Income Taxes (Tables)

12 Months Ended

Dec. 31, 2017

Schedule of earnings before income taxes

Earnings before income taxes for the years ended December 31 were as follows ($ in millions):



	2017		2016		2015
United States	$	816.7	$	812.9	$	913.8
International	467.5		384.1		355.9
Total	$	1,284.2	$	1,197.0	$	1,269.7

Schedule of provision for income taxes

The provision for income taxes for the years ended December 31 were as follows ($ in millions):



	2017			2016			2015
Current:
Federal U.S.	$	215.9		$	227.4		$	310.8
Non-U.S.	88.7			74.6			54.3
State and local	13.3			32.7			32.8
Deferred:
Federal U.S.	(79.5		)	(4.6		)	(4.0		)
Non-U.S.	(2.2		)	(3.0		)	12.7
State and local	3.5			(2.4		)	(0.7		)
Income tax provision	$	239.7		$	324.7		$	405.9

Schedule of deferred tax assets and liabilities

Deferred income tax assets and liabilities as of December 31 were as follows ($ in millions):



	2017			2016
Deferred Tax Assets:
Allowance for doubtful accounts	$	22.0		$	28.5
Inventories	31.3			33.0
Pension benefits	41.2			49.1
Environmental and regulatory compliance	17.7			18.9
Other accruals and prepayments	35.2			44.2
Deferred service income	14.5			10.5
Warranty services	29.0			27.1
Stock compensation expense	36.4			31.7
Tax credit and loss carryforwards	61.4			74.0
Other	7.3			8.0
Valuation allowances	(27.7		)	(26.7		)
Total deferred tax assets	268.3			298.3
Deferred Tax Liabilities:
Property, plant and equipment	(79.9		)	(33.2		)
Insurance, including self-insurance	(138.7		)	(85.2		)
Goodwill and other intangibles	(607.6		)	(416.5		)
Other	(20.0		)	(10.0		)
Total deferred tax liabilities	(846.2		)	(544.9		)
Provisional estimate of the deferred tax asset revaluation	(54.5		)	—
Provisional estimate of the deferred tax liability revaluation	274.0			—
Net deferred tax liability	$	(358.4	)	$	(246.6	)

Schedule of effective income tax rate reconciliation

The effective income tax rate for the years ended December 31 varies from the U.S. statutory federal income tax rate as follows:



	Percentage of Pretax Earnings
	2017		2016		2015
Statutory federal income tax rate	35.0	%	35.0	%	35.0	%
Increase (decrease) in tax rate resulting from:
State income taxes (net of federal income tax benefit)	0.7	%	1.7	%	1.8	%
Foreign income taxed at lower rate than U.S. statutory rate	(5.0	)%	(4.7	)%	(4.6	)%
Separation related adjustments for final resolution of uncertain tax positions	—	%	(1.9	)%	—	%
Research and experimentation credits and federal domestic production deduction	(2.9	)%	(2.5	)%	(2.1	)%
Other	(3.6	)%	(0.5	)%	1.9	%
Effective income tax rate prior to the impact of the TCJA	24.2	%	27.1	%	32.0	%

Deferred Tax Revaluation	(16.0	)%	—	%	—	%
Transition Tax	10.5	%	—	%	—	%
Total provisional estimates related to the TCJA	(5.5	)%	—	%	—	%

Estimated effective income tax rate including provisional estimates of the TCJA	18.7	%	27.1	%	32.0	%

Schedule of unrecognized tax benefits

A reconciliation of the beginning and ending amount of unrecognized tax benefits, excluding amounts accrued for potential interest and penalties, is as follows ($ in millions):



	2017			2016			2015
Unrecognized tax benefits, beginning of year	$	28.6		$	169.9		$	167.2
Additions based on tax positions related to the current year	25.3			6.0			18.4
Additions for tax positions of prior years	7.8			0.4			9.7
Reductions for tax positions of prior years	(1.9		)	(1.2		)	(13.4		)
Lapse of statute of limitations	(3.3		)	(1.3		)	(5.5		)
Settlements	(0.6		)	(0.6		)	(1.5		)
Effect of foreign currency translation	1.9			(0.4		)	(5.0		)
Separation related adjustments ^(a)	1.2			(144.2		)	—
Unrecognized tax benefits, end of year	$	59.0		$	28.6		$	169.9

^(a) Unrecognized tax benefits were reduced by $144 million in 2016 related to positions taken prior to the Separation for which Danaher, as the Former Parent, is the primary obligor and is responsible for settlement and payment of the tax expenses.