Danaher 2011 Annual Report Download - page 32

Table of Contents
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Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is designed to provide a reader of Danaher’s financial
statements with a narrative from the perspective of Company management. The Company’s MD&A is divided into four main sections:
• Overview
• Results of Operations
• Liquidity and Capital Resources
• Critical Accounting Estimates
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General
Please see “Item 1. Business – General” for a discussion of Danaher’s objectives and methodologies for delivering shareholder value. Danaher is a
multinational corporation with global operations. During 2011, approximately 58% of Danaher’s sales were derived from customers outside the United States.
As a global business, Danaher’s operations are affected by worldwide, regional and industry-specific economic and political factors. Danaher’s geographic
and industry diversity, as well as the diversity of its products and services, typically helps limit the impact of any one industry or the economy of any single
country on the consolidated operating results. Given the broad range of products manufactured, services provided and geographies served, management does
not use any indices other than general economic trends to predict the overall outlook for the Company. The Company’s individual businesses monitor key
competitors and customers, including to the extent possible their sales, to gauge relative performance and the outlook for the future.
As a result of the Company’s geographic and industry diversity, the Company faces a variety of challenges and opportunities, including rapid technological
development in most of the Company’s served markets, the expansion of opportunities in emerging markets, trends toward increased utilization of the global
labor force and consolidation of the Company’s competitors. The Company operates in a highly competitive business environment in most markets, and the
Company’s long-term growth and profitability will depend in particular on its ability to expand its business in high-growth geographies and high-growth
product segments, identify, consummate and integrate appropriate acquisitions, develop innovative new products and services with higher gross profit
margins, expand and improve the effectiveness of the Company’s sales force and continue to reduce costs and improve operating efficiency and quality. The
Company is making significant investments, organically and through acquisitions, to address the rapid pace of technological change in its served markets
and to globalize its manufacturing, research and development and customer-facing resources (particularly in emerging markets such as China, India and
Brazil) in order to be responsive to the Company’s customers throughout the world and improve the efficiency of the Company’s operations.
Business Performance and Outlook
While differences exist among the Company’s businesses, on an overall basis, demand for the Company’s products and services increased in 2011 as
compared to 2010 resulting in aggregate year-over-year sales growth. In addition, the Company’s previous investment in sales growth initiatives and the other
business-specific factors discussed below contributed to year-over-year sales growth. Geographically, year-over-year sales growth rates during 2011 were led
primarily by China and other emerging markets. Sales growth rates in developed markets were led by North America. Providing no significant deterioration in
general economic conditions occurs, the Company expects sales from existing businesses to continue to grow on a year-over-year basis during 2012 but at a
moderating rate from that experienced during 2011, particularly in the Industrial Technologies segment, and to a lesser extent, the Test & Measurement
segment.
The acquisition of Beckman Coulter, Inc. (“Beckman Coulter”) as discussed below provides additional sales and earnings growth opportunities for the
Company’s Life Sciences and Diagnostics segment by expanding the businesses’ geographic and product line diversity, including new and complementary
product and service offerings in the areas of clinical diagnostics and life sciences research, and through the potential acquisition of complementary businesses.
As Beckman Coulter is integrated into the Company, the Company also expects to realize significant cost synergies through the application of the Danaher
Business System and the combined purchasing power of the Company and Beckman Coulter. For a discussion of the acquisition’s impact on the Company
and segment results, please refer to the “Results of Operations” section of this MD&A.
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Source: DANAHER CORP /DE/, 10-K, February 24, 2012 Powered by Morningstar® Document Research℠
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