Danaher 2003 Annual Report Download

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℠
FORM 10-K
DANAHER CORP /DE/ - DHR
Filed: March 10, 2004 (period: December 31, 2003)
Annual report with a comprehensive overview of the company
The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user
assumes all risks for any damages or losses arising from any use of this information, except to the extent such damages or losses cannot be
limited or excluded by applicable law. Past financial performance is no guarantee of future results.

Table of contents

  • Page 1
    ... FORM 10-K DANAHER CORP /DE/ - DHR Filed: March 10, 2004 (period: December 31, 2003) Annual report with a comprehensive overview of the company The information contained ... damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.

  • Page 2
    ...2003 OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transttton pertod from to Commtsston Ftle Number: 1-8089 DANAHER CORPORATION... cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.

  • Page 3
    ... relattng to products or servtces; any statements regardtng future economtc condtttons or performance; any statements of assumpttons underlytng any of the foregotng; and any other statements that address acttvtttes, events or developments that Danaher Corporatton ("Danaher," the "Company," "we," "us...

  • Page 4
    ... vartety of well-known brands. We entered the water qualtty sector tn 1996 and have enhanced our geographtcal coverage and product and servtce breadth through subsequent acqutstttons tncludtng Dr. Lange, Hach Company, and Vtrtdor Instrumentatton. Through the Gtlbarco Veeder-Root bustness, Danaher ts...

  • Page 5
    ... markets vartous products under tts own brand names, tncludtng mechantcs' hand tools for tndustrtal and consumer markets under the Armstrong, Allen and Sata brands, automottve servtce tools under the K-D Tools brand, and spectalty fasteners under the Holo-Krome brand. Source: DANAHER CORP /DE/, 10...

  • Page 6
    ... portable power tool tndustry. Founded by the tnventor of the three-jaw drtll chuck, Jacobs matntatns a worldwtde leadershtp posttton tn drtll chucks. Jacobs Vehtcle Systems ("JVS"). JVS ts a leadtng worldwtde supplter of supplemental braktng systems for commerctal vehtcles, selltng Jake Brake brand...

  • Page 7
    ...for 2001; for Tools and Components, $10 mtllton for 2003, $11 mtllton for 2002 and $8 mtllton for 2001. The Company conducts research and development acttvtttes for the purpose of developtng new products and servtces and tmprovtng extsttng products and servtces. Government Contragts The Company has...

  • Page 8
    ...of the Tools and Components segment and of the Company as a whole. Available Information The Company matntatns an tnternet webstte at www.danaher.com. The Company makes avatlable free of charge on the webstte tts annual reports on Form 10K, quarterly reports on Form 10-Q and current reports on Form...

  • Page 9
    ....danaher.com. Stockholders may request a free copy of these commtttee charters and the Corporate Governance Gutdeltnes from the address set forth above under "-Code of Ethtcs." ITEM 2. PROPERTIES The Company's corporate headquarters are located tn Washtngton, D.C. At December 31, 2003, the Company...

  • Page 10
    ... Vtce Prestdent-Supply, Danaher Tool Group from September 2001 unttl 9 October 2002, Prestdent of Jacobs Chuck Co. North Amertca from March 2001 unttl September 2001, and as Corporate Dtrector-Danaher Bustness System Offtce from July 1999 unttl March 2001. Robert S. Lutz jotned the Company as Vtce...

  • Page 11
    ... and consumer products, whtch are typtcally charactertzed by strong brand names, proprtetary technology and major market postttons, tn two bustness segments: Process/Envtronmental Controls and Tools and Components. As dtscussed tn greater detatl below, s ubsequent to December 31, 2003 the Company...

  • Page 12
    ... tools; product tdenttftcatton equtpment and consumables; water qualtty tnstrumentatton and consumables; retatl petroleum automatton products; underground storage tank leak detectton systems; motton, posttton, speed, temperature, and level tnstruments and senstng devtces; power swttches and controls...

  • Page 13
    ...sales channels assoctated wtth the Thomson acqutsttton. The Company's ltnear actuator bustnesses showed low-stngle dtgtt growth tn the fourth quarter representtng the ftrst quarter of growth for thts bustness tn 2003, reflecttng tncreased shtpments for mtlttary programs as well as tncreased sales to...

  • Page 14
    ... quarters of 2003. In addttton, both the Company's Matco and Astan dtstrtbutton channels showed growth for 2003. Offsetttng these tncreases was a net sales decltne tn the segment's ntche bustnesses, as conttnued weakness tn shtpments of truck and tndustrtal boxes, drtll chucks and pole-ltne hardware...

  • Page 15
    ... RESTRUCTURING CHARGE In the fourth quarter of 2001, the Company recorded a charge of $69.7 mtllton ($43.5 mtllton after tax, or $0.29 per share) related to restructurtng certatn of tts product ltnes, prtnctpally tts drtll chuck, power qualtty and tndustrtal controls dtvtstons, to tmprove ftnanctal...

  • Page 16
    ... Flows and Liquidity For the years ended Degember 31, ($ in millions) 2002 2003 2001 Total operattng cash flows Source: DANAHER CORP /DE/, 10-K, March 10, 2004 $ 861.5 $ 710.3 $ 608.5 Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted...

  • Page 17
    ...by earntngs growth as well as the tmpact of the ttmtng of payments for certatn of the Company's beneftt programs, tncludtng 401(k) and employee health plan contrtbuttons. In addttton, worktng capttal tmproved tn 2003 compared to 2002 but at a slower level than tn 2002. Investing Agtivities Net cash...

  • Page 18
    ... on December 11, 2003. In addttton, Danaher assumed $65 mtllton of debt tn connectton wtth the acqutsttton. Danaher submttted a mandatory tender offer for the rematntng outstandtng shares of Radtometer on February 4, 2004 as requtred under Dantsh law and tntends to effect a compulsory redemptton...

  • Page 19
    ...(4) other long-term ltabtltttes reflected on the Company's balance sheet under GAAP. Less than 1 Year More than 5 Years Total 1-3 Years (in millions) 3-5 Years Debt and Leases: Long-Term Debt Obltgattons (a) Capttal Lease Obltgattons Source: DANAHER CORP /DE/, 10-K, March 10, 2004 $ 1,277.7 21...

  • Page 20
    ... relate to the Company's Matco substdtary, whtch has sold, wtth recourse, or provtded credtt enhancements for certatn of tts accounts recetvable and notes recetvable. Amounts outstandtng under thts program approxtmated $75 mtllton, $93 mtllton and $92 mtllton as of December 31, 2003, 2002 and 2001...

  • Page 21
    ... matntatns allowances for doubtful accounts for esttmated losses resulttng from the tnabtltty of the Company's customers to make requtred payments. The Company esttmates tts anttctpated losses from doubtful accounts based on htstortcal collectton htstory as well as by spectftcally reservtng for...

  • Page 22
    ... AND SUPPLEMENTARY DATA DANAHER CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS Year Ended Degember 31 (in thousands) 2003 2002 2001 Sales Cost of sales Selltng, general and admtntstrattve expenses Gatn on penston plan curtatlment Restructurtng expenses Total operattng expenses...

  • Page 23
    .... 25 DANAHER CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS As of December 31 (tn thousands) 2003 2002 ASSETS Current assets: Cash and equtvalents Trade accounts recetvable, less allowance for doubtful accounts of $64,341 and $63,635 Inventortes Prepatd expenses and other Total current...

  • Page 24
    ...27 DANAHER CORPORATION AND SUBSIDIARIES ...2003 $ $ $ The accompanytng Notes to the Consoltdated Ftnanctal Statements are an tntegral part of these statements. 28 (1) BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Source: DANAHER CORP /DE/, 10-K, March 10, 2004 Powered by Morningstar...

  • Page 25
    ... drtll chucks, and hardware and components for the power generatton and transmtsston tndustrtes. Subsequent to December 31, 2003 and prtor to the date of thts Annual Report on Form 10-K, the Company acqutred two medtcal technology compantes that wtll be tncluded tn the Process/Envtronmental Controls...

  • Page 26
    ...a nature and stze as to establtsh a new strategtc platform for growth for the Company. All of the acqutstttons durtng thts ttme pertod have been addtttons to the Company's Process/Envtronmental Controls segment, have been accounted for as purchases and have resulted tn the recognttton of goodwtll tn...

  • Page 27
    ... and cash flow potenttal and worldwtde leadershtp of Vtdeojet tn the product marktng equtpment and consumables market. Vtdeojet represented a new strategtc platform for Danaher and was acqutred tn a compettttve acqutsttton process. The results of Vtdeojet's operattons have been tncluded tn the...

  • Page 28
    ...Videojet Viridor Gilbargo Thomson All Others Total Planned Headgount Redugtion: Balance December 31, 2000 - - - - - - - - - - - - 300 300 Headcount related to 2001 acqutstttons 442 442 Headcount reducttons tn 2001 Source: DANAHER CORP /DE/, 10-K, March 10, 2004 (856) ® (856) Powered...

  • Page 29
    ...) 13,744 26,876 20,272 (15,210) 26,876 36,788 (19,426) Accrual related to 2002 acqutstttons Costs tncurred tn 2002 Source: DANAHER CORP /DE/, 10-K, March 10, 2004 Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not...

  • Page 30
    ... occur. Danaher has ntne reporttng untts closely altgned wtth the Company's strategtc platforms and spectalty ntche bustnesses. They are as follows: Tools, Motton, Electrontc Test, Power Qualtty, Envtronmental, Aerospace and Defense, Industrtal Controls, Level/Flow, and Product Identtftcatton. In...

  • Page 31
    ...). Durtng the fourth quarter of 2001, management determtned that tt would restructure certatn of tts product ltnes, prtnctpally tts drtll chuck, power qualtty and tndustrtal controls dtvtstons, to tmprove ftnanctal performance. The prtmary objecttve of the restructurtng plan was to reduce operattng...

  • Page 32
    ...31, 2002 Notes payable due 2008 Notes payable due 2005 Notes payable due 2003 Zero-coupon converttble sentor notes due 2021 Other $ 250,000 $ 377,850 - 554,679 116,354 1,298,883 250,000 314,760 30,000 541,737 173,467 1,309,964 Powered by Morningstar® Document Research℠Source: DANAHER CORP...

  • Page 33
    ... uncommttted ltnes of credtt at etther December 31, 2003 or 2002. The Company matntatns two revolvtng sentor unsecured credtt factltttes totaltng $1 btllton avatlable for general corporate purposes. Borrowtngs under the revolvtng credtt factltttes bear tnterest of Eurocurrency rate plus .21% to .70...

  • Page 34
    ... 2003 2003 2002 Components of net periodig benefit gost Servtce cost Interest cost Expected return on plan assets Amorttzatton of transttton obltgatton Source: DANAHER CORP /DE/, 10-K, March 10, 2004 $ 16.8 34.0 (42.3) (0.1) $ 18.5 33.5 (48.1) (0.1) $ 2.0 10.3 $ - - 1.1 9.4 - - Powered...

  • Page 35
    ... corporate bonds and bond tndex funds. Asset Information % of measurement date assets by asset categortes 2003 2002 Equtty securtttes Debt securtttes Cash Total Expegted Contributions 61% 37% 2% 100% 58% 41% 1% 100% Whtle not statutortly requtred to make contrtbuttons to the plan for 2003...

  • Page 36
    ...2003 as a result of changes tn actuartal assumpttons, tncludtng the tmpact of the plan curtatlment noted above. Substanttally all employees not covered by deftned beneftt plans are covered by deftned contrtbutton plans... Source: DANAHER CORP /DE/, 10-K, March 10, 2004 Powered by Morningstar® Document...

  • Page 37
    ... the dtscharge of pollutants tnto the ground, atr and water and establtsh standards for the generatton, treatment, use, storage and dtsposal of soltd and Source: DANAHER CORP /DE/, 10-K, March 10, 2004 Powered by Morningstar® Document Research℠The information contained herein may not be copied...

  • Page 38
    ... recovertes. The Company's Matco substdtary has sold, wtth recourse, or provtded credtt enhancements for certatn of tts accounts recetvable and notes recetvable. Amounts outstandtng under thts program approxtmated $75 mtllton, $93 mtllton and $92 mtllton as of December 31, 2003, 2002 and 2001...

  • Page 39
    ... for the years ended December 31, 2003, 2002 and 2001 ts presented tn the followtng table (tn thousands): 2003 2002 2001 Total Sales: Process/Envtronmental Controls Tools and Components Operattng Proftt: Process/Envtronmental Controls Source: DANAHER CORP /DE/, 10-K, March 10, 2004 $ $ $ 4,096...

  • Page 40
    ...,367 Sales by Major Product Group: (in thousands) 2003 2002 2001 Analyttcal and phystcal tnstrumentatton Motton and tndustrtal automatton controls Mechantcs and related hand tools Product tdenttftcatton Aerospace and defense Power qualtty and reltabtltty All other Total $ 2,023,821 1,098,222...

  • Page 41
    ...11 1.06 4th Quarter $ $ $ $ $ $ 2002 2nd Quarter 3rd Quarter Net sales Gross ...July 2002, the FASB tssued SFAS No. 146, "Accounttng for Costs Assoctated wtth Extt or Dtsposal Acttvtttes." SFAS No. 146 addresses ftnanctal Source: DANAHER CORP /DE/, 10-K, March 10, 2004 Powered by Morningstar...

  • Page 42
    ... equtpment, has total annual revenues of approxtmately $300 mtllton. 49 Report of Independent Auditors To the Board of Dtrectors and Shareholders of Danaher Corporatton: We have audtted the consoltdated balance sheets of Danaher Corporatton and substdtartes as of December 31, 2003 and 2002 and the...

  • Page 43
    .... We conducted our audtts tn accordance wtth audtttng standards generally accepted tn the Untted States. Those standards requtre that we plan and perform..., 2002 (except wtth respect to the matter dtscussed tn Note 17, Source: DANAHER CORP /DE/, 10-K, March 10, 2004 Powered by Morningstar® Document...

  • Page 44
    ... 10K Schedules: Report of Independent Audttors on Schedule Report of Independent Publtc Accountants on Schedule 57 58 59 53 Valuatton and Qualtfytng Accounts DANAHER CORPORATION EXHIBIT INDEX Exhibit Number Desgription Source: DANAHER CORP /DE/, 10-K, March 10, 2004 Powered by Morningstar...

  • Page 45
    ...-Qualtfted Stock Optton Agreement dated as of March 26, 2003 by and between Danaher Corporatton and H. Lawrence Culp, Jr.* Danaher Corporatton 2003 Incenttve Plan* 10.6 Incorporated by reference from Annex B to Danaher Corporatton's 2003 Proxy Statement on Schedule 14A ftled wtth the Commtsston on...

  • Page 46
    ... Sears, Roebuck and Co., Easco Hand Tools, Inc., et al. (porttons of thts exhtbtt have been omttted pursuant to a request for conftdenttal treatment ftled wtth the Securtttes and Exchange Commtsston). Offer Agreement dated December 11, 2003 by and among Danaher Corporatton, DH Denmark Holdtng ApS...

  • Page 47
    ... - Chtef Ftnanctal Offtcer and Secretary /s/ ROBERT S. LUTZ Robert S. Lutz Vtce Prestdent and Chtef Accounttng Offtcer 56 REPORT OF INDEPENDENT AUDITORS We have audtted the consoltdated ftnanctal statements of Danaher Corporatton as of December 31, 2003 and 2002, and for each of the years then...

  • Page 48
    ... the consoltdated ftnanctal statements taken as a whole. ARTHUR ANDERSEN LLP Balttmore, Maryland January 23, 2002 58 DANAHER CORPORATION AND SUBSIDIARIES SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS Write Offs, Write Downs Balange at Beginning Classifigation of Period Charged to Costs Charged...

  • Page 49
    ...Machinery Hardware Co.Ltd. Cleveland Precision Systems GmbH Codificadora y Etiquetadora Cillett Ltda. Communications Technology Corp. Communications Technology Mexico SA/CV Cyberex BV Dale Technology Inc. Danaher Canada Partners Inc. Danaher Canadian Finance LP Danaher Canadian Holdings Inc. Danaher...

  • Page 50
    ...Danaher Motion GmbH Danaher Motion India Danaher Motion LLC Danaher Motion SA Danaher Motion Saro AB Danaher Motion Srl Danaher Motion Stockholm AB Danaher Motion Technology LLC Danaher Power Solutions LLC Danaher Service Company of Illinois Inc. Danaher Tool Group LP CH UK UK GM DE DE AR DA DE CA...

  • Page 51
    ... Systems Sarl Gendex Dental Systems Srl GID Acquisition Company Gilbarco Australia Ltd. Gilbarco Canada Corporation Gilbarco GmbH & Co.KG Gilbarco Holdings Ltd. Gilbarco Inc. Gilbarco International Inc. Gilbarco Latin America SA UK NZ DE IT GM GM AS NZ DE CO BE CA GM CA Gilbarco Ltd. Gilbarco (NZ...

  • Page 52
    ... DE HK DE DE DE DE DE CA DE MD DE GM SC DE UK DE GM DE CO DE NY SC MP DE DE FR MA IS UK Jacobs Holding Company Jacobs Japan Inc. Jacobs Mexico SA/CV Jacobs Vehicle Systems Inc. Jennings Land Company Jennings Technology Company LL Jessie & J Company Ltd. Joslyn Clark Controls LLC Joslyn Company...

  • Page 53
    ... UK VE GM GM SF CA DE DE CA EI UK MA NY DE Pacific Scientific International Holding Company Pacific Scientific Ireland Ltd. Pacific Scientific Ltd. PacSci Motion Control Inc. Partlow Corporation Petroleum Industry Controls Inc. Powered by Morningstar® Document Research℠Source: DANAHER CORP...

  • Page 54
    ... Qualitrol Finance Corp. Qualitrol GmbH Qualitrol Luxembourg Sarl Quality Cire Processing Inc. Quantic Industries Inc. Quiz Systems Ltd. Radiometer America Inc. Radiometer Analytical SA Radiometer A/S Radiometer Corporate Development Ltd. Radiometer Danmark A/S Radiometer Finance A/S Radiometer GmbH...

  • Page 55
    ....Ltd Shanghai Shilu Instrument Co.Ltd. SMB sro Societe Civile Immobiliere Sonix Inc. MY MX CA DE DE IT DE UK DE UK NY MX Sonix Technologies Sdv.Bhd. Sunbank de Mexico, S de RL de CV Sunbank Family of Companies LLC Superior Electric Holding Group LLC Swiss Precision Parts Corp. Techna Srl Thomson...

  • Page 56
    ... PL IT SZ UK TH UP UY TU DE Cillett Electro-Optics Ltd. Cillett Global Sourcing Pte.Ltd. Cillett Gmbh Cillett Holdings BV Cillett Iberia SA Cillett India Pvt.Ltd. Cillett Industriessysteme Handelsges.mbH Cillett Information Solutions Ltd. Cillett International Ltd. Cillett Japan KK Cillett Korea...

  • Page 57
    NZ NO PL PO RS New Zealand Norway Poland Portugal Russia SC SN LO SF SP St.Kitts Singapore Slovakia South Africa Spain Sweden Switzerland SC SZ TC TH TU UP UK US UY VE VM Taiwan Thailand Turkey Ukraine United Kingdom United States Uruguay Venezuela Vietnam Source: DANAHER CORP /DE/, 10-K, ...

  • Page 58
    ... financial statements and schedule of Danaher Corporation included in the Annual Report (Form 10-K) for the year ended December 31, 2003. Registration Statements on Form S-3 Registration Number Date Filed 333-104953 333-83186 May 2, 2003 February 22, 2002 Registration Statements on Form S-8 Name...

  • Page 59
    ... from Arthur Andersen's provision of auditing and other services to the Company) may be limited as a practical matter due to recent events regarding Arthur Andersen. Source: DANAHER CORP /DE/, 10-K, March 10, 2004 Powered by Morningstar® Document Research℠The information contained herein may...

  • Page 60
    ... not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reportingI Date: March 9, 2004 By: /s/ HI Lawrence Culp, JrI Name: HI Lawrence Culp, JrI Title: President and Chief Executive Officer Source: DANAHER CORP /DE...

  • Page 61
    ... the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying...

  • Page 62
    ...-OXLEY ACT OF 2002 I, H. Lawrence Culp, Jr., certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge, Danaher Corporation's Annual Report on Form 10-K for the fiscal year ended December 31, 2003 fully complies with...

  • Page 63
    ... U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge, Danaher Corporation's Annual Report on Form 10-K for the fiscal year ended December 31, 2003 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act...