Danaher 2009 Annual Report Download - page 56

Table of Contents
Off-Balance Sheet Arrangements
The following table sets forth, by period due or year of expected expiration, as applicable, a summary of off-balance sheet commercial commitments of the
Company.




 





Standby Letters of Credit and Performance Bonds $291.6 $139.0 $86.9 $15.8 $49.9
Guarantees 47.8 28.2 5.8 2.4 11.4
Total $339.4 $167.2 $92.7 $ 18.2 $ 61.3
Standby letters of credit and performance bonds are generally issued to secure the Company’s obligations under short-term contracts to purchase raw materials
and components and for performance under specific sales agreements. Guarantees are generally issued in connection with certain transactions with vendors,
suppliers, and financing counterparties and governmental entities.
Other Off-Balance Sheet Arrangements
The Company has from time to time divested certain of its businesses and assets. In connection with these divestitures, the Company often provides
representations, warranties and/or indemnities to cover various risks and unknown liabilities, such as claims for damages arising out of the use of products
or relating to intellectual property matters, commercial disputes, environmental matters or tax matters. The Company cannot estimate the potential liability
from such representations, warranties and indemnities because they relate to unknown conditions and has not included any such items in the table above, but
does not believe that any such liability will have a material adverse effect on the Company’s financial position, results of operations or liquidity. In addition,
as a result of these divestitures, as well as restructuring activities, certain properties leased by the Company have been sublet to third parties. In the event any
of these third parties vacates any of these premises, the Company would be legally obligated under master lease arrangements. The Company believes that the
financial risk of default by such sub-lessors is individually and in the aggregate not material to the Company’s financial position, results of operations or
liquidity.
In the normal course of business, the Company periodically enters into agreements that require it to indemnify customers or suppliers for specific risks, such
as claims for injury or property damage arising out of the Company’s products or claims alleging that Company products infringe third-party intellectual
property. The Company cannot estimate its maximum exposure under these indemnification provisions and has not accrued any liabilities in its consolidated
financial statements or included any indemnification provisions in our contractual commitments table above. Historically, the Company has not experienced
significant losses on these types of indemnification obligations.
The Company’s Certificate of Incorporation requires it to indemnify to the full extent authorized or permitted by law any person made, or threatened to be made
a party to any action or proceeding by reason of his or her service as a director or officer of the Company, or by reason of serving at the request of the
Company as a director or officer of any other entity, subject to limited exceptions. Danaher’s Amended and Restated By-laws provide for similar
indemnification rights. In addition, Danaher has executed with each of its directors and executive officers an indemnification agreement which provides for
substantially similar indemnification rights and under which Danaher has agreed to pay expenses in advance of the final disposition of any such
indemnifiable proceeding. While the Company maintains insurance for this type of liability, a significant deductible applies to this coverage and any such
liability could exceed the amount of the insurance coverage.
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Source: DANAHER CORP /DE/, 10-K, February 24, 2010 Powered by Morningstar® Document Research℠
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