Danaher 2011 Annual Report Download - page 45

Table of Contents
The impact on the Company’s results of operations from (1) the contributed business prior to the formation of Apex, and (2) the Company’s equity in the
earnings of Apex subsequent to the formation of Apex, is reflected in the table below ($ in millions):

  
Prior to formation of Apex
Sales — $315.6 $607.9
Operating profit — 41.5 63.9
Subsequent to formation of Apex
Earnings from unconsolidated joint venture $66.8 22.8 —
Earnings from unconsolidated joint venture increased $44 million for 2011 as compared to 2010, primarily due to a full year of earnings in 2011 as compared
to only six months of earnings in 2010 following the closing of the formation of the joint venture in July 2010.
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For a description of the Company’s outstanding indebtedness, please refer to “–Liquidity and Capital Resources – Financing Activities and Indebtedness”
below.
Interest expense of $142 million in 2011 was approximately $24 million higher than 2010 interest expense of $117 million. The increase in interest expense
during 2011 results primarily from the additional debt incurred during the second quarter of 2011 in connection with the Beckman Coulter acquisition. The
Company’s average commercial paper borrowings were also higher in 2011 as compared to 2010, in large part due to borrowings used to partially fund the
acquisition of Beckman Coulter. Interest expense in 2010 was essentially flat compared to interest expense in 2009.
Interest income of $5 million, $6 million and $5 million in 2011, 2010 and 2009, respectively, was essentially flat on a year-over-year basis.
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General
Income tax expense and deferred tax assets and liabilities reflect management’s assessment of future taxes expected to be paid on items reflected in the
Company’s financial statements. The Company records the tax effect of discrete items and items that are reported net of their tax effects in the period in which
they occur.
The Company’s effective tax rate can be affected by changes in the mix of earnings in countries with differing statutory tax rates (including as a result of
business acquisitions and dispositions), changes in the valuation of deferred tax assets and liabilities, accruals related to contingent tax liabilities and period-
to-period changes in such accruals, the results of audits and examinations of previously filed tax returns (as discussed below), the expiration of statutes of
limitations, the implementation of tax planning strategies and changes in tax laws. For a description of the tax treatment of earnings that are planned to be
reinvested indefinitely outside the United States, please refer to “—Cash and Cash Requirements” below.
The amount of income taxes the Company pays is subject to ongoing audits by federal, state and foreign tax authorities, which often result in proposed
assessments. Management performs a comprehensive review of its global tax positions on a quarterly basis and accrues amounts for contingent tax liabilities.
Based on these reviews, the results of discussions and resolutions of matters with certain tax authorities, tax rulings and court decisions and the expiration of
statutes of limitation, reserves are adjusted as necessary. For a discussion of risks related to these and other tax matters, please refer to “Item 1A. Risk
Factors”.
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Source: DANAHER CORP /DE/, 10-K, February 24, 2012 Powered by Morningstar® Document Research℠
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