ý
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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59-1995548
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(State of Incorporation)
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(I.R.S. Employer Identification number)
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2200 Pennsylvania Avenue, N.W., Suite 800W
Washington, D.C.
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20037-1701
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(Address of Principal Executive Offices)
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(Zip Code)
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Large accelerated filer
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ý
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Accelerated filer
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¨
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Non-accelerated filer
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¨
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Smaller reporting company
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¨
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Emerging growth company
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¨
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Page
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PART I -
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FINANCIAL INFORMATION
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PART II -
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OTHER INFORMATION
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September 28, 2018
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December 31, 2017
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||||
ASSETS
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Current assets:
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||||
Cash and equivalents
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$
|
776.2
|
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$
|
630.3
|
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Trade accounts receivable, net
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3,323.1
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3,521.8
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Inventories:
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||||
Finished goods
|
1,110.1
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982.5
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Work in process
|
331.4
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309.7
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Raw materials
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587.9
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548.6
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Total inventories
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2,029.4
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1,840.8
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Prepaid expenses and other current assets
|
701.8
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857.1
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Total current assets
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6,830.5
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6,850.0
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Property, plant and equipment, net of accumulated depreciation of $2,739.6 and $2,519.4, respectively
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2,462.3
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2,454.6
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Other long-term assets
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577.3
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538.3
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Goodwill
|
26,035.0
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25,138.6
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Other intangible assets, net
|
11,814.4
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11,667.1
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Total assets
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$
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47,719.5
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$
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46,648.6
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LIABILITIES AND STOCKHOLDERS’ EQUITY
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Current liabilities:
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||||
Notes payable and current portion of long-term debt
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$
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59.8
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$
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194.7
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Trade accounts payable
|
1,569.6
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1,509.9
|
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Accrued expenses and other liabilities
|
2,835.9
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3,087.7
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Total current liabilities
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4,465.3
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4,792.3
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Other long-term liabilities
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5,011.0
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5,161.1
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Long-term debt
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10,558.0
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10,327.4
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Stockholders’ equity:
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Common stock - $0.01 par value, 2.0 billion shares authorized; 817.2 and 812.5 issued; 700.8 and 696.6 outstanding, respectively
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8.2
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8.1
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Additional paid-in capital
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5,772.2
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5,538.2
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Retained earnings
|
24,528.7
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22,806.1
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Accumulated other comprehensive income (loss)
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(2,635.7
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)
|
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(1,994.2
|
)
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Total Danaher stockholders’ equity
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27,673.4
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26,358.2
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Noncontrolling interests
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11.8
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9.6
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Total stockholders’ equity
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27,685.2
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26,367.8
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Total liabilities and stockholders’ equity
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$
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47,719.5
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$
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46,648.6
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Three-Month Period Ended
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Nine-Month Period Ended
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September 28, 2018
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September 29, 2017
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September 28, 2018
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September 29, 2017
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Sales
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$
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4,853.1
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$
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4,528.2
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$
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14,529.5
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$
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13,244.0
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Cost of sales
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(2,162.6
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)
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(1,991.4
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)
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(6,378.3
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)
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(5,890.6
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)
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Gross profit
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2,690.5
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2,536.8
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8,151.2
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7,353.4
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Operating costs:
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Selling, general and administrative expenses
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(1,558.6
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)
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(1,498.4
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)
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(4,798.4
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)
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(4,470.6
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)
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Research and development expenses
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(301.2
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)
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(279.2
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(911.6
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)
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(829.9
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)
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Operating profit
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830.7
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759.2
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2,441.2
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2,052.9
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Nonoperating income (expense):
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Other income, net
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9.1
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8.3
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25.2
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22.2
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Interest expense
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(41.3
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)
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(39.9
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)
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(123.6
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)
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(120.9
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)
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Interest income
|
2.8
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2.2
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6.7
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5.6
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Earnings from continuing operations before income taxes
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801.3
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729.8
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2,349.5
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1,959.8
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Income taxes
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(137.6
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)
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(157.7
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)
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(445.4
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)
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(346.6
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)
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Net earnings from continuing operations
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663.7
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572.1
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1,904.1
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1,613.2
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Earnings from discontinued operations, net of income taxes
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—
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—
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—
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22.3
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Net earnings
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$
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663.7
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$
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572.1
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$
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1,904.1
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$
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1,635.5
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Net earnings per share from continuing operations:
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Basic
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$
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0.95
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$
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0.82
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$
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2.72
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$
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2.32
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Diluted
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$
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0.93
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$
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0.81
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$
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2.68
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$
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2.29
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Net earnings per share from discontinued operations:
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Basic
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$
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—
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$
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—
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$
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—
|
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$
|
0.03
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Diluted
|
$
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—
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$
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—
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$
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—
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$
|
0.03
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Net earnings per share:
|
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Basic
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$
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0.95
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$
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0.82
|
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$
|
2.72
|
|
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$
|
2.35
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Diluted
|
$
|
0.93
|
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$
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0.81
|
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$
|
2.68
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$
|
2.32
|
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Average common stock and common equivalent shares outstanding:
|
|
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|
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||||||||
Basic
|
701.4
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696.2
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700.1
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|
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695.3
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||||
Diluted
|
710.6
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705.6
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709.9
|
|
|
705.5
|
|
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Three-Month Period Ended
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Nine-Month Period Ended
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September 28, 2018
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September 29, 2017
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September 28, 2018
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September 29, 2017
|
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Net earnings
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$
|
663.7
|
|
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$
|
572.1
|
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$
|
1,904.1
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$
|
1,635.5
|
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Other comprehensive income (loss), net of income taxes:
|
|
|
|
|
|
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Foreign currency translation adjustments
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(162.4
|
)
|
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260.0
|
|
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(509.4
|
)
|
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839.2
|
|
||||
Pension and postretirement plan benefit adjustments
|
5.9
|
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4.6
|
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19.7
|
|
|
14.4
|
|
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Unrealized (loss) gain on available-for-sale securities adjustments
|
—
|
|
|
(1.9
|
)
|
|
(0.6
|
)
|
|
16.3
|
|
||||
Total other comprehensive income (loss), net of income taxes
|
(156.5
|
)
|
|
262.7
|
|
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(490.3
|
)
|
|
869.9
|
|
||||
Comprehensive income
|
$
|
507.2
|
|
|
$
|
834.8
|
|
|
$
|
1,413.8
|
|
|
$
|
2,505.4
|
|
|
Common Stock
|
|
Additional Paid-in Capital
|
|
Retained Earnings
|
|
Accumulated Other Comprehensive Income (Loss)
|
|
Noncontrolling Interests
|
|||||||||||||
Shares
|
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Amount
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|
|||||||||||||||||||
Balance, December 31, 2017
|
812.5
|
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$
|
8.1
|
|
|
$
|
5,538.2
|
|
|
$
|
22,806.1
|
|
|
$
|
(1,994.2
|
)
|
|
$
|
9.6
|
|
Adoption of accounting standards
|
—
|
|
|
—
|
|
|
—
|
|
|
154.5
|
|
|
(151.2
|
)
|
|
—
|
|
|||||
Balance, January 1, 2018
|
812.5
|
|
|
8.1
|
|
|
5,538.2
|
|
|
22,960.6
|
|
|
(2,145.4
|
)
|
|
9.6
|
|
|||||
Net earnings
|
—
|
|
|
—
|
|
|
—
|
|
|
1,904.1
|
|
|
—
|
|
|
—
|
|
|||||
Other comprehensive income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(490.3
|
)
|
|
—
|
|
|||||
Dividends declared
|
—
|
|
|
—
|
|
|
—
|
|
|
(336.0
|
)
|
|
—
|
|
|
—
|
|
|||||
Common stock-based award activity
|
4.0
|
|
|
0.1
|
|
|
194.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Common stock issued in connection with acquisitions
|
0.2
|
|
|
—
|
|
|
23.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Common stock issued in connection with LYONs’ conversions, including tax benefit of $4.2
|
0.5
|
|
|
—
|
|
|
16.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Change in noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2.2
|
|
|||||
Balance, September 28, 2018
|
817.2
|
|
|
$
|
8.2
|
|
|
$
|
5,772.2
|
|
|
$
|
24,528.7
|
|
|
$
|
(2,635.7
|
)
|
|
$
|
11.8
|
|
|
Nine-Month Period Ended
|
||||||
|
September 28, 2018
|
|
September 29, 2017
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net earnings
|
$
|
1,904.1
|
|
|
$
|
1,635.5
|
|
Less: earnings from discontinued operations, net of income taxes
|
—
|
|
|
22.3
|
|
||
Net earnings from continuing operations
|
1,904.1
|
|
|
1,613.2
|
|
||
Noncash items:
|
|
|
|
||||
Depreciation
|
449.4
|
|
|
427.3
|
|
||
Amortization
|
527.5
|
|
|
492.9
|
|
||
Stock-based compensation expense
|
111.6
|
|
|
104.8
|
|
||
Restructuring and impairment charges
|
—
|
|
|
49.3
|
|
||
Change in trade accounts receivable, net
|
128.6
|
|
|
74.6
|
|
||
Change in inventories
|
(255.4
|
)
|
|
(98.2
|
)
|
||
Change in trade accounts payable
|
71.5
|
|
|
(48.5
|
)
|
||
Change in prepaid expenses and other assets
|
245.6
|
|
|
242.3
|
|
||
Change in accrued expenses and other liabilities
|
(398.5
|
)
|
|
(214.6
|
)
|
||
Net operating cash provided by continuing operations
|
2,784.4
|
|
|
2,643.1
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Cash paid for acquisitions
|
(2,173.3
|
)
|
|
(112.0
|
)
|
||
Payments for additions to property, plant and equipment
|
(441.3
|
)
|
|
(445.8
|
)
|
||
Proceeds from sales of property, plant and equipment
|
1.6
|
|
|
32.3
|
|
||
Proceeds from sale of investments
|
22.1
|
|
|
—
|
|
||
All other investing activities
|
(61.1
|
)
|
|
(2.4
|
)
|
||
Net operating cash used in investing activities
|
(2,652.0
|
)
|
|
(527.9
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Proceeds from the issuance of common stock
|
77.3
|
|
|
49.0
|
|
||
Payment of dividends
|
(321.2
|
)
|
|
(281.0
|
)
|
||
Payment for purchase of noncontrolling interests
|
—
|
|
|
(64.4
|
)
|
||
Net proceeds from (repayments of) borrowings (maturities of 90 days or less)
|
882.1
|
|
|
(3,319.1
|
)
|
||
Proceeds from borrowings (maturities longer than 90 days)
|
—
|
|
|
1,684.0
|
|
||
Repayments of borrowings (maturities longer than 90 days)
|
(503.9
|
)
|
|
(562.4
|
)
|
||
All other financing activities
|
(16.6
|
)
|
|
(50.7
|
)
|
||
Net operating cash provided by (used in) financing activities
|
117.7
|
|
|
(2,544.6
|
)
|
||
Effect of exchange rate changes on cash and equivalents
|
(104.2
|
)
|
|
114.3
|
|
||
Net change in cash and equivalents
|
145.9
|
|
|
(315.1
|
)
|
||
Beginning balance of cash and equivalents
|
630.3
|
|
|
963.7
|
|
||
Ending balance of cash and equivalents
|
$
|
776.2
|
|
|
$
|
648.6
|
|
|
|
|
|
||||
Supplemental disclosures:
|
|
|
|
||||
Cash interest payments
|
$
|
129.0
|
|
|
$
|
117.4
|
|
Cash income tax payments
|
502.0
|
|
|
378.3
|
|
|
Foreign Currency Translation Adjustments
|
|
Pension & Postretirement Plan Benefit Adjustments
|
|
Unrealized Gain (Loss) on Available-For-Sale Securities Adjustments
|
|
Total
|
||||||||
For the Three-Month Period Ended September 28, 2018:
|
|
|
|
|
|
|
|
||||||||
Balance, June 29, 2018
|
$
|
(1,812.9
|
)
|
|
$
|
(664.6
|
)
|
|
$
|
(1.7
|
)
|
|
$
|
(2,479.2
|
)
|
Other comprehensive income (loss) before reclassifications:
|
|
|
|
|
|
|
|
||||||||
Decrease
|
(162.4
|
)
|
|
—
|
|
|
—
|
|
|
(162.4
|
)
|
||||
Other comprehensive income (loss) before reclassifications, net of income taxes
|
(162.4
|
)
|
|
—
|
|
|
—
|
|
|
(162.4
|
)
|
||||
Amounts reclassified from accumulated other comprehensive income (loss):
|
|
|
|
|
|
|
|
||||||||
Increase
|
—
|
|
|
7.7
|
|
(a)
|
—
|
|
|
7.7
|
|
||||
Income tax impact
|
—
|
|
|
(1.8
|
)
|
|
—
|
|
|
(1.8
|
)
|
||||
Amounts reclassified from accumulated other comprehensive income (loss), net of income taxes
|
—
|
|
|
5.9
|
|
|
—
|
|
|
5.9
|
|
||||
Net current period other comprehensive income (loss), net of income taxes
|
(162.4
|
)
|
|
5.9
|
|
|
—
|
|
|
(156.5
|
)
|
||||
Balance, September 28, 2018
|
$
|
(1,975.3
|
)
|
|
$
|
(658.7
|
)
|
|
$
|
(1.7
|
)
|
|
$
|
(2,635.7
|
)
|
For the Three-Month Period Ended September 29, 2017:
|
|
|
|
|
|
|
|
||||||||
Balance, June 30, 2017
|
$
|
(1,819.0
|
)
|
|
$
|
(632.4
|
)
|
|
$
|
36.9
|
|
|
$
|
(2,414.5
|
)
|
Other comprehensive income (loss) before reclassifications:
|
|
|
|
|
|
|
|
||||||||
Increase (decrease)
|
260.0
|
|
|
—
|
|
|
(3.0
|
)
|
|
257.0
|
|
||||
Income tax impact
|
—
|
|
|
—
|
|
|
1.1
|
|
|
1.1
|
|
||||
Other comprehensive income (loss) before reclassifications, net of income taxes
|
260.0
|
|
|
—
|
|
|
(1.9
|
)
|
|
258.1
|
|
||||
Amounts reclassified from accumulated other comprehensive income (loss):
|
|
|
|
|
|
|
|
||||||||
Increase
|
—
|
|
|
7.0
|
|
(a)
|
—
|
|
|
7.0
|
|
||||
Income tax impact
|
—
|
|
|
(2.4
|
)
|
|
—
|
|
|
(2.4
|
)
|
||||
Amounts reclassified from accumulated other comprehensive income (loss), net of income taxes
|
—
|
|
|
4.6
|
|
|
—
|
|
|
4.6
|
|
||||
Net current period other comprehensive income (loss), net of income taxes
|
260.0
|
|
|
4.6
|
|
|
(1.9
|
)
|
|
262.7
|
|
||||
Balance, September 29, 2017
|
$
|
(1,559.0
|
)
|
|
$
|
(627.8
|
)
|
|
$
|
35.0
|
|
|
$
|
(2,151.8
|
)
|
|
Foreign Currency Translation Adjustments
|
|
Pension & Postretirement Plan Benefit Adjustments
|
|
Unrealized Gain (Loss) on Available-For-Sale Securities Adjustments
|
|
Total
|
||||||||
For the Nine-Month Period Ended September 28, 2018:
|
|
|
|
|
|
|
|
||||||||
Balance, December 31, 2017
|
$
|
(1,422.1
|
)
|
|
$
|
(571.2
|
)
|
|
$
|
(0.9
|
)
|
|
$
|
(1,994.2
|
)
|
Adoption of accounting standards
|
(43.8
|
)
|
|
(107.2
|
)
|
|
(0.2
|
)
|
|
(151.2
|
)
|
||||
Balance, January 1, 2018
|
(1,465.9
|
)
|
|
(678.4
|
)
|
|
(1.1
|
)
|
|
(2,145.4
|
)
|
||||
Other comprehensive income (loss) before reclassifications:
|
|
|
|
|
|
|
|
||||||||
Decrease
|
(509.4
|
)
|
|
—
|
|
|
(0.8
|
)
|
|
(510.2
|
)
|
||||
Income tax impact
|
—
|
|
|
—
|
|
|
0.2
|
|
|
0.2
|
|
||||
Other comprehensive income (loss) before reclassifications, net of income taxes
|
(509.4
|
)
|
|
—
|
|
|
(0.6
|
)
|
|
(510.0
|
)
|
||||
Amounts reclassified from accumulated other comprehensive income (loss):
|
|
|
|
|
|
|
|
||||||||
Increase
|
—
|
|
|
25.8
|
|
(a)
|
—
|
|
|
25.8
|
|
||||
Income tax impact
|
—
|
|
|
(6.1
|
)
|
|
—
|
|
|
(6.1
|
)
|
||||
Amounts reclassified from accumulated other comprehensive income (loss), net of income taxes
|
—
|
|
|
19.7
|
|
|
—
|
|
|
19.7
|
|
||||
Net current period other comprehensive income (loss), net of income taxes
|
(509.4
|
)
|
|
19.7
|
|
|
(0.6
|
)
|
|
(490.3
|
)
|
||||
Balance, September 28, 2018
|
$
|
(1,975.3
|
)
|
|
$
|
(658.7
|
)
|
|
$
|
(1.7
|
)
|
|
$
|
(2,635.7
|
)
|
For the Nine-Month Period Ended September 29, 2017:
|
|
|
|
|
|
|
|
||||||||
Balance, December 31, 2016
|
$
|
(2,398.2
|
)
|
|
$
|
(642.2
|
)
|
|
$
|
18.7
|
|
|
$
|
(3,021.7
|
)
|
Other comprehensive income (loss) before reclassifications:
|
|
|
|
|
|
|
|
||||||||
Increase
|
839.2
|
|
|
—
|
|
|
26.1
|
|
|
865.3
|
|
||||
Income tax impact
|
—
|
|
|
—
|
|
|
(9.8
|
)
|
|
(9.8
|
)
|
||||
Other comprehensive income (loss) before reclassifications, net of income taxes
|
839.2
|
|
|
—
|
|
|
16.3
|
|
|
855.5
|
|
||||
Amounts reclassified from accumulated other comprehensive income (loss):
|
|
|
|
|
|
|
|
||||||||
Increase
|
—
|
|
|
22.2
|
|
(a)
|
—
|
|
|
22.2
|
|
||||
Income tax impact
|
—
|
|
|
(7.8
|
)
|
|
—
|
|
|
(7.8
|
)
|
||||
Amounts reclassified from accumulated other comprehensive income (loss), net of income taxes
|
—
|
|
|
14.4
|
|
|
—
|
|
|
14.4
|
|
||||
Net current period other comprehensive income (loss), net of income taxes
|
839.2
|
|
|
14.4
|
|
|
16.3
|
|
|
869.9
|
|
||||
Balance, September 29, 2017
|
$
|
(1,559.0
|
)
|
|
$
|
(627.8
|
)
|
|
$
|
35.0
|
|
|
$
|
(2,151.8
|
)
|
|
Three-Month Period Ended September 28, 2018
|
||||||||||||||||||
|
Life Sciences
|
|
Diagnostics
|
|
Dental
|
|
Environmental & Applied Solutions
|
|
Total
|
||||||||||
Geographical region:
|
|
|
|
|
|
|
|
|
|
||||||||||
North America
|
$
|
584.0
|
|
|
$
|
574.0
|
|
|
$
|
339.8
|
|
|
$
|
439.7
|
|
|
$
|
1,937.5
|
|
Western Europe
|
447.1
|
|
|
262.3
|
|
|
137.2
|
|
|
257.5
|
|
|
1,104.1
|
|
|||||
Other developed markets
|
134.5
|
|
|
91.8
|
|
|
42.5
|
|
|
31.0
|
|
|
299.8
|
|
|||||
High-growth markets
|
431.1
|
|
|
574.4
|
|
|
160.0
|
|
|
346.2
|
|
|
1,511.7
|
|
|||||
Total
|
$
|
1,596.7
|
|
|
$
|
1,502.5
|
|
|
$
|
679.5
|
|
|
$
|
1,074.4
|
|
|
$
|
4,853.1
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenue type:
|
|
|
|
|
|
|
|
|
|
||||||||||
Recurring
|
$
|
1,030.9
|
|
|
$
|
1,273.3
|
|
|
$
|
478.2
|
|
|
$
|
571.1
|
|
|
$
|
3,353.5
|
|
Nonrecurring
|
565.8
|
|
|
229.2
|
|
|
201.3
|
|
|
503.3
|
|
|
1,499.6
|
|
|||||
Total
|
$
|
1,596.7
|
|
|
$
|
1,502.5
|
|
|
$
|
679.5
|
|
|
$
|
1,074.4
|
|
|
$
|
4,853.1
|
|
|
Nine-Month Period Ended September 28, 2018
|
||||||||||||||||||
|
Life Sciences
|
|
Diagnostics
|
|
Dental
|
|
Environmental & Applied Solutions
|
|
Total
|
||||||||||
Geographical region:
|
|
|
|
|
|
|
|
|
|
||||||||||
North America
|
$
|
1,642.4
|
|
|
$
|
1,760.1
|
|
|
$
|
977.2
|
|
|
$
|
1,308.7
|
|
|
$
|
5,688.4
|
|
Western Europe
|
1,346.5
|
|
|
861.4
|
|
|
483.3
|
|
|
785.5
|
|
|
3,476.7
|
|
|||||
Other developed markets
|
417.9
|
|
|
275.3
|
|
|
133.5
|
|
|
94.9
|
|
|
921.6
|
|
|||||
High-growth markets
|
1,271.1
|
|
|
1,676.3
|
|
|
491.5
|
|
|
1,003.9
|
|
|
4,442.8
|
|
|||||
Total
|
$
|
4,677.9
|
|
|
$
|
4,573.1
|
|
|
$
|
2,085.5
|
|
|
$
|
3,193.0
|
|
|
$
|
14,529.5
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenue type:
|
|
|
|
|
|
|
|
|
|
||||||||||
Recurring
|
$
|
3,057.3
|
|
|
$
|
3,892.8
|
|
|
$
|
1,513.5
|
|
|
$
|
1,702.7
|
|
|
$
|
10,166.3
|
|
Nonrecurring
|
1,620.6
|
|
|
680.3
|
|
|
572.0
|
|
|
1,490.3
|
|
|
4,363.2
|
|
|||||
Total
|
$
|
4,677.9
|
|
|
$
|
4,573.1
|
|
|
$
|
2,085.5
|
|
|
$
|
3,193.0
|
|
|
$
|
14,529.5
|
|
|
IDT
|
|
Others
|
|
Total
|
||||||
Trade accounts receivable
|
$
|
36.0
|
|
|
$
|
5.3
|
|
|
$
|
41.3
|
|
Inventories
|
15.1
|
|
|
—
|
|
|
15.1
|
|
|||
Property, plant and equipment
|
88.6
|
|
|
0.4
|
|
|
89.0
|
|
|||
Goodwill
|
1,239.9
|
|
|
70.5
|
|
|
1,310.4
|
|
|||
Other intangible assets, primarily customer relationships, trade names and technology
|
759.0
|
|
|
30.0
|
|
|
789.0
|
|
|||
Trade accounts payable
|
(5.5
|
)
|
|
(2.7
|
)
|
|
(8.2
|
)
|
|||
Other assets and liabilities, net
|
(31.0
|
)
|
|
(8.4
|
)
|
|
(39.4
|
)
|
|||
Net assets acquired
|
2,102.1
|
|
|
95.1
|
|
|
2,197.2
|
|
|||
Less: noncash consideration
|
(23.9
|
)
|
|
—
|
|
|
(23.9
|
)
|
|||
Net cash consideration
|
$
|
2,078.2
|
|
|
$
|
95.1
|
|
|
$
|
2,173.3
|
|
|
Three-Month Period Ended
|
|
Nine-Month Period Ended
|
||||||||||||
|
September 28, 2018
|
|
September 29, 2017
|
|
September 28, 2018
|
|
September 29, 2017
|
||||||||
Sales
|
$
|
4,855.6
|
|
|
$
|
4,629.4
|
|
|
$
|
14,632.2
|
|
|
$
|
13,572.1
|
|
Net earnings from continuing operations
|
663.8
|
|
|
561.2
|
|
|
1,906.1
|
|
|
1,581.1
|
|
||||
Diluted net earnings per share from continuing operations
|
0.93
|
|
|
0.80
|
|
|
2.69
|
|
|
2.24
|
|
Balance, December 31, 2017
|
$
|
25,138.6
|
|
Attributable to 2018 acquisitions
|
1,310.4
|
|
|
Adjustments due to finalization of purchase price allocations
|
7.6
|
|
|
Foreign currency translation and other
|
(421.6
|
)
|
|
Balance, September 28, 2018
|
$
|
26,035.0
|
|
|
September 28, 2018
|
|
December 31, 2017
|
||||
Life Sciences
|
$
|
13,378.9
|
|
|
$
|
12,335.5
|
|
Diagnostics
|
6,952.4
|
|
|
7,079.5
|
|
||
Dental
|
3,331.5
|
|
|
3,370.0
|
|
||
Environmental & Applied Solutions
|
2,372.2
|
|
|
2,353.6
|
|
||
Total
|
$
|
26,035.0
|
|
|
$
|
25,138.6
|
|
|
Quoted Prices in Active Market (Level 1)
|
|
Significant Other Observable Inputs (Level 2)
|
|
Significant Unobservable Inputs (Level 3)
|
|
Total
|
||||||||
September 28, 2018:
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Available-for-sale debt securities
|
$
|
—
|
|
|
$
|
40.3
|
|
|
$
|
—
|
|
|
$
|
40.3
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Deferred compensation plans
|
—
|
|
|
65.4
|
|
|
—
|
|
|
65.4
|
|
||||
|
|
|
|
|
|
|
|
||||||||
December 31, 2017:
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Available-for-sale debt securities
|
$
|
—
|
|
|
$
|
45.4
|
|
|
$
|
—
|
|
|
$
|
45.4
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Deferred compensation plans
|
—
|
|
|
62.9
|
|
|
—
|
|
|
62.9
|
|
|
September 28, 2018
|
|
December 31, 2017
|
||||
U.S. dollar-denominated commercial paper
|
$
|
—
|
|
|
$
|
436.9
|
|
Euro-denominated commercial paper (€2.9 billion and €1.7 billion, respectively)
|
3,324.3
|
|
|
1,993.9
|
|
||
1.65% senior unsecured notes due 2018 (the “2018 U.S. Notes”)
|
—
|
|
|
499.2
|
|
||
1.0% senior unsecured notes due 2019 (€600.0 million aggregate principal amount) (the “2019 Euronotes”)
|
695.6
|
|
|
718.4
|
|
||
2.4% senior unsecured notes due 2020
|
498.3
|
|
|
497.7
|
|
||
5.0% senior unsecured notes due 2020 (the “2020 Assumed Pall Notes”)
|
390.5
|
|
|
394.6
|
|
||
Zero-coupon Liquid Yield Option Notes (LYONs) due 2021
|
58.3
|
|
|
69.1
|
|
||
0.352% senior unsecured notes due 2021 (¥30.0 billion aggregate principal amount) (the “2021 Yen Notes”)
|
263.5
|
|
|
265.5
|
|
||
1.7% senior unsecured notes due 2022 (€800.0 million aggregate principal amount) (the “2022 Euronotes”)
|
924.8
|
|
|
955.6
|
|
||
Floating rate senior unsecured notes due 2022 (€250.0 million aggregate principal amount) (the “Floating Rate 2022 Euronotes”)
|
289.4
|
|
|
299.1
|
|
||
0.5% senior unsecured bonds due 2023 (CHF 540.0 million aggregate principal amount) (the “2023 CHF Bonds”)
|
551.8
|
|
|
555.5
|
|
||
2.5% senior unsecured notes due 2025 (€800.0 million aggregate principal amount) (the “2025 Euronotes”)
|
924.4
|
|
|
955.6
|
|
||
3.35% senior unsecured notes due 2025
|
496.7
|
|
|
496.3
|
|
||
0.3% senior unsecured notes due 2027 (¥30.8 billion aggregate principal amount) (the “2027 Yen Notes”)
|
270.1
|
|
|
272.2
|
|
||
1.2% senior unsecured notes due 2027 (€600.0 million aggregate principal amount) (the “2027 Euronotes”)
|
690.8
|
|
|
714.1
|
|
||
1.125% senior unsecured bonds due 2028 (CHF 210.0 million aggregate principal amount) (the “2028 CHF Bonds”)
|
218.6
|
|
|
220.3
|
|
||
0.65% senior unsecured notes due 2032 (¥53.2 billion aggregate principal amount) (the “2032 Yen Notes”)
|
466.4
|
|
|
470.2
|
|
||
4.375% senior unsecured notes due 2045
|
499.3
|
|
|
499.3
|
|
||
Other
|
55.0
|
|
|
208.6
|
|
||
Total debt
|
10,617.8
|
|
|
10,522.1
|
|
||
Less: currently payable
|
59.8
|
|
|
194.7
|
|
||
Long-term debt
|
$
|
10,558.0
|
|
|
$
|
10,327.4
|
|
|
Three-Month Period Ended
|
|
Nine-Month Period Ended
|
||||||||||||
|
September 28, 2018
|
|
September 29, 2017
|
|
September 28, 2018
|
|
September 29, 2017
|
||||||||
U.S. pension benefits:
|
|
|
|
|
|
|
|
||||||||
Service cost
|
$
|
(1.2
|
)
|
|
$
|
(1.9
|
)
|
|
$
|
(5.4
|
)
|
|
$
|
(5.7
|
)
|
Interest cost
|
(20.3
|
)
|
|
(20.1
|
)
|
|
(60.7
|
)
|
|
(62.1
|
)
|
||||
Expected return on plan assets
|
33.0
|
|
|
32.4
|
|
|
99.2
|
|
|
98.2
|
|
||||
Amortization of actuarial loss
|
(8.0
|
)
|
|
(5.9
|
)
|
|
(23.6
|
)
|
|
(19.1
|
)
|
||||
Amortization of prior service cost
|
(0.2
|
)
|
|
—
|
|
|
(0.7
|
)
|
|
—
|
|
||||
Net periodic pension benefit
|
$
|
3.3
|
|
|
$
|
4.5
|
|
|
$
|
8.8
|
|
|
$
|
11.3
|
|
|
|
|
|
|
|
|
|
||||||||
Non-U.S. pension benefits:
|
|
|
|
|
|
|
|
||||||||
Service cost
|
$
|
(8.6
|
)
|
|
$
|
(8.1
|
)
|
|
$
|
(26.2
|
)
|
|
$
|
(23.7
|
)
|
Interest cost
|
(6.3
|
)
|
|
(6.7
|
)
|
|
(19.6
|
)
|
|
(19.5
|
)
|
||||
Expected return on plan assets
|
11.6
|
|
|
10.8
|
|
|
35.6
|
|
|
31.5
|
|
||||
Amortization of actuarial loss
|
(1.5
|
)
|
|
(2.0
|
)
|
|
(4.5
|
)
|
|
(5.8
|
)
|
||||
Amortization of prior service credit
|
0.2
|
|
|
0.1
|
|
|
0.4
|
|
|
0.3
|
|
||||
Settlement loss recognized
|
1.2
|
|
|
—
|
|
|
0.8
|
|
|
—
|
|
||||
Net periodic pension cost
|
$
|
(3.4
|
)
|
|
$
|
(5.9
|
)
|
|
$
|
(13.5
|
)
|
|
$
|
(17.2
|
)
|
|
Three-Month Period Ended
|
|
Nine-Month Period Ended
|
||||||||||||
|
September 28, 2018
|
|
September 29, 2017
|
|
September 28, 2018
|
|
September 29, 2017
|
||||||||
Service cost
|
$
|
—
|
|
|
$
|
(0.1
|
)
|
|
$
|
(0.3
|
)
|
|
$
|
(0.5
|
)
|
Interest cost
|
(1.2
|
)
|
|
(1.1
|
)
|
|
(3.5
|
)
|
|
(3.7
|
)
|
||||
Amortization of prior service credit
|
0.6
|
|
|
0.8
|
|
|
1.8
|
|
|
2.4
|
|
||||
Net periodic benefit cost
|
$
|
(0.6
|
)
|
|
$
|
(0.4
|
)
|
|
$
|
(2.0
|
)
|
|
$
|
(1.8
|
)
|
|
Three-Month Period Ended
|
|
Nine-Month Period Ended
|
||||||||||||
|
September 28, 2018
|
|
September 29, 2017
|
|
September 28, 2018
|
|
September 29, 2017
|
||||||||
Service cost:
|
|
|
|
|
|
|
|
||||||||
Cost of sales
|
$
|
(1.6
|
)
|
|
$
|
(2.1
|
)
|
|
$
|
(7.0
|
)
|
|
$
|
(6.2
|
)
|
Selling, general and administrative expenses
|
(8.2
|
)
|
|
(8.0
|
)
|
|
(24.9
|
)
|
|
(23.7
|
)
|
||||
Total service cost
|
(9.8
|
)
|
|
(10.1
|
)
|
|
(31.9
|
)
|
|
(29.9
|
)
|
||||
Other n
et periodic benefit costs:
|
|
|
|
|
|
|
|
||||||||
Other income, net
|
9.1
|
|
|
8.3
|
|
|
25.2
|
|
|
22.2
|
|
||||
Total
|
$
|
(0.7
|
)
|
|
$
|
(1.8
|
)
|
|
$
|
(6.7
|
)
|
|
$
|
(7.7
|
)
|
|
Three-Month Period Ended
|
|
Nine-Month Period Ended
|
||||||||
|
September 28, 2018
|
|
September 29, 2017
|
|
September 28, 2018
|
|
September 29, 2017
|
||||
Effective tax rate from continuing operations
|
17.2
|
%
|
|
21.6
|
%
|
|
19.0
|
%
|
|
17.7
|
%
|
•
|
establishes a flat corporate income tax rate of
21.0%
on U.S. earnings;
|
•
|
imposes a one-time tax on unremitted cumulative non-U.S. earnings of foreign subsidiaries
(“Transition Tax”);
|
•
|
imposes a new minimum tax on certain non-U.S. earnings, irrespective of the territorial system of taxation, and generally allows for the repatriation of future earnings of foreign subsidiaries without incurring additional U.S. taxes by transitioning to a territorial system of taxation
(Global Intangible Low-Taxed Income or “GILTI Tax”);
|
•
|
subjects certain payments made by a U.S. company to a related foreign company to certain minimum taxes (Base Erosion Anti-Abuse Tax);
|
•
|
eliminates certain prior tax incentives for manufacturing in the United States and creates an incentive for U.S. companies to sell, lease or license goods and services abroad by allowing for a reduction in taxes owed on earnings related to such sales;
|
•
|
allows the cost of investments in certain depreciable assets acquired and placed in service after September 27, 2017 to be immediately expensed; and
|
•
|
reduces deductions with respect to certain compensation paid to specified executive officers.
|
Balance, December 31, 2017
|
$
|
79.0
|
|
Accruals for warranties issued during the period
|
44.8
|
|
|
Settlements made
|
(44.1
|
)
|
|
Effect of foreign currency translation
|
(1.7
|
)
|
|
Balance, September 28, 2018
|
$
|
78.0
|
|
|
Three-Month Period Ended
|
|
Nine-Month Period Ended
|
||||||||||||
|
September 28, 2018
|
|
September 29, 2017
|
|
September 28, 2018
|
|
September 29, 2017
|
||||||||
Restricted stock units (“RSUs”)/performance stock units (“PSUs”):
|
|
|
|
|
|
|
|
||||||||
Pretax compensation expense
|
$
|
24.0
|
|
|
$
|
21.9
|
|
|
$
|
69.6
|
|
|
$
|
67.6
|
|
Income tax benefit
|
(5.0
|
)
|
|
(6.6
|
)
|
|
(14.6
|
)
|
|
(20.7
|
)
|
||||
RSU/PSU expense, net of income taxes
|
19.0
|
|
|
15.3
|
|
|
55.0
|
|
|
46.9
|
|
||||
Stock options:
|
|
|
|
|
|
|
|
||||||||
Pretax compensation expense
|
14.2
|
|
|
11.5
|
|
|
42.0
|
|
|
37.2
|
|
||||
Income tax benefit
|
(3.0
|
)
|
|
(3.6
|
)
|
|
(8.9
|
)
|
|
(11.8
|
)
|
||||
Stock option expense, net of income taxes
|
11.2
|
|
|
7.9
|
|
|
33.1
|
|
|
25.4
|
|
||||
Total stock-based compensation:
|
|
|
|
|
|
|
|
||||||||
Pretax compensation expense
|
38.2
|
|
|
33.4
|
|
|
111.6
|
|
|
104.8
|
|
||||
Income tax benefit
|
(8.0
|
)
|
|
(10.2
|
)
|
|
(23.5
|
)
|
|
(32.5
|
)
|
||||
Total stock-based compensation expense, net of income taxes
|
$
|
30.2
|
|
|
$
|
23.2
|
|
|
$
|
88.1
|
|
|
$
|
72.3
|
|
|
Net Earnings from Continuing Operations
(Numerator) |
|
Shares
(Denominator) |
|
Per Share Amount
|
|||||
For the Three-Month Period Ended September 28, 2018:
|
|
|
|
|
|
|||||
Basic EPS
|
$
|
663.7
|
|
|
701.4
|
|
|
$
|
0.95
|
|
Adjustment for interest on convertible debentures
|
0.6
|
|
|
—
|
|
|
|
|||
Incremental shares from assumed exercise of dilutive options and vesting of dilutive RSUs and PSUs
|
—
|
|
|
6.9
|
|
|
|
|||
Incremental shares from assumed conversion of the convertible debentures
|
—
|
|
|
2.3
|
|
|
|
|||
Diluted EPS from continuing operations
|
$
|
664.3
|
|
|
710.6
|
|
|
$
|
0.93
|
|
|
|
|
|
|
|
|||||
For the Three-Month Period Ended September 29, 2017:
|
|
|
|
|
|
|||||
Basic EPS
|
$
|
572.1
|
|
|
696.2
|
|
|
$
|
0.82
|
|
Adjustment for interest on convertible debentures
|
0.6
|
|
|
—
|
|
|
|
|||
Incremental shares from assumed exercise of dilutive options and vesting of dilutive RSUs and PSUs
|
—
|
|
|
6.5
|
|
|
|
|||
Incremental shares from assumed conversion of the convertible debentures
|
—
|
|
|
2.9
|
|
|
|
|||
Diluted EPS from continuing operations
|
$
|
572.7
|
|
|
705.6
|
|
|
$
|
0.81
|
|
|
|
|
|
|
|
|||||
For the Nine-Month Period Ended September 28, 2018:
|
|
|
|
|
|
|||||
Basic EPS
|
$
|
1,904.1
|
|
|
700.1
|
|
|
$
|
2.72
|
|
Adjustment for interest on convertible debentures
|
1.7
|
|
|
—
|
|
|
|
|||
Incremental shares from assumed exercise of dilutive options and vesting of dilutive RSUs and PSUs
|
—
|
|
|
7.3
|
|
|
|
|||
Incremental shares from assumed conversion of the convertible debentures
|
—
|
|
|
2.5
|
|
|
|
|||
Diluted EPS from continuing operations
|
$
|
1,905.8
|
|
|
709.9
|
|
|
$
|
2.68
|
|
|
|
|
|
|
|
|||||
For the Nine-Month Period Ended September 29, 2017:
|
|
|
|
|
|
|||||
Basic EPS
|
$
|
1,613.2
|
|
|
695.3
|
|
|
$
|
2.32
|
|
Adjustment for interest on convertible debentures
|
1.6
|
|
|
—
|
|
|
|
|||
Incremental shares from assumed exercise of dilutive options and vesting of dilutive RSUs and PSUs
|
—
|
|
|
7.3
|
|
|
|
|||
Incremental shares from assumed conversion of the convertible debentures
|
—
|
|
|
2.9
|
|
|
|
|||
Diluted EPS from continuing operations
|
$
|
1,614.8
|
|
|
705.5
|
|
|
$
|
2.29
|
|
|
Three-Month Period Ended
|
|
Nine-Month Period Ended
|
||||||||||||
|
September 28, 2018
|
|
September 29, 2017
|
|
September 28, 2018
|
|
September 29, 2017
|
||||||||
Sales:
|
|
|
|
|
|
|
|
||||||||
Life Sciences
|
$
|
1,596.7
|
|
|
$
|
1,392.6
|
|
|
$
|
4,677.9
|
|
|
$
|
4,085.0
|
|
Diagnostics
|
1,502.5
|
|
|
1,448.7
|
|
|
4,573.1
|
|
|
4,216.0
|
|
||||
Dental
|
679.5
|
|
|
694.0
|
|
|
2,085.5
|
|
|
2,052.1
|
|
||||
Environmental & Applied Solutions
|
1,074.4
|
|
|
992.9
|
|
|
3,193.0
|
|
|
2,890.9
|
|
||||
Total
|
$
|
4,853.1
|
|
|
$
|
4,528.2
|
|
|
$
|
14,529.5
|
|
|
$
|
13,244.0
|
|
|
|
|
|
|
|
|
|
||||||||
Operating profit:
|
|
|
|
|
|
|
|
||||||||
Life Sciences
|
$
|
312.8
|
|
|
$
|
246.8
|
|
|
$
|
875.6
|
|
|
$
|
680.0
|
|
Diagnostics
|
235.1
|
|
|
242.7
|
|
|
757.4
|
|
|
554.9
|
|
||||
Dental
|
86.1
|
|
|
102.2
|
|
|
241.8
|
|
|
301.4
|
|
||||
Environmental & Applied Solutions
|
254.3
|
|
|
222.8
|
|
|
732.5
|
|
|
666.0
|
|
||||
Other
|
(57.6
|
)
|
|
(55.3
|
)
|
|
(166.1
|
)
|
|
(149.4
|
)
|
||||
Total
|
$
|
830.7
|
|
|
$
|
759.2
|
|
|
$
|
2,441.2
|
|
|
$
|
2,052.9
|
|
•
|
Information Relating to Forward-Looking Statements
|
•
|
Overview
|
•
|
Results of Operations
|
•
|
Liquidity and Capital Resources
|
•
|
Critical Accounting Estimates
|
•
|
We intend to spin-off our Dental business into an independent, publicly traded company by the second half of 2019. The proposed transaction may not be completed on the currently contemplated timeline or at all and may not achieve the intended benefits.
|
•
|
Conditions in the global economy, the markets we serve and the financial markets may adversely affect our business and financial statements.
|
•
|
Significant developments or uncertainties stemming from the current U.S. administration, including changes in U.S. trade policies, tariffs and the reaction of other countries thereto, could have an adverse effect on our business.
|
•
|
Our growth could suffer if the markets into which we sell our products and services decline, do not grow as anticipated or experience cyclicality.
|
•
|
We face intense competition and if we are unable to compete effectively, we may experience decreased demand and decreased market share. Even if we compete effectively, we may be required to reduce prices for our products and services.
|
•
|
Our growth depends in part on the timely development and commercialization, and customer acceptance, of new and enhanced products and services based on technological innovation.
|
•
|
Our reputation, ability to do business and financial statements may be impaired by improper conduct by any of our employees, agents or business partners.
|
•
|
Certain of our businesses are subject to extensive regulation by the U.S. Food and Drug Administration and by comparable agencies of other countries, as well as laws regulating fraud and abuse in the health care industry and the privacy and security of health information. Failure to comply with those regulations could adversely affect our reputation and financial statements.
|
•
|
The health care industry and related industries that we serve have undergone, and are in the process of undergoing, significant changes in an effort to reduce costs, which could adversely affect our financial statements.
|
•
|
Any inability to consummate acquisitions at our historical rate and at appropriate prices could negatively impact our growth rate and stock price.
|
•
|
Our acquisition of businesses, investments, joint ventures and strategic relationships could negatively impact our financial statements.
|
•
|
The indemnification provisions of acquisition agreements by which we have acquired companies may not fully protect us and as a result we may face unexpected liabilities.
|
•
|
Divestitures and other dispositions could negatively impact our business, and contingent liabilities from businesses that we have disposed could adversely affect our financial statements.
|
•
|
We could incur significant liability if any of the 2016 spin-off of Fortive, the 2015 split-off of our communications business or the anticipated spin-off of our Dental business is determined to be a taxable transaction.
|
•
|
Potential indemnification liabilities pursuant to any of the 2016 spin-off of Fortive, the 2015 split-off of our communications business or the anticipated spin-off of our Dental business could materially and adversely affect our business and financial statements.
|
•
|
A significant disruption in, or breach in security of, our information technology systems or violation of data privacy laws could adversely affect our business, reputation and financial statements.
|
•
|
Our operations, products and services expose us to the risk of environmental, health and safety liabilities, costs and violations that could adversely affect our reputation and financial statements.
|
•
|
Our businesses are subject to extensive regulation; failure to comply with those regulations could adversely affect our financial statements and our business, including our reputation.
|
•
|
Our restructuring actions could have long-term adverse effects on our business.
|
•
|
We may be required to recognize impairment charges for our goodwill and other intangible assets.
|
•
|
Foreign currency exchange rates may adversely affect our financial statements.
|
•
|
Changes in our tax rates or exposure to additional income tax liabilities or assessments could affect our profitability. In addition, audits by tax authorities could result in additional tax payments for prior periods.
|
•
|
Changes in tax law relating to multinational corporations could adversely affect our tax position.
|
•
|
We are subject to a variety of litigation and other legal and regulatory proceedings in the course of our business that could adversely affect our business and financial statements.
|
•
|
If we do not or cannot adequately protect our intellectual property, or if third parties infringe our intellectual property rights, we may suffer competitive injury or expend significant resources enforcing our rights.
|
•
|
Third parties may claim that we are infringing or misappropriating their intellectual property rights and we could suffer significant litigation expenses, losses or licensing expenses or be prevented from selling products or services.
|
•
|
The U.S. government has certain rights to use and disclose some of the intellectual property that we license and could exclusively license it to a third party if we fail to achieve practical application of the intellectual property.
|
•
|
Defects and unanticipated use or inadequate disclosure with respect to our products or services (including software), or allegations thereof, could adversely affect our business, reputation and financial statements.
|
•
|
The manufacture of many of our products is a highly exacting and complex process, and if we directly or indirectly encounter problems manufacturing products, our reputation, business and financial statements could suffer.
|
•
|
Our indebtedness may limit our operations and our use of our cash flow, and any failure to comply with the covenants that apply to our indebtedness could adversely affect our liquidity and financial statements.
|
•
|
Adverse changes in our relationships with, or the financial condition, performance, purchasing patterns or inventory levels of, key distributors and other channel partners could adversely affect our financial statements.
|
•
|
Certain of our businesses rely on relationships with collaborative partners and other third parties for development, supply and marketing of certain products and potential products, and such collaborative partners or other third parties could fail to perform sufficiently.
|
•
|
Our financial results are subject to fluctuations in the cost and availability of commodities that we use in our operations.
|
•
|
If we cannot adjust our manufacturing capacity or the purchases required for our manufacturing activities to reflect changes in market conditions and customer demand, our profitability may suffer. In addition, our reliance upon sole or limited sources of supply for certain materials, components and services could cause production interruptions, delays and inefficiencies.
|
•
|
Changes in laws or governmental regulations may reduce demand for our products or services or increase our expenses.
|
•
|
Work stoppages, union and works council campaigns and other labor disputes could adversely impact our productivity and results of operations.
|
•
|
International economic, political, legal, compliance and business factors could negatively affect our financial statements.
|
•
|
The United Kingdom’s referendum favoring departure from the EU could have an adverse effect on our business.
|
•
|
If we suffer loss to our facilities, supply chains, distribution systems or information technology systems due to catastrophe or other events, our operations could be seriously harmed.
|
•
|
Our defined benefit pension plans are subject to financial market risks that could adversely affect our financial statements.
|
•
|
sales from acquired businesses; and
|
•
|
the impact of currency translation.
|
•
|
the period-to-period change in revenue (excluding sales from acquired businesses); and
|
•
|
the period-to-period change in revenue (excluding sales from acquired businesses) after applying current period foreign exchange rates to the prior year period.
|
|
% Change Three-Month Period Ended September 28, 2018 vs. Comparable 2017 Period
|
|
% Change Nine- Month Period Ended September 28, 2018 vs. Comparable 2017 Period
|
||
Total sales growth (GAAP)
|
7.0
|
%
|
|
9.5
|
%
|
Less the impact of:
|
|
|
|
||
Acquisitions
|
(2.0
|
)%
|
|
(1.5
|
)%
|
Currency exchange rates
|
1.5
|
%
|
|
(2.0
|
)%
|
Core revenue growth (non-GAAP)
|
6.5
|
%
|
|
6.0
|
%
|
•
|
Higher
2018
core sales volumes, incremental year-over-year cost savings associated with continuing productivity improvement initiatives taken in
2017
, net of incremental year-over-year costs associated with various new product development, sales, service and marketing growth investments and the impact of foreign currency exchange rates in the
third quarter
of
2018
-
50
basis points
|
•
|
The incremental net dilutive effect in
2018
of acquired businesses -
20
basis points
|
•
|
Higher
2018
sales volumes from existing businesses and incremental year-over-year cost savings associated with the ongoing restructuring actions and continuing productivity improvement initiatives taken in
2017
, net of incremental year-over-year costs associated with various new product development, sales, service and marketing growth investments -
100
basis points
|
•
|
Restructuring, impairment and other related charges related to discontinuing a product line in the second quarter of 2017 -
55
basis points
|
•
|
Second quarter 2018 gain on resolution of acquisition-related matters -
5
basis points
|
•
|
The incremental net dilutive effect in 2018 of acquired businesses -
20
basis points
|
•
|
Acquisition-related charges associated with transaction costs and fair value adjustments to acquired inventory recorded in the second quarter of 2018 in connection with the IDT acquisition -
10
basis points
|
|
Three-Month Period Ended
|
|
Nine-Month Period Ended
|
||||||||||||
|
September 28, 2018
|
|
September 29, 2017
|
|
September 28, 2018
|
|
September 29, 2017
|
||||||||
Life Sciences
|
$
|
1,596.7
|
|
|
$
|
1,392.6
|
|
|
$
|
4,677.9
|
|
|
$
|
4,085.0
|
|
Diagnostics
|
1,502.5
|
|
|
1,448.7
|
|
|
4,573.1
|
|
|
4,216.0
|
|
||||
Dental
|
679.5
|
|
|
694.0
|
|
|
2,085.5
|
|
|
2,052.1
|
|
||||
Environmental & Applied Solutions
|
1,074.4
|
|
|
992.9
|
|
|
3,193.0
|
|
|
2,890.9
|
|
||||
Total
|
$
|
4,853.1
|
|
|
$
|
4,528.2
|
|
|
$
|
14,529.5
|
|
|
$
|
13,244.0
|
|
|
Three-Month Period Ended
|
|
Nine-Month Period Ended
|
||||||||||||
($ in millions)
|
September 28, 2018
|
|
September 29, 2017
|
|
September 28, 2018
|
|
September 29, 2017
|
||||||||
Sales
|
$
|
1,596.7
|
|
|
$
|
1,392.6
|
|
|
$
|
4,677.9
|
|
|
$
|
4,085.0
|
|
Operating profit
|
312.8
|
|
|
246.8
|
|
|
875.6
|
|
|
680.0
|
|
||||
Depreciation
|
32.6
|
|
|
29.5
|
|
|
94.8
|
|
|
88.6
|
|
||||
Amortization
|
84.2
|
|
|
76.9
|
|
|
255.4
|
|
|
229.9
|
|
||||
Operating profit as a % of sales
|
19.6
|
%
|
|
17.7
|
%
|
|
18.7
|
%
|
|
16.6
|
%
|
||||
Depreciation as a % of sales
|
2.0
|
%
|
|
2.1
|
%
|
|
2.0
|
%
|
|
2.2
|
%
|
||||
Amortization as a % of sales
|
5.3
|
%
|
|
5.5
|
%
|
|
5.5
|
%
|
|
5.6
|
%
|
|
% Change Three-Month Period Ended September 28, 2018 vs. Comparable 2017 Period
|
|
% Change Nine- Month Period Ended September 28, 2018 vs. Comparable 2017 Period
|
||
Total sales growth (GAAP)
|
14.5
|
%
|
|
14.5
|
%
|
Less the impact of:
|
|
|
|
||
Acquisitions
|
(6.5
|
)%
|
|
(4.5
|
)%
|
Currency exchange rates
|
1.5
|
%
|
|
(2.5
|
)%
|
Core revenue growth (non-GAAP)
|
9.5
|
%
|
|
7.5
|
%
|
•
|
Higher
2018
core sales volumes and incremental year-over-year cost savings associated with the
restructuring actions
and continuing productivity improvement initiatives taken in
2017
, net of incremental year-over-year costs associated with various new product development, sales and marketing growth investments and the impact of foreign currency exchange rates in the
third quarter
of
2018
-
230
basis points
|
•
|
The incremental net dilutive effect in
2018
of acquired businesses -
40
basis points
|
•
|
Higher
2018
core sales volumes, incremental year-over-year cost savings associated with the
restructuring actions
and continuing productivity improvement initiatives taken in
2017
and the impact of foreign currency exchange rates in the
nine
-month period in
2018
, net of incremental year-over-year costs associated with various new product development, sales and marketing growth investments -
255
basis points
|
•
|
Second quarter 2018 gain on resolution of acquisition-related matters -
20
basis points
|
•
|
The incremental net dilutive effect in
2018
of acquired businesses -
30
basis points
|
•
|
Acquisition-related charges associated with transaction costs and fair value adjustments to acquired inventory recorded in the second quarter of 2018 in connection with the IDT acquisition -
35
basis points
|
|
Three-Month Period Ended
|
|
Nine-Month Period Ended
|
||||||||||||
($ in millions)
|
September 28, 2018
|
|
September 29, 2017
|
|
September 28, 2018
|
|
September 29, 2017
|
||||||||
Sales
|
$
|
1,502.5
|
|
|
$
|
1,448.7
|
|
|
$
|
4,573.1
|
|
|
$
|
4,216.0
|
|
Operating profit
|
235.1
|
|
|
242.7
|
|
|
757.4
|
|
|
554.9
|
|
||||
Depreciation
|
92.2
|
|
|
92.6
|
|
|
284.5
|
|
|
271.8
|
|
||||
Amortization
|
52.1
|
|
|
54.2
|
|
|
157.8
|
|
|
160.2
|
|
||||
Operating profit as a % of sales
|
15.6
|
%
|
|
16.8
|
%
|
|
16.6
|
%
|
|
13.2
|
%
|
||||
Depreciation as a % of sales
|
6.1
|
%
|
|
6.4
|
%
|
|
6.2
|
%
|
|
6.4
|
%
|
||||
Amortization as a % of sales
|
3.5
|
%
|
|
3.7
|
%
|
|
3.5
|
%
|
|
3.8
|
%
|
|
% Change Three-Month Period Ended September 28, 2018 vs. Comparable 2017 Period
|
|
% Change Nine- Month Period Ended September 28, 2018 vs. Comparable 2017 Period
|
||
Total sales growth (GAAP)
|
3.5
|
%
|
|
8.5
|
%
|
Less the impact of:
|
|
|
|
||
Currency exchange rates
|
2.0
|
%
|
|
(2.0
|
)%
|
Core revenue growth (non-GAAP)
|
5.5
|
%
|
|
6.5
|
%
|
•
|
Incremental year-over-year costs associated with various new product development, sales, service and marketing growth investments and the impact of foreign currency exchange rates in the
third quarter
of
2018
, net of higher
2018
core sales volumes and incremental year-over-year cost savings associated with the
restructuring actions
and continuing productivity improvement initiatives taken in
2017
-
120
basis points
|
•
|
Higher
2018
core sales volumes, incremental year-over-year cost savings associated with the
restructuring actions
and continuing productivity improvement initiatives taken in
2017
, net of the impact of foreign currency exchange rates in
|
•
|
Restructuring, impairment and other related charges related to discontinuing a product line in the second quarter of 2017 -
180
basis points
|
|
Three-Month Period Ended
|
|
Nine-Month Period Ended
|
||||||||||||
($ in millions)
|
September 28, 2018
|
|
September 29, 2017
|
|
September 28, 2018
|
|
September 29, 2017
|
||||||||
Sales
|
$
|
679.5
|
|
|
$
|
694.0
|
|
|
$
|
2,085.5
|
|
|
$
|
2,052.1
|
|
Operating profit
|
86.1
|
|
|
102.2
|
|
|
241.8
|
|
|
301.4
|
|
||||
Depreciation
|
9.4
|
|
|
9.3
|
|
|
29.1
|
|
|
29.7
|
|
||||
Amortization
|
22.5
|
|
|
20.8
|
|
|
68.0
|
|
|
61.0
|
|
||||
Operating profit as a % of sales
|
12.7
|
%
|
|
14.7
|
%
|
|
11.6
|
%
|
|
14.7
|
%
|
||||
Depreciation as a % of sales
|
1.4
|
%
|
|
1.3
|
%
|
|
1.4
|
%
|
|
1.4
|
%
|
||||
Amortization as a % of sales
|
3.3
|
%
|
|
3.0
|
%
|
|
3.3
|
%
|
|
3.0
|
%
|
|
% Change Three-Month Period Ended September 28, 2018 vs. Comparable 2017 Period
|
|
% Change Nine- Month Period Ended September 28, 2018 vs. Comparable 2017 Period
|
||
Total sales growth (GAAP)
|
(2.0
|
)%
|
|
1.5
|
%
|
Less the impact of:
|
|
|
|
||
Currency exchange rates
|
1.5
|
%
|
|
(2.0
|
)%
|
Core revenue growth (non-GAAP)
|
(0.5
|
)%
|
|
(0.5
|
)%
|
•
|
Lower
2018
core sales volumes of dental equipment and traditional dental consumables, incremental year-over-year costs associated with product development and sales and marketing growth investments, lower overall pricing and increased spending on productivity initiatives and the impact of foreign currency exchange rates in the third quarter of
2018
, net of cost savings associated with productivity initiatives taken in
2017
-
195
basis points
|
•
|
The incremental net dilutive effect in
2018
of acquired businesses -
5
basis points
|
•
|
Lower
2018
core sales volumes of dental equipment and traditional dental consumables, incremental year-over-year costs associated with product development and sales and marketing growth investments, lower overall pricing and increased spending on productivity initiatives and the impact of foreign currency exchange rates for the nine-month period in
2018
, net of cost savings associated with productivity initiatives taken in
2017
-
300
basis points
|
•
|
The incremental net dilutive effect in
2018
of acquired businesses -
10
basis points
|
|
Three-Month Period Ended
|
|
Nine-Month Period Ended
|
||||||||||||
($ in millions)
|
September 28, 2018
|
|
September 29, 2017
|
|
September 28, 2018
|
|
September 29, 2017
|
||||||||
Sales
|
$
|
1,074.4
|
|
|
$
|
992.9
|
|
|
$
|
3,193.0
|
|
|
$
|
2,890.9
|
|
Operating profit
|
254.3
|
|
|
222.8
|
|
|
732.5
|
|
|
666.0
|
|
||||
Depreciation
|
11.0
|
|
|
11.3
|
|
|
34.8
|
|
|
31.6
|
|
||||
Amortization
|
15.3
|
|
|
14.6
|
|
|
46.3
|
|
|
41.8
|
|
||||
Operating profit as a % of sales
|
23.7
|
%
|
|
22.4
|
%
|
|
22.9
|
%
|
|
23.0
|
%
|
||||
Depreciation as a % of sales
|
1.0
|
%
|
|
1.1
|
%
|
|
1.1
|
%
|
|
1.1
|
%
|
||||
Amortization as a % of sales
|
1.4
|
%
|
|
1.5
|
%
|
|
1.5
|
%
|
|
1.4
|
%
|
|
% Change Three-Month Period Ended September 28, 2018 vs. Comparable 2017 Period
|
|
% Change Nine- Month Period Ended September 28, 2018 vs. Comparable 2017 Period
|
||
Total sales growth (GAAP)
|
8.0
|
%
|
|
10.5
|
%
|
Less the impact of:
|
|
|
|
||
Acquisitions
|
(1.5
|
)%
|
|
(1.5
|
)%
|
Currency exchange rates
|
1.5
|
%
|
|
(2.0
|
)%
|
Core revenue growth (non-GAAP)
|
8.0
|
%
|
|
7.0
|
%
|
•
|
Higher
2018
core sales volumes and incremental year-over-year cost savings associated with the
restructuring actions
and continuing productivity improvement initiatives taken in
2017
, net of the impact of foreign currency exchange rates in the
third quarter
of
2018
and incremental year-over-year costs associated with various new product development, sales, service and marketing growth investments -
160
basis points
|
•
|
The incremental net dilutive effect in
2018
of acquired businesses -
30
basis points
|
•
|
Higher
2018
core sales volumes, incremental year-over-year cost savings associated with the
restructuring actions
and continuing productivity improvement initiatives taken in
2017
and the impact of foreign currency exchange rates in the
nine
month period in
2018
, net of incremental year-over-year costs associated with various new product development, sales, service and marketing growth investments -
40
basis points
|
•
|
The incremental net dilutive effect in
2018
of acquired businesses -
50
basis points
|
|
Three-Month Period Ended
|
|
Nine-Month Period Ended
|
||||||||||||
($ in millions)
|
September 28, 2018
|
|
September 29, 2017
|
|
September 28, 2018
|
|
September 29, 2017
|
||||||||
Sales
|
$
|
4,853.1
|
|
|
$
|
4,528.2
|
|
|
$
|
14,529.5
|
|
|
$
|
13,244.0
|
|
Cost of sales
|
(2,162.6
|
)
|
|
(1,991.4
|
)
|
|
(6,378.3
|
)
|
|
(5,890.6
|
)
|
||||
Gross profit
|
$
|
2,690.5
|
|
|
$
|
2,536.8
|
|
|
$
|
8,151.2
|
|
|
$
|
7,353.4
|
|
Gross profit margin
|
55.4
|
%
|
|
56.0
|
%
|
|
56.1
|
%
|
|
55.5
|
%
|
|
Three-Month Period Ended
|
|
Nine-Month Period Ended
|
||||||||||||
($ in millions)
|
September 28, 2018
|
|
September 29, 2017
|
|
September 28, 2018
|
|
September 29, 2017
|
||||||||
Sales
|
$
|
4,853.1
|
|
|
$
|
4,528.2
|
|
|
$
|
14,529.5
|
|
|
$
|
13,244.0
|
|
Selling, general and administrative (“SG&A”) expenses
|
1,558.6
|
|
|
1,498.4
|
|
|
4,798.4
|
|
|
4,470.6
|
|
||||
Research and development (“R&D”) expenses
|
301.2
|
|
|
279.2
|
|
|
911.6
|
|
|
829.9
|
|
||||
SG&A as a % of sales
|
32.1
|
%
|
|
33.1
|
%
|
|
33.0
|
%
|
|
33.8
|
%
|
||||
R&D as a % of sales
|
6.2
|
%
|
|
6.2
|
%
|
|
6.3
|
%
|
|
6.3
|
%
|
|
Three-Month Period Ended
|
|
Nine-Month Period Ended
|
||||||||
|
September 28, 2018
|
|
September 29, 2017
|
|
September 28, 2018
|
|
September 29, 2017
|
||||
Effective tax rate from continuing operations
|
17.2
|
%
|
|
21.6
|
%
|
|
19.0
|
%
|
|
17.7
|
%
|
•
|
establishes a flat corporate income tax rate of
21.0%
on U.S. earnings;
|
•
|
imposes a one-time tax on unremitted cumulative non-U.S. earnings of foreign subsidiaries
(“Transition Tax”);
|
•
|
imposes a new minimum tax on certain non-U.S. earnings, irrespective of the territorial system of taxation, and generally allows for the repatriation of future earnings of foreign subsidiaries without incurring additional U.S. taxes by transitioning to a territorial system of taxation
(“GILTI Tax”);
|
•
|
subjects certain payments made by a U.S. company to a related foreign company to certain minimum taxes (Base Erosion Anti-Abuse Tax);
|
•
|
eliminates certain prior tax incentives for manufacturing in the United States and creates an incentive for U.S. companies to sell, lease or license goods and services abroad by allowing for a reduction in taxes owed on earnings related to such sales;
|
•
|
allows the cost of investments in certain depreciable assets acquired and placed in service after September 27, 2017 to be immediately expensed; and
|
•
|
reduces deductions with respect to certain compensation paid to specified executive officers.
|
•
|
The expected rate for the remainder of
2018
includes the anticipated discrete income tax benefits from excess tax deductions related to the Company’s stock compensation programs, which are reflected as a reduction in tax expense, though the actual benefits (if any) will depend on the Company’s stock price and stock option exercise patterns.
|
•
|
The actual mix of earnings by jurisdiction could fluctuate from the Company’s projection.
|
•
|
The tax effects of other discrete items, including accruals related to tax contingencies, the resolution of worldwide tax matters, tax audit settlements, statute of limitations expirations and changes in tax regulations.
|
•
|
Any future legislative changes or potential tax reform, the impact of future regulations and guidance implementing the TCJA and any related additional tax planning efforts to address these changes.
|
|
Nine-Month Period Ended
|
||||||
($ in millions)
|
September 28, 2018
|
|
September 29, 2017
|
||||
Total operating cash flows provided by continuing operations
|
$
|
2,784.4
|
|
|
$
|
2,643.1
|
|
|
|
|
|
||||
Cash paid for acquisitions
|
$
|
(2,173.3
|
)
|
|
$
|
(112.0
|
)
|
Payments for additions to property, plant and equipment
|
(441.3
|
)
|
|
(445.8
|
)
|
||
Proceeds from sales of property, plant and equipment
|
1.6
|
|
|
32.3
|
|
||
Proceeds from sale of investments
|
22.1
|
|
|
—
|
|
||
All other investing activities
|
(61.1
|
)
|
|
(2.4
|
)
|
||
Net operating cash used in investing activities
|
$
|
(2,652.0
|
)
|
|
$
|
(527.9
|
)
|
|
|
|
|
||||
Proceeds from the issuance of common stock
|
$
|
77.3
|
|
|
$
|
49.0
|
|
Payment of dividends
|
(321.2
|
)
|
|
(281.0
|
)
|
||
Payment for purchase of noncontrolling interests
|
—
|
|
|
(64.4
|
)
|
||
Net proceeds from (repayments of) borrowings (maturities of 90 days or less)
|
882.1
|
|
|
(3,319.1
|
)
|
||
Proceeds from borrowings (maturities longer than 90 days)
|
—
|
|
|
1,684.0
|
|
||
Repayments of borrowings (maturities longer than 90 days)
|
(503.9
|
)
|
|
(562.4
|
)
|
||
All other financing activities
|
(16.6
|
)
|
|
(50.7
|
)
|
||
Net operating cash provided by (used in) financing activities
|
$
|
117.7
|
|
|
$
|
(2,544.6
|
)
|
•
|
Operating cash flows from continuing operations
increased
$141 million
, or approximately
5%
, during the first
nine
months of
2018
as compared to the first
nine
months of
2017
, primarily due to higher earnings and slightly lower cash used for funding trade accounts receivable, inventories and accounts payable during the period compared to the prior year, partially offset by increased cash used for payments for income taxes, certain employee related benefits and accrued expenses compared to the prior year.
|
•
|
On March 23, 2018, Danaher entered into the
$1.0 billion
364-Day Facility which provides liquidity support for an expansion of Danaher’s U.S. and euro-denominated commercial paper programs and for general corporate purposes. Danaher used proceeds from the issuance of U.S. dollar and euro-denominated commercial paper to fund a portion of the purchase price for the acquisition of IDT in April 2018.
|
•
|
The Company repaid the
$500 million
of 2018 U.S. Notes (plus accrued interest) upon their maturity in September 2018 using available cash and proceeds from the issuance of commercial paper.
|
•
|
As of
September 28, 2018
, the Company held
$776 million
of cash and cash equivalents.
|
•
|
2018
operating cash flows reflected
an increase
of
$291 million
in net earnings from continuing operations for the first
nine
months of
2018
as compared to the comparable period in
2017
.
|
•
|
Net earnings from continuing operations for the first
nine
months of
2018
reflected
an increase
of
$57 million
of depreciation and amortization expense as compared to the comparable period of
2017
. Amortization expense primarily relates to the amortization of intangible assets acquired in connection with acquisitions and increased due to
|
•
|
The aggregate of trade accounts receivable, inventories and trade accounts payable
used
$55 million
in operating cash flows during the first
nine
months of
2018
, compared to
$72 million
of operating cash flows
used
in the comparable period of
2017
. The amount of cash flow generated from or used by the aggregate of trade accounts receivable, inventories and trade accounts payable depends upon how effectively the Company manages the cash conversion cycle, which effectively represents the number of days that elapse from the day it pays for the purchase of raw materials and components to the collection of cash from its customers and can be significantly impacted by the timing of collections and payments in a period.
|
•
|
The aggregate of prepaid expenses and other assets and accrued expenses and other liabilities
used
$153 million
of operating cash flows during the first
nine
months of
2018
, compared to
$28 million
of operating cash flows
provided
in the comparable period of
2017
. This use of operational cash flow in the first
nine
months of
2018
resulted primarily from the timing of cash payments for income taxes, various employee-related liabilities, customer funding and accrued expenses during the first
nine
months of
2018
compared to the comparable period of
2017
.
|
(a)
|
Exhibits:
|
3.1
|
|
|
|
|
|
3.2
|
|
|
|
|
|
10.1
|
|
|
|
|
|
10.2
|
|
|
|
|
|
10.3
|
|
|
|
|
|
11.1
|
|
|
|
|
|
12.1
|
|
|
|
|
|
31.1
|
|
|
|
|
|
31.2
|
|
|
|
|
|
32.1
|
|
|
|
|
|
32.2
|
|
|
|
|
|
101.INS
|
|
XBRL Instance Document **
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document **
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document **
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document **
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document **
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document **
|
**
|
Attached as Exhibit 101 to this report are the following documents formatted in XBRL (Extensible Business Reporting Language): (i) Consolidated Condensed Balance Sheets as of
September 28, 2018
and
December 31, 2017
, (ii) Consolidated Condensed Statements of Earnings for the three and
nine
-month periods ended
September 28, 2018
and
September 29, 2017
, (iii) Consolidated Condensed Statements of Comprehensive Income for the three and
nine
-month periods ended
September 28, 2018
and
September 29, 2017
, (iv) Consolidated Condensed Statement of Stockholders’ Equity for the
nine
-month period ended
September 28, 2018
, (v) Consolidated Condensed Statements of Cash Flows for the
nine
-month periods ended
September 28, 2018
and
September 29, 2017
, and (vi) Notes to Consolidated Condensed Financial Statements.
|
|
|
DANAHER CORPORATION
|
|
|
|
|
|
Date:
|
October 17, 2018
|
By:
|
/s/ Daniel L. Comas
|
|
|
|
Daniel L. Comas
|
|
|
|
Executive Vice President and Chief Financial Officer
|
|
|
|
|
Date:
|
October 17, 2018
|
By:
|
/s/ Robert S. Lutz
|
|
|
|
Robert S. Lutz
|
|
|
|
Senior Vice President and Chief Accounting Officer
|
DANAHER CORPORATION & SUBSIDIARIES
EXECUTIVE DEFERRED INCENTIVE PROGRAM
AMENDED AND RESTATED AS OF JANUARY 1, 2019
|
|
VESTING YEARS OF
PARTICIPATION
|
VESTING
PERCENTAGE
|
1
|
10%
|
2
|
20%
|
3
|
30%
|
4
|
40%
|
5
|
50%
|
6
|
60%
|
7
|
70%
|
8
|
80%
|
9
|
90%
|
10
|
100%
|
|
|
APPENDIX A
APPLICABLE PERCENTAGE
|
||||
I.
EFFECTIVE PRIOR TO JANUARY 1, 2004
:
|
||||
Target Compensation
|
Age of Participant
|
|||
|
Under 40
|
40 and Over
|
||
Less than $150,000
|
3.5%
|
4.5%
|
||
Greater than or equal to $150,000
|
5.5%
|
6.5%
|
||
II.
EFFECTIVE ON AND AFTER JANUARY 1, 2004
:
|
||||
Years of Participation
|
|
Applicable Percentage
|
||
0-10
|
|
6%
|
||
11-15
|
|
8%
|
||
Greater than 15
|
|
10%
|
APPENDIX B
PRESENT VALUE FACTORS
|
PV Factor 1+2+3 2.6
|
PV Factor 1+2 1.8
|
PV Factor 1 .9
|
I.
EFFECTIVE PRIOR TO JANUARY 1, 2004
:
|
|
MONTHS FACTORS
|
|
|
|
Months Factor
|
PV Factor O
|
12
|
.9
|
11
|
.8
|
10
|
.8
|
9
|
.8
|
8
|
.8
|
7
|
.9
|
6
|
1.0
|
5
|
1.0
|
4
|
1.0
|
3
|
1.0
|
2
|
1.0
|
1
|
1.0
|
DANAHER EXCESS CONTRIBUTION PROGRAM
AS ESTABLISHED AS A SUB-PLAN UNDER THE
DANAHER CORPORATION 2007 OMNIBUS INCENTIVE PLAN,
AS AMENDED AND RESTATED
EFFECTIVE JANUARY 1, 2019
|
|
DANAHER DEFERRED COMPENSATION PLAN
EFFECTIVE JANUARY 1, 2019
|
|
|
Nine-Month Period Ended
|
|
Year Ended December 31
|
||||||||||||||||||||
|
September 28, 2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||||
Fixed charges:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Gross interest expense
|
$
|
123.6
|
|
|
$
|
162.7
|
|
|
$
|
204.1
|
|
|
$
|
162.8
|
|
|
$
|
119.1
|
|
|
$
|
141.2
|
|
Interest element of rental expense
|
6.9
|
|
|
9.8
|
|
|
10.0
|
|
|
14.0
|
|
|
12.9
|
|
|
12.7
|
|
||||||
Interest on unrecognized tax benefits
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total fixed charges
|
$
|
130.5
|
|
|
$
|
172.5
|
|
|
$
|
214.1
|
|
|
$
|
176.8
|
|
|
$
|
132.0
|
|
|
$
|
153.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Earnings available for fixed charges:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Earnings from continuing operations (excluding earnings from equity investees) before income taxes plus distributed income of equity investees
|
$
|
2,349.5
|
|
|
$
|
2,938.8
|
|
|
$
|
2,611.3
|
|
|
$
|
2,039.4
|
|
|
$
|
2,086.2
|
|
|
$
|
2,249.4
|
|
Add fixed charges
|
130.5
|
|
|
172.5
|
|
|
214.1
|
|
|
176.8
|
|
|
132.0
|
|
|
153.9
|
|
||||||
Interest on unrecognized tax benefits
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total earnings available for fixed charges
|
$
|
2,480.0
|
|
|
$
|
3,111.3
|
|
|
$
|
2,825.4
|
|
|
$
|
2,216.2
|
|
|
$
|
2,218.2
|
|
|
$
|
2,403.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Ratio of earnings to fixed charges
|
19.0
|
|
|
18.0
|
|
|
13.2
|
|
|
12.5
|
|
|
16.8
|
|
|
15.6
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
NOTE:
These ratios include Danaher Corporation and its consolidated subsidiaries. The ratio of earnings to fixed charges was computed by dividing earnings by fixed charges for the periods indicated, where “earnings” consist of (1) earnings from continuing operations (excluding earnings from equity investees) before income taxes plus distributed income of equity investees; plus (2) fixed charges, and “fixed charges” consist of (A) interest, whether expensed or capitalized, on all indebtedness, (B) amortization of premiums, discounts and capitalized expenses related to indebtedness, and (C) an interest component representing the estimated portion of rental expense that management believes is attributable to interest. Interest on unrecognized tax benefits is included in the tax provision in the Company's Consolidated Statements of Earnings and is excluded from the computation of fixed charges.
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Danaher Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a.
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b.
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date:
|
October 17, 2018
|
By:
|
/s/ Thomas P. Joyce, Jr.
|
|
|
|
Thomas P. Joyce, Jr.
|
|
|
|
President and Chief Executive Officer
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Danaher Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a.
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b.
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date:
|
October 17, 2018
|
By:
|
/s/ Daniel L. Comas
|
|
|
|
Daniel L. Comas
|
|
|
|
Executive Vice President and Chief Financial Officer
|
Date:
|
October 17, 2018
|
By:
|
/s/ Thomas P. Joyce, Jr.
|
|
|
|
Thomas P. Joyce, Jr.
|
|
|
|
President and Chief Executive Officer
|
Date:
|
October 17, 2018
|
By:
|
/s/ Daniel L. Comas
|
|
|
|
Daniel L. Comas
|
|
|
|
Executive Vice President and Chief Financial Officer
|