Danaher 2014 Annual Report Download

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℠
FORM 10-K
DANAHER CORP /DE/ - DHR
Filed: February 25, 2015 (period: December 31, 2014)
Annual report with a comprehensive overview of the company
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.

Table of contents

  • Page 1
    ...â„ FORM 10-K DANAHER CORP /DE/ - DHR Filed: February 25, 2015 (period: December 31, 2014) Annual report with a comprehensive overview of the company The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes...

  • Page 2
    ... aggregate market value of common stock held by non-affiliates of the Registrant on June 27, 2014 was $48.2 billion, based upon the closing price of the Registrant's common stock as quoted on the New York ntock Exchange composite tape on such date. Source: DANAHER CORP /DE/, 10-K, February 25, 2015...

  • Page 3
    ... 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.

  • Page 4
    ... Disclosures About Market Risk Financial ntatements and nupplementary Data Changes in and Disagreements with Accountants on Accounting and Financial Disclosure Controls and Procedures Other Information 29 30 31 59 60 104 104 104 2 Source: DANAHER CORP /DE/, 10-K, February 25, 2015 Powered by...

  • Page 5
    ... new information, future events and developments or otherwise. PTRT I ITEM 1. BUSINESS General Danaher Corporation designs, manufactures and markets professional, medical, industrial and commercial products and services, which are typically characterized by strong brand names, innovative technology...

  • Page 6
    ... operations. Our instruments business offers test, measurement and monitoring products that are used in electronic design, manufacturing and advanced technology development, as well as for installation, service and maintenance of electrical, industrial, electronic and calibration applications. Our...

  • Page 7
    ...service equipment business is based on the factors described under "-Competition." Test & Measurement segment manufacturing facilities are located in North America, Europe, and Asia. 5 Source: DANAHER CORP /DE/, 10-K, February 25, 2015 Powered by Morningstar® Document Research℠The information...

  • Page 8
    ... offering, after-sales service and support and the other factors described under "-Competition." Our water quality business provides products under a variety of brands, including CHEMTREAT, HACH, HACH/LANGE, MCCROMETER and TROJAN TECHNOLOGIEn. Manufacturing facilities are located in North America...

  • Page 9
    ... the acquisitions of Leica Microsystems in 2005, Vision nystems in 2006, Genetix in 2009, Beckman Coulter in 2011, Iris International and Aperio Technologies in 2012, HemoCue in 2013, Devicor Medical Products in 2014 and the clinical microbiology business of niemens Healthcare Diagnostics in 2015...

  • Page 10
    ... business generally markets its products under the APERIO, BECKMAN COULTER, HEMOCUE, IRIn, LEICA BIOnYnTEMn, MAMMATOME, RADIOMETER and nURGIPATH brands. Manufacturing facilities are located in North America, Europe, Asia and Australia. The business sells to customers primarily through direct sales...

  • Page 11
    ... Our life sciences business generally markets its products under the AB nCIEX, BECKMAN COULTER, LEICA MICROnYnTEMn and MOLECULAR DEVICEn brands. Manufacturing facilities are located in Europe, Australia, Asia and North America. The business sells to customers primarily through direct sales personnel...

  • Page 12
    ... Willett International Limited in 2003, Linx Printing Technologies PLC in 2005, EskoArtwork in 2011 and X-Rite in 2012. Our product identification businesses design, manufacture, and market the following products and services: • we provide a variety of equipment used to print bar codes, date codes...

  • Page 13
    ... 7 vehicles. Customers are primarily major manufacturers of class 2 through class 8 vehicles, and sales are typically made through our direct sales personnel. Manufacturing facilities of our sensors & controls, energetic materials and engine retarder businesses are located in North America, nouth...

  • Page 14
    ...2014 2013 2012 Test & Measurement Environmental Life nciences & Diagnostics Dental Industrial Technologies Total $ 371 183 507 82 171 1,314 $ 362 167 476 75 170 1,250 $ 335 155 418 76 154 1,138 $ $ $ We conduct research and development activities for the purpose of developing new products...

  • Page 15
    ... substantial majority of our revenue in 2014 was from customers other than governmental entities, each of our segments has agreements relating to the sale of products to government entities. As a result, we are subject to various statutes and regulations that apply to companies doing business with...

  • Page 16
    ... the process of adopting regulations and standards for medical devices sold in those countries. We are also subject to various healthcare related laws regulating fraud and abuse, pricing and sales and marketing practices and the privacy and security of health information, including the United ntates...

  • Page 17
    ... for sale): 2014 2013 2012 Test & Measurement Environmental Life nciences & Diagnostics Dental Industrial Technologies Total percentage of long-lived assets located outside of the United ntates 18% 37% 45% 46% 34% 39% 20% 38% 48% 33% 37% 39% 19% 39% 45% 34% 38% 37% For additional information...

  • Page 18
    ..., references to products also includes software) and services, limiting the financing available to our customers and suppliers, increasing order cancellations and resulting in longer sales cycles and slower adoption of new technologies; increasing the difficulty in collecting accounts receivable and...

  • Page 19
    ...services in industries that are characterized by rapid technological changes, frequent new product introductions and changing industry standards. If we do not develop innovative new and enhanced products and services on a timely basis, our offerings will become obsolete over time and our competitive...

  • Page 20
    ..., competition for acquisitions may result in higher purchase prices. Changes in accounting or regulatory requirements or instability in the credit markets could also adversely impact our ability to consummate acquisitions. Our acquisition of businesses, joint ventures and strategic relationships...

  • Page 21
    ... to meet our public financial reporting obligations in connection with acquisitions and joint ventures, we often enter into post-closing financial arrangements such as purchase price adjustments, earnout obligations and indemnification obligations, which may have unpredictable financial results. as...

  • Page 22
    ... offered for sale in the United ntates as well as reporting and disclosure requirements on medical device manufacturers. governmental and private healthcare providers and payors around the world are increasingly utilizing managed care for the delivery of healthcare services, forming group purchasing...

  • Page 23
    ... laws, which may affect our transactions with certain customers, business partners and other persons and dealings between our employees and subsidiaries. In certain circumstances, export control and economic sanctions regulations may prohibit the export of certain products, services and technologies...

  • Page 24
    ... out of the use of products or services and claims relating to intellectual property matters, employment matters, tax matters, commercial disputes, competition and sales and trading practices, environmental matters, personal injury, insurance coverage and acquisition or divestiture-related matters...

  • Page 25
    ... on a timely basis to replace such production capacity. Any of these manufacturing problems could result in significant costs and liability, as well as negative publicity and damage to our reputation that could reduce demand for our products. 23 Source: DANAHER CORP /DE/, 10-K, February 25, 2015...

  • Page 26
    ...upturn, suppliers may extend lead times, limit supplies or increase prices. If we cannot purchase sufficient products at competitive prices and quality and on a timely enough basis to meet increasing demand, we may not be able to satisfy market demand, product shipments may be delayed, our costs may...

  • Page 27
    ... and business factors could negatively affect our financial statements. In 2014, approximately 57% of our sales were derived from customers outside the U.n. In addition, many of our manufacturing operations, suppliers and employees are located outside the U.n. nince our growth strategy depends...

  • Page 28
    ... actions on a timely or comprehensive basis; and differing protection of intellectual property. Any of these risks could negatively affect our financial statements and growth. If we suffer loss to our facilities, supply chains, distribution systems or information technology systems due to...

  • Page 29
    ...President - General Counsel nenior Vice President - ntrategic Development nenior Vice President - Human Resources nenior Vice President - Chief Accounting Officer nenior Vice President - Corporate Development 1984 1984 2002 1996 2014 2006 2002 1991 2006 2005 2012 2002 2004 27 Source: DANAHER CORP...

  • Page 30
    ... business development, manufacturing strategy, marketing and general management, including most recently as Executive Vice President, Environmental Technologies and Life nciences from January 2010 to March 2014. William K. Daniel II has served as Executive Vice President since 2008. James A. Lico...

  • Page 31
    ...market conditions and other factors. The 2013 Repurchase Program may be suspended or discontinued at any time. Any repurchased shares will be available for use in connection with the Company's equity compensation plans (or any successor plan) and for other corporate purposes. As of December 31, 2014...

  • Page 32
    ... certain of the Company's hand tools businesses to Apex. Refer to Note 3 of the Notes to the Consolidated Financial ntatements for additional information. The Company increased its quarterly dividend rate in 2014 to $0.10 per share. 30 Source: DANAHER CORP /DE/, 10-K, February 25, 2015 Powered by...

  • Page 33
    ... business in high-growth geographies and high-growth market segments, identify, consummate and integrate appropriate acquisitions, develop innovative and differentiated new products, services and software with higher gross profit margins, expand and improve the effectiveness of the Company's sales...

  • Page 34
    ...the Company successfully completed its tender offer for the outstanding shares of common stock of Nobel Biocare Holding AG, acquiring 97% of the outstanding shares for an aggregate cash purchase price of approximately CHF 1.9 billion (approximately $1.9 billion based on exchange rates as of the date...

  • Page 35
    ... various product development, sales and marketing growth investments - 65 basis points • The fourth quarter 2013 impairment of intangible assets associated with a technology investment in the communications business - 15 basis points 33 Source: DANAHER CORP /DE/, 10-K, February 25, 2015 Powered...

  • Page 36
    ...product development, sales and marketing growth investments - 80 basis points 2013 vs. 2012 operating profit margin comparisons were unfavorably impacted by: • The incremental net dilutive effect in 2013 of acquired businesses - 40 basis points • The divestiture of the Apex joint venture in 2013...

  • Page 37
    ... 2.7% 2014 vs. 2013 2013 vs. 2012 Existing businesses Acquisitions Currency exchange rates Total 2014 COMPTRED TO 2013 (0.5)% 2.5 % (0.5)% 1.5 % 1.5 % -% (0.5)% 1.0 % Price increases in the segment contributed 0.5% to sales growth on a year-over-year basis during 2014 as compared to 2013 and...

  • Page 38
    ... sales, marketing and product development growth investments. In addition, 2013 vs. 2012 operating profit margin comparisons were unfavorably impacted by: • The fourth quarter 2013 impairment of intangible assets associated with a technology investment in the communications business - 90 basis...

  • Page 39
    ... businesses in the segment's water quality business grew at a mid-single digit rate during 2014 as compared to 2013. nales growth in the analytical instrumentation product line was led primarily by continued strong sales of instruments and related consumables and service in North America, China...

  • Page 40
    ...with various product development, sales and marketing growth investments - 70 basis points 2013 vs. 2012 operating profit margin comparisons were unfavorably impacted by: • The incremental net dilutive effect in 2013 of acquired businesses - 100 basis points LIFE SCIENCES & DITGNOSTICS The Company...

  • Page 41
    ... product development, sales and marketing growth investments and the new U.n. medical device excise tax that took effect in 2013 - 190 basis points 2013 vs. 2012 operating profit margin comparisons were unfavorably impacted by: • The incremental net dilutive effect in 2013 of acquired businesses...

  • Page 42
    ... and the Middle East. The acquisition of Nobel Biocare provides additional sales and earnings growth opportunities for the Company's Dental segment by expanding the businesses' geographic and product line diversity, including new and complementary product and service offerings in the area of implant...

  • Page 43
    ... product development, sales and marketing growth investments and the new U.n. medical device excise tax that took effect in 2013 - 5 basis points INDUSTRITL TECHNOLOGIES The Company's Industrial Technologies segment solutions help protect the world's food supply, improve packaging design and quality...

  • Page 44
    ... rate during 2014 as compared to 2013, primarily due to strong demand in the segment's engine retarder business, and to a lesser extent, continued improving demand in the segment's sensors and controls businesses. Operating profit margins increased 160 basis points during 2014 as compared to 2013...

  • Page 45
    ... segments. The excise tax increased the Company's 2013 cost of sales as a percentage of revenue on a year-over-year basis by approximately 20 basis points. The impact of the medical devices excise tax was partially mitigated by general price increases implemented during 2013. Gross profit margins...

  • Page 46
    ... (consisting principally of internal and contract engineering personnel costs) as a percentage of sales increased 10 basis points on a year-over-year basis in 2014 as compared to 2013. Incremental year-over-year increases in investments in the Company's new product development initiatives were the...

  • Page 47
    ... returns for 2010 and 2011. The Company's U.n. tax returns for 2012 and 2013 remain open for examination by the IRn. In addition, the Company has subsidiaries in Belgium, Brazil, Canada, China, Denmark, France, Finland, Germany, India, Italy, Japan, Norway, ningapore, nweden, the United Kingdom and...

  • Page 48
    ..., 2014, 2013 or 2012. FINTNCITL INSTRUMENTS TND RISK MTNTGEMENT The Company is exposed to market risk from changes in interest rates, foreign currency exchange rates, credit risk, equity prices and commodity prices, each of which could impact its financial statements. The Company generally addresses...

  • Page 49
    ... to affect the reported amount of sales, profit, and assets and liabilities in the Company's Consolidated Financial ntatements. On April 2, 2014, the Company terminated the Japanese Yen/U.n. dollar currency swap agreement that had been acquired in connection with a prior business acquisition. The...

  • Page 50
    ...publicly traded 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...

  • Page 51
    ...Investments For a discussion of the Company's 2014 acquisitions, divestitures and the sale of certain marketable equity securities, refer to "-Overview." 49 Source: DANAHER CORP /DE/, 10-K, February 25, 2015 Powered by Morningstar® Document Research℠The information contained herein may not be...

  • Page 52
    ... of the Industrial Technologies segment. The businesses had combined annual revenues of $275 million in 2011. The Company recorded an aggregate after-tax gain on the sale of these businesses of $94 million, or $0.13 per diluted share, in its first quarter 2012 results. The Company has reported the...

  • Page 53
    ... based on the ratings assigned to the Company by credit rating agencies at the time of the issuance and prevailing market rates measured by reference to LIBOR. Borrowings under the program are available for general corporate purposes, including acquisitions. During 2014, as commercial paper balances...

  • Page 54
    ...Financing Notes, 2013 Notes and 2014 Notes offering, after deducting expenses and the underwriters' discount, were approximately $1.8 billion and were used to fund a portion of the purchase price for the acquisition of Beckman Coulter. The Company paid interest on the 2013 Notes quarterly in arrears...

  • Page 55
    ... 31, 2012, the Company repurchased approximately 12.5 million shares of Company common stock under the 2010 Repurchase Program in open market transactions at a cost of $648 million. 53 Source: DANAHER CORP /DE/, 10-K, February 25, 2015 Powered by Morningstar® Document Research℠The information...

  • Page 56
    ... tax planning alternatives the Company could employ if it repatriated these earnings. The cash that the Company's foreign subsidiaries hold for indefinite reinvestment is generally used to finance foreign operations and investments, including acquisitions. As of December 31, 2014 and 2013, the total...

  • Page 57
    ... timing of the transaction. Primarily consist of obligations under product service and warranty policies and allowances, performance and operating cost guarantees, estimated environmental remediation costs, self-insurance and litigation claims, post-retirement benefits, pension obligations...

  • Page 58
    ... of demand, technological advances and pricing competition in many of the Company's markets can fluctuate significantly from period to period due to circumstances beyond the Company's control. If actual market conditions are less favorable than those projected by management, the Company could be...

  • Page 59
    ... revenues from the sale of products and services. Refer to Note 1 to the Company's Consolidated Financial ntatements for a description of the Company's revenue recognition policies. 57 Source: DANAHER CORP /DE/, 10-K, February 25, 2015 Powered by Morningstar® Document Research℠The information...

  • Page 60
    ... results are not consistent with management's assumptions and estimates, the Company's equity-based compensation expense could be materially different in the future. Pension and Other Post-retirement Benefits: For a description of the Company's pension and other post-retirement benefit accounting...

  • Page 61
    ... in exchange for those goods or services. The standard is effective for annual reporting periods beginning after December 15, 2016. Management has not yet completed its assessment of the impact of the new standard, including possible transition alternatives, on the Company's financial statements...

  • Page 62
    ..., 2014, respectively, and each accounted for less than 1% of the Company's total revenues for the year then ended. The Company's independent registered public accounting firm has issued an audit report on the effectiveness of the Company's internal control over financial reporting. This report dated...

  • Page 63
    ...effective internal control over financial reporting as of December 31, 2014, based on the COnO criteria. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United ntates), the consolidated balance sheets of Danaher Corporation and subsidiaries as...

  • Page 64
    ... in all material respects the information set forth therein. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United ntates), Danaher Corporation's internal control over financial reporting as of December 31, 2014, based on criteria established...

  • Page 65
    ...stock - $0.01 par value, 2.0 billion shares authorized; 792.5 and 785.7 issued; 704.3 and 698.1 outstanding, respectively Additional paid-in capital Retained earnings Accumulated other comprehensive income (loss) Total Danaher stockholders' equity Non-controlling interests Total stockholders' equity...

  • Page 66
    ... in millions, except per share amounts) Year Ended December 31 2014 2013 2012 nales Cost of sales Gross profit Operating costs and other: nelling, general and administrative expenses Research and development expenses Earnings from unconsolidated joint venture Operating profit Non-operating income...

  • Page 67
    ...) Year Ended December 31 2014 2013 2012 Net earnings Other comprehensive income (loss), net of income taxes: Foreign currency translation adjustments Pension and post-retirement plan benefit adjustments Unrealized (loss) gain on available-for-sale securities Total other comprehensive income (loss...

  • Page 68
    ...' EQUITY ($ and shares in millions) Common Stock Shares Balance, January 1, 2012 Net earnings for the year Other comprehensive loss Dividends declared Common stock-based award activity Common stock issued in connection with LYONs' conversions Purchase of stock (12.5 shares) Change in non-controlling...

  • Page 69
    ... 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.

  • Page 70
    ... TCCOUNTING POLICIES Business-Danaher Corporation (the "Company") designs, manufactures and markets professional, medical, industrial and commercial products and services, which are typically characterized by strong brand names, innovative technology and major market positions. The Company operates...

  • Page 71
    ... Company's share of the investee's income or loss and dividends paid. All equity investments are periodically reviewed to determine if declines in fair value below cost basis are other-than-temporary. nignificant and sustained decreases in quoted market prices or a series of historic and projected...

  • Page 72
    ... additional information about the Company's goodwill and other intangible assets. Revenue Recognition-As described above, the Company derives revenues primarily from the sale of test and measurement, environmental, life science and diagnostic, dental and industrial technologies products and services...

  • Page 73
    ... addition to facility closure, contract termination and other related activities. The Company records the cost of the restructuring activities when the associated liability is incurred. Refer to Note 14 for additional information. Foreign Currency Translation-Exchange rate adjustments resulting from...

  • Page 74
    ...-The Company accounts for stock-based compensation by measuring the cost of employee services received in exchange for all equity awards granted, including stock options, restricted stock units ("RnUs") and restricted shares, based on the fair value of the award as of the grant date. Equity-based...

  • Page 75
    ... Company successfully completed its tender offer for the outstanding shares of common stock of Nobel Biocare Holding AG ("Nobel Biocare"), acquiring 97% of the outstanding shares for an aggregate cash purchase price of approximately CHF 1.9 billion (approximately $1.9 billion based on exchange rates...

  • Page 76
    ... 2014 acquisitions as a group ($ in millions): Nobel Biocare Others Total Trade accounts receivable Inventories Property, plant and equipment Goodwill Other intangible assets, primarily customer relationships, trade names and technology In-process research and development Trade accounts payable...

  • Page 77
    ... of the Industrial Technologies segment. The businesses had combined annual revenues of $275 million in 2011. The Company recorded an aggregate after-tax gain on the sale of these businesses of $94 million, or $0.13 per diluted share, in its first quarter 2012 results. The Company has reported the...

  • Page 78
    ... to be completed in 2015. In August 2014, the Company completed the divestiture of its electric vehicle systems ("EVn")/hybrid product line for a sale price of $87 million in cash. This product line, which was part of the Industrial Technologies segment, had revenues of approximately $60 million...

  • Page 79
    ... purchase price for acquired businesses exceeding the fair value of tangible and intangible assets acquired less assumed liabilities and non-controlling interests. Management assesses the goodwill of each of its reporting units for impairment at least annually at the beginning of the fourth quarter...

  • Page 80
    ... the Company's goodwill by segment ($ in millions): Life Sciences & Diagnostics Test & Measurement Environmental Dental Industrial Technologies Total Balance, January 1, 2013 Attributable to 2013 acquisitions Foreign currency translation & other Balance, December 31, 2013 Attributable to 2014...

  • Page 81
    ... basis were as follows ($ in millions): Significant Unobservable Inputs (Level 3) Quoted Prices in Tctive Market (Level 1) Significant Other Observable Inputs (Level 2) Total December 31, 2014: Assets: Available-for-sale securities Liabilities: Deferred compensation plans December 31, 2013...

  • Page 82
    ... Non-Current Current 2013 Non-Current Compensation and benefits Restructuring Claims, including self-insurance and litigation Pension and post-retirement benefits Environmental and regulatory compliance Taxes, income and other Deferred revenue nales and product allowances Warranty Other Total NOTE...

  • Page 83
    ...Financing Notes, 2013 Notes and 2014 Notes offering, after deducting expenses and the underwriters' discount, were approximately $1.8 billion and were used to fund a portion of the purchase price for the acquisition of Beckman Coulter. The Company paid interest on the 2013 Notes quarterly in arrears...

  • Page 84
    ... the commercial paper issued to finance the acquisition of the Tektronix business. The Company pays interest on the 2018 Notes semi-annually in arrears, on January 15 and July 15 of each year. 2016 Bonds-In connection with the acquisition of Nobel Biocare in December 2014, the Company acquired bonds...

  • Page 85
    ... at date of measurement: U.S. Plans 2014 2013 2014 Non-U.S. Plans 2013 Discount rate Rate of compensation increase 4.00% N/A 4.80% N/A 2.25% 2.95% 3.60% 3.05% 83 Source: DANAHER CORP /DE/, 10-K, February 25, 2015 Powered by Morningstar® Document Research℠The information contained...

  • Page 86
    ...net periodic pension cost at date of measurement: U.S. Plans 2014 2013 2014 Non-U.S. Plans 2013 Discount rate Expected long-term return on plan assets Rate of compensation increase 4.80% 7.50% N/A 3.90% 7.50% N/A 3.60% 4.80% 3.05% 3.45% 4.65% 3.00% The discount rate reflects the market rate on...

  • Page 87
    ... 3) Quoted Prices in Tctive Market (Level 1) Significant Other Observable Inputs (Level 2) Total Cash and equivalents Equity securities: Common stock Preferred stock Fixed income securities: Corporate bonds Government issued Mutual funds Common/collective trusts Venture capital, partnerships...

  • Page 88
    ... financial instruments could result in a different fair value measurement at the reporting date. The following is a rollforward of the fair value of the Company's Level 3 venture capital, partnerships and other private investments ($ in millions): Balance, January 1, 2013 Actual return on plan...

  • Page 89
    ... total underfunded status of the plan was recognized as long-term accrued post-retirement liability since it was not expected to be funded within one year. Weighted average assumptions used to determine benefit obligations at date of measurement: 2014 2013 Discount rate Medical trend rate - initial...

  • Page 90
    ...assumed health care cost trend rates: ($ in millions) 1% Increase 1% Decrease Effect on the total of service and interest cost components Effect on post-retirement medical benefit obligation $ 0.6 8.1 $ (0.4) (7.2) The medical trend rate used to determine the post-retirement benefit obligation...

  • Page 91
    ... Pension and post-retirement benefits Environmental and regulatory compliance Other accruals and prepayments ntock-based compensation expense Tax credit and loss carryforwards Other Valuation allowances Total deferred tax asset Deferred tax liabilities: Property, plant and equipment Insurance...

  • Page 92
    ..., the Company had general business and foreign tax credit carryforwards of $159 million (net of applicable valuation allowances of $12 million) as of December 31, 2014, which can be carried forward to various dates from 2015 to 2024. As of December 31, 2014, gross unrecognized tax benefits totaled...

  • Page 93
    ... returns for 2010 and 2011. The Company's U.n. tax returns for 2012 and 2013 remain open for examination by the IRn. In addition, the Company has subsidiaries in Belgium, Brazil, Canada, China, Denmark, France, Finland, Germany, India, Italy, Japan, Norway, ningapore, nweden, the United Kingdom and...

  • Page 94
    ... shares of Align Technology, Inc. ("Align") common stock that the Company received in 2009 as a result of a settlement between Align and Ormco Corporation, a wholly-owned subsidiary of the Company. The Company received cash proceeds of $251 million from the sale of these marketable equity securities...

  • Page 95
    ... thereafter. Total rent expense for all operating leases was $232 million, $245 million and $247 million for the years ended December 31, 2014, 2013 and 2012, respectively. The Company generally accrues estimated warranty costs at the time of sale. In general, manufactured products are warranted...

  • Page 96
    ... policies in connection with certain acquisitions) up to certain limits that cover certain of these claims, this insurance may be insufficient or unavailable to cover such losses. For general, products and property liability and most other insured risks, the Company purchases outside insurance...

  • Page 97
    ... handling, manufacturing, use or sale of substances that are or could be classified as hazardous materials within the meaning of applicable laws. The Company must also comply with various health and safety regulations in both the United ntates and abroad in connection with the Company's operations...

  • Page 98
    ... equity compensation plans (or any successor plan) and for other corporate purposes. As of December 31, 2014, 20 million shares remained available for repurchase pursuant to the 2013 Repurchase Program. Neither the Company nor any "affiliated purchaser" repurchased any shares of Company common stock...

  • Page 99
    ... the 2007 ntock Incentive Plan. The Company accounts for stock-based compensation by measuring the cost of employee services received in exchange for all equity awards granted, including stock options, RnUs and restricted shares, based on the fair value of the award as of the grant date. The Company...

  • Page 100
    ... the forfeiture rate assumption to total unvested options. 98 Source: DANAHER CORP /DE/, 10-K, February 25, 2015 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...

  • Page 101
    ..., the Company derives a tax deduction measured by the excess of the market value over the grant price at the date of exercise. The Company realized a tax benefit of $46 million, $52 million, and $75 million in 2014, 2013 and 2012, respectively, related to the exercise of employee stock options. The...

  • Page 102
    ... of Contents In connection with the exercise of certain stock options and the vesting of RnUs and restricted shares previously issued by the Company, a number of shares sufficient to fund statutory minimum tax withholding requirements has been withheld from the total shares issued or released to the...

  • Page 103
    ... INFORMTTION The Company operates and reports its results in five separate business segments consisting of the Test & Measurement, Environmental, Life nciences & Diagnostics, Dental and Industrial Technologies segments. In addition, the Company's equity in earnings of the Apex joint venture is shown...

  • Page 104
    ... Total Sales by Major Product Group Year Ended December 31 ($ in millions) $ 16,888.3 1,875.1 8,797.0 27,560.4 $ 15,673.7 1,939.7 7,945.1 25,558.5 $ 15,980.8 1,957.1 7,415.3 25,353.2 $ $ $ 2014 2013 2012 Analytical & physical instrumentation Medical & dental products Motion & industrial...

  • Page 105
    ... ($ in millions, except per share data) 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter 2014: nales Gross profit Operating profit Net earnings Net earnings per share: Basic Diluted 2013: nales Gross profit Operating profit Net earnings Net earnings per share: Basic Diluted $ 4,662.7 2,452...

  • Page 106
    ... of Management on Danaher Corporation's Internal Control Over Financial Reporting" and "Report of Independent Registered Public Accounting Firm," respectively, and are incorporated herein by reference. The Company completed the acquisition of more than 97% of the outstanding common stock of Nobel...

  • Page 107
    ... by reference from the sections entitled Beneficial Ownership of Danaher Common Stock by Directors, Officers and Principal Shareholders and Equity Compensation Plan Information in the Proxy ntatement for the Company's 2015 annual meeting. ITEM 13. CERTTIN RELTTIONSHIPS TND RELTTED TRTNSTCTIONS, TND...

  • Page 108
    ... Corporation's Quarterly Report on Form 10-Q for the quarter ended July 1, 2011 (Commission File Number: 1-8089) 3.2 Amended and Restated By-laws of Danaher Corporation 4.1 nenior Indenture dated as of December 11, 2007 by and between Danaher Corporation and The Bank of New York Trust Company...

  • Page 109
    ...' Deferred Compensation Plan* Form of Danaher Corporation 2007 ntock Incentive Plan ntock Option Agreement for Non-Employee Directors* Incorporated by reference from Exhibit 10.2 to Danaher Corporation's Annual Report on Form 10-K for the year ended December 31, 2008 (Commission File Number: 1-8089...

  • Page 110
    ... Corporation's Annual Report on Form 10-K for the year ended December 31, 2013 (Commission File Number: 1-8089) Incorporated by reference from Exhibit 10.1 to Danaher Corporation's Current Report on Form 8-K filed on July 19, 2011 (Commission File Number: 1-8089) 10.20 Credit Agreement, dated...

  • Page 111
    ... Agent, dated December 6, 2011 Management Agreement dated February 23, 2012 by and between FJ900, Inc. and Joust Capital III, LLC (3) Incorporated by reference from Exhibit 10.22 to Danaher Corporation's Annual Report on Form 10-K for the year ended December 31, 2009 (Commission File Number: 1-8089...

  • Page 112
    ... 23.1 31.1 Consent of Independent Registered Public Accounting Firm Certification of Chief Executive Officer Pursuant to Item 601(b) (31) of Regulation n-K, as adopted pursuant to nection 302 of the narbanes-Oxley Act of 2002 Certification of Chief Financial Officer Pursuant to Item 601(b) (31) of...

  • Page 113
    ... to the referenced aircraft and, in certain cases, the name of the counterparty. In accordance with Instruction 2 to Item 601(a)(4) of Regulation n-K, Danaher Corporation has entered into an aircraft time sharing agreement with Daniel L. Comas that is substantially identical in all material respects...

  • Page 114
    ..., thereunto duly authorized. DTNTHER CORPORTTION Date: February 24, 2015 By: /s/ THOMAn P. JOYCE, JR. Thomas P. Joyce, Jr. President and Chief Executive Officer Pursuant to the requirements of the necurities Exchange Act of 1934, this annual report has been signed below by the following persons on...

  • Page 115
    ...Comas Executive Vice President and Chief Financial Officer /s/ ROBERT n. LUTZ Robert n. Lutz nenior Vice President and Chief Accounting Officer February 24, 2015 February 24, 2015 112 Source: DANAHER CORP /DE/, 10-K, February 25, 2015 Powered by Morningstar® Document Research℠The information...

  • Page 116
    ... 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.

  • Page 117
    ..., and the documents and information regarding, among other things, the Company's employees and talent, the Danaher Business System, customers, vendors, services, products, technology, formulations, methods of operation, sales, marketing, pricing, and costs are highly confidential and proprietary...

  • Page 118
    ... or strategies, acquisitions, divestitures or mergers, marketing plans, advertising or promotions, financial data (including but not limited to the revenues, costs, or profits, associated with any products or services), business and customer strategy, techniques, formulations, technical information...

  • Page 119
    ...had direct contact regarding such products or services at any time during the 24 months preceding the termination of my employment or relationship with the Company. 3 Source: DANAHER CORP /DE/, 10-K, February 25, 2015 Powered by Morningstar® Document Research℠The information contained herein...

  • Page 120
    ... customer of the Company, during the 24 months preceding the termination of my employment or relationship with the Company, in any capacity in which I would work with or support products or services competitive with or similar to the products, services, or support offered by, performed by, developed...

  • Page 121
    ... of my base salary (excluding incentive compensation, bonus amounts, benefits and similar items) at the monthly rate in effect on the date of my termination to be paid on the same schedule as if I were still employed by the Company (the "Severance Payments") provided I sign a release of all claims...

  • Page 122
    ... name using any name confusingly similar to the name Danaher Corporation or the name of any affiliate of Danaher or any other name under which any such entities does business. 9. Certification. I agree not to disclose to the Company, or use in my work for the Company, any confidential information...

  • Page 123
    ... to any media outlet, industry group, financial institution, current or former employee, consultant, client or customer of the Company, or any other entity or person, which are adverse to the interests, products, services or personnel of the Company or its and their customers or vendors. I further...

  • Page 124
    ... of my employment or relationship with the Company. Agreed to by: Danaher Corporation /s/ Thomas P. Joyce, Jr. Associate Signature By: s/ Henk van Duijnhoven Thomas P. Joyce, Jr. Associate's Printed Name Print Name and Title Date: 3/10/09 Date: 16 March 2009 8 Source: DANAHER CORP /DE/, 10...

  • Page 125
    ..., and the documents and information regarding, among other things, the Company's employees and talent, the Danaher Business System, customers, vendors, services, products, technology, formulations, methods of operation, sales, marketing, pricing, and costs are highly confidential and proprietary...

  • Page 126
    ... or strategies, acquisitions, divestitures or mergers, marketing plans, advertising or promotions, financial data (including but not limited to the revenues, costs, or profits, associated with any products or services), business and customer strategy, techniques, formulations, technical information...

  • Page 127
    ... I had direct contact regarding such products or services at any time during the 24 months preceding the termination of my employment or relationship with the Company. Source: DANAHER CORP /DE/, 10-K, February 25, 2015 Powered by Morningstar® Document Research℠The information contained herein...

  • Page 128
    ... customer of the Company, during the 24 months preceding the termination of my employment or relationship with the Company, in any capacity in which I would work with or support products or services competitive with or similar to the products, services, or support offered by, performed by, developed...

  • Page 129
    ... of time. I acknowledge and agree that if I am employed by the Company it is on an at-will basis which means that the Company and I each have the right to terminate the employment Source: DANAHER CORP /DE/, 10-K, February 25, 2015 Powered by Morningstar® Document Research℠The information...

  • Page 130
    ...evidenced by my employment or relationship with the Company, the payment of wages or monies to me, the provision of benefits to me, or by executing this Agreement. Source: DANAHER CORP /DE/, 10-K, February 25, 2015 Powered by Morningstar® Document Research℠The information contained herein may...

  • Page 131
    ... of my employment or relationship with the Company. Agreed to by: Danaher Corporation By: Associate Signature Associate's Printed Name Print Name and Title Date: Date: Source: DANAHER CORP /DE/, 10-K, February 25, 2015 Powered by Morningstar® Document Research℠The information contained...

  • Page 132
    ... Danaher Business System to achieve our aggressive growth targets. We look forward to welcoming you to our dynamic team. As we discussed, your position would be the Executive Officer position of Executive Vice President (with an initial focus on Water Quality), based in Washington, D.C., reporting...

  • Page 133
    ... through CapRelo, our third party relocation services company. Our CapRelo representative will contact you to explain the services, assistance and benefits provided under the Corporate/Executive Officer Relocation Policy for Danaher Corporation and its Affiliates, coordinate your relocation coverage...

  • Page 134
    ... and accept this offer of at will employment by signing and returning it to me, along with the abovereferenced signed documents no later than March 7, 2014. Mark A. Beck: /s/ Mark A. Beck Date: March 6, 2014 Source: DANAHER CORP /DE/, 10-K, February 25, 2015 Powered by Morningstar® Document...

  • Page 135
    ...12.1 Danaher Corporation Statement Regarding Computation of Ratio of Earnings to Fixed Charges (In millions, except ratio data) Year Ended December 31 2010 2011 2012 2013 2014 Fixed Charges: Gross Interest Expense Interest Element of Rental Expense Interest on Unrecognized Tax Benefits Total Fixed...

  • Page 136
    ... Delaware New York Delaware China California Germany Ireland Delaware United Kingdom Canada Utah California Delaware Sweden Australia Germany Turkey Canada Czech Republic China Mexico Brazil Croatia Spain Switzerland France Delaware Germany Hong Kong Delaware India Switzerland Ireland Japan Korea...

  • Page 137
    ... Coulter South Africa (Proprietary) Limited Beckman Coulter Srl Beckman Coulter Taiwan Inc. Beckman Coulter United Kingdom Limited BioTector Analytical Systems Ltd Carnassial Corporation ChemTreat, Inc. ChemTreat International, Inc. ClearSight Networks, Inc. Comark Limited Danaher China Holdings...

  • Page 138
    ... Measurement Limited Fluke Sales B.V. Fluke Shanghai Corporation Fluke Software Ireland Limited Fullerton LLC Gems Sensors Inc. Genetix Group Limited Gilbarco Australia Pty Ltd Gilbarco China Co. Ltd Gilbarco GmbH & Co. KG Gilbarco Inc. Gilbarco S.r.l. Gilbarco Veeder Root India Private Limited Hach...

  • Page 139
    ... Leica Microsystems (UK) Limited Leica Mikrosysteme (Austria) GmbH Leica Mikrosysteme Vertrieb GmbH Life Sciences Holdings France SAS Linx Printing Technologies Limited Lumigen, Inc. Maxtek Components Corporation McCrometer, Inc. Metrex Research, LLC Mixed Signals, Inc. Molecular Devices, LLC Motion...

  • Page 140
    ... Biocare Holding AG Nobel Biocare Services AG Nobel Biocare USA LLC* Normond info SAS Ormco BV Ormco Corporation OTT Hydromet GmbH Pacific Scientific Energetic Materials Company (Arizona) LLC Pacific Scientific Energetic Materials Company (California) LLC PacSci Motion Control, Inc. PaloDEx Group...

  • Page 141
    ... Systems, Inc. X-Rite Asia Pacific Limited X-Rite Europe GmbH X-Rite GmbH X-Rite Incorporated Young's L&S Dental Supplies Ltd. Zhuhai S.E.Z. Videojet Electronics Ltd. Switzerland Delaware United Kingdom Delaware Delaware New York Delaware Germany China Sweden Canada Sweden Delaware Delaware China...

  • Page 142
    ... effectiveness of internal control over financial reporting of Danaher Corporation and subsidiaries included in this Annual Report (Form 10-K) of Danaher Corporation and subsidiaries for the year ended December 31, 2014. Registration Statement on Form S-3 Registration Number Date Filed 333-181214...

  • Page 143
    ... management or other employees who have a significant role in the registrant's internal control over financial reporting. February 24, 2015 By: Name: Title: /s/ Thomas P. Joyce, Jr. Thomas P. Joyce, Jr. President and Chief Executive Officer Date: Source: DANAHER CORP /DE/, 10-K, February 25, 2015...

  • Page 144
    ..., that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. February 24, 2015 By: Name: Title: /s/ Daniel L. Comas Daniel L. Comas Executive Vice President and Chief Financial Officer Date: Source: DANAHER CORP /DE/, 10...

  • Page 145
    ... information contained in such Annual Report on Form 10-K fairly presents in all material respects the financial condition and results of operations of Danaher Corporation. Date: February 24, 2015 By: Name: Title: /s/ Thomas P. Joyce, Jr. Thomas P. Joyce, Jr. President and Chief Executive Officer...

  • Page 146
    ...and results of operations of Danaher Corporation. Date: February 24, 2015 By: Name: Title: /s/ Daniel L. Comas Daniel L. Comas Executive Vice President and Chief Financial Officer This certification accompanies the Annual Report on Form 10-K pursuant to Section 906 of the Sarbanes-Oxley Act of 2002...

  • Page 147
    ... 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.