Danaher 2009 Annual Report Download - page 70

Table of Contents
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Business—Danaher Corporation designs, manufactures and markets professional, medical, industrial, commercial and consumer products and services
which are typically characterized by strong brand names, proprietary technology and major market positions in four business segments: Professional
Instrumentation, Medical Technologies, Industrial Technologies and Tools & Components. Businesses in the Professional Instrumentation segment offer
professional and technical customers various products and services that are used to enable or enhance the performance of their work. The Professional
Instrumentation segment encompasses two strategic lines of business - environmental and test and measurement. These businesses produce and sell bench top
and compact, professional electronic test tools and calibration equipment, a variety of video test and monitoring products, network management solutions,
network diagnostic equipment and related services; water quality instrumentation and consumables and ultraviolet disinfection systems; industrial water
treatment solutions; and retail/commercial petroleum products and services, including underground storage tank leak detection and vapor recovery systems.
The Medical Technologies segment consists of businesses that offer clinical and research medical professionals various products and services that are used in
connection with the performance of their work. The Medical Technologies segment encompasses the acute care diagnostic, life science and diagnostics, and
dental businesses. Businesses in the Industrial Technologies segment manufacture products and sub-systems that are typically incorporated by customers and
systems integrators into production and packaging lines as well as incorporated by original equipment manufacturers (OEMs) into various end-products.
Many of the businesses also provide services to support their products, including helping customers integrate and install the products and helping ensure
product uptime. The Industrial Technologies segment encompasses two strategic lines of business - product identification and motion, and two focused niche
businesses, aerospace and defense and sensors & controls. These businesses produce and sell product identification equipment and consumables; precision
motion control equipment; monitoring, sensing and control devices; and aerospace safety devices and defense articles. The Tools & Components segment is
one of the largest producers and distributors of general purpose and specialty mechanics’ hand tools. Other products manufactured by the businesses in this
segment include toolboxes and storage devices; diesel engine retarders; wheel service equipment and drill chucks.
Accounting Principles—The consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany balances and
transactions have been eliminated upon consolidation.
Use of Estimates—The preparation of these financial statements in conformity with accounting principles generally accepted in the United States requires
management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of
contingent assets and liabilities. The Company bases these estimates on historical experience, the current economic environment and on various other
assumptions that are believed to be reasonable under the circumstances. However, uncertainties associated with these estimates exist and actual results may
differ from these estimates. For example, if one or more of our significant customers, or a group of less significant customers, becomes insolvent, the
Company may be faced with uncollectible accounts receivable in excess of established reserves, preference actions that could require us to repay to the
bankruptcy estate payments recently received from such customers and increased obsolete inventory and/or impairment of long-lived assets due to
underutilized manufacturing capacity which could require the write-down of the carrying value of these assets.
Cash and Equivalents—The Company considers all highly liquid investments with a maturity of three months or less at the date of purchase to be cash
equivalents.
Inventory Valuation—Inventories include the costs of material, labor and overhead. Depending on the business, domestic inventories are stated at either the
lower of cost or market using the last-in, first-out method (LIFO) or the lower of cost or market using the first-in, first-out (FIFO) method. Inventories held
outside the United States are primarily stated at the lower of cost or market using the FIFO method.
Property, Plant and Equipment—Property, plant and equipment are carried at cost. The provision for depreciation has been computed principally by the
straight-line method based on the estimated useful lives (3 to 35 years) of the depreciable assets.
Other Assets—Other assets include principally noncurrent trade receivables, other investments, and capitalized costs associated with obtaining financings
which are amortized over the term of the related debt.
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Source: DANAHER CORP /DE/, 10-K, February 24, 2010 Powered by Morningstar® Document Research℠
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