DISCONTINUED OPERATIONS

Fortive Corporation Separation

On July 2, 2016 (the “Distribution Date”), Danaher completed the separation (the “Separation”) of Fortive Corporation (“Fortive”). For additional details on the Separation reference is made to the financial statements as of and for the year ended December 31, 2016 and Note 3 thereto included in the Company’s 2016 Annual Report. The accounting requirements for reporting the Separation of Fortive as a discontinued operation were met when the Separation was completed. Accordingly, the accompanying 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 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 income tax benefit related to discontinued operations.

The key components of income from discontinued operations for the three-month period ended September 30, 2016 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