Danaher 2011 Annual Report Download - page 21

Table of Contents
was Danaher’s largest acquisition and has expanded Danaher’s business into new markets. Our acquisitions involve a number of financial, accounting,
managerial, operational, legal and other risks and challenges, including the following, any of which could adversely affect our financial statements:
• Any acquired business, technology, service or product could under-perform relative to our expectations and the price that we paid for it, or not
perform in accordance with our anticipated timetable.
• Acquisitions could cause our financial results to differ from our own or the investment community’s expectations in any given period, or over the
long-term.
• Pre-closing and post-closing acquisition-related earnings charges could adversely impact operating results in any given period, and the impact may
be substantially different from period to period.
• Acquisitions could create demands on our management, operational resources and financial and internal control systems that we are unable to
effectively address.
• We could experience difficulty in integrating personnel, operations and financial and other systems and retaining key employees and customers.
• We may be unable to achieve cost savings or other synergies anticipated in connection with an acquisition.
• We may assume by acquisition unknown liabilities, known contingent liabilities that become realized, known liabilities that prove greater than
anticipated, internal control deficiencies or exposure to regulatory sanctions resulting from the acquired company’s activities. The realization of
any of these liabilities or deficiencies may increase our expenses, adversely affect our financial position or cause us to fail to meet our public
financial reporting obligations.
• In connection with acquisitions, we often enter into post-closing financial arrangements such as purchase price adjustments, earn-out obligations
and indemnification obligations, which may have unpredictable financial results.
• As a result of our acquisitions, we have recorded significant goodwill and other indefinite lived intangible assets on our balance sheet. If we are not
able to realize the value of these assets, we may be required to incur charges relating to the impairment of these assets.


Certain of the acquisition agreements by which we have acquired companies require the former owners to indemnify us against certain liabilities related to the
operation of the company before we acquired it. In most of these agreements, however, the liability of the former owners is limited and certain former owners
may be unable to meet their indemnification responsibilities. We cannot assure you that these indemnification provisions will protect us fully or at all, and as a
result we may face unexpected liabilities that adversely affect our financial statements.


We continually assess the strategic fit of our existing businesses and may divest businesses that are deemed not to fit with our strategic plan or are not
achieving the desired return on investment. Divestitures pose risks and challenges that could negatively impact our business. For example, when we decide to
sell a business or assets, we may be unable to do so on satisfactory terms and within our anticipated timeframe, and even after reaching a definitive agreement
to sell a business the sale is typically subject to satisfaction of pre-closing conditions which may not become satisfied. In addition, divestitures may dilute the
Company’s earnings per share, have other adverse accounting impacts and distract management, and disputes may arise with buyers. In addition, we have
retained responsibility for and/or have agreed to indemnify buyers against some known and unknown contingent liabilities related to a number of businesses
we have sold, such as lawsuits, tax liabilities, product liability claims and environmental matters. The resolution of these contingencies has not had a material
effect on our financial statements but we cannot be certain that this favorable pattern will continue.



Certain of our products are medical devices and other products that are subject to regulation by the FDA, by comparable agencies of other countries and by
regulations governing radioactive or other hazardous materials (or the manufacture and sale of products containing such materials). For more information
regarding these regulations please see “Item 1 – Business – Regulatory Matters.” We cannot guarantee that we will be able to obtain regulatory
19
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.