☒
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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
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20037-1701
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Washington,
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DC
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(Address of Principal Executive Offices)
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(Zip Code)
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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Common stock, $0.01 par value
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DHR
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New York Stock Exchange
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4.75% Mandatory Convertible Preferred Stock, Series A, without par value
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DHR.PRA
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New York Stock Exchange
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Floating Rate Senior Notes due 2022
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DHR F 06/30/22
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New York Stock Exchange
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1.700% Senior Notes due 2022
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DHR 1.7 01/04/22
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New York Stock Exchange
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2.500% Senior Notes due 2025
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DHR 2.5 07/08/25
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New York Stock Exchange
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1.200% Senior Notes due 2027
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DHR 1.2 06/30/27
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New York Stock Exchange
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Large Accelerated Filer
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☒
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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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June 28, 2019
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December 31, 2018
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||||
ASSETS
|
|
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|
||||
Current assets:
|
|
|
|
||||
Cash and equivalents
|
$
|
5,433.6
|
|
|
$
|
787.8
|
|
Trade accounts receivable, net
|
3,481.6
|
|
|
3,489.6
|
|
||
Inventories:
|
|
|
|
||||
Finished goods
|
1,099.2
|
|
|
1,031.2
|
|
||
Work in process
|
332.4
|
|
|
313.9
|
|
||
Raw materials
|
624.3
|
|
|
565.0
|
|
||
Total inventories
|
2,055.9
|
|
|
1,910.1
|
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||
Prepaid expenses and other current assets
|
632.6
|
|
|
906.3
|
|
||
Total current assets
|
11,603.7
|
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|
7,093.8
|
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||
Property, plant and equipment, net of accumulated depreciation of $2,999.2 and $2,828.3, respectively
|
2,541.6
|
|
|
2,511.2
|
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Other long-term assets
|
1,678.1
|
|
|
648.4
|
|
||
Goodwill
|
26,074.5
|
|
|
25,906.0
|
|
||
Other intangible assets, net
|
11,424.1
|
|
|
11,673.1
|
|
||
Total assets
|
$
|
53,322.0
|
|
|
$
|
47,832.5
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Notes payable and current portion of long-term debt
|
$
|
153.7
|
|
|
$
|
51.8
|
|
Trade accounts payable
|
1,664.1
|
|
|
1,712.8
|
|
||
Accrued expenses and other liabilities
|
3,190.2
|
|
|
3,076.9
|
|
||
Total current liabilities
|
5,008.0
|
|
|
4,841.5
|
|
||
Other long-term liabilities
|
5,956.4
|
|
|
5,075.8
|
|
||
Long-term debt
|
10,144.4
|
|
|
9,688.5
|
|
||
Stockholders’ equity:
|
|
|
|
||||
Preferred stock, without par value, 15.0 million shares authorized; 1.65 million shares of 4.75% Mandatory Convertible Preferred Stock, Series A, issued and outstanding at June 28, 2019; no shares issued or outstanding at December 31, 2018
|
1,599.6
|
|
|
—
|
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Common stock - $0.01 par value, 2.0 billion shares authorized; 834.0 million issued and 717.3 million outstanding at June 28, 2019; 817.9 million issued and 701.5 million outstanding at December 31, 2018
|
8.3
|
|
|
8.2
|
|
||
Additional paid-in capital
|
7,482.6
|
|
|
5,834.3
|
|
||
Retained earnings
|
25,955.0
|
|
|
25,163.0
|
|
||
Accumulated other comprehensive income (loss)
|
(2,844.3
|
)
|
|
(2,791.1
|
)
|
||
Total Danaher stockholders’ equity
|
32,201.2
|
|
|
28,214.4
|
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||
Noncontrolling interests
|
12.0
|
|
|
12.3
|
|
||
Total stockholders’ equity
|
32,213.2
|
|
|
28,226.7
|
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||
Total liabilities and stockholders’ equity
|
$
|
53,322.0
|
|
|
$
|
47,832.5
|
|
|
Three-Month Period Ended
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|
Six-Month Period Ended
|
||||||||||||
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June 28, 2019
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June 29, 2018
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June 28, 2019
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June 29, 2018
|
||||||||
Sales
|
$
|
5,156.6
|
|
|
$
|
4,981.0
|
|
|
$
|
10,036.5
|
|
|
$
|
9,676.4
|
|
Cost of sales
|
(2,279.2
|
)
|
|
(2,163.9
|
)
|
|
(4,441.1
|
)
|
|
(4,215.7
|
)
|
||||
Gross profit
|
2,877.4
|
|
|
2,817.1
|
|
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5,595.4
|
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5,460.7
|
|
||||
Operating costs:
|
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|
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|
||||||||
Selling, general and administrative expenses
|
(1,671.8
|
)
|
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(1,637.9
|
)
|
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(3,355.2
|
)
|
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(3,239.8
|
)
|
||||
Research and development expenses
|
(321.8
|
)
|
|
(311.7
|
)
|
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(632.6
|
)
|
|
(610.4
|
)
|
||||
Operating profit
|
883.8
|
|
|
867.5
|
|
|
1,607.6
|
|
|
1,610.5
|
|
||||
Nonoperating income (expense):
|
|
|
|
|
|
|
|
||||||||
Other income, net
|
6.3
|
|
|
8.3
|
|
|
11.5
|
|
|
16.1
|
|
||||
Interest expense
|
(20.6
|
)
|
|
(43.2
|
)
|
|
(43.9
|
)
|
|
(82.3
|
)
|
||||
Interest income
|
26.2
|
|
|
2.5
|
|
|
41.9
|
|
|
3.9
|
|
||||
Earnings before income taxes
|
895.7
|
|
|
835.1
|
|
|
1,617.1
|
|
|
1,548.2
|
|
||||
Income taxes
|
(164.4
|
)
|
|
(161.3
|
)
|
|
(552.0
|
)
|
|
(307.8
|
)
|
||||
Net earnings
|
731.3
|
|
|
673.8
|
|
|
1,065.1
|
|
|
1,240.4
|
|
||||
Mandatory convertible preferred stock dividends
|
(22.7
|
)
|
|
—
|
|
|
(29.2
|
)
|
|
—
|
|
||||
Net earnings attributable to common stockholders
|
$
|
708.6
|
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|
$
|
673.8
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$
|
1,035.9
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$
|
1,240.4
|
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Net earnings per common share:
|
|
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Basic
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$
|
0.99
|
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$
|
0.96
|
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$
|
1.45
|
|
|
$
|
1.77
|
|
Diluted
|
$
|
0.97
|
|
|
$
|
0.95
|
|
|
$
|
1.43
|
|
|
$
|
1.75
|
|
Average common stock and common equivalent shares outstanding:
|
|
|
|
|
|
|
|
||||||||
Basic
|
717.6
|
|
|
700.2
|
|
|
712.6
|
|
|
699.4
|
|
||||
Diluted
|
727.9
|
|
|
709.5
|
|
|
723.2
|
|
|
709.5
|
|
|
Three-Month Period Ended
|
|
Six-Month Period Ended
|
||||||||||||
|
June 28, 2019
|
|
June 29, 2018
|
|
June 28, 2019
|
|
June 29, 2018
|
||||||||
Net earnings
|
$
|
731.3
|
|
|
$
|
673.8
|
|
|
$
|
1,065.1
|
|
|
$
|
1,240.4
|
|
Other comprehensive income (loss), net of income taxes:
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustments
|
(46.5
|
)
|
|
(641.1
|
)
|
|
(57.3
|
)
|
|
(347.0
|
)
|
||||
Pension and postretirement plan benefit adjustments
|
4.6
|
|
|
6.7
|
|
|
10.0
|
|
|
13.8
|
|
||||
Unrealized gain (loss) on available-for-sale securities adjustments
|
0.5
|
|
|
(0.1
|
)
|
|
0.9
|
|
|
(0.6
|
)
|
||||
Cash flow hedge adjustments
|
(6.8
|
)
|
|
—
|
|
|
(6.8
|
)
|
|
—
|
|
||||
Total other comprehensive income (loss), net of income taxes
|
(48.2
|
)
|
|
(634.5
|
)
|
|
(53.2
|
)
|
|
(333.8
|
)
|
||||
Comprehensive income
|
$
|
683.1
|
|
|
$
|
39.3
|
|
|
$
|
1,011.9
|
|
|
$
|
906.6
|
|
|
Three-Month Period Ended
|
|
Six-Month Period Ended
|
||||||||||||
|
June 28, 2019
|
|
June 29, 2018
|
|
June 28, 2019
|
|
June 29, 2018
|
||||||||
Preferred stock
|
|
|
|
|
|
|
|
||||||||
Balance, beginning of period
|
$
|
1,599.6
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Issuance of Mandatory Convertible Preferred Stock
|
—
|
|
|
—
|
|
|
1,599.6
|
|
|
—
|
|
||||
Balance, end of period
|
$
|
1,599.6
|
|
|
$
|
—
|
|
|
$
|
1,599.6
|
|
|
$
|
—
|
|
Common stock
|
|
|
|
|
|
|
|
||||||||
Balance, beginning of period
|
$
|
8.3
|
|
|
$
|
8.1
|
|
|
$
|
8.2
|
|
|
$
|
8.1
|
|
Common stock-based award activity
|
—
|
|
|
0.1
|
|
|
—
|
|
|
0.1
|
|
||||
Issuance of common stock
|
—
|
|
|
—
|
|
|
0.1
|
|
|
—
|
|
||||
Balance, end of period
|
$
|
8.3
|
|
|
$
|
8.2
|
|
|
$
|
8.3
|
|
|
$
|
8.2
|
|
Additional paid-in capital
|
|
|
|
|
|
|
|
||||||||
Balance, beginning of period
|
$
|
7,376.3
|
|
|
$
|
5,611.1
|
|
|
$
|
5,834.3
|
|
|
$
|
5,538.2
|
|
Common stock-based award activity
|
93.5
|
|
|
66.9
|
|
|
175.6
|
|
|
127.9
|
|
||||
Common stock issued in connection with acquisitions
|
—
|
|
|
23.9
|
|
|
—
|
|
|
23.9
|
|
||||
Common stock issued in connection with LYONs’ conversions, including tax benefit of $3.5, $1.1, $8.2 and $4.2, respectively
|
12.8
|
|
|
4.2
|
|
|
29.6
|
|
|
16.1
|
|
||||
Issuance of common stock
|
—
|
|
|
—
|
|
|
1,443.1
|
|
|
—
|
|
||||
Balance, end of period
|
$
|
7,482.6
|
|
|
$
|
5,706.1
|
|
|
$
|
7,482.6
|
|
|
$
|
5,706.1
|
|
Retained earnings
|
|
|
|
|
|
|
|
||||||||
Balance, beginning of period
|
$
|
25,368.5
|
|
|
$
|
23,415.4
|
|
|
$
|
25,163.0
|
|
|
$
|
22,806.1
|
|
Adoption of accounting standards
|
—
|
|
|
—
|
|
|
—
|
|
|
154.5
|
|
||||
Net earnings
|
731.3
|
|
|
673.8
|
|
|
1,065.1
|
|
|
1,240.4
|
|
||||
Dividends declared
|
(122.1
|
)
|
|
(112.0
|
)
|
|
(243.9
|
)
|
|
(223.8
|
)
|
||||
Mandatory Convertible Preferred Stock cumulative dividends
|
(22.7
|
)
|
|
—
|
|
|
(29.2
|
)
|
|
—
|
|
||||
Balance, end of period
|
$
|
25,955.0
|
|
|
$
|
23,977.2
|
|
|
$
|
25,955.0
|
|
|
$
|
23,977.2
|
|
Accumulated other comprehensive income (loss)
|
|
|
|
|
|
|
|
||||||||
Balance, beginning of period
|
$
|
(2,796.1
|
)
|
|
$
|
(1,844.7
|
)
|
|
$
|
(2,791.1
|
)
|
|
$
|
(1,994.2
|
)
|
Adoption of accounting standards
|
—
|
|
|
—
|
|
|
—
|
|
|
(151.2
|
)
|
||||
Other comprehensive income (loss)
|
(48.2
|
)
|
|
(634.5
|
)
|
|
(53.2
|
)
|
|
(333.8
|
)
|
||||
Balance, end of period
|
$
|
(2,844.3
|
)
|
|
$
|
(2,479.2
|
)
|
|
$
|
(2,844.3
|
)
|
|
$
|
(2,479.2
|
)
|
Noncontrolling interests
|
|
|
|
|
|
|
|
||||||||
Balance, beginning of period
|
$
|
12.1
|
|
|
$
|
11.9
|
|
|
$
|
12.3
|
|
|
$
|
9.6
|
|
Change in noncontrolling interests
|
(0.1
|
)
|
|
0.2
|
|
|
(0.3
|
)
|
|
2.5
|
|
||||
Balance, end of period
|
$
|
12.0
|
|
|
$
|
12.1
|
|
|
$
|
12.0
|
|
|
$
|
12.1
|
|
Total stockholders’ equity, end of period
|
$
|
32,213.2
|
|
|
$
|
27,224.4
|
|
|
$
|
32,213.2
|
|
|
$
|
27,224.4
|
|
|
Six-Month Period Ended
|
||||||
|
June 28, 2019
|
|
June 29, 2018
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net earnings
|
$
|
1,065.1
|
|
|
$
|
1,240.4
|
|
Noncash items:
|
|
|
|
||||
Depreciation
|
300.5
|
|
|
302.0
|
|
||
Amortization
|
358.7
|
|
|
353.4
|
|
||
Stock-based compensation expense
|
85.4
|
|
|
73.4
|
|
||
Change in trade accounts receivable, net
|
7.4
|
|
|
159.6
|
|
||
Change in inventories
|
(171.5
|
)
|
|
(197.1
|
)
|
||
Change in trade accounts payable
|
(47.0
|
)
|
|
87.0
|
|
||
Change in prepaid expenses and other assets
|
211.9
|
|
|
186.2
|
|
||
Change in accrued expenses and other liabilities
|
64.3
|
|
|
(340.0
|
)
|
||
Net operating cash provided by operating activities
|
1,874.8
|
|
|
1,864.9
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Cash paid for acquisitions
|
(326.6
|
)
|
|
(2,067.8
|
)
|
||
Payments for additions to property, plant and equipment
|
(336.5
|
)
|
|
(291.7
|
)
|
||
Proceeds from sales of property, plant and equipment
|
12.1
|
|
|
1.4
|
|
||
Payments for purchases of investments
|
(92.3
|
)
|
|
—
|
|
||
Proceeds from sale of investments
|
—
|
|
|
22.1
|
|
||
All other investing activities
|
15.9
|
|
|
(29.3
|
)
|
||
Net operating cash used in investing activities
|
(727.4
|
)
|
|
(2,365.3
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Proceeds from the issuance of common stock in connection with stock-based compensation
|
83.0
|
|
|
49.7
|
|
||
Proceeds from the public offering of common stock, net of issuance costs
|
1,443.2
|
|
|
—
|
|
||
Proceeds from the public offering of preferred stock, net of issuance costs
|
1,599.6
|
|
|
—
|
|
||
Payment of dividends
|
(233.9
|
)
|
|
(209.3
|
)
|
||
Net proceeds from borrowings (maturities of 90 days or less)
|
599.6
|
|
|
1,030.1
|
|
||
Net repayments of borrowings (maturities longer than 90 days)
|
(3.9
|
)
|
|
(3.9
|
)
|
||
All other financing activities
|
(4.8
|
)
|
|
(16.2
|
)
|
||
Net operating cash provided by financing activities
|
3,482.8
|
|
|
850.4
|
|
||
Effect of exchange rate changes on cash and equivalents
|
15.6
|
|
|
(76.3
|
)
|
||
Net change in cash and equivalents
|
4,645.8
|
|
|
273.7
|
|
||
Beginning balance of cash and equivalents
|
787.8
|
|
|
630.3
|
|
||
Ending balance of cash and equivalents
|
$
|
5,433.6
|
|
|
$
|
904.0
|
|
|
|
|
|
||||
Supplemental disclosures:
|
|
|
|
||||
Cash interest payments
|
$
|
49.2
|
|
|
$
|
65.4
|
|
Cash income tax payments
|
196.1
|
|
|
310.4
|
|
|
Foreign Currency Translation Adjustments
|
|
Pension & Postretirement Plan Benefit Adjustments
|
|
Unrealized Gain (Loss) on Available-For-Sale Securities Adjustments
|
|
Cash Flow Hedge Adjustments
|
|
Total
|
||||||||||
For the Three-Month Period Ended June 28, 2019:
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance, March 29, 2019
|
$
|
(2,108.9
|
)
|
|
$
|
(685.7
|
)
|
|
$
|
(1.5
|
)
|
|
$
|
—
|
|
|
$
|
(2,796.1
|
)
|
Other comprehensive income (loss) before reclassifications:
|
|
|
|
|
|
|
|
|
|
||||||||||
(Decrease) increase
|
(51.9
|
)
|
|
—
|
|
|
0.7
|
|
|
(8.9
|
)
|
|
(60.1
|
)
|
|||||
Income tax impact
|
5.4
|
|
|
—
|
|
|
(0.2
|
)
|
|
2.1
|
|
|
7.3
|
|
|||||
Other comprehensive income (loss) before reclassifications, net of income taxes
|
(46.5
|
)
|
|
—
|
|
|
0.5
|
|
|
(6.8
|
)
|
|
(52.8
|
)
|
|||||
Amounts reclassified from accumulated other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
||||||||||
Increase
|
—
|
|
|
6.1
|
|
(a)
|
—
|
|
|
—
|
|
|
6.1
|
|
|||||
Income tax impact
|
—
|
|
|
(1.5
|
)
|
|
—
|
|
|
—
|
|
|
(1.5
|
)
|
|||||
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
|
(46.5
|
)
|
|
4.6
|
|
|
0.5
|
|
|
(6.8
|
)
|
|
(48.2
|
)
|
|||||
Balance, June 28, 2019
|
$
|
(2,155.4
|
)
|
|
$
|
(681.1
|
)
|
|
$
|
(1.0
|
)
|
|
$
|
(6.8
|
)
|
|
$
|
(2,844.3
|
)
|
For the Three-Month Period Ended June 29, 2018:
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance, March 30, 2018
|
$
|
(1,171.8
|
)
|
|
$
|
(671.3
|
)
|
|
$
|
(1.6
|
)
|
|
$
|
—
|
|
|
$
|
(1,844.7
|
)
|
Other comprehensive income (loss) before reclassifications:
|
|
|
|
|
|
|
|
|
|
||||||||||
Decrease
|
(641.1
|
)
|
|
—
|
|
|
(0.1
|
)
|
|
—
|
|
|
(641.2
|
)
|
|||||
Income tax impact
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Other comprehensive income (loss) before reclassifications, net of income taxes
|
(641.1
|
)
|
|
—
|
|
|
(0.1
|
)
|
|
—
|
|
|
(641.2
|
)
|
|||||
Amounts reclassified from accumulated other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
||||||||||
Increase
|
—
|
|
|
8.8
|
|
(a)
|
—
|
|
|
—
|
|
|
8.8
|
|
|||||
Income tax impact
|
—
|
|
|
(2.1
|
)
|
|
—
|
|
|
—
|
|
|
(2.1
|
)
|
|||||
Amounts reclassified from accumulated other comprehensive income (loss), net of income taxes
|
—
|
|
|
6.7
|
|
|
—
|
|
|
—
|
|
|
6.7
|
|
|||||
Net current period other comprehensive income (loss), net of income taxes
|
(641.1
|
)
|
|
6.7
|
|
|
(0.1
|
)
|
|
—
|
|
|
(634.5
|
)
|
|||||
Balance, June 29, 2018
|
$
|
(1,812.9
|
)
|
|
$
|
(664.6
|
)
|
|
$
|
(1.7
|
)
|
|
$
|
—
|
|
|
$
|
(2,479.2
|
)
|
|
Foreign Currency Translation Adjustments
|
|
Pension & Postretirement Plan Benefit Adjustments
|
|
Unrealized Gain (Loss) on Available-For-Sale Securities Adjustments
|
|
Cash Flow Hedge Adjustments
|
|
Total
|
||||||||||
For the Six-Month Period Ended June 28, 2019:
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance, December 31, 2018
|
$
|
(2,098.1
|
)
|
|
$
|
(691.1
|
)
|
|
$
|
(1.9
|
)
|
|
$
|
—
|
|
|
$
|
(2,791.1
|
)
|
Other comprehensive income (loss) before reclassifications:
|
|
|
|
|
|
|
|
|
|
||||||||||
(Decrease) increase
|
(59.2
|
)
|
|
—
|
|
|
1.2
|
|
|
(8.9
|
)
|
|
(66.9
|
)
|
|||||
Income tax impact
|
1.9
|
|
|
—
|
|
|
(0.3
|
)
|
|
2.1
|
|
|
3.7
|
|
|||||
Other comprehensive income (loss) before reclassifications, net of income taxes
|
(57.3
|
)
|
|
—
|
|
|
0.9
|
|
|
(6.8
|
)
|
|
(63.2
|
)
|
|||||
Amounts reclassified from accumulated other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
||||||||||
Increase
|
—
|
|
|
13.2
|
|
(a)
|
—
|
|
|
—
|
|
|
13.2
|
|
|||||
Income tax impact
|
—
|
|
|
(3.2
|
)
|
|
—
|
|
|
—
|
|
|
(3.2
|
)
|
|||||
Amounts reclassified from accumulated other comprehensive income (loss), net of income taxes
|
—
|
|
|
10.0
|
|
|
—
|
|
|
—
|
|
|
10.0
|
|
|||||
Net current period other comprehensive income (loss), net of income taxes
|
(57.3
|
)
|
|
10.0
|
|
|
0.9
|
|
|
(6.8
|
)
|
|
(53.2
|
)
|
|||||
Balance, June 28, 2019
|
$
|
(2,155.4
|
)
|
|
$
|
(681.1
|
)
|
|
$
|
(1.0
|
)
|
|
$
|
(6.8
|
)
|
|
$
|
(2,844.3
|
)
|
For the Six-Month Period Ended June 29, 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
|
(347.0
|
)
|
|
—
|
|
|
(0.8
|
)
|
|
—
|
|
|
(347.8
|
)
|
|||||
Income tax impact
|
—
|
|
|
—
|
|
|
0.2
|
|
|
—
|
|
|
0.2
|
|
|||||
Other comprehensive income (loss) before reclassifications, net of income taxes
|
(347.0
|
)
|
|
—
|
|
|
(0.6
|
)
|
|
—
|
|
|
(347.6
|
)
|
|||||
Amounts reclassified from accumulated other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
||||||||||
Increase
|
—
|
|
|
18.1
|
|
(a)
|
—
|
|
|
—
|
|
|
18.1
|
|
|||||
Income tax impact
|
—
|
|
|
(4.3
|
)
|
|
—
|
|
|
—
|
|
|
(4.3
|
)
|
|||||
Amounts reclassified from accumulated other comprehensive income (loss), net of income taxes
|
—
|
|
|
13.8
|
|
|
—
|
|
|
—
|
|
|
13.8
|
|
|||||
Net current period other comprehensive income (loss), net of income taxes
|
(347.0
|
)
|
|
13.8
|
|
|
(0.6
|
)
|
|
—
|
|
|
(333.8
|
)
|
|||||
Balance, June 29, 2018
|
$
|
(1,812.9
|
)
|
|
$
|
(664.6
|
)
|
|
$
|
(1.7
|
)
|
|
$
|
—
|
|
|
$
|
(2,479.2
|
)
|
|
Life Sciences
|
|
Diagnostics
|
|
Dental
|
|
Environmental & Applied Solutions
|
|
Total
|
||||||||||
Three-Month Period Ended June 28, 2019:
|
|
|
|
|
|
|
|
|
|
||||||||||
Geographical region:
|
|
|
|
|
|
|
|
|
|
||||||||||
North America
|
$
|
653.6
|
|
|
$
|
601.0
|
|
|
$
|
340.2
|
|
|
$
|
488.3
|
|
|
$
|
2,083.1
|
|
Western Europe
|
459.3
|
|
|
281.7
|
|
|
156.1
|
|
|
261.6
|
|
|
1,158.7
|
|
|||||
Other developed markets
|
137.6
|
|
|
95.2
|
|
|
45.0
|
|
|
31.3
|
|
|
309.1
|
|
|||||
High-growth markets
|
462.1
|
|
|
640.4
|
|
|
170.8
|
|
|
332.4
|
|
|
1,605.7
|
|
|||||
Total
|
$
|
1,712.6
|
|
|
$
|
1,618.3
|
|
|
$
|
712.1
|
|
|
$
|
1,113.6
|
|
|
$
|
5,156.6
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenue type:
|
|
|
|
|
|
|
|
|
|
||||||||||
Recurring
|
$
|
1,111.9
|
|
|
$
|
1,380.6
|
|
|
$
|
522.1
|
|
|
$
|
592.8
|
|
|
$
|
3,607.4
|
|
Nonrecurring
|
600.7
|
|
|
237.7
|
|
|
190.0
|
|
|
520.8
|
|
|
1,549.2
|
|
|||||
Total
|
$
|
1,712.6
|
|
|
$
|
1,618.3
|
|
|
$
|
712.1
|
|
|
$
|
1,113.6
|
|
|
$
|
5,156.6
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Three-Month Period Ended June 29, 2018:
|
|
|
|
|
|
|
|
|
|
||||||||||
Geographical region:
|
|
|
|
|
|
|
|
|
|
||||||||||
North America
|
$
|
578.0
|
|
|
$
|
578.7
|
|
|
$
|
346.1
|
|
|
$
|
450.7
|
|
|
$
|
1,953.5
|
|
Western Europe
|
449.5
|
|
|
288.7
|
|
|
170.5
|
|
|
263.2
|
|
|
1,171.9
|
|
|||||
Other developed markets
|
138.5
|
|
|
91.3
|
|
|
47.1
|
|
|
32.3
|
|
|
309.2
|
|
|||||
High-growth markets
|
439.2
|
|
|
592.2
|
|
|
169.7
|
|
|
345.3
|
|
|
1,546.4
|
|
|||||
Total
|
$
|
1,605.2
|
|
|
$
|
1,550.9
|
|
|
$
|
733.4
|
|
|
$
|
1,091.5
|
|
|
$
|
4,981.0
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenue type:
|
|
|
|
|
|
|
|
|
|
||||||||||
Recurring
|
$
|
1,056.0
|
|
|
$
|
1,311.0
|
|
|
$
|
547.3
|
|
|
$
|
574.6
|
|
|
$
|
3,488.9
|
|
Nonrecurring
|
549.2
|
|
|
239.9
|
|
|
186.1
|
|
|
516.9
|
|
|
1,492.1
|
|
|||||
Total
|
$
|
1,605.2
|
|
|
$
|
1,550.9
|
|
|
$
|
733.4
|
|
|
$
|
1,091.5
|
|
|
$
|
4,981.0
|
|
|
Life Sciences
|
|
Diagnostics
|
|
Dental
|
|
Environmental & Applied Solutions
|
|
Total
|
||||||||||
Six-Month Period Ended June 28, 2019:
|
|
|
|
|
|
|
|
|
|
||||||||||
Geographical region:
|
|
|
|
|
|
|
|
|
|
||||||||||
North America
|
$
|
1,240.9
|
|
|
$
|
1,233.4
|
|
|
$
|
638.7
|
|
|
$
|
937.5
|
|
|
$
|
4,050.5
|
|
Western Europe
|
919.6
|
|
|
570.6
|
|
|
316.2
|
|
|
521.3
|
|
|
2,327.7
|
|
|||||
Other developed markets
|
286.9
|
|
|
187.2
|
|
|
85.4
|
|
|
60.2
|
|
|
619.7
|
|
|||||
High-growth markets
|
892.1
|
|
|
1,163.9
|
|
|
331.5
|
|
|
651.1
|
|
|
3,038.6
|
|
|||||
Total
|
$
|
3,339.5
|
|
|
$
|
3,155.1
|
|
|
$
|
1,371.8
|
|
|
$
|
2,170.1
|
|
|
$
|
10,036.5
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenue type:
|
|
|
|
|
|
|
|
|
|
||||||||||
Recurring
|
$
|
2,180.1
|
|
|
$
|
2,704.7
|
|
|
$
|
1,009.9
|
|
|
$
|
1,175.0
|
|
|
$
|
7,069.7
|
|
Nonrecurring
|
1,159.4
|
|
|
450.4
|
|
|
361.9
|
|
|
995.1
|
|
|
2,966.8
|
|
|||||
Total
|
$
|
3,339.5
|
|
|
$
|
3,155.1
|
|
|
$
|
1,371.8
|
|
|
$
|
2,170.1
|
|
|
$
|
10,036.5
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Six-Month Period Ended June 29, 2018:
|
|
|
|
|
|
|
|
|
|
||||||||||
Geographical region:
|
|
|
|
|
|
|
|
|
|
||||||||||
North America
|
$
|
1,058.4
|
|
|
$
|
1,186.1
|
|
|
$
|
637.4
|
|
|
$
|
869.0
|
|
|
$
|
3,750.9
|
|
Western Europe
|
899.4
|
|
|
599.1
|
|
|
346.1
|
|
|
528.0
|
|
|
2,372.6
|
|
|||||
Other developed markets
|
283.4
|
|
|
183.5
|
|
|
91.0
|
|
|
63.9
|
|
|
621.8
|
|
|||||
High-growth markets
|
840.0
|
|
|
1,101.9
|
|
|
331.5
|
|
|
657.7
|
|
|
2,931.1
|
|
|||||
Total
|
$
|
3,081.2
|
|
|
$
|
3,070.6
|
|
|
$
|
1,406.0
|
|
|
$
|
2,118.6
|
|
|
$
|
9,676.4
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenue type:
|
|
|
|
|
|
|
|
|
|
||||||||||
Recurring
|
$
|
2,026.4
|
|
|
$
|
2,619.5
|
|
|
$
|
1,035.3
|
|
|
$
|
1,131.6
|
|
|
$
|
6,812.8
|
|
Nonrecurring
|
1,054.8
|
|
|
451.1
|
|
|
370.7
|
|
|
987.0
|
|
|
2,863.6
|
|
|||||
Total
|
$
|
3,081.2
|
|
|
$
|
3,070.6
|
|
|
$
|
1,406.0
|
|
|
$
|
2,118.6
|
|
|
$
|
9,676.4
|
|
Trade accounts receivable
|
$
|
8.6
|
|
Inventories
|
8.8
|
|
|
Property, plant and equipment
|
3.9
|
|
|
Goodwill
|
210.3
|
|
|
Other intangible assets, primarily customer relationships, trade names and technology
|
115.2
|
|
|
Trade accounts payable
|
(2.8
|
)
|
|
Other assets and liabilities, net
|
(17.4
|
)
|
|
Net cash consideration
|
$
|
326.6
|
|
|
Three-Month Period Ended
|
|
Six-Month Period Ended
|
||||||||||||
|
June 28, 2019
|
|
June 29, 2018
|
|
June 28, 2019
|
|
June 29, 2018
|
||||||||
Sales
|
$
|
5,157.5
|
|
|
$
|
5,020.4
|
|
|
$
|
10,043.3
|
|
|
$
|
9,810.4
|
|
Net earnings attributable to common stockholders
|
707.7
|
|
|
679.2
|
|
|
1,031.6
|
|
|
1,230.6
|
|
||||
Diluted net earnings per share
|
0.97
|
|
|
0.96
|
|
|
1.43
|
|
|
1.74
|
|
|
Three-Month Period Ended
|
|
Six-Month Period Ended
|
||||
|
June 28, 2019
|
|
June 28, 2019
|
||||
Fixed operating lease expense (a)
|
$
|
56.0
|
|
|
$
|
119.4
|
|
Variable operating lease expense
|
12.9
|
|
|
24.9
|
|
||
Total operating lease expense
|
$
|
68.9
|
|
|
$
|
144.3
|
|
Cash paid for amounts included in the measurement of operating lease liabilities
|
$
|
119.8
|
|
ROU assets obtained in exchange for operating lease obligations
|
66.3
|
|
Lease Assets and Liabilities
|
Classification
|
|
||
Assets:
|
|
|
||
Operating lease ROU assets
|
Other long-term assets
|
$
|
924.9
|
|
|
|
|
||
Liabilities:
|
|
|
||
Current:
|
|
|
||
Operating lease liabilities
|
Accrued expenses and other liabilities
|
$
|
185.2
|
|
Long-term:
|
|
|
||
Operating lease liabilities
|
Other long-term liabilities
|
780.1
|
|
|
Total operating lease liabilities
|
|
$
|
965.3
|
|
|
|
|
||
Weighted average remaining lease term
|
7 years
|
|
||
Weighted average discount rate
|
3.1
|
%
|
Remainder of 2019
|
$
|
110.9
|
|
2020
|
190.9
|
|
|
2021
|
156.1
|
|
|
2022
|
131.7
|
|
|
2023
|
112.9
|
|
|
Thereafter
|
387.2
|
|
|
Total operating lease payments
|
1,089.7
|
|
|
Less: imputed interest
|
124.4
|
|
|
Total operating lease liabilities
|
$
|
965.3
|
|
Balance, December 31, 2018
|
$
|
25,906.0
|
|
Attributable to 2019 acquisitions
|
210.3
|
|
|
Adjustments due to finalization of purchase price allocations
|
(6.9
|
)
|
|
Foreign currency translation and other
|
(34.9
|
)
|
|
Balance, June 28, 2019
|
$
|
26,074.5
|
|
|
June 28, 2019
|
|
December 31, 2018
|
||||
Life Sciences
|
$
|
13,488.0
|
|
|
$
|
13,311.0
|
|
Diagnostics
|
6,919.1
|
|
|
6,925.6
|
|
||
Dental
|
3,321.9
|
|
|
3,325.5
|
|
||
Environmental & Applied Solutions
|
2,345.5
|
|
|
2,343.9
|
|
||
Total
|
$
|
26,074.5
|
|
|
$
|
25,906.0
|
|
|
Quoted Prices in Active Market (Level 1)
|
|
Significant Other Observable Inputs (Level 2)
|
|
Significant Unobservable Inputs (Level 3)
|
|
Total
|
||||||||
June 28, 2019:
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Available-for-sale debt securities
|
$
|
—
|
|
|
$
|
36.4
|
|
|
$
|
—
|
|
|
$
|
36.4
|
|
Investment in equity securities
|
—
|
|
|
—
|
|
|
241.2
|
|
|
241.2
|
|
||||
Cross-currency swap derivative contracts
|
—
|
|
|
0.3
|
|
|
—
|
|
|
0.3
|
|
||||
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Cross-currency swap derivative contracts
|
—
|
|
|
5.0
|
|
|
—
|
|
|
5.0
|
|
||||
Interest rate swap derivative contracts
|
—
|
|
|
8.9
|
|
|
—
|
|
|
8.9
|
|
||||
Deferred compensation plans
|
—
|
|
|
69.3
|
|
|
—
|
|
|
69.3
|
|
||||
|
|
|
|
|
|
|
|
||||||||
December 31, 2018:
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Available-for-sale debt securities
|
$
|
—
|
|
|
$
|
38.3
|
|
|
$
|
—
|
|
|
$
|
38.3
|
|
Investment in equity securities
|
—
|
|
|
—
|
|
|
148.9
|
|
|
148.9
|
|
||||
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Deferred compensation plans
|
—
|
|
|
60.9
|
|
|
—
|
|
|
60.9
|
|
|
June 28, 2019
|
|
December 31, 2018
|
||||
U.S. dollar-denominated commercial paper
|
$
|
—
|
|
|
$
|
72.8
|
|
Euro-denominated commercial paper (€2.7 billion and €2.1 billion, respectively)
|
3,047.4
|
|
|
2,377.5
|
|
||
1.0% senior unsecured notes due 2019 (€600.0 million aggregate principal amount) (the “2019 Euronotes”)
|
682.1
|
|
|
687.0
|
|
||
2.4% senior unsecured notes due 2020
|
499.0
|
|
|
498.5
|
|
||
5.0% senior unsecured notes due 2020 (the “2020 Assumed Pall Notes”)
|
382.8
|
|
|
386.7
|
|
||
Zero-coupon LYONs due 2021
|
35.3
|
|
|
56.2
|
|
||
0.352% senior unsecured notes due 2021 (¥30.0 billion aggregate principal amount) (the “2021 Yen Notes”)
|
277.8
|
|
|
273.2
|
|
||
1.7% senior unsecured notes due 2022 (€800.0 million aggregate principal amount) (the “2022 Euronotes”)
|
906.4
|
|
|
913.2
|
|
||
Floating rate senior unsecured notes due 2022 (€250.0 million aggregate principal amount) (the “Floating Rate 2022 Euronotes”)
|
283.5
|
|
|
285.7
|
|
||
0.5% senior unsecured bonds due 2023 (CHF 540.0 million aggregate principal amount) (the “2023 CHF Bonds”)
|
554.1
|
|
|
550.7
|
|
||
2.5% senior unsecured notes due 2025 (€800.0 million aggregate principal amount) (the “2025 Euronotes”)
|
905.6
|
|
|
912.6
|
|
||
3.35% senior unsecured notes due 2025
|
497.0
|
|
|
496.8
|
|
||
0.3% senior unsecured notes due 2027 (¥30.8 billion aggregate principal amount) (the “2027 Yen Notes”)
|
284.7
|
|
|
279.9
|
|
||
1.2% senior unsecured notes due 2027 (€600.0 million aggregate principal amount) (the “2027 Euronotes”)
|
676.8
|
|
|
682.0
|
|
||
1.125% senior unsecured bonds due 2028 (CHF 210.0 million aggregate principal amount) (the “2028 CHF Bonds”)
|
219.3
|
|
|
218.1
|
|
||
0.65% senior unsecured notes due 2032 (¥53.2 billion aggregate principal amount) (the “2032 Yen Notes”)
|
491.5
|
|
|
483.4
|
|
||
4.375% senior unsecured notes due 2045
|
499.4
|
|
|
499.3
|
|
||
Other
|
55.4
|
|
|
66.7
|
|
||
Total debt
|
10,298.1
|
|
|
9,740.3
|
|
||
Less: currently payable
|
153.7
|
|
|
51.8
|
|
||
Long-term debt
|
$
|
10,144.4
|
|
|
$
|
9,688.5
|
|
|
Notional Amount
|
|
Gain (Loss) Recognized in OCI
|
||||
For the Three-Month Period Ended June 28, 2019:
|
|
|
|
||||
Foreign currency contracts
|
$
|
1,000.0
|
|
|
$
|
(19.5
|
)
|
Foreign currency denominated debt
|
8,329.2
|
|
|
(129.5
|
)
|
||
Interest rate swaps
|
850.0
|
|
|
(8.9
|
)
|
||
Total
|
$
|
10,179.2
|
|
|
$
|
(157.9
|
)
|
For the Six-Month Period Ended June 28, 2019:
|
|
|
|
||||
Foreign currency contracts
|
$
|
1,000.0
|
|
|
$
|
(4.7
|
)
|
Foreign currency denominated debt
|
8,329.2
|
|
|
8.3
|
|
||
Interest rate swaps
|
850.0
|
|
|
(8.9
|
)
|
||
Total
|
$
|
10,179.2
|
|
|
$
|
(5.3
|
)
|
Derivative assets:
|
|
||
Prepaid expenses and other current assets
|
$
|
0.3
|
|
|
|
||
Derivative liabilities:
|
|
||
Accrued expenses and other liabilities
|
13.9
|
|
|
|
|
||
Nonderivative hedging instruments:
|
|
||
Long-term debt
|
8,329.2
|
|
|
Three-Month Period Ended
|
|
Six-Month Period Ended
|
||||||||||||
|
June 28, 2019
|
|
June 29, 2018
|
|
June 28, 2019
|
|
June 29, 2018
|
||||||||
U.S. pension benefits:
|
|
|
|
|
|
|
|
||||||||
Service cost
|
$
|
(1.6
|
)
|
|
$
|
(2.1
|
)
|
|
$
|
(3.2
|
)
|
|
$
|
(4.2
|
)
|
Interest cost
|
(22.2
|
)
|
|
(20.2
|
)
|
|
(44.5
|
)
|
|
(40.4
|
)
|
||||
Expected return on plan assets
|
31.6
|
|
|
33.1
|
|
|
63.2
|
|
|
66.2
|
|
||||
Amortization of actuarial loss
|
(6.2
|
)
|
|
(7.8
|
)
|
|
(12.5
|
)
|
|
(15.6
|
)
|
||||
Amortization of prior service cost
|
(0.3
|
)
|
|
(0.2
|
)
|
|
(0.5
|
)
|
|
(0.5
|
)
|
||||
Net periodic pension benefit
|
$
|
1.3
|
|
|
$
|
2.8
|
|
|
$
|
2.5
|
|
|
$
|
5.5
|
|
|
|
|
|
|
|
|
|
||||||||
Non-U.S. pension benefits:
|
|
|
|
|
|
|
|
||||||||
Service cost
|
$
|
(8.1
|
)
|
|
$
|
(8.9
|
)
|
|
$
|
(16.2
|
)
|
|
$
|
(17.6
|
)
|
Interest cost
|
(6.6
|
)
|
|
(6.6
|
)
|
|
(13.3
|
)
|
|
(13.3
|
)
|
||||
Expected return on plan assets
|
10.9
|
|
|
11.9
|
|
|
21.8
|
|
|
24.0
|
|
||||
Amortization of actuarial gain (loss)
|
0.1
|
|
|
(1.5
|
)
|
|
0.2
|
|
|
(3.0
|
)
|
||||
Amortization of prior service (cost) credit
|
(1.2
|
)
|
|
0.1
|
|
|
(2.4
|
)
|
|
0.2
|
|
||||
Curtailment gain recognized
|
1.1
|
|
|
—
|
|
|
1.1
|
|
|
—
|
|
||||
Settlement loss recognized
|
(0.1
|
)
|
|
—
|
|
|
(0.1
|
)
|
|
(0.4
|
)
|
||||
Net periodic pension cost
|
$
|
(3.9
|
)
|
|
$
|
(5.0
|
)
|
|
$
|
(8.9
|
)
|
|
$
|
(10.1
|
)
|
|
Three-Month Period Ended
|
|
Six-Month Period Ended
|
||||||||||||
|
June 28, 2019
|
|
June 29, 2018
|
|
June 28, 2019
|
|
June 29, 2018
|
||||||||
Service cost
|
$
|
(0.1
|
)
|
|
$
|
(0.2
|
)
|
|
$
|
(0.2
|
)
|
|
$
|
(0.3
|
)
|
Interest cost
|
(1.3
|
)
|
|
(1.1
|
)
|
|
(2.5
|
)
|
|
(2.3
|
)
|
||||
Amortization of prior service credit
|
0.5
|
|
|
0.6
|
|
|
1.0
|
|
|
1.2
|
|
||||
Net periodic cost
|
$
|
(0.9
|
)
|
|
$
|
(0.7
|
)
|
|
$
|
(1.7
|
)
|
|
$
|
(1.4
|
)
|
|
Three-Month Period Ended
|
|
Six-Month Period Ended
|
||||||||||||
|
June 28, 2019
|
|
June 29, 2018
|
|
June 28, 2019
|
|
June 29, 2018
|
||||||||
Service cost:
|
|
|
|
|
|
|
|
||||||||
Cost of sales
|
$
|
(2.2
|
)
|
|
$
|
(3.3
|
)
|
|
$
|
(4.2
|
)
|
|
$
|
(5.4
|
)
|
Selling, general and administrative expenses
|
(7.6
|
)
|
|
(7.9
|
)
|
|
(15.4
|
)
|
|
(16.7
|
)
|
||||
Total service cost
|
(9.8
|
)
|
|
(11.2
|
)
|
|
(19.6
|
)
|
|
(22.1
|
)
|
||||
Other net periodic benefit costs:
|
|
|
|
|
|
|
|
||||||||
Other income, net
|
6.3
|
|
|
8.3
|
|
|
11.5
|
|
|
16.1
|
|
||||
Total
|
$
|
(3.5
|
)
|
|
$
|
(2.9
|
)
|
|
$
|
(8.1
|
)
|
|
$
|
(6.0
|
)
|
|
Three-Month Period Ended
|
|
Six-Month Period Ended
|
||||||||
|
June 28, 2019
|
|
June 29, 2018
|
|
June 28, 2019
|
|
June 29, 2018
|
||||
Effective tax rate
|
18.4
|
%
|
|
19.3
|
%
|
|
34.1
|
%
|
|
19.9
|
%
|
Balance, December 31, 2018
|
$
|
77.4
|
|
Accruals for warranties issued during the period
|
35.3
|
|
|
Settlements made
|
(30.3
|
)
|
|
Effect of foreign currency translation
|
0.1
|
|
|
Balance, June 28, 2019
|
$
|
82.5
|
|
|
Three-Month Period Ended
|
|
Six-Month Period Ended
|
||||||||
|
June 28, 2019
|
|
June 29, 2018
|
|
June 28, 2019
|
|
June 29, 2018
|
||||
Preferred stock - shares issued:
|
|
|
|
|
|
|
|
||||
Balance, beginning of period
|
1.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Issuance of Mandatory Convertible Preferred Stock
|
—
|
|
|
—
|
|
|
1.7
|
|
|
—
|
|
Balance, end of period
|
1.7
|
|
|
—
|
|
|
1.7
|
|
|
—
|
|
|
|
|
|
|
|
|
|
||||
Common stock - shares issued:
|
|
|
|
|
|
|
|
||||
Balance, beginning of period
|
832.5
|
|
|
814.8
|
|
|
817.9
|
|
|
812.5
|
|
Common stock-based award activity
|
1.1
|
|
|
0.9
|
|
|
3.1
|
|
|
2.8
|
|
Common stock issued in connection with acquisitions
|
—
|
|
|
0.2
|
|
|
—
|
|
|
0.2
|
|
Common stock issued in connection with LYONs’ conversions
|
0.4
|
|
|
0.1
|
|
|
0.9
|
|
|
0.5
|
|
Issuance of common stock
|
—
|
|
|
—
|
|
|
12.1
|
|
|
—
|
|
Balance, end of period
|
834.0
|
|
|
816.0
|
|
|
834.0
|
|
|
816.0
|
|
|
Three-Month Period Ended
|
|
Six-Month Period Ended
|
||||||||||||
|
June 28, 2019
|
|
June 29, 2018
|
|
June 28, 2019
|
|
June 29, 2018
|
||||||||
Restricted stock units (“RSUs”)/performance stock units (“PSUs”):
|
|
|
|
|
|
|
|
||||||||
Pretax compensation expense
|
$
|
27.9
|
|
|
$
|
24.7
|
|
|
$
|
52.2
|
|
|
$
|
45.6
|
|
Income tax benefit
|
(5.8
|
)
|
|
(5.2
|
)
|
|
(10.9
|
)
|
|
(9.6
|
)
|
||||
RSU/PSU expense, net of income taxes
|
22.1
|
|
|
19.5
|
|
|
41.3
|
|
|
36.0
|
|
||||
Stock options:
|
|
|
|
|
|
|
|
||||||||
Pretax compensation expense
|
18.3
|
|
|
15.4
|
|
|
33.2
|
|
|
27.8
|
|
||||
Income tax benefit
|
(3.8
|
)
|
|
(3.3
|
)
|
|
(7.0
|
)
|
|
(5.9
|
)
|
||||
Stock option expense, net of income taxes
|
14.5
|
|
|
12.1
|
|
|
26.2
|
|
|
21.9
|
|
||||
Total stock-based compensation:
|
|
|
|
|
|
|
|
||||||||
Pretax compensation expense
|
46.2
|
|
|
40.1
|
|
|
85.4
|
|
|
73.4
|
|
||||
Income tax benefit
|
(9.6
|
)
|
|
(8.5
|
)
|
|
(17.9
|
)
|
|
(15.5
|
)
|
||||
Total stock-based compensation expense, net of income taxes
|
$
|
36.6
|
|
|
$
|
31.6
|
|
|
$
|
67.5
|
|
|
$
|
57.9
|
|
|
Three-Month Period Ended
|
|
Six-Month Period Ended
|
||||||||||||
|
June 28, 2019
|
|
June 29, 2018
|
|
June 28, 2019
|
|
June 29, 2018
|
||||||||
Numerator:
|
|
|
|
|
|
|
|
||||||||
Net earnings
|
$
|
731.3
|
|
|
$
|
673.8
|
|
|
$
|
1,065.1
|
|
|
$
|
1,240.4
|
|
Adjustment for interest on convertible debentures
|
0.5
|
|
|
0.5
|
|
|
1.0
|
|
|
1.1
|
|
||||
MCPS dividends
|
(22.7
|
)
|
|
—
|
|
|
(29.2
|
)
|
|
—
|
|
||||
Net earnings attributable to common stockholders after assumed conversions for diluted EPS
|
$
|
709.1
|
|
|
$
|
674.3
|
|
|
$
|
1,036.9
|
|
|
$
|
1,241.5
|
|
|
|
|
|
|
|
|
|
||||||||
Denominator:
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding used in basic EPS
|
717.6
|
|
|
700.2
|
|
|
712.6
|
|
|
699.4
|
|
||||
Incremental common shares from:
|
|
|
|
|
|
|
|
||||||||
Assumed exercise of dilutive options and vesting of dilutive RSUs and PSUs
|
8.8
|
|
|
6.9
|
|
|
8.8
|
|
|
7.6
|
|
||||
Assumed conversion of the convertible debentures
|
1.5
|
|
|
2.4
|
|
|
1.8
|
|
|
2.5
|
|
||||
Weighted average common shares outstanding used in diluted EPS
|
727.9
|
|
|
709.5
|
|
|
723.2
|
|
|
709.5
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Basic EPS
|
$
|
0.99
|
|
|
$
|
0.96
|
|
|
$
|
1.45
|
|
|
$
|
1.77
|
|
Diluted EPS
|
$
|
0.97
|
|
|
$
|
0.95
|
|
|
$
|
1.43
|
|
|
$
|
1.75
|
|
|
Three-Month Period Ended
|
|
Six-Month Period Ended
|
||||||||||||
|
June 28, 2019
|
|
June 29, 2018
|
|
June 28, 2019
|
|
June 29, 2018
|
||||||||
Sales:
|
|
|
|
|
|
|
|
||||||||
Life Sciences
|
$
|
1,712.6
|
|
|
$
|
1,605.2
|
|
|
$
|
3,339.5
|
|
|
$
|
3,081.2
|
|
Diagnostics
|
1,618.3
|
|
|
1,550.9
|
|
|
3,155.1
|
|
|
3,070.6
|
|
||||
Dental
|
712.1
|
|
|
733.4
|
|
|
1,371.8
|
|
|
1,406.0
|
|
||||
Environmental & Applied Solutions
|
1,113.6
|
|
|
1,091.5
|
|
|
2,170.1
|
|
|
2,118.6
|
|
||||
Total
|
$
|
5,156.6
|
|
|
$
|
4,981.0
|
|
|
$
|
10,036.5
|
|
|
$
|
9,676.4
|
|
|
|
|
|
|
|
|
|
||||||||
Operating profit:
|
|
|
|
|
|
|
|
||||||||
Life Sciences
|
$
|
344.0
|
|
|
$
|
291.5
|
|
|
$
|
653.0
|
|
|
$
|
562.8
|
|
Diagnostics
|
282.9
|
|
|
274.3
|
|
|
516.0
|
|
|
522.3
|
|
||||
Dental
|
79.5
|
|
|
104.8
|
|
|
127.7
|
|
|
155.7
|
|
||||
Environmental & Applied Solutions
|
260.2
|
|
|
251.0
|
|
|
504.8
|
|
|
478.2
|
|
||||
Other
|
(82.8
|
)
|
|
(54.1
|
)
|
|
(193.9
|
)
|
|
(108.5
|
)
|
||||
Total
|
$
|
883.8
|
|
|
$
|
867.5
|
|
|
$
|
1,607.6
|
|
|
$
|
1,610.5
|
|
|
June 28, 2019
|
|
December 31, 2018
|
||||
Life Sciences
|
$
|
22,492.2
|
|
|
$
|
22,122.4
|
|
Diagnostics
|
14,307.9
|
|
|
14,031.1
|
|
||
Dental
|
6,043.9
|
|
|
5,897.3
|
|
||
Environmental & Applied Solutions
|
4,804.2
|
|
|
4,637.3
|
|
||
Other
|
5,673.8
|
|
|
1,144.4
|
|
||
Total
|
$
|
53,322.0
|
|
|
$
|
47,832.5
|
|
•
|
Information Relating to Forward-Looking Statements
|
•
|
Overview
|
•
|
Results of Operations
|
•
|
Liquidity and Capital Resources
|
•
|
Critical Accounting Estimates
|
•
|
We may not complete the GE Biopharma Acquisition within the time frame we anticipate or at all; any regulatory approval of the GE Biopharma Acquisition may be subject to conditions; and the GE Biopharma Acquisition could negatively impact our business, financial statements and stock price.
|
•
|
We have outstanding debt, and our debt will increase as a result of the GE Biopharma Acquisition. Our existing and future indebtedness may limit our operations and our use of our cash flow and negatively impact our credit ratings; and any failure to comply with the covenants that apply to our indebtedness could adversely affect our liquidity and financial statements.
|
•
|
We intend to conduct an initial public offering of shares of Envista in the second half of 2019. Subsequent to the initial public offering, we intend to distribute our remaining equity interest in Envista in one or more spin-off and/or split-off transactions. Any or all of these transactions 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 particular markets we serve and the financial markets may adversely affect our business and financial statements.
|
•
|
Significant developments or uncertainties stemming from the 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, ability to do business and financial statements.
|
•
|
Our products are subject to clinical trials, the results of which may be unexpected, or perceived as unfavorable by the market, and could have a material adverse effect on our business, financial condition or results of operations.
|
•
|
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, and to make appropriate investments that support our long-term strategy, could negatively impact our growth rate and stock price.
|
•
|
Our acquisition of businesses, investments, joint ventures and other 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 or 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 the anticipated Envista IPO, any subsequent spin-off and/or split-off of Envista, the 2016 spin-off of Fortive Corporation (“Fortive”) or the 2015 split-off of our communications business is determined to be a taxable transaction.
|
•
|
Potential indemnification liabilities pursuant to the anticipated Envista IPO, any subsequent spin-off and/or split-off of Envista, 2016 spin-off of Fortive or the 2015 split-off of our communications 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 data 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 business, 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.
|
•
|
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.
|
•
|
Significant developments stemming from the United Kingdom’s referendum decision to exit 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 June 28, 2019 vs. Comparable 2018 Period
|
|
% Change Six- Month Period Ended June 28, 2019 vs. Comparable 2018 Period
|
||
Total sales growth (GAAP)
|
3.5
|
%
|
|
3.5
|
%
|
Less the impact of:
|
|
|
|
||
Acquisitions
|
(1.0
|
)%
|
|
(1.5
|
)%
|
Currency exchange rates
|
3.0
|
%
|
|
3.5
|
%
|
Core revenue growth (non-GAAP)
|
5.5
|
%
|
|
5.5
|
%
|
•
|
Higher 2019 core sales volumes, incremental year-over-year cost savings associated with continuing productivity improvement initiatives taken in 2018, 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 second quarter of 2019 - 15 basis points
|
•
|
Acquisition-related transaction costs deemed significant and fair value adjustments to inventory incurred in the second quarter of 2018 - 35 basis points. The Company deems acquisition-related transaction costs incurred in a given period to be significant (generally relating to the Company’s larger acquisitions) if it determines that such costs exceed the range of acquisition-related transaction costs typical for Danaher in a given period.
|
•
|
The incremental net dilutive effect in 2019 of acquired businesses - 5 basis points
|
•
|
Transaction costs incurred in the second quarter of 2019 related to the GE Biopharma Acquisition - 35 basis points
|
•
|
Second quarter 2018 gain on resolution of acquisition-related matters - 20 basis points
|
•
|
Costs incurred in the second quarter of 2019 related to the Envista IPO, including separation related activities and costs related to establishing a new separate company infrastructure, primarily related to incremental salaries, benefits and rent expense - 20 basis points
|
•
|
Higher 2019 core sales volumes, incremental year-over-year cost savings associated with continuing productivity improvement initiatives taken in 2018, 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 six-month period in 2019 - 30 basis points
|
•
|
Acquisition-related transaction costs deemed significant and fair value adjustments to inventory incurred in the second quarter of 2018 - 15 basis points
|
•
|
The incremental net dilutive effect in 2019 of acquired businesses - 5 basis points
|
•
|
Transaction costs incurred in 2019 related to the GE Biopharma Acquisition - 35 basis points
|
•
|
First quarter 2019 costs and estimated liabilities related to a legal contingency - 35 basis points.
|
•
|
Costs incurred in 2019 related to the Envista IPO, including separation related activities and costs related to establishing a new separate company infrastructure, primarily related to incremental salaries, benefits and rent expense - 20 basis points
|
•
|
Second quarter 2018 gain on resolution of acquisition-related matters - 10 basis points
|
|
Three-Month Period Ended
|
|
Six-Month Period Ended
|
||||||||||||
|
June 28, 2019
|
|
June 29, 2018
|
|
June 28, 2019
|
|
June 29, 2018
|
||||||||
Life Sciences
|
$
|
1,712.6
|
|
|
$
|
1,605.2
|
|
|
$
|
3,339.5
|
|
|
$
|
3,081.2
|
|
Diagnostics
|
1,618.3
|
|
|
1,550.9
|
|
|
3,155.1
|
|
|
3,070.6
|
|
||||
Dental
|
712.1
|
|
|
733.4
|
|
|
1,371.8
|
|
|
1,406.0
|
|
||||
Environmental & Applied Solutions
|
1,113.6
|
|
|
1,091.5
|
|
|
2,170.1
|
|
|
2,118.6
|
|
||||
Total
|
$
|
5,156.6
|
|
|
$
|
4,981.0
|
|
|
$
|
10,036.5
|
|
|
$
|
9,676.4
|
|
|
Three-Month Period Ended
|
|
Six-Month Period Ended
|
||||||||||||
($ in millions)
|
June 28, 2019
|
|
June 29, 2018
|
|
June 28, 2019
|
|
June 29, 2018
|
||||||||
Sales
|
$
|
1,712.6
|
|
|
$
|
1,605.2
|
|
|
$
|
3,339.5
|
|
|
$
|
3,081.2
|
|
Operating profit
|
344.0
|
|
|
291.5
|
|
|
653.0
|
|
|
562.8
|
|
||||
Depreciation
|
32.8
|
|
|
31.6
|
|
|
65.1
|
|
|
62.2
|
|
||||
Amortization
|
89.1
|
|
|
90.5
|
|
|
178.7
|
|
|
171.2
|
|
||||
Operating profit as a % of sales
|
20.1
|
%
|
|
18.2
|
%
|
|
19.6
|
%
|
|
18.3
|
%
|
||||
Depreciation as a % of sales
|
1.9
|
%
|
|
2.0
|
%
|
|
1.9
|
%
|
|
2.0
|
%
|
||||
Amortization as a % of sales
|
5.2
|
%
|
|
5.6
|
%
|
|
5.4
|
%
|
|
5.6
|
%
|
|
% Change Three-Month Period Ended June 28, 2019 vs. Comparable 2018 Period
|
|
% Change Six- Month Period Ended June 28, 2019 vs. Comparable 2018 Period
|
||
Total sales growth (GAAP)
|
6.5
|
%
|
|
8.5
|
%
|
Less the impact of:
|
|
|
|
||
Acquisitions
|
(2.0
|
)%
|
|
(4.5
|
)%
|
Currency exchange rates
|
3.0
|
%
|
|
3.0
|
%
|
Core revenue growth (non-GAAP)
|
7.5
|
%
|
|
7.0
|
%
|
•
|
Higher 2019 core sales volumes and incremental year-over-year cost savings, 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 second quarter of 2019 - 170 basis points
|
•
|
Acquisition-related transaction costs deemed significant and fair value adjustments to inventory incurred in the second quarter of 2018 - 100 basis points
|
•
|
The incremental net dilutive effect in 2019 of acquired businesses - 25 basis points
|
•
|
Second quarter 2018 gain on resolution of acquisition-related matters - 55 basis points
|
•
|
Higher 2019 core sales volumes and incremental year-over-year cost savings, 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 six-month period in 2019 - 140 basis points
|
•
|
Acquisition-related transaction costs deemed significant and fair value adjustments to inventory incurred in the second quarter of 2018 - 50 basis points
|
•
|
The incremental net dilutive effect in 2019 of acquired businesses - 30 basis points
|
•
|
Second quarter 2018 gain on resolution of acquisition-related matters - 30 basis points
|
|
Three-Month Period Ended
|
|
Six-Month Period Ended
|
||||||||||||
($ in millions)
|
June 28, 2019
|
|
June 29, 2018
|
|
June 28, 2019
|
|
June 29, 2018
|
||||||||
Sales
|
$
|
1,618.3
|
|
|
$
|
1,550.9
|
|
|
$
|
3,155.1
|
|
|
$
|
3,070.6
|
|
Operating profit
|
282.9
|
|
|
274.3
|
|
|
516.0
|
|
|
522.3
|
|
||||
Depreciation
|
94.2
|
|
|
98.0
|
|
|
185.8
|
|
|
192.3
|
|
||||
Amortization
|
51.8
|
|
|
52.6
|
|
|
103.8
|
|
|
105.7
|
|
||||
Operating profit as a % of sales
|
17.5
|
%
|
|
17.7
|
%
|
|
16.4
|
%
|
|
17.0
|
%
|
||||
Depreciation as a % of sales
|
5.8
|
%
|
|
6.3
|
%
|
|
5.9
|
%
|
|
6.3
|
%
|
||||
Amortization as a % of sales
|
3.2
|
%
|
|
3.4
|
%
|
|
3.3
|
%
|
|
3.4
|
%
|
|
% Change Three-Month Period Ended June 28, 2019 vs. Comparable 2018 Period
|
|
% Change Six- Month Period Ended June 28, 2019 vs. Comparable 2018 Period
|
||
Total sales growth (GAAP)
|
4.5
|
%
|
|
3.0
|
%
|
Less the impact of:
|
|
|
|
||
Currency exchange rates
|
3.0
|
%
|
|
3.5
|
%
|
Core revenue growth (non-GAAP)
|
7.5
|
%
|
|
6.5
|
%
|
•
|
Incremental year-over-year costs associated with various new product development, sales, service and marketing growth investments, unfavorable product mix and the impact of foreign currency exchange rates and tariffs in the second quarter of 2019, net of higher 2019 core sales volumes and incremental year-over-year cost savings associated with the restructuring actions and continuing productivity improvement initiatives taken in 2018 - 20 basis points
|
•
|
Incremental year-over-year costs associated with various new product development, sales, service and marketing growth investments, unfavorable product mix and the impact of foreign currency exchange rates in 2019, net of higher 2019 core sales volumes and incremental year-over-year cost savings associated with the restructuring actions and continuing productivity improvement initiatives taken in 2018 - 60 basis points
|
|
Three-Month Period Ended
|
|
Six-Month Period Ended
|
||||||||||||
($ in millions)
|
June 28, 2019
|
|
June 29, 2018
|
|
June 28, 2019
|
|
June 29, 2018
|
||||||||
Sales
|
$
|
712.1
|
|
|
$
|
733.4
|
|
|
$
|
1,371.8
|
|
|
$
|
1,406.0
|
|
Operating profit
|
79.5
|
|
|
104.8
|
|
|
127.7
|
|
|
155.7
|
|
||||
Depreciation
|
10.0
|
|
|
9.8
|
|
|
19.8
|
|
|
19.7
|
|
||||
Amortization
|
22.5
|
|
|
22.6
|
|
|
45.0
|
|
|
45.5
|
|
||||
Operating profit as a % of sales
|
11.2
|
%
|
|
14.3
|
%
|
|
9.3
|
%
|
|
11.1
|
%
|
||||
Depreciation as a % of sales
|
1.4
|
%
|
|
1.3
|
%
|
|
1.4
|
%
|
|
1.4
|
%
|
||||
Amortization as a % of sales
|
3.2
|
%
|
|
3.1
|
%
|
|
3.3
|
%
|
|
3.2
|
%
|
|
% Change Three-Month Period Ended June 28, 2019 vs. Comparable 2018 Period
|
|
% Change Six- Month Period Ended June 28, 2019 vs. Comparable 2018 Period
|
||
Total sales growth (GAAP)
|
(3.0
|
)%
|
|
(2.5
|
)%
|
Less the impact of:
|
|
|
|
||
Currency exchange rates
|
2.5
|
%
|
|
3.5
|
%
|
Core revenue growth (non-GAAP)
|
(0.5
|
)%
|
|
1.0
|
%
|
•
|
Lower overall pricing, incremental year-over-year costs associated with sales and marketing growth investments and the impact of foreign currency exchange rates in the second quarter of 2019, net of higher 2019 core sales volumes, lower spending on productivity initiatives in 2019 and cost savings associated with productivity initiatives taken in 2018 - 310 basis points
|
•
|
Lower overall pricing and incremental year-over-year costs associated with sales and marketing growth investments, net of higher 2019 core sales volumes, lower spending on productivity initiatives in 2019 and cost savings associated with productivity initiatives taken in 2018 - 180 basis points
|
|
Three-Month Period Ended
|
|
Six-Month Period Ended
|
||||||||||||
($ in millions)
|
June 28, 2019
|
|
June 29, 2018
|
|
June 28, 2019
|
|
June 29, 2018
|
||||||||
Sales
|
$
|
1,113.6
|
|
|
$
|
1,091.5
|
|
|
$
|
2,170.1
|
|
|
$
|
2,118.6
|
|
Operating profit
|
260.2
|
|
|
251.0
|
|
|
504.8
|
|
|
478.2
|
|
||||
Depreciation
|
12.6
|
|
|
12.1
|
|
|
25.0
|
|
|
23.8
|
|
||||
Amortization
|
15.4
|
|
|
15.4
|
|
|
31.2
|
|
|
31.0
|
|
||||
Operating profit as a % of sales
|
23.4
|
%
|
|
23.0
|
%
|
|
23.3
|
%
|
|
22.6
|
%
|
||||
Depreciation as a % of sales
|
1.1
|
%
|
|
1.1
|
%
|
|
1.2
|
%
|
|
1.1
|
%
|
||||
Amortization as a % of sales
|
1.4
|
%
|
|
1.4
|
%
|
|
1.4
|
%
|
|
1.5
|
%
|
|
% Change Three-Month Period Ended June 28, 2019 vs. Comparable 2018 Period
|
|
% Change Six- Month Period Ended June 28, 2019 vs. Comparable 2018 Period
|
||
Total sales growth (GAAP)
|
2.0
|
%
|
|
2.5
|
%
|
Less the impact of:
|
|
|
|
||
Acquisitions
|
(0.5
|
)%
|
|
(1.0
|
)%
|
Currency exchange rates
|
2.5
|
%
|
|
3.5
|
%
|
Core revenue growth (non-GAAP)
|
4.0
|
%
|
|
5.0
|
%
|
•
|
Higher 2019 core sales volumes, incremental year-over-year cost savings associated with the restructuring actions and continuing productivity improvement initiatives taken in 2018 and the impact of foreign currency exchange rates in the second quarter of 2019, net of incremental year-over-year costs associated with sales, service and marketing growth investments - 45 basis points
|
•
|
The incremental net dilutive effect in 2019 of acquired businesses - 5 basis points
|
•
|
Higher 2019 core sales volumes, incremental year-over-year cost savings associated with the restructuring actions and continuing productivity improvement initiatives taken in 2018 and the impact of foreign currency exchange rates in 2019, net of incremental year-over-year costs associated with sales, service and marketing growth investments - 85 basis points
|
•
|
The incremental net dilutive effect in 2019 of acquired businesses - 15 basis points
|
|
Three-Month Period Ended
|
|
Six-Month Period Ended
|
||||||||||||
($ in millions)
|
June 28, 2019
|
|
June 29, 2018
|
|
June 28, 2019
|
|
June 29, 2018
|
||||||||
Sales
|
$
|
5,156.6
|
|
|
$
|
4,981.0
|
|
|
$
|
10,036.5
|
|
|
$
|
9,676.4
|
|
Cost of sales
|
(2,279.2
|
)
|
|
(2,163.9
|
)
|
|
(4,441.1
|
)
|
|
(4,215.7
|
)
|
||||
Gross profit
|
$
|
2,877.4
|
|
|
$
|
2,817.1
|
|
|
$
|
5,595.4
|
|
|
$
|
5,460.7
|
|
Gross profit margin
|
55.8
|
%
|
|
56.6
|
%
|
|
55.8
|
%
|
|
56.4
|
%
|
|
Three-Month Period Ended
|
|
Six-Month Period Ended
|
||||||||||||
($ in millions)
|
June 28, 2019
|
|
June 29, 2018
|
|
June 28, 2019
|
|
June 29, 2018
|
||||||||
Sales
|
$
|
5,156.6
|
|
|
$
|
4,981.0
|
|
|
$
|
10,036.5
|
|
|
$
|
9,676.4
|
|
Selling, general and administrative (“SG&A”) expenses
|
1,671.8
|
|
|
1,637.9
|
|
|
3,355.2
|
|
|
3,239.8
|
|
||||
Research and development (“R&D”) expenses
|
321.8
|
|
|
311.7
|
|
|
632.6
|
|
|
610.4
|
|
||||
SG&A as a % of sales
|
32.4
|
%
|
|
32.9
|
%
|
|
33.4
|
%
|
|
33.5
|
%
|
||||
R&D as a % of sales
|
6.2
|
%
|
|
6.3
|
%
|
|
6.3
|
%
|
|
6.3
|
%
|
|
Three-Month Period Ended
|
|
Six-Month Period Ended
|
||||||||
|
June 28, 2019
|
|
June 29, 2018
|
|
June 28, 2019
|
|
June 29, 2018
|
||||
Effective tax rate
|
18.4
|
%
|
|
19.3
|
%
|
|
34.1
|
%
|
|
19.9
|
%
|
•
|
The expected rate for the remainder of 2019 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.
|
|
Six-Month Period Ended
|
||||||
($ in millions)
|
June 28, 2019
|
|
June 29, 2018
|
||||
Total operating cash flows
|
$
|
1,874.8
|
|
|
$
|
1,864.9
|
|
|
|
|
|
||||
Cash paid for acquisitions
|
$
|
(326.6
|
)
|
|
$
|
(2,067.8
|
)
|
Payments for additions to property, plant and equipment
|
(336.5
|
)
|
|
(291.7
|
)
|
||
Proceeds from sales of property, plant and equipment
|
12.1
|
|
|
1.4
|
|
||
Payments for purchases of investments
|
(92.3
|
)
|
|
—
|
|
||
Proceeds from sale of investments
|
—
|
|
|
22.1
|
|
||
All other investing activities
|
15.9
|
|
|
(29.3
|
)
|
||
Net operating cash used in investing activities
|
$
|
(727.4
|
)
|
|
$
|
(2,365.3
|
)
|
|
|
|
|
||||
Proceeds from the issuance of common stock in connection with stock-based compensation
|
$
|
83.0
|
|
|
$
|
49.7
|
|
Proceeds from the public offering of common stock, net of issuance costs
|
1,443.2
|
|
|
—
|
|
||
Proceeds from the public offering of preferred stock, net of issuance costs
|
1,599.6
|
|
|
—
|
|
||
Payment of dividends
|
(233.9
|
)
|
|
(209.3
|
)
|
||
Net proceeds from borrowings (maturities of 90 days or less)
|
599.6
|
|
|
1,030.1
|
|
||
Net repayments of borrowings (maturities longer than 90 days)
|
(3.9
|
)
|
|
(3.9
|
)
|
||
All other financing activities
|
(4.8
|
)
|
|
(16.2
|
)
|
||
Net operating cash provided by financing activities
|
$
|
3,482.8
|
|
|
$
|
850.4
|
|
•
|
Operating cash flows increased $10 million, or approximately 0.5%, during the six-month period ended June 28, 2019 as compared to the comparable period of 2018, primarily due to higher net earnings (after excluding the noncash discrete tax charges during the period) and the timing of payments for income taxes, partially offset by higher cash used for funding trade accounts receivable, inventories and accounts payable during the period compared to the prior year.
|
•
|
On March 1, 2019, the Company completed the underwritten public offering of 12.1 million shares of Danaher common stock at a price to the public of $123.00 per share resulting in net proceeds of approximately $1.4 billion. Simultaneously, the Company completed the underwritten public offering of 1.65 million shares of its MCPS resulting in net proceeds of approximately $1.6 billion, after deducting expenses and the underwriters’ discount. The Company intends to use the net proceeds from the Common Stock Offering and the MCPS Offering to fund a portion of the cash consideration payable for, and certain costs associated with, the GE Biopharma Acquisition.
|
•
|
During the six-month period ended June 28, 2019, the Company invested $92 million in strategic non-marketable equity securities.
|
•
|
As of June 28, 2019, the Company held approximately $5.4 billion of cash and cash equivalents.
|
•
|
2019 operating cash flows reflected a decrease of $175 million in net earnings for the first six months of 2019 as compared to the comparable period in 2018. However, included in net earnings for the first six months of 2019 are
|
•
|
Net earnings for the first six months of 2019 reflected an increase of $4 million of depreciation and amortization expense as compared to the comparable period of 2018. Amortization expense primarily relates to the amortization of intangible assets acquired in connection with acquisitions and increased due to recently acquired businesses. Depreciation expense relates to both the Company’s manufacturing and operating facilities as well as instrumentation leased to customers under OTL arrangements and increased due primarily to the impact of increased capital expenditures. Depreciation and amortization are noncash expenses that decrease earnings without a corresponding impact to operating cash flows.
|
•
|
The aggregate of trade accounts receivable, inventories and trade accounts payable used $211 million in operating cash flows during the first six months of 2019, compared to $50 million of operating cash flows provided in the comparable period of 2018. 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 provided $276 million of operating cash flows during the first six months of 2019, compared to $154 million of operating cash flows used in the comparable period of 2018. The cash flows provided in the first six months of 2019 resulted primarily from the noncash discrete tax charges noted above and the timing of cash payments for income taxes.
|
•
|
If the GE Biopharma Acquisition is not completed on the anticipated timetable or at all, or if regulatory approval of the acquisition is subject to conditions, we may fail to realize the anticipated benefits of the GE Biopharma Acquisition on the anticipated timetable or at all.
|
•
|
The GE Biopharma Business could under-perform relative to our expectations and the price that we pay or not perform in accordance with our anticipated timetable, or we could fail to operate such business profitably.
|
•
|
The GE Biopharma Acquisition could cause our financial results to differ from our own or the investment community’s expectations in any given period, or over the long-term.
|
•
|
Pre-closing and post-closing earnings charges related to the GE Biopharma Acquisition could adversely impact operating results in any given period, and the impact may be substantially different from period-to-period.
|
•
|
The GE Biopharma Acquisition could create demands on our management, operational resources and financial and internal control systems that we are unable to effectively address.
|
•
|
The GE Biopharma Acquisition could divert management’s attention and other resources, which could have a negative impact on our ability to manage existing operations or pursue other strategic transactions.
|
•
|
We could experience difficulty or greater-than-anticipated costs in integrating the personnel, operations and financial and other controls and systems of GE Biopharma, and could experience difficulty attracting and retaining key employees and customers.
|
•
|
We may be unable to achieve anticipated cost savings or other synergies on the timetable we expect or at all.
|
•
|
We may assume unknown liabilities, known contingent liabilities that become realized, known liabilities that prove greater than anticipated, internal control deficiencies or exposure to regulatory sanctions resulting from GE Biopharma’s activities and the realization of any of these liabilities or deficiencies may increase our expenses, adversely affect our financial position or cause us to fail to meet our public financial reporting obligations.
|
•
|
The GE Biopharma Purchase Agreement includes provisions relating to purchase price adjustments, which may have unpredictable financial results.
|
•
|
As a result of the GE Biopharma Acquisition, we expect to record significant goodwill and other assets on our balance sheet and if we are not able to realize the value of these assets, we may be required to incur impairment charges.
|
(a)
|
Exhibits:
|
3.1
|
|
|
|
|
|
3.2
|
|
|
|
|
|
3.3
|
|
|
|
|
|
31.1
|
|
|
|
|
|
31.2
|
|
|
|
|
|
32.1
|
|
|
|
|
|
32.2
|
|
|
|
|
|
101.INS
|
|
XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL 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
|
|
|
DANAHER CORPORATION
|
|
|
|
|
|
Date:
|
July 17, 2019
|
By:
|
/s/ Matthew R. McGrew
|
|
|
|
Matthew R. McGrew
|
|
|
|
Executive Vice President and Chief Financial Officer
|
|
|
|
|
Date:
|
July 17, 2019
|
By:
|
/s/ Robert S. Lutz
|
|
|
|
Robert S. Lutz
|
|
|
|
Senior Vice President and Chief Accounting 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:
|
July 17, 2019
|
By:
|
/s/ Thomas P. Joyce, Jr.
|
|
|
|
Thomas P. Joyce, Jr.
|
|
|
|
President and Chief Executive Officer
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1.
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I have reviewed this Quarterly Report on Form 10-Q of Danaher Corporation;
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2.
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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;
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3.
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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;
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4.
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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:
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a.
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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;
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b.
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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;
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c.
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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
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d.
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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
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5.
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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):
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a.
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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
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b.
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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.
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Date:
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July 17, 2019
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By:
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/s/ Matthew R. McGrew
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Matthew R. McGrew
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Executive Vice President and Chief Financial Officer
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Date:
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July 17, 2019
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By:
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/s/ Thomas P. Joyce, Jr.
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Thomas P. Joyce, Jr.
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President and Chief Executive Officer
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Date:
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July 17, 2019
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By:
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/s/ Matthew R. McGrew
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Matthew R. McGrew
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Executive Vice President and Chief Financial Officer
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