Danaher 2011 Annual Report Download - page 48

Table of Contents
Credit Risk
The Company is exposed to credit losses in the event of nonperformance by counterparties to its financial instruments. Financial instruments that potentially
subject the Company to credit risk consist of cash and temporary investments, receivables from customers, and derivatives. The Company places cash and
temporary investments with various high-quality financial institutions throughout the world, and exposure is limited at any one institution. Although the
Company typically does not obtain collateral or other security to secure these obligations, it does regularly monitor the third-party depository institutions that
hold our cash and cash equivalents. The Company’s emphasis is primarily on safety and liquidity of principal and secondarily on maximizing yield on those
funds.
In addition, concentrations of credit risk arising from receivables from customers are limited due to the diversity of the Company’s customers. The
Company’s businesses perform credit evaluations of their customers’ financial conditions as appropriate and also obtain collateral or other security when
appropriate.
The Company enters into derivative transactions infrequently and only with high-quality financial institutions and limits its exposure at any one institution.
Equity Price Risk
The Company’s available-for-sale investment portfolio includes equity securities that are sensitive to fluctuations in market price. Changes in equity prices
would result in changes in the fair value of the Company’s available-for-sale investments due to the difference between the current market price and the market
price at the date of purchase or issuance of the equity securities. A 10% decline in the value of these equity securities as of December 31, 2011 would have
reduced the fair value of the Company’s available-for-sale investment portfolio by approximately $29 million.
Commodity Price Risk
For a discussion of risks relating to commodity prices, please see “Item 1A. Risk Factors.”
46
Source: DANAHER CORP /DE/, 10-K, February 24, 2012 Powered by Morningstar® Document Research℠
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.