Edgar Filing: DANAHER CORP /DE/

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Accelerated filer

Non-accelerated filer

¨ (Do not check if a smaller reporting company)

Smaller reporting company

DHR-2014.6.27-10Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

________________________________________________________

FORM 10-Q

________________________________________________________

(Mark One)



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

For the quarterly period ended June 27, 2014



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

For the transition period from to

Commission File Number: 1-8089

DANAHER CORPORATION

(Exact name of registrant as specified in its charter)



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

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

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

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files). Yes ý No ¨

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

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

The number of shares of common stock outstanding at July 11, 2014 was 700,684,075.

DANAHER CORPORATION

INDEX

FORM 10-Q



		Page
PART I -	FINANCIAL INFORMATION

Item 1.	Financial Statements

	Consolidated Condensed Balance Sheets	1

	Consolidated Condensed Statements of Earnings	2

	Consolidated Condensed Statements of Comprehensive Income	3

	Consolidated Condensed Statement 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	19

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	34

Item 4.	Controls and Procedures	34

Item 5.	Other Information	35

PART II -	OTHER INFORMATION

Item 1A.	Risk Factors	35

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	35

Item 6.	Exhibits	36

	Signatures	37

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DANAHER CORPORATION AND SUBSIDIARIES

CONSOLIDATED CONDENSED BALANCE SHEETS

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

(unaudited)



	June 27, 2014		December 31, 2013
ASSETS
Current Assets:
Cash and equivalents	$	3,321.1	$	3,115.2
Trade accounts receivable, net	3,631.8		3,451.6
Inventories:
Finished goods	942.8		885.9
Work in process	302.1		287.0
Raw materials	649.3		610.6
Total inventories	1,894.2		1,783.5
Prepaid expenses and other current assets	660.2		763.4
Total current assets	9,507.3		9,113.7
Property, plant and equipment, net of accumulated depreciation of $2,524.3 and $2,299.5, respectively	2,232.1		2,211.3
Other assets	1,145.2		1,061.3
Goodwill	16,398.4		16,038.2
Other intangible assets, net	6,369.1		6,247.7
Total assets	$	35,652.1	$	34,672.2
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Notes payable and current portion of long-term debt	$	49.0	$	62.3
Trade accounts payable	1,734.8		1,778.2
Accrued expenses and other liabilities	2,622.9		2,686.9
Total current liabilities	4,406.7		4,527.4
Other long-term liabilities	4,436.5		4,256.7
Long-term debt	3,020.0		3,436.7
Stockholders’ Equity:
Common stock - $0.01 par value	7.9		7.9
Additional paid-in capital	4,285.4		4,157.6
Retained earnings	19,121.4		18,005.3
Accumulated other comprehensive income	305.8		214.5
Total Danaher stockholders’ equity	23,720.5		22,385.3
Non-controlling interests	68.4		66.1
Total stockholders’ equity	23,788.9		22,451.4
Total liabilities and stockholders’ equity	$	35,652.1	$	34,672.2

See the accompanying Notes to the Consolidated Condensed Financial Statements.

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DANAHER CORPORATION AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS

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

(unaudited)



	Three Months Ended						Six Months Ended
	June 27, 2014			June 28, 2013			June 27, 2014			June 28, 2013
Sales	$	4,963.6		$	4,737.5		$	9,626.3		$	9,182.2
Cost of sales	(2,343.4		)	(2,242.0		)	(4,553.2		)	(4,361.0		)
Gross profit	2,620.2			2,495.5			5,073.1			4,821.2
Operating costs:
Selling, general and administrative expenses	(1,394.5		)	(1,339.7		)	(2,745.1		)	(2,638.1		)
Research and development expenses	(336.4		)	(312.2		)	(649.8		)	(608.6		)
Operating profit	889.3			843.6			1,678.2			1,574.5
Non-operating income (expense):
Other income	19.2			—			19.2			229.8
Interest expense	(33.2		)	(39.4		)	(65.7		)	(78.6		)
Interest income	3.7			1.6			8.6			2.5
Earnings before income taxes	879.0			805.8			1,640.3			1,728.2
Income taxes	(202.6		)	(189.0		)	(384.2		)	(419.5		)
Net earnings	$	676.4		$	616.8		$	1,256.1		$	1,308.7
Net earnings per share:
Basic	$	0.96		$	0.89		$	1.79		$	1.89
Diluted	$	0.95		$	0.87		$	1.76		$	1.85
Average common stock and common equivalent shares outstanding:
Basic	701.2			695.2			700.6			693.6
Diluted	715.6			709.8			715.2			709.1

See the accompanying Notes to the Consolidated Condensed Financial Statements.

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DANAHER CORPORATION AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME

($ in millions)

(unaudited)



	Three Months Ended					Six Months Ended
	June 27, 2014		June 28, 2013			June 27, 2014		June 28, 2013
Net earnings	$	676.4	$	616.8		$	1,256.1	$	1,308.7
Other comprehensive income (loss), net of income taxes:
Foreign currency translation adjustments	59.1		(129.1		)	51.9		(385.6		)
Pension and post-retirement plan benefit adjustments	3.5		5.5			2.5		11.0
Unrealized gain on available-for-sale securities	24.6		13.0			36.9		55.2
Total other comprehensive income (loss), net of income taxes	87.2		(110.6		)	91.3		(319.4		)
Comprehensive income	$	763.6	$	506.2		$	1,347.4	$	989.3

See the accompanying Notes to the Consolidated Condensed Financial Statements.

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DANAHER CORPORATION AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENT OF STOCKHOLDERS’ EQUITY

($ and shares in millions)

(unaudited)



	Common Stock			Additional Paid-in Capital		Retained Earnings			Accumulated Other Comprehensive Income		Non- Controlling Interests
	Shares	Amount		Additional Paid-in Capital		Retained Earnings			Accumulated Other Comprehensive Income		Non- Controlling Interests
Balance, December 31, 2013	785.7	$	7.9	$	4,157.6	$	18,005.3		$	214.5	$	66.1
Net earnings for the period	—	—		—		1,256.1			—		—
Other comprehensive income	—	—		—		—			91.3		—
Dividends declared	—	—		—		(140.0		)	—		—
Common stock-based award activity	2.5	—		120.6		—			—		—
Common stock issued in connection with LYONs’ conversions including tax benefit of $1.9	0.2	—		7.2		—			—		—
Change in non-controlling interests	—	—		—		—			—		2.3
Balance, June 27, 2014	788.4	$	7.9	$	4,285.4	$	19,121.4		$	305.8	$	68.4

See the accompanying Notes to the Consolidated Condensed Financial Statements.

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DANAHER CORPORATION AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

($ in millions)

(unaudited)



	Six Months Ended
	June 27, 2014			June 28, 2013
Cash flows from operating activities:
Net earnings	$	1,256.1		$	1,308.7
Non-cash items:
Depreciation	272.6			257.0
Amortization	187.5			179.4
Stock-based compensation expense	55.0			56.1
Dividends received related to earnings of unconsolidated joint venture	—			66.6
Pre-tax gain on sales of investments	(19.2		)	(229.8		)
Change in trade accounts receivable, net	(158.7		)	(28.9		)
Change in inventories	(58.8		)	(112.5		)
Change in trade accounts payable	(51.0		)	82.0
Change in prepaid expenses and other assets	81.4			113.4
Change in accrued expenses and other liabilities	(62.0		)	(156.3		)
Net cash provided by operating activities	1,502.9			1,535.7
Cash flows from investing activities:
Cash paid for acquisitions	(606.7		)	(322.6		)
Payments for additions to property, plant and equipment	(278.6		)	(252.5		)
Proceeds from sales of investments	25.0			692.0
All other investing activities	11.2			(5.9		)
Net cash (used in) provided by investing activities	(849.1		)	111.0
Cash flows from financing activities:
Proceeds from the issuance of common stock	60.9			110.0
Payment of dividends	(87.4		)	(17.3		)
Net repayments of borrowings (maturities of 90 days or less)	(13.4		)	(768.0		)
Repayments of borrowings (maturities longer than 90 days)	(403.6		)	(310.4		)
Net cash used in financing activities	(443.5		)	(985.7		)
Effect of exchange rate changes on cash and equivalents	(4.4		)	(14.8		)
Net change in cash and equivalents	205.9			646.2
Beginning balance of cash and equivalents	3,115.2			1,678.7
Ending balance of cash and equivalents	$	3,321.1		$	2,324.9
Supplemental disclosures:
Cash interest payments	$	60.3		$	60.7
Cash income tax payments	$	238.3		$	182.7

See the accompanying Notes to the Consolidated Condensed Financial Statements.

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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 (the “Company”) without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. 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 condensed financial statements included herein should be read in conjunction with the financial statements as of and for the year ended December 31, 2013 and the Notes thereto included in the Company’s 2013 Annual Report on Form 10-K.

In the opinion of the Company, the accompanying financial statements contain all adjustments (consisting of only normal recurring accruals) necessary to present fairly the financial position of the Company as of June 27, 2014 and December 31, 2013, and its results of operations for the three and six months ended June 27, 2014 and June 28, 2013 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 and Post-Retirement Plan Benefit Adjustments				Unrealized Gain on Available-For- Sale Securities				Total
For the Three Months Ended June 27, 2014:
Balance, March 28, 2014	$	406.0	$	(367.7	)		$	180.3			$	218.6
Other comprehensive income (loss) before reclassifications:
Increase	59.1		—				58.7				117.8
Income tax expense	—		—				(22.1		)		(22.1		)
Other comprehensive income (loss) before reclassifications, net of income taxes	59.1		—				36.6				95.7
Amounts reclassified from accumulated other comprehensive income (loss):
Increase (decrease)	—		5.4			(1)	(19.2		)	(2)	(13.8		)
Income tax (expense) benefit	—		(1.9		)		7.2				5.3
Amounts reclassified from accumulated other comprehensive income (loss), net of income taxes	—		3.5				(12.0		)		(8.5		)
Net current period other comprehensive income (loss), net of income taxes	59.1		3.5				24.6				87.2
Balance, June 27, 2014	$	465.1	$	(364.2	)		$	204.9			$	305.8

(1) This accumulated other comprehensive income (loss) component is included in the computation of net periodic pension cost (refer to Note 6 for additional details).
(2) Included in other income in the accompanying Consolidated Condensed Statement of Earnings (refer to Note 9 for additional details).

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	Foreign Currency Translation Adjustments			Pension and Post-Retirement Plan Benefit Adjustments				Unrealized Gain on Available-For- Sale Securities				Total
For the Three Months Ended June 28, 2013:
Balance, March 29, 2013	$	218.8		$	(650.2	)		$	163.4			$	(268.0	)
Other comprehensive income (loss) before reclassifications:
(Decrease) increase	(129.1		)	—				20.9				(108.2		)
Income tax expense	—			—				(7.9		)		(7.9		)
Other comprehensive income (loss) before reclassifications, net of income taxes	(129.1		)	—				13.0				(116.1		)
Amounts reclassified from accumulated other comprehensive income (loss):
Increase	—			8.4			(1)	—				8.4
Income tax expense	—			(2.9		)		—				(2.9		)
Amounts reclassified from accumulated other comprehensive income (loss), net of income taxes	—			5.5				—				5.5
Net current period other comprehensive income (loss), net of income taxes	(129.1		)	5.5				13.0				(110.6		)
Balance, June 28, 2013	$	89.7		$	(644.7	)		$	176.4			$	(378.6	)

For the Six Months Ended June 27, 2014:
Balance, December 31, 2013	$	413.2		$	(366.7	)		$	168.0			$	214.5
Other comprehensive income (loss) before reclassifications:
Increase (decrease)	51.9			(5.5		)		78.3				124.7
Income tax benefit (expense)	—			1.1				(29.4		)		(28.3		)
Other comprehensive income (loss) before reclassifications, net of income taxes	51.9			(4.4		)		48.9				96.4
Amounts reclassified from accumulated other comprehensive income (loss):
Increase (decrease)	—			10.7			(1)	(19.2		)	(2)	(8.5		)
Income tax (expense) benefit	—			(3.8		)		7.2				3.4
Amounts reclassified from accumulated other comprehensive income (loss), net of income taxes	—			6.9				(12.0		)		(5.1		)
Net current period other comprehensive income (loss), net of income taxes	51.9			2.5				36.9				91.3
Balance, June 27, 2014	$	465.1		$	(364.2	)		$	204.9			$	305.8

For the Six Months Ended June 28, 2013:
Balance, December 31, 2012	$	475.3		$	(655.7	)		$	121.2			$	(59.2	)
Other comprehensive income (loss) before reclassifications:
(Decrease) increase	(385.6		)	—				88.4				(297.2		)
Income tax expense	—			—				(33.2		)		(33.2		)
Other comprehensive income (loss) before reclassifications, net of income taxes	(385.6		)	—				55.2				(330.4		)
Amounts reclassified from accumulated other comprehensive income (loss):
Increase	—			16.8			(1)	—				16.8
Income tax expense	—			(5.8		)		—				(5.8		)
Amounts reclassified from accumulated other comprehensive income (loss), net of income taxes	—			11.0				—				11.0
Net current period other comprehensive income (loss), net of income taxes	(385.6		)	11.0				55.2				(319.4		)
Balance, June 28, 2013	$	89.7		$	(644.7	)		$	176.4			$	(378.6	)

(1) This accumulated other comprehensive income (loss) component is included in the computation of net periodic pension cost (refer to Note 6 for additional details).
(2) Included in other income in the accompanying Consolidated Condensed Statement of Earnings (refer to Note 9 for additional details).

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New Accounting Standards - In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers (Topic 606), which impacts virtually all aspects of an entity's revenue recognition. The core principle of the new standard 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. The standard is effective for annual reporting periods beginning after December 15, 2016. Management has not yet completed its assessment of the impact of the new standard, including possible transition alternatives, on the Company's financial statements.

In April 2014, the FASB issued ASU No. 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity, which changes the criteria for determining which disposals can be presented as discontinued operations and modifies the related disclosure requirements. To qualify as a discontinued operation the standard requires a disposal to represent a strategic shift that has, or will have, a major effect on an entity's operations and financial results. The standard also expands the disclosures for discontinued operations and requires new disclosures related to individually material dispositions that do not qualify as discontinued operations. The standard is effective prospectively for fiscal years beginning after December 15, 2014, with early adoption permitted. The implementation of this standard is not expected to have a material impact on the Company's financial statements, but will impact the reporting of any future dispositions.

NOTE 2. ACQUISITIONS

For a description of the Company’s acquisition activity for the year ended December 31, 2013, reference is made to the financial statements as of and for the year ended December 31, 2013 and Note 2 thereto included in the Company’s 2013 Annual Report on Form 10-K.

The Company continually evaluates potential acquisitions that either strategically fit with the Company’s existing portfolio or expand the Company’s portfolio into a new and attractive business area. The Company has completed a number of acquisitions that have been accounted for as purchases and have resulted in the recognition of goodwill in the Company’s financial statements. This goodwill arises because the purchase prices for these businesses reflect a number of factors including the future earnings and cash flow potential of these businesses, the multiple to earnings, cash flow and other factors at which similar businesses have been purchased by other acquirers, the competitive nature of the processes by which the Company acquired the businesses and the complementary strategic fit and resulting synergies these businesses bring to existing operations.

The Company makes an initial allocation of the purchase price at the date of acquisition based upon its understanding of the fair value of the acquired assets and assumed liabilities. The Company obtains this information during due diligence and through other sources. In the months after closing, as the Company obtains additional information about these assets and liabilities, including through tangible and intangible asset appraisals, and learns more about the newly acquired business, it is able to refine the estimates of fair value and more accurately allocate the purchase price. Only items identified as of the acquisition date are considered for subsequent adjustment. The Company is continuing to evaluate certain pre-acquisition contingencies associated with certain of its 2014 and 2013 acquisitions and is also in the process of obtaining valuations of acquired intangible assets and certain acquisition related 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. The Company evaluated whether any adjustments to the prior periods' purchase price allocations were material and concluded no retrospective adjustment to prior period financial statements was required.

During the first six months of 2014, the Company acquired fourteen businesses for total consideration of $607 million in cash, net of cash acquired. The businesses acquired complement existing units of the Life Sciences & Diagnostics, Environmental, Dental and Test & Measurement segments. The aggregate annual sales of these fourteen 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 $250 million. The Company preliminarily recorded an aggregate of $330 million of goodwill related to these acquisitions.

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The following summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition for all acquisitions consummated during the six months ended June 27, 2014 ($ in millions):



Trade accounts receivable	$	21.3
Inventories	34.9
Property, plant and equipment	15.9
Goodwill	330.4
Other intangible assets, primarily customer relationships, trade names and technology	256.0
In-process research and development	60.6
Trade accounts payable	(7.4		)
Other assets and liabilities, net	(102.4		)
Assumed debt	(2.6		)
Net cash consideration	$	606.7

Pro Forma Financial Information

The unaudited pro forma information for the periods set forth below gives effect to the 2014 and 2013 acquisitions as if they had occurred as of January 1, 2013. 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 Months Ended				Six Months Ended
	June 27, 2014		June 28, 2013		June 27, 2014		June 28, 2013
Sales	$	5,002.2	$	4,848.2	$	9,716.8	$	9,432.1
Net earnings	675.5		620.3		1,254.5		1,312.7
Diluted net earnings per share	0.95		0.88		1.76		1.85

NOTE 3. GOODWILL

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



Balance, December 31, 2013	$	16,038.2
Attributable to 2014 acquisitions	330.4
Foreign currency translation & other	29.8
Balance, June 27, 2014	$	16,398.4

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



	June 27, 2014		December 31, 2013
Test & Measurement	$	3,327.4	$	3,266.9
Environmental	2,035.9		1,851.4
Life Sciences & Diagnostics	6,382.3		6,304.8
Dental	2,236.8		2,196.6
Industrial Technologies	2,416.0		2,418.5
	$	16,398.4	$	16,038.2

The Company has not identified any "triggering" events which indicate a potential impairment of goodwill in 2014.

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NOTE 4. FAIR VALUE MEASUREMENTS

Accounting standards define fair value based on an exit price model, establish a framework for measuring fair value where the Company’s assets and liabilities are required to be carried at fair value and provide for certain disclosures related to the valuation methods used within a valuation hierarchy as established within the accounting standards. This hierarchy prioritizes the inputs into three broad levels as follows. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets in markets that are not active, or other observable characteristics for the asset or liability, including interest rates, yield curves and credit risks, or inputs that are derived principally from, or corroborated by, observable market data through correlation. Level 3 inputs are unobservable inputs based on the Company’s assumptions. A financial asset or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement in its entirety.

A summary of financial assets and liabilities that are measured at fair value on a recurring basis were as follows ($ in millions):



	Quoted Prices in Active Market (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)	Total
June 27, 2014:
Assets:
Available-for-sale securities	$	438.5	—		—	$	438.5
Liabilities:
Deferred compensation plans	—		$	74.7	—	74.7
December 31, 2013:
Assets:
Available-for-sale securities	$	385.2	—		—	$	385.2
Liabilities:
Deferred compensation plans	—		$	70.1	—	70.1

Available-for-sale securities are measured at fair value using quoted market prices in an active market and are included in other long-term assets in the accompanying Consolidated Condensed Balance Sheets.

The Company has established nonqualified deferred compensation programs that permit officers, directors and certain management employees to defer a portion of their compensation, on a pre-tax basis, until their termination of employment (or board service, as applicable). All amounts deferred under such plans are unfunded, unsecured obligations of the Company and are presented as a component of the Company’s compensation and benefits accrual included in other long-term liabilities in the accompanying Consolidated Condensed Balance Sheets. Participants may choose among alternative earning rates for the amounts they defer, which are primarily based on investment options within the Company’s 401(k) program (except that the earnings rates for amounts deferred by the Company’s directors and amounts contributed unilaterally by the Company are entirely based on changes in the value of the Company’s common stock). Changes in the deferred compensation liability under these programs are recognized based on changes in the fair value of the participants’ accounts, which are based on the applicable earnings rates.

On April 2, 2014, the Company terminated the Japanese Yen/U.S. dollar currency swap agreement that had been acquired in connection with a prior acquisition. The fair value of the currency swap as of the termination date was not significant and the fair value had not changed significantly during 2014. During the three and six months ended June 28, 2013, the Company recorded pre-tax income of $3 million and $11 million, respectively, related to changes in the fair value of this currency swap. The currency swap did not qualify for hedge accounting, and as a result, changes in the fair value are reflected in selling, general and administrative expenses in the accompanying Consolidated Condensed Statements of Earnings each reporting period.

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Fair Value of Financial Instruments

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



	June 27, 2014				December 31, 2013
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Assets:
Available-for-sale securities	$	438.5	$	438.5	$	385.2	$	385.2
Liabilities:
Short-term borrowings	49.0		49.0		62.3		62.3
Long-term borrowings	3,020.0		3,513.5		3,436.7		3,877.6

As of June 27, 2014 and December 31, 2013, available-for-sale securities and short and long-term borrowings were categorized as Level 1.

The fair value of long-term borrowings was based on quoted market prices. The difference between the fair value and the carrying amounts of long-term borrowings (other than the Company’s Liquid Yield Option Notes due 2021 (the “LYONs”)) is attributable to changes in market interest rates and/or the Company’s credit ratings subsequent to the incurrence of the borrowing. In the case of the LYONs, differences in the fair value from the carrying value are attributable to changes in the price of the Company’s common stock due to the LYONs' conversion features. The fair values of short-term borrowings, as well as cash and cash equivalents, trade accounts receivable, net and trade accounts payable approximate their carrying amounts due to the short-term maturities of these instruments.

NOTE 5. FINANCING

As of June 27, 2014, the Company was in compliance with all of its debt covenants. The components of the Company’s debt were as follows ($ in millions):



	June 27, 2014		December 31, 2013
Commercial paper	$	450.0	$	450.0
1.3% senior notes due 2014	—		400.0
2.3% senior notes due 2016	500.0		500.0
5.625% senior notes due 2018	500.0		500.0
5.4% senior notes due 2019	750.0		750.0
3.9% senior notes due 2021	600.0		600.0
Zero-coupon LYONs due 2021	150.7		154.1
Other	118.3		144.9
Subtotal	3,069.0		3,499.0
Less currently payable	49.0		62.3
Long-term debt	$	3,020.0	$	3,436.7

For a full description of the Company’s debt financing, reference is made to Note 10 of the Company’s financial statements as of and for the year ended December 31, 2013 included in the Company’s 2013 Annual Report on Form 10-K.

The Company repaid the $400 million principal amount of 1.3% senior notes due 2014 upon maturity in June 2014.

During the six months ended June 27, 2014, holders of certain of the Company’s LYONs converted such LYONs into an aggregate of approximately 0.2 million shares of the Company’s common stock, par value $0.01 per share. The Company’s deferred tax liability associated with the book and tax basis difference in the converted LYONs of approximately $2 million was transferred to additional paid-in capital as a result of the conversions.

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The Company satisfies any short-term liquidity needs that are not met through operating cash flow and available cash primarily through issuances of commercial paper under its U.S. and Euro commercial paper programs. As of June 27, 2014, borrowings outstanding under the Company’s U.S. commercial paper program had a weighted average annual interest rate of 0.1% and a weighted average remaining maturity of approximately twelve days. There was no commercial paper outstanding under the Euro commercial paper program as of June 27, 2014. As of June 27, 2014, the Company has classified its borrowings outstanding under the commercial paper program as long-term debt in the accompanying Consolidated Condensed Balance Sheet as the Company had the intent and ability, as supported by availability under the Credit Facility referenced below, to refinance these borrowings for at least one year from the balance sheet date.

Credit support for the commercial paper program is provided by a $2.5 billion unsecured multi-year revolving credit facility with a syndicate of banks that expires on July 15, 2016 (the “Credit Facility”). The Credit Facility can also be used for working capital and other general corporate purposes. As of June 27, 2014, no borrowings were outstanding under the Credit Facility and the Company was in compliance with all covenants under the facility. In addition to the Credit Facility, the Company has entered into reimbursement agreements with various commercial banks to support the issuance of letters of credit.

NOTE 6. DEFINED BENEFIT PLANS

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



U.S. Pension Benefits
	Three Months Ended						Six Months Ended
	June 27, 2014			June 28, 2013			June 27, 2014			June 28, 2013
Service cost	$	1.5		$	1.4		$	3.0		$	2.8
Interest cost	26.5			23.7			53.0			47.4
Expected return on plan assets	(32.3		)	(31.4		)	(64.6		)	(62.8		)
Amortization of actuarial loss	4.6			7.0			9.2			14.0
Net periodic pension cost	$	0.3		$	0.7		$	0.6		$	1.4



Non-U.S. Pension Benefits
	Three Months Ended						Six Months Ended
	June 27, 2014			June 28, 2013			June 27, 2014			June 28, 2013
Service cost	$	8.0		$	6.7		$	16.0		$	13.2
Interest cost	11.8			10.4			23.5			20.8
Expected return on plan assets	(10.6		)	(8.5		)	(21.1		)	(17.1		)
Amortization of actuarial loss	1.8			2.0			3.5			4.0
Amortization of prior service credit	—			(0.1		)	—			(0.2		)
Settlement losses recognized	—			—			—			0.6
Net periodic pension cost	$	11.0		$	10.5		$	21.9		$	21.3

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



	Three Months Ended						Six Months Ended
	June 27, 2014			June 28, 2013			June 27, 2014			June 28, 2013
Service cost	$	0.3		$	0.4		$	0.6		$	0.8
Interest cost	2.1			1.9			4.2			4.0
Amortization of prior service credit	(1.0		)	(1.7		)	(2.0		)	(3.3		)
Amortization of actuarial loss	—			0.4			—			0.8
Net periodic benefit cost	$	1.4		$	1.0		$	2.8		$	2.3

Net periodic pension and benefit costs are included in cost of sales and selling, general and administrative expenses in the accompanying Consolidated Condensed Statements of Earnings.

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Employer Contributions

During 2014, the Company’s cash contribution requirements for its U.S. and non-U.S. defined benefit pension plans are expected to be approximately $50 million and $55 million, respectively. The ultimate amounts to be contributed depend upon, among other things, legal requirements, underlying asset returns, the plan’s funded status, the anticipated tax deductibility of the contribution, local practices, market conditions, interest rates and other factors.

NOTE 7. INCOME TAXES

The Company’s effective tax rate for the three and six months ended June 27, 2014 was 23.0% and 23.4%, respectively, as compared to 23.5% and 24.3% for the three and six months ended June 28, 2013, respectively.

The Company's effective tax rate for 2014 and 2013 differs from the U.S. federal statutory rate of 35.0% due principally to the Company’s earnings outside the United States that are indefinitely reinvested and taxed at rates lower than the U.S. federal statutory rate. The effective tax rate for the three and six months ended June 27, 2014 includes tax benefits in foreign tax jurisdictions for release of valuation allowances and expiration of statutes of limitation, partially offset by audit settlements in various tax jurisdictions.

Tax authorities in Denmark and Germany have raised significant issues related to the deductibility and taxability of interest accrued by certain of the Company's subsidiaries. On December 10, 2013, the Company received assessments from the Danish tax authority (“SKAT”) totaling approximately DKK 1.1 billion (approximately $205 million based on exchange rates as of June 27, 2014) imposing withholding tax and interest thereon relating to interest accrued in Denmark on borrowings from certain of the Company's subsidiaries for the years 2004-2009. If the SKAT claims are successful, it is likely that the Company would be assessed additional amounts through June 2014 totaling approximately DKK 825 million (approximately $150 million based on exchange rates as of June 27, 2014) as well as future interest on the disputed withholding tax for subsequent periods prior to such a determination. Discussions with the German tax authorities are ongoing and final assessments have not been issued.

Management believes the positions the Company has taken in both Denmark and Germany are in accordance with the relevant tax laws and intends to vigorously defend its positions, including contesting the SKAT assessment; however, the ultimate resolution of these matters is uncertain, could take many years, and individually or in the aggregate could result in a material adverse impact to the Company's financial statements, including its effective tax rate.

NOTE 8. STOCK TRANSACTIONS AND STOCK-BASED COMPENSATION

Neither the Company nor any “affiliated purchaser” repurchased any shares of Company common stock during the three or six months ended June 27, 2014. On July 16, 2013, the Company's Board of Directors approved a repurchase program (the “Repurchase Program”) authorizing the repurchase of up to 20 million shares of the Company's common stock from time to time on the open market or in privately negotiated transactions. As of June 27, 2014, 20 million shares remained available for repurchase pursuant to the Repurchase Program.

For a full description of the Company’s stock-based compensation programs, reference is made to Note 18 of the Company’s financial statements as of and for the year ended December 31, 2013 included in the Company’s 2013 Annual Report on Form 10-K. As of June 27, 2014, approximately 27 million shares of the Company’s common stock were reserved for issuance under the 2007 Stock Incentive Plan.

The following summarizes the assumptions used in the Black-Scholes Merton option pricing model ("Black-Scholes") to value options granted during the six months ended June 27, 2014:



Risk-free interest rate	1.68% - 2.38%
Weighted average volatility	22.4	%
Dividend yield	0.5	%
Expected years until exercise	5.5 - 8.0

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The following summarizes the components of the Company’s stock-based compensation expense ($ in millions):



	Three Months Ended						Six Months Ended
	June 27, 2014			June 28, 2013			June 27, 2014			June 28, 2013
RSUs:
Pre-tax compensation expense	$	15.9		$	16.8		$	33.8		$	32.3
Income tax benefit	(4.4		)	(5.2		)	(9.6		)	(9.8		)
RSU expense, net of income taxes	$	11.5		$	11.6		$	24.2		$	22.5
Stock options:
Pre-tax compensation expense	$	10.1		$	11.5		$	21.2		$	23.8
Income tax benefit	(2.9		)	(3.5		)	(6.3		)	(7.3		)
Stock option expense, net of income taxes	$	7.2		$	8.0		$	14.9		$	16.5
Total stock-based compensation:
Pre-tax compensation expense	$	26.0		$	28.3		$	55.0		$	56.1
Income tax benefit	(7.3		)	(8.7		)	(15.9		)	(17.1		)
Total stock-based compensation expense, net of income taxes	$	18.7		$	19.6		$	39.1		$	39.0

Stock-based compensation has been recognized as a component of selling, general and administrative expenses in the accompanying Consolidated Condensed Statements of Earnings. As of June 27, 2014, $147 million of total unrecognized compensation cost related to RSUs is expected to be recognized over a weighted average period of approximately three years. As of June 27, 2014, $129 million of total unrecognized compensation cost related to stock options is expected to be recognized over a weighted average period of approximately three years. Both amounts will be adjusted for any future changes in estimated forfeitures.

The following summarizes option activity under the Company’s stock plans (in millions, except exercise price and number of years):



	Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in Years)	Aggregate Intrinsic Value
Outstanding as of December 31, 2013	25.0		$	42.93
Granted	1.9		76.04
Exercised	(1.7	)	33.98
Cancelled/forfeited	(0.3	)	54.67
Outstanding as of June 27, 2014	24.9		$	45.90	6	$	828.1
Vested and Expected to Vest as of June 27, 2014 ⁽¹⁾	23.3		$	44.54	6	$	807.6
Vested as of June 27, 2014	13.3		$	35.66	4	$	580.6


(1)	The “Expected to Vest” options are the net unvested options that remain after applying the forfeiture rate assumption to total unvested options.

The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between the Company’s closing stock price on the last trading day of the second quarter of 2014 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on June 27, 2014. The amount of aggregate intrinsic value will change based on the price of the Company’s common stock.

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The aggregate intrinsic value of options exercised during the six months ended June 27, 2014 and June 28, 2013 was $71 million and $96 million, respectively. Exercise of options during the first six months of 2014 and 2013 resulted in cash receipts of $56 million and $96 million, respectively. The Company realized a tax benefit of $11 million and $21 million in the three and six months ended June 27, 2014 related to the exercise of employee stock options. The net income tax benefit in excess of the expense recorded for financial reporting purposes (the “excess tax benefit”) has been recorded as an increase to additional paid-in capital and is reflected as a financing cash inflow in the accompanying Consolidated Condensed Statements of Cash Flows.

The following summarizes information on unvested RSUs activity (in millions, except grant-date fair value):



	Number of RSUs		Weighted Average Grant-Date Fair Value
Unvested as of December 31, 2013	5.2		$	51.04
Granted	0.8		76.02
Vested	(0.8	)	37.48
Forfeited	(0.1	)	53.70
Unvested as of June 27, 2014	5.1		$	57.18

The Company realized a tax benefit of $1 million and $21 million in the three and six months ended June 27, 2014, respectively, related to the vesting of RSUs. The excess tax benefit attributable to RSUs has been recorded as an increase to additional paid-in capital and is reflected as a financing cash inflow in the accompanying Consolidated Condensed Statements of Cash Flows.

In connection with the exercise of certain stock options and the vesting of RSUs previously issued by the Company, a number of shares sufficient to fund statutory minimum tax withholding requirements has been withheld from the total shares issued or released to the award holder (though under the terms of the applicable plan, the shares are considered to have been issued and are not added back to the pool of shares available for grant). During the first six months of 2014, 316 thousand shares with an aggregate value of $24 million were withheld to satisfy the requirement. The withholding is treated as a reduction in additional paid-in capital in the accompanying Consolidated Condensed Statement of Stockholders’ Equity.

NOTE 9. OTHER INCOME

In June 2014, the Company received $25 million cash proceeds from the sale of marketable equity securities and recorded a pre-tax gain of $19 million ($12 million after-tax or $0.02 per diluted share).

On July 4, 2010, the Company entered into a joint venture with Cooper Industries, plc (“Cooper”), combining certain of the Company's hand tool businesses with Cooper's Tools business to form a new entity called Apex Tool Group, LLC (“Apex”). Each of Cooper and the Company owned a 50% interest in Apex and had an equal number of representatives on Apex's Board of Directors and neither joint venture partner controlled the significant operating and financing activities of Apex. The Company accounted for its investment in the joint venture based on the equity method of accounting.

In February 2013, the Company and Cooper sold Apex to an unrelated third party for approximately $1.6 billion. The Company received $797 million from the sale, consisting of cash of $759 million (including $67 million of dividends received prior to closing) and a note receivable of $38 million. The Company recognized a pre-tax gain of $230 million ($144 million after-tax or $0.20 per diluted share) in its first quarter 2013 results in connection with this transaction. The Company has collected the majority of the note receivable. The Company's share of the 2013 earnings generated by Apex prior to the closing of the sale was insignificant. Subsequent to the sale of its investment in Apex, the Company has no continuing involvement in Apex's operations.

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NOTE 10. RESTRUCTURING AND OTHER RELATED CHARGES

During 2013, the Company recorded pre-tax restructuring and other related charges totaling $107 million. These costs were incurred to position the Company to provide superior products and services to its customers in a cost efficient manner and taking into consideration broad economic uncertainties.

For a full description of the Company’s restructuring activities, reference is made to Note 15 of the Company’s financial statements as of and for the year ended December 31, 2013 included in the Company’s 2013 Annual Report on Form 10-K.

Substantially all restructuring activities initiated in 2013 were completed by December 31, 2013 and the Company expects substantially all cash payments associated with remaining termination benefits to be paid during 2014. As of June 27, 2014, restructuring charges of $27 million related to restructuring activities initiated in 2013 were included in accrued expenses and other liabilities in the accompanying Consolidated Condensed Balance Sheet.

NOTE 11. CONTINGENCIES

For a description of the Company’s litigation and contingencies, reference is made to Note 17 of the Company’s financial statements as of and for the year ended December 31, 2013 included in the Company’s 2013 Annual Report on Form 10-K.

The Company generally accrues estimated warranty costs at the time of sale. In general, manufactured products are warranted against defects in material and workmanship when properly used for their intended purpose, installed correctly and appropriately maintained. Warranty period terms depend on the nature of the product and range from ninety days up to the life of the product. The amount of the accrued warranty liability is determined based on historical information such as past experience, product failure rates or number of units repaired, estimated cost of material and labor, and in certain instances estimated property damage. The accrued warranty liability is reviewed on a quarterly basis and may be adjusted as additional information regarding expected warranty costs becomes known. The following is a rollforward of the Company’s accrued warranty liability ($ in millions):



Balance, December 31, 2013	$	141.2
Accruals for warranties issued during the period	69.2
Settlements made	(68.1		)
Additions due to acquisitions	0.7
Effect of foreign currency translation	(0.1		)
Balance, June 27, 2014	$	142.9

NOTE 12. NET EARNINGS PER SHARE

Basic net earnings per share (“EPS”) is calculated by dividing net earnings by the weighted average number of common shares outstanding for the applicable period. Diluted net EPS is computed based on the weighted average number of common shares outstanding increased by the number of additional shares that would have been outstanding had the potentially dilutive common shares been issued and reduced by the number of shares the Company could have repurchased with the proceeds from the issuance of the potentially dilutive shares. For the three and six months ended June 27, 2014, approximately 1 million options to purchase shares were not included in the diluted earnings per share calculation as the impact of their inclusion would have been anti-dilutive. There were no anti-dilutive options for the three and six months ended June 28, 2013.

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



	Net Earnings (Numerator)		Shares (Denominator)	Per Share Amount
For the Three Months Ended June 27, 2014:
Basic EPS	$	676.4	701.2	$	0.96
Adjustment for interest on convertible debentures	1.0		—
Incremental shares from assumed exercise of dilutive options and vesting of dilutive RSUs	—		9.2
Incremental shares from assumed conversion of the convertible debentures	—		5.2
Diluted EPS	$	677.4	715.6	$	0.95

For the Three Months Ended June 28, 2013:
Basic EPS	$	616.8	695.2	$	0.89
Adjustment for interest on convertible debentures	0.9		—
Incremental shares from assumed exercise of dilutive options and vesting of dilutive RSUs	—		8.3
Incremental shares from assumed conversion of the convertible debentures	—		6.3
Diluted EPS	$	617.7	709.8	$	0.87

For the Six Months Ended June 27, 2014:
Basic EPS	$	1,256.1	700.6	$	1.79
Adjustment for interest on convertible debentures	1.7		—
Incremental shares from assumed exercise of dilutive options and vesting of dilutive RSUs	—		9.4
Incremental shares from assumed conversion of the convertible debentures	—		5.2
Diluted EPS	$	1,257.8	715.2	$	1.76

For the Six Months Ended June 28, 2013:
Basic EPS	$	1,308.7	693.6	$	1.89
Adjustment for interest on convertible debentures	2.0		—
Incremental shares from assumed exercise of dilutive options and vesting of dilutive RSUs	—		8.5
Incremental shares from assumed conversion of the convertible debentures	—		7.0
Diluted EPS	$	1,310.7	709.1	$	1.85

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NOTE 13. SEGMENT INFORMATION

The Company operates and reports its results in five separate business segments consisting of the Test & Measurement, Environmental, Life Sciences & Diagnostics, Dental and Industrial Technologies segments. There has been no material change in total assets or liabilities by segment since December 31, 2013. Segment results are shown below ($ in millions):



	Three Months Ended						Six Months Ended
Sales:	June 27, 2014			June 28, 2013			June 27, 2014			June 28, 2013
Test & Measurement	$	856.5		$	855.0		$	1,727.5		$	1,710.4
Environmental	876.0			826.8			1,644.7			1,552.1
Life Sciences & Diagnostics	1,790.0			1,674.3			3,449.6			3,241.7
Dental	528.1			514.7			1,037.8			994.5
Industrial Technologies	913.0			866.7			1,766.7			1,683.5
Total	$	4,963.6		$	4,737.5		$	9,626.3		$	9,182.2

Operating Profit:
Test & Measurement	$	157.8		$	178.4		$	350.5		$	365.7
Environmental	183.8			178.9			329.4			314.0
Life Sciences & Diagnostics	282.7			240.7			502.4			440.0
Dental	77.9			78.8			153.4			141.7
Industrial Technologies	217.5			204.1			409.2			375.0
Other	(30.4		)	(37.3		)	(66.7		)	(61.9		)
Total	$	889.3		$	843.6		$	1,678.2		$	1,574.5

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is designed to provide a reader of Danaher Corporation’s (“Danaher,” the “Company,” “we,” “us” or “our”) financial statements with a narrative from the perspective of Company management. The Company’s MD&A is divided into four main sections:


•	Information Relating to Forward-Looking Statements


•	Overview


•	Results of Operations


•	Liquidity and Capital Resources

You should read this discussion along with the Company’s MD&A and audited financial statements as of and for the year ended December 31, 2013 and Notes thereto, included in the Company’s 2013 Annual Report on Form 10-K, and the Company's Consolidated Condensed Financial Statements and related Notes as of and for the three and six months ended June 27, 2014.

INFORMATION RELATING TO FORWARD-LOOKING STATEMENTS

Certain statements included or incorporated by reference in this quarterly report, in other documents we file with or furnish to the Securities and Exchange Commission ("SEC"), in our press releases, webcasts, conference calls, materials delivered to shareholders and other communications, are “forward-looking statements” within the meaning of the United States federal securities laws. All statements other than historical factual information are forward-looking statements, including without limitation statements regarding: projections of revenue, expenses, profit, profit margins, tax rates, tax provisions, cash flows, pension and benefit obligations and funding requirements, our liquidity position or other projected financial measures; management’s plans and strategies for future operations, including statements relating to anticipated operating performance, cost reductions, restructuring activities, new product and service developments, competitive strengths or market position, acquisitions, divestitures, strategic opportunities, securities offerings, stock repurchases, dividends and executive compensation; growth, declines and other trends in markets we sell into; new or modified laws, regulations and accounting pronouncements; outstanding claims, legal proceedings, tax audits and assessments and other contingent liabilities; foreign currency exchange rates and fluctuations in those rates; general economic and capital markets conditions; the timing of any of the foregoing; assumptions underlying any of the foregoing; and any other statements that address events or developments that Danaher intends or believes will or may occur in the future. Terminology such as “believe,” “anticipate,” “should,” “could,” “intend,” “plan,” “expect,” “estimate,” “project,” “target,” “may,” “possible,” “potential,” “forecast” and “positioned” and similar references to future periods are intended to identify forward-looking statements, although not all forward-looking statements are accompanied by such words.

Forward-looking statements are based on assumptions and assessments made by our management in light of their experience and perceptions of historical trends, current conditions, expected future developments and other factors they believe to be appropriate. Forward-looking statements are not guarantees of future performance and actual results may differ materially from the results, developments and business decisions contemplated by our forward-looking statements. Accordingly, you should not place undue reliance on any such forward-looking statements. Important factors that could cause actual results to differ materially from those envisaged in the forward-looking statements include the following:


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


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


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


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


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


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

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•	Any inability to consummate acquisitions at our historical rate and at appropriate prices could negatively impact our growth rate and stock price.


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


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


•	Divestitures could negatively impact our business, and contingent liabilities from businesses that we have sold could adversely affect our financial statements.


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


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


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


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


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


•	Foreign currency exchange rates may adversely affect our financial statements.


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


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


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


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


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


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


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


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


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

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


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


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


•	International economic, political, legal, compliance and business factors could negatively affect our financial statements and in particular geopolitical uncertainties relating to Russia could impact the Company’s growth in Russia.


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


•	A significant disruption in, or breach in security of, our information technology systems could adversely affect our business.


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

See Part I – Item 1A of the Company’s 2013 Annual Report on Form 10-K for a further discussion regarding reasons that actual results may differ materially from the results, developments and business decisions contemplated by our forward-looking statements. Forward-looking statements speak only as of the date of the report, document, press release, webcast, call, materials or other communication in which they are made. We do not assume any obligation to update or revise any forward-looking statement, whether as a result of new information, future events and developments or otherwise.

OVERVIEW

General

As a result of the Company’s geographic and industry diversity, the Company faces a variety of opportunities and challenges, including rapid technological development (particularly with respect to computing, 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 defines high-growth markets as developing markets of the world experiencing rapid growth in gross domestic product and infrastructure which includes Eastern Europe, the Middle East, Africa, Latin America and Asia with the exception of Japan and Australia. The Company 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, services and software with higher gross profit margins, expand and improve the effectiveness of the Company’s sales force, continue to reduce costs and improve operating efficiency and quality, and effectively address the demands of an increasingly regulated environment. The Company is making significant investments, organically and through acquisitions, to address the rapid pace of technological change in its served markets and to globalize its manufacturing, research and development and customer-facing resources (particularly in high-growth markets) in order to be responsive to the Company’s customers throughout the world and improve the efficiency of the Company’s operations.

Business Performance and Outlook

While differences exist among the Company’s businesses, on an overall basis, demand for the Company’s products and services increased during the second quarter of 2014 as compared to the comparable period of 2013 resulting in aggregate year-over-year sales growth from existing businesses of 3.0%. In addition, the Company's continued investments in sales growth initiatives and other business-specific factors discussed below contributed to year-over-year sales growth. Geographically, year-over-year sales growth rates from existing businesses during the second quarter of 2014 were led primarily by the high-growth markets. Sales from existing businesses in high-growth markets grew at a high-single digit rate in the second quarter of 2014 as compared to the comparable period of 2013 and represented approximately 27% of the Company's total sales in the second quarter of 2014. Sales from existing businesses in developed markets grew at a low-single digit rate in the second quarter of 2014 as compared to the comparable period of 2013 due primarily to growth in North America and Europe. The

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Company expects overall market growth to continue but remains cautious about challenges due to macro-economic and geopolitical uncertainties and monetary and fiscal policies of countries where we do business. While individual businesses will vary, the Company expects sales from existing businesses to continue to grow on a year-over-year basis during the second half of 2014 at a level in line with that experienced in the first half of 2014.

Acquisitions

Currency Exchange Rates

On a year-over-year basis, currency exchange rates positively impacted reported sales for the three and six month periods ended June 27, 2014 by approximately 0.5% compared to exchange rate levels during the comparable periods of 2013. If the currency exchange rates in effect as of June 27, 2014 were to prevail throughout the remainder of 2014, currency exchange rates would positively impact the Company’s estimated full-year 2014 sales by approximately 0.5% on a year-over-year basis. Any weakening of the U.S. dollar against other major currencies would positively impact the Company’s sales and results of operations, and any strengthening of the U.S. dollar against other major currencies would adversely impact the Company's sales and results of operations for the remainder of the year.

RESULTS OF OPERATIONS

Consolidated sales for the three months ended June 27, 2014 increased 5.0% compared to the three months ended June 28, 2013. Sales from existing businesses contributed 3.0% growth, and sales from acquired businesses contributed 1.5% growth on a year-over-year basis. Currency translation increased reported sales by 0.5% on a year-over-year basis.

Consolidated sales for the six months ended June 27, 2014 increased 5.0% compared to the six months ended June 28, 2013. Sales from existing businesses contributed 3.0% growth, and sales from acquired businesses contributed 1.5% growth on a year-over-year basis. Currency translation increased reported sales by 0.5% on a year-over-year basis.

In this report, references to sales from existing businesses refers to sales calculated according to generally accepted accounting principles in the United States (“GAAP”) but excluding (1) sales from acquired businesses and (2) the impact of currency translation. References to sales or operating profit attributable to acquisitions or acquired businesses refer to GAAP sales or operating profit, as applicable, from acquired businesses recorded prior to the first anniversary of the acquisition less the impact from the divestiture of a product line, the sales from which (prior to the divestiture) were included in sales from acquired businesses. The portion of revenue attributable to currency translation is calculated as the difference between (a) the period-to-period change in revenue (excluding sales from acquired businesses) and (b) the period-to-period change in revenue (excluding sales from acquired businesses) after applying current period foreign exchange rates to the prior year period. Sales from existing businesses 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 sales from existing businesses provides useful information to investors by helping identify underlying growth trends in our business and facilitating easier comparisons of our revenue performance with our performance in prior and future periods and to our peers. The Company excludes the effect of currency translation from sales from existing businesses 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 related items because the nature, size and number of acquisitions 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. References to sales volume refer to the impact of both price and unit sales.

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Operating profit margins were 17.9% for the three months ended June 27, 2014 as compared to 17.8% in the comparable period of 2013. The following factors impacted year-over-year operating profit margin comparisons.

2014 vs. 2013 operating profit margin comparisons were favorably impacted by:


•	Higher 2014 sales volumes and incremental year-over-year cost savings associated with the restructuring actions and continuing productivity improvement initiatives taken in 2013, net of incremental year-over-year costs associated with various new product development, sales and marketing growth investments - 45 basis points

2014 vs. 2013 operating profit margin comparisons were unfavorably impacted by:


•	The incremental net dilutive effect in 2014 of acquired businesses - 35 basis points

Operating profit margins were 17.4% for the six months ended June 27, 2014 as compared to 17.1% in the comparable period of 2013. The following factors impacted year-over-year operating profit margin comparisons.

2014 vs. 2013 operating profit margin comparisons were favorably impacted by:


•	Higher 2014 sales volumes and incremental year-over-year cost savings associated with the restructuring actions and continuing productivity improvement initiatives taken in 2013, net of incremental year-over-year costs associated with various new product development, sales and marketing growth investments - 70 basis points

2014 vs. 2013 operating profit margin comparisons were unfavorably impacted by:


•	The incremental net dilutive effect in 2014 of acquired businesses - 40 basis points

Business Segments

The following table summarizes sales by business segment for each of the periods indicated ($ in millions):



	Three Months Ended				Six Months Ended
	June 27, 2014		June 28, 2013		June 27, 2014		June 28, 2013
Test & Measurement	$	856.5	$	855.0	$	1,727.5	$	1,710.4
Environmental	876.0		826.8		1,644.7		1,552.1
Life Sciences & Diagnostics	1,790.0		1,674.3		3,449.6		3,241.7
Dental	528.1		514.7		1,037.8		994.5
Industrial Technologies	913.0		866.7		1,766.7		1,683.5
Total	$	4,963.6	$	4,737.5	$	9,626.3	$	9,182.2

TEST & MEASUREMENT

The Company’s Test & Measurement segment is a leading global provider of electronic measurement instruments, professional test tools, thermal imaging and calibration equipment used in electrical, industrial, electronic and calibration applications. Danaher offers test, measurement and monitoring products that are used in electronic design, manufacturing and advanced technology development; network monitoring, management and optimization tools; and security solutions for communications and enterprise networks. Customers for these products and services include manufacturers of electronic instruments; service, installation and maintenance professionals; manufacturers who design, develop, manufacture and deploy network equipment; and service providers who implement, maintain and manage communications networks and services. Also included in the Test & Measurement segment are the Company’s mobile tool and wheel service businesses.

Test & Measurement Selected Financial Data ($ in millions):



	Three Months Ended						Six Months Ended
	June 27, 2014			June 28, 2013			June 27, 2014			June 28, 2013
Sales	$	856.5		$	855.0		$	1,727.5		$	1,710.4
Operating profit	157.8			178.4			350.5			365.7
Depreciation and amortization	33.9			33.5			67.1			67.3
Operating profit as a % of sales	18.4		%	20.9		%	20.3		%	21.4		%
Depreciation and amortization as a % of sales	4.0		%	3.9		%	3.9		%	3.9		%

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Components of Sales Growth	% Change Three Months Ended June 27, 2014 vs. Comparable 2013 Period		% Change Six Months Ended June 27, 2014 vs. Comparable 2013 Period
Existing businesses	(2.0	)%	(0.5	)%
Acquisitions	1.5	%	1.5	%
Currency exchange rates	0.5	%	—	%
Total	—	%	1.0	%

Year-over-year price increases in the segment contributed 0.5% to sales growth during both the three and six month periods ended June 27, 2014 and are reflected as a component of the change in sales from existing businesses. On an overall basis, sales from existing businesses in the segment’s mobile tool and wheel service businesses grew during both the three and six months ended June 27, 2014 but this growth was more than offset by sales declines in the segment's communications businesses in both periods.

Sales from existing businesses in the segment's instruments businesses were essentially flat during both the three and six months ended June 27, 2014, as compared to the comparable periods of 2013, with increased year-over-year sales of calibration and thermography products, primarily due to several new product offerings, offset by softness in demand for other product categories. Demand in North America increased during the second quarter as compared to the first quarter of 2014, and offset decreased year-over-year demand in certain high-growth markets.

Sales from existing businesses in the segment's communications businesses declined at a low-double digit rate during the three months and at a mid-single digit rate during the six months ended June 27, 2014, as compared to the comparable periods of 2013. During the second quarter, the business experienced sequential improvement in demand for network enterprise and network security and analysis solutions, primarily in high-growth markets. This growth was more than offset by continued lower demand for network management solutions due to delays in wireless carrier spending. The Company expects sales growth from existing businesses in the segment's communications businesses to remain negative for the remainder of 2014.

Operating profit margins declined 250 basis points during the three months ended June 27, 2014 as compared to the comparable period of 2013. Year-over-year operating profit margin comparisons were unfavorably impacted by:

•

Lower sales volumes from existing businesses particularly with respect to high margin communications sales as well as incremental year-over-year costs associated with various new product development, sales and marketing growth investments, net of incremental year-over-year cost savings associated with the restructuring actions and continuing productivity improvement initiatives taken in 2013 - 155 basis points


•	The incremental net dilutive effect in 2014 of acquired businesses - 95 basis points

Operating profit margins declined 110 basis points during the six months ended June 27, 2014 as compared to the comparable period of 2013. Year-over-year operating profit margin comparisons were unfavorably impacted by:

•


•	The incremental net dilutive effect in 2014 of acquired businesses - 100 basis points

ENVIRONMENTAL

The Company’s Environmental segment provides products that help protect the water supply and air quality by serving two primary markets: water quality and retail/commercial petroleum. Danaher’s water quality business is a global leader in water quality analysis and treatment, providing instrumentation and disinfection systems to help analyze and manage the quality of ultra pure water, potable water, wastewater, groundwater and ocean water in residential, commercial, industrial and natural resource applications. Danaher’s retail/commercial petroleum business is a leading worldwide provider of solutions and services focused on fuel dispensing, remote fuel management, point-of-sale systems, payment systems, environmental compliance, vehicle tracking and fleet management.

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Environmental Selected Financial Data ($ in millions):



	Three Months Ended						Six Months Ended
	June 27, 2014			June 28, 2013			June 27, 2014			June 28, 2013
Sales	$	876.0		$	826.8		$	1,644.7		$	1,552.1
Operating profit	183.8			178.9			329.4			314.0
Depreciation and amortization	23.0			13.5			41.0			26.7
Operating profit as a % of sales	21.0		%	21.6		%	20.0		%	20.2		%
Depreciation and amortization as a % of sales	2.6		%	1.6		%	2.5		%	1.7		%



Components of Sales Growth	% Change Three Months Ended June 27, 2014 vs. Comparable 2013 Period		% Change Six Months Ended June 27, 2014 vs. Comparable 2013 Period
Existing businesses	3.5	%	4.0	%
Acquisitions	2.0	%	2.0	%
Currency exchange rates	0.5	%	—	%
Total	6.0	%	6.0	%

Year-over-year price increases in the segment contributed 0.5% and 1.0% to sales growth during the three and six month periods ended June 27, 2014, respectively, and are reflected as a component of the change in sales from existing businesses.

Sales from existing businesses in the segment's water quality businesses grew at a mid-single digit rate during both the three and six months ended June 27, 2014 as compared to the comparable periods of 2013. Sales growth in the analytical instrumentation business was led primarily by continued strong sales of consumables and related service in North America and China, and to a lesser extent in Western Europe. Sales in the business' chemical treatment solutions product line grew on a year-over-year basis for both the three and six month periods due primarily to continued sales force investments in the U.S. market, and to a lesser extent, continued international expansion. Year-over-year sales from existing businesses in the business' ultraviolet water disinfection product line declined during both the three and six month periods ended June 27, 2014 due to continued weak demand in municipal end markets, primarily in North America and Western Europe.

Sales from existing businesses in the segment's retail petroleum equipment businesses grew at a low-single digit rate during both the three and six month periods ended June 27, 2014 as compared to the comparable periods of 2013. On a year-over-year basis, the business experienced strong increase in demand in most major geographies during both the three and six month periods for its point-of-sale systems, service and vapor recovery products. This growth was partially offset by lower year-over-year sales of payment systems in Western Europe for the three months ended June 27, 2014, as well as a decline in demand for dispensers in both periods, primarily in North America.

Operating profit margins declined 60 basis points during the three months ended June 27, 2014 as compared to the comparable period of 2013. The following factors impacted year-over-year operating profit margin comparisons.

2014 vs. 2013 operating profit margin comparisons were favorably impacted by:


•	Higher 2014 sales volumes and incremental year-over-year cost savings associated with the restructuring actions and continuing productivity improvement initiatives taken in 2013, net of incremental year-over-year costs associated with various new product development, sales and marketing growth investments - 40 basis points

2014 vs. 2013 operating profit margin comparisons were unfavorably impacted by:


•	The incremental net dilutive effect in 2014 of acquired businesses - 100 basis points

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Operating profit margins declined 20 basis points during the six months ended June 27, 2014 as compared to the comparable period of 2013. The following factors impacted year-over-year operating profit margin comparisons.

2014 vs. 2013 operating profit margin comparisons were favorably impacted by:


•	Higher 2014 sales volumes and incremental year-over-year cost savings associated with the restructuring actions and continuing productivity improvement initiatives taken in 2013, net of incremental year-over-year costs associated with various new product development, sales and marketing growth investments - 90 basis points

2014 vs. 2013 operating profit margin comparisons were unfavorably impacted by:


•	The incremental net dilutive effect in 2014 of acquired businesses - 110 basis points

LIFE SCIENCES & DIAGNOSTICS

The Company’s diagnostics businesses offer a broad range of analytical instruments, reagents, consumables, software and services that hospitals, physician’s offices, reference laboratories and other critical care settings use to diagnose disease and make treatment decisions. The Company’s life sciences businesses offer a broad range of research and clinical tools that scientists use to study cells and cell components to understand the causes of disease, identify new therapies and test new drugs and vaccines.

Life Sciences & Diagnostics Selected Financial Data ($ in millions):



	Three Months Ended						Six Months Ended
	June 27, 2014			June 28, 2013			June 27, 2014			June 28, 2013
Sales	$	1,790.0		$	1,674.3		$	3,449.6		$	3,241.7
Operating profit	282.7			240.7			502.4			440.0
Depreciation and amortization	133.2			127.9			262.0			253.1
Operating profit as a % of sales	15.8		%	14.4		%	14.6		%	13.6		%
Depreciation and amortization as a % of sales	7.4		%	7.6		%	7.6		%	7.8		%



Components of Sales Growth	% Change Three Months Ended June 27, 2014 vs. Comparable 2013 Period		% Change Six Months Ended June 27, 2014 vs. Comparable 2013 Period
Existing businesses	5.0	%	4.5	%
Acquisitions	1.5	%	2.0	%
Currency exchange rates	0.5	%	—	%
Total	7.0	%	6.5	%

Sales from existing businesses in the segment's diagnostics business grew at a mid-single digit rate during both the three and six month periods ended June 27, 2014 as compared to the comparable periods of 2013, primarily due to strong demand in the acute care and pathology diagnostic businesses and, to a lesser extent, the clinical business. Demand in the clinical business increased in both periods on a year over-year-basis led by strong demand in China and other high-growth markets, partly offset by year-over-year declines in demand in Europe. The clinical business in North America reported year-over-year growth during the second quarter of 2014 as a result of continued improvements in service and delivery and the impact of new product offerings. Year-over-year sales growth in the acute care diagnostic business in both periods was driven primarily by continued strong global consumable sales related to the installed base of acute care instruments. Geographically, this business' year-over-year sales growth was led by China, the Middle East and Japan. Improving year-over-year demand for the business' products in North America and Western Europe during the three months ended June 27, 2014 also contributed to sales growth. Increased demand for advanced staining systems and consumables drove the majority of the year-over-year sales growth in the pathology diagnostics business. Geographically, sales growth was strong in China and other high-growth markets in the three and six month periods ended June 27, 2014.

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Sales from existing businesses in the segment's life sciences businesses grew at a mid-single digit rate during both the three and six month periods ended June 27, 2014 as compared to the comparable periods of 2013, due primarily to continued strong demand for the business' recently introduced products. Sales of the business' broad range of mass spectrometers continued to grow on a year-over-year basis in both periods led by North America and Europe. Sales of confocal and stereo microscopy products increased on a year-over-year basis in both periods due to strong demand in North America, Western Europe and high-growth markets. The business' flow cytometry and sample preparation product lines also contributed to the year-over-year growth in both periods, with growth primarily in North America and Western Europe.

Operating profit margins increased 140 basis points during the three months ended June 27, 2014 as compared to the comparable period of 2013. The following factors impacted year-over-year operating profit margin comparisons.

2014 vs. 2013 operating profit margin comparisons were favorably impacted by:


•	Higher 2014 sales volumes and incremental year-over-year cost savings associated with the restructuring actions and continuing productivity improvement initiatives taken in 2013, net of incremental year-over-year costs associated with various new product development, sales and marketing growth investments - 145 basis points

2014 vs. 2013 operating profit margin comparisons were unfavorably impacted by:


•	The incremental net dilutive effect in 2014 of acquired businesses - 5 basis points

Operating profit margins increased 100 basis points during the six months ended June 27, 2014 as compared to the comparable period of 2013. The following factors impacted year-over-year operating profit margin comparisons.

2014 vs. 2013 operating profit margin comparisons were favorably impacted by:


•	Higher 2014 sales volumes and incremental year-over-year cost savings associated with the restructuring actions and continuing productivity improvement initiatives taken in 2013, net of incremental year-over-year costs associated with various new product development, sales and marketing growth investments - 115 basis points

2014 vs. 2013 operating profit margin comparisons were unfavorably impacted by:


•	The incremental net dilutive effect in 2014 of acquired businesses - 15 basis points

DENTAL

The Company’s Dental segment is a leading worldwide provider of a broad range of dental consumables, equipment and services that are used to diagnose, treat and prevent disease and ailments of the teeth, gums and supporting bone, and to improve the aesthetics of the human smile. The Company is dedicated to driving technological innovations that help dental professionals improve clinical outcomes and enhance productivity.

Dental Selected Financial Data ($ in millions):



	Three Months Ended						Six Months Ended
	June 27, 2014			June 28, 2013			June 27, 2014			June 28, 2013
Sales	$	528.1		$	514.7		$	1,037.8		$	994.5
Operating profit	77.9			78.8			153.4			141.7
Depreciation and amortization	20.5			20.9			41.0			41.8
Operating profit as a % of sales	14.8		%	15.3		%	14.8		%	14.3		%
Depreciation and amortization as a % of sales	3.9		%	4.1		%	4.0		%	4.2		%



Components of Sales Growth	% Change Three Months Ended June 27, 2014 vs. Comparable 2013 Period		% Change Six Months Ended June 27, 2014 vs. Comparable 2013 Period
Existing businesses	2.0	%	4.0	%
Acquisitions	—	%	—	%
Currency exchange rates	0.5	%	0.5	%
Total	2.5	%	4.5	%

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Year-over-year price increases in the segment had a negligible impact on sales during both the three and six month periods ended June 27, 2014.

During the second quarter of 2014, sales grew on a year-over-year basis as a result of increased demand for imaging products, instruments and handpieces and implant products, along with very modest growth in dental consumables. Geographically, sales growth in the quarter was driven by strong demand in Europe, China and other high-growth markets and contracted somewhat in Japan following that country's April 1, 2014 value added tax rate increase. During the six month period sales grew on a year-over-year basis in all major product categories and across all major geographies.

Operating profit margins declined 50 basis points during the three months ended June 27, 2014 as compared to the comparable period of 2013. The following factors impacted year-over-year operating profit margin comparisons.

2014 vs. 2013 operating profit margin comparisons were favorably impacted by:


•	The incremental net accretive effect in 2014 of acquired businesses - 5 basis points

2014 vs. 2013 operating profit margin comparisons were unfavorably impacted by:


•	Lower year-over-year growth in higher margin consumables and incremental year-over-year costs associated with various new product development, sales and marketing growth investments, net of higher 2014 sales volumes and incremental year-over-year cost savings associated with the restructuring actions and continuing productivity improvement initiatives taken in 2013 - 55 basis points

Operating profit margins increased 50 basis points during the six months ended June 27, 2014 as compared to the comparable period of 2013. Higher 2014 sales volumes and incremental year-over-year cost savings associated with the restructuring actions and continuing productivity improvement initiatives taken in 2013, net of incremental year-over-year costs associated with various new product development, sales and marketing growth investments, favorably impacted operating profit margin comparisons.

INDUSTRIAL TECHNOLOGIES

The Company’s Industrial Technologies segment is a leading global provider of equipment, consumables and software for various printing, marking, coding, design and color management applications on consumer and industrial products. The segment is also a leading global provider of electromechanical motion control solutions for the industrial automation and packaging markets. In addition to the product identification and motion strategic lines of business, the segment also includes Danaher's sensors and controls, energetic materials and engine retarder businesses.

Industrial Technologies Selected Financial Data ($ in millions):



	Three Months Ended						Six Months Ended
	June 27, 2014			June 28, 2013			June 27, 2014			June 28, 2013
Sales	$	913.0		$	866.7		$	1,766.7		$	1,683.5
Operating profit	217.5			204.1			409.2			375.0
Depreciation and amortization	22.8			21.9			45.2			43.7
Operating profit as a % of sales	23.8		%	23.5		%	23.2		%	22.3		%
Depreciation and amortization as a % of sales	2.5		%	2.5		%	2.6		%	2.6		%



Components of Sales Growth	% Change Three Months Ended June 27, 2014 vs. Comparable 2013 Period		% Change Six Months Ended June 27, 2014 vs. Comparable 2013 Period
Existing businesses	3.5	%	3.0	%
Acquisitions	1.0	%	1.0	%
Currency exchange rates	1.0	%	1.0	%
Total	5.5	%	5.0	%

Price increases in the segment contributed 1.0% to sales growth on a year-over-year basis during both the three and six month periods ended June 27, 2014, respectively, and are reflected as a component of the change in sales from existing businesses.

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Sales from existing businesses in the segment’s motion businesses grew at a low-single digit rate during the three months ended June 27, 2014 and were essentially flat during the six month period, in each case as compared to the comparable period of 2013. Improving year-over-year demand in medical related end-markets and strong growth in high-growth markets was partially offset by continued soft year-over-year demand in the technology, defense and industrial automation related end-markets and the impact of exiting certain low-margin original equipment manufacturers product lines.

Sales from existing businesses in the segment’s product identification businesses grew at a low-single digit rate during both the three and six month periods ended June 27, 2014 as compared to the comparable periods of 2013. Continued increased demand for marking and coding equipment and related consumables as well as packaging and color solutions in most major end-markets was partially offset by continued lower year-over-year demand in consumer electronics related equipment.

Sales from existing businesses in the segment’s other businesses collectively grew at a high-single digit rate during both the three and six month periods ended June 27, 2014 as compared to the comparable periods of 2013, primarily due to continued strong demand in the segment's engine retarder business, and to a lesser extent, improving demand in the segment's sensors and controls businesses.

Operating profit margins increased 30 basis points during the three months ended June 27, 2014 as compared to the comparable period of 2013. The following factors impacted year-over-year operating profit margin comparisons.

2014 vs. 2013 operating profit margin comparisons were favorably impacted by:


•	Higher 2014 sales volumes and incremental year-over-year cost savings associated with the restructuring actions and continuing productivity improvement initiatives taken in 2013, net of incremental year-over-year costs associated with various new product development, sales and marketing growth investments - 45 basis points

2014 vs. 2013 operating profit margin comparisons were unfavorably impacted by:


•	The incremental net dilutive effect in 2014 of acquired businesses - 15 basis points

Operating profit margins increased 90 basis points during the six months ended June 27, 2014 as compared to the comparable period of 2013. The following factors impacted year-over-year operating profit margin comparisons.

2014 vs. 2013 operating profit margin comparisons were favorably impacted by:


•	Higher 2014 sales volumes and incremental year-over-year cost savings associated with the restructuring actions and continuing productivity improvement initiatives taken in 2013, net of incremental year-over-year costs associated with various new product development, sales and marketing growth investments - 110 basis points

2014 vs. 2013 operating profit margin comparisons were unfavorably impacted by:


•	The incremental net dilutive effect in 2014 of acquired businesses - 20 basis points

COST OF SALES AND GROSS PROFIT



($ in millions)	Three Months Ended						Six Months Ended
	June 27, 2014			June 28, 2013			June 27, 2014			June 28, 2013
Sales	$	4,963.6		$	4,737.5		$	9,626.3		$	9,182.2
Cost of sales	(2,343.4		)	(2,242.0		)	(4,553.2		)	(4,361.0		)
Gross profit	2,620.2			2,495.5			5,073.1			4,821.2
Gross profit margin	52.8		%	52.7		%	52.7		%	52.5		%

The year-over-year increase in gross profit margins during both the three and six month periods ended June 27, 2014 as compared to the comparable periods in 2013, is due primarily to the favorable impact of higher year-over-year sales volumes, incremental year-over-year cost savings associated with 2013 restructuring activities and continued productivity improvements.

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OPERATING EXPENSES



($ in millions)	Three Months Ended						Six Months Ended
	June 27, 2014			June 28, 2013			June 27, 2014			June 28, 2013
Sales	$	4,963.6		$	4,737.5		$	9,626.3		$	9,182.2
Selling, general and administrative ("SG&A") expenses	1,394.5			1,339.7			2,745.1			2,638.1
Research and development ("R&D") expenses	336.4			312.2			649.8			608.6
SG&A as a % of sales	28.1		%	28.3		%	28.5		%	28.7		%
R&D as a % of sales	6.8		%	6.6		%	6.8		%	6.6		%

Selling, general and administrative expenses as a percentage of sales declined 20 basis points on a year-over-year basis for both the three and six month periods ended June 27, 2014 compared with the comparable periods of 2013. Incremental year-over-year increases in investments in sales and marketing growth initiatives were more than offset by increased leverage of the Company’s general and administrative cost base resulting from higher 2014 sales and incremental year-over-year cost savings associated with 2013 restructuring activities.

Research and development expenses (consisting principally of internal and contract engineering personnel costs) as a percentage of sales increased 20 basis points on a year-over-year basis during both the three and six months ended June 27, 2014 as compared to the comparable periods in 2013. Incremental year-over-year increases in investments in the Company's new product development initiatives were the primary contributors to this increase.

INTEREST COSTS AND FINANCING

For a discussion of the Company’s outstanding indebtedness, refer to Note 5 of the Consolidated Condensed Financial Statements.

Interest expense of $33 million and $66 million for the three and six months ended June 27, 2014, respectively, was $6 million and $13 million lower than the comparable periods of 2013. The decrease in interest expense results primarily from the repayment of the €500 million principal amount of Eurobond notes due 2013 and the $300 million principal amount of floating rate senior notes due 2013 upon maturity in July and June 2013, respectively.

INCOME TAXES

The Company conducts business globally and files numerous consolidated and separate income tax returns in the United States federal, state and foreign jurisdictions. The countries in which the Company has a significant presence that have significantly lower statutory tax rates than the United States include China, Denmark, Germany and the United Kingdom. The Company's ability to obtain a tax benefit from lower statutory tax rates outside of the United States is dependent on its levels of taxable income in these foreign countries. The Company believes that a change in the statutory tax rate of any individual foreign country would not have a material effect on the Company's financial statements given the geographic dispersion of the Company's taxable income.

The Company and its subsidiaries are routinely examined by various domestic and international taxing authorities. The Internal Revenue Service (“IRS”) has completed examinations of certain of the Company's federal income tax returns through 2009 and is currently examining the federal income tax returns for 2010 and 2011. In addition, the Company has subsidiaries in Belgium, Brazil, Canada, Denmark, France, Finland, Germany, India, Italy, Japan, Norway, Singapore, Sweden, the United Kingdom and various other countries, states and provinces that are currently under audit for years ranging from 2004 through 2012.

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The effective tax rate for the second half of 2014 is forecasted to be approximately 24.0% based on the projected mix of earnings before tax by jurisdiction, excluding the impact of any matters that would be treated as “discrete.” The actual mix of earnings by jurisdiction could fluctuate from the Company's projection which would impact the Company's effective tax rate for the period. In addition, the tax effects of discrete items, including accruals related to tax contingencies, the resolution of worldwide tax matters, tax audit settlements, statute of limitations expirations and changes in tax regulations, are reflected in the period in which they occur. As a result, it is reasonably possible that the actual effective tax rate used for financial reporting purposes will change in future periods.

INFLATION

The effect of inflation on the Company’s revenues and net earnings was not significant in the three and six month periods ended June 27, 2014.

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 believes 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, paying interest and servicing debt and managing its capital structure on a short and long-term basis.

Following is an overview of the Company’s cash flows and liquidity for the six months ended June 27, 2014:

Overview of Cash Flows and Liquidity



	Six Months Ended
($ in millions)	June 27, 2014			June 28, 2013
Total operating cash flows	$	1,502.9		$	1,535.7

Cash paid for acquisitions	$	(606.7	)	$	(322.6	)
Payments for additions to property, plant and equipment	(278.6		)	(252.5		)
Proceeds from sale of investments	25.0			692.0
All other investing activities	11.2			(5.9		)
Net cash (used in) provided by investing activities	$	(849.1	)	$	111.0

Proceeds from the issuance of common stock	$	60.9		$	110.0
Payment of dividends	(87.4		)	(17.3		)
Net repayments of borrowings (maturities of 90 days or less)	(13.4		)	(768.0		)
Repayments of borrowings (maturities longer than 90 days)	(403.6		)	(310.4		)
Net cash used in financing activities	$	(443.5	)	$	(985.7	)

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•

Operating cash flows decreased $33 million, or 2%, during the first half of 2014 as compared to the first half of 2013, due primarily to year-over-year changes in the amount and timing of collection of trade accounts receivable and payments of trade accounts payables. In addition, operating cash flows for the first half of 2013 benefited from $67 million of dividends received related to earnings of the Apex joint venture.


•	Cash paid for acquisitions constituted the most significant use of cash during the first half of 2014. The Company acquired fourteen businesses during the first half of 2014 for total consideration (net of cash acquired) of $607 million.


•	The Company repaid the $400 million principal amount of 1.3% senior notes due 2014 upon their maturity in June 2014. The Company also reduced outstanding borrowings with maturities of 90 days or less, primarily commercial paper borrowings, by $13 million during the first half of 2014.


•	As of June 27, 2014, the Company held $3.3 billion of cash and cash equivalents.

Operating Activities

Cash flows from operating activities can fluctuate significantly from period to period as working capital needs and the timing of payments for income taxes, restructuring activities, pension funding and other items impact reported cash flows.

Operating cash flows from continuing operations were $1.5 billion for the first half of 2014, a decrease of $33 million, or 2%, as compared to the comparable period of 2013. The year-over-year change in operating cash flows from 2013 to 2014 was primarily attributable to the following factors:

•

The aggregate of trade accounts receivable, inventories and trade accounts payable used $269 million in operating cash flows during the first half of 2014, compared to $59 million used in the comparable period of 2013. 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 Company expects the impact of these operating factors to normalize in the balance of 2014.


•	The first half of 2013 operating cash flows included $67 million of dividends received related to earnings of the Apex joint venture, which was sold in 2013. These dividends increased the first half of 2013 operating cash flows but did not repeat in 2014 due to the sale.

•

2014 operating cash flows benefited from higher net earnings, excluding the impact of the gain on the sale of the Apex joint venture and other non-operating income, as compared to the comparable 2013 period. While the gain on the sale of Apex was included in 2013 earnings from continuing operations, the proceeds from this sale are shown in the investing activities section of the Statement of Cash Flows and therefore do not contribute to operating cash flows.

•

Net earnings for the first half of 2014 reflected an increase of $24 million of depreciation and amortization expense as compared to the comparable period of 2013. Amortization expense primarily relates to the amortization of intangible assets acquired in connection with acquisitions. Depreciation expense relates to both the Company's manufacturing and operating facilities as well as instrumentation leased to customers under operating-type lease arrangements. Depreciation and amortization are non-cash expenses that decrease earnings without a corresponding impact to operating cash flows.

Investing Activities

Cash flows relating to investing activities consist primarily of cash used for acquisitions and capital expenditures, including instruments leased to customers, and cash proceeds from divestitures of businesses or assets.

Net cash used in investing activities was $849 million during the first half of 2014 compared to $111 million of cash provided in the first half of 2013. For a discussion of the Company’s acquisitions during the first half of 2014 refer to “—Overview.” In the first half of 2013, the Company generated $692 million of cash from the sale of the Apex joint venture.

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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 increased $26 million or 10% on a year-over-year basis for the first half of 2014 compared to 2013 due primarily to increases in equipment leased to customers. For full year 2014, the Company expects capital spending to approximate $650 million, though actual expenditures will ultimately depend on business conditions.

Financing Activities and Indebtedness

Cash flows from financing activities consist primarily of proceeds from the issuance of commercial paper, common stock and debt, excess tax benefits from stock-based compensation, payments of principal on indebtedness, payments for repurchases of common stock and payments of dividends to shareholders. Financing activities used cash of $444 million during the first half of 2014 due primarily to the repayment of the $400 million principal amount of 1.3% senior notes due 2014 upon their maturity in June 2014.

For a description of the Company’s outstanding debt as of June 27, 2014, refer to Note 5 of the Consolidated Condensed Financial Statements. As of June 27, 2014, the Company was in compliance with all of its debt covenants.

The Company satisfies any short-term liquidity needs that are not met through operating cash flow and available cash primarily through issuances of commercial paper under its U.S. and Euro commercial paper programs. As of June 27, 2014, borrowings outstanding under the Company’s U.S. commercial paper program had a weighted average annual interest rate of 0.1% and a weighted average remaining maturity of approximately twelve days. There was no commercial paper outstanding under the Euro commercial paper program as of June 27, 2014. As commercial paper obligations mature, the Company anticipates issuing additional short-term commercial paper obligations to refinance all or part of these borrowings. As of June 27, 2014, the Company has classified its borrowings outstanding under the commercial paper program as long-term debt in the accompanying Consolidated Condensed Balance Sheet as the Company had the intent and ability, as supported by availability under the Credit Facility referenced below, to refinance these borrowings for at least one year from the balance sheet date.

Credit support for the commercial paper program is provided by a $2.5 billion unsecured multi-currency revolving credit facility with a syndicate of banks that expires on July 15, 2016 (the “Credit Facility”). The Credit Facility can also be used for working capital and other general corporate purposes. As of June 27, 2014, no borrowings were outstanding under the Credit Facility and the Company was in compliance with all covenants under the facility. In addition to the Credit Facility, the Company has entered into reimbursement agreements with various commercial banks to support the issuance of letters of credit.

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 for general corporate purposes, including without limitation repayment or refinancing of debt or other corporate obligations, acquisitions, capital expenditures, share repurchases and dividends, and working capital.

Aggregate cash payments for dividends during the first half of 2014 were $87 million. This is higher than in the comparable period of 2013, as the Company increased its quarterly dividend in the first quarter of 2014 and because the Company made no cash payments for dividends during the first quarter of 2013. The Company's Board had determined to accelerate the quarterly dividend payment that normally would have been paid in January 2013 and paid it in December 2012. In the second quarter of 2014, the Company declared a regular quarterly dividend of $0.10 per share payable on July 25, 2014 to holders of record on June 27, 2014.

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Cash and Cash Requirements

As of June 27, 2014, the Company held $3.3 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 0.4%. Of this amount, $795 million was held within the United States and $2.5 billion was held outside of the United States. The Company will continue to have cash requirements to support working capital needs, capital expenditures and acquisitions, to pay interest and service debt, pay taxes and any related interest or penalties, fund its restructuring activities and pension plans as required, repurchase shares of the Company’s common stock, pay dividends to shareholders and support other business needs. The Company generally intends to use available cash and internally generated funds to meet these cash requirements, but in the event that additional liquidity is required, particularly in connection with acquisitions, the Company may also borrow under its commercial paper program or the Credit Facility, enter into new credit facilities and either borrow directly thereunder or use such credit facilities to backstop additional borrowing capacity under its commercial paper program and/or access the capital markets. The Company also may from time to time access the capital markets to take advantage of favorable interest rate environments or other market conditions.

While repatriation of some cash held outside the United States may be restricted by local laws, most of the Company's foreign cash balances could be repatriated to the United States but, under current law, could be subject to U.S federal income taxes, less applicable foreign tax credits. For most of its foreign subsidiaries, the Company makes an election regarding the amount of earnings intended for indefinite reinvestment, with the balance available to be repatriated to the United States. A deferred tax liability has been accrued for the funds that are available to be repatriated to the United States. No provisions for U.S. income taxes have been made with respect to earnings that are planned to be reinvested indefinitely outside the United States, and the amount of U.S. income taxes that may be applicable to such earnings is not readily determinable given the various tax planning alternatives the Company could employ if it repatriated these earnings. The cash that the Company's foreign subsidiaries hold for indefinite reinvestment is generally used to finance foreign operations and investments, including acquisitions. As of June 27, 2014, management believes that it has sufficient liquidity to satisfy its cash needs, including its cash needs in the United States.

During 2014, the Company’s cash contribution requirements for its U.S. and its non-U.S. defined benefit pension plans are expected to be approximately $50 million and $55 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.

CRITICAL ACCOUNTING POLICIES

There were no material changes during the three months ended June 27, 2014 to the items that the Company disclosed as its critical accounting policies and estimates in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s 2013 Annual Report on Form 10-K.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Quantitative and qualitative disclosures about market risk appear in “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Financial Instruments and Risk Management,” in the Company’s 2013 Annual Report on Form 10-K. There were no material changes during the three months ended June 27, 2014 to this information reported in the Company’s 2013 Annual Report on Form 10-K.

ITEM 4. CONTROLS AND PROCEDURES

The Company’s management, with the participation of the Company’s President and Chief Executive Officer, and Executive Vice President and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report. Based on such evaluation, the Company’s President and Chief Executive Officer, and Executive Vice President and Chief Financial Officer, have concluded that, as of the end of such period, the Company’s disclosure controls and procedures were effective.

There have been no changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the Company’s most recent completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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ITEM 5. OTHER INFORMATION

On May 7, 2014, H. Lawrence Culp, Jr., Danaher’s President and Chief Executive Officer, entered into a pre-arranged stock trading plan in accordance with Rule 10b5-1 under the Exchange Act and Danaher’s policy with respect to the adoption of 10b5-1 plans. The plan is intended to allow a limited liability company of which the members are Mr. Culp and an entity controlled by Mr. Culp (the “LLC”) and which holds certain of Mr. Culp’s outstanding stock options, to exercise and sell, over an extended period of time on pre-arranged dates, options that are approaching their expiration dates.

Under the plan, the LLC may sell in the open market at prevailing prices on specified dates (subject to minimum price thresholds set forth in the plan) an aggregate of up to 507,000 shares to be acquired upon exercise of stock options that were granted to Mr. Culp in February 2006 and are scheduled to expire in February 2016. Any sales will be made during the period from July 2014 until the plan terminates in January 2015. The transactions under the plan will be disclosed publicly through Form 144 and Form 4 filings with the Securities and Exchange Commission.

Certain other officers and directors of Danaher may from time to time enter into trading plans established in accordance with Rule 10b5-1. Except to the extent required by law, Danaher does not undertake to report Rule 10b5-1 plans that may be adopted by any officers or directors in the future or to report any modifications or terminations of any publicly announced trading plan.

PART II - OTHER INFORMATION

ITEM 1A. RISK FACTORS

Information regarding risk factors appears in “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Information Relating to Forward-Looking Statements,” in Part I — Item 2 of this Form 10-Q and in Part I — Item 1A of Danaher’s 2013 Annual Report on Form 10-K.

There were no material changes during the three months ended June 27, 2014 to the risk factors described in Danaher's 2013 Annual Report on Form 10-K.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Neither the Company nor any “affiliated purchaser” repurchased any shares of Company common stock during the three or six month periods ended June 27, 2014. On July 16, 2013, the Company's Board of Directors approved a new repurchase program (the “Repurchase Program”) authorizing the repurchase of up to 20 million shares of the Company's common stock from time to time on the open market or in privately negotiated transactions. There is no expiration date for the Repurchase Program, and the timing and amount of any shares repurchased under the program will be determined by the Company's management based on its evaluation of market conditions and other factors. The Repurchase Program may be suspended or discontinued at any time. Any repurchased shares will be available for use in connection with the Company's equity compensation plans (or any successor plan) and for other corporate purposes. As of June 27, 2014, 20 million shares remained available for repurchase pursuant to the Repurchase Program.

During the second quarter of 2014, holders of certain of the Company’s Liquid Yield Option Notes due 2021 (“LYONs”) converted such LYONs into an aggregate of 90,232 shares of Danaher common stock, par value $0.01 per share. In each case, the shares of common stock were issued solely to existing security holders upon conversion of the LYONs pursuant to the exemption from registration provided under Section 3(a)(9) of the Securities Act of 1933, as amended.

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ITEM 6. EXHIBITS


(a)	Exhibits:



3.1		Restated Certificate of Incorporation of Danaher Corporation (1)

3.2		Amended and Restated By-laws of Danaher Corporation (2)

10.1		Transition Agreement by and between the Company and H. Lawrence Culp, Jr. dated April 16, 2014 *(3)

10.2		Aircraft Time Sharing Agreement by and between Danaher Corporation and Thomas P. Joyce, Jr., dated May 7, 2014

10.3		Form of Danaher Corporation 2007 Stock Incentive Plan Stock Option Agreement*

10.4		Form of Danaher Corporation 2007 Stock Incentive Plan Restricted Stock Unit Agreement*

11.1		Computation of per-share earnings (4)

12.1		Calculation of ratio of earnings to fixed charges

31.1		Certification of Chief Executive Officer Pursuant to Item 601(b)(31) of Regulation S-K, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2		Certification of Chief Financial Officer Pursuant to Item 601(b)(31) of Regulation S-K, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1		Certification of Chief Executive Officer, Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2		Certification of Chief Financial Officer, Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS		XBRL Instance Document (5)

101.SCH		XBRL Taxonomy Extension Schema Document (5)

101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document (5)

101.DEF		XBRL Taxonomy Extension Definition Linkbase Document (5)

101.LAB		XBRL Taxonomy Extension Label Linkbase Document (5)

101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document (5)

* Indicates management contract or compensatory plan, contract or arrangement.


(1)	Incorporated by reference from Exhibit 3.1 to Danaher Corporation's Quarterly Report on Form 10-Q for the quarter ended June 29, 2012 (Commission File Number: 1-8089).


(2)	Incorporated by reference from Exhibit 3.2 to Danaher Corporation’s Annual Report on Form 10-K for the year ended December 31, 2011 (Commission File Number: 1-8089).


(3)	Incorporated by reference from Exhibit 10.1 to Danaher Corporation’s Current Report on Form 8-K filed on April 16, 2014 (Commission File Number: 1-8089)


(4)	See Note 12, “Net Earnings Per Share”, to our Consolidated Condensed Financial Statements.

(5)

Attached as Exhibit 101 to this report are the following documents formatted in XBRL (Extensible Business Reporting Language): (i) Consolidated Condensed Balance Sheets as of June 27, 2014 and December 31, 2013, (ii) Consolidated Condensed Statements of Earnings for the three and six months ended June 27, 2014 and June 28, 2013, (iii) Consolidated Condensed Statements of Comprehensive Income for the three and six months ended June 27, 2014 and June 28, 2013, (iv) Consolidated Condensed Statement of Stockholders’ Equity for the six months ended June 27, 2014, (v) Consolidated Condensed Statements of Cash Flows for the six months ended June 27, 2014 and June 28, 2013, and (vi) Notes to Consolidated Condensed Financial Statements.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



		DANAHER CORPORATION:

Date:	July 16, 2014	By:	/s/ Daniel L. Comas
		Daniel L. Comas
		Executive Vice President and Chief Financial Officer

Date:	July 16, 2014	By:	/s/ Robert S. Lutz
		Robert S. Lutz
		Senior Vice President and Chief Accounting Officer