WASHINGTON, April 18, 2019 /PRNewswire/ -- Danaher
Corporation (NYSE: DHR) today announced results for the first
quarter 2019. For the quarter ended March
29, 2019, net earnings were $333.8
million, or $0.46 per diluted
share which represents a 41.0% year-over-year decrease from the
comparable 2018 period.
Non-GAAP adjusted diluted net earnings per share were
$1.07 which represents an 8.0%
increase over the comparable 2018 period. For the first quarter
2019, revenues increased 4.0% year-over-year to $4.9 billion, with non-GAAP core revenue growth
of 5.5%.
Operating cash flow for the first quarter 2019 was $703.3 million and non-GAAP free cash flow was
$548.4 million.
For the second quarter 2019, the Company anticipates that
diluted net earnings per share will be in the range of $0.89 to $0.92 and
non-GAAP adjusted diluted net earnings per share will be in the
range of $1.13 to $1.16.
For the full year 2019, the Company now anticipates that diluted
net earnings per share will be in the range of $3.34 to $3.42
versus previous guidance of $3.85 to
$3.95. The Company now expects its
2019 non-GAAP adjusted diluted net earnings per share to be in the
range of $4.72 to $4.80 versus previous guidance of $4.75 to $4.85.
This updated guidance reflects the dilution related to our recent
equity offerings to fund the GE Biopharma acquisition, partially
offset by our first quarter 2019 performance.
Thomas P. Joyce, Jr., President
and Chief Executive Officer, stated, "During the first quarter, we
achieved 5.5% core revenue growth and believe we expanded our
market-leading positions across a number of our businesses.
Combined with high-single digit adjusted earnings per share growth
and good cash flow generation, our performance is a testament to
our team's focused execution and the power of the Danaher Business
System."
Joyce continued, "We are excited about our recently announced
agreement to acquire GE Biopharma and continue to expect the deal
to close in the fourth quarter of this year. The business will be
an excellent complement to our current biologics workflow solutions
and will bring a highly innovative, industry-leading product suite
to our Life Sciences portfolio. We look forward to welcoming this
talented team to Danaher."
Danaher will discuss its results during its quarterly investor
conference call today starting at 8:00 a.m.
ET. The call and an accompanying slide presentation will be
webcast on the "Investors" section of Danaher's website,
www.danaher.com, under the subheading "Events & Presentations."
A replay of the webcast will be available in the same section of
Danaher's website shortly after the conclusion of the presentation
and will remain available until the next quarterly earnings
call.
The conference call can be accessed by dialing 866-503-8675
within the U.S. or by dialing +1 786-815-8792 outside the U.S. a
few minutes before the 8:00 a.m. ET
start and telling the operator that you are dialing in for
Danaher's investor conference call (access code 1492175). A replay
of the conference call will be available shortly after the
conclusion of the call and until April 25,
2019. You can access the replay dial-in information on the
"Investors" section of Danaher's website under the subheading
"Events & Presentations." In addition, presentation materials
relating to Danaher's results have been posted to the "Investors"
section of Danaher's website under the subheading "Quarterly
Earnings."
All results in this release reflect only continuing operations
unless otherwise noted.
ABOUT DANAHER
Danaher is a global science and technology innovator committed
to helping its customers solve complex challenges and improving
quality of life around the world. Its family of world class brands
has leadership positions in the demanding and attractive health
care, environmental and applied end-markets. With more than 20
operating companies, Danaher's globally diverse team of
approximately 71,000 associates is united by a common culture and
operating system, the Danaher Business System, and our Shared
Purpose, Helping Realize Life's Potential. For more
information, please visit www.danaher.com.
NON-GAAP MEASURES
In addition to the financial measures prepared in accordance
with generally accepted accounting principles (GAAP), this earnings
release also contains non-GAAP financial measures. Calculations of
these measures, the reasons why we believe these measures provide
useful information to investors, a reconciliation of these measures
to the most directly comparable GAAP measures and other information
relating to these non-GAAP measures are included in the
supplemental reconciliation schedule attached.
FORWARD-LOOKING STATEMENTS
Statements in this release that are not strictly historical,
including the statements regarding the Company's anticipated
financial performance for the second quarter and full year 2019 and
opportunities and positioning for 2019 and beyond, the anticipated
acquisition of GE Biopharma, the expected timetable for completing
the acquisition, the anticipated impact of the acquisition on
Danaher and any other statements regarding events or developments
that we believe or anticipate will or may occur in the future are
"forward-looking" statements within the meaning of the federal
securities laws. There are a number of important factors that could
cause actual results, developments and business decisions to differ
materially from those suggested or indicated by such
forward-looking statements and you should not place undue reliance
on any such forward-looking statements. These factors include,
among other things, the uncertainty of regulatory approvals with
respect to the GE Biopharma acquisition and the timing or
conditionality thereof, the parties' ability to satisfy the
acquisition agreement conditions and consummate the acquisition of
GE Biopharma on the anticipated timetable and terms or at all,
Danaher's ability to successfully integrate GE Biopharma's
operations and employees with Danaher's existing business, the
ability to realize anticipated financial, tax and operational
synergies and benefits, GE Biopharma's performance and maintenance
of important business relationships, Danaher's ability to complete
the previously-announced Initial Public Offering ("IPO") of its
Dental business on the currently contemplated timeline or at all
and achieve the intended benefits thereof, deterioration of or
instability in the economy, the markets served by us or GE
Biopharma and the financial markets, developments and uncertainties
in U.S. policy stemming from the U.S. administration, such as
changes in U.S. trade and tariff policies and the reaction of other
countries thereto, contractions or growth rates and cyclicality of
markets we serve, competition, our ability to develop and
successfully market new products and technologies and expand into
new markets, the potential for improper conduct by our employees,
agents or business partners, our compliance with applicable laws
and regulations (including regulations relating to medical devices
and the health care industry), the results of our clinical trials
and perceptions thereof, our ability to effectively address cost
reductions and other changes in the health care industry, our
ability to successfully identify and consummate appropriate
acquisitions and strategic investments and successfully complete
divestitures and other dispositions, our ability to integrate the
businesses we acquire and achieve the anticipated benefits of such
acquisitions, contingent liabilities relating to acquisitions,
investments and divestitures (including tax-related and other
contingent liabilities relating to past and future IPOs, split-offs
or spin-offs), security breaches or other disruptions of our
information technology systems or violations of data privacy laws,
the impact of our restructuring activities on our ability to grow,
risks relating to potential impairment of goodwill and other
intangible assets, currency exchange rates, tax audits and changes
in our tax rate and income tax liabilities, changes in tax laws
applicable to multinational companies, litigation and other
contingent liabilities including intellectual property and
environmental, health and safety matters, the rights of
the United States government to
use, disclose and license certain intellectual property we license
if we fail to commercialize it, risks relating to product, service
or software defects, product liability and recalls, risks relating
to product manufacturing, the impact of our debt obligations on our
operations and liquidity (including the impact of the additional
debt Danaher expects to incur to finance the GE Biopharma
acquisition), our relationships with and the performance of our
channel partners, uncertainties relating to collaboration
arrangements with third-parties, commodity costs and surcharges,
our ability to adjust purchases and manufacturing capacity to
reflect market conditions, reliance on sole sources of supply, the
impact of deregulation on demand for our products and services,
labor matters, international economic, political, legal, compliance
and business factors (including the impact of the United Kingdom's decision to leave the EU and
uncertainty relating to the terms and timing of such separation),
disruptions relating to man-made and natural disasters and pension
plan costs. Additional information regarding the factors that may
cause actual results to differ materially from these
forward-looking statements is available in our SEC filings,
including our 2018 Annual Report on Form 10-K and Quarterly Report
on Form 10-Q for the first quarter of 2019. These forward-looking
statements speak only as of the date of this release and except to
the extent required by applicable law, the Company does not assume
any obligation to update or revise any forward-looking statement,
whether as a result of new information, future events and
developments or otherwise.
DANAHER
CORPORATION AND SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF EARNINGS (unaudited)
|
($ and shares in
millions, except per share amounts)
|
|
|
Three-Month Period
Ended
|
|
March 29,
2019
|
|
|
March 30,
2018
|
|
Sales
|
$
|
4,879.9
|
|
|
$
|
4,695.4
|
|
Cost of
sales
|
(2,161.9)
|
|
|
(2,051.8)
|
|
Gross
profit
|
2,718.0
|
|
|
2,643.6
|
|
Operating
costs:
|
|
|
|
Selling, general and
administrative expenses
|
(1,683.4)
|
|
|
(1,601.9)
|
|
Research and
development expenses
|
(310.8)
|
|
|
(298.7)
|
|
Operating
profit
|
723.8
|
|
|
743.0
|
|
Nonoperating income
(expense):
|
|
|
|
Other income,
net
|
5.2
|
|
|
7.8
|
|
Interest
expense
|
(23.3)
|
|
|
(39.1)
|
|
Interest
income
|
15.7
|
|
|
1.4
|
|
Earnings before
income taxes
|
721.4
|
|
|
713.1
|
|
Income
taxes
|
(387.6)
|
|
|
(146.5)
|
|
Net
earnings
|
333.8
|
|
|
566.6
|
|
Mandatory convertible
preferred stock dividends
|
(6.5)
|
|
|
—
|
|
Net earnings
attributable to common stockholders
|
$
|
327.3
|
|
|
$
|
566.6
|
|
Net earnings per
common share:
|
|
|
|
Basic
|
$
|
0.46
|
|
|
$
|
0.81
|
|
Diluted
|
$
|
0.46
|
|
|
$
|
0.80
|
|
Average common stock
and common equivalent shares outstanding:
|
|
|
|
Basic
|
707.6
|
|
|
698.6
|
|
Diluted
|
718.5
|
|
|
709.5
|
|
|
This information is
presented for reference only. A complete copy of Danaher's
Form 10-Q financial statements is available on the Company's
website (www.danaher.com).
|
DANAHER
CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL
MEASURES
|
|
Adjusted Diluted
Net Earnings Per Share
|
|
|
Three-Month Period
Ended
|
|
March 29, 2019
1
|
|
March 30,
2018
|
Diluted Net
Earnings Per Share (GAAP)
|
$
|
0.46
|
|
|
$
|
0.80
|
|
Pretax amortization
of acquisition-related intangible assets A
|
0.25
|
|
|
0.24
|
|
Pretax separation and
duplicative general and administrative costs related to the
Dental
business separation and initial public offering
B
|
0.01
|
|
|
—
|
|
Pretax transaction
costs deemed significant and integration preparation costs related
to the
anticipated GE Biopharma acquisition C
|
0.02
|
|
|
—
|
|
Provision for a legal
contingency D
|
0.05
|
|
|
—
|
|
Tax effect of all
adjustments reflected above E
|
(0.06)
|
|
|
(0.05)
|
|
Discrete tax
adjustments and other tax-related adjustments
F
|
0.34
|
|
|
—
|
|
Adjusted Diluted
Net Earnings Per Share (Non-GAAP)
|
$
|
1.07
|
|
|
$
|
0.99
|
|
|
1
|
Each of the per share
adjustments was calculated assuming the Mandatory Convertible
Preferred Stock ("MCPS")
had been converted.
|
Forecasted
Adjusted Diluted Net Earnings Per Share 2
|
|
Three-Month Period
Ending
June 28, 2019
3
|
|
Year
Ending
December 31, 2019
3
|
|
Low
End
|
|
High
End
|
|
Low
End
|
|
High
End
|
Forecasted Diluted
Net Earnings Per Share (GAAP)
|
$
|
0.89
|
|
|
$
|
0.92
|
|
|
$
|
3.34
|
|
|
$
|
3.42
|
|
Anticipated pretax
amortization of acquisition-related
intangible assets A
|
0.24
|
|
|
0.24
|
|
|
0.97
|
|
|
0.97
|
|
Anticipated pretax
separation and duplicative general
and administrative costs related to the Dental business
separation and initial public offering B
|
0.02
|
|
|
0.02
|
|
|
0.10
|
|
|
0.10
|
|
Anticipated pretax
transaction costs deemed significant
and integration preparation costs related to the
anticipated GE Biopharma acquisition C
|
0.02
|
|
|
0.02
|
|
|
0.12
|
|
|
0.12
|
|
Provision for a legal
contingency D
|
—
|
|
|
—
|
|
|
0.05
|
|
|
0.05
|
|
Tax effect of all
adjustments reflected above E
|
(0.05)
|
|
|
(0.05)
|
|
|
(0.23)
|
|
|
(0.23)
|
|
Discrete tax
adjustments and other tax-related
adjustments F
|
—
|
|
|
—
|
|
|
0.33
|
|
|
0.33
|
|
Anticipated dividends
on the MCPS assuming "if-
converted" method G
|
0.01
|
|
|
0.01
|
|
|
0.04
|
|
|
0.04
|
|
Forecasted
Adjusted Diluted Net Earnings Per Share
(Non-GAAP)
|
$
|
1.13
|
|
|
$
|
1.16
|
|
|
$
|
4.72
|
|
|
$
|
4.80
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2
|
These forward-looking
estimates do not reflect future gains and charges that are
inherently difficult to predict and estimate due to their
unknown timing, effect and/or significance, such as certain future
gains or losses on the sale of investments, acquisition or
divestiture-
related gains or charges, discrete tax items and legal contingency
provisions.
|
3
|
Each of the per share
adjustments was calculated assuming MCPS had been converted.
Certain Adjusted Earnings Per Share components
impact are different between the three-month period ending March
29, 2019 and the year ending December 31, 2019 since the MCPS
were
issued in March 2019 and have less of a dilutive impact on the
three-month period than the full year.
|
See the accompanying
Notes to Reconciliation of GAAP to Non-GAAP Financial
Measures
|
DANAHER
CORPORATION RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL
MEASURES (continued)
|
|
Core Revenue
4
|
|
% Change
Three-
Month Period Ended
March 29, 2019 vs.
Comparable 2018 Period
|
Total sales growth
(GAAP)
|
4.0
|
%
|
Less the impact
of:
|
|
Acquisitions
|
(2.5)
|
%
|
Currency exchange
rates
|
4.0
|
%
|
Core revenue growth
(non-GAAP)
|
5.5
|
%
|
|
|
4
|
We
use the term "core revenue" to refer to GAAP revenue excluding (1)
sales from acquired businesses recorded prior to the first
anniversary of the acquisition less the amount of sales
attributable to divested businesses or product lines not considered
discontinued operations ("acquisitions") and (2) the impact of
currency translation. The portion of GAAP revenue
attributable to currency translation is calculated as the
difference between (a) the period-to-period change in revenue
(excluding acquisition sales) and (b) the period-to-period change
in revenue (excluding acquisition sales) after applying current
period foreign exchange rates to the prior year period. We
use the term "core revenue growth" to refer to the measure of
comparing current period core revenue with the corresponding period
of the prior year.
|
Reconciliation of
Operating Cash Flows (GAAP) to Free Cash Flow
(Non-GAAP)
|
|
|
|
|
|
|
Three-Month Period
Ended
|
|
|
($ in
millions)
|
March 29,
2019
|
|
March 30,
2018
|
|
%
Decrease
|
Net Operating Cash
Used in Investing Activities
(GAAP)
|
$
|
(498.5)
|
|
|
$
|
(122.7)
|
|
|
|
Net Operating Cash
Provided by (Used in) Financing Activities
(GAAP)
|
2,877.8
|
|
|
(321.7)
|
|
|
|
|
|
|
|
|
|
Net Operating Cash
Provided by Operating Activities (GAAP)
|
$
|
703.3
|
|
|
$
|
828.9
|
|
|
~(15.0)%
|
Less: payments for
additions to property, plant & equipment (capital
expenditures) (GAAP)
|
(155.7)
|
|
|
(137.9)
|
|
|
|
Plus: proceeds from
sales of property, plant & equipment (capital
disposals) (GAAP)
|
0.8
|
|
|
0.4
|
|
|
|
Free Cash Flow
(Non-GAAP)
|
$
|
548.4
|
|
|
$
|
691.4
|
|
|
~(20.5)%
|
|
|
|
|
|
|
Net Earnings
(GAAP)
|
$
|
333.8
|
|
|
$
|
566.6
|
|
|
|
Free Cash Flow to
Net Earnings Conversion Ratio (Non-GAAP)
|
1.64
|
|
|
1.22
|
|
|
|
Adjusted Diluted
Shares Outstanding
|
|
|
|
|
|
|
|
|
|
Forecasted
|
|
Three-Month Period
Ended
|
|
Year
Ended
|
|
Three-Month
Period Ending
|
|
Year
Ending
|
(shares in
millions)
|
March 29,
2019
|
|
March 30,
2018
|
|
June 29,
2018
|
|
December 31,
2018
|
|
June 28,
2019
|
|
December 31,
2019
|
Average common stock
and
common equivalent shares
outstanding - diluted
|
718.5
|
|
|
709.5
|
|
|
709.5
|
|
|
710.2
|
|
|
730.1
|
|
|
728.8
|
|
Converted shares
5
|
4.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12.9
|
|
|
10.8
|
|
Adjusted average
common
stock and common equivalent
shares outstanding - diluted
|
722.8
|
|
|
709.5
|
|
|
709.5
|
|
|
710.2
|
|
|
743.0
|
|
|
739.6
|
|
DANAHER
CORPORATION RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL
MEASURES (continued)
|
|
5
|
The number of
converted shares assumes the conversion of all 1.65 million shares
of common stock underlying the MCPS applying the "if-converted"
method of accounting and using an average 20 trading-day trailing
volume weighted average price ("VWAP") of $128.09 as of March 29,
2019.
|
DANAHER
CORPORATION RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL
MEASURES (continued)
|
|
Notes to
Reconciliation of GAAP to Non-GAAP Financial
Measures
|
|
A
|
Amortization of
acquisition-related intangible assets in the following historical
and forecasted periods ($ in millions) (only the pretax amounts set
forth below are reflected in the amortization line item
above):
|
|
|
|
|
|
Forecasted
|
|
Three-Month Period
Ended
|
|
Three-Month Period
Ending
|
|
Year
Ending
|
|
March 29,
2019
|
|
March 30,
2018
|
|
June 28,
2019
|
|
December 31,
2019
|
Pretax
|
$
|
179.9
|
|
|
$
|
172.3
|
|
|
$
|
178.3
|
|
|
$
|
714.8
|
|
After-tax
|
144.3
|
|
|
137.0
|
|
|
142.6
|
|
|
572.2
|
|
|
|
B
|
Pretax costs incurred
(or anticipated to be incurred, as applicable) in the three-month
period ended March 29, 2019, ($11 million pretax as reported in
this line item, $10 million after-tax), the three-month period
ending June 28, 2019 ($17 million pretax as reported in this line
item, $15 million after-tax) and the year ending December 31, 2019
($76 million pretax as reported in this line item, $66 million
after-tax) related to preparation for the anticipated Dental
business separation and initial public offering primarily related
to professional fees for legal, tax, finance and information
technology services and duplicative general and administrative
costs related to establishing a public company infrastructure for
the business including incremental salaries, benefits and rent
expense.
|
|
|
C
|
Pretax costs incurred
(or anticipated to be incurred, as applicable) for transaction
costs deemed significant and integration preparation costs in the
three-month period ended March 29, 2019, ($15 million pretax as
reported in this line item, $13 million after-tax), the three-month
period ending June 28, 2019 ($15 million pretax as reported in this
line item, $14 million after-tax) and the year ending December 31,
2019 ($90 million pretax as reported in this line item, $81 million
after-tax) related to the anticipated GE Biopharma
acquisition. The Company deems acquisition-related
transaction costs incurred in a given period to be significant
(generally relating to the Company's larger acquisitions) if it
determines that such costs exceed the range of acquisition-related
transaction costs typical for Danaher in a given period.
|
|
|
D
|
Provision for
potential costs and liabilities in connection with a legal
contingency ($36 million pretax as presented in this line item, $29
million after-tax) recorded in the three-month period ended March
29, 2019.
|
|
|
E
|
This line item
reflects the aggregate tax effect of all nontax adjustments
reflected in the preceding line items of the table. In
addition, the footnote above indicates the after-tax amount of each
individual adjustment item. Danaher estimates the tax effect
of each adjustment item by applying Danaher's overall estimated
effective tax rate to the pretax amount, unless the nature of the
item and/or the tax jurisdiction in which the item has been
recorded requires application of a specific tax rate or tax
treatment, in which case the tax effect of such item is estimated
by applying such specific tax rate or tax treatment. The MCPS
are not tax deductible and therefore the tax effect of the
adjustments does not include any tax impact of the MCPS
dividends.
|
|
|
F
|
Discrete tax
adjustments and other tax-related adjustments for the three-month
period ended March 29, 2019 include the impact of net discrete tax
charges of $242 million ($0.34 per diluted share) related primarily
to changes in estimates associated with prior period uncertain tax
positions and audit settlements, net of the release of valuation
allowances associated with certain foreign tax credits and tax
benefits resulting from a change in law and excess tax benefits
from stock-based compensation realized in the three-month period
ended March 29, 2019 in excess of anticipated levels. The
Company anticipates excess tax benefits from stock compensation of
approximately $7 million per quarter and therefore excludes
benefits in excess of this amount in the calculation of Adjusted
Diluted Net Earnings Per Share.
|
|
|
G
|
In March 2019, the
Company issued $1.65 billion in aggregate liquidation preference of
our 4.75% MCPS. Dividends on the MCPS are payable on a
cumulative basis at an annual rate of 4.75% on the liquidation
preference of $1,000 per share. Unless earlier converted,
each share of MCPS will automatically convert on April 15, 2022
into between 6.6368 and 8.1300 shares of Danaher's common stock,
subject to further anti-dilution adjustments. The number of
shares of Danaher's common stock issuable on conversion of the MCPS
will be determined based on the VWAP per share of our common stock
over the 20 consecutive trading day period beginning on, and
including, the 21st scheduled trading day immediately before April
15, 2022. For the purposes of calculating adjusted earnings
per share, the Company has excluded the anticipated MCPS dividends
and assumed the "if converted" method of share dilution (the
incremental shares of common stock deemed outstanding applying the
"if-converted" method of calculating share dilution are referred to
as the "Converted Shares.") The Company believes that using
the "if-converted" method provides additional insight to investors
on the potential impact of the MCPS once they are converted into
common stock no later than April 15, 2022.
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Statement Regarding Non-GAAP Measures
Each of the non-GAAP measures set forth above should be
considered in addition to, and not as a replacement for or superior
to, the comparable GAAP measure, and may not be comparable to
similarly titled measures reported by other companies.
Management believes that these measures provide useful information
to investors by offering additional ways of viewing Danaher
Corporation's ("Danaher" or the "Company") results that, when
reconciled to the corresponding GAAP measure, help our investors
to:
- with respect to Adjusted Diluted Net Earnings Per Share,
understand the long-term profitability trends of our business and
compare our profitability to prior and future periods and to our
peers;
- with respect to core revenue, identify underlying growth trends
in our business and compare our revenue performance with prior and
future periods and to our peers; and
- with respect to free cash flow (the "FCF Measure"), understand
Danaher's ability to generate cash without external financings,
strengthen its balance sheet, invest in its business and grow its
business through acquisitions and other strategic opportunities
(although a limitation of free cash flow is that it does not take
into account the Company's debt service requirements and other
non-discretionary expenditures, and as a result the entire free
cash flow amount is not necessarily available for discretionary
expenditures).
Management uses these non-GAAP measures to measure the Company's
operating and financial performance, and uses core revenue and
non-GAAP measures similar to Adjusted Diluted Net Earnings Per
Share and the FCF Measure in the Company's executive compensation
program.
The items excluded from the non-GAAP measures set forth above
have been excluded for the following reasons:
- With respect to Adjusted Diluted Net Earnings Per Share:
-
- We exclude the amortization of acquisition-related intangible
assets because the amount and timing of such charges are
significantly impacted by the timing, size, number and nature of
the acquisitions we consummate. While we have a history of
significant acquisition activity we do not acquire businesses on a
predictable cycle, and the amount of an acquisition's purchase
price allocated to intangible assets and related amortization term
are unique to each acquisition and can vary significantly from
acquisition to acquisition. Exclusion of this amortization expense
facilitates more consistent comparisons of operating results over
time between our newly acquired and long-held businesses, and with
both acquisitive and non-acquisitive peer companies. We believe
however that it is important for investors to understand that such
intangible assets contribute to revenue generation and that
intangible asset amortization related to past acquisitions will
recur in future periods until such intangible assets have been
fully amortized.
- We exclude costs incurred pursuant to discrete restructuring
plans that are fundamentally different (in terms of the size,
strategic nature and planning requirements, as well as the
inconsistent frequency, of such plans) from the ongoing
productivity improvements that result from application of the
Danaher Business System. Because these restructuring plans are
incremental to the core activities that arise in the ordinary
course of our business and we believe are not indicative of
Danaher's ongoing operating costs in a given period, we exclude
these costs from the calculation of Adjusted Diluted Net Earnings
Per Share to facilitate a more consistent comparison of operating
results over time.
- With respect to the other items excluded from Adjusted Diluted
Net Earnings Per Share, we exclude these items because they are of
a nature and/or size that occur with inconsistent frequency, occur
for reasons that may be unrelated to Danaher's commercial
performance during the period and/or we believe that such items may
obscure underlying business trends and make comparisons of
long-term performance difficult. For example, the first quarter
2019 legal contingency charges excluded from Adjusted Earnings Per
Share were excluded because legal contingencies of this nature and
amount are atypical for our businesses, infrequent and not
representative of a trend in our underlying business.
- With respect to core revenue, (1) we exclude the impact of
currency translation because it is not under management's control,
is subject to volatility and can obscure underlying business
trends, and (2) we exclude the effect of acquisitions and divested
product lines because the timing, size, number and nature of such
transactions can vary significantly from period-to-period and
between us and our peers, which we believe may obscure underlying
business trends and make comparisons of long-term performance
difficult.
- With respect to the FCF Measure, we exclude payments for
additions to property, plant and equipment (net of the proceeds
from capital disposals) to demonstrate the amount of operating cash
flow for the period that remains after accounting for the Company's
capital expenditure requirements.
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SOURCE Danaher Corporation