GENERAL

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

In the opinion of the Company, the accompanying financial statements contain all adjustments (consisting of only normal recurring accruals) necessary to present fairly the financial position of the Company as of June 30, 2017 and December 31, 2016, its results of operations for the three and six-month periods ended June 30, 2017 and July 1, 2016 and its cash flows for each of the six-month periods then ended.

Accumulated Other Comprehensive Income (Loss)—The changes in accumulated other comprehensive income (loss) by component are summarized below ($ in millions). Foreign currency translation adjustments are generally not adjusted for income taxes as they relate to indefinite investments in non-U.S. subsidiaries.



	Foreign Currency Translation Adjustments			Pension & Postretirement Plan Benefit Adjustments				Unrealized Gain (Loss) on Available-For-Sale Securities Adjustments			Total
For the Three-Month Period Ended June 30, 2017:
Balance, March 31, 2017	$	(2,093.9	)	$	(637.3	)		$	26.0		$	(2,705.2	)
Other comprehensive income (loss) before reclassifications:
Increase	274.9			—				17.4			292.3
Income tax impact	—			—				(6.5		)	(6.5		)
Other comprehensive income (loss) before reclassifications, net of income taxes	274.9			—				10.9			285.8
Amounts reclassified from accumulated other comprehensive income (loss):
Increase	—			7.6			(a)	—			7.6
Income tax impact	—			(2.7		)		—			(2.7		)
Amounts reclassified from accumulated other comprehensive income (loss), net of income taxes	—			4.9				—			4.9
Net current period other comprehensive income (loss), net of income taxes	274.9			4.9				10.9			290.7
Balance, June 30, 2017	$	(1,819.0	)	$	(632.4	)		$	36.9		$	(2,414.5	)

^(a) This accumulated other comprehensive income (loss) component is included in the computation of net periodic pension cost. Refer to Note 7 for additional details.



	Foreign Currency Translation Adjustments			Pension & Postretirement Plan Benefit Adjustments				Unrealized Gain (Loss) on Available-For-Sale Securities Adjustments				Total
For the Three-Month Period Ended July 1, 2016:
Balance, April 1, 2016	$	(1,596.3	)	$	(642.0	)		$	1.8			$	(2,236.5	)
Other comprehensive income (loss) before reclassifications:
(Decrease) increase	(161.9		)	—				2.3				(159.6		)
Income tax impact	—			—				(0.9		)		(0.9		)
Other comprehensive income (loss) before reclassifications, net of income taxes	(161.9		)	—				1.4				(160.5		)
Amounts reclassified from accumulated other comprehensive income (loss):
Increase	—			8.6			(a)	—				8.6
Income tax impact	—			(2.8		)		—				(2.8		)
Amounts reclassified from accumulated other comprehensive income (loss), net of income taxes	—			5.8				—				5.8
Net current period other comprehensive income (loss), net of income taxes	(161.9		)	5.8				1.4				(154.7		)
Balance, July 1, 2016	$	(1,758.2	)	$	(636.2	)		$	3.2			$	(2,391.2	)
For the Six-Month Period Ended June 30, 2017:
Balance, December 31, 2016	$	(2,398.2	)	$	(642.2	)		$	18.7			$	(3,021.7	)
Other comprehensive income (loss) before reclassifications:
Increase	579.2			—				29.1				608.3
Income tax impact	—			—				(10.9		)		(10.9		)
Other comprehensive income (loss) before reclassifications, net of income taxes	579.2			—				18.2				597.4
Amounts reclassified from accumulated other comprehensive income (loss):
Increase	—			15.2			(a)	—				15.2
Income tax impact	—			(5.4		)		—				(5.4		)
Amounts reclassified from accumulated other comprehensive income (loss), net of income taxes	—			9.8				—				9.8
Net current period other comprehensive income (loss), net of income taxes	579.2			9.8				18.2				607.2
Balance, June 30, 2017	$	(1,819.0	)	$	(632.4	)		$	36.9			$	(2,414.5	)
For the Six-Month Period Ended July 1, 2016:
Balance, December 31, 2015	$	(1,797.4	)	$	(647.3	)		$	133.5			$	(2,311.2	)
Other comprehensive income (loss) before reclassifications:
Increase	39.2			—				14.9				54.1
Income tax impact	—			—				(5.6		)		(5.6		)
Other comprehensive income (loss) before reclassifications, net of income taxes	39.2			—				9.3				48.5
Amounts reclassified from accumulated other comprehensive income (loss):
Increase (decrease)	—			16.4			(a)	(223.4		)	(b)	(207.0		)
Income tax impact	—			(5.3		)		83.8				78.5
Amounts reclassified from accumulated other comprehensive income (loss), net of income taxes	—			11.1				(139.6		)		(128.5		)
Net current period other comprehensive income (loss), net of income taxes	39.2			11.1				(130.3		)		(80.0		)
Balance, July 1, 2016	$	(1,758.2	)	$	(636.2	)		$	3.2			$	(2,391.2	)

^(a) This accumulated other comprehensive income (loss) component is included in the computation of net periodic pension cost. Refer to Note 7 for additional details.

^(b) Included in other income in the accompanying Consolidated Condensed Statement of Earnings. Refer to Note 10 for additional details.

New Accounting Standards—In May 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2017-09, Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting, which provided clarity on which changes to the terms or conditions of share-based payment awards require an entity to apply the modification accounting provisions required in Topic 718. The standard is effective for all entities for annual periods beginning after December 15, 2017, with early adoption permitted, including adoption in any interim period for which financial statements have not yet been issued. The Company does not expect the adoption of this ASU will have a material impact on its consolidated financial statements.

In March 2017, the FASB issued ASU No. 2017-07, Compensation—Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, which requires employers to disaggregate the service cost component from other components of net periodic benefit costs and to disclose the amounts of net periodic benefit costs that are included in each income statement line item. The standard requires employers to report the service cost component in the same line item as other compensation costs and to report the other components of net periodic benefit costs (which include interest costs, expected return on plan assets, amortization of prior service cost or credits and actuarial gains and losses) separately and outside a subtotal of operating income. The income statement guidance requires application on a retrospective basis. The ASU is effective for public entities for annual periods beginning after December 15, 2017, including interim periods, with early adoption permitted. Management has not yet completed its assessment of the impact of the new standard on the Company’s consolidated financial statements.

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which amends the impairment model by requiring entities to use a forward-looking approach based on expected losses to estimate credit losses on certain types of financial instruments, including trade receivables. The ASU is effective for public entities for fiscal years beginning after December 15, 2019, with early adoption permitted. Management has not yet completed its assessment of the impact of the new standard on the Company’s consolidated financial statements.

In March 2016, the FASB issued ASU No. 2016-09, Compensation—Stock Compensation (Topic 718), simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, classification of certain items on the statement of cash flows and accounting for forfeitures. The Company has adopted this standard effective January 1, 2017. The ASU requires that the difference between the actual tax benefit realized upon exercise or vesting, as applicable, and the tax benefit recorded based on the fair value of the stock award at the time of grant (the “excess tax benefits”) be reflected as a reduction of the current period provision for income taxes with any shortfall recorded as an increase in the tax provision rather than as a component of changes to additional paid-in capital. The ASU also requires the excess tax benefit realized be reflected as operating cash flow rather than a financing cash flow. For the three and six-month periods ended June 30, 2017, the provision for income taxes from continuing operations was reduced and operating cash flow from continuing operations was increased by $7 million and $33 million, respectively, reflecting the impact of adopting this standard. Had this ASU been adopted at January 1, 2016, the provision for income taxes from continuing operations would have been reduced and operating cash flow from continuing operations would have been increased by $12 million and $26 million from the amounts reported for the three and six-month periods ended July 1, 2016, respectively. The actual benefit to be realized in future periods is inherently uncertain and will vary based on the price of the Company’s common stock as well as the timing of and relative value realized for future share-based transactions.

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

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