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What changed in Danaher Corporation's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of Danaher Corporation's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+363 added−430 removedSource: 10-K (2024-02-21) vs 10-K (2023-02-22)

Top changes in Danaher Corporation's 2023 10-K

363 paragraphs added · 430 removed · 289 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

66 edited+6 added−36 removed106 unchanged
Biggest changeOur Shared Purpose gives meaning and direction to our continuous improvement. ◦ Danaher’s Board of Directors reviews the Company’s human capital strategy annually and at other times during the year in connection with significant initiatives and acquisitions, supported by the Compensation Committee’s oversight of our executive and equity compensation programs.
Biggest changeOur human capital strategy spans multiple, key dimensions, including the following: 8 • Culture and Governance ◦ Our culture is rooted in DBS and in our commitment to “Innovation at the Speed of Life.” At its core, DBS reflects a commitment to use process to continuously improve every aspect of our business, and our dedication to improving human life through innovation gives meaning and direction to our continuous improvement. ◦ Danaher’s Board of Directors reviews the Company’s human capital strategy annually and at other times during the year in connection with significant initiatives and acquisitions, supported by the Compensation Committee’s oversight of our executive and equity compensation programs.
Materials The Company’s manufacturing operations employ a wide variety of raw materials, including metallic-based components, electronic components, chemistries, OEM products, plastics and other petroleum-based products. Prices of oil and gas also affect the Company’s costs for freight and utilities and also have an indirect impact on the cost of other purchased materials.
Materials The Company’s manufacturing operations employ a wide variety of raw materials, including metallic-based components, electronic components, chemistries, OEM products, plastics and other petroleum-based products. Prices of oil and gas also affect the Company’s costs for freight and utilities and have an indirect impact on the cost of other purchased materials.
Most of the Company’s sales in non-U.S. markets are made by its subsidiaries located outside the U.S., though the Company also sells directly from the U.S. into non-U.S. markets through various representatives and distributors and, in some cases, directly. In countries with low sales volumes, the Company generally sells through representatives and distributors.
Most of the Company’s sales in non-U.S. markets are made by its subsidiaries located outside the U.S., though the Company also sells from the U.S. into non-U.S. markets through various representatives and distributors and, in some cases, directly. In countries with low sales volumes, the Company generally sells through representatives and distributors.
Federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the civil False Claims Act. • The federal Civil Monetary Penalties Law prohibits, among other things, the offering or transferring of remuneration to a Medicare or Medicaid beneficiary that the person knows or should know is likely to influence the beneficiary’s selection of a particular supplier of Medicare or Medicaid payable items or services. • The Open Payments Act requires manufacturers of medical devices covered under Medicare, Medicaid or the Children’s Health Insurance Program (subject to certain exceptions) to record payments and other transfers of value to a broad range of healthcare providers and teaching hospitals and to report this data as well as ownership and investment interests held by the physicians described above and their immediate family members to HHS for subsequent public disclosure.
Federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the civil False Claims Act. • The federal Civil Monetary Penalties Law prohibits, among other things, the offering or transferring of remuneration to a Medicare or Medicaid beneficiary that the person knows or should know is likely to influence the beneficiary’s selection of a particular supplier of Medicare or Medicaid payable items or services. • The Open Payments Act requires manufacturers of medical devices covered under Medicare, Medicaid or the Children’s Health Insurance Program (subject to certain exceptions) to record payments and other transfers of value to a broad range of healthcare providers and teaching hospitals and to report this data as well as ownership 12 and investment interests held by the physicians described above and their immediate family members to HHS for subsequent public disclosure.
Customers served by the Life Sciences segment select products based on a number of factors, including product quality and reliability, the product’s capacity to enhance productivity, innovation (particularly productivity and sensitivity improvements), product performance and ergonomics, access to a service and support network and the other factors described under “—Competition.” The businesses in Danaher’s Life Sciences segment market their products and services under key brands including ALDEVRON, BECKMAN COULTER, IDT, LEICA MICROSYSTEMS, MOLECULAR DEVICES, PALL, PHENOMENEX and SCIEX.
Customers served by the Life Sciences segment select products based on a number of factors, including product quality and reliability, the product’s capacity to enhance productivity, innovation (particularly productivity and sensitivity improvements), product performance and ergonomics, access to a service and support network and the other factors described under “—Competition.” The businesses in Danaher’s Life Sciences segment market their products and services under key brands including ABCAM, ALDEVRON, BECKMAN COULTER, IDT, LEICA MICROSYSTEMS, MOLECULAR DEVICES, PALL, PHENOMENEX and SCIEX.
Manufacturing facilities are located in North America, Europe and Asia. The business sells to customers through direct sales personnel and independent distributors. DIAGNOSTICS The Diagnostics segment offers clinical instruments, reagents, consumables, software and services that hospitals, physicians’ offices, reference laboratories and other critical care settings use to diagnose disease and make treatment decisions.
Manufacturing facilities are located in North America, Europe and Asia. The business sells to customers through direct sales personnel and independent distributors. DIAGNOSTICS The Diagnostics segment offers clinical instruments, consumables, software and services that hospitals, physicians’ offices, reference laboratories and other critical care settings use to diagnose disease and make treatment decisions.
We have a common job architecture across our businesses to provide a standardized framework for defining jobs, job families, and career levels, and set market-aligned pay structures for each career level (adjusted as appropriate for the particular job family, industry, and geography) based on a range of compensation surveys. ◦ Performance Management .
We have a common 9 job architecture across our businesses to provide a standardized framework for defining jobs, job families, and career levels, and set market-aligned pay structures for each career level (adjusted as appropriate for the particular job family, industry, and geography) based on a range of compensation surveys. ◦ Performance Management .
The Company defines North America as the United States and Canada. The Company defines high-growth markets as developing markets of the world experiencing extended periods of accelerated growth in gross domestic product and infrastructure which include Eastern Europe, the Middle East, Africa, Latin America (including Mexico) and Asia (with the exception of Japan, Australia and New Zealand).
The Company defines North America as the United States and Canada. The Company defines high-growth markets as developing markets of the world experiencing accelerated growth, over extended periods, in gross domestic product and infrastructure which include Eastern Europe, the Middle East, Africa, Latin America (including Mexico) and Asia (with the exception of Japan, Australia and New Zealand).
Commonly performed tests include glucose, cholesterol, triglycerides, electrolytes, proteins and enzymes, as well as tests to detect urinary tract infections and kidney and bladder disease. 6 • Immunoassay systems also detect and quantify biochemicals of diagnostic interest (such as proteins and hormones) in body fluids, particularly in circumstances where more specialized diagnosis is required.
Commonly performed tests include glucose, cholesterol, triglycerides, electrolytes, proteins and enzymes, as well as tests to detect urinary tract infections and kidney and bladder disease. • Immunoassay systems also detect and quantify biochemicals of diagnostic interest (such as proteins and hormones) in body fluids, particularly in circumstances where more specialized diagnosis is required.
We seek to continuously improve and sustain a diverse and inclusive culture free of systemic bias and where all associates feel they belong. We believe a diverse workforce and culture of inclusion is essential to drive innovation, fuel growth and help ensure our technologies and products effectively serve a global customer base.
We seek to continuously improve and sustain a diverse, equitable and inclusive culture free of systemic bias and where all associates feel they belong. We believe a diverse workforce and culture of inclusion is essential to drive innovation, fuel growth and help ensure our technologies and products effectively serve a global customer base.
Department of Health and Human Services (“HHS”), including the Centers for Medicare & Medicaid Services (“CMS”), as well as comparable state and non-U.S. agencies responsible for reimbursement and regulation of healthcare goods and services, including 13 laws and regulations related to kickbacks, false claims, self-referrals and healthcare fraud.
Department of Health and Human Services (“HHS”), including the Centers for Medicare & Medicaid Services (“CMS”), as well as comparable state and non-U.S. agencies responsible for reimbursement and regulation of healthcare goods and services, including laws and regulations related to kickbacks, false claims, self-referrals and healthcare fraud.
The bioprocessing business’ offering includes cell line and cell culture media development services; cell culture media, process liquids and buffers for manufacturing, chromatography 4 resins, filtration technologies, aseptic fill finish, as well as single-use hardware and consumables and services such as the design and installation of full manufacturing suites.
The bioprocessing business’ offering includes cell line and cell culture media development services; cell culture media, process liquids and buffers for manufacturing, chromatography resins, filtration technologies, aseptic fill finish, as well as single-use hardware and consumables and services such as the design and installation of full manufacturing suites.
In addition, HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, also restricts the use and disclosure of patient identifiable health information, mandates the adoption of standards relating to the privacy and security of patient identifiable health information and requires the reporting of certain security breaches with respect to such information.
In addition, HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, restricts the use and disclosure of patient identifiable health information, mandates the adoption of standards relating to the privacy and security of patient identifiable health information and requires the reporting of certain security breaches with respect to such information.
Danaher strives to create shareholder value primarily through three strategic priorities: • strengthening our competitive advantage through consistent application of DBS tools; • enhancing our portfolio in attractive science and technology markets through strategic capital allocation; and • consistently attracting and retaining exceptional talent.
Danaher strives to create shareholder value primarily through three strategic priorities: • strengthening our competitive advantage through consistent application of DBS tools and culture; • enhancing our portfolio in attractive science and technology markets through strategic capital allocation; and • consistently attracting and retaining exceptional talent.
Within these segments, demand is driven by end-users and original equipment manufacturers seeking to improve product performance, increase production and efficiency, reduce operating costs, extend the life of their equipment, conserve water and meet environmental regulations.
Within these segments, demand is driven by end-users and original equipment manufacturers (“OEM”) seeking to improve product performance, increase production and efficiency, reduce operating costs, extend the life of their equipment, conserve water and meet environmental regulations.
Risk Factors.” Environmental Laws and Regulations For a discussion of the environmental laws and regulations that the Company’s operations, products and services are subject to and other environmental contingencies, refer to Note 18 to the Consolidated Financial Statements included in this Annual Report.
Risk Factors.” 13 Environmental Laws and Regulations For a discussion of the environmental laws and regulations that the Company’s operations, products and services are subject to and other environmental contingencies, refer to Note 18 to the Consolidated Financial Statements included in this Annual Report.
These therapeutics include protein-based and other biological therapies as well as a new emerging class of highly-targeted therapies such as cell and gene therapies, nucleic acid-based therapies, and others requiring viral vectors and lipid nanoparticles in their manufacture.
These therapeutics include protein-based and other biological therapies as well as a new emerging class of highly-targeted therapies such as cell and gene therapies, nucleic acid-based therapies, and others requiring viral vectors and lipid nanoparticles in their 4 manufacture.
Customers in the diagnostics industry select products based on a number of factors, including product quality and reliability, the scope of tests that can be performed, the accuracy and speed of the product, the product’s ability to enhance productivity, ease of use, total cost of ownership and access to a highly qualified service and support network as well as the other factors described under “—Competition.” The businesses in Danaher’s Diagnostics segment market their products and services under key brands including BECKMAN COULTER, CEPHEID, HEMOCUE, LEICA BIOSYSTEMS, MAMMATOME and RADIOMETER.
Customers in the diagnostics industry select products based on a number of factors, including product quality and reliability, the scope of tests that can be performed, the accuracy and speed of the product, the product’s ability to enhance productivity, ease of use, total cost of ownership and access to a highly qualified service and support network as well as the other factors described under “—Competition.” The businesses in Danaher’s Diagnostics segment market their products and services under key brands including BECKMAN COULTER, CEPHEID, HEMOCUE, LEICA BIOSYSTEMS, MAMMOTOME and RADIOMETER.
Department of State, Directorate of Defense Trade Controls, which, among other things, imposes license requirements on the export from the United States of defense articles and defense services listed on the U.S. Munitions List; 15 • the Export Administration Regulations administered by the U.S.
Department of State, Directorate of Defense Trade Controls, which, among other things, imposes license requirements on the export from the United States of defense articles and defense services listed on the U.S. Munitions List; • the Export Administration Regulations administered by the U.S.
Molecular Diagnostics —The molecular diagnostics business is a leading provider of biomedical testing instruments, systems and related consumables that enable DNA-based testing for organisms and genetic-based diseases in both clinical and non-clinical markets.
Molecular Diagnostics —The molecular diagnostics business is a leading provider of biomedical testing instruments, systems, software and related consumables that enable DNA-based testing for organisms and genetic-based diseases in both clinical and non-clinical markets.
Regulatory requirements in the United Kingdom (“UK”) are also changing as a result of Brexit (the UK’s withdrawal from the EU), and regulatory requirements in Switzerland are changing as a result of the country’s withdrawal from its Mutual Recognition Agreement with the EU Commission.
Regulatory requirements in 11 the United Kingdom (“UK”) are also changing as a result of Brexit (the UK’s withdrawal from the EU), and regulatory requirements in Switzerland are changing as a result of the country’s withdrawal from its Mutual Recognition Agreement with the EU Commission.
The information generated is used to diagnose disease, monitor and guide treatment and therapy, assist in managing chronic disease and assess patient status in hospital, outpatient and physicians’ office settings.
The information generated is used to diagnose disease, monitor and guide treatment and therapy, assist in 6 managing chronic disease and assess patient status in hospital, outpatient and physicians’ office settings.
United by the DANAHER BUSINESS SYSTEM (“DBS”), our businesses are also typically characterized by a high level of products and services that are sold on a recurring basis, primarily through a direct sales model and to a geographically diverse customer base. Our business’ research and development, manufacturing, sales, distribution, service and administrative facilities are located in more than 60 countries.
United by the DANAHER BUSINESS SYSTEM (“DBS”), our businesses are also typically characterized by a high level of products and services that are sold on a recurring basis, primarily through a direct sales model and to a geographically diverse customer base. Our business’ research and development, manufacturing, sales, distribution, service and administrative facilities are located in more than 50 countries.
Our D+I initiatives focus on broadening our candidate pools, sourcing diverse slates in the hiring process, developing people leaders’ competency in and accountability for D+I and implementing and sustaining programs (such as our Associate Resource Groups for Women, Black, Latinx, LGBTQ and Asian descent associates and friends/allies) that offer mentorship, support and engagement to help our associates succeed and thrive.
Our DE+I initiatives focus on broadening our candidate pools, sourcing diverse slates in the hiring process, developing people leaders’ competency in and accountability for DE+I and implementing and sustaining programs (such as our Associate Resource Groups for Women, Black, Latinx, LGBTQ and Asian descent associates and friends/allies) that offer mentorship, support and engagement to help our associates succeed and thrive.
Risk Factors.” Government Contracts Although the substantial majority of the Company’s revenue in 2022 was from customers other than governmental entities, each of Danaher’s segments has agreements relating to the sale of products to government entities. As a result, the Company is subject to various statutes and regulations that apply to companies doing business with governments.
Risk Factors.” Government Contracts Although the substantial majority of the Company’s revenue in 2023 was from customers other than governmental entities, each of Danaher’s segments has agreements relating to the sale of products to government entities. As a result, the Company is subject to various statutes and regulations that apply to companies doing business with governments.
Genomic Consumables —The genomic consumables businesses are leading providers of custom nucleic acid products for the life sciences industry, primarily through the manufacture of custom DNA and RNA oligonucleotides and gene fragments utilizing a proprietary manufacturing ecosystem. The businesses have developed proprietary technologies for genomics applications such as next generation sequencing, CRISPR genome editing, qPCR, and RNA interference.
Genomic Medicines —The genomic medicines businesses are leading providers of custom nucleic acid products for the life sciences industry, primarily through the manufacture of custom DNA and RNA oligonucleotides and gene fragments utilizing a proprietary manufacturing ecosystem. The businesses have developed proprietary technologies for genomics applications such as next generation sequencing, CRISPR genome editing, qPCR, and RNA interference.
Danaher’s internet site and the information contained on or connected to that site are not incorporated by reference into this Form 10-K. 16
Danaher’s internet site and the information contained on or connected to that site are not incorporated by reference into this Form 10-K.
Third-party payers are increasingly reducing reimbursements for medical products and services and, in international markets, many countries have instituted price ceilings on specific products and therapies. Price ceilings, decreases in third-party reimbursement for any product or a decision by a third-party payor not to cover a product could reduce usage and patient demand for the product. • The U.S.
Third-party payers are increasingly reducing reimbursements for medical products and services and, in international markets, many countries have instituted price ceilings on specific products and therapies. Price ceilings, decreases in third-party reimbursement for any product or a decision by a third-party payor not to cover a product typically reduce usage and patient demand for the product. • The U.S.
The Company defines developed markets as all markets of the world that are not high-growth markets. BIOTECHNOLOGY The Biotechnology segment includes the bioprocessing and discovery and medical businesses and offers a broad range of tools, consumables and services that are primarily used by customers to advance and accelerate the research, development, manufacture and delivery of biological medicines.
The Company defines developed markets as all markets of the world that are not high-growth markets. BIOTECHNOLOGY The Biotechnology segment includes the bioprocessing and discovery and medical businesses and offers a broad range of equipment, consumables and services that are primarily used by customers to advance and accelerate the research, development, manufacture and delivery of biological medicines.
Manufacturing facilities are in North America, Europe, and Asia. The business sells to customers through direct sales personnel and independent distributors.
Manufacturing facilities are located in North America, Europe and Asia. The business sells to customers through direct sales personnel and independent distributors.
Key quantitative measures that we use to assess performance in this category include total recordable incident rate (defined as the number of work-related injuries or illness cases serious enough to require treatment beyond first aid, per 11 100 associates) and days away, restricted or transferred (defined as the number of work-related injuries or illness cases that result in an employee working with physical restrictions, being away from work or unable to do their job or transferring to other work, per 100 associates).
Key quantitative measures that we use to assess performance in this category include total recordable incident rate (defined as the number of work-related injuries or illness cases serious enough to require treatment beyond first aid, per 100 associates) and days away, restricted or transferred (defined as the number of work-related injuries or illness cases that result in an employee working with physical restrictions, being away from work or unable to do their job or transferring to other work, per 100 associates). ◦ Health and Well-Being.
Danaher established the life sciences business in 2005 through the acquisition of Leica Microsystems and has expanded the business through numerous subsequent acquisitions, including the acquisitions of AB Sciex and Molecular Devices in 2010, Beckman Coulter in 2011, Pall in 2015, Phenomenex in 2016, IDT in 2018 and Aldevron in 2021.
Danaher established the life sciences business in 2005 through the acquisition of Leica Microsystems and has expanded the business through numerous subsequent acquisitions, including the acquisitions of AB Sciex and Molecular Devices in 2010, Beckman Coulter in 2011, Pall in 2015, Phenomenex in 2016, IDT in 2018, Aldevron in 2021 and Abcam in 2023.
LIFE SCIENCES The Life Sciences segment offers a broad range of instruments and consumables that are primarily used by customers to study the basic building blocks of life, including DNA and RNA, nucleic acid, proteins, metabolites and cells, in order to understand the causes of disease, identify new therapies, and test and manufacture new drugs, vaccines and gene editing technologies.
LIFE SCIENCES The Life Sciences segment offers a broad range of instruments, consumables, services and software that are primarily used by customers to study genomics and the basic building blocks of life, including DNA and RNA, nucleic acid, proteins, metabolites and cells, in order to understand the causes of disease, identify new therapies, and test and manufacture new drugs, vaccines and gene editing technologies.
Regulatory Matters The Company faces extensive government regulation both within and outside the United States relating to the development, manufacture, marketing, sale and distribution of its products and services. The following sections describe certain significant regulations that the Company is subject to. These are not the only regulations that the Company’s businesses must comply with.
Regulatory Matters The Company faces extensive government regulation both within and outside the United States relating to its operations, including the development, manufacture, marketing, sale and distribution of its products and services. The following sections describe certain significant regulations that the Company is subject to. These are not the only regulations that 10 the Company’s businesses must comply with.
Further, we believe that better associate engagement helps enable better retention and better business performance. We assess our engagement performance through our annual Associate Engagement Survey, which addresses engagement, direct supervisor effectiveness, behavior change and performance enablement, as well as through our voluntary turnover rate. 10 ◦ D + I .
Further, we believe that better associate engagement helps enable better retention and better business performance. We assess our engagement performance through our annual Associate Engagement Survey, which addresses engagement, direct supervisor effectiveness, behavior change and performance enablement, as well as through our voluntary turnover rate. ◦ DE + I .
Approximately 79,000 of the Company’s total employees were full-time and 2,000 were part-time employees. Of the United States employees, approximately 400 were hourly-rated, unionized employees. Outside the United States, the Company has government-mandated collective bargaining arrangements and union contracts in certain countries, particularly in Europe where many of the Company’s employees are represented by unions and/or works councils.
Approximately 61,000 of the Company’s total employees were full-time and 2,000 were part-time employees. Of the United States employees, approximately 250 were hourly-rated, unionized employees. Outside the United States, the Company has government-mandated collective bargaining arrangements and union contracts in certain countries, particularly in Europe where many of the Company’s employees are represented by unions and/or works councils.
Risk Factors.” Sustainability The Company views sustainability as a fundamental responsibility and a strategic priority. Our sustainability strategy is to help generations of our stakeholders realize life’s potential by innovating products that improve lives and our planet, building the best team, and protecting our environment.
Risk Factors.” 14 Sustainability The Company views sustainability as a fundamental responsibility and a strategic priority. Our sustainability strategy is to help generations of our stakeholders by innovating products that improve lives and our planet, building the best team, and protecting our environment.
However, in May 2017, the EU adopted new, formal regulations to replace such Directives; specifically, the EU Medical Device Regulation (the “EU MDR”) and In Vitro Diagnostic Regulation (the “EU IVDR”), each of which imposes stricter requirements for the marketing and sale of medical devices and in vitro devices, including in the area of clinical evaluation requirements, quality systems and post-market surveillance.
However, in May 2017, the EU adopted new, formal regulations to replace such Directives; specifically, the EU Medical Device Regulation (the “MDR”) and In Vitro Diagnostic Regulation (the “IVDR”), each of which imposes stricter requirements for the marketing and sale of medical devices and in vitro devices, including in the area of clinical evaluation requirements, quality systems and post-market surveillance.
The Company is facing increased competition in a number of its served markets as a result of the entry of well-resourced companies into certain markets, the entry of competitors based in low-cost manufacturing locations, the development of competitive technologies by early-stage and emerging companies and increasing consolidation in particular markets. The number of competitors varies by product and service line.
The Company is facing increased competition in a number of its served markets as a result of the entry of well-resourced companies into certain markets, the entry of competitors based in low-cost manufacturing locations, the development of competitive technologies by early-stage, emerging and other companies and increasing consolidation in particular markets.
The Company purchases raw materials from a large number of independent sources around the world. No single supplier is material, although for some components that require particular specifications or regulatory or other qualifications there may be a single supplier or a limited number of suppliers that can readily provide such components.
The Company purchases raw materials from a large number of sources around the world. No single supplier is material, although for some components that require particular specifications or regulatory or other qualifications only a single supplier or a limited number of suppliers can readily provide such components.
Industrial Filtration —The filtration, separation and purification technologies business is a leading provider of products used to remove solid, liquid and gaseous contaminants from a variety of liquids and gases in industrial settings, primarily through the sale of filtration consumables and to a lesser extent systems that incorporate filtration consumables and associated hardware.
Industrial Filtration —The filtration, separation and purification technologies business is a leading provider of products used to remove solid, liquid and gaseous contaminants from a variety of liquids and gases in industrial settings, primarily through the sale of filtration consumables and associated hardware.
Additionally, the segment provides products and consumables used to filter and remove contaminants from a variety of liquids and gases in many end-market applications. Sales in 2022 for this segment by geographic destination (as a percentage of total 2022 sales) were: North America, 45%; Western Europe, 20%; other developed markets, 7%; and high-growth markets, 28%.
Additionally, the segment provides products and consumables used to filter and remove contaminants from a variety of liquids and gases in many end-market applications. Sales in 2023 for this segment by geographic destination (as a percentage of total 2023 sales) were: North America, 42%; Western Europe, 21%; other developed markets, 7%; and high-growth markets, 30%.
Sales in 2022 by geographic destination (geographic destination refers to the geographic area where the final sale to the Company’s unaffiliated customer is made) as a percentage of total 2022 sales were: North America, 44% (including 42% in the United States); Western Europe, 22%; other developed markets, 5%; and high-growth markets, 29%.
Sales in 2023 by geographic destination (geographic destination refers to the geographic area where the final sale to the Company’s unaffiliated customer is made) as a percentage of total 2023 sales were: North America, 42% (including 40% in the United States); Western Europe, 23%; other developed markets, 5%; and high-growth markets, 30%.
The Life Sciences segment consists of the following businesses: Flow Cytometry, Genomics, Lab Automation, Centrifugation, Particle Counting and Characterization —The business offers workflow instruments and consumables that help researchers analyze genomic, protein and cellular information.
The Life Sciences segment consists of the following businesses: Flow Cytometry and Lab Automation Solutions —The business offers workflow instruments and consumables that help researchers analyze genomic, protein and cellular information.
For a discussion of risks related to competition, refer to “Item 1A. Risk Factors.” Human Capital As of December 31, 2022, the Company had approximately 81,000 employees (whom we refer to as “associates”), of whom approximately 32,000 were employed in the North America, 25,000 in Western Europe, 3,000 in other developed markets and 21,000 in high-growth markets.
For a discussion of risks related to competition, refer to “Item 1A. Risk Factors.” Human Capital As of December 31, 2023, the Company had approximately 63,000 employees (whom we refer to as “associates”), of whom approximately 24,000 were employed in the North America, 20,000 in Western Europe, 3,000 in other developed markets and 16,000 in high-growth markets.
Further, there are state laws that require medical device manufacturers to comply with the voluntary compliance guidelines and the relevant compliance guidance promulgated by the U.S. federal government, or otherwise restrict payments that may be made to healthcare providers and other potential referral sources; state laws and regulations that require manufacturers to file reports relating to pricing and marketing information, which requires tracking gifts and other remuneration and items of value provided to healthcare professionals and entities; state and local laws requiring the registration of sales representatives; and state laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA. 14 For a discussion of risks related to regulation by the FDA and comparable agencies of other countries, and the other regulatory regimes referenced above, please refer to “Item 1A.
Further, there are state laws that require medical device manufacturers to comply with the voluntary compliance guidelines and the relevant compliance guidance promulgated by the U.S. federal government, or otherwise restrict payments that may be made to healthcare providers and other potential referral sources; state laws and regulations that require manufacturers to file reports relating to pricing and marketing information, which requires tracking gifts and other remuneration and items of value provided to healthcare professionals and entities; state and local laws requiring the registration of sales representatives; and state laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA.
This strategy aligns with Danaher’s Shared Purpose and Core Values, as well as key UN Sustainable Development Goals (UN SDGs) under the United Nations 2030 Agenda for Sustainable Development. Our sustainability strategy is also informed by and grounded in the feedback we continually solicit from our stakeholders, including our regular sustainability prioritization assessments.
This strategy aligns with Danaher’s commitment to “Innovation at the Speed of Life,” our Core Values, as well as key UN Sustainable Development Goals (UN SDGs) under the United Nations 2030 Agenda for Sustainable Development. Our sustainability strategy is also informed by and grounded in the feedback we continually solicit from our stakeholders, including our regular sustainability prioritization assessments.
A predecessor device is referred to as “predicate device.” As a result, FDA clearance requirements may extend the development process for a considerable length of time. 12 Medical devices can be marketed only for the indications for which they are cleared or approved.
As a result, FDA clearance requirements may extend the development process for a considerable length of time. Medical devices can be marketed only for the indications for which they are cleared or approved.
Sales in 2022 for this segment by geographic destination (as a percentage of total 2022 sales) were: North America, 35%; Western Europe, 30%; other developed markets, 4%; and high-growth markets, 31%. Danaher established the Biotechnology segment, which was previously part of the former Life Sciences segment, in 2022.
Sales in 2023 for this segment by geographic destination (as a percentage of total 2023 sales) were: North America, 34%; Western Europe, 33%; other developed markets, 5%; and high-growth markets, 28%. Danaher established the Biotechnology segment, which was previously part of Danaher’s former Life Sciences segment, in 2022.
As of December 31, 2022, (1) 38% of our total associates were female and females represented 32%, 34% and 39% of our executives/senior leaders, managers and individual contributors, respectively; and (2) 41% of our total U.S. associates were People of Color and People of Color represented 24%, 31% and 43% of our U.S. executives/senior leaders, managers and individual contributors, respectively. ◦ In support of our D+I commitment, we conduct regular pay reviews from a race (in the United States) and gender (globally) perspective that serve to proactively identify and address potential pay differences.
As of December 31, 2023, (1) 40% of our total associates were female and females represented 35%, 37% and 41% of our executives/senior leaders, managers and individual contributors, respectively; and (2) 42% of our total U.S. associates were People of Color and People of Color represented 25%, 34% and 44% of our U.S. executives/senior leaders, managers and individual contributors, respectively. ◦ In support of our DE+I commitment, we conduct regular pay reviews from a race (in the United States) and gender (globally) perspective that serve to proactively identify and address potential pay differences.
We have leveraged DBS with the goal of driving progress on diversity representation and inclusive culture, including by requiring all of our operating companies to implement a D+I Policy Deployment initiative in each of 2021, 2022 and 2023.
We have leveraged DBS with the goal of driving progress on diversity representation and inclusive culture, including by requiring our operating companies as applicable to implement a DE+I Policy Deployment initiative in each of 2021, 2022 and 2023. Policy Deployment is a DBS tool designed to achieve strategic breakthroughs.
For a discussion of risks related to the Company’s operations as a result of the military conflict between Russia and Ukraine, refer to “Item 1A. Risk Factors.” Intellectual Property The Company owns numerous patents, trademarks, copyrights, trade secrets and licenses to intellectual property owned by others.
For a further discussion of risks related to the materials and components required for the Company’s operations, refer to “Item 1A. Risk Factors.” Intellectual Property The Company owns numerous patents, trademarks, copyrights, trade secrets and licenses to intellectual property owned by others.
DBS is not only the set of business processes and tools our operating companies use on a daily basis, but is more broadly our culture. As reflected in our logo, DBS features five core values (the “Core Values”): 1. The Best Team Wins 2. Customers Talk, We Listen 3. Kaizen is our Way of Life 4.
DBS is not only the set of business processes and tools our operating companies use on a daily basis in the pursuit of continuous improvement, but also represents our culture, which is guided by the following core values (the “Core Values”): 1. The Best Team Wins 2. Customers Talk, We Listen 3. Kaizen is our Way of Life 4.
The Company utilizes a number of techniques to address potential disruption in and other risks relating to its supply chain, including in certain cases the use of safety stock, alternative materials and qualification of multiple supply sources.
The Company utilizes a number of techniques to address potential disruption in and other risks relating to its supply chain, including in certain cases the use of safety stock, alternative materials and qualification of multiple supply sources. During 2023, there were no material effects on the business related to the availability of raw materials.
Sales in 2022 for this segment by geographic destination (as a percentage of total 2022 sales) were: North America, 51%; Western Europe, 17%; other developed markets, 4%; and high-growth markets, 28%.
Sales in 2023 for this segment by geographic destination (as a percentage of total 2023 sales) were: North America, 47%; Western Europe, 16%; other developed markets, 5%; and high-growth markets, 32%.
Risk Factors.” All capitalized brands and product names throughout this document are trademarks owned by, or licensed to, Danaher. 9 Competition Although the Company’s businesses generally operate in highly competitive markets, the Company’s competitive position cannot be determined accurately in the aggregate or by segment since none of its competitors offer all of the same product and service lines or serve all of the same markets as the Company, or any of its segments, does.
Competition Although the Company’s businesses generally operate in highly competitive markets, the Company’s competitive position cannot be determined accurately in the aggregate or by segment since none of its competitors offer all of the same product and service lines or serve all of the same markets as the Company, or any of its segments, does.
Management believes that the Company has a leadership position in many of the markets it serves.
The number of competitors varies by product and service line. Management believes that the Company has a leadership position in many of the markets it serves.
Innovation Defines our Future 5. We Compete for Shareholders 3 Underpinned by these five Core Values as well as our Shared Purpose – Helping Realize Life’s Potential , the DBS tools are organized into four pillars that are designed to apply to every aspect of our business: Growth, Lean, Leadership and the DBS Fundamentals.
Innovation Defines our Future 5. We Compete for Shareholders 3 Underpinned by these five Core Values, the DBS tools are organized into four pillars that are designed to apply to every aspect of our business: Growth, Lean, Leadership and the DBS Fundamentals. The idea for Danaher originated in the early 1980s when the Company’s founders, Steven M. and Mitchell P.
The EU regulations were adopted with staggered transitional periods that have since been updated. In January 2023, the European Commission endorsed a proposal to extend the original compliance dates for both MDR and EU IVDR, subject to approval by the European Parliament and European Council.
The EU regulations were adopted with staggered transitional periods that have since been updated. In March 2023, the European Commission issued an amended regulation to eliminate the previous “selloff” periods and extend the original transitional compliance dates for both the MDR and IVDR regulations.
Manufacturing and software development facilities are located in North America, Europe, Latin America and Asia. Sales are generally made through the business’ direct sales personnel, independent distributors and e-commerce. ************************************ The following discussion includes information common to all of Danaher’s segments.
Manufacturing facilities are located in North America, Europe, Asia and Australia. The business sells to customers primarily through direct sales personnel and, to a lesser extent, through independent distributors. ************************************ 7 The following discussion includes information common to all of Danaher’s segments.
We launched a global Employee Assistance Program in 2020 to ensure a consistent support structure for mental health and well-being across the Company and have since expanded the program to provide enhanced support with respect to childcare, eldercare and tutoring, among other areas.
The health and well-being of our associates is a critical element of our human capital program. We maintain a global Employee Assistance Program to help ensure a consistent support structure for mental health and well-being across the Company. Key, recent additions to the program include enhanced support with respect to childcare, eldercare and tutoring, among other areas.
The idea for Danaher originated in the early 1980s when the Company’s founders, Steven M. and Mitchell P. Rales, envisioned a business that would generate sustainable long-term value for customers, associates and shareholders. Through a series of acquisitions and divestitures, Danaher has evolved over time into the science and technology innovator it is today.
Rales, envisioned a business that would generate sustainable long-term value for customers, associates and shareholders. Through a series of acquisitions and divestitures, Danaher has evolved over time into the science and technology innovator it is today. While the operating companies that make up Danaher have changed, DBS continues to be the guiding philosophy for the Company.
Danaher’s Office of Diversity + Inclusion is led by our Vice President of Global Diversity + Inclusion, who is responsible for the execution of Danaher’s D+I strategy and reports to Danaher’s Senior Vice President of Human Resources. Both serve on the Danaher Diversity + Inclusion Council along with executives who lead our businesses.
Danaher’s Office of Diversity, Equity + Inclusion is led by our Vice President of Global Diversity, Equity + Inclusion, who is responsible for the execution of Danaher’s DE+I strategy and reports to Danaher’s Senior Vice President of Human Resources. Our DE+I strategy includes a focus on creating DE+I accountability measures; and operationalizing DE+I initiatives, learnings, and programming across our businesses.
From time to time the Company engages in litigation to protect its intellectual property rights. For a discussion of risks related to the Company’s intellectual property, refer to “Item 1A.
From time to time the Company engages in litigation to protect its intellectual property rights. For a discussion of risks related to the Company’s intellectual property, refer to “Item 1A. Risk Factors.” All capitalized brands and product names throughout this document are trademarks owned by, or licensed to, Danaher.
Danaher is comprised of more than 20 operating companies with leadership positions in the biotechnology, life sciences, diagnostics, environmental and applied sectors, organized under four segments (Biotechnology; Life Sciences; Diagnostics; and Environmental & Applied Solutions).
ITEM 1. BUSINESS General Danaher is a global science and technology innovator committed to accelerating the power of science and technology to improve human health. Danaher is comprised of more than 15 operating companies with leadership positions in the biotechnology, life sciences and diagnostics sectors, organized under three segments (Biotechnology, Life Sciences and Diagnostics).
In 2020 we achieved base pay equity for women and for racial and ethnic minorities in the U.S. and in 2021 expanded the U.S. analysis to include both base pay and short-term incentive compensation. • Retention ◦ Compensation and Benefits .
Based on our reviews, we have achieved pay equity in the U.S. by gender and by race and ethnicity, and have also achieved base pay equity for women globally. • Retention ◦ Compensation and Benefits .
Removed
ITEM 1. BUSINESS General Danaher is a global science and technology innovator committed to helping customers solve complex challenges and improving quality of life around the world.
Added
On September 30, 2023 (the “Distribution Date”), we completed the separation (“the Separation”) of our former Environmental & Applied Solutions business by distributing to Danaher stockholders on a pro rata basis all of the issued and outstanding common stock of Veralto Corporation (“Veralto”).
Removed
In particular, we have announced our intention to separate Danaher’s Environmental & Applied Solutions segment to create a publicly-traded company in the fourth quarter of 2023, subject to the satisfaction of customary conditions, including obtaining final approval from the Danaher Board of Directors, satisfactory completion of financing and receipt of tax opinions, favorable rulings from the Internal Revenue Service and other regulatory approvals.
Added
To effect the Separation, Danaher distributed to its stockholders one share of Veralto common stock for every three shares of Danaher common stock outstanding at the close of business on September 13, 2023, the record date for the distribution. In lieu of fractional shares cash was distributed to Danaher stockholders.
Removed
While the operating companies that make up Danaher have changed, DBS continues to be the guiding philosophy for the Company.
Added
Protein Consumables —The business, which is a leading supplier in the proteomics market, provides highly validated antibodies, reagents, biomarkers and assays to address targets in biological pathways that are critical for advancing drug discovery, life sciences research, diagnostics and drug discovery. Researchers use these products to study biological pathways critical for scientific research, diagnostics and drug discovery.
Removed
Manufacturing facilities are located in North America, Europe, Asia and Australia. The business sells to customers primarily through direct sales personnel and, to a lesser extent, through independent distributors. ENVIRONMENTAL & APPLIED SOLUTIONS In September 2022, the Company announced its intention to spin-off its Environmental & Applied Solutions business into a publicly traded company.
Added
Typical users of these products include scientists and researchers in academic institutions, research institutes and in pharmaceutical, biotechnology and diagnostics companies.
Removed
The transaction is expected to be tax-free to the Company’s shareholders.
Added
The amended MDR and IVDR timelines for becoming fully effective are now from May 2026 to December 2028 for MDR devices and May 2026 to May 2028 for IVDR devices, depending on product classifications.
Removed
The Company is targeting to complete the EAS Separation in the fourth quarter of 2023, subject to the satisfaction of certain conditions, including obtaining final approval from the Danaher Board of Directors, satisfactory completion of financing, receipt of tax opinions, receipt of favorable rulings from the Internal Revenue Service (“IRS”) and receipt of other regulatory approvals.
Added
For a discussion of risks related to regulation by the FDA and comparable agencies of other countries, and the other regulatory regimes referenced above, please refer to “Item 1A.
Removed
The Environmental & Applied Solutions segment offers products and services that help protect precious resources and keep global food and water supplies safe. Sales in 2022 for this segment by geographic destination (as a percentage of total 2022 7 sales) were: North America, 46%; Western Europe, 22%; other developed markets, 3%; and high-growth markets, 29%.
Removed
The Company’s Environmental & Applied Solutions segment consists of the following businesses: Water Quality —The Company’s water quality business is a leading provider of instrumentation, consumables, software, services and disinfection systems to help analyze, treat and manage the quality of ultra-pure, potable, industrial, waste, ground, source and ocean water in residential, commercial, municipal, industrial and natural resource applications.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeFollowing the proposed separation, the combined value of the common stock of the two publicly-traded companies may not be equal to or greater than what the value of our common stock would have been had the separation not occurred. 22 Divestitures or other dispositions could negatively impact our business, and contingent liabilities from businesses that we or our predecessors have disposed of could adversely affect our business and financial statements.
Biggest changeDivestitures or other dispositions could negatively impact our business, and contingent liabilities from businesses that we or our predecessors have disposed of could adversely affect our business and financial statements. We continually assess the strategic fit of our existing businesses and may divest, spin-off, split-off or otherwise dispose of businesses for strategic, financial or other reasons.
From time to time, we receive notices from third parties alleging intellectual property infringement or misappropriation of third parties’ intellectual property and cannot be certain that the conduct of our business does not and will not infringe or misappropriate the intellectual property rights of others.
From time to time, we receive notices from third parties alleging intellectual property infringement or misappropriation of third parties’ intellectual property and we cannot be certain that the conduct of our business does not and will not infringe or misappropriate the intellectual property rights of others.
Moreover, any insurance or indemnification rights that we may have may be insufficient or unavailable to protect us against such losses.
Moreover, any insurance or indemnification rights that we have may be insufficient or unavailable to protect us against such losses.
Failure to obtain required regulatory clearances or approvals before marketing our products (or before implementing modifications to or promoting additional indications or uses of our products), other violations of laws or regulations, failure to remediate inspectional observations to the satisfaction of these regulatory authorities, real or perceived efficacy or safety concerns or trends of adverse events with respect to our products (even after obtaining clearance for distribution) and unfavorable or inconsistent clinical data from existing or future clinical trials can lead to FDA Form 483 Inspectional Observations, warning letters, notices to customers, declining sales, loss of customers, loss of market share, remediation and increased compliance costs, recalls, seizures of adulterated or misbranded products, fines, expenses, injunctions, civil penalties, criminal penalties, consent decrees, administrative detentions, refusals to permit importations, partial or total shutdown of production facilities or the implementation of operating restrictions, narrowing of permitted uses for a product, refusal of the government to grant 510(k) clearance, suspension or withdrawal of approvals, pre-market notification rescissions and other adverse effects referenced under the risk factor titled “Our businesses are subject to extensive regulation; 32 failure to comply with those regulations could adversely affect our business and financial statements.” Further, defending against any such actions can be costly and time-consuming and may require significant personnel resources.
Failure to obtain required regulatory clearances or approvals before marketing our products (or before implementing modifications to or promoting additional indications or uses of our products), other violations of laws or regulations, failure to remediate inspectional observations to the satisfaction of these regulatory authorities, real or perceived efficacy or safety concerns or trends of adverse events with respect to our products (even after obtaining clearance for distribution) and unfavorable or inconsistent clinical data from existing or future clinical trials can lead to FDA Form 483 Inspectional Observations, warning letters, notices to customers, declining sales, loss of customers, loss of market share, remediation and increased compliance costs, recalls, seizures of adulterated or misbranded products, fines, expenses, injunctions, civil penalties, criminal penalties, consent decrees, administrative detentions, refusals to permit importations, partial or total shutdown of production facilities or the implementation of operating restrictions, narrowing of permitted uses for a product, refusal of the government to grant 510(k) clearance, suspension or withdrawal of approvals, pre-market notification rescissions and other adverse effects referenced under the risk factor titled “Our businesses are subject to extensive regulation; failure to comply with those regulations could adversely affect our business and financial statements.” Further, defending against any such actions can be costly and time-consuming and may require significant personnel resources.
These changes as well as other impacts from market demand, government regulations, third-party coverage and reimbursement policies and societal pressures are changing the way healthcare is delivered, reimbursed and funded and have in the past and could in the future cause participants in the healthcare industry and related industries that we serve to purchase fewer of our products and services, reduce the prices they are willing to pay for our products or services, reduce the amounts of reimbursement and funding available for our products and services from governmental agencies or third-party payors, heighten clinical data requirements, reduce the volume of medical procedures that use our products and services, affect the acceptance rate of new technologies and products and increase our compliance and other costs.
These changes as well as other impacts from market demand, government regulations, third-party coverage and reimbursement policies and societal pressures are changing the way healthcare is delivered, reimbursed and funded and have in the past and could in the future cause participants in the healthcare industry and related industries that we serve 17 to purchase fewer of our products and services, reduce the prices they are willing to pay for our products or services, reduce the amounts of reimbursement and funding available for our products and services from governmental agencies or third-party payors, heighten clinical data requirements, reduce the volume of medical procedures that use our products and services, affect the acceptance rate of new technologies and products and increase our compliance and other costs.
In addition to the environmental, health, safety, health care, medical device, anticorruption, data privacy and other regulations noted elsewhere in this Annual Report, our businesses are subject to extensive regulation by U.S. and non-U.S. governmental and self-regulatory entities at the supranational, federal, state, local and other jurisdictional levels, including for example the following: • We are required to comply with various import laws and export control and economic sanctions laws, which may affect our transactions with certain customers, business partners and other persons and dealings between our 30 employees and between our subsidiaries.
In addition to the environmental, health, safety, health care, medical device, anticorruption, data privacy and other regulations noted elsewhere in this Annual Report, our businesses are subject to extensive regulation by U.S. and non-U.S. governmental and self-regulatory entities at the supranational, federal, state, local and other jurisdictional levels, including for example the following: • We are required to comply with various import laws and export control and economic sanctions laws, which may affect our transactions with certain customers, business partners and other persons and dealings between our employees and between our subsidiaries.
There can be no assurance that our internal controls and compliance systems, including our Code of Conduct, always protect us from acts committed by employees, agents or business partners of ours (or of businesses we acquire or partner with) that violate laws, including the laws governing payments to government officials, bribery, fraud, kickbacks and false claims, pricing, sales and marketing practices, conflicts of interest, competition, employment practices and workplace behavior, export and import compliance, economic and trade sanctions, money laundering and data privacy.
There can be no assurance that our internal controls and compliance systems, including our Code of Conduct, protect us from acts committed by employees, agents or business partners of ours (or of businesses we acquire or partner with) that violate laws, including the laws governing payments to government officials, bribery, fraud, kickbacks and false claims, pricing, sales and marketing practices, conflicts of interest, competition, employment practices and workplace behavior, export and import compliance, economic and trade sanctions, money laundering and data privacy.
There can be no assurance that our liabilities arising from past or future releases of, or exposures to, hazardous substances will not exceed our estimates or adversely affect our reputation and financial statements or that we will not be subject to additional 33 claims for personal injury or remediation in the future based on our past, present or future business activities.
There can be no assurance that our liabilities arising from past or future releases of, or exposures to, hazardous substances will not exceed our estimates or adversely affect our reputation and financial statements or that we will not be subject to additional claims for personal injury or remediation in the future based on our past, present or future business activities.
Promising acquisitions and investments are difficult to identify and complete for a number of reasons, including high valuations, competition among prospective buyers or investors, the availability of affordable funding in the capital markets and the need to satisfy applicable closing conditions and obtain applicable antitrust and other regulatory approvals on acceptable terms.
Promising acquisitions and investments are difficult to identify and complete for a number of reasons, including high valuations, competition among prospective buyers or investors, the availability of affordable funding in the capital markets and the need to satisfy applicable closing conditions 19 and obtain applicable antitrust and other regulatory approvals on acceptable terms.
To the extent that the exclusive forum provisions of our By-laws limit a current or former stockholder’s ability to select a judicial forum other than the Delaware Courts, they might discourage the specified legal actions, might cause current or former stockholders to incur additional litigation-related expenses and might result in outcomes unfavorable to current or former stockholders.
To the extent that the exclusive forum provisions of our By-laws limit a 31 current or former stockholder’s ability to select a judicial forum other than the Delaware Courts, they might discourage the specified legal actions, might cause current or former stockholders to incur additional litigation-related expenses and might result in outcomes unfavorable to current or former stockholders.
The defense of these lawsuits can divert our management’s attention, we from time to time incur significant expenses in defending these lawsuits, and we can be required to pay damage awards or settlements or become subject to equitable remedies 31 that adversely affect our business and financial statements.
The defense of these lawsuits can divert our management’s attention, we from time to time incur significant expenses in defending these lawsuits, and we can be required to pay damage awards or settlements or become subject to equitable remedies that adversely affect our business and financial statements.
Any of these manufacturing problems could result in adverse impacts to our business and financial statements. Our financial results are subject to fluctuations in the cost and availability of the supplies that we use in, and the labor we need for, our operations.
Any of these manufacturing problems could result in adverse impacts to our business and financial statements. 23 Our financial results are subject to fluctuations in the cost and availability of the supplies that we use in, and the labor we need for, our operations.
In addition, in times of national emergency the U.S. government could also control our allocation of manufacturing capacity. Certain agencies of the U.S. government, such as the Biomedical Advanced Research and Development Authority (“BARDA”) within the U.S.
In addition, in times of national emergency the U.S. government could control our allocation of manufacturing capacity. Certain agencies of the U.S. government, such as the Biomedical Advanced Research and Development Authority (“BARDA”) within the U.S.
However, based on our experience, information and applicable law as of the date of this Annual Report, we do not believe that it is reasonably possible that any amounts we may be required to pay in connection with litigation and other legal and regulatory proceedings in excess of our reserves as of December 31, 2022 will have a material effect on our business or financial statements.
However, based on our experience, information and applicable law as of the date of this Annual Report, we do not believe that it is reasonably possible that any amounts we may be required to pay in connection with litigation and other legal and regulatory proceedings in excess of our reserves as of December 31, 2023 will have a material effect on our business or financial statements.
For example, our ability to achieve our current and future ESG goals is uncertain and remains subject to numerous risks, including evolving regulatory requirements and stakeholder expectations, our ability to recruit, develop and retain a diverse workforce, the availability of suppliers and other business partners that can meet our ESG expectations, the effects of the organic and inorganic growth of our business, cost considerations and the development and availability of cost-effective technologies or resources that support our goals.
For example, our ability to achieve our current and future sustainability goals is uncertain and remains subject to numerous risks, including evolving regulatory requirements and stakeholder expectations, our ability to recruit, develop and retain a diverse workforce, the availability of suppliers and other business partners that can meet our sustainability expectations, the effects of the organic and inorganic growth of our business, cost considerations and the development and availability of cost-effective technologies or resources that support our goals.
The supply chains for our businesses can be disrupted by supplier capacity constraints, fluctuations in demand, decreased availability of key raw materials or commodities, legislative or regulatory changes, bankruptcy or exiting of the business for other reasons and external events such 25 as natural disasters, pandemic health issues, war, terrorist actions and governmental actions (such as trade protectionism).
The supply chains for our businesses can be disrupted by inflation, supplier capacity constraints, fluctuations in demand, decreased availability of key raw materials or commodities, legislative or regulatory changes, bankruptcy or exiting of the business for other reasons and external events such as natural disasters, pandemic health issues, war, terrorist actions and governmental actions (such as trade protectionism).
However, based on the information we have as of the date of this Annual Report we do not believe that it is reasonably possible that any amounts we may be required to pay in connection with environmental matters in excess of our reserves as of December 31, 2022, will have a material effect on our business or financial statements.
However, based on the information we have as of the date of this Annual Report we do not believe that it is reasonably possible that any amounts we may be required to pay in connection with environmental matters in excess of our reserves as of December 31, 2023, will have a material effect on our business or financial statements.
If we are unable to fully recover higher supply and labor costs through price increases or offset these increases through cost reductions, or if there is a time delay between the increase in costs and our ability to recover or offset these costs, our margins and profitability can decline and our business and financial statements can be adversely affected.
Whenever we are unable to fully recover higher supply and labor costs through price increases or offset these increases through cost reductions, or whenever there is a time delay between the increase in costs and our ability to recover or offset these costs, our margins and profitability can decline and our business and financial statements can be adversely affected.
Acquisitions, investments, joint ventures and strategic relationships involve a number of financial, accounting, managerial, operational, legal, compliance and other risks and challenges, including but not limited to the following, any of which can adversely affect our business and our financial statements: • businesses, technologies, services and products that we acquire or invest in have sometimes under-performed relative to our expectations and the price that we paid, failed to perform in accordance with our anticipated timetable or failed to achieve and/or sustain profitability; • we from time to time incur or assume significant debt in connection with our acquisitions, investments, joint ventures or strategic relationships, which can also cause a deterioration of Danaher’s credit ratings, result in increased borrowing costs and interest expense and diminish our future access to the capital markets; • acquisitions, investments, joint ventures or strategic relationships can cause our financial results to differ from our own or the investment community’s expectations in any given period, or over the long-term; • pre-closing and post-closing earnings charges can adversely impact our results in any given period, and the impact may be substantially different from period-to-period; • acquisitions, investments, joint ventures or strategic relationships can create demands on our management, operational resources and financial and internal control systems that we are unable to effectively address; • we can experience difficulty in integrating cultures, personnel, operations and financial and other controls and systems and retaining key employees and customers, and former employees of our existing businesses or businesses we acquire sometimes compete with us; • we are not always able to achieve cost savings or other synergies anticipated in connection with acquisitions, investments, joint ventures or strategic relationships; 21 • we have assumed and may assume unknown liabilities, known contingent liabilities that become realized, known liabilities that prove greater than anticipated, internal control deficiencies or exposure to regulatory sanctions resulting from the acquired company’s or investee’s activities; and the realization of any of these liabilities or deficiencies can increase our expenses, adversely affect our financial position or cause us to fail to meet our public financial reporting obligations; • in connection with acquisitions and joint ventures, we often enter into post-closing financial arrangements such as purchase price adjustments, earn-out obligations and indemnification obligations, which can have unpredictable financial results; • as a result of our acquisitions and investments, we have recorded significant goodwill and other assets on our balance sheet and if we are not able to realize the value of these assets, or if the value of our investments declines, we are required to incur impairment charges; • we may have interests that diverge from those of our joint venture partners or other strategic partners or the companies we invest in, and we are not always able to direct or influence the management and operations of the joint venture, other strategic relationship or investee in the manner we believe is most appropriate, exposing us to additional risk; and • investing in or making loans to early-stage companies often entails a high degree of risk, including uncertainty regarding the company’s ability to successfully develop new technologies and services, bring these new technologies and services to market and gain market acceptance, maintain adequate capitalization and access to cash or other forms of liquidity, and retain critical management personnel; we do not always achieve the strategic, technological, financial or commercial benefits we anticipate; we may lose our investment or fail to recoup our loan; or our investment may be illiquid for a greater-than-expected period of time.
Acquisitions, investments, joint ventures and strategic relationships involve a number of financial, accounting, managerial, operational, legal, compliance and other risks and challenges, including but not limited to the following, any of which can adversely affect our business and our financial statements: • businesses, technologies, services and products that we acquire or invest in have sometimes under-performed relative to our expectations and the price that we paid, failed to perform in accordance with our anticipated timetable or failed to achieve and/or sustain profitability; • we from time to time incur or assume significant debt in connection with our acquisitions, investments, joint ventures or strategic relationships, which can also cause a deterioration of Danaher’s credit ratings, result in increased borrowing costs and interest expense and diminish our future access to the capital markets; • acquisitions, investments, joint ventures or strategic relationships can cause our financial results to differ from our own or the investment community’s expectations in any given period, or over the long-term; • pre-closing and post-closing earnings charges can adversely impact our results in any given period, and the impact may be substantially different from period-to-period; • acquisitions, investments, joint ventures or strategic relationships can create demands on our management, operational resources and financial and internal control systems that we are unable to effectively address; • we can experience difficulty in integrating cultures, personnel, operations and financial and other controls and systems and retaining key employees and customers, and former employees of our existing businesses or businesses we acquire sometimes compete with us; • we are not always able to achieve cost savings or other synergies anticipated in connection with acquisitions, investments, joint ventures or strategic relationships; • we have assumed and may assume unknown liabilities, known contingent liabilities that become realized, known liabilities that prove greater than anticipated, internal control deficiencies or exposure to regulatory sanctions resulting from the acquired company’s or investee’s activities; and the realization of any of these liabilities or deficiencies can increase our expenses, adversely affect our financial position or cause us to fail to meet our public financial reporting obligations; • in connection with acquisitions and joint ventures, we often enter into post-closing financial arrangements such as purchase price adjustments, earn-out obligations and indemnification obligations, which can have unpredictable financial results and/or lead to disputes and litigation; • as a result of our acquisitions and investments, we have recorded significant goodwill and other assets on our balance sheet and if we are not able to realize the value of these assets, or if the value of our investments declines, we are required to incur impairment charges; • we may have interests that diverge from those of our joint venture partners or other strategic partners or the companies we invest in, and we are not always able to direct or influence the management and operations of the joint venture, other strategic relationship or investee in the manner we believe is most appropriate, exposing us to additional risk; and • investing in or making loans to early-stage companies often entails a high degree of risk, including uncertainty regarding the company’s ability to successfully develop new technologies and services, bring these new technologies and services to market and gain market acceptance, maintain adequate capitalization and access to cash or other forms of liquidity, and retain critical management personnel; we do not always achieve the strategic, technological, financial or commercial benefits we anticipate; we may lose our investment or fail to recoup our loan; or our investment may be illiquid for a greater-than-expected period of time. 20 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.
Any of the circumstances described above could adversely impact our business and financial statements. 26 Intellectual Property Risks If we are unable to 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.
Any of the circumstances described above could adversely impact our business and financial statements. 24 Intellectual Property Risks If we are unable to 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.
Disputes or litigations regarding intellectual property can be costly and time-consuming to defend due to the complexity of many of our technologies and the uncertainty of intellectual property 27 litigation. Our intellectual property portfolio may not be useful in asserting a counterclaim, or negotiating a license, in response to a claim of infringement or misappropriation.
Disputes or litigations regarding intellectual property can be costly and time-consuming to defend due to the complexity of many of our technologies and the uncertainty of intellectual 25 property litigation. Our intellectual property portfolio may not be useful in asserting a counterclaim, or negotiating a license, in response to a claim of infringement or misappropriation.
In addition, we had the ability to incur approximately $3.0 billion of additional indebtedness in direct borrowings or under our outstanding commercial paper facilities based on the amounts available under our credit facilities that were not being used to backstop outstanding commercial paper balances.
In addition, we had the ability to incur approximately $4.0 billion of additional indebtedness in direct borrowings or under our outstanding commercial paper facilities based on the amounts available under our credit facilities that were not being used to backstop outstanding commercial paper balances.
The attacks, breaches, misappropriations and other disruptions and damage described above can interrupt our operations or the operations of our customers and partners, delay production and shipments, result in theft of our and our customers’ intellectual property and trade secrets, result in disclosure of personal data, damage customer, patient, business partner and employee relationships and our reputation and result in defective products or services, legal claims and proceedings, liability and penalties under privacy and other laws and increased costs for security and remediation, in each case resulting in an adverse effect on our business and financial statements.
The attacks, breaches, misappropriations and other disruptions and damage described above have the ability to interrupt our operations or the operations of our customers and partners, delay production and shipments, result in theft of our and our customers’ intellectual property and trade secrets, result in disclosure of personal data, damage customer, patient, business partner and employee relationships and our reputation and result in defective products or services, legal claims and proceedings, liability and penalties under privacy and other laws and increased costs for security and remediation, in each case resulting in an adverse effect on our business and financial statements.
Slower economic growth in the domestic and/or international markets, inflation, actual or anticipated default on sovereign debt, volatility in the currency and credit markets, high levels of unemployment or underemployment, labor availability constraints, reduced levels of capital expenditures, changes or anticipation of potential changes in government trade, fiscal, tax and monetary policies, changes in capital requirements for financial institutions, government budget negotiation dynamics, sequestration, austerity measures and other challenges that affect economies of the world have in the past adversely affected, and may in the future adversely affect, the Company and its distributors, customers and suppliers, including having the effect of: • reducing demand for our products and services (in this Annual Report, references to products and services also includes software), limiting the financing available to our customers and suppliers, increasing order cancellations and resulting in longer sales cycles and slower adoption of new technologies; • increasing the difficulty in collecting accounts receivable and the risk of excess and obsolete inventories; • increasing price competition in our served markets; • supply interruptions, delays or cost increases, which can disrupt our ability to produce or deliver our products and/or increase our costs; • increasing the risk of impairment of goodwill and other long-lived assets, and the risk that we may not be able to fully recover the value of other assets such as real estate and tax assets; 17 • increasing the risk that counterparties to our contractual arrangements will become insolvent or otherwise unable to fulfill their contractual obligations which, in addition to increasing the risks identified above, could result in preference actions against us; and • adversely impacting market sizes and growth rates.
In addition to inflation and higher interest rates, slower economic growth in the domestic and/or international markets, actual or anticipated default on sovereign debt, volatility in the currency and credit markets, high levels of unemployment or underemployment, labor availability constraints, reduced levels of capital expenditures, changes or anticipation of potential changes in government trade, fiscal, tax and monetary policies (including as a result of upcoming elections in the U.S.), changes in capital requirements for financial institutions, government budget negotiation dynamics, sequestration or government shut-downs, austerity measures and other challenges that affect economies of the world 15 have in the past adversely affected, and may in the future adversely affect, the Company and its distributors, customers and suppliers, including having the effect of: • reducing demand for our products and services (in this Annual Report, references to products and services also includes software), limiting the financing available to our customers and suppliers, increasing order cancellations and resulting in longer sales cycles and slower adoption of new technologies; • increasing the difficulty in collecting accounts receivable and the risk of excess and obsolete inventories; • increasing price competition in our served markets; • supply interruptions, delays or cost increases, which can disrupt our ability to produce or deliver our products and/or increase our costs; • increasing the risk of impairment of goodwill and other long-lived assets, and the risk that we may not be able to fully recover the value of other assets such as real estate and tax assets; • increasing the risk that counterparties to our contractual arrangements will become insolvent or otherwise unable to fulfill their contractual obligations which, in addition to increasing the risks identified above, could result in preference actions against us; and • adversely impacting market sizes and growth rates.
These events can lead to recalls or safety alerts, result in the removal of a product or service from the market and result in product liability or similar claims being brought against us.
These events can lead to recalls or safety alerts, result in the removal of a product or service from the market and result in product liability, errors and omissions or similar claims being brought against us.
Attacks can also target hardware, software and information installed, stored or transmitted in our products after such products have been purchased and incorporated into third-party products, facilities or infrastructure.
Certain attacks also target hardware, software and information installed, stored or transmitted in our products after such products have been purchased and incorporated into third-party products, facilities or infrastructure.
These restructuring activities and our regular ongoing cost reduction activities could diminish our resources and competitiveness, and delays or failures in implementing planned restructuring activities may diminish the expected operational or financial benefits from such actions.
These activities could diminish our resources and competitiveness, and delays or failures in implementing planned restructuring and other cost reduction activities may diminish the expected operational or financial benefits from such actions.
International business risks have in the past and may in the future negatively affect our business and financial statements. In 2022 we generated approximately 13% of our sales from China. Accordingly, political, economic, legal, compliance, social and business conditions in China generally can adversely influence our business and financial statements.
International business risks have in the past and may in the future negatively affect our business and financial statements. In 2023 we generated approximately 13% of our sales from continuing operations from China. Accordingly, political, economic, legal, compliance, social and business conditions in China generally can adversely influence our business and financial statements.
These systems, products and services (including those we 23 acquire through business acquisitions) can be damaged, disrupted or shut down due to attacks by computer hackers, computer viruses, ransomware, human error or malfeasance (including by employees), power outages, hardware failures, telecommunication or utility failures, catastrophes or other unforeseen events, and in any such circumstances our system redundancy and other disaster recovery planning may be ineffective or inadequate.
These systems, products and services (including those we acquire through business acquisitions) are susceptible to being damaged, disrupted or shut down due to attacks by computer hackers, computer viruses, ransomware, human error or malfeasance (including by employees), power outages, hardware failures, telecommunication or utility failures, catastrophes, war, conflicts or other unforeseen events, and in any such circumstances our system redundancy and other disaster recovery planning may be ineffective or inadequate.
Concern over climate change can also result in new or additional legal, regulatory or quasi-regulatory requirements designed to reduce greenhouse gas emissions and/or mitigate the effects of climate change on the environment (such as taxation of, or caps on the use of, carbon-based energy).
Concern over climate change can also result in new or additional legal, regulatory or quasi-regulatory requirements designed to reduce greenhouse gas emissions, mitigate the effects of climate change on the environment (such as taxation of, or caps on the use of, carbon-based energy) and/or increase disclosures with respect thereto.
Notwithstanding the opinion of tax counsel, the IRS could determine on audit that any such transactions are taxable if it determines that any of these facts, assumptions, representations or undertakings are not correct or have been violated or if it disagrees with the conclusions in the respective opinion.
Notwithstanding the opinion of tax counsel, the Internal Revenue Service (“IRS”) could determine on audit that any such transactions are taxable if it determines that any of these facts, assumptions, representations or undertakings are not correct or have been violated or if it disagrees with the conclusions in the respective opinion.
Our existing and future indebtedness may limit our operations and our use of our cash flow and negatively impact our credit ratings; and any failure to comply with the covenants that apply to our indebtedness could adversely affect our business and financial statements. As of December 31, 2022, we had approximately $19.7 billion in outstanding indebtedness.
Our existing and future indebtedness may limit our operations and our use of our cash flow and negatively impact our credit ratings; and any failure to comply with the covenants that apply to our indebtedness could adversely affect our business and financial statements. As of December 31, 2023, we had approximately $18.4 billion in outstanding indebtedness.
Our non-U.S. business (and particularly our business in high-growth markets) is subject to risks that include: • public health crises and epidemics, such as COVID-19; 19 • interruption in the transportation of materials to us and finished goods to our customers; • differences in terms of sale, including longer payment terms than are typical in the U.S.; • local product preferences or requirements; • changes in a country’s or region’s political, legal, social, compliance, business or economic conditions, such as the devaluation of particular currencies; • trade protection measures, tariffs, embargoes and import or export restrictions and requirements; • unexpected changes in laws or regulatory requirements, including changes in tax laws; • capital controls and limitations on ownership and on repatriation of earnings and cash; • the potential for nationalization of enterprises; • changes in local healthcare delivery, payment and reimbursement policies and programs; • complex data privacy and cybersecurity requirements; • limitations on legal rights and our ability to enforce such rights, including differing protection of intellectual property; • difficulty in staffing and managing widespread operations; • workforce instability and differing labor or employment regulations; • difficulties in implementing restructuring actions on a timely or comprehensive basis; • greater uncertainty, risk, expense and delay in commercializing products in certain foreign jurisdictions, including with respect to product and other regulatory approvals; and • remaining uncertainties relating to the impact of the UK’s exit from the EU in 2020.
Our non-U.S. business (and particularly our business in high-growth markets) is subject to risks that include: • public health crises and epidemics, such as COVID-19; • interruption in the transportation of materials to us and finished goods to our customers; • increases in materials, energy, labor or other manufacturing-related costs or higher supply chain logistics costs; • differences in terms of sale, including longer payment terms than are typical in the U.S.; • local product preferences or requirements; • changes in a country’s or region’s political, legal, social, compliance, business or economic conditions, such as the devaluation of particular currencies or military conflict; • trade protection measures, tariffs, embargoes and import or export restrictions and requirements; • unexpected changes in laws or regulatory requirements, including changes in tax laws; • capital controls and limitations on ownership and on repatriation of earnings and cash; • the potential for nationalization of enterprises; • changes in local healthcare delivery, payment and reimbursement policies and programs; • complex data privacy and cybersecurity requirements; • limitations on legal rights and our ability to enforce such rights, including differing protection of intellectual property; • difficulty in staffing and managing widespread operations; • workforce instability and differing labor or employment regulations; • difficulties in implementing restructuring actions on a timely or comprehensive basis; and • greater uncertainty, risk, expense and delay in commercializing products in certain foreign jurisdictions, including with respect to product and other regulatory approvals.
We have established policies and procedures designed to ensure compliance with such laws and regulations but there can be no assurance that the policies and procedures have prevented and will prevent violations of these regulations, and any such violation can adversely affect our business and financial statements. • We also have agreements to sell products and services to government entities (as well as agreements relating to government financing, as discussed above) and are subject to various statutes and regulations that apply to companies doing business with government entities (less than 5% of our 2022 sales were made to the U.S. federal government).
We have established policies and procedures designed to ensure compliance with such laws and regulations but there can be no assurance that the policies and procedures have prevented and will prevent violations of these regulations, and any such violation can adversely affect our business and financial statements. • We also have agreements to sell products and services to government entities as well as agreements relating to government financing, as discussed above (less than 5% of our 2023 sales were made to the U.S. federal government).
Because of the time required to approve and license certain regulated manufacturing facilities and other stringent regulations of the FDA and similar agencies regarding the manufacture of certain of our products, an alternative manufacturer is not always available on a timely basis to replace such production capacity.
Because of the time required to obtain approval of and licenses for certain regulated manufacturing facilities and other stringent regulations of the FDA and similar agencies regarding the manufacture of certain of our products, an alternative manufacturer is not always available on a timely basis to replace such production capacity.
For example, certain of our customers are or have been subject to DPA requirements relating to the production of COVID-19 related products and have required certain of our businesses to also comply with these requirements under our supply agreements.
For example, certain of our customers were subject to DPA requirements relating to the production of COVID-19 related products and required certain of our businesses to also comply with these requirements under our supply agreements.
Such risks include, but are not limited to, adverse effects on macroeconomic conditions, including increased inflation, constraints on the availability of commodities, supply chain disruption and decreased business spending; disruptions to our or our business partners’ global technology infrastructure, including through cyber-attack or cyber-intrusion; adverse changes in international trade policies and relations; claims, litigation and regulatory enforcement; our ability to implement and execute our business strategy; terrorist activities; our exposure to foreign currency fluctuations; reputational risk; and constraints, volatility, or disruption in the capital markets.
Such risks include, but are not limited to, adverse effects on macroeconomic conditions, including increased inflation, constraints on the availability of commodities, supply chain disruption and decreased business spending; disruptions to our or our business partners’ global technology infrastructure, including through cyber-attack or cyber-intrusion; adverse changes in international trade policies and relations; claims, litigation and regulatory enforcement; potential retaliatory actions by governments against companies, such as nationalization of foreign 27 businesses; adverse impacts on our ability to implement and execute our business strategy; terrorist activities; our exposure to foreign currency fluctuations; reputational risk; and constraints, volatility, or disruption in the capital markets.
Our success depends on several factors, including our ability to: • correctly identify customer needs and preferences and predict future needs and preferences; • allocate our R&D funding to products and services with higher growth prospects; • anticipate and respond to our competitors’ development of new products and services and technological innovations; • differentiate our offerings from our competitors’ offerings and avoid commoditization; • innovate and develop new technologies and applications, and acquire or obtain rights to third-party technologies that may have valuable applications in our served markets; • obtain adequate intellectual property rights with respect to key technologies before our competitors do; • successfully commercialize new technologies in a timely manner, price them competitively and cost-effectively manufacture and deliver sufficient volumes of new products of appropriate quality on time; • obtain necessary regulatory approvals of appropriate scope (including with respect to medical device products by demonstrating satisfactory clinical results where applicable as well as achieving third-party reimbursement); and • stimulate customer demand for and convince customers to adopt new technologies. 18 If we fail to accurately predict future customer needs and preferences or fail to produce viable technologies, we may invest heavily in R&D of products and services that do not lead to significant revenue, which would adversely affect our business and financial statements.
Our success depends on several factors, including our ability to: • correctly identify customer needs and preferences and predict future needs and preferences; • allocate our R&D funding to products and services with higher growth prospects; 16 • anticipate and respond to our competitors’ development of new products and services and technological innovations; • differentiate our offerings from our competitors’ offerings and avoid commoditization; • innovate and develop new technologies and applications, and acquire or obtain rights to third-party technologies that may have valuable applications in our served markets; • obtain adequate intellectual property rights with respect to key technologies before our competitors do; • successfully commercialize new technologies in a timely manner, price them competitively and cost-effectively manufacture and deliver sufficient volumes of new products of appropriate quality on time; • obtain necessary regulatory approvals of appropriate scope (including with respect to medical device products by demonstrating satisfactory clinical results where applicable as well as achieving third-party reimbursement); and • stimulate customer demand for and convince customers to adopt new technologies.
If we add new debt in the future, the risks described above would increase. 28 We may be required to recognize impairment charges for our goodwill and other intangible assets. As of December 31, 2022, the net carrying value of our goodwill and other intangible assets totaled approximately $60.1 billion.
If we add new debt in the future, the risks described above would increase. 26 We may be required to recognize impairment charges for our goodwill and other intangible assets. As of December 31, 2023, the net carrying value of our goodwill and other intangible assets totaled approximately $62.4 billion.
If the FDA or any other regulator determines that we have marketed our products for off-label use, we can be subject to exclusion from participation in government healthcare programs and the other adverse effects referenced under the risk factors set forth above. Any of these events could significantly harm our business and financial statements.
If the FDA or any other regulator determines that we have marketed our products for off-label use, we can be subject to exclusion from participation in government healthcare programs and the other adverse effects referenced under the risk factors set forth above.
The FDA strictly regulates the promotional claims that may be made about approved or cleared products. In particular, any clearances we may receive only permit us to market our products for the intended uses indicated on the labeling cleared by the FDA.
The FDA and other regulatory agencies around the world strictly regulate the promotional claims that may be made about approved or cleared products. In particular, any clearances we may receive only permit us to market our products for the intended uses indicated on the labeling cleared by the FDA.
If we are less successful in our recruiting efforts, if we cannot retain and motivate highly skilled workers and key leaders representing diverse backgrounds, experiences and skill sets, or if we experience labor disputes, our business and financial statements may be adversely affected. Our restructuring actions can have long-term adverse effects on our business and financial statements.
If we are less successful in our recruiting efforts, if we cannot retain and motivate highly skilled workers and key leaders representing diverse backgrounds, experiences and skill sets, or if we experience labor disputes, our business and financial statements may be adversely affected.
While the direct impact of COVID-19 and many of the preventive measures moderated in 2022, any resurgence of COVID-19 (or the outbreak of any other epidemic or pandemic) or the reinstatement of similar preventive measures in the future could negatively impact the economies and financial markets of the world and our businesses and financial statements.
Any resurgence of COVID-19 (or the outbreak of any other epidemic or pandemic) or the reinstatement of similar preventive measures in the future could negatively impact the economies and financial markets of the world and our business and financial statements.
The resolution of these contingencies has not had a material effect on our business or financial statements but there can be no assurance that this favorable pattern will continue. Potential indemnification liabilities pursuant to the Communications Disposition, the Fortive Disposition, the Envista Disposition or the anticipated EAS Separation could adversely affect our business and financial statements.
The resolution of these contingencies has not had a material effect on our business or financial statements but there can be no assurance that this favorable pattern will continue. Potential indemnification liabilities pursuant to the Dispositions or similar transactions could adversely affect our business and financial statements.
Our debt level and related debt service obligations (as well as the dividend obligations pursuant to our Series B Mandatory Convertible Preferred Stock (“MCPS”)) can have negative consequences, including (1) requiring us to dedicate significant cash flow from operations to the payment of principal and interest on our debt (or dividends on our MCPS), which reduces the funds we have available for other purposes such as acquisitions and other investments; (2) reducing our flexibility in planning for or reacting to changes in our business and market conditions; and (3) exposing us to interest rate risk on any variable rate debt we may issue.
Our debt level and related debt service obligations can have negative consequences, including (1) requiring us to dedicate significant cash flow from operations to the payment of principal and interest on our debt, which reduces the funds we have available for other purposes such as acquisitions and other investments; (2) reducing our flexibility in planning for or reacting to changes in our business and market conditions; and (3) exposing us to interest rate risk on any variable rate debt we may issue, particularly in light of increases in interest rates.
As a global organization, we are subject to data privacy and security laws, regulations and customer-imposed controls in numerous jurisdictions as a result of having access to and processing confidential, personal and/or sensitive data in the course of our business. Please see “Item 1. Business—Regulatory Matters” for additional information.
As a global organization, we are subject to data privacy and security laws, regulations and customer-imposed controls in numerous jurisdictions as a result of having access to and processing confidential, personal and/or sensitive data in the course of our business.
There can be no assurance that we will be able to successfully maintain, enhance and upgrade our systems as necessary to effectively address these requirements. Further, a greater number of our employees have been working remotely since the beginning of the COVID-19 pandemic, which exposes us to greater cybersecurity and data privacy risks.
There can be no assurance that we will be able to successfully maintain, enhance and upgrade our systems as necessary to effectively address these requirements. Further, more of our employees work remotely now compared to before the beginning of the COVID-19 pandemic, which exposes us to greater cybersecurity and data privacy risks.
As a result, the tax laws in the U.S. and other countries in which we do business could change on a prospective or retroactive basis, and any such changes could adversely affect our business and financial statements. The military conflict between Russia and Ukraine has adversely affected and may further adversely affect our business and financial statements.
As a result, the tax laws in the U.S. and other countries in which we do business could change on a prospective or retroactive basis, and any such changes could adversely affect our business and financial statements.
Certain of our products are medical devices and other products that are subject to regulation by the FDA, by other federal and state governmental agencies, by comparable agencies of other countries and regions, by certain accrediting bodies and by regulations governing hazardous materials and drugs-of-abuse (or the manufacture and sale of products containing any such materials).
Failure to comply with those regulations could adversely affect our business and financial statements. 29 Certain of our products are medical devices and other products that are subject to regulation by the FDA, by other federal and state governmental agencies, by comparable agencies of other countries and regions, by certain accrediting bodies and by regulations governing hazardous materials and drugs-of-abuse (or the manufacture and sale of products containing any such materials).
In addition, any failure to adequately address stakeholder expectations with respect to environmental, social and governance (“ESG”) matters may result in the loss of business, adverse reputational impacts, diluted market valuations and challenges in attracting and retaining customers and talented employees.
In addition, any failure to adequately address regulatory requirements or stakeholder expectations with respect to sustainability matters may result in the loss of business, adverse reputational impacts, diluted market valuations and challenges in attracting and retaining customers and employees.
We rely on information technology systems, some of which are provided and/or managed by third-parties, to process, transmit and store electronic information (including sensitive data such as confidential business information and personal data relating to employees, customers, other business partners and patients), and to manage or support a variety of critical business processes and activities (such as receiving and fulfilling orders, billing, collecting and making payments, shipping products, providing services and support to customers and fulfilling contractual obligations).
Operational Risks Significant disruptions in, or breaches in security of, our information technology systems or data or violation of data privacy laws can adversely affect our business and financial statements. 21 We rely on information technology systems, some of which are provided and/or managed by third-parties, to process, transmit and store electronic information (including sensitive data such as confidential business information and personal data relating to employees, customers, other business partners and patients), and to manage or support a variety of critical business processes and activities (such as receiving and fulfilling orders, billing, collecting and making payments, shipping products, providing services and support to customers and fulfilling contractual obligations).
ITEM 1A. RISK FACTORS You should carefully consider the risks and uncertainties described below, together with the information included elsewhere in this Annual Report on Form 10-K and other documents we file with the SEC. We have identified the risks and uncertainties described below as material, but they are not the only risks and uncertainties facing us.
ITEM 1A. RISK FACTORS You should carefully consider the risks and uncertainties described below, together with the information included elsewhere in this Annual Report on Form 10-K and other documents we file with the SEC.
Since our growth strategy depends in part on our ability to further penetrate markets outside the U.S. and increase the localization of our products and services, we expect to continue to increase our sales and presence outside the U.S., particularly in the high-growth markets.
In addition, many of our manufacturing operations, suppliers and employees are located outside the U.S. Since our growth strategy depends in part on our ability to further penetrate markets outside the U.S. and increase the localization of our products and services, we plan to continue to increase our sales and presence outside the U.S., particularly in the high-growth markets.
Prices for and availability of the components, raw materials and other commodities we use in our business, as well as for labor, have fluctuated significantly in the past, including during 2022. Please see “Item 1.
Prices for and availability of the components, raw materials and other commodities we use in our business, as well as for labor, have fluctuated significantly in recent years. Please see “Item 1. Business-Materials” for additional details.
Further, considerable uncertainty exists regarding the long-term effects of the expansionary monetary and fiscal policies adopted by the central banks and financial authorities of some of the world’s leading economies, including the U.S. and China.
Further, considerable uncertainty exists regarding the long-term effects of the expansionary monetary and fiscal actions by certain central banks and financial authorities of some of the world’s leading economies.
Certain of our businesses are subject to extensive regulation by the 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 business and financial statements.
Certain of our businesses are subject to extensive regulation by the 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.
All of the factors described above can adversely affect our business and financial statements. Non-U.S. economic, political, legal, compliance, social and business factors can negatively affect our business and financial statements. In 2022 approximately 58% of our sales were derived from customers outside the U.S. In addition, many of our manufacturing operations, suppliers and employees are located outside the U.S.
All of the factors described above can adversely affect our business and financial statements. Non-U.S. economic, political, legal, compliance, social and business factors can negatively affect our business and financial statements. In 2023 approximately 60% of our sales from continuing operations were derived from customers outside the U.S.
Certain of our businesses operate in industries that have experienced and may experience periodic, cyclical downturns. In addition, in certain of our businesses demand depends on customers’ capital spending budgets as well as government funding policies, and matters of public policy and government budget dynamics as well as product and economic cycles can affect the spending decisions of these entities.
In addition, in certain of our businesses demand depends on customers’ capital spending budgets, government funding policies and interest rates, and matters of public policy and government budget, fiscal and monetary dynamics as well as product and economic cycles can affect the spending decisions of these entities.
We could incur significant liability if any of the Fortive Disposition, the Envista Disposition or the EAS Separation is determined to be a taxable transaction.
We could incur significant liability if any of the Dispositions is determined to be a taxable transaction.
Unauthorized tampering, adulteration or interference with our products may also adversely affect product functionality and result in loss of data, risk to patient safety and product recalls or field actions.
Unauthorized tampering, adulteration or interference with our products may also adversely affect product functionality and result in loss of data, risk to patient safety and product recalls or field actions. In addition, the rapid evolution and increased adoption of artificial intelligence technologies may intensify our cybersecurity risks.
Additional risks and uncertainties not currently known to us or that we currently believe are immaterial also may impair our business and financial statements, including our results of operations, liquidity and financial condition, and our stock price.
Additional risks and uncertainties not currently known to us or that we currently believe are immaterial also may impair our business and financial statements, including our results of operations, liquidity and financial condition, and our stock price. Business and Strategic Risks Unanticipated, further declines in demand for our COVID-19 related products could adversely affect our business and financial statements.
In addition, compliance with the varying data privacy regulations across the U.S. and around the world has required significant expenditures and may require additional expenditures, and may require further changes in our products or business models that increase competition or reduce revenue.
In addition, compliance with the varying data privacy regulations across the U.S. and around the world has required significant expenditures and may require additional expenditures, and may require further changes in our products or business models that increase competition or reduce revenue. 22 Defects and unanticipated use or inadequate disclosure with respect to our products or services, or allegations thereof, can adversely affect our business and financial statements.
To varying degrees, these regulators require us to comply with laws and regulations governing the development, testing, manufacturing, labeling, marketing, distribution and post-marketing surveillance of our products.
Failure to meet these requirements can adversely impact our business and financial statements in the applicable geographies. To varying degrees, these regulators require us to comply with laws and regulations governing the development, testing, manufacturing, labeling, marketing, distribution and post-marketing surveillance of our products.
Uncertainty or adverse changes to conditions in China or the policies of China’s government or its laws and regulations can adversely affect the overall economic growth of China, or of the particular industries in which we participate, and can adversely affect our business and financial statements.
Uncertainty or adverse changes to conditions in China or the policies of China’s government or its laws and regulations can adversely affect the overall economic growth of China, or of the particular industries in which we participate, and can adversely affect our business and financial statements. 18 Our growth can suffer if the markets into which we sell our products and services decline, do not grow as anticipated or experience cyclicality.
We have received opinions from outside tax counsel to the effect that each of the Fortive Disposition and the Envista Disposition qualifies as a transaction that is described in Sections 355(a) and 368(a)(1)(D) of the Internal Revenue Code, and we anticipate obtaining a similar opinion with respect to the EAS Separation.
We have received opinions from outside tax counsel to the effect that the Dispositions of Fortive Corporation in 2016, Envista Holdings Corporation in 2019 and Veralto Corporation in 2023 each qualifies as a transaction that is described in Sections 355(a) and 368(a)(1)(D) of the Internal Revenue Code.
Any of these risks can adversely affect our financial statements. Legal, Regulatory, Compliance and Reputational Risks Significant developments or changes in national laws or policies to protect or promote domestic interests and/or address foreign competition can have an adverse effect on our business and financial statements.
In 2023, Russia, Ukraine and Israel sales combined accounted for less than 1% of the Company’s sales. Legal, Regulatory, Compliance and Reputational Risks Significant developments or changes in national laws or policies to protect or promote domestic interests and/or address foreign competition can have an adverse effect on our business and financial statements.
Our liability insurance may not be sufficient in type or amount to cover us against claims related to security breaches, cyber-attacks and other related breaches.
Our liability insurance may not be sufficient in type or amount to cover us against claims related to security breaches, cyber-attacks and other related breaches. In addition, any businesses that we acquire may further expose us to the risks set forth above.
Our credit facilities and long-term debt obligations also impose certain restrictions on us, including certain restrictions on our ability to incur liens on our assets, and a requirement under our credit facilities to maintain a consolidated leverage ratio (the ratio of consolidated indebtedness to consolidated indebtedness plus shareholders’ equity) of 0.65 to 1.0 or less.
Our credit facilities and long-term debt obligations also impose certain restrictions on us, including certain restrictions on our ability to incur liens on our assets, and a requirement under our credit facilities to not exceed a specified, consolidated leverage ratio.
Certain modifications to our products may require new 510(k) clearances or other marketing authorizations and may require us to recall or cease marketing our products.
Any of these events could significantly harm our business and financial statements. 30 Certain modifications to our products may require new 510(k) clearances or other marketing authorizations and may require us to recall or cease marketing our products.
There can be no assurance that these indemnification provisions or insurance coverages will protect us fully or at all, and as a result we may face unexpected liabilities that adversely affect our business and financial statements. We intend to separate our Environmental & Applied Solutions segment to create a publicly-traded company in the fourth quarter of 2023.
In addition, we obtain or receive the benefits of representations and warranties insurance in connection with certain acquisitions. There can be no assurance that these indemnification provisions or insurance coverages will protect us fully or at all, and as a result we may face unexpected liabilities that adversely affect our business and financial statements.
Adverse changes in our relationships with these distributors and other partners, reduction or discontinuation of their purchases from us or adverse developments in their financial condition, performance or purchasing patterns, can adversely affect our business and financial statements.
Some of these distributors and other partners also sell our competitors’ products or compete with us directly. Adverse developments in the financial condition, performance or purchasing patterns of these distributors and partners, or consolidation, can adversely affect our business and financial statements.
We have implemented significant restructuring activities across our businesses to adjust our cost structure, and we may engage in similar restructuring activities in the future.
Our restructuring actions and other cost reduction efforts can have long-term adverse effects on our business and financial statements. In the past, we have implemented significant restructuring and other cost reduction activities across our businesses to adjust our cost structure, and we may engage in similar activities in the future.
These agreements provide for specific indemnity and liability obligations of each party that can lead to disputes between us and the respective counterparty. If we are required to indemnify any of the other parties under the circumstances set forth in these agreements, we may be subject to substantial liabilities.
If we are required to indemnify any of the other parties under the circumstances set forth in these agreements, we may be subject to substantial liabilities.
Our agreements with government entities are in some cases subject to termination, reduction or modification at the convenience of the government or in the event of changes in government requirements, reductions in federal spending and other factors, and we may underestimate our costs of performing under the contract.
The laws governing government contracts differ from the laws governing private contracts; for example, our government contracts are in some cases subject to termination, reduction or modification at the convenience of the government or in the event of changes in government requirements, reductions in federal 28 spending and other factors.
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. Certain of the acquisition agreements by which we have acquired companies require the former owners to indemnify us against certain liabilities related to the operation of the acquired company before we acquired it.
Certain of the acquisition agreements by which we have acquired companies require the former owners to indemnify us against certain liabilities related to the operation of the acquired company before we acquired it. In most of these agreements, however, the liability of the former owners is limited and certain former owners may be unable to meet their indemnification responsibilities.
We, our representatives and the industries in which we operate are at times under review and/or investigation by regulatory authorities.
The regulations we are subject to have tended to become more stringent over time and can be inconsistent across jurisdictions. We, our representatives and the industries in which we operate are at times under review and/or investigation by regulatory authorities.
In light of the situation in Ukraine, in addition to suspending sales prohibited by sanctions, the Company has suspended the shipment of products to Russia with the exception of products for the purposes of diagnosing and treating patients and producing vaccines and therapeutics.
In addition to suspending sales prohibited by sanctions, the Company has suspended the shipment of products to Russia with the exception of products for the purposes of diagnosing and treating patients and producing vaccines and therapeutics. Military conflicts also heighten other risks disclosed in this Annual Report, any of which can adversely affect our business and financial statements.
Any of these factors could adversely affect our business and financial statements in any given period. 20 Certain of our businesses rely on relationships with collaborative partners and other third-parties for development, supply and/or marketing of certain products, potential products and technologies, and such collaborative partners or other third-parties could fail to perform sufficiently.
Failure to appropriately respond to this evolving landscape may result in legal liability, regulatory action, or brand and reputational harm. Certain of our businesses rely on relationships with collaborative partners and other third-parties for development, supply and/or marketing of certain products, potential products and technologies, and such collaborative partners or other third-parties could fail to perform sufficiently.
The military conflict between Russia and Ukraine has adversely affected and may further adversely affect our business and financial statements.
Military conflicts (such as the conflict between Russia and Ukraine and the conflict in Israel and surrounding areas) can adversely affect our business and financial statements. Military conflicts (such as the conflict between Russia and Ukraine and the conflict in Israel and surrounding areas) can adversely affect our business and financial statements.
Our success depends on our ability to recruit, retain and motivate talented employees representing diverse backgrounds, experiences and skill sets. The market for highly skilled workers and leaders in our industries, particularly in the areas of science and technology, is extremely competitive and expectations from qualified talent in many areas of the labor market have evolved and escalated recently.
The market for highly skilled workers and leaders in our industries, particularly in the areas of science and technology, is extremely competitive and expectations from qualified talent in many areas of the labor market have evolved and escalated recently. In addition, in recent years we faced labor availability constraints and labor cost inflation in certain areas of our business.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changePROPERTIES As of December 31, 2022, the Company had facilities in over 60 countries, including approximately 244 significant administrative, sales, research and development, manufacturing and distribution facilities. 90 of these facilities are located in the United States in over 20 states and 154 are located outside the United States, primarily in Europe and to a lesser extent in Asia, South America, Canada and Australia.
Biggest changePROPERTIES As of December 31, 2023, the Company had facilities in over 50 countries, including approximately 184 significant administrative, sales, research and development, manufacturing and distribution facilities. 70 of these facilities are located in the United States in over 20 states and 114 are located outside the United States, primarily in Europe, and to a lesser extent in Asia, Australia, Canada and South America.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeRales is also a member of the board of directors of each of Enovis Corporation and ESAB Corporation, and is a brother of Steven M. Rales. Rainer M. Blair has served as President and Chief Executive Officer since September 2020, after serving as Executive Vice President from January 2017 to August 2020. Matthew R.
Biggest changeRainer M. Blair has served as President and Chief Executive Officer since September 2020, after serving as Executive Vice President from January 2017 to August 2020. Matthew R. McGrew has served as Executive Vice President and Chief Financial Officer since January 2019. Christopher P.
Raskas 56 Senior Vice President – Corporate Development 2004 Steven M. Rales is a co-founder of Danaher and has served on Danaher’s Board of Directors since 1983, serving as Danaher’s Chairman of the Board since 1984. He was also CEO of the Company from 1984 to 1990. Mr. Rales is a brother of Mitchell P. Rales. Mitchell P.
Raskas 57 Senior Vice President – Corporate Development 2004 Steven M. Rales is a co-founder of Danaher and has served on Danaher’s Board of Directors since 1983, serving as Danaher’s Chairman of the Board since 1984. He was also CEO of the Company from 1984 to 1990. Mr. Rales is a brother of Mitchell P. Rales. Mitchell P.
Couchara has served as Senior Vice President – Human Resources since April 2022, after serving as Vice President-Talent from January 2021 to April 2022, Vice President – Human Resources for Danaher’s Life Sciences business from July 2019 to January 2021 and Senior Vice President-Human Resources and Communications for Danaher’s Pall business from June 2017 to July 2019. Brian W.
Couchara has served as Senior Vice President – Human Resources since April 2022, after serving as Vice President-Talent from January 2021 to April 2022, Vice President – Human Resources for Danaher’s Life Sciences subsidiary from July 2019 to January 2021 and Senior Vice President-Human Resources and Communications for Danaher’s Pall subsidiary from June 2017 to July 2019. Brian W.
ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 34 INFORMATION ABOUT OUR EXECUTIVE OFFICERS Set forth below are the names, ages, positions and experience of Danaher’s executive officers as of February 4, 2023. All of Danaher’s executive officers hold office at the pleasure of Danaher’s Board of Directors. Unless otherwise stated, the positions indicated are Danaher positions.
ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 33 INFORMATION ABOUT OUR EXECUTIVE OFFICERS Set forth below are the names, ages, positions and experience of Danaher’s executive officers as of February 4, 2024. All of Danaher’s executive officers hold office at the pleasure of Danaher’s Board of Directors. Unless otherwise stated, the positions indicated are Danaher positions.
Rales is a co-founder of Danaher and has served on Danaher’s Board of Directors since 1983, serving as Chairman of the Executive Committee of Danaher since 1984. He was also President of the Company from 1984 to 1990. Mr.
Rales is a co-founder of Danaher and has served on Danaher’s Board of Directors since 1983, serving as Chairman of the Executive Committee of Danaher since 1984. He was also President of the Company from 1984 to 1990. Mr. Rales is also a member of the board of directors of ESAB Corporation, and is a brother of Steven M. Rales.
Gutierrez-Ramos served as Vice President – Drug Discovery for AbbVie, Inc., a biopharmaceutical company, from January 2020 to December 2020; as President and CEO of Repertoire Immune Medicines, a biotechnology company, from August 2018 until January 2020; and as President and CEO of Synlogic, Inc., a biopharmaceutical company, from August 2015 until August 2018. William H.
Gutierrez-Ramos served as Vice President – Drug Discovery for AbbVie, Inc., a biopharmaceutical company, from January 2020 to December 2020; and as President and CEO of Repertoire Immune Medicines, a biotechnology company, from August 2018 until January 2020. William H. King has served as Senior Vice President – Strategic Development since 2014. Daniel A.
Honeycutt 53 Executive Vice President 2021 Joakim Weidemanis 53 Executive Vice President 2017 Georgeann F. Couchara 46 Senior Vice President - Human Resources 2022 Brian W. Ellis 56 Senior Vice President – General Counsel 2016 Jose-Carlos Gutierrez-Ramos 60 Senior Vice President – Chief Science Officer 2020 William H. King 55 Senior Vice President – Strategic Development 2005 Daniel A.
Riley 50 Executive Vice President 2024 Joakim Weidemanis 54 Executive Vice President 2017 Georgeann F. Couchara 47 Senior Vice President - Human Resources 2022 Brian W. Ellis 57 Senior Vice President – General Counsel 2016 Jose-Carlos Gutierrez-Ramos 61 Senior Vice President – Chief Science Officer 2020 William H. King 56 Senior Vice President – Strategic Development 2005 Daniel A.
Name Age Position Officer Since Steven M. Rales 71 Chairman of the Board 1984 Mitchell P. Rales 66 Chairman of the Executive Committee 1984 Rainer M. Blair 58 President and Chief Executive Officer 2014 Matthew R. McGrew 51 Executive Vice President and Chief Financial Officer 2019 Jennifer L.
Name Age Position Officer Since Steven M. Rales 72 Chairman of the Board 1984 Mitchell P. Rales 67 Chairman of the Executive Committee 1984 Rainer M. Blair 59 President and Chief Executive Officer 2014 Matthew R. McGrew 52 Executive Vice President and Chief Financial Officer 2019 Christopher P.
King has served as Senior Vice President – Strategic Development since 2014. Daniel A. Raskas has served as Senior Vice President – Corporate Development since 2010. 35 Table of Contents PART II
Raskas has served as Senior Vice President – Corporate Development since 2010. 34 Table of Contents PART II
Honeycutt has served as Executive Vice President since January 2021 after serving as Vice President – Group Executive from May 2019 until December 2020 and President of Danaher’s Pall business from January 2017 until April 2019. Joakim Weidemanis has served as Executive Vice President since December 2017. Georgeann F.
Joakim Weidemanis has served as Executive Vice President since December 2017. Georgeann F.
Removed
McGrew has served as Executive Vice President and Chief Financial Officer since January 2019, after serving as Group CFO of Danaher from 2012 until December 2018. Jennifer L.
Added
Riley has served as Executive Vice President since January 2024 after serving as Vice President – Group Executive of Danaher’s Life Sciences subsidiary from July 2022 to December 2023, Vice President-Group Executive of Danaher’s Diagnostics subsidiary from January 2020 to July 2022 and President of Danaher’s Beckman Coulter Diagnostics subsidiary from August 2017 to January 2020.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeIssuer Purchases of Equity Securities Refer to Note 19 to the Consolidated Financial Statements included in this Annual Report for a discussion of the Company’s common stock repurchase program. Neither the Company nor any “affiliated purchaser” repurchased any shares of Company common stock during 2022, 2021 or 2020, other than as described in Note 19.
Biggest changeIssuer Purchases of Equity Securities Refer to Note 19 to the Consolidated Financial Statements included in this Annual Report for a discussion of the Company’s common stock repurchase program. Neither the Company nor any “affiliated purchaser” repurchased any shares of Company common stock during 2023, 2022 or 2021, other than 3,906 shares in July 2022 as described in Note 19.
ITEM 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock is traded on the New York Stock Exchange under the symbol DHR. As of February 3, 2023, there were 2,300 holders of record of Danaher’s common stock.
ITEM 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock is traded on the New York Stock Exchange under the symbol DHR. As of February 2, 2024, there were 2,191 holders of record of Danaher’s common stock.
Recent Issuances of Unregistered Securities None ITEM 6. RESERVED 36 Table of Contents
Recent Issuances of Unregistered Securities None ITEM 6. RESERVED 35 Table of Contents

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeSubject to any limitations that may result from the COVID-19 pandemic or other market disruptions (such as the disruptions in the financial and capital markets that occurred at times in 2020), the Company anticipates following the same approach in the future. 52 Table of Contents Overview of Cash Flows and Liquidity Following is an overview of the Company’s cash flows and liquidity for the years ended December 31: ($ in millions) 2022 2021 2020 Total operating cash flows provided by continuing operations $ 8,519 $ 8,358 $ 6,215 Cash paid for acquisitions $ (637) $ (10,961) $ (20,971) Payments for additions to property, plant and equipment (1,152) (1,294) (791) Proceeds from sales of property, plant and equipment 9 13 2 Payments for purchases of investments (523) (934) (342) Proceeds from sales of investments 18 126 13 Proceeds from sale of product lines — 26 826 All other investing activities 51 37 24 Net cash used in investing activities for continuing operations $ (2,234) $ (12,987) $ (21,239) Proceeds from the issuance of common stock in connection with stock-based compensation $ 31 $ 86 $ 153 Proceeds from the public offering of common stock, net of issuance costs — — 1,729 Proceeds from the public offering of preferred stock, net of issuance costs — — 1,668 Payment of dividends (818) (742) (615) Net (repayments of) proceeds from borrowings (maturities of 90 days or less) (723) 2,265 (4,637) Proceeds from borrowings (maturities longer than 90 days) — 984 8,670 Repayments of borrowings (maturities longer than 90 days) (965) (1,186) (5,933) Make-whole premiums to redeem borrowings prior to maturity — (96) (26) All other financing activities (95) (16) (3) Net cash (used in) provided by financing activities for continuing operations $ (2,570) $ 1,295 $ 1,006 • Operating cash flows from continuing operations increased $161 million, or 2%, during 2022 as compared to 2021, due primarily to higher net earnings from continuing operations (after excluding charges for depreciation, amortization (including intangible assets and inventory step-up), stock compensation, gain on sale of product lines, unrealized investment gains/losses, loss on the extinguishment of debt and the contract settlement expense in 2021).
Biggest changeSubject to any limitations that may result from market disruptions (such as the disruptions in the financial and capital markets that occurred at times in 2020), the Company anticipates following the same approach in the future. 48 Table of Contents Overview of Cash Flows and Liquidity Following is an overview of the Company’s cash flows and liquidity for the years ended December 31: ($ in millions) 2023 2022 2021 Total operating cash flows provided by continuing operations $ 6,490 $ 7,613 $ 7,423 Cash paid for acquisitions $ (5,610) $ (582) $ (10,901) Payments for additions to property, plant and equipment (1,383) (1,118) (1,240) Proceeds from sales of property, plant and equipment 12 9 13 Payments for purchases of investments (172) (523) (925) Proceeds from sales of investments 61 18 126 All other investing activities 44 51 37 Total cash used in investing activities from continuing operations (7,048) (2,145) (12,890) Total investing cash used in discontinued operations (33) (89) (97) Net cash used in investing activities $ (7,081) $ (2,234) $ (12,987) Proceeds from the issuance of common stock in connection with stock-based compensation $ 68 $ 31 $ 86 Payment of dividends (821) (818) (742) Net (repayments of) proceeds from borrowings (maturities of 90 days or less) (1,006) (723) 2,265 Proceeds from borrowings (maturities longer than 90 days) — — 984 Repayments of borrowings (maturities longer than 90 days) (620) (965) (1,186) Distribution from discontinued operations 2,600 — — Make-whole premiums to redeem borrowings prior to maturity — — (96) All other financing activities (67) (95) (16) Net cash provided by (used in) financing activities for continuing operations 154 (2,570) 1,295 Cash distributions to Veralto Corporation, net (427) — — Net cash (used in) provided by financing activities $ (273) $ (2,570) $ 1,295 • Operating cash flows continuing from operations decreased approximately $1.1 billion, or 15% during 2023 compared to 2022, due primarily to lower net earnings from continuing operations (after excluding charges for depreciation, amortization, stock compensation and unrealized investment gains/losses).
FINANCIAL INSTRUMENTS AND RISK MANAGEMENT The Company is exposed to market risk from changes in interest rates, foreign currency exchange rates, equity prices and commodity prices as well as credit risk, each of which could impact its Consolidated Financial Statements. The Company generally addresses its exposure to these risks through its normal operating and financing activities.
FINANCIAL INSTRUMENTS AND RISK MANAGEMENT The Company is exposed to market risk from changes in interest rates, currency exchange rates, equity prices and commodity prices as well as credit risk, each of which could impact its Consolidated Financial Statements. The Company generally addresses its exposure to these risks through its normal operating and financing activities.
The settlement of this matter for the 2012 through 2015 audit was not material to the Company’s financial statements but did not preclude the IRS from proposing similar adjustments in future audit periods, as the IRS has with the 2022 assessment.
The settlement of this matter for the 2012 through 2015 audit was not material to the Company’s financial statements but did not preclude the IRS from proposing similar adjustments in future audit periods, as the IRS did with the 2022 assessment.
The Company’s MD&A is divided into five sections: • Overview • Results of Operations • Liquidity and Capital Resources • Critical Accounting Estimates • New Accounting Standards This discussion and analysis should be read together with Danaher’s audited financial statements and related Notes thereto as of December 31, 2022 and 2021 and for each of the three years in the period ended December 31, 2022 included in this Annual Report.
The Company’s MD&A is divided into five sections: • Overview • Results of Operations • Liquidity and Capital Resources • Critical Accounting Estimates • New Accounting Standards This discussion and analysis should be read together with Danaher’s audited financial statements and related Notes thereto as of December 31, 2023 and 2022 and for each of the three years in the period ended December 31, 2023 included in this Annual Report.
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, the Company may also borrow under its commercial paper programs (if available) or borrow under the Company’s Five-Year 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 programs (if available) and/or access the capital markets.
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, the Company may also borrow under its commercial paper programs (if available) or borrow under the Company’s 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 programs (if available) and/or access the capital markets.
Refer to Note 11 to the Consolidated Financial Statements for a description of intangible assets impairment charges recorded during 2022. If actual results are not consistent with management’s estimates and assumptions, goodwill and other intangible assets may be overstated and a charge would need to be taken against net earnings which would adversely affect the Company’s financial statements.
Refer to Note 11 to the Consolidated Financial Statements for a description of intangible assets impairment charges recorded during 2023. If actual results are not consistent with management’s estimates and assumptions, goodwill and other intangible assets may be overstated and a charge would need to be taken against net earnings which would adversely affect the Company’s financial statements.
The effect of a change in currency exchange rates on the Company’s net investment in non-U.S. subsidiaries is reflected in the accumulated other comprehensive income (loss) component of stockholders’ equity. Currency exchange rates negatively impacted 2022 reported sales on a year-over-year basis primarily due to the strengthening of the U.S. dollar against most major currencies during 2022.
The effect of a change in currency exchange rates on the Company’s net investment in non-U.S. subsidiaries is reflected in the accumulated other comprehensive income (loss) component of stockholders’ equity. Currency exchange rates negatively impacted 2023 reported sales on a year-over-year basis primarily due to the strengthening of the U.S. dollar against most major currencies during 2023.
RESULTS OF OPERATIONS In this report, references to the non-GAAP measures of core sales (also referred to as core revenues or sales/revenues from existing businesses) and core sales including Cytiva refer to sales from continuing operations calculated according to generally accepted accounting principles in the United States (“GAAP”) but excluding: • sales from acquired businesses (as defined below, as applicable); and • the impact of currency translation.
RESULTS OF OPERATIONS In this report, references to the non-GAAP measures of core sales (also referred to as core revenues or sales/revenues from existing businesses) refer to sales from continuing operations calculated according to generally accepted accounting principles in the United States (“GAAP”) but excluding: • sales from acquired businesses (as defined below, as applicable); and • the impact of currency translation.
As of December 31, 2022, the Company had no variable-rate debt obligations, however, the interest rates of the Company’s euro-based commercial paper borrowings are fixed based on short-term market rates at the time of issuance (refer to Note 14 to the Consolidated Financial Statements for information regarding the Company’s outstanding commercial paper balances as of December 31, 2022).
As of December 31, 2023, the Company had no variable-rate debt obligations, however, the interest rates of the Company’s euro-based commercial paper borrowings are fixed based on short-term market rates at the time of issuance (refer to Note 14 to the Consolidated Financial Statements for information regarding the Company’s outstanding commercial paper balances as of December 31, 2023).
Equity Price Risk The Company’s investment portfolio from time to time includes publicly-traded equity securities that are sensitive to fluctuations in market price. As of December 31, 2022, the Company held $16 million of publicly-traded equity securities, excluding equity-method investments. Additionally, the Company holds non-marketable equity investments in privately held companies that may be impacted by equity price risks.
Equity Price Risk The Company’s investment portfolio from time to time includes publicly-traded equity securities that are sensitive to fluctuations in market price. As of December 31, 2023, the Company held $16 million of publicly-traded equity securities, excluding equity-method investments. Additionally, the Company holds non-marketable equity investments in privately held companies that may be impacted by equity price risks.
The Company also periodically uses derivative financial instruments to manage foreign exchange risks and interest rate risks. In addition, the Company’s broad-based business activities help to reduce the impact that volatility in any particular area or related areas may have on its financial statements as a whole.
The Company also periodically uses derivative financial instruments to manage currency exchange risks and interest rate risks. In addition, the Company’s broad-based business activities help to reduce the impact that volatility in any particular area or related areas may have on its financial statements as a whole.
Acquired Intangibles —The Company’s business acquisitions, including the Cytiva and Aldevron acquisitions, typically result in the recognition of goodwill, developed technology and other intangible assets, which affect the amount of future period amortization expense and possible impairment charges that the Company may incur.
Acquired Intangibles —The Company’s business acquisitions, including the Abcam and Aldevron acquisitions, typically result in the recognition of goodwill, developed technology and other intangible assets, which affect the amount of future period amortization expense and possible impairment charges that the Company may incur.
The Company will continue to have cash requirements to support general corporate purposes, which may include working capital needs, capital expenditures, acquisitions and investments, paying interest and servicing debt, paying taxes and any related interest or penalties, 55 Table of Contents funding its restructuring activities and pension plans as required, paying dividends to shareholders, repurchasing shares of the Company’s common stock and supporting other business needs.
The Company will continue to have cash requirements to support general corporate purposes, which may include working capital needs, capital expenditures, acquisitions and investments, paying interest and servicing debt, paying taxes and any related interest or penalties, funding its restructuring activities and pension plans as required, paying dividends to shareholders, repurchasing shares of the Company’s common stock and supporting other business needs.
BIOTECHNOLOGY The Biotechnology segment includes the bioprocessing and discovery and medical businesses and offers a broad range of tools, consumables and services that are primarily used by customers to advance and accelerate the research, development, manufacture and delivery of biological medicines.
BIOTECHNOLOGY The Biotechnology segment includes the bioprocessing and discovery and medical businesses and offers a broad range of equipment, consumables and services that are primarily used by customers to advance and accelerate the research, development, manufacture and delivery of biological medicines.
LIFE SCIENCES The Life Sciences segment offers a broad range of instruments and consumables that are primarily used by customers to study the basic building blocks of life, including DNA and RNA, nucleic acid, proteins, metabolites and cells, in order to understand the causes of disease, identify new therapies, and test and manufacture new drugs, vaccines and gene editing technologies.
LIFE SCIENCES The Life Sciences segment offers a broad range of instruments, consumables, services and software that are primarily used by customers to study genomics and the basic building blocks of life, including DNA and RNA, nucleic acid, proteins, metabolites and cells, in order to understand the causes of disease, identify new therapies, and test and manufacture new drugs, vaccines and gene editing technologies.
Excluding these jurisdictions, the Company believes that a change in the statutory tax rate of any individual non-U.S. country would not have a material effect on the Company’s Consolidated Financial Statements given the geographic dispersion of the Company’s taxable income. The Company and its subsidiaries are routinely examined by various U.S. and non-U.S. taxing authorities.
Excluding these 45 Table of Contents jurisdictions, the Company believes that a change in the statutory tax rate of any individual non-U.S. country would not have a material effect on the Company’s Consolidated Financial Statements given the geographic dispersion of the Company’s taxable income. The Company and its subsidiaries are routinely examined by various U.S. and non-U.S. taxing authorities.
Income Taxes —For a description of the Company’s income tax accounting policies, refer to Notes 1 and 7 to the Consolidated Financial Statements. The Company establishes valuation allowances for its deferred tax assets if it is more likely than not that 57 Table of Contents some or all of the deferred tax asset will not be realized.
Income Taxes —For a description of the Company’s income tax accounting policies, refer to Notes 1 and 7 to the Consolidated Financial Statements. The Company establishes valuation allowances for its deferred tax assets if it is more likely than not that some or all of the deferred tax asset will not be realized.
Significant assumptions include the discount rates and certain assumptions that form the basis of the forecasted results of the acquired business including earnings before interest, taxes, depreciation and amortization (“EBITDA”), revenue, revenue growth rates, royalty rates and technology obsolescence rates. These assumptions are forward looking and could be affected by future economic and market conditions.
Significant assumptions include the discount rates and certain assumptions 52 Table of Contents that form the basis of the forecasted results of the acquired business including earnings before interest, taxes, depreciation and amortization (“EBITDA”), revenue, revenue growth rates, royalty rates and technology obsolescence rates. These assumptions are forward looking and could be affected by future economic and market conditions.
Gross profit margins declines were partially offset by increased year-over-year core sales and product mix as well as the impact of acquisition-related charges incurred in 2021.
Gross profit margin declines were partially offset by increased year-over-year core sales and product mix as well as the impact of acquisition-related charges incurred in 2021.
Unless otherwise indicated, all financial results in this report refer to continuing operations. OVERVIEW General Refer to “Item 1. Business—General” for a discussion of Danaher’s strategic objectives and methodologies for delivering long-term shareholder value. Danaher is a multinational business with global operations. During 2022, approximately 58% of Danaher’s sales were derived from customers outside the United States.
Unless otherwise indicated, all financial results in this report refer to continuing operations. OVERVIEW General Refer to “Item 1. Business—General” for a discussion of Danaher’s strategic objectives and methodologies for delivering long-term shareholder value. Danaher is a multinational business with global operations. During 2023, approximately 60% of Danaher’s sales were derived from customers outside the United States.
A 10% depreciation in major currencies relative to the U.S. dollar as of December 31, 2022 would have reduced foreign currency-denominated net assets and stockholders’ equity by approximately $1.7 billion. Refer to Note 15 to the Consolidated Financial Statements for information regarding the Company’s hedging of a portion of its net investment in non-U.S. operations.
A 10% depreciation in major currencies relative to the U.S. dollar as of December 31, 2023 would have reduced foreign currency-denominated net assets and stockholders’ equity by approximately $1.6 billion. Refer to Note 15 to the Consolidated Financial Statements for information regarding the Company’s hedging of a portion of its net investment in non-U.S. operations.
The amount of cash flow generated from or used by the aggregate of trade accounts receivable, inventories and trade accounts payable depends upon how effectively the Company manages the cash conversion cycle, which effectively represents the number of days that elapse from the day it pays for the purchase of raw materials and components to the collection of cash from its customers and can be significantly impacted by the timing of collections and payments in a period. • The aggregate of prepaid expenses and other assets, deferred income taxes and accrued expenses and other liabilities used $561 million in operating cash flows during 2022, compared to $94 million used in 2021.
The amount of cash flow generated from or used by the aggregate of trade accounts receivable, inventories and trade accounts payable depends upon how effectively the Company manages the cash conversion cycle, which effectively represents the number of days that elapse from the day it pays for the purchase of raw materials and components to the collection of cash from its customers and can be significantly impacted by the timing of collections and payments in a period. • The aggregate of prepaid expenses and other assets, deferred income taxes and accrued expenses and other liabilities used $751 million in operating cash flows during 2023, compared to $558 million used in 2022.
The IRS has completed substantially all of the examinations of the Company’s federal income tax returns through 2015 and is currently examining certain of the Company’s federal income tax returns for 2016 through 2018.
The IRS has completed substantially all of the examinations of the Company’s federal income tax returns through 2015 and is currently examining certain of the Company’s federal income tax returns for 2016 through 2021.
Strengthening of the U.S. dollar against other major currencies compared to the exchange rates in effect as of December 31, 2022 would adversely impact the Company’s sales and results of operations on an overall basis.
Strengthening of the U.S. dollar against other major currencies in 2024 compared to the exchange rates in effect as of December 31, 2023 would adversely impact the Company’s sales and results of operations on an overall basis.
Realized and unrealized gains and losses for these investments in equity securities and partnerships are recorded in other income (expense), net, in the Consolidated Statements of Earnings. A 10% decrease in the carrying value of the Company’s investments in equity securities and partnerships as of December 31, 2022 would result in a loss of approximately $180 million.
Realized and unrealized gains and losses for these investments in equity securities and partnerships are recorded in other income (expense), net, in the Consolidated Statements of Earnings. A 10% decrease in the carrying value of the Company’s investments in equity securities and partnerships as of December 31, 2023 would result in a loss of approximately $165 million.
This requires management to make judgments and estimates regarding: (1) the timing and amount of the reversal of taxable temporary differences, (2) expected future taxable income and (3) the impact of tax planning strategies.
This requires management to make judgments and estimates regarding: (1) the timing and amount of the reversal of taxable temporary differences, 53 Table of Contents (2) expected future taxable income and (3) the impact of tax planning strategies.
Generally, the fair market value of fixed-rate debt will increase as interest rates fall and decrease as interest rates rise. As of December 31, 2022, an increase of 100 basis points in interest rates would have decreased the fair value of the Company’s fixed-rate long-term debt by approximately $1.5 billion.
Generally, the fair market value of fixed-rate debt will increase as interest rates fall and decrease as interest rates rise. As of December 31, 2023, an increase of 100 basis points in interest rates would have decreased the fair value of the Company’s fixed-rate long-term debt by approximately $1.4 billion.
The Company recorded a loss on early extinguishment of these borrowings related to the payment of the make-whole premiums and deferred costs in connection with the redemption of $96 million ($73 million after-tax).
The Company recorded a loss on early extinguishment of these borrowings related to the payment of the make-whole premiums and deferred costs in connection with the redemption of $96 million.
To evaluate the sensitivity of the fair value calculations used in both goodwill impairment tests, the Company applied a hypothetical 10% decrease to the fair values of each reporting unit and compared those hypothetical values to the reporting unit carrying values in both tests.
To evaluate the sensitivity of the fair value calculations used in the goodwill impairment test, the Company applied a hypothetical 10% decrease to the fair values of each reporting unit and compared those hypothetical values to the reporting unit carrying values.
Of the cash and cash equivalents, approximately $3.4 billion was held within the United States and approximately $2.6 billion was held outside of the United States.
Of the cash and cash equivalents, approximately $2.5 billion was held within the United States and approximately $3.4 billion was held outside of the United States.
These increases were partially offset by higher cash used in aggregate for accounts receivables, inventories, trade accounts payable and prepaid and accrued expenses, including deferred taxes, in 2022 compared to the prior year. • Net cash used in investing activities consisted primarily of capital expenditures, cash paid for acquisitions and investments, net of proceeds from the sale of investments, and decreased primarily as a result of lower cash paid for acquisitions in 2022 compared to 2021.
These decreases were partially offset by lower cash used in aggregate for accounts receivables, inventories, trade accounts payable and prepaid and accrued expenses, including deferred taxes, in 2023 compared to the prior year. • Net cash used in investing activities consisted primarily of cash paid for acquisitions and investments and capital expenditures, net of proceeds from the sale of investments, and increased primarily as a result of higher cash paid for acquisitions in 2023 compared to 2022.
As of December 31, 2022, the Company has classified approximately $2.0 billion of its borrowings outstanding under the euro-denominated commercial paper program as long-term debt in the Consolidated Balance Sheet as the Company has the intent and ability, as supported by availability under the Five-Year Facility, to refinance these borrowings for at least one year from the balance sheet date.
As of December 31, 2023, the Company has classified approximately $1.0 billion of its borrowings outstanding under the euro-denominated commercial paper program as long-term debt in the Consolidated Balance Sheet as the Company has the intent and ability, as supported by availability under the Credit Facility, to refinance these borrowings for at least one year from the balance sheet date.
Refer to Notes 1, 2 and 11 to 56 Table of Contents the Consolidated Financial Statements for a description of the Company’s policies relating to goodwill, acquired intangibles and acquisitions.
Refer to Notes 1, 2 and 11 to the Consolidated Financial Statements for a description of the Company’s policies relating to goodwill, acquired intangibles and acquisitions.
Based on this hypothetical 10% decrease, the excess of the estimated fair value over carrying value (expressed as a percentage of carrying value for the respective reporting unit) for each of the Company’s reporting units ranged from approximately 120% to approximately 500%.
Based on this hypothetical 10% decrease, the excess of the estimated fair value over carrying value (expressed as a percentage of carrying value for the respective reporting unit) for each of the Company’s reporting units ranged from approximately 115% to approximately 435%.
For income tax purposes, the recognition of premium income has been deferred in accordance with U.S. tax laws related to insurance. The IRS is challenging the deferral of premium income for certain types of the Company’s self-insurance policies. The proposed adjustments would increase the Company’s taxable income over the 2016 through 2018 periods by approximately $2.5 billion.
For income tax purposes, the recognition of premium income has been deferred in accordance with U.S. tax laws related to insurance. The IRS challenged the deferral of premium income for certain types of the Company’s self-insurance policies. The proposed adjustments would have increased the Company’s taxable income over the 2016 through 2018 periods by approximately $2.5 billion.
The Company’s annual goodwill impairment analysis and the analysis after the change in the Company’s reporting units in 2022 indicated that in all instances, the fair values of the Company’s reporting units exceeded their carrying values and consequently did not result in an impairment charge.
The Company’s annual goodwill impairment analysis in 2023 indicated that in all instances, the fair values of the Company’s reporting units exceeded their carrying values and consequently did not result in an impairment charge.
An increase of 1.0% in the Company’s 2022 nominal tax rate would have resulted in an additional income tax provision for continuing operations for the year ended December 31, 2022 of $83 million.
An increase of 1.0% in the Company’s 2023 nominal tax rate would have resulted in an additional income tax provision for continuing operations for the year ended December 31, 2023 of $50 million.
The portion of revenue attributable to currency translation is calculated as the difference between: • the period-to-period change in revenue (excluding sales from acquired businesses (as defined above, as applicable)); and • the period-to-period change in revenue (excluding sales from acquired businesses (as defined above, as applicable)) after applying current period foreign exchange rates to the prior year period.
The portion of revenue attributable to currency translation is calculated as the difference between: • the period-to-period change in revenue (as defined above, as applicable); and • the period-to-period change in revenue (as defined above, as applicable) after applying current period foreign exchange rates to the prior year period.
Management also uses these non-GAAP financial measures to measure the Company’s operating and financial performance and uses core sales growth (and previously used core sales growth including Cytiva) as one of the performance measures in the Company’s executive short-term cash incentive program.
Management also uses these non-GAAP financial measures to measure the Company’s operating and financial performance and uses core sales (decline) growth as one of the performance measures in the Company’s executive short-term cash incentive program.
As a diversified, global business, Danaher’s operations are affected by worldwide, regional and industry-specific economic and political factors. Danaher’s geographic and industry diversity, as well as the range of its products and services, help limit the impact of any one industry or the economy of any single country on its consolidated operating results.
As a diversified, global business, Danaher’s operations are affected by worldwide, regional and industry-specific economic, political and geopolitical factors. Danaher’s geographic and industry diversity, as well as the range of its products and services, help mitigate the impact of any one industry or the economy of any single country, other than the United States, on its consolidated operating results.
Interest income of $41 million for 2022 was $30 million higher than in 2021, due primarily to higher interest rates and higher cash balances in 2022. For a further description of the Company’s debt and cross-currency swap derivative contracts related to the debt as of December 31, 2022 refer to Notes 14 and 15 to the Consolidated Financial Statements.
Interest income of $303 million for 2023 was $262 million higher than in 2022, due primarily to higher interest rates and higher average cash balances in 2023. For a further description of the Company’s debt and cross-currency swap derivative contracts related to the debt as of December 31, 2023 refer to Notes 14 and 15 to the Consolidated Financial Statements.
The amount awarded pursuant to these grants in 2021 totaled $568 million and will be paid over periods ranging from one year to four years.
The amount awarded pursuant to these grants in 2021 totaled $568 million and is being paid over periods ranging from one year to four years.
During 2023, the Company’s cash contribution requirements for its U.S. and its non-U.S. defined benefit pension plans are forecasted to be approximately $10 million and $35 million, respectively.
During 2023, the Company contributed $10 million to its U.S. defined benefit pension plans and $36 million to its non-U.S. defined benefit pension plans. During 2024, the Company’s cash contribution requirements for its U.S. and its non-U.S. defined benefit pension plans are forecasted to be approximately $9 million and $35 million, respectively.
Refer to Notes 2 and 12 to the Consolidated Financial Statements included in this Annual Report for a discussion of the Company’s acquisitions and investments. • As of December 31, 2022, the Company held approximately $6.0 billion of cash and cash equivalents.
Refer to Notes 2 and 12 to the Consolidated Financial Statements included in this Annual Report for a discussion of the Company’s acquisitions and investments. • As of December 31, 2023, the Company held approximately $5.9 billion of cash and cash equivalents.
Life Sciences Selected Financial Data Year Ended December 31 ($ in millions) 2022 2021 2020 Sales $ 7,036 $ 6,388 $ 5,300 Operating profit 1,414 1,293 972 Depreciation 112 100 92 Amortization of intangible assets 419 282 200 Operating profit as a % of sales 20.1 % 20.2 % 18.3 % Depreciation as a % of sales 1.6 % 1.6 % 1.7 % Amortization as a % of sales 6.0 % 4.4 % 3.8 % Sales Growth and Core Sales Growth 2022 vs. 2021 2021 vs. 2020 Total sales growth (GAAP) 10.0 % 20.5 % Impact of: Acquisitions/divestitures (5.5) % (2.0) % Currency exchange rates 5.0 % (1.5) % Core sales growth (non-GAAP) 9.5 % 17.0 % 2022 Sales Compared to 2021 Price increases in the segment contributed 5.0% to sales growth on a year-over-year basis during 2022 as compared with 2021 and are reflected as a component of the change in core revenue growth.
Life Sciences Selected Financial Data Year Ended December 31 ($ in millions) 2023 2022 2021 Sales $ 7,141 $ 7,036 $ 6,388 Operating profit 1,209 1,414 1,293 Depreciation 129 112 100 Amortization of intangible assets 429 419 282 Operating profit as a % of sales 16.9 % 20.1 % 20.2 % Depreciation as a % of sales 1.8 % 1.6 % 1.6 % Amortization as a % of sales 6.0 % 6.0 % 4.4 % Sales Growth and Core Sales Growth 2023 vs. 2022 2022 vs. 2021 Total sales growth (GAAP) 1.5 % 10.0 % Impact of: Acquisitions/divestitures (1.5) % (5.5) % Currency exchange rates 1.0 % 5.0 % Core sales growth (non-GAAP) 1.0 % 9.5 % 2023 Sales Compared to 2022 Price increases in the segment contributed 4.0% to sales growth on a year-over-year basis during 2023 as compared with 2022 and are reflected as a component of the change in core revenue growth.
R efer to Note 14 to the Consolidated Financial Statements for additional information regarding the Company’s financing activities and indebtedness, including the Company’s outstanding debt as of December 31, 2022, and the Company’s commercial paper program and F ive-Year Facility .
R efer to Note 14 to the Consolidated Financial Statements for additional information regarding the Company’s financing activities and indebtedness, including the Company’s outstanding debt as of December 31, 2023, and the Company’s commercial paper program and Credit Facility .
The excess of the estimated fair value over carrying value (expressed as a percentage of carrying value for the respective reporting unit) for each of the Company’s eight reporting units as of the testing date ranged from approximately 145% to approximately 565%.
The excess of the estimated fair value over carrying value (expressed as a percentage of carrying value for the respective reporting unit) for each of the Company’s reporting units as of the annual testing date ranged from approximately 140% to approximately 495%.
Stock Repurchase Program Please see Note 19 to the Consolidated Financial Statements for a description of the Company’s stock repurchase program. Dividends The Company declared a regular quarterly dividend of $0.25 per share of Company common stock that was paid on January 27, 2023 to holders of record on December 30, 2022.
Stock Repurchase Program Please see Note 19 to the Consolidated Financial Statements for a description of the Company’s stock repurchase program. Dividends The Company declared a regular quarterly cash dividend of $0.24 per share of Company common stock that was paid on January 26, 2024 to holders of record on December 29, 2023.
The Company’s effective tax rate for 2021 differs from the U.S. federal statutory rate of 21.0% due principally to net discrete benefits related primarily to the release of reserves for uncertain tax positions due to the expiration of statutes of limitation and audit settlements and excess tax benefits from stock-based compensation, net of changes in estimates associated with prior period uncertain tax positions.
The Company’s effective tax rate for 2021 differs from the U.S. federal statutory rate of 21.0% principally due to the geographic mix of earnings described above and discrete tax benefits from release of reserves for uncertain tax positions from the expiration of statutes of limitation, audit settlements and excess tax benefits from stock-based compensation, partially offset by changes in estimates associated with prior period uncertain tax positions.
Net earnings attributable to common stockholders for the year ended December 31, 2022 totaled approximately $7.1 billion or $9.66 per diluted common share compared to approximately $6.3 billion or $8.61 per diluted common share for the year ended December 31, 2021.
Net earnings attributable to common stockholders for the year ended December 31, 2023 totaled approximately $4.7 billion or $6.38 per diluted common share compared to approximately $7.1 billion or $9.66 per diluted common share for the year ended December 31, 2022.
Core sales growth (and the related measure of core sales including Cytiva) 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.
Core sales (decline) growth should be considered in addition to, and not as a replacement for or superior to, sales, and may not be comparable to similarly titled measures reported by other companies.
Reporting units resulting from recent acquisitions generally present the highest risk of impairment. Management believes the impairment risk associated with these reporting units generally decreases as these businesses are integrated into the Company and better positioned for potential future earnings growth.
Management believes the impairment risk associated with these reporting units generally decreases as these businesses are integrated into the Company and better positioned for potential future earnings growth.
Refer to Note 3 to the Consolidated Financial Statements for additional information. 50 Table of Contents COMPREHENSIVE INCOME Comprehensive income decreased by $410 million in 2022 as compared to 2021, primarily driven by the impact of higher losses from foreign currency translation adjustments in 2022 compared to 2021 and a decrease in the income from pension and postretirement plan benefit adjustments and cash flow hedge adjustments in 2022 compared to 2021, partially offset by higher net earnings in 2022 compared to 2021.
Refer to Note 3 to the Consolidated Financial Statements for additional information. 46 Table of Contents COMPREHENSIVE INCOME Comprehensive income decreased by $450 million in 2023 as compared to 2022, primarily driven by lower net earnings in 2023 compared to 2022, partially offset by the impact of gains from foreign currency translation adjustments in 2023 compared to losses in 2022 net of a decrease in income from pension and postretirement plan benefit adjustments in 2023 compared to 2022.
In addition, certain of the Company’s tax returns are currently under review by tax authorities including in Denmark and the United States (refer to “—Results of Operations—Income Taxes” and Note 7 to the Consolidated Financial Statements). Management believes the positions taken in these returns are in accordance with the relevant tax laws.
In addition, certain of the Company’s tax returns are currently under review by tax authorities including in Denmark and the United States (refer to “—Results of Operations—Income Taxes” and Note 7 to the Consolidated Financial Statements).
Biotechnology Selected Financial Data Year Ended December 31 ($ in millions) 2022 2021 2020 Sales $ 8,758 $ 8,570 $ 5,276 Operating profit 3,008 3,074 1,082 Depreciation 190 158 91 Amortization of intangible assets 812 901 670 Operating profit as a % of sales 34.3 % 35.9 % 20.5 % Depreciation as a % of sales 2.2 % 1.8 % 1.7 % Amortization as a % of sales 9.3 % 10.5 % 12.7 % Sales Growth, Core Sales Growth and Core Sales Growth Including Cytiva 2022 vs. 2021 2021 vs. 2020 Total sales growth (GAAP) 2.0 % 62.5 % Impact of: Acquisitions/divestitures (0.5) % (31.5) % Currency exchange rates 4.5 % (1.5) % Core sales growth (non-GAAP) 6.0 % 29.5 % Impact of Cytiva sales growth (net of divested product lines) 7.0 % Core sales growth including Cytiva (non-GAAP) 36.5 % 2022 Sales Compared to 2021 Price increases in the segment contributed 4.0% to sales growth on a year-over-year basis during 2022 as compared with 2021 and are reflected as a component of the change in core revenue growth.
Biotechnology Selected Financial Data Year Ended December 31 ($ in millions) 2023 2022 2021 Sales $ 7,172 $ 8,758 $ 8,570 Operating profit 1,909 3,008 3,074 Depreciation 162 190 158 Amortization of intangible assets 864 812 901 Operating profit as a % of sales 26.6 % 34.3 % 35.9 % Depreciation as a % of sales 2.3 % 2.2 % 1.8 % Amortization as a % of sales 12.0 % 9.3 % 10.5 % Sales (Decline) Growth and Core Sales (Decline) Growth 2023 vs. 2022 2022 vs. 2021 Total sales (decline) growth (GAAP) (18.0) % 2.0 % Impact of: Acquisitions/divestitures — % (0.5) % Currency exchange rates — % 4.5 % Core sales (decline) growth (non-GAAP) (18.0) % 6.0 % 2023 Sales Compared to 2022 Price increases in the segment contributed 4.5% to sales growth on a year-over-year basis during 2023 as compared with 2022 and are reflected as a component of the change in core revenue decline.
As of December 31, 2022, the Company had the ability to incur approximately $3.0 billion of additional indebtedness in direct borrowings or under the outstanding commercial paper facilities based on the amounts available under the Company’s $5.0 billion Five-Year Facility which were not being used to backstop outstanding commercial paper balances.
As of December 31, 2023, the Company had the ability to incur approximately $4.0 billion of additional indebtedness in direct borrowings or under the outstanding commercial paper facilities based on the amounts available under the Company’s $5.0 billion unsecured, multiyear revolving credit facility (“Credit Facility”) which were not being used to backstop outstanding commercial paper balances.
Aggregate 2022 and 2021 cash payments for dividends on Company common stock were $693 million and $578 million, respectively, and aggregate 2022 and 2021 cash payments for the dividends on the Company’s MCPS were $125 million and $164 million, respectively.
Aggregate 2023 and 2022 cash payments for dividends on Company common stock were $778 million and $693 million, respectively, and aggregate 2023 and 2022 cash payments for the dividends on the Company’s MCPS were $43 million and $125 million, respectively.
The Company expects its 2023 effective tax rate to be approximately 19.5% which is higher than the 2022 rate due primarily to the impact of net discrete tax benefits on the 2022 effective tax rate that are not expected to repeat in 2023 and the geographic mix of earnings anticipated for 2023.
The Company expects its 2024 effective tax rate to be approximately 17.5% which is higher than the 2023 rate due primarily to the impact of net discrete tax benefits on the 2023 effective tax rate that are not expected to repeat in 2024.
Year-Over-Year Changes in the Tax Provision and Effective Tax Rate Year Ended December 31 2022 2021 2020 Effective tax rate from continuing operations 13.1 % 16.5 % 18.9 % The Company’s effective tax rate for 2022 differs from the U.S. federal statutory rate of 21.0% due principally to net deferred tax benefits resulting from legal and operational actions undertaken to realign certain of its businesses, as well as excess tax benefits from stock-based compensation, the release of reserves for uncertain tax positions due to the expiration of statutes of limitation and audit settlements and changes in estimates related to prior year tax filing positions, net of changes in estimates associated with prior period uncertain tax positions.
The Company’s effective tax rate for 2022 differs from the U.S. federal statutory rate of 21.0% due principally to the geographic mix of earnings discussed above and net deferred tax benefits resulting from legal and operational actions undertaken to realign certain of its businesses, as well as excess tax benefits from stock-based compensation, the release of reserves for uncertain tax positions due to the expiration of statutes of limitation and audit settlements and changes in estimates related to prior year tax filing positions, net of changes in estimates associated with prior period uncertain tax positions.
In particular, the Company has more sales in European currencies than it has expenses in those currencies. Therefore, when European currencies strengthen or weaken against the U.S. dollar, operating profits are increased or decreased, respectively.
As a result, the Company is exposed to movements in the exchange rates of various currencies against the U.S. dollar. In particular, the Company has more sales in European currencies than it has expenses in those currencies. Therefore, when European currencies strengthen or weaken against the U.S. dollar, operating profits are increased or decreased, respectively.
The Company engages third-party valuation specialists who review the Company’s critical assumptions and calculations of the fair value of acquired intangible assets in connection with significant acquisitions. In connection with acquisitions during the year ended December 31, 2022, the Company recognized aggregate goodwill of $427 million and intangible assets of $218 million.
The Company engages third-party valuation specialists who review the Company’s critical assumptions and calculations of the fair value of acquired intangible assets in connection with significant acquisitions. In connection with the Abcam Acquisition during the year ended December 31, 2023, the Company recognized aggregate goodwill of approximately $3.9 billion and intangible assets of approximately $2.1 billion.
Management's discussion and analysis of financial condition and results of operations for 2020 is included in Item 7 of the Company’s Annual Report on Form 10-K with respect to the year ended December 31, 2021 filed with the Securities and Exchange Commission, as supplemented by the discussion herein of the new Biotechnology and Life Sciences segments (which were previously reported together as the former Life Sciences segment), and should be referred to for information regarding this period.
Management's discussion and analysis of financial condition and results of operations for the Biotechnology, Life Sciences and Diagnostics segments for 2022 and 2021 is included in Item 7 of the Company’s Annual Report on Form 10-K with respect to the year ended December 31, 2022 filed with the Securities and Exchange Commission, and should be referred to for segment information regarding these periods.
Investing Activities Cash flows relating to investing activities consist primarily of cash used for acquisitions and capital expenditures, including instruments leased to customers, cash used for investments and cash proceeds from divestitures of businesses or assets. Net cash used in investing activities was approximately $2.2 billion during 2022 compared to approximately $13.0 billion of net cash used in 2021.
Investing Activities Cash flows relating to investing activities consist primarily of cash used for acquisitions and capital expenditures, including instruments leased to customers, cash used for investments and cash proceeds from divestitures of businesses or assets.
During 2022, total Life Sciences segment sales increased 10.0% primarily as a result of increased core sales resulting from the factors discussed below and increased sales from acquisitions, partially offset by the impact of changes in currency exchange rates due to the strengthening of the U.S. dollar in 2022 compared to 2021.
During 2023, total Life Sciences segment sales increased 1.5% primarily as a result of increased core sales resulting from the factors discussed below and increased sales from acquisitions, partially offset by the impact of changes in currency exchange rates.
Any weakening of the U.S. dollar against other major currencies compared to the exchange rates in effect as of December 31, 2022 would positively impact the Company’s sales and results of operations. 51 Table of Contents The Company has generally accepted the exposure to exchange rate movements without using derivative financial instruments to manage this transactional exchange risk, although the Company has used foreign currency-denominated debt and cross-currency swaps to hedge a portion of its net investments in non-U.S. operations against adverse movements in exchange rates.
The Company has generally accepted the exposure to exchange rate movements without using derivative financial instruments to manage this transactional exchange risk, although the Company has used foreign currency-denominated debt and cross-currency swaps to hedge a portion of its net investments in non-U.S. operations against adverse movements in exchange rates.
Total debt was approxim ately $19.7 billion and $22.2 billion as of December 31, 2022 and 2021, respectively, including notes payable and current portion of long-term debt was $591 million and $8 million as of December 31, 2022 and 2021, respectively.
Total debt was approximately $18.4 billion and $19.7 billion as of December 31, 2023 and 2022, respectively, including notes payable and current portion of long-term debt of approximately $1.7 billion and $591 million as of December 31, 2023 and 2022, respectively.
Diagnostics Selected Financial Data Year Ended December 31 ($ in millions) 2022 2021 2020 Sales $ 10,849 $ 9,844 $ 7,403 Operating profit 3,436 2,313 1,538 Depreciation 387 409 397 Amortization of intangible assets 203 205 205 Operating profit as a % of sales 31.7 % 23.5 % 20.8 % Depreciation as a % of sales 3.6 % 4.2 % 5.4 % Amortization as a % of sales 1.9 % 2.1 % 2.8 % Sales Growth and Core Sales Growth 2022 vs. 2021 2021 vs. 2020 Total sales growth (GAAP) 10.0 % 33.0 % Impact of: Acquisitions/divestitures (0.5) % (0.5) % Currency exchange rates 4.0 % (1.5) % Core sales growth (non-GAAP) 13.5 % 31.0 % 2022 Sales Compared to 2021 Price increases in the segment contributed 1.0% to sales growth on a year-over-year basis during 2022 as compared with 2021 and are reflected as a component of the change in core sales growth.
Diagnostics Selected Financial Data Year Ended December 31 ($ in millions) 2023 2022 2021 Sales $ 9,577 $ 10,849 $ 9,844 Operating profit 2,406 3,436 2,313 Depreciation 379 387 409 Amortization of intangible assets 198 203 205 Operating profit as a % of sales 25.1 % 31.7 % 23.5 % Depreciation as a % of sales 4.0 % 3.6 % 4.2 % Amortization as a % of sales 2.1 % 1.9 % 2.1 % Sales (Decline) Growth and Core Sales (Decline) Growth 2023 vs. 2022 2022 vs. 2021 Total sales (decline) growth (GAAP) (11.5) % 10.0 % Impact of: Acquisitions/divestitures — % (0.5) % Currency exchange rates 1.0 % 4.0 % Core sales (decline) growth (non-GAAP) (10.5) % 13.5 % 2023 Sales Compared to 2022 Price increases in the segment contributed 1.0% to sales growth on a year-over-year basis during 2023 as compared with 2022 and are reflected as a component of the change in core revenue decline. 42 Table of Contents During 2023, total segment sales decreased 11.5% primarily as a result of decreased core sales resulting from the factors discussed below, primarily lower year-over-year core sales of molecular diagnostics tests for COVID-19, and to a lesser extent due to the impact of changes in currency exchange rates.
R&D expenses (consisting principally of internal and contract engineering personnel costs) as a percentage of sales declined in 2022 as compared with 2021, primarily due to the sales growth rate exceeding the spending growth related to new product development initiatives.
R&D expenses (consisting principally of internal and contract engineering personnel costs) as a percentage of sales increased in 2023 as compared with 2022, primarily due to the year-over-year sales decline, and to a lesser extent the timing of new product development initiatives.
Cash flows from the gain on sale of product lines and loss on the extinguishment of debt are reflected in cash flows from investing activities while unrealized investment gains/losses impact net earnings without immediately impacting cash flows as the cash flow impact from investments occurs when the invested capital is returned to the Company. • The aggregate of trade accounts receivable, inventories and trade accounts payable used $958 million in operating cash flows during 2022, compared to $564 million of operating cash flows used in 2021.
Unrealized investment gains/losses impact net earnings from continuing operations without immediately impacting cash flows as the cash flow impact from investments occurs when the invested capital is returned to the Company. • The aggregate of trade accounts receivable, inventories and trade accounts payable provided $358 million in operating cash flows from continuing operations during 2023, compared to $855 million of operating cash flows used in 2022.
Following enactment of the TCJA and the associated Transition Tax, in general, repatriation of cash to the United States can be completed with no incremental U.S. tax; however, repatriation of cash could subject the Company to non-U.S. taxes on distributions.
Following enactment of the TCJA, in general, repatriation of cash to the United States can be completed with no incremental U.S. tax; however, repatriation of cash could subject the Company to non-U.S. taxes on distributions. The cash that the Company’s non-U.S. subsidiaries hold for indefinite reinvestment is generally used to finance non-U.S. operations and investments, including acquisitions.
The 2021 acquisition-related charges of $76 million included fair value adjustments to deferred revenue related to the acquisition of Cytiva and fair value adjustments to inventory in connection with the acquisitions of Aldevron and Cytiva. 47 Table of Contents OPERATING EXPENSES Year Ended December 31 ($ in millions) 2022 2021 2020 Sales $ 31,471 $ 29,453 $ 22,284 Selling, general and administrative (“SG&A”) expenses (8,516) (8,198) (6,896) Research and development (“R&D”) expenses (1,745) (1,742) (1,348) Other operating expenses — (547) — SG&A as a % of sales 27.1 % 27.8 % 30.9 % R&D as a % of sales 5.5 % 5.9 % 6.0 % Other operating expenses as a % of sales — % 1.9 % — % SG&A expenses as a percentage of sales declined 70 basis points on a year-over-year basis for 2022 compared with 2021.
The 2021 acquisition-related charges of $76 million included fair value adjustments to deferred revenue related to the acquisition of Cytiva and fair value adjustments to inventory in connection with the acquisitions of Aldevron and Cytiva. 43 Table of Contents OPERATING EXPENSES Year Ended December 31 ($ in millions) 2023 2022 2021 Sales $ 23,890 $ 26,643 $ 24,802 Selling, general and administrative (“SG&A”) expenses (7,329) (7,124) (6,817) Research and development (“R&D”) expenses (1,503) (1,528) (1,498) Other operating expenses — — (547) SG&A as a % of sales 30.7 % 26.7 % 27.5 % R&D as a % of sales 6.3 % 5.7 % 6.0 % Other operating expenses as a % of sales — % — % 2.2 % SG&A expenses as a percentage of sales increased 400 basis points on a year-over-year basis for 2023 compared with 2022.
Property, plant and equipment purchased using funds provided by governments are recorded net of government assistance. 54 Table of Contents Financing Activities Cash flows from financing activities consist primarily of cash flows associated with the issuance and repayments of commercial paper, issuance and repayment of long-term debt, borrowings under committed credit facilities, issuance and repurchases of common stock, issuance of preferred stock and payments of cash dividends to shareholders.
Financing Activities Cash flows from financing activities consist primarily of cash flows associated with the issuance and repayments of commercial paper, issuance and repayment of long-term debt, borrowings under committed credit facilities, issuance and repurchases of common stock, issuance of preferred stock, payments of cash dividends to shareholders and proceeds from the Separation.
Sales Growth, Core Sales Growth and Core Sales Growth Including Cytiva 2022 vs. 2021 2021 vs. 2020 Total sales growth (GAAP) 7.0 % 32.0 % Impact of: Acquisitions/divestitures (1.5) % (7.5) % Currency exchange rates 4.0 % (1.5) % Core sales growth (non-GAAP) 9.5 % 23.0 % Impact of Cytiva sales growth (net of divested product lines) 2.0 % Core sales growth including Cytiva (non-GAAP) 25.0 % 2022 Sales Compared to 2021 Total sales increased 7.0% on a year-over-year basis in 2022 primarily as a result of an increase in core sales resulting from the factors discussed below by segment as well as an increase in sales from acquired businesses.
Sales (Decline) Growth and Core Sales (Decline) Growth 2023 vs. 2022 2022 vs. 2021 Total sales (decline) growth (GAAP) (10.5) % 7.5 % Impact of: Acquisitions/divestitures (0.5) % (2.0) % Currency exchange rates 1.0 % 4.5 % Core sales (decline) growth (non-GAAP) (10.0) % 10.0 % 38 Table of Contents 2023 Sales Compared to 2022 Total sales decreased 10.5% on a year-over-year basis in 2023 primarily as a result of a decrease in core sales resulting from the factors discussed below by segment.
In 2023, the Company expects capital expenditures to be approximately $1.5 billion primarily to increase manufacturing capacity and to support other growth opportunities. During 2021, certain agencies of the U.S. government, including the Biomedical Advanced Research and Development Authority (“BARDA”) within the U.S.
In 2024, the Company expects capital expenditures to be at similar levels as those of the past three years as the Company continues investments in increased manufacturing capacity and to support other growth opportunities. During 2021, certain agencies of the U.S. government, including the Biomedical Advanced Research and Development Authority (“BARDA”) within the U.S.
High-growth markets represented approximately 29% of the Company’s total sales in 2022. The Company’s net earnings from continuing operations for the year ended December 31, 2022 totaled approximately $7.2 billion, compared to approximately $6.3 billion for the year ended December 31, 2021.
The Company’s net earnings from continuing operations for the year ended December 31, 2023 totaled approximately $4.2 billion, compared to approximately $6.3 billion for the year ended December 31, 2022.
During the first quarter of 2021, the Company received a notice from the Danish tax authorities that included a significant reduction in the interest amounts imposed in the original tax assessments.
Tax authorities in Denmark have issued tax assessments related to interest accrued by certain of the Company’s subsidiaries for the years 2004 through 2015. During the first quarter of 2021, the Company received a notice from the Danish tax authorities that included a significant reduction in the interest amounts imposed in the original tax assessments.
In 2022, the Company received aggregate payments related to the BARDA grants and other government assistance of $137 million that offset operating expenses of $50 million and purchases of property, plant and equipment of $87 million.
In 2023 and 2022, the Company recorded amounts related to these grants and other government assistance that offset operating expenses of $51 million and $49 million, respectively, and purchases of property, plant 50 Table of Contents and equipment of $136 million and $87 million, respectively.
In 2022, the average annual interest rate associated with the Company’s outstanding commercial paper borrowings was approximately 43 basis points. A hypothetical increase of this average by 100 basis points would have increased the Company’s 2022 interest expense by approximately $21 million.
In 2023, the average annual interest rate associated with the Company’s outstanding commercial paper borrowings was approximately 350 basis points. A hypothetical increase of this average by 100 basis points would have increased the Company’s 2023 interest expense by approximately $18 million. Refer to Note 15 for discussion of the Company’s cross-currency swap derivative contracts and interest rate swap agreements.
References to sales or operating profit attributable to acquisitions or acquired businesses refer to sales or operating profit, as applicable, from acquired businesses recorded prior to the first anniversary of the acquisition less any sales and operating profit, during the applicable period, attributable to divested product lines not considered discontinued operations; provided that in calculating core sales including Cytiva, Cytiva’s sales (net of the sales of the Company product lines divested in 2020 to obtain regulatory approval to acquire Cytiva, or the “divested product lines”) (“Cytiva sales”) are excluded from the definition of sales attributable to acquisitions or acquired businesses.
References to sales or operating profit attributable to acquisitions or acquired businesses refer to sales or operating profit, as applicable, from acquired businesses recorded prior to the first anniversary of the acquisition less any sales and operating profit, during the applicable period, attributable to divested product lines not considered discontinued operations.
The Company excludes the effect of currency translation from these measures 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 (other than Cytiva sales, in the case of core sales growth including Cytiva) and divestiture-related items because the nature, size, timing and number of acquisitions and divestitures can vary dramatically from period-to-period and between the Company and its peers and can also obscure underlying business trends and make comparisons of long-term performance difficult. 39 Table of Contents Throughout this discussion, references to sales growth or decline refer to the impact of both price and unit sales and references to productivity improvements generally refer to improved cost efficiencies resulting from the ongoing application of DBS.
The Company excludes the effect of currency translation from these measures because currency translation is not under management’s control, is subject to volatility and can obscure underlying business trends, and excludes the effect of acquisitions and divestiture-related items because the nature, size, timing and number of acquisitions and divestitures can vary dramatically from period-to-period and between the Company and its peers and can also obscure underlying business trends and make comparisons of long-term performance difficult.

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