Danaher 2011 Annual Report Download - page 75

Table of Contents
In June 2011, updated accounting guidance was issued which requires entities to present comprehensive income, which is currently presented in the
Consolidated Statement of Stockholders’ Equity, either as a single continuous statement of comprehensive income or as two separate but consecutive
statements. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2011, with early adoption
permitted. As this new guidance is related to presentation only, the implementation of this guidance in the first quarter of fiscal year 2012 will not have a
material impact on the Company’s results of operations, financial position or cash flows.
In May 2011, updated accounting guidance was issued as a result of joint efforts by the Financial Accounting Standards Board and the International
Accounting Standards Board to develop a single, converged fair value framework on how to measure fair value and on what disclosures to provide about fair
value measurements. The guidance is largely consistent with existing fair value measurement principles and is effective during interim and annual periods
beginning after December 15, 2011. The Company’s adoption of this guidance in the first quarter of fiscal year 2012 will not have a material impact on the
Company’s results of operations, financial position or cash flows.
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The Company continually evaluates potential acquisitions that either strategically fit with the Company’s existing portfolio or expand the Company’s portfolio
into a new and attractive business area. The Company has completed a number of acquisitions that have been accounted for as purchases and have resulted in
the recognition of goodwill in the Company’s financial statements. This goodwill arises because the purchase prices for these businesses reflect a number of
factors including the future earnings and cash flow potential of these businesses; the multiple to earnings, cash flow and other factors at which similar
businesses have been purchased by other acquirers; the competitive nature of the processes by which the Company acquired the businesses; and the
complementary strategic fit and resulting synergies these businesses bring to existing operations.
The Company makes an initial allocation of the purchase price at the date of acquisition based upon its understanding of the fair value of the acquired assets
and assumed liabilities. The Company obtains this information during due diligence and through other sources. In the months after closing, as the Company
obtains additional information about these assets and liabilities, including through tangible and intangible asset appraisals, and learns more about the newly
acquired business, it is able to refine the estimates of fair value and more accurately allocate the purchase price. Only items identified as of the acquisition date
are considered for subsequent adjustment. The Company is continuing to evaluate certain pre-acquisition contingencies associated with certain of its 2011
acquisitions and is also in the process of obtaining valuations of acquired intangible assets and certain acquisition related liabilities in connection with these
acquisitions. The Company will make appropriate adjustments to the purchase price allocation prior to completion of the measurement period, as required.
The Company evaluated whether any adjustments to the prior year purchase price allocations were material and concluded no retrospective adjustment to prior
financial statements was required.
The following briefly describes the Company’s acquisition activity for the three years ended December 31, 2011.
On June 30, 2011, following the successful completion of the Company’s tender offer for all of the outstanding shares of common stock of Beckman Coulter,
Inc. (“Beckman Coulter”), the Company completed the acquisition of Beckman Coulter by merging one of its indirect, wholly-owned subsidiaries with and
into Beckman Coulter such that Beckman Coulter became an indirect, wholly-owned subsidiary of the Company. Beckman Coulter develops, manufactures
and markets products that simplify and automate complex biomedical testing. Beckman Coulter’s diagnostic systems are found in hospitals and other clinical
settings around the world and produce information used by physicians to diagnose disease and make treatment decisions. Scientists use its life science
research instruments to study complex biological problems including causes of disease and potential new therapies or drugs. Beckman Coulter had revenues of
approximately $3.7 billion in 2010, and is included in the Company’s Life Sciences & Diagnostics segment from the acquisition date. The Company has
recorded an aggregate of $3.7 billion of goodwill related to the acquisition of Beckman Coulter. The Company obtained control of Beckman Coulter on
June 24, 2011 and, as a result, the earnings of Beckman Coulter are reflected in the Company’s results from June 25, 2011 forward.
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Source: DANAHER CORP /DE/, 10-K, February 24, 2012 Powered by Morningstar® Document Research℠
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