Danaher 2011 Annual Report Download - page 80

Table of Contents
financing activities of Apex. Upon the closing of the transaction, Apex simultaneously obtained a credit facility and term debt financing and used $45 million
of the term debt financing to purchase from the Company certain assets of the Company’s tools business. In addition, as indicated in the table below, the
Company recorded receivables from Apex totaling approximately $45 million related to consideration due to the Company in connection with the formation of
the joint venture. The Company has collected the majority of this receivable as of December 31, 2011 and expects to collect the remaining outstanding balance
during 2012.
In accordance with accounting standards applicable to non-controlling interests in subsidiaries, the Company recognized a $232 million after-tax gain ($0.34
per diluted share) during the third quarter of 2010 associated with the transaction. The gain is computed as the difference between the book value of the
contributed business that was deconsolidated and the fair value of the consideration received in exchange, consisting of $45 million in cash, a receivable of
$45 million from Apex and the 50% interest in Apex as indicated in the table below ($ in millions):
Fair value of consideration received:
Fair value of 50% equity interest received $480.0
Cash received 45.2
Receivable from joint venture 44.8
Total fair value of consideration received 570.0
Less: book value of net assets contributed (279.0)
Pre-tax gain on contribution to joint venture 291.0
Income taxes (58.8)
After-tax gain on contribution to joint venture $232.2
As of the closing of the transaction, the Company deconsolidated its contributed businesses and accounts for its investment in the joint venture based on the
equity method of accounting. As a result of the Company’s continuing involvement with the joint venture, the contributed businesses are not presented as a
discontinued operation. The Company recorded its equity in the earnings of Apex in an amount equal to $67 million and $23 million for the years ended
December 31, 2011 and 2010, respectively, reflecting its 50% ownership position.
Sales and operating profit generated by the contributed business prior to the closing of the transaction and included in the Company’s consolidated results of
operations during the two years ended December 31 were as indicated in the table below ($ in millions):
 
Sales $315.6 $607.9
Operating profit 41.5 63.9
 
The classes of inventory as of December 31 are summarized as follows ($ in millions):
 
Finished goods $ 930.9 $581.8
Work in process 262.2 177.5
Raw materials 588.3 406.3
$1,781.4 $1,165.6
At December 31, 2011 and 2010, the difference between inventories valued at LIFO and the value of that same inventory if the FIFO method had been used
was not significant. The liquidation of LIFO inventory did not have a significant impact on the Company’s results of operations in any period presented.
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Source: DANAHER CORP /DE/, 10-K, February 24, 2012 Powered by Morningstar® Document Research℠
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