UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

________________________________________________________

FORM 10-Q

________________________________________________________

(Mark One)



ý☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 29, ~~2017~~2023



¨☐			TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: ~~1-8089~~001-08089

DANAHER CORPORATION

(Exact name of registrant as specified in its charter)



Delaware		59-1995548
(State of Incorporation)		(I.R.S. Employer Identification ~~number)~~Number)

2200 Pennsylvania Avenue, N.W., Suite 800W ~~Washington, D.C.~~		20037-1701
Washington,	DC
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s telephone number, including area code: 202-828-0850


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, $0.01 par value	DHR	New York Stock Exchange
1.700% Senior Notes due 2024	DHR 24	New York Stock Exchange
0.200% Senior Notes due 2026	DHR/26	New York Stock Exchange
2.100% Senior Notes due 2026	DHR 26	New York Stock Exchange
1.200% Senior Notes due 2027	DHR/27	New York Stock Exchange
0.450% Senior Notes due 2028	DHR/28	New York Stock Exchange
2.500% Senior Notes due 2030	DHR 30	New York Stock Exchange
0.750% Senior Notes due 2031	DHR/31	New York Stock Exchange
1.350% Senior Notes due 2039	DHR/39	New York Stock Exchange
1.800% Senior Notes due 2049	DHR/49	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes ý☒ No ¨☐

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files). Yes ý☒ No ¨☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. ~~(Check one):~~

Large Accelerated Filer

☒

Accelerated Filer

☐

Non-accelerated Filer

☐

Smaller Reporting Company

☐

~~Large accelerated filer~~Emerging Growth Company

ý☐

~~Accelerated filer~~

~~Non-accelerated filer~~

¨ ~~(Do not check if a smaller reporting company)~~

~~Smaller reporting company~~

~~Emerging growth company~~

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes ¨☐ No ý☒

The number of shares of common stock outstanding at October ~~13, 2017~~19, 2023 was ~~695,605,257.~~738,927,107.

DANAHER CORPORATION

INDEX

FORM 10-Q

Table of Contents

DANAHER CORPORATION AND SUBSIDIARIES

CONSOLIDATED CONDENSED BALANCE SHEETS

($ ~~and shares~~ in millions, except per share amount)

(unaudited)


	September 29, 2017			December 31, 2016				September 29, 2023		December 31, 2022
ASSETS							ASSETS
Current assets:							Current assets:
Cash and equivalents	$	648.6		$	963.7		Cash and equivalents	$	12,277	$	5,995
Trade accounts receivable, net	3,254.6			3,186.1
Trade accounts receivable, less allowance for doubtful accounts of $136 and $126, respectively							Trade accounts receivable, less allowance for doubtful accounts of $136 and $126, respectively	4,201		4,918
Inventories:							Inventories:
Finished goods	1,007.3			884.4			Finished goods	1,447		1,504
Work in process	325.1			299.4			Work in process	497		473
Raw materials	559.9			525.6			Raw materials	1,080		1,133
Total inventories	1,892.3			1,709.4			Total inventories	3,024		3,110
Prepaid expenses and other current assets	464.7			805.9			Prepaid expenses and other current assets	1,703		1,860
Total current assets	6,260.2			6,665.1			Total current assets	21,205		15,883
Property, plant and equipment, net of accumulated depreciation of $2,373.3 and $1,963.3, respectively	2,424.9			2,354.0
Property, plant and equipment, net of accumulated depreciation of $4,122 and $3,893, respectively							Property, plant and equipment, net of accumulated depreciation of $4,122 and $3,893, respectively	4,302		3,956
Other long-term assets	689.1			631.3			Other long-term assets	4,286		4,459
Goodwill	24,783.8			23,826.9			Goodwill	39,155		39,752
Other intangible assets, net	11,693.3			11,818.0			Other intangible assets, net	18,786		20,300
Total assets	$	45,851.3		$	45,295.3		Total assets	$	87,734	$	84,350
LIABILITIES AND STOCKHOLDERS’ EQUITY							LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:							Current liabilities:
Notes payable and current portion of long-term debt	$	182.2		$	2,594.8		Notes payable and current portion of long-term debt	$	2,547	$	591
Trade accounts payable	1,501.8			1,485.0			Trade accounts payable	1,894		2,296
Accrued expenses and other liabilities	2,703.5			2,794.2			Accrued expenses and other liabilities	4,926		5,502
Total current liabilities	4,387.5			6,874.0			Total current liabilities	9,367		8,389
Other long-term liabilities	5,356.4			5,670.3			Other long-term liabilities	6,439		6,785
Long-term debt	10,726.8			9,674.2			Long-term debt	19,513		19,086
Stockholders’ equity:							Stockholders’ equity:
Common stock - $0.01 par value, 2.0 billion shares authorized; 811.4 and 807.7 issued; 695.5 and 692.2 outstanding, respectively	8.1			8.1
Preferred stock, no par value, 15.0 million shares authorized; no shares issued and outstanding as of September 29, 2023; 1.72 million shares of 5.00% Mandatory Convertible Preferred Stock, Series B, issued and outstanding as of December 31, 2022							Preferred stock, no par value, 15.0 million shares authorized; no shares issued and outstanding as of September 29, 2023; 1.72 million shares of 5.00% Mandatory Convertible Preferred Stock, Series B, issued and outstanding as of December 31, 2022	—		1,668
Common stock - $0.01 par value, 2.0 billion shares authorized; 880.2 million issued and 738.9 million outstanding as of September 29, 2023; 869.3 million issued and 728.3 million outstanding as of December 31, 2022							Common stock - $0.01 par value, 2.0 billion shares authorized; 880.2 million issued and 738.9 million outstanding as of September 29, 2023; 869.3 million issued and 728.3 million outstanding as of December 31, 2022	9		9
Additional paid-in capital	5,472.0			5,312.9			Additional paid-in capital	14,085		12,072
Retained earnings	22,047.1			20,703.5			Retained earnings	42,272		39,205
Accumulated other comprehensive income (loss)	(2,151.8		)	(3,021.7		)	Accumulated other comprehensive income (loss)	(3,959)		(2,872)
Total Danaher stockholders’ equity	25,375.4			23,002.8			Total Danaher stockholders’ equity	52,407		50,082
Noncontrolling interests	5.2			74.0			Noncontrolling interests	8		8
Total stockholders’ equity	25,380.6			23,076.8			Total stockholders’ equity	52,415		50,090
Total liabilities and stockholders’ equity	$	45,851.3		$	45,295.3		Total liabilities and stockholders’ equity	$	87,734	$	84,350

See the accompanying Notes to the Consolidated Condensed Financial Statements.

Table of Contents

DANAHER CORPORATION AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS

($ and shares in millions, except per share amounts)

(unaudited)


	Three-Month Period Ended				Nine-Month Period Ended
	September 29, 2023		September 30, 2022		September 29, 2023			September 30, 2022
Sales	$	6,873	$	7,663	$	21,197		$	23,102
Cost of sales	(2,873)		(3,079)		(8,786)			(9,092)
Gross profit	4,000		4,584		12,411			14,010
Operating costs:
Selling, general and administrative expenses	(2,145)		(2,149)		(6,486)			(6,326)
Research and development expenses	(417)		(420)		(1,264)			(1,292)

Operating profit	1,438		2,015		4,661			6,392
Nonoperating income (expense):
Other income (expense), net	(47)		(51)		(52)			(158)


Interest expense	(73)		(42)		(208)			(147)
Interest income	79		9		186			12
Earnings before income taxes	1,397		1,931		4,587			6,099
Income taxes	(268)		(359)		(902)			(1,122)


Net earnings	1,129		1,572		3,685			4,977
Mandatory convertible preferred stock dividends	—		(21)		(21)			(84)
Net earnings attributable to common stockholders	$	1,129	$	1,551	$	3,664		$	4,893






Net earnings per common share:
Basic	$	1.53	$	2.13	$	4.98	(a)	$	6.76
Diluted	$	1.51	$	2.10	$	4.94		$	6.67	(a)
Average common stock and common equivalent shares outstanding:
Basic	739.4		728.5		735.4			723.8
Diluted	745.9		737.4		742.1			737.0

Three-Month Period Ended Nine-Month Period Ended
September 29, 2017 September 30, 2016 September 29, 2017 September 30, 2016
Sales $ 4,528.2
$ 4,132.1
$ 13,244.0
$ 12,298.1

Cost of sales (1,991.4 ) (1,846.1 ) (5,890.6 ) (5,463.5 )
Gross profit 2,536.8
2,286.0
7,353.4
6,834.6

Operating costs:
Selling, general and administrative expenses (1,490.1 ) (1,345.8 ) (4,448.4 ) (4,105.2 )
Research and development expenses (279.2 ) (241.1 ) (829.9 ) (707.1 )
Operating profit 767.5
699.1
2,075.1
2,022.3

Nonoperating income (expense):
Other income —
—
—
223.4

Loss on early extinguishment of borrowings —
(178.8 ) —
(178.8 )
Interest expense (39.9 ) (43.7 ) (120.9 ) (152.1 )
Interest income 2.2
0.1
5.6
0.1

Earnings from continuing operations before income taxes 729.8
476.7
1,959.8
1,914.9

Income taxes (157.7 ) (74.1 ) (346.6 ) (508.5 )
Net earnings from continuing operations 572.1
402.6
1,613.2
1,406.4

Earnings from discontinued operations, net of income taxes —
(11.0 ) 22.3
400.3

Net earnings $ 572.1
$ 391.6
$ 1,635.5
$ 1,806.7

Net earnings per share from continuing operations:
Basic $ 0.82
$ 0.58
$ 2.32
$ 2.04

Diluted $ 0.81
$ 0.57
$ 2.29
$ 2.01

Net earnings per share from discontinued operations:
Basic $ —
$ (0.02 ) $ 0.03
$ 0.58

Diluted $ —
$ (0.02 ) $ 0.03
$ 0.57

Net earnings per share:
Basic $ 0.82
$ 0.57
* $ 2.35
$ 2.62

Diluted $ 0.81
$ 0.56
* $ 2.32
$ 2.59
*
Average common stock and common equivalent shares outstanding:
Basic 696.2
692.2
695.3
690.6

Diluted 705.6
701.3
705.5
699.1

* (a) Net earnings per common share amounts for the relevant three-month periods do not add to the nine-month period amount due to rounding.

See the accompanying Notes to the Consolidated Condensed Financial Statements.

Table of Contents

DANAHER CORPORATION AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME

($ in millions)

(unaudited)


	Three-Month Period Ended					Nine-Month Period Ended						Three-Month Period Ended				Nine-Month Period Ended
	September 29, 2017			September 30, 2016		September 29, 2017		September 30, 2016				September 29, 2023		September 30, 2022		September 29, 2023		September 30, 2022
Net earnings	$	572.1		$	391.6	$	1,635.5	$	1,806.7		Net earnings	$	1,129	$	1,572	$	3,685	$	4,977
Other comprehensive income (loss), net of income taxes:											Other comprehensive income (loss), net of income taxes:
Foreign currency translation adjustments	260.0			275.6		839.2		314.8			Foreign currency translation adjustments	(303)		(1,039)		(982)		(2,824)
Pension and postretirement plan benefit adjustments	4.6			4.7		14.4		15.8			Pension and postretirement plan benefit adjustments	1		7		1		28
Unrealized gain (loss) on available-for-sale securities adjustments	(1.9		)	8.8		16.3		(121.5		)

Cash flow hedge adjustments											Cash flow hedge adjustments	(81)		(77)		(106)		(31)
Total other comprehensive income (loss), net of income taxes	262.7			289.1		869.9		209.1			Total other comprehensive income (loss), net of income taxes	(383)		(1,109)		(1,087)		(2,827)

Comprehensive income	$	834.8		$	680.7	$	2,505.4	$	2,015.8		Comprehensive income	$	746	$	463	$	2,598	$	2,150

See the accompanying Notes to the Consolidated Condensed Financial Statements.

Table of Contents

DANAHER CORPORATION AND SUBSIDIARIES

CONSOLIDATED CONDENSED ~~STATEMENT~~STATEMENTS OF STOCKHOLDERS’ EQUITY

($ ~~and shares~~ in millions)

(unaudited)

Common Stock Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Noncontrolling Interests
Shares Amount
Balance, December 31, 2016 807.7
$ 8.1
$ 5,312.9
$ 20,703.5
$ (3,021.7 ) $ 74.0
Net earnings for the period —
—
—
1,635.5
—
—
Other comprehensive income —
—
—
—
869.9
—
Dividends declared —
—
—
(291.9 ) —
—
Common stock-based award activity 3.7
—
159.3
—
—
—
Common stock issued in connection with LYONs’ conversions, including tax benefit —
—
1.0
—
—
—
Change in noncontrolling interests —
—
(1.2 ) —
—
(68.8 )
Balance, September 29, 2017 811.4
$ 8.1
$ 5,472.0
$ 22,047.1
$ (2,151.8 ) $ 5.2


	Three-Month Period Ended				Nine-Month Period Ended
	September 29, 2023		September 30, 2022		September 29, 2023		September 30, 2022
Preferred stock:
Balance, beginning of period	$	—	$	1,668	$	1,668	$	3,268
Conversion of Mandatory Convertible Preferred Stock to common stock	—		—		(1,668)		(1,600)
Balance, end of period	$	—	$	1,668	$	—	$	1,668
Common stock:



Balance, beginning and end of period	$	9	$	9	$	9	$	9
Additional paid-in capital:
Balance, beginning of period	$	13,939	$	11,854	$	12,072	$	10,090
Common stock-based award	146		131		345		309
Common stock issued in connection with Mandatory Convertible Preferred Stock conversions	—		—		1,668		1,600



Acquisition of noncontrolling interests	—		—		—		(14)
Balance, end of period	$	14,085	$	11,985	$	14,085	$	11,985
Retained earnings:
Balance, beginning of period	$	41,344	$	35,808	$	39,205	$	32,827

Net earnings	1,129		1,572		3,685		4,977
Common stock dividends declared	(201)		(182)		(597)		(543)
Mandatory Convertible Preferred Stock dividends declared	—		(21)		(21)		(84)
Balance, end of period	$	42,272	$	37,177	$	42,272	$	37,177
Accumulated other comprehensive income (loss):
Balance, beginning of period	$	(3,576)	$	(2,745)	$	(2,872)	$	(1,027)

Other comprehensive income (loss)	(383)		(1,109)		(1,087)		(2,827)
Balance, end of period	$	(3,959)	$	(3,854)	$	(3,959)	$	(3,854)
Noncontrolling interests:
Balance, beginning of period	$	8	$	7	$	8	$	10

Change in noncontrolling interests	—		1		—		(2)
Balance, end of period	$	8	$	8	$	8	$	8
Total stockholders’ equity, end of period	$	52,415	$	46,993	$	52,415	$	46,993

See the accompanying Notes to the Consolidated Condensed Financial Statements.

Table of Contents

DANAHER CORPORATION AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

($ in millions)

(unaudited)


	Nine-Month Period Ended							Nine-Month Period Ended
	September 29, 2017			September 30, 2016				September 29, 2023		September 30, 2022
Cash flows from operating activities:							Cash flows from operating activities:
Net earnings	$	1,635.5		$	1,806.7		Net earnings	$	3,685	$	4,977
Less: earnings from discontinued operations, net of income taxes	22.3			400.3
Net earnings from continuing operations	1,613.2			1,406.4

Noncash items:							Noncash items:
Depreciation	427.3			395.9			Depreciation	526		537
Amortization	492.9			426.6
Amortization of intangible assets							Amortization of intangible assets	1,147		1,120

Stock-based compensation expense	104.8			96.3			Stock-based compensation expense	280		270
Restructuring and impairment charges	49.3			—
Pretax loss on early extinguishment of borrowings	—			178.8
Pretax gain on sale of investments	—			(223.4		)

Investment (gains) losses							Investment (gains) losses	58		186
Change in trade accounts receivable, net	74.6			(94.8		)	Change in trade accounts receivable, net	709		(134)
Change in inventories	(98.2		)	(138.5		)	Change in inventories	(25)		(729)
Change in trade accounts payable	(48.5		)	(38.1		)	Change in trade accounts payable	(399)		(180)
Change in prepaid expenses and other assets	242.3			171.9			Change in prepaid expenses and other assets	331		(104)
Change in accrued expenses and other liabilities	(214.6		)	257.4			Change in accrued expenses and other liabilities	(767)		35
Total operating cash provided by continuing operations	2,643.1			2,438.5
Total operating cash provided by discontinued operations	—			434.3

Net cash provided by operating activities	2,643.1			2,872.8			Net cash provided by operating activities	5,545		5,978
Cash flows from investing activities:							Cash flows from investing activities:
Cash paid for acquisitions	(112.0		)	(99.6		)	Cash paid for acquisitions	—		(304)
Payments for additions to property, plant and equipment	(445.8		)	(422.1		)	Payments for additions to property, plant and equipment	(981)		(823)
Proceeds from sales of property, plant and equipment	32.3			7.2			Proceeds from sales of property, plant and equipment	8		9
Proceeds from sale of investments	—			264.8
Payments for purchases of investments							Payments for purchases of investments	(152)		(354)
Proceeds from sales of investments							Proceeds from sales of investments	33		18

All other investing activities	(2.4		)	—			All other investing activities	28		36
Total investing cash used in continuing operations	(527.9		)	(249.7		)
Total investing cash used in discontinued operations	—			(69.8		)
Net cash used in investing activities	(527.9		)	(319.5		)
Total cash used in investing activities							Total cash used in investing activities	(1,064)		(1,418)
Cash flows from financing activities:							Cash flows from financing activities:
Proceeds from the issuance of common stock	49.0			156.6
Proceeds from the issuance of common stock in connection with stock-based compensation, net							Proceeds from the issuance of common stock in connection with stock-based compensation, net	51		15

Payment of dividends	(281.0		)	(313.3		)	Payment of dividends	(621)		(615)
Payment for purchase of noncontrolling interests	(64.4		)	—
Make-whole premiums to redeem borrowings prior to maturity	—			(188.1		)
Net borrowings (maturities longer than 90 days)							Net borrowings (maturities longer than 90 days)	2,605		—
Net repayments of borrowings (maturities of 90 days or less)	(3,319.1		)	(2,334.2		)	Net repayments of borrowings (maturities of 90 days or less)	(9)		(719)
Proceeds from borrowings (maturities longer than 90 days)	1,684.0			3,240.9
Repayments of borrowings (maturities longer than 90 days)	(562.4		)	(2,354.2		)

Net repayments of borrowings (maturities longer than 90 days)							Net repayments of borrowings (maturities longer than 90 days)	—		(265)

All other financing activities	(50.7		)	(26.7		)	All other financing activities	(53)		(80)
Total financing cash used in continuing operations	(2,544.6		)	(1,819.0		)
Cash distributions to Fortive, net	—			(485.3		)
Net cash used in financing activities	(2,544.6		)	(2,304.3		)
Total cash provided by (used in) financing activities							Total cash provided by (used in) financing activities	1,973		(1,664)
Effect of exchange rate changes on cash and equivalents	114.3			(68.4		)	Effect of exchange rate changes on cash and equivalents	(172)		(332)
Net change in cash and equivalents	(315.1		)	180.6			Net change in cash and equivalents	6,282		2,564
Beginning balance of cash and equivalents	963.7			790.8			Beginning balance of cash and equivalents	5,995		2,586
Ending balance of cash and equivalents	$	648.6		$	971.4		Ending balance of cash and equivalents	$	12,277	$	5,150
Supplemental disclosures:							Supplemental disclosures:
Cash interest payments	$	117.4		$	199.4		Cash interest payments	$	289	$	250
Cash income tax payments	378.3			330.8			Cash income tax payments	1,170		1,094
Distribution of noncash net assets to Fortive Corporation	—			(1,983.6		)

See the accompanying Notes to the Consolidated Condensed Financial Statements.

Table of Contents

DANAHER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(unaudited)

NOTE 1. GENERAL

The ~~consolidated condensed financial statements~~Consolidated Condensed Financial Statements included herein have been prepared by Danaher Corporation (“Danaher” or the “Company”) without audit, pursuant to the rules and regulations of the Securities and Exchange ~~Commission.~~Commission (“SEC”). In this quarterly report, the terms “Danaher” or the “Company” refer to Danaher Corporation, Danaher Corporation and its consolidated subsidiaries, or the consolidated subsidiaries of Danaher Corporation, as the context requires. ~~Unless otherwise indicated, all amounts in this quarterly report refer to continuing operations.~~ Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) have been condensed or omitted pursuant to ~~such~~SEC rules and regulations; however, the Company believes that the disclosures are adequate to make the information presented not misleading. The ~~consolidated condensed financial statements~~Consolidated Condensed Financial Statements included herein should be read in conjunction with the financial statements as of and for the year ended December 31, ~~2016~~2022 and the Notes thereto included in the Company’s ~~Current Report on Form 8-K filed on June 19, 2017 and the 2016~~2022 Annual Report on Form 10-K filed on February 22, ~~2017 (collectively, the “2016~~2023 (the “2022 Annual Report”).

In the opinion of the Company, the accompanying financial statements contain all adjustments (consisting of only normal recurring accruals) necessary to present fairly the financial position of the Company as of September 29, ~~2017~~2023 and December 31, ~~2016,~~2022, its results of operations for the three and nine-month periods ended September 29, ~~2017~~2023 and September 30, ~~2016~~2022 and its cash flows for each of the nine-month periods then ended.

~~Accumulated Other Comprehensive Income (Loss)—The~~There have been no changes ~~in accumulated other comprehensive income (loss) by component are summarized below ($ in millions). Foreign currency translation adjustments are generally not adjusted for income taxes as they relate~~ to ~~indefinite investments in non-U.S. subsidiaries.~~

^(a) ~~This accumulated other comprehensive income (loss) component is included~~the Company’s significant accounting policies described in the ~~computation of net periodic pension cost. Refer to Note 7 for additional details.~~

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 30, 2016:
Balance, July 1, 2016 $ (1,758.2 ) $ (636.2 ) $ 3.2
$ (2,391.2 )
Other comprehensive income (loss) before reclassifications:
Increase 275.6
—
13.9
289.5
Income tax impact —
—
(5.1 ) (5.1 )
Other comprehensive income (loss) before reclassifications, net of income taxes 275.6
—
8.8
284.4
Amounts reclassified from accumulated other comprehensive income (loss):
Increase —
7.2
(a) —
7.2
Income tax impact —
(2.5 ) —
(2.5 )
Amounts reclassified from accumulated other comprehensive income (loss), net of income taxes —
4.7
—
4.7
Net current period other comprehensive income (loss), net of income taxes 275.6
4.7
8.8
289.1
Distribution of Fortive Corporation (83.5 ) 63.3
(c) —
(20.2 )
Balance, September 30, 2016 $ (1,566.1 ) $ (568.2 ) $ 12.0
$ (2,122.3 )
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 )
For the Nine-Month Period Ended September 30, 2016:
Balance, December 31, 2015 $ (1,797.4 ) $ (647.3 ) $ 133.5
$ (2,311.2 )
Other comprehensive income (loss) before reclassifications:
Increase 314.8
—
28.8
343.6
Income tax impact —
—
(10.7 ) (10.7 )
Other comprehensive income (loss) before reclassifications, net of income taxes 314.8
—
18.1
332.9
Amounts reclassified from accumulated other comprehensive income (loss):
Increase (decrease) —
23.6
(a) (223.4 ) (b) (199.8 )
Income tax impact —
(7.8 ) 83.8
76.0
Amounts reclassified from accumulated other comprehensive income (loss), net of income taxes —
15.8
(139.6 ) (123.8 )
Net current period other comprehensive income (loss), net of income taxes 314.8
15.8
(121.5 ) 209.1
Distribution of Fortive Corporation (83.5 ) 63.3
(c) —
(20.2 )
Balance, September 30, 2016 $ (1,566.1 ) $ (568.2 ) $ 12.0
$ (2,122.3 )

^(a) ~~This accumulated other comprehensive income (loss) component is included in~~Company’s 2022 Annual Report that have a material impact on the ~~computation of net periodic pension cost. Refer to Note 7 for additional details.~~

^(b) ~~Included in other income in the accompanying~~Company’s Consolidated Condensed ~~Statement~~Financial Statements and the related Notes. Reclassifications of ~~Earnings. Refer~~certain prior year amounts have been made to ~~Note 10 for additional details.~~conform to the current year presentation.

^(c) ~~This accumulated other comprehensive income (loss) component included an income tax impact of $21 million.~~

~~New~~ Accounting Standards Recently Adopted—In ~~May 2017,~~August 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) ~~No. 2017-09,~~ ~~Compensation—Stock Compensation (Topic 718)~~2023-05, Business Combinations—Joint Venture Formations (Subtopic 805-60): ~~Scope~~Recognition and Initial Measurement. The ASU requires that a joint venture apply a new basis of ~~Modification Accounting,~~accounting upon formation in which ~~provided clarity on which changes~~the joint venture will recognize and initially measure its assets and liabilities at fair value (with exceptions to the terms or conditions of share-based payment awards require an entity to apply the modification accounting provisions required in Topic 718. The standard is effective for all entities for annual periods beginning after December 15, 2017, with early adoption permitted, including adoption in any interim period for which financial statements have not yet been issued. The Company does not expect the adoption of this ASU will have a material impact on its consolidated financial statements.

~~In March 2017, the FASB issued ASU No. 2017-07,~~ ~~Compensation—Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, which requires employers to disaggregate the service cost component from other components of net periodic benefit costs and to disclose the amounts of net periodic benefit costs~~fair value measurement that are ~~included in each income statement line item. The standard requires employers to report~~consistent with the service cost component in the same line item as other compensation costs and to report the other components of net periodic benefit costs (which include interest costs, expected return on plan assets, amortization of prior service cost or credits and actuarial gains and losses) separately and outside a subtotal of operating income. The income statement guidance requires application on a retrospective basis.business combinations guidance). The ASU is effective prospectively for ~~public entities for annual periods beginning~~all joint venture formations with a formation date on or after ~~December 15, 2017, including interim periods,~~January 1, 2025, with early adoption permitted. The Company ~~does not expect~~early adopted the ~~adoption~~ASU effective September 30, 2023 on a prospective basis.

Operating Leases—As of ~~this ASU will~~September 29, 2023 and December 31, 2022, operating lease right-of-use assets where the Company was the lessee were approximately $1.0 billion and are included within other long-term assets in the accompanying Consolidated Condensed Balance Sheets. The associated operating lease liabilities were approximately $1.1 billion as of September 29, 2023 and December 31, 2022, and are included in accrued expenses and other liabilities and other long-term liabilities.

NOTE 2. PENDING ACQUISITION

On August 28, 2023, the Company entered into a definitive agreement to acquire all of the outstanding shares of Abcam plc (“Abcam”) for a cash purchase price of approximately $5.7 billion, including assumed indebtedness and net of acquired cash (the “Abcam Acquisition”). Abcam is a leading global supplier of protein consumables, including highly validated antibodies, reagents, biomarkers and assays to address targets in biological pathways that are critical for advancing drug discovery, life sciences research and diagnostics. Abcam generated revenues of £362 million in 2022. The Company expects to include the Abcam business within its Life Sciences segment. The transaction is subject to customary closing conditions, including receipt of applicable regulatory approvals and Abcam shareholder approval.

The Company expects to finance the Abcam Acquisition using cash on hand and/or the proceeds from the issuance of commercial paper.

NOTE 3. ENVIRONMENTAL & APPLIED SOLUTIONS SEPARATION

On September 30, 2023 (the “Distribution Date”), the Company completed the separation (the “Separation”) of its former Environmental & Applied Solutions business by distributing to Danaher stockholders on a pro rata basis all of the issued and outstanding common stock of Veralto Corporation (“Veralto”), the entity Danaher incorporated to hold such businesses. To effect the Separation, Danaher distributed to its stockholders one share of Veralto common stock for every three shares of Danaher common stock outstanding as of September 13, 2023, the record date for the distribution. Fractional shares of Veralto common stock that otherwise would have ~~a material impact on its consolidated financial statements.~~been distributed were aggregated and sold into the public market and the proceeds distributed to Danaher stockholders who otherwise would have received fractional shares of Veralto common stock.

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In ~~June 2016,~~preparation for the ~~FASB~~Separation, in September 2023 Veralto issued ~~ASU No. 2016-13,~~ ~~Financial Instruments—Credit Losses (Topic 326): Measurement~~approximately $2.6 billion in debt securities (refer to Note 11). The proceeds of ~~Credit Losses on Financial Instruments,~~ ~~which amends~~these issuances were used to fund the ~~impairment model by requiring entities~~approximately $2.6 billion net cash distributions Veralto made to Danaher prior to the Distribution Date. In accordance with the applicable tax rules, Danaher intends to use a forward-looking approach based on expected losses to estimate credit losses on certain types of financial instruments, including trade receivables. The ASU is effective for public entities for fiscal years beginning after December 15, 2019, with early adoption permitted. Management has not yet completed its assessmentportion of the ~~impact~~cash distribution proceeds it received from Veralto to meet upcoming commercial paper and bond maturities and to use the balance of the ~~new standard on~~proceeds to partially fund certain of the Company’s ~~consolidated~~regular, quarterly cash dividends to shareholders.

As the disposition occurred during the fourth quarter of 2023, the Company will classify Veralto as a discontinued operation in its historical financial ~~statements.~~

~~In March 2016,~~statements beginning with the ~~FASB issued ASU No. 2016-09,~~ ~~Compensation—Stock Compensation (Topic 718), which simplifies several aspects~~fourth quarter of 2023. The Environmental & Applied Solutions business had sales for the year ended December 31, 2022 of approximately $4.8 billion. Below is a summary of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, classification of certain items on the statement of cash flowsEnvironmental & Applied Solutions business' sales and ~~accounting for forfeitures.~~ operating profit ($ in millions):


	Three-Month Period Ended				Nine-Month Period Ended
	September 29, 2023		September 30, 2022		September 29, 2023		September 30, 2022
Sales	$	1,249	$	1,208	$	3,712	$	3,593
Operating profit	286		286		887		829

The Company ~~has adopted this standard effective January 1, 2017. The ASU requires that the difference between the actual tax benefit realized upon exercise or vesting, as applicable,~~incurred separation costs of $36 million ($31 million after-tax) and the tax benefit recorded based on the fair value of the stock award at the time of grant (the “excess tax benefits”) be reflected as a reduction of the current period provision for income taxes with any shortfall recorded as an increase$101 million ($90 million after-tax) in the tax provision rather than as a component of changes to additional paid-in capital. The ASU also requires the excess tax benefit realized be reflected as operating cash flow rather than a financing cash flow. For the three and nine-month periods ended September 29, ~~2017, the provision for income taxes from continuing operations was reduced and operating cash flow from continuing operations was increased by $7 million and $40 million,~~2023, respectively, reflecting the impact of adopting this standard. Had this ASU been adopted at January 1, 2016, the provision for income taxes from continuing operations would have been reduced and operating cash flow from continuing operations would have been increased by $8 million and $34 million from the amounts reportedrelated to preparation for the ~~three and nine-month periods ended September 30, 2016, respectively. The actual benefit to be realized in future periods is inherently uncertain and will vary based on the price~~separation of the Company’s ~~common stock as well as the timing of and relative value realized for future share-based transactions.~~

~~In February 2016, the FASB issued ASU No. 2016-02,~~ ~~Leases (Topic 842)~~, which requires lessees to recognize a right-of-use asset and a lease liability for all leases with terms greater than 12 months. The standard also requires disclosures by lessees and lessors about the amount, timing and uncertainty of cash flows arising from leases. The accounting applied by a lessor is largely unchanged from that applied under the current standard. The standard must be adopted using a modified retrospective transition approach and provides for certain practical expedients. The ASU is effective for public entities for fiscal years beginning after December 15, 2018, with early adoption permitted. In September 2017, the FASB issued ASU No. 2017-13, ~~Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842),~~ ~~which provided additional implementation guidance on the previously issued ASU~~. ~~Management has not yet completed its assessment of the impact of the new standard on the Company’s consolidated financial statements.~~

~~In January 2016, the FASB issued ASU No. 2016-01,~~ ~~Recognition and Measurement of Financial Assets and Financial Liabilities~~. The ASU amends guidance on the classification and measurement of financial instruments, including significant revisions in accounting related to the classification and measurement of investments in equity securities and presentation of certain fair value changes for financial liabilities when the fair value option is elected. The ASU requires equity securities to be measured at fair value with changes in fair value recognized through net earnings and amends certain disclosure requirements associated with the fair value of financial instruments. The ASU is effective for the Company on January 1, 2018. In the period of adoption, the Company is required to reclassify the unrealized gains/losses on equity securities within accumulated

~~other comprehensive income (loss) to retained earnings, which is not expected to be material to the Company’s consolidated financial statements.~~

~~In May 2014, the FASB issued ASU No. 2014-09,~~ ~~Revenue from Contracts with Customers (Topic 606)~~, which supersedes nearly all existing revenue recognition guidance. The core principle of Topic 606 is that revenue should be recognized to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In July 2015, the FASB deferred the effective date of the standard by one year which results in the new standard being effective for the Company at the beginning of its first quarter of fiscal year 2018. In addition, during March, April, May and December 2016 and September 2017, the FASB issued ASU No. 2016-08, ~~Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net),~~ ~~ASU No. 2016-10,~~ ~~Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing,~~ ~~ASU No. 2016-12,~~ ~~Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients,~~ ~~ASU No. 2016-20,~~ ~~Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers, and~~ ~~ASU No. 2017-13,~~ ~~Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842),~~ respectively, which clarified the guidance on certain items such as reporting revenue as a principal versus agent, identifying performance obligations, accounting for intellectual property licenses, assessing collectability, presentation of sales taxes, impairment testing for contract costs, disclosure of performance obligations, and provided additional implementation guidance. The Company plans to adopt the new standard on January 1, 2018. The Company has completed its initial assessment of the effect of adoption. Based on this assessment, the Company expects the impact of the new standard on the amount and timing of revenue recognition to be insignificant. The new standard will require certain costs, primarily sales-related commissions on contracts greater than one year in duration, to be capitalized rather than expensed currently. The new standard will also require additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows from customer contracts, including judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. The Company has identified, and is in the process of implementing, appropriate changes to its business processes, systems and controls to support recognition and disclosure under the new standard. The Company expects to use the modified retrospective method of adoption, reflecting the cumulative effect of initially applying the new standard to revenue recognition in the first quarter of 2018.

~~NOTE 2. ACQUISITIONS~~

For a description of the Company’s acquisition activity for the year ended December 31, 2016 reference is made to the financial statements as of and for the year ended December 31, 2016 and Note 2 thereto included in the Company’s 2016 Annual Report.

The Company continually evaluates potential acquisitions that either strategically fit with the Company’s existing portfolio or expand the Company’s portfolio into a new and attractive business area. The Company has completed a number of acquisitions that have been accounted for as purchases and have resulted in the recognition of goodwill in the Company’s financial statements. This goodwill arises because the purchase prices for these businesses reflect a number of factors including the future earnings and cash flow potential of these businesses, the multiple to earnings, cash flow and other factors at which similar businesses have been purchased by other acquirers, the competitive nature of the processes by which the Company acquired the businesses, avoidance of the time and costs which would be required (and the associated risks that would be encountered) to enhance the Company’s existing product offerings to key target markets and enter into new and profitable businesses, anticipated opportunities for synergies from the elimination of redundant facilities and staffing and use of each party’s respective, existing commercial infrastructure to cost-effectively expand sales of the other party’s products and services, and the complementary strategic fit and resulting synergies these businesses bring to existing operations.

The Company makes an initial allocation of the purchase price at the date of acquisition based upon its understanding of the fair value of the acquired assets and assumed liabilities. The Company obtains this information during due diligence and through other sources. In the months after closing, as the Company obtains additional information about these assets and liabilities, including through tangible and intangible asset appraisals, and learns more about the newly acquired business, it is able to refine the estimates of fair value and more accurately allocate the purchase price. Only items identified as of the acquisition date are considered for subsequent adjustment. The Company is continuing to evaluate certain pre-acquisition contingencies associated with certain of its 2017 and 2016 acquisitions and is also in the process of obtaining valuations of certain property, plant and equipment, acquired intangible assets and certain acquisition-related liabilities in connection with these acquisitions. The Company will make appropriate adjustments to the purchase price allocation prior to completion of the measurement period, as required.

During the first nine months of 2017, the Company acquired five businesses for total consideration of $112 million in cash, net of cash acquired. The businesses acquired complement existing units of the Life Sciences and Environmental & Applied Solutions ~~segments. The aggregate annual sales of these five businesses at the time of their respective acquisitions, in each~~

case based on the company’s revenues for its last completed fiscal year prior to the acquisition, were approximately $70 million. The Company preliminarily recorded an aggregate of $73 million of goodwill related to these acquisitions.

The following summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition for all acquisitions consummated during the nine-month period ended September 29, 2017 ($ in millions):

Trade accounts receivable $ 8.7
Inventories 13.2
Property, plant and equipment 4.9
Goodwill 73.2
Other intangible assets, primarily customer relationships, trade names and technology 52.5
Trade accounts payable (4.1 )
Other assets and liabilities, net (36.4 )
Net cash consideration $ 112.0

~~Acquisition of Noncontrolling Interest~~

~~In the first quarter of 2017, Danaher acquired the remaining noncontrolling interest associated with one of its prior~~ business combinations for consideration of $64 million. Danaher recorded the increase in ownership interests as a transaction within stockholders’ equity. As a result of this transaction, noncontrolling interests were reduced by $63 million reflecting the carrying value of the interest with the $1 million difference charged to additional paid-in capital.

~~Pro Forma Financial Information~~

The unaudited pro forma information for the periods set forth below gives effect to the 2017 and 2016 acquisitions as if they had occurred as of January 1, 2016. The pro forma information is presented for informational purposes only and is not necessarily indicative of the results of operations that actually would have been achieved had the acquisitions been consummated as of that time ($ in millions, except per share amounts):

Three-Month Period Ended Nine-Month Period Ended
September 29, 2017 September 30, 2016 September 29, 2017 September 30, 2016
Sales $ 4,528.5
$ 4,327.2
$ 13,269.4
$ 12,883.7
Net earnings from continuing operations 572.1
367.8
1,613.2
1,287.2
Diluted net earnings per share from continuing operations 0.81
0.53
2.29
1.84

In the nine-month period ended September 30, 2016, unaudited pro forma earnings set forth above were adjusted to include the $23 million pretax impact of nonrecurring acquisition date fair value adjustments to inventory and deferred revenue primarily related to ~~the 2016 acquisition of Cepheid.~~

~~NOTE 3. DISCONTINUED OPERATIONS~~

~~Fortive Corporation Separation~~

On July 2, 2016 (the “Distribution Date”), Danaher completed the separation (the “Separation”) of Fortive Corporation (“Fortive”). For additional details on the Separation reference is made to the financial statements as ofprofessional fees for legal, tax, finance, banking and ~~for the year ended December 31, 2016~~information technology services and Note 3 thereto included in the Company’s 2016 Annual Report. The accounting requirements for reporting the Separation of Fortive as a discontinued operation were met when the Separation was completed. Accordingly, the accompanying consolidated condensed financial statements for all periods presented reflect this business as a discontinued operation.duplicative general and administrative costs.

In connection with the Separation, Danaher and ~~Fortive~~Veralto entered into various agreements to effect the Separation and provide a framework for their relationship after the Separation, including a separation and distribution agreement, transition services agreement, an employee matters agreement, a tax matters agreement, an intellectual property matters agreement and a Danaher Business System (“DBS”) license agreement. These agreements provide for the allocation between Danaher and ~~Fortive~~Veralto of assets, employees, liabilities and obligations (including investments, property and employee benefits and tax-related assets and liabilities) attributable to periods prior to, at and after ~~Fortive’s~~Veralto’s separation from Danaher and will govern certain relationships between Danaher and ~~Fortive~~

Veralto after the Separation. ~~In addition, Danaher~~

NOTE 4. NET EARNINGS PER COMMON SHARE

Basic net earnings per common share (“EPS”) is ~~party to various commercial agreements with Fortive entities. The amounts billed for transition services provided under~~calculated by taking net earnings less the ~~above agreements as well as commercial sales and purchases to and from Fortive were not material to~~Mandatory Convertible Preferred Stock (“MCPS”) dividends divided by the ~~Company’s results~~weighted average number of ~~operations~~common shares outstanding for the ~~three or~~applicable period. Diluted net EPS is computed by taking net earnings less the MCPS dividends divided by the weighted average number of common shares outstanding increased by the number of additional shares that would have been outstanding had the potentially dilutive common shares been issued and reduced by the number of shares the Company could have repurchased with the proceeds from the issuance of the potentially dilutive shares. For the three-month periods ended September 29, 2023 and September 30, 2022, approximately 2.5 million and 538 thousand options, respectively, and for the nine-month periods ended September 29, ~~2017.~~2023 and September 30, 2022, approximately 3.2 million and 1.1 million options, respectively, to purchase shares were excluded from the diluted EPS calculation, as the impact of their inclusion would have been anti-dilutive. Basic and diluted EPS are computed independently for each quarter and year-to-date period, and each period involves the use of different weighted-average share count figures. As a result, and after factoring the effect of rounding to the nearest cent per share, the sum of prior quarterly EPS figures may not equal year-to-date EPS.

InThe impact of the MCPS Series B calculated under the if-converted method was anti-dilutive for the nine-month period ended September 29, ~~2017, Danaher recorded a $22~~2023 and the three and nine-month periods ended September 30, 2022, and as such 3.4 million ~~income tax benefit~~shares for the nine-month period ended September 29, 2023 and 8.6 million for both the three and nine-month periods ended September 30, 2022 underlying the MCPS Series B were excluded from the calculation of diluted EPS and the related toMCPS Series B dividends of $21 million for the ~~release of previously provided reserves associated with uncertain tax positions on certain Danaher tax returns which were jointly filed with Fortive entities. These reserves were released due to~~nine-month period ended September 29, 2023 and $21 million and $64 million for the ~~expiration of statutes of limitations for those returns. All Fortive entity-related balances~~three and nine-month periods ended September 30, 2022, respectively, were included in the ~~income tax benefit~~calculation of net earnings for diluted EPS. As of April 17, 2023, all outstanding shares of the MCPS Series B converted into 8.6 million shares of the Company’s common stock.

The impact of the MCPS Series A calculated under the if-converted method was dilutive for the nine-month period ended September 30, 2022, and as such 4.0 million shares underlying the MCPS Series A were included in the calculation of diluted EPS. The related MCPS Series A dividends of $20 million for the nine-month period ended September 30, 2022 were excluded from the calculation of net earnings for diluted EPS. On April 15, 2022, all outstanding shares of the MCPS Series A converted into 11.0 million shares of the Company’s common stock. Refer to Note 15 for additional information about the MCPS Series A and B conversions.

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Information related to ~~discontinued operations.~~ the calculation of net earnings per common share is summarized as follows ($ and shares in millions, except per share amounts):


	Three-Month Period Ended				Nine-Month Period Ended
	September 29, 2023		September 30, 2022		September 29, 2023		September 30, 2022
Numerator:
Net earnings	$	1,129	$	1,572	$	3,685	$	4,977
MCPS dividends	—		(21)		(21)		(84)
Net earnings attributable to common stockholders for Basic EPS	1,129		1,551		3,664		4,893

Adjustment for MCPS dividends for dilutive MCPS	—		—		—		20
Net earnings attributable to common stockholders after assumed conversions for Diluted EPS	$	1,129	$	1,551	$	3,664	$	4,913

Denominator:
Weighted average common shares outstanding used in Basic EPS	739.4		728.5		735.4		723.8
Incremental common shares from:
Assumed exercise of dilutive options and vesting of dilutive restricted stock units (“RSUs”) and performance stock units (“PSUs”)	6.5		8.9		6.7		9.2

Weighted average MCPS converted shares	—		—		—		4.0
Weighted average common shares outstanding used in Diluted EPS	745.9		737.4		742.1		737.0

Basic EPS	$	1.53	$	2.13	$	4.98	$	6.76
Diluted EPS	$	1.51	$	2.10	$	4.94	$	6.67

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NOTE 5. REVENUE

The following tables present the Company’s revenues disaggregated by geographical region and revenue type for the three and nine-month periods ended September 29, 2023 and September 30, 2022 ($ in millions). Sales taxes and other usage-based taxes collected from customers are excluded from revenue.


	Biotechnology		Life Sciences		Diagnostics		Environmental & Applied Solutions		Total
For the Three-Month Period Ended September 29, 2023:
Geographical region:
North America(a)	$	593	$	728	$	1,054	$	599	$	2,974
Western Europe	508		356		334		269		1,467
Other developed markets(b)	78		117		105		30		330
High-growth markets(c)	485		505		761		351		2,102
Total	$	1,664	$	1,706	$	2,254	$	1,249	$	6,873

Revenue type:
Recurring	$	1,390	$	1,062	$	1,986	$	744	$	5,182
Nonrecurring	274		644		268		505		1,691
Total	$	1,664	$	1,706	$	2,254	$	1,249	$	6,873

For the Three-Month Period Ended September 30, 2022:
Geographical region:
North America(a)	$	723	$	785	$	1,397	$	575	$	3,480
Western Europe	599		314		388		240		1,541
Other developed markets(b)	71		118		122		28		339
High-growth markets(c)	660		506		772		365		2,303
Total	$	2,053	$	1,723	$	2,679	$	1,208	$	7,663

Revenue type:
Recurring	$	1,662	$	1,038	$	2,396	$	729	$	5,825
Nonrecurring	391		685		283		479		1,838
Total	$	2,053	$	1,723	$	2,679	$	1,208	$	7,663

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	Biotechnology		Life Sciences		Diagnostics		Environmental & Applied Solutions		Total
For the Nine-Month Period Ended September 29, 2023:
Geographical region:
North America(a)	$	1,822	$	2,193	$	3,160	$	1,748	$	8,923
Western Europe	1,839		1,095		1,119		830		4,883
Other developed markets(b)	229		369		322		90		1,010
High-growth markets(c)	1,523		1,554		2,260		1,044		6,381
Total	$	5,413	$	5,211	$	6,861	$	3,712	$	21,197

Revenue type:
Recurring	$	4,435	$	3,205	$	6,056	$	2,210	$	15,906
Nonrecurring	978		2,006		805		1,502		5,291
Total	$	5,413	$	5,211	$	6,861	$	3,712	$	21,197

For the Nine-Month Period Ended September 30, 2022:
Geographical region:
North America(a)	$	2,303	$	2,301	$	3,938	$	1,674	$	10,216
Western Europe	1,938		982		1,365		775		5,060
Other developed markets(b)	244		366		361		92		1,063
High-growth markets(c)	2,050		1,441		2,220		1,052		6,763
Total	$	6,535	$	5,090	$	7,884	$	3,593	$	23,102

Revenue type:
Recurring	$	5,267	$	3,143	$	7,067	$	2,138	$	17,615
Nonrecurring	1,268		1,947		817		1,455		5,487
Total	$	6,535	$	5,090	$	7,884	$	3,593	$	23,102

(a)The Company defines North America as the United States and Canada.

(b) The Company defines other developed markets as Japan, Australia and New Zealand.

(c) The Company defines high-growth markets as developing markets of the world experiencing accelerated growth, over extended periods, in gross domestic product and infrastructure which include Eastern Europe, the Middle East, Africa, Latin America (including Mexico) and Asia (with the exception of Japan, Australia and New Zealand). The Company defines developed markets as all markets of the world that are not high-growth markets.

The ~~key components~~Company sells equipment to customers as well as consumables and services, some of which customers purchase on a recurring basis. Consumables sold for use with the equipment sold by the Company are typically critical to the use of the equipment and are typically used on a one-time or limited basis, requiring frequent replacement in the customer’s operating cycle. Examples of these consumables include reagents used in diagnostic tests, chromatography resins used for research and bioprocessing, filters used in filtration, separation and purification processes and (prior to the Separation) cartridges for marking and coding equipment. Additionally, some of the Company’s consumables are used on a standalone basis, such as custom nucleic acids, genomics solutions and (prior to the Separation) water treatment solutions. The Company separates its goods and services between those typically sold to a customer on a recurring basis and those typically sold to a customer on a nonrecurring basis. Recurring revenue includes revenue from consumables, services and operating-type leases (“OTLs”). Nonrecurring revenue includes sales of equipment and sales-type leases (“STLs”). OTLs and STLs are included in the above revenue amounts. For the three-month periods ended September 29, 2023 and September 30, 2022, lease revenue was $125 million and $120 million, respectively. For the nine-month periods ended September 29, 2023 and September 30, 2022, lease revenue was $363 million and $361 million, respectively.

Remaining performance obligations related to Topic 606, Revenue from Contracts with Customers, represent the aggregate transaction price allocated to performance obligations with an original contract term greater than one year which are fully or partially unsatisfied at the end of the period. As of September 29, 2023, the aggregate amount of the transaction price allocated to remaining performance obligations was approximately $4.9 billion. The Company expects to recognize revenue on approximately 51% of the remaining performance obligations over the next 12 months, 27% over the subsequent 12 months, and the remainder recognized thereafter.

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The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled receivables (“contract assets”) and deferred revenue, customer deposits and billings in excess of revenue recognized (“contract liabilities”) on the Consolidated Condensed Balance Sheets.

Most of the Company’s long-term contracts are billed as work progresses in accordance with the contract terms and conditions, either at periodic intervals or upon achievement of certain milestones. Often this results in billing occurring subsequent to revenue recognition resulting in contract assets. Contract assets are generally classified as other current assets in the Consolidated Condensed Balance Sheets. The balance of contract assets as of September 29, 2023 and December 31, 2022 was $63 million and $90 million, respectively.

The Company often receives cash payments from customers in advance of the Company’s performance resulting in contract liabilities that are classified as either current or long-term in the Consolidated Condensed Balance Sheets based on the timing of when the Company expects to recognize revenue. As of both September 29, 2023 and December 31, 2022, contract liabilities were approximately $1.9 billion, and are included within accrued expenses and other liabilities and other long-term liabilities in the accompanying Consolidated Condensed Balance Sheets. Revenue recognized during both the nine-month periods ended September 29, 2023 and September 30, 2022 that was included in the contract liability balance on December 31, 2022 and December 31, 2021, respectively, was approximately $1.2 billion. Contract assets and liabilities are reported on a net basis on the accompanying Consolidated Condensed Balance Sheets on a contract-by-contract basis at the end of each reporting period.

NOTE 6. SEGMENT INFORMATION

The Company operates and reports its results in business segments consisting of the Biotechnology, Life Sciences, Diagnostics, and (prior to the Separation) Environmental & Applied Solutions segments. When determining the reportable segments, the Company aggregated operating segments based on their similar economic and operating characteristics. Operating profit represents total revenues less operating expenses, excluding nonoperating income and expense, interest and income taxes. Operating profit amounts in the Other segment consist of unallocated corporate costs, including separation costs related to preparation for the separation of the Company’s Environmental & Applied Solutions business of $36 million and $101 million in the three and nine-month periods ended September 29, 2023, respectively, and other costs not considered part of management’s evaluation of reportable segment operating performance. Intersegment amounts are not significant and are eliminated to arrive at consolidated totals.

Segment results are shown below ($ in millions):


	Three-Month Period Ended				Nine-Month Period Ended
	September 29, 2023		September 30, 2022		September 29, 2023		September 30, 2022
Sales:
Biotechnology	$	1,664	$	2,053	$	5,413	$	6,535
Life Sciences	1,706		1,723		5,211		5,090
Diagnostics	2,254		2,679		6,861		7,884
Environmental & Applied Solutions	1,249		1,208		3,712		3,593
Total	$	6,873	$	7,663	$	21,197	$	23,102

Operating profit:
Biotechnology	$	417	$	691	$	1,493	$	2,315
Life Sciences	313		354		974		1,022
Diagnostics	539		761		1,640		2,447
Environmental & Applied Solutions	286		286		887		829
Other	(117)		(77)		(333)		(221)
Total	$	1,438	$	2,015	$	4,661	$	6,392

NOTE 7. INCOME TAXES

The following table summarizes the Company’s effective tax rate:


	Three-Month Period Ended				Nine-Month Period Ended
	September 29, 2023		September 30, 2022		September 29, 2023		September 30, 2022
Effective tax rate	19.2	%	18.6	%	19.7	%	18.4	%

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The Company operates globally, including in certain jurisdictions with lower tax rates than the United States (“U.S.”) federal statutory rate. Therefore, the impact of operating in such jurisdictions contributes to a lower effective tax rate compared to the U.S. federal statutory tax rate.

The effective tax rate for the three-month period ended September 29, 2023 differs from ~~discontinued operations~~the U.S. federal statutory rate of 21.0% due to the geographic mix of earnings described above. Discrete tax benefits from excess tax benefits from stock-based compensation were offset by charges related to tax costs related to the separation of the Environmental & Applied Solutions business and changes in estimates associated with prior period uncertain tax positions.

The effective tax rate for the nine-month period ended September 29, 2023 differs from the U.S. federal statutory rate of 21.0% principally due to the geographic mix of earnings described above, partially offset by net discrete tax charges of $13 million. Net discrete tax charges related primarily to tax costs related to the separation of the Environmental & Applied Solutions business, tax costs related to legal and operational actions taken to realign certain businesses and changes in estimates associated with prior period uncertain tax positions, partially offset by excess tax benefits from stock-based compensation and interest on prior year tax refunds. The net discrete charges increased the effective tax rate by 0.3% for the nine-month period ended September 29, 2023.

The effective tax rate for the three-month period ended September 30, 2022 differs from the U.S. federal statutory rate of 21.0% principally due to the geographic mix of earnings described above and net discrete benefits of $3 million related primarily to excess tax benefits from stock-based compensation, partially offset by changes in estimates associated with prior period uncertain tax positions. The net discrete benefits reduced the effective tax rate by 0.2% for the three-month period ended September 30, 2022.

The effective tax rate for the nine-month period ended September 30, 2022 differs from the U.S. federal statutory rate of 21.0% principally due the geographic mix of earnings described above and net discrete benefits of $52 million related primarily to excess tax benefits from stock-based compensation and changes in estimates associated with prior period uncertain tax positions. The net discrete benefits reduced the effective tax rate by 0.9% for the nine-month period ended September 30, 2022.

In the fourth quarter of 2022, the U.S. Internal Revenue Service (“IRS”) proposed significant adjustments to the Company’s taxable income for the years 2016 through 2018 with respect to the deferral of tax on certain premium income related to the Company’s self-insurance programs. For income tax purposes, the recognition of premium income has been deferred in accordance with U.S. tax laws related to insurance. The IRS challenged the deferral of premium income for certain types of the Company’s self-insurance policies. The proposed adjustments would have increased the Company’s taxable income over the 2016 through 2018 periods by approximately $2.5 billion. In the first quarter of 2023, the Company settled these proposed adjustments with the IRS, although the audit is still open with respect to other matters for the 2016 through 2018 period. The impact of the settlement with respect to the Company’s self-insurance policies was not material to the Company’s financial statements, including cash flows and the ~~nine-month~~effective tax rate. As the settlement with the IRS was specific to the audit period, the settlement does not preclude the IRS from proposing similar adjustments to the Company’s self-insurance programs with respect to periods subsequent to 2018. Management believes the positions the Company has taken in its U.S. tax returns are in accordance with the relevant tax laws.

For a description of the Company’s significant tax matters, reference is made to the financial statements as of and for the year ended ~~September 29, 2017~~December 31, 2022 and ~~September 30, 2016 were as follows~~Note 7 thereto included in the Company’s 2022 Annual Report.

NOTE 8. OTHER INCOME (EXPENSE), NET

The following sets forth the components of the Company’s other income (expense), net ($ in millions):


	Three-Month Period Ended				Nine-Month Period Ended
	September 29, 2023		September 30, 2022		September 29, 2023		September 30, 2022
Other components of net periodic benefit costs	$	1	$	13	$	6	$	28
Investment gains (losses):
Realized investment gains (losses)	120		27		120		91
Unrealized investment gains (losses)	(168)		(91)		(178)		(277)
Total investment gains (losses)	(48)		(64)		(58)		(186)

Total other income (expense), net	$	(47)	$	(51)	$	(52)	$	(158)

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Three-Month Period Ended Nine-Month Period Ended
September 30, 2016 September 29, 2017 September 30, 2016
Sales $ —
$ —
$ 3,029.8
Cost of sales —
—
(1,566.4 )
Selling, general and administrative expenses (16.4 ) —
(696.0 )
Research and development expenses —
—
(190.4 )
Interest expense —
—
(19.7 )
Earnings from discontinued operations before income taxes (16.4 ) —
557.3
Income taxes 5.4
22.3
(157.0 )
Earnings from discontinued operations, net of income taxes $ (11.0 ) $ 22.3
$ 400.3
Other Components of Net Periodic Benefit Costs

The Company disaggregates the service cost component of net periodic benefit costs of noncontributory defined benefit pension plans and other postretirement employee benefit plans and presents the other components of net periodic benefit costs in other income (expense), net. These other components of net periodic benefit costs include the assumed rate of return on plan assets, partially offset by amortization of actuarial losses and interest. The Company’s net periodic benefit costs for the nine-month period ended September 30, 2022 included a settlement loss of $10 million ($9 million after-tax) as a result of the transfer of a portion of its non-U.S. pension liabilities related to one defined benefit plan to a third-party.

Investment Gains (Losses)

The Company estimates the fair value of its investments in equity securities using the Fair Value Alternative and records adjustments to fair value within net earnings. Additionally, the Company is a limited partner in partnerships that invest primarily in early-stage companies. While the partnerships record these investments at fair value, the Company’s investments in the partnerships are accounted for under the equity method of accounting. The investment gains (losses) include realized and unrealized gains and losses related to changes in the fair value of the Company’s investments in equity securities and the Company’s equity in earnings of the partnerships that reflect the changes in fair value of the investments of the partnerships, and related management fees and operating expenses. In addition, the Company recorded an impairment of $46 million ($35 million after-tax) related to equity method investments that is reflected in unrealized investment gains (losses) for the nine-month period ended September 29, 2023.

NOTE 4. 9. GOODWILL AND OTHER INTANGIBLE ASSETS

The following is a rollforward of the Company’s goodwill ($ in millions):


Balance, December 31, 2022	$	39,752


Adjustments due to finalization of purchase price allocations	(2)
Foreign currency translation and other	(595)
Balance, September 29, 2023	$	39,155

Balance, December 31, 2016 $ 23,826.9
Attributable to 2017 acquisitions 73.2
Adjustments due to finalization of purchase price allocations (71.3 )
Foreign currency translation and other 955.0
Balance, September 29, 2017 $ 24,783.8

The carrying value of goodwill by segment is summarized as follows ($ in millions):

September 29, 2017 December 31, 2016
Life Sciences $ 12,153.9
$ 11,610.3
Diagnostics 7,049.0
6,903.0
Dental 3,341.1
3,215.6
Environmental & Applied Solutions 2,239.8
2,098.0
Total $ 24,783.8
$ 23,826.9


	September 29, 2023		December 31, 2022
Biotechnology	$	21,643	$	22,087
Life Sciences	8,227		8,314
Diagnostics	6,805		6,875
Environmental & Applied Solutions	2,480		2,476
Total	$	39,155	$	39,752

The Company has not identified any “triggering” events which indicate ~~a potential~~an impairment of goodwill in 2023.

The Company reviews identified intangible assets for impairment whenever events or changes in circumstances indicate that the related carrying amounts may not be recoverable. The Company identified impairment triggers during the second and third quarters of 2023 and the second quarter of 2022 which resulted in the impairment charges of certain long-lived assets, including technology, customer relationships and trade names. The Company recorded impairment charges totaling $6 million and $40 million in the three and nine-month periods ended September 29, 2023, respectively, and $9 million in the nine-month period ended September ~~29, 2017.~~

~~NOTE 5. FAIR VALUE MEASUREMENTS~~

the inputs into three broad levels as follows. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets in markets that are not active, or other observable characteristics for the asset or liability, including interest rates, yield curves and credit risks, or inputs that are derived principally from, or corroborated by, observable market data through correlation. Level 3 inputs are unobservable inputs based on the Company’s assumptions. A financial asset or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement in its entirety.

~~A summary of financial assets and liabilities that are measured at fair value on a recurring basis were as follows ($ in millions):~~

Quoted Prices in Active Market (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total
September 29, 2017:
Assets:
Available-for-sale securities $ 143.6
$ 47.1
$ —
$ 190.7
Liabilities:
Deferred compensation plans —
59.3
—
59.3

December 31, 2016:
Assets:
Available-for-sale securities $ 117.8
$ 52.3
$ —
$ 170.1
Liabilities:
Deferred compensation plans —
52.2
—
52.2

Available-for-sale securities, which are included in other long-term assets in the accompanying Consolidated Condensed Balance Sheets, are either measured at fair value using quoted market prices in an active market or if they are not traded on an active market are valued at quoted prices reported by investment brokers and dealers based on the underlying terms of the security and comparison to similar securities traded on an active market.

The Company has established nonqualified deferred compensation programs that permit officers, directors and certain management employees to defer a portion of their compensation, on a pretax basis, until at or after their termination of employment (or board service, as applicable). All amounts deferred under such plans are unfunded, unsecured obligations of the Company and are presented as a component of the Company’s compensation and benefits accrual included in other long-term liabilities in the accompanying Consolidated Condensed Balance Sheets. Participants may choose among alternative earning rates for the amounts they defer, which are primarily based on investment options within the Company’s 401(k) program (except that the earnings rates for amounts deferred by the Company’s directors and amounts contributed unilaterally by the Company are entirely based on changes in the value of the Company’s common stock). Changes in the deferred compensation liability under these ~~programs are recognized based on changes in the fair value of the participants’ accounts, which are based on the applicable earnings rates.~~

~~Fair Value of Financial Instruments~~

~~The carrying amounts and fair values of the Company’s financial instruments were as follows ($ in millions):~~

September 29, 2017 December 31, 2016
Carrying Amount Fair Value Carrying Amount Fair Value
Assets:
Available-for-sale securities $ 190.7
$ 190.7
$ 170.1
$ 170.1
Liabilities:
Notes payable and current portion of long-term debt 182.2
182.2
2,594.8
2,594.8
Long-term debt 10,726.8
11,181.4
9,674.2
10,095.1

As of September 29, 2017 and December 31, 2016, available-for-sale securities were categorized as Level 1 and Level 2, as indicated above, and short and long-term borrowings were categorized as Level 1.

The fair value of long-term borrowings was based on quoted market prices. The difference between the fair value and the carrying amounts of long-term borrowings (other than the Company’s Liquid Yield Option Notes due 2021 (the “LYONs”)) is attributable to changes in market interest rates and/or the Company’s credit ratings subsequent to the incurrence of the borrowing. In the case of the LYONs, differences in the fair value from the carrying value are attributable to changes in the price of the Company’s common stock due to the LYONs’ conversion features. The fair values of borrowings with original maturities of one year or less, as well as cash and cash equivalents, trade accounts receivable, net and trade accounts payable approximate their carrying amounts due to the short-term maturities of these instruments.

~~NOTE 6. FINANCING~~

~~As of September 29, 2017, the Company was in compliance with all of its debt covenants. The components of the Company’s debt were as follows ($ in millions):~~

September 29, 2017 December 31, 2016
U.S. dollar-denominated commercial paper $ 190.0
$ 2,733.5
Euro-denominated commercial paper (€2.3 billion and €3.0 billion, respectively) 2,692.1
3,127.6
Floating rate senior unsecured notes due 2017 (€500.0 million aggregate principal amount) (the “2017 Euronotes”) —
526.0
0.0% senior unsecured bonds due 2017 (CHF 100.0 million aggregate principal amount) (the “2017 CHF Bonds”) 103.1
98.0
1.65% senior unsecured notes due 2018 499.0
498.1
1.0% senior unsecured notes due 2019 (€600.0 million aggregate principal amount) (the “2019 Euronotes”) 706.9
628.6
2.4% senior unsecured notes due 2020 497.5
496.8
5.0% senior unsecured notes due 2020 398.5
402.6
Zero-coupon Liquid Yield Option Notes (LYONs) due 2021 68.7
68.1
0.352% senior unsecured notes due 2021 (¥30.0 billion aggregate principal amount) (the “2021 Yen Notes”) 265.7
255.6
1.7% senior unsecured notes due 2022 (€800.0 million aggregate principal amount) (the “2022 Euronotes”) 940.5
836.5
Floating rate senior unsecured notes due 2022 (€250.0 million aggregate principal amount) (the “Floating Rate 2022 Euronotes”) 294.4
—
0.5% senior unsecured bonds due 2023 (CHF 540.0 million aggregate principal amount) (the “2023 CHF Bonds”) 559.6
532.3
2.5% senior unsecured notes due 2025 (€800.0 million aggregate principal amount) (the “2025 Euronotes”) 940.5
836.8
3.35% senior unsecured notes due 2025 496.2
495.8
0.3% senior unsecured notes due 2027 (¥30.8 billion aggregate principal amount) (the “2027 Yen Notes”) 272.5
—
1.2% senior unsecured notes due 2027 (€600.0 million aggregate principal amount) (the “2027 Euronotes”) 702.8
—
1.125% senior unsecured bonds due 2028 (CHF 110.0 million aggregate principal amount) (the “2028 CHF Bonds”) 114.4
108.8
0.65% senior unsecured notes due 2032 (¥53.2 billion aggregate principal amount) (the “2032 Yen Notes”) 470.6
—
4.375% senior unsecured notes due 2045 499.3
499.3
Other 196.7
124.6
Total debt 10,909.0
12,269.0
Less: currently payable 182.2
2,594.8
Long-term debt $ 10,726.8
$ 9,674.2

For additional details regarding the Company’s debt financing, reference is made to Note 9 of the Company’s financial statements as of and for the year ended December 31, 2016 included in the Company’s 2016 Annual Report.

The Company satisfies any short-term liquidity needs that are not met through operating cash flow and available cash primarily through issuances of commercial paper under its U.S. dollar and euro-denominated commercial paper programs. Credit support for the commercial paper programs is generally provided by the Company’s $4.0 billion unsecured, multi-year revolving credit facility with a syndicate of banks that expires on July 10, 2020 (the “Credit Facility”), which can also be used for working capital and other general corporate purposes. In October 2016, the Company expanded its borrowing capacity by entering into a $3.0 billion 364-day unsecured revolving credit facility with a syndicate of banks that expires on October 23, 2017 (the “364-Day Facility” and together with the Credit Facility, the “Credit Facilities”), to provide additional liquidity support for issuances under the Company’s U.S. dollar and euro-denominated commercial paper programs.

Effective April 21, 2017, the Company reduced the commitment amount under the 364-Day Facility from $3.0 billion to $2.3 billion, and effective June 23, 2017, the Company further reduced the commitment amount under the facility to $1.0 billion, as permitted by the facility. As of September 29, 2017, no borrowings were outstanding under the Credit Facilities, and the Company was in compliance with all covenants thereunder.long-lived assets. In addition, ~~to the Credit Facilities, the Company has also entered into reimbursement agreements with various commercial banks to support the issuance of letters of credit.~~

As of September 29, 2017, borrowings outstanding under the Company’s U.S. dollar and euro-denominated commercial paper programs had a weighted average annual interest rate of negative 0.2% and a weighted average remaining maturity of approximately 64 days.

The Company has classified approximately $2.9 billion of its borrowings outstanding under the commercial paper programs as of September 29, 2017 as long-term debt in the accompanying Consolidated Condensed Balance Sheet as the Company had the intent and ability, as supported by availability under the Credit Facility, to refinance these borrowings for at least one year from the balance sheet date.

Debt discounts, premiums and debt issuance costs totaled $31 million and $25 million as of September 29, 2017 and December 31, 2016, respectively, and have been netted against the aggregate principal amounts of the related debt in the components of debt table above.

~~2017 Long-Term Debt Issuances~~

On May 11, 2017, DH Japan Finance S.A. (“Danaher Japan”), a wholly-owned finance subsidiary of the Company, completed the private placement of ¥30.8 billion aggregate principal amount of 0.3% senior unsecured notes due May 11, 2027 (the “2027 Yen Notes”) and ¥53.2 billion aggregate principal amount of 0.65% senior unsecured notes due May 11, 2032 (the “2032 Yen Notes” and together with the 2027 Yen Notes, the “Yen Notes”). The Yen Notes were issued at 100% of their principal amount.

The Yen Notes are fully and unconditionally guaranteed by the Company. The Company received net proceeds, after offering expenses, of approximately ¥83.6 billion (approximately $744 million based on currency exchange rates as of the date of the pricing of the notes) and used the net proceeds from the offering to partially repay commercial paper borrowings. Interest on the Yen Notes is payable semiannually in arrears on May 11 and November 11 of each year, commencing on November 11, 2017.

On June 30, 2017, DH Europe Finance S.A. (“Danaher International”), a wholly-owned finance subsidiary of the Company, completed the underwritten public offering of €250 million aggregate principal amount of floating rate, senior unsecured notes due 2022 (the “2022 Floating Rate Euronotes”) and €600 million aggregate principal amount of 1.2% senior unsecured notes due 2027 (the “2027 Euronotes” and together with the 2022 Floating Rate Euronotes, the “Euronotes”). The 2022 Floating Rate Euronotes were issued at 100.147% of their principal amount, will mature on June 30, 2022 and bear interest at a floating rate equal to three-month EURIBOR plus 0.3% per year (provided that the minimum interest rate is zero). The 2027 Euronotes were issued at 99.682% of their principal amount, will mature on June 30, 2027 and bear interest at the rate of 1.2% per year.

The Euronotes are fully and unconditionally guaranteed by the Company. The Company received net proceeds, after underwriting discounts and commissions and offering expenses, of €843 million (approximately $940 million based on currency exchange rates as of the date of the pricing of the notes) and used the net proceeds from the offering to repay the €500 million aggregate principal amount of floating rate senior unsecured notes which matured on June 30, 2017 as well as to repay commercial paper borrowings. Interest on the 2022 Floating Rate Euronotes is payable quarterly in arrears on March 31, June 30, September 30 and December 31 of each year, commencing on September 30, 2017. Interest on the 2027 Euronotes is payable annually in arrears on June 30 of each year, commencing on June 30, 2018.

The note purchase agreement under which the Yen Notes were issued, and the indenture under which the Euronotes were issued, each contain customary covenants, all of which the Company was in compliance with as of September 29, 2017.

If a change of control triggering event occurs with respect to the Euronotes or the Yen Notes, each holder of such notes may require the Company to repurchase some or all of its notes at a purchase price equal to 101% (in the case of the Euronotes) or 100% (in the case of the Yen Notes) of the principal amount of the notes, plus accrued and unpaid interest (and in the case of the Yen Notes, certain swap-related losses as applicable). A change of control triggering event means the occurrence of both a change of control and a rating event, each as defined in the applicable indenture or note purchase agreement. Each holder of the Yen Notes may also require the Company to repurchase some or all of its notes at a purchase price equal to 100% of the principal amount of the notes, plus accrued and unpaid interest and certain swap-related losses as applicable, in certain circumstances whereby such holder comes into violation of economic sanctions laws as a result of holding such notes.

At any time and from time to time prior to March 30, 2027 (three months prior to the maturity date of the 2027 Notes), the Company may redeem the 2027 Notes, in whole or in part, by paying the principal amount and a “make-whole” premium, plus accrued and unpaid interest. In addition, on or after March 30, 2027, the Company will have the right, at its option, to redeem the 2027 Notes, in whole or in part, at any time and from time to time, by paying the principal amount plus accrued and unpaid interest. At any time and from time to time, the Company may redeem the Yen Notes, in whole or in part, by paying the principal amount and a “make-whole” premium, plus accrued and unpaid interest and net of certain swap-related gains or losses as applicable. The Company may also redeem the Euronotes and the Yen Notes upon the occurrence of specified, adverse changes in tax laws, or interpretations under such laws, at a redemption price equal to the principal amount of the notes to be redeemed.

~~2017 Long-Term Debt Repayments~~

~~The €500 million aggregate principal amount of floating rate senior unsecured notes due in 2017 were repaid upon their maturity in June 2017.~~

~~Guarantors of Debt~~

Danaher has guaranteed long-term debt and commercial paper issued by certain of its wholly-owned subsidiaries. The 2017 Euronotes, 2019 Euronotes, 2022 Euronotes, 2022 Floating Rate Euronotes, 2025 Euronotes and 2027 Euronotes were issued by Danaher International. The 2017 CHF Bonds, 2023 CHF Bonds and 2028 CHF Bonds were issued by DH Switzerland Finance S.A. (“Danaher Switzerland”), a wholly-owned finance subsidiary of the Company. The 2021 Yen Notes, 2027 Yen Notes and 2032 Yen Notes were issued by Danaher Japan. All securities issued by each of Danaher International, Danaher Switzerland and Danaher Japan are fully and unconditionally guaranteed by the Company and these guarantees rank on parity with the Company’s unsecured and unsubordinated indebtedness.

~~LYONs Redemption~~

~~During~~during the nine-month period ended September 29, ~~2017, holders of certain of~~2023, the Company’s LYONs converted such LYONs into an aggregate of approximately 27 thousand shares of the Company’s common stock, par value $0.01 per share. The Company’s deferred tax liability associated with the book and tax basis difference in the converted LYONs was transferredCompany recorded a $14 million impairment related to ~~additional paid-in capital as~~ a ~~result of the conversions.~~facility.

NOTE 7.10. FAIR VALUE MEASUREMENTS

Accounting standards define fair value based on an exit price model, establish a framework for measuring fair value where the Company’s assets and liabilities are required to be carried at fair value and provide for certain disclosures related to the valuation methods used within a valuation hierarchy as established within the accounting standards. This hierarchy prioritizes the inputs into three broad levels as follows. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets in markets that are not active, or other observable characteristics for the asset or liability, including interest rates, yield curves and credit risks, or inputs that are derived principally from, or corroborated by, observable market data through correlation. Level 3 inputs are unobservable inputs based on the Company’s assumptions. A financial asset or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement in its entirety.

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A summary of financial assets that are measured at fair value on a recurring basis were as follows ($ in millions):


	Balance				Quoted Prices in Active Market (Level 1)				Significant Other Observable Inputs (Level 2)				Significant Unobservable Inputs (Level 3)
	September 29, 2023		December 31, 2022		September 29, 2023		December 31, 2022		September 29, 2023		December 31, 2022		September 29, 2023		December 31, 2022
Assets:
Available-for-sale debt securities	$	4	$	11	$	—	$	—	$	4	$	11	$	—	$	—
Investment in equity securities	444		315		131		16		—		—		—		—
Cross-currency swap derivative contracts	547		653		—		—		547		653		—		—

Available-for-sale debt securities, which are included in other long-term assets in the accompanying Consolidated Condensed Balance Sheets, are measured at fair value using quoted prices reported by investment brokers and dealers based on the underlying terms of the security and comparison to similar securities traded on an active market. As of September 29, 2023 and December 31, 2022, available-for-sale debt securities primarily included U.S. Treasury Notes and corporate debt securities.

The Company’s investments in equity securities consist of investments in publicly traded equity securities and investments in non-marketable equity securities. The publicly traded securities are classified as Level 1 in the fair value hierarchy as they are measured based on quotes in active markets. For the non-marketable equity securities, the Company estimates the fair value of the investments in equity securities based on the measurement alternative and adjusts for impairments and observable price changes with a same or similar security from the same issuer within net earnings (the “Fair Value Alternative”). The Company’s investments in these equity securities are not classified in the fair value hierarchy due to the use of these measurement methods. Additionally, the Company is a limited partner in partnerships that invest primarily in early-stage companies. While the partnerships record these investments at fair value, the Company’s investments in the partnerships are accounted for under the equity method of accounting and are not subject to fair value measurement disclosures noted above. As of both September 29, 2023 and December 31, 2022, the Company’s equity method investments included investments in partnerships with a carrying value of approximately $1.5 billion. Refer to Note 8 for additional information on gains and losses on the Company’s investments including investments in the partnerships.

The cross-currency swap derivative contracts are used to partially hedge the Company’s net investments in non-U.S. operations against adverse movements in exchange rates between the U.S. dollar and the Danish kroner, Japanese yen, euro and Swiss franc. The Company also uses cross-currency swap derivative contracts to hedge the exchange rate exposure from long-term debt issuances in a foreign currency other than the functional currency of the borrower. The cross-currency swap derivative contracts are classified as Level 2 in the fair value hierarchy as they are measured using the income approach with the relevant interest rates and current foreign currency exchange rates and forward curves as inputs. Refer to Note 12 for additional information.

Fair Value of Other Financial Instruments

The carrying amounts and fair values of the Company’s other financial instruments were as follows ($ in millions):


	September 29, 2023				December 31, 2022
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Debt obligations:
Notes payable and current portion of long-term debt	$	2,547	$	2,534	$	591	$	584
Long-term debt	19,513		16,245		19,086		16,079

As of September 29, 2023 and December 31, 2022, short and long-term borrowings were categorized as Level 1. The fair value of long-term borrowings was based on quoted market prices. The difference between the fair value and the carrying amounts of long-term borrowings is attributable to changes in market interest rates and/or the Company’s credit ratings subsequent to the incurrence of the borrowing. The fair values of borrowings with original maturities of one year or less, as well as cash and cash equivalents, trade accounts receivable, net and trade accounts payable generally approximate their carrying amounts due to the short-term maturities of these instruments.

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NOTE 11. FINANCING

As of September 29, 2023, the Company was in compliance with all of its debt covenants. The components of the Company’s debt were as follows ($ in millions):


	Outstanding Amount
Description and Aggregate Principal Amount	September 29, 2023		December 31, 2022




Euro-denominated commercial paper (€1.9 billion)(e)	$	1,982	$	2,013


0.5% senior unsecured bonds due 12/08/2023 (CHF 540 million) (the “2023 CHF Bonds”)(c)	590		584
1.7% senior unsecured notes due 3/30/2024 (€900 million) (the “2024 Euronotes”)(f)	951		962

2.2% senior unsecured notes due 11/15/2024 ($700 million) (the “2024 Biopharma Notes”)(b)	699		698
3.35% senior unsecured notes due 9/15/2025 ($500 million) (the “2025 U.S. Notes”)(f)	499		499
0.2% senior unsecured notes due 3/18/2026 (€1.3 billion) (the “2026 Biopharma Euronotes”)(b)	1,317		1,333
2.1% senior unsecured notes due 9/30/2026 (€800 million) (the “2026 Euronotes”)(f)	844		854
0.3% senior unsecured notes due 5/11/2027 (¥30.8 billion) (the “2027 Yen Notes”)(d)	206		234
1.2% senior unsecured notes due 6/30/2027 (€600 million) (the “2027 Euronotes”)(a)	632		639
0.45% senior unsecured notes due 3/18/2028 (€1.3 billion) (the “2028 Biopharma Euronotes”)(b)	1,315		1,331
1.125% senior unsecured bonds due 12/08/2028 (CHF 210 million) (the “2028 CHF Bonds”)(c)	232		230
2.6% senior unsecured notes due 11/15/2029 ($800 million) (the “2029 Biopharma Notes”)(b)	796		796
2.5% senior unsecured notes due 3/30/2030 (€800 million) (the “2030 Euronotes”)(f)	846		856
0.75% senior unsecured notes due 9/18/2031 (€1.8 billion) (the “2031 Biopharma Euronotes”)(b)	1,841		1,863
0.65% senior unsecured notes due 5/11/2032 (¥53.2 billion) (the “2032 Yen Notes”)(d)	355		404
1.35% senior unsecured notes due 9/18/2039 (€1.3 billion) (the “2039 Biopharma Euronotes”)(b)	1,307		1,323
3.25% senior unsecured notes due 11/15/2039 ($900 million) (the “2039 Biopharma Notes”)(b)	891		890
4.375% senior unsecured notes due 9/15/2045 ($500 million) (the “2045 U.S. Notes”)(f)	499		499
1.8% senior unsecured notes due 9/18/2049 (€750 million) (the “2049 Biopharma Euronotes”)(b)	784		794
3.4% senior unsecured notes due 11/15/2049 ($900 million) (the “2049 Biopharma Notes”)(b)	890		889
2.6% senior unsecured notes due 10/01/2050 ($1.0 billion) (the “2050 U.S. Notes”)(f)	981		981
2.8% senior unsecured notes due 12/10/2051 ($1.0 billion) (the “2051 U.S. Notes”)(f)	984		984
Other	15		21
Subtotal	$	19,456	$	19,677
Veralto debt:
5.50% senior unsecured bonds due 9/18/2026 ($700 million) (the “2026 Veralto Bonds”)(g)	695		—
5.35% senior unsecured bonds due 9/18/2028 ($700 million) (the “2028 Veralto Bonds”)(g)	694		—
4.15% senior unsecured bonds due 9/19/2031 (€500 million) (the “2031 Veralto Bonds”)(g)	523		—
5.45% senior unsecured bonds due 9/18/2033 ($700 million) (the “2033 Veralto Bonds”)(g)	692		—


Total Veralto debt	$	2,604	$	—
Total debt	22,060		19,677
Less: currently payable	(2,547)		(591)
Long-term debt	$	19,513	$	19,086

(a) Issued by DH Europe Finance S.A. (“Danaher International”).

(b) Issued by DH Europe Finance II S.a.r.l. (“Danaher International II”).

(d) Issued by DH Japan Finance S.A. (“Danaher Japan”).

(e) Issued by Danaher Corporation or Danaher International II.

(f) Issued by Danaher Corporation.

(g) Issued by Veralto Corporation.

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Debt discounts, premiums and debt issuance costs totaled $135 million and $118 million as of September 29, 2023 and December 31, 2022, respectively, and have been netted against the aggregate principal amounts of the related debt in the components of debt table above. For additional details regarding the Company’s debt financing, refer to Note 14 of the Company’s financial statements as of and for the year ended December 31, 2022 included in the Company’s 2022 Annual Report.

The Company has historically satisfied short-term liquidity needs that are not met through operating cash flow and available cash primarily through issuances of commercial paper under its U.S. dollar and euro-denominated commercial paper programs.

As of September 29, 2023, borrowings outstanding under the Company’s euro-denominated commercial paper program had a weighted average annual interest rate of 4.0% and a weighted average remaining maturity of approximately 38 days.

Revolving Credit Facility

On August 11, 2023, the Company replaced its existing $5.0 billion unsecured, multiyear revolving credit facility with a third amended and restated $5.0 billion unsecured, multiyear revolving credit facility (the “Credit Facility”) with a syndicate of lenders. The Credit Facility expires on August 11, 2028, subject to a one-year extension option at the request of Danaher and with the consent of the lenders. The Credit Facility also contains an expansion option permitting Danaher to request up to five increases of up to an aggregate additional $2.5 billion from lenders that elect to make such increase available, upon the satisfaction of certain conditions. No borrowings were outstanding under the existing credit facility at the time it was replaced with the Credit Facility.

Borrowings under the Credit Facility bear interest as follows: (i) in the case of borrowings denominated in U.S. dollars, (1) Term Secured Overnight Financing Rate (“SOFR”) Loans (as defined in the Credit Facility) bear interest at a variable rate equal to the Term SOFR (as defined in the Credit Facility) plus a margin of between 58.5 and 101.5 basis points, depending on Danaher’s long-term debt credit rating; (2) Base Rate Committed Loans and Swing Line Loans (each as defined in the Credit Facility) bear interest at a variable rate equal to the highest of (a) the Federal funds rate (as published by the Federal Reserve Bank of New York from time to time) plus 1/2 of 1%, (b) Bank of America’s “prime rate” as publicly announced from time to time, (c) Term SOFR (based on one-month interest period plus 1%) and (d) 1%, plus in each case a margin of between 0 to 1.5 basis points depending on Danaher’s long-term debt credit rating; and (ii) in the case of borrowings denominated in an Alternative Currency (as defined in the Credit Facility), Alternative Currency Loans and Swing Line Loans (each as defined in the Credit Facility) bear interest at the applicable variable benchmark rate plus, in each case, a margin of between 58.5 and 101.5 basis points, depending on Danaher’s long-term debt credit rating. In no event will Term SOFR Loans, Swing Line Loans or Alternative Currency Loans bear interest at a rate lower than 0.0%. In addition, Danaher is required to pay a per annum facility fee of between 4.0 and 11.0 basis points (depending on Danaher’s long-term debt credit rating) based on the aggregate commitments under the Credit Facility, regardless of usage.

The Credit Facility requires Danaher to maintain a Consolidated Leverage Ratio (as defined in the Credit Facility) of 0.65 to 1.00 or less. Borrowings under the Credit Facility are prepayable at Danaher’s option at any time in whole or in part without premium or penalty.

Danaher’s obligations under the Credit Facility are unsecured. Danaher has unconditionally and irrevocably guaranteed the obligations of each of its subsidiaries in the event a subsidiary is named a borrower under the Credit Facility. The Credit Facility contains customary representations, warranties, conditions precedent, events of default, indemnities and affirmative and negative covenants. Danaher intends to use the Credit Facility for liquidity support for Danaher’s U.S. dollar and euro-denominated commercial paper programs and for general corporate purposes.

Indebtedness Related to the Veralto Separation

In September 2023, the Company received net cash distributions of approximately $2.6 billion from Veralto as partial consideration for the Company’s contribution of assets to Veralto in connection with the Separation. Veralto financed these cash payments through the issuance of approximately $2.6 billion of debt, consisting of $700 million aggregate principal amount of 5.50% senior unsecured bonds due 2026, $700 million aggregate principal amount of 5.35% senior unsecured bonds due 2028, $700 million aggregate principal amount of 5.45% senior unsecured bonds due 2033 and €500 million aggregate principal amount of 4.15% senior unsecured bonds due 2031 (collectively, the “Veralto Debt”). Danaher initially guaranteed the Veralto Debt, and the guarantee automatically terminated effective as of the Distribution Date. As of September 29, 2023, Veralto was a wholly-owned, consolidated subsidiary of the Company, and as a result, the Company’s Consolidated Balance Sheet as of September 29, 2023 includes the Veralto Debt. The transfer of the liabilities associated with the Veralto Debt, as well as all other assets and liabilities transferred to Veralto, will be reflected in the Company's financial statements in the fourth quarter of 2023.

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In addition, Veralto Corporation entered into a revolving credit agreement with a syndicate of lenders providing for a five-year $1.5 billion unsecured revolving credit facility (the “Veralto Credit Facility”). No amounts were outstanding under the Veralto Credit Facility at any time prior to the Separation. As of September 29, 2023, Veralto was in compliance with all covenants under the Veralto Credit Facility.

Guarantors of Debt

The Company has guaranteed long-term debt and commercial paper issued by certain of its wholly-owned finance subsidiaries: Danaher International, Danaher International II, Danaher Switzerland and Danaher Japan. All of the outstanding and future securities issued by each of these entities are or will be fully and unconditionally guaranteed by the Company and these guarantees rank on parity with the Company’s unsecured and unsubordinated indebtedness. In addition, prior to the Separation, the Company guaranteed the long-term debt issued by Veralto Corporation. This guarantee terminated as of the time of the Separation.

NOTE 12. HEDGING TRANSACTIONS AND DERIVATIVE FINANCIAL INSTRUMENTS

The Company uses cross-currency swap derivative contracts to partially hedge its net investments in non-U.S. operations against adverse movements in exchange rates between the U.S. dollar and the Danish kroner, Japanese yen, euro and Swiss franc. The cross-currency swap derivative contracts are agreements to exchange fixed-rate payments in one currency for fixed-rate payments in another currency. These contracts effectively convert U.S. dollar-denominated bonds to obligations denominated in Danish kroner, Japanese yen, euro and Swiss franc, and partially offset the impact of changes in currency rates on the Company’s foreign currency denominated net investments. These contracts also reduce the interest rate from the stated interest rates on the U.S. dollar-denominated debt to the interest rates of the swaps. The changes in the spot rate of these instruments are recorded in accumulated other comprehensive income (loss) in stockholders’ equity, partially offsetting the foreign currency translation adjustment of the Company’s related net investment that is also recorded in accumulated other comprehensive income (loss). The interest income or expense from these swaps are recorded in interest expense in the accompanying Consolidated Condensed Statements of Earnings consistent with the classification of interest expense attributable to the underlying debt. These instruments mature on dates ranging from September 2025 to November 2032.

The Company also uses cross-currency swap derivative contracts to hedge U.S. dollar-denominated long-term debt issuances in a foreign subsidiary whose functional currency is the euro against adverse movements in exchange rates between the U.S. dollar and the euro. These contracts effectively convert these U.S. dollar-denominated bonds to obligations denominated in euro. The changes in the fair value of these instruments are recorded in accumulated other comprehensive income (loss), with a reclassification from accumulated other comprehensive income (loss) to net earnings to offset the remeasurement of the hedged debt that is also recorded in net earnings. The interest income or expense from these swaps are recorded in interest expense in the accompanying Consolidated Condensed Statements of Earnings consistent with the classification of interest expense attributable to the underlying debt. These instruments mature on dates ranging from November 2024 to November 2049.

The Company has also issued foreign currency denominated long-term debt as partial hedges of its net investments in foreign operations against adverse movements in exchange rates between the U.S. dollar and the euro, Japanese yen and Swiss franc. These foreign currency denominated long-term debt issuances are designated and qualify as nonderivative hedging instruments. Accordingly, the foreign currency translation of these debt instruments is recorded in accumulated other comprehensive income (loss), offsetting the foreign currency translation adjustment of the Company’s related net investment that is also recorded in accumulated other comprehensive income (loss). These instruments mature on dates ranging from October 2023 to May 2032.

The Company used interest rate swap agreements to hedge the variability in cash flows due to changes in benchmark interest rates related to a portion of the U.S. debt the Company issued to fund the acquisition of Cytiva and a portion of the 2051 U.S. Notes. These contracts effectively fixed the interest rate for a portion of the Company’s U.S. dollar-denominated debt equal to the notional amount of the swaps to the rate specified in the interest rate swap agreements and were settled in November 2019 and December 2021, respectively. The changes in the fair value of these instruments were recorded in accumulated other comprehensive income (loss) prior to the issuance of the debt and are subsequently being reclassified to interest expense over the life of the related debt.

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The following table summarizes the notional values as of September 29, 2023 and September 30, 2022 and pretax impact of changes in the fair values of instruments designated as net investment hedges and cash flow hedges in accumulated other comprehensive income (“OCI”) for the three and nine-month periods ended September 29, 2023 and September 30, 2022 ($ in millions):


	Original Notional Amount		Notional Amount Outstanding		Gain (Loss) Recognized in OCI		Amounts Reclassified from OCI
For the Three-Month Period Ended September 29, 2023:
Net investment hedges:
Cross-currency contracts	$	3,875	$	3,000	$	28	$	—
Foreign currency denominated debt	6,179		6,179		181		—
Cash flow hedges:
Cross-currency contracts	4,000		3,300		22		(102)
Interest rate swaps	1,600		—		—		—
Total	$	15,654	$	12,479	$	231	$	(102)

For the Three-Month Period Ended September 30, 2022:
Net investment hedges:
Cross-currency contracts	$	3,875	$	3,000	$	127	$	—
Foreign currency denominated debt	5,522		5,522		174		—
Cash flow hedges:
Cross-currency contracts	4,000		4,000		214		(240)
Interest rate swaps	1,600		—		—		—
Total	$	14,997	$	12,522	$	515	$	(240)

For the Nine-Month Period Ended September 29, 2023:
Net investment hedges:
Cross-currency contracts	$	3,875	$	3,000	$	(38)	$	—
Foreign currency denominated debt	6,179		6,179		130		—
Cash flow hedges:
Cross-currency contracts	4,000		3,300		(68)		(39)
Interest rate swaps	1,600		—		—		2
Total	$	15,654	$	12,479	$	24	$	(37)

For the Nine-Month Period Ended September 30, 2022:
Net investment hedges:
Cross-currency contracts	$	3,875	$	3,000	$	394	$	—
Foreign currency denominated debt	5,522		5,522		569		—
Cash flow hedges:
Cross-currency contracts	4,000		4,000		720		(580)
Interest rate swaps	1,600		—		—		2
Total	$	14,997	$	12,522	$	1,683	$	(578)

Gains or losses related to the net investment hedges are classified as foreign currency translation adjustments in the schedule of changes in OCI in Note 15, as these items are attributable to the Company’s hedges of its net investment in foreign operations. Gains or losses related to the cash flow hedges are classified as cash flow hedge adjustments in the schedule of changes in OCI in Note 15. The amount reclassified from other comprehensive income (loss) for the cross-currency swap derivative contracts that are cash flow hedges of the Company’s U.S. dollar-denominated debt was equal to the remeasurement amount recorded in the three and nine-month periods on the hedged debt.

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The Company did not reclassify any other deferred gains or losses related to net investment hedges or cash flow hedges from accumulated other comprehensive income (loss) to earnings during the three and nine-month periods ended September 29, 2023 and September 30, 2022. In addition, the Company did not have any ineffectiveness related to net investment hedges or cash flow hedges during the three and nine-month periods ended September 29, 2023 and September 30, 2022, and, should they arise, any ineffective portions of the hedges would be reclassified from accumulated other comprehensive income (loss) into earnings during the period of change. The cash inflows and outflows associated with the Company’s derivative contracts designated as net investment hedges are classified in all other investing activities in the accompanying Consolidated Condensed Statements of Cash Flows. The cash inflows and outflows associated with the Company’s derivative contracts designated as cash flow hedges are classified in cash flows from operating activities in the accompanying Consolidated Condensed Statements of Cash Flows.

The Company’s derivative instruments, as well as its nonderivative debt instruments designated and qualifying as net investment hedges, were classified in the Company’s Consolidated Condensed Balance Sheets as follows ($ in millions):


	September 29, 2023		December 31, 2022
Derivative assets:

Other long-term assets	$	547	$	653




Nonderivative hedging instruments:
Notes payable and current portion of long-term debt	2,541		—
Long-term debt	3,638		5,777

Amounts related to the Company’s derivatives expected to be reclassified from accumulated other comprehensive income (loss) to net earnings during the next 12 months, if interest rates and foreign exchange rates remain unchanged, are not significant.

NOTE 13. DEFINED BENEFIT PLANS

The following sets forth the components of the Company’s net periodic benefit ~~cost~~costs of the noncontributory defined benefit pension plans ~~($ in millions):~~

Three-Month Period Ended Nine-Month Period Ended
September 29, 2017 September 30, 2016 September 29, 2017 September 30, 2016
U.S. Pension Benefits:
Service cost $ 1.9
$ 2.2
$ 5.7
$ 6.8
Interest cost 20.1
22.3
62.1
67.7
Expected return on plan assets (32.4 ) (33.0 ) (98.2 ) (99.6 )
Amortization of actuarial loss 5.9
6.3
19.1
18.3
Curtailment gain recognized —
—
—
(0.7 )
Net periodic pension cost $ (4.5 )
$ (2.2 )
$ (11.3 )
$ (7.5 )

Non-U.S. Pension Benefits:
Service cost $ 8.1
$ 9.0
$ 23.7
$ 26.9
Interest cost 6.7
8.4
19.5
25.8
Expected return on plan assets (10.8 ) (9.9 ) (31.5 ) (30.8 )
Amortization of actuarial loss 2.0
1.9
5.8
8.5
Amortization of prior service credit (0.1 ) (0.1 ) (0.3 ) (0.3 )
Settlement loss recognized —
—
—
0.1
Net periodic pension cost $ 5.9
$ 9.3
$ 17.2
$ 30.2

~~The following sets forth the components of the Company’s net periodic benefit cost of the~~and other postretirement employee benefit plans ($ in millions):


	Three-Month Period Ended				Nine-Month Period Ended
	September 29, 2023		September 30, 2022		September 29, 2023		September 30, 2022
U.S. pension benefits:
Service cost	$	—	$	—	$	—	$	—
Interest cost	(25)		(13)		(73)		(40)
Expected return on plan assets	31		32		94		97
Amortization of actuarial loss	(3)		(8)		(9)		(26)
Amortization of prior service cost	(1)		—		(1)		—

Net periodic pension benefit	$	2	$	11	$	11	$	31

Non-U.S. pension benefits:
Service cost	$	(8)	$	(10)	$	(24)	$	(29)
Interest cost	(12)		(6)		(37)		(18)
Expected return on plan assets	10		10		28		28
Amortization of actuarial gain (loss)	2		—		6		(1)
Amortization of prior service credit	—		1		1		1

Settlement losses recognized	—		(1)		—		(11)
Net periodic pension cost	$	(8)	$	(6)	$	(26)	$	(30)

Other postretirement employee benefit plans:
Service cost	$	—	$	—	$	—	$	—
Interest cost	(2)		(1)		(5)		(2)
Amortization of actuarial loss	—		(1)		—		(1)
Amortization of prior service credit	1		—		2		1
Net periodic benefit cost	$	(1)	$	(2)	$	(3)	$	(2)

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Three-Month Period Ended Nine-Month Period Ended
September 29, 2017 September 30, 2016 September 29, 2017 September 30, 2016
Service cost $ 0.1
$ 0.2
$ 0.5
$ 0.6
Interest cost 1.1
1.4
3.7
4.2
Amortization of actuarial (gain) loss —
(0.1 ) —
0.1
Amortization of prior service credit (0.8 ) (0.8 ) (2.4 ) (2.4 )
Net periodic benefit cost $ 0.4
$ 0.7
$ 1.8
$ 2.5

~~Net~~The service cost component of net periodic ~~pension and~~ benefit costs ~~are included~~is presented in cost of ~~sales~~goods sold and selling, general and administrative expenses while the other cost components are presented in other income (expense), net. The Company’s net periodic pension cost for the ~~accompanying Consolidated Condensed Statements~~nine-month period ended September 30, 2022 included a settlement loss of ~~Earnings.~~$10 million as a result of the transfer of a portion of its non-U.S. pension liabilities related to one defined benefit plan to a third-party.

Employer Contributions

During ~~2017,~~2023, the Company’s cash contribution requirements for its U.S. and non-U.S. defined benefit pension plans are ~~expected~~forecasted to be approximately ~~$55~~$10 million and ~~$40~~$39 million, respectively. The ultimate amounts to be contributed depend upon, among other things, legal requirements, underlying asset returns, the plan’s funded status, the anticipated tax deductibility of the contribution, local practices, market conditions, interest rates and other factors.

~~NOTE 8~~. ~~INCOME TAXES~~

The Company’s effective tax rate from continuing operations for the three and nine-month periods ended September 29, 2017 was 21.6% and 17.7%, respectively, as compared to 15.5% and 26.6% for the three and nine-month periods ended September 30, 2016, respectively.

The Company’s effective tax rate for 2017 and 2016 differs from the U.S. federal statutory rate of 35.0% due principally to the Company’s earnings outside the United States that are indefinitely reinvested and taxed at rates lower than the U.S. federal

statutory rate. The effective tax rate for the nine-month period ended September 29, 2017 includes a benefit from the release of reserves upon the expiration of statutes of limitations and audit settlements, excess tax benefits from stock-based compensation, as well as higher tax benefits from restructuring charges that are predominantly in the United States, which in aggregate decreased the reported tax rate by 3.3%. The effective tax rate for the three and nine-month periods ended September 30, 2016 includes a higher tax rate associated with the loss on the early extinguishment of borrowings during the third quarter of 2016 which lowered the effective tax rate by 6.0% and 1.0%, respectively. The effective tax rate for the nine-month periods ended September 30, 2016 also includes charges related to the repatriation of earnings and legal entity realignments associated with the Separation and higher tax rate on the gain from sale of marketable equity securities which in aggregate increased the effective tax rate by 6.6%.

Tax authorities in Denmark have raised significant issues related to interest accrued by certain of the Company’s subsidiaries. On December 10, 2013, the Company received assessments from the Danish tax authority (“SKAT”) totaling approximately DKK 1.5 billion including interest through September 29, 2017 (approximately $235 million based on the exchange rate as of September 29, 2017), imposing withholding tax relating to interest accrued in Denmark on borrowings from certain of the Company’s subsidiaries for the years 2004-2009. The Company is currently in discussions with SKAT and anticipates receiving an assessment for years 2010-2012 totaling approximately DKK 874 million including interest through September 29, 2017 (approximately $139 million based on the exchange rate as of September 29, 2017). Management believes the positions the Company has taken in Denmark are in accordance with the relevant tax laws and is vigorously defending its positions. The Company appealed these assessments to the National Tax Tribunal in 2014 and intends on pursuing this matter through the European Court of Justice should this appeal be unsuccessful. The ultimate resolution of this matter is uncertain, could take many years, and could result in a material adverse impact to the Company’s financial statements, including its effective tax rate.

~~NOTE 9~~. ~~STOCK TRANSACTIONS AND STOCK-BASED COMPENSATION~~

Neither the Company nor any “affiliated purchaser” repurchased any shares of Company common stock during the nine-month period ended September 29, 2017. On July 16, 2013, the Company’s Board of Directors approved a repurchase program (the “Repurchase Program”) authorizing the repurchase of up to 20 million shares of the Company’s common stock from time to time on the open market or in privately negotiated transactions. As of September 29, 2017, 20 million shares remained available for repurchase pursuant to the Repurchase Program.

For a full description of the Company’s stock-based compensation programs, reference is made to Note 17 of the Company’s financial statements as of and for the year ended December 31, 2016 included in the Company’s 2016 Annual Report. As of September 29, 2017, approximately 72 million shares of the Company’s common stock were reserved for issuance under the 2007 Omnibus Incentive Plan.

~~The following summarizes the components of the Company’s stock-based compensation expense ($ in millions):~~

Three-Month Period Ended Nine-Month Period Ended
September 29, 2017 September 30, 2016 September 29, 2017 September 30, 2016
Restricted stock units (“RSUs”)/performance stock units (“PSUs”):
Pretax compensation expense $ 21.9
$ 21.1
$ 67.6
$ 65.0
Income tax benefit (6.6 ) (6.2 ) (20.7 ) (19.1 )
RSU/PSU expense, net of income taxes 15.3
14.9
46.9
45.9
Stock options:
Pretax compensation expense 11.5
10.3
37.2
31.3
Income tax benefit (3.6 ) (3.2 ) (11.8 ) (9.7 )
Stock option expense, net of income taxes 7.9
7.1
25.4
21.6
Total stock-based compensation:
Pretax compensation expense 33.4
31.4
104.8
96.3
Income tax benefit (10.2 ) (9.4 ) (32.5 ) (28.8 )
Total stock-based compensation expense, net of income taxes $ 23.2
$ 22.0
$ 72.3
$ 67.5

Stock-based compensation has been recognized as a component of selling, general and administrative expenses in the accompanying Consolidated Condensed Statements of Earnings. As of September 29, 2017, $153 million of total unrecognized compensation cost related to RSUs/PSUs is expected to be recognized over a weighted average period of approximately two years. As of September 29, 2017, $129 million of total unrecognized compensation cost related to stock options is expected to be recognized over a weighted average period of approximately three years. Future compensation amounts will be adjusted for any changes in estimated forfeitures.

The Company realized a tax benefit of $15 million and $64 million in the three and nine-month periods ended September 29, 2017, respectively, related to the exercise of employee stock options and vesting of RSUs. As a result of the adoption of ASU 2016-09, ~~Compensation—Stock Compensation~~, the excess tax benefit of $7 million and $40 million for the three and nine-month periods ended September 29, 2017, respectively, has been recorded as a reduction to the current income tax provision and is reflected as an operating cash inflow in the accompanying Consolidated Condensed Statement of Cash Flows. Prior to the adoption of ASU 2016-09, the excess tax benefit was recorded as an increase to additional paid-in capital and was reflected as a financing cash flow.

~~NOTE 10. NONOPERATING INCOME (EXPENSE)~~

The Company received $265 million of cash proceeds from the sale of marketable equity securities during the first quarter of 2016. The Company recorded a pretax gain related to this sale of $223 million ($140 million after-tax or $0.20 per diluted share) during the nine-month period ended September 30, 2016.

In the third quarter of 2016, the Company redeemed approximately $1.9 billion in aggregate principal amount of outstanding indebtedness and paid an aggregate of $188 million in make-whole premiums in connection with those redemptions, plus accrued and unpaid interest. The payment of these make-whole premiums, net of certain deferred gains of $9 million, are reflected as a loss on early extinguishment of borrowings in the accompanying Consolidated Condensed Statement of Earnings of $179 million ($112 million after-tax or 0.16 per diluted share) in the three and nine-month periods ended September 30, 2016.

~~NOTE 11. RESTRUCTURING~~

For additional details regarding the Company’s restructuring activities, reference is made to Note 14 of the Company’s financial statements as of and for the year ended December 31, 2016 included in the Company’s 2016 Annual Report.

During the nine-month period ended September 29, 2017, the Company made the strategic decision to discontinue a molecular diagnostic product line in its Diagnostics segment. As a result, the Company recorded $76 million of pretax restructuring, impairment and other related charges ($51 million after-tax or $0.07 per diluted share). These charges included $49 million of noncash charges for the impairment of certain technology-related intangible assets as well as related inventory and property, plant and equipment with no further use. In addition, the Company incurred $27 million of cash restructuring costs primarily related to employee severance and related charges. Substantially all restructuring activities related to this discontinued product line were completed in the nine-month period ended September 29, 2017.

The restructuring, impairment and other related charges incurred during the nine-month period ended September 29, 2017 related to the discontinued product line in the Diagnostics segment are reflected in the following captions in the accompanying Consolidated Condensed Statement of Earnings ($ in millions):

Cost of sales $ 20.7
Selling, general and administrative expenses 55.2
Total $ 75.9

~~NOTE 12. COMMITMENTS AND CONTINGENCIES~~

For a description of the Company’s litigation and contingencies, reference is made to Note 16 of the Company’s financial statements as of and for the year ended December 31, 2016 included in the Company’s 2016 Annual Report.

The Company generally accrues estimated warranty costs at the time of sale. In general, manufactured products are warranted against defects in material and workmanship when properly used for their intended purpose, installed correctly, and appropriately maintained. Warranty period terms depend on the nature of the product and range from 90 days up to the life of the product. The amount of the accrued warranty liability is determined based on historical information such as past experience, product failure rates or number of units repaired, estimated cost of material and labor, and in certain instances

~~estimated property damage. The accrued warranty liability is reviewed on a quarterly basis and may be adjusted as additional information regarding expected warranty costs becomes known.~~

~~The following is a rollforward of the Company’s accrued warranty liability ($ in millions):~~

Balance, December 31, 2016 $ 75.8
Accruals for warranties issued during the period 36.0
Settlements made (42.0 )
Additions due to acquisitions 1.3
Effect of foreign currency translation 3.4
Balance, September 29, 2017 $ 74.5

~~NOTE 13. NET EARNINGS PER SHARE FROM CONTINUING OPERATIONS~~

Basic net earnings per share (“EPS”) from continuing operations is calculated by dividing net earnings from continuing operations by the weighted average number of common shares outstanding for the applicable period. Diluted net EPS from continuing operations is computed based on the weighted average number of common shares outstanding increased by the number of additional shares that would have been outstanding had the potentially dilutive common shares been issued and reduced by the number of shares the Company could have repurchased with the proceeds from the issuance of the potentially dilutive shares. For the three and nine-month periods ended September 29, 2017, approximately four million options to purchase shares were not included in the diluted EPS from continuing operations calculation as the impact of their inclusion would have been anti-dilutive. For both the three and nine-month periods ended September 30, 2016 there were no anti-dilutive options to purchase shares excluded from the diluted EPS from continuing operations calculation.

~~Information related to the calculation of net earnings per share from continuing operations is summarized as follows ($ and shares in millions, except per share amounts):~~

Net Earnings from Continuing Operations
(Numerator) Shares
(Denominator) Per Share Amount
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 $ 572.7
705.6
$ 0.81

For the Three-Month Period Ended September 30, 2016:
Basic EPS $ 402.6
692.2
$ 0.58
Adjustment for interest on convertible debentures 0.5
—

Incremental shares from assumed exercise of dilutive options and vesting of dilutive RSUs and PSUs —
6.2

Incremental shares from assumed conversion of the convertible debentures —
2.9

Diluted EPS $ 403.1
701.3
$ 0.57

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 $ 1,614.8
705.5
$ 2.29

For the Nine-Month Period Ended September 30, 2016:
Basic EPS $ 1,406.4
690.6
$ 2.04
Adjustment for interest on convertible debentures 1.4
—

Incremental shares from assumed exercise of dilutive options and vesting of dilutive RSUs and PSUs —
6.0

Incremental shares from assumed conversion of the convertible debentures —
2.5

Diluted EPS $ 1,407.8
699.1
$ 2.01

NOTE 14. ~~SEGMENT INFORMATION~~COMMITMENTS AND CONTINGENCIES

The Company ~~operates~~reviews the adequacy of its legal reserves on a quarterly basis and ~~reports its results in four separate business segments consisting~~establishes reserves for loss contingencies that are both probable and reasonably estimable. For a further description of the ~~Life Sciences, Diagnostics, Dental~~Company’s litigation and ~~Environmental & Applied Solutions segments. When determining~~contingencies, refer to Note 18 of the ~~reportable segments,~~Company’s financial statements as of and for the year ended December 31, 2022 included in the Company’s 2022 Annual Report.

In connection with the Separation and in accordance with the separation and distribution and related agreements Danaher and Veralto entered into, the Company ~~aggregated operating segments~~agreed to indemnify Veralto and its affiliates against certain damages and expenses that might occur in the future. These indemnification obligations cover a variety of liabilities, including, but not limited to, employee and tax matters.

The Company generally accrues estimated warranty costs at the time of sale. In general, manufactured products are warranted against defects in material and workmanship when properly used for their intended purpose, installed correctly and appropriately maintained. Warranty periods depend on the nature of the product and range from the date of such sale up to twenty years. The amount of the accrued warranty liability is determined based on ~~their similar economic~~historical information such as past experience, product failure rates or number of units repaired, estimated cost of material and ~~operating characteristics. Operating profit represents~~labor and in certain instances estimated property damage. As of September 29, 2023 and December 31, 2022, the Company had accrued warranty liabilities of $97 million and $95 million, respectively.

NOTE 15. STOCKHOLDERS' EQUITY AND STOCK-BASED COMPENSATION

Stockholders’ Equity

On July 16, 2013, the Company’s Board of Directors approved a repurchase program (the “Repurchase Program”) authorizing the repurchase of up to 20 million shares of the Company’s common stock from time to time on the open market or in privately negotiated transactions. As of September 29, 2023, approximately 20 million shares remained available for repurchase pursuant to the Repurchase Program.

The following table summarizes the Company’s share activity (shares in millions):


	Three-Month Period Ended		Nine-Month Period Ended
	September 29, 2023	September 30, 2022	September 29, 2023	September 30, 2022
Preferred stock - shares issued:
Balance, beginning of period	—	1.7	1.7	3.4
Conversion of MCPS to common stock	—	—	(1.7)	(1.7)
Balance, end of period	—	1.7	—	1.7

Common stock - shares issued:
Balance, beginning of period	879.5	868.4	869.3	855.7
Common stock-based compensation awards	0.7	0.5	2.3	2.2


Conversion of MCPS to common stock	—	—	8.6	11.0

Balance, end of period	880.2	868.9	880.2	868.9

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As of April 17, 2023, all outstanding shares of the Company’s 5.00% MCPS Series B converted to common shares at a rate of 5.0175 common shares per share of preferred stock into an aggregate of 8.6 million shares of the Company’s common stock, pursuant to the terms of the Certificate of Designation governing the Series B Preferred Stock. On April 15, 2022, all outstanding shares of the Company’s 4.75% MCPS Series A converted to common shares at a rate of 6.6632 common shares per share of preferred stock into an aggregate of 11.0 million shares of the Company’s common stock, pursuant to the terms of the Certificate of Designation governing the Series A Preferred Stock. For additional information on the MCPS, refer to Note 19 in the Company’s 2022 Annual Report.

Stock-Based Compensation

For a full description of the Company’s stock-based compensation programs, refer to Note 19 of the Company’s financial statements as of and for the year ended December 31, 2022 included in the Company’s 2022 Annual Report. As of September 29, 2023, approximately 41 million shares of the Company’s common stock were reserved for issuance under the 2007 Omnibus Incentive Plan.

The following information about the Company's stock-based compensation programs includes amounts for both the Company's and Veralto's employees. In connection with the Separation and in accordance with the employee matters agreement Danaher and Veralto have entered into, the Company has made certain adjustments to the exercise price and the number of stock-based compensation awards with the intention of preserving the intrinsic value of the awards immediately prior to the Separation. Stock-based compensation awards have been converted into awards of the company that employs the employee post-separation, and Veralto has responsibility for the awards that were converted into Veralto awards. The adjustment to the Company’s stock-based compensation awards as a result of the Separation is not expected to have a significant impact to the Company’s stock compensation expense. Stock-based compensation disclosures reflecting the impact of the Separation will be included in the Company's Annual Report on Form 10-K for the year ending December 31, 2023.

The following summarizes the components of the Company’s stock-based compensation expense ($ in millions):


	Three-Month Period Ended				Nine-Month Period Ended
	September 29, 2023		September 30, 2022		September 29, 2023		September 30, 2022
RSUs/PSUs:
Pretax compensation expense	$	51	$	52	$	157	$	156
Income tax benefit	(11)		(11)		(32)		(32)
RSU/PSU expense, net of income taxes	40		41		125		124
Stock options:
Pretax compensation expense	41		37		123		114
Income tax benefit	(8)		(7)		(25)		(23)
Stock option expense, net of income taxes	33		30		98		91
Total stock-based compensation:
Pretax compensation expense	92		89		280		270
Income tax benefit	(19)		(18)		(57)		(55)
Total stock-based compensation expense, net of income taxes	$	73	$	71	$	223	$	215

Stock-based compensation has been recognized as a component of selling, general and administrative expenses in the accompanying Consolidated Condensed Statements of Earnings. As of September 29, 2023, $222 million of total ~~revenues less operating expenses, excluding nonoperating~~unrecognized compensation cost related to RSUs/PSUs is expected to be recognized over a weighted average period of approximately two years. As of September 29, 2023, $269 million of total unrecognized compensation cost related to stock options is expected to be recognized over a weighted average period of approximately two years. Future compensation amounts will be adjusted for any changes in estimated forfeitures.

Accumulated Other Comprehensive Income

Accumulated other comprehensive income (loss) refers to certain gains and ~~expense, interest and~~losses that under U.S. GAAP are included in comprehensive income ~~taxes. Intersegment~~(loss) but are excluded from net earnings as these amounts are ~~not significant and~~initially recorded as an adjustment to stockholders’ equity. Foreign currency translation adjustments generally relate to indefinite investments in non-U.S. subsidiaries, as well as the impact from the Company’s hedges of its net investment in foreign operations, including the Company’s cross-currency swap derivatives, net of any income tax impacts.

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The changes in accumulated other comprehensive income (loss) by component are eliminated to arrive at consolidated totals. Operating profit amounts in the Other segment consist of unallocated corporate costs and other costs not considered part of management’s evaluation of reportable segment operating performance. There has been no material change in total assets or liabilities by segment since December 31, 2016.

~~Segment results are shown~~summarized below ($ in millions):.


	Foreign Currency Translation Adjustments		Pension and Postretirement Plan Benefit Adjustments			Cash Flow Hedge Adjustments			Accumulated Comprehensive Income (Loss)
For the Three-Month Period Ended September 29, 2023:
Balance, June 30, 2023	$	(3,323)	$	(341)		$	88		$	(3,576)
Other comprehensive income (loss) before reclassifications:
Increase (decrease)	(296)		—			22			(274)
Income tax impact	(7)		—			—			(7)
Other comprehensive income (loss) before reclassifications, net of income taxes	(303)		—			22			(281)
Reclassification adjustments:
Increase (decrease)	—		1		(a)	(102)		(b)	(101)
Income tax impact	—		—			(1)			(1)
Reclassification adjustments, net of income taxes	—		1			(103)			(102)
Net other comprehensive income (loss), net of income taxes	(303)		1			(81)			(383)
Balance, September 29, 2023	$	(3,626)	$	(340)		$	7		$	(3,959)

For the Three-Month Period Ended September 30, 2022:
Balance, July 1, 2022	$	(2,324)	$	(529)		$	108		$	(2,745)
Other comprehensive income (loss) before reclassifications:
Increase (decrease)	(1,008)		—			214			(794)
Income tax impact	(31)		—			(51)			(82)
Other comprehensive income (loss) before reclassifications, net of income taxes	(1,039)		—			163			(876)
Reclassification adjustments:
Increase (decrease)	—		9		(a)	(240)		(b)	(231)
Income tax impact	—		(2)			—			(2)
Reclassification adjustments, net of income taxes	—		7			(240)			(233)
Net other comprehensive income (loss), net of income taxes	(1,039)		7			(77)			(1,109)
Balance, September 30, 2022	$	(3,363)	$	(522)		$	31		$	(3,854)

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Three-Month Period Ended Nine-Month Period Ended
September 29, 2017 September 30, 2016 September 29, 2017 September 30, 2016
Sales:
Life Sciences $ 1,392.6
$ 1,325.4
$ 4,085.0
$ 3,911.8
Diagnostics 1,448.7
1,212.7
4,216.0
3,606.5
Dental 694.0
675.6
2,052.1
2,046.1
Environmental & Applied Solutions 992.9
918.4
2,890.9
2,733.7
Total $ 4,528.2
$ 4,132.1
$ 13,244.0
$ 12,298.1

Operating profit:
Life Sciences $ 246.8
$ 204.7
$ 680.0
$ 574.1
Diagnostics 242.7
193.9
554.9
606.3
Dental 102.2
101.3
301.4
305.6
Environmental & Applied Solutions 222.8
223.4
666.0
640.1
Other (47.0 ) (24.2 ) (127.2 ) (103.8 )
Total $ 767.5
$ 699.1
$ 2,075.1
$ 2,022.3


	Foreign Currency Translation Adjustments		Pension and Postretirement Plan Benefit Adjustments			Cash Flow Hedge Adjustments			Accumulated Comprehensive Income (Loss)
For the Nine-Month Period Ended September 29, 2023:
Balance, December 31, 2022	$	(2,644)	$	(341)		$	113		$	(2,872)
Other comprehensive income (loss) before reclassifications:
Increase (decrease)	(991)		—			(68)			(1,059)
Income tax impact	9		—			—			9
Other comprehensive income (loss) before reclassifications, net of income taxes	(982)		—			(68)			(1,050)
Reclassification adjustments:
Increase (decrease)	—		1		(a)	(37)		(b)	(36)
Income tax impact	—		—			(1)			(1)
Reclassification adjustments, net of income taxes	—		1			(38)			(37)
Net other comprehensive income (loss), net of income taxes	(982)		1			(106)			(1,087)
Balance, September 29, 2023	$	(3,626)	$	(340)		$	7		$	(3,959)

For the Nine-Month Period Ended September 30, 2022:
Balance, December 31, 2021	$	(539)	$	(550)		$	62		$	(1,027)
Other comprehensive income (loss) before reclassifications:
Increase (decrease)	(2,729)		—			720			(2,009)
Income tax impact	(95)		—			(173)			(268)
Other comprehensive income (loss) before reclassifications, net of income taxes	(2,824)		—			547			(2,277)
Reclassification adjustments:
Increase (decrease)	—		37		(a)	(578)		(b)	(541)
Income tax impact	—		(9)			—			(9)
Reclassification adjustments, net of income taxes	—		28			(578)			(550)
Net other comprehensive income (loss), net of income taxes	(2,824)		28			(31)			(2,827)
Balance, September 30, 2022	$	(3,363)	$	(522)		$	31		$	(3,854)

(a)This accumulated other comprehensive income (loss) component is included in the computation of net periodic benefit cost (refer to Notes 8 and 13 for additional details).

(b)Reflects reclassification to earnings related to cash flow hedges of certain long-term debt (refer to Note 12 for additional details).

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is designed to provide ~~a reader~~material information relevant to an assessment of Danaher Corporation’s (“Danaher,” the “Company,” “we,” “us” or “our”) financial ~~statements with~~condition and results of operations, including an evaluation of the amounts and certainty of cash flows from operations and from outside sources. The MD&A is designed to focus specifically on material events and uncertainties known to management that are reasonably likely to cause reported financial information not to be necessarily indicative of future operating results or of future financial condition. This includes descriptions and amounts of matters that have had a ~~narrative from the perspective of Company management.~~material impact on reported operations, as well as matters that are reasonably likely based on management’s assessment to have a material impact on future operations. The Company’s MD&A is divided into ~~four~~five sections:

•Information Relating to Forward-Looking Statements

•Overview

•Results of Operations

•Liquidity and Capital Resources

•Critical Accounting Estimates

You should read this discussion along with the Company’s MD&A and audited financial statements and Notes thereto as of and for the year ended December 31, ~~2016 and Notes thereto,~~2022, included in the Company’s ~~Current Report on Form 8-K filed on June 19, 2017 and the 2016~~2022 Annual Report ~~on Form 10-K filed on February 22, 2017 (collectively, the “2016 Annual Report”)~~ and the Company’s Consolidated Condensed Financial Statements and related Notes as of and for the three and nine-month periods ended September 29, ~~2017~~2023 included in this ~~Report.~~Quarterly Report on Form 10-Q (“Report”).

~~Unless otherwise indicated, all financial results in this report refer to continuing operations.~~

INFORMATION RELATING TO FORWARD-LOOKING STATEMENTS

Certain statements included or incorporated by reference in this ~~quarterly report,~~Report, in other documents we file with or furnish to the Securities and Exchange Commission, ~~(“SEC”),~~ in our press releases, webcasts, conference calls, materials delivered to shareholders and other communications, are “forward-looking statements” within the meaning of the ~~United States~~U.S. federal securities laws. All statements other than historical factual information are forward-looking statements, including without limitation statements regarding: projections of revenue, expenses, profit, profit margins, pricing, tax rates, tax provisions, cash flows, pension and benefit obligations and funding requirements, asset values, our liquidity position or other projected financial measures; management’s plans and strategies for future operations, including statements relating to anticipated operating performance, customer demand, cost reductions, restructuring activities, new product and service developments, competitive strengths or market position, acquisitions and the integration thereof, divestitures, spin-offs, split-offs, initial public offerings, other securities offerings, or other distributions, strategic opportunities, ~~securities offerings,~~ stock repurchases, dividends and executive compensation; growth, declines and other trends in markets we sell into; new or modified laws, regulations and accounting pronouncements; future regulatory ~~approvals;~~approvals and the timing and conditionality thereof; outstanding claims, legal proceedings, tax audits and assessments and other contingent liabilities; future foreign currency exchange rates and fluctuations in those rates; the potential or anticipated direct or indirect impact of COVID-19 and military conflicts on our business, results of operations and/or financial condition; general economic and capital markets conditions; the anticipated timing of any of the foregoing; assumptions underlying any of the foregoing; and any other statements that address events or developments that Danaher intends or believes will or may occur in the future. Terminology such as “believe,” “anticipate,” “should,” “could,” “intend,” “will,” “plan,” “expect,” “estimate,” “project,” “target,” “may,” “possible,” “potential,” “forecast” and “positioned” and similar references to future periods are intended to identify forward-looking statements, although not all forward-looking statements are accompanied by such words.

Forward-looking statements are based on assumptions and assessments made by our management in light of their experience and perceptions of historical trends, current conditions, expected future developments and other ~~factors they believe to be appropriate.~~factors. Forward-looking statements are not guarantees of future performance and actual results may differ materially from the results, developments and business decisions contemplated by our forward-looking statements. Accordingly, you should not place undue reliance on any such forward-looking statements. Important factors that in some cases have affected us in the past and that in the future could cause actual results to differ materially from those envisaged in the forward-looking statements include the following:

~~Conditions~~Business and Strategic Risks

•The COVID-19 pandemic, and declines in demand as the pandemic has evolved to endemic status, have adversely impacted and could in the future continue to adversely impact elements of our business and financial statements. Other conditions in the global economy, the particular markets we serve and the financial markets ~~may~~can also adversely affect our business and financial statements.

Our growth could suffer if the markets into which we sell our products and services (references to products and services in this report also include software) decline, do not grow as anticipated or experience cyclicality.

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•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 the prices ~~for our products and services.~~we charge.

•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 growth can also suffer if the markets into which we sell our products and services decline, do not grow as anticipated or experience cyclicality.

~~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~~healthcare industry and related industries that we serve ~~have undergone, and~~ are ~~in the process of~~ undergoing significant changes in an effort to reduce (and increase the predictability of) costs, which ~~could~~can adversely affect our business and financial statements.

•Non-U.S. economic, political, legal, compliance, social and business factors (including military conflicts) can negatively affect our business and financial statements.

•Collaborative partners and other third-parties we rely on for development, supply and/or marketing of certain products, potential products and technologies could fail to perform sufficiently.

Acquisitions, Divestitures and Investment Risks

•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.~~business.

•Our acquisition of businesses, ~~(including our recent acquisitions of Pall and Cepheid),~~investments, joint ventures and other strategic relationships could also negatively impact our business and financial ~~statements.~~

~~The~~statements and our indemnification ~~provisions of acquisition agreements by which we have acquired companies~~rights may not fully protect us from liabilities related thereto. In addition, acquisitions (including Danaher’s pending acquisition of Abcam plc) can be difficult to complete on the anticipated timetable or at all for a number of reasons, including the uncertainty of regulatory approvals and the timing or conditionality thereof, and the parties' ability to satisfy the acquisition agreement conditions, including as ~~a result we may face unexpected liabilities.~~applicable the receipt of shareholder approval.

•Divestitures ~~and~~or other dispositions (including the Veralto Separation) could negatively impact our business, and contingent liabilities from Veralto or from other businesses that we or our predecessors have disposed or will dispose in the future could adversely affect our business and financial statements.

We For example, we could incur significant liability if the ~~2016~~Veralto Separation or any of the other split-off or spin-off ~~of Fortive or the 2015 split-off of our communications business is~~transactions we have previously consummated are determined to be a taxable ~~transaction.~~transaction or otherwise pursuant to our indemnification obligations with respect to such transactions.

~~Potential indemnification liabilities related to the 2016 spin-off of Fortive and the 2015 split-off~~Operational Risks

•Significant disruptions in, or breaches in security of, our ~~communications business could materially~~information technology (“IT”) systems or data; data privacy violations; other losses or disruptions to facilities, supply chains, distribution systems or IT systems due to catastrophe; and labor disputes can all adversely affect our business and financial statements.

~~A significant disruption~~•Defects and unanticipated use or inadequate disclosure with respect to our products or services, or allegations thereof, can adversely affect our business and financial statements.

•Our financial results are subject to fluctuations in the cost and availability of the supplies (including commodities) we use in, and the labor we need for, our operations. Over the past year, we have at times experienced to varying degrees supply chain disruptions including in some cases shortages of supply, cost inflation and shipping delays, labor availability constraints and labor cost increases.

•Climate change, legal or ~~breach in security~~regulatory measures to address climate change and any inability to address stakeholder expectations with respect to climate change, may negatively affect us.

•Our success depends on our ability to recruit, retain and motivate talented employees representing diverse backgrounds, experiences and skill sets.

•Our restructuring actions can have long-term adverse effects on our business and financial statements.

Intellectual Property Risks

•Any inability to adequately protect or avoid third-party infringement of our ~~information technology systems~~ intellectual property, and third-party claims we are infringing intellectual property rights, can adversely affect our business and financial statements.

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•The U.S. government has certain rights with respect to incremental production capacity attributable to, and/or the ~~systems~~intellectual property we have developed using, government financing. In addition, in times of ~~third-parties on which~~national emergency the U.S. government has authority to control our allocation of manufacturing capacity.

Financial and Tax Risks

•Our outstanding debt has increased significantly as a result of acquisitions, and we ~~rely or violation~~may incur additional debt. Such indebtedness may limit our operations and use of ~~data privacy laws~~cash flow and negatively impact our credit ratings; and failure to comply with our indebtedness-related covenants could adversely affect our business ~~reputation~~ and financial statements.

•Our business and financial statements can be adversely affected by foreign currency exchange rates, changes in our tax rates (including as a result of changes in tax laws) or income tax liabilities/assessments, the outcome of tax audits, financial market risks related to our defined benefit pension plans, health care costs and recognition of impairment charges for our goodwill or other intangible assets.

Legal, Regulatory, Compliance and Reputational Risks

•Significant developments or changes in national laws or policies to protect or promote domestic interests and/or address foreign competition can have an adverse effect on our business and financial statements.

•Our businesses are subject to extensive regulation (including those applicable to the healthcare industry). Failure to comply with those regulations (including by our employees, agents or business partners) or significant developments or changes in laws or policies can adversely affect our business and financial statements.

•With respect to the regulated medical devices we offer, product introductions or modifications may require regulatory clearance or authorizations and we could be required to recall or cease marketing such products; off-label marketing could result in penalties; and clinical trials may have results that are unexpected or are perceived unfavorably by the market, all of which could adversely affect our business and financial statements.

•We are subject to or otherwise responsible for a variety of litigation and other legal and regulatory proceedings in the course of our business that can adversely affect our business and financial statements.

•Our operations, products and services also 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 business, reputation, and financial statements.~~

~~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~~•Our By-law exclusive forum provisions could ~~suffer significant litigation expenses, losses or licensing expenses or be prevented from selling products or services.~~

The United States 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 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 business, reputation, and financial statements could suffer.

~~Our indebtedness may~~ limit our ~~operations and our use of our cash flow, and any failure~~stockholders’ ability 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~~choose their preferred judicial forum 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.~~

~~Developments and uncertainties regarding international economic, political, legal, compliance, trade and business factors could negatively affect our financial statements.~~

The results of the European Union membership referendum in the United Kingdom and their formal notice of withdrawal from the European Union could adversely affect customer demand, our relationships with customers and suppliers and our business and financial statements.

~~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.~~disputes.

See ~~Part~~“Part I—Item 1A1A. Risk Factors” of the Company’s 2022 Annual Report ~~on Form 10-K~~ for ~~the year ended December 31, 2016 for a~~ further discussion regarding reasons that actual results may differ materially from the results, developments and business decisions contemplated by our forward-looking statements. Forward-looking statements speak only as of the date of the report, document, press release, webcast, call, materials or other communication in which they are made. Except to the extent required by applicable law, we do not assume any obligation to update or revise any forward-looking statement, whether as a result of new information, future events and developments or otherwise.

OVERVIEW

General

As a result of the Company’s geographic and industry diversity, the Company faces a variety of opportunities and challenges, including rapid ~~innovation and~~ technological development ~~(particularly with respect to computing, mobile connectivity, artificial intelligence, communications and digitization)~~ in most of the Company’s served markets, the expansion and evolution of opportunities in high-growth markets, trends and costs associated with a global labor force, consolidation of the Company’s competitors and increasing regulation. The Company defines high-growth markets as developing markets of the world experiencing extended periods of accelerated growth in gross domestic product and infrastructure which includes Eastern Europe, the Middle East, Africa, Latin America and Asia (with the exception of Japan and Australia). The Company operates in a highly competitive business environment in most markets, and the Company’s long-term growth and profitability will depend in particular on its ability to expand its business in high-growth geographies and high-growth market segments, identify,

consummate and integrate appropriate acquisitions and identify and consummate appropriate investments and strategic partnerships, develop innovative and differentiated new products and services with higher gross profit margins, expand and improve the effectiveness of the Company’s sales force, continue to reduce costs and improve operating efficiency and quality and effectively address the demands of an increasingly regulated global environment. The Company is making significant investments, organically and through acquisitions and investments, to address the rapid pace of technological change in its served markets and to globalize its manufacturing, research and development and customer-facing resources (particularly in high-growth markets) ~~in order~~ to be responsive to the Company’s customers throughout the world and improve the efficiency of the Company’s operations.

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Business Performance and Outlook

During the third quarter of ~~2017,~~2023, the Company’s overall revenues ~~increased 9.5%~~decreased 10.5% compared to the comparable period of ~~2016. While differences exist among the Company’s businesses, on an overall basis,~~2022. Core sales ~~from existing businesses grew 3.0% during~~decreased 11.5% in the third quarter of ~~2017 as~~2023 compared to the comparable prior year period due primarily to the decline of ~~2016. Increased~~ demand for ~~the Company’s~~COVID-19-related products, and ~~services on an overall basis, together with the Company’s continued investments~~to a lesser extent declines in demand for other products and services. The impact of currency translation increased reported sales ~~growth initiatives and the other business-specific factors discussed below contributed to year-over-year sales growth. Geographically, year-over-year core revenue growth rates during~~0.5% in the third quarter of ~~2017 were led~~2023 compared to the comparable prior year period. For the nine-month period ended September 29, 2023, overall revenues decreased 8.0% and core sales decreased 7.5% compared to the comparable prior year period due primarily to the decline of demand for COVID-19-related products, partially offset by increases in demand for other products and services. The impact of currency translation decreased reported sales by 1.0% in the ~~high-growth markets. Core revenues~~nine-month period compared to the comparable prior year period. For the definition of “core sales” refer to “—Results of Operations” below.

Geographically, the Company’s sales in the three-month period ended September 29, 2023 in developed markets decreased year-over-year by 11% driven primarily by decreased sales in North America, and to a lesser extent in Western Europe. For the same period, core sales in developed markets declined at a low-double digit rate, with the declines primarily attributable to the same geographic regions. The decline in core sales was primarily driven by reduced demand for products and services related to diagnostic testing associated with COVID-19 in North America and Western Europe and a reduction in year-over-year demand in the Biotechnology segment. For the same period, sales in high-growth markets ~~increased~~decreased year-over-year by 9% due primarily to mid-teens core revenue declines in China, led by declines in the Biotechnology segment due to deterioration in the funding environment and lower underlying activity levels. For the same period, core sales in high-growth markets declined at a high-single digit rate, ~~during~~with the ~~third quarter of 2017 as compared~~declines primarily attributable to the ~~comparable period of 2016 led primarily by continued strength in China.~~same geographic factor. High-growth markets represented approximately 31% of the Company’s total sales in the third quarter of ~~2017. Core revenues in developed markets increased at a low-single digit rate~~2023. For additional information regarding the Company’s sales by geographical region during the ~~third quarter of 2017 led primarily by growth~~three and nine-month periods ended September 29, 2023 and September 30, 2022, refer to Note 5 to the accompanying Consolidated Condensed Financial Statements.

The Company’s net earnings for the three and nine-month periods ended September 29, 2023 totaled approximately $1.1 billion and $3.7 billion, respectively, compared to approximately $1.6 billion and $5.0 billion, respectively, for the three and nine-month periods ended September 30, 2022. Net earnings attributable to common stockholders for the three and nine-month periods ended September 29, 2023 totaled approximately $1.1 billion or $1.51 per diluted common share and approximately $3.7 billion or $4.94 per diluted common share, respectively, compared to approximately $1.6 billion or $2.10 per diluted common share and approximately $4.9 billion or $6.67 per diluted common share, respectively, for the three and nine-month periods ended September 30, 2022. Decreased core sales in the ~~United States~~2023 period drove the year-over-year decrease in net earnings and ~~Japan.~~diluted net earnings per common share for both the three and nine-month periods ended September 29, 2023.

In an effort to moderate inflationary pressure, the U.S. Federal Reserve and other central banks around the world have raised interest rates, which has tightened the global credit environment. While the Company’s interest costs and liquidity were not significantly impacted during the three and nine-month periods ended September 29, 2023 by this credit tightening due to the significant cash flow generated from the Company’s operations and the predominantly fixed-interest rates of the Company’s outstanding borrowings, the credit tightening has adversely impacted demand from certain of the Company’s customers, including emerging biotechnology companies.

In response to the attack in Israel and the subsequent hostilities, the Company is continuing to monitor the social, political and economic environment in Israel and in the region for any impact on its operations and value chain. As of December 31, 2022, the Company’s net investment in property, plant and equipment in Israel was less than $1 million. For the year ended December 31, 2022, sales to Israel were less than $100 million. While we are monitoring the conflict, as of the date of this report we do not expect the conflict will have a material impact on our business.

The COVID-19 Pandemic

Overall conditions related to COVID-19 have improved in 2023 compared to 2022 (including the announcement on April 10, 2023 that the U.S. public health emergency related to COVID-19 ended). The Company has deployed our capabilities, expertise and scale to address the critical health needs related to COVID-19, including making available diagnostic tests for the rapid detection of COVID-19 and support for production of vaccines and therapies for COVID-19. Demand for the Company’s products that support COVID-19 related vaccines and therapeutics (including related to research and development that seeks to prevent or mitigate similar, future pandemics) decreased in both the three and nine-month periods ended September 29, 2023 versus the comparable periods of 2022. The Company expects overall ~~year-over-year sales growth~~demand for these products to continue ~~and year-over-year core revenue growth rates~~ to ~~improve,~~decrease in the fourth quarter of 2023 compared to the fourth quarter of 2022 in response to COVID-19 evolving to an endemic status. Additionally, demand for the ~~remainder~~Company’s products that support COVID-19 testing is expected to continue to fluctuate, corresponding to fluctuations in COVID-19 cases in particular geographies. Demand for the Company’s COVID-19 related testing products decreased in the three and nine-month

Table of ~~2017 but remains cautious about challenges due~~Contents

periods ended September 29, 2023 versus the comparable periods of 2022. In response to ~~macro-economic~~COVID-19 evolving to an endemic status, the Company continues to review and ~~geopolitical uncertainties,~~adjust its cost structure.

For additional information on the risks of COVID-19 to the Company’s operations, refer to the “Part I—Item 1A. Risk Factors” section of the Company’s 2022 Annual Report and “Information Relating to Forward-Looking Statements” in Part I, Item 2 of this Report.

Pending Acquisition

On August 28, 2023, the Company entered into a definitive agreement to acquire all of the outstanding shares of Abcam plc (“Abcam”) for a cash purchase price of approximately $5.7 billion, including assumed indebtedness and net of acquired cash (the “Abcam Acquisition”). Abcam is a leading global ~~uncertainties related~~supplier of protein consumables, including highly validated antibodies, reagents, biomarkers and assays to ~~monetary, fiscal~~address targets in biological pathways that are critical for advancing drug discovery, life sciences research and ~~trade policies.~~

diagnostics. Abcam generated revenues of £362 million in 2022. The Company ~~regularly evaluates market needs and conditions with~~expects to include the ~~objective of positioning itself to provide superior products and services to~~Abcam business within its customers in a cost-efficient manner. Consistent with this approach, during the second quarter of 2017, the Company made the strategic decision to discontinue a molecular diagnostic product line in its Diagnostics segment. As a result, the Company recorded $76 million of pretax restructuring, impairment and other related charges ($51 million after-tax or $0.07 per diluted share). These charges included $49 million of noncash charges for the impairment of certain technology-related intangible assets as well as related inventory and property, plant and equipment with no further use. In addition, the Company incurred $27 million of cash restructuring costs primarily related to employee severance and related charges. These restructuring charges are expected to result in recurring annual savings of approximately $40 million, beginning in 2018.

~~Acquisitions~~

During the first nine months of 2017, the Company acquired five businesses for total consideration of $112 million in cash, net of cash acquired. The businesses acquired complement existing units of the Life Sciences segment. The transaction is subject to customary closing conditions, including receipt of applicable regulatory approvals and Abcam shareholder approval.

The Company expects to finance the Abcam Acquisition using cash on hand and/or the proceeds from the issuance of commercial paper.

Separation of the Environmental & Applied Solutions ~~segments. The aggregate annual sales~~Business

Effective as of ~~these five businesses at~~September 30, 2023, the ~~time~~Company completed the separation of ~~their respective acquisitions,~~its former Environmental & Applied Solutions business to Veralto Corporation (the “Separation”). As the disposition occurred during the fourth quarter of 2023, the Company will classify Veralto as a discontinued operation in ~~each case based on~~its historical financial statements beginning with the ~~company’s revenues for its last completed fiscal year prior~~fourth quarter of 2023. For additional information, refer to Note 3 to the ~~acquisition, were approximately $70 million. The Company preliminarily recorded an aggregate of $73 million of goodwill related to these acquisitions.~~accompanying Consolidated Condensed Financial Statements

Currency Exchange Rates

~~On a year-over-year basis, currency~~Currency exchange rates ~~positively impacted~~increased reported sales by approximately 0.5% for the three-month period and decreased reported sales by approximately 1.0% for the three-month period ended September 29, 2017 primarily due to the weakness of the U.S. dollar against several major currencies in the third quarter of 2017 compared to the comparable period of 2016. On a year-over-year basis, currency exchange rates adversely impacted reported sales by approximately 0.5% for the nine-month period ended September 29, ~~2017~~2023 compared to the comparable periods of 2022, primarily due to the ~~strength~~exchange rates of the U.S. dollar ~~against several~~compared to the euro and most other major currencies in ~~the nine-month period of 2017 compared to the comparable period of 2016.~~2023. If the currency exchange rates in effect as of September 29, ~~2017~~2023 were to prevail throughout the remainder of ~~2017,~~2023, currency exchange rates would ~~increase~~be essentially flat relative to the ~~Company’s estimated~~fourth quarter of 2022 and full year ~~2017~~2023 sales would decrease by approximately 0.5% on a year-over-year basis since the U.S. dollar is currently weaker in comparison with rates experienced in the second half of 2016 which would offset the negative currency impact reported in the first half of 2017. Any future strengtheningbasis. Strengthening of the U.S. dollar against other major currencies compared to the exchange rates in effect as of September 29, 2023 would adversely impact the Company’s sales ~~and results of operations for the remainder of the year,~~on an overall basis, and any weakening of the U.S. dollar against other major currencies compared to the exchange rates in effect as of September 29, 2023 would positively impact the Company’s sales and results of operations for the remainder of the year.

RESULTS OF OPERATIONS

Non-GAAP Measures

In this report, references to the non-GAAP ~~measure~~measures of core sales ~~or core revenue growth~~ (also referred to as ~~sales~~core revenues or sales/revenues from existing businesses) refer to sales ~~from continuing operations~~ calculated according to ~~generally accepted accounting principles in the United States (“GAAP”)~~U.S. GAAP, but excluding:

•sales from acquired ~~businesses;~~businesses (as defined below, as applicable); and

•the impact of currency translation.

References to sales or operating profit attributable to acquisitions or acquired businesses refer to ~~GAAP~~ sales or operating profit, as applicable, from acquired businesses recorded prior to the first anniversary of the acquisition less ~~the amount of~~any sales and operating profit, asduring the applicable period, attributable to divested product lines not considered discontinued operations. The portion of revenue attributable to currency translation is calculated as the difference between:

•the period-to-period change in revenue (excluding sales from acquired ~~businesses)~~businesses (as defined above, as applicable)); and

•the period-to-period change in revenue (excluding sales from acquired ~~businesses)~~businesses (as defined above, as applicable)) after applying current period foreign exchange rates to the prior year period.

Core sales ~~and core revenue~~ growth should be considered in addition to, and not as a replacement for or superior to, sales, and may not be comparable to similarly titled measures reported by other companies. Management believes that reporting ~~the~~this non-GAAP financial measure ~~of core sales or core revenue growth~~ provides useful information to investors by helping identify underlying growth trends in Danaher’s

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business and facilitating comparisons of Danaher’s revenue performance with its performance in prior and future periods and to Danaher’s peers. Management also uses ~~core sales and core revenue growth~~this non-GAAP financial measure to measure the Company’s operating and financial ~~performance.~~performance and uses core sales growth as one of the performance measures in the Company’s executive short-term cash incentive compensation program. The Company excludes the effect of currency translation from ~~core sales~~this measure because currency translation is not under management’s control, is subject to volatility and can obscure underlying business trends, and excludes the effect of acquisitions and divestiture-related items because the nature, size, timing and number of acquisitions and divestitures can vary dramatically from period-to-period and between the Company and its peers and can also obscure underlying business trends and make comparisons of long-term performance difficult.

Throughout this discussion, references to sales ~~volume~~growth or decline refer to the impact of both price and unit sales and references to productivity improvements generally refer to improved cost-efficiencies resulting from the ongoing application of the Danaher Business System.

~~Revenue Performance~~Sales (Decline) Growth and Core Sales (Decline) Growth


	% Change Three-Month Period Ended September 29, 2023 vs. Comparable 2022 Period		% Change Nine-Month Period Ended September 29, 2023 vs. Comparable 2022 Period
Total sales (decline) growth (GAAP)	(10.5)	%	(8.0)	%
Impact of:
Acquisitions/divestitures	(0.5)	%	(0.5)	%
Currency exchange rates	(0.5)	%	1.0	%
Core sales (decline) growth (non-GAAP)	(11.5)	%	(7.5)	%

% Change Three-Month Period Ended September 29, 2017 vs. Comparable 2016 Period % Change Nine- Month Period Ended September 29, 2017 vs.
Comparable 2016 Period
Total sales growth (GAAP) 9.5 % 7.5 %
Less the impact of:
Acquisitions and other (5.5 )% (5.5 )%
Currency exchange rates (1.0 )% 0.5 %
Core revenue growth (non-GAAP) 3.0 % 2.5 %
2023 Sales Compared to 2022

~~Operating profit margins were 16.9% for both~~Total sales decreased 10.5% and 8.0% during the three and nine-month periods ended September 29, 2023 compared to the three and nine-month periods ended September 30, 2022, respectively, primarily as a result of the decrease in core sales due to the factors discussed below by segment. The impact of currency translation increased reported sales 0.5% on a year-over-year basis during the three-month period ended September 29, ~~2017~~2023, primarily due to the year-over-year impact of the weakening of the U.S. dollar against most other major currencies for the three-month period, and decreased reported sales 1.0% on a year-over-year basis during the ~~comparable~~nine-month period ended September 29, 2023, primarily due to the year-over-year impact of ~~2016.~~the strengthening of the U.S. dollar against the euro and most other major currencies for the nine-month period. Price increases contributed 3.0% to sales growth on a year-over-year basis during both the three and nine-month periods ended September 29, 2023 and are reflected as a component of core sales decline above.

Operating Profit Performance

Operating profit margins decreased 540 basis points from 26.3% during the three-month period ended September 30, 2022 to 20.9% for the three-month period ended September 29, 2023. The following factors unfavorably impacted year-over-year operating profit margin:

•Lower third quarter 2023 core sales, the impact of product mix and reduced leverage in the Company’s operational and administrative cost structure - 470 basis points

•Third quarter ~~2017~~2023 costs incurred related to preparation for the separation of the Company's Environmental & Applied Solutions business - 55 basis points

•Third quarter 2023 impairment charges related to a trade name in the Environmental & Applied Solutions segment - 10 basis points

•The incremental dilutive effect in 2023 of acquired businesses - 5 basis points

Operating profit margins decreased 570 basis points from 27.7% during the nine-month period ended September 30, 2022 to 22.0% for the nine-month period end September 29, 2023.

Year-to-date 2023 vs. year-to-date 2022 operating profit margin comparisons were unfavorably impacted by:

•Lower 2023 core sales, the impact of product mix, inventory write-offs and reduced leverage in the Company’s operational and administrative cost structure - 510 basis points

•First nine months of 2023 costs incurred related to preparation for the separation of the Company's Environmental & Applied Solutions business - 45 basis points

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•Second quarter 2023 impairment charges related to technology and other assets in the Biotechnology segment and customer relationships in the Environmental & Applied Solutions segments and a third quarter ~~2016~~2023 impairment charge related to a trade name in the Environmental & Applied Solutions segment, net of a second quarter 2022 impairment charge related to technology and customer relationships in the Environmental & Applied Solutions segment - 20 basis points

•The incremental dilutive effect in 2023 of acquired businesses - 10 basis points

Year-to-date 2023 vs. year-to-date 2022 operating profit margin comparisons were favorably impacted by:

~~Higher 2017 core sales volumes, incremental year-over-year cost savings associated with the restructuring actions~~•First nine months of 2022 impairments of accounts receivable and ~~continuing productivity improvement initiatives taken~~inventory as well as accruals for contractual obligations in 2016 and the impact of the weaker U.S. dollar in the third quarter of 2017, net of incremental year-over-year costs associated with various new product development, sales, service and marketing growth investments - 95 basis points

~~Third quarter 2017 vs. third quarter 2016 operating profit margin comparisons were unfavorably impacted by:~~

~~Third quarter 2016 gain on resolution of acquisition-related matters - 40 basis points~~

~~The incremental net dilutive effect in 2017 of acquired businesses - 55 basis points~~

~~Operating profit margins were 15.7% for the nine-month period ended September 29, 2017 as compared to 16.4% in the comparable period of 2016.~~

~~Year-to-date 2017 vs. year-to-date 2016 operating profit margin comparisons were favorably impacted by:~~

Higher 2017 core sales volumes and incremental year-over-year cost savings associated with the restructuring actions and continuing productivity improvement initiatives taken in 2016, net of incremental year-over-year costs associated with various new product development, sales, service and marketing growth investments, and the impact of the stronger U.S. dollar in 2017 - 60 basis points

~~Year-to-date 2017 vs. year-to-date 2016 operating profit margin comparisons were unfavorably impacted by:~~

~~Restructuring, impairment and other related charges related to discontinuing a product line in the second quarter of 2017 related to the Diagnostic segment - 55 basis points~~

~~Third quarter 2016 gain on resolution of acquisition-related matters~~Russia - 15 basis points

~~The incremental net dilutive effect in 2017 of acquired businesses - 60 basis points~~

Business Segments

Sales by business segment for each of the periods indicated were as follows ($ in millions):


	Three-Month Period Ended				Nine-Month Period Ended
	September 29, 2023		September 30, 2022		September 29, 2023		September 30, 2022
Biotechnology	$	1,664	$	2,053	$	5,413	$	6,535
Life Sciences	1,706		1,723		5,211		5,090
Diagnostics	2,254		2,679		6,861		7,884
Environmental & Applied Solutions	1,249		1,208		3,712		3,593
Total	$	6,873	$	7,663	$	21,197	$	23,102

For information regarding the Company’s sales by geographical region, refer to Note 5 to the accompanying Consolidated Condensed Financial Statements.

BIOTECHNOLOGY

The Biotechnology segment includes the bioprocessing and discovery and medical businesses and offers a broad range of tools, consumables and services that are primarily used by customers to advance and accelerate the research, development, manufacture and delivery of biological medicines. The biotherapeutics that the Company’s solutions support range from replacement therapies such as insulin, vaccines, recombinant proteins and other biologic drugs, to novel cell, gene, mRNA and other nucleic acid therapies.

Biotechnology Selected Financial Data


	Three-Month Period Ended						Nine-Month Period Ended
($ in millions)	September 29, 2023			September 30, 2022			September 29, 2023			September 30, 2022
Sales	$	1,664		$	2,053		$	5,413		$	6,535
Operating profit	417			691			1,493			2,315
Depreciation	40			40			119			127
Amortization of intangible assets	214			197			649			616
Operating profit as a % of sales	25.1		%	33.7		%	27.6		%	35.4		%
Depreciation as a % of sales	2.4		%	1.9		%	2.2		%	1.9		%
Amortization as a % of sales	12.9		%	9.6		%	12.0		%	9.4		%

Sales (Decline) Growth and Core Sales (Decline) Growth


	% Change Three-Month Period Ended September 29, 2023 vs. Comparable 2022 Period		% Change Nine-Month Period Ended September 29, 2023 vs. Comparable 2022 Period
Total sales (decline) growth (GAAP)	(19.0)	%	(17.0)	%
Impact of:
Acquisitions/divestitures	(0.5)	%	—	%
Currency exchange rates	(1.5)	%	0.5	%
Core sales (decline) growth (non-GAAP)	(21.0)	%	(16.5)	%

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Three-Month Period Ended Nine-Month Period Ended
September 29, 2017 September 30, 2016 September 29, 2017 September 30, 2016
Life Sciences $ 1,392.6
$ 1,325.4
$ 4,085.0
$ 3,911.8
Diagnostics 1,448.7
1,212.7
4,216.0
3,606.5
Dental 694.0
675.6
2,052.1
2,046.1
Environmental & Applied Solutions 992.9
918.4
2,890.9
2,733.7
Total $ 4,528.2
$ 4,132.1
$ 13,244.0
$ 12,298.1
Price increases in the segment contributed 5.0% and 4.0% to sales growth on a year-over-year basis during the three and nine-month periods ended September 29, 2023, respectively, and are reflected as a component of core sales decline above.

Total segment sales decreased 19.0% and 17.0% during the three and nine-month periods, respectively, led by decreased core sales in both periods resulting from the factors discussed below, particularly lower year-over-year sales related to COVID-19 and lower core sales in the bioprocessing business. The impact of acquisitions and changes in currency exchange rates increased sales in the three-month period, while the impact of changes in currency exchange rates decreased sales in the nine-month period. In both periods, total segment core sales decreased in North America, China and Western Europe. Core sales in the bioprocessing business decreased year-over-year during both the three and nine-month periods primarily due to lower end-customer demand for COVID-19 related therapeutics and vaccines and the reduction of customer inventory levels. Bioprocessing business core sales decreased more than 20% in the three-month period and decreased approximately 45% in China in the same period. Core sales in the discovery and medical business decreased year-over-year during both the three and nine-month periods due to lower demand for lab filtration, medical and diagnostics and genomics product lines, partially offset by increased demand for protein research products. Additionally, the Company believes that the tightening credit environment also contributed to a reduction in year-over-year demand from emerging biotechnology companies during both periods as these customers continued to preserve capital. The Company expects the impact of reduced demand and reduction of customer inventory levels to continue at least through the remainder of the year.

Operating Profit Performance

Operating profit margins decreased 860 basis points during the three-month period ended September 29, 2023 as compared to the comparable period of 2022.

Third quarter 2023 vs. third quarter 2022 operating profit margin comparisons were unfavorably impacted by:

•Lower third quarter 2023 core sales, the impact of product mix, higher amortization expense and reduced leverage in the Company’s operational and administrative cost structure - 865 basis points

Third quarter 2023 vs. third quarter 2022 operating profit margin comparisons were favorably impacted by:

•Incremental accretive effect in 2023 of acquired businesses - 5 basis points

Operating profit margins decreased 780 basis points during the nine-month period ended September 29, 2023 as compared to the comparable period of 2022.

Year-to-date 2023 vs. year-to-date 2022 operating profit margin comparisons were unfavorably impacted by:

•Lower 2023 core sales, the impact of product mix, inventory write-offs, higher amortization expense and reduced leverage in the Company’s operational and administrative cost structure - 710 basis points

•Second quarter 2023 impairment charges related to technology and other assets - 80 basis points

•Incremental dilutive effect in 2023 of acquired businesses - 10 basis points

Year-to-date 2023 vs. year-to-date 2022 operating profit margin comparisons were favorably impacted by:

•First nine months of 2022 impairments of accounts receivable and inventory in Russia - 20 basis points

Amortization of intangible assets as a percentage of sales increased during both the three and nine-month periods ended September 29, 2023 as compared with 2022, primarily as a result of the decrease in sales and to a lesser extent increased year-over year amortization from the change of a trade name from indefinite-lived to definite-lived.

LIFE SCIENCES

The ~~Company’s~~ Life Sciences segment offers a broad range of ~~research tools~~instruments and consumables that ~~scientists use~~are primarily used by customers to study the basic building blocks of life, including ~~genes,~~DNA and RNA, nucleic acid, proteins, metabolites and cells, in order to understand the causes of disease, identify new therapies, and test and manufacture new drugs, vaccines and ~~vaccines. The~~gene editing technologies. Additionally, the segment ~~through its Pall business, is also~~provides products and consumables used to filter and remove contaminants from a ~~leading provider~~variety of ~~filtration, separation~~liquids and ~~purification technologies to the biopharmaceutical, food and beverage, medical, aerospace, microelectronics and general industrial segments.~~gases in many end-market applications.

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Life Sciences Selected Financial Data


	Three-Month Period Ended						Nine-Month Period Ended
($ in millions)	September 29, 2023			September 30, 2022			September 29, 2023			September 30, 2022
Sales	$	1,706		$	1,723		$	5,211		$	5,090
Operating profit	313			354			974			1,022
Depreciation	31			29			92			84
Amortization of intangible assets	104			103			313			315
Operating profit as a % of sales	18.3		%	20.5		%	18.7		%	20.1		%
Depreciation as a % of sales	1.8		%	1.7		%	1.8		%	1.7		%
Amortization as a % of sales	6.1		%	6.0		%	6.0		%	6.2		%

Three-Month Period Ended Nine-Month Period Ended
($ in millions) September 29, 2017 September 30, 2016 September 29, 2017 September 30, 2016
Sales $ 1,392.6
$ 1,325.4
$ 4,085.0
$ 3,911.8
Operating profit 246.8
204.7
680.0
574.1
Depreciation 29.5
30.3
88.6
92.5
Amortization 76.9
76.1
229.9
223.3
Operating profit as a % of sales 17.7 % 15.4 % 16.6 % 14.7 %
Depreciation as a % of sales 2.1 % 2.3 % 2.2 % 2.4 %
Amortization as a % of sales 5.5 % 5.7 % 5.6 % 5.7 %
Sales Growth and Core Sales Growth

~~Revenue Performance~~

% Change Three-Month Period Ended September 29, 2017 vs. Comparable 2016 Period % Change Nine- Month Period Ended September 29, 2017 vs.
Comparable 2016 Period
Total sales growth (GAAP) 5.0 % 4.5 %
Less the impact of:
Acquisitions and other (1.0 )% (2.5 )%
Currency exchange rates (1.0 )% 1.0 %
Core revenue growth (non-GAAP) 3.0 % 3.0 %

During the first quarter of 2017, a product line was transferred from the Life Sciences segment to the Environmental & Applied Solutions segment. While this change is not material to segment results in total, the resulting change in sales growth has been included in the “Acquisitions and other” line in the table above.


	% Change Three-Month Period Ended September 29, 2023 vs. Comparable 2022 Period		% Change Nine-Month Period Ended September 29, 2023 vs. Comparable 2022 Period
Total sales growth (GAAP)	(1.0)	%	2.5	%
Impact of:
Acquisitions/divestitures	(1.0)	%	(1.0)	%
Currency exchange rates	(0.5)	%	1.0	%
Core sales growth (non-GAAP)	(2.5)	%	2.5	%

Price increases in the segment contributed ~~0.5%~~4.0% to sales growth on a year-over-year basis during both the three and nine-month periods ended September 29, ~~2017,~~2023 and are reflected as a component of core ~~revenue~~sales growth.

~~Core~~Total segment sales of the business’ broad range of mass spectrometers grew on a year-over-year basis during both the three and nine-month periods ended September 29, 2017, led by strong sales growth in China and Western Europe, across the food and forensics and pharmaceutical end-markets, partially offset by declines in demand in the clinical end-market in the United States. Core sales of microscopy products grewdecreased 1.0% during the three-month period ~~ended September 29, 2017~~and increased 2.5% during the nine-month period. Total segment core sales decreased year-over-year in the three-month period as a result of the decline in COVID-19 related sales and weakness at pharma and biopharma customers, partially offset by the impact of acquisitions and currency exchange rates. Total segment core sales increased year-over-year in the nine-month period as a result of increased demand in the life science research, academic and applied end-markets ~~in North America~~ and the ~~medical end-market~~impact of acquisitions, partially offset by the decline in ~~Western Europe. Core~~COVID-19 related sales, weakness at pharma and biopharma customers and the impact of microscopy products grew on a year-over-year basis during the nine-month period primarily due to increased demand in the high-growth markets and Western Europe. Demand for the business’ flow cytometry and genomics products was strong across all major product lines in both the three and nine-month periods ended September 29, 2017 as compared to the comparable periods in 2016, due to strong demand in North America, China and Western Europe. Corecurrency exchange rates. Geographically, overall segment core sales ~~for filtration, separation and purification technologies~~ decreased in the three-month period in North America and to a lesser extent, China, partially offset by Western Europe. Core sales increased in the nine-month period ~~ended September 29, 2017 compared to the comparable periods~~ in ~~2016, as hurricanes in North America impacted performance in the third quarter of 2017. For these businesses, increased demand in North America~~Western Europe and ~~Asia was largely~~China, partially offset by declines in North America. In the ~~Middle East~~three-month period, the decrease in core sales was driven by the flow cytometry, genomics, lab automation, centrifugation, particle counting and ~~Western Europe~~characterization business due to reduced demand across most product lines and in ~~both periods, as increased~~the genomics medicine business from reduced demand in ~~the microelectronics end-market was~~next generation sequencing and basic research. These declines were partially offset by ~~lower demand~~increased core sales in the ~~process,~~ industrial ~~and medical end-markets. For~~filtration business. In the nine-month period, the ~~decline~~increase in core sales was driven by the industrial filtration business, the mass spectrometry business and the microscopy business. These increases were partially offset by lower core sales in the ~~Middle East was largely due~~genomics medicine business as a result of reduced demand for COVID-19 related products and to a ~~major project~~lesser extent from reduced demand in ~~2016 which did not repeat in 2017. The Company expects the core growth rate~~next generation sequencing and basic research, net of ~~the filtration, separation~~increased demand for plasmids, proteins and ~~purification technologies business to improve sequentially in the fourth quarter.~~gene writing and editing solutions.

Operating Profit Performance

Operating profit margins ~~increased 230~~decreased 220 basis points during the three-month period ended September 29, ~~2017~~2023 as compared to the comparable period of ~~2016.~~2022. The following factors ~~favorably~~unfavorably impacted year-over-year operating profit ~~margin comparisons:~~margin:

~~Higher 2017~~•Lower third quarter 2023 core sales, ~~volumes~~the impact of product mix and ~~incremental year-over-year~~reduced leverage in the Company’s operational and administrative cost savings associated with the restructuring actions and continuing productivity improvement initiatives taken in 2016, net of incremental year-over-year costs associated with various new product development, sales and marketing growth investments in 2017structure - ~~185~~195 basis points

•The incremental ~~net accretive~~dilutive effect in ~~2017~~2023 of acquired businesses ~~and intersegment product line transfers~~ - 4525 basis points

Operating profit margins ~~increased 190~~decreased 140 basis points during the nine-month period ended September 29, ~~2017~~2023 as compared to the comparable period of ~~2016. The following factors favorably impacted year-over-year~~2022.

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Year-to-date 2023 vs. year-to-date 2022 operating profit margin ~~comparisons:~~comparisons were unfavorably impacted by:

~~Higher 2017~~•The impact of product mix and reduced leverage in the Company’s operational and administrative cost structure, net of higher 2023 core sales volumes and incremental year-over-year cost savings associated with the restructuring actions and continuing productivity improvement initiatives taken in 2016, net of incremental year-over-year costs associated with various new product development, sales and marketing growth investments and the impact of the stronger U.S. dollar in 2017 - ~~160~~155 basis points

•The incremental ~~net accretive~~dilutive effect in ~~2017~~2023 of acquired businesses ~~and intersegment product line transfers~~ - 3035 basis points

Year-to-date 2023 vs. year-to-date 2022 operating profit margin comparisons were favorably impacted by:

•First nine months of 2022 impairments of accounts receivable and inventory as well as accruals for contractual obligations in Russia - 50 basis points

DIAGNOSTICS

The ~~Company’s~~ Diagnostics segment offers ~~analytical~~clinical instruments, reagents, consumables, software and services that hospitals, physicians’ offices, reference laboratories and other critical care settings use to diagnose disease and make treatment decisions.

Diagnostics Selected Financial Data


	Three-Month Period Ended						Nine-Month Period Ended
($ in millions)	September 29, 2023			September 30, 2022			September 29, 2023			September 30, 2022
Sales	$	2,254		$	2,679		$	6,861		$	7,884
Operating profit	539			761			1,640			2,447
Depreciation	93			98			282			290
Amortization of intangible assets	49			50			149			151
Operating profit as a % of sales	23.9		%	28.4		%	23.9		%	31.0		%
Depreciation as a % of sales	4.1		%	3.7		%	4.1		%	3.7		%
Amortization as a % of sales	2.2		%	1.9		%	2.2		%	1.9		%

Three-Month Period Ended Nine-Month Period Ended
($ in millions) September 29, 2017 September 30, 2016 September 29, 2017 September 30, 2016
Sales $ 1,448.7
$ 1,212.7
$ 4,216.0
$ 3,606.5
Operating profit 242.7
193.9
554.9
606.3
Depreciation 92.6
82.3
271.8
239.4
Amortization 54.2
33.9
160.2
101.8
Operating profit as a % of sales 16.8 % 16.0 % 13.2 % 16.8 %
Depreciation as a % of sales 6.4 % 6.8 % 6.4 % 6.6 %
Amortization as a % of sales 3.7 % 2.8 % 3.8 % 2.8 %
Sales (Decline) Growth and Core Sales (Decline) Growth

~~Revenue Performance~~

% Change Three-Month Period Ended September 29, 2017 vs. Comparable 2016 Period % Change Nine- Month Period Ended September 29, 2017 vs.
Comparable 2016 Period
Total sales growth (GAAP) 19.5 % 17.0 %
Less the impact of:
Acquisitions and other (15.0 )% (14.5 )%
Currency exchange rates (0.5 )% 0.5 %
Core revenue growth (non-GAAP) 4.0 % 3.0 %


	% Change Three-Month Period Ended September 29, 2023 vs. Comparable 2022 Period		% Change Nine-Month Period Ended September 29, 2023 vs. Comparable 2022 Period
Total sales (decline) growth (GAAP)	(16.0)	%	(13.0)	%
Impact of:

Currency exchange rates	0.5	%	1.5	%
Core sales (decline) growth (non-GAAP)	(15.5)	%	(11.5)	%

Price ~~changes~~increases in the segment ~~modestly benefited~~contributed 1.0% to sales growth on a year-over-year basis during both the three and nine-month periods ended September 29, 2023 and are reflected as a component of core sales decline.

Total segment sales decreased 16.0% and 13.0% during the three and nine-month periods, respectively, primarily as a result of decreased core sales resulting from the factors discussed below, particularly lower year-over-year core sales of molecular diagnostics tests for COVID-19, and to a lesser extent due to the impact of changes in currency exchange rates. In both periods, overall segment core sales declines were driven primarily by year-over-year declines in North America, and to a lesser extent in Western Europe. During both the three and nine-month periods, core sales in the molecular diagnostics business decreased on a year-over-year basis as the business experienced declines in sales of diagnostic test solutions for COVID-19, partially offset by increased sales of non-respiratory disease tests, which increased over 20% in the three-month period. Core sales in the segment’s clinical diagnostics businesses grew on a year-over-year basis in both the three and nine-month periods, led by the clinical lab business in North America, and to a lesser extent, the acute care and pathology businesses.

Operating Profit Performance

Operating profit margins decreased 450 basis points during the three-month period ended September 29, ~~2017.~~ 2023 as compared to the comparable period of 2022. The following factors unfavorably impacted year-over-year operating profit margin:

•Lower third quarter 2023 core sales, the impact of product mix and reduced leverage in the Company’s operational and administrative cost structure - 445 basis points

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•The incremental dilutive effect in 2023 of acquired businesses - 5 basis points

Operating profit margins decreased 710 basis points during the nine-month period ended September 29, 2023 as compared to the comparable period of 2022.

Year-to-date 2023 vs. year-to-date 2022 operating profit margin comparisons were unfavorably impacted by:

•Lower 2023 core sales, the impact of product mix and reduced leverage in the Company’s operational and administrative cost structure - 710 basis points

•The incremental dilutive effect in 2023 of acquired businesses - 5 basis points

Year-to-date 2023 vs. year-to-date 2022 operating profit margin comparisons were favorably impacted by:

•First nine months of 2022 impairments of accounts receivable and inventory as well as accruals for contractual obligations in Russia - 5 basis points

Depreciation and amortization increased as a percentage of sales during both the three and nine-month periods ended September 29, 2023, primarily as a result of the decrease in sales.

ENVIRONMENTAL & APPLIED SOLUTIONS

The businesses that comprised Danaher’s Environmental & Applied Solutions segment prior to the Separation are a provider of essential technology solutions, unified under a common purpose of Safeguarding the World’s Most Vital ResourcesTM, to support customers to address large global challenges including environmental resource sustainability, water scarcity, management of severe weather events, food and pharmaceutical security and the impact of an aging workforce.

The Company’s water quality business provides proprietary precision instrumentation and advanced water treatment technologies to help measure, analyze and treat the world’s water in residential, commercial, municipal, industrial, research and natural resource applications. In addition to instrumentation, the water quality businesses also provide chemical reagents, services and digital solutions. The Company’s product identification business provides marking and coding, and packaging and color instrumentation and related consumables for brand owners and consumer packaged goods companies that enable speed to market as well as traceability and quality control of their products. The product identification business’s solutions help customers across consumer, pharmaceutical and industrial sectors to bring products to market, mark packaging in compliance with industry and regulatory standards and convey the safety of products to their customers.

Effective as of September 30, 2023, the first day of the Company’s fourth quarter of 2023, the Company completed the separation of its former Environmental & Applied Solutions business to Veralto.

Environmental & Applied Solutions Selected Financial Data


	Three-Month Period Ended						Nine-Month Period Ended
($ in millions)	September 29, 2023			September 30, 2022			September 29, 2023			September 30, 2022
Sales	$	1,249		$	1,208		$	3,712		$	3,593
Operating profit	286			286			887			829
Depreciation	9			10			29			31
Amortization of intangible assets	12			11			36			38
Operating profit as a % of sales	22.9		%	23.7		%	23.9		%	23.1		%
Depreciation as a % of sales	0.7		%	0.8		%	0.8		%	0.9		%
Amortization as a % of sales	1.0		%	0.9		%	1.0		%	1.1		%

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Sales Growth and Core Sales Growth


	% Change Three-Month Period Ended September 29, 2023 vs. Comparable 2022 Period		% Change Nine-Month Period Ended September 29, 2023 vs. Comparable 2022 Period
Total sales growth (GAAP)	3.5	%	3.5	%
Impact of:
Acquisitions/divestitures	(0.5)	%	(0.5)	%
Currency exchange rates	(2.0)	%	—	%
Core sales growth (non-GAAP)	1.0	%	3.0	%

Price increases in the segment contributed ~~0.5%~~3.5% and 4.5% to sales growth on a year-over-year basis during the three and nine-month ~~period~~periods ended September 29, ~~2017~~2023, respectively, and are reflected as a component of core ~~revenue~~sales growth.

~~Demand~~Total segment sales increased 3.5% during both the three and nine-month periods. In the three-month period, the increase was a result of core sales growth driven by the factors discussed below, changes in currency exchange rates and acquisitions. In the nine-month period, the increase was primarily as a result of core sales growth driven by the factors discussed below, and to a lesser extent acquisitions.

Core sales in the segment’s ~~clinical~~water quality businesses increased at a low-single and mid-single digit rate during the three and nine-month periods ended September 29, 2023, respectively, compared to the comparable periods of 2022. The increase in core sales in the three-month period was driven primarily by the chemical treatment solutions and ultraviolet water disinfection product lines. The increase in core sales in the nine-month period was driven primarily by the analytical instrumentation product line, and to a lesser extent by the chemical treatment solutions product line. Geographically, the increase in core sales in both periods was led primarily by North America, and to a lesser extent by Western Europe, partially offset by China. Core sales in the business’ chemical treatment solutions product line increased year-over-year during both the three and nine-month periods as a result of increased core sales across most major end-markets. Core sales in the business’ ultraviolet water disinfection product line increased year-over-year during the three-month period, driven by demand in the municipal and residential end-markets. Year-over-year core sales in the analytical instrumentation product line increased in the nine-month period driven by the industrial and municipal end-markets in the developed markets, partially offset by lower demand in China.

Core sales in the segment’s product identification businesses decreased at a low-single digit rate during both the three and nine-month periods ended September 29, 2023 compared to the comparable periods of 2022. The decrease in core sales was primarily driven by the packaging and color solutions business in the three-month period and both the marking and coding business and the packaging and color solutions business in the nine-month period. Geographically, the decrease in core sales in the three-month period was led primarily by China and North America, partially offset by Latin America, and in the nine-month period was led by North America and China, partially offset by Latin America and Western Europe. For the packaging and color solutions business, core sales decreased in both the three and nine-month periods primarily driven by reduced capital spending across the consumer packaged goods and industrial end-markets. Core sales in the marking and coding business was essentially flat in the three-month period and decreased during the nine-month period driven by lower demand in the consumer packaged goods and industrial end-markets.

Operating Profit Performance

Operating profit margins decreased 80 basis points during the three-month period ended September 29, 2023 as compared to the comparable period of 2022.

Third quarter 2023 vs. third quarter 2022 operating profit margin comparisons were unfavorably impacted by:

•Third quarter 2023 impairment charges related to a trade name - 50 basis points

•The reduced leverage in the Company’s operational and administrative cost structure, net of higher third quarter 2023 core sales and the impact of product mix - 40 basis points

Third quarter 2023 vs. third quarter 2022 operating profit margin comparisons were favorably impacted by:

•The incremental net accretive effect in 2023 of acquired businesses - 10 basis points

Operating profit margins increased on80 basis points during the nine-month period ended September 29, 2023 as compared to the comparable period of 2022.

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Year-to-date 2023 vs. year-to-date 2022 operating profit margin comparisons were favorably impacted by:

•Higher 2023 core sales, net of the impact of product mix - 75 basis points

•The incremental net accretive effect in 2023 of acquired businesses - 10 basis points

Year-to-date 2023 vs. year-to-date 2022 operating profit margin comparisons were unfavorably impacted by:

•Second quarter 2023 impairment charges related to customer relationships and third quarter 2023 impairment charges related to a trade name, net of a second quarter 2022 impairment charge related to technology and customer relationships - 5 basis points

COST OF SALES AND GROSS PROFIT


	Three-Month Period Ended						Nine-Month Period Ended
($ in millions)	September 29, 2023			September 30, 2022			September 29, 2023			September 30, 2022
Sales	$	6,873		$	7,663		$	21,197		$	23,102
Cost of sales	(2,873)			(3,079)			(8,786)			(9,092)
Gross profit	$	4,000		$	4,584		$	12,411		$	14,010
Gross profit margin	58.2		%	59.8		%	58.6		%	60.6		%

Cost of sales decreased year-over-year ~~basis~~during both the three and nine-month periods ended September 29, 2023 as compared to the comparable periods in 2022, primarily due to lower year-over-year sales volumes, partially offset in the nine-month period by costs associated with restructuring and continuing productivity initiatives and $87 million of charges incurred in the second quarter of 2023, primarily related to excess inventory in the Biotechnology segment, due to reduced demand. In the first quarter of 2022, the Company incurred inventory charges related to the reduction of business activities in Russia.

Year-over-year gross profit margins decreased during both the three and nine-month periods ended September 29, 2023 as compared to the comparable periods in 2022 due primarily to lower core sales and the impact of product mix in both periods. Year-over-year gross profit margin for the nine-month period was unfavorably impacted by costs associated with restructuring and continuing productivity initiatives and the $87 million of charges in the second quarter of 2023 referenced in the preceding paragraph, net of an inventory charge taken during the first quarter of 2022 related to reduction of business activities in Russia.

OPERATING EXPENSES


	Three-Month Period Ended						Nine-Month Period Ended
($ in millions)	September 29, 2023			September 30, 2022			September 29, 2023			September 30, 2022
Sales	$	6,873		$	7,663		$	21,197		$	23,102
Selling, general and administrative (“SG&A”) expenses	2,145			2,149			6,486			6,326
Research and development (“R&D”) expenses	417			420			1,264			1,292

SG&A as a % of sales	31.2		%	28.0		%	30.6		%	27.4		%
R&D as a % of sales	6.1		%	5.5		%	6.0		%	5.6		%

SG&A expenses as a percentage of sales increased for both the three and nine-month periods ended September 29, ~~2017 led by increased demand in high-growth markets, primarily in China and the Middle East, and North America. Increased demand in Western Europe also contributed~~2023 as compared to the ~~year-over-year core sales growth~~comparable periods in 2022, driven by the impact of decreased leverage of the Company’s general and administrative cost base, including amortization expense, resulting from lower 2023 sales. Costs incurred related to preparation for the ~~three-month period. Lower demand in Japan~~separation of the Company’s Environmental & Applied Solutions business of $36 million and ~~Latin America~~$101 million for ~~both the three and nine-month periods and in Western Europe for the nine-month period partially offset this growth. Core sales in the acute care diagnostic business increased year-over-year in both~~ the three and nine-month periods ended September 29, ~~2017, due to strong sales of blood gas~~2023, respectively, and ~~immunoassay analyzer products across all major geographies. Core sales~~impairment charges totaling $6 million and $40 million in ~~the pathology diagnostics business grew year-over-year in both~~ the three and nine-month periods ended September 29, ~~2017, due primarily~~2023, respectively, also negatively impacted SG&A expenses as a percentage of sales. These impairment charges consisted of $6 million in the three-month period in the Environmental & Applied Solutions segment related to a trade name, $28 million in the nine-month period in the Biotechnology segment related to technology and other assets, and $12 million in the nine-month period in the Environmental & Applied Solutions segment related to customer relationships and a trade name, net of a $9 million second quarter 2022 impairment charge related to technology and customer relationships in the Environmental & Applied Solutions segment. Increased labor costs also contributed to the year-over-year increase in SG&A expenses for the three and nine-month periods. Costs associated with restructuring and continuing productivity initiatives decreased year-over-year for the three-month period and increased ~~demand for advanced staining and core histology products. Demand increased in Western Europe and China for both periods as well as in North America~~year-over year for the nine-month period.

~~The acquisition of Cepheid in November 2016 provides additional sales and earnings growth opportunities for~~ For the ~~segment~~nine-month period, these increases were partially offset by expanding geographic and product line diversity, including new product and service offerings in the areas of molecular diagnostics. As Cepheid is integrated into the Company over the next several years, the Company expects to realize significant synergies through the application of the Danaher Business System. During both the three and nine-month periods ended September 29, 2017, Cepheid’s revenues grew on a year-over-year basis in most major geographies and product lines.

During the second quarter of 2017, the Company made the strategic decision to discontinue a molecular diagnostic product line in the Diagnostics segment. As a result, the Company recorded $76 million of pretax restructuring, impairment and other related charges ($51 million after-tax or $0.07 per diluted share). These charges included $49 million of noncash charges for the impairment of certain technology-related intangible assets as well as related inventory and property, plant and equipment with no further use. In addition, the Company incurred $27 million of cash restructuring costs primarily related to employee

~~severance and related charges. These restructuring charges are expected to result in recurring annual savings of approximately $40 million, beginning in 2018.~~

~~Operating profit margins increased 80 basis points during the three-month period ended September 29, 2017 as compared to the comparable period of 2016.~~

~~Third quarter 2017 vs. third quarter 2016 operating profit margin comparisons were favorably impacted by:~~

~~Higher 2017 core sales volumes and incremental year-over-year cost savings associated with the restructuring actions and continuing productivity improvement initiatives taken in 2016 and~~ the impact of a charge related to impairments of certain accounts receivable and accrual of contractual obligations incurred in Russia during the ~~weaker U.S. dollar in the third~~first quarter of ~~2017, net~~2022.

Table of ~~incremental year-over-year costs associated with various new product development, sales, service~~Contents

R&D expenses (consisting principally of internal and ~~marketing growth investments - 245 basis points~~

~~Third quarter 2017 vs. third quarter 2016 operating profit margin comparisons were unfavorably impacted by:~~

~~The incremental net dilutive effect in 2017 of acquired businesses - 165 basis points~~

~~Operating profit margins decreased 360 basis points during the nine-month period ended September 29, 2017 as compared to the comparable period of 2016.~~

~~Third quarter 2017 vs. third quarter 2016 operating profit margin comparisons were favorably impacted by:~~

~~Third quarter 2017 vs. third quarter 2016 operating profit margin comparisons were unfavorably impacted by:~~

~~Restructuring, impairment and other related charges related to discontinuing a product line in the second quarter of 2017 - 180 basis points~~

~~The incremental net dilutive effect in 2017 of acquired businesses - 185 basis points~~

~~Amortization~~contract engineering personnel costs) as a percentage of sales increased during both the three and nine-month periods ended September 29, ~~2017~~2023 as compared to the comparable periods of ~~2016~~2022, primarily due ~~primarily~~ to the ~~impact~~year-over-year sales decline and to a lesser extent the timing of ~~recently acquired businesses, particularly Cepheid.~~

~~DENTAL~~

The Company’s Dental segment provides products that are used to diagnose, treat and prevent disease and ailments of the teeth, gums and supporting bone, as well as to improve the aesthetics of the human smile. The Company is a leading worldwide provider of a broad range of dental consumables, equipment and services, and is dedicated to driving technological innovations that help dental professionals improve clinical outcomes and enhance productivity.

~~Dental Selected Financial Data~~

Three-Month Period Ended Nine-Month Period Ended
($ in millions) September 29, 2017 September 30, 2016 September 29, 2017 September 30, 2016
Sales $ 694.0
$ 675.6
$ 2,052.1
$ 2,046.1
Operating profit 102.2
101.3
301.4
305.6
Depreciation 9.3
10.8
29.7
32.6
Amortization 20.8
20.4
61.0
63.2
Operating profit as a % of sales 14.7 % 15.0 % 14.7 % 14.9 %
Depreciation as a % of sales 1.3 % 1.6 % 1.4 % 1.6 %
Amortization as a % of sales 3.0 % 3.0 % 3.0 % 3.1 %

~~Revenue Performance~~

% Change Three-Month Period Ended September 29, 2017 vs. Comparable 2016 Period % Change Nine- Month Period Ended September 29, 2017 vs.
Comparable 2016 Period
Total sales growth (GAAP) 2.5 % 0.5 %
Less the impact of:
Acquisitions and other — % — %
Currency exchange rates (1.5 )% (0.5 )%
Core revenue growth (non-GAAP) 1.0 % — %

Price increases modestly benefited sales growth on a year-over-year basis in the three-month period and did not significantly impact sales growth on a year-over-year basis during the nine-month period ended September 29, 2017.

Geographically, year-over-year core revenue growth in China and other high-growth markets was strong in both the three and nine-month periods ended September 29, 2017, offset by softer demand in North America and Western Europe. Core revenue growth for implant systems was driven by increased demand in high-growth markets and North America for both the three and nine-month periods. In addition, increased demand in China and North America drove increased core sales of orthodontic products. Dental equipment sales also grew during both periods, primarily in high-growth markets and North America. Lower demand for dental consumable product lines in North America and Western Europe largely offset the year-over-year growth in the other product categories for both the three and nine-month periods, primarily reflecting inventory destocking by several distribution partners. While the Company expects the impact of inventory destocking in its consumables business to lessen, the recent realignment of distributors and manufacturers in the dental industry, primarily in North America, may have a negative impact on equipment revenues in the near-term.

Operating profit margins decreased 30 basis points during the three-month period ended September 29, 2017 as compared to the comparable period of 2016. The following factors unfavorably impacted year-over-year operating profit margin comparisons:

~~Incremental year-over-year costs associated with various~~ new product development sales and marketing growth investments, and unfavorable product mix due to lower sales of dental consumables in 2017, net of incremental year-over-year cost savings associated with the restructuring actions and continuing productivity improvement initiatives taken in 2016 - 15 basis pointsinitiatives.

~~The incremental net dilutive effect in 2017 of acquired businesses - 15 basis points~~

Operating profit margins decreased 20 basis points during the nine-month period ended September 29, 2017 as compared to the comparable period of 2016. The following factors unfavorably impacted year-over-year operating profit margin comparisons:

~~Incremental year-over-year costs associated with various new product development, sales and marketing growth investments, the impact~~OTHER INCOME (EXPENSE), NET

For a description of the ~~stronger U.S. dollar in 2017 and unfavorable product mix due to lower sales of dental consumables in 2017,~~Company’s other income (expense), net ~~of incremental year-over-year cost savings associated with the restructuring actions and continuing productivity improvement initiatives taken in 2016 - 10 basis points~~

~~The incremental net dilutive effect in 2017 of acquired businesses - 10 basis points~~

~~ENVIRONMENTAL & APPLIED SOLUTIONS~~

The Company’s Environmental & Applied Solutions segment products and services help protect important resources and keep global food and water supplies safe. The Company’s water quality business provides instrumentation, services and disinfection systems to help analyze, treat and manage the quality of ultra-pure, potable, waste, ground, source and ocean water in residential, commercial, municipal, industrial and natural resource applications. The Company’s product identification business provides equipment, consumables, software and services for various printing, marking, coding, traceability, packaging, design and color management applications on consumer, pharmaceutical and industrial products.

~~Environmental & Applied Solutions Selected Financial Data~~

Three-Month Period Ended Nine-Month Period Ended
($ in millions) September 29, 2017 September 30, 2016 September 29, 2017 September 30, 2016
Sales $ 992.9
$ 918.4
$ 2,890.9
$ 2,733.7
Operating profit 222.8
223.4
666.0
640.1
Depreciation 11.3
9.1
31.6
26.4
Amortization 14.6
12.8
41.8
38.3
Operating profit as a % of sales 22.4 % 24.3 % 23.0 % 23.4 %
Depreciation as a % of sales 1.1 % 1.0 % 1.1 % 1.0 %
Amortization as a % of sales 1.5 % 1.4 % 1.4 % 1.4 %

~~Revenue Performance~~

% Change Three-Month Period Ended September 29, 2017 vs. Comparable 2016 Period % Change Nine- Month Period Ended September 29, 2017 vs.
Comparable 2016 Period
Total sales growth (GAAP) 8.0 % 6.0 %
Less the impact of:
Acquisitions and other (3.0 )% (2.5 )%
Currency exchange rates (2.0 )% — %
Core revenue growth (non-GAAP) 3.0 % 3.5 %

~~Price increases in the segment contributed 1.0% and 0.5% to sales growth on a year-over-year basis~~ during the three and nine-month periods ended September 29, ~~2017, respectively,~~2023 and ~~are reflected as a component of core revenue growth.~~

Core sales in the segment’s water quality business grew at a low-single digit rate during both the three and nine-month periods ended September 29, 2017 as compared to the comparable periods of 2016. Year-over-year core sales in the analytical instrumentation product line increased in both the three and nine-month periods, as increased demand in the industrial and municipal end-markets was partially offset by lower demand in the environmental end-markets. Geographically, year-over-year core revenue growth for both the three and nine-month periods was driven by increased demand in China and Western Europe partially offset by weakness in the Middle East and Latin America. Increased demand in North America also contributed to the year-over-year core revenue growth for the nine-month period. Core revenue growth in the business’ chemical treatment solutions product line for both the three and nine-month periods was due to an expansion of the customer base in the United States and increased demand in Latin America, driven by higher demand in food, steel and oil and gas-related end-markets. Core sales in the business’ ultraviolet water disinfection product line decreased in the three-month period and increased slightly in the nine-month period ended September 29, 2017 due to differences in the timing of the completion of several projects in 2017 as compared to the comparable periods of 2016.

Core sales in the segment’s product identification businesses grew at a mid-single digit rate during both the three and nine-month periods ended September 29, 2017 as compared to the comparable periods of 2016. Continued strong year-over-year demand for marking and coding equipment and related consumables in most major geographies, led by North America, drove the majority of the core revenue growth. Increased year-over-year demand for the business’ packaging and color solutions products and services, led by Asia and Western Europe, also contributed to core revenue growth for both the three and nine-month periods ended September 29, 2017.

Operating profit margins decreased 190 basis points during the three-month period ended September 29, 2017 as compared to the comparable period of 2016. The following factors unfavorably impacted year-over-year operating profit margin comparisons:

Incremental year-over-year costs associated with various new product development, sales and marketing growth investments, net of the positive impact of higher 2017 core sales volumes and incremental year-over-year cost savings associated with the restructuring actions and continuing productivity improvement initiatives taken in 2016 - 105 basis points

~~The incremental net dilutive effect in 2017 of acquired businesses and intersegment product line transfers - 85 basis points~~

~~Operating profit margins decreased 40 basis points during the nine-month period ended September 29, 2017 as compared to the comparable period of 2016.~~

~~Year-to-date 2017 vs. year-to-date 2016 operating profit margin comparisons were favorably impacted by:~~

Higher 2017 core sales volumes, incremental year-over-year cost savings associated with the restructuring actions and continuing productivity improvement initiatives taken in 2016 and improved pricing, net of incremental year-over-year costs associated with various new product development, sales and marketing growth investments - 20 basis points

~~Year-to-date 2017 vs. year-to-date 2016 operating profit margin comparisons were unfavorably impacted by:~~

~~The incremental net dilutive effect in 2017 of acquired businesses and intersegment product line transfers - 60 basis points~~

~~COST OF SALES AND GROSS PROFIT~~

Three-Month Period Ended Nine-Month Period Ended
($ in millions) September 29, 2017 September 30, 2016 September 29, 2017 September 30, 2016
Sales $ 4,528.2
$ 4,132.1
$ 13,244.0
$ 12,298.1
Cost of sales (1,991.4 ) (1,846.1 ) (5,890.6 ) (5,463.5 )
Gross profit $ 2,536.8
$ 2,286.0
$ 7,353.4
$ 6,834.6
Gross profit margin 56.0 % 55.3 % 55.5 % 55.6 %

The year-over-year increase in cost of sales during both the three and nine-month periods ended September 29, 2017 as compared to the comparable periods in 2016, is due primarily to the impact of higher year-over-year sales volumes, including sales from recently acquired businesses. During the nine-month period ended September 29, 2017 the impact of restructuring, impairment and other related charges associated with the Company’s strategic decision to discontinue a product line in its Diagnostics segment also contributed to the year-over-year increase in cost of sales. Foreign exchange losses realized due to the weakening of the U.S. dollar against other major currencies also increased cost of sales for the nine-month period ended September 29, 2017. These increases were partially offset by incremental year-over-year cost savings associated with the restructuring and continued productivity improvement actions taken in 2016.

The year-over-year increase in gross profit margins during the three-month period ended September 29, 2017 as compared to the comparable period in 2016, is due to the favorable impact of higher year-over-year sales volumes, and incremental year-over-year cost savings associated with the restructuring activities and continued productivity improvement actions taken in 2016. The year-over-year decrease in gross profit margins during the nine-month period ended September 29, 2017 as compared to the comparable period in 2016, is due primarily to the impact of the restructuring, impairment and other related charges associated with the Company’s strategic decision to discontinue a product line in its Diagnostics segment. The above mentioned foreign exchange losses also reduced gross profit margins for the nine-month period ended September 29, 2017. These impacts were largely offset by the favorable impact of higher year-over-year sales volumes, and incremental year-over-year cost savings associated with the restructuring activities and continued productivity improvement actions taken in 2016.

~~OPERATING EXPENSES~~

Three-Month Period Ended Nine-Month Period Ended
($ in millions) September 29, 2017 September 30, 2016 September 29, 2017 September 30, 2016
Sales $ 4,528.2
$ 4,132.1
$ 13,244.0
$ 12,298.1
Selling, general and administrative (“SG&A”) expenses 1,490.1
1,345.8
4,448.4
4,105.2
Research and development (“R&D”) expenses 279.2
241.1
829.9
707.1
SG&A as a % of sales 32.9 % 32.6 % 33.6 % 33.4 %
R&D as a % of sales 6.2 % 5.8 % 6.3 % 5.7 %

The year-over-year increase in SG&A expenses as a percentage of sales for the three-month period ended September 29, 2017 as compared to the comparable period in 2016, was driven by higher relative spending levels at recently acquired companies, primarily Cepheid, and continued investments in sales and marketing growth initiatives, partially offset by the benefit of increased leverage of the Company’s general and administrative cost base resulting from higher 2017 sales volumes. The year-over-year increase in SG&A expenses as a percentage of sales for the nine-month period ended September 29, 2017 as compared to the comparable period in 2016, was driven by restructuring, impairment and other related charges associated with the Company’s strategic decision to discontinue a product line in its Diagnostics segment, higher relative spending levels at recently acquired companies, primarily Cepheid, and continued investments in sales and marketing growth initiatives. These increases were partially offset by the benefit of increased leverage of the Company’s general and administrative cost base resulting from higher 2017 sales volumes.

The year-over-year increase in R&D expenses (consisting principally of internal and contract engineering personnel costs) as a percentage of sales for both the three and nine-month periods ended September 29, 2017 as compared to the comparable periods in 2016, was due primarily to higher R&D expenses as a percentage of sales in the businesses most recently acquired, particularly Cepheid, as well as continued investments in new product development initiatives.

~~NONOPERATING INCOME (EXPENSE)~~

In the third quarter of 2016, the Company redeemed approximately $1.9 billion in aggregate principal amount of outstanding indebtedness and paid an aggregate of $188 million in make-whole premiums in connection with those redemptions, plus accrued and unpaid interest. The payment of these make-whole premiums, net of certain deferred gains of $9 million, are reflected as a loss on early extinguishment of borrowings in2022, refer to Note 8 to the accompanying Consolidated Condensed ~~Statement of Earnings of $179 million ($112 million after-tax or $0.16 per diluted share) in the three and nine-month periods ended September 30, 2016.~~Financial Statements.

INTEREST COSTS AND FINANCING

For a discussion of the Company’s outstanding indebtedness, refer to Note 611 to the accompanying Consolidated Condensed Financial Statements.

Interest expense of ~~$40~~$73 million and ~~$121~~$208 million for the three and nine-month periods ended September 29, ~~2017,~~2023, respectively, was ~~$4 million lower and~~ $31 million ~~lower~~higher and $61 million higher than the comparable periods of ~~2016, respectively,~~2022, due primarily to higher balances and higher average interest rates on the ~~decrease in interest costs as a result of the early extinguishment of certain~~Company’s outstanding euro-denominated commercial paper borrowings in the ~~third quarter~~three and nine-month periods in 2023 versus the comparable periods of ~~2016 using the proceeds from the Fortive Distribution, partially offset by the cost~~2022.

Interest income of ~~additional borrowings incurred to finance the acquisition of Cepheid in November 2016~~$79 million and ~~additional long-term debt refinancing in 2017.~~

~~INCOME TAXES~~

~~The Company’s effective tax rate from continuing operations~~$186 million for the three and nine-month periods ended September 29, ~~2017~~2023, respectively, was ~~21.6%~~$70 million higher and ~~17.7%, respectively, as~~$174 million higher than the comparable periods of 2022, due primarily to higher average interest rates and higher average cash balances in 2023 compared to ~~15.5% and 26.6% for the three and nine-month periods ended September 30, 2016, respectively.~~2022.

INCOME TAXES

The following table summarizes the Company’s effective tax rate:


	Three-Month Period Ended				Nine-Month Period Ended
	September 29, 2023		September 30, 2022		September 29, 2023		September 30, 2022
Effective tax rate	19.2	%	18.6	%	19.7	%	18.4	%

The Company operates globally, including in certain jurisdictions with lower tax rates than the U.S. federal statutory rate. Therefore, the impact of operating in such jurisdictions contributes to a lower effective tax rate compared to the U.S. federal statutory tax rate.

The effective tax rate for ~~2017 and 2016~~the three-month period ended September 29, 2023 differs from the U.S. federal statutory rate of ~~35.0%~~21.0% due ~~principally~~ to the ~~Company’s~~geographic mix of earnings ~~outside~~described above. Discrete tax benefits from excess tax benefits from stock-based compensation were offset by charges related to tax costs related to the ~~United States that are indefinitely reinvested~~separation of the Environmental & Applied Solutions business and ~~taxed at rates lower than the U.S. federal~~changes in estimates associated with prior period uncertain tax positions.

~~statutory rate.~~ The effective tax rate for the nine-month period ended September 29, ~~2017 includes a benefit~~2023 differs from the ~~release~~U.S. federal statutory rate of ~~reserves upon~~21.0% principally due to the ~~expiration~~geographic mix of ~~statutes~~earnings described above, partially offset by net discrete tax charges of ~~limitations~~$13 million. Net discrete tax charges related primarily to tax costs related to the separation of the Environmental & Applied Solutions business, tax costs related to legal and ~~audit settlements,~~operational actions taken to realign certain businesses and changes in estimates associated with prior period uncertain tax positions, partially offset by excess tax benefits from stock-based compensation ~~as well as higher~~and interest on prior year tax ~~benefits from restructuring~~refunds. The net discrete charges ~~that are predominantly in~~increased the ~~United States, which in aggregate decreased the reported~~effective tax rate by ~~3.3%.~~ 0.3% for the nine-month period ended September 29, 2023.

The effective tax rate for the ~~three and nine-month periods~~three-month period ended September 30, ~~2016 includes a higher~~2022 differs from the U.S. federal statutory rate of 21.0% principally due to the geographic mix of earnings described above and net discrete benefits of $3 million related primarily to excess tax ~~rate~~benefits from stock-based compensation, partially offset by changes in estimates associated with ~~the loss on the early extinguishment of borrowings during the third quarter of 2016 which lowered~~prior period uncertain tax positions. The net discrete benefits reduced the effective tax rate by ~~6.0% and 1.0%, respectively.~~ 0.2% for the three-month period ended September 30, 2022.

The effective tax rate for the nine-month ~~periods~~period ended September 30, ~~2016 also includes charges related to~~2022 differs from the ~~repatriation~~U.S. federal statutory rate of 21.0% principally due the geographic mix of earnings described above and ~~legal entity realignments~~net discrete benefits of $52 million related primarily to excess tax benefits from stock-based compensation and changes in estimates associated with ~~the Separation and higher~~prior period uncertain tax ~~rate on the gain from sale of marketable equity securities which in aggregate increased~~positions. The net discrete benefits reduced the effective tax rate by ~~6.6%.~~0.9% for the nine-month period ended September 30, 2022.

The Company (including its subsidiaries) conducts business globally, and files numerous consolidated and separate income tax returns in federal, state and foreign jurisdictions. ~~The countries~~In addition to the Company’s significant presence in ~~which~~the U.S., the Company also has a significant presence ~~that have significantly lower statutory tax rates than the United States include~~in China, Denmark, Germany, Singapore, Sweden, Switzerland and the

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United ~~Kingdom. The Company’s ability to obtain tax benefits from lower statutory tax rates outside~~Kingdom (“UK”). Excluding these jurisdictions, the ~~United States is dependent on its levels of taxable income in these foreign countries and the amount of foreign earnings which are indefinitely reinvested in those countries. The~~ Company believes that a change in the statutory tax rate of any individual foreign country would not have a material ~~effect~~impact on the Company’s financial statements given the ~~geographic~~geographical dispersion of the Company’s taxable income.

The Company and its subsidiaries are routinely examined by various domestic and international taxing authorities. The U.S. Internal Revenue Service (“IRS”) has completed the examinations of substantially all of the Company’s federal income tax returns through ~~2011~~2015 and is currently examining certain of the Company’s federal income tax returns for ~~2012~~2016 through ~~2015.~~2021. In addition, the Company has subsidiaries in Belgium, Canada, China, Denmark, France, ~~Finland,~~ Germany, India, Italy, Japan, ~~Singapore, Sweden,~~Korea, Switzerland, the ~~United Kingdom~~UK and various other countries, states and provinces that are currently under audit for years ranging from 2004 through ~~2015.~~2022.

~~Tax authorities in Denmark have raised~~In the fourth quarter of 2022, the IRS proposed significant ~~issues~~adjustments to the Company’s taxable income for the years 2016 through 2018 with respect to the deferral of tax on certain premium income related to ~~interest accrued by~~the Company’s self-insurance programs. For income tax purposes, the recognition of premium income has been deferred in accordance with U.S. tax laws related to insurance. The IRS challenged the deferral of premium income for certain types of the Company’s ~~subsidiaries. On December 10, 2013,~~self-insurance policies. The proposed adjustments would have increased the Company’s taxable income over the 2016 through 2018 periods by approximately $2.5 billion. In the first quarter of 2023, the Company ~~received assessments from~~settled these proposed adjustments with the ~~Danish tax authority (“SKAT”) totaling approximately DKK 1.5 billion including interest~~IRS, although the audit is still open with respect to other matters for the 2016 through ~~September 29, 2017 (approximately $235 million based on the exchange rate as of September 29, 2017), imposing withholding tax relating to interest accrued in Denmark on borrowings from certain~~2018 period. The impact of the settlement with respect to the Company’s ~~subsidiaries for~~self-insurance policies was not material to the ~~years 2004-2009. The Company is currently in discussions~~Company’s financial statements, including cash flows and the effective tax rate. As the settlement with ~~SKAT and anticipates receiving an assessment for years 2010-2012 totaling approximately DKK 874 million including interest through September 29, 2017 (approximately $139 million based on~~ the ~~exchange rate as of September 29, 2017).~~IRS was specific to the audit period, the settlement does not preclude the IRS from proposing similar adjustments to the Company’s self-insurance programs with respect to periods subsequent to 2018. Management believes the positions the Company has taken in ~~Denmark~~its U.S. tax returns are in accordance with the relevant tax ~~laws and is vigorously defending its positions. The Company appealed these assessments to~~laws.

As a result of the ~~National Tax Tribunal~~completion of the Separation in ~~2014 and intends on pursuing this matter through~~ the ~~European Court~~fourth quarter of ~~Justice should this appeal be unsuccessful. The ultimate resolution of this matter is uncertain, could take many years, and could result in a material adverse impact to~~2023, the ~~Company’s financial statements, including its effective tax rate.~~

~~The~~ Company expects its effective tax rate ~~related to continuing operations~~ for the remainder of ~~2017~~2023 to be approximately ~~21%~~18.5% based on its projected mix of ~~earnings, although the actual~~earnings. The Company’s effective tax rate could vary ~~from the anticipated rate~~ as a result of many factors, including but not limited to the following:

•The expected rate for the remainder of ~~2017~~2023 includes the anticipated discrete income tax benefits from excess tax deductions related to the Company’s stock compensation programs, which are ~~now~~ reflected as a reduction in tax expense, ~~(refer to Note 1 to the accompanying Consolidated Condensed Financial Statements for additional information related to this change in accounting guidance),~~ 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.~~projection, including as a result of the separation of the Environmental & Applied Solutions business.

•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, are reflected in the period in which they occur.~~regulations.

•Any future ~~legislative~~ changes in tax law or ~~potential~~the implementation of increases in tax ~~reform in~~rates, the ~~United States or other jurisdictions~~impact of future regulations and any related additional tax planning efforts to address these changes.

As a result of the uncertainty in predicting these items, it is reasonably possible that the actual effective tax rate used for financial reporting purposes will change in future periods.

~~In the nine-month period ended September 29, 2017, Danaher recorded a $22 million income tax benefit related~~Refer to Note 7 to the ~~release of previously provided reserves associated with uncertain~~Consolidated Condensed Financial Statements for discussion regarding the Company’s significant tax positions on certain Danaher tax returns which were jointly filed with Fortive entities. These reserves were released due to the expiration of statutes of limitations for those returns. All Fortive entity-related balances were included in the income tax benefit related to discontinued operations.matters.

COMPREHENSIVE INCOME

~~For the three-month period ended September 29, 2017,~~In 2023, comprehensive income increased $154 million as compared to the comparable period of 2016, primarily due to an increase in net earnings in the three-month period partially offset by a smaller impact from foreign currency translation adjustments. In the nine-month period ended September 29, 2017, comprehensive income increased $490 million as compared to the comparable period of 2016, due to an increased gain from foreign currency translation adjustments compared to the gain realized in 2016 and the change in the unrealized gains on the available-for-sale securities, partially offset by lower net earnings in the nine-month period of 2017 associated with the spin-off of Fortive in July 2016. For the three and nine-month periods ended September 29, 2017, the Company recorded a foreign currency translation gain of $260$283 million and ~~$839 million, respectively, as compared to a translation gain of $276 million and $315~~$448 million for the three and nine-month periods ended September 29, 2023, respectively, as compared to the comparable periods of 2022. For the three-month period, the increase in comprehensive income was primarily driven by decreased losses from foreign currency translation adjustments, partially offset by lower net earnings. For the nine-month period, the increase in comprehensive income was primarily driven by lower losses from foreign currency translation adjustments, partially offset by lower net earnings and increased losses from cash flow hedge adjustments. The Company recorded foreign currency translation losses of $303 million for the three-month period ended September 29, 2023 compared to losses of approximately $1.0 billion for the three-month period ended September 30, ~~2016,~~2022. The Company recorded foreign currency translation losses of $982 million and approximately $2.8 billion for the nine-month periods ended September 29, 2023 and September 30, 2022, respectively.

~~INFLATION~~

The ~~effect~~foreign currency translation losses were primarily driven by the change in the exchange rates between the U.S. dollar and the Swedish krona in both periods, as well as the euro during the three-month period and the Chinese renminbi in the nine-month period. Foreign currency translation adjustments reflect the gain or loss resulting from the impact of ~~inflation~~the change in currency exchange rates on the Company’s ~~revenues~~foreign operations as they are translated to the Company’s reporting currency, the U.S. dollar. The Company recorded losses of $81 million and ~~net earnings was not significant in~~$106 million from cash

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flow hedge adjustments related to the Company’s cross-currency swap derivative contracts for the three and nine-month periods ended September 29, ~~2017.~~2023, respectively, as compared to losses of $77 million and $31 million for the comparable periods of 2022.

LIQUIDITY AND CAPITAL RESOURCES

Management assesses the Company’s liquidity in terms of its ability to generate cash to fund its operating, investing and financing activities. The Company continues to generate substantial cash from operating activities and believes that its operating cash flow, cash on hand and other sources of liquidity will be sufficient to allow it to continue investing in existing businesses (including capital expenditures), consummating strategic acquisitions and investments, paying interest and servicing debt, paying dividends, funding restructuring activities, repurchasing common stock and managing its capital structure on a ~~short~~short-term and long-term basis.

The Company has relied primarily on borrowings under its commercial paper program to address liquidity requirements that exceed the capacity provided by its operating cash flows and cash on hand, while also accessing the capital markets from time to time including to secure financing for more significant acquisitions. Subject to any limitations that may result from market disruptions, the Company anticipates following the same approach in the future.

Overview of Cash Flows and Liquidity

Following is an overview of the Company’s cash flows and liquidity ~~for~~($ in millions):


	Nine-Month Period Ended
($ in millions)	September 29, 2023		September 30, 2022
Total operating cash provided by operations	$	5,545	$	5,978

Cash paid for acquisitions	$	—	$	(304)
Payments for additions to property, plant and equipment	(981)		(823)
Proceeds from sales of property, plant and equipment	8		9
Payments for purchases of investments	(152)		(354)
Proceeds from sales of investments	33		18

All other investing activities	28		36

Total cash used in investing activities	$	(1,064)	$	(1,418)

Proceeds from the issuance of common stock in connection with stock-based compensation, net	$	51	$	15



Payment of dividends	(621)		(615)
Net proceeds from borrowings (maturities longer than 90 days)	2,605		—
Net repayments of borrowings (maturities of 90 days or less)	(9)		(719)
Net repayments of borrowings (maturities longer than 90 days)	—		(265)

All other financing activities	(53)		(80)
Total cash provided by (used in) financing activities	$	1,973	$	(1,664)

•Operating cash flows decreased $433 million, or 7%, during the nine-month period ended September 29, ~~2017:~~

~~Overview of Cash Flows and Liquidity~~

Nine-Month Period Ended
($ in millions) September 29, 2017 September 30, 2016
Total operating cash flows provided by continuing operations $ 2,643.1
$ 2,438.5

Cash paid for acquisitions $ (112.0 ) $ (99.6 )
Payments for additions to property, plant and equipment (445.8 ) (422.1 )
Proceeds from sales of property, plant and equipment 32.3
7.2
Proceeds from sale of investments —
264.8
All other investing activities (2.4 ) —
Total investing cash used in discontinued operations —
(69.8 )
Net cash used in investing activities $ (527.9 ) $ (319.5 )

Proceeds from the issuance of common stock $ 49.0
$ 156.6
Payment of dividends (281.0 ) (313.3 )
Make-whole premiums to redeem borrowings prior to maturity —
(188.1 )
Payment for purchase of noncontrolling interests (64.4 ) —
Net repayments of borrowings (maturities of 90 days or less) (3,319.1 ) (2,334.2 )
Proceeds from borrowings (maturities longer than 90 days) 1,684.0
3,240.9
Repayments of borrowings (maturities longer than 90 days) (562.4 ) (2,354.2 )
All other financing activities (50.7 ) (26.7 )
Cash distributions to Fortive, net —
(485.3 )
Net cash used in financing activities $ (2,544.6 ) $ (2,304.3 )

~~Operating cash flows from continuing operations increased $205 million, or approximately 8%, during the first nine months of 2017~~2023 as compared to the ~~first nine months~~comparable period of ~~2016,~~2022, due to ~~higher~~lower net earnings (after excluding in both periods charges for depreciation, amortization, stock compensation and unrealized investment gains/losses) in the 2023 period compared to the 2022 period and lower cash used in aggregate for ~~funding~~ accounts ~~receivable,~~receivables, inventories, ~~and~~trade accounts payable ~~during the period partially offset by increased cash used for income tax~~ and ~~certain employee benefit payments~~prepaid and accrued expenses, including deferred taxes, in 2023 compared to the prior ~~years.~~year.

~~The Company used~~•In September 2023, Veralto received approximately $2.6 billion of cash ~~generated from operations as well as the~~ proceeds ~~from the long-term borrowings noted below to reduce net outstanding borrowings with maturities of 90 days or less, primarily commercial paper borrowings, by approximately $3.3 billion.~~

In May 2017, the Company received net proceeds, after offering expenses, of approximately ¥83.6 billion (approximately $744 million based on currency exchange rates as of the date of the pricing of the notes) from the issuance of ~~yen-denominated notes~~debt (refer to Note 611 of the accompanying Consolidated Condensed Financial Statements), ~~and used~~of which approximately $2.6 billion was distributed to the ~~net~~Company as partial consideration for the contribution to Veralto of the businesses comprising the Company’s former Environmental & Applied Solutions segment. The Company intends to use a portion of the cash distribution proceeds it received from ~~the offering~~Veralto to ~~repay~~meet upcoming commercial paper ~~borrowings.~~

~~In June 2017,~~and bond maturities and to use the ~~Company received net proceeds, after underwriting discounts and commissions and offering expenses, of approximately €843 million (approximately $940 million based on currency exchange rates as~~balance of the ~~date~~proceeds to partially fund certain of the ~~pricing~~Company’s regular, quarterly cash dividends to shareholders.

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•Net cash used in investing activities in the ~~notes) from~~2023 period consisted primarily of capital expenditures and investments and decreased year-over-year largely as a result of lower cash paid for acquisitions and investments in the ~~issuance of euro-denominated notes (refer~~2023 period compared to Note 6 of the accompanying Consolidated Condensed Financial Statements) and used the net proceeds from the offering to repay the €500 million floating rate senior unsecured notes which matured on June 30, 2017 as well as to repay commercial paper borrowings.2022.

•As of September 29, ~~2017,~~2023, the Company held ~~$649 million~~approximately $12.3 billion of cash and cash equivalents.

Operating Activities

Cash flows from operating activities can fluctuate significantly from period-to-period as working capital needs and the timing of payments for income taxes, restructuring activities and productivity improvement initiatives, pension funding and other items impact reported cash flows.

Operating cash flows ~~from continuing operations~~ were approximately ~~$2.6~~$5.5 billion for the first nine months of ~~2017, an increase~~2023, a decrease of ~~$205~~$433 million, or ~~approximately 8%~~7%, as compared to the comparable period of ~~2016.~~2022. The year-over-year change in operating cash flows from ~~2016~~2022 to ~~2017~~2023 was primarily attributable to the following factors:

~~2017~~•2023 operating cash flows reflected ~~an increase~~a decrease of approximately $1.3 billion in net earnings ~~from continuing operations~~ for the first nine months of ~~2017~~2023 as compared to the comparable period in 2016. The increase in net earnings from continuing operations was partially offset by the net impact of the gain from the sale of marketable equity securities and the loss on early extinguishment of borrowings in 2016. The cash flow impact of the gain from the sale of marketable equity securities is reflected in the investing activities section of the accompanying Consolidated Condensed Statement of Cash Flows, and the cash flow impact of the loss on early extinguishment of borrowings is reflected in the financing activities section of the Consolidated Condensed Statement of Cash Flows, and therefore, do not contribute to operating cash flows.2022.

•Net earnings ~~from continuing operations~~ for the first nine months of ~~2017 reflected an increase of $98~~2023 also includes $102 million oflower noncash charges for depreciation, intangible asset amortization, stock compensation expense and ~~amortization expense~~unrealized investment gains/losses as compared to the comparable period of ~~2016.~~2022. Amortization expense primarily relates to the amortization of intangible ~~assets acquired in connection with acquisitions and increased due to the impact of recently acquired businesses, particularly Cepheid.~~assets. Depreciation expense relates to ~~both~~ the Company’s manufacturing and operating facilities as well as instrumentation leased to customers under operating-type lease ~~arrangements~~(“OTL”) arrangements. Depreciation, amortization and ~~increased due primarily to the impact of recently acquired businesses, particularly Cepheid. Depreciation and amortization~~stock compensation are noncash expenses that decrease earnings without a corresponding impact to operating cash flows. Unrealized investment gains/losses impact net earnings without immediately impacting cash flows as the cash flow impact from investments occurs when the invested capital is returned to the Company.

•The aggregate of trade accounts receivable, inventories and trade accounts payable ~~used $72~~provided $285 million in operating cash flows during the first nine months of ~~2017,~~2023, compared to ~~$271 million~~approximately $1.0 billion of operating cash flows used in the comparable period of ~~2016.~~2022. 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, deferred income taxes and accrued expenses and other liabilities ~~provided $28~~used $436 million of operating cash flows during the first nine months of ~~2017,~~2023, compared to ~~$429~~$69 million ~~provided~~of operating cash flows used in the comparable period of ~~2016. This operational cash flow in the first nine months of 2017 resulted primarily from the~~2022. The timing of cash payments for ~~income taxes compared to the timing of recording the related income tax provisions,~~ various employee-related liabilities, ~~and~~higher income tax payments, realized investment returns, customer funding ~~during~~and changes in accrued expenses drove the ~~first nine months~~majority of ~~2017 compared to the comparable period of 2016.~~this change.

Investing Activities

Cash flows relating to investing activities consist primarily of cash used for acquisitions and capital expenditures, including instruments leased to customers, cash used for investments and cash proceeds from divestitures of businesses or assets.

Net cash used in investing activities ~~from continuing operations was $528~~decreased $354 million ~~during~~in the nine-month period ended September 29, 2023 compared to the comparable period of 2022, primarily as a result of a decrease in cash used for the purchase of investments. In the first nine months of ~~2017 compared to $250~~2023 and 2022, the Company invested $152 million ~~of cash used~~and $354 million, respectively, in the first nine months of 2016. For a discussion of the Company’s acquisitions during the first nine months of 2017 refer to “—Overview” and for a discussion of the Company’s 2016 sale of marketablenon-marketable equity securities ~~refer~~and partnerships.

Though the relative significance of particular categories of capital investment can change from period to ~~“—Results of Operations—Nonoperating Income (Expense)”.~~

~~Capital~~period, capital expenditures are typically made ~~primarily~~ for increasing manufacturing capacity, replacing equipment, ~~supporting new product development, improving information technology systems and~~ the manufacture of instruments that are used in ~~operating-type lease~~OTL arrangements that certain of the Company’s businesses enter into with ~~customers.~~customers, supporting new product development and improving IT systems. Capital expenditures increased ~~$24~~$158 million on a year-over-year basis for the ~~first nine months of 2017~~nine-month period ended September 29, 2023 compared to ~~2016 due to increased investments~~the comparable period in ~~other operating assets, particularly new facilities and operating assets at newly acquired businesses.~~2022. For the full year ~~2017,~~2023, the Company ~~expects~~forecasts capital spending to be approximately ~~$675 million, though actual expenditures will ultimately depend on business conditions.~~

~~Capital disposals~~$1.5 billion (excluding capital spending during 2023 with respect to the businesses contributed to Veralto in the ~~first nine months~~Separation), driven primarily by continued expenditures to support customer demand.

Table of ~~2017 were primarily related to the sale of a building.~~Contents

Financing Activities and Indebtedness

Cash flows relating to financing activities consist ~~primarily~~ of cash flows associated with the issuance and repayments of commercial paper, issuance and ~~other~~repayment of long-term debt, borrowings under committed credit facilities, issuance and repurchases of common stock, issuance of preferred stock and payments of cash dividends to shareholders.

Financing activities ~~from continuing operations used~~provided cash of approximately ~~$2.5~~$2.0 billion during the ~~first nine months of 2017~~nine-month period ended September 29, 2023 compared to approximately ~~$1.8~~$1.7 billion of cash used in the comparable period of ~~2016.~~2022. The year-over-year increase in cash ~~used in~~provided by financing activities was due primarily to ~~higher net~~approximately $2.6 billion of cash proceeds received from Veralto’s debt issuance in September 2023 (which Veralto subsequently distributed to the Company prior to the Separation), partially offset by lower repayments of ~~commercial paper~~ borrowings in 2017 as well as lower proceeds from the issuance of the Yen Notes and the Euronotes in 2017 as compared to the proceeds from the issuance of debt (primarily related to Fortive) in the comparable period of 2016.2023.

For a description of the Company’s outstanding debt as of September 29, ~~2017, the debt issued and debt repaid during the nine-month period ended September 29, 2017~~2023 and the Company’s commercial paper programs and credit ~~facilities,~~facility, refer to Note 611 to the accompanying Consolidated Condensed Financial Statements. As of September 29, ~~2017,~~2023, the Company was in compliance with all of its respective debt covenants.

Effective April 21, 2017, the Company reduced the commitment amount under the 364-Day Facility from $3.0 billion to $2.3 billion, and effective June 23, 2017, the Company further reduced the commitment amount under the facility to $1.0 billion, as permitted by the facility. As ~~of September 29, 2017, Danaher had the ability to incur approximately an additional $2.1 billion of indebtedness~~discussed in direct borrowings under the Credit Facilities or under outstanding commercial paper facilities (based on aggregate amounts available under the Credit Facilities that were not being used to backstop outstanding commercial paper balances). Effective October 23, 2017, Danaher’s ability to incur additional indebtedness will be reduced to approximately $1.1 billion due to the expiration of the 364-Day Facility noted above.

~~The Company has classified approximately $2.9 billion of its borrowings outstanding under the commercial paper programs as of September 29, 2017 as long-term debt~~Note 15 in the accompanying Consolidated Condensed ~~Balance Sheet as~~Financial Statements all outstanding shares of the ~~Company had the intent~~Company’s 4.75% MCPS Series A and ~~ability, as supported by availability under the Credit Facility,~~5.00% MCPS Series B were converted to ~~refinance these borrowings for~~common shares on April 15, 2022 and April 17, 2023, respectively. The Company’s 4.75% MCPS Series A converted to common shares at ~~least one year from the balance sheet date. As commercial paper obligations mature, the Company may issue additional short-term commercial paper obligations~~a rate of 6.6632 common shares per share of preferred stock. The Company’s 5.00% MCPS Series B converted to ~~refinance all or part~~common shares at a rate of ~~these borrowings.~~5.0175 common shares per share of preferred stock.

Stock Repurchase Program

~~Neither~~For information regarding the ~~Company nor any “affiliated purchaser” repurchased any shares~~Company’s stock repurchase program, refer to Part II—Item 2, “Unregistered Sales of Equity Securities and Use of Proceeds”.

Dividends

Aggregate cash payments for dividends on Company common stock during the nine-month period ended September 29, ~~2017. On July 16, 2013,~~2023 were $578 million and aggregate cash payments for dividends on the Company’s ~~Board~~MCPS during the nine-month period ended September 29, 2023 were $43 million. The increase in dividend payments on the Company’s common stock over the comparable period of ~~Directors approved~~2022 primarily relates to the ~~Repurchase Program authorizing~~increase in the ~~repurchase~~quarterly dividend rate for common stock beginning with respect to the dividend paid in the second quarter of up2023. The decrease in MCPS dividend payments compared to ~~20 million~~the comparable period of 2022 primarily relates to the conversion of all outstanding shares of the Company’s ~~common stock from time to time on the open market or in privately negotiated transactions. There is no expiration date for the Repurchase Program,~~4.75% MCPS Series A and the ~~timing~~5.00% MCPS Series B to common shares on April 15, 2022 and amount of any shares repurchased under the program will be determined by the Company’s management based on its evaluation of market conditions and other factors. The Repurchase Program may be suspended or discontinued at any time. Any repurchased shares will be available for use in connection with the Company’s equity compensation plans (or any successor plan) and for other corporate purposes. As of September 29, 2017, 20 million shares remained available for repurchase pursuant to the Repurchase Program. The Company expects to fund any future stock repurchases using the Company’s available cash balances or proceeds from the issuance of debt.

~~Dividends~~

Aggregate cash payments for dividends during the first nine months of 2017 were $281 million. This is lower than in the comparable period of 2016, as the Company decreased the per share amount of its quarterly dividend in the third quarter of 2016 as a result of the Fortive Separation.April 17, 2023, respectively.

In the third quarter of ~~2017,~~2023, the Company declared a regular quarterly dividend of ~~$0.14~~$0.27 per share of Company common stock payable on October 27, ~~2017~~2023 to holders of record ~~on September 29, 2017.~~as of October 12, 2023.

Cash and Cash Requirements

As of September 29, ~~2017,~~2023, the Company held ~~$649 million~~approximately $12.3 billion of cash and cash equivalents that were held on deposit with financial institutions or invested in highly liquid investment-grade debt instruments with a maturity of 90 days or ~~less with an approximate weighted average annual interest rate of 1.1%.~~less. Of ~~this amount, $22 million~~the cash and cash equivalents, approximately $6.8 billion was held within the United States and

~~$627 million~~ approximately $5.5 billion was held outside of the United States. The Company will continue to have cash requirements to support general corporate purposes, which may include working capital needs, capital expenditures, acquisitions (including the Company’s pending acquisition of Abcam) and ~~acquisitions, pay~~investments, paying interest and ~~service~~servicing debt, ~~pay~~paying taxes and any related interest or penalties, ~~fund~~funding its restructuring activities and pension plans as required, ~~pay~~paying dividends to shareholders, ~~repurchase~~repurchasing shares of the Company’s common stock and ~~support~~supporting other business needs.

The Company generally intends to use available cash and internally generated funds to meet these cash requirements, but in the event that additional liquidity is required, ~~particularly in connection with acquisitions,~~ the Company may also borrow under its commercial paper programs (if available) or borrow under the ~~credit facilities,~~Company’s Credit Facility, enter into new credit facilities and either borrow directly thereunder or use such credit facilities to backstop additional borrowing capacity under its commercial paper programs (if available) and/or access the capital ~~markets.~~markets (if available). The Company also may from time to time seek to access the capital markets to take advantage of favorable interest rate environments or other market conditions. With respect to the ~~Company’s~~ commercial paper ~~notes~~ and ~~bonds~~other notes scheduled to mature during the remainder of ~~2017,~~2023, the Company expects to repay the principal amounts when due using available cash, proceeds from ~~the issuance~~new issuances of commercial paper (if available), drawing on its Credit Facility and/or proceeds from other debt issuances. With respect to the pending acquisition of Abcam, Danaher expects to fund the acquisition using cash on hand and proceeds from the issuance of commercial paper.

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While repatriation of some cash held outside the United States may be restricted by local laws, most of the Company’s foreign cash ~~balances~~ could be repatriated to the United ~~States but, under current law, would be subject to U.S. federal income taxes, less applicable foreign tax credits. For most~~States. Following enactment of ~~its foreign subsidiaries,~~ the ~~Company makes an election regarding~~Tax Cuts and Jobs Act and the ~~amount~~associated Transition Tax, in general, repatriation of ~~earnings intended for indefinite reinvestment, with the balance available to be repatriated~~cash to the United ~~States. The Company has recorded a deferred tax liability for the funds that are available to~~States can be ~~repatriated to the United States. No provisions for~~completed with no incremental U.S. ~~income taxes have been made with respect to earnings that are planned to be reinvested indefinitely outside the United States, and the amount~~tax; however, repatriation of ~~U.S. income taxes that may be applicable to such earnings is not readily determinable given the various tax planning alternatives~~cash could subject the Company ~~could employ if it repatriated these earnings.~~to non-U.S. taxes on distributions. The cash that the Company’s ~~foreign~~non-U.S. subsidiaries hold for indefinite reinvestment is generally used to finance foreign operations and investments, including acquisitions. The income taxes, if any, applicable to such earnings including basis differences in our foreign subsidiaries are not readily determinable. As of September 29, ~~2017,~~2023, management believes that it has sufficient sources of liquidity to satisfy its cash needs, including its cash needs in the United States.

CRITICAL ACCOUNTING ESTIMATES

There have been no material changes to the Company’s critical accounting estimates as described in the 2022 Annual Report.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Quantitative and qualitative disclosures about market risk appear in “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Financial Instruments and Risk Management,” in the Company’s ~~2016~~2022 Annual Report. There were no material changes during the quarter ended September 29, ~~2017~~2023 to this information as reported in the Company’s ~~2016~~2022 Annual Report.

ITEM 4. CONTROLS AND PROCEDURES

The Company’s management, with the participation of the Company’s President and Chief Executive Officer, and Executive Vice President and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report. Based on such evaluation, the Company’s President and Chief Executive Officer, and Executive Vice President and Chief Financial Officer, have concluded that, as of the end of such period, the Company’s disclosure controls and procedures were effective.

~~There~~Except as set forth below, there have been no changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the Company’s most recent completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

In January 2023, the Company began integrating various business processes within its Biotechnology businesses, including the transition of certain activities to one existing common enterprise resource planning system and to common applications used for various financial reporting and operational purposes. In connection with this integration and related business process changes, the Company replaced certain internal controls with new or modified controls. The integration is being executed in phases throughout 2023 and is intended to support customer requirements and accommodate future business demands.

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PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

For additional information regarding legal proceedings, refer to the section titled “Legal Proceedings” in the MD&A section of the Company’s 2022 Annual Report.

ITEM 1A. RISK FACTORS

Information regarding risk factors can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Information Related to Forward-Looking Statements,” in Part I—Item 2 of this Form 10-Q and in Part I—Item 1A of Danaher’s ~~2016~~2022 Annual ~~Report. There were no material changes during the quarter ended September 29, 2017 to the risk factors reported in the Company’s 2016 Annual Report.~~Report on Form 10-K.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Neither the Company nor any “affiliated purchaser” repurchased any shares of Company common stock during the ~~nine-month~~three-month period ended September 29, ~~2017.~~2023. On July 16, 2013, the Company’s Board of Directors approved a repurchase program (the “Repurchase Program”) authorizing the repurchase of up to 20 million shares of the Company’s common stock from time to time on the open market or in privately negotiated transactions. As of September 29, 2023, approximately 20 million shares remained available for repurchase pursuant to the Repurchase Program. There is no expiration date for the Repurchase Program, and the timing and amount of any future shares repurchased under the program will be determined by members of the Company’s management based on its evaluation of market conditions and other factors. The Repurchase Program may be suspended or discontinued at any time. Any repurchased shares will be available for use in connection with the Company’s equity compensation plans (or any successor plans) and for other corporate purposes. ~~As of September 29, 2017, 20 million shares remained available for repurchase pursuant~~The Company expects to ~~the Repurchase Program.~~

~~During the third quarter of 2017, holders of certain of~~fund any future stock repurchases using the Company’s ~~Liquid Yield Option Notes due 2021 (“LYONs”) converted such LYONs into an aggregate~~available cash balances or proceeds from the issuance of ~~24 thousand shares~~debt.

ITEM 5. OTHER INFORMATION

Director and Officer Trading Arrangements

None of ~~Danaher common stock, par value $0.01 per share. In each case,~~our directors or executive officers adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement (as defined in Item 408(c) of Regulation S-K) during the ~~shares~~quarterly period covered by this report.

Table of common stock were issued solely to existing security holders upon conversion of the LYONs pursuant to the exemption from registration provided under Section 3(a)(9) of the Securities Act of 1933, as amended.Contents

ITEM 6. EXHIBITS

(a)Exhibits:


~~(a)~~2.1			~~Exhibits:~~ Separation and Distribution Agreement, dated as of September 29, 2023, by and between Danaher Corporation and Veralto Corporation (incorporated by reference to Exhibit 2.1 to Danaher Corporation’s Current Report on Form 8-K filed on October 2, 2023)



3.1		Restated Certificate of Incorporation of Danaher Corporation (incorporated by reference from Exhibit 3.1 to Danaher Corporation’s Quarterly Report on Form 10-Q for the quarter ended June 29, ~~2012 (Commission File Number: 1-8089))~~2012)

3.2		Certificate of Elimination relating to Preferred Stock, filed with the Secretary of State of the State of Delaware on May 09, 2023 (incorporated by reference from Exhibit 3.1 to Danaher Corporation’s Current Report on Form 8-K filed May 11, 2023)

3.3	Amended and Restated By-laws of Danaher Corporation (incorporated by reference from Exhibit ~~3.2~~3.1 to Danaher Corporation’s Current Report on Form 8-K filed December ~~6, 2016 (Commission File Number: 1-8089)~~7, 2022 )

~~11.1~~	10.1	~~Computation~~Employee Matters Agreement, dated as of ~~per-share earnings (See Note 13, “Net Earnings Per Share from Continuing Operations”,~~September 29, 2023, by and between Danaher Corporation and Veralto Corporation (incorporated by reference to ~~the Consolidated Condensed Financial Statements)~~Exhibit 10.1 to Danaher Corporation’s Current Report on Form 8-K filed on October 2, 2023)

~~12.1~~	10.2	~~Calculation~~Tax Matters Agreement, dated as of ~~ratio of earnings~~September 29, 2023, by and between Danaher Corporation and Veralto Corporation (incorporated by reference to ~~fixed charges~~Exhibit 10.2 to Danaher Corporation’s Current Report on Form 8-K filed on October 2, 2023)

~~31.1~~	10.3	Transition Services Agreement, dated as of September 29, 2023, by and between Danaher Corporation and Veralto Corporation (incorporated by reference to Exhibit 10.3 to Danaher Corporation’s Current Report on Form 8-K filed on October 2, 2023)

10.4	Intellectual Property Matters Agreement, dated as of September 29, 2023, by and between Danaher Corporation and Veralto Corporation (incorporated by reference to Exhibit 10.4 to Danaher Corporation’s Current Report on Form 8-K filed on October 2, 2023)

10.5	DBS License Agreement, dated as of September 29, 2023, by and between Danaher Corporation and Veralto Corporation (incorporated by reference to Exhibit 10.5 to Danaher Corporation’s Current Report on Form 8-K filed on October 2, 2023)

10.6	Third Amended and Restated Credit Agreement, dated as of August 11, 2023, among Danaher Corporation, certain of its subsidiaries party thereto, Bank of America, N.A., as Administrative Agent, and the lenders referred to therein (incorporated by reference to Exhibit 10.1 to Danaher Corporation’s Current Report on Form 8-K filed on August 15, 2023)

10.7	Credit Agreement, dated as of August 31, 2023, among Veralto Corporation, certain of its subsidiaries party thereto, Bank of America, N.A., as Administrative Agent, and the lenders referred to therein (incorporated by reference to Exhibit 10.1 to Danaher Corporation’s Current Report on Form 8-K filed on August 31, 2023)

10.8	Indenture, dated as of September 18, 2023, between Veralto Corporation, as issuer, and Deutsche Bank Trust Company Americas, a New York banking corporation, as trustee (incorporated by reference to Exhibit 4.1 to Danaher Corporation’s Current Report on Form 8-K filed on September 19, 2023)

10.9	Guarantee Agreement, dated as of September 18, 2023, made by Danaher Corporation (incorporated by reference to Exhibit 4.2 to Danaher Corporation’s Current Report on Form 8-K filed on September 19, 2023)

10.10	Indenture, dated as of September 19, 2023, between Veralto Corporation, as issuer, and Deutsche Bank Trust Company Americas, a New York banking corporation, as trustee (incorporated by reference to Exhibit 4.3 to Danaher Corporation’s Current Report on Form 8-K filed on September 19, 2023)

10.11	Guarantee Agreement, dated as of September 19, 2023, made by Danaher Corporation (incorporated by reference to Exhibit 4.4 to Danaher Corporation’s Current Report on Form 8-K filed on September 19, 2023)

10.12	Amendment to Danaher Deferred Compensation Plan

10.13	Amendment to Danaher Executive Deferred Incentive Program

10.14	Amendment to Danaher Excess Contribution Program

10.15	Management Agreement dated September 29, 2023 by and between FJ900, Inc. and Joust Capital II, LLC (1)

10.16	Interchange Agreement dated September 29, 2023 by and between Danaher Corporation and Joust Capital II, LLC

22.1	Subsidiary guarantors and issuers of guaranteed securities and affiliates whose securities collateralize securities of the Registrant

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31.1	Certification of Chief Executive Officer Pursuant to Item 601(b)(31) of Regulation S-K, As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2		Certification of Chief Financial Officer Pursuant to Item 601(b)(31) of Regulation S-K, As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1		Certification of Chief Executive Officer, Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2		Certification of Chief Financial Officer, Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS			Inline 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			Inline XBRL Taxonomy Extension Schema Document **

101.CAL			Inline XBRL Taxonomy Extension Calculation Linkbase Document **

101.DEF			Inline XBRL Taxonomy Extension Definition Linkbase Document **

101.LAB			Inline XBRL Taxonomy Extension Label Linkbase Document **

101.PRE			Inline XBRL Taxonomy Extension Presentation Linkbase Document **


**104			~~Attached~~Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101 to this report are the following documents formatted in XBRL (Extensible Business Reporting Language): (i) Consolidated Condensed Balance Sheets as of September 29, 2017 and December 31, 2016, (ii) Consolidated Condensed Statements of Earnings for the three and nine-month periods ended September 29, 2017 and September 30, 2016, (iii) Consolidated Condensed Statements of Comprehensive Income for the three and nine-month periods ended September 29, 2017 and September 30, 2016, (iv) Consolidated Condensed Statement of Stockholders’ Equity for the nine-month period ended September 29, 2017, (v) Consolidated Condensed Statements of Cash Flows for the nine-month periods ended September 29, 2017 and September 30, 2016, and (vi) Notes to Consolidated Condensed Financial Statements.101)

(1)In accordance with Instruction 2 to Item 601(a)(4) of Regulation S-K, FJ900, Inc. (a subsidiary of Danaher) has entered into a management agreement with Stonehavens Global LLC that is substantially identical in all material respects to the form of agreement referenced as Exhibit 10.15, except as to name of the counterparty.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


		DANAHER CORPORATION

Date:	October 23, 2023	~~DANAHER CORPORATION~~By:	/s/ Matthew R. McGrew
			Matthew R. McGrew
~~Date:~~	~~October 18, 2017~~	~~By:~~	~~/s/ Daniel L. Comas~~
	~~Daniel L. Comas~~
	Executive Vice President and Chief Financial Officer

Date:	October ~~18, 2017~~23, 2023	By:	/s/ ~~Robert S. Lutz~~Christopher M. Bouda
			~~Robert S. Lutz~~Christopher M. Bouda
			~~Senior~~ Vice President and Chief Accounting Officer

4346


				Page
PART I -		FINANCIAL INFORMATION

			~~Page~~
~~PART I -~~	~~FINANCIAL INFORMATION~~

Item 1.	Financial Statements

		Consolidated Condensed Balance Sheets		1

		Consolidated Condensed Statements of Earnings		2

		Consolidated Condensed Statements of Comprehensive Income		3

		Consolidated Condensed ~~Statement~~Statements of Stockholders’ Equity		4

		Consolidated Condensed Statements of Cash Flows		5

		Notes to Consolidated Condensed Financial Statements		6

Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations		2224

Item 3.		Quantitative and Qualitative Disclosures About Market Risk		4042

Item 4.		Controls and Procedures		4042

PART II -		OTHER INFORMATION

Item 1.		Legal Proceedings		43

Item 1A.		Risk Factors		4143

Item 2.		Unregistered Sales of Equity Securities and Use of Proceeds		4143

Item 5.		Other Information		43

Item 6.		Exhibits		4244

		Signatures		4346



	Common Stock			Additional Paid-in Capital			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Noncontrolling Interests
	Shares	Amount		Additional Paid-in Capital			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Noncontrolling Interests
Balance, December 31, 2016	807.7	$	8.1	$	5,312.9		$	20,703.5		$	(3,021.7	)	$	74.0
Net earnings for the period	—	—		—			1,635.5			—			—
Other comprehensive income	—	—		—			—			869.9			—
Dividends declared	—	—		—			(291.9		)	—			—
Common stock-based award activity	3.7	—		159.3			—			—			—
Common stock issued in connection with LYONs’ conversions, including tax benefit	—	—		1.0			—			—			—
Change in noncontrolling interests	—	—		(1.2		)	—			—			(68.8		)
Balance, September 29, 2017	811.4	$	8.1	$	5,472.0		$	22,047.1		$	(2,151.8	)	$	5.2



	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 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	)



Trade accounts receivable	$	8.7
Inventories	13.2
Property, plant and equipment	4.9
Goodwill	73.2
Other intangible assets, primarily customer relationships, trade names and technology	52.5
Trade accounts payable	(4.1		)
Other assets and liabilities, net	(36.4		)
Net cash consideration	$	112.0



Balance, December 31, 2016	$	23,826.9
Attributable to 2017 acquisitions	73.2
Adjustments due to finalization of purchase price allocations	(71.3		)
Foreign currency translation and other	955.0
Balance, September 29, 2017	$	24,783.8



	September 29, 2017		December 31, 2016
U.S. dollar-denominated commercial paper	$	190.0	$	2,733.5
Euro-denominated commercial paper (€2.3 billion and €3.0 billion, respectively)	2,692.1		3,127.6
Floating rate senior unsecured notes due 2017 (€500.0 million aggregate principal amount) (the “2017 Euronotes”)	—		526.0
0.0% senior unsecured bonds due 2017 (CHF 100.0 million aggregate principal amount) (the “2017 CHF Bonds”)	103.1		98.0
1.65% senior unsecured notes due 2018	499.0		498.1
1.0% senior unsecured notes due 2019 (€600.0 million aggregate principal amount) (the “2019 Euronotes”)	706.9		628.6
2.4% senior unsecured notes due 2020	497.5		496.8
5.0% senior unsecured notes due 2020	398.5		402.6
Zero-coupon Liquid Yield Option Notes (LYONs) due 2021	68.7		68.1
0.352% senior unsecured notes due 2021 (¥30.0 billion aggregate principal amount) (the “2021 Yen Notes”)	265.7		255.6
1.7% senior unsecured notes due 2022 (€800.0 million aggregate principal amount) (the “2022 Euronotes”)	940.5		836.5
Floating rate senior unsecured notes due 2022 (€250.0 million aggregate principal amount) (the “Floating Rate 2022 Euronotes”)	294.4		—
0.5% senior unsecured bonds due 2023 (CHF 540.0 million aggregate principal amount) (the “2023 CHF Bonds”)	559.6		532.3
2.5% senior unsecured notes due 2025 (€800.0 million aggregate principal amount) (the “2025 Euronotes”)	940.5		836.8
3.35% senior unsecured notes due 2025	496.2		495.8
0.3% senior unsecured notes due 2027 (¥30.8 billion aggregate principal amount) (the “2027 Yen Notes”)	272.5		—
1.2% senior unsecured notes due 2027 (€600.0 million aggregate principal amount) (the “2027 Euronotes”)	702.8		—
1.125% senior unsecured bonds due 2028 (CHF 110.0 million aggregate principal amount) (the “2028 CHF Bonds”)	114.4		108.8
0.65% senior unsecured notes due 2032 (¥53.2 billion aggregate principal amount) (the “2032 Yen Notes”)	470.6		—
4.375% senior unsecured notes due 2045	499.3		499.3
Other	196.7		124.6
Total debt	10,909.0		12,269.0
Less: currently payable	182.2		2,594.8
Long-term debt	$	10,726.8	$	9,674.2



Cost of sales	$	20.7
Selling, general and administrative expenses	55.2
Total	$	75.9



Balance, December 31, 2016	$	75.8
Accruals for warranties issued during the period	36.0
Settlements made	(42.0		)
Additions due to acquisitions	1.3
Effect of foreign currency translation	3.4
Balance, September 29, 2017	$	74.5



	Net Earnings from Continuing Operations (Numerator)		Shares (Denominator)	Per Share Amount
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	$	572.7	705.6	$	0.81

For the Three-Month Period Ended September 30, 2016:
Basic EPS	$	402.6	692.2	$	0.58
Adjustment for interest on convertible debentures	0.5		—
Incremental shares from assumed exercise of dilutive options and vesting of dilutive RSUs and PSUs	—		6.2
Incremental shares from assumed conversion of the convertible debentures	—		2.9
Diluted EPS	$	403.1	701.3	$	0.57

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	$	1,614.8	705.5	$	2.29

For the Nine-Month Period Ended September 30, 2016:
Basic EPS	$	1,406.4	690.6	$	2.04
Adjustment for interest on convertible debentures	1.4		—
Incremental shares from assumed exercise of dilutive options and vesting of dilutive RSUs and PSUs	—		6.0
Incremental shares from assumed conversion of the convertible debentures	—		2.5
Diluted EPS	$	1,407.8	699.1	$	2.01



	% Change Three-Month Period Ended September 29, 2017 vs. Comparable 2016 Period		% Change Nine- Month Period Ended September 29, 2017 vs. Comparable 2016 Period
Total sales growth (GAAP)	9.5	%	7.5	%
Less the impact of:
Acquisitions and other	(5.5	)%	(5.5	)%
Currency exchange rates	(1.0	)%	0.5	%
Core revenue growth (non-GAAP)	3.0	%	2.5	%