Danaher 2011 Annual Report Download - page 83

Table of Contents
A summary of financial assets and liabilities that are measured at fair value on a recurring basis at December 31, 2011 and 2010 were as follows ($ in
millions):









 
December 31, 2011:
Assets:
Available-for-sale securities $287.0 — — $287.0
Liabilities:
Deferred compensation plans — $58.2 — 58.2
Currency swap agreement — 53.9 — 53.9
December 31, 2010:
Assets:
Available-for-sale securities $ 257.0 — — $257.0
Liabilities:
Deferred compensation plans — $64.4 — 64.4
Available-for-sale securities are measured at fair value using quoted market prices in an active market and included in other long-term assets in the
accompanying Consolidated Balance Sheet.
The Company has established nonqualified deferred compensation programs that permit officers, directors and certain management employees to defer a
portion of their compensation, on a pre-tax basis, until at or after their termination of employment (or board service, as applicable). All amounts deferred under
this plan are unfunded, unsecured obligations of the Company and presented as a component of the Company’s compensation and benefits accrual included
in accrued expenses in the accompanying Consolidated Balance Sheet (refer to Note 9). Participants may choose among alternative earning rates for the
amounts they defer, which are primarily based on investment options within the Company’s 401(k) program (except that the earnings rates for amounts
deferred by the Company’s directors and amounts contributed unilaterally by the Company are entirely based on changes in the value of the Company’s
common stock). Changes in the deferred compensation liability under these programs are recognized based on changes in the fair value of the participants’
accounts, which are based on the applicable earnings rate.
In connection with the acquisition of Beckman Coulter, the Company acquired an existing currency swap agreement. The agreement requires the Company to
purchase approximately 184 million Japanese Yen (JPY/¥) at rate of $1 / ¥102.25 on a monthly basis through June 1, 2018. As of December 31, 2011, the
aggregate Japanese Yen purchase commitment was approximately ¥14.1 billion (approximately $182 million based on exchange rates as of December 31,
2011). The currency swap does not qualify for hedge accounting, and as a result changes in the fair value of the currency swap are reflected in selling, general
and administrative expenses in the accompanying Consolidated Statements of Earnings each reporting period. During the year ended December 31, 2011 the
Company recorded a pre-tax charge of approximately $8 million related to changes in the fair value of this currency swap. The fair value of the currency swap
is included in other long-term liabilities in the accompanying Consolidated Balance Sheet. Since there is not an active market for the currency swap, the
Company obtains a market quote based on observable inputs, including foreign currency exchange market data, from the swap counterparties to adjust the
currency swap to fair value each quarter.
Fair Value of Financial Instruments
In addition to the fair value disclosure requirements related to financial instruments carried at fair value, accounting standards require disclosures regarding
the fair value of all the Company’s financial instruments. The methods and significant assumptions used to estimate fair value of financial instruments and
any changes in methods or significant assumptions from prior periods are also required to be disclosed.
81
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.