UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 ________________________________________________________

FORM 10-Q

 ________________________________________________________

(Mark One)

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

For the quarterly period ended July 1, 2022

OR

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

For the transition period from              to             

Commission File Number: 001-08089

DANAHER CORPORATION

(Exact name of registrant as specified in its charter)

Delaware		59-1995548
(State of Incorporation)		(I.R.S. Employer Identification Number)
2200 Pennsylvania Avenue, N.W., Suite 800W		20037-1701
Washington,	DC
(Address of Principal Executive Offices)		(Zip Code)

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

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, $0.01 par value	DHR	New York Stock Exchange
5.00% Mandatory Convertible Preferred Stock, Series B, without par value	DHR.PRB	New York Stock Exchange
1.700% Senior Notes due 2024	DHR 24	New York Stock Exchange
0.200% Senior Notes due 2026	DHR/26	New York Stock Exchange
2.100% Senior Notes due 2026	DHR 26	New York Stock Exchange
1.200% Senior Notes due 2027	DHR/27	New York Stock Exchange
0.450% Senior Notes due 2028	DHR/28	New York Stock Exchange
2.500% Senior Notes due 2030	DHR 30	New York Stock Exchange
0.750% Senior Notes due 2031	DHR/31	New York Stock Exchange
1.350% Senior Notes due 2039	DHR/39	New York Stock Exchange
1.800% Senior Notes due 2049	DHR/49	New York Stock Exchange

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

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐

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

Large Accelerated Filer	☒	Accelerated Filer	☐
Non-accelerated Filer	☐	Smaller Reporting Company	☐
Emerging Growth Company	☐

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

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

The number of shares of common stock outstanding at July 15, 2022 was 727,445,355.

DANAHER CORPORATION

INDEX

FORM 10-Q

		Page
PART I -	FINANCIAL INFORMATION
Item 1.	Financial Statements
	Consolidated Condensed Balance Sheets	1
	Consolidated Condensed Statements of Earnings	2
	Consolidated Condensed Statements of Comprehensive Income	3
	Consolidated Condensed Statements of Stockholders’ Equity	4
	Consolidated Condensed Statements of Cash Flows	5
	Notes to Consolidated Condensed Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	41
Item 4.	Controls and Procedures	41
PART II -	OTHER INFORMATION
Item 1.	Legal Proceedings	43
Item 1A.	Risk Factors	43
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	43
Item 5.	Other Information	43
Item 6.	Exhibits	45
	Signatures	46

DANAHER CORPORATION AND SUBSIDIARIES

CONSOLIDATED CONDENSED BALANCE SHEETS

($ in millions, except per share amount)

(unaudited)

	July 1, 2022		December 31, 2021
ASSETS
Current assets:
Cash and equivalents	$	3,984	$	2,586
Trade accounts receivable, less allowance for doubtful accounts of $120 and $124, respectively	4,527		4,631
Inventories:
Finished goods	1,608		1,343
Work in process	530		473
Raw materials	1,119		951
Total inventories	3,257		2,767
Prepaid expenses and other current assets	1,461		1,664
Total current assets	13,229		11,648
Property, plant and equipment, net of accumulated depreciation of $3,538 and $3,465, respectively	3,794		3,790
Other long-term assets	4,600		3,719
Goodwill	39,276		41,184
Other intangible assets, net	20,907		22,843
Total assets	$	81,806	$	83,184
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Notes payable and current portion of long-term debt	$	10	$	8
Trade accounts payable	2,419		2,569
Accrued expenses and other liabilities	5,127		5,563
Total current liabilities	7,556		8,140
Other long-term liabilities	7,597		7,699
Long-term debt	20,052		22,168
Stockholders’ equity:
Preferred stock, no par value, 15.0 million shares authorized; no shares and 1.65 million shares of 4.75% Mandatory Convertible Preferred Stock, Series A, issued and outstanding as of July 1, 2022 and December 31, 2021, respectively; 1.72 million shares of 5.00% Mandatory Convertible Preferred Stock, Series B, issued and outstanding as of July 1, 2022 and December 31, 2021	1,668		3,268
Common stock - $0.01 par value, 2.0 billion shares authorized; 868.4 million issued and 727.4 million outstanding as of July 1, 2022; 855.7 million issued and 715.0 million outstanding as of December 31, 2021	9		9
Additional paid-in capital	11,854		10,090
Retained earnings	35,808		32,827
Accumulated other comprehensive income (loss)	(2,745)		(1,027)
Total Danaher stockholders’ equity	46,594		45,167
Noncontrolling interests	7		10
Total stockholders’ equity	46,601		45,177
Total liabilities and stockholders’ equity	$	81,806	$	83,184

See the accompanying Notes to the Consolidated Condensed Financial Statements.

1

DANAHER CORPORATION AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS

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

(unaudited)

	Three-Month Period Ended				Six-Month Period Ended
	July 1, 2022		July 2, 2021		July 1, 2022		July 2, 2021
Sales	$	7,751	$	7,218	$	15,439	$	14,076
Cost of sales	(3,030)		(2,821)		(6,013)		(5,426)
Gross profit	4,721		4,397		9,426		8,650
Operating costs:
Selling, general and administrative expenses	(2,085)		(1,966)		(4,177)		(3,842)
Research and development expenses	(431)		(426)		(872)		(806)
Operating profit	2,205		2,005		4,377		4,002
Nonoperating income (expense):
Other income (expense), net	(87)		97		(107)		237
Interest expense	(51)		(62)		(105)		(120)
Interest income	2		3		3		7
Earnings from continuing operations before income taxes	2,069		2,043		4,168		4,126
Income taxes	(389)		(344)		(763)		(725)
Net earnings from continuing operations	1,680		1,699		3,405		3,401
Earnings from discontinued operations, net of income taxes	—		86		—		86
Net earnings	1,680		1,785		3,405		3,487
Mandatory convertible preferred stock dividends	(22)		(41)		(63)		(82)
Net earnings attributable to common stockholders	$	1,658	$	1,744	$	3,342	$	3,405
Net earnings per common share from continuing operations:
Basic	$	2.28	$	2.32	$	4.63	$	4.65
Diluted	$	2.25	$	2.28	$	4.56	$	4.57
Net earnings per common share from discontinued operations:
Basic	$	—	$	0.12	$	—	$	0.12
Diluted	$	—	$	0.12	$	—	$	0.12
Net earnings per common share:
Basic	$	2.28	$	2.44	$	4.63	$	4.77
Diluted	$	2.25	$	2.40	$	4.56	$	4.68	(a)
Average common stock and common equivalent shares outstanding:
Basic	726.7		714.5		721.5		713.9
Diluted	736.0		736.0		736.8		735.6

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

See the accompanying Notes to the Consolidated Condensed Financial Statements.

2

DANAHER CORPORATION AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME

($ in millions)

(unaudited)

	Three-Month Period Ended				Six-Month Period Ended
	July 1, 2022		July 2, 2021		July 1, 2022		July 2, 2021
Net earnings	$	1,680	$	1,785	$	3,405	$	3,487
Other comprehensive income (loss), net of income taxes:
Foreign currency translation adjustments	(1,442)		408		(1,785)		(514)
Pension and postretirement plan benefit adjustments	7		11		21		21
Cash flow hedge adjustments	66		228		46		186
Total other comprehensive income (loss), net of income taxes	(1,369)		647		(1,718)		(307)
Comprehensive income	$	311	$	2,432	$	1,687	$	3,180

See the accompanying Notes to the Consolidated Condensed Financial Statements.

3

DANAHER CORPORATION AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF STOCKHOLDERS’ EQUITY

($ in millions)

(unaudited)

	Three-Month Period Ended				Six-Month Period Ended
	July 1, 2022		July 2, 2021		July 1, 2022		July 2, 2021
Preferred stock:
Balance, beginning of period	$	3,268	$	3,268	$	3,268	$	3,268
Conversion of Mandatory Convertible Preferred Stock to common stock	(1,600)		—		(1,600)		—
Balance, end of period	$	1,668	$	3,268	$	1,668	$	3,268
Common stock:
Balance, beginning and end of period	$	9	$	9	$	9	$	9
Additional paid-in capital:
Balance, beginning of period	$	10,123	$	9,794	$	10,090	$	9,698
Common stock-based award	130		96		178		158
Common stock issued in connection with Mandatory Convertible Preferred Stock conversions	1,600		—		1,600		—
Common stock issued in connection with LYONs’ conversions, including tax benefit of $10 for the six-month period ended July 2, 2021	—		—		—		34
Change in noncontrolling interests	1		—		(14)		—
Balance, end of period	$	11,854	$	9,890	$	11,854	$	9,890
Retained earnings:
Balance, beginning of period	$	34,332	$	28,670	$	32,827	$	27,159
Net earnings	1,680		1,785		3,405		3,487
Common stock dividends declared	(182)		(150)		(361)		(300)
Mandatory Convertible Preferred Stock dividends declared	(22)		(41)		(63)		(82)
Balance, end of period	$	35,808	$	30,264	$	35,808	$	30,264
Accumulated other comprehensive income (loss):
Balance, beginning of period	$	(1,376)	$	(1,322)	$	(1,027)	$	(368)
Other comprehensive income (loss)	(1,369)		647		(1,718)		(307)
Balance, end of period	$	(2,745)	$	(675)	$	(2,745)	$	(675)
Noncontrolling interests:
Balance, beginning of period	$	6	$	11	$	10	$	11
Change in noncontrolling interests	1		(1)		(3)		(1)
Balance, end of period	$	7	$	10	$	7	$	10
Total stockholders’ equity, end of period	$	46,601	$	42,766	$	46,601	$	42,766

See the accompanying Notes to the Consolidated Condensed Financial Statements.

4

DANAHER CORPORATION AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

($ in millions)

(unaudited)

	Six-Month Period Ended
	July 1, 2022		July 2, 2021
Cash flows from operating activities:
Net earnings	$	3,405	$	3,487
Less: earnings from discontinued operations, net of income taxes	—		86
Net earnings from continuing operations	3,405		3,401
Noncash items:
Depreciation	358		336
Amortization of intangible assets	759		691
Amortization of acquisition-related inventory fair value step-up	—		29
Stock-based compensation expense	181		107
Pretax gain on sale of product lines and investment (gains) losses	122		(215)
Change in trade accounts receivable, net	(145)		(71)
Change in inventories	(668)		(292)
Change in trade accounts payable	(11)		(70)
Change in prepaid expenses and other assets	(99)		143
Change in accrued expenses and other liabilities	66		(68)
Net cash provided by operating activities from continuing operations	3,968		3,991
Cash flows from investing activities:
Cash paid for acquisitions	(77)		(1,065)
Payments for additions to property, plant and equipment	(546)		(556)
Proceeds from sales of property, plant and equipment	9		13
Payments for purchases of investments	(328)		(552)
Proceeds from sales of investments	17		56
Proceeds from sale of product lines	—		26
All other investing activities	22		18
Total cash used in investing activities for continuing operations	(903)		(2,060)
Cash flows from financing activities:
(Payments for) proceeds from the issuance of common stock in connection with stock-based compensation, net	(23)		25
Payment of dividends	(411)		(360)
Net (repayments of) proceeds from borrowings (maturities of 90 days or less)	(669)		13
Net repayments of borrowings (maturities longer than 90 days)	(265)		(279)
All other financing activities	(66)		13
Total cash used in financing activities for continuing operations	(1,434)		(588)
Effect of exchange rate changes on cash and equivalents	(233)		(56)
Net change in cash and equivalents	1,398		1,287
Beginning balance of cash and equivalents	2,586		6,035
Ending balance of cash and equivalents	$	3,984	$	7,322
Supplemental disclosures:
Cash interest payments	$	167	$	150
Cash income tax payments	625		568

See the accompanying Notes to the Consolidated Condensed Financial Statements.

5

DANAHER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(unaudited)

NOTE 1. 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 (“SEC”). In this quarterly report, the terms “Danaher” or the “Company” refer to Danaher Corporation, Danaher Corporation and its consolidated subsidiaries, or the consolidated subsidiaries of Danaher Corporation, as the context requires. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) have been condensed or omitted pursuant to SEC rules and regulations; however, the Company believes that the disclosures are adequate to make the information presented not misleading. The Consolidated Condensed Financial Statements included herein should be read in conjunction with the financial statements as of and for the year ended December 31, 2021 and the Notes thereto included in the Company’s 2021 Annual Report on Form 10-K filed on February 23, 2022 (the “2021 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 July 1, 2022 and December 31, 2021, its results of operations for the three and six-month periods ended July 1, 2022 and July 2, 2021 and its cash flows for each of the six-month periods then ended.

There have been no changes to the Company’s significant accounting policies described in the Company’s 2021 Annual Report that have a material impact on the Company’s Consolidated Condensed Financial Statements and the related Notes. Reclassifications of certain prior year amounts have been made to conform to the current year presentation.

Accounting Standards Recently Adopted—In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No. 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. The ASU includes amendments to the guidance on convertible instruments and the derivative scope exception for contracts in an entity’s own equity and simplifies the accounting for convertible instruments which include beneficial conversion features or cash conversion features by removing certain separation models in Subtopic 470-20. Additionally, the ASU requires entities to use the “if-converted” method when calculating diluted earnings per common share for convertible instruments. On January 1, 2022, the Company adopted the ASU and the ASU did not have a significant impact on the Company’s financial statements.

In November 2021, the FASB issued ASU No. 2021-10, Government Assistance (Topic 832), which requires annual disclosures of transactions with a government that are accounted for by applying a grant or contribution accounting model by analogy. For the Company, these disclosures will initially be required for the Company’s financial statements for the year ending December 31, 2022. These required annual disclosures include information on the nature of transactions and related accounting policies used to account for transactions, detail of the line items on the balance sheet and income statement affected by these transactions, including amounts applicable to each line, and significant terms and conditions of the transactions including commitments and contingencies. On January 1, 2022, the Company adopted the ASU. The Company is in the process of assessing the impact of this ASU and drafting the annual disclosures.

In June 2022, the FASB issued ASU No. 2022-03, Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions. The ASU clarifies the guidance in ASC 820, Fair Value Measurement, related to the measurement of the fair value of an equity security subject to contractual sale restrictions and introduces disclosure requirements related to such equity securities. The Company early adopted the ASU effective July 1, 2022. The impact of the adoption of the ASU was not significant.

Operating Leases—As of both July 1, 2022 and December 31, 2021, operating lease right-of-use assets where the Company was the lessee were approximately $1.0 billion and are included within other long-term assets in the accompanying Consolidated Condensed Balance Sheets.  The associated operating lease liabilities were approximately $1.1 billion as of both July 1, 2022 and December 31, 2021 and are included in accrued expenses and other liabilities and other long-term liabilities.

NOTE 2. ACQUISITIONS

For a description of the Company’s acquisition activity for the year ended December 31, 2021, reference is made to the financial statements as of and for the year ended December 31, 2021 and Note 2 thereto included in the Company’s 2021 Annual Report.

6

The Company continually evaluates potential acquisitions that either strategically fit with the Company’s existing portfolio or expand the Company’s portfolio into a new and attractive business area. The Company has completed a number of acquisitions that have been accounted for as purchases and have resulted in the recognition of goodwill in the Company’s financial statements. This goodwill arises because the purchase prices for these businesses exceed the fair value of acquired identifiable net assets due to a number of factors including the future earnings and cash flow potential of these businesses, the multiple to earnings, cash flow and other factors at which similar businesses have been purchased by other acquirers, the competitive nature of the processes by which the Company acquired the businesses, avoidance of the time and costs which would be required (and the associated risks that would be encountered) to enhance the Company’s existing product offerings to key target markets and enter into new and profitable businesses and the complementary strategic fit and resulting synergies these businesses bring to existing operations.

The Company makes an initial allocation of the purchase price at the date of acquisition based upon its understanding of the fair value of the acquired assets and assumed liabilities. The Company obtains the information used for the purchase price allocation during due diligence and through other sources. In the months after closing, as the Company obtains additional information about these assets and liabilities, including through tangible and intangible asset appraisals, and learns more about the newly acquired business, it is able to refine the estimates of fair value and more accurately allocate the purchase price. The fair values of acquired intangibles are determined based on estimates and assumptions that are deemed reasonable by the Company. Significant assumptions include the discount rates and certain assumptions that form the basis of the forecasted results of the acquired business including earnings before interest, taxes, depreciation and amortization (“EBITDA”), revenue, revenue growth rates, royalty rates and technology obsolescence rates. These assumptions are forward looking and could be affected by future economic and market conditions. The Company engages third-party valuation specialists who review the Company’s critical assumptions and calculations of the fair value of acquired intangible assets in connection with significant acquisitions. Only facts and circumstances that existed as of the acquisition date are considered for subsequent adjustment. The Company is continuing to evaluate certain pre-acquisition contingencies associated with its 2021 and 2022 acquisitions and is also in the process of obtaining valuations of certain acquisition-related assets and liabilities in connection with these acquisitions. The Company will make appropriate adjustments to the purchase price allocation prior to completion of the measurement period, as required.

During the six-month period ended July 1, 2022, the Company acquired two businesses for total consideration of $77 million in cash, net of cash acquired. The businesses acquired complement existing units of the Company’s Life Science and Environmental & Applied Solutions segments. The aggregate annual sales of the two businesses acquired in 2022 at the time of acquisition, in each case based on the company’s revenues for its last completed fiscal year prior to the acquisition, were $7 million.

The following summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition for the six-month period ended July 1, 2022 ($ in millions):

Goodwill	$	44
Other intangible assets, primarily technology and customer relationships	35
Deferred tax liabilities	(4)
Other assets and liabilities, net	2
Net cash consideration	$	77

7

Pro Forma Financial Information

The unaudited pro forma information for the periods set forth below gives effect to the 2021 and 2022 acquisitions as if they had occurred as of January 1, 2021. The pro forma information is presented for informational purposes only and is not necessarily indicative of the results of operations that actually would have been achieved had the acquisitions been consummated as of that time ($ in millions, except per share amounts):

	Three-Month Period Ended				Six-Month Period Ended
	July 1, 2022		July 2, 2021		July 1, 2022		July 2, 2021
Sales	$	7,751	$	7,320	$	15,440	$	14,287
Net earnings from continuing operations	1,679		1,638		3,404		3,265
Diluted net earnings per common share from continuing operations (a)	2.25		2.20		4.56		4.38

(a) Diluted net earnings per common share from continuing operations is calculated by deducting the Mandatory Convertible Preferred Stock (“MCPS”) dividends from net earnings from continuing operations for the anti-dilutive MCPS shares (refer to Note 4 for additional information).

NOTE 3. DISCONTINUED OPERATIONS

On July 2, 2016, the Company completed the separation of its former Test & Measurement segment, Industrial Technologies segment (excluding the product identification businesses) and retail/commercial petroleum business by distributing to Danaher stockholders on a pro rata basis all of the issued and outstanding common stock of Fortive Corporation (“Fortive”), the entity the Company incorporated to hold such businesses. For the three and six-month periods ended July 2, 2021, the Company recorded an income tax benefit of $86 million related to the release of previously provided reserves associated with uncertain tax positions on certain of the Company’s tax returns which were jointly filed with Fortive entities. These reserves were released due to the expiration of statutes of limitations for those returns. This income tax benefit is included in earnings from discontinued operations, net of income taxes in the accompanying Consolidated Condensed Statements of Earnings.

NOTE 4. NET EARNINGS PER COMMON SHARE

Basic net earnings per common share from continuing operations (“EPS”) is calculated by taking net earnings from continuing operations less the MCPS dividends divided by the weighted average number of common shares outstanding for the applicable period. Diluted net EPS from continuing operations is computed by taking net earnings from continuing operations less the MCPS dividends divided by the weighted average number of common shares outstanding increased by the number of additional shares that would have been outstanding had the potentially dilutive common shares been issued and reduced by the number of shares the Company could have repurchased with the proceeds from the issuance of the potentially dilutive shares. For the three-month periods ended July 1, 2022 and July 2, 2021, approximately 2.4 million and 193 thousand options to purchase shares, respectively, were excluded from the diluted EPS from continuing operations calculation and for the six-month periods ended July 1, 2022 and July 2, 2021, approximately 2.4 million and 132 thousand options, respectively, to purchase shares were excluded from the diluted EPS calculation, as the impact of their inclusion would have been anti-dilutive. Basic and diluted EPS are computed independently for each quarter and year-to-date period, and each period involves the use of different weighted-average share count figures. As a result, and after factoring the effect of rounding to the nearest cent per share, the sum of prior quarterly EPS figures may not equal year-to-date EPS.

The impact of the MCPS Series A calculated under the if-converted method was dilutive for both the three and six-month periods ended July 1, 2022 and July 2, 2021, and as such 1.1 million and 6.0 million shares for the three and six-month periods ended July 1, 2022, respectively, and 11.0 million shares, for both the three and six-month periods ended July 2, 2021, underlying the MCPS Series A were included in the calculation of diluted EPS. The related MCPS Series A dividends of $20 million for the six-month period ended July 1, 2022 and $20 million and $40 million for the three and six-month periods ended July 2, 2021, respectively, were excluded from the calculation of net earnings for diluted EPS. On April 15, 2022, all outstanding shares of the MCPS Series A converted into 11.0 million shares of the Company’s common stock. There were no MCPS Series A dividends declared in the second quarter of 2022 prior to their conversion and the MCPS Series A were dilutive for all periods prior to the conversion. Refer to Note 15 for additional information about the MCPS Series A conversion.

The impact of the MCPS Series B calculated under the if-converted method was anti-dilutive for both the three and six-month periods ended July 1, 2022 and July 2, 2021, and as such 8.6 million shares, for both the three and six-month periods underlying the MCPS Series B were excluded from the calculation of diluted EPS and the related MCPS Series B dividends of $22 million and $21 million for the three-month periods, respectively, and $43 million and $42 million for the six-month periods, respectively, were included in the calculation of net earnings for diluted EPS.

8

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

	Three-Month Period Ended				Six-Month Period Ended
	July 1, 2022		July 2, 2021		July 1, 2022		July 2, 2021
Numerator:
Net earnings from continuing operations	$	1,680	$	1,699	$	3,405	$	3,401
MCPS dividends	(22)		(41)		(63)		(82)
Net earnings from continuing operations attributable to common stockholders for Basic EPS	1,658		1,658		3,342		3,319
Adjustment for MCPS dividends for dilutive MCPS	—		20		20		40
Net earnings from continuing operations attributable to common stockholders after assumed conversions for Diluted EPS	$	1,658	$	1,678	$	3,362	$	3,359
Denominator:
Weighted average common shares outstanding used in Basic EPS	726.7		714.5		721.5		713.9
Incremental common shares from:
Assumed exercise of dilutive options and vesting of dilutive RSUs and PSUs	8.2		10.5		9.3		10.6
Assumed conversion of the convertible debentures	—		—		—		0.1
Weighted average MCPS converted shares	1.1		11.0		6.0		11.0
Weighted average common shares outstanding used in Diluted EPS	736.0		736.0		736.8		735.6
Basic EPS from continuing operations	$	2.28	$	2.32	$	4.63	$	4.65
Diluted EPS from continuing operations	$	2.25	$	2.28	$	4.56	$	4.57

9

NOTE 5. REVENUE

The following tables present the Company’s revenues disaggregated by geographical region and revenue type for the three and six-month periods ended July 1, 2022 and July 2, 2021 ($ in millions). Sales taxes and other usage-based taxes collected from customers are excluded from revenue.

	Life Sciences		Diagnostics		Environmental & Applied Solutions		Total
For the Three-Month Period Ended July 1, 2022:
Geographical region:
North America (b)	$	1,576	$	1,235	$	571	$	3,382
Western Europe	972		453		266		1,691
Other developed markets	199		115		32		346
High-growth markets (a)	1,220		758		354		2,332
Total	$	3,967	$	2,561	$	1,223	$	7,751
Revenue type:
Recurring	$	2,872	$	2,301	$	719	$	5,892
Nonrecurring	1,095		260		504		1,859
Total	$	3,967	$	2,561	$	1,223	$	7,751
For the Three-Month Period Ended July 2, 2021:
Geographical region:
North America (b)	$	1,349	$	970	$	497	$	2,816
Western Europe	1,052		443		275		1,770
Other developed markets	209		111		30		350
High-growth markets (a)	1,124		812		346		2,282
Total	$	3,734	$	2,336	$	1,148	$	7,218
Revenue type:
Recurring	$	2,640	$	2,022	$	658	$	5,320
Nonrecurring	1,094		314		490		1,898
Total	$	3,734	$	2,336	$	1,148	$	7,218

10

	Life Sciences		Diagnostics		Environmental & Applied Solutions		Total
For the Six-Month Period Ended July 1, 2022:
Geographical region:
North America (b)	$	3,096	$	2,541	$	1,099	$	6,736
Western Europe	2,007		977		535		3,519
Other developed markets	421		239		64		724
High-growth markets (a)	2,325		1,448		687		4,460
Total	$	7,849	$	5,205	$	2,385	$	15,439
Revenue type:
Recurring	$	5,710	$	4,671	$	1,409	$	11,790
Nonrecurring	2,139		534		976		3,649
Total	$	7,849	$	5,205	$	2,385	$	15,439
For the Six-Month Period Ended July 2, 2021:
Geographical region:
North America (b)	$	2,612	$	1,942	$	989	$	5,543
Western Europe	2,022		858		554		3,434
Other developed markets	434		229		59		722
High-growth markets (a)	2,212		1,485		680		4,377
Total	$	7,280	$	4,514	$	2,282	$	14,076
Revenue type:
Recurring	$	5,169	$	3,924	$	1,306	$	10,399
Nonrecurring	2,111		590		976		3,677
Total	$	7,280	$	4,514	$	2,282	$	14,076

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

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

The Company sells equipment to customers as well as consumables and services, some of which customers purchase on a recurring basis. Consumables sold for use with the equipment sold by the Company are typically critical to the use of the equipment and are typically used on a one-time or limited basis, requiring frequent replacement in the customer’s operating cycle. Examples of these consumables include reagents used in diagnostic tests, chromatography resins used for research and bioprocessing, filters used in filtration, separation and purification processes and cartridges for marking and coding equipment. Additionally, some of the Company’s consumables are used on a standalone basis, such as water treatment solutions. The Company separates its goods and services between those typically sold to a customer on a recurring basis and those typically sold on a nonrecurring basis. Recurring revenue includes revenue from consumables, services and operating-type leases (“OTLs”). Nonrecurring revenue includes sales from equipment and sales-type leases (“STLs”). OTLs and STLs are included in the above revenue amounts. For both the three-month periods ended July 1, 2022 and July 2, 2021, lease revenue was $117 million. For the six-month periods ended July 1, 2022 and July&