Company: DHR
Filing Date: 2025-07-22
Form Type: 10-Q
Source: 0000313616-25-000153
Chunk: 117

Company: DANAHER CORP /DE/
Filing Date: 2025-07-22
Form: 10-Q
Item: Item 8
Chunk 117
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 China, Denmark, France, Germany, India, Italy, Switzerland, the United Kingdom and various other countries, states and provinces that are currently under audit for years ranging from 2004 through 2023.

In the fourth quarter of 2022, the IRS proposed significant adjustments to the Company’s taxable income for the years 2016 through 2018 with respect to the deferral of tax on certain premium income related to the Company’s self-insurance programs.  For income tax purposes, the recognition of premium income has been deferred in accordance with U.S. tax laws related to insurance.  The proposed adjustments would have increased the Company’s taxable income over the 2016 through 2018 periods by approximately $2.5 billion.  In the first quarter of 2023, the Company settled these proposed adjustments with the IRS, although the audit is still open with respect to other matters for the 2016 through 2018 period.  The impact of the settlement with respect to the Company’s self-insurance policies was not material to the Company’s financial statements, including cash flows and the effective tax rate.  As the settlement with the IRS was specific to the audit period, the settlement does not preclude the IRS from proposing similar adjustments to the Company’s self-insurance programs with respect to periods after 2018.  Management believes the positions the Company has taken in its U.S. tax returns are in accordance with the relevant tax laws.

On July 4, 2025, the OBBBA was enacted, which includes permanent extensions of most expiring Tax Cuts and Jobs Act provisions and international tax changes.  The Company is still evaluating the potential impacts of the OBBBA; however, the Company does not anticipate it will have a material impact on the Company’s financial statements.

The Company expects its effective tax rate for the remainder of 2025 to be approximately 17.0% based on its projected mix of earnings.  The Company’s effective tax rate could vary as a result of many factors, including but not limited to the following:

•The expected rate for the remainder of 2025 includes the anticipated discrete income tax benefits from excess tax deductions related to the Company’s stock compensation programs, which are reflected as a reduction in tax expense, 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