Revenue (Notes)

9 Months Ended

Sep. 27, 2019

Revenue from Contract with Customer [Abstract]

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 27, 2019 and September 28, 2018 ($ in millions). Sales taxes and other usage-based taxes collected from customers are excluded from revenue.



	Life Sciences		Diagnostics		Dental / Envista		Environmental & Applied Solutions		Total
Three-month period ended September 27, 2019:
Geographical region:
North America	$	637.2	$	602.9	$	327.7	$	465.5	$	2,033.3
Western Europe	444.1		257.9		127.5		252.8		1,082.3
Other developed markets	149.2		108.4		45.6		32.5		335.7
High-growth markets ^(a)	465.1		632.7		158.5		329.7		1,586.0
Total	$	1,695.6	$	1,601.9	$	659.3	$	1,080.5	$	5,037.3

Revenue type:
Recurring	$	1,084.3	$	1,343.2	$	479.4	$	595.2	$	3,502.1
Nonrecurring	611.3		258.7		179.9		485.3		1,535.2
Total	$	1,695.6	$	1,601.9	$	659.3	$	1,080.5	$	5,037.3

Three-month period ended September 28, 2018:
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 ^(a)	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



	Life Sciences		Diagnostics		Dental / Envista		Environmental & Applied Solutions		Total
Nine-month period ended September 27, 2019:
Geographical region:
North America	$	1,878.1	$	1,836.3	$	966.4	$	1,403.0	$	6,083.8
Western Europe	1,363.7		828.5		443.7		774.1		3,410.0
Other developed markets	436.1		295.6		131.0		92.7		955.4
High-growth markets ^(a)	1,357.2		1,796.6		490.0		980.8		4,624.6
Total	$	5,035.1	$	4,757.0	$	2,031.1	$	3,250.6	$	15,073.8

Revenue type:
Recurring	$	3,264.4	$	4,047.9	$	1,489.3	$	1,770.2	$	10,571.8
Nonrecurring	1,770.7		709.1		541.8		1,480.4		4,502.0
Total	$	5,035.1	$	4,757.0	$	2,031.1	$	3,250.6	$	15,073.8

Nine-month period ended September 28, 2018:
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 ^(a)	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

^(a) 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 include 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 that are not high-growth markets.

The Company sells equipment to customers as well as consumables, spare parts, software licenses and services, some of which customers purchase on a recurring basis. In most of the Company’s businesses, consumables are typically critical to the use of the equipment and are typically 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, software-as-a-service, 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-month periods ended September 27, 2019 and September 28, 2018, revenue accounted for under ASC 842 and ASC 840 was $108 million and $115 million, respectively. For the nine-month periods ended September 27, 2019 and September 28, 2018, revenue accounted for under ASC 842 and ASC 840 was $321 million and $308 million, respectively.

Remaining performance obligations related to Topic 606, Revenue from Contracts with Customers (“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. As of September 27, 2019, the aggregate amount of the transaction price allocated to remaining performance obligations was approximately $2.0 billion. The Company expects to recognize revenue on

approximately 39% of the remaining performance obligations over the next 12 months, 25% over the subsequent 12 months, and the remainder thereafter.

The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled receivables (contract assets) and deferred revenue, customer deposits and billings in excess of revenue recognized (contract liabilities) on the Consolidated Condensed Balance Sheets. 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 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 Sheets. The balance of contract assets as of September 27, 2019 and December 31, 2018 were $77 million and $82 million, respectively.

The Company 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 Consolidated Condensed Balance Sheets based on the timing of when the Company expects to recognize revenue. As of September 27, 2019 and December 31, 2018, contract liabilities were $801 million and $799 million, respectively, and are included within accrued expenses and other liabilities and other long-term liabilities in the accompanying Consolidated Condensed Balance Sheets. Revenue recognized during the nine-month periods ended September 27, 2019 and September 28, 2018 that was included in the contract liability balance on December 31, 2018 and at the date of adoption of ASC 606 on January 1, 2018 was $544 million and $568 million, respectively. Contract assets and liabilities are reported on the accompanying Consolidated Condensed Balance Sheets on a contract-by-contract basis.