Donaldson Provides Provisional Estimates of Impact from Tax Reform, Announces Second Quarter 2018 Earnings Webcast

MINNEAPOLIS–(BUSINESS WIRE)–Donaldson Company, Inc. (NYSE: DCI) today provided provisional estimates
of the impact from the Federal Tax Cuts and Jobs Act (“TCJA”) on its
fiscal 2018 results.

Donaldson expects its second quarter 2018 results will include the
following non-cash items:

• A provisional charge of approximately $110 million, or $0.83 per share,1
  related to the deemed repatriation of undistributed foreign earnings,
  to be paid over eight years.
• A provisional charge of approximately $2 million, or $0.02 per share,
  related to the re-measurement of Donaldson’s net deferred tax assets.

Additionally, the Company estimates the net impact from the TCJA will
lower the full-year 2018 effective tax rate by approximately 1
percentage point, reflecting a partial-year benefit from the U.S.
corporate tax rate reduction that is largely offset by a negative impact
from foreign withholding tax and other matters related to the TCJA.
Longer term, Donaldson expects an annual effective tax rate between 24
and 28 percent.

The provisional estimates of the impact from the TCJA are based on
currently available information and interpretation of its provisions.
Management believes these charges are a reasonable estimate, as of
February 7, 2018, that may change as additional required information is
prepared and analyzed, interpretations and assumptions are refined,
additional guidance is issued, and due to actions taken because of the
legislation. Donaldson expects to finalize the impact from the TCJA
during the financial close process for its fiscal year ended July 31,
2018.

Members of Donaldson’s management team will discuss the broader impacts
from tax reform, including the Company’s capital deployment priorities
and other business matters, during a webcast of its second quarter 2018
earnings conference call on March 6, 2018, at 9:00 a.m. CST.

Miscellaneous

Statements in this release regarding future events and expectations,
such as forecasts, plans, trends and projections relating to the
Company’s business and financial performance, are forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995, and are identified by words or phrases such as “will
likely result,” “are expected to,” “will continue,” “will allow,”
“estimate,” “project,” “believe,” “expect,” “anticipate,” “forecast,”
and similar expressions. These forward-looking statements speak only as
of the date such statements are made and are subject to risks and
uncertainties that could cause the Company’s results to differ
materially from these statements. These factors include, but are not
limited to, world economic and industrial market conditions; the
Company's ability to maintain certain competitive advantages over
competitors; pricing pressures; the Company's ability to protect and
enforce its intellectual property rights; the Company's dependence on
global operations; customer concentration in certain cyclical
industries; commodity availability and pricing; the Company’s ability to
develop new information technology systems and maintain and upgrade
existing systems; information security and data breaches; foreign
currency fluctuations; governmental laws and regulations; changes in tax
laws, regulations and results of examinations; the Company's ability to
attract and retain key personnel; changes in capital and credit markets;
execution of the Company's acquisition strategy; the possibility of
asset impairment; execution of restructuring plans; the Company's
ability to maintain an effective system of internal control over
financial reporting. These and other risks and uncertainties are
described in Item 1A of the Company’s Annual Report on Form 10-K for the
year ended July 31, 2017. The Company makes these statements as of the
date of this disclosure, and undertakes no obligation to update them
unless otherwise required by law.

About Donaldson Company

Founded in 1915, Donaldson Company is a global leader in the filtration
industry with sales, manufacturing and distribution locations around the
world. Donaldson’s innovative technologies are designed to solve complex
filtration challenges and enhance customers’ equipment performance. For
more information, visit www.Donaldson.com.

Contacts

Donaldson Company, Inc.
Brad Pogalz, 952-887-3753