023 CHF Bonds and 2028 CHF Bonds were issued by DH Switzerland Finance S.A. (“Danaher Switzerland”)~~, a wholly-owned finance subsidiary of the Company.~~. The 2021 Yen Notes, 2027 Yen Notes and 2032 Yen Notes were issued by DH Japan Finance S.A. (“Danaher ~~Japan. All securities issued by each~~Japan”). Each of Danaher International, Danaher Switzerland and Danaher Japan are wholly-owned finance subsidiaries of Danaher Corporation. All of the securities issued by each of these entities, as well as the 2020 Assumed Pall Notes, are fully and unconditionally guaranteed by the Company and these guarantees rank on parity with the Company’s unsecured and unsubordinated indebtedness.

LYONs Redemption

During the nine-month period ended September ~~29, 2017,~~28, 2018, holders of certain of the Company’s LYONs converted such LYONs into an aggregate of approximately 27487 thousand shares of the Company’s common stock, par value $0.01 per share. The Company’s deferred tax liability associated with the book and tax basis difference in the converted LYONs of $4 million was transferred to additional paid-in capital as a result of the conversions.

NOTE 7. 8. DEFINED BENEFIT PLANS

The following sets forth the components of the Company’s net periodic benefit cost of the noncontributory defined benefit pension plans ($ in millions):


	Three-Month Period Ended						Nine-Month Period Ended						Three-Month Period Ended						Nine-Month Period Ended
	September 29, 2017			September 30, 2016			September 29, 2017			September 30, 2016			September 28, 2018			September 29, 2017			September 28, 2018			September 29, 2017
U.S. Pension Benefits:
U.S. pension benefits:
Service cost	$	1.9		$	2.2		$	5.7		$	6.8		$	(1.2	)	$	(1.9	)	$	(5.4	)	$	(5.7	)
Interest cost	20.1			22.3			62.1			67.7			(20.3		)	(20.1		)	(60.7		)	(62.1		)
Expected return on plan assets	(32.4		)	(33.0		)	(98.2		)	(99.6		)	33.0			32.4			99.2			98.2
Amortization of actuarial loss	5.9			6.3			19.1			18.3			(8.0		)	(5.9		)	(23.6		)	(19.1		)
Curtailment gain recognized	—			—			—			(0.7		)
Net periodic pension cost	$	(4.5	)	$	(2.2	)	$	(11.3	)	$	(7.5	)
Amortization of prior service cost													(0.2		)	—			(0.7		)	—
Net periodic pension benefit													$	3.3		$	4.5		$	8.8		$	11.3

Non-U.S. Pension Benefits:
Non-U.S. pension benefits:
Service cost	$	8.1		$	9.0		$	23.7		$	26.9		$	(8.6	)	$	(8.1	)	$	(26.2	)	$	(23.7	)
Interest cost	6.7			8.4			19.5			25.8			(6.3		)	(6.7		)	(19.6		)	(19.5		)
Expected return on plan assets	(10.8		)	(9.9		)	(31.5		)	(30.8		)	11.6			10.8			35.6			31.5
Amortization of actuarial loss	2.0			1.9			5.8			8.5			(1.5		)	(2.0		)	(4.5		)	(5.8		)
Amortization of prior service credit	(0.1		)	(0.1		)	(0.3		)	(0.3		)	0.2			0.1			0.4			0.3
Settlement loss recognized	—			—			—			0.1			1.2			—			0.8			—
Net periodic pension cost	$	5.9		$	9.3		$	17.2		$	30.2		$	(3.4	)	$	(5.9	)	$	(13.5	)	$	(17.2	)

The following sets forth the components of the Company’s net periodic benefit cost of the other postretirement employee benefit plans ($ in millions):


	Three-Month Period Ended						Nine-Month Period Ended						Three-Month Period Ended						Nine-Month Period Ended
	September 29, 2017			September 30, 2016			September 29, 2017			September 30, 2016			September 28, 2018			September 29, 2017			September 28, 2018			September 29, 2017
Service cost	$	0.1		$	0.2		$	0.5		$	0.6		$	—		$	(0.1	)	$	(0.3	)	$	(0.5	)
Interest cost	1.1			1.4			3.7			4.2			(1.2		)	(1.1		)	(3.5		)	(3.7		)
Amortization of actuarial (gain) loss	—			(0.1		)	—			0.1
Amortization of prior service credit	(0.8		)	(0.8		)	(2.4		)	(2.4		)	0.6			0.8			1.8			2.4
Net periodic benefit cost	$	0.4		$	0.7		$	1.8		$	2.5		$	(0.6	)	$	(0.4	)	$	(2.0	)	$	(1.8	)

In the first quarter of 2018, the Company adopted ASU No. 2017-07, Compensation—Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, which requires the Company to disaggregate the service cost component from other components of net periodic ~~pension and~~ benefit costs ~~are included~~and report the service cost component in the same line item as other compensation costs and the other components of net periodic benefit costs (which include interest costs, expected return on plan assets, amortization of prior service cost or credits and actuarial gains and losses) separately and outside a subtotal of operating income. As this ASU requires application on a retrospective basis, the Company restated the prior period presentation for the adoption of this ASU, resulting in a decrease in operating profit and an increase in other income, net of $8.3 million and $22.2 million for the three and nine-month periods ended September 29, 2017. The net periodic benefit cost of ~~sales~~the noncontributory defined benefit pension plans and ~~selling, general~~other postretirement employee benefit plans incurred during the three and ~~administrative expenses~~nine-month periods ended September 28, 2018 and September 29, 2017 are reflected in the following captions in the accompanying Consolidated Condensed Statements of ~~Earnings.~~Earnings ($ in millions):



	Three-Month Period Ended						Nine-Month Period Ended
	September 28, 2018			September 29, 2017			September 28, 2018			September 29, 2017
Service cost:
Cost of sales	$	(1.6	)	$	(2.1	)	$	(7.0	)	$	(6.2	)
Selling, general and administrative expenses	(8.2		)	(8.0		)	(24.9		)	(23.7		)
Total service cost	(9.8		)	(10.1		)	(31.9		)	(29.9		)
Other net periodic benefit costs:
Other income, net	9.1			8.3			25.2			22.2
Total	$	(0.7	)	$	(1.8	)	$	(6.7	)	$	(7.7	)

Employer Contributions

During ~~2017,~~2018, the Company’s cash contribution requirements for its U.S. and non-U.S. defined benefit pension plans are ~~expected~~forecasted to be approximately ~~$55~~$30 million and ~~$40~~$50 million, respectively. The ultimate amounts to be contributed depend upon, among other things, legal requirements, underlying asset returns, the plan’s funded status, the anticipated tax deductibility of the contribution, local practices, market conditions, interest rates and other factors.

NOTE 8.9. INCOME TAXES

The following table summarizes the Company’s effective tax rate from continuing ~~operations~~operations:



	Three-Month Period Ended				Nine-Month Period Ended
	September 28, 2018		September 29, 2017		September 28, 2018		September 29, 2017
Effective tax rate from continuing operations	17.2	%	21.6	%	19.0	%	17.7	%

The effective tax rate for 2018 includes the benefit of a lower U.S. corporate income tax rate of 21.0% from the enactment of the TCJA, partially offset by a new minimum tax on certain non-U.S. earnings. In addition, the Company’s effective tax rate benefits from the impact of earnings outside the United States which overall are taxed at rates lower than the U.S. federal rate. The effective tax rate for the ~~three and nine-month periods~~three-month period ended September ~~29, 2017 was 21.6%~~28, 2018 includes net tax benefits of $23 million ($0.03 per diluted share) related primarily to the release of valuation allowances associated with certain foreign operating losses and ~~17.7%, respectively, as compared to 15.5% and 26.6%~~excess tax benefits from stock-based compensation, which in aggregate reduced the reported tax rate by 2.9%. The effective tax rate for the ~~three and~~ nine-month ~~periods~~period ended September ~~30, 2016, respectively.~~28, 2018 also includes these benefits, in addition to net tax benefits of $9 million ($0.01 per diluted share) recorded in the second quarter of 2018 related to the release of reserves upon the expiration of statutes of limitation and excess tax benefits from stock-based compensation, which were partially offset by increases in estimates associated with prior period uncertain tax positions.

The Company’s effective tax rate for 2017 ~~and 2016 differs~~differed from the then-effective U.S. federal statutory rate of 35.0% due principally to the Company’s earnings outside the United States ~~that~~which overall are ~~indefinitely reinvested and~~ taxed at rates lower than ~~the~~such U.S. federal

~~statutory~~ rate. The effective tax rate for the nine-month period ended September 29, 2017 includes a benefit from the release of reserves upon the expiration of statutes of limitations and audit settlements, excess tax benefits from stock-based compensation, as well as higher tax benefits from restructuring charges that are predominantly in the United States, which in aggregate decreased the reported tax rate by 3.3%. ~~The effective~~

On December 22, 2017, the TCJA was enacted, substantially changing the U.S. tax system and affecting the Company in a number of ways. Notably, the TCJA:

establishes a flat corporate income tax rate of 21.0% on U.S. earnings;

imposes a one-time tax on unremitted cumulative non-U.S. earnings of foreign subsidiaries (“Transition Tax”);

imposes a new minimum tax on certain non-U.S. earnings, irrespective of the territorial system of taxation, and generally allows for the repatriation of future earnings of foreign subsidiaries without incurring additional U.S. taxes by transitioning to a territorial system of taxation (Global Intangible Low-Taxed Income or “GILTI Tax”);

subjects certain payments made by a U.S. company to a related foreign company to certain minimum taxes (Base Erosion Anti-Abuse Tax);

eliminates certain prior tax incentives for manufacturing in the United States and creates an incentive for U.S. companies to sell, lease or license goods and services abroad by allowing for a reduction in taxes owed on earnings related to such sales;

allows the cost of investments in certain depreciable assets acquired and placed in service after September 27, 2017 to be immediately expensed; and

reduces deductions with respect to certain compensation paid to specified executive officers.

As U.S. GAAP accounting for income taxes requires the effect of a change in tax laws or rates to be recognized in income from continuing operations for the period that includes the enactment date, the Company recognized an estimate of the impact of the TCJA in the year ended December 31, 2017. As a result of the TCJA, the Company recognized a provisional tax liability of approximately $1.2 billion in 2017 for the Transition Tax, which is payable over a period of eight years. The Company also remeasured U.S. deferred tax assets and liabilities based on the income tax rates at which the deferred tax assets and liabilities are expected to reverse in the future (generally 21.0%), resulting in an income tax benefit of approximately $1.2 billion in 2017. For a description of the impact of the TCJA for the year ended December 31, 2017 reference is made to Note 12 of the Company’s financial statements as of and for the year ended December 31, 2017 included in the Company’s 2017 Annual Report.

Due to the complexities involved in accounting for the enactment of the TCJA, SAB No. 118 allowed the Company to record provisional amounts in earnings for the year ended December 31, 2017. SAB No. 118 provides that where reasonable estimates can be made, the provisional accounting should be based on such estimates and when no reasonable estimate can be made, the provisional accounting may be based on the tax law in effect before the TCJA. During the three and nine-month periods ended September ~~30, 2016 includes a higher tax rate associated with~~28, 2018, there were no changes made to the ~~loss~~provisional amounts recognized in 2017. The Company continues to analyze the effects of the TCJA on its Consolidated Condensed Financial Statements. Additional impacts from the ~~early extinguishment~~enactment of ~~borrowings~~the TCJA will be recorded as they are identified during the ~~third~~measurement period as provided for in SAB No. 118, which extends up to one year from the enactment date. The final impact of the TCJA may differ from the provisional amounts that have been recognized, possibly materially, due to, among other things, changes in the Company’s interpretation of the TCJA, legislative or administrative actions to clarify the intent of the statutory language provided that differ from the Company’s current interpretation, any changes in accounting standards for income taxes or related interpretations in response to the TCJA, or any updates or changes to estimates utilized to calculate the impacts, including changes to current year earnings estimates and applicable foreign exchange rates. Additionally, the Company’s U.S. tax returns for 2017 will be filed during the fourth quarter of ~~2016~~2018 and any changes to the tax positions reflected in those returns compared to the estimates recorded in the Company’s earnings for the year ended December 31, 2017 will result in an adjustment of the estimated tax provision recorded as of December 31, 2017.

The Company also continues to evaluate the impact of the GILTI provisions under the TCJA which ~~lowered~~are complex and subject to continuing regulatory interpretation by the ~~effective~~U.S. Internal Revenue Service (“IRS”). The Company is required to make an accounting policy election of either (1) treating taxes due on future U.S. inclusions in taxable income related to GILTI as a current period expense when incurred (the “period cost method”) or (2) factoring such amounts into the Company’s measurement of its deferred taxes (the “deferred method”). The Company’s accounting policy election with respect to the new GILTI Tax rules will depend, in part, on analyzing its global income to determine whether it can reasonably estimate the tax ~~rate by 6.0% and 1.0%, respectively. The~~impact. While the Company has included an estimate of GILTI in its estimated effective tax rate for ~~the nine-month periods ended September 30, 2016 also includes charges~~2018, it has not completed its analysis and has not determined which method to elect. Adjustments related to the ~~repatriation~~amount of ~~earnings and legal entity realignments associated with the Separation and higher tax rate~~GILTI Tax recorded in its Consolidated Condensed Financial Statements may be required based on the ~~gain from sale~~outcome of ~~marketable equity securities which in aggregate increased the effective tax rate by 6.6%.~~this election.

Tax authorities in Denmark have raised significant issues related to interest accrued by certain of the Company’s subsidiaries. On December 10, 2013, the Company received assessments from the Danish tax authority (“SKAT”) totaling approximately DKK ~~1.5~~1.6 billion including interest through September ~~29, 2017~~28, 2018 (approximately ~~$235~~$247 million based on the exchange rate as of September ~~29, 2017)~~28, 2018), imposing withholding tax relating to interest accrued in Denmark on borrowings from certain of the Company’s subsidiaries for the years 2004-2009. The Company is currently in discussions with SKAT and anticipates receiving an assessment for years 2010-2012 totaling approximately DKK ~~874~~939 million including interest through September ~~29, 2017~~28, 2018 (approximately ~~$139~~$146 million based on the exchange rate as of September ~~29, 2017)~~28, 2018). Management believes the positions the Company has taken in Denmark are in accordance with the relevant tax laws and is vigorously defending its positions. The Company appealed these assessments to the National Tax Tribunal in 2014 and intends on pursuing this matter through the European Court of Justice should this appeal be unsuccessful. The ultimate resolution of this matter is uncertain, could take many years, and could result in a material adverse impact to the Company’s consolidated financial statements, including its effective tax rate.

NOTE 10. NONOPERATING INCOME (EXPENSE)

As described in Note 1 and Note 8, in the first quarter of 2018, the Company adopted ASU No. 2017-07, Compensation—Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. The ASU requires the Company to disaggregate the service cost component from the other components of net periodic benefit costs and requires the Company to present the other components of net periodic benefit cost in other income, net. The ASU also requires application on a retrospective basis. The other components of net periodic benefit costs included in other income, net for the three and nine-month periods ended September 28, 2018 were $9 million and $25 million, respectively, compared to $8 million and $22 million for the three and nine-month periods ended September 29, 2017, respectively.

NOTE 911. . ~~STOCK TRANSACTIONS~~COMMITMENTS AND ~~STOCK-BASED COMPENSATION~~CONTINGENCIES

Neither the Company nor any “affiliated purchaser” repurchased any shares of Company common stock during the nine-month period ended September 29, 2017. 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, 2017, 20 million shares remained available for repurchase pursuant to the Repurchase Program.

For a ~~full~~ description of the Company’s ~~stock-based compensation programs,~~litigation and contingencies, reference is made to Note 1716 of the Company’s financial statements as of and for the year ended December 31, ~~2016~~2017 included in the Company’s ~~2016~~2017 Annual Report. As

The Company generally accrues estimated warranty costs at the time of ~~September 29, 2017, approximately 72 million shares~~sale. In general, manufactured products are warranted against defects in material and workmanship when properly used for their intended purpose, installed correctly, and appropriately maintained. Warranty period terms depend on the nature of the product and range from 90 days up to the life of the product. The amount of the accrued warranty liability is determined based on historical information such as past experience, product failure rates or number of units repaired, estimated cost of material and labor, and in certain instances estimated property damage. The accrued warranty liability is reviewed on a quarterly basis and may be adjusted as additional information regarding expected warranty costs becomes known.

The following is a rollforward 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~~accrued warranty liability ($ in millions):

Three-Month Period Ended Nine-Month Period Ended
September 29, 2017 September 30, 2016 September 29, 2017 September 30, 2016
Restricted stock units (“RSUs”)/performance stock units (“PSUs”):
Pretax compensation expense $ 21.9
$ 21.1
$ 67.6
$ 65.0
Income tax benefit (6.6 ) (6.2 ) (20.7 ) (19.1 )
RSU/PSU expense, net of income taxes 15.3
14.9
46.9
45.9
Stock options:
Pretax compensation expense 11.5
10.3
37.2
31.3
Income tax benefit (3.6 ) (3.2 ) (11.8 ) (9.7 )
Stock option expense, net of income taxes 7.9
7.1
25.4
21.6
Total stock-based compensation:
Pretax compensation expense 33.4
31.4
104.8
96.3
Income tax benefit (10.2 ) (9.4 ) (32.5 ) (28.8 )
Total stock-based compensation expense, net of income taxes $ 23.2
$ 22.0
$ 72.3
$ 67.5

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, 2017, $153 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, 2017, $129 million of total unrecognized compensation cost related to stock options is expected to be recognized over a weighted average period of approximately three years. Future compensation amounts will be adjusted for any changes in estimated forfeitures.

The Company realized a tax benefit of $15 million and $64 million in the three and nine-month periods ended September 29, 2017, respectively, related to the exercise of employee stock options and vesting of RSUs. As a result of the adoption of ASU 2016-09, ~~Compensation—Stock Compensation~~, the excess tax benefit of $7 million and $40 million for the three and nine-month periods ended September 29, 2017, respectively, has been recorded as a reduction to the current income tax provision and is reflected as an operating cash inflow in the accompanying Consolidated Condensed Statement of Cash Flows. Prior to the adoption of ASU 2016-09, the excess tax benefit was recorded as an increase to additional paid-in capital and was reflected as a financing cash flow.



Balance, December 31, 2017	$	79.0
Accruals for warranties issued during the period	44.8
Settlements made	(44.1		)
Effect of foreign currency translation	(1.7		)
Balance, September 28, 2018	$	78.0

~~NOTE 10. NONOPERATING INCOME (EXPENSE)~~

The Company received $265 million of cash proceeds from the sale of marketable equity securities during the first quarter of 2016. The Company recorded a pretax gain related to this sale of $223 million ($140 million after-tax or $0.20 per diluted share) during the nine-month period ended September 30, 2016.

In the third quarter of 2016, the Company redeemed approximately $1.9 billion in aggregate principal amount of outstanding indebtedness and paid an aggregate of $188 million in make-whole premiums in connection with those redemptions, plus accrued and unpaid interest. The payment of these make-whole premiums, net of certain deferred gains of $9 million, are reflected as a loss on early extinguishment of borrowings in the accompanying Consolidated Condensed Statement of Earnings of $179 million ($112 million after-tax or 0.16 per diluted share) in the three and nine-month periods ended September 30, 2016.

~~NOTE 11. RESTRUCTURING~~

For additional details regarding the Company’s restructuring activities, reference is made to Note 14 of the Company’s financial statements as of and for the year ended December 31, 2016 included in the Company’s 2016 Annual Report.

During the nine-month period ended September 29, 2017, the Company made the strategic decision to discontinue a molecular diagnostic product line in its Diagnostics segment. As a result, the Company recorded $76 million of pretax restructuring, impairment and other related charges ($51 million after-tax or $0.07 per diluted share). These charges included $49 million of noncash charges for the impairment of certain technology-related intangible assets as well as related inventory and property, plant and equipment with no further use. In addition, the Company incurred $27 million of cash restructuring costs primarily related to employee severance and related charges. Substantially all restructuring activities related to this discontinued product line were completed in the nine-month period ended September 29, 2017.

The restructuring, impairment and other related charges incurred during the nine-month period ended September 29, 2017 related to the discontinued product line in the Diagnostics segment are reflected in the following captions in the accompanying Consolidated Condensed Statement of Earnings ($ in millions):

Cost of sales $ 20.7
Selling, general and administrative expenses 55.2
Total $ 75.9

NOTE 12. ~~COMMITMENTS~~STOCK TRANSACTIONS AND ~~CONTINGENCIES~~STOCK-BASED COMPENSATION

Neither the Company nor any “affiliated purchaser” repurchased any shares of Company common stock during the nine-month period ended September 28, 2018. 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 28, 2018, 20 million shares remained available for repurchase pursuant to the Repurchase Program.

For a full description of the Company’s ~~litigation and contingencies,~~stock-based compensation programs, reference is made to Note 1617 of the Company’s financial statements as of and for the year ended December 31, ~~2016~~2017 included in the Company’s ~~2016~~2017 Annual Report.

~~The Company generally accrues estimated warranty costs at the time~~ As of sale. In general, manufactured products are warranted against defects in material and workmanship when properly used for their intended purpose, installed correctly, and appropriately maintained. Warranty period terms depend on the natureSeptember 28, 2018, approximately 59 million shares of the ~~product and range from 90 days up to~~Company’s common stock were reserved for issuance under the life of the product. The amount of the accrued warranty liability is determined based on historical information such as past experience, product failure rates or number of units repaired, estimated cost of material and labor, and in certain instances2007 Omnibus Incentive Plan.

~~estimated property damage. The accrued warranty liability is reviewed on a quarterly basis and may be adjusted as additional information regarding expected warranty costs becomes known.~~

The following ~~is a rollforward~~summarizes the components of the Company’s ~~accrued warranty liability~~stock-based compensation expense ($ in millions):

Balance, December 31, 2016 $ 75.8
Accruals for warranties issued during the period 36.0
Settlements made (42.0 )
Additions due to acquisitions 1.3
Effect of foreign currency translation 3.4
Balance, September 29, 2017 $ 74.5



	Three-Month Period Ended						Nine-Month Period Ended
	September 28, 2018			September 29, 2017			September 28, 2018			September 29, 2017
Restricted stock units (“RSUs”)/performance stock units (“PSUs”):
Pretax compensation expense	$	24.0		$	21.9		$	69.6		$	67.6
Income tax benefit	(5.0		)	(6.6		)	(14.6		)	(20.7		)
RSU/PSU expense, net of income taxes	19.0			15.3			55.0			46.9
Stock options:
Pretax compensation expense	14.2			11.5			42.0			37.2
Income tax benefit	(3.0		)	(3.6		)	(8.9		)	(11.8		)
Stock option expense, net of income taxes	11.2			7.9			33.1			25.4
Total stock-based compensation:
Pretax compensation expense	38.2			33.4			111.6			104.8
Income tax benefit	(8.0		)	(10.2		)	(23.5		)	(32.5		)
Total stock-based compensation expense, net of income taxes	$	30.2		$	23.2		$	88.1		$	72.3

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 28, 2018, $171 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 28, 2018, $151 million of total unrecognized compensation cost related to stock options is expected to be recognized over a weighted average period of approximately three years. Future compensation amounts will be adjusted for any changes in estimated forfeitures.

NOTE 13. NET EARNINGS PER SHARE FROM CONTINUING OPERATIONS

Basic net earnings per share (“EPS”) from continuing operations is calculated by dividing net earnings from continuing operations by the weighted average number of common shares outstanding for the applicable period. Diluted net EPS from continuing operations is computed based on the weighted average number of common shares outstanding increased by the number of additional shares that would have been outstanding had the potentially dilutive common shares been issued and reduced by the number of shares the Company could have repurchased with the proceeds from the issuance of the potentially dilutive shares. For the three-month period ended September 28, 2018, no options to purchase shares were excluded from the diluted EPS from continuing operations calculation. For the nine-month period ended September 28, 2018, one million options to purchase shares were not included in the diluted EPS from continuing operations calculation as the impact of their inclusion would have been anti-dilutive. For both the three and nine-month periods ended September 29, 2017, approximately four million options to purchase shares were not included in the diluted EPS from continuing operations calculation as the impact of their inclusion would have been anti-dilutive. ~~For both the three and nine-month periods ended September 30, 2016 there were no anti-dilutive options to purchase shares excluded from the diluted EPS from continuing operations calculation.~~

Information related to the calculation of net earnings per share from continuing operations is summarized as follows ($ and shares in millions, except per share amounts):


						Net Earnings from Continuing Operations (Numerator)		Shares (Denominator)	Per Share Amount
For the Three-Month Period Ended September 28, 2018:
Basic EPS						$	663.7	701.4	$	0.95
Adjustment for interest on convertible debentures						0.6		—
Incremental shares from assumed exercise of dilutive options and vesting of dilutive RSUs and PSUs						—		6.9
Incremental shares from assumed conversion of the convertible debentures						—		2.3
Diluted EPS from continuing operations						$	664.3	710.6	$	0.93
	Net Earnings from Continuing Operations (Numerator)		Shares (Denominator)	Per Share Amount
For the Three-Month Period Ended September 29, 2017:
Basic EPS	$	572.1	696.2	$	0.82	$	572.1	696.2	$	0.82
Adjustment for interest on convertible debentures	0.6		—			0.6		—
Incremental shares from assumed exercise of dilutive options and vesting of dilutive RSUs and PSUs	—		6.5			—		6.5
Incremental shares from assumed conversion of the convertible debentures	—		2.9			—		2.9
Diluted EPS	$	572.7	705.6	$	0.81
Diluted EPS from continuing operations						$	572.7	705.6	$	0.81

For the Three-Month Period Ended September 30, 2016:
For the Nine-Month Period Ended September 28, 2018:
Basic EPS	$	402.6	692.2	$	0.58	$	1,904.1	700.1	$	2.72
Adjustment for interest on convertible debentures	0.5		—			1.7		—
Incremental shares from assumed exercise of dilutive options and vesting of dilutive RSUs and PSUs	—		6.2			—		7.3
Incremental shares from assumed conversion of the convertible debentures	—		2.9			—		2.5
Diluted EPS	$	403.1	701.3	$	0.57
Diluted EPS from continuing operations						$	1,905.8	709.9	$	2.68

For the Nine-Month Period Ended September 29, 2017:
Basic EPS	$	1,613.2	695.3	$	2.32	$	1,613.2	695.3	$	2.32
Adjustment for interest on convertible debentures	1.6		—			1.6		—
Incremental shares from assumed exercise of dilutive options and vesting of dilutive RSUs and PSUs	—		7.3			—		7.3
Incremental shares from assumed conversion of the convertible debentures	—		2.9			—		2.9
Diluted EPS	$	1,614.8	705.5	$	2.29

For the Nine-Month Period Ended September 30, 2016:
Basic EPS	$	1,406.4	690.6	$	2.04
Adjustment for interest on convertible debentures	1.4		—
Incremental shares from assumed exercise of dilutive options and vesting of dilutive RSUs and PSUs	—		6.0
Incremental shares from assumed conversion of the convertible debentures	—		2.5
Diluted EPS	$	1,407.8	699.1	$	2.01
Diluted EPS from continuing operations						$	1,614.8	705.5	$	2.29

NOTE 14. SEGMENT INFORMATION

The Company operates and reports its results in four separate business segments consisting of the Life Sciences, Diagnostics, Dental and Environmental & Applied Solutions segments. When determining the reportable segments, the Company

aggregated operating segments based on their similar economic and operating characteristics. Operating profit represents total revenues less operating expenses, excluding nonoperating income and expense, interest and income taxes. Intersegment amounts are not significant and are eliminated to arrive at consolidated totals. Operating profit amounts in the Other segment consist of unallocated corporate costs and other costs not considered part of management’s evaluation of reportable segment operating performance. There has been no material change in total assets or liabilities by segment since December 31, ~~2016.~~2017, with the exception of the inclusion of IDT in the Life Sciences segment in April 2018 (refer to Note 3 for additional information).

Segment results are shown below ($ in millions):


	Three-Month Period Ended						Nine-Month Period Ended						Three-Month Period Ended						Nine-Month Period Ended
	September 29, 2017			September 30, 2016			September 29, 2017			September 30, 2016			September 28, 2018			September 29, 2017			September 28, 2018			September 29, 2017
Sales:
Life Sciences	$	1,392.6		$	1,325.4		$	4,085.0		$	3,911.8		$	1,596.7		$	1,392.6		$	4,677.9		$	4,085.0
Diagnostics	1,448.7			1,212.7			4,216.0			3,606.5			1,502.5			1,448.7			4,573.1			4,216.0
Dental	694.0			675.6			2,052.1			2,046.1			679.5			694.0			2,085.5			2,052.1
Environmental & Applied Solutions	992.9			918.4			2,890.9			2,733.7			1,074.4			992.9			3,193.0			2,890.9
Total	$	4,528.2		$	4,132.1		$	13,244.0		$	12,298.1		$	4,853.1		$	4,528.2		$	14,529.5		$	13,244.0

Operating profit:
Life Sciences	$	246.8		$	204.7		$	680.0		$	574.1		$	312.8		$	246.8		$	875.6		$	680.0
Diagnostics	242.7			193.9			554.9			606.3			235.1			242.7			757.4			554.9
Dental	102.2			101.3			301.4			305.6			86.1			102.2			241.8			301.4
Environmental & Applied Solutions	222.8			223.4			666.0			640.1			254.3			222.8			732.5			666.0
Other	(47.0		)	(24.2		)	(127.2		)	(103.8		)	(57.6		)	(55.3		)	(166.1		)	(149.4		)
Total	$	767.5		$	699.1		$	2,075.1		$	2,022.3		$	830.7		$	759.2		$	2,441.2		$	2,052.9

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is designed to provide a reader of Danaher Corporation’s (“Danaher,” the “Company,” “we,” “us” or “our”) financial statements with a narrative from the perspective of Company management. The Company’s MD&A is divided into ~~four~~five sections:

Information Relating to Forward-Looking Statements

Overview

Results of Operations

Liquidity and Capital Resources

Critical Accounting Estimates

You should read this discussion along with the Company’s MD&A and audited financial statements as of and for the year ended December 31, ~~2016~~2017 and Notes thereto, included in the Company’s ~~Current Report on Form 8-K filed on June 19,~~ 2017 ~~and the 2016~~ Annual Report on Form 10-K filed on February ~~22, 2017 (collectively, the “2016 Annual Report”)~~21, 2018 and the Company’s Consolidated Condensed Financial Statements and related Notes as of and for the three and nine-month periods ended September ~~29, 2017~~28, 2018 included in this Report.

Unless otherwise indicated, all financial results in this report refer to continuing operations.

INFORMATION RELATING TO FORWARD-LOOKING STATEMENTS

Certain statements included or incorporated by reference in this quarterly report, in other documents we file with or furnish to the Securities and Exchange Commission, ~~(“SEC”),~~ in our press releases, webcasts, conference calls, materials delivered to shareholders and other communications, are “forward-looking statements” within the meaning of the United States federal securities laws. All statements other than historical factual information are forward-looking statements, including without limitation statements regarding: projections of revenue, expenses, profit, profit margins, tax rates, tax provisions, cash flows, pension and benefit obligations and funding requirements, our liquidity position or other projected financial measures; management’s plans and strategies for future operations, including statements relating to anticipated operating performance, cost reductions, restructuring activities, new product and service developments, competitive strengths or market position, acquisitions and the integration thereof, divestitures, spin-offs, split-offs or other distributions, strategic opportunities, securities offerings, stock repurchases, dividends and executive compensation; growth, declines and other trends in markets we sell into; new or modified laws, regulations and accounting pronouncements; future regulatory approvals; outstanding claims, legal proceedings, tax audits and assessments and other contingent liabilities; future foreign currency exchange rates and fluctuations in those rates; general economic and capital markets conditions; the anticipated timing of any of the foregoing; assumptions underlying any of the foregoing; and any other statements that address events or developments that Danaher intends or believes will or may occur in the future. Terminology such as “believe,” “anticipate,” “should,” “could,” “intend,” “will,” “plan,” “expect,” “estimate,” “project,” “target,” “may,” “possible,” “potential,” “forecast” and “positioned” and similar references to future periods are intended to identify forward-looking statements, although not all forward-looking statements are accompanied by such words.

Forward-looking statements are based on assumptions and assessments made by our management in light of their experience and perceptions of historical trends, current conditions, expected future developments and other ~~factors they believe to be appropriate.~~factors. Forward-looking statements are not guarantees of future performance and actual results may differ materially from the results, developments and business decisions contemplated by our forward-looking statements. Accordingly, you should not place undue reliance on any such forward-looking statements. Important factors that in some cases have affected us in the past and that in the future could cause actual results to differ materially from those envisaged in the forward-looking statements include the following:

We intend to spin-off our Dental business into an independent, publicly traded company by the second half of 2019. The proposed transaction may not be completed on the currently contemplated timeline or at all and may not achieve the intended benefits.

Conditions in the global economy, the markets we serve and the financial markets may adversely affect our business and financial statements.

Significant developments or uncertainties stemming from the current U.S. administration, including changes in U.S. trade policies, tariffs and the reaction of other countries thereto, could have an adverse effect on our business.

Our growth could suffer if the markets into which we sell our products and services ~~(references to products and services in this report also include software)~~ decline, do not grow as anticipated or experience cyclicality.

We face intense competition and if we are unable to compete effectively, we may experience decreased demand and decreased market share. Even if we compete effectively, we may be required to reduce prices for our products and services.

Our growth depends in part on the timely development and commercialization, and customer acceptance, of new and enhanced products and services based on technological innovation.

Our reputation, ability to do business and financial statements may be impaired by improper conduct by any of our employees, agents or business partners.

Certain of our businesses are subject to extensive regulation by the U.S. Food and Drug Administration and by comparable agencies of other countries, as well as laws regulating fraud and abuse in the health care industry and the privacy and security of health information. Failure to comply with those regulations could adversely affect our reputation and financial statements.

The health care industry and related industries that we serve have undergone, and are in the process of undergoing, significant changes in an effort to reduce costs, which could adversely affect our financial statements.

Any inability to consummate acquisitions at our historical rate and at appropriate prices could negatively impact our growth rate and stock price.

Our acquisition of businesses, ~~(including our recent acquisitions of Pall and Cepheid),~~investments, joint ventures and strategic relationships could negatively impact our financial statements.

The indemnification provisions of acquisition agreements by which we have acquired companies may not fully protect us and as a result we may face unexpected liabilities.

Divestitures and other dispositions could negatively impact our business, and contingent liabilities from businesses that we have disposed could adversely affect our financial statements.

We could incur significant liability if any of the 2016 spin-off of Fortive, or the 2015 split-off of our communications business or the anticipated spin-off of our Dental business is determined to be a taxable transaction.

Potential indemnification liabilities ~~related~~pursuant to any of the 2016 spin-off of Fortive, ~~and~~ the 2015 split-off of our communications business or the anticipated spin-off of our Dental business could materially and adversely affect our business and financial statements.

A significant disruption in, or breach in security of, our information technology systems ~~or the systems of third-parties on which we rely~~ or violation of data privacy laws could adversely affect our business, reputation and financial statements.

Our operations, products and services expose us to the risk of environmental, health and safety liabilities, costs and violations that could adversely affect our reputation and financial statements.

Our businesses are subject to extensive regulation; failure to comply with those regulations could adversely affect our financial statements and our business, ~~reputation, and financial statements.~~including our reputation.

Our restructuring actions could have long-term adverse effects on our business.

We may be required to recognize impairment charges for our goodwill and other intangible assets.

Foreign currency exchange rates may adversely affect our financial statements.

Changes in our tax rates or exposure to additional income tax liabilities or assessments could affect our profitability. In addition, audits by tax authorities could result in additional tax payments for prior periods.

Changes in tax law relating to multinational corporations could adversely affect our tax position.

We are subject to a variety of litigation and other legal and regulatory proceedings in the course of our business that could adversely affect our business and financial statements.

If we do not or cannot adequately protect our intellectual property, or if third parties infringe our intellectual property rights, we may suffer competitive injury or expend significant resources enforcing our rights.

Third parties may claim that we are infringing or misappropriating their intellectual property rights and we could suffer significant litigation expenses, losses or licensing expenses or be prevented from selling products or services.

The ~~United States~~U.S. government has certain rights to use and disclose some of the intellectual property that we license and could exclusively license it to a ~~third-party~~third party if we fail to achieve practical application of the intellectual property.

Defects and unanticipated use or inadequate disclosure with respect to our products or services (including software), or allegations thereof, could adversely affect our business, reputation and financial statements.

The manufacture of many of our products is a highly exacting and complex process, and if we directly or indirectly encounter problems manufacturing products, our reputation, business ~~reputation,~~ and financial statements could suffer.

Our indebtedness may limit our operations and our use of our cash flow, and any failure to comply with the covenants that apply to our indebtedness could adversely affect our liquidity and financial statements.

Adverse changes in our relationships with, or the financial condition, performance, purchasing patterns or inventory levels of, key distributors and other channel partners could adversely affect our financial statements.

Certain of our businesses rely on relationships with collaborative partners and other ~~third-parties~~third parties for development, supply and marketing of certain products and potential products, and such collaborative partners or other ~~third-parties~~third parties could fail to perform sufficiently.

Our financial results are subject to fluctuations in the cost and availability of commodities that we use in our operations.

If we cannot adjust our manufacturing capacity or the purchases required for our manufacturing activities to reflect changes in market conditions and customer demand, our profitability may suffer. In addition, our reliance upon sole or limited sources of supply for certain materials, components and services could cause production interruptions, delays and inefficiencies.

Changes in laws or governmental regulations may reduce demand for our products or services or increase our expenses.

Work stoppages, union and works council campaigns and other labor disputes could adversely impact our productivity and results of operations.

~~Developments and uncertainties regarding international~~International economic, political, legal, compliance ~~trade~~ and business factors could negatively affect our financial statements.

The ~~results of the European Union membership~~United Kingdom’s referendum ~~in the United Kingdom and their formal notice of withdrawal~~favoring departure from the ~~European Union~~EU could ~~adversely affect customer demand,~~have an adverse effect on our ~~relationships with customers and suppliers and our business and financial statements.~~business.

If we suffer loss to our facilities, supply chains, distribution systems or information technology systems due to catastrophe or other events, our operations could be seriously harmed.

Our defined benefit pension plans are subject to financial market risks that could adversely affect our financial statements.

See Part I—Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2016~~2017 for a further discussion regarding reasons that actual results may differ materially from the results, developments and business decisions contemplated by our forward-looking statements. Forward-looking statements speak only as of the date of the report, document, press release, webcast, call, materials or other communication in which they are made. Except to the extent required by applicable law, we do not assume any obligation to update or revise any forward-looking statement, whether as a result of new information, future events and developments or otherwise.

OVERVIEW

General

As a result of the Company’s geographic and industry diversity, the Company faces a variety of opportunities and challenges, including rapid ~~innovation and~~ technological development (particularly with respect to computing, automation, artificial intelligence, mobile connectivity, ~~artificial intelligence,~~ communications and digitization) in most of the Company’s served markets, the expansion and evolution of opportunities in high-growth markets, trends and costs associated with a global labor force, consolidation of the Company’s competitors and increasing regulation. The Company defines high-growth markets as developing markets of the world experiencing extended periods of accelerated growth in gross domestic product and infrastructure which includes Eastern Europe, the Middle East, Africa, Latin America and Asia (with the exception of Japan and Australia). The Company operates in a highly competitive business environment in most markets, and the Company’s long-term growth and profitability will depend in particular on its ability to expand its business in ~~high-growth~~high-

growth geographies and high-growth market segments, identify,

consummate and integrate appropriate acquisitions, develop innovative and differentiated new products and services with higher gross profit margins, expand and improve the effectiveness of the Company’s sales force, continue to reduce costs and improve operating efficiency and quality, and effectively address the demands of an increasingly regulated environment. The Company is making significant investments, organically and through acquisitions, to address the rapid pace of technological change in its served markets and to globalize its manufacturing, research and development and customer-facing resources (particularly in high-growth markets) in order to be responsive to the Company’s customers throughout the world and improve the efficiency of the Company’s operations.

Business Performance and Outlook

During the third quarter of ~~2017,~~2018, the Company’s revenues increased ~~9.5%~~7.0% compared to the comparable period of ~~2016.~~2017. While differences exist among the Company’s businesses, on an overall basis, ~~sales from existing businesses grew 3.0% during the third quarter of 2017 as compared to the comparable period of 2016. Increased~~ demand for the Company’s products and services ~~on an overall basis,~~increased during the third quarter of 2018 compared to the comparable period of 2017. This demand, together with the Company’s continued investments in sales growth initiatives and the other business-specific factors discussed below, contributed to year-over-year core sales ~~growth.~~growth of 6.5% (for the definition of “core sales” or “core revenue” refer to “—Results of Operations” below). Geographically, ~~year-over-year~~both high-growth and developed markets contributed to core ~~revenue~~sales growth ~~rates~~ during the third quarter of ~~2017 were led by the high-growth markets.~~2018. Core revenues in high-growth markets increased at a ~~high-single~~double digit rate during the third quarter of ~~2017~~2018 as compared to the comparable period of ~~2016~~2017 led primarily by continued strength in China. High-growth markets represented approximately 31% of the Company’s total sales in the third quarter of ~~2017.~~2018. Core revenues in developed markets increased at a ~~low-single~~mid-single digit rate during the third quarter of ~~2017~~2018 led primarily by growth in ~~the United States~~North America and ~~Japan.~~Western Europe. The Company expects overall year-over-year sales growth to continue ~~and year-over-year core revenue growth rates to improve,~~ for the remainder of ~~2017~~2018 but remains cautious about challenges due to macro-economic and geopolitical uncertainties, including global uncertainties related to trade, tariffs, monetary and fiscal policies. For additional information regarding the Company’s sales by geographical region during the three and ~~trade policies.~~nine-month periods ended September 28, 2018, please refer to Note 2 to the accompanying Consolidated Condensed Financial Statements.

The Company’s net earnings from continuing operations for the three and nine-month periods ended September 28, 2018 totaled $664 million or $0.93 per diluted share and approximately $1.9 billion or $2.68 per diluted share, respectively, compared to $572 million or $0.81 per diluted share and approximately $1.6 billion or $2.29 per diluted share, respectively, for the three and nine-month periods ended September 29, 2017. The factors discussed below in “Results of Operations” are the primary drivers of the increase in net earnings from continuing operations and diluted earnings per share for the three and nine-month periods ended September 28, 2018.

The Company ~~regularly evaluates market needs~~recorded a net increase to beginning retained earnings of $3 million as of January 1, 2018 due to the cumulative impact of adopting ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). The impact to beginning retained earnings was primarily driven by the capitalization of certain costs to obtain a contract, primarily sales-related commissions, partially offset by the deferral of revenue for unfulfilled performance obligations. The adoption of this ASU did not have a significant impact on the Company’s Consolidated Condensed Financial Statements as of and ~~conditions with~~for the ~~objective~~three and nine-month periods ended September 28, 2018 and, as a result, comparisons of ~~positioning itself~~revenues and operating profit performance between periods are not affected by the adoption of this ASU. Refer to ~~provide superior products~~Note 2 to the accompanying Consolidated Condensed Financial Statements.

Acquisitions & Proposed Dental Separation

The Company’s growth strategy contemplates future acquisitions. Operations and ~~services~~results can be affected by the rate and extent to ~~its~~which appropriate acquisition opportunities are available, acquired businesses are effectively integrated, and anticipated synergies or cost savings are achieved.

On April 13, 2018, the Company acquired Integrated DNA Technologies, Inc. (“IDT”), a privately-held manufacturer of custom DNA and RNA oligonucleotides serving customers in the academic and biopharmaceutical research, biotechnology, agriculture, clinical diagnostics and pharmaceutical development end-markets, for a ~~cost-efficient manner. Consistent~~purchase price of approximately $2.1 billion, net of cash acquired. IDT had revenues of approximately $260 million in 2017. The Company financed the acquisition of IDT with ~~this approach, during~~available cash and proceeds from the ~~second quarter~~issuance of ~~2017,~~commercial paper. The Company preliminarily recorded approximately $1.2 billion of goodwill related to the ~~Company made~~IDT acquisition. The acquisition of IDT provides additional sales and earnings growth opportunities for the ~~strategic decision to discontinue a molecular diagnostic~~Company’s Life Sciences segment by expanding the segment’s product line diversity, including new product and service offerings in ~~its Diagnostics segment. As a result,~~ the ~~Company recorded $76 million~~area of ~~pretax restructuring, impairment~~genomics consumables, and ~~other related charges ($51 million after-tax or $0.07 per diluted share). These charges included $49 million~~through the potential future acquisition of ~~noncash charges for the impairment of certain technology-related intangible assets as well as related inventory and property, plant and equipment with no further use.~~ complementary businesses.

In addition to the Company incurred $27 million of cash restructuring costs primarily related to employee severance and related charges. These restructuring charges are expected to result in recurring annual savings of approximately $40 million, beginning in 2018.

~~Acquisitions~~

~~During~~IDT acquisition, during the first nine months of ~~2017,~~2018 the Company acquired ~~five businesses~~one other business for total consideration of ~~$112~~$95 million in cash, net of cash acquired. The ~~businesses~~business acquired ~~complement~~complements existing units of the ~~Life Sciences and~~ Environmental & Applied Solutions ~~segments.~~segment. The aggregate annual sales of ~~these five businesses~~this business at the time of ~~their respective acquisitions, in each case~~its acquisition, based

on the company’s revenues for its last completed fiscal year prior to the acquisition, were approximately ~~$70~~$26 million. The Company preliminarily recorded an aggregate of ~~$73~~$71 million of goodwill related to ~~these acquisitions.~~this acquisition.

For a description of Danaher’s plan to distribute ownership of its Dental business to Danaher shareholders in a tax-free spin-off transaction, see “Results of Operations—Dental.”

Currency Exchange Rates

On a year-over-year basis, currency exchange rates ~~positively~~negatively impacted reported sales by approximately ~~1.0%~~1.5% for the three-month period ended September ~~29, 2017 primarily due to the weakness of the U.S. dollar against several major currencies in the third quarter of 2017~~28, 2018, compared to the comparable period of ~~2016. On a year-over-year basis, currency exchange rates adversely impacted reported sales by approximately 0.5% for the nine-month period ended September 29,~~ 2017, primarily due to the strength of the U.S. dollar against several major currencies in the third quarter of 2018. For the nine-month period ended September 28, 2018, currency exchange rates increased reported sales by approximately 2.0% reflecting the weakness of ~~2017 compared to~~ the ~~comparable period~~U.S. dollar during the first six months of ~~2016.~~2018 which more than offset the strengthening experienced in the third quarter of 2018. If the currency exchange rates in effect as of September ~~29, 2017~~28, 2018 were to prevail throughout the remainder of ~~2017,~~2018, currency exchange rates would ~~increase~~reduce the Company’s estimated ~~full year 2017~~ sales for the fourth quarter of 2018 by approximately ~~0.5%~~1.5% on a year-over-year ~~basis since the U.S. dollar is currently weaker in comparison with rates experienced in the second half of 2016 which would offset the negative currency impact reported in the first half of 2017.~~basis. Any future strengthening of the U.S. dollar against major currencies would adversely impact the Company’s sales and results of operations for the remainder of the year, and any weakening of the U.S. dollar against major currencies would positively impact the Company’s sales and results of operations for the remainder of the year.

RESULTS OF OPERATIONS

Non-GAAP Measures

In this report, references to the non-GAAP measure of core sales ~~or core revenue growth~~ (also referred to as ~~sales~~core revenues or sales/revenues from existing businesses) refer to sales from continuing operations calculated according to ~~generally accepted accounting principles in the United States (“GAAP”)~~U.S. GAAP, but excluding:

sales from acquired businesses; and

the impact of currency translation.

References to sales or operating profit attributable to acquisitions or acquired businesses refer to ~~GAAP~~ sales or operating profit, as applicable, from acquired businesses recorded prior to the first anniversary of the acquisition less the amount of sales and operating profit, as applicable, attributable to divested product lines not considered discontinued operations. The portion of revenue attributable to currency translation is calculated as the difference between:

the period-to-period change in revenue (excluding sales from acquired businesses); and

the period-to-period change in revenue (excluding sales from acquired businesses) after applying current period foreign exchange rates to the prior year period.

Core sales ~~and core revenue~~ growth should be considered in addition to, and not as a replacement for or superior to, sales, and may not be comparable to similarly titled measures reported by other companies. Management believes that reporting the non-GAAP financial measure of core sales ~~or core revenue~~ growth provides useful information to investors by helping identify underlying growth trends in Danaher’s business and facilitating comparisons of Danaher’s revenue performance with its performance in prior and future periods and to Danaher’s peers. Management also uses core sales ~~and core revenue~~ growth to measure the Company’s operating and financial performance. The Company excludes the effect of currency translation from core sales because currency translation is not under management’s control, is subject to volatility and can obscure underlying business ~~trends, and~~trends. The Company excludes the effect of acquisitions and divestiture-related items because the nature, size, timing and number of acquisitions and divestitures can vary dramatically from period-to-period and between the Company and its peers and can also obscure underlying business trends and make comparisons of long-term performance difficult.

Throughout this discussion, references to sales volume refer to the impact of both price and unit sales and references to productivity improvements generally refer to improved cost-efficiencies resulting from the ongoing application of the Danaher Business System.

Core Revenue ~~Performance~~


	% Change Three-Month Period Ended September 29, 2017 vs. Comparable 2016 Period		% Change Nine- Month Period Ended September 29, 2017 vs. Comparable 2016 Period		% Change Three-Month Period Ended September 28, 2018 vs. Comparable 2017 Period		% Change Nine- Month Period Ended September 28, 2018 vs. Comparable 2017 Period
Total sales growth (GAAP)	9.5	%	7.5	%	7.0	%	9.5	%
Less the impact of:
Acquisitions and other	(5.5	)%	(5.5	)%
Acquisitions					(2.0	)%	(1.5	)%
Currency exchange rates	(1.0	)%	0.5	%	1.5	%	(2.0	)%
Core revenue growth (non-GAAP)	3.0	%	2.5	%	6.5	%	6.0	%

Operating Profit Performance

Operating profit margins ~~were 16.9% for both~~increased 30 basis points during the three-month period ended September ~~29, 2017 and~~28, 2018 as compared to the comparable period of ~~2016.~~2017.

Third quarter ~~2017~~2018 vs. third quarter ~~2016~~2017 operating profit margin comparisons were favorably impacted by:

Higher ~~2017~~2018 core sales volumes, incremental year-over-year cost savings associated with ~~the restructuring actions and~~ continuing productivity improvement initiatives taken in ~~2016 and the impact of the weaker U.S. dollar in the third quarter of~~ 2017, ~~net of incremental year-over-year costs associated with various new product development, sales, service and marketing growth investments - 95 basis points~~

~~Third quarter 2017 vs. third quarter 2016 operating profit margin comparisons were unfavorably impacted by:~~

~~Third quarter 2016 gain on resolution of acquisition-related matters - 40 basis points~~

~~The incremental net dilutive effect in 2017 of acquired businesses - 55 basis points~~

~~Operating profit margins were 15.7% for the nine-month period ended September 29, 2017 as compared to 16.4% in the comparable period of 2016.~~

~~Year-to-date 2017 vs. year-to-date 2016 operating profit margin comparisons were favorably impacted by:~~

~~Higher 2017 core sales volumes and incremental year-over-year cost savings associated with the restructuring actions and continuing productivity improvement initiatives taken in 2016,~~ net of incremental year-over-year costs associated with various new product development, sales, service and marketing growth investments and the impact of foreign currency exchange rates in the ~~stronger U.S. dollar in 2017~~third quarter of 2018 - 6050 basis points

~~Year-to-date~~Third quarter 2018 vs. third quarter 2017 ~~vs. year-to-date 2016~~ operating profit margin comparisons were unfavorably impacted by:

The incremental net dilutive effect in 2018 of acquired businesses - 20 basis points

Operating profit margins increased 130 basis points during the nine-month period ended September 28, 2018 as compared to the comparable period of 2017.

Year-to-date 2018 vs. year-to-date 2017 operating profit margin comparisons were favorably impacted by:

Higher 2018 sales volumes from existing businesses and incremental year-over-year cost savings associated with the ongoing restructuring actions and continuing productivity improvement initiatives taken in 2017, net of incremental year-over-year costs associated with various new product development, sales, service and marketing growth investments - 100 basis points

Restructuring, impairment and other related charges related to discontinuing a product line in the second quarter of 2017 ~~related to the Diagnostic segment~~ - 55 basis points

~~Third~~Second quarter ~~2016~~2018 gain on resolution of acquisition-related matters - 155 basis points

Year-to-date 2018 vs. year-to-date 2017 operating profit margin comparisons were unfavorably impacted by:

The incremental net dilutive effect in ~~2017~~2018 of acquired businesses - 6020 basis points

Acquisition-related charges associated with transaction costs and fair value adjustments to acquired inventory recorded in the second quarter of 2018 in connection with the IDT acquisition - 10 basis points

Business Segments

Sales by business segment for each of the periods indicated were as follows ($ in millions):


	Three-Month Period Ended				Nine-Month Period Ended				Three-Month Period Ended				Nine-Month Period Ended
	September 29, 2017		September 30, 2016		September 29, 2017		September 30, 2016		September 28, 2018		September 29, 2017		September 28, 2018		September 29, 2017
Life Sciences	$	1,392.6	$	1,325.4	$	4,085.0	$	3,911.8	$	1,596.7	$	1,392.6	$	4,677.9	$	4,085.0
Diagnostics	1,448.7		1,212.7		4,216.0		3,606.5		1,502.5		1,448.7		4,573.1		4,216.0
Dental	694.0		675.6		2,052.1		2,046.1		679.5		694.0		2,085.5		2,052.1
Environmental & Applied Solutions	992.9		918.4		2,890.9		2,733.7		1,074.4		992.9		3,193.0		2,890.9
Total	$	4,528.2	$	4,132.1	$	13,244.0	$	12,298.1	$	4,853.1	$	4,528.2	$	14,529.5	$	13,244.0

For information regarding the Company’s sales by geographical region during the three and nine-month periods ended September 28, 2018, please refer to Note 2 to the accompanying Consolidated Condensed Financial Statements.

LIFE SCIENCES

The Company’s Life Sciences segment offers a broad range of research tools that scientists use to study the basic building blocks of life, including genes, proteins, metabolites and cells, in order to understand the causes of disease, identify new therapies and test new drugs and vaccines. The segment, through its Pall Corporation business, is also a leading provider of filtration, separation and purification technologies to the biopharmaceutical, food and beverage, medical, aerospace, microelectronics and general industrial segments.

Life Sciences Selected Financial Data


	Three-Month Period Ended						Nine-Month Period Ended						Three-Month Period Ended						Nine-Month Period Ended
($ in millions)	September 29, 2017			September 30, 2016			September 29, 2017			September 30, 2016			September 28, 2018			September 29, 2017			September 28, 2018			September 29, 2017
Sales	$	1,392.6		$	1,325.4		$	4,085.0		$	3,911.8		$	1,596.7		$	1,392.6		$	4,677.9		$	4,085.0
Operating profit	246.8			204.7			680.0			574.1			312.8			246.8			875.6			680.0
Depreciation	29.5			30.3			88.6			92.5			32.6			29.5			94.8			88.6
Amortization	76.9			76.1			229.9			223.3			84.2			76.9			255.4			229.9
Operating profit as a % of sales	17.7		%	15.4		%	16.6		%	14.7		%	19.6		%	17.7		%	18.7		%	16.6		%
Depreciation as a % of sales	2.1		%	2.3		%	2.2		%	2.4		%	2.0		%	2.1		%	2.0		%	2.2		%
Amortization as a % of sales	5.5		%	5.7		%	5.6		%	5.7		%	5.3		%	5.5		%	5.5		%	5.6		%

Core Revenue ~~Performance~~

% Change Three-Month Period Ended September 29, 2017 vs. Comparable 2016 Period % Change Nine- Month Period Ended September 29, 2017 vs.
Comparable 2016 Period
Total sales growth (GAAP) 5.0 % 4.5 %
Less the impact of:
Acquisitions and other (1.0 )% (2.5 )%
Currency exchange rates (1.0 )% 1.0 %
Core revenue growth (non-GAAP) 3.0 % 3.0 %

During the first quarter of 2017, a product line was transferred from the Life Sciences segment to the Environmental & Applied Solutions segment. While this change is not material to segment results in total, the resulting change in sales growth has been included in the “Acquisitions and other” line in the table above.



	% Change Three-Month Period Ended September 28, 2018 vs. Comparable 2017 Period		% Change Nine- Month Period Ended September 28, 2018 vs. Comparable 2017 Period
Total sales growth (GAAP)	14.5	%	14.5	%
Less the impact of:
Acquisitions	(6.5	)%	(4.5	)%
Currency exchange rates	1.5	%	(2.5	)%
Core revenue growth (non-GAAP)	9.5	%	7.5	%

Price increases in the segment contributed 0.5% to sales growth on a year-over-year basis during both the three and nine-month periods ended September ~~29, 2017,~~28, 2018, and are reflected as a component of core revenue growth.

Core sales of the business’ broad range of mass spectrometers grew on a year-over-year basis during both the three and nine-month periods ended September ~~29, 2017,~~28, 2018, led by strong sales growth in high-growth markets, particularly China and ~~Western Europe, across~~ the ~~food~~rest of Asia, and ~~forensics and pharmaceutical end-markets, partially offset by declines in demand in the clinical end-market in the United States.~~North America. Core sales of microscopy products grew during both the ~~three-month period~~three and nine-month periods ended

September ~~29, 2017 as a result~~28, 2018 across most major end-markets, due partially to demand related to the release of ~~increased~~new products in 2018. Geographically, demand ~~in the life science and applied end-markets~~for microscopy products increased in North America and ~~the medical end-market~~ in ~~Western Europe. Core sales of microscopy products grew on a year-over-year basis during the nine-month period primarily due to increased demand in the~~ high-growth markets, ~~and Western Europe.~~primarily China. Demand for the business’ flow cytometry and ~~genomics products~~particle counting product lines was strong across ~~all~~most major ~~product lines~~geographies, led by North America and China in both the three and nine-month periods ended September ~~29, 2017~~28, 2018, as ~~compared~~well as Western Europe in the nine-month period ended September 28, 2018. New product launches in 2018 also contributed to the ~~comparable periods in 2016, due to strong demand in North America, China and Western Europe.~~increased demand. Core sales for filtration, separation and purification technologies ~~decreased~~increased across most major geographies in both the three and nine-month periods ended September 28, 2018 versus comparable periods in 2017, led by continued growth in the biopharmaceutical, microelectronics and fluid technology and asset protection end-markets, as well as the laboratory, food and beverage end-markets during the three-month period ended September 28, 2018.

Sales growth from acquisitions is primarily due to the acquisition of IDT in April 2018. IDT provides additional sales and ~~increased~~earnings growth opportunities for the segment by expanding the segment’s product line diversity, including new product and service offerings in the area of genomics consumables, and through the potential future acquisition of complementary businesses. During the three and nine-month ~~period~~periods ended September ~~29, 2017 compared to the comparable periods in 2016, as hurricanes in North America impacted performance in the third quarter of 2017. For these businesses, increased demand in North America~~28, 2018, IDT’s revenues grew on a year-over-year basis with growth across all major geographies and Asia was largely offset by declines in the Middle East and Western Europe in both periods, as increased demand in the microelectronics end-market was offset by lower demand in the process, industrial, and medical end-markets. For the nine-month period, the decline in the Middle East was largely due to a major project in 2016 which did not repeat in 2017. The Company expects the core growth rate of the filtration, separation and purification technologies business to improve sequentially in the fourth quarter.product lines.

Operating Profit Performance

Operating profit margins increased ~~230~~190 basis points during the three-month period ended September ~~29, 2017~~28, 2018 as compared to the comparable period of ~~2016. The following factors favorably impacted year-over-year~~2017.

Third quarter 2018 vs. third quarter 2017 operating profit margin ~~comparisons:~~comparisons were favorably impacted by:

Higher ~~2017~~2018 core sales volumes and incremental year-over-year cost savings associated with the restructuring actions and continuing productivity improvement initiatives taken in ~~2016, net of incremental year-over-year costs associated with various new product development, sales and marketing growth investments in~~ 2017, ~~- 185 basis points~~

~~The incremental net accretive effect in 2017 of acquired businesses and intersegment product line transfers - 45 basis points~~

Operating profit margins increased 190 basis points during the nine-month period ended September 29, 2017 as compared to the comparable period of 2016. The following factors favorably impacted year-over-year operating profit margin comparisons:

~~Higher 2017 core sales volumes and incremental year-over-year cost savings associated with the restructuring actions and continuing productivity improvement initiatives taken in 2016,~~ net of incremental year-over-year costs associated with various new product development, sales and marketing growth investments and the impact of foreign currency exchange rates in the ~~stronger U.S. dollar in 2017~~third quarter of 2018 - ~~160~~230 basis points

Third quarter 2018 vs. third quarter 2017 operating profit margin comparisons were unfavorably impacted by:

The incremental net ~~accretive~~dilutive effect in ~~2017~~2018 of acquired businesses - 40 basis points

Operating profit margins increased 210 basis points during the nine-month period ended September 28, 2018 as compared to the comparable period of 2017.

Year-to-date 2018 vs. year-to-date 2017 operating profit margin comparisons were favorably impacted by:

Higher 2018 core sales volumes, incremental year-over-year cost savings associated with the restructuring actions and ~~intersegment~~continuing productivity improvement initiatives taken in 2017 and the impact of foreign currency exchange rates in the nine-month period in 2018, net of incremental year-over-year costs associated with various new product ~~line transfers~~development, sales and marketing growth investments - 255 basis points

Second quarter 2018 gain on resolution of acquisition-related matters - 20 basis points

Year-to-date 2018 vs. year-to-date 2017 operating profit margin comparisons were unfavorably impacted by:

The incremental net dilutive effect in 2018 of acquired businesses - 30 basis points

DIAGNOSTICS

The Company’s Diagnostics segment offers analytical instruments, reagents, consumables, software and services that hospitals, physicians’ offices, reference laboratories and other critical care settings use to diagnose disease and make treatment decisions.

Diagnostics Selected Financial Data


	Three-Month Period Ended						Nine-Month Period Ended						Three-Month Period Ended						Nine-Month Period Ended
($ in millions)	September 29, 2017			September 30, 2016			September 29, 2017			September 30, 2016			September 28, 2018			September 29, 2017			September 28, 2018			September 29, 2017
Sales	$	1,448.7		$	1,212.7		$	4,216.0		$	3,606.5		$	1,502.5		$	1,448.7		$	4,573.1		$	4,216.0
Operating profit	242.7			193.9			554.9			606.3			235.1			242.7			757.4			554.9
Depreciation	92.6			82.3			271.8			239.4			92.2			92.6			284.5			271.8
Amortization	54.2			33.9			160.2			101.8			52.1			54.2			157.8			160.2
Operating profit as a % of sales	16.8		%	16.0		%	13.2		%	16.8		%	15.6		%	16.8		%	16.6		%	13.2		%
Depreciation as a % of sales	6.4		%	6.8		%	6.4		%	6.6		%	6.1		%	6.4		%	6.2		%	6.4		%
Amortization as a % of sales	3.7		%	2.8		%	3.8		%	2.8		%	3.5		%	3.7		%	3.5		%	3.8		%

Core Revenue ~~Performance~~


	% Change Three-Month Period Ended September 29, 2017 vs. Comparable 2016 Period		% Change Nine- Month Period Ended September 29, 2017 vs. Comparable 2016 Period		% Change Three-Month Period Ended September 28, 2018 vs. Comparable 2017 Period		% Change Nine- Month Period Ended September 28, 2018 vs. Comparable 2017 Period
Total sales growth (GAAP)	19.5	%	17.0	%	3.5	%	8.5	%
Less the impact of:
Acquisitions and other	(15.0	)%	(14.5	)%
Currency exchange rates	(0.5	)%	0.5	%	2.0	%	(2.0	)%
Core revenue growth (non-GAAP)	4.0	%	3.0	%	5.5	%	6.5	%

~~Price changes~~Pricing in the segment ~~modestly benefited~~negatively impacted sales growth by 0.5% on a year-over-year basis during the ~~three-month period~~three and nine-month periods ended September ~~29, 2017. Price increases in the segment contributed 0.5% to sales growth on a year-over-year basis during the nine-month period ended September 29, 2017~~28, 2018, and ~~are~~is reflected as a component of core revenue growth.

~~Demand~~During both the three and nine-month periods ended September 28, 2018, core sales grew in the molecular diagnostics business driven by strong growth in both developed and high-growth markets. During the first quarter of 2018, the molecular diagnostics business experienced particularly strong growth in the infectious diseases product line driven in part by the severity of the flu season. Core sales in the segment’s clinical lab business increased on a year-over-year basis for both the three and nine-month periods ended September ~~29, 2017 led by~~28, 2018 due to increased demand in the high-growth markets, ~~primarily in~~led by China, ~~and~~partially offset by the ~~Middle East, and North America. Increased demand in Western Europe also contributed to the year-over-year core sales growth for the three-month period. Lower demand in Japan and Latin America for both~~developed markets. For the three and nine-month periods, the increased demand was driven by the immunoassay and ~~in Western Europe for the nine-month period partially offset this growth.~~automation product lines. Core sales in the acute care diagnostic business increased year-over-year in both the three and nine-month periods ended September ~~29, 2017,~~28, 2018, due to continued strong sales of blood gas and immunoassay ~~analyzer products~~product lines across ~~all~~most major ~~geographies.~~geographies, with particularly strong growth in the high-growth markets. Core sales in the pathology diagnostics business grew year-over-year in both the three and nine-month periods ended September ~~29, 2017, due primarily to increased~~28, 2018, led by demand for new products in both the advanced staining and core histology ~~products. Demand~~product lines. Core sales in the pathology diagnostics business increased inacross most major geographies, led by North America, Western Europe and China ~~for both periods as well as~~ in ~~North America for the nine-month period.~~

The acquisition of Cepheid in November 2016 provides additional sales and earnings growth opportunities for the segment by expanding geographic and product line diversity, including new product and service offerings in the areas of molecular diagnostics. As Cepheid is integrated into the Company over the next several years, the Company expects to realize significant synergies through the application of the Danaher Business System. During both the three and nine-month periods ended September ~~29, 2017, Cepheid’s revenues grew on a year-over-year basis in most major geographies and product lines.~~28, 2018.

During the second quarter of 2017, the Company made the strategic decision to discontinue a molecular diagnostic product line in the Diagnostics segment. As a result, the Company recorded $76 million of pretax restructuring, impairment and other related charges ($51 million after-tax or $0.07 per diluted share). These charges included $49 million of noncash charges for the impairment of certain technology-related intangible assets as well as related inventory and property, plant and equipment with no further use. In addition, the Company incurred $27 million of cash restructuring costs primarily related to employee

~~severance and related charges. These restructuring charges are expected to result in recurring annual savings of approximately $40 million, beginning in 2018.~~Operating Profit Performance

Operating profit margins ~~increased 80~~decreased 120 basis points during the three-month period ended September ~~29, 2017~~28, 2018 as compared to the comparable period of ~~2016.~~

~~Third quarter 2017 vs. third quarter 2016~~2017. The following factor unfavorably impacted year-over-year operating profit margin ~~comparisons were favorably impacted by:~~comparisons:

~~Higher 2017~~Incremental year-over-year costs associated with various new product development, sales, service and marketing growth investments and the impact of foreign currency exchange rates in the third quarter of 2018, net of higher 2018 core sales volumes and incremental year-over-year cost savings associated with the restructuring actions and continuing productivity improvement initiatives taken in ~~2016~~2017 - 120 basis points

Operating profit margins increased 340 basis points during the nine-month period ended September 28, 2018 as compared to the comparable period of 2017. The following factors favorably impacted year-over-year operating profit margin comparisons:

Higher 2018 core sales volumes, incremental year-over-year cost savings associated with the restructuring actions and continuing productivity improvement initiatives taken in 2017, net of the impact of foreign currency exchange rates in

the ~~weaker U.S. dollar in the third quarter of 2017, net of~~nine-month period and incremental year-over-year costs associated with various new product development, sales, service and marketing growth investments - ~~245~~160 basis points

~~Third quarter 2017 vs. third quarter 2016 operating profit margin comparisons were unfavorably impacted by:~~

~~The incremental net dilutive effect in 2017 of acquired businesses - 165 basis points~~

~~Operating profit margins decreased 360 basis points during the nine-month period ended September 29, 2017 as compared to the comparable period of 2016.~~

~~Third quarter 2017 vs. third quarter 2016 operating profit margin comparisons were favorably impacted by:~~

Higher 2017 core sales volumes and incremental year-over-year cost savings associated with the restructuring actions and continuing productivity improvement initiatives taken in 2016, net of incremental year-over-year costs associated with various new product development, sales, service and marketing growth investments, and the impact of the stronger U.S. dollar in 2017 - 5 basis points

~~Third quarter 2017 vs. third quarter 2016 operating profit margin comparisons were unfavorably impacted by:~~

Restructuring, impairment and other related charges related to discontinuing a product line in the second quarter of 2017 - 180 basis points

~~The incremental net dilutive effect in 2017 of acquired businesses - 185 basis points~~

Amortization as a percentage of sales increased during both the three and nine-month periods ended September 29, 2017 as compared to the comparable periods of 2016 due primarily to the impact of recently acquired businesses, particularly Cepheid.

DENTAL

The Company’s Dental segment provides products that are used to diagnose, treat and prevent disease and ailments of the teeth, gums and supporting bone, as well as to improve the aesthetics of the human smile. The Company is a leading worldwide provider of a broad range of dental consumables, equipment and services, and is dedicated to driving technological innovations that help dental professionals improve clinical outcomes and enhance productivity.

Dental Selected Financial Data


	Three-Month Period Ended						Nine-Month Period Ended						Three-Month Period Ended						Nine-Month Period Ended
($ in millions)	September 29, 2017			September 30, 2016			September 29, 2017			September 30, 2016			September 28, 2018			September 29, 2017			September 28, 2018			September 29, 2017
Sales	$	694.0		$	675.6		$	2,052.1		$	2,046.1		$	679.5		$	694.0		$	2,085.5		$	2,052.1
Operating profit	102.2			101.3			301.4			305.6			86.1			102.2			241.8			301.4
Depreciation	9.3			10.8			29.7			32.6			9.4			9.3			29.1			29.7
Amortization	20.8			20.4			61.0			63.2			22.5			20.8			68.0			61.0
Operating profit as a % of sales	14.7		%	15.0		%	14.7		%	14.9		%	12.7		%	14.7		%	11.6		%	14.7		%
Depreciation as a % of sales	1.3		%	1.6		%	1.4		%	1.6		%	1.4		%	1.3		%	1.4		%	1.4		%
Amortization as a % of sales	3.0		%	3.0		%	3.0		%	3.1		%	3.3		%	3.0		%	3.3		%	3.0		%

Core Revenue ~~Performance~~


	% Change Three-Month Period Ended September 29, 2017 vs. Comparable 2016 Period		% Change Nine- Month Period Ended September 29, 2017 vs. Comparable 2016 Period		% Change Three-Month Period Ended September 28, 2018 vs. Comparable 2017 Period		% Change Nine- Month Period Ended September 28, 2018 vs. Comparable 2017 Period
Total sales growth (GAAP)	2.5	%	0.5	%	(2.0	)%	1.5	%
Less the impact of:
Acquisitions and other	—	%	—	%
Currency exchange rates	(1.5	)%	(0.5	)%	1.5	%	(2.0	)%
Core revenue growth (non-GAAP)	1.0	%	—	%	(0.5	)%	(0.5	)%

Price ~~increases modestly benefited~~in the segment negatively impacted sales growth by 0.5% on a year-over-year basis ~~in the three-month period and did not significantly impact sales growth on a year-over-year basis during the nine-month period ended September 29, 2017.~~

~~Geographically, year-over-year core revenue growth in China and other high-growth markets was strong~~ in both the three and nine-month periods ended September ~~29, 2017,~~28, 2018, and are reflected as a component of core revenue growth.

Geographically, year-over-year core revenue declines in both the three and nine-month periods ended September 28, 2018 were driven by growth in high-growth markets, primarily China and Russia, which was more than offset by ~~softer demand~~declines in North America and to a lesser extent Western ~~Europe.~~Europe and Japan. Core revenue growth for the specialty consumables business, which consists of implant systems and orthodontic products, was ~~driven~~led by ~~increased demand in high-growth markets~~China and North America for both the three and nine-month ~~periods. In addition, increased demand~~periods ended September 28, 2018. Core sales of dental equipment and traditional dental consumables declined in ~~China~~the three and nine-month periods ended September 28, 2018, due primarily to declines in North ~~America drove increased~~America. For the three and nine-month periods ended September 28, 2018, lower core sales of ~~orthodontic products. Dental~~dental equipment ~~sales also grew during both periods, primarily in high-growth markets~~ and ~~North America. Lower demand for~~traditional dental ~~consumable~~consumables product lines in North America ~~and Western Europe largely~~more than offset the year-over-year growth in the ~~other product~~specialty consumables categories, ~~for both the three and nine-month periods,~~ primarily reflecting ~~inventory destocking by several distribution partners. While the Company expects~~ the impact of inventory ~~destocking in its consumables business to lessen,~~reductions at several distribution partners as well as the ~~recent~~impact from realignment of distributors and manufacturers in the dental ~~industry, primarily in North America, may have a negative impact on equipment revenues~~industry.

In July 2018, the Company announced its intention to spin-off its Dental business into an independent publicly traded company (the “Dental Separation”). The Dental business had sales for the year-ended December 31, 2017 of $2.8 billion. The transaction is expected to be tax-free to the Company’s shareholders. The Company is targeting to complete the Dental Separation in the ~~near-term.~~second half of 2019, subject to the satisfaction of certain conditions, including obtaining final approval from the Danaher Board of Directors, satisfactory completion of financing, receipt of tax opinions, receipt of favorable rulings from the IRS and receipt of other regulatory approvals.

Operating Profit Performance

Operating profit margins decreased 30200 basis points during the three-month period ended September ~~29, 2017~~28, 2018 as compared to the comparable period of ~~2016.~~2017. The following factors unfavorably impacted year-over-year operating profit margin comparisons:

Lower 2018 core sales volumes of dental equipment and traditional dental consumables, incremental year-over-year costs associated with product development and sales and marketing growth investments, lower overall pricing and increased spending on productivity initiatives and the impact of foreign currency exchange rates in the third quarter of 2018, net of cost savings associated with productivity initiatives taken in 2017 - 195 basis points

The incremental net dilutive effect in 2018 of acquired businesses - 5 basis points

Operating profit margins decreased 310 basis points during the nine-month period ended September 28, 2018 as compared to the comparable period of 2017. The following factors unfavorably impacted year-over-year operating profit margin comparisons:

~~Incremental~~Lower 2018 core sales volumes of dental equipment and traditional dental consumables, incremental year-over-year costs associated with ~~various new~~ product development and sales and marketing growth investments, lower overall pricing and ~~unfavorable product mix due to lower sales~~increased spending on productivity initiatives and the impact of ~~dental consumables~~foreign currency exchange rates for the nine-month period in ~~2017,~~2018, net of ~~incremental year-over-year~~ cost savings associated with ~~the restructuring actions and continuing~~ productivity ~~improvement~~ initiatives taken in ~~2016~~2017 - 15300 basis points

The incremental net dilutive effect in ~~2017 of acquired businesses - 15 basis points~~

Operating profit margins decreased 20 basis points during the nine-month period ended September 29, 2017 as compared to the comparable period of 2016. The following factors unfavorably impacted year-over-year operating profit margin comparisons:

Incremental year-over-year costs associated with various new product development, sales and marketing growth investments, the impact of the stronger U.S. dollar in 2017 and unfavorable product mix due to lower sales of dental consumables in 2017, net of incremental year-over-year cost savings associated with the restructuring actions and continuing productivity improvement initiatives taken in 2016 - 10 basis points

~~The incremental net dilutive effect in 2017~~2018 of acquired businesses - 10 basis points

ENVIRONMENTAL & APPLIED SOLUTIONS

The Company’s Environmental & Applied Solutions segment products and services help protect important resources and keep global food and water supplies safe. The Company’s water quality business provides instrumentation, services and disinfection systems to help analyze, treat and manage the quality of ultra-pure, potable, industrial waste, ground, source and ocean water in residential, commercial, municipal, industrial and natural resource applications. The Company’s product identification business provides equipment, consumables, software and services for various printing, marking, coding, traceability, packaging, design and color management applications on consumer, pharmaceutical and industrial products.

Environmental & Applied Solutions Selected Financial Data


	Three-Month Period Ended						Nine-Month Period Ended						Three-Month Period Ended						Nine-Month Period Ended
($ in millions)	September 29, 2017			September 30, 2016			September 29, 2017			September 30, 2016			September 28, 2018			September 29, 2017			September 28, 2018			September 29, 2017
Sales	$	992.9		$	918.4		$	2,890.9		$	2,733.7		$	1,074.4		$	992.9		$	3,193.0		$	2,890.9
Operating profit	222.8			223.4			666.0			640.1			254.3			222.8			732.5			666.0
Depreciation	11.3			9.1			31.6			26.4			11.0			11.3			34.8			31.6
Amortization	14.6			12.8			41.8			38.3			15.3			14.6			46.3			41.8
Operating profit as a % of sales	22.4		%	24.3		%	23.0		%	23.4		%	23.7		%	22.4		%	22.9		%	23.0		%
Depreciation as a % of sales	1.1		%	1.0		%	1.1		%	1.0		%	1.0		%	1.1		%	1.1		%	1.1		%
Amortization as a % of sales	1.5		%	1.4		%	1.4		%	1.4		%	1.4		%	1.5		%	1.5		%	1.4		%

Core Revenue ~~Performance~~


	% Change Three-Month Period Ended September 29, 2017 vs. Comparable 2016 Period		% Change Nine- Month Period Ended September 29, 2017 vs. Comparable 2016 Period		% Change Three-Month Period Ended September 28, 2018 vs. Comparable 2017 Period		% Change Nine- Month Period Ended September 28, 2018 vs. Comparable 2017 Period
Total sales growth (GAAP)	8.0	%	6.0	%	8.0	%	10.5	%
Less the impact of:
Acquisitions and other	(3.0	)%	(2.5	)%
Acquisitions					(1.5	)%	(1.5	)%
Currency exchange rates	(2.0	)%	—	%	1.5	%	(2.0	)%
Core revenue growth (non-GAAP)	3.0	%	3.5	%	8.0	%	7.0	%

Price increases in the segment contributed ~~1.0%~~2.0% and ~~0.5%~~1.5% to sales growth on a year-over-year basis during the three and nine-month periods ended September ~~29, 2017,~~28, 2018, respectively, and are reflected as a component of core revenue growth.

Core sales in the segment’s water quality business ~~grew~~increased at a ~~low-single~~low double digit rate during ~~both~~ the ~~three and nine-month periods~~three-month period ended September ~~29, 2017~~28, 2018, and at a high-single digit rate for the nine-month period ended September 28, 2018 as compared to the comparable periods of ~~2016.~~2017. Year-over-year core sales in the analytical instrumentation product line ~~increased~~grew in both the three and nine-month periods, as increased demand in the industrial and municipal end-markets was partially offset by lower demand in the environmental end-markets. Geographically, year-over-year core revenue growth for both the three and nine-month periods was driven by ~~increased~~higher demand inacross all major geographies, led by China, North America and Western ~~Europe partially offset by weakness in the Middle East and Latin America. Increased demand in North America also contributed to the year-over-year core revenue growth for the nine-month period.~~Europe. Core revenue growth in the business’ chemical treatment solutions product line for both the three and nine-month periods was ~~due to an expansion of the customer base in the United States and increased demand in Latin America,~~ driven by higher demand in primary metals, mining, food ~~steel~~ and beverage and commercial and institutional end-markets, partially offset by lower demand in the oil and ~~gas-related~~gas and chemical end-markets. Geographically, year-over-year core revenue growth for chemical treatment solutions was driven by increased demand in North America and high-growth markets for both the three and nine-month periods. Core sales in the business’ ultraviolet water disinfection product line ~~decreased~~increased both in the ~~three-month period~~three and ~~increased slightly in the~~ nine-month ~~period~~periods ended September ~~29, 2017 due to differences in the timing of the completion of several projects in 2017~~28, 2018 as compared to the comparable periods of ~~2016.~~2017, led by continued strength in municipal end-markets. Geographically, year-over-year demand for ultraviolet water disinfection products was driven by higher demand in North America in the three-month period and North America and high-growth markets, primarily China, in the nine-month period, partially offset by softer demand in Western Europe in both periods and China in the three-month period.

Core sales in the segment’s product identification businesses ~~grew~~increased at a mid-single digit rate during both the three and nine-month periods ended September ~~29, 2017~~28, 2018 as compared to the comparable periods of ~~2016. Continued~~2017. The majority of core revenue growth was driven by strong ~~year-over-year~~ demand for marking and coding equipment and related consumables across all major end-markets and in most major geographies, led by Western Europe, North America ~~drove the majority of the core revenue growth. Increased year-over-year demand~~and high-growth markets. Demand for ~~the business’~~ packaging and color solutions products and services ~~led by Asia and Western Europe, also contributed to core revenue growth for~~decreased slightly in both the three and nine-month periods ended September ~~29,~~28, 2018 as compared to the comparable periods of 2017. Geographically, year-over-year core revenue growth for packaging and color solutions products and services softened in both developed and high-growth markets for the three-month period. For the nine-month period, weaker demand in the high-growth markets was slightly offset by increased demand in the developed markets.

Operating Profit Performance

Operating profit margins ~~decreased 190~~increased 130 basis points during the three-month period ended September ~~29, 2017~~28, 2018 as compared to the comparable period of ~~2016. The following factors unfavorably impacted year-over-year~~2017.

Third quarter 2018 vs. third quarter 2017 operating profit margin ~~comparisons:~~comparisons were favorably impacted by:

~~Incremental year-over-year costs associated with various new product development, sales and marketing growth investments, net of the positive impact of higher 2017~~Higher 2018 core sales volumes and incremental year-over-year cost savings associated with the restructuring actions and continuing productivity improvement initiatives taken in ~~2016~~2017, net of the impact of foreign currency exchange rates in the third quarter of 2018 and incremental year-over-year costs associated with various new product development, sales, service and marketing growth investments - ~~105~~160 basis points

Third quarter 2018 vs. third quarter 2017 operating profit margin comparisons were unfavorably impacted by:

The incremental net dilutive effect in ~~2017~~2018 of acquired businesses ~~and intersegment product line transfers~~ - 8530 basis points

Operating profit margins decreased 4010 basis points during the nine-month period ended September ~~29, 2017~~28, 2018 as compared to the comparable period of ~~2016.~~2017.

Year-to-date ~~2017~~2018 vs. year-to-date ~~2016~~2017 operating profit margin comparisons were favorably impacted by:

Higher ~~2017~~2018 core sales volumes, incremental year-over-year cost savings associated with the restructuring actions and continuing productivity improvement initiatives taken in ~~2016~~2017 and ~~improved pricing,~~the impact of foreign currency exchange rates in the nine month period in 2018, net of incremental year-over-year costs associated with various new product development, sales, service and marketing growth investments - 2040 basis points

Year-to-date ~~2017~~2018 vs. year-to-date ~~2016~~2017 operating profit margin comparisons were unfavorably impacted by:

The incremental net dilutive effect in ~~2017~~2018 of acquired businesses ~~and intersegment product line transfers~~ - 6050 basis points

COST OF SALES AND GROSS PROFIT


	Three-Month Period Ended						Nine-Month Period Ended						Three-Month Period Ended						Nine-Month Period Ended
($ in millions)	September 29, 2017			September 30, 2016			September 29, 2017			September 30, 2016			September 28, 2018			September 29, 2017			September 28, 2018			September 29, 2017
Sales	$	4,528.2		$	4,132.1		$	13,244.0		$	12,298.1		$	4,853.1		$	4,528.2		$	14,529.5		$	13,244.0
Cost of sales	(1,991.4		)	(1,846.1		)	(5,890.6		)	(5,463.5		)	(2,162.6		)	(1,991.4		)	(6,378.3		)	(5,890.6		)
Gross profit	$	2,536.8		$	2,286.0		$	7,353.4		$	6,834.6		$	2,690.5		$	2,536.8		$	8,151.2		$	7,353.4
Gross profit margin	56.0		%	55.3		%	55.5		%	55.6		%	55.4		%	56.0		%	56.1		%	55.5		%

The year-over-year increase in cost of sales during both the three and nine-month periods ended September ~~29, 2017~~28, 2018 as compared to the comparable periods in ~~2016,~~2017, is due primarily to the impact of higher year-over-year sales volumes, including sales from recently acquired businesses. During the nine-month period ended September 29, 2017 the impact of restructuring, impairment and other related charges associated with the Company’s strategic decision to discontinue a product line in its Diagnostics segment also contributed to the year-over-year increase in cost of sales. Foreign exchange losses realized due to the weakening of the U.S. dollar against other major currencies also increased cost of sales for the nine-month period ended September 29, 2017. These increases were partiallybusinesses, partly offset by incremental year-over-year cost savings associated with the restructuring and continued productivity improvement actions taken in ~~2016.~~2017.

The year-over-year ~~increase~~decrease in gross profit margins during the three-month period ended September ~~29, 2017~~28, 2018 as compared to the comparable period in ~~2016,~~2017, is due primarily to the ~~favorable~~impact of foreign currency exchange rates during the third quarter of 2018, including transactional currency losses recorded, partially offset by the impact of higher year-over-year sales volumes, including sales from recently acquired businesses, increased leverage of certain manufacturing costs and incremental year-over-year cost savings associated with the restructuring activities and continued productivity improvement actions taken in ~~2016.~~2017. The year-over-year ~~decrease~~increase in gross profit margins during the nine-month period ended September ~~29, 2017~~28, 2018 as compared to the comparable period in ~~2016,~~2017, is due primarily to the impact of the restructuring, impairment and other related charges associated with the Company’s strategic decision to discontinue a product line in its Diagnostics segment. The above mentioned foreign exchange losses also reduced gross profit margins for the nine-month period ended September 29, 2017. These impacts were largely offset by the favorable impact of higher year-over-year sales volumes, including sales from recently acquired businesses, increased leverage of certain manufacturing costs and incremental year-over-year cost savings associated with the restructuring activities and continued productivity improvement actions taken in ~~2016.~~2017. Gross profit margin improvements were partially offset by the impact of foreign currency exchange rates during the nine-month period ended September 28, 2018 as compared to the comparable period in 2017.

OPERATING EXPENSES


	Three-Month Period Ended						Nine-Month Period Ended						Three-Month Period Ended						Nine-Month Period Ended
($ in millions)	September 29, 2017			September 30, 2016			September 29, 2017			September 30, 2016			September 28, 2018			September 29, 2017			September 28, 2018			September 29, 2017
Sales	$	4,528.2		$	4,132.1		$	13,244.0		$	12,298.1		$	4,853.1		$	4,528.2		$	14,529.5		$	13,244.0
Selling, general and administrative (“SG&A”) expenses	1,490.1			1,345.8			4,448.4			4,105.2			1,558.6			1,498.4			4,798.4			4,470.6
Research and development (“R&D”) expenses	279.2			241.1			829.9			707.1			301.2			279.2			911.6			829.9
SG&A as a % of sales	32.9		%	32.6		%	33.6		%	33.4		%	32.1		%	33.1		%	33.0		%	33.8		%
R&D as a % of sales	6.2		%	5.8		%	6.3		%	5.7		%	6.2		%	6.2		%	6.3		%	6.3		%

The year-over-year ~~increase~~decrease in SG&A expenses as a percentage of sales for both the ~~three-month period~~three and nine-month periods ended September ~~29, 2017~~28, 2018 as compared to the comparable ~~period~~periods in ~~2016,~~2017, was driven ~~by higher relative spending levels at recently acquired companies, primarily Cepheid, and continued investments in sales and marketing growth initiatives, partially offset~~ by the benefit of increased leverage of the Company’s general and administrative cost base resulting from higher 2018 sales volumes, partially offset by continued investments in sales and marketing growth initiatives. The impact of the restructuring, impairment and other related charges incurred in the second quarter of 2017 ~~sales volumes. The~~related to discontinuing a product line also contributed to the year-over-year ~~increase~~decrease in SG&A expenses as a percentage of sales ~~for~~during the nine-month period ended September 29, 2017 as compared to the comparable period in 2016, was driven by restructuring, impairment and other related charges associated with the Company’s strategic decision to discontinue a product line in its Diagnostics segment, higher relative spending levels at recently acquired companies, primarily Cepheid, and continued investments in sales and marketing growth initiatives. These increases were partially offset by the benefit of increased leverage of the Company’s general and administrative cost base resulting from higher 2017 sales volumes.28, 2018.

~~The year-over-year increase in~~Year-over-year, R&D expenses (consisting principally of internal and contract engineering personnel costs) remained constant as a percentage of sales for both the three and nine-month periods ended September ~~29, 2017~~28, 2018 as compared to the comparable periods in ~~2016, was due primarily to higher R&D expenses as a percentage of sales~~2017. Year-over-year increases in spending on the ~~businesses most recently acquired, particularly Cepheid, as well as continued investments in~~Company’s new product development ~~initiatives.~~initiatives corresponded to the increase in sales.

NONOPERATING INCOME (EXPENSE)

~~The Company received $265 million of cash proceeds from~~As described in Note 1 and Note 8 to the ~~sale of marketable equity securities during~~accompanying Condensed Consolidated Financial Statements, in the first quarter of ~~2016. The Company recorded a pretax gain related to this sale of $223 million ($140 million after-tax or $0.20 per diluted share) during the nine-month period ended September 30, 2016.~~

~~In the third quarter of 2016,~~2018, the Company ~~redeemed approximately $1.9 billion~~adopted ASU No. 2017-07, Compensation—Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. The ASU requires the Company to disaggregate the service cost component from the other components of net periodic benefit costs and requires the Company to present the other components of net periodic benefit cost in ~~aggregate principal amount~~other income, net. The ASU also requires application on a retrospective basis. The

other components of ~~outstanding indebtedness and paid an aggregate of $188 million~~net periodic benefit costs included in ~~make-whole premiums in connection with those redemptions, plus accrued and unpaid interest. The payment of these make-whole premiums,~~other income, net of certain deferred gains of $9 million, are reflected as a loss on early extinguishment of borrowings in the accompanying Consolidated Condensed Statement of Earnings of $179 million ($112 million after-tax or $0.16 per diluted share) infor the three and nine-month periods ended September ~~30, 2016.~~28, 2018 were $9 million and $25 million, respectively, compared to $8 million and $22 million for the three and nine-month periods ended September 29, 2017, respectively.

INTEREST COSTS AND FINANCING

For a discussion of the Company’s outstanding indebtedness, refer to Note 67 to the accompanying Consolidated Condensed Financial Statements.

Interest expense of ~~$40~~$41 million and ~~$121~~$124 million for the three and nine-month periods ended September ~~29, 2017,~~28, 2018, was higher by $1 million and $3 million, respectively, ~~was $4 million lower and $31 million lower~~ than the comparable periods of ~~2016, respectively,~~2017, due primarily to ~~the decrease in~~higher average interest ~~costs as a result of the early extinguishment of certain~~rates on outstanding borrowings during 2018 as compared with the average interest rates in ~~the third quarter of 2016 using the proceeds from the Fortive Distribution,~~2017, partially offset by lower average outstanding U.S. commercial paper borrowings in 2018 compared to 2017. For the ~~cost~~three-month period ended September 28, 2018, the impact of ~~additional borrowings incurred~~foreign currency exchange rates had a negligible impact on interest expense. For the nine-month period ended September 28, 2018, the impact of foreign currency exchange rates also contributed to ~~finance~~ the ~~acquisition of Cepheid~~higher interest expense in ~~November 2016 and additional long-term debt refinancing~~2018 compared to the comparable period in 2017.

INCOME TAXES

The following table summarizes the Company’s effective tax rate from continuing ~~operations~~operations:



	Three-Month Period Ended				Nine-Month Period Ended
	September 28, 2018		September 29, 2017		September 28, 2018		September 29, 2017
Effective tax rate from continuing operations	17.2	%	21.6	%	19.0	%	17.7	%

The effective tax rate for 2018 includes the benefit of a lower U.S. corporate income tax rate of 21.0% from the enactment of the Tax Cuts and Jobs Act (“TCJA”), partially offset by a new minimum tax on certain non-U.S. earnings. In addition, the Company’s effective tax rate benefits from the impact of earnings outside the United States which overall are taxed at rates lower than the U.S. federal rate. The effective tax rate for the ~~three and nine-month periods~~three-month period ended September ~~29, 2017 was 21.6%~~28, 2018 includes net tax benefits of $23 million ($0.03 per diluted share) related primarily to the release of valuation allowances associated with certain foreign operating losses and ~~17.7%, respectively, as compared to 15.5% and 26.6%~~excess tax benefits from stock-based compensation, which in aggregate reduced the reported tax rate by 2.9%. The effective tax rate for the ~~three and~~ nine-month ~~periods~~period ended September ~~30, 2016, respectively.~~28, 2018 also includes these benefits, in addition to net tax benefits of $9 million ($0.01 per diluted share) recorded in the second quarter of 2018 related to the release of reserves upon the expiration of statutes of limitation and excess tax benefits from stock-based compensation, which were partially offset by increases in estimates associated with prior period uncertain tax positions.

On December 22, 2017, the TCJA was enacted, substantially changing the U.S. tax system and affecting the Company in a number of ways. Notably, the TCJA:

establishes a flat corporate income tax rate of 21.0% on U.S. earnings;

imposes a one-time tax on unremitted cumulative non-U.S. earnings of foreign subsidiaries (“Transition Tax”);

subjects certain payments made by a U.S. company to a related foreign company to certain minimum taxes (Base Erosion Anti-Abuse Tax);

allows the cost of investments in certain depreciable assets acquired and placed in service after September 27, 2017 to be immediately expensed; and

reduces deductions with respect to certain compensation paid to specified executive officers.

The Company also continues to evaluate the impact of the GILTI provisions under the TCJA which ~~lowered~~are complex and subject to continuing regulatory interpretation by the ~~effective~~IRS. The Company is required to make an accounting policy election of either (1) treating taxes due on future U.S. inclusions in taxable income related to GILTI as a current period expense when incurred (the “period cost method”) or (2) factoring such amounts into the Company’s measurement of its deferred taxes (the “deferred method”). The Company’s accounting policy election with respect to the new GILTI Tax rules will depend, in part, on analyzing its global income to determine whether it can reasonably estimate the tax ~~rate by 6.0% and 1.0%, respectively. The~~impact. While the Company has included an estimate of GILTI in its estimated effective tax rate for ~~the nine-month periods ended September 30, 2016 also includes charges~~2018, it has not completed its analysis and has not determined which method to elect. Adjustments related to the ~~repatriation~~amount of ~~earnings and legal entity realignments associated with the Separation and higher tax rate~~GILTI Tax recorded in its Consolidated Condensed Financial Statements may be required based on the ~~gain from sale~~outcome of ~~marketable equity securities which in aggregate increased the effective tax rate by 6.6%.~~this election.

The Company conducts business globally, and files numerous consolidated and separate income tax returns in federal, state and foreign jurisdictions. The non-U.S. countries in which the Company has a significant presence ~~that have significantly lower statutory tax rates than the United States~~ include China, Denmark, Germany, Singapore, Switzerland and the United Kingdom. The Company’s ability to obtain tax benefits from lower statutory tax rates outside the United States is dependent on its levels of taxable income in these foreign countries and the amount of foreign earnings which are indefinitely reinvested in those countries. The Company believes that a change in the statutory tax rate of any individual foreign country would not have a material effect on the Company’s financial statements given the ~~geographic~~geographical dispersion of the Company’s taxable income.

The Company and its subsidiaries are routinely examined by various domestic and international taxing authorities. The ~~U.S. Internal Revenue Service (“IRS”)~~IRS has completed the examinations of substantially all of the Company’s federal income tax returns through 2011 and is currently examining certain of the Company’s federal income tax returns for 2012 through 2015. In addition, the Company has subsidiaries in Austria, Belgium, Canada, China, Denmark, Finland, France, ~~Finland,~~ Germany, Hong Kong, India, Italy, Japan, ~~Singapore,~~New Zealand, Sweden, Switzerland and the United Kingdom and various other countries, states and provinces that are currently under audit for years ranging from 2004 through ~~2015.~~2016.

receiving an assessment for years 2010-2012 totaling approximately DKK ~~874~~939 million including interest through September ~~29, 2017~~28, 2018 (approximately ~~$139~~$146 million based on the exchange rate as of September ~~29, 2017)~~28, 2018). Management believes the positions the Company has taken in Denmark are in accordance with the relevant tax laws and is vigorously defending its positions. The Company appealed these assessments to the National Tax Tribunal in 2014 and intends on pursuing this matter through the European Court of Justice should this appeal be unsuccessful. The ultimate resolution of this matter is uncertain, could take many years, and could result in a material adverse impact to the Company’s consolidated financial statements, including its effective tax rate.

The Company’s effective tax rate for the nine-month period ended September 28, 2018 was 19.0%, which included discrete tax adjustments that reduced the effective tax rate by 1.3%. The Company expects its effective tax rate ~~related to continuing operations~~ for the ~~remainder~~fourth quarter of ~~2017~~2018 to be approximately ~~21% based on its projected mix of earnings, although the actual~~20.0%. The Company’s effective tax rate could vary ~~from the anticipated rate~~ as a result of many factors, including but not limited to the following:

The expected rate for the remainder of ~~2017~~2018 includes the anticipated discrete income tax benefits from excess tax deductions related to the Company’s stock compensation programs, which are ~~now~~ reflected as a reduction in tax expense, ~~(refer to Note 1 to the accompanying Consolidated Condensed Financial Statements for additional information related to this change in accounting guidance),~~ though the actual benefits (if any) will depend on the Company’s stock price and stock option exercise patterns.

The actual mix of earnings by jurisdiction could fluctuate from the Company’s projection.

The tax effects of other discrete items, including accruals related to tax contingencies, the resolution of worldwide tax matters, tax audit settlements, statute of limitations expirations and changes in tax ~~regulations, are reflected in the period in which they occur.~~regulations.

Any future legislative changes or potential tax reform, in the ~~United States or other jurisdictions~~impact of future regulations and guidance implementing the TCJA and any related additional tax planning efforts to address these changes.

As a result of the uncertainty in predicting these items, it is reasonably possible that the actual effective tax rate used for financial reporting purposes will change in future periods.

COMPREHENSIVE INCOME

For the ~~three-month period~~three and nine-month periods ended September ~~29, 2017,~~28, 2018, comprehensive income ~~increased $154~~decreased $328 million and approximately $1.1 billion, respectively, as compared to the comparable ~~period~~periods of ~~2016,~~2017. These declines were primarily due to ~~an increase in net earnings in~~ the three-month period partially offset by a smaller impact from foreign currency translation adjustments. In the nine-month period ended September 29, 2017, comprehensive income increased $490 million as compared to the comparable period of 2016, due to an increased gainlosses from foreign currency translation adjustments in both the three and nine-month periods ended September 28, 2018 as compared to the ~~gain~~gains from foreign currency translation adjustments realized in ~~2016 and~~ the ~~change in the unrealized gains on the available-for-sale securities,~~comparable periods of 2017, partially offset by ~~lower~~higher net earnings in both the three and nine-month ~~period of 2017 associated with the spin-off of Fortive in July 2016.~~periods ended September 28, 2018. For the three and nine-month periods ended September ~~29, 2017,~~28, 2018, the Company recorded a foreign currency translation loss of $162 million and $509 million, respectively, as compared to a foreign currency translation gain of $260 million and $839 million ~~respectively, as compared to a translation gain of $276 million and $315 million~~ for the three and nine-month periods ended September ~~30, 2016,~~29, 2017, respectively.

INFLATION

The effect of inflation on the Company’s revenues and net earnings was not significant in the three and nine-month periods ended September ~~29, 2017.~~28, 2018.

LIQUIDITY AND CAPITAL RESOURCES

Management assesses the Company’s liquidity in terms of its ability to generate cash to fund its operating, investing and financing activities. The Company continues to generate substantial cash from operating activities and ~~believes~~forecasts that its operating cash flow and other sources of liquidity will be sufficient to allow it to continue investing in existing businesses, consummating strategic acquisitions and investments, paying interest and servicing debt and managing its capital structure on a short and long-term basis.

Following is an overview of the Company’s cash flows and liquidity ~~for the nine-month period ended September 29, 2017:~~($ in millions):

Overview of Cash Flows and Liquidity


	Nine-Month Period Ended						Nine-Month Period Ended
($ in millions)	September 29, 2017			September 30, 2016			September 28, 2018			September 29, 2017
Total operating cash flows provided by continuing operations	$	2,643.1		$	2,438.5		$	2,784.4		$	2,643.1

Cash paid for acquisitions	$	(112.0	)	$	(99.6	)	$	(2,173.3	)	$	(112.0	)
Payments for additions to property, plant and equipment	(445.8		)	(422.1		)	(441.3		)	(445.8		)
Proceeds from sales of property, plant and equipment	32.3			7.2			1.6			32.3
Proceeds from sale of investments	—			264.8			22.1			—
All other investing activities	(2.4		)	—			(61.1		)	(2.4		)
Total investing cash used in discontinued operations	—			(69.8		)
Net cash used in investing activities	$	(527.9	)	$	(319.5	)
Net operating cash used in investing activities							$	(2,652.0	)	$	(527.9	)

Proceeds from the issuance of common stock	$	49.0		$	156.6		$	77.3		$	49.0
Payment of dividends	(281.0		)	(313.3		)	(321.2		)	(281.0		)
Make-whole premiums to redeem borrowings prior to maturity	—			(188.1		)
Payment for purchase of noncontrolling interests	(64.4		)	—			—			(64.4		)
Net repayments of borrowings (maturities of 90 days or less)	(3,319.1		)	(2,334.2		)
Net proceeds from (repayments of) borrowings (maturities of 90 days or less)							882.1			(3,319.1		)
Proceeds from borrowings (maturities longer than 90 days)	1,684.0			3,240.9			—			1,684.0
Repayments of borrowings (maturities longer than 90 days)	(562.4		)	(2,354.2		)	(503.9		)	(562.4		)
All other financing activities	(50.7		)	(26.7		)	(16.6		)	(50.7		)
Cash distributions to Fortive, net	—			(485.3		)
Net cash used in financing activities	$	(2,544.6	)	$	(2,304.3	)
Net operating cash provided by (used in) financing activities							$	117.7		$	(2,544.6	)

Operating cash flows from continuing operations increased ~~$205~~$141 million, or approximately 8%5%, during the first nine months of ~~2017~~2018 as compared to the first nine months of ~~2016,~~2017, primarily due to higher earnings and slightly lower cash used for funding trade accounts receivable, inventories and accounts payable during the period compared to the prior year, partially offset by increased cash used for payments for income ~~tax and~~taxes, certain employee ~~benefit payments~~related benefits and accrued expenses compared to the prior ~~years.~~year.

~~The Company used cash generated from operations as well as~~On March 23, 2018, Danaher entered into the ~~proceeds from the long-term borrowings noted below to reduce net outstanding borrowings with maturities~~$1.0 billion 364-Day Facility which provides liquidity support for an expansion of ~~90 days or less, primarily~~Danaher’s U.S. and euro-denominated commercial paper ~~borrowings, by approximately $3.3 billion.~~

~~In May 2017, the Company received net~~programs and for general corporate purposes. Danaher used proceeds ~~after offering expenses, of approximately ¥83.6 billion (approximately $744 million based on currency exchange rates as of the date of the pricing of the notes)~~ from the issuance of ~~yen-denominated notes (refer~~U.S. dollar and euro-denominated commercial paper to ~~Note 6~~fund a portion of the ~~accompanying Consolidated Condensed Financial Statements),~~purchase price for the acquisition of IDT in April 2018.

The Company repaid the $500 million of 2018 U.S. Notes (plus accrued interest) upon their maturity in September 2018 using available cash and ~~used the net~~ proceeds ~~from the offering to repay commercial paper borrowings.~~

In June 2017, the Company received net proceeds, after underwriting discounts and commissions and offering expenses, of approximately €843 million (approximately $940 million based on currency exchange rates as of the date of the pricing of the notes) from the issuance of euro-denominated notes (refer to Note 6 of the accompanying Consolidated Condensed Financial Statements) and used the net proceeds from the offering to repay the €500 million floating rate senior unsecured notes which matured on June 30, 2017 as well as to repay commercial ~~paper borrowings.~~paper.

As of September ~~29, 2017,~~28, 2018, the Company held ~~$649~~$776 million of cash and cash equivalents.

Operating Activities

Cash flows from operating activities can fluctuate significantly from period-to-period as working capital needs and the timing of payments for income taxes, restructuring activities, pension funding and other items impact reported cash flows.

Operating cash flows from continuing operations were approximately ~~$2.6~~$2.8 billion for the first nine months of ~~2017,~~2018, an increase of ~~$205~~$141 million, or approximately 8%5%, as compared to the comparable period of ~~2016.~~2017. The year-over-year change in operating cash flows from ~~2016~~2017 to ~~2017~~2018 was primarily attributable to the following factors:

~~2017~~2018 operating cash flows reflected an increase of $291 million in net earnings from continuing operations for the first nine months of ~~2017~~2018 as compared to the comparable period in 2016. The increase in net earnings from continuing operations was partially offset by the net impact of the gain from the sale of marketable equity securities and the loss on early extinguishment of borrowings in 2016. The cash flow impact of the gain from the sale of marketable equity securities is reflected in the investing activities section of the accompanying Consolidated Condensed Statement of Cash Flows, and the cash flow impact of the loss on early extinguishment of borrowings is reflected in the financing activities section of the Consolidated Condensed Statement of Cash Flows, and therefore, do not contribute to operating cash flows.2017.

Net earnings from continuing operations for the first nine months of ~~2017~~2018 reflected an increase of ~~$98~~$57 million of depreciation and amortization expense as compared to the comparable period of ~~2016.~~2017. Amortization expense primarily relates to the amortization of intangible assets acquired in connection with acquisitions and increased due to ~~the impact of~~

recently acquired ~~businesses, particularly Cepheid.~~businesses. Depreciation expense relates to both the Company’s manufacturing and operating facilities as well as instrumentation leased to customers under operating-type lease arrangements and increased due primarily to the impact of ~~recently acquired businesses, particularly Cepheid.~~increased capital expenditures. Depreciation and amortization are noncash expenses that decrease earnings without a corresponding impact to operating cash flows.

The aggregate of trade accounts receivable, inventories and trade accounts payable used ~~$72~~$55 million in operating cash flows during the first nine months of ~~2017,~~2018, compared to ~~$271~~$72 million of operating cash flows used in the comparable period of ~~2016.~~2017. The amount of cash flow generated from or used by the aggregate of trade accounts receivable, inventories and trade accounts payable depends upon how effectively the Company manages the cash conversion cycle, which effectively represents the number of days that elapse from the day it pays for the purchase of raw materials and components to the collection of cash from its customers and can be significantly impacted by the timing of collections and payments in a period.

The aggregate of prepaid expenses and other assets and accrued expenses and other liabilities ~~provided $28~~used $153 million of operating cash flows during the first nine months of ~~2017,~~2018, compared to ~~$429~~$28 million of operating cash flows provided in the comparable period of ~~2016.~~2017. This use of operational cash flow in the first nine months of ~~2017~~2018 resulted primarily from the timing of cash payments for income taxes, ~~compared to the timing of recording the related income tax provisions,~~ various employee-related liabilities, ~~and~~ customer funding and accrued expenses during the first nine months of ~~2017~~2018 compared to the comparable period of ~~2016.~~2017.

Investing Activities

Cash flows relating to investing activities consist primarily of cash used for acquisitions and capital expenditures, including instruments leased to customers, cash used for investments and cash proceeds from divestitures of businesses or assets.

Net cash used in investing activities from continuing operations was ~~$528 million~~approximately $2.7 billion during the first nine months of ~~2017~~2018 compared to ~~$250~~$528 million of cash used in the first nine months of ~~2016.~~2017. For a discussion of the Company’s acquisitions during the first nine months of ~~2017~~2018 refer to “—Overview” ~~and for a discussion of the Company’s 2016 sale of marketable equity securities refer to “—Results of Operations—Nonoperating Income (Expense)”~~.

Capital expenditures are made primarily for increasing capacity, replacing equipment, supporting new product development, improving information technology systems and the manufacture of instruments that are used in operating-type lease arrangements that certain of the Company’s businesses enter into with customers. Capital expenditures ~~increased $24~~decreased $5 million on a year-over-year basis for the first nine months of ~~2017~~2018 compared to ~~2016~~2017 due to ~~increased~~decreased investment in construction of new facilities, partially offset by increases in investments in ~~other operating assets, particularly new facilities and~~ operating assets at newly acquired ~~businesses.~~businesses such as IDT. For the full year ~~2017,~~2018, the Company ~~expects~~forecasts capital spending to be approximately $675 million, though actual expenditures will ultimately depend on business conditions.

~~Capital disposals in~~During the first nine months of ~~2017 were primarily~~2018, the Company received cash proceeds of $22 million from the collection of short-term other receivables related to the sale of ~~a building.~~certain marketable equity securities during 2017.

Financing Activities and Indebtedness

Cash flows relating to financing activities consist primarily of cash flows associated with the issuance and repayments of commercial paper and other debt, issuance and repurchases of common stock and payments of cash dividends to shareholders.

Financing activities from continuing operations ~~used~~provided cash of ~~approximately $2.5 billion~~$118 million during the first nine months of ~~2017~~2018 compared to approximately ~~$1.8~~$2.5 billion of cash used in the comparable period of ~~2016.~~2017. The year-over-year increase in cash ~~used in~~provided by financing activities was due primarily to higher net ~~repayments of~~proceeds from commercial paper borrowings in 2018, as the Company issued commercial paper to pay for a portion of the acquisition price of IDT in April 2018. Additionally, despite the repayment of the $500 million of 2018 U.S. Notes upon their maturity in September 2018, long-term debt repayments were lower in the first nine months of 2018 as compared to the comparable period in 2017 ~~as well as~~which contributed to the cash provided by financing activities. Both of these factors were partially offset by lower proceeds from the issuance of long-term notes in the ~~Yen Notes and the Euronotes in 2017~~first nine months of 2018 as compared to the ~~proceeds from the issuance of debt (primarily related to Fortive) in the~~ comparable period of ~~2016.~~2017. In addition, the Company paid $64 million to a noncontrolling interest holder in the first quarter of 2017 which contributed to the use of cash from financing activities in the prior period.

For a description of the Company’s outstanding debt as of September ~~29, 2017,~~28, 2018, the debt issued and debt repaid during the nine-month period ended September ~~29, 2017~~28, 2018 and the Company’s commercial paper programs and credit facilities, refer to Note 67 to the accompanying Consolidated Condensed Financial Statements. As of September ~~29, 2017,~~28, 2018, the Company was in compliance with all of its debt covenants.

for the commercial paper programs is generally provided by the Company’s $4.0 billion unsecured, multi-year revolving credit facility with a syndicate of banks that expires on July 10, 2020 (the “Credit Facility”), which can also be used for working capital and other general corporate purposes. In October 2016, the Company expanded its borrowing capacity by entering into a $3.0 billion 364-day unsecured revolving credit facility with a syndicate of banks that expires on October 23, 2017 (the “364-Day Facility” and together with the Credit Facility ~~the “Credit Facilities”), to provide additional liquidity support for issuances under the Company’s U.S. dollar~~ and ~~euro-denominated commercial paper programs.~~

Effective April 21, 2017, the Company reduced the commitment amount under the 364-Day Facility from $3.0 billion to $2.3 billion, and effective June 23, 2017, the Company further reduced the commitment amount under the facility to $1.0 billion ~~as permitted by the facility.~~ 364-Day Facility.

As of September ~~29, 2017,~~28, 2018, Danaher had the ability to incur ~~approximately~~ an additional ~~$2.1~~approximately $1.7 billion of indebtedness in direct borrowings under the Credit ~~Facilities~~Facility, 364-Day Facility or under outstanding commercial paper facilities (based on aggregate amounts available under the Credit ~~Facilities~~Facility and 364-Day Facility that were not being used to backstop outstanding commercial paper balances). ~~Effective October 23, 2017, Danaher’s ability to incur additional indebtedness will be reduced to approximately $1.1 billion due to the expiration of the 364-Day Facility noted above.~~

Stock Repurchase Program

~~Neither the Company nor any “affiliated purchaser” repurchased any shares of Company common stock during the nine-month period ended September 29, 2017. On July 16, 2013,~~For information regarding the Company’s ~~Board~~stock repurchase program, please see Part II—Item 2, “Unregistered Sales of ~~Directors approved the Repurchase Program authorizing the repurchase~~Equity Securities and Use of ~~up to 20 million shares of the Company’s common stock from time to time on the open market or~~Proceeds,” in privately negotiated transactions. There is no expiration date for the Repurchase Program, and the timing and amount of any shares repurchased under the program will be determined by the Company’s management based on its evaluation of market conditions and other factors. The Repurchase Program may be suspended or discontinued at any time. Any repurchased shares will be available for use in connection with the Company’s equity compensation plans (or any successor plan) and for other corporate purposes. As of September 29, 2017, 20 million shares remained available for repurchase pursuant to the Repurchase Program. The Company expects to fund any future stock repurchases using the Company’s available cash balances or proceeds from the issuance of debt.this Form 10-Q.

Dividends

Aggregate cash payments for dividends during the first nine months of ~~2017~~2018 were ~~$281~~$321 million. ~~This is lower than in~~The increase over the comparable period of ~~2016, as~~2017 results from increases in the ~~Company decreased the per share amount of its~~ quarterly dividend rate effective with respect to the dividend paid in the ~~third~~second quarter of ~~2016 as a result~~2017 and with respect to the dividend paid in the second quarter of ~~the Fortive Separation.~~2018.

In the third quarter of ~~2017,~~2018, the Company declared a regular quarterly dividend of ~~$0.14~~$0.16 per share payable on October ~~27, 2017~~26, 2018 to holders of record on September ~~29,~~28, 2018, reflecting a 14% increase in the per share amount of the Company’s quarterly dividend compared to the third quarter of 2017.

Cash and Cash Requirements

As of September ~~29, 2017,~~28, 2018, the Company held ~~$649~~$776 million of cash and cash equivalents that were held on deposit with financial institutions or invested in highly liquid investment-grade debt instruments with a maturity of 90 days or less with an approximate weighted average annual interest rate of ~~1.1%~~1.3%. Of this amount, ~~$22~~$61 million was held within the United States and

~~$627~~ $715 million was held outside of the United States. The Company will continue to have cash requirements to support working capital needs, capital expenditures and acquisitions, pay interest and service debt, pay taxes and any related interest or penalties, fund its restructuring activities and pension plans as required, pay dividends to shareholders, repurchase shares of the Company’s common stock and support other business needs.

The Company generally intends to use available cash and internally generated funds to meet these cash requirements, but in the event that additional liquidity is required, particularly in connection with acquisitions, the Company may also borrow under its commercial paper programs or the credit facilities, enter into new credit facilities and either borrow directly thereunder or use such credit facilities to backstop additional borrowing capacity under its commercial paper programs and/or access the capital markets. The Company also may from time to time access the capital markets to take advantage of favorable interest rate environments or other market conditions. With respect to the Company’s commercial paper ~~notes and bonds~~ scheduled to mature during the remainder of ~~2017,~~2018, the Company expects to repay the principal amounts when due using available cash, proceeds from the issuance of commercial paper and/or proceeds from other debt issuances.

While repatriation of some cash held outside the United States may be restricted by local laws, most of the Company’s foreign cash ~~balances~~ could be repatriated to the United ~~States but, under current law, would be subject to U.S. federal income taxes, less applicable foreign tax credits. For most~~States. Following enactment of ~~its foreign subsidiaries,~~ the ~~Company makes an election regarding~~TCJA and the ~~amount~~associated Transition Tax, in general, repatriation of ~~earnings intended for indefinite reinvestment, with the balance available to be repatriated~~cash to the United ~~States. The Company has recorded a deferred tax liability for the funds that are available to~~States can be ~~repatriated to the United States. No provisions for~~completed with no incremental U.S. ~~income taxes have been made with respect to earnings that are planned to be reinvested indefinitely outside the United States, and the amount~~tax; however, repatriation of ~~U.S. income taxes that may be applicable to such earnings is not readily determinable given the various tax planning alternatives~~cash could subject the Company ~~could employ if it repatriated these earnings.~~to non-U.S. jurisdictional taxes on distributions. The cash that the Company’s ~~foreign~~non-U.S. subsidiaries hold for indefinite reinvestment is generally used to finance foreign operations and investments, including acquisitions. The income taxes, if any, applicable to such earnings including basis differences in our foreign subsidiaries are not readily determinable. The Company continues to evaluate the impact of the TCJA on its election to indefinitely reinvest certain of its non-U.S. earnings. As of September ~~29, 2017,~~28, 2018, management believes that it has sufficient liquidity to satisfy its cash needs, including its cash needs in the United States.

upon, among other things, legal requirements, underlying asset returns, the plan’s funded status, the anticipated tax deductibility of the contribution, local practices, market conditions, interest rates and other factors.

CRITICAL ACCOUNTING ESTIMATES

Except as set forth below in connection with the adoption of ASC 606, there have been no changes to the Company’s critical accounting estimates described in the Annual Report on Form 10-K for the year ended December 31, 2017 that have a material impact on the Company’s Consolidated Condensed Financial Statements and the related Notes.

Revenue Recognition—The Company derives revenues from the sale of products and services. Refer to Note 1 to the accompanying Consolidated Condensed Financial Statements for a description of the Company’s revenue recognition policies.

Although most of the Company’s sales agreements contain standard terms and conditions, certain agreements contain multiple products or services or nonstandard terms and conditions. As a result, judgment is sometimes required to determine the appropriate accounting, including whether the products or services specified in these agreements should be treated as separate units of accounting for revenue recognition purposes, and, if so, how the consideration should be allocated among the distinct products or services and when to recognize revenue for each element. The Company allocates the contract’s transaction price at inception of the contract to each performance obligation on a relative standalone selling price basis using the Company’s best estimate of the standalone selling price of each distinct product or service in the contract. The Company’s estimate of standalone selling price impacts the amount and timing of revenue recognized in arrangements with multiple products or services. The Company also enters into lease arrangements with customers, which requires the Company to determine whether the arrangements are operating or sales-type leases. Certain of the Company’s lease contracts are customized for larger customers and often result in complex terms and conditions that typically require significant judgment in applying the lease accounting criteria.

If the Company’s judgments regarding revenue recognition prove incorrect, the Company’s reported revenues in particular periods may be adversely affected.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Quantitative and qualitative disclosures about market risk appear in “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Financial Instruments and Risk Management,” in the Company’s ~~2016~~2017 Annual Report. There were no material changes during the quarter ended September ~~29, 2017~~28, 2018 to this information reported in the Company’s ~~2016~~2017 Annual Report.

ITEM 4. CONTROLS AND PROCEDURES

The Company’s management, with the participation of the Company’s President and Chief Executive Officer, and Executive Vice President and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report. Based on such evaluation, the Company’s President and Chief Executive Officer, and Executive Vice President and Chief Financial Officer, have concluded that, as of the end of such period, the Company’s disclosure controls and procedures were effective.

There have been no changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the Company’s most recent completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

In September 2016, the U.S. Environmental Protection Agency (“EPA”) issued a Notice of Violation to the Richmond, Illinois facility of Leica Biosystems Richmond, Inc. (“Leica Biosystems”), an indirect subsidiary of the Company, alleging that the facility violated certain provisions of the Clean Air Act and related regulations pertaining to permitting requirements, emissions limitations and the installation and use of proper controls. In July 2018, Leica Biosystems and the EPA executed an agency administrative settlement whereby all of Leica Biosystems’ alleged violations were settled for a payment of approximately $175 thousand and certain injunctive relief.

For additional information regarding legal proceedings, refer to the section titled “Legal Proceedings” in MD&A in the 2017 Consolidated Financial Statements.

ITEM 1A. RISK FACTORS

Information regarding risk factors can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Information Related to Forward-Looking Statements,” in Part I—Item 2 of this Form 10-Q and in Part I—Item 1A of Danaher’s ~~2016~~2017 Annual Report. There were no material changes during the quarter ended September ~~29, 2017~~28, 2018 to the risk factors reported in the Company’s ~~2016~~2017 Annual Report.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Neither the Company nor any “affiliated purchaser” repurchased any shares of Company common stock during the nine-month period ended September ~~29, 2017.~~28, 2018. 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. There is no expiration date for the Repurchase Program, and the timing and amount of any shares repurchased under the program will be determined by the Company’s management based on its evaluation of market conditions and other factors. The Repurchase Program may be suspended or discontinued at any time. Any repurchased shares will be available for use in connection with the Company’s equity compensation plans (or any successor plans) and for other corporate purposes. As of September ~~29, 2017,~~28, 2018, 20 million shares remained available for repurchase pursuant to the Repurchase Program. The Company expects to fund any future stock repurchases using the Company’s available cash balances or proceeds from the issuance of debt.

During the third quarter of ~~2017, holders of certain of the Company’s~~2018, there were no Liquid Yield Option Notes due 2021 ~~(“LYONs”)~~ converted ~~such LYONs~~ into ~~an aggregate of 24 thousand~~ shares of Danaher common stock, par value $0.01 per share. In each case, the shares of common stock were issued solely to existing security holders upon conversion of the LYONs pursuant to the exemption from registration provided under Section 3(a)(9) of the Securities Act of 1933, as amended.stock.

ITEM 6. EXHIBITS


(a)	Exhibits:



3.1		Restated Certificate of Incorporation of Danaher Corporation (incorporated by reference from Exhibit 3.1 to Danaher Corporation’s Quarterly Report on Form 10-Q for the quarter ended June 29, 2012 (Commission File Number: 1-8089))

3.2		Amended and Restated By-laws of Danaher Corporation (incorporated by reference from Exhibit 3.2 to Danaher Corporation’s Current Report on Form 8-K filed December 6, 2016 (Commission File Number: 1-8089))

10.1		Danaher Corporation and Subsidiaries Amended and Restated Executive Deferred Incentive Program

10.2		Danaher Corporation Excess Contribution Program, a sub-plan under the 2007 Omnibus Incentive Plan, as amended and restated

10.3		Danaher Corporation Deferred Compensation Plan

11.1		Computation of per-share earnings (See Note 13, “Net Earnings Per Share from Continuing Operations”, to the Consolidated Condensed Financial Statements)

12.1		Calculation of ratio of earnings to fixed charges

31.1		Certification of Chief Executive Officer Pursuant to Item 601(b)(31) of Regulation S-K, As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2		Certification of Chief Financial Officer Pursuant to Item 601(b)(31) of Regulation S-K, As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1		Certification of Chief Executive Officer, Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2		Certification of Chief Financial Officer, Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS		XBRL Instance Document **

101.SCH		XBRL Taxonomy Extension Schema Document **

101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document **

101.DEF		XBRL Taxonomy Extension Definition Linkbase Document **

101.LAB		XBRL Taxonomy Extension Label Linkbase Document **

101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document **

Attached as Exhibit 101 to this report are the following documents formatted in XBRL (Extensible Business Reporting Language): (i) Consolidated Condensed Balance Sheets as of September ~~29, 2017~~28, 2018 and December 31, ~~2016,~~2017, (ii) Consolidated Condensed Statements of Earnings for the three and nine-month periods ended September ~~29, 2017~~28, 2018 and September ~~30, 2016,~~29, 2017, (iii) Consolidated Condensed Statements of Comprehensive Income for the three and nine-month periods ended September ~~29, 2017~~28, 2018 and September ~~30, 2016,~~29, 2017, (iv) Consolidated Condensed Statement of Stockholders’ Equity for the nine-month period ended September ~~29, 2017,~~28, 2018, (v) Consolidated Condensed Statements of Cash Flows for the nine-month periods ended September ~~29, 2017~~28, 2018 and September ~~30, 2016,~~29, 2017, and (vi) Notes to Consolidated Condensed Financial Statements.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



		DANAHER CORPORATION

Date:	October ~~18, 2017~~17, 2018	By:	/s/ Daniel L. Comas
			Daniel L. Comas
			Executive Vice President and Chief Financial Officer

Date:	October ~~18, 2017~~17, 2018	By:	/s/ Robert S. Lutz
			Robert S. Lutz
			Senior Vice President and Chief Accounting Officer

4348



Balance, December 31, 2016	$	23,826.9
Attributable to 2017 acquisitions	73.2
Adjustments due to finalization of purchase price allocations	(71.3		)
Foreign currency translation and other	955.0
Balance, September 29, 2017	$	24,783.8



Cost of sales	$	20.7
Selling, general and administrative expenses	55.2
Total	$	75.9



Balance, December 31, 2016	$	75.8
Accruals for warranties issued during the period	36.0
Settlements made	(42.0		)
Additions due to acquisitions	1.3
Effect of foreign currency translation	3.4
Balance, September 29, 2017	$	74.5