DANAHER : DE/ MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (form 10-K)

Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") is designed to provide a reader of Danaher's financial statements with a narrative from the perspective of Company management. The Company's MD&A is divided into five sections: • Overview

• Results of Operations

• Liquidity and Capital Resources

• Critical Accounting Estimates

• New Accounting Standards

This discussion and analysis should be read along with Danaher's audited
financial statements and related Notes thereto as of December 31, 2019 and 2018
and for each of the three years in the period ended December 31, 2019 included
in this Annual Report.
Unless otherwise indicated, all financial results in this report refer to
continuing operations.
OVERVIEW
General
Refer to "Item 1. Business-General" for a discussion of Danaher's strategic
objectives and methodologies for delivering long-term shareholder value. Danaher
is a multinational business with global operations. During 2019, approximately
63% of Danaher's sales were derived from customers outside the United States. As
a diversified, global business, Danaher's operations are affected by worldwide,
regional and industry-specific economic and political factors. Danaher's
geographic and industry diversity, as well as the range of its products,
software and services, help limit the impact of any one industry or the economy
of any single country on its consolidated operating results. The Company's
individual businesses monitor key competitors and customers, including to the
extent possible their sales, to gauge relative performance and the outlook for
the future.
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 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 global
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
Consolidated sales for the year ended December 31, 2019 increased 5.0% as
compared to 2018. While differences exist among the Company's businesses, on an
overall basis, demand for the Company's products and services increased on a
year-over-year basis in 2019 as compared to 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 6.0% (for the definition of "core sales," refer to "-Results of
Operations" below). Geographically, both high-growth and developed markets
contributed to year-over-year core sales growth during 2019. Core sales in
high-growth markets grew at a high-single digit rate in 2019 as compared to 2018
led by strength in China. High-growth markets represented approximately 32% of
the Company's total sales in 2019. Core sales in developed markets grew at a
mid-single digit rate in 2019 as compared to 2018 and were driven by North
America and Western Europe.
The Company's net earnings from continuing operations for the year ended
December 31, 2019 totaled approximately $2.4 billion, or $3.26 per diluted
share, compared to approximately $2.4 billion, or $3.39 per diluted share for
the year ended

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December 31, 2018. Net earnings attributable to common stockholders for the year
ended December 31, 2019 totaled approximately $2.9 billion or $4.05 per diluted
share compared to approximately $2.7 billion or $3.74 per diluted share for the
year ended December 31, 2018. The gain on the disposition of Envista, partially
offset by the tax-related charges discussed below in "-Results of
Operations-Income Taxes" are the primary reasons for the year-over-year increase
in net earnings attributable to common stockholders and diluted earnings per
share for the year ended December 31, 2019; refer to "-Results of Operations"
for further discussion of year-over-year changes in net earnings and diluted
earnings per share for the year ended December 31, 2019. Refer to "Results of
Operations-Discontinued Operations" for further discussion of the disposition of
Envista.
Acquisitions and Dispositions
On February 25, 2019, the Company entered into the GE Biopharma Purchase
Agreement with GE to acquire the GE Biopharma Business 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 Business, to be known as Cytiva following the closing of the
acquisition, is a leading provider of instruments, consumables and software that
support the research, discovery, process development and manufacturing workflows
of biopharmaceutical drugs. Based on preliminary unaudited financial information
provided by GE, the GE Biopharma Business generated revenues of approximately
$3.3 billion in 2019. Though the timing of obtaining the final regulatory
approvals necessary to close the GE Biopharma Acquisition is uncertain, the
Company continues to make progress with respect thereto and expects to close the
transaction in the first quarter of 2020. The 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 line
diversity, including new product and service offerings that complement the
Company's current biologics workflow solutions. As a condition to obtaining
certain regulatory approvals for the closing of the transaction, the Company
expects it will be required to divest certain of its existing product lines that
in the aggregate generated revenues of approximately $170 million in 2019.
The Company plans 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 MCPS, approximately $10.8 billion of
proceeds from the issuance of euro-denominated and U.S. dollar-denominated
long-term debt in the second half of 2019, and approximately $7.2 billion from
the aggregate of cash on hand and proceeds from commercial paper borrowings.
Refer to Note 11 in the Consolidated Financial Statements for additional
information related to the issuance of debt and to Note 19 for additional
information related to the March 1, 2019 public offerings.
During 2019, the Company acquired five businesses for total consideration of
$331 million in cash, net of cash acquired. The businesses acquired complement
existing units of each of the Company's three segments. The aggregate annual
sales of these five businesses at the time of their respective acquisitions, in
each case based on the company's revenues for its last completed fiscal year
prior to the acquisition, were $72 million. In addition, in 2019 the Company
invested $241 million in non-marketable equity securities and a partnership.
For a discussion of the Company's 2018 and 2017 acquisition and disposition
activity, refer to "Liquidity and Capital Resources-Investing Activities".
Envista Disposition
On September 20, 2019, Envista completed an underwritten IPO of 30.8 million
shares of its common stock, (the "IPO"), which represented 19.4% of Envista's
outstanding shares at the time of the offering, at a public offering price of
$22.00 per share. Envista realized net proceeds of $643 million from the IPO,
after deducting underwriting discounts and deal expenses.
In connection with the completion of the IPO, through a series of equity and
other transactions, the Company transferred its dental businesses to Envista
(the "Separation"). In exchange, Envista transferred consideration of
approximately $2.0 billion to the Company, which consisted primarily of the net
proceeds from the IPO and approximately $1.3 billion of proceeds from Envista's
term debt financing. The excess of the net proceeds from the IPO over the net
book value of the business transferred to Envista was $60 million and was
recorded in additional paid-in capital.
On December 18, 2019, Danaher completed the disposition of its
remaining 80.6% ownership of Envista common stock through a split-off exchange
offer, which resulted in Danaher's repurchase of 22.9 million shares of Danaher
common stock in exchange for the remaining shares of Envista common stock held
by Danaher (the "Split-Off"). The IPO, Separation and Split-Off are collectively
referred to as the "Envista Disposition". As a result, the Company recognized a
gain on the disposition of $451 million in the fourth quarter of 2019 equal to
the difference between the fair value of the Danaher common stock tendered in
the exchange offer and the carrying value of Envista common stock. The
accounting requirements for reporting Envista as a discontinued operation were
met when the Split-Off was completed. Accordingly, the Consolidated Financial
Statements for all periods presented reflect this business as a discontinued
operation. For each period presented, the Company allocated a portion of the
consolidated interest expense to discontinued operations based on the ratio of
the discontinued business' net assets to the

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Company's consolidated net assets. Envista had revenues of approximately $2.6
billion in 2019 prior to the Envista Disposition and approximately $2.8 billion
in 2018.
To effect the Envista Disposition, the Company incurred $69 million in costs
during the year ended December 31, 2019 which are reflected in earnings from
discontinued operations, net of income taxes in the accompanying Consolidated
Statements of Earnings. These costs primarily relate to professional fees
associated with preparation of regulatory filings and activities within finance,
tax, legal and information technology functions as well as certain investment
banking fees and tax costs.
Refer to Note 4 to the Consolidated Financial Statements for further discussion.
UK's referendum decision to exit the EU
In a referendum on June 23, 2016, voters approved for the UK to exit the EU. The
UK formally withdrew from the EU on January 31, 2020 with a transition period
through December 31, 2020. During the transition period, the UK will continue to
follow EU law and will negotiate with the EU on the terms of its relationship
post-2020. Failure to complete negotiations by the implementation deadline of
December 31, 2020 relating to Brexit could result in the UK reverting to
undesirable and adverse trade agreements with the EU. The nature of the UK's
future relationship with the EU is still uncertain. The Company continues to
monitor the status of Brexit and plan for potential impacts. As of December 31,
2019, the Company had seven manufacturing facilities in the UK and the Company's
net investment in plant, property and equipment in the UK was $163 million. For
the year ended December 31, 2019, less than 5% of the Company's sales were
derived from customers located in the UK, however, the impact of Brexit could
also impact the Company's sales and operations outside the UK. To mitigate the
potential impact of Brexit on the import of goods to the UK, the Company has
increased its level of inventory within 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 this Annual Report.
Coronavirus
For information on the potential impact of the coronavirus to the Company's
operations, refer to the "Item 1A-Risk Factors" section of this Annual Report.

RESULTS OF OPERATIONS
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 generally accepted accounting
principles in the United States ("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, 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, and
excludes the effect of acquisitions and divestiture-related items because the
nature, size, timing and number of acquisitions and divestitures can vary
dramatically from period-to-period and between the Company and its peers and can
also obscure underlying business trends and make comparisons of long-term
performance difficult.
Throughout this discussion, references to sales volume 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
DBS.

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Core Revenue
                                2019 vs. 2018     2018 vs. 2017
Total sales growth (GAAP)            5.0  %           10.0  %
Impact of:
Acquisitions and other              (1.0 )%           (2.0 )%
Currency exchange rates              2.0  %           (1.0 )%
Core revenue growth (non-GAAP)       6.0  %            7.0  %


Core sales grew on a year-over-year basis in both 2019 and 2018. Sales from
acquired businesses increased on a year-over-year basis in both 2019 and 2018,
primarily due to the acquisition of IDT in the second quarter of 2018. The
impact of currency translation reduced reported sales on a year-over-year basis
in 2019 as the U.S. dollar was, on average, stronger against other major
currencies. Currency translation increased reported sales on a year-over-year
basis in 2018, primarily due to the U.S. dollar weakening against other major
currencies in the first half of 2018, partially offset by the U.S. dollar
strengthening in the second half of 2018.
Operating profit margins were 18.3% for the year ended December 31, 2019 as
compared to 17.9% in 2018. The following factors impacted year-over-year
operating profit margin comparisons.
2019 vs. 2018 operating profit margin comparisons were favorably impacted by:
•      Higher 2019 core sales volumes and incremental year-over-year cost savings

associated with the continued productivity improvement initiatives taken

in 2019 and 2018, net of incremental year-over-year costs associated with

various new product development and sales, service and marketing growth

       investments and the impact of foreign exchange rates - 100 basis points


•      Acquisition-related transaction costs and fair value adjustments to

inventory related to the acquisition of IDT in the second quarter of 2018

- 10 basis points

2019 vs. 2018 operating profit margin comparisons were unfavorably impacted by: • The incremental net dilutive effect in 2019 of acquired businesses - 15

basis points

• Transaction costs and integration preparation costs related to the

anticipated acquisition of the GE Biopharma Business - 50 basis points

• Second quarter 2018 gain on resolution of acquisition-related matters - 5

basis points

Operating profit margins were 17.9% for the year ended December 31, 2018 as
compared to 16.6% in 2017. The following factors impacted year-over-year
operating profit margin comparisons.
2018 vs. 2017 operating profit margin comparisons were favorably impacted by:
•      Higher 2018 core sales volumes and incremental year-over-year cost savings

associated with the continued productivity improvement initiatives taken

in 2018 and 2017, net of incremental year-over-year costs associated with

various product development, sales and marketing growth investments and

the impact of foreign exchange rates - 120 basis points

• Restructuring, impairment and other related charges related to

discontinuing a product line in the second quarter of 2017 related to the

Diagnostic segment - 45 basis points

2018 vs. 2017 operating profit margin comparisons were unfavorably impacted by:
•      The incremental net dilutive effect in 2018 of acquired businesses - 25
       basis points


•      Acquisition-related transaction costs and fair value adjustments to
       inventory related to the acquisition of IDT in the second quarter of 2018
       - 10 basis points



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Business Segments
Sales by business segment for the years ended December 31 are as follows ($ in
millions):
                                     2019          2018          2017
Life Sciences                     $  6,951.1    $  6,471.4    $  5,710.1
Diagnostics                          6,561.5       6,257.6       5,839.9
Environmental & Applied Solutions    4,398.5       4,319.5       3,968.8
Total                             $ 17,911.1    $ 17,048.5    $ 15,518.8



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 is also a
leading provider of filtration, separation and purification technologies to the
biopharmaceutical, food and beverage, medical, aerospace, microelectronics and
general industrial sectors.
Life Sciences Selected Financial Data
                                         Year Ended December 31
($ in millions)                     2019          2018          2017
Sales                            $ 6,951.1     $ 6,471.4     $ 5,710.1
Operating profit                   1,401.4       1,229.3       1,004.3
Depreciation                         130.5         127.4         119.0
Amortization                         356.6         343.8         308.9
Operating profit as a % of sales      20.2 %        19.0 %        17.6 %
Depreciation as a % of sales           1.9 %         2.0 %         2.1 %
Amortization as a % of sales           5.1 %         5.3 %         5.4 %


Core Revenue
                                2019 vs. 2018     2018 vs. 2017
Total sales growth (GAAP)            7.5  %           13.5  %
Impact of:
Acquisitions and other              (2.5 )%           (5.0 )%
Currency exchange rates              2.0  %           (1.0 )%
Core revenue growth (non-GAAP)       7.0  %            7.5  %


2019 Compared to 2018
Price increases in the segment contributed 1.0% to revenue growth on a
year-over-year basis during 2019 as compared with 2018 and are reflected as a
component of the change in core revenue growth.
Core sales for filtration, separation and purification technologies increased
across most major geographies on a year-over-year basis led by growth in the
biopharmaceuticals, aerospace and fluid technology and asset protection
end-markets, partially offset by softness in the microelectronics end-market.
Core sales of microscopy products grew on a year-over-year basis across most
major product lines led by North America and the high-growth markets,
particularly China. Year-over-year core sales for flow cytometry and particle
counting products grew in 2019 across all major geographies and end-markets.
Core sales of the business' broad range of mass spectrometers increased on a
year-over-year basis led by strong core sales growth in the high-growth markets,
particularly China and the rest of Asia, partially offset by lower demand in
North America. This growth was led by demand in the pharmaceutical and academic
end-markets and for service offerings, partially offset by lower core sales in
the clinical end-market.
Sales growth from acquisitions was primarily due to the acquisition of 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

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service offerings in the area of genomics consumables. During 2019, IDT's
revenues grew on a year-over-year basis across all major product lines and
geographies, primarily driven by North America.
Operating profit margins increased 120 basis points during 2019 as compared to
2018. The following factors impacted year-over-year operating profit margin
comparisons.
2019 vs. 2018 operating profit margin comparisons were favorably impacted by:
•      Higher 2019 core sales volumes and incremental year-over-year cost savings
       associated with the continued productivity improvement initiatives taken
       in 2019 and 2018, net of incremental year-over-year costs associated with

various new product development and sales and marketing growth investments

       and the impact of foreign exchange rates - 145 basis points


•      Acquisition-related transaction costs and fair value adjustments to
       inventory related to the acquisition of IDT in the second quarter of 2018
       - 25 basis points

2019 vs. 2018 operating profit margin comparisons were unfavorably impacted by: • The incremental net dilutive effect in 2019 of acquired businesses - 35

       basis points

• Second quarter 2018 gain on resolution of acquisition-related matters - 15

       basis points



2018 Compared to 2017
Price increases in the segment contributed 0.5% to revenue growth on a
year-over-year basis during 2018 as compared with 2017 and are reflected as a
component of the change in core revenue growth.
Core sales of the business' broad range of mass spectrometers grew on a
year-over-year basis led by strong sales growth in high-growth markets,
particularly China and the rest of Asia, and in North America. This growth was
led by demand in the clinical, applied and pharmaceutical end-markets and by
demand for service offerings. Core sales of microscopy products grew on a
year-over-year basis with growth in demand across most major end-markets
partially driven by recent new product releases. Geographically, demand for
microscopy products increased in North America and high-growth markets,
particularly China. Year-over-year core sales for the business' flow cytometry
and particle counting products grew in 2018 across most major end-markets, led
by increases in sales in North America, China and Western Europe. New product
launches in 2018 also contributed to the increased demand in these markets. Core
sales for filtration, separation and purification technologies grew on a
year-over-year basis led by growth in biopharmaceuticals, microelectronics and
fluid technology and asset protection end-markets. Geographically, core sales in
filtration, separation and purification technologies were led by growth in
Western Europe, North America and high-growth markets.
Sales growth from acquisitions was primarily due to the acquisition of IDT in
April 2018. During 2018, IDT's revenues grew on a year-over-year basis across
all major geographies and product lines.
Operating profit margins increased 140 basis points during 2018 as compared to
2017. The following factors impacted year-over-year operating profit margin
comparisons.
2018 vs. 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 continued productivity

improvement initiatives taken in 2018 and 2017, net of incremental

year-over-year costs associated with various new product development,

sales and marketing growth investments - 180 basis points

• 2018 gain on resolution of acquisition-related matters - 20 basis points

2018 vs. 2017 operating profit margin comparisons were unfavorably impacted by: • The incremental net dilutive effect in 2018 of acquired businesses - 35

       basis points

• Acquisition-related charges consisting of transaction costs and fair value

adjustments to inventory for the acquisition of IDT in the second quarter

       of 2018 - 25 basis points




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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
                                         Year Ended December 31
($ in millions)                     2019          2018          2017
Sales                            $ 6,561.5     $ 6,257.6     $ 5,839.9
Operating profit                   1,134.1       1,073.8         871.6
Depreciation                         376.0         379.2         368.1
Amortization                         206.5         209.8         213.4
Operating profit as a % of sales      17.3 %        17.2 %        14.9 %
Depreciation as a % of sales           5.7 %         6.1 %         6.3 %
Amortization as a % of sales           3.1 %         3.4 %         3.7 %


Core Revenue
                                2019 vs. 2018     2018 vs. 2017
Total sales growth (GAAP)             5.0 %            7.0  %
Impact of:
Currency exchange rates               2.0 %           (0.5 )%
Core revenue growth (non-GAAP)        7.0 %            6.5  %


2019 Compared to 2018
Price increases in the segment did not have a significant impact on sales growth
on a year-over-year basis during 2019 as compared with 2018.
Geographically, core sales in the clinical lab business increased on a
year-over-year basis due to continued demand in high-growth markets, led by
China, and in North America, partially offset by modest declines in Western
Europe. The increased demand in the clinical lab business was mainly driven by
the immunoassay, chemistry and automation product lines. Core sales in the
molecular diagnostics business increased on a year-over-year basis in most major
product lines and across all major geographies. Year-over-year core sales growth
in the acute care diagnostic business was driven by continued strong sales of
blood gas and immunoassay product lines, primarily in China, Western Europe,
Japan and North America. Increased demand for advanced staining and core
histology product lines drove the majority of the year-over-year core sales
growth in the pathology diagnostics business. Geographically, core revenue
growth in the pathology diagnostics business was led by North America, Western
Europe and China.
Operating profit margins increased 10 basis points during 2019 as compared to
2018, due to higher 2019 core sales volumes and incremental year-over-year cost
savings associated with the continued productivity improvement initiatives taken
in 2019 and 2018, net of incremental year-over-year costs associated with
various new product development and sales, service and marketing growth
investments and the impact of foreign exchange rates.
Depreciation and amortization as a percentage of sales decreased during 2019 as
compared with 2018 largely due to the impact of increased sales in 2019.

2018 Compared to 2017
Price in the segment negatively impacted sales growth by 0.5% on a
year-over-year basis during 2018 as compared with 2017 and is reflected as a
component of the change in core revenue growth.
Core sales in the molecular diagnostics business increased on a year-over-year
basis, driven by strong growth in both developed and high-growth markets. The
molecular diagnostics business experienced particularly strong growth in the
infectious disease product line driven in part by the severity of the flu season
during the first quarter of 2018. Core sales in the clinical lab business
increased on a year-over-year basis due to increased demand in the high-growth
markets, led by China, partially offset

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by lower sales in Western Europe. The increased demand in the clinical lab
business was driven by the immunoassay product line. Core sales in the acute
care diagnostic business increased, driven by continued strong sales of blood
gas and immunoassay product lines across most major geographies, led by the
high-growth markets. Core sales in the pathology diagnostics business increased
across most major geographies, led by North America, Western Europe and China.
Demand for new products in the advanced staining and core histology product
lines drove the increased core sales in the pathology diagnostics business.
Operating profit margins increased 230 basis points during 2018 as compared to
2017. The following factors impacted year-over-year operating profit margin
comparisons.
2018 vs. 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 continued productivity

improvement initiatives taken in 2018 and 2017, net of incremental

year-over-year costs associated with various new product development,

sales and marketing growth investments and the effect of year-over-year

       changes in foreign exchange rates - 125 basis points


•      Restructuring, impairment and other related charges related to
       discontinuing a product line in 2017 - 130 basis points

2018 vs. 2017 operating profit margin comparisons were unfavorably impacted by: • 2017 gain on resolution of acquisition-related matters - 25 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,
consumables, software, 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, software, services and consumables for various color and appearance
management, packaging design and quality management, packaging converting,
printing, marking, coding and traceability applications for consumer,
pharmaceutical and industrial products.
Environmental & Applied Solutions Selected Financial Data
                                         Year Ended December 31
($ in millions)                     2019          2018          2017
Sales                            $ 4,398.5     $ 4,319.5     $ 3,968.8
Operating profit                   1,051.6         988.0         914.6
Depreciation                          48.6          47.0          43.4
Amortization                          62.0          62.0          56.5
Operating profit as a % of sales      23.9 %        22.9 %        23.0 %
Depreciation as a % of sales           1.1 %         1.1 %         1.1 %
Amortization as a % of sales           1.4 %         1.4 %         1.4 %


Core Revenue
                                2019 vs. 2018     2018 vs. 2017
Total sales growth (GAAP)            2.0  %            9.0  %
Impact of:
Acquisitions and other              (0.5 )%           (2.0 )%
Currency exchange rates              2.0  %           (1.0 )%
Core revenue growth (non-GAAP)       3.5  %            6.0  %



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2019 Compared to 2018
Price increases in the segment contributed 1.5% to sales growth on a
year-over-year basis during 2019 as compared with 2018 and are reflected as a
component of the change in core revenue growth.
Core sales in the segment's water quality businesses grew at a mid-single digit
rate during 2019 as compared with 2018. Year-over-year core sales in the
analytical instrumentation product line increased, driven by demand in North
America, Western Europe, and high-growth markets, partially offset by lower core
sales in China primarily as a result of strong regulatory driven demand in the
prior year. Year-over-year core revenue growth in the business' chemical
treatment solutions product line was driven by demand in the oil and gas,
primary metals, food and beverage, and commercial and industrial end-markets.
Geographically, year-over-year core revenue growth in the chemical treatment
solutions product line was driven by North America and Latin America. Core sales
in the business' ultraviolet water disinfection product line increased across
all major end-markets on a year-over-year basis, driven by the completion of
several municipal projects. Geographically, year-over year core revenue growth
for ultraviolet water disinfection products was led by North America and China.
Core sales in the segment's product identification businesses grew at a
low-single digit rate during 2019 as compared with 2018. Year-over-year core
revenue growth for marking and coding equipment and related consumables was
driven by demand in North America, Western Europe and high-growth markets. Core
sales for the business' packaging and color solutions increased year-over-year,
driven by increased demand in North America, Western Europe and high-growth
markets.
Operating profit margins increased 100 basis points during 2019 as compared to
2018. The following factors impacted year-over-year operating profit margin
comparisons:
2019 vs. 2018 operating profit margin comparisons were favorably impacted by:
•      Higher 2019 core sales volumes, incremental year-over-year cost savings
       associated with the continued productivity improvement initiatives taken
       in 2019 and 2018 and the impact of foreign exchange rates, net of
       incremental year-over-year costs associated with various new product
       development and sales, service and marketing growth investments - 115
       basis points

2019 vs. 2018 operating profit margin comparisons were unfavorably impacted by: • The incremental net dilutive effect in 2019 of acquired businesses - 15

       basis points



2018 Compared to 2017
Price increases in the segment contributed 1.5% to sales growth on a
year-over-year basis during 2018 as compared with 2017 and are reflected as a
component of the change in core revenue growth.
Core sales in the segment's water quality businesses grew at a high-single digit
rate during 2018 as compared with 2017. Year-over-year core sales in the
analytical instrumentation product line increased, led by continued demand in
the industrial and municipal end-markets. Geographically, year-over-year core
revenue growth in the analytical instrumentation product line was driven by
increased demand across all major geographies, led by China, North America and
Western Europe. Year-over-year core revenue growth in the business' chemical
treatment solutions product line was driven by demand in the commercial and
industrial, mining and primary metals end-markets. Geographically,
year-over-year core revenue growth in the chemical treatment solutions product
line was driven by North America and Latin America. Core sales in the business'
ultraviolet water disinfection product line grew on a year-over-year basis due
primarily to demand in the municipal and consumer end-markets. Geographically,
year-over year core revenue growth in the ultraviolet water disinfection product
line was led by North America and China, partially offset by softer demand in
Western Europe.
Core sales in the segment's product identification businesses grew at a
mid-single digit rate during 2018 as compared with 2017. Year-over-year core
revenue growth for marking and coding equipment and related consumables was
driven by demand across all major end-markets and in all major geographies,
particularly Western Europe, North America and high-growth markets. Demand for
the business' packaging and color solutions decreased slightly year-over-year.
Geographically, core sales for packaging and color solutions decreased in North
America and high-growth markets, partially offset by increased demand in Western
Europe.
Operating profit margins declined 10 basis points during 2018 as compared to
2017. The following factors impacted year-over-year operating profit margin
comparisons:

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2018 vs. 2017 operating profit margin comparisons were favorably impacted by:
•      Higher 2018 sales volumes, incremental year-over-year cost savings
       associated with the continued productivity improvement initiatives taken

in 2018 and 2017, and improved pricing, net of incremental year-over-year

costs associated with various new product development and sales and

marketing growth investments - 35 basis points

2018 vs. 2017 operating profit margin comparisons were unfavorably impacted by: • The incremental net dilutive effect in 2018 of acquired businesses - 45

       basis points

COST OF SALES AND GROSS PROFIT

                              Year Ended December 31
($ in millions)         2019           2018           2017
Sales               $ 17,911.1     $ 17,048.5     $ 15,518.8

Cost of sales (7,927.4 ) (7,543.2 ) (6,947.5 ) Gross profit $ 9,983.7 $ 9,505.3 $ 8,571.3 Gross profit margin 55.7 % 55.8 % 55.2 %

The year-over-year increase in cost of sales during 2019 as compared with 2018
was due primarily to the impact of higher year-over-year sales volumes,
including sales from recently acquired businesses, product mix, and higher
freight and tariff costs, partially offset by increased leverage of certain
manufacturing costs and incremental year-over-year cost savings associated with
the continued productivity improvement initiatives taken in 2019 and 2018.
The year-over-year increase in cost of sales during 2018 as compared with 2017,
was due primarily to the impact of higher year-over-year sales volumes,
including sales from recently acquired businesses, partially offset by
incremental year-over-year cost savings associated with the continued
productivity improvement initiatives taken in 2018 and 2017 and charges
associated with the Company's strategic decision to discontinue a product line
in its Diagnostics segment in 2017. Cost of goods sold also increased in 2018 as
a result of higher tariffs.
The slight year-over-year decrease in gross profit margins during 2019 as
compared with 2018 was due primarily to the impact of product mix and higher
freight and tariff 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 continued productivity improvement initiatives
taken in 2019 and 2018.
The year-over-year increase in gross profit margins during 2018 as compared with
2017 was due primarily to the favorable 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 continued productivity improvement initiatives taken in 2018
and 2017. Gross margin improvements were partially offset by the impact of
foreign exchange rates in 2018.

OPERATING EXPENSES
                                                          Year Ended December 31
($ in millions)                                     2019           2018           2017
Sales                                           $ 17,911.1     $ 17,048.5     $ 15,518.8
Selling, general and administrative ("SG&A")
expenses                                          (5,588.3 )     (5,391.0 )     (5,042.6 )
Research and development ("R&D") expenses         (1,126.0 )     (1,059.2 )       (956.4 )
SG&A as a % of sales                                  31.2 %         31.6 %         32.5 %
R&D as a % of sales                                    6.3 %          6.2 %          6.2 %


SG&A expenses as a percentage of sales declined 40 basis points on a
year-over-year basis for 2019 compared with 2018. The decline was driven by
increased leverage of the Company's general and administrative cost base
resulting from higher 2019 sales volumes and continuing productivity
improvements taken in 2019 and 2018, partially offset by continued investments
in sales and marketing growth initiatives and transaction costs and integration
preparation costs associated with the anticipated GE Biopharma Acquisition,
which increased SG&A as a percentage of sales by approximately 50 basis points
during 2019.

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SG&A expenses as a percentage of sales declined 90 basis points on a
year-over-year basis for 2018 compared with 2017. The decline was driven by
increased leverage of the Company's general and administrative cost base
resulting from higher 2018 sales volumes, continuing productivity improvements
taken in 2018 and 2017, and the impact of the restructuring, impairment and
other related charges incurred in 2017 associated with the Company's strategic
decision to discontinue a product line in its Diagnostics segment. The decline
in SG&A expenses as a percentage of sales was partially offset by higher
relative spending levels at recently acquired companies and continued
investments in sales and marketing growth initiatives.
R&D expenses (consisting principally of internal and contract engineering
personnel costs) as a percentage of sales increased slightly in 2019 as compared
with 2018, as year-over-year increases in the Company's investments in new
product development initiatives approximated the year-over-year increase in
sales. R&D expenses as a percentage of sales were flat in 2018 as compared to
2017.

NONOPERATING INCOME (EXPENSE)
As described in Note 1 and Note 13 to the Consolidated Financial Statements, in
the first quarter of 2018, the Company adopted Accounting Standards Update
("ASU") 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 the
service cost component from the other components of net periodic benefit costs
and requires the Company to present the other components of net periodic benefit
cost in other income, net. The ASU required application on a retrospective
basis. The other components of net periodic benefit costs included in other
income, net for the years ended December 31, 2019, 2018 and 2017 were net gains
of $12 million, $35 million and $31 million, respectively. The Company's net
periodic pension cost for the year-ended December 31, 2019 includes a settlement
loss of $7 million pre-tax ($6 million after-tax, or $0.01 per diluted share) as
a result of the transfer of a portion of its non-U.S. pension liabilities
related to one defined benefit plan to a third party.
During 2017, the Company received $138 million of cash proceeds and recorded $22
million in short-term other receivables from the sale of certain marketable
equity securities during 2017. The Company recorded a pretax gain related to
this sale of $73 million ($46 million after-tax or $0.06 per diluted share).

LOSS ON EARLY EXTINGUISHMENT OF BORROWINGS
In the fourth quarter of 2019, the Company redeemed the $500 million aggregate
principal amount of 2.4% senior unsecured notes due 2020 and the $375 million
aggregate principal amount of 5.0% senior unsecured notes due 2020. The Company
recorded a loss on extinguishment of these borrowings, net of certain deferred
gains, of $7 million ($5 million after-tax or $0.01 per diluted share). The
Company funded the redemption using a portion of the cash distribution it
received in connection with the Envista Disposition.

INTEREST COSTS
Interest expense of $109 million for 2019 was $28 million lower than in 2018,
due primarily to the impact of the Company's cross-currency swap derivative
contracts and the repayment of certain outstanding borrowings in 2019, partially
offset by interest expense from 2019 debt issuances. For a further description
of the Company's debt as of December 31, 2019 refer to Note 11 to the
Consolidated Financial Statements. Interest expense of $137 million in 2018 was
$3 million lower than the 2017 interest expense of $140 million due primarily to
the decrease in interest costs as a result of the repayment of certain
outstanding borrowings in the third quarter of 2018 and the second and fourth
quarters of 2017, lower average outstanding U.S. commercial paper borrowings
during 2018 compared to 2017, and the impact of foreign exchange rates in 2018
as compared to 2017, partially offset by the cost of additional non-U.S. debt
issued during 2017.
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 and reduce the
interest rate from the stated interest rates on the U.S. dollar-denominated debt
to the interest rates of the swaps. As of December 31, 2019, approximately $1.0
billion of the cross-currency swap derivative contracts remained outstanding.

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The Company used interest rate swap agreements to hedge the variability in cash
flows due to changes in benchmark interest rates related to a portion of the
U.S. debt the Company issued to fund the GE Biopharma Acquisition. The interest
rate swap agreements are agreements in which the Company agrees to pay a fixed
interest rate based on the rate specified in the agreement in exchange for
receiving a floating interest rate from a third-party bank based upon a
specified benchmark interest rate. In June 2019, the Company entered into
interest rate swap agreements with a notional amount of $850 million. These
contracts, which were settled in November 2019, effectively fixed the interest
rate for a portion of the Company's U.S. dollar-denominated debt issued in
November 2019 equal to the notional amount of the swaps to the rate specified in
the interest rate swap agreements. The changes in the fair value of these
instruments resulting from the changes in interest rates were recorded as a loss
of $38 million in accumulated other comprehensive income (loss) in stockholders'
equity prior to the issuance of the debt and are subsequently being reclassified
to interest expense over the life of the related debt.

INCOME TAXES
General
Income tax expense and deferred tax assets and liabilities reflect management's
assessment of future taxes expected to be paid on items reflected in the
Company's Consolidated Financial Statements. The Company records the tax effect
of discrete items and items that are reported net of their tax effects in the
period in which they occur.
The Company's effective tax rate can be affected by changes in the mix of
earnings in countries with different statutory tax rates (including as a result
of business acquisitions and dispositions), changes in the valuation of deferred
tax assets and liabilities, accruals related to contingent tax liabilities and
period-to-period changes in such accruals, the results of audits and
examinations of previously filed tax returns (as further discussed below), the
expiration of statutes of limitations, the implementation of tax planning
strategies, tax rulings, court decisions, settlements with tax authorities and
changes in tax laws and regulations, such as the TCJA and legislative policy
changes that may result from the OECD's initiative on Base Erosion and Profit
Shifting. For a description of the tax treatment of earnings that are planned to
be reinvested indefinitely outside the United States, refer to "-Liquidity and
Capital Resources-Cash and Cash Requirements" below.
The amount of income taxes the Company pays is subject to ongoing audits by
federal, state and foreign tax authorities, which often result in proposed
assessments. Management performs a comprehensive review of its global tax
positions on a quarterly basis. Based on these reviews, the results of
discussions and resolutions of matters with certain tax authorities, tax rulings
and court decisions and the expiration of statutes of limitations, reserves for
contingent tax liabilities are accrued or adjusted as necessary. For a
discussion of risks related to these and other tax matters, refer to "Item 1A.
Risk Factors".
On December 22, 2017, the TCJA was enacted, substantially changing the U.S. tax
system. Under the SEC Staff Accounting Bulletin No. 118 ("SAB No. 118")
guidance, for the year ended December 31, 2017, the Company recorded provisional
amounts in earnings for the enactment of the TCJA and during 2018, the Company
completed its accounting for the TCJA based on the Company's interpretation of
the new tax regulations and related guidance issued by the U.S. Department of
the Treasury and the IRS.
The TCJA imposes tax on U.S. shareholders for global intangible low-taxed income
("GILTI") earned by certain foreign subsidiaries. The Company has elected the
period cost method for its accounting for GILTI.
Due to the complexity and recent issuance of these tax regulations, management's
interpretations of the impact of these rules could be subject to challenge by
the taxing authorities.
Year-Over-Year Changes in the Tax Provision and Effective Tax Rate
                                                  Year Ended December 31
                                                2019         2018      2017

Effective tax rate from continuing operations 26.4 % 18.8 % 14.6 %

The Company's effective tax rate for 2019, 2018 and 2017 differs from the U.S.
federal statutory rates of 21.0% in 2019 and 2018 and 35.0% in 2017, due
principally to the Company's earnings outside the United States that are
indefinitely reinvested and taxed at rates different than the U.S. federal
statutory rate. In addition:
•      The effective tax rate of 26.4% in 2019 includes 650 basis points of net
       tax charges related primarily to changes in estimates associated with
       prior period uncertain tax positions, audit settlements, and Envista
       Disposition costs, net of the release of reserves for uncertain tax
       positions due to the expiration of statutes of limitation, release of
       valuation



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allowances associated with certain foreign tax credits, tax benefits resulting
from changes in tax law and excess tax benefits from stock-based compensation.
•      The effective tax rate of 18.8% in 2018 includes 120 basis points of tax

benefits primarily related to the release of reserves upon the expiration

of statutes of limitation, audit settlements and release of a valuation

allowance in a certain foreign tax jurisdiction. These tax benefits were

partially offset by additional provisions related to completing the

accounting for the enactment of the TCJA and tax costs directly related to

reorganization activities associated with the Envista Disposition.

• The effective tax rate of 14.6% in 2017 includes 560 basis points of net

tax benefits due to the revaluation of deferred tax liabilities from 35.0%

to 21.0% due to the TCJA and the release of reserves upon statute of

limitation expiration, partially offset by income tax expense related to

       the Transition Tax on foreign earnings due to the TCJA and changes in
       estimates associated with prior period uncertain tax positions.


The Company conducts business globally, and files numerous consolidated and
separate income tax returns in the U.S. 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
Consolidated Financial Statements given the geographic 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 substantially all of the
examinations 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 2017. In addition, the Company has subsidiaries in Austria, Belgium,
Canada, China, Denmark, France, Germany, Hong Kong, India, Italy, Japan, Korea,
Switzerland, the United Kingdom and various other countries, states and
provinces that are currently under audit for years ranging from 2004 through
2018.
In the fourth quarter of 2018 and the first quarter of 2019, the IRS 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. For income tax purposes, the
recognition of premium income has been deferred in accordance with U.S. tax laws
related to insurance. The IRS is challenging the deferral of premiums for
certain types of the Company's self-insurance policies. The proposed adjustments
would increase the Company's taxable income over the 2012 through 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 and
intends to vigorously defend these positions. 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 financial statements, 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") of
approximately DKK 1.8 billion (approximately $266 million based on exchange
rates as of December 31, 2019) including interest through December 31, 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 Danish National Tax Tribunal in 2014. The
appeal is pending, awaiting the final outcome of other, preceding withholding
tax cases that were appealed to the Danish courts and subsequently to the Court
of Justice of the European Union ("CJEU"). In February 2019, the CJEU decided
several of these cases and 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. This decision of the CJEU
now awaits application by the Danish High Court in the other, preceding
withholding tax cases.
SKAT has maintained a similar position related to withholding tax on interest
accrued in Denmark on borrowings from certain of the Company's subsidiaries with
respect to tax years 2010-2012 and 2013-2015. On August 27, 2019 and December
16, 2019, the Company received assessments for these matters of approximately
DKK 1.1 billion including interest through December 31, 2019 (approximately $159
million based on the exchange rate as of December 31, 2019) for tax years
2010-2012 and DKK 751 million including interest through December 31, 2019
(approximately $113 million based on the exchange rate as of December 31, 2019)
for tax years 2013-2015, respectively. The Company is appealing these
assessments as well.

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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 intends on pursuing this matter through the Danish High Court should
the appeal to the Danish National 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 financial
statements, including its cash flow and effective tax rate.
The Company expects its 2020 effective tax rate to be approximately 19.5%. Any
future legislative changes in the United States including potential tax reform
in other jurisdictions, could cause the Company's effective tax rate to differ
from this estimate. Refer to Note 15 to the Consolidated Financial Statements
for additional information related to income taxes.

DISCONTINUED OPERATIONS
As further discussed in Note 4 to the Consolidated Financial Statements,
discontinued operations include the results of Envista which was disposed of
during the fourth quarter of 2019 as well as an income tax benefit in 2017
related to the Fortive businesses that were disposed of during the third quarter
of 2016.
In 2019, earnings from discontinued operations, net of income taxes, were $576
million and reflect the operating results of Envista prior to the Envista
Disposition and a gain on the disposition of Envista of $451 million, net of
certain costs associated with the Envista Disposition including costs related to
establishing Envista as a stand-alone entity and legal, accounting and
investment banking fees. In 2018 and 2017, earnings from discontinued
operations, net of income taxes, were $245 million and $320 million,
respectively, and reflect the operations of Envista as well as a $22 million
income tax benefit in 2017 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. All Fortive
entity-related balances are included in the income tax benefit related to
discontinued operations for the year ended December 31, 2017.

COMPREHENSIVE INCOME
Comprehensive income increased by approximately $726 million in 2019 as compared
to 2018, primarily due to a decrease in losses from foreign currency translation
adjustments in 2019 compared to 2018 and higher net earnings (including those
attributable to discontinued operations) partially offset by an increase in
losses from pension and postretirement plan benefit adjustments in 2019 compared
to 2018 and losses from cash flow hedge adjustments in 2019. The Company
recorded a foreign currency translation loss of $75 million for 2019 compared to
a translation loss of $632 million for 2018. The Company recorded a pension and
postretirement plan benefit loss of $90 million for 2019 compared to a loss of
$13 million for 2018. The Company recorded losses from cash flow hedge
adjustments in 2019 of $113 million.
Comprehensive income decreased by approximately $1.5 billion in 2018 as compared
to 2017, primarily due to a loss from foreign currency translation adjustments
in 2018 compared to a gain in 2017 and a loss from pension and postretirement
plan benefit adjustments in 2018 as compared to a gain in 2017, partially offset
by higher net earnings (including those attributable to discontinued operations)
and a decrease in unrealized losses on available-for-sale securities in 2018
compared to 2017. The Company recorded a foreign currency translation loss of
$632 million for 2018 compared to a translation gain of $976 million for 2017.
The Company recorded a pension and postretirement plan benefit loss of $13
million in 2018 compared to a gain of $71 million in 2017.
INFLATION
The effect of inflation on the Company's revenues and net earnings was not
significant in any of the years ended December 31, 2019, 2018 or 2017.

FINANCIAL INSTRUMENTS AND RISK MANAGEMENT
The Company is exposed to market risk from changes in interest rates, foreign
currency exchange rates, equity prices and commodity prices as well as credit
risk, each of which could impact its Consolidated Financial Statements. The
Company generally addresses its exposure to these risks through its normal
operating and financing activities. The Company also periodically uses
derivative financial instruments to manage foreign exchange risks and interest
rate risks. In addition, the Company's broad-based business activities help to
reduce the impact that volatility in any particular area or related areas may
have on its operating profit as a whole.

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Interest Rate Risk
The Company manages interest cost using a mixture of fixed-rate and
variable-rate debt. A change in interest rates on fixed rate long-term debt
impacts the fair value of the debt but not the Company's earnings or cash flow
because the interest on such debt is fixed. Generally, the fair market value of
fixed-rate debt will increase as interest rates fall and decrease as interest
rates rise. As of December 31, 2019, an increase of 100 basis points in interest
rates would have decreased the fair value of the Company's fixed-rate long-term
debt (excluding the LYONs, which have not been included in this calculation as
the value of this convertible debt is primarily derived from the value of its
underlying common stock) by approximately $1.7 billion.
As of December 31, 2019, the Company's variable-rate debt obligations consisted
primarily of euro-based commercial paper borrowings (refer to Note 11 to the
Consolidated Financial Statements for information regarding the Company's
outstanding commercial paper balances as of December 31, 2019). As a result, the
Company's primary interest rate exposure results from changes in short-term
interest rates. As these shorter duration obligations mature, the Company may
issue additional short-term commercial paper obligations to refinance all or
part of these borrowings. In 2019, the average annual interest rate associated
with outstanding commercial paper borrowings was approximately negative 19 basis
points. A hypothetical increase of this average to negative 12 basis points
would have increased the Company's annual interest expense by $2 million. The
hypothetical increase used is the actual amount by which the Company's
commercial paper interest rates fluctuated during 2019.
Refer to "Results of Operations-Interest Costs" for discussion of the Company's
cross-currency swap derivative contracts and interest rate swap agreements.
Currency Exchange Rate Risk
The Company faces transactional exchange rate risk from transactions with
customers in countries outside the United States and from intercompany
transactions between affiliates. Transactional exchange rate risk arises from
the purchase and sale of goods and services in currencies other than Danaher's
functional currency or the functional currency of its applicable subsidiary. The
Company also faces translational exchange rate risk related to the translation
of financial statements of its foreign operations into U.S. dollars, Danaher's
functional currency. Costs incurred and sales recorded by subsidiaries operating
outside of the United States are translated into U.S. dollars using exchange
rates effective during the respective period. As a result, the Company is
exposed to movements in the exchange rates of various currencies against the
U.S. dollar. In particular, the Company has more sales in European currencies
than it has expenses in those currencies. Therefore, when European currencies
strengthen or weaken against the U.S. dollar, operating profits are increased or
decreased, respectively. The effect of a change in currency exchange rates on
the Company's net investment in international subsidiaries is reflected in the
accumulated other comprehensive income (loss) component of stockholders' equity.
Currency exchange rates negatively impacted 2019 reported sales by 2.0% on a
year-over-year basis, primarily as a result of the U.S. dollar strengthening
against other major currencies. If the exchange rates in effect as of
December 31, 2019 were to prevail throughout 2020, currency exchange rates would
slightly increase 2020 estimated sales relative to 2019 sales. Strengthening of
the U.S. dollar against other major currencies compared to the exchange rates in
effect as of December 31, 2019 would adversely impact the Company's sales and
results of operations on an overall basis. Any weakening of the U.S. dollar
against other major currencies compared to the exchange rates in effect as of
December 31, 2019 would positively impact the Company's sales and results of
operations.
The Company has generally accepted the exposure to exchange rate movements
without using derivative financial instruments to manage this transactional
exchange risk, although the Company has used foreign currency-denominated debt
and cross-currency swaps to hedge a portion of its net investments in foreign
operations against adverse movements in exchange rates. Both positive and
negative movements in currency exchange rates against the U.S. dollar will
continue to affect the reported amount of sales and net earnings in the
Company's Consolidated Financial Statements. In addition, the Company has assets
and liabilities held in foreign currencies. A 10% depreciation in major
currencies relative to the U.S. dollar as of December 31, 2019 would have
reduced foreign currency-denominated net assets and stockholders' equity by
approximately $830 million. In 2019, the Company entered into approximately $1.9
billion of cross-currency swap derivative contracts on its U.S.
dollar-denominated bonds to hedge its net investment in foreign operations
against adverse changes in the exchange rates between the U.S. dollar and the
Danish kroner, Japanese yen, euro and the Swiss franc. 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 partially
offset the impact of changes in currency rates on foreign currency-denominated
net assets during the term of the swap. As of December 31, 2019, approximately
$1.0 billion of the cross-currency swap derivative contracts remained
outstanding. The Company also uses cross-currency swap derivative contracts to
hedge U.S. dollar-denominated long-term debt issuances in a foreign subsidiary
whose functional currency is the euro against adverse movements in exchange
rates between the U.S. dollar and the euro. In November 2019, the Company
entered into cross-currency swap derivative contracts with respect to

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approximately $4.0 billion of its U.S. dollar-denominated bonds and all of these
derivative contracts remained outstanding as of December 31, 2019.
Equity Price Risk
The Company's investment portfolio from time to time includes publicly-traded
equity securities that are sensitive to fluctuations in market price, though as
of December 31, 2019, the Company held no available-for-sale marketable equity
securities. The Company holds non-marketable equity investments in privately
held companies that may be impacted by equity price risks or other factors.
These non-marketable equity investments are accounted for under the Fair Value
Alternative method with changes in fair value recorded in earnings. Volatility
in the equity markets or other fair value considerations could affect the value
of these investments and require charges or gains to be recognized in earnings.
Commodity Price Risk
For a discussion of risks relating to commodity prices, refer to "Item 1A. Risk
Factors."
Credit Risk
The Company is exposed to potential credit losses in the event of nonperformance
by counterparties to its financial instruments. Financial instruments that
potentially subject the Company to credit risk consist of cash and temporary
investments, receivables from customers and derivatives. The Company places cash
and temporary investments with various high-quality financial institutions
throughout the world and exposure is limited at any one institution. Although
the Company typically does not obtain collateral or other security to secure
these obligations, it does regularly monitor the third-party depository
institutions that hold its cash and cash equivalents. The Company's emphasis is
primarily on safety and liquidity of principal and secondarily on maximizing
yield on those funds.
In addition, concentrations of credit risk arising from receivables from
customers are limited due to the diversity of the Company's customers. The
Company's businesses perform credit evaluations of their customers' financial
conditions as deemed appropriate and also obtain collateral or other security
when deemed appropriate.
The Company enters into derivative transactions infrequently and typically with
high-quality financial institutions, so that exposure at any one institution is
limited.

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 will be sufficient
to allow it to continue investing in existing businesses, consummating strategic
acquisitions and investments, paying interest and servicing debt and managing
its capital structure on a short and long-term basis. In addition, as discussed
in further detail above, the Company received approximately $2.0 billion of cash
from Envista as consideration for the transfer of the Company's dental
businesses to Envista, a portion of which consideration the Company used to
redeem certain of the Company's outstanding indebtedness in the fourth quarter
of 2019.


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Following is an overview of the Company's cash flows and liquidity for the years
ended December 31:
Overview of Cash Flows and Liquidity
($ in millions)                                     2019           2018     

2017

Total operating cash flows provided by
continuing operations                           $  3,657.4     $  3,644.0     $  3,122.2

Cash paid for acquisitions                      $   (331.3 )   $ (2,173.3 )   $   (385.8 )
Payments for additions to property, plant and
equipment                                           (635.5 )       (583.5 )       (570.7 )
Proceeds from sales of property, plant and
equipment                                             12.8            6.3   

32.5

Payments for purchases of investments               (241.0 )       (145.9 )            -
Proceeds from sales of investments                       -           22.2   

137.9

All other investing activities                        28.9            0.3           (2.4 )
Total investing cash used in discontinued
operations                                           (72.0 )        (75.5 )        (54.9 )
Net cash used in investing activities           $ (1,238.1 )   $ (2,949.4 )

$ (843.4 )

Proceeds from the issuance of common stock in
connection with stock-based compensation        $    130.1     $     96.0     $     68.8
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              -              -
Net proceeds from the sale of Envista Holdings
Corporation common stock, net of issuance costs      643.4              -              -
Payment of dividends                                (526.7 )       (433.4 )       (378.3 )
Payment for purchase of noncontrolling interest          -              -          (64.4 )
Net proceeds from (repayments of) borrowings
(maturities of 90 days or less)                    2,801.8           65.7       (3,778.5 )
Proceeds from borrowings (maturities longer
than 90 days)                                     12,112.8              -   

1,782.1

Repayments of borrowings (maturities longer
than 90 days)                                     (1,564.5 )       (507.8 )       (668.4 )
Make-whole premiums to redeem borrowings prior
to maturity                                           (6.5 )            -              -
All other financing activities                       (43.3 )        (17.9 )        (59.8 )
Cash distributions to Envista Holdings
Corporation, net                                    (224.0 )            -              -
Net cash provided by (used in) financing
activities                                      $ 16,365.9     $   (797.4 )

$ (3,098.5 )

• Operating cash flows from continuing operations increased $13 million, or

less than 1%, during 2019 as compared to 2018, due primarily to higher net

earnings, which included higher noncash charges for depreciation,

amortization, and stock compensation, and the impact of a noncash discrete

income tax charge in 2019, net of higher cash used for funding trade

accounts receivable, inventories and trade accounts payable in 2019

compared to 2018. In addition, lower cash used for payments for various

employee-related liabilities, customer funding and accrued expenses

increased operating cash flows from continuing operations in 2019 compared

to 2018.

• On March 1, 2019, the Company completed the underwritten public offering

of 12.1 million shares of Danaher common stock at a price to the public of

$123.00 per share resulting in net proceeds of approximately $1.4 billion,

after deducting expenses and the underwriters' discount. Simultaneously,

the Company completed the underwritten public offering of 1.65 million

       shares of its MCPS resulting in net proceeds of approximately $1.6
       billion, after deducting expenses and the underwriters' discount. The
       Company intends to use the net proceeds from the underwritten public
       offerings of its Common Stock and MCPS (the "Common Stock Offering" and

"MCPS Offering", respectively) to fund a portion of the cash consideration

       payable for, and certain costs associated with, the GE Biopharma
       Acquisition.

• In the second half of 2019, the Company issued approximately €6.2 billion

of senior unsecured euronotes and approximately $4.0 billion of senior

unsecured notes. The proceeds from these issuances will be used to fund a

       portion of the cash consideration payable for the GE Biopharma
       Acquisition.



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• On December 18, 2019, Danaher completed the Envista Disposition. Prior to

the IPO, Envista borrowed $650 million under a senior unsecured term loan

and €600 million under a three-year, senior unsecured term loan facility.

Envista transferred the net proceeds from these borrowings along with the

       net proceeds of $643 million from the Envista IPO to the Company in
       consideration for the Company's transfer of the dental businesses to
       Envista.


•      Danaher used a portion of the consideration received from Envista to
       redeem $882 million in aggregate principal amount of outstanding

indebtedness in the fourth quarter of 2019 (consisting of the Company's

2.4% senior unsecured notes due 2020 and 5.0% senior unsecured notes due

2020 (collectively the "Redeemed Notes")), as well as the make-whole

premiums and accrued and unpaid interest required to be paid in connection

with such redemptions. The Company used the balance of the consideration

       it received from Envista to redeem commercial paper borrowings as they
       matured.

• Net cash used in investing activities during 2019 consisted primarily of

cash paid for acquisitions, additions to property, plant and equipment and

payments for purchases of investments. The Company acquired five

businesses during 2019 for total consideration (including assumed debt and

net of cash acquired) of $331 million. Payments for additions to property,

plant and equipment increased $52 million in 2019 compared to 2018 and

included investments in operating assets and new facilities. In addition,

       in 2019, the Company invested $241 million in non-marketable equity
       securities and a partnership.

• As of December 31, 2019, the Company held approximately $19.9 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 and productivity improvement initiatives,
pension funding and other items impact reported cash flows.
Operating cash flows from continuing operations were approximately $3.7 billion
for 2019, an increase of $13 million, or less than 1%, as compared to 2018. The
year-over-year change in operating cash flows from 2018 to 2019 was primarily
attributable to the following factors:
•     2019 operating cash flows benefited from higher net earnings in 2019 as

compared to 2018. Net earnings for 2019 include noncash discrete income tax

      charges totaling $215 million, which decreased net earnings without a
      corresponding impact to operating cash flows.

• Net earnings for 2019 reflected an increase of $12 million of depreciation

       and amortization expense as compared to 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 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 $160 million in operating cash flows during 2019, compared to

$41 million of operating cash flows provided in 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, deferred income taxes

and accrued expenses and other liabilities provided $37 million in

operating cash flows during 2019, compared to $121 million used in 2018.

The noncash discrete tax charge, the timing of cash payments for taxes,

various employee-related liabilities, customer funding and accrued

expenses drove the majority of this change.

Operating cash flows from continuing operations were approximately $3.6 billion
for 2018, an increase of $522 million, or 17%, as compared to 2017. This
increase was primarily attributable to the increase in net earnings from
continuing operations in 2018 as compared to 2017. Net earnings in 2017 also
included a $73 million gain on sale of marketable equity securities for which
the proceeds were reflected in the investing activities section of the
accompanying Consolidated Statement of Cash Flows, and therefore, did not
contribute to operating cash flows.


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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 was approximately $1.2 billion during 2019
compared to approximately $2.9 billion and $843 million of net cash used in 2018
and 2017, respectively.
Acquisitions, Divestitures and Sale of Investments
For a discussion of the Company's 2019 acquisitions refer to "-Overview." In
addition, in 2019, the Company invested $241 million in non-marketable equity
securities and partnerships.
During 2018, the Company acquired two businesses for total consideration of
approximately $2.2 billion in cash, net of cash acquired. The businesses
acquired complement existing units of the Company's Life Sciences and
Environmental & Applied Solutions segments. The aggregate annual sales of these
two businesses at the time of their respective acquisitions, in each case based
on the companies' revenues for its last completed fiscal year prior to the
acquisition, were $313 million.
In addition, in 2018, the Company invested $146 million in non-marketable equity
securities and partnerships. 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.
During 2017, the Company acquired nine businesses for total consideration of
$386 million in cash, net of cash acquired. The businesses acquired complement
existing units of the Life Sciences and Environmental & Applied Solutions
segments. The aggregate annual sales of these nine businesses at the time of
their respective acquisitions, in each case based on the companies' revenues for
its last completed fiscal year prior to the acquisition, were $160 million.
The Company received $138 million of cash proceeds and recorded $22 million in
short-term other receivables from the sale of certain marketable equity
securities during 2017. The Company recorded a pretax gain related to this sale
of $73 million ($46 million after-tax or $0.06 per diluted share).
Capital Expenditures
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
arrangements that certain of the Company's businesses enter into with customers.
Capital expenditures totaled $636 million in 2019 and $584 million in 2018. The
year-over-year increase in capital spending in 2019 was due to increased
investments in operating assets and new facilities across the Company. In 2020,
the Company expects capital spending to be approximately $700 million, though
actual expenditures will ultimately depend on business conditions.

Financing Activities
Cash flows from financing activities consist primarily of cash flows associated
with the issuance and repayments of commercial paper, issuance and repayment of
long-term debt, issuance and repurchases of common stock, issuance of preferred
stock, payments of cash dividends to shareholders and proceeds from the Envista
IPO. Financing activities provided cash of approximately $16.4 billion during
2019 compared to $797 million of cash used during 2018. The year-over-year
increase in cash provided by financing activities was due primarily to the
public offerings of the Company's common and preferred stock during the first
quarter of 2019, the issuance of debt by the Company in the second half of 2019,
the proceeds received from the Envista IPO and Envista debt issuances, and net
proceeds from commercial paper borrowings in 2019 compared to 2018. These
sources of liquidity were partially offset by higher debt redemptions during
2019 compared to 2018 which included the impact of the early extinguishment of
$882 million of borrowings through the use of the proceeds received from Envista
as part of the disposition of this business.
Financing activities used cash of $797 million during 2018 compared to
approximately $3.1 billion of cash used during 2017. The year-over-year decrease
in cash used in financing activities was due primarily to lower net repayments
of commercial paper borrowings in 2018, as the Company decreased its commercial
paper borrowings in 2017 after increasing commercial paper borrowings for the
Cepheid acquisition in 2016. The Company issued commercial paper early in 2018
to pay for a portion of the acquisition price of IDT and repaid substantially
all of such commercial paper borrowings later in 2018. The cash outflow in 2017
for the net repayment of commercial paper was partially offset by proceeds from
the issuance of long-term notes. In both 2018 and 2017, the Company repaid
long-term debt, including $500 million aggregate principal amount of U.S. Notes
with accrued interest that matured in September 2018.

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Total debt was approximately $21.7 billion and $9.7 billion as of December 31,
2019 and 2018, respectively. The Company had the ability to incur approximately
$4.9 billion of additional indebtedness in direct borrowings or under the
outstanding commercial paper facilities based on the amounts available under the
Company's $10.0 billion of credit facilities which were not being used to
backstop outstanding commercial paper balances as of December 31, 2019. The
Company has classified approximately $5.0 billion of its borrowings outstanding
under the euro-denominated commercial paper program as of December 31, 2019 as
long-term debt in the accompanying Consolidated Balance Sheet as the Company has
the intent and ability, as supported by availability under the revolving credit
facility, to refinance these borrowings for at least one year from the balance
sheet date. As commercial paper obligations mature, the Company may issue
additional short-term commercial paper obligations to refinance all or part of
these borrowings.
Under the Company's U.S. and euro-denominated commercial paper program, the
notes are typically issued at a discount from par, generally based on the
ratings assigned to the Company by credit rating agencies at the time of the
issuance and prevailing market rates measured by reference to LIBOR or EURIBOR.
Additionally, the Company's floating rate senior unsecured notes due 2022 pay
interest based upon the three-month EURIBOR plus 0.3%. In July 2017, the head of
the United Kingdom Financial Conduct Authority announced the intent to phase out
the use of LIBOR by the end of 2021. The U.S. Federal Reserve, in conjunction
with the Alternative Reference Rates Committee, a steering committee comprised
of large U.S. financial institutions, is considering replacing U.S.
dollar LIBOR with the Secured Overnight Financing Rate, or SOFR, a new index
calculated by short-term repurchase agreements, backed by Treasury securities.
The Company has evaluated the anticipated impact of the transition from LIBOR
and does not expect the transition to be material to the Company's financial
position.
Refer to Note 11 to the Consolidated Financial Statements for additional
information regarding the Company's financing activities and indebtedness,
including the Company's outstanding debt as of December 31, 2019, and the
Company's commercial paper program and related credit facilities.
Common Stock Offering and MCPS Offering
For a description of the first quarter 2019 Common Stock and MCPS Offerings,
refer to Note 19 to the Consolidated Financial Statements.

Shelf Registration Statement
The Company has filed a "well-known seasoned issuer" shelf registration
statement on Form S-3 with the SEC that registers an indeterminate amount of
debt securities, common stock, preferred stock, warrants, depositary shares,
purchase contracts and units for future issuance. The Company expects to use net
proceeds realized by the Company from future securities sales off this shelf
registration statement for general corporate purposes, including without
limitation repayment or refinancing of debt or other corporate obligations,
acquisitions, capital expenditures, share repurchases and dividends and/or
working capital.
Stock Repurchase Program
Please see "Issuer Purchases of Equity Securities" in Item 5 of Part II of this
Annual Report for a description of the Company's stock repurchase program.
Dividends
The Company declared a regular quarterly dividend of $0.17 per share of Company
common stock that was paid on January 31, 2020 to holders of record on
December 27, 2019. In addition, the Company declared a quarterly cash dividend
of $11.875 per MCPS that was paid on January 15, 2020 to holders of record as of
December 31, 2019. Aggregate cash payments for dividends on Company common stock
during 2019 were $478 million. The year-over-year increase in dividend payments
on common stock in 2019 results from increases in the quarterly dividend rate
effective with respect to the dividend paid in the second quarter of 2019.
Aggregate cash payments for dividends on the MCPS during 2019 were $49 million.
Cash and Cash Requirements
As of December 31, 2019, the Company held approximately $19.9 billion of cash
and cash equivalents that were 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 1.5%. Of this amount, approximately $16.3
billion was held within the United States and approximately $3.6 billion was
held outside of the United States. The Company will continue to have cash
requirements to support working capital needs, capital expenditures,
acquisitions and investments, 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. The Company generally
intends to use available

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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 the GE Biopharma Acquisition), the Company may also
borrow under its commercial paper programs or 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 issue debt and/or equity in 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. For a
description of the Company's anticipated financing of the GE Biopharma
Acquisition, refer to Note 3 to the Consolidated Financial Statements.
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, investments and acquisitions. The income taxes
applicable to repatriating such earnings are not readily determinable. As of
December 31, 2019, the Company continues to assert that principally all of its
non-U.S. earnings are indefinitely reinvested and management believes that the
Company has sufficient liquidity to satisfy its cash needs, including its cash
needs in the United States.
During 2019, the Company contributed $10 million to its U.S. defined benefit
pension plans and $44 million to its non-U.S. defined benefit pension plans.
During 2020, the Company's cash contribution requirements for its U.S. and its
non-U.S. defined benefit pension plans are expected to be approximately $95
million and $40 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.

Contractual Obligations
The following table sets forth, by period due or year of expected expiration, as
applicable, a summary of the Company's contractual obligations as of
December 31, 2019 under (1) debt obligations, (2) leases, (3) purchase
obligations and (4) other long-term liabilities reflected on the Company's
Consolidated Balance Sheet. The amounts presented in the "Other long-term
liabilities" line in the table below include approximately $1.3 billion of
noncurrent gross unrecognized tax benefits and related interest (and do not
include $58 million of current gross unrecognized tax benefits which are
included in accrued expenses and other liabilities on the accompanying
Consolidated Balance Sheet). The timing of the long-term portion of these tax
liabilities is uncertain, and therefore, they have been included in the "More
Than 5 Years" column in the table below. Refer to Note 15 to the Consolidated
Financial Statements for additional information on unrecognized tax benefits.
Certain of the Company's acquisitions also involve the potential payment of
contingent consideration. The table below does not reflect any such obligations,
as the timing and amounts of any such payments are uncertain. Refer to
"-Off-Balance Sheet Arrangements" for a discussion of other contractual
obligations that are not reflected in the table below.
                                             Less Than                                      More Than
($ in millions)                Total         One Year        1-3 Years       4-5 Years       5 Years
Debt and leases:
Debt obligations (a)(b)     $ 21,714.9     $     211.3     $   2,160.4     $   6,237.3     $ 13,105.9
Capital lease obligations
(b)                               14.2             1.1            13.1               -              -
Total debt and leases         21,729.1           212.4         2,173.5         6,237.3       13,105.9
Interest payments on debt
and capital lease
obligations (c)                3,041.1           256.5           488.3           443.1        1,853.2
Operating lease obligations
(d)                              888.2           179.5           267.4           196.4          244.9
Other:
Purchase obligations (e)         594.3           545.1            46.8             2.1            0.3
Other long-term liabilities
reflected on the Company's
Consolidated Balance Sheet
(f)                            4,711.8               -           625.1           482.6        3,604.1
Total                       $ 30,964.5     $   1,193.5     $   3,601.1     $   7,361.5     $ 18,808.4

(a) As described in Note 11 to the Consolidated Financial Statements.

(b) Amounts do not include interest payments. Interest on debt and capital lease

     obligations is reflected in a separate line in the table.


(c)  Interest payments on debt are projected for future periods using the

interest rates in effect as of December 31, 2019. Certain of these projected

     interest payments may differ in the future based on changes in market
     interest rates.



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(d) Amounts reflect undiscounted future operating lease payments under

Accounting Standards Update No. 2016-02, Leases (Topic 842), while the

current and long-term operating lease liabilities in the accompanying

Consolidated Balance Sheet reflect the discounted future operating lease

     payments. Refer to Note 5 to the Consolidated Financial Statements for
     further information.

(e) Consist of agreements to purchase goods or services that are enforceable,

legally binding on the Company, and that specify all significant terms,

including fixed or minimum quantities to be purchased, fixed, minimum or

variable price provisions and the approximate timing of the transaction.

(f) Primarily consist of obligations under product service and warranty policies

and allowances, performance and operating cost guarantees, estimated

environmental remediation costs, self-insurance and litigation claims,

postretirement benefits, pension obligations, deferred tax liabilities and

deferred compensation obligations. The timing of cash flows associated with

these obligations is based upon management's estimates over the terms of

these arrangements and is largely based upon historical experience. Other

long-term liabilities reflected in the accompanying Consolidated Balance

Sheet include the above amounts as well as the long-term operating lease

liabilities, which are reflected on a discounted basis in the Consolidated

Balance Sheet.

Off-Balance Sheet Arrangements
Guarantees and Related Instruments
The following table sets forth, by period due or year of expected expiration, as
applicable, a summary of guarantees and related instruments of the Company as of
December 31, 2019.
                                              Amount of Commitment Expiration per Period
                                              Less Than                                       More Than
($ in millions)                 Total         One Year        1-3 Years       4-5 Years        5 Years
Guarantees and related
instruments                 $     575.7     $     498.4     $      56.9     $      11.1     $        9.3


Guarantees and related instruments consist primarily of outstanding standby
letters of credit, bank guarantees and performance and bid bonds. These have
been provided in connection with certain arrangements with vendors, customers,
insurance providers, financing counterparties and governmental entities to
secure the Company's obligations and/or performance requirements related to
specific transactions.
Other Off-Balance Sheet Arrangements
The Company has from time to time divested certain of its businesses and assets.
In connection with these divestitures, the Company often provides
representations, warranties and/or indemnities to cover various risks and
unknown liabilities, such as claims for damages arising out of the use of
products or relating to intellectual property matters, employment matters,
commercial disputes, environmental matters or tax matters. In particular, in
connection with the 2019 Envista Disposition, the 2016 Fortive Disposition and
the 2015 Communications disposition, Danaher entered into separation and related
agreements pursuant to which Danaher agreed to indemnify the other parties
against certain damages and expenses that might occur in the future. These
indemnification obligations cover a variety of liabilities, including, but not
limited to, employee, tax and environmental matters. The Company has not
included any such items in the contractual obligations table above because they
generally relate to unknown conditions and the Company cannot estimate the
potential liabilities from such matters, but the Company does not believe it is
reasonably possible that any such liability will have a material effect on the
Company's financial statements. In addition, as a result of these divestitures,
as well as restructuring activities, certain properties leased by the Company
have been sublet to third parties. In the event any of these third parties
vacate any of these premises, the Company would be legally obligated under
master lease arrangements. The Company believes that the financial risk of
default by such sub-lessors is individually and in the aggregate not material to
the Company's financial statements.
In the normal course of business, the Company periodically enters into
agreements that require it to indemnify customers, suppliers or other business
partners for specific risks, such as claims for injury or property damage
arising out of the Company's products, software or services or claims alleging
that Company products or services infringe third-party intellectual property.
The Company has not included any such indemnification provisions in the
contractual obligations table above. Historically, the Company has not
experienced significant losses on these types of indemnification obligations.
The Company's Restated Certificate of Incorporation requires it to indemnify to
the full extent authorized or permitted by law any person made, or threatened to
be made a party to any action or proceeding by reason of his or her service as a
director or officer of the Company, or by reason of serving at the request of
the Company as a director or officer of any other entity, subject to limited
exceptions. Danaher's Amended and Restated By-laws provide for similar
indemnification rights. In addition, Danaher has executed with each director and
executive officer of Danaher Corporation an indemnification agreement which
provides for substantially similar indemnification rights and under which
Danaher has agreed to pay expenses in advance of the final disposition of any
such indemnifiable proceeding. While the Company maintains insurance for this
type of liability, a significant deductible applies to this coverage and any
such liability could exceed the amount of the insurance coverage.

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Legal Proceedings
Refer to "Item 3. Legal Proceedings" and Note 18 to the Consolidated Financial
Statements for information regarding legal proceedings and contingencies, and
for a discussion of risks related to legal proceedings and contingencies, refer
to "Item 1A. Risk Factors."

CRITICAL ACCOUNTING ESTIMATES
Management's discussion and analysis of the Company's financial condition and
results of operations is based upon the Company's Consolidated Financial
Statements, which have been prepared in accordance with accounting principles
generally accepted in the United States. The preparation of these financial
statements requires management to make estimates and judgments that affect the
reported amounts of assets, liabilities, revenues and expenses, and related
disclosure of contingent assets and liabilities. The Company bases these
estimates and judgments on historical experience, the current economic
environment and on various other assumptions that are believed to be reasonable
under the circumstances. Actual results may differ materially from these
estimates and judgments.
The Company believes the following accounting estimates are most critical to an
understanding of its financial statements. Estimates are considered to be
critical if they meet both of the following criteria: (1) the estimate requires
assumptions about material matters that are uncertain at the time the estimate
is made, and (2) material changes in the estimate are reasonably likely from
period-to-period. For a detailed discussion on the application of these and
other accounting estimates, refer to Note 1 to the Consolidated Financial
Statements.
Acquired Intangibles-The Company's business acquisitions typically result in the
recognition of goodwill, in-process R&D and other intangible assets, which
affect the amount of future period amortization expense and possible impairment
charges that the Company may incur. Refer to Notes 1, 3 and 8 to the
Consolidated Financial Statements for a description of the Company's policies
relating to goodwill, acquired intangibles and acquisitions.
In performing its goodwill impairment testing, the Company estimates the fair
value of its reporting units primarily using a market-based approach. In
evaluating the estimates derived by the market-based approach, management makes
judgments about the relevance and reliability of the multiples by considering
factors unique to its reporting units, including operating results, business
plans, economic projections, anticipated future cash flows, and transactions and
marketplace data as well as judgments about the comparability of the market
proxies selected. In certain circumstances the Company also estimates fair value
utilizing a discounted cash flow analysis (i.e., an income approach) in order to
validate the results of the market approach. The discounted cash flow model
requires judgmental assumptions about projected revenue growth, future operating
margins, discount rates and terminal values. There are inherent uncertainties
related to these assumptions and management's judgment in applying them to the
analysis of goodwill impairment.
As of December 31, 2019, the Company had five reporting units for goodwill
impairment testing. Reporting units resulting from recent acquisitions generally
present the highest risk of impairment. Management believes the impairment risk
associated with these reporting units generally decreases as these businesses
are integrated into the Company and better positioned for potential future
earnings growth. The Company's annual goodwill impairment analysis in 2019
indicated that in all instances, the fair values of the Company's reporting
units exceeded their carrying values and consequently did not result in an
impairment charge. The excess of the estimated fair value over carrying value
(expressed as a percentage of carrying value for the respective reporting unit)
for each of the Company's reporting units as of the annual testing date ranged
from approximately 85% to approximately 600%. In order to evaluate the
sensitivity of the fair value calculations used in the goodwill impairment test,
the Company applied a hypothetical 10% decrease to the fair values of each
reporting unit and compared those hypothetical values to the reporting unit
carrying values. Based on this hypothetical 10% decrease, the excess of the
estimated fair value over carrying value (expressed as a percentage of carrying
value for the respective reporting unit) for each of the Company's reporting
units ranged from approximately 65% to approximately 530%.
The Company reviews identified intangible assets for impairment whenever events
or changes in circumstances indicate that the related carrying amounts may not
be recoverable. The Company also tests intangible assets with indefinite lives
at least annually for impairment. Determining whether an impairment loss
occurred requires a comparison of the carrying amount to the sum of undiscounted
cash flows expected to be generated by the asset. These analyses require
management to make judgments and estimates about future revenues, expenses,
market conditions and discount rates related to these assets.
If actual results are not consistent with management's estimates and
assumptions, goodwill and other intangible assets may be overstated and a charge
would need to be taken against net earnings which would adversely affect the
Company's financial statements. Historically, the Company's estimates of
goodwill and intangible assets have been materially correct.

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Contingent Liabilities-As discussed in "Item 3. Legal Proceedings" and Note 18
to the Consolidated Financial Statements, the Company is, from time to time,
subject to a variety of litigation and similar contingent liabilities incidental
to its business (or the business operations of previously owned entities). The
Company recognizes a liability for any legal contingency that is known or
probable of occurrence and reasonably estimable. These assessments require
judgments concerning matters such as litigation developments and outcomes, the
anticipated outcome of negotiations, the number of future claims and the cost of
both pending and future claims. In addition, because most contingencies are
resolved over long periods of time, liabilities may change in the future due to
various factors, including those discussed in Note 18 to the Consolidated
Financial Statements. If the reserves established by the Company with respect to
these contingent liabilities are inadequate, the Company would be required to
incur an expense equal to the amount of the loss incurred in excess of the
reserves, which would adversely affect the Company's financial statements.
Revenue Recognition-The Company derives revenues from the sale of products and
services. Revenue is recognized when control over the promised products or
services is transferred to the customer in an amount that reflects the
consideration that the Company expects to receive in exchange for those goods or
services. In determining if control has transferred, the Company considers
whether certain indicators of the transfer of control are present, such as the
transfer of title, present right to payment, significant risks and rewards of
ownership and customer acceptance when acceptance is not a formality. To
determine the consideration that the customer owes the Company, the Company must
make judgments regarding the amount of customer allowances and rebates, as well
as an estimate for product returns. The Company also enters into lease
arrangements with customers which requires the Company to determine whether the
arrangements are operating or sales-type leases. Refer to Note 1 to the
Consolidated Financial Statements for a description of the Company's revenue
recognition policies.
If the Company's judgments regarding revenue recognition prove incorrect, the
Company's reported revenues in particular periods may be incorrect.
Historically, the Company's estimates of revenue have been materially correct.
Pension and Other Postretirement Benefits-For a description of the Company's
pension and other postretirement benefit accounting practices, refer to Notes 13
and 14 to the Consolidated Financial Statements. Calculations of the amount of
pension and other postretirement benefit costs and obligations depend on the
assumptions used in the actuarial valuations, including assumptions regarding
discount rates, expected return on plan assets, rates of salary increases,
health care cost trend rates, mortality rates and other factors. If the
assumptions used in calculating pension and other postretirement benefits costs
and obligations are incorrect or if the factors underlying the assumptions
change (as a result of differences in actual experience, changes in key economic
indicators or other factors) the Company's financial statements could be
materially affected. A 50 basis point reduction in the discount rates used for
the plans would have increased the U.S. net obligation by $133 million ($99
million on an after-tax basis) and the non-U.S. net obligation by $137 million
($116 million on an after-tax basis) from the amounts recorded in the
Consolidated Financial Statements as of December 31, 2019. A 50 basis point
increase in the discount rates used for the plans would have decreased the U.S.
net obligation by $122 million ($91 million on an after-tax basis) and the
non-U.S. net obligation by $124 million ($105 million on an after-tax basis)
from the amounts recorded in the Consolidated Financial Statements as of
December 31, 2019.
For 2019, the estimated long-term rate of return for the U.S. plans was 7.0%,
and the Company intends to continue to use an assumption of 7.0% for 2020. The
estimated long-term rate of return for the non-U.S. plans was determined on a
plan-by-plan basis based on the nature of the plan assets and ranged from 0.8%
to 5.0%. If the expected long-term rate of return on plan assets for 2019 was
reduced by 50 basis points, pension expense for the U.S. and non-U.S. plans for
2019 would have increased $9 million ($7 million on an after-tax basis) and $5
million ($4 million on an after-tax basis), respectively.
For a discussion of the Company's 2019 and anticipated 2020 defined benefit
pension plan contributions, refer to "-Liquidity and Capital Resources-Cash and
Cash Requirements".
Income Taxes-For a description of the Company's income tax accounting policies,
refer to Notes 1 and 15 to the Consolidated Financial Statements. The Company
establishes valuation allowances for its deferred tax assets if it is more
likely than not that some or all of the deferred tax asset will not be realized.
This requires management to make judgments and estimates regarding: (1) the
timing and amount of the reversal of taxable temporary differences, (2) expected
future taxable income, and (3) the impact of tax planning strategies. Future
changes to tax rates would also impact the amounts of deferred tax assets and
liabilities and could have an adverse impact on the Company's financial
statements.
The Company provides for unrecognized tax benefits when, based upon the
technical merits, it is "more likely than not" that an uncertain tax position
will not be sustained upon examination. Judgment is required in evaluating tax
positions and determining income tax provisions. The Company re-evaluates the
technical merits of its tax positions and may recognize an uncertain tax benefit
in certain circumstances, including when: (1) a tax audit is completed; (2)
applicable tax laws change, including a tax case ruling or legislative guidance;
or (3) the applicable statute of limitations expires.

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In addition, certain of the Company's tax returns are currently under review by
tax authorities including in Denmark and the United States (refer to "-Results
of Operations-Income Taxes" and Note 15 to the Consolidated Financial
Statements). Management believes the positions taken in these returns are in
accordance with the relevant tax laws. However, the outcome of these audits is
uncertain and could result in the Company being required to record charges for
prior year tax obligations which could have a material adverse impact to the
Company's financial statements, including its effective tax rate.
An increase of 1.0% in the Company's 2019 nominal tax rate would have resulted
in an additional income tax provision for continuing operations for the year
ended December 31, 2019 of $33 million.

NEW ACCOUNTING STANDARDS
For a discussion of the new accounting standards impacting the Company, refer to
Note 1 to the Consolidated Financial Statements.

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