Danaher 2012 Annual Report Download

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℠
FORM 10-K
DANAHER CORP /DE/ - DHR
Filed: February 22, 2013 (period: December 31, 2012)
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 22, 2013 (period: December 31, 2012) 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
    ... EXCHTNGE TCT OF 1934 For the fiscal year ended December 31, 2012 OR ¨ TRTNSITION REPORT PURSUTNT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHTNGE TCT OF 1934 For the transition period from to Commission File Number: 1-8089 _____ DTNTHER CORPORTTION (Exact name of registrant as specified in...

  • Page 3
    ... INCORPORTTED BY REFERENCE Part III incorporates certain information by reference from the Registrant's proxy statement for its 2013 annual meeting of stockholders to be filed pursuant to Regulation 14A within 120 days after Registrant's fiscal year end. With the exception of the sections of...

  • Page 4
    ... in and Disagreements with Accountants on Accounting and Financial Disclosure Controls and Procedures Other Information 29 31 32 61 62 109 109 109 Item 10. Item 11. Item 12. Item 13. Item 14. Directors, Executive Officers and Corporate Governance Executive Compensation necurity Ownership of...

  • Page 5
    ... brand names, innovative technology and major market positions. Our research and development, manufacturing, sales, distribution, service and administrative facilities are located in more than 50 countries. Our business consists of five segments: Test & Measurement; Environmental; Life nciences...

  • Page 6
    ... years. For additional information regarding sales, operating profit and identifiable assets by segment, please refer to Note 19 in the Consolidated Financial ntatements included in this Annual Report. For the Years Ended December 31 2012 2011 2010 Test & Measurement Environmental Life nciences...

  • Page 7
    ... wheel service equipment business is based on the factors described under "-Competition." Test & Measurement segment manufacturing facilities are located in North America, Europe, and Asia. ENVIRONMENTTL Our Environmental segment provides products that help protect our water supply and air quality...

  • Page 8
    ... the supplier's product offering and the other factors described under "-Competition." Our water quality business provides products under a variety of brands, including CHEMTREAT, HACH, HACH/LANGE and TROJAN TECHNOLOGIEn. Manufacturing facilities are located in North America, Europe, and Asia. nales...

  • Page 9
    ...diagnostics business generally markets its products under the APERIO, BECKMAN COULTER, IRIn, LEICA BIOnYnTEMn, RADIOMETER and nURGIPATH brands. Manufacturing facilities are located in North America, Europe, Asia and Australia. The businesses sell to customers primarily through direct sales personnel...

  • Page 10
    ... under "-Competition." 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 businesses sell to customers primarily through...

  • Page 11
    ... products are primarily marketed under the EnKO, FOBA, LINX, PANTONE, VIDEOJET and X-RITE brands. Manufacturing facilities are located in North America, Europe, nouth America, and Asia. nales are generally made through our direct sales personnel and independent distributors. 9 Source: DANAHER CORP...

  • Page 12
    ...our direct sales personnel. Manufacturing facilities of our sensors & controls, energetic materials and JVn businesses are located in North America, nouth America, Europe and Asia. TPEX TOOL GROUP JOINT VENTURE In 2010, the Company entered into a joint venture with Cooper Industries, plc, combining...

  • Page 13
    ... includes information common to all of our segments. Materials Our manufacturing operations employ a wide variety of raw materials, including steel, copper, cast iron, electronic components, aluminum, plastics and other petroleum-based products. Prices of oil and gas also affect our costs for...

  • Page 14
    ... and development expenditures over each of the last three years, by segment and in the aggregate ($ in millions): Year Ended December 31 2012 2011 2010 Test & Measurement Environmental Life nciences & Diagnostics Dental Industrial Technologies Businesses contributed to the Apex joint venture Total...

  • Page 15
    ... majority of our revenue in 2012 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 governments...

  • Page 16
    ... delivery of or payment for health care benefits, items or services. In addition, HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, also restricts the use 14 • Source: DANAHER CORP /DE/, 10-K, February 22, 2013 Powered by Morningstar® Document...

  • Page 17
    ... opportunity to access new markets for products. In addition, we believe that our future growth depends in part on our ability to develop products and sales models that successfully target high-growth markets. 15 Source: DANAHER CORP /DE/, 10-K, February 22, 2013 Powered by Morningstar® Document...

  • Page 18
    ...the last three years, by segment and in the aggregate: Year Ended December 31 2012 2011 2010 Test & Measurement Environmental Life nciences & Diagnostics Dental Industrial Technologies Businesses contributed to the Apex joint venture Total percentage of revenue derived from customers outside of the...

  • Page 19
    ... of: reducing demand for our products and services, limiting the financing available to our customers, increasing order cancellations and resulting in longer sales cycles and slower adoption of new technologies; increasing the difficulty in collecting accounts receivable and the risk of excess...

  • Page 20
    ... resulting from competition may adversely impact our financial statements. Our growth depends in part on the timely development and commercialization, and customer acceptance, of new products and product enhancements based on technological innovation. We generally sell our products in industries...

  • Page 21
    .... In particular, as of the date of this report the acquisition of Beckman Coulter, Inc. in June 2011 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...

  • Page 22
    ..., as well as laws regulating fraud and abuse in the healthcare industry and the privacy and security of health information. Failure to comply with those regulations could adversely affect our reputation and financial statements. Certain of our products are medical devices and other products that are...

  • 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
    ... 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 divestiturerelated matters. These...

  • Page 25
    ... and product liability claims can result in significant costs, 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 22, 2013 Powered by Morningstar® Document Research℠The information contained...

  • Page 26
    ... 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. Our indebtedness may limit our operations and our use of our cash...

  • Page 27
    ... and business factors could negatively affect our financial statements. In 2012, approximately 57% of our sales were derived from customers outside the United ntates. In addition, many of our manufacturing operations, suppliers and employees are located outside the United ntates. nince our growth...

  • Page 28
    ... in defective products or services, damage customer relationships and our reputation and result in legal claims or proceedings, liability or penalties under privacy laws, each of which could adversely affect our business and our financial statements. Our defined benefit pension plans are subject...

  • Page 29
    ... purposes, such as administration, sales, manufacturing, warehousing and/or distribution. The number of significant facilities by business segment is: Test & Measurement, 40; Environmental, 42; Life nciences & Diagnostics, 74; Dental, 29; and Industrial Technologies, 57. We consider our...

  • Page 30
    ... Corporation, and is a brother of nteven M. Rales. H. Lawrence Culp, Jr. has served on Danaher's Board of Directors and as Danaher's President and Chief Executive Officer since May 2001. Daniel L. Comas has served as Executive Vice President and Chief Financial Officer since 2005. William K. Daniel...

  • Page 31
    ...323 Maximum Number of Shares that May Yet Be Purchased Under The Plans or Programs (1) 15,022,690 8,261,858 7,518,535 7,504,155 On May 11, 2010, the Company's Board of Directors authorized the repurchase of up to 20 million shares of the Company's common stock from time to time on the open market...

  • Page 32
    ...in this report, including earnings per share, dividends per share and the weighted average number of shares outstanding for basic and diluted earnings per share for each respective period, have been adjusted to reflect the stock split. 30 Source: DANAHER CORP /DE/, 10-K, February 22, 2013 Powered...

  • Page 33
    ...the Company's hand tools businesses to the Apex Tool Group, LLC joint venture. Refer to Note 4 of the Notes to the Consolidated Financial ntatements for additional information. Net earnings per share amounts do not add due to rounding. 31 Source: DANAHER CORP /DE/, 10-K, February 22, 2013 Powered...

  • Page 34
    ... in general economic conditions occurs, the Company expects sales from existing businesses to continue to grow on a year-over-year basis during 2013 with sales growth returning to the Test & Measurement segment and the other segments growing at rates experienced in 2012. 32 Source: DANAHER CORP /DE...

  • Page 35
    ... segments. The aggregate annual sales of the fourteen businesses acquired at the time of their respective acquisitions, in each case based on the company's revenues for its last completed fiscal year prior to the acquisition, were $666 million. On June 30, 2011, following the successful completion...

  • Page 36
    ... ended December 31, 2011 and 2010. Year-over-year operating profit margin comparisons benefited 160 basis points from the favorable impact of higher sales volumes and ongoing productivity improvements net of the impact of costs associated with various sales, marketing and product development growth...

  • Page 37
    ... table summarizes sales by business segment for each of the periods indicated ($ in millions): For the Year Ended December 31 2012 2011 2010 Test & Measurement Environmental Life nciences & Diagnostics Dental Industrial Technologies Businesses contributed to Apex joint venture Total $ 3,381...

  • Page 38
    ... of costs associated with various sales, marketing and product development growth investments. The dilutive effect of acquired businesses adversely impacted year-over-year operating profit margin comparisons by 20 basis points. ENVIRONMENTTL The Company's Environmental segment provides products...

  • Page 39
    ...year costs associated with various sales, marketing and product development growth investments. The dilutive effect of acquisitions adversely impacted year-over-year operating margin comparisons by 60 basis points. 2011 COMPTRED TO 2010 Price increases in the segment contributed 1.5% to sales growth...

  • Page 40
    ...universities, medical schools and research institutions use these tools to study the causes of disease, identify new therapies and test new drugs and vaccines. Life Sciences & Diagnostics Selected Financial Data ($ in millions) For the Year Ended December 31 2012 2011 2010 nales Operating profit...

  • Page 41
    ... Beckman Coulter's business model on the Company's depreciation and amortization costs, please see "-Liquidity and Capital Resources-Operating Activities." 2011 COMPTRED TO 2010 Price increases in the segment contributed 0.5% to sales growth on a year-over-year basis during 2011 as compared to 2010...

  • Page 42
    .... 2011 COMPTRED TO 2010 Price increases throughout the segment contributed 1.0% to sales growth on a year-over-year basis during 2011 as compared to 2010 and are reflected as a component of the change in sales from existing businesses. 40 Source: DANAHER CORP /DE/, 10-K, February 22, 2013 Powered...

  • Page 43
    ...' integrated packaging solutions product lines also contributed to the existing business' sales growth in the second half of 2012, with growth in most major geographies and particular strength in North America. The Company's acquisition of X-Rite, Incorporated, a global 41 Source: DANAHER CORP /DE...

  • Page 44
    ... in 2012 and 2011, net of incremental year-over-year costs associated with various sales, marketing and product development growth investments, increased operating profit margins by 75 basis points on a year-over-year basis. 2011 COMPTRED TO 2010 Price increases throughout the segment contributed...

  • Page 45
    ... restructuring costs incurred during 2011 compared to 2010 and ongoing investments in the Company's sales growth initiatives. In addition, change in control payments to Beckman Coulter employees in connection with the closing of the Beckman Coulter acquisition adversely impacted selling, general and...

  • Page 46
    ... used to partially fund the acquisition of Beckman Coulter. Interest income of $3 million, $5 million and $6 million in 2012, 2011 and 2010, respectively, was essentially flat on a year-over-year basis. INCOME TTXES General Income tax expense and deferred tax assets and liabilities reflect...

  • Page 47
    ...by the benefit on 2013's effective tax rate from the reinstatement of the tax benefits under the Act noted above. INFLTTION The effect of inflation on the Company's revenues and net earnings was not significant in the years ended December 31, 2012 , 2011 or 2010. 45 Source: DANAHER CORP /DE/, 10...

  • Page 48
    ... impact the Company's sales and results of operations. 46 Source: DANAHER CORP /DE/, 10-K, February 22, 2013 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...

  • Page 49
    ... continue to affect the reported amount of sales, profit, and assets and liabilities in the Company's Consolidated Financial ntatements. In connection with a 2011 acquisition, the Company acquired a currency swap agreement that requires the Company to purchase approximately 184 million Japanese...

  • Page 50
    ... the Company completed the sale of its KEO business. Aggregate cash proceeds in 2012 in connection with the completed sales were $337 million . The Company repurchased approximately 12.5 million shares of Company common stock in open market transactions at a cost of $648 million and an average price...

  • Page 51
    ... cash flows during 2010. In connection with the Company's restructuring activities, the Company records appropriate accruals for the costs of closing facilities, severing personnel and, in connection with acquisitions, integrating the acquired businesses into existing Company operations. Cash...

  • Page 52
    ... Company's five segments. The aggregate annual sales of these seventeen acquired businesses at the time of their respective acquisitions, in each case based on the company's revenues for its last completed fiscal year prior to the acquisition, were $440 million. As discussed above, on July 4, 2010...

  • 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 2012, as commercial paper balances...

  • Page 54
    ...rate of 3.9% per year. The net proceeds from the 2011 Financing 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 pays interest on the 2013...

  • Page 55
    ...the common stock dividend paid during such quarterly period multiplied by the number of shares issuable upon conversion of a LYON. The Company paid $1 million of contingent interest on the LYONs for each of the years ended December 31, 2012 and 2011 and paid $2 million in contingent interest in 2010...

  • Page 56
    ... in connection with the Company's equity compensation plans (or any successor plan) and for other corporate purposes. Pursuant to the stock repurchase program, during the year ended December 31, 2012 , the Company repurchased approximately 12.5 million shares of Company common stock in open market...

  • Page 57
    ... various tax planning alternatives the Company could employ if it repatriated these earnings. The cash that our foreign subsidiaries hold for indefinite reinvestment is generally used to finance foreign operations and investments, including acquisitions. As of December 31, 2012 and 2011, the total...

  • Page 58
    ..., certain leases require the Company to pay real estate taxes, insurance, maintenance and other operating expenses associated with the leased premises. These future costs are not included in the schedule above. Consist of agreements to purchase goods or services that are enforceable and legally...

  • Page 59
    ... and services and claims relating to intellectual property matters, employment matters, tax matters, commercial disputes, competition and sales and trading practices, personal injury and insurance coverage. The Company may also become subject to lawsuits as a result of past or future acquisitions or...

  • Page 60
    ... the Company also estimates fair value utilizing a discounted cash flow analysis (i.e., an income approach) in order to validate the results of the market approach. The discounted cash flow model requires judgmental assumptions about projected revenue growth, future operating margins, discount rates...

  • Page 61
    ... The Company's estimate of selling price impacts the amount and timing of revenue recognized in multiple element arrangements. For transactions entered into prior to fiscal year 2011, revenue for multiple element arrangements was recognized for the separate elements when the product or services that...

  • Page 62
    ... benefit pension plans ("pension plans") and certain eligible retirees are entitled to health care and life insurance benefits under post-retirement benefit plans ("post-retirement plans"). The Company measures its pension and post retirement plans' assets and obligations as of the end of each year...

  • Page 63
    ... only, the implementation of this guidance in the first quarter of fiscal year 2013 will not have a material impact on the Company's results of operations, financial position or cash flows. In July 2012, updated accounting guidance was issued which allows entities to perform a qualitative...

  • Page 64
    ...'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 February 22, 2013 appears on p age 63 of t his Form 10-K. 62 Source: DANAHER CORP /DE/, 10-K, February 22, 2013 Powered by...

  • Page 65
    ... Registered Public Tccounting Firm The Board of Directors of Danaher Corporation: We have audited Danaher Corporation and subsidiaries' internal control over financial reporting as of December 31, 2012 , based on criteria established in Internal Control-Integrated Framework issued by the Committee...

  • Page 66
    .... 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, 2012 , based on criteria established in Internal Control-Integrated Framework issued by...

  • Page 67
    ...31 2012 2011 TSSETS Current Assets: Cash and equivalents Trade accounts receivable, less allowance for doubtful accounts of $121.4 and $117.4, respectively Inventories Prepaid expenses and other current assets $ Total current assets Property, plant and equipment, net Investment in joint venture...

  • Page 68
    ... in millions, except per share data) Year Ended December 31 2012 2011 2010 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 69
    ... ($ in millions) Year Ended December 31 2012 2011 2010 Net earnings Other comprehensive income (loss), net of income taxes: Foreign currency translation adjustments Pension and post-retirement plan benefit adjustments Unrealized gain on available-for-sale securities Total other comprehensive loss...

  • Page 70
    ...connection with LYONs' conversions Treasury stock purchase (12.5 shares) Change in non-controlling interests - - - 7.7 $ (648.4) - 3,688.1 Balance, December 31, 2012 67.4 nee the accompanying Notes to the Consolidated Financial ntatements. 68 Source: DANAHER CORP /DE/, 10-K, February 22, 2013...

  • Page 71
    ... OF CTSH FLOWS ($ in millions) Year Ended December 31 2012 2011 2010 Cash flows from operating activities: Net earnings $ 2,392.2 92.9 $ Less earnings from discontinued operations, net of income taxes Net earnings from continuing operations Non-cash items: Depreciation 2,172.3 237.0 $ 1,793...

  • Page 72
    ...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 in five business segments: Test & Measurement, Environmental, Life...

  • Page 73
    ...of credit risk because of the diversified portfolio of individual customers and geographical areas. The Company recorded $40 million associated with doubtful accounts for each of the years ended December 31, 2012 and 2011 and recorded $47 million in doubtful accounts in 2010. Included in the Company...

  • Page 74
    ...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 75
    ...and tax basis of assets and liabilities using enacted rates expected to be in effect during the year in which the differences reverse. Deferred tax assets generally represent items that can be used as a tax deduction or credit in the Company's tax return in future years for which the tax benefit has...

  • Page 76
    ... evaluates potential acquisitions that either strategically fit with the Company's existing portfolio or expand the Company's portfolio into a new and attractive business area. The Company has completed a number of acquisitions that have been accounted for as purchases and have resulted in the...

  • Page 77
    ...the Company's five segments. The aggregate annual sales of these seventeen acquired businesses at the time of their respective acquisitions, in each case based on the company's revenues for its last completed fiscal year prior to the acquisition, were $440 million . The 75 Source: DANAHER CORP /DE...

  • Page 78
    ... and 2010 acquisitions as a group ($ in millions): 2011 Tcquisitions Beckman Coulter Others Total Trade accounts receivable Inventories Property, plant and equipment Goodwill Other intangible assets, primarily customer relationships, trade names and patents In-process research and development...

  • Page 79
    ...$0.13 per diluted share in its first quarter 2012 results. In April 2011, the Company completed the divestiture of its Pacific ncientific Aerospace ("PnA") business for a sale price of $680 million in cash. This business, which was also part of the Industrial Technologies segment and supplies safety...

  • Page 80
    ... 4, 2010, the Company entered into a joint venture with Cooper Industries, plc ("Cooper"), combining certain of the Company's hand tool businesses with Cooper's Tools business to form a new entity called Apex Tool Group, LLC ("Apex"). The 2009 sales, on a combined basis, of the two tools businesses...

  • Page 81
    ... the joint venture, the contributed businesses were not presented as a discontinued operation. The Company recorded its equity in the earnings of Apex in an amount equal to $70 million , $67 million and $23 million for the three years ended December 31, 2012, 2011 and 2010, respectively, reflecting...

  • Page 82
    ... to approximately $3.9 billion . The Company's annual impairment test was performed as of the first day of the Company's fiscal fourth quarters of 2012, 2011 and 2010 and no impairment was identified in any period. Reporting units resulting from recent acquisitions generally present the highest risk...

  • Page 83
    ...statements resulting from the Company's activities during 2012 and 2011 ($ in millions). Life Sciences & Environmental Diagnostics Test & Measurement Dental Industrial Technologies Total Balance, January 1, 2011 Attributable to 2011 acquisitions Adjustments due to finalization of purchase price...

  • Page 84
    ... Balance nheets. 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 after their termination of employment (or board service, as applicable). All...

  • Page 85
    ...millions): 2012 Current Non-Current 2011 Current 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...

  • Page 86
    ...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. The Company issued commercial paper under the Euro commercial paper program during 2012...

  • Page 87
    ...rate of 3.9% per year. The net proceeds from the 2011 Financing 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 pays interest on the 2013...

  • Page 88
    ... million in 2012, 2011 and 2010, respectively. 86 Source: DANAHER CORP /DE/, 10-K, February 22, 2013 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...

  • Page 89
    ... of measurement: U.S. Plans Non-U.S. Plans 2012 2011 2012 2011 Discount rate Rate of compensation increase 3.90% N/A 4.50% 4.00% 3.45% 3.00% 4.10% 3.00% 87 Source: DANAHER CORP /DE/, 10-K, February 22, 2013 Powered by Morningstar® Document Research℠The information contained herein...

  • Page 90
    ..., net of tax), respectively. No plan assets are expected to be returned to the Company during the year ending December 31, 2013 . Selection of Expected Rate of Return on Tssets For the years ended December 31, 2012 , 2011 and 2010, the Company used an expected long-term rate of return assumption of...

  • Page 91
    ...the Company's pension plan assets for both the U.n. and non-U.n. plans as of December 31, 2012 , by asset category were as follows ($ in millions): Significant Unobservable Inputs Quoted Prices in Tctive Market (Level 1) Significant Other Observable Inputs (Level 2) (Level 3) Total Cash Equity...

  • Page 92
    ... years ended December 31, 2012 and 2011 ($ in millions): Common Stock Venture Capital and Partnerships Real Estate Total Balance, January 1, 2011 Actual return on plan assets: - Relating to assets sold during the period - Relating to assets still held at December 31, 2011 Acquisitions Purchases...

  • Page 93
    ... defined contribution pension plans amounted to $181 million , $166 million and $126 million for the years ended December 31, 2012 , 2011 and 2010, respectively. 91 Source: DANAHER CORP /DE/, 10-K, February 22, 2013 Powered by Morningstar® Document Research℠The information contained herein...

  • Page 94
    ... certain health care and life insurance benefits for some of its retired employees in the United ntates. Certain employees may become eligible for these benefits as they reach normal retirement age while working for the Company. The following sets forth the funded status of the domestic plans as...

  • Page 95
    ... income taxes for the years ended December 31 consist of the following ($ in millions): 2012 2011 2010 United ntates International Total $ $ 1,349.9 1,660.9 3,010.8 $ $ 1,168.1 1,279.7 2,447.8 $ $ 1,006.3 1,223.3 2,229.6 93 Source: DANAHER CORP /DE/, 10-K, February 22, 2013 Powered...

  • Page 96
    ...): 2012 2011 Deferred tax assets: Allowance for doubtful accounts Inventories Pension and post-retirement benefits Environmental and regulatory compliance Other accruals and prepayments ntock compensation expense Tax credit and loss carryforwards Other Valuation allowances Total deferred tax...

  • Page 97
    ...Earnings 2012 2011 2010 ntatutory federal income tax rate Increase (decrease) in tax rate resulting from: ntate income taxes (net of Federal income tax benefit) Foreign income taxed at lower rate than U.n. statutory rate Resolution of uncertain tax positions/statute expirations Acquisition costs...

  • Page 98
    ... Germany, Hong Kong, India, Italy, Japan, Norway, ningapore, nweden, United Kingdom and various other countries, provinces and states, that are currently under audit for years ranging from 2000 through 2011. The Company files numerous consolidated and separate income tax returns in the United ntates...

  • Page 99
    ... charges recorded for the year ended December 31 by segment, for years when charges were significant, are summarized in the table below ($ in millions): 2012 2011 Test & Measurement Environmental Life nciences & Diagnostics Dental Industrial Technologies Other $ 22.2 8.0 $ $ 51.5 9.8 29...

  • Page 100
    ... thereafter. Total rent expense for all operating leases was $247 million , $210 million and $146 million for the years ended December 31, 2012 , 2011 and 2010, respectively. The Company generally accrues estimated warranty costs at the time of sale. In general, manufactured products are warranted...

  • Page 101
    ... While the Company maintains general, products, property, workers' compensation, automobile, cargo, aviation, crime, fiduciary and directors' and officers' liability insurance (and has acquired rights under similar policies in connection with certain acquisitions) up to certain limits that cover...

  • Page 102
    ...for stock repurchases under the existing Board authorization. ntock options and RnUs have been issued to directors, officers and other employees under the Company's 1998 ntock Option Plan and the 2007 ntock Incentive Plan. In addition, in connection with the November 2007 Tektronix acquisition, the...

  • Page 103
    ... shares of the Company's common stock were reserved for issuance under 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...

  • Page 104
    ... components of the Company's stock-based compensation program recorded as expense ($ in millions): Year Ended December 31 2012 2011 2010 RnUs and restricted shares: Pre-tax compensation expense Income tax benefit RnU and restricted share expense, net of income taxes $ $ $ $ $ $ 61.1 $ (19.6) 41...

  • Page 105
    ... options during the years ended December 31, 2012 , 2011 and 2010 resulted in cash receipts of $201 million , $114 million, and $134 million , respectively. Upon exercise of the award by the employee, the Company derives a tax deduction measured by the excess of the market value over the grant price...

  • Page 106
    ...anti-dilutive options for the year ended December 31, 2010 . 104 Source: DANAHER CORP /DE/, 10-K, February 22, 2013 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 107
    ... separate business segments consisting of the Test & Measurement, Environmental, Life nciences & Diagnostics, Dental and Industrial Technologies segments. In addition, the historical results of the hand tools related business (which was contributed to the Apex joint venture) and the Company's equity...

  • Page 108
    ... Detailed segment data for the years ended December 31, 2012 , 2011 and 2010 is presented in the following table ($ in millions): 2012 2011 2010 Total sales: Test & Measurement Environmental Life nciences & Diagnostics Dental Industrial Technologies Businesses contributed to Apex joint venture...

  • Page 109
    ....4 1,398.9 4,773.4 $ Sales by Major Product Group Year Ended December 31 ($ in millions) $ $ 16,151.7 2012 2011 2010 Analytical and physical instrumentation Medical & dental products Motion and industrial automation controls Mechanics and related hand tools Product identification All other...

  • Page 110
    ... has been reclassified to reflect businesses identified as discontinued operations. Refer to Note 3 for information regarding these discontinued operations. 2012 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Net sales $ Gross profit Operating profit Net earnings from continuing operations...

  • Page 111
    ... accounting firm's audit report on the effectiveness of our internal control over financial reporting are included in our financial statements for the year ended December 31, 2012 included in Item 8 of this Annual Report on Form 10-K, under the headings "Report of Management on Danaher Corporation...

  • Page 112
    ... 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 2013 annual meeting. ITEM 13. CERTTIN RELTTIONSHIPS TND RELTTED TRTNSTCTIONS TND...

  • Page 113
    ... 10-Q for the quarter ended June 29, 2012 (Commission File Number: 1-8089) 3.2 Amended and Restated By-laws of Danaher Corporation Incorporated by reference from Exhibit 3.2 to Danaher Corporation's Annual Report on Form 10-K for the year ended December 31, 2011 (Commission File Number: 1-8089...

  • Page 114
    ... Compensation Plan* 10.3 10.4 Form of Danaher Corporation 2007 ntock Incentive Plan ntock Option Agreement for Non-Employee Directors* Incorporated by reference from Exhibit 10.6 to Danaher Corporation's Quarterly Report on Form 10-Q for the quarter ended July 1, 2011 (Commission File Number...

  • Page 115
    ... dated March 19, 2012 Form of Proprietary Interest Agreement for Named Executive Officers (with severance) (1)* 10.14 10.15 Incorporated by reference from Exhibit 10.33 to Danaher Corporation's Annual Report on Form 10-K for the year ended December 31, 2008 (Commission File Number: 1-8089) 10.16...

  • Page 116
    ... Corporation's Annual Report on Form 10-K for the year ended December 31, 2011 (Commission File Number: 1-8089) 10.28 Aircraft Time nharing Agreement by and between Danaher Corporation and H. Lawrence Culp, Jr., dated December 18, 2012 (4) 114 Source: DANAHER CORP /DE/, 10-K, February 22, 2013...

  • Page 117
    ...and Officer Indemnification Agreement Incorporated by reference from Exhibit 10.35 to Danaher Corporation's Annual Report on Form 10-K for the year ended December 31, 2008 (Commission File Number: 1-8089) 10.30 Amendment to Danaher Corporation and nubsidiaries Executive Deferred Incentive Program...

  • Page 118
    ...ntatements of Cash Flows for the twelve months ended December 31, 2012, 2011 and 2010 and (vi) Notes to Consolidated Financial ntatements. (2) (3) (4) (5) (6) 116 Source: DANAHER CORP /DE/, 10-K, February 22, 2013 Powered by Morningstar® Document Research℠The information contained herein...

  • Page 119
    ... H. LAWRENCE CULP, JR. H. Lawrence Culp, 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 behalf of the Registrant and in the capacities and on the date indicated: Name...

  • Page 120
    ... Director February 21, 2013 /s/ DANIEL L. COMAn Daniel L. Comas Executive Vice President and Chief Financial Officer February 21, 2013 /s/ ROBERT n. LUTZ Robert n. Lutz nenior Vice President and Chief Accounting Officer February 21, 2013 117 Source: DANAHER CORP /DE/, 10-K, February 22, 2013...

  • Page 121
    ...of amounts related to businesses disposed. 118 Source: DANAHER CORP /DE/, 10-K, February 22, 2013 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...

  • Page 122
    ... review. More information regarding the Company's annual cash incentive compensation program for Executive Officers is available beginning at page 25 of Danaher's 2011 Annual Proxy Statement. Provided your employment with the Company commences on or before April 30, 2012, your annual cash incentive...

  • Page 123
    ...Danaher's Board of Directors to grant you stock options and RSUs with a total target award value of $3,500,000 (representing the combined target award value of a 2012 annual grant and a new hire grant), at its next regularly scheduled meeting after the commencement of your employment at which equity...

  • Page 124
    ... comprehensive medical, dental and life insurance benefits immediately upon your first day of employment with the Company. Information on our various benefit programs, including the Danaher Retirement and Savings Plan, is enclosed. Danaher will also reimburse you for the costs of an annual physical...

  • Page 125
    ... and your family. If there is anything we can do, please do not hesitate to contact me. Sincerely yours, /s/ H. Lawrence Culp, Jr. H. Lawrence Culp, Jr. President and Chief Executive Officer Please acknowledge that you have read, understood and accept this offer of at-will employment by signing...

  • Page 126
    ...identification and contacts, information about customers, Voice of the Customer data, reports or analyses, business relationships, contract terms, pricing, price lists, pricing formulas, margins, business plans, projections, prospects, opportunities or strategies, acquisitions, Source: DANAHER CORP...

  • Page 127
    ...including but not limited to, notebooks, computers, files, reports, proposals, price lists, lists of actual or potential customers or suppliers, talent lists, formulae, prototypes, tools, equipment, models, specifications, technical data, methodologies, research results, test results, financial data...

  • Page 128
    ..., providing or selling, products or services competitive with or similar to products or services offered by, developed by, designed by or distributed by the Company to any person, company or entity which was a customer or potential customer of the Company for such products or services and with which...

  • Page 129
    ... other person, company or entity, participate in the planning, research or development of any products or services, competitive with products or services of the Company, excluding general industry knowledge, for which I had product or service planning, research or development responsibilities during...

  • Page 130
    ... of Danaher or any other name under which any such entities does business. 8. Certification . I agree not to disclose to the Company, or use in my work for the Company, any confidential information and/or trade secrets belonging to others, including without limitation, my prior employers, or...

  • Page 131
    ... to the benefit of the Company, its successors and its assigns. Source: DANAHER CORP /DE/, 10-K, February 22, 2013 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 132
    ... on the last day of my employment or relationship with the Company. Agreed to by: Danaher Corporation /s/ Angela S. Lalor Associate Signature By: /s/ H. Lawrence Culp, Jr. Angela S. Lalor Associate's Printed Name H. Lawrence Culp, Jr./President and CEO Print Name and Title Date: 3/19/12 Date...

  • Page 133
    ...TIME SHARING AGREEMENT THIS AIRCRAFT TIME SHARING AGREEMENT (this tAgreement") is entered into as of January 1, 2013 by and between Danaher Corporation (tOwner"), a Delaware corporation, with principal offices at 2200 Pennsylvania Avenue, NW, Suite 800W, Washington, DC 20037 and H. Lawrence Culp, Jr...

  • Page 134
    ... the Internal Revenue Code. Lessee shall reimburse Owner for the expenses authorized by FAR Section 91.501(d) plus applicable federal excise taxes within thirty (30) calendar days after receipt of the related invoice. Owner agrees to collect and remit to the Internal Revenue Service for the benefit...

  • Page 135
    ...FAA on all flights conducted pursuant to this Agreement. 3 Source: DANAHER CORP /DE/, 10-K, February 22, 2013 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...

  • Page 136
    ... (excluding the conflicts of law rules thereof). 4 Source: DANAHER CORP /DE/, 10-K, February 22, 2013 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...

  • Page 137
    ... be changed from time to time by such party by written notice to the other party. If to Owner: Danaher Corporation 2200 Pennsylvania Avenue, NW Suite 800W Washington, DC 20037 Attention: General Counsel Fax: 202-828-0860 If to Lessee: Mr. H. Lawrence Culp, Jr. Danaher Corporation 2200 Pennsylvania...

  • Page 138
    ... THE NEAREST FAA FLIGHT STANDARDS DISTRICT OFFICE, GENERAL AVIATION DISTRICT OFFICE, OR AIR CARRIER DISTRICT OFFICE. [SIGNATURES ON FOLLOWING PAGE] (iv) 6 Source: DANAHER CORP /DE/, 10-K, February 22, 2013 Powered by Morningstar® Document Research℠The information contained herein may not...

  • Page 139
    ...below on the day and year first above written. DANAHER CORPORATION By: Name: Title: Date of Execution: /s/ Steven M. Rales Steven M. Rales Chairman of the Board December 18, 2012 Date of Execution: /s/ H. Lawrence Culp, Jr. H. Lawrence Culp, Jr. December 18, 2012 7 Source: DANAHER CORP /DE/, 10...

  • Page 140
    ...700-1A10) Manufacturer's Serial Number N909PM N886DC N807DC 8 Source: DANAHER CORP /DE/, 10-K, February 22, 2013 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 141
    ... TO DANAHER CORPORATION & SUBSIDIARIES EXECUTIVE DEFERRED INCENTIVE PROGRAM This is an Amendment to the Danaher Corporation & Subsidiaries Executive Deferred Incentive Program, which was amended and restated as of January 1, 2008 (the "Plan"). Under Section 7.1 of the Plan, Danaher Corporation (the...

  • Page 142
    ...(85%) of such Bonus for the Plan Year." 2 Source: DANAHER CORP /DE/, 10-K, February 22, 2013 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...

  • Page 143
    ... the total Section 409A Amount to be distributed, divided by (ii) the number of installment payments remaining in the applicable period of annual installments." 10. Amend Article IX of the Plan by adding the following new Section 9.4 immediately following Section 9.3: 3 Source: DANAHER CORP /DE...

  • Page 144
    ...409A Amount for another Class Year." 11. All other parts of the Plan not inconsistent herewith are hereby ratified and confirmed. [SIGNATURES ON NEXT PAGE] 4 Source: DANAHER CORP /DE/, 10-K, February 22, 2013 Powered by Morningstar® Document Research℠The information contained herein may not...

  • Page 145
    ... Amendment to the Plan to be executed by its duly authorized officer as of the last date signed by the officer as set forth below. PLAN SPONSOR : DANAHER CORPORATION By: Date: /s/ Daniel L. Comas Daniel L. Comas December 6, 2012 5 Source: DANAHER CORP /DE/, 10-K, February 22, 2013 Powered by...

  • Page 146
    ...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 2008 2009 2012 Fixed Charges: Gross Interest Expense Interest Element of Rental Expense Interest on Unrecognized Tax Benefits $ Total...

  • Page 147
    ... United States Sweden Australia Germany Ireland United States Turkey Canada Czech Repunlic China Croatia Mexico Ireland Brazil Spain Switzerland France Germany Hong Kong India Switzerland Ireland Panama Japan Korea, Repunlic of China Russia Hungary Source: DANAHER CORP /DE/, 10-K, February 22, 2013...

  • Page 148
    ... B.V. Danaher Holding GmnH Danaher Hong Kong Limited Danaher Medical ApS Danaher Setra-ICG (Tianjin) Co. Ltd. Danaher UK Industries Limited DANRAD ApS DANRAD Holding ApS DATAPAQ Limited Dental Complex Dental Equipment, LLC Dental Imaging Technologies Corporation DH Alpha Limited DH Business Services...

  • Page 149
    ... Holding Austria GmnH Fluke Holding Company AB Fluke Industrial B.V. Fluke International Holding B.V. Fluke Italia S.r.l. Fluke Precision Measurement Limited Fluke Shanghai Corporation Fluke Software Ireland Limited Fullerton LLC Gems Sensors Inc. Gendex Dental Systems S.r.l. Genetix Group Limited...

  • Page 150
    ... Leica Mikrosysteme Vertrien GmnH Life Sciences Holdings France SAS Linx Printing Technologies Limited Lumigen, Inc. Martel Electronics Corp. McCrometer, Inc. Metrex Research, LLC Mixed Signals, Inc. Molecular Devices (Hong Kong) Limited Molecular Devices, LLC Motion Engineering Incorporated United...

  • Page 151
    ...India Private Limited Prozess und Maschinen Automation GmnH Qualitrol Company LLC Qualitrol Finance Corp. Radiometer America Inc. HL Sensors Radiometer GmnH Radiometer K.K. Radiometer Limited Radiometer Medical ApS Radiometer Medical Equipment (Shanghai) Co. Ltd. Radiometer Medical Sales Pty Limited...

  • Page 152
    ... Limited Tektronix, Inc. TFF Corporation Thomson Industries, Inc. Thomson Linear LLC Thomson Neff GmnH (f.k.a. Danaher Linear GmnH) Tianjin Danaher Motion Co., Ltd. TMX Holding LLC Tollo Linear AB Trojan Technologies U.S. Peroxide, LLC Veeder-Root Company Venture Measurement Company LLC Videojet...

  • Page 153
    ... Annual Report (Form 10-K) of Danaher Corporation and subsidiaries for the year ended December 31, 2012. Registration Statement on Form S-3 Registration Number Date Filed 333-181214 May 7, 2012 Registration Statements on Form S-8 Name Registration Number Date Filed Tektronix, Inc. 2005 Stock...

  • Page 154
    ... management or other employees who have a significant role in the registrant's internal control over financial reporting. b. Date: February 21, 2013 By: Name: Title: /s/ H. Lawrence Culp, Jr. H. Lawrence Culp, Jr. President and Chief Executive Officer Source: DANAHER CORP /DE/, 10-K, February...

  • Page 155
    ... involves management or other employees who have a significant role in the registrant's internal control over financial reporting. b. Date: February 21, 2013 By: Name: Title: /s/ Daniel L. Comas Daniel L. Comas Executive Vice President and Chief Financial Officer Source: DANAHER CORP /DE/, 10...

  • Page 156
    ...all material respects the financial condition and results of operations of Danaher Corporation. Date: February 21, 2013 By: Name: Title: /s/ H. Lawrence Culp, Jr. H. Lawrence Culp, Jr. President and Chief Executive Officer This certification accompanies the Annual Report on Form 10-K pursuant to...

  • Page 157
    ... material respects the financial condition and results of operations of Danaher Corporation. Date: February 21, 2013 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...

  • Page 158
    Source: DANAHER CORP /DE/, 10-K, February 22, 2013 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...