INCOME TAXES

9 Months Ended

Sep. 30, 2019



	Three Months								Nine Months
For the Periods Ended September 30	2019			2018			Change		2019			2018			Change
Income tax expense	$	34.1		$	25.9		31.7	%	$	73.1		$	42.4		72.4	%
Effective tax rate	22.3		%	18.9		%	340bp		22.1		%	13.1		%	900bp

The higher effective tax rate during the third quarter of 2019 was primarily due to the 2018 release of unrecognized tax benefits of $3.4 related to audit closures and tax benefits of $1.8 in 2018 from valuation allowance reversals on deferred tax assets. The higher effective tax rate during the year-to-date period was primarily due to tax benefits of $21.6 in 2018 from German valuation allowance reversals on deferred tax assets.

The Company operates in various tax jurisdictions and is subject to examination by tax authorities in these jurisdictions. The Company is currently under examination in several jurisdictions including the Czech Republic, Germany, Hong Kong, India, Italy, Japan, Mexico, the U.S. and Venezuela. The estimated tax liability calculation for unrecognized tax benefits considers uncertainties in the application of complex tax laws and regulations in various tax jurisdictions. Due to the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from the current estimate of the unrecognized tax benefit. Over the next 12 months, the net amount of the tax liability for unrecognized tax benefits in foreign and domestic jurisdictions could change by approximately $14 due to changes in audit status, expiration of statutes of limitations and other events. In addition, the settlement of any future examinations relating to the 2011 and prior tax years could result in changes in amounts attributable to the Company under its Tax Matters Agreement with Exelis Inc. and Xylem Inc. relating to the Company’s 2011 spin-off of those businesses.