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 28, 2018~~March 29, 2019



¨	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

DANAHER CORPORATION

(Exact name of registrant as specified in its charter)



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

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

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

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 every Interactive Data File required to be submitted 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 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	ý	Accelerated filer	¨

Non-accelerated filer	¨	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~~April 12, ~~2018~~2019 was ~~700,902,703.~~715,933,649.

DANAHER CORPORATION

INDEX

FORM 10-Q



		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	2625

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	4542

Item 4.	Controls and Procedures	4542

PART II -	OTHER INFORMATION

Item 1.	Legal Proceedings	4643

Item 1A.	Risk Factors	4643

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	4645

Item 6.	Exhibits	4746

	Signatures	4847

DANAHER CORPORATION AND SUBSIDIARIES

CONSOLIDATED CONDENSED BALANCE SHEETS

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

(unaudited)


	September 28, 2018			December 31, 2017			March 29, 2019			December 31, 2018
ASSETS
Current assets:
Cash and equivalents	$	776.2		$	630.3		$	3,910.0		$	787.8
Trade accounts receivable, net	3,323.1			3,521.8			3,409.2			3,489.6
Inventories:
Finished goods	1,110.1			982.5			1,098.4			1,031.2
Work in process	331.4			309.7			335.5			313.9
Raw materials	587.9			548.6			594.0			565.0
Total inventories	2,029.4			1,840.8			2,027.9			1,910.1
Prepaid expenses and other current assets	701.8			857.1			733.3			906.3
Total current assets	6,830.5			6,850.0			10,080.4			7,093.8
Property, plant and equipment, net of accumulated depreciation of $2,739.6 and $2,519.4, respectively	2,462.3			2,454.6
Property, plant and equipment, net of accumulated depreciation of $2,906.2 and $2,828.3, respectively							2,504.3			2,511.2
Other long-term assets	577.3			538.3			1,646.4			648.4
Goodwill	26,035.0			25,138.6			26,001.4			25,906.0
Other intangible assets, net	11,814.4			11,667.1			11,541.9			11,673.1
Total assets	$	47,719.5		$	46,648.6		$	51,774.4		$	47,832.5
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Notes payable and current portion of long-term debt	$	59.8		$	194.7		$	36.6		$	51.8
Trade accounts payable	1,569.6			1,509.9			1,676.2			1,712.8
Accrued expenses and other liabilities	2,835.9			3,087.7			2,920.0			3,076.9
Total current liabilities	4,465.3			4,792.3			4,632.8			4,841.5
Other long-term liabilities	5,011.0			5,161.1			6,114.7			5,075.8
Long-term debt	10,558.0			10,327.4			9,458.2			9,688.5
Stockholders’ equity:
Common stock - $0.01 par value, 2.0 billion shares authorized; 817.2 and 812.5 issued; 700.8 and 696.6 outstanding, respectively	8.2			8.1
Preferred stock, without par value, 15.0 million shares authorized; 1.65 million shares of 4.75% Mandatory Convertible Preferred Stock, Series A, issued and outstanding at March 29, 2019; no shares issued or outstanding at December 31, 2018							1,599.6			—
Common stock - $0.01 par value, 2.0 billion shares authorized; 832.5 and 817.9 issued; 715.8 and 701.5 outstanding, respectively							8.3			8.2
Additional paid-in capital	5,772.2			5,538.2			7,376.3			5,834.3
Retained earnings	24,528.7			22,806.1			25,368.5			25,163.0
Accumulated other comprehensive income (loss)	(2,635.7		)	(1,994.2		)	(2,796.1		)	(2,791.1		)
Total Danaher stockholders’ equity	27,673.4			26,358.2			31,556.6			28,214.4
Noncontrolling interests	11.8			9.6			12.1			12.3
Total stockholders’ equity	27,685.2			26,367.8			31,568.7			28,226.7
Total liabilities and stockholders’ equity	$	47,719.5		$	46,648.6		$	51,774.4		$	47,832.5

See the accompanying Notes to the Consolidated Condensed Financial Statements.

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						Three-Month Period Ended
	September 28, 2018			September 29, 2017			September 28, 2018			September 29, 2017			March 29, 2019			March 30, 2018
Sales	$	4,853.1		$	4,528.2		$	14,529.5		$	13,244.0		$	4,879.9		$	4,695.4
Cost of sales	(2,162.6		)	(1,991.4		)	(6,378.3		)	(5,890.6		)	(2,161.9		)	(2,051.8		)
Gross profit	2,690.5			2,536.8			8,151.2			7,353.4			2,718.0			2,643.6
Operating costs:
Selling, general and administrative expenses	(1,558.6		)	(1,498.4		)	(4,798.4		)	(4,470.6		)	(1,683.4		)	(1,601.9		)
Research and development expenses	(301.2		)	(279.2		)	(911.6		)	(829.9		)	(310.8		)	(298.7		)
Operating profit	830.7			759.2			2,441.2			2,052.9			723.8			743.0
Nonoperating income (expense):
Other income, net	9.1			8.3			25.2			22.2			5.2			7.8
Interest expense	(41.3		)	(39.9		)	(123.6		)	(120.9		)	(23.3		)	(39.1		)
Interest income	2.8			2.2			6.7			5.6			15.7			1.4
Earnings from continuing operations before income taxes	801.3			729.8			2,349.5			1,959.8
Earnings before income taxes													721.4			713.1
Income taxes	(137.6		)	(157.7		)	(445.4		)	(346.6		)	(387.6		)	(146.5		)
Net earnings from continuing operations	663.7			572.1			1,904.1			1,613.2
Earnings from discontinued operations, net of income taxes	—			—			—			22.3
Net earnings	$	663.7		$	572.1		$	1,904.1		$	1,635.5		333.8			566.6
Net earnings per share from continuing operations:
Basic	$	0.95		$	0.82		$	2.72		$	2.32
Diluted	$	0.93		$	0.81		$	2.68		$	2.29
Net earnings per share from discontinued operations:
Basic	$	—		$	—		$	—		$	0.03
Diluted	$	—		$	—		$	—		$	0.03
Net earnings per share:
Mandatory convertible preferred stock dividends													(6.5		)	—
Net earnings attributable to common stockholders													$	327.3		$	566.6
Net earnings per common share:
Basic	$	0.95		$	0.82		$	2.72		$	2.35		$	0.46		$	0.81
Diluted	$	0.93		$	0.81		$	2.68		$	2.32		$	0.46		$	0.80
Average common stock and common equivalent shares outstanding:
Basic	701.4			696.2			700.1			695.3			707.6			698.6
Diluted	710.6			705.6			709.9			705.5			718.5			709.5

See the accompanying Notes to the Consolidated Condensed Financial Statements.

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
	September 28, 2018			September 29, 2017			September 28, 2018			September 29, 2017		March 29, 2019			March 30, 2018
Net earnings	$	663.7		$	572.1		$	1,904.1		$	1,635.5	$	333.8		$	566.6
Other comprehensive income (loss), net of income taxes:
Foreign currency translation adjustments	(162.4		)	260.0			(509.4		)	839.2		(10.8		)	294.1
Pension and postretirement plan benefit adjustments	5.9			4.6			19.7			14.4		5.4			7.1
Unrealized (loss) gain on available-for-sale securities adjustments	—			(1.9		)	(0.6		)	16.3
Unrealized gain (loss) on available-for-sale securities adjustments												0.4			(0.5		)
Total other comprehensive income (loss), net of income taxes	(156.5		)	262.7			(490.3		)	869.9		(5.0		)	300.7
Comprehensive income	$	507.2		$	834.8		$	1,413.8		$	2,505.4	$	328.8		$	867.3

See the accompanying Notes to the Consolidated Condensed Financial Statements.

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		Common Stock			Preferred 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		Shares	Amount		Shares	Amount		Additional Paid-in Capital		Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Noncontrolling Interests
For the Three-Month Period Ended March 29, 2019:														For the Three-Month Period Ended March 29, 2019:
Balance, December 31, 2018														817.9	$	8.2	—	$	—	$	5,834.3	$	25,163.0		$	(2,791.1	)	$	12.3
Net earnings														—	—		—	—		—		333.8			—			—
Other comprehensive income (loss)														—	—		—	—		—		—			(5.0		)	—
Dividends declared														—	—		—	—		—		(121.8		)	—			—
Mandatory convertible preferred stock cumulative dividends														—	—		—	—		—		(6.5		)	—			—
Common stock-based award activity														2.0	—		—	—		82.1		—			—			—
Common stock issued in connection with LYONs’ conversions, including tax benefit of $4.7														0.5	—		—	—		16.8		—			—			—
Issuance of common stock														12.1	0.1		—	—		1,443.1		—			—			—
Issuance of mandatory convertible preferred stock														—	—		1.7	1,599.6		—		—			—			—
Change in noncontrolling interests														—	—		—	—		—		—			—			(0.2		)
Balance, March 29, 2019														832.5	$	8.3	1.7	$	1,599.6	$	7,376.3	$	25,368.5		$	(2,796.1	)	$	12.1
For the Three-Month Period Ended March 30, 2018:														For the Three-Month Period Ended March 30, 2018:
Balance, December 31, 2017	812.5	$	8.1	$	5,538.2	$	22,806.1		$	(1,994.2	)	$	9.6	812.5	$	8.1	—	$	—	$	5,538.2	$	22,806.1		$	(1,994.2	)	$	9.6
Adoption of accounting standards	—	—		—		154.5			(151.2		)	—		—	—		—	—		—		154.5			(151.2		)	—
Balance, January 1, 2018	812.5	8.1		5,538.2		22,960.6			(2,145.4		)	9.6		812.5	8.1		—	—		5,538.2		22,960.6			(2,145.4		)	9.6
Net earnings	—	—		—		1,904.1			—			—		—	—		—	—		—		566.6			—			—
Other comprehensive income (loss)	—	—		—		—			(490.3		)	—		—	—		—	—		—		—			300.7			—
Dividends declared	—	—		—		(336.0		)	—			—		—	—		—	—		—		(111.8		)	—			—
Common stock-based award activity	4.0	0.1		194.0		—			—			—		1.9	—		—	—		61.0		—			—			—
Common stock issued in connection with acquisitions	0.2	—		23.9		—			—			—
Common stock issued in connection with LYONs’ conversions, including tax benefit of $4.2	0.5	—		16.1		—			—			—
Common stock issued in connection with LYONs’ conversions, including tax benefit of $3.1														0.4	—		—	—		11.9		—			—			—
Change in noncontrolling interests	—	—		—		—			—			2.2		—	—		—	—		—		—			—			2.3
Balance, September 28, 2018	817.2	$	8.2	$	5,772.2	$	24,528.7		$	(2,635.7	)	$	11.8
Balance, March 30, 2018														814.8	$	8.1	—	$	—	$	5,611.1	$	23,415.4		$	(1,844.7	)	$	11.9

See the accompanying Notes to the Consolidated Condensed Financial Statements.

DANAHER CORPORATION AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

($ in millions)

(unaudited)


	Nine-Month Period Ended						Three-Month Period Ended
	September 28, 2018			September 29, 2017			March 29, 2019			March 30, 2018
Cash flows from operating activities:
Net earnings	$	1,904.1		$	1,635.5		$	333.8		$	566.6
Less: earnings from discontinued operations, net of income taxes	—			22.3
Net earnings from continuing operations	1,904.1			1,613.2
Noncash items:
Depreciation	449.4			427.3			148.5			148.5
Amortization	527.5			492.9			179.9			172.3
Stock-based compensation expense	111.6			104.8			39.2			33.3
Restructuring and impairment charges	—			49.3
Change in trade accounts receivable, net	128.6			74.6			73.8			219.0
Change in inventories	(255.4		)	(98.2		)	(132.3		)	(128.9		)
Change in trade accounts payable	71.5			(48.5		)	(32.3		)	51.4
Change in prepaid expenses and other assets	245.6			242.3			152.6			125.0
Change in accrued expenses and other liabilities	(398.5		)	(214.6		)	(59.9		)	(358.3		)
Net operating cash provided by continuing operations	2,784.4			2,643.1
Net operating cash provided by operating activities							703.3			828.9
Cash flows from investing activities:
Cash paid for acquisitions	(2,173.3		)	(112.0		)	(308.2		)	—
Payments for additions to property, plant and equipment	(441.3		)	(445.8		)	(155.7		)	(137.9		)
Proceeds from sales of property, plant and equipment	1.6			32.3			0.8			0.4
Payments for purchases of investments							(43.2		)	—
Proceeds from sale of investments	22.1			—			—			21.9
All other investing activities	(61.1		)	(2.4		)	7.8			(7.1		)
Net operating cash used in investing activities	(2,652.0		)	(527.9		)	(498.5		)	(122.7		)
Cash flows from financing activities:
Proceeds from the issuance of common stock	77.3			49.0
Proceeds from the issuance of common stock in connection with stock-based compensation							37.3			23.2
Proceeds from the public offering of common stock, net of issuance costs							1,443.2			—
Proceeds from the public offering of preferred stock, net of issuance costs							1,599.6			—
Payment of dividends	(321.2		)	(281.0		)	(112.2		)	(97.5		)
Payment for purchase of noncontrolling interests	—			(64.4		)
Net proceeds from (repayments of) borrowings (maturities of 90 days or less)	882.1			(3,319.1		)
Proceeds from borrowings (maturities longer than 90 days)	—			1,684.0
Repayments of borrowings (maturities longer than 90 days)	(503.9		)	(562.4		)
Net repayments of borrowings (maturities of 90 days or less)							(86.1		)	(236.6		)
All other financing activities	(16.6		)	(50.7		)	(4.0		)	(10.8		)
Net operating cash provided by (used in) financing activities	117.7			(2,544.6		)	2,877.8			(321.7		)
Effect of exchange rate changes on cash and equivalents	(104.2		)	114.3			39.6			30.9
Net change in cash and equivalents	145.9			(315.1		)	3,122.2			415.4
Beginning balance of cash and equivalents	630.3			963.7			787.8			630.3
Ending balance of cash and equivalents	$	776.2		$	648.6		$	3,910.0		$	1,045.7

Supplemental disclosures:
Cash interest payments	$	129.0		$	117.4		$	42.0		$	47.7
Cash income tax payments	502.0			378.3
Cash income tax (refunds) payments							(6.3		)	133.5

See the accompanying Notes to the Consolidated Condensed Financial Statements.

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 (“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 included herein should be read in conjunction with the financial statements as of and for the year ended December 31, ~~2017~~2018 and the Notes thereto included in the Company’s ~~2017~~2018 Annual Report on Form 10-K filed on February 21, ~~2018.~~2019 (the “2018 Annual Report on Form 10-K”).

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 28, 2018~~March 29, 2019 and December 31, ~~2017,~~2018, its results of operations for the ~~three and nine-month~~three-month periods ended ~~September 28,~~March 29, 2019 and March 30, 2018 ~~and September 29, 2017~~ and its cash flows for each of the ~~nine-month~~three-month periods then ended. ~~Reclassifications of certain prior year amounts have been made to conform to the current year presentation.~~

Accounting Standards Recently Adopted

In ~~May 2014,~~February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. ~~2014-09,~~2016-02, ~~Revenue~~Leases (Topic 842), which requires lessees to recognize a right-of-use (“ROU”) asset and a lease liability for all leases with terms greater than 12 months and also requires disclosures by lessees and lessors about the amount, timing and uncertainty of cash flows arising from ~~Contracts with Customers (Topic 606)~~ ~~which supersedes nearly all existing revenue recognition guidance.~~leases. The accounting applied by a lessor is largely unchanged from that applied under the prior standard. Subsequent to the issuance of Topic ~~606,~~842, the FASB clarified the guidance through several ASUs; hereinafter the collection of ~~revenue~~lease guidance is referred to as “ASC ~~606”~~842”. The core principle of ASC 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.

On January 1, ~~2018,~~2019, the Company adopted ASC ~~606~~842 using the modified retrospective method for all ~~contracts.~~lease arrangements at the beginning of the period of adoption. Results for reporting periods beginning January 1, ~~2018~~2019 are presented under ASC ~~606,~~842, while prior period amounts were not adjusted and continue to be reported in accordance with the Company’s historic accounting under ~~Topic 605,~~ASC 840, ~~Revenue Recognition~~Leases.

The ~~Company recorded~~standard had a ~~net increase to beginning retained earnings of $3 million as of January 1, 2018 due to~~material impact on the cumulative impact of adopting ASC 606. The impact to beginning retained earnings was primarily driven by the capitalization of certain costs to obtain a contract, primarily sales-related commissions, partially offset by the deferral of revenue for unfulfilled performance obligations. The adoption of ASC 606Company’s Consolidated Condensed Balance Sheet but did not have a significant impact on the Company’s ~~Consolidated Condensed Financial Statements~~consolidated net earnings and cash flows. The most significant impact was the recognition of ROU assets and lease liabilities for operating leases, while the accounting for finance leases remained substantially unchanged. For leases that commenced before the effective date of ASC 842, the Company elected the permitted practical expedients to not reassess the following: (i) whether any expired or existing contracts contain leases; (ii) the lease classification for any expired or existing leases; and (iii) initial direct costs for any existing leases. The Company also elected to include leases with a term of 12 months or less in the recognized ROU assets and lease liabilities.

As a result of the cumulative impact of adopting ASC 842, the Company recorded operating lease ROU assets of $971 million and operating lease liabilities of $1,012 million as of January 1, 2019, primarily related to real estate and ~~for~~automobile leases, based on the ~~three and nine-month periods ended September 28, 2018 and, as a result, comparisons~~present value of ~~revenues and operating profit performance between periods are not affected by~~ the ~~adoption~~future lease payments on the date of ~~this ASU.~~adoption. Refer to Note 25 for the additional disclosures required by ASC ~~606.~~842.

The Company ~~derives revenues primarily~~determines if an arrangement is a lease at inception. For leases where the Company is the lessee, ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent an obligation to make lease payments arising from the ~~sale~~lease. ROU assets and lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. As most of the Company’s leases do not provide an implicit interest rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The ROU asset also consists of any prepaid lease payments, lease incentives received, costs which will be incurred in exiting a lease and the amount of any asset or liability recognized on business combinations relating to favorable or unfavorable lease terms. The lease terms used to calculate the ROU asset and related lease liability include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for operating leases is recognized on a straight-line basis over the lease term as an operating expense while the expense for finance leases is recognized as depreciation expense and interest expense using the accelerated interest method of recognition. The Company has lease agreements which require payments for lease and non-lease components and has elected to account for these as a single lease component.

The Company leases Life Sciences, Diagnostics, ~~Dental~~ and Environmental & Applied Solutions ~~products and services. Revenue is recognized when control of the promised products or services is transferred~~equipment to ~~the Company’s~~ customers in an amount that reflects the consideration the Company expects to be entitled to in exchange for those products or services (the transaction price). A performance obligation is a promise in a contract to transfer a distinct product or service to a customer and is the unit of account under ASC 606. For equipment, consumables, spare parts and most software licenses sold by the Company, control transfers to the customer at a point in time. To indicate the transfer of control, the Company must have a present right to payment, legal title must have passed to the customer, the customer must have the significant risks and rewards of ownership, and where acceptance is not a formality, the customer must have accepted the product or service. The Company’s principal terms of sale are FOB Shipping Point, or equivalent, and, as such, the Company primarily transfers control and records revenue for product sales upon shipment. Sales arrangements with delivery terms that are not FOB Shipping Point are not recognized upon shipment and the transfer of control for revenue recognition is evaluated based on the associated shipping terms and customer obligations. If a performance obligation to the customer with respect to a sales transaction remains to be fulfilled following shipment (typically installation or acceptance by the customer), revenue recognition for that performance obligation is deferred until such commitments have been fulfilled. Returns for products sold are estimated and recorded as a reduction of revenue at the time of sale. Customer allowances and rebates, consisting primarily

of volume discounts and other short-term incentive programs, are recorded as a reduction of revenue at the time of sale because these allowances reflect a reduction in the transaction price. Product returns, customer allowances and rebates are estimated based on historical experience and known trends. For extended warranty, service, post contract support (“PCS”), software-as-a-service (“SaaS”) and other long-term contracts, control transfers to the customer over the term of the arrangement. Revenue for extended warranty, service, PCS, SaaS and certain software licenses is recognized based upon the period of time elapsed under the arrangement. Revenue for other long-term contracts is generally recognized based upon the cost-to-cost measure of progress, provided that the Company meets the criteria associated with transferring control of the good or service over time.

~~Certain of the Company’s revenues relate to~~both operating-type lease (“OTL”) and sales-type lease (“STL”) arrangements. ~~Leases are outside the scope of ASC 606 and are therefore accounted for in accordance with ASC 840,~~ ~~Leases. Instrument~~Equipment lease revenue for OTL agreements is recognized on a straight-line basis over the life of the lease, and the costs of customer-leased ~~instruments are~~equipment is recorded within property, plant and equipment, net in the accompanying Consolidated Condensed Balance Sheets and depreciated over the ~~instrument’s~~equipment’s estimated useful life. ~~The depreciation~~Depreciation expense associated with the leased equipment under OTL arrangements is reflected in cost of sales in the accompanying Consolidated Condensed Statements of Earnings. The OTLs are generally not cancellable until after an initial term and may or may not require the customer to purchase a minimum number of consumables or tests throughout the contract term. Certain of the Company’s lease contracts are customized for larger customers and often result in complex terms and conditions that typically require significant judgment in applying the criteria used to evaluate whether the arrangement should be considered an OTL or ~~a sales-type lease (“STL”). A sales-type lease would result~~an STL. An STL results in earlier recognition of ~~instrument~~equipment revenue as compared to an OTL. Some of the Company’s leases include a purchase option for the customer to purchase the leased asset at the end of the lease arrangement for a purchase price equal to the asset’s fair market value at the time of the purchase. The Company manages its risk on the unguaranteed residual asset for leased equipment through the pricing and term of the leases. In certain geographies, equipment coming off OTL and STL arrangements after the initial lease term may be leased to other customers or used for spare parts.

For ~~contracts~~lease arrangements with ~~multiple performance obligations,~~lease and non-lease components where the Company is the lessor, the Company allocates the contract’s transaction price to ~~each performance obligation~~the lease and non-lease components on a relative standalone selling price basis using the Company’s best estimate of the standalone selling price of each distinct product or service in the contract. The primary method used to estimate standalone selling price is the price observed in standalone sales to customers; however, when prices in standalone sales are not available the Company may use third-party pricing for similar products or services or estimate the standalone selling price. Allocation of the transaction price is determined at the ~~contracts’ inception. The Company does not adjust transaction price for the effects of a significant financing component when the period between the transfer~~inception of the ~~promised good~~lease arrangement. The Company’s leases primarily consist of leases with fixed lease payments. For those leases with variable lease payments, the variable lease payment is typically based upon use of the leased equipment or ~~service to~~ the ~~customer and payment for that good or service by~~purchase of consumables used with the ~~customer is expected to be one year or less. This allocation approach also applies to contracts that include a lease component.~~leased equipment.

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. 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. In February 2018, the FASB issued ASU No. 2018-03, ~~Technical Corrections and Improvements to Financial Instruments—Overall (Subtopic 825-10),~~ which clarified certain aspects of the previously issued ASU. The ASU was adopted by the Company on January 1, 2018 and did not have a material effect on the Company’s Consolidated Condensed Financial Statements.

~~In March~~August 2017, the FASB issued ASU No. ~~2017-07,~~2017-12, ~~Compensation—Retirement Benefits~~Derivatives and Hedging (Topic ~~715)~~815): ~~Improving~~Targeted Improvements to Accounting for Hedging Activities, which expands and refines hedge accounting for both financial and non-financial risk components, aligns the ~~Presentation~~recognition and presentation of ~~Net Periodic Pension Cost~~the effects of hedging instruments 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 that are included in each income statement line item. The standard requires employers to report the service cost componenthedge items in the ~~same line item as other compensation costs~~financial statements and includes certain targeted improvements to ~~report~~ease the ~~other components~~application of ~~net periodic benefit costs (which include interest costs, expected return on plan assets, amortization~~current guidance related to the assessment 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.~~hedge effectiveness. The ASU was adopted by the Company on January 1, 2018 and as a result operating profit decreased and other income, net increased by $8.3 million and $22.2 million for the three and nine-month periods ended September 29, 2017, respectively. Refer to Note 8 for further information on the implementation of this ASU.

The Company measures its pension and postretirement plans’ assets and its obligations that determine the respective plan’s funded status as of the end of the Company’s fiscal year, and recognizes an asset for a plan’s overfunded status or a liability for a plan’s underfunded status in its balance sheet. Changes in the funded status of the plans are recognized in the year in which the changes occur and reported in other comprehensive income (loss). The service cost component of net periodic pension cost is included in cost of sales and selling, general and administrative expenses in the accompanying Consolidated Condensed Statements of Earnings and the other components of net periodic pension cost are included in nonoperating income (expense).

~~In February 2018, the FASB issued ASU No. 2018-02,~~ ~~Income Statement—Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income~~, to address a specific consequence of the Tax Cuts and Jobs Act (“TCJA”) by allowing a reclassification from accumulated other comprehensive income (loss) to retained earnings for stranded tax effects resulting from the TCJA’s reduction of the U.S. federal corporate income tax rate. The standard is effective for ~~all~~public entities for ~~annual periods~~fiscal years beginning after December 15, ~~2018, with early adoption permitted, and is~~2018. In January 2019, the Company entered into approximately $1.9 billion of cross-currency swap derivative contracts to ~~be applied either~~hedge its net investment in foreign operations against adverse changes in the ~~period of adoption or retrospectively to each period in which the effect of the change in~~exchange rates between the U.S. federal corporate income tax rate in the TCJA is recognized. The Company early adopted this ASU on January 1, 2018 and as a result recorded a net increase to beginning retained earnings and decrease to accumulated other comprehensive income (loss) of $151 million to reclassify the income tax effects of the TCJA on the Company’s U.S. pension plans, available-for-sale debt securities and certain foreign currency losses. The ASU also requires the Company to disclose its policy on accounting for income tax effects in accumulated other comprehensive income (loss). In general, the Company applies the individual item approach with respect to available-for-sale debt securitiesdollar and the ~~portfolio approach with respect to pension, postretirement benefit plan obligations~~Danish kroner, Japanese yen, euro and ~~currency translation matters.~~

~~In March 2018,~~ the ~~FASB issued ASU No. 2018-05,~~ ~~Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118,~~ which allowed SEC registrants to record provisional amounts in earnings for the year ended December 31, 2017 due to the complexities involved in accounting for the enactment of the TCJA. The Company recognized the estimated income tax effects of the TCJA in its 2017 Consolidated Financial Statements in accordance with SEC Staff Accounting Bulletin No. 118 (“SAB No. 118”).Swiss franc. Refer to Note 9 for ~~further information regarding~~additional disclosures about the ~~provisional amounts recorded by the Company as of December 31, 2017.~~Company’s hedging activities.

Except for the above accounting policy for ~~revenue recognition~~leases that was updated as a result of adopting ASC ~~606 and the policy for pension and postretirement benefit plans that was updated as a result of adopting ASU 2017-07,~~842, there have been no ~~significant~~ changes to the Company’s significant accounting policies described in the Annual Report on Form 10-K for the year ended December 31, ~~2017.~~2018 that have a material impact on the Company’s Consolidated Condensed Financial Statements and the related Notes.

Accounting Standards Not Yet Adopted

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which amends the impairment model by requiring entities to use a forward-looking approach based on expected losses rather than incurred losses to estimate credit losses on certain types of financial instruments, including trade receivables. This may result in the earlier recognition of allowances for losses. The ASU is effective for public entities for fiscal years beginning after December 15, 2019, with early adoption permitted. In November 2018, the FASB issued ASU No. 2018-19, Codification Improvements to Topic 326, Financial Instruments—Credit Losses, 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. Currently, the Company believes that the most notable impact of this ASU will relate to its processes around the assessment of the adequacy of its allowance for doubtful accounts on trade accounts receivable and the recognition of credit losses.

~~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, January 2018 and July 2018 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),~~ ~~ASU No. 2018-01,~~ ~~Leases (Topic 842), Land Easement Practical Expedient for Transition to Topic 842,~~ ~~ASU No. 2018-10,~~ ~~Codification Improvements to Topic 842, Leases~~ ~~and ASU No. 2018-11,~~ ~~Leases (Topic 842), Targeted Improvements~~,~~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. The Company is in the process of implementing a new lease system and the related processes and controls for the accounting for leases in accordance with the ASU. Management currently believes that the most notable impact to its financial statements upon the adoption of this ASU will be the recognition of a material right-of-use asset and a lease liability for its real estate and automobile leases.

In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820), which modifies the disclosures on fair value measurements by removing the requirement to disclose the amount and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy and the policy for timing of such transfers. The ASU expands the disclosure requirements for Level 3 fair value measurements, primarily focused on changes in unrealized gains and losses included in other comprehensive ~~income.~~income (loss). 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 assessment of the impact of the new standard on the Company’s ~~Consolidated Financial Statements.~~financial statements.

In August 2018, the FASB issued ASU No. 2018-14, Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans, which amends ASC 715 to add, remove, and clarify disclosure requirements related to defined benefit pension and other postretirement plans. The ASU is effective for public entities for fiscal years beginning after December 15, 2020, with early adoption permitted. Management has not yet completed its assessment of the impact of the new standard on the Company’s ~~Consolidated Financial Statements.~~financial statements.

Accumulated Other Comprehensive Income (Loss)—Accumulated other comprehensive income (loss) refers to certain gains and losses that under U.S. GAAP are included in comprehensive income (loss) but are excluded from net earnings as these amounts are initially recorded as an adjustment to stockholders’ equity. The 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.~~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 tax impacts.


	Foreign Currency Translation Adjustments			Pension & Postretirement Plan Benefit Adjustments				Unrealized Gain (Loss) on Available-For-Sale Securities Adjustments			Total			Foreign Currency Translation Adjustments			Pension & Postretirement Plan Benefit Adjustments				Unrealized Gain (Loss) on Available-For-Sale Securities Adjustments			Total
For the Three-Month Period Ended September 28, 2018:
Balance, June 29, 2018	$	(1,812.9	)	$	(664.6	)		$	(1.7	)	$	(2,479.2	)
For the Three-Month Period Ended March 29, 2019:
Balance, December 31, 2018														$	(2,098.1	)	$	(691.1	)		$	(1.9	)	$	(2,791.1	)
Other comprehensive income (loss) before reclassifications:
Decrease	(162.4		)	—				—			(162.4		)
(Decrease) increase														(7.3		)	—				0.5			(6.8		)
Income tax impact														(3.5		)	—				(0.1		)	(3.6		)
Other comprehensive income (loss) before reclassifications, net of income taxes	(162.4		)	—				—			(162.4		)	(10.8		)	—				0.4			(10.4		)
Amounts reclassified from accumulated other comprehensive income (loss):
Increase	—			7.7			(a)	—			7.7			—			7.1			(a)	—			7.1
Income tax impact	—			(1.8		)		—			(1.8		)	—			(1.7		)		—			(1.7		)
Amounts reclassified from accumulated other comprehensive income (loss), net of income taxes	—			5.9				—			5.9			—			5.4				—			5.4
Net current period other comprehensive income (loss), net of income taxes	(162.4		)	5.9				—			(156.5		)	(10.8		)	5.4				0.4			(5.0		)
Balance, September 28, 2018	$	(1,975.3	)	$	(658.7	)		$	(1.7	)	$	(2,635.7	)
For the Three-Month Period Ended September 29, 2017:
Balance, June 30, 2017	$	(1,819.0	)	$	(632.4	)		$	36.9		$	(2,414.5	)
Balance, March 29, 2019														$	(2,108.9	)	$	(685.7	)		$	(1.5	)	$	(2,796.1	)
For the Three-Month Period Ended March 30, 2018:
Balance, December 31, 2017														$	(1,422.1	)	$	(571.2	)		$	(0.9	)	$	(1,994.2	)
Adoption of accounting standards														(43.8		)	(107.2		)		(0.2		)	(151.2		)
Balance, January 1, 2018														(1,465.9		)	(678.4		)		(1.1		)	(2,145.4		)
Other comprehensive income (loss) before reclassifications:
Increase (decrease)	260.0			—				(3.0		)	257.0			294.1			—				(0.8		)	293.3
Income tax impact	—			—				1.1			1.1			—			—				0.3			0.3
Other comprehensive income (loss) before reclassifications, net of income taxes	260.0			—				(1.9		)	258.1			294.1			—				(0.5		)	293.6
Amounts reclassified from accumulated other comprehensive income (loss):
Increase	—			7.0			(a)	—			7.0			—			9.3			(a)	—			9.3
Income tax impact	—			(2.4		)		—			(2.4		)	—			(2.2		)		—			(2.2		)
Amounts reclassified from accumulated other comprehensive income (loss), net of income taxes	—			4.6				—			4.6			—			7.1				—			7.1
Net current period other comprehensive income (loss), net of income taxes	260.0			4.6				(1.9		)	262.7			294.1			7.1				(0.5		)	300.7
Balance, September 29, 2017	$	(1,559.0	)	$	(627.8	)		$	35.0		$	(2,151.8	)
Balance, March 30, 2018														$	(1,171.8	)	$	(671.3	)		$	(1.6	)	$	(1,844.7	)

^(a) This accumulated other comprehensive income (loss) component is included in the computation of net periodic pension cost. Refer to Note 810 for additional details.

Foreign Currency Translation Adjustments Pension & Postretirement Plan Benefit Adjustments Unrealized Gain (Loss) on Available-For-Sale Securities Adjustments Total
For the Nine-Month Period Ended September 28, 2018:
Balance, December 31, 2017 $ (1,422.1 ) $ (571.2 ) $ (0.9 ) $ (1,994.2 )
Adoption of accounting standards (43.8 ) (107.2 ) (0.2 ) (151.2 )
Balance, January 1, 2018 (1,465.9 ) (678.4 ) (1.1 ) (2,145.4 )
Other comprehensive income (loss) before reclassifications:
Decrease (509.4 ) —
(0.8 ) (510.2 )
Income tax impact —
—
0.2
0.2
Other comprehensive income (loss) before reclassifications, net of income taxes (509.4 ) —
(0.6 ) (510.0 )
Amounts reclassified from accumulated other comprehensive income (loss):
Increase —
25.8
(a) —
25.8
Income tax impact —
(6.1 ) —
(6.1 )
Amounts reclassified from accumulated other comprehensive income (loss), net of income taxes —
19.7
—
19.7
Net current period other comprehensive income (loss), net of income taxes (509.4 ) 19.7
(0.6 ) (490.3 )
Balance, September 28, 2018 $ (1,975.3 ) $ (658.7 ) $ (1.7 ) $ (2,635.7 )
For the Nine-Month Period Ended September 29, 2017:
Balance, December 31, 2016 $ (2,398.2 ) $ (642.2 ) $ 18.7
$ (3,021.7 )
Other comprehensive income (loss) before reclassifications:
Increase 839.2
—
26.1
865.3
Income tax impact —
—
(9.8 ) (9.8 )
Other comprehensive income (loss) before reclassifications, net of income taxes 839.2
—
16.3
855.5
Amounts reclassified from accumulated other comprehensive income (loss):
Increase —
22.2
(a) —
22.2
Income tax impact —
(7.8 ) —
(7.8 )
Amounts reclassified from accumulated other comprehensive income (loss), net of income taxes —
14.4
—
14.4
Net current period other comprehensive income (loss), net of income taxes 839.2
14.4
16.3
869.9
Balance, September 29, 2017 $ (1,559.0 ) $ (627.8 ) $ 35.0
$ (2,151.8 )

^(a) ~~This accumulated other comprehensive income (loss) component is included in the computation of net periodic pension cost. Refer to Note 8 for additional details.~~

NOTE 2. REVENUE

The following tables present the Company’s revenues disaggregated by geographical region and revenue type for the ~~three and nine-month~~three-month periods ended ~~September 28,~~March 29, 2019 and March 30, 2018 ($ in millions). Sales taxes and other usage-based taxes collected from customers are excluded from revenues. 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 defines developed markets as all markets of the world that are not high-growth markets.revenue.



	Three-Month Period Ended March 29, 2019
	Life Sciences		Diagnostics		Dental		Environmental & Applied Solutions		Total
Geographical region:
North America	$	587.3	$	632.4	$	298.5	$	449.2	$	1,967.4
Western Europe	460.3		288.9		160.1		259.7		1,169.0
Other developed markets	149.3		92.0		40.4		28.9		310.6
High-growth markets	430.0		523.5		160.7		318.7		1,432.9
Total	$	1,626.9	$	1,536.8	$	659.7	$	1,056.5	$	4,879.9

Revenue type:
Recurring	$	1,068.2	$	1,324.1	$	487.8	$	582.2	$	3,462.3
Nonrecurring	558.7		212.7		171.9		474.3		1,417.6
Total	$	1,626.9	$	1,536.8	$	659.7	$	1,056.5	$	4,879.9

Three-Month Period Ended September 28, 2018
Life Sciences Diagnostics Dental Environmental & Applied Solutions Total
Geographical region:
North America $ 584.0
$ 574.0
$ 339.8
$ 439.7
$ 1,937.5
Western Europe 447.1
262.3
137.2
257.5
1,104.1
Other developed markets 134.5
91.8
42.5
31.0
299.8
High-growth markets 431.1
574.4
160.0
346.2
1,511.7
Total $ 1,596.7
$ 1,502.5
$ 679.5
$ 1,074.4
$ 4,853.1

Revenue type:
Recurring $ 1,030.9
$ 1,273.3
$ 478.2
$ 571.1
$ 3,353.5
Nonrecurring 565.8
229.2
201.3
503.3
1,499.6
Total $ 1,596.7
$ 1,502.5
$ 679.5
$ 1,074.4
$ 4,853.1


	Nine-Month Period Ended September 28, 2018										Three-Month Period Ended March 30, 2018
	Life Sciences		Diagnostics		Dental		Environmental & Applied Solutions		Total		Life Sciences		Diagnostics		Dental		Environmental & Applied Solutions		Total
Geographical region:
North America	$	1,642.4	$	1,760.1	$	977.2	$	1,308.7	$	5,688.4	$	480.4	$	607.4	$	291.3	$	418.3	$	1,797.4
Western Europe	1,346.5		861.4		483.3		785.5		3,476.7		449.9		310.4		175.6		264.8		1,200.7
Other developed markets	417.9		275.3		133.5		94.9		921.6		144.9		92.2		43.9		31.6		312.6
High-growth markets	1,271.1		1,676.3		491.5		1,003.9		4,442.8		400.8		509.7		161.8		312.4		1,384.7
Total	$	4,677.9	$	4,573.1	$	2,085.5	$	3,193.0	$	14,529.5	$	1,476.0	$	1,519.7	$	672.6	$	1,027.1	$	4,695.4

Revenue type:
Recurring	$	3,057.3	$	3,892.8	$	1,513.5	$	1,702.7	$	10,166.3	$	970.4	$	1,308.5	$	488.0	$	557.0	$	3,323.9
Nonrecurring	1,620.6		680.3		572.0		1,490.3		4,363.2		505.6		211.2		184.6		470.1		1,371.5
Total	$	4,677.9	$	4,573.1	$	2,085.5	$	3,193.0	$	14,529.5	$	1,476.0	$	1,519.7	$	672.6	$	1,027.1	$	4,695.4

The Company sells equipment to customers as well as consumables, spare parts, software licenses and services, ~~that~~some of which customers purchase on a recurring basis. Consumables 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, filters used in filtration, separation and purification processes and cartridges for marking and coding equipment. Additionally, some of the Company’s consumables are used on a standalone basis, such as dental implants and water treatment solutions. The Company separates its goods and services between those sold on a recurring basis and those sold on a nonrecurring basis. Recurring revenue includes revenue from consumables, services, spare parts, software licenses recognized over time, SaaS licenses, sales-and-usage based royalties and OTLs. Nonrecurring revenue includes sales from equipment, software licenses recognized at a point in time and STLs. OTLs and STLs are included in the above revenue amounts. For the ~~three and nine-month~~three-month periods ended ~~September 28,~~March 29, 2019 and March 30, 2018, revenue accounted for under Topic 842 and840, Leases was ~~$115~~$107 million and ~~$308~~$97 million, respectively.

~~Remaining Performance Obligations~~

Remaining performance obligations related to Topic 606, Revenue from Contracts with Customers (“ASC ~~606~~606”) 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. Remaining performance obligations include noncancelable purchase orders, the non-lease portion of minimum purchase commitments under long-term consumable supply arrangements, extended warranty, service and PCS contracts, SaaS and other long-term contracts. Remaining performance obligations do not include revenue from contracts with customers with an original term of one year or less, revenue from long-term consumable supply arrangements with no minimum purchase requirements or revenue expected from purchases made in excess of the minimum purchase requirements or revenue from equipment leased to customers. While the remaining performance obligation disclosure is similar in concept to backlog, the definition of remaining performance obligations excludes leases and contracts that provide the customer with the right to cancel or terminate for convenience with no substantial penalty, even if historical experience indicates the likelihood of cancellation or termination is remote. Additionally, the Company has elected to exclude contracts with customers with an original term of one year or less from remaining performance obligations while these contracts are included within backlog.

As of ~~September 28, 2018,~~March 29, 2019, the aggregate amount of the transaction price allocated to remaining performance obligations was approximately ~~$1.8~~$1.9 billion. The Company expects to recognize revenue on approximately ~~44%~~43% of the remaining performance obligations over the next 12 months, ~~26%~~27% recognized over the subsequent 12 months, and the remainder recognized thereafter.

~~Contract Balances~~

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. ~~In addition, the Company defers certain costs incurred to obtain a contract (contract costs).~~

~~Contract assets~~—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 ~~Sheet.~~Sheets. The balance of contract assets as of ~~September 28,~~March 29, 2019 and December 31, 2018 ~~and at the date of adoption of ASC 606~~ were $97 million and ~~$114~~$82 million, respectively.

~~Contract liabilities~~—The Company often receives cash payments from customers in advance of the Company’s performance resulting in contract liabilities. These contract liabilities are classified as either current or long-term in the Consolidated Condensed Balance ~~Sheet~~Sheets based on the timing of when the Company expects to recognize revenue. As of ~~September 28,~~March 29, 2019 and December 31, 2018, ~~and at the date of adoption of ASC 606,~~ contract liabilities were ~~$787~~$838 million and ~~$783~~$799 million, respectively, and are included within accrued expenses and other liabilities and other long-term liabilities in the accompanying Consolidated Condensed Balance Sheet. The increase in the contract liability balance during the nine-month period ended September 28, 2018 is primarily as a result of cash payments received in advance of satisfying performance obligations and acquisitions, partially offset by revenue recognized during the period that was included in the contract liability balance at the date of adoption and foreign currency exchange.Sheets. Revenue recognized during the ~~three and nine-month~~three-month periods ended ~~September 28,~~March 29, 2019 and March 30, 2018 that was included in the contract liability balance ~~at the date of adoption was $144 million and $568 million, respectively.~~

~~Contract costs~~—The Company capitalizes certain direct incremental costs incurred to obtain a contract, typically sales-related commissions, where the amortization period for the related asset is greater than one year. These costs are amortized over the contract term or a longer period, generally the expected life of the customer relationship if renewals are expected and the renewal commission is not commensurate with the initial commission. Contract costs are classified as current or long-term other assets in the Consolidated Condensed Balance Sheet based on the timing of when the Company expects to recognize the expense and are generally amortized into earnings on a straight-line basis (which is consistent with the transfer of control for the related goods or services). Management assesses these costs for impairment at least quarterly and as “triggering” events occur that indicate it is more likely than not that an impairment exists. The balance of contract costs as of September 28,December 31, 2018 and at the date of adoption ~~were not significant. Amortization expense for the three and nine-month periods ended September 28,~~of ASC 606 on January 1, 2018 was ~~also not significant. The costs to obtain a contract where the amortization period for the related asset is one year or less are expensed as incurred~~$287 million and ~~recorded within selling, general and administrative expenses in the accompanying Consolidated Condensed Statements of Earnings.~~

$265 million, respectively. Contract assets ~~liabilities~~ and ~~costs~~liabilities are reported on the accompanying Consolidated Condensed Balance ~~Sheet~~Sheets on a contract-by-contract basis.

NOTE 3. ACQUISITIONS

For a description of the Company’s acquisition activity for the year ended December 31, ~~2017~~2018, reference is made to the financial statements as of and for the year ended December 31, ~~2017~~2018 and Note 23 thereto included in the Company’s ~~2017~~2018 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~~2018 and ~~2018~~2019 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.~~its first quarter 2019 acquisition. The Company will make appropriate adjustments to the purchase price allocation prior to completion of the measurement period, as required.

~~On April 13, 2018,~~During the three-month period ended March 29, 2019, the Company acquired Integrated DNA Technologies, Inc. (“IDT”), a privately-held manufacturer of custom DNA and RNA oligonucleotides serving customers in the academic and biopharmaceutical research, biotechnology, agriculture, clinical diagnostics and pharmaceutical development end-markets, for a purchase price of approximately $2.1 billion, net of cash acquired. IDT had revenues of approximately $260 million in 2017, and is now part of the Company’s Life Sciences segment.

The Company financed the acquisition of IDT with available cash and proceeds from the issuance of commercial paper. The Company preliminarily recorded approximately $1.2 billion of goodwill related to the IDT acquisition. The acquisition of IDT provides additional sales and earnings growth opportunities for the Company’s Life Sciences segment by expanding the segment’s product line diversity, including new product and service offerings in the area of genomics consumables, and through the potential future acquisition of complementary businesses.

~~In addition to the IDT acquisition, during the first nine months of 2018, the Company acquired~~ one ~~other~~ business for total consideration of ~~$95~~$308 million in cash, net of cash acquired. The business acquired complements an existing ~~units~~unit of the ~~Environmental & Applied Solutions~~Life Sciences segment. The aggregate annual sales of this business at the time of its acquisition, based on the company’s revenues for its last completed fiscal year prior to the acquisition, were ~~approximately $26~~$61 million. The Company preliminarily recorded an aggregate of ~~$71~~$211 million of goodwill related to this acquisition.

The following summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition for ~~all acquisitions~~the acquisition consummated during the ~~nine-month~~three-month period ended ~~September 28, 2018~~March 29, 2019 ($ in millions):


	IDT			Others			Total
Trade accounts receivable	$	36.0		$	5.3		$	41.3		$	7.7
Inventories	15.1			—			15.1			8.6
Property, plant and equipment	88.6			0.4			89.0			3.9
Goodwill	1,239.9			70.5			1,310.4			211.1
Other intangible assets, primarily customer relationships, trade names and technology	759.0			30.0			789.0			87.0
Trade accounts payable	(5.5		)	(2.7		)	(8.2		)	(2.6		)
Other assets and liabilities, net	(31.0		)	(8.4		)	(39.4		)	(7.5		)
Net assets acquired	2,102.1			95.1			2,197.2
Less: noncash consideration	(23.9		)	—			(23.9		)
Net cash consideration	$	2,078.2		$	95.1		$	2,173.3		$	308.2

Pro Forma Financial Information

The unaudited pro forma information for the periods set forth below gives effect to the ~~2018~~2019 and ~~2017~~2018 acquisitions as if they had occurred as of January 1, ~~2017.~~2018. 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 28, 2018 September 29, 2017 September 28, 2018 September 29, 2017
Sales $ 4,855.6
$ 4,629.4
$ 14,632.2
$ 13,572.1
Net earnings from continuing operations 663.8
561.2
1,906.1
1,581.1
Diluted net earnings per share from continuing operations 0.93
0.80
2.69
2.24



	Three-Month Period Ended
	March 29, 2019		March 30, 2018
Sales	$	4,884.1	$	4,788.3
Net earnings attributable to common stockholders	326.1		552.4
Diluted net earnings per share	0.45		0.78

InPending Acquisition

On February 25, 2019, the ~~nine-month period ended September 28, 2018,~~Company entered into an Equity and Asset Purchase Agreement (the “GE Biopharma Purchase Agreement”) with General Electric Company (“GE”) to acquire the Biopharma Business of GE Life Sciences (the “GE Biopharma Business” or “GE Biopharma”) for a cash purchase price of approximately $21.0 billion, subject to certain adjustments, and the assumption of approximately $0.4 billion of pension liabilities (the “GE Biopharma Acquisition”). The GE Biopharma Business is a leading provider of instruments, consumables and software that support the research, discovery, process development and manufacturing workflows of biopharmaceutical drugs. Based on unaudited ~~pro forma~~preliminary financial measures provided by GE, the GE Biopharma Business generated revenues of approximately $3.0 billion in 2018. The GE Biopharma Acquisition is expected to provide additional sales and earnings ~~set forth above were adjusted~~growth opportunities for the Company’s Life Sciences segment by expanding the business’ geographic and product line diversity, including new product and service offerings that complement the Company’s current biologics workflow solutions. The Company expects to ~~exclude~~include the ~~$1 million pretax impact~~GE Biopharma Business within the Life Sciences segment. The transaction is expected to be completed in the fourth quarter of ~~nonrecurring acquisition date fair value adjustments~~2019, subject to ~~inventory~~customary conditions, including receipt of applicable regulatory approvals.

The Company expects to finance the GE Biopharma Acquisition with approximately $3.0 billion of proceeds from the March 1, 2019 underwritten public offerings of its Common Stock and Mandatory Convertible Preferred Stock (“MCPS”), proceeds from the issuance of debt or other borrowings and available cash on hand. Refer to Note 14 for additional information related to the 2018 acquisition of IDT and in the nine-month period ended September 29, 2017 unaudited pro forma earnings set forth above were adjusted to include the impact of this same fair value adjustment as if the acquisition had occurred on JanuaryMarch 1, ~~2017.~~

~~In addition, acquisition-related transaction costs of $15 million in 2018 associated with the IDT acquisition were excluded from pro forma earnings in both 2018 and 2017.~~2019 public offerings.

NOTE 4. ~~DISCONTINUED OPERATIONS AND~~ DENTAL ~~SEPARATION~~INITIAL PUBLIC OFFERING

~~Discontinued Operations~~

On July 2, 2016 (the “Distribution Date”), the Company completed the separation (the “Fortive Separation”) of Fortive Corporation (“Fortive”). For additional details on the Fortive Separation reference is made to the financial statements as of and for the year ended December 31, 2017 and Note 3 thereto included in the Company’s 2017 Annual Report. The accounting requirements for reporting the Fortive Separation as a discontinued operation were met when the Fortive Separation was completed. Accordingly, the accompanying Consolidated Condensed Financial Statements for all periods presented reflect this business as a discontinued operation.

In the nine-month period ended September 29, 2017, the Company recorded a $22 million income tax benefit related to 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 the expiration of statutes of limitations for those returns. This income tax benefit was included in earnings from discontinued operations in the accompanying Consolidated Condensed Statement of Earnings.

~~Dental Separation~~

In July 2018, the Company announced its intention to spin-off its Dental business into ~~an independent publicly traded~~a separate publicly-traded company (the “Dental Separation”). ~~The~~On February 25, 2019, in connection with the announcement of the GE Biopharma Acquisition, the Company also announced a modification of its plans with respect to the Dental business, ~~had sales for the year-ended December 31, 2017~~specifically that it now intends to conduct an initial public offering of ~~$2.8 billion. The transaction is expected to be tax-free to the Company’s shareholders. The Company is targeting to complete~~shares of the Dental ~~Separation~~business (the “Dental IPO”) in the second half of 2019, subject to the satisfaction of certain conditions, including obtaining final approval from the Danaher Board of Directors, ~~satisfactory completion of financing, receipt of tax opinions, receipt of~~ favorable rulings from the ~~IRS~~Internal Revenue Service (“IRS”) and ~~receipt of~~ other regulatory approvals. All assets, liabilities, revenues and expenses of the Dental business are included in continuing operations of the Company in these Consolidated Condensed Financial Statements.

dividend to all our shareholders, the split-off of Dental business shares in exchange for Danaher shares or other securities, or any combination thereof in one transaction or in a series of transactions (collectively, “the Distribution”). While the Company currently intends to effect the Distribution, the Company has no obligation to pursue or consummate any further dispositions of our ownership in the Dental business, including through the Distribution, by any specified date or at all. If pursued, the Distribution may be subject to various conditions, including receipt of any necessary regulatory or other approvals, the existence of satisfactory market conditions, and the receipt of an opinion of counsel to the effect that the separation of the Dental business in connection with the IPO, together with such Distribution, will be tax-free to the Company and the Company’s shareholders for U.S. federal income tax purposes. The conditions to the Distribution may not be satisfied; the Company may decide not to consummate the Distribution even if the conditions are satisfied; or we may decide to waive one or more of these conditions and consummate the Distribution even if all of the conditions are not satisfied. In addition to or in lieu of the Distribution, subsequent to the Dental IPO the Company may sell additional shares of the Dental business in one or more publicly registered offerings or private placements. The Company cannot assure whether or when any such transaction will be consummated or as to the final terms of any such transaction.

NOTE 5.LEASES

The Company has operating leases for office space, warehouses, distribution centers, research and development facilities, manufacturing locations and certain equipment, primarily automobiles. Many leases include one or more options to renew, some of which include options to extend the leases for up to 30 years, and some leases include options to terminate the leases within 30 days. In certain of the Company’s lease agreements, the rental payments are adjusted periodically to reflect actual charges incurred for capital area maintenance, utilities, inflation and/or changes in other indexes. The Company’s finance leases were not material as of March 29, 2019 and for the three-month period then ended. ROU assets arising from finance leases are included in property, plant and equipment, net and the liabilities are included in notes payable and current portion of long-term debt and long-term debt in the accompanying Consolidated Condensed Balance Sheets.

For the three-month period ended March 29, 2019, the components of operating lease expense were as follows ($ in millions):



Fixed operating lease expense ^(a)	$	63.4
Variable operating lease expense	12.0
Total operating lease expense	$	75.4

^(a)Includes short-term leases and sublease income, both of which were immaterial.

Supplemental cash flow information related to the Company’s operating leases for the three-month period ended March 29, 2019 was as follows ($ in millions):



Cash paid for amounts included in the measurement of operating lease liabilities	$	61.9
ROU assets obtained in exchange for operating lease obligations	39.6

The following table presents the lease balances within the Consolidated Condensed Balance Sheet, weighted average remaining lease term, and weighted average discount rates related to the Company’s operating leases as of March 29, 2019 ($ in millions except for the weighted average remaining lease term and weighted average discount rate):



Lease Assets and Liabilities	Classification
Assets:
Operating lease ROU assets	Other long-term assets	$	946.7

Liabilities:
Current:
Operating lease liabilities	Accrued expenses and other liabilities	$	186.1
Long-term:
Operating lease liabilities	Other long-term liabilities	800.0
Total operating lease liabilities		$	986.1

Weighted average remaining lease term		7 years
Weighted average discount rate		3.3		%

The following table presents the maturity of the Company’s operating lease liabilities as of March 29, 2019 ($ in millions):



Remainder of 2019	$	163.3
2020	183.5
2021	149.0
2022	125.8
2023	109.7
Thereafter	395.3
Total operating lease payments	1,126.6
Less: imputed interest	140.5
Total operating lease liabilities	$	986.1

As of March 29, 2019, the Company had no additional significant operating or finance leases that had not yet commenced.

NOTE 6. GOODWILL

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

Balance, December 31, 2017 $ 25,138.6
Attributable to 2018 acquisitions 1,310.4
Adjustments due to finalization of purchase price allocations 7.6
Foreign currency translation and other (421.6 )
Balance, September 28, 2018 $ 26,035.0



Balance, December 31, 2018	$	25,906.0
Attributable to 2019 acquisitions	211.1
Adjustments due to finalization of purchase price allocations	(6.1		)
Foreign currency translation and other	(109.6		)
Balance, March 29, 2019	$	26,001.4

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


	September 28, 2018		December 31, 2017		March 29, 2019		December 31, 2018
Life Sciences	$	13,378.9	$	12,335.5	$	13,463.0	$	13,311.0
Diagnostics	6,952.4		7,079.5		6,902.9		6,925.6
Dental	3,331.5		3,370.0		3,301.0		3,325.5
Environmental & Applied Solutions	2,372.2		2,353.6		2,334.5		2,343.9
Total	$	26,035.0	$	25,138.6	$	26,001.4	$	25,906.0

The Company has not identified any “triggering” events which indicate an impairment of goodwill in the ~~nine-month~~three-month period ended ~~September 28, 2018.~~March 29, 2019.

NOTE 6.7. 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.

~~Financial~~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		Quoted Prices in Active Market (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
September 28, 2018:
March 29, 2019:
Assets:
Available-for-sale debt securities	$	—	$	40.3	$	—	$	40.3	$	—	$	36.8	$	—	$	36.8
Investment in equity securities									—		—		193.1		193.1
Cross-currency swap derivative contracts									—		17.1		—		17.1
Liabilities:
Cross-currency swap derivative contracts									—		2.3		—		2.3
Deferred compensation plans									—		66.3		—		66.3

December 31, 2018:
Assets:
Available-for-sale debt securities									$	—	$	38.3	$	—	$	38.3
Investment in equity securities									—		—		148.9		148.9
Liabilities:
Deferred compensation plans	—		65.4		—		65.4		—		60.9		—		60.9

December 31, 2017:
Assets:
Available-for-sale debt securities	$	—	$	45.4	$	—	$	45.4
Liabilities:
Deferred compensation plans	—		62.9		—		62.9

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 March 29, 2019, available-for-sale debt securities primarily include U.S. Treasury Notes and corporate debt securities, which are valued based on instruments with similar terms traded on an active market.

The Company’s investments in equity securities are classified as Level 3 in the fair value hierarchy because the Company estimates the fair value 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 investments in equity securities includes investments that the Company has made as a limited partner in a partnership for which the underlying investments are recorded on a fair value basis.

The cross-currency swap derivative contracts are used to partially hedge the Company’s net investments in foreign operations against adverse movements in exchange rates between the U.S. dollar and the Danish kroner, Japanese yen, euro and the Swiss franc. 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 foreign currency current exchange rates and forward curves as inputs. Refer to Note 9 for additional information.

The Company has established nonqualified deferred compensation programs that permit the Company to make tax-deferred contributions to officers ~~directors~~ and certain ~~management~~other employees, and also permit directors, officers and certain other employees to voluntarily defer taxation on a portion of their ~~compensation, on a pretax basis, until at or after their termination of employment (or board service, as applicable).~~compensation. 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~~Non-director 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. 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. Amounts voluntarily deferred by directors and amounts unilaterally contributed to participant accounts by the Company are ~~based on the value of~~deemed invested in the Company’s common stock and future distributions of such contributions (as well as future distributions of any voluntary deferrals allocated at any time to the Danaher common stock investment option) will be made solely in shares of common stock. As a result, Company contributions to ~~this program~~these programs and voluntary deferrals allocated at any time to the Danaher common stock investment option are not reflected in the above amounts.

Fair Value of Financial Instruments

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


	September 28, 2018				December 31, 2017				March 29, 2019				December 31, 2018
	Carrying Amount		Fair Value		Carrying Amount		Fair Value		Carrying Amount		Fair Value		Carrying Amount		Fair Value
Assets:
Available-for-sale debt securities	$	40.3	$	40.3	$	45.4	$	45.4	$	36.8	$	36.8	$	38.3	$	38.3
Investment in equity securities									193.1		193.1		148.9		148.9
Cross-currency swap derivative contracts									17.1		17.1		—		—
Liabilities:
Cross-currency swap derivative contracts									2.3		2.3		—		—
Notes payable and current portion of long-term debt	59.8		59.8		194.7		194.7		36.6		36.6		51.8		51.8
Long-term debt	10,558.0		10,893.3		10,327.4		10,847.1		9,458.2		9,848.5		9,688.5		9,990.6

As of ~~September 28, 2018~~March 29, 2019 and December 31, ~~2017, available-for-sale debt~~2018, investments in non-marketable equity securities were categorized as Level 2,3, available-for-sale debt securities and cross-currency swap derivative contracts were categorized as ~~indicated above,~~Level 2 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 7.8. FINANCING

As of ~~September 28, 2018,~~March 29, 2019, the Company was in compliance with all of its debt covenants. The components of the Company’s debt were as follows ($ in millions):


	September 28, 2018		December 31, 2017		March 29, 2019		December 31, 2018
U.S. dollar-denominated commercial paper	$	—	$	436.9	$	—	$	72.8
Euro-denominated commercial paper (€2.9 billion and €1.7 billion, respectively)	3,324.3		1,993.9
1.65% senior unsecured notes due 2018 (the “2018 U.S. Notes”)	—		499.2
Euro-denominated commercial paper (€2.1 billion and €2.1 billion, respectively)					2,327.0		2,377.5
1.0% senior unsecured notes due 2019 (€600.0 million aggregate principal amount) (the “2019 Euronotes”)	695.6		718.4		672.7		687.0
2.4% senior unsecured notes due 2020	498.3		497.7		498.7		498.5
5.0% senior unsecured notes due 2020 (the “2020 Assumed Pall Notes”)	390.5		394.6		386.6		386.7
Zero-coupon Liquid Yield Option Notes (LYONs) due 2021	58.3		69.1
Zero-coupon LYONs due 2021					44.3		56.2
0.352% senior unsecured notes due 2021 (¥30.0 billion aggregate principal amount) (the “2021 Yen Notes”)	263.5		265.5		270.2		273.2
1.7% senior unsecured notes due 2022 (€800.0 million aggregate principal amount) (the “2022 Euronotes”)	924.8		955.6		894.1		913.2
Floating rate senior unsecured notes due 2022 (€250.0 million aggregate principal amount) (the “Floating Rate 2022 Euronotes”)	289.4		299.1		279.7		285.7
0.5% senior unsecured bonds due 2023 (CHF 540.0 million aggregate principal amount) (the “2023 CHF Bonds”)	551.8		555.5		543.4		550.7
2.5% senior unsecured notes due 2025 (€800.0 million aggregate principal amount) (the “2025 Euronotes”)	924.4		955.6		893.4		912.6
3.35% senior unsecured notes due 2025	496.7		496.3		496.9		496.8
0.3% senior unsecured notes due 2027 (¥30.8 billion aggregate principal amount) (the “2027 Yen Notes”)	270.1		272.2		276.9		279.9
1.2% senior unsecured notes due 2027 (€600.0 million aggregate principal amount) (the “2027 Euronotes”)	690.8		714.1		667.6		682.0
1.125% senior unsecured bonds due 2028 (CHF 210.0 million aggregate principal amount) (the “2028 CHF Bonds”)	218.6		220.3		215.2		218.1
0.65% senior unsecured notes due 2032 (¥53.2 billion aggregate principal amount) (the “2032 Yen Notes”)	466.4		470.2		478.1		483.4
4.375% senior unsecured notes due 2045	499.3		499.3		499.4		499.3
Other	55.0		208.6		50.6		66.7
Total debt	10,617.8		10,522.1		9,494.8		9,740.3
Less: currently payable	59.8		194.7		36.6		51.8
Long-term debt	$	10,558.0	$	10,327.4	$	9,458.2	$	9,688.5

For additional details regarding the Company’s debt financing, ~~reference is made~~refer to Note 910 of the Company’s financial statements as of and for the year ended December 31, ~~2017~~2018 included in the Company’s ~~2017~~2018 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 ~~and the 364-Day Facility~~ described below. As of ~~September 28, 2018,~~March 29, 2019, no borrowings were outstanding under the Credit ~~Facility or the 364-Day~~ Facility and the Company was in compliance with all covenants thereunder. In addition to the Credit ~~Facility and the 364-Day~~ Facility, the Company has also entered into reimbursement agreements with various commercial banks to support the issuance of letters of credit.

As of ~~September 28, 2018,~~March 29, 2019, borrowings outstanding under the Company’s euro-denominated commercial paper program had a weighted average annual interest rate of negative 0.3% and a weighted average remaining maturity of approximately ~~45 days and~~37 days. There were no borrowings ~~were~~ outstanding under the Company’s U.S. ~~dollar denominated~~dollar-denominated commercial paper ~~program.~~program as of March 29, 2019.

The Company has classified the ~~€600~~$673 million of 2019 Euronotes and approximately ~~$3.3~~$2.3 billion of its borrowings outstanding under the euro-denominated commercial paper ~~programs~~program as of ~~September 28, 2018~~March 29, 2019 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 ~~$20~~$17 million and ~~$25~~$19 million as of ~~September 28, 2018~~March 29, 2019 and December 31, ~~2017,~~2018, respectively, and have been netted against the aggregate principal amounts of the related debt in the components of debt table above.

~~364-Day Revolving Credit Facility~~

On March 23, 2018, the Company entered into a $1.0 billion 364-day revolving credit facility (the “364-Day Facility”) to provide liquidity support for the issuance of additional commercial paper to fund a portion of the IDT acquisition (refer to Note 3 for information about the acquisition). The 364-Day Facility expires on March 22, 2019 (the “Scheduled Termination Date”). The Company may elect, upon the payment of a fee equal to 0.75% of the principal amount of the loans then outstanding and, upon the satisfaction of certain conditions, to convert any loans outstanding on the Scheduled Termination Date into term loans that are due and payable one year following the Scheduled Termination Date.

Borrowings under the 364-Day Facility bear interest as follows: (1) Eurodollar Rate Loans bear interest at a variable rate per annum equal to the London inter-bank offered rate plus 81.5 basis points; and (2) Base Rate Loans bear interest at a variable rate per annum 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 0.5%, (b) the rate of interest in effect for such day as publicly announced by Bank of America, N.A. as its “prime rate,” and (c) the Eurodollar Rate plus 1.0%. In addition, the Company is required to pay a per annum facility fee of six basis points based on the aggregate commitments under the 364-Day Facility, regardless of usage.

The 364-Day Facility requires the Company to maintain a consolidated leverage ratio (as defined in the facility) of .65 to 1.00 or less. Borrowings under the 364-Day Facility are prepayable at the Company’s option at any time in whole or in part without premium or penalty.

The Company’s obligations under the 364-Day Facility are unsecured. The Company has unconditionally and irrevocably guaranteed the obligations of each of its subsidiaries in the event a subsidiary is named a borrower under the 364-Day Facility. The 364-Day Facility contains customary representations, warranties, conditions precedent, events of default, indemnities and affirmative and negative covenants.

~~2018 Long-Term Debt Repayments~~

~~The $500 million of 2018 U.S. Notes were repaid with accrued interest upon their maturity in September 2018 using available cash and proceeds from commercial paper borrowings.~~

Guarantors of Debt

The Company has guaranteed long-term debt and commercial paper issued by certain of its wholly-owned subsidiaries. The 2019 Euronotes, 2022 Euronotes, Floating Rate 2022 Euronotes, 2025 Euronotes and 2027 Euronotes were issued by DH Europe Finance S.A. (“Danaher International”). The 2023 CHF Bonds and 2028 CHF Bonds were issued by DH Switzerland Finance S.A. (“Danaher Switzerland”). The 2021 Yen Notes, 2027 Yen Notes and 2032 Yen Notes were issued by DH Japan Finance S.A. (“Danaher Japan”). Each of Danaher International, Danaher Switzerland and Danaher Japan are wholly-owned finance subsidiaries of Danaher Corporation. All of the securities issued by each of these entities, as well as the 2020 Assumed Pall Notes, 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 the ~~nine-month~~three-month period ended ~~September 28, 2018,~~March 29, 2019, holders of certain of the Company’s LYONs converted such LYONs into an aggregate of approximately ~~487~~486 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 of $4$5 million was transferred to additional paid-in capital as a result of the conversions.

NOTE 9. HEDGING TRANSACTIONS AND DERIVATIVE FINANCIAL INSTRUMENTS

The Company uses cross-currency swap derivative contracts to partially hedge its net investments in foreign operations against adverse movements in exchange rates between the U.S. dollar and the Danish kroner, Japanese yen, euro and the 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. In January 2019, the Company entered into cross-currency swap derivative contracts on approximately $1.9 billion which corresponds with certain of its U.S. dollar-denominated bonds. These contracts effectively convert the Company’s U.S. dollar-denominated bonds to obligations denominated in Danish kroner, Japanese yen, euro and Swiss franc, and will partially offset the impact of changes in currency rates on foreign currency denominated net investments in future periods. The changes in the fair value 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) in the Company’s Consolidated Condensed Statements of Stockholders’ Equity. Any ineffective portions of net investment hedges are reclassified from accumulated other comprehensive income (loss) into earnings during the period of change. The interest income or expense from these swaps are recorded in interest expense in the Company’s Consolidated Condensed Statements of Earnings consistent with the interest expense attributable to the underlying debt. These instruments will mature on dates ranging from June 2019 to September 2028.

The Company incurred 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, Swiss franc, British pound and Canadian dollar. 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) in stockholders’ equity in the accompanying Consolidated Condensed Balance Sheets, offsetting the foreign currency translation adjustment of the Company’s related net investment that is also recorded in accumulated other comprehensive income (loss). Any ineffective portions of net investment hedges are reclassified from accumulated other comprehensive income (loss) into earnings during the period of change. These instruments will mature on dates ranging from June 2019 to May 2032.

The following table summarizes the notional values and pretax impact of changes in the fair values of instruments designated as net investment hedges ($ in millions):



	Three-Month Period Ended March 29, 2019
	Notional Amount		Gain (Loss) Recognized in OCI
Foreign currency contracts	$	1,875.0	$	14.8
Foreign currency denominated debt	7,518.3		137.8
Total	$	9,393.3	$	152.6

The Company did not reclassify any deferred gains or losses related to net investment hedges from accumulated other comprehensive income (loss) to earnings during the three-month period ended March 29, 2019. In addition, the Company did not have any ineffectiveness related to net investment hedges during the three-month period ended March 29, 2019. The cash inflows and outflows associated with the Company’s derivative contracts designated as net investment hedges are classified in the line item “all other investing activities” in the accompanying Consolidated Condensed Statement of Cash Flows.

The Company’s derivative instruments, as well as its nonderivative debt instruments designated and qualifying as net investment hedges, were classified as of March 29, 2019 in the Company’s Consolidated Condensed Balance Sheet as follows ($ in millions):



	March 29, 2019
Derivative assets:
Prepaid expenses and other current assets	$	17.1

Derivative liabilities:
Accrued expenses and other liabilities	2.3

Nonderivative hedging instruments:
Long-term debt	7,518.3

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 are not significant.

NOTE 8.10. DEFINED BENEFIT PLANS

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


	Three-Month Period Ended						Nine-Month Period Ended						Three-Month Period Ended
	September 28, 2018			September 29, 2017			September 28, 2018			September 29, 2017			March 29, 2019			March 30, 2018
U.S. pension benefits:
Service cost	$	(1.2	)	$	(1.9	)	$	(5.4	)	$	(5.7	)	$	(1.6	)	$	(2.1	)
Interest cost	(20.3		)	(20.1		)	(60.7		)	(62.1		)	(22.3		)	(20.2		)
Expected return on plan assets	33.0			32.4			99.2			98.2			31.6			33.1
Amortization of actuarial loss	(8.0		)	(5.9		)	(23.6		)	(19.1		)	(6.3		)	(7.8		)
Amortization of prior service cost	(0.2		)	—			(0.7		)	—			(0.2		)	(0.3		)
Net periodic pension benefit	$	3.3		$	4.5		$	8.8		$	11.3		$	1.2		$	2.7

Non-U.S. pension benefits:
Service cost	$	(8.6	)	$	(8.1	)	$	(26.2	)	$	(23.7	)	$	(8.1	)	$	(8.7	)
Interest cost	(6.3		)	(6.7		)	(19.6		)	(19.5		)	(6.7		)	(6.7		)
Expected return on plan assets	11.6			10.8			35.6			31.5			10.9			12.1
Amortization of actuarial loss	(1.5		)	(2.0		)	(4.5		)	(5.8		)
Amortization of prior service credit	0.2			0.1			0.4			0.3
Amortization of actuarial gain (loss)													0.1			(1.5		)
Amortization of prior service (cost) credit													(1.2		)	0.1
Settlement loss recognized	1.2			—			0.8			—			—			(0.4		)
Net periodic pension cost	$	(3.4	)	$	(5.9	)	$	(13.5	)	$	(17.2	)	$	(5.0	)	$	(5.1	)

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


	Three-Month Period Ended						Nine-Month Period Ended						Three-Month Period Ended
	September 28, 2018			September 29, 2017			September 28, 2018			September 29, 2017			March 29, 2019			March 30, 2018
Service cost	$	—		$	(0.1	)	$	(0.3	)	$	(0.5	)	$	(0.1	)	$	(0.1	)
Interest cost	(1.2		)	(1.1		)	(3.5		)	(3.7		)	(1.2		)	(1.2		)
Amortization of prior service credit	0.6			0.8			1.8			2.4			0.5			0.6
Net periodic benefit cost	$	(0.6	)	$	(0.4	)	$	(2.0	)	$	(1.8	)
Net periodic cost													$	(0.8	)	$	(0.7	)

~~In the first quarter of 2018, the Company adopted 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 the Company to disaggregate the service cost component from other components of net periodic benefit costs and report the service cost component in the same line item as other compensation costs and 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. As this ASU requires application on a retrospective basis, the Company restated the prior period presentation for the adoption of this ASU, resulting in a decrease in operating profit and an increase in other income, net of $8.3 million and $22.2 million for the three and nine-month periods ended September 29, 2017. The net periodic benefit cost of the noncontributory defined benefit pension plans and other postretirement employee benefit plans incurred during the ~~three and nine-month~~three-month periods ended ~~September 28,~~March 29, 2019 and March 30, 2018 ~~and September 29, 2017~~ are reflected in the following captions in the accompanying Consolidated Condensed Statements of Earnings ($ in millions):


	Three-Month Period Ended						Nine-Month Period Ended						Three-Month Period Ended
	September 28, 2018			September 29, 2017			September 28, 2018			September 29, 2017			March 29, 2019			March 30, 2018
Service cost:
Cost of sales	$	(1.6	)	$	(2.1	)	$	(7.0	)	$	(6.2	)	$	(2.0	)	$	(2.1	)
Selling, general and administrative expenses	(8.2		)	(8.0		)	(24.9		)	(23.7		)	(7.8		)	(8.8		)
Total service cost	(9.8		)	(10.1		)	(31.9		)	(29.9		)	(9.8		)	(10.9		)
Other net periodic benefit costs:
Other income, net	9.1			8.3			25.2			22.2			5.2			7.8
Total	$	(0.7	)	$	(1.8	)	$	(6.7	)	$	(7.7	)	$	(4.6	)	$	(3.1	)

Employer Contributions

During ~~2018,~~2019, the Company’s cash contribution requirements for its U.S. and non-U.S. defined benefit pension plans are forecasted to be approximately ~~$30~~$10 million and $50 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 9.11. INCOME TAXES

The following table summarizes the Company’s effective tax ~~rate from continuing operations:~~rate:

Three-Month Period Ended Nine-Month Period Ended
September 28, 2018 September 29, 2017 September 28, 2018 September 29, 2017
Effective tax rate from continuing operations 17.2 % 21.6 % 19.0 % 17.7 %



	Three-Month Period Ended
	March 29, 2019		March 30, 2018
Effective tax rate	53.7	%	20.5	%

The effective tax rate for 2019 differs from the U.S. federal statutory rate of 21.0% principally due to the impact of net discrete tax charges of $242 million ($0.34 per diluted share) related primarily to changes in estimates associated with prior period uncertain tax positions and audit settlements, net of the release of valuation allowances associated with certain foreign tax credits, tax benefits resulting from a change in tax law, and excess tax benefits from stock-based compensation. These discrete tax charges increased the reported tax rate by 34.0%. These provisions were partially offset by benefits from the impact of earnings outside the United States which generally are taxed at rates lower than the U.S. federal rate.

The Company’s effective tax rate for 2018 was slightly lower than the U.S. federal statutory rate of 21.0% due principally to the impact of the Company’s earnings outside the United States which generally are taxed at rates lower than the U.S. federal rate. The 2018 effective tax rate includes the benefit of a lower U.S. corporate income tax rate of 21.0% from the enactment of the ~~TCJA,~~Tax Cuts and Jobs Act (“TCJA”), partially offset by a new minimum tax on certain non-U.S. earnings. ~~In addition, the Company’s effective tax rate benefits from the impact of earnings outside the United States which overall are taxed at rates lower than the U.S. federal rate.~~ The effective tax rate for the three-month period ended September 28, 2018 includes net tax benefits of $23 million ($0.03 per diluted share) related primarily to the release of valuation allowances associated with certain foreign operating losses and excess tax benefits from stock-based compensation, which in aggregate reduced the reported tax rate by 2.9%. The effective tax rate for the nine-month period ended September 28,March 30, 2018 also includes ~~these benefits, in addition to net~~ tax benefits ~~of $9 million ($0.01 per diluted share) recorded in the second quarter of 2018 related to the~~for release of reserves upon the expiration of statutes of limitation and excess tax benefits from stock-based compensation which were ~~partially~~ offset by ~~increases~~changes in estimates associated with prior period uncertain tax ~~positions.~~provisions and other matters.

The Company’s effective tax rate for 2017 differed from the then-effective U.S. federal statutory rate of 35.0% due principally to the Company’s earnings outside the United States which overall are taxed at rates lower than such U.S. federal 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%.

~~On December 22, 2017, the TCJA was enacted, substantially changing the U.S. tax system and affecting the Company in a number of ways. Notably, the TCJA:~~

~~establishes a flat corporate income tax rate of 21.0% on U.S. earnings;~~

~~imposes a one-time tax on unremitted cumulative non-U.S. earnings of foreign subsidiaries (“Transition Tax”);~~

imposes a new minimum tax on certain non-U.S. earnings, irrespective of the territorial system of taxation, and generally allows for the repatriation of future earnings of foreign subsidiaries without incurring additional U.S. taxes by transitioning to a territorial system of taxation (Global Intangible Low-Taxed Income or “GILTI Tax”);

~~subjects certain payments made by a U.S. company to a related foreign company to certain minimum taxes (Base Erosion Anti-Abuse Tax);~~

eliminates certain prior tax incentives for manufacturing in the United States and creates an incentive for U.S. companies to sell, lease or license goods and services abroad by allowing for a reduction in taxes owed on earnings related to such sales;

~~allows the cost of investments in certain depreciable assets acquired and placed in service after September 27, 2017 to be immediately expensed; and~~

~~reduces deductions with respect to certain compensation paid to specified executive officers.~~

As U.S. GAAP accounting for income taxes requires the effect of a change in tax laws or rates to be recognized in income from continuing operations for the period that includes the enactment date, the Company recognized an estimate of the impact of the TCJA in the year ended December 31, 2017. As a result of the TCJA, the Company recognized a provisional tax liability of approximately $1.2 billion in 2017 for the Transition Tax, which is payable over a period of eight years. The Company also remeasured U.S. deferred tax assets and liabilities based on the income tax rates at which the deferred tax assets and liabilities are expected to reverse in the future (generally 21.0%), resulting in an income tax benefit of approximately $1.2 billion in 2017. For a description of the impact of the TCJA for the year ended December 31, 2017 reference is made to Note 12 of the Company’s financial statements as of and for the year ended December 31, 2017 included in the Company’s 2017 Annual Report.

Due to the complexities involved in accounting for the enactment of the TCJA, SAB No. 118 allowed the Company to record provisional amounts in earnings for the year ended December 31, 2017. SAB No. 118 provides that where reasonable estimates can be made, the provisional accounting should be based on such estimates and when no reasonable estimate can be made, the provisional accounting may be based on the tax law in effect before the TCJA. During the three and nine-month periods ended September 28, 2018, there were no changes made to the provisional amounts recognized in 2017. The Company continues to analyze the effects of the TCJA on its Consolidated Condensed Financial Statements. Additional impacts from the enactment of the TCJA will be recorded as they are identified during the measurement period as provided for in SAB No. 118, which extends up to one year from the enactment date. The final impact of the TCJA may differ from the provisional amounts that have been recognized, possibly materially, due to, among other things, changes in the Company’s interpretation of the TCJA, legislative or administrative actions to clarify the intent of the statutory language provided that differ from the Company’s current interpretation, any changes in accounting standards for income taxes or related interpretations in response to the TCJA, or any updates or changes to estimates utilized to calculate the impacts, including changes to current year earnings estimates and applicable foreign exchange rates. Additionally, the Company’s U.S. tax returns for 2017 will be filed duringIn the fourth quarter of 2018 and ~~any changes~~first quarter of 2019, the IRS has proposed significant adjustments to the ~~tax positions reflected in those returns compared to the estimates recorded in the~~ Company’s ~~earnings~~taxable income for the ~~year ended December 31, 2017 will result in an adjustment of the estimated tax provision recorded as of December 31, 2017.~~

The Company also continues to evaluate the impact of the GILTI provisions under the TCJA which are complex and subject to continuing regulatory interpretation by the U.S. Internal Revenue Service (“IRS”). The Company is required to make an accounting policy election of either (1) treating taxes due on future U.S. inclusions in taxable income related to GILTI as a current period expense when incurred (the “period cost method”) or (2) factoring such amounts into the Company’s measurement of its deferred taxes (the “deferred method”). The Company’s accounting policy electionyears 2012 through 2015 with respect to the ~~new GILTI Tax rules will depend, in part,~~deferral of tax on ~~analyzing its global~~certain premium income related to ~~determine whether it can reasonably estimate~~ the ~~tax impact. While~~Company’s self-insurance programs. The proposed adjustments would increase the Company’s taxable income over the 2012-2015 period by approximately $2.7 billion. Management believes the positions the Company has ~~included an estimate of GILTI~~taken in its ~~estimated effective~~U.S. tax returns are in accordance with the relevant tax laws, intends to vigorously defend these positions and is currently considering all of its alternatives. Due to the enactment of the TCJA in 2017 and the resulting reduction in the U.S. corporate tax rate for ~~2018, it has not completed~~years after 2017, the Company revalued its ~~analysis and has not determined which method to elect. Adjustments~~deferred tax liabilities related to the ~~amount~~temporary differences associated with this deferred premium income from 35.0% to 21.0%. If the Company is not successful in defending these assessments, the taxes owed to the IRS may be computed under the previous 35.0% statutory tax rate and the Company may be required to revalue the related deferred tax liabilities from 21.0% to 35.0%, which in addition to any interest due on the amounts assessed, would require a charge to future earnings. The ultimate resolution of ~~GILTI Tax recorded~~this matter is uncertain, could take many years and could result in ~~its~~a material adverse impact to the Company’s Consolidated Condensed Financial Statements, ~~may be required based on the outcome of this election.~~including its cash flows and effective tax rate.

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 ~~1.6~~1.7 billion including interest through ~~September 28, 2018~~March 29, 2019 (approximately ~~$247~~$253 million based on the exchange rate as of ~~September 28, 2018)~~March 29, 2019), 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 appealed these assessments to the National Tax Tribunal in 2014, which appeal has been pending awaiting the outcome of other cases brought to the Court of Justice of the European Union (“CJEU”). The Company is currently in discussions with SKAT and anticipates receiving an assessment for similar withholding tax matters for the years 2010-2012 totaling approximately DKK ~~939~~994 million including interest through ~~September 28, 2018~~March 29, 2019 (approximately ~~$146~~$149 million based on the exchange rate as of ~~September 28, 2018)~~March 29, 2019). In February 2019, the CJEU decided several other cases related to Danish withholding tax on dividends and interest. In these cases, the CJEU ruled that the exemption of interest payments from withholding taxes provided in the applicable European Union (“EU”) directive should be denied where taxpayers use the directive for abusive or fraudulent purposes, and that it is up to the national courts to make this determination. 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~~Danish High Court ~~of Justice~~ should ~~this~~the appeal to the Tax Tribunal be unsuccessful. The Company will continue to monitor decisions of both the Danish

courts and the CJEU and evaluate the impact of these court rulings on the Company’s tax positions in Denmark. The ultimate resolution of this matter is uncertain, could take many years, and could result in a material adverse impact to the Company’s ~~consolidated financial statements,~~Consolidated Condensed Financial Statements, including its effective tax rate.

NOTE ~~10.~~12. NONOPERATING INCOME (EXPENSE)

~~As described in Note 1 and Note 8, in the first quarter of 2018, the~~The Company ~~adopted ASU No. 2017-07,~~ ~~Compensation—Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost.~~ ~~The ASU requires the Company to disaggregate~~disaggregates the service cost component ~~from the other components~~ of net periodic benefit costs of the noncontributory defined benefit pension plans and ~~requires the Company to present~~other postretirement employee benefit plans and presents the other components of net periodic benefit cost in other income, net. ~~The ASU also requires application on a retrospective basis. The~~These other components include the assumed rate of ~~net periodic benefit costs included in other income, net for the three~~return on plan assets partially offset by amortization of actuarial losses and ~~nine-month periods ended September 28, 2018 were $9~~interest and aggregated to a gain of $5 million and ~~$25 million, respectively, compared to~~ $8 ~~million and $22~~ million for the ~~three and nine-month~~three-month periods ended ~~September~~March 29, ~~2017,~~2019 and March 30, 2018, respectively.

NOTE ~~11.~~13. COMMITMENTS AND CONTINGENCIES

For a description of the Company’s litigation and contingencies, ~~reference is made~~refer to Note 1617 of the Company’s financial statements as of and for the year ended December 31, ~~2017~~2018 included in the Company’s ~~2017~~2018 Annual Report. The Company reviews the adequacy of its legal reserves on a quarterly basis and establishes reserves for loss contingencies that are both probable and reasonably estimable. During the three-month period ended March 29, 2019, the Company recorded a provision of an additional $36 million ($29 million after-tax or $0.04 per diluted share) for costs and estimated damages related to a legal contingency.

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~~periods depend on the nature of the product and range from ~~90 days~~the date of such sale 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, 2017	$	79.0
Balance, December 31, 2018				$	77.4
Accruals for warranties issued during the period	44.8			18.0
Settlements made	(44.1		)	(17.2		)
Effect of foreign currency translation	(1.7		)	(0.2		)
Balance, September 28, 2018	$	78.0
Balance, March 29, 2019				$	78.0

NOTE ~~12.~~14. STOCK TRANSACTIONS AND STOCK-BASED COMPENSATION

On March 1, 2019, the Company completed the underwritten public offering of 12.1 million shares of Danaher common stock at a price to the public of $123.00 per share (the “Common Stock Offering”), resulting in net proceeds of approximately $1.4 billion, after deducting expenses and the underwriters’ discount of $45 million. Simultaneously, the Company completed the underwritten public offering of 1.65 million shares of its 4.75% Mandatory Convertible Preferred Stock, Series A (“MCPS”), without par value and with a liquidation preference of $1,000 per share (the “MCPS Offering”), resulting in net proceeds of approximately $1.6 billion, after deducting expenses and the underwriters’ discount of $50 million. The Company intends to use the net proceeds from the Common Stock Offering and the MCPS Offering to fund a portion of the cash consideration payable for, and certain costs associated with, the GE Biopharma Acquisition. Pending completion of the GE Biopharma Acquisition, the Company intends to invest the net proceeds in short-term bank deposits and/or interest-bearing, investment-grade securities.

Unless converted or redeemed earlier in accordance with the terms of the applicable certificate of designations, each share of MCPS will mandatorily convert on the mandatory conversion date, which is expected to be April 15, 2022, into between 6.6368 and 8.1300 shares of the Company’s common stock, subject to customary anti-dilution adjustments. The number of shares of

the Company’s common stock issuable upon conversion will be determined based on the average volume-weighted average price per share of the Company’s common stock over the 20 consecutive trading day period beginning on, and including, the 21st scheduled trading day immediately before April 15, 2022. Subject to certain exceptions, at any time prior to April 15, 2022, holders may elect to convert each share of the MCPS into 6.6368 shares of common stock, subject to customary anti-dilution adjustments. In the event of a fundamental change, the MCPS will convert at the fundamental change rates specified in the certificate of designations, and the holders of MCPS would be entitled to a fundamental change make-whole dividend.

Holders of MCPS will be entitled to receive, when and if declared by the Company’s Board of Directors, cumulative dividends at the annual rate of 4.75% of the liquidation preference of $1,000 per share (equivalent to $47.50 annually per share), payable in cash or, subject to certain limitations, by delivery of shares of the Company’s common stock or any combination of cash and shares of the Company’s common stock, at the Company’s election. If declared, dividends on the MCPS will be payable quarterly on January 15, April 15, July 15 and October 15 of each year (commencing on July 15, 2019 to, and including, April 15, 2022), to the holders of record of the MCPS as they appear on the Company’s stock register at the close of business on the immediately preceding December 31, March 31, June 30 and September 30, respectively.

If the GE Biopharma Acquisition has not closed on or before 5:00 p.m. (New York City time) on August 25, 2020, the GE Biopharma Purchase Agreement is terminated or the Company’s Board of Directors, in its good faith judgment, determines that the GE Biopharma Acquisition will not occur, the Company has the option to redeem the shares of MCPS, in whole but not in part, subject to certain terms and conditions.

For a full description of the Company’s stock-based compensation programs, ~~reference is made~~refer to Note 1718 of the Company’s financial statements as of and for the year ended December 31, ~~2017~~2018 included in the Company’s ~~2017~~2018 Annual Report. As of ~~September 28, 2018,~~March 29, 2019, approximately 5948 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						Three-Month Period Ended
	September 28, 2018			September 29, 2017			September 28, 2018			September 29, 2017			March 29, 2019			March 30, 2018
Restricted stock units (“RSUs”)/performance stock units (“PSUs”):
Pretax compensation expense	$	24.0		$	21.9		$	69.6		$	67.6		$	24.3		$	20.9
Income tax benefit	(5.0		)	(6.6		)	(14.6		)	(20.7		)	(5.1		)	(4.4		)
RSU/PSU expense, net of income taxes	19.0			15.3			55.0			46.9			19.2			16.5
Stock options:
Pretax compensation expense	14.2			11.5			42.0			37.2			14.9			12.4
Income tax benefit	(3.0		)	(3.6		)	(8.9		)	(11.8		)	(3.2		)	(2.6		)
Stock option expense, net of income taxes	11.2			7.9			33.1			25.4			11.7			9.8
Total stock-based compensation:
Pretax compensation expense	38.2			33.4			111.6			104.8			39.2			33.3
Income tax benefit	(8.0		)	(10.2		)	(23.5		)	(32.5		)	(8.3		)	(7.0		)
Total stock-based compensation expense, net of income taxes	$	30.2		$	23.2		$	88.1		$	72.3		$	30.9		$	26.3

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 28, 2018, $171~~March 29, 2019, $246 million of total unrecognized compensation cost related to RSUs/PSUs is expected to be recognized over a weighted average period of approximately ~~two~~three years. As of ~~September 28, 2018, $151~~March 29, 2019, $209 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.

NOTE ~~13.~~15. 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~~attributable to common stockholders 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-month period

ended ~~September 28, 2018,~~March 29, 2019, no options to purchase shares were excluded from the diluted EPS ~~from continuing operations~~ calculation. For the ~~nine-month~~three-month period ended ~~September 28,~~March 30, 2018, ~~one~~approximately three 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 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.

The impact of the MCPS calculated under the if-converted method was anti-dilutive, and as such 12.9 million shares underlying the MCPS were excluded from the dilutive EPS calculation for the three-month period ended March 29, 2019.

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 28, 2018:
Basic EPS $ 663.7
701.4
$ 0.95
Adjustment for interest on convertible debentures 0.6
—

Incremental shares from assumed exercise of dilutive options and vesting of dilutive RSUs and PSUs —
6.9

Incremental shares from assumed conversion of the convertible debentures —
2.3

Diluted EPS from continuing operations $ 664.3
710.6
$ 0.93

For the Three-Month Period Ended September 29, 2017:
Basic EPS $ 572.1
696.2
$ 0.82
Adjustment for interest on convertible debentures 0.6
—

Incremental shares from assumed exercise of dilutive options and vesting of dilutive RSUs and PSUs —
6.5

Incremental shares from assumed conversion of the convertible debentures —
2.9

Diluted EPS from continuing operations $ 572.7
705.6
$ 0.81

For the Nine-Month Period Ended September 28, 2018:
Basic EPS $ 1,904.1
700.1
$ 2.72
Adjustment for interest on convertible debentures 1.7
—

Incremental shares from assumed exercise of dilutive options and vesting of dilutive RSUs and PSUs —
7.3

Incremental shares from assumed conversion of the convertible debentures —
2.5

Diluted EPS from continuing operations $ 1,905.8
709.9
$ 2.68

For the Nine-Month Period Ended September 29, 2017:
Basic EPS $ 1,613.2
695.3
$ 2.32
Adjustment for interest on convertible debentures 1.6
—

Incremental shares from assumed exercise of dilutive options and vesting of dilutive RSUs and PSUs —
7.3

Incremental shares from assumed conversion of the convertible debentures —
2.9

Diluted EPS from continuing operations $ 1,614.8
705.5
$ 2.29



	Three-Month Period Ended
	March 29, 2019			March 30, 2018
Numerator:
Net earnings	$	333.8		$	566.6
Adjustment for interest on convertible debentures	0.5			0.6
MCPS dividends	(6.5		)	—
Net earnings attributable to common stockholders after assumed conversions for diluted EPS	$	327.8		$	567.2

Denominator:
Weighted average common shares outstanding used in basic EPS	707.6			698.6
Incremental common shares from:
Assumed exercise of dilutive options and vesting of dilutive RSUs and PSUs	8.7			8.3
Assumed conversion of the convertible debentures	2.2			2.6
Weighted average common shares outstanding used in diluted EPS	718.5			709.5

Basic EPS	$	0.46		$	0.81
Diluted EPS	$	0.46		$	0.80

NOTE ~~14.~~16. SEGMENT INFORMATION

The Company operates and reports its results in four separate business segments consisting of the Life Sciences, Diagnostics, Dental and 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. ~~Intersegment amounts are not significant and 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, 2017, with the exception of the inclusion of IDT in the Life Sciences segment in April 2018 (refer~~Intersegment amounts are not significant and are eliminated to ~~Note 3 for additional information).~~arrive at consolidated totals.

Segment results are shown below ($ in millions):


	Three-Month Period Ended						Nine-Month Period Ended						Three-Month Period Ended
	September 28, 2018			September 29, 2017			September 28, 2018			September 29, 2017			March 29, 2019			March 30, 2018
Sales:
Life Sciences	$	1,596.7		$	1,392.6		$	4,677.9		$	4,085.0		$	1,626.9		$	1,476.0
Diagnostics	1,502.5			1,448.7			4,573.1			4,216.0			1,536.8			1,519.7
Dental	679.5			694.0			2,085.5			2,052.1			659.7			672.6
Environmental & Applied Solutions	1,074.4			992.9			3,193.0			2,890.9			1,056.5			1,027.1
Total	$	4,853.1		$	4,528.2		$	14,529.5		$	13,244.0		$	4,879.9		$	4,695.4

Operating profit:
Life Sciences	$	312.8		$	246.8		$	875.6		$	680.0		$	309.0		$	271.3
Diagnostics	235.1			242.7			757.4			554.9			233.1			248.0
Dental	86.1			102.2			241.8			301.4			48.2			50.9
Environmental & Applied Solutions	254.3			222.8			732.5			666.0			244.6			227.2
Other	(57.6		)	(55.3		)	(166.1		)	(149.4		)	(111.1		)	(54.4		)
Total	$	830.7		$	759.2		$	2,441.2		$	2,052.9		$	723.8		$	743.0

Segment identifiable assets are shown below ($ in millions):



	March 29, 2019		December 31, 2018
Life Sciences	$	22,485.9	$	22,122.4
Diagnostics	14,282.8		14,031.1
Dental	6,019.5		5,897.3
Environmental & Applied Solutions	4,782.6		4,637.3
Other	4,203.6		1,144.4
Total	$	51,774.4	$	47,832.5

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 of Danaher Corporation’s (“Danaher,” the “Company,” “we,” “us” or “our”) financial statements with a narrative from the perspective of Company management. The Company’s MD&A is divided into 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 as of and for the year ended December 31, ~~2017~~2018 and Notes thereto, included in the Company’s ~~2017~~2018 Annual Report on Form 10-K ~~filed on February 21, 2018~~ and the Company’s Consolidated Condensed Financial Statements and related Notes as of and for the ~~three and nine-month periods~~three-month period ended ~~September 28, 2018~~March 29, 2019 included in this 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, in other documents we file with or furnish to the Securities and Exchange Commission, 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 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, tax rates, tax provisions, cash flows, pension and benefit obligations and funding requirements, our liquidity position or other projected financial measures; management’s plans and strategies for future operations, including statements relating to anticipated operating performance, cost reductions, restructuring activities, new product and service developments, competitive strengths or market position, acquisitions and the integration thereof, divestitures, spin-offs, split-offs or other distributions (including the anticipated initial public offering of the Company’s Dental business), 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; outstanding claims, legal proceedings, tax audits and assessments and other contingent liabilities; future foreign currency exchange rates and fluctuations in those rates; 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. 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:

We may not complete the GE Biopharma Acquisition within the time frame we anticipate or at all; any regulatory approval of the GE Biopharma Acquisition may be subject to conditions; and the GE Biopharma Acquisition could negatively impact our business, financial statements and stock price.

We have outstanding debt, and our debt will increase as a result of the GE Biopharma Acquisition. Our existing and future indebtedness may limit our operations and our use of our cash flow and negatively impact our credit ratings; and any failure to comply with the covenants that apply to our indebtedness could adversely affect our liquidity and financial statements.

We intend to ~~spin-off~~conduct an initial public offering of shares of our Dental business ~~into an independent, publicly traded company by~~in the second half of 2019. ~~The proposed transaction~~Subsequent to the initial public offering, we intend to distribute our remaining equity interest in the Dental business in one or more spin-off and/or split-off transactions, and in addition to or in lieu of such transactions may sell additional shares of the Dental business in one or more publicly registered offerings or private placements. Any or all of these transactions may not be completed on the currently contemplated timeline or at all and may not achieve the intended benefits.

Conditions in the global economy, the particular markets we serve and the financial markets may adversely affect our business and financial statements.

Significant developments or uncertainties stemming from the ~~current~~ U.S. administration, including changes in U.S. trade policies, tariffs and the reaction of other countries thereto, could have an adverse effect on our business.

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

We face intense competition and if we are unable to compete effectively, we may experience decreased demand and decreased market share. Even if we compete effectively, we may be required to reduce prices for our products and services.

Our growth depends in part on the timely development and commercialization, and customer acceptance, of new and enhanced products and services based on technological innovation.

Our reputation, ability to do business and financial statements may be impaired by improper conduct by any of our employees, agents or business partners.

Certain of our businesses are subject to extensive regulation by the U.S. Food and Drug Administration and by comparable agencies of other countries, as well as laws regulating fraud and abuse in the health care industry and the privacy and security of health information. Failure to comply with those regulations could adversely affect our reputation, ability to do business and financial statements.

Our products are subject to clinical trials, the results of which may be unexpected, or perceived as unfavorable by the market, and could have a material adverse effect on our business, financial condition or results of operations.

The health care industry and related industries that we serve have undergone, and are in the process of undergoing, significant changes in an effort to reduce costs, which could adversely affect our financial statements.

Any inability to consummate acquisitions at our historical rate and at appropriate prices, and to make appropriate investments that support our long-term strategy, could negatively impact our growth rate and stock price.

Our acquisition of businesses, investments, joint ventures and other strategic relationships could negatively impact our financial statements.

The indemnification provisions of acquisition agreements by which we have acquired companies may not fully protect us and as a result we may face unexpected liabilities.

Divestitures ~~and~~or other dispositions could negatively impact our business, and contingent liabilities from businesses that we have disposed could adversely affect our financial statements.

We could incur significant liability if the anticipated IPO of our Dental business, any subsequent spin-off and/or split-off of, or sale of additional shares of, our Dental business, the 2016 spin-off of Fortive Corporation (“Fortive”) or the 2015 split-off of our communications ~~business or the anticipated spin-off of our Dental~~ business is determined to be a taxable transaction.

Potential indemnification liabilities pursuant to the anticipated IPO of our Dental business, any subsequent spin-off and/or split-off of, ~~the~~or sale of additional shares of, our Dental business, 2016 spin-off of Fortive or the 2015 split-off of our communications ~~business or the anticipated spin-off of our Dental~~ business could materially and adversely affect our business and financial statements.

A significant disruption in, or breach in security of, our information technology systems or data or violation of data privacy laws could adversely affect our business, reputation and financial statements.

Our operations, products and services expose us to the risk of environmental, health and safety liabilities, costs and violations that could adversely affect our business, reputation and financial statements.

Our businesses are subject to extensive regulation; failure to comply with those regulations could adversely affect our financial statements and our business, including our reputation.

Our restructuring actions could have long-term adverse effects on our business.

We may be required to recognize impairment charges for our goodwill and other intangible assets.

Foreign currency exchange rates may adversely affect our financial statements.

Changes in our tax rates or exposure to additional income tax liabilities or assessments could affect our profitability. In addition, audits by tax authorities could result in additional tax payments for prior periods.

Changes in tax law relating to multinational corporations could adversely affect our tax position.

We are subject to a variety of litigation and other legal and regulatory proceedings in the course of our business that could adversely affect our business and financial statements.

If we do not or cannot adequately protect our intellectual property, or if third parties infringe our intellectual property rights, we may suffer competitive injury or expend significant resources enforcing our rights.

Third parties may claim that we are infringing or misappropriating their intellectual property rights and we could suffer significant litigation expenses, losses or licensing expenses or be prevented from selling products or services.

The U.S. government has certain rights to use and disclose some of the intellectual property that we license and could exclusively license it to a third party if we fail to achieve practical application of the intellectual property.

Defects and unanticipated use or inadequate disclosure with respect to our products or services (including software), or allegations thereof, could adversely affect our business, reputation and financial statements.

The manufacture of many of our products is a highly exacting and complex process, and if we directly or indirectly encounter problems manufacturing products, our reputation, business and financial statements could suffer.

Our indebtedness may limit our operations and our use of our cash flow, and any failure to comply with the covenants that apply to our indebtedness could adversely affect our liquidity and financial statements.

Adverse changes in our relationships with, or the financial condition, performance, purchasing patterns or inventory levels of, key distributors and other channel partners could adversely affect our financial statements.

Certain of our businesses rely on relationships with collaborative partners and other third parties for development, supply and marketing of certain products and potential products, and such collaborative partners or other third parties could fail to perform sufficiently.

Our financial results are subject to fluctuations in the cost and availability of commodities that we use in our operations.

If we cannot adjust our manufacturing capacity or the purchases required for our manufacturing activities to reflect changes in market conditions and customer demand, our profitability may suffer. In addition, our reliance upon sole or limited sources of supply for certain materials, components and services could cause production interruptions, delays and inefficiencies.

Changes in laws or governmental regulations may reduce demand for our products or services or increase our expenses.

Work stoppages, union and works council campaigns and other labor disputes could adversely impact our productivity and results of operations.

International economic, political, legal, compliance and business factors could negatively affect our financial statements.

~~The~~Significant developments stemming from the United Kingdom’s referendum ~~favoring departure from~~decision to exit the EU could have an adverse effect on our business.

If we suffer loss to our facilities, supply chains, distribution systems or information technology systems due to catastrophe or other events, our operations could be seriously harmed.

Our defined benefit pension plans are subject to financial market risks that could adversely affect our financial statements.

See Part I—Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2017~~2018 and Part I—Item 1A of this Quarterly Report 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 technological development (particularly with respect to computing, automation, artificial intelligence, mobile connectivity, 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 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~~high-growth geographies and high-growth market segments, identify, consummate and integrate appropriate acquisitions, 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 environment. The Company is making significant investments, organically and through acquisitions, 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.

Business Performance and Outlook

During the ~~third~~first quarter of ~~2018,~~2019, the Company’s revenues increased ~~7.0%~~4.0% compared to the comparable period of ~~2017.~~2018. While differences exist among the Company’s businesses, on an overall basis, demand for the Company’s products and services increased during the ~~third~~first quarter of ~~2018~~2019 compared to the comparable period of ~~2017.~~2018. This demand, together with the Company’s continued investments in sales growth initiatives and the other business-specific factors discussed below, contributed to year-over-year core sales growth of ~~6.5%~~5.5% (for the definition of “core sales” or “core revenue” refer to “—Results of Operations” below). Geographically, both high-growth and developed markets contributed to core sales growth during the ~~third~~first quarter of ~~2018.~~2019. Core revenues in high-growth markets increased at a ~~double~~high-single digit rate during the ~~third~~first quarter of ~~2018~~2019 as compared to the comparable period of ~~2017~~2018 led primarily by continued strength in China. High-growth markets represented approximately ~~31%~~29% of the Company’s total sales in the ~~third~~first quarter of ~~2018.~~2019. Core revenues in developed markets increased at a mid-single digit rate during the ~~third~~first quarter of ~~2018~~2019 led primarily by growth in North America and Western Europe. The Company expects overall year-over-year sales growth ~~to continue~~ for the remainder of ~~2018~~2019 but remains cautious about challenges due to macro-economic and geopolitical uncertainties, including global uncertainties related to trade, tariffs, monetary and fiscal policies. For additional information regarding the Company’s sales by geographical region during the ~~three and nine-month~~three-month periods ended ~~September 28,~~March 29, 2019 and March 30, 2018, ~~please~~ refer to Note 2 to the accompanying Consolidated Condensed Financial Statements.

The Company’s net earnings ~~from continuing operations~~ for the ~~three and nine-month periods~~three-month period ended ~~September 28, 2018~~March 29, 2019 totaled ~~$664~~$334 million or ~~$0.93~~$0.46 per diluted share ~~and approximately $1.9 billion~~compared to $567 million or ~~$2.68~~$0.80 per diluted share ~~respectively, compared to $572 million or $0.81 per diluted share and approximately $1.6 billion or $2.29 per diluted share, respectively,~~ for the ~~three and nine-month periods~~three-month period ended ~~September 29, 2017.~~March 30, 2018. The ~~factors~~tax-related charges discussed below in “Results of ~~Operations”~~Operations – Income Taxes” are the primary drivers of the ~~increase~~year-over-year decrease in net earnings ~~from continuing operations~~ and diluted earnings per share for the ~~three and nine-month periods~~three-month period ended ~~September 28, 2018.~~

~~The Company recorded a net increase to beginning retained earnings of $3 million as of January 1, 2018 due to the cumulative impact of adopting ASU No. 2014-09,~~ ~~Revenue from Contracts with Customers (Topic 606)~~. The impact to beginning retained earnings was primarily driven by the capitalization of certain costs to obtain a contract, primarily sales-related commissions, partially offset by the deferral of revenue for unfulfilled performance obligations. The adoption of this ASU did not have a significant impact on the Company’s Consolidated Condensed Financial Statements as of and for the three and nine-month periods ended September 28, 2018 and, as a result, comparisons of revenues and operating profit performance between periods are not affected by the adoption of this ASU. Refer to Note 2 to the accompanying Consolidated Condensed Financial Statements.March 29, 2019.

Acquisitions &and Proposed Dental ~~Separation~~Initial Public Offering

The Company’s growth strategy contemplates future acquisitions. Operations and results can be affected by the rate and extent to which appropriate acquisition opportunities are available and successfully consummated, acquired businesses are effectively integrated and anticipated synergies or cost savings are achieved. For a description of the Company’s pending acquisition of the Biopharma Business of GE Life Sciences and the anticipated financing thereof, refer to Note 3 to the accompanying Consolidated Condensed Financial Statements. For a description of the Company’s anticipated initial public offering with respect to its Dental business, refer to Note 4 to the accompanying Consolidated Condensed Financial Statements.

~~On April 13, 2018,~~During the three-month period ended March 29, 2019 the Company acquired Integrated DNA Technologies, Inc. (“IDT”), a privately-held manufacturer of custom DNA and RNA oligonucleotides serving customers in the academic and biopharmaceutical research, biotechnology, agriculture, clinical diagnostics and pharmaceutical development end-markets, for a purchase price of approximately $2.1 billion, net of cash acquired. IDT had revenues of approximately $260 million in 2017. The Company financed the acquisition of IDT with available cash and proceeds from the issuance of commercial paper. The Company preliminarily recorded approximately $1.2 billion of goodwill related to the IDT acquisition. The acquisition of IDT provides additional sales and earnings growth opportunities for the Company’s Life Sciences segment by expanding the segment’s product line diversity, including new product and service offerings in the area of genomics consumables, and through the potential future acquisition of complementary businesses.

~~In addition to the IDT acquisition, during the first nine months of 2018 the Company acquired~~ one ~~other~~ business for total consideration of ~~$95~~$308 million in cash, net of cash acquired. The business acquired complements an existing ~~units~~unit of the ~~Environmental & Applied Solutions~~Life Sciences segment. The aggregate annual sales of this business at the time of its acquisition, based

on the company’s revenues for its last completed fiscal year prior to the acquisition, were ~~approximately $26~~$61 million. The Company preliminarily recorded an aggregate of ~~$71~~$211 million of goodwill related to this acquisition.

~~For a description of Danaher’s plan to distribute ownership of its Dental business to Danaher shareholders in a tax-free spin-off transaction, see “Results of Operations—Dental.”~~

Currency Exchange Rates

On a year-over-year basis, currency exchange rates negatively impacted reported sales by approximately ~~1.5%~~4.0% for the three-month period ended ~~September 28, 2018,~~March 29, 2019, compared to the comparable period of ~~2017,~~2018, primarily due to the strength of the U.S. dollar against ~~several~~most major currencies in the ~~third~~first quarter of 2018. For the nine-month period ended September 28, 2018, currency exchange rates increased reported sales by approximately 2.0% reflecting the weakness of the U.S. dollar during the first six months of 2018 which more than offset the strengthening experienced in the third quarter of 2018.2019. If the currency exchange rates in effect as of ~~September 28, 2018~~March 29, 2019 were to prevail throughout the remainder of ~~2018,~~2019, currency exchange rates would reduce the Company’s estimated full year 2019 sales ~~for the fourth quarter of 2018~~ by approximately ~~1.5%~~2.0% on a year-over-year basis. Any future strengthening of the U.S. dollar against major currencies would adversely impact the Company’s sales and results of operations for the remainder of the year, and any weakening of the U.S. dollar against major currencies would positively impact the Company’s sales and results of operations for the remainder of the year.

UK’s Referendum Decision to Exit the EU (“Brexit”)

In a referendum on June 23, 2016, voters approved for the United Kingdom (“UK”) to exit the EU. The timing of the UK’s exit from the EU remains uncertain; the EU has extended the deadline for the UK to exit the EU until October 31, 2019. With the terms of the UK’s withdrawal and the nature of its future relationship with the EU still being decided, the Company continues to monitor the status of the negotiations and plan for any impact. To mitigate the potential impact of Brexit on the import and export of goods to and from the UK, the Company has increased its warehouse capacity and the level of inventory within the UK. For goods the Company manufactures within the UK and exports to other countries, the Company has manufactured and shipped additional goods for storage in countries outside the UK in an effort to maintain inventory required to meet customer demand in the event of disruption in shipments from the UK. The ultimate impact of Brexit on the Company’s financial results is uncertain. For additional information, refer to the “Item 1A—Risk Factors” section of the Company’s 2018 Annual Report on Form 10-K filed on February 21, 2019.

RESULTS OF OPERATIONS

Non-GAAP Measures

In this report, references to the non-GAAP measure of core sales (also referred to as core revenues or sales/revenues from existing businesses) refer to sales ~~from continuing operations~~ calculated according to U.S. GAAP, but excluding:

sales from acquired businesses; and

the impact of currency translation.

References to sales or operating profit attributable to acquisitions or acquired businesses refer to sales or operating profit, as applicable, from acquired businesses recorded prior to the first anniversary of the acquisition less the amount of sales and operating profit, as applicable, 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); and

the period-to-period change in revenue (excluding sales from acquired businesses) after applying current period foreign exchange rates to the prior year period.

Core sales 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 non-GAAP financial measure of core sales growth provides useful information to investors by helping identify underlying growth trends in Danaher’s 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 growth to measure the Company’s operating and financial ~~performance.~~performance, and uses it as one of the performance measures in the Company’s executive short-term cash incentive program. The Company excludes the effect of currency translation from core sales because currency translation is not under management’s control, is subject to volatility and can obscure underlying business trends. The Company 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 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.

Core Revenue

% Change Three-Month Period Ended September 28, 2018 vs. Comparable 2017 Period % Change Nine- Month Period Ended September 28, 2018 vs. Comparable 2017 Period
Total sales growth (GAAP) 7.0 % 9.5 %
Less the impact of:
Acquisitions (2.0 )% (1.5 )%
Currency exchange rates 1.5 % (2.0 )%
Core revenue growth (non-GAAP) 6.5 % 6.0 %



	% Change Three-Month Period Ended March 29, 2019 vs. Comparable 2018 Period
Total sales growth (GAAP)	4.0	%
Less the impact of:
Acquisitions	(2.5	)%
Currency exchange rates	4.0	%
Core revenue growth (non-GAAP)	5.5	%

Operating Profit Performance

Operating profit margins ~~increased 30~~decreased 100 basis points from 15.8% during the three-month period ended ~~September 28,~~March 30, 2018 ~~as compared~~ to 14.8% for the ~~comparable~~three-month period ~~of 2017.~~ended March 29, 2019.

~~Third~~First quarter ~~2018~~2019 vs. ~~third~~first quarter ~~2017~~2018 operating profit margin comparisons were favorably impacted by:

Higher ~~2018~~2019 core sales volumes, incremental year-over-year cost savings associated with continuing productivity improvement initiatives taken in ~~2017,~~2018, net of incremental year-over-year costs associated with various new product development, sales, service and marketing growth investments and the impact of foreign currency exchange rates in the ~~third~~first quarter of ~~2018~~2019 - 5040 basis points

~~Third~~First quarter ~~2018~~2019 vs. ~~third~~first quarter ~~2017~~2018 operating profit margin comparisons were unfavorably impacted by:

The incremental net dilutive effect in ~~2018~~2019 of acquired businesses - ~~20 basis points~~

~~Operating profit margins increased 130 basis points during the nine-month period ended September 28, 2018 as compared to the comparable period of 2017.~~

~~Year-to-date 2018 vs. year-to-date 2017 operating profit margin comparisons were favorably impacted by:~~

Higher 2018 sales volumes from existing businesses and incremental year-over-year cost savings associated with the ongoing restructuring actions and continuing productivity improvement initiatives taken in 2017, net of incremental year-over-year costs associated with various new product development, sales, service and marketing growth investments - 100 basis points

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

~~Second quarter 2018 gain on resolution of acquisition-related matters - 5 basis points~~

~~Year-to-date 2018 vs. year-to-date 2017 operating profit margin comparisons were unfavorably impacted by:~~

~~The incremental net dilutive effect in 2018 of acquired businesses - 20 basis points~~

~~Acquisition-related charges associated with transaction costs and fair value adjustments to acquired inventory recorded in the second quarter of 2018 in connection with the IDT acquisition -~~ 10 basis points

Transaction costs incurred in the first quarter of 2019 related to the GE Biopharma Acquisition - 30 basis points

First quarter 2019 costs and estimated damages related to a legal contingency - 75 basis points.

Costs incurred in the first quarter of 2019 related to the Dental IPO, including separation related activities and costs related to establishing a new separate company infrastructure, primarily related to incremental salaries, benefits and rent expense - 25 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				Three-Month Period Ended
	September 28, 2018		September 29, 2017		September 28, 2018		September 29, 2017		March 29, 2019		March 30, 2018
Life Sciences	$	1,596.7	$	1,392.6	$	4,677.9	$	4,085.0	$	1,626.9	$	1,476.0
Diagnostics	1,502.5		1,448.7		4,573.1		4,216.0		1,536.8		1,519.7
Dental	679.5		694.0		2,085.5		2,052.1		659.7		672.6
Environmental & Applied Solutions	1,074.4		992.9		3,193.0		2,890.9		1,056.5		1,027.1
Total	$	4,853.1	$	4,528.2	$	14,529.5	$	13,244.0	$	4,879.9	$	4,695.4

For information regarding the Company’s sales by geographical region during the ~~three and nine-month~~three-month periods ended ~~September 28,~~March 29, 2019 and March 30, 2018, please refer to Note 2 to the accompanying Consolidated Condensed Financial Statements.

LIFE SCIENCES

The Company’s Life Sciences segment offers a broad range of research tools that scientists use to study the basic building blocks of life, including genes, proteins, metabolites and cells, in order to understand the causes of disease, identify new therapies and test new drugs and vaccines. The segment ~~through its Pall Corporation business,~~ is also a leading provider of filtration, separation and purification technologies to the biopharmaceutical, food and beverage, medical, aerospace, microelectronics and general industrial ~~segments.~~sectors.

Life Sciences Selected Financial Data


	Three-Month Period Ended						Nine-Month Period Ended						Three-Month Period Ended
($ in millions)	September 28, 2018			September 29, 2017			September 28, 2018			September 29, 2017			March 29, 2019			March 30, 2018
Sales	$	1,596.7		$	1,392.6		$	4,677.9		$	4,085.0		$	1,626.9		$	1,476.0
Operating profit	312.8			246.8			875.6			680.0			309.0			271.3
Depreciation	32.6			29.5			94.8			88.6			32.3			30.6
Amortization	84.2			76.9			255.4			229.9			89.6			80.7
Operating profit as a % of sales	19.6		%	17.7		%	18.7		%	16.6		%	19.0		%	18.4		%
Depreciation as a % of sales	2.0		%	2.1		%	2.0		%	2.2		%	2.0		%	2.1		%
Amortization as a % of sales	5.3		%	5.5		%	5.5		%	5.6		%	5.5		%	5.5		%

Core Revenue

% Change Three-Month Period Ended September 28, 2018 vs. Comparable 2017 Period % Change Nine- Month Period Ended September 28, 2018 vs. Comparable 2017 Period
Total sales growth (GAAP) 14.5 % 14.5 %
Less the impact of:
Acquisitions (6.5 )% (4.5 )%
Currency exchange rates 1.5 % (2.5 )%
Core revenue growth (non-GAAP) 9.5 % 7.5 %



	% Change Three-Month Period Ended March 29, 2019 vs. Comparable 2018 Period
Total sales growth (GAAP)	10.0	%
Less the impact of:
Acquisitions	(7.0	)%
Currency exchange rates	4.0	%
Core revenue growth (non-GAAP)	7.0	%

Price increases in the segment contributed 0.5% to sales growth on a year-over-year basis during ~~both~~ the ~~three and nine-month periods~~three-month period ended ~~September 28, 2018,~~March 29, 2019 and are reflected as a component of core revenue growth.

Core sales of the business’ broad range of mass spectrometers grew on a year-over-year basis during ~~both~~ the ~~three and nine-month periods~~three-month period ended ~~September 28, 2018,~~March 29, 2019, led by strong sales growth in the high-growth markets ~~particularly China~~ and Western Europe, partially offset by lower core sales in the ~~rest of Asia,~~clinical end-market in North America due to a difficult prior year comparison. Growth was led by demand in the academic and ~~North America.~~pharmaceutical end-markets and by service offerings. Core sales of microscopy products grew during ~~both~~ the ~~three~~three-month period, partially driven by recent new product releases, and ~~nine-month periods ended~~

~~September 28, 2018 across most major end-markets, due partially to demand related to the release of new products in 2018. Geographically, demand for microscopy products increased in~~led by North America and ~~in high-growth markets, primarily~~ China. Demand for the business’ flow cytometry and particle counting product lines ~~was strong~~increased across most major geographies, led by North America, ~~and~~ China ~~in both the three~~ and ~~nine-month periods ended September 28, 2018, as well as~~ Western Europe in the ~~nine-month~~three-month period ended ~~September 28, 2018. New product launches in 2018 also contributed to the increased demand.~~March 29, 2019. Core sales for filtration, separation and purification technologies increased across ~~most~~all major geographies in ~~both~~ the ~~three and nine-month periods ended September 28,~~three-month period in 2019 versus the comparable period in 2018, ~~versus comparable periods in 2017,~~ led by ~~continued~~ growth in the biopharmaceutical, ~~microelectronics~~aerospace and fluid technology and ~~asset protection end-markets, as well as the laboratory, food~~process and ~~beverage end-markets during the three-month period ended September 28, 2018.~~industrial end-markets.

Sales growth from acquisitions is primarily due to the acquisition of ~~IDT~~Integrated DNA Technologies (“IDT”) in April 2018. IDT provides additional sales and earnings growth opportunities for the segment by expanding the segment’s product line diversity, including new product and service offerings in the area of genomics ~~consumables, and through the potential future acquisition of complementary businesses.~~consumables. During the ~~three and nine-month periods~~three-month period ended ~~September 28, 2018,~~March 29, 2019, IDT’s revenues grew on a year-over-year basis with growth across all major product lines and all major geographies, primarily driven by North America.

In addition, as noted above, the GE Biopharma Acquisition is expected to be completed in the fourth quarter of 2019 subject to customary conditions, including receipt of applicable regulatory approvals. Upon closing, the Company expects to include the GE Biopharma Business within the Life Sciences segment. The GE Biopharma Acquisition is expected to provide additional sales and earnings growth opportunities for the Company’s Life Sciences segment by expanding the business’ geographic and product ~~lines.~~line diversity, including new product and service offerings in the areas of process chromatography and consumables, cell culture media, single-use technologies, development instrumentation and consumables that complement the Company’s current biologics workflow solutions.

Operating Profit Performance

Operating profit margins increased ~~190~~60 basis points during the three-month period ended ~~September 28, 2018~~March 29, 2019 as compared to the comparable period of ~~2017.~~2018.

~~Third~~First quarter 2019 vs. first quarter 2018 ~~vs. third quarter 2017~~ operating profit margin comparisons were favorably impacted by:

Higher ~~2018~~2019 core sales volumes and incremental year-over-year cost savings, ~~associated with the restructuring actions and continuing productivity improvement initiatives taken in 2017,~~ net of incremental year-over-year costs associated with various new product development, sales and marketing growth investments and the impact of foreign currency exchange rates in the ~~third~~first quarter of ~~2018~~2019 - ~~230~~100 basis points

~~Third~~First quarter ~~2018~~2019 vs. ~~third~~first quarter ~~2017~~2018 operating profit margin comparisons were unfavorably impacted by:

The incremental net dilutive effect in ~~2018~~2019 of acquired businesses - 40 ~~basis points~~

~~Operating profit margins increased 210 basis points during the nine-month period ended September 28, 2018 as compared to the comparable period of 2017.~~

~~Year-to-date 2018 vs. year-to-date 2017 operating profit margin comparisons were favorably impacted by:~~

Higher 2018 core sales volumes, incremental year-over-year cost savings associated with the restructuring actions and continuing productivity improvement initiatives taken in 2017 and the impact of foreign currency exchange rates in the nine-month period in 2018, net of incremental year-over-year costs associated with various new product development, sales and marketing growth investments - 255 basis points

~~Second quarter 2018 gain on resolution of acquisition-related matters - 20 basis points~~

~~Year-to-date 2018 vs. year-to-date 2017 operating profit margin comparisons were unfavorably impacted by:~~

~~The incremental net dilutive effect in 2018 of acquired businesses - 30 basis points~~

DIAGNOSTICS

The Company’s Diagnostics segment offers analytical 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						Three-Month Period Ended
($ in millions)	September 28, 2018			September 29, 2017			September 28, 2018			September 29, 2017			March 29, 2019			March 30, 2018
Sales	$	1,502.5		$	1,448.7		$	4,573.1		$	4,216.0		$	1,536.8		$	1,519.7
Operating profit	235.1			242.7			757.4			554.9			233.1			248.0
Depreciation	92.2			92.6			284.5			271.8			91.6			94.3
Amortization	52.1			54.2			157.8			160.2			52.0			53.1
Operating profit as a % of sales	15.6		%	16.8		%	16.6		%	13.2		%	15.2		%	16.3		%
Depreciation as a % of sales	6.1		%	6.4		%	6.2		%	6.4		%	6.0		%	6.2		%
Amortization as a % of sales	3.5		%	3.7		%	3.5		%	3.8		%	3.4		%	3.5		%

Core Revenue

% Change Three-Month Period Ended September 28, 2018 vs. Comparable 2017 Period % Change Nine- Month Period Ended September 28, 2018 vs. Comparable 2017 Period
Total sales growth (GAAP) 3.5 % 8.5 %
Less the impact of:
Currency exchange rates 2.0 % (2.0 )%
Core revenue growth (non-GAAP) 5.5 % 6.5 %



	% Change Three-Month Period Ended March 29, 2019 vs. Comparable 2018 Period
Total sales growth (GAAP)	1.0	%
Less the impact of:
Currency exchange rates	4.0	%
Core revenue growth (non-GAAP)	5.0	%

Pricing in the segment ~~negatively impacted~~did not significantly impact sales growth ~~by 0.5%~~ on a year-over-year basis during the ~~three and nine-month periods~~three-month period ended ~~September 28, 2018, and is reflected as a component of core revenue growth.~~March 29, 2019.

During both the three and nine-month periods ended September 28, 2018, core sales grew in the molecular diagnostics business driven by strong growth in both developed and high-growth markets. During the first quarter of 2018, the molecular diagnostics business experienced particularly strong growth in the infectious diseases product line driven in part by the severity of the flu season. Core sales in the segment’s clinical lab business increased on a year-over-year basis for ~~both~~ the ~~three and nine-month periods~~three-month period ended ~~September 28, 2018~~March 29, 2019 due to increased demand in the high-growth markets, led by China, and in North America, partially offset by ~~the developed markets. For the three and nine-month periods, the increased~~lower demand ~~was driven by the~~in Western Europe. The immunoassay and automation product ~~lines.~~lines drove the core sales growth. During the three-month period, core sales decreased slightly in the molecular diagnostics business as growth in the developed markets was more than offset by the difficult prior year sales comparison driven by the severity of the 2018 flu season. Core sales in the acute care diagnostic business increased year-over-year in ~~both~~ the ~~three and nine-month periods~~three-month period ended ~~September 28, 2018, due to~~March 29, 2019, as installed base growth drove continued strong sales of blood gas and immunoassay product lines across most major geographies, ~~with particularly strong growth in the high-growth markets.~~led by China and North America. Core sales in the pathology diagnostics business grew year-over-year in ~~both~~ the ~~three and nine-month periods ended September 28, 2018, led by~~three-month period, as demand for ~~new products in~~ both the advanced staining and core histology product ~~lines. Core~~lines increased core sales in ~~the pathology diagnostics business increased across most major geographies, led by~~ North America, China and Western ~~Europe and China in both the three and nine-month periods ended September 28, 2018.~~Europe.

Operating Profit Performance

Operating profit margins decreased ~~120~~110 basis points during the three-month period ended ~~September 28, 2018~~March 29, 2019 as compared to the comparable period of ~~2017.~~2018. The following ~~factor~~factors unfavorably impacted year-over-year operating profit margin comparisons:

Incremental year-over-year costs associated with various new product development, sales, service and marketing growth investments, unfavorable product mix and the impact of foreign currency exchange rates in the ~~third~~first quarter of ~~2018,~~2019, net of higher ~~2018~~2019 core sales volumes and incremental year-over-year cost savings associated with the restructuring actions and continuing productivity improvement initiatives taken in ~~2017~~2018 - ~~120 basis points~~

Operating profit margins increased 340 basis points during the nine-month period ended September 28, 2018 as compared to the comparable period of 2017. The following factors favorably impacted year-over-year operating profit margin comparisons:

~~the nine-month period and incremental year-over-year costs associated with various new product development, sales, service and marketing growth investments - 160 basis points~~

~~Restructuring, impairment and other related charges related to discontinuing a product line in the second quarter of 2017 - 180~~110 basis points

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~~With leading brand names, innovative technology and significant market position, 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						Three-Month Period Ended
($ in millions)	September 28, 2018			September 29, 2017			September 28, 2018			September 29, 2017			March 29, 2019			March 30, 2018
Sales	$	679.5		$	694.0		$	2,085.5		$	2,052.1		$	659.7		$	672.6
Operating profit	86.1			102.2			241.8			301.4			48.2			50.9
Depreciation	9.4			9.3			29.1			29.7			9.8			9.9
Amortization	22.5			20.8			68.0			61.0			22.5			22.9
Operating profit as a % of sales	12.7		%	14.7		%	11.6		%	14.7		%	7.3		%	7.6		%
Depreciation as a % of sales	1.4		%	1.3		%	1.4		%	1.4		%	1.5		%	1.5		%
Amortization as a % of sales	3.3		%	3.0		%	3.3		%	3.0		%	3.4		%	3.4		%

Core Revenue

% Change Three-Month Period Ended September 28, 2018 vs. Comparable 2017 Period % Change Nine- Month Period Ended September 28, 2018 vs. Comparable 2017 Period
Total sales growth (GAAP) (2.0 )% 1.5 %
Less the impact of:
Currency exchange rates 1.5 % (2.0 )%
Core revenue growth (non-GAAP) (0.5 )% (0.5 )%



	% Change Three-Month Period Ended March 29, 2019 vs. Comparable 2018 Period
Total sales growth (GAAP)	(2.0	)%
Less the impact of:
Currency exchange rates	4.5	%
Core revenue growth (non-GAAP)	2.5	%

Price in the segment negatively impacted sales growth by 0.5% on a year-over-year basis in ~~both~~ the ~~three~~three-month period ended March 29, 2019 and ~~nine-month periods ended September 28, 2018, and are~~is reflected as a component of core revenue growth.

Geographically, year-over-year core revenue declines in both the three and nine-month periods ended September 28, 2018 were driven by growth in high-growth markets, primarily China and Russia, which was more than offset by declines in North America and to a lesser extent Western Europe and Japan. Core revenue growth for the specialty consumables business, which consists of implant systems and orthodontic products, was led by high-growth markets, primarily China, and North America for ~~both~~ the ~~three~~three-month period ended March 29, 2019. Core sales growth was driven by demand for premium implant systems and ~~nine-month periods ended September 28, 2018.~~equipment, as well as increased demand for orthodontic products due partially to recent product launches. Core sales of dental equipment and traditional dental consumables ~~declined~~grew in the ~~three and nine-month periods~~three-month period ended ~~September 28, 2018, due primarily to declines~~March 29, 2019, led by demand in ~~North America. For~~ the ~~three and nine-month periods ended September 28, 2018, lower core~~high-growth markets. Core sales ~~of dental equipment and traditional dental consumables product lines~~also grew in North America ~~more than offset the year-over-year growth in the specialty consumables categories, primarily reflecting the impact of inventory reductions at several distribution partners as well~~ as the ~~impact from~~business experienced stabilization in this market after the realignment of ~~distributors and manufacturers in the dental industry.~~certain distribution relationships disrupted 2018 performance.

certain conditions, including obtaining final approval from the Danaher Board of Directors, ~~satisfactory completion of financing, receipt of tax opinions, receipt of~~ favorable rulings from the IRS and ~~receipt of~~ other regulatory approvals.

Subsequent to the anticipated Dental IPO, the Company currently intends to distribute to our shareholders all or a portion of our remaining equity interest in the Dental business, which may include the spin-off of Dental business shares effected as a dividend to all our shareholders, the split-off of Dental business shares in exchange for Danaher shares or other securities, or any combination thereof in one transaction or in a series of transactions (collectively, the “Distribution”). While the Company currently intends to effect the Distribution, the Company has no obligation to pursue or consummate any further dispositions of our ownership in the Dental business, including through the Distribution, by any specified date or at all. If pursued, the Distribution may be subject to various conditions, including receipt of any necessary regulatory or other approvals, the existence of satisfactory market conditions, and the receipt of an opinion of counsel to the effect that the separation of the Dental business in connection with the IPO, together with such Distribution, will be tax-free to the Company and the Company’s shareholders for U.S. federal income tax purposes. The conditions to the Distribution may not be satisfied; the Company may decide not to consummate the Distribution even if the conditions are satisfied; or we may decide to waive one or more of these conditions and consummate the Distribution even if all of the conditions are not satisfied. In addition to or in lieu of the Distribution, subsequent to the Dental IPO the Company may sell additional shares of the Dental business in one or more publicly registered offerings or private placements. The Company cannot assure whether or when any such transaction will be consummated or as to the final terms of any such transaction.

Operating Profit Performance

Operating profit margins decreased ~~200~~30 basis points during the three-month period ended ~~September 28, 2018~~March 29, 2019 as compared to the comparable period of ~~2017.~~2018. The following factors unfavorably impacted year-over-year operating profit margin comparisons:

Lower ~~2018 core sales volumes of dental equipment~~overall pricing and ~~traditional dental consumables,~~ incremental year-over-year costs associated with ~~product development and~~ sales and marketing growth investments, net of higher 2019 core sales volumes, lower ~~overall pricing and increased~~ spending on productivity initiatives in 2019, cost savings associated with productivity initiatives taken in 2018 and the impact of foreign currency exchange rates in the ~~third~~first quarter of ~~2018, net of cost savings associated with productivity initiatives taken in 2017~~2019 - ~~195 basis points~~

~~The incremental net dilutive effect in 2018 of acquired businesses - 5 basis points~~

Operating profit margins decreased 310 basis points during the nine-month period ended September 28, 2018 as compared to the comparable period of 2017. The following factors unfavorably impacted year-over-year operating profit margin comparisons:

Lower 2018 core sales volumes of dental equipment and traditional dental consumables, incremental year-over-year costs associated with product development and sales and marketing growth investments, lower overall pricing and increased spending on productivity initiatives and the impact of foreign currency exchange rates for the nine-month period in 2018, net of cost savings associated with productivity initiatives taken in 2017 - 300 basis points

~~The incremental net dilutive effect in 2018 of acquired businesses - 10~~30 basis points

ENVIRONMENTAL & APPLIED SOLUTIONS

The Company’s Environmental & Applied Solutions segment offers products and services that 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, industrial, 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, services and ~~services~~consumables for various color and appearance management, packaging design and quality management, packaging converting, printing, marking, coding ~~traceability, packaging, design~~ and ~~color management~~traceability applications on consumer, pharmaceutical and industrial products.

Environmental & Applied Solutions Selected Financial Data


	Three-Month Period Ended						Nine-Month Period Ended						Three-Month Period Ended
($ in millions)	September 28, 2018			September 29, 2017			September 28, 2018			September 29, 2017			March 29, 2019			March 30, 2018
Sales	$	1,074.4		$	992.9		$	3,193.0		$	2,890.9		$	1,056.5		$	1,027.1
Operating profit	254.3			222.8			732.5			666.0			244.6			227.2
Depreciation	11.0			11.3			34.8			31.6			12.4			11.7
Amortization	15.3			14.6			46.3			41.8			15.8			15.6
Operating profit as a % of sales	23.7		%	22.4		%	22.9		%	23.0		%	23.2		%	22.1		%
Depreciation as a % of sales	1.0		%	1.1		%	1.1		%	1.1		%	1.2		%	1.1		%
Amortization as a % of sales	1.4		%	1.5		%	1.5		%	1.4		%	1.5		%	1.5		%

Core Revenue

% Change Three-Month Period Ended September 28, 2018 vs. Comparable 2017 Period % Change Nine- Month Period Ended September 28, 2018 vs. Comparable 2017 Period
Total sales growth (GAAP) 8.0 % 10.5 %
Less the impact of:
Acquisitions (1.5 )% (1.5 )%
Currency exchange rates 1.5 % (2.0 )%
Core revenue growth (non-GAAP) 8.0 % 7.0 %



	% Change Three-Month Period Ended March 29, 2019 vs. Comparable 2018 Period
Total sales growth (GAAP)	3.0	%
Less the impact of:
Acquisitions	(1.0	)%
Currency exchange rates	3.5	%
Core revenue growth (non-GAAP)	5.5	%

Price increases in the segment contributed ~~2.0% and~~ 1.5% to sales growth on a year-over-year basis during the ~~three and nine-month periods~~three-month period ended ~~September 28, 2018, respectively,~~March 29, 2019 and are reflected as a component of core revenue growth.

Core sales in the segment’s water quality business increased at a ~~low double~~high-single digit rate during the three-month period ended ~~September 28, 2018, and at a high-single digit rate for the nine-month period ended September 28, 2018~~March 29, 2019 as compared to the comparable ~~periods~~period of ~~2017.~~2018. Year-over-year core sales in the analytical instrumentation product line grew in ~~both~~ the ~~three and nine-month periods,~~three-month period, driven by ~~higher~~increased demand ~~across all major geographies, led by~~in high-growth markets, particularly China, ~~North America~~ and Western Europe. Core revenue growth in the business’ chemical treatment solutions product line for ~~both~~ the ~~three and nine-month periods~~three-month period was driven by higher demand in the oil and gas, primary metals ~~mining, food~~ and ~~beverage and commercial and institutional~~chemical end-markets, partially offset by lower ~~demand~~core sales in the ~~oil and gas and chemical end-markets.~~power end-market. Geographically, year-over-year core revenue growth for chemical treatment solutions was driven by increased demand in North ~~America and high-growth markets for both the three and nine-month periods.~~America. Core sales in the business’ ultraviolet water disinfection product line increased ~~both in~~across all major end-markets during the ~~three and nine-month periods ended September 28, 2018 as compared to the comparable periods of 2017,~~three-month period, led by ~~continued strength in~~the completion of several municipal ~~end-markets.~~projects. Geographically, year-over-year ~~demand~~core sales growth for ultraviolet water disinfection products was driven by ~~higher demand in North America in the three-month period and~~ North America and ~~high-growth markets, primarily China, in the nine-month period, partially offset by softer demand in Western Europe in both periods and China in the three-month period.~~China.

Core sales in the segment’s product identification businesses increased at a ~~mid-single~~low-single digit rate during ~~both~~ the ~~three and nine-month periods~~three-month period ended ~~September 28, 2018~~March 29, 2019 as compared to the comparable ~~periods~~period of ~~2017. The majority of core revenue growth was driven by strong~~2018. Increased demand for marking and coding equipment and related consumables ~~across all major end-markets and~~drove core sales growth in ~~most major geographies, led by~~North America, Western Europe ~~North America~~ and high-growth markets. ~~Demand for~~For packaging and color solutions products and services, ~~decreased slightly~~increased demand for packaging was offset by lower demand for color solutions in ~~both~~ the ~~three and nine-month periods ended September 28, 2018 as compared to the comparable periods of 2017.~~three-month period. Geographically, year-over-year core revenue growth for packaging and color solutions products and services ~~softened~~strengthened in ~~both developed and~~ high-growth markets, ~~for the three-month period. For the nine-month period, weaker demand in the high-growth markets~~but was ~~slightly~~ offset by ~~increased demand~~softness in ~~the~~ developed markets.

Operating Profit Performance

Operating profit margins increased ~~130~~110 basis points during the three-month period ended ~~September 28, 2018~~March 29, 2019 as compared to the comparable period of ~~2017.~~2018.

~~Third~~First quarter 2019 vs. first quarter 2018 ~~vs. third quarter 2017~~ operating profit margin comparisons were favorably impacted by:

Higher 2018 core sales volumes and incremental year-over-year cost savings associated with the restructuring actions and continuing productivity improvement initiatives taken in 2017, net of the impact of foreign currency exchange rates in the third quarter of 2018 and incremental year-over-year costs associated with various new product development, sales, service and marketing growth investments - 160 basis points

~~Third quarter 2018 vs. third quarter 2017 operating profit margin comparisons were unfavorably impacted by:~~

~~The incremental net dilutive effect in 2018 of acquired businesses - 30 basis points~~

~~Operating profit margins decreased 10 basis points during the nine-month period ended September 28, 2018 as compared to the comparable period of 2017.~~

~~Year-to-date 2018 vs. year-to-date 2017 operating profit margin comparisons were favorably impacted by:~~

~~Higher 2018~~2019 core sales volumes, incremental year-over-year cost savings associated with the restructuring actions and continuing productivity improvement initiatives taken in ~~2017~~2018 and the impact of foreign currency exchange rates in the ~~nine month period in 2018,~~first quarter of 2019, net of incremental year-over-year costs associated with ~~various new product development,~~ sales, service and marketing growth investments - 40140 basis points

~~Year-to-date~~First quarter 2019 vs. first quarter 2018 ~~vs. year-to-date 2017~~ operating profit margin comparisons were unfavorably impacted by:

The incremental net dilutive effect in ~~2018~~2019 of acquired businesses - 5030 basis points

COST OF SALES AND GROSS PROFIT


	Three-Month Period Ended						Nine-Month Period Ended						Three-Month Period Ended
($ in millions)	September 28, 2018			September 29, 2017			September 28, 2018			September 29, 2017			March 29, 2019			March 30, 2018
Sales	$	4,853.1		$	4,528.2		$	14,529.5		$	13,244.0		$	4,879.9		$	4,695.4
Cost of sales	(2,162.6		)	(1,991.4		)	(6,378.3		)	(5,890.6		)	(2,161.9		)	(2,051.8		)
Gross profit	$	2,690.5		$	2,536.8		$	8,151.2		$	7,353.4		$	2,718.0		$	2,643.6
Gross profit margin	55.4		%	56.0		%	56.1		%	55.5		%	55.7		%	56.3		%

The year-over-year increase in cost of sales during ~~both~~ the ~~three and nine-month periods~~three-month period ended ~~September 28, 2018~~March 29, 2019 as compared to the comparable ~~periods~~period in ~~2017, is~~2018 was due primarily to the impact of higher year-over-year sales volumes, including sales from recently acquired businesses, partly offset by incremental year-over-year cost savings associated with the restructuring and continued productivity improvement actions taken in ~~2017.~~2018.

The year-over-year decrease in gross profit margins during the three-month period ended ~~September 28, 2018~~March 29, 2019 as compared to the comparable period in ~~2017, is~~2018 was due ~~primarily~~ to the impact of ~~foreign currency exchange rates during the third quarter of 2018, including transactional currency losses recorded,~~product mix and higher freight and tariffs costs, partially offset by the impact of higher year-over-year sales volumes, including sales from recently acquired businesses, increased leverage of certain manufacturing costs and incremental year-over-year cost savings associated with the restructuring activities and continued productivity improvement actions taken in 2017. The year-over-year increase in gross profit margins during the nine-month period ended September 28, 2018 as compared to the comparable period in 2017, is due primarily to the impact of higher year-over-year sales volumes, including sales from recently acquired businesses, increased leverage of certain manufacturing costs and incremental year-over-year cost savings associated with the restructuring activities and continued productivity improvement actions taken in 2017. Gross profit margin improvements were partially offset by the impact of foreign currency exchange rates during the nine-month period ended September 28, 2018 as compared to the comparable period in 2017.2018.

OPERATING EXPENSES


	Three-Month Period Ended						Nine-Month Period Ended						Three-Month Period Ended
($ in millions)	September 28, 2018			September 29, 2017			September 28, 2018			September 29, 2017			March 29, 2019			March 30, 2018
Sales	$	4,853.1		$	4,528.2		$	14,529.5		$	13,244.0		$	4,879.9		$	4,695.4
Selling, general and administrative (“SG&A”) expenses	1,558.6			1,498.4			4,798.4			4,470.6			1,683.4			1,601.9
Research and development (“R&D”) expenses	301.2			279.2			911.6			829.9			310.8			298.7
SG&A as a % of sales	32.1		%	33.1		%	33.0		%	33.8		%	34.5		%	34.1		%
R&D as a % of sales	6.2		%	6.2		%	6.3		%	6.3		%	6.4		%	6.4		%

The year-over-year ~~decrease~~increase in SG&A expenses as a percentage of sales for ~~both~~ the ~~three and nine-month periods~~three-month period ended ~~September 28, 2018~~March 29, 2019 as compared to the comparable ~~periods~~period in ~~2017,~~2018, was primarily driven by investments in sales and marketing growth initiatives and a provision for legal matters of $36 million, partially offset by the benefit of increased leverage of the Company’s general and administrative cost base resulting from higher ~~2018~~2019 sales volumes, partially offset by continued investments in sales and marketing growth initiatives. The impact of the restructuring, impairment and other related charges incurred in the second quarter of 2017 related to discontinuing a product line also contributed to the year-over-year decrease in SG&A expenses as a percentage of sales during the nine-month period ended September 28, 2018.volumes.

Year-over-year, R&D expenses (consisting principally of internal and contract engineering personnel costs) remained constant as a percentage of sales for ~~both~~ the ~~three and nine-month periods~~three-month period ended ~~September 28, 2018~~March 29, 2019 as compared to the comparable ~~periods~~period in ~~2017. Year-over-year~~2018, as year-over-year increases in ~~spending on~~ the Company’s new product development initiatives corresponded to the increase in sales.

NONOPERATING INCOME (EXPENSE)

~~As described in Note 1 and Note 8 to the accompanying Condensed Consolidated Financial Statements, in the first quarter of 2018, the~~The Company ~~adopted ASU No. 2017-07,~~ ~~Compensation—Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost.~~ ~~The ASU requires the Company to disaggregate~~disaggregates the service cost component ~~from the other components~~ of net periodic benefit costs of the noncontributory defined benefit pension plans and ~~requires the Company to present~~other postretirement employee benefit plans and presents the other components of net periodic benefit cost in other income, net. ~~The ASU also requires application on a retrospective basis. The~~

These other components include the assumed rate of ~~net periodic benefit costs included in other income, net for the three~~return on plan assets partially offset by amortization of actuarial losses and ~~nine-month periods ended September 28, 2018 were $9~~interest and aggregated to a gain of $5 million and ~~$25 million, respectively, compared to~~ $8 ~~million and $22~~ million for the ~~three and nine-month~~three-month periods ended ~~September~~March 29, ~~2017,~~2019 and March 30, 2018, respectively.

INTEREST COSTS AND FINANCING

For a discussion of the Company’s outstanding indebtedness, refer to Note 78 to the accompanying Consolidated Condensed Financial Statements.

Interest expense of ~~$41 million and $124~~$23 million for the ~~three and nine-month periods~~three-month period ended ~~September 28, 2018,~~March 29, 2019, was ~~higher by $1~~$16 million ~~and $3 million, respectively,~~lower than the comparable ~~periods~~period of ~~2017,~~2018, due primarily to the impact of the Company’s cross-currency swap derivatives. In January 2019, the Company entered into approximately $1.9 billion of cross-currency swap derivative contracts on its U.S. dollar-denominated bonds to effectively convert the Company’s U.S. dollar-denominated bonds to obligations denominated in Danish kroner, Japanese yen, euro and Swiss franc. Interest income of $16 million for the three-month period ended March 29, 2019, was $14 million higher than the comparable period of 2018, due primarily to higher average ~~interest rates on outstanding borrowings~~cash balances during ~~2018 as compared with~~2019 from the ~~average interest rates~~additional cash received from the Common Stock and MCPS Offerings completed in ~~2017, partially offset by lower average outstanding U.S. commercial paper borrowings in 2018 compared to 2017. For~~preparation for the three-month period ended September 28, 2018, the impact of foreign currency exchange rates had a negligible impact on interest expense. For the nine-month period ended September 28, 2018, the impact of foreign currency exchange rates also contributed to the higher interest expense in 2018 compared to the comparable period in 2017.GE Biopharma Acquisition.

INCOME TAXES

The following table summarizes the Company’s effective tax ~~rate from continuing operations:~~rate:

Three-Month Period Ended Nine-Month Period Ended
September 28, 2018 September 29, 2017 September 28, 2018 September 29, 2017
Effective tax rate from continuing operations 17.2 % 21.6 % 19.0 % 17.7 %



	Three-Month Period Ended
	March 29, 2019		March 30, 2018
Effective tax rate	53.7	%	20.5	%

The Company’s effective tax rate for 2018 was slightly lower than the U.S. federal statutory rate of 21.0% due principally to the impact of the Company’s earnings outside the United States which generally are taxed at rates lower than the U.S. federal rate. The 2018 effective tax rate includes the benefit of a lower U.S. corporate income tax rate of 21.0% from the enactment of the ~~Tax Cuts and Jobs Act (“TCJA”),~~TCJA, partially offset by a new minimum tax on certain non-U.S. earnings. ~~In addition, the Company’s effective tax rate benefits from the impact of earnings outside the United States which overall are taxed at rates lower than the U.S. federal rate.~~ The effective tax rate for the three-month period ended September 28, 2018 includes net tax benefits of $23 million ($0.03 per diluted share) related primarily to the release of valuation allowances associated with certain foreign operating losses and excess tax benefits from stock-based compensation, which in aggregate reduced the reported tax rate by 2.9%. The effective tax rate for the nine-month period ended September 28,March 30, 2018 also includes ~~these benefits, in addition to net~~ tax benefits ~~of $9 million ($0.01 per diluted share) recorded in the second quarter of 2018 related to the~~for release of reserves upon the expiration of statutes of limitation and excess tax benefits from stock-based compensation which were ~~partially~~ offset by ~~increases~~changes in estimates associated with prior period uncertain tax ~~positions.~~

The Company’s effective tax rate for 2017 differed from the then-effective U.S. federal statutory rate of 35.0% due principally to the Company’s earnings outside the United States which overall are taxed at rates lower than such U.S. federal 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 limitationsprovisions 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%.

~~On December 22, 2017, the TCJA was enacted, substantially changing the U.S. tax system and affecting the Company in a number of ways. Notably, the TCJA:~~

~~establishes a flat corporate income tax rate of 21.0% on U.S. earnings;~~

~~imposes a one-time tax on unremitted cumulative non-U.S. earnings of foreign subsidiaries (“Transition Tax”);~~

~~subjects certain payments made by a U.S. company to a related foreign company to certain minimum taxes (Base Erosion Anti-Abuse Tax);~~

~~allows the cost of investments in certain depreciable assets acquired and placed in service after September 27, 2017 to be immediately expensed; and~~

~~reduces deductions with respect to certain compensation paid to specified executive officers.~~

Due to the complexities involved in accounting for the enactment of the TCJA, SAB No. 118 allowed the Company to record provisional amounts in earnings for the year ended December 31, 2017. SAB No. 118 provides that where reasonable estimates can be made, the provisional accounting should be based on such estimates and when no reasonable estimate can be made, the provisional accounting may be based on the tax law in effect before the TCJA. During the three and nine-month periods ended September 28, 2018, there were no changes made to the provisional amounts recognized in 2017. The Company continues to analyze the effects of the TCJA on its Consolidated Condensed Financial Statements. Additional impacts from the enactment of the TCJA will be recorded as they are identified during the measurement period as provided for in SAB No. 118, which extends up to one year from the enactment date. The final impact of the TCJA may differ from the provisional amounts that have been recognized, possibly materially, due to, among other things, changes in the Company’s interpretation of the TCJA, legislative or administrative actions to clarify the intent of the statutory language provided that differ from the Company’s current interpretation, any changes in accounting standards for income taxes or related interpretations in response to the TCJA, or any updates or changes to estimates utilized to calculate the impacts, including changes to current year earnings estimates and applicable foreign exchange rates. Additionally, the Company’s U.S. tax returns for 2017 will be filed during the fourth quarter of 2018 and any changes to the tax positions reflected in those returns compared to the estimates recorded in the Company’s earnings for the year ended December 31, 2017 will result in an adjustment of the estimated tax provision recorded as of December 31, 2017.

The Company also continues to evaluate the impact of the GILTI provisions under the TCJA which are complex and subject to continuing regulatory interpretation by the IRS. The Company is required to make an accounting policy election of either (1) treating taxes due on future U.S. inclusions in taxable income related to GILTI as a current period expense when incurred (the “period cost method”) or (2) factoring such amounts into the Company’s measurement of its deferred taxes (the “deferred method”). The Company’s accounting policy election with respect to the new GILTI Tax rules will depend, in part, on analyzing its global income to determine whether it can reasonably estimate the tax impact. While the Company has included an estimate of GILTI in its estimated effective tax rate for 2018, it has not completed its analysis and has not determined which method to elect. Adjustments related to the amount of GILTI Tax recorded in its Consolidated Condensed Financial Statements may be required based on the outcome of this election.matters.

The Company conducts business globally, and files numerous consolidated and separate income tax returns in federal, state and foreign jurisdictions. The non-U.S. countries in which the Company has a significant presence include China, Denmark, Germany, Singapore, Switzerland and the United Kingdom. The Company believes that a change in the statutory tax rate of any individual foreign country would not have a material effect on the Company’s financial statements given the geographical dispersion of the Company’s taxable income.

The Company and its subsidiaries are routinely examined by various domestic and international taxing authorities. The IRS has completed the examinations of substantially all of the Company’s federal income tax returns through 2011 and is currently examining certain of the Company’s federal income tax returns for 2012 through 2015. In addition, the Company has subsidiaries in Austria, Belgium, Canada, China, Denmark, ~~Finland,~~ France, Germany, ~~Hong Kong,~~ India, ~~Italy,~~ Japan, New Zealand, Sweden, Switzerland and the United Kingdom and various other countries, states and provinces that are currently under audit for years ranging from 2004 through 2016.

In the fourth quarter of 2018 and first quarter of 2019, the IRS has proposed significant adjustments to the Company’s taxable income for the years 2012 through 2015 with respect to the deferral of tax on certain premium income related to the Company’s self-insurance programs. The proposed adjustments would increase the Company’s taxable income over the 2012-2015 period by approximately $2.7 billion. Management believes the positions the Company has taken in its U.S. tax returns are in accordance with the relevant tax laws, intends to vigorously defend these positions and is currently considering all of its alternatives. Due to the enactment of the TCJA in 2017 and the resulting reduction in the U.S. corporate tax rate for years after 2017, the Company revalued its deferred tax liabilities related to the temporary differences associated with this deferred premium income from 35.0% to 21.0%. If the Company is not successful in defending these assessments, the taxes owed to the IRS may be computed under the previous 35.0% statutory tax rate and the Company may be required to revalue the related deferred tax liabilities from 21.0% to 35.0%, which in addition to any interest due on the amounts assessed, would require a charge to future earnings. The ultimate resolution of this matter is uncertain, could take many years and could result in a material adverse impact to the Company’s Consolidated Condensed Financial Statements, including its cash flows and effective tax rate.

receiving an assessment for similar withholding tax matters for the years 2010-2012 totaling approximately DKK ~~939~~994 million including interest through ~~September 28, 2018~~March 29, 2019 (approximately ~~$146~~$149 million based on the exchange rate as of ~~September 28, 2018)~~March 29, 2019). In February 2019, the CJEU decided several other cases related to Danish withholding tax on dividends and interest. In these cases, the CJEU ruled that the exemption of interest payments from withholding taxes

provided in the applicable EU directive should be denied where taxpayers use the directive for abusive or fraudulent purposes, and that it is up to the national courts to make this determination. 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~~Danish High Court ~~of Justice~~ should ~~this~~the appeal to the Tax Tribunal be unsuccessful. The Company will continue to monitor decisions of both the Danish courts and the CJEU and evaluate the impact of these court rulings on the Company’s tax positions in Denmark. The ultimate resolution of this matter is uncertain, could take many years, and could result in a material adverse impact to the Company’s ~~consolidated financial statements,~~Consolidated Condensed Financial Statements, including its effective tax rate.

~~The Company’s effective tax rate for the nine-month period ended September 28, 2018 was 19.0%, which included discrete tax adjustments that reduced the effective tax rate by 1.3%.~~ The Company expects its effective tax rate for the ~~fourth quarter~~remainder of ~~2018~~2019 to be approximately 20.0%. The Company’s effective tax rate could vary as a result of many factors, including but not limited to the following:

The expected rate for the remainder of ~~2018~~2019 includes the anticipated discrete income tax benefits from excess tax deductions related to the Company’s stock compensation programs, which are reflected as a reduction in tax expense, though the actual benefits (if any) will depend on the Company’s stock price and stock option exercise patterns.

The actual mix of earnings by jurisdiction could fluctuate from the Company’s projection.

The tax effects of other discrete items, including accruals related to tax contingencies, the resolution of worldwide tax matters, tax audit settlements, statute of limitations expirations and changes in tax regulations.

Any future legislative changes or potential tax reform, the impact of future regulations and guidance implementing the TCJA and any related additional tax planning efforts to address these changes.

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.

COMPREHENSIVE INCOME

For the ~~three and nine-month periods~~three-month period ended ~~September 28, 2018,~~March 29, 2019, comprehensive income decreased ~~$328~~$539 million ~~and approximately $1.1 billion, respectively,~~ as compared to the comparable ~~periods~~period of ~~2017. These declines were~~2018, primarily due to lower net earnings in 2019 versus the three-month period in 2018 and due to losses from foreign currency translation adjustments in ~~both~~ the ~~three and nine-month periods~~three-month period ended ~~September 28, 2018~~March 29, 2019 as compared to ~~the~~ gains from foreign currency translation adjustments ~~realized~~recognized in the comparable ~~periods~~period of ~~2017, partially offset by higher net earnings in both the three and nine-month periods ended September 28,~~ 2018. For the ~~three and nine-month periods~~three-month period ended ~~September 28, 2018,~~March 29, 2019, the Company recorded a foreign currency translation loss of ~~$162~~$11 million, ~~and $509 million, respectively,~~ as compared to a foreign currency translation gain of ~~$260 million and $839~~$294 million for the ~~three and nine-month periods~~three-month period ended ~~September 29, 2017, respectively.~~March 30, 2018.

INFLATION

The effect of inflation on the Company’s revenues and net earnings was not significant in the ~~three and nine-month periods~~three-month period ended ~~September 28, 2018.~~March 29, 2019.

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 forecasts that its operating cash flow and other sources of liquidity (including the anticipated financing for the GE Biopharma Acquisition) will be sufficient to allow it to continue investing in existing businesses, consummating strategic acquisitions and investments (including the anticipated GE Biopharma Acquisition), paying interest and servicing debt and managing its capital structure on a short and long-term basis.

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

Overview of Cash Flows and Liquidity


	Nine-Month Period Ended						Three-Month Period Ended
($ in millions)	September 28, 2018			September 29, 2017			March 29, 2019			March 30, 2018
Total operating cash flows provided by continuing operations	$	2,784.4		$	2,643.1
Total operating cash flows							$	703.3		$	828.9

Cash paid for acquisitions	$	(2,173.3	)	$	(112.0	)	$	(308.2	)	$	—
Payments for additions to property, plant and equipment	(441.3		)	(445.8		)	(155.7		)	(137.9		)
Proceeds from sales of property, plant and equipment	1.6			32.3			0.8			0.4
Payments for purchases of investments							(43.2		)	—
Proceeds from sale of investments	22.1			—			—			21.9
All other investing activities	(61.1		)	(2.4		)	7.8			(7.1		)
Net operating cash used in investing activities	$	(2,652.0	)	$	(527.9	)	$	(498.5	)	$	(122.7	)

Proceeds from the issuance of common stock	$	77.3		$	49.0
Proceeds from the issuance of common stock in connection with stock-based compensation							$	37.3		$	23.2
Proceeds from the public offering of common stock, net of issuance costs							1,443.2			—
Proceeds from the public offering of preferred stock, net of issuance costs							1,599.6			—
Payment of dividends	(321.2		)	(281.0		)	(112.2		)	(97.5		)
Payment for purchase of noncontrolling interests	—			(64.4		)
Net proceeds from (repayments of) borrowings (maturities of 90 days or less)	882.1			(3,319.1		)
Proceeds from borrowings (maturities longer than 90 days)	—			1,684.0
Repayments of borrowings (maturities longer than 90 days)	(503.9		)	(562.4		)
Net repayments of borrowings (maturities of 90 days or less)							(86.1		)	(236.6		)
All other financing activities	(16.6		)	(50.7		)	(4.0		)	(10.8		)
Net operating cash provided by (used in) financing activities	$	117.7		$	(2,544.6	)	$	2,877.8		$	(321.7	)

Operating cash flows ~~from continuing operations increased $141~~decreased $126 million, or approximately 5%15%, during the ~~first nine months of 2018~~three-month period ended March 29, 2019 as compared to the ~~first nine months~~comparable period of ~~2017,~~2018, primarily due to ~~higher~~lower earnings and ~~slightly lower~~higher cash used for funding trade accounts receivable, inventories and accounts payable during the period compared to the prior ~~year,~~year. This decrease was partially offset by ~~increased~~lower cash used for payments for income ~~taxes, certain employee related benefits and accrued expenses compared~~taxes.

On March 1, 2019, the Company completed the underwritten public offering of 12.1 million shares of Danaher common stock at a price to the ~~prior year.~~

~~On March 23, 2018, Danaher entered into~~public of $123.00 per share resulting in net proceeds of approximately $1.4 billion. Simultaneously, the ~~$1.0~~Company completed the underwritten public offering of 1.65 million shares of its MCPS resulting in net proceeds of approximately $1.6 billion, ~~364-Day Facility which provides liquidity support for an expansion of Danaher’s U.S.~~after deducting expenses and ~~euro-denominated commercial paper programs and for general corporate purposes. Danaher used~~the underwriters’ discount. The Company intends to use the net proceeds from the ~~issuance of U.S. dollar~~Common Stock Offering and ~~euro-denominated commercial paper~~the MCPS Offering to fund a portion of the ~~purchase price~~cash consideration payable for, and certain costs associated with, the ~~acquisition of IDT in April 2018.~~GE Biopharma Acquisition.

The Company ~~repaid the $500~~invested $43 million ~~of 2018 U.S. Notes (plus accrued interest) upon their maturity~~ in ~~September 2018 using available cash and proceeds from the issuance of commercial paper.~~strategic non-marketable equity securities.

As of ~~September 28, 2018,~~March 29, 2019, the Company held ~~$776 million~~approximately $3.9 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, pension funding and other items impact reported cash flows.

Operating cash flows ~~from continuing operations~~ were ~~approximately $2.8 billion~~$703 million for the first ~~nine~~three months of ~~2018, an increase~~2019, a decrease of ~~$141~~$126 million, or approximately 5%15%, as compared to the comparable period of ~~2017.~~2018. The year-over-year change in operating cash flows from ~~2017~~2018 to ~~2018~~2019 was primarily attributable to the following factors:

~~2018~~2019 operating cash flows reflected ~~an increase~~a decrease of ~~$291~~$233 million in net earnings ~~from continuing operations~~ for the first ~~nine~~three months of ~~2018~~2019 as compared to the comparable period in ~~2017.~~2018.

Net earnings ~~from continuing operations~~ for the first ~~nine~~three months of ~~2018~~2019 reflected an increase of ~~$57~~$8 million of depreciation and amortization expense as compared to the comparable period of ~~2017.~~2018. Amortization expense primarily relates to the amortization of intangible assets acquired in connection with acquisitions and increased due to

recently acquired businesses. Depreciation expense relates to both the Company’s manufacturing and operating facilities as well as instrumentation

leased to customers under ~~operating-type lease~~OTL arrangements and increased due primarily to the impact of increased capital expenditures. Depreciation and amortization are noncash expenses that decrease earnings without a corresponding impact to operating cash flows.

The aggregate of trade accounts receivable, inventories and trade accounts payable used ~~$55~~$91 million in operating cash flows during the first ~~nine~~three months of ~~2018,~~2019, compared to ~~$72~~$142 million of operating cash flows ~~used~~provided in the comparable period of ~~2017.~~2018. The amount of cash flow generated from or used by the aggregate of trade accounts receivable, inventories and trade accounts payable depends upon how effectively the Company manages the cash conversion cycle, which effectively represents the number of days that elapse from the day it pays for the purchase of raw materials and components to the collection of cash from its customers and can be significantly impacted by the timing of collections and payments in a period.

The aggregate of prepaid expenses and other assets and accrued expenses and other liabilities ~~used $153~~provided $93 million of operating cash flows during the first ~~nine~~three months of ~~2018,~~2019, compared to ~~$28~~$233 million of operating cash flows ~~provided~~used in the comparable period of ~~2017. This use of operational~~2018. Operational cash ~~flow~~flows provided in the first ~~nine~~three months of ~~2018~~2019 resulted primarily from the timing of cash payments for income ~~taxes, various employee-related liabilities, customer funding and accrued expenses during the first nine months of 2018 compared to the comparable period of 2017.~~taxes.

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 approximately $2.7 billion~~increased $376 million in the three-month period ended March 29, 2019 compared to the comparable period of 2018 due primarily to cash used for the acquisition of a business and investments in non-marketable equity securities during the ~~first nine months of 2018 compared to $528 million of cash used in the first nine months of 2017.~~three-month period ended March 29, 2019. For a discussion of the Company’s acquisitions during the first ~~nine~~three months of ~~2018~~2019 refer to “—Overview”. In addition, for a description of the Company’s pending GE Biopharma Acquisition, refer to Note 3 to the accompanying Consolidated Condensed Financial Statements; and for a description of the anticipated Dental IPO, refer to Note 4 to the accompanying Consolidated Condensed Financial Statements.

Capital expenditures are made primarily for increasing 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. Capital expenditures ~~decreased $5~~increased $18 million on a year-over-year basis for the first ~~nine~~three months of ~~2018~~2019 compared to ~~2017~~2018 due to ~~decreased investment in construction of new facilities, partially offset by increases in~~increased investments in operating assets at newly acquired businesses such as ~~IDT.~~IDT and increased investments in facilities and operating assets across the Company. For the full year ~~2018,~~2019, the Company forecasts capital spending to be approximately ~~$675~~$750 million, though actual expenditures will ultimately depend on business conditions.

During the first nine months of 2018, the Company received cash proceeds of $22 million from the collection of short-term other receivables related to the sale of certain marketable equity securities during 2017.

Financing Activities and Indebtedness

Cash flows relating to financing activities consist primarily of cash flows associated with the issuance and repayments of commercial paper, ~~and other debt,~~ issuance and repurchases of common stock, issuance of preferred stock and payments of cash dividends to shareholders. Financing activities ~~from continuing operations~~ provided cash of ~~$118 million~~approximately $2.9 billion during the first ~~nine~~three months of ~~2018~~2019 compared to ~~approximately $2.5 billion~~$322 million of cash used in the comparable period of ~~2017.~~2018. The year-over-year increase in cash provided by financing activities was due primarily to ~~higher~~the public offerings of common and preferred stock during the first quarter of 2019 and lower net ~~proceeds~~repayments from commercial paper borrowings in 2018, as the Company issued commercial paper to pay for a portion of the acquisition price of IDT in April 2018. Additionally, despite the repayment of the $500 million of 2018 U.S. Notes upon their maturity in September 2018, long-term debt repayments were lower in the first nine months of 2018 as compared to the comparable period in 2017 which contributed to the cash provided by financing activities. Both of these factors were partially offset by lower proceeds from the issuance of long-term notes in the first nine months of 2018 as compared to the comparable period of 2017. In addition, the Company paid $64 million to a noncontrolling interest holder in the first quarter of 2017 which contributed to the use of cash from financing activities in the prior period.2019.

For a description of the Company’s outstanding debt as of ~~September 28, 2018, the debt issued and debt repaid during the nine-month period ended September 28, 2018~~March 29, 2019, and the Company’s commercial paper programs and credit facilities, refer to Note 78 to the accompanying Consolidated Condensed Financial Statements. As of ~~September 28, 2018,~~March 29, 2019, the Company was in compliance with all of its debt covenants.

for the commercial paper programs is generally provided by the Company’s $4.0 billion Credit ~~Facility and $1.0 billion 364-Day~~ Facility.

As of ~~September 28, 2018,~~March 29, 2019, Danaher had the ability to incur an additional approximately $1.7 billion of indebtedness in direct borrowings under the Credit Facility, ~~364-Day Facility~~ and/or under outstanding commercial paper facilities (based on aggregate amounts available under the Credit Facility ~~and 364-Day Facility~~ that were not being used to backstop outstanding commercial paper balances).

For a description of the Company’s anticipated financing of the pending GE Biopharma Acquisition, refer to Note 3 to the accompanying Consolidated Condensed Financial Statements.

Common Stock Offering and MCPS Stock Offering

For a description of the Common Stock and MCPS Offerings, refer to Note 14 to the accompanying Consolidated Condensed Financial Statements.

Stock Repurchase Program

For information regarding the Company’s stock repurchase program, please see Part II—Item 2, “Unregistered Sales of Equity Securities and Use of ~~Proceeds,” in this Form 10-Q.~~Proceeds”.

Dividends

Aggregate cash payments for dividends during the ~~first nine months of 2018~~three-month period ended March 29, 2019 were ~~$321~~$112 million. The increase over the comparable period of ~~2017~~2018 results from ~~increases~~an increase in the quarterly dividend rate effective with respect to the dividend paid in the second quarter of ~~2017 and with respect to the dividend paid in the second quarter of~~ 2018.

In the ~~third~~first quarter of ~~2018,~~2019, the Company declared a regular quarterly dividend of ~~$0.16~~$0.17 per share payable on ~~October~~April 26, ~~2018~~2019 to holders of record on ~~September 28, 2018,~~March 29, 2019, reflecting a ~~14%~~6% increase in the per share amount of the Company’s quarterly ~~dividend compared~~dividend.

Dividends on our MCPS are payable on a cumulative basis, when and if declared by our Board, at an annual rate of 4.75% of the liquidation preference of $1,000 per share (equivalent to ~~the third quarter of 2017.~~$47.50 annually per share).

Cash and Cash Requirements

As of ~~September 28, 2018,~~March 29, 2019, the Company held ~~$776 million~~approximately $3.9 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 ~~1.3%~~2.3%. Of this amount, ~~$61 million~~approximately $2.8 billion was held within the United States and ~~$715 million~~approximately $1.1 billion was held outside of the United States. The Company will continue to have cash requirements to support working capital needs, capital expenditures and acquisitions (including the GE Biopharma Acquisition), pay interest and service debt, pay taxes and any related interest or penalties, fund its restructuring activities and pension plans as required, pay dividends to shareholders, repurchase shares of the Company’s common stock and support other business needs. For a description of the Company’s anticipated financing of the GE Biopharma Acquisition, please refer to Note 3 to the accompanying Consolidated Condensed Financial Statements.

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 (including as noted above in connection with the GE Biopharma Acquisition), the Company may also borrow under its commercial paper programs or the credit facilities, 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 and/or access the capital markets. The Company also may from time to time access the capital markets to take advantage of favorable interest rate environments or other market conditions. With respect to the Company’s 2019 Euronotes and commercial paper scheduled to mature during the remainder of ~~2018,~~2019, the Company expects to repay the principal amounts when due using available cash, proceeds from the issuance of commercial paper and/or proceeds from other debt issuances.

While repatriation of some cash held outside the United States may be restricted by local laws, most of the Company’s foreign cash could be repatriated to the United States. Following enactment of the TCJA and the associated Transition Tax, in general, repatriation of cash to the United States can be completed with no incremental U.S. tax; however, repatriation of cash could subject the Company to non-U.S. jurisdictional taxes on distributions. The cash that the Company’s 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. ~~The Company continues to evaluate the impact of the TCJA on its election to indefinitely reinvest certain of its non-U.S. earnings.~~ As of ~~September 28, 2018,~~March 29, 2019, management believes that it has sufficient sources of liquidity to satisfy its cash needs, including its cash needs in the United States.

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.

CRITICAL ACCOUNTING ESTIMATES

~~Except as set forth below in connection with the adoption of ASC 606, there have been~~There were no material changes to the Company’s critical accounting estimates described in the Annual Report on Form 10-K for the year ended December 31, ~~2017~~2018 that have a material impact on the Company’s Consolidated Condensed Financial Statements and the related Notes.

~~Revenue Recognition~~—The Company derives revenues from the sale of products and services. Refer to Note 1 to the accompanying Consolidated Condensed Financial Statements for a description of the Company’s revenue recognition policies.

Although most of the Company’s sales agreements contain standard terms and conditions, certain agreements contain multiple products or services or nonstandard terms and conditions. As a result, judgment is sometimes required to determine the appropriate accounting, including whether the products or services specified in these agreements should be treated as separate units of accounting for revenue recognition purposes, and, if so, how the consideration should be allocated among the distinct products or services and when to recognize revenue for each element. The Company allocates the contract’s transaction price at inception of the contract to each performance obligation on a relative standalone selling price basis using the Company’s best estimate of the standalone selling price of each distinct product or service in the contract. The Company’s estimate of standalone selling price impacts the amount and timing of revenue recognized in arrangements with multiple products or services. The Company also enters into lease arrangements with customers, which requires the Company to determine whether the arrangements are operating or sales-type leases. Certain of the Company’s lease contracts are customized for larger customers and often result in complex terms and conditions that typically require significant judgment in applying the lease accounting criteria.

~~If the Company’s judgments regarding revenue recognition prove incorrect, the Company’s reported revenues in particular periods may be adversely affected.~~

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 ~~2017~~2018 Annual Report. There were no material changes during the quarter ended ~~September 28, 2018~~March 29, 2019 to this information reported in the Company’s ~~2017~~2018 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.

During the first quarter of 2019, the Company implemented controls and processes relating to adoption of the new lease accounting standard that the Company adopted as of January 1, 2019. Throughout the implementation, the Company evaluated the impact of the adoption of the new standard on its internal control over financial reporting and made changes to controls where necessary to maintain the effectiveness of internal control over financial reporting in all material respects. There have been no other 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.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

In September 2016, the U.S. Environmental Protection Agency (“EPA”) issued a Notice of Violation to the Richmond, Illinois facility of Leica Biosystems Richmond, Inc. (“Leica Biosystems”), an indirect subsidiary of the Company, alleging that the facility violated certain provisions of the Clean Air Act and related regulations pertaining to permitting requirements, emissions limitations and the installation and use of proper controls. In July 2018, Leica Biosystems and the EPA executed an agency administrative settlement whereby all of Leica Biosystems’ alleged violations were settled for a payment of approximately $175 thousand and certain injunctive relief.

For additional information regarding legal proceedings, refer to the section titled “Legal Proceedings” in MD&A in the ~~2017 Consolidated Financial Statements.~~Company’s 2018 Annual Report on Form 10-K filed on February 21, 2019

ITEM 1A. RISK FACTORS

~~Information~~Except as set forth below, there were no material changes during the quarter ended March 29, 2019 to the risk factors reported in the Company’s 2018 Annual Report. Additional 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 the Company’s 2018 Annual Report on Form 10-K.

The GE Biopharma Acquisition discussed above would constitute Danaher’s ~~2017 Annual Report. There were no material changes during~~largest acquisition to date based on purchase price, would expand Danaher’s business into new segments and involves a number of financial, accounting, managerial, operational, legal, compliance and other risks and challenges, including the ~~quarter ended September 28, 2018~~following. Any of these risks or challenges could adversely affect our business, financial statements and stock price.

If the GE Biopharma Acquisition is not completed on the anticipated timetable or at all, or if regulatory approval of the acquisition is subject to conditions, we may fail to realize the anticipated benefits of the GE Biopharma Acquisition on the anticipated timetable or at all.

The GE Biopharma Business could under-perform relative to our expectations and the price that we pay or not perform in accordance with our anticipated timetable, or we could fail to operate such business profitably.

The GE Biopharma Acquisition could cause our financial results to differ from our own or the investment community’s expectations in any given period, or over the long-term.

Pre-closing and post-closing earnings charges related to the GE Biopharma Acquisition could adversely impact operating results in any given period, and the impact may be substantially different from period-to-period.

The GE Biopharma Acquisition could create demands on our management, operational resources and financial and internal control systems that we are unable to effectively address.

The GE Biopharma Acquisition could divert management’s attention and other resources, which could have a negative impact on our ability to manage existing operations or pursue other strategic transactions.

We could experience difficulty or greater-than-anticipated costs in integrating the personnel, operations and financial and other controls and systems of GE Biopharma, and could experience difficulty attracting and retaining key employees and customers.

We may be unable to achieve anticipated cost savings or other synergies on the timetable we expect or at all.

We may assume unknown liabilities, known contingent liabilities that become realized, known liabilities that prove greater than anticipated, internal control deficiencies or exposure to regulatory sanctions resulting from GE Biopharma’s activities and the realization of any of these liabilities or deficiencies may increase our expenses, adversely affect our financial position or cause us to fail to meet our public financial reporting obligations.

The GE Biopharma Purchase Agreement includes provisions relating to purchase price adjustments, which may have unpredictable financial results.

As a result of the GE Biopharma Acquisition, we expect to record significant goodwill and other assets on our balance sheet and if we are not able to realize the value of these assets, we may be required to incur impairment charges.

As of March 29, 2019, we had approximately $9.5 billion in outstanding indebtedness and had the ability to incur approximately an additional approximately $1.7 billion of indebtedness in direct borrowings or under our outstanding commercial paper facility based on the amounts available under the Company’s $4.0 billion Credit Facility which were not being used to backstop outstanding commercial paper balances. We expect to incur up to approximately $18 billion of additional indebtedness to fund a portion of the purchase price of the GE Biopharma Acquisition.

Our debt level and related debt service obligations can have negative consequences, including (1) requiring us to dedicate significant cash flow from operations to the payment of principal and interest on our debt, which reduces the funds we have available for other purposes such as acquisitions and other investments; (2) reducing our flexibility in planning for or reacting to changes in our business and market conditions; and (3) exposing us to interest rate risk ~~factors reported~~since a portion of our debt obligations are at variable rates.

We anticipate that the additional indebtedness we expect to incur in connection with the GE Biopharma Acquisition will likely result in a negative change to our credit ratings and a potential downgrading compared to our credit rating prior to the public announcement of the GE Biopharma Acquisition. This anticipated reduction in our credit ratings will limit our ability to borrow at interest rates consistent with the interest rates that have been available to us prior to the GE Biopharma Acquisition. If our credit ratings are further downgraded or put on watch for a further potential downgrade, we may not be able to sell additional debt securities or borrow money in the amounts, at the times or interest rates or upon the more favorable terms and conditions that might be available if our current credit ratings were maintained.

Our current revolving credit facility and long-term debt obligations also impose certain restrictions on us, including certain restrictions on our ability to incur liens on our assets, and a requirement under the revolving credit facility to maintain a consolidated leverage ratio (the ratio of consolidated indebtedness to consolidated indebtedness plus shareholders’ equity) of 0.65 to 1.0 or less. If we breach any of these restrictions and cannot obtain a waiver from the lenders on favorable terms, subject to applicable cure periods, the outstanding indebtedness (and any other indebtedness with cross-default provisions) could be declared immediately due and payable, which would adversely affect our liquidity and financial statements.

If we add new debt in the future, the risks described above would increase.

We intend to conduct an initial public offering of shares of our Dental business in the second half of 2019. Subsequent to the initial public offering, we intend to distribute our remaining equity interest in the Dental business in one or more spin-off and/or split-off transactions, and in addition to or in lieu of such transactions may sell additional shares of the Dental business in one or more publicly registered offerings or private placements. Any or all of these transactions may not be completed on the currently contemplated timeline or at all and may not achieve the intended benefits.

In July 2018, the Company announced its intention to spin-off its Dental business into an independent publicly-traded company. On February 25, 2019, in connection with the announcement of the GE Biopharma Acquisition, the Company also announced a modification of its plans with respect to the Dental business, specifically that it now intends to conduct an initial public offering of shares of the Dental business in the second half of 2019, subject to the satisfaction of certain conditions, including obtaining final approval from the Danaher Board of Directors, receipt of favorable rulings from the IRS and receipt of other receipt of regulatory approvals. Subsequent to the Dental IPO, we intend to distribute our remaining equity interest in the Dental business in one or more spin-off and/or split-off transactions, and in addition to or in lieu of such transactions may sell additional shares of the Dental business in one or more publicly registered offerings or private placements.

Unanticipated developments, including adverse market conditions, possible delays in obtaining various tax rulings, regulatory approvals or clearances, uncertainty of the financial markets or changes in the Company’s ~~2017 Annual Report.~~cash requirements, business performance and challenges in establishing infrastructure or processes, could delay or prevent the proposed Dental IPO and/or any of the other potential transactions described above, or cause the proposed Dental IPO and/or any of the other potential transactions described above to occur on terms or conditions that are less favorable and/or different than expected. Even if these transactions are completed, we may not realize some or all of the anticipated benefits therefrom. Expenses incurred to accomplish these transactions may be significantly higher than what we currently anticipate.

Executing the proposed separation also requires significant time and attention from management, which could distract them from other tasks in operating our business. We cannot assure you that the Dental IPO and the other transactions described above, if consummated, will yield greater, net benefits to Danaher and its shareholders than if the Dental IPO and other transactions described above had not occurred.

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 28, 2018.~~March 29, 2019. 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. There is no expiration date for the Repurchase Program, and the timing 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 plans) and for other corporate purposes. As of ~~September 28, 2018,~~March 29, 2019, 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.

During the ~~third~~first quarter of ~~2018, there were no~~2019, holders of certain of the Company’s Liquid Yield Option Notes due 2021 (“LYONS”) converted such LYONS into an aggregate of 486 thousand shares of Danaher common ~~stock.~~stock, par value $0.01 per share. In each case, the shares 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.

ITEM 6. EXHIBITS


(a)	Exhibits:



2.1		Equity and Asset Purchase Agreement dated as of February 25, 2019, by and between General Electric Company and Danaher Corporation (incorporated by reference from Exhibit 2.1 to Danaher Corporation’s Current Report on Form 8-K filed February 25, 2019 (Commission File Number: 1-8089))

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))

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

~~10.1~~3.3		Certificate of Designations of the 4.75% Mandatory Convertible Preferred Stock, Series A, filed with the Secretary of State of the State of Delaware on February 28, 2019 (incorporated by reference from Exhibit 3.1 to Danaher ~~Corporation and Subsidiaries Amended and Restated Executive Deferred Incentive Program~~Corporation’s Current Report on Form 8-K filed March 1, 2019 (Commission File Number: 1-8089))

~~10.2~~4.1		~~Danaher Corporation Excess Contribution Program, a sub-plan under~~Specimen Certificate of the ~~2007 Omnibus Incentive Plan, as amended and restated~~4.75% Mandatory Convertible Preferred Stock, Series A (contained in Exhibit 3.3 above)

~~10.3~~10.1		Form of Danaher Corporation ~~Deferred Compensation~~2007 Omnibus Incentive Plan PSU Agreement

11.1		Computation of per-share earnings (See Note ~~13,~~15, “Net Earnings Per ~~Share from Continuing Operations”~~Share”, to the Consolidated Condensed Financial Statements)

~~12.1~~		~~Calculation of ratio of earnings to fixed charges~~

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		XBRL Instance Document ***

101.SCH		XBRL Taxonomy Extension Schema Document ***

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

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

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

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

Attached as Exhibit 101 to this report are the following documents formatted in XBRL (Extensible Business Reporting Language): (i) Consolidated Condensed Balance Sheets as of ~~September 28, 2018~~March 29, 2019 and December 31, ~~2017,~~2018, (ii) Consolidated Condensed Statements of Earnings for the ~~three and nine-month~~three-month periods ended ~~September 28,~~March 29, 2019 and March 30, 2018, ~~and September 29, 2017,~~ (iii) Consolidated Condensed Statements of Comprehensive Income for the ~~three and nine-month~~three-month periods ended ~~September 28,~~March 29, 2019 and March 30, 2018, ~~and September 29, 2017,~~ (iv) Consolidated Condensed ~~Statement~~Statements of Stockholders’ Equity for the ~~nine-month period~~three-month periods ended ~~September 28,~~March 29, 2019 and March 30, 2018, (v) Consolidated Condensed Statements of Cash Flows for the ~~nine-month~~three-month periods ended ~~September 28,~~March 29, 2019 and March 30, 2018, ~~and September 29, 2017,~~ and (vi) Notes to Consolidated Condensed Financial Statements.

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~~April 17, ~~2018~~2019	By:	/s/ ~~Daniel L. Comas~~Matthew R. McGrew
			~~Daniel L. Comas~~Matthew R. McGrew
			Executive Vice President and Chief Financial Officer

Date:	~~October~~April 17, ~~2018~~2019	By:	/s/ Robert S. Lutz
			Robert S. Lutz
			Senior Vice President and Chief Accounting Officer

4847



Balance, December 31, 2017	$	25,138.6
Attributable to 2018 acquisitions	1,310.4
Adjustments due to finalization of purchase price allocations	7.6
Foreign currency translation and other	(421.6		)
Balance, September 28, 2018	$	26,035.0



	Net Earnings from Continuing Operations (Numerator)		Shares (Denominator)	Per Share Amount
For the Three-Month Period Ended September 28, 2018:
Basic EPS	$	663.7	701.4	$	0.95
Adjustment for interest on convertible debentures	0.6		—
Incremental shares from assumed exercise of dilutive options and vesting of dilutive RSUs and PSUs	—		6.9
Incremental shares from assumed conversion of the convertible debentures	—		2.3
Diluted EPS from continuing operations	$	664.3	710.6	$	0.93

For the Three-Month Period Ended September 29, 2017:
Basic EPS	$	572.1	696.2	$	0.82
Adjustment for interest on convertible debentures	0.6		—
Incremental shares from assumed exercise of dilutive options and vesting of dilutive RSUs and PSUs	—		6.5
Incremental shares from assumed conversion of the convertible debentures	—		2.9
Diluted EPS from continuing operations	$	572.7	705.6	$	0.81

For the Nine-Month Period Ended September 28, 2018:
Basic EPS	$	1,904.1	700.1	$	2.72
Adjustment for interest on convertible debentures	1.7		—
Incremental shares from assumed exercise of dilutive options and vesting of dilutive RSUs and PSUs	—		7.3
Incremental shares from assumed conversion of the convertible debentures	—		2.5
Diluted EPS from continuing operations	$	1,905.8	709.9	$	2.68

For the Nine-Month Period Ended September 29, 2017:
Basic EPS	$	1,613.2	695.3	$	2.32
Adjustment for interest on convertible debentures	1.6		—
Incremental shares from assumed exercise of dilutive options and vesting of dilutive RSUs and PSUs	—		7.3
Incremental shares from assumed conversion of the convertible debentures	—		2.9
Diluted EPS from continuing operations	$	1,614.8	705.5	$	2.29



	% Change Three-Month Period Ended September 28, 2018 vs. Comparable 2017 Period		% Change Nine- Month Period Ended September 28, 2018 vs. Comparable 2017 Period
Total sales growth (GAAP)	7.0	%	9.5	%
Less the impact of:
Acquisitions	(2.0	)%	(1.5	)%
Currency exchange rates	1.5	%	(2.0	)%
Core revenue growth (non-GAAP)	6.5	%	6.0	%