DANAHER CORP /DE/ - Annual Report: 2023 (Form 10-K)

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 operations2,600 — — 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 operations154 (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). 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. 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.

Operating Activities

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

Operating cash flows from continuing operations were approximately $6.5 billion for 2023, a decrease of approximately $1.1 billion, or 15%, as compared to 2022. The year-over-year change in operating cash flows from 2022 to 2023 was primarily attributable to the following factors:

•2023 operating cash flows from continuing operations reflected a decrease of approximately $2.1 billion in net earnings from continuing operations in 2023 as compared to 2022.

•Net earnings from continuing operations for 2023 reflected a decrease of $36 million of depreciation, amortization, stock compensation expense and unrealized investment gains/losses in 2023 as compared to 2022.

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Amortization expense primarily relates to the amortization of intangible assets and inventory fair value adjustments. Depreciation expense relates to both the Company’s manufacturing and operating facilities as well as instrumentation leased to customers under operating-type lease (“OTL”) arrangements. Depreciation, amortization and stock compensation are noncash expenses that decrease earnings without a corresponding impact to operating cash flows. 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. 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 timing of cash payments and refunds for taxes and the impact of deferred tax benefits and charges, various employee-related liabilities, customer funding and accrued expenses drove the majority of this change.

Operating cash flows from continuing operations were approximately $7.6 billion for 2022, an increase of $190 million, or 3%, as compared to 2021. This increase was primarily attributable to the increase in net earnings from continuing operations in 2022 as compared to 2021 (after excluding charges for depreciation, amortization (including intangible assets and inventory step-up), stock compensation, unrealized investment gains/losses, loss on the extinguishment of debt and contract settlement expense in 2021). 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.

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 $7.1 billion during 2023 compared to approximately $2.2 billion and $13.0 billion of net cash used in 2022 and 2021, respectively.

Acquisitions, Divestitures and Sale of Investments

For a discussion of the Company’s acquisitions and divestitures refer to “—Overview” and Notes 2 and 3 to the Consolidated Financial Statements. In addition, in 2023, 2022 and 2021, the Company invested $172 million, $523 million and $925 million respectively, in non-marketable equity securities and partnerships.

Capital Expenditures

Though the relative significance of particular categories of capital investment can change from period to period, capital expenditures are typically made for increasing manufacturing capacity, the manufacture of instruments that are used in OTL arrangements, replacing equipment, supporting new product development and improving information technology systems. Capital expenditures totaled approximately $1.4 billion, $1.1 billion and $1.2 billion in 2023, 2022 and 2021, respectively. The year-over-year increase in capital spending in 2023 was primarily due to expenditures to increase manufacturing capacity. 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. Department of Health and Human Services, agreed to finance an expansion of production capacity related to chromatography, liquid cell culture media, buffers and cell culture powder media and single-use consumables at certain of the Company’s Biotechnology businesses and the development of diagnostics testing technologies and the expansion of testing production capacity at certain of the Company’s Diagnostics businesses. The Company’s businesses may enter into similar agreements in the future. In consideration of this financing, the U.S. government has certain rights, including rights with respect to the allocation of certain of the incremental production capacity associated with such expansion and/or rights in intellectual property produced with its financial assistance. 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. 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

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and equipment of $136 million and $87 million, respectively. Property, plant and equipment purchased using funds provided by governments are recorded net of government assistance.

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. Financing activities used cash of $273 million during 2023 compared to approximately $2.6 billion of cash used during 2022. The year-over-year decrease in cash used by financing activities was due primarily to the approximately $2.6 billion Veralto Distribution, partially offset by $427 million of cash distributed to Veralto in connection with the Separation.

Financing activities used cash of approximately $2.6 billion during 2022 compared to approximately $1.3 billion of cash provided during 2021. The year-over-year increase in cash used by financing activities was due primarily to net repayments of borrowings in 2022 compared to net proceeds from borrowings in 2021.

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. 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. 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. As commercial paper obligations mature, the Company may issue additional short-term commercial paper obligations to refinance all or part of these borrowings, to the extent commercial paper markets are available.

Under the Company’s U.S. dollar and euro-denominated commercial paper program, the notes are typically issued at a discount from par, generally based on the ratings assigned to the Company by credit rating agencies at the time of the issuance and prevailing market rates measured by reference to the Secured Overnight Financing Rate or Euro Interbank Offer Rate, depending on the applicable currency of the borrowing.

Refer 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.

Shelf Registration Statement

The Company has filed a “well-known seasoned issuer” shelf registration statement on Form S-3 with the SEC that registers an indeterminate amount of debt securities, common stock, preferred stock, warrants, depositary shares, purchase contracts and units for future issuance. The Company expects to use net proceeds realized by the Company from future securities sales off this shelf registration statement for general corporate purposes, including without limitation repayment or refinancing of debt or other corporate obligations, acquisitions, capital expenditures, share repurchases, dividends and/or working capital.

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. 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 year-over-year increase in dividend payments in 2023 primarily related to an increase in the quarterly dividend rate on common stock beginning with the dividend paid in the second quarter of 2023, partially offset by lower dividends paid on the MCPS Series A and Series B as a result of their conversion into common shares in April 2022 and April 2023, respectively.

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Cash and Cash Requirements

As of December 31, 2023, the Company held approximately $5.9 billion of cash and cash equivalents that were on deposit with financial institutions or invested in highly liquid investment-grade debt instruments with a maturity of 90 days or less with an approximate weighted average annual interest rate of 4.2%. 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. 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.

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. The Company also may from time to time seek to access the capital markets to take advantage of favorable interest rate environments or other market conditions.

While repatriation of some cash held outside the United States may be restricted by local laws, most of the Company’s foreign cash could be repatriated to the United States. 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 income taxes, if any, applicable to such earnings including basis differences in our non-U.S. subsidiaries are not readily determinable. As of December 31, 2023, management believes that it has sufficient sources of liquidity to satisfy its cash needs, including its cash needs in the United States.

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. The ultimate amounts to be contributed depend upon, among other things, legal requirements, underlying asset returns, the plan’s funded status, the anticipated tax deductibility of the contribution, local practices, market conditions, interest rates and other factors.

Contractual and Other Obligations

For a description of the Company’s debt and lease obligations, commitments, and litigation and contingencies, refer to Notes 10, 14, 17 and 18 to the Consolidated Financial Statements.

Legal Proceedings

Refer to Note 18 to the Consolidated Financial Statements for information regarding legal proceedings and contingencies, and for a discussion of risks related to legal proceedings and contingencies, refer to “Item 1A. Risk Factors.”

CRITICAL ACCOUNTING ESTIMATES

Management’s discussion and analysis of the Company’s financial condition and results of operations is based upon the Company’s Consolidated Financial Statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. The Company bases these estimates and judgments on historical experience, the current economic environment and on various other assumptions that are believed to be reasonable under the circumstances. Actual results may differ materially from these estimates and judgments.

The Company believes the following accounting estimates are most critical to an understanding of its financial statements. Estimates are considered to be critical if they meet both of the following criteria: (1) the estimate requires assumptions about material matters that are uncertain at the time the estimate is made, and (2) material changes in the estimate are reasonably likely from period-to-period. For a detailed discussion on the application of these and other accounting estimates, refer to Note 1 to the Consolidated Financial Statements.

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 fair values of acquired intangibles are determined using information available near the acquisition date based on estimates and assumptions that are deemed reasonable by the Company. Significant assumptions include the discount rates and certain assumptions

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that form the basis of the forecasted results of the acquired business including earnings before interest, taxes, depreciation and amortization (“EBITDA”), revenue, revenue growth rates, royalty rates and technology obsolescence rates. These assumptions are forward looking and could be affected by future economic and market conditions. The Company engages third-party valuation specialists who review the Company’s critical assumptions and calculations of the fair value of acquired intangible assets in connection with significant acquisitions. 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. 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.

In performing its goodwill impairment testing, the Company estimates the fair value of its reporting units primarily using a market-based approach which relies on current trading multiples of forecasted EBITDA for companies operating in businesses similar to each of the Company’s reporting units to calculate an estimated fair value of each reporting unit. In evaluating the estimates derived by the market-based approach, management makes judgments about the relevance and reliability of the multiples by considering factors unique to its reporting units, including operating results, business plans, economic projections, anticipated future cash flows, and transactions and marketplace data as well as judgments about the comparability of the market proxies selected. There are inherent uncertainties related to these assumptions and management’s judgment in applying them to the analysis of goodwill impairment.

As of December 31, 2023, the Company had five reporting units for goodwill impairment testing. 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. 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. 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%. 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. 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%.

The Company reviews identified intangible assets for impairment whenever events or changes in circumstances indicate that the related carrying amounts may not be recoverable. Determining whether an impairment loss occurred for finite-lived intangibles requires a comparison of the carrying amount to the sum of undiscounted cash flows expected to be generated by the asset. These analyses require management to make judgments and estimates about future revenues, expenses, market conditions and discount rates related to these assets. Indefinite-lived intangibles are subject to impairment testing at least annually or more frequently if events or changes in circumstances indicate that potential impairment exists. Determining whether an impairment loss occurred for indefinite-lived intangible assets involves calculating the fair value of the indefinite-lived intangible assets and comparing the fair value to their carrying value. If the fair value is less than the carrying value, the difference is recorded as an impairment loss. 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.

Contingent Liabilities—As discussed in “Item 3. Legal Proceedings” and Notes 8 and 18 to the Consolidated Financial Statements, the Company is, from time to time, subject to a variety of litigation and similar contingent liabilities incidental to its business (or the business operations of previously owned entities). The Company recognizes a liability for any legal contingency or contract settlement expense that is known or probable of occurrence and reasonably estimable. These assessments require judgments concerning matters such as litigation developments and outcomes, the anticipated outcome of negotiations, the number of future claims, the cost of both pending and future claims and the value of the elements in the outcome. In addition, because most contingencies are resolved over long periods of time, liabilities may change in the future due to various factors, including those discussed in Note 18 to the Consolidated Financial Statements. If the reserves established by the Company with respect to these contingent liabilities are inadequate, the Company would be required to incur an expense equal to the amount of the loss incurred in excess of the reserves, which would adversely affect the Company’s financial statements.

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. This requires management to make judgments and estimates regarding: (1) the timing and amount of the reversal of taxable temporary differences,

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(2) expected future taxable income and (3) the impact of tax planning strategies. Future changes to tax rates would also impact the amounts of deferred tax assets and liabilities and could have an adverse impact on the Company’s financial statements.

The Company provides for unrecognized tax benefits when, based upon the technical merits, it is “more likely than not” that an uncertain tax position will not be sustained upon examination. Judgment is required in evaluating tax positions and determining income tax provisions. The Company re-evaluates the technical merits of its tax positions and may recognize an uncertain tax benefit in certain circumstances, including when: (1) a tax audit is completed; (2) applicable tax laws change, including a tax case ruling or legislative guidance; or (3) the applicable statute of limitations expires.

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 and does not expect the resolution of these matters to have a future material adverse impact to the Company’s financial statements, including its cash flows and effective tax rate. However, the outcome of these audits is uncertain.

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.

Valuation of Investments in Equity Securities—For a description of the Company’s investments in equity securities and partnerships refer to Notes 1, 9 and 12 to the Consolidated Financial Statements. The Company invests in publicly-traded securities, non-marketable securities of early-stage companies and equity method investments, including partnerships that invest primarily in early-stage companies.

Investments in early-stage companies have significant risks, including uncertainty regarding the investee 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. Refer to “Item 1A. Risk Factors” for a further discussion of the risks related to investing in early-stage companies.

The Company’s investments in publicly traded securities are measured at fair value based on quotes in active markets. For investments in non-marketable equity securities where the Company does not have influence over the investee, the Company has elected the measurement alternative and records these investments at cost and adjusts the carrying value for impairments and observable price changes with a same or similar security from the same issuer adjusted to reflect the specific rights and preferences of the securities, if applicable. Valuations of non-marketable equity securities are complex and require judgment due to the absence of market prices, lack of liquidity and the risks inherent in early-stage companies. The uncertainty in the process of valuing securities for which a ready market does not exist may cause our estimated values of these securities to differ significantly from the values that would have been derived had a ready market for the securities existed, and those differences could be material.

The Company accounts for its investments in the partnerships using the equity method. Accordingly, the investments are initially recorded at cost and adjusted each period for the Company’s share of the partnership’s income or loss and distributions received. The partnerships’ investments are recorded by the partnerships on an estimated fair value basis and pose the same risks and require the same valuation judgments discussed above. As a result, changes in the value of investments in the partnership will have a direct impact on the Company’s earnings. Impairment losses are recognized to reduce the investment’s carrying value to its fair value if there is a decline in fair value below carrying value that is considered to be other-than-temporary. To determine whether there is an other-than-temporary impairment, the Company uses qualitative and quantitative valuation methods.

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.

NEW ACCOUNTING STANDARDS

For a discussion of the new accounting standards impacting the Company, refer to Note 1 to the Consolidated Financial Statements.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The information required by this item is included under “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Report of Management on Danaher Corporation’s Internal Control Over Financial Reporting

The management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting for the Company. Internal control over financial reporting is defined in Rules 13a-15(f) and 15d-15(f) promulgated under the Securities Exchange Act of 1934.

The Company’s management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2023. In making this assessment, the Company’s management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in “Internal Control-Integrated Framework” (2013 framework). Based on this assessment, management concluded that, as of December 31, 2023, the Company’s internal control over financial reporting is effective.

The Company completed the acquisition of Abcam plc (“Abcam”) on December 6, 2023. Since the Company has not yet fully incorporated the internal controls and procedures of Abcam into the Company’s internal control over financial reporting, management excluded Abcam from its assessment of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2023. Abcam constituted 8% of the Company’s total assets as of December 31, 2023 and less than 1% of the Company’s total revenues for the year then ended.

The Company’s independent registered public accounting firm has issued an audit report on the effectiveness of the Company’s internal control over financial reporting. This report dated February 21, 2024 appears on page 56 of this Form 10-K.

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Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors of Danaher Corporation

Opinion on Internal Control Over Financial Reporting

We have audited Danaher Corporation and subsidiaries’ internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Danaher Corporation and subsidiaries (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on the COSO criteria.

As indicated in the accompanying Report of Management on Danaher Corporation’s Internal Control Over Financial Reporting, management’s assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of Abcam plc, acquired on December 6, 2023, which is included in the 2023 consolidated financial statements of the Company and constituted 8% of total assets as of December 31, 2023 and less than 1% of revenues for the year then ended. Our audit of internal control over financial reporting of the Company also did not include an evaluation of the internal control over financial reporting of Abcam plc.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2023 and 2022, the related consolidated statements of earnings, comprehensive income, stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2023, and the related notes and financial statement schedule listed in the Index at Item 15(a) and our report dated February 21, 2024 expressed an unqualified opinion thereon.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Report of Management on Danaher Corporation’s Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/

February 21, 2024

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Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors of Danaher Corporation

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Danaher Corporation and subsidiaries (the Company) as of December 31, 2023 and 2022, the related consolidated statements of earnings, comprehensive income, stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2023, and the related notes and financial statement schedule listed in the Index at Item 15(a) (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 21, 2024 expressed an unqualified opinion thereon.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

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			Uncertain Tax Positions
Description of the Matter			As discussed in Note 7 to the consolidated financial statements, the Company operates in the U.S. and multiple international tax jurisdictions and as a result files numerous tax returns in those locations. Uncertainty in a tax position may arise for multiple reasons, including because tax laws are subject to interpretation. The Company applies the applicable tax law and judgment to (1) determine whether, based on the technical merits, a tax position is more likely than not to be sustained and (2) measure the amount of tax benefit that qualifies for recognition. As of December 31, 2023, the Company’s gross unrecognized tax benefits related to uncertain tax positions were approximately $1.2 billion. Auditing the recognition and measurement of certain of the Company’s tax positions including the evaluation of whether such tax position is more likely than not to be sustained, and if applicable the measurement of the benefit, is complex and required the use of tax subject matter resources.
How We Addressed the Matter in Our Audit			We tested controls over management’s accounting for tax positions, including assessment of the technical merits of tax positions and if applicable, the measurement of the benefit of the tax position. To evaluate whether the technical merits of certain of the Company’s income tax positions are more likely than not sustainable, our audit procedures included, among others, evaluation of applicable tax law, court cases, tax regulations and other regulatory guidance by our tax subject matter resources. For certain of the income tax positions, we also involved tax subject matter resources in corroborating our understanding of the relevant facts, examining the Company’s analysis, evaluating relevant correspondence with the tax authority and reading third-party advice obtained by management, as applicable. We also evaluated the adequacy of the Company’s disclosures included in Note 7 to the consolidated financial statements.

/s/

We have served as the Company’s auditor since 2002.

February 21, 2024

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DANAHER CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

($ in millions, except per share amount)


	As of December 31
	2023	2022
ASSETS
Current assets:
Cash and equivalents	$	$
Trade accounts receivable, less allowance for doubtful accounts of $ as of December 31, 2023 and $ as of December 31, 2022
Inventories
Prepaid expenses and other current assets
Current assets, discontinued operations
Total current assets
Property, plant and equipment, net
Other long-term assets
Goodwill
Other intangible assets, net
Other assets, discontinued operations
Total assets	$	$

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Notes payable and current portion of long-term debt	$	$
Trade accounts payable
Accrued expenses and other liabilities
Current liabilities, discontinued operations
Total current liabilities
Other long-term liabilities
Long-term debt
Long-term liabilities, discontinued operations
Stockholders’ equity:
Preferred stock, par value, million shares authorized; shares issued and outstanding as of December 31, 2023; million shares of % Mandatory Convertible Preferred Stock, Series B, issued and outstanding as of December 31, 2022
Common stock - $ par value, billion shares authorized; million issued and million outstanding as of December 31, 2023; million issued and million outstanding as of December 31, 2022
Additional paid-in capital
Retained earnings
Accumulated other comprehensive income (loss)	()	()
Total Danaher stockholders’ equity
Noncontrolling interests
Total stockholders’ equity
Total liabilities and stockholders’ equity	$	$

See the accompanying Notes to the Consolidated Financial Statements.

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DANAHER CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EARNINGS

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


	Year Ended December 31
	2023	2022		2021
Sales	$	$		$
Cost of sales	()	()		()
Gross profit
Operating costs:
Selling, general and administrative expenses	()	()		()
Research and development expenses	()	()		()
Other operating expenses				()
Operating profit
Nonoperating income (expense):
Other income (expense), net	()	()
Loss on early extinguishment of borrowings				()
Interest expense	()	()		()
Interest income
Earnings from continuing operations before income taxes
Income taxes	()	()		()
Net earnings from continuing operations
Earnings from discontinued operations, net of income taxes
Net earnings
Mandatory convertible preferred stock dividends	()	()		()
Net earnings attributable to common stockholders	$	$		$

Net earnings per common share from continuing operations:
Basic	$	$		$
Diluted	$	$		$
Net earnings per common share from discontinued operations:
Basic	$	$		$
Diluted	$	$		$
Net earnings per common share:
Basic	$	$		$
Diluted	$	$	*	$	*
Average common stock and common equivalent shares outstanding:
Basic
Diluted

See the accompanying Notes to the Consolidated Financial Statements.

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DANAHER CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

($ in millions)


	Year Ended December 31
	2023	2022	2021
Net earnings	$	$	$
Other comprehensive income (loss), net of income taxes:
Foreign currency translation adjustments		()	()
Pension and postretirement plan benefit adjustments	()
Cash flow hedge adjustments	()
Total other comprehensive income (loss), net of income taxes		()	()
Comprehensive income	$	$	$

See the accompanying Notes to the Consolidated Financial Statements.

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DANAHER CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

($ in millions)


	Year Ended December 31
	2023		2022		2021
Preferred stock:
Balance, beginning of period	$		$		$
Conversion of Mandatory Convertible Preferred Stock to common stock	()		()
Balance, end of period	$		$		$
Common stock:
Balance, beginning and end of period	$		$		$
Additional paid-in capital:
Balance, beginning of period	$		$		$
Common stock-based award activity
Common stock issued in connection with Mandatory Convertible Preferred Stock conversions
Common stock issued in connection with acquisitions
Common stock issued in connection with LYONs’ conversions
Acquisition of noncontrolling interests			()
Distribution of Veralto Corporation	()
Balance, end of period	$		$		$
Retained earnings:
Balance, beginning of period	$		$		$
Net earnings
Common stock dividends declared	()		()		()
Mandatory Convertible Preferred Stock dividends declared	()		()		()
Distribution of Veralto Corporation	()
Balance, end of period	$		$		$
Accumulated other comprehensive income (loss):
Balance, beginning of period	$	()	$	()	$	()
Distribution of Veralto Corporation
Other comprehensive income (loss)			()		()
Balance, end of period	$	()	$	()	$	()
Noncontrolling interests:
Balance, beginning of period	$		$		$
Distribution of Veralto Corporation	()
Change in noncontrolling interests			()		()
Balance, end of period	$		$		$
Total stockholders’ equity, end of period	$		$		$

See the accompanying Notes to the Consolidated Financial Statements.

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DANAHER CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

($ in millions)


	Year Ended December 31
	2023		2022	2021
Cash flows from operating activities:
Net earnings	$		$	$
Less: earnings from discontinued operations, net of income taxes	()		()	()
Net earnings from continuing operations
Noncash items:
Depreciation
Amortization of intangible assets
Amortization of acquisition-related inventory fair value step-up
Stock-based compensation expense
Contract settlement expense
Pretax loss on early extinguishment of borrowings
Pretax gain on sale of product lines and investment (gains) losses				()
Change in deferred income taxes	()		()	()
Change in trade accounts receivable, net			()	()
Change in inventories			()	()
Change in trade accounts payable	()		()
Change in prepaid expenses and other assets			()
Change in accrued expenses and other liabilities
Total operating cash provided by continuing operations
Total operating cash provided by discontinued operations
Net cash provided by operating activities
Cash flows from investing activities:
Cash paid for acquisitions	()		()	()
Payments for additions to property, plant and equipment	()		()	()
Proceeds from sales of property, plant and equipment
Payments for purchases of investments	()		()	()
Proceeds from sales of investments
All other investing activities
Total cash used in investing activities from continuing operations	()		()	()
Total investing cash used in discontinued operations	()		()	()
Net cash used in investing activities	()		()	()
Cash flows from financing activities:
Proceeds from the issuance of common stock in connection with stock-based compensation
Payment of dividends	()		()	()
Net (repayments of) proceeds from borrowings (maturities of 90 days or less)	()		()
Proceeds from borrowings (maturities longer than 90 days)
Repayments of borrowings (maturities longer than 90 days)	()		()	()
Distribution from discontinued operations
Make-whole premiums to redeem borrowings prior to maturity				()
All other financing activities	()		()	()
Net cash provided by (used in) financing activities for continuing operations			()
Cash distributions to Veralto Corporation, net	()
Net cash (used in) provided by financing activities	()		()
Effect of exchange rate changes on cash and equivalents			()	()
Net change in cash and equivalents	()			()
Beginning balance of cash and equivalents
Ending balance of cash and equivalents	$		$	$

Supplemental disclosure:
Distribution of noncash net assets to Veralto Corporation	$	()	$	$

See the accompanying Notes to the Consolidated Financial Statements.

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DANAHER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1.

business segments:

•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. The biotherapeutics that the Company’s solutions support range from replacement therapies such as insulin, vaccines, recombinant proteins and other biologic drugs, to novel cell, gene, mRNA and other nucleic acid therapies.

•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. 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.

•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.

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million, $ million and $ million of expense associated with doubtful accounts related to continuing operations for the years ended December 31, 2023, 2022 and 2021, respectively.

Included in the Company’s trade accounts receivable and other long-term assets as of December 31, 2023 and 2022 are $ million and $ million of net aggregate financing receivables, respectively. All financing receivables are evaluated for impairment based on individual customer credit profiles.

$ Work in process Raw materials Total$ $

million and $ million, respectively, and taxes receivable for income and other taxes of $ million and $ million, respectively.

yearsLeased assets and leasehold improvementsAmortized over the lesser of the economic life of the asset or the term of the leaseMachinery and equipment

– years

Customer-leased equipment

– years

Estimated useful lives are periodically reviewed and, when appropriate, changes to estimates are made prospectively.

The classes of property, plant and equipment as of December 31 are summarized as follows ($ in millions):


	2023	2022
Land and improvements	$	$
Buildings
Machinery and equipment
Customer-leased equipment
Gross property, plant and equipment
Less: accumulated depreciation	()	()
Property, plant and equipment, net	$	$

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million, $ million and $ million in 2023, 2022 and 2021, respectively, including investments in partnerships of $ million, $ million and $ million in 2023, 2022 and 2021, respectively. The Company recorded net realized and unrealized gains and losses related to changes in the fair value of these investments, as well as impairments to equity-method investments in other income (expense), net, in the accompanying Consolidated Statements of Earnings. Refer to Notes 9 and 12 for additional information about the Company’s investments.

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million and is being paid over periods ranging from to . In 2023 and 2022, the Company recorded amounts related to these grants and other government assistance that offset operating expenses of $ million and $ million, respectively, and purchases of property, plant and equipment of $ million and $ million, respectively. Property, plant and equipment purchased using funds provided by governments are recorded net of government assistance.

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

In August 2023, the FASB issued ASU 2023-05, Business Combinations—Joint Venture Formations (Subtopic 805-60): Recognition and Initial Measurement. The ASU requires that a joint venture apply a new basis of accounting upon formation in which the joint venture will recognize and initially measure its assets and liabilities at fair value (with exceptions to fair value measurement that are consistent with the business combinations guidance). The ASU is effective prospectively for all joint venture formations with a formation date on or after January 1, 2025, with early adoption permitted. The Company early adopted the ASU effective September 30, 2023 on a prospective basis.

Accounting Standards Not Yet Adopted—In November 2023, the FASB issued ASU 2023-07, Improvements to Reportable Segment Disclosures. The ASU requires additional disclosures about reportable segments’ significant expenses on an interim and annual basis. The ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024 on a retrospective basis. The Company is assessing the impact of this ASU on the Company's disclosures.

NOTE 2.

billion (the “Abcam Acquisition”). Abcam is a leading global supplier of protein consumables, including highly validated antibodies, reagents, biomarkers and assays to address targets in biological pathways that are critical for

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million in 2022. The acquisition of Abcam has provided and is expected to provide the Company additional sales and earnings opportunities in the proteomics sector. The Company financed the Abcam Acquisition using cash on hand. The Company preliminarily recorded approximately $ billion of goodwill related to the Abcam Acquisition. The Company is continuing to evaluate certain pre-acquisition contingencies associated with its 2023 acquisition of Abcam (due to the acquisition’s open measurement period) and is also in the process of obtaining valuations of certain acquisition-related assets and liabilities in connection with the acquisition. The Company will make appropriate adjustments to the purchase price allocation prior to completion of the measurement period, as required.

During 2022, the Company acquired businesses for total consideration of $ million in cash, net of cash acquired. The businesses acquired complement existing units of each of the Company’s segments. The Company preliminarily recorded an aggregate of $ million of goodwill related to these acquisitions. The aggregate annual sales of the businesses acquired in 2022, at the time of their acquisition, in each case based on the company’s revenues for its last completed fiscal year prior to the acquisition, were approximately $ million.

On August 30, 2021, the Company acquired Aldevron, L.L.C. (“Aldevron”) for a cash purchase price of approximately $ billion (the “Aldevron Acquisition”). Aldevron manufactures high-quality plasmid DNA, mRNA and proteins, serving biotechnology and pharmaceutical customers across research, clinical and commercial applications, and is now part of the Company’s Life Sciences segment. Aldevron generated revenues of approximately $ million in 2020. The acquisition of Aldevron has provided and is expected to provide additional sales and earnings opportunities for the Company by expanding product line diversity, including new product offerings supporting genomic medicine. The Company financed the Aldevron Acquisition using cash on hand and proceeds from the issuance of commercial paper. The Company recorded approximately $ billion of goodwill related to the Aldevron Acquisition.

During 2021, in addition to the Aldevron Acquisition, the Company acquired businesses for total consideration of approximately $ billion in cash, net of cash acquired. The businesses acquired complement existing units of each of the Company’s segments. The Company recorded an aggregate of approximately $ billion of goodwill related to these acquisitions. The aggregate annual sales of the other businesses acquired in 2021 at the time of their acquisition, in each case based on the company’s revenues for its last completed fiscal year prior to the acquisition, were approximately $ million.

$ $ Inventories Property, plant and equipment Goodwill Other intangible assets, primarily developed technology, trade names and customer relationships Trade accounts payable()()()Deferred tax liabilities()()()Other assets and liabilities, net()()()Net assets acquired Less: noncash consideration() ()Net cash consideration$ $ $

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Transaction-related costs for the Abcam Acquisition were $ million for the year ended December 31, 2023 and for the Aldevron Acquisition were $ million for the year ended December 31, 2021. The Company’s earnings for 2023 also reflect the pretax impact of $ million of non-recurring acquisition date fair value adjustments to inventory and the settlement of pre-acquisition share-based payment awards, both related to the Abcam Acquisition. The Company’s earnings for 2021 also reflect the pretax impact of $ million of non-recurring acquisition date fair value adjustments to inventory related to the Aldevron Acquisition. In addition, the Company’s earnings for 2021 reflect the pretax impact of $ million of non-recurring acquisition date fair value adjustments to inventory and deferred revenue related to the acquisition of Cytiva in 2020. Transaction-related costs and acquisition-related fair value adjustments attributable to other acquisitions were not material for the years ended December 31, 2023, 2022 or 2021.

Pro Forma Financial Information (Unaudited)

The unaudited pro forma information for the periods set forth below gives effect to the 2023 and 2022 acquisitions as if they had occurred as of January 1, 2022, including the results from operations for the acquired business as well as the impact of assumed financing of the transaction and the impact of the purchase price allocation (including the amortization of acquired intangible assets).

$ Net earnings from continuing operations

Diluted net earnings per common share from continuing operations (a)

(a) Diluted net earnings from continuing operations is calculated by taking net earnings from continuing operations and deducting the anti-dilutive MCPS dividends.

million of non-recurring acquisition date fair value adjustments to inventory and the settlement of pre-acquisition share-based payment awards related to the Abcam Acquisition. The 2022 unaudited pro forma net earnings from continuing operations were adjusted to include the impact of these items. In addition, acquisition-related transaction costs of $ million pretax for the year ended December 31, 2023 associated with the Abcam Acquisition were excluded from pro forma net earnings from continuing operations.

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NOTE 3.

billion in debt securities (refer to Note 14). The proceeds from these issuances were used to fund the approximately $ billion net cash distributions Veralto made to Danaher prior to the Distribution Date (“Veralto Distribution”). Danaher used a portion of the Veralto Distribution proceeds to redeem approximately $ billion of commercial paper. The Company has also used, and intends to use, the balance of the Veralto Distribution proceeds to satisfy bond maturities and to fund certain of the Company’s regular, quarterly cash dividends to shareholders.

The accounting requirements for reporting Veralto as a discontinued operation were met when the Separation was completed. Accordingly, the accompanying Consolidated Financial Statements for all periods presented reflect this business as a discontinued operation. The Company allocated a portion of the consolidated interest expense to discontinued operations based on the ratio of the discontinued business’ net assets to the Company’s consolidated net assets.

As a result of the Separation, the Company incurred $ million and $ million in Separation-related costs during the years ended December 31, 2023 and 2022, respectively, which are reflected in earnings from discontinued operations, net of income taxes in the accompanying Consolidated Statements of Earnings. These costs primarily relate to professional fees associated with preparation of regulatory filings and activities within finance, tax, legal and information technology functions as well as certain investment banking fees and tax costs incurred upon the Separation.

In connection with the Separation, Danaher and Veralto entered into various agreements to effect the Separation and provide a framework for their relationship after the Separation, including a separation and distribution agreement, transition services agreement, an employee matters agreement, a tax matters agreement, an intellectual property matters agreement and a Danaher Business System (“DBS”) license agreement. These agreements provide for the allocation between Danaher and Veralto of assets, employees, liabilities and obligations (including investments, property and employee benefits and tax-related assets and liabilities) attributable to periods prior to, at and after Veralto’s separation from Danaher and govern certain relationships between Danaher and Veralto after the Separation. In addition, Danaher is also party to various commercial agreements with Veralto entities. The amounts paid and received by Danaher for transition services provided under the above agreements as well as sales and purchases to and from Veralto were not material to the Company’s results of operations for the year ended December 31, 2023.

Fortive Corporation Separation

On July 2, 2016, the Company completed the separation of its former Test & Measurement segment, Industrial Technologies segment (excluding the product identification businesses) and retail/commercial petroleum business by distributing to Danaher stockholders on a pro rata basis all of the issued and outstanding common stock of Fortive Corporation (“Fortive”), the entity the Company incorporated to hold such businesses. For the year ended December 31, 2021, the Company recorded an income tax benefit of $ million related to the release of previously provided reserves associated with uncertain tax positions on certain of the Company’s tax returns which were jointly filed with Fortive entities. These reserves were released due to the expiration of statutes of limitations for those returns. This income tax benefit is included in earnings from discontinued operations, net of income taxes in the accompanying Consolidated Statements of Earnings.

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$ $ Cost of sales()()()Selling, general and administrative expenses()()()Research and development expenses()()()Other income (expense)() Interest expense()()()Income from discontinued operations before income taxes Income tax expense()()()Earnings from discontinued operations, net of income taxes$ $ $

The following table summarizes the major classes of assets and liabilities of the Veralto-related discontinued operations that were included in the Company’s accompanying Consolidated Balance Sheet as of December 31, 2022 ($ in millions):


Assets:
Trade accounts receivable, net			$
Inventories
Prepaid expenses and other current assets
Property, plant and equipment, net
Goodwill
Other intangible assets, net
Other long-term assets
Total assets, discontinued operations			$
Liabilities:
Trade accounts payable			$
Accrued expenses and other liabilities
Other long-term liabilities
Total liabilities, discontinued operations			$

NOTE 4.

million and million options to purchase shares, respectively, were excluded from the diluted earnings per share calculation, as the impact of their inclusion would have been anti-dilutive. For the year ended December 31, 2021, options to purchase shares were excluded from the diluted earnings per share calculation.

Basic and diluted EPS are computed independently for each quarter and annual period, which involves the use of different weighted-average share count figures relating to quarterly and annual periods. As a result, and after factoring the effect of rounding to the nearest cent per share, the sum of prior quarter-to-date EPS figures may not equal annual EPS.

On April 17, 2023, all outstanding shares of the MCPS Series B converted into million shares of the Company’s common stock. The impact of the MCPS Series B calculated under the if-converted method was anti-dilutive for each of the years ended December 31, 2023, 2022 and 2021 and as such million, million and million shares, respectively, underlying the MCPS Series B were excluded in the calculation of diluted EPS and the related MCPS Series B dividends of $ million, $ million and $ million, respectively, were included in the calculation of net earnings for diluted EPS for the period.

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million shares of the Company’s common stock. The impact of the MCPS Series A calculated under the if-converted method was dilutive for both of the years ended December 31, 2022 and 2021, and as such million and million shares, respectively, underlying the MCPS Series A were included in the calculation of diluted EPS and the related MCPS Series A dividends of $ million and $ million were excluded from the calculation of net earnings for diluted EPS for the periods. Refer to Note 19 for additional information about the MCPS Series A and B conversions. $ $ MCPS dividends()()()Net earnings from continuing operations attributable to common stockholders for Basic EPS Adjustment for MCPS dividends for dilutive MCPS Net earnings from continuing operations attributable to common stockholders after assumed conversions for Diluted EPS$ $ $ Denominator:Weighted average common shares outstanding used in Basic EPS Incremental common shares from:Assumed exercise of dilutive options and vesting of dilutive RSUs and PSUs

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

(b) The Company defines other developed markets as Japan, Australia and New Zealand.

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million, $ million and $ million, respectively.

Remaining Performance Obligations

Remaining performance obligations represent the aggregate transaction price allocated to performance obligations with an original contract term greater than one year which are fully or partially unsatisfied at the end of the period. Remaining performance obligations include noncancelable purchase orders, the non-lease portion of minimum purchase commitments under long-term consumable supply arrangements, extended warranty and service and other long-term contracts. These remaining performance obligations do not include revenue from contracts with customers with an original term of one year or less, revenue from long-term consumable supply arrangements with no minimum purchase requirements or revenue expected from purchases made in excess of the minimum purchase requirements or revenue from equipment leased to customers. While the remaining performance obligation disclosure is similar in concept to backlog, the definition of remaining performance obligations excludes leases and contracts that provide the customer with the right to cancel or terminate for convenience with no substantial penalty, even if historical experience indicates the likelihood of cancellation or termination is remote. Additionally, the Company has elected to exclude contracts with customers with an original term of one year or less from remaining performance obligations while these contracts are included within backlog.

As of December 31, 2023, the aggregate amount of the transaction price allocated to remaining performance obligations was approximately $ billion. The Company expects to recognize revenue on approximately % of the remaining performance obligations over the next 12 months, % over the subsequent 12 months, and the remainder recognized thereafter.

Contract Balances

The timing of revenue recognition, billings and cash collections results in billed trade accounts receivable, unbilled receivables (“contract assets”) and deferred revenue, customer deposits and billings in excess of revenue recognized (“contract liabilities”) on the Consolidated Balance Sheets. In addition, the Company defers certain costs incurred to obtain a contract (“contract costs”). Contract assets, liabilities and costs are reported on the accompanying Consolidated Balance Sheets on a contract-by-contract basis.

Contract Assets—Most of the Company’s long-term contracts are billed as work progresses in accordance with the contract terms and conditions, either at periodic intervals or upon achievement of certain milestones. Often this results in billing occurring subsequent to revenue recognition resulting in contract assets. Contract assets are generally classified as other current assets in the Consolidated Balance Sheets. The balance of contract assets as of December 31, 2023 and 2022 was $ million and $ million, respectively.

Contract Liabilities—The Company often receives cash payments from customers in advance of the Company’s performance resulting in contract liabilities that are classified as either current or long-term in the Consolidated Balance Sheets based on the timing of when the Company expects to recognize revenue. As of both December 31, 2023 and 2022, contract liabilities were approximately $ billion and are included within accrued expenses and other liabilities and other long-term liabilities in the accompanying Consolidated Balance Sheets. Cash payments received in advance of satisfying performance obligations during the year ended December 31, 2023 were largely offset by revenue recognized during the year that was included in the opening contract liability balance. The increase in the contract liability balance during the year ended December 31, 2022 was primarily a result of cash payments received in advance of satisfying performance obligations, partially offset by revenue recognized during the year that was included in the opening contract liability balance and the impact of foreign currency. Revenue recognized during both the years ended December 31, 2023 and 2022 that was included in the opening contract liability balance was approximately $ billion.

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NOTE 6.

separate business segments consisting of the Biotechnology, Life Sciences and Diagnostics segments. Operating profit represents total revenues less operating expenses, excluding nonoperating income and expense, loss on early extinguishment of borrowings, interest and income taxes. Operating profit amounts in the Other segment consist of unallocated corporate costs and other costs not considered part of management’s evaluation of reportable segment operating performance. The identifiable assets by segment are those used in each segment’s operations. Intersegment amounts are not significant and are eliminated to arrive at consolidated totals. $ $ Life Sciences Diagnostics Total$ $ $ Operating profit:Biotechnology$ $ $ Life Sciences Diagnostics Other()()()Total$ $ $ Depreciation and amortization of intangible assets:Biotechnology$ $ $ Life Sciences Diagnostics Other Total$ $ $

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$ $ Life Sciences Diagnostics Other Discontinued operations Total$ $ $ Capital expenditures, gross:Biotechnology$ $ $ Life Sciences Diagnostics Other Total$ $ $ $ $ China Operating lease ROU assets()()Goodwill and other intangibles()()Total deferred tax liability()()Net deferred tax liability$()$()

The Company evaluates the future realizability of tax credits and loss carryforwards considering the anticipated future earnings of the Company’s subsidiaries as well as tax planning strategies in the associated jurisdictions. Deferred taxes associated with U.S. entities consist of net deferred tax liabilities of $ million and approximately $ billion as of December 31, 2023 and 2022, respectively, of which $ million were associated with discontinued operations in 2022. Deferred taxes associated with non-U.S. entities consist of net deferred tax liabilities of approximately $ billion and $ billion as of December 31, 2023 and 2022, respectively, of which $ million of net deferred tax assets were associated with discontinued operations in 2022. During 2023, the Company’s valuation allowance decreased by $ million due to deferred tax assets and associated valuation allowance transferred due to the Separation, offset by certain tax benefits recognized in 2023 that were not expected to be realized. As of December 31, 2023, the total amount of the basis difference in investments indefinitely reinvested outside the United States for which deferred taxes have not been

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billion. The income taxes applicable to repatriating such earnings are not readily determinable. As of December 31, 2023, the Company had no plans which would subject these basis differences to income taxes in the United States or elsewhere.

The Tax Cuts and Jobs Act (“TCJA”) imposes tax on U.S. shareholders for global intangible low-taxed income (“GILTI”) earned by certain non-U.S. subsidiaries. The Company has elected the period cost method for its accounting for GILTI.

% % %Increase (decrease) in tax rate resulting from:State income taxes (net of federal income tax benefit) % % %Non-U.S. rate differential()%()%()%Resolution and expiration of statutes of limitation of uncertain tax positions()%()%()%Realignment of businesses %()% %Research credits()%()%()%Foreign-derived intangible income, uncertain tax positions and other()%()% %Excess tax benefits from stock-based compensation()%()%()%Effective income tax rate % % %

The Company’s effective tax rate for 2023, 2022 and 2021 differs from the U.S. federal statutory rate of %, due to the Company’s earnings outside the United States that are indefinitely reinvested and taxed at rates different than the U.S. federal statutory rate as well as the impact of the following:

•The effective tax rate of % in 2023 includes net deferred tax benefits from changes in estimates related to prior year tax filing positions, the release of reserves for uncertain tax positions due to the expiration of statutes of limitation and excess tax benefits from stock-based compensation, net of charges related to tax costs related to the Separation, tax costs from legal and operational actions undertaken to realign certain of its businesses and changes in estimates associated with prior period uncertain tax positions. These items decreased the reported rate on a net basis by %.

•The effective tax rate of % in 2022 includes 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. These items decreased the reported rate on a net basis by %.

•The effective tax rate of % in 2021 includes net tax benefits primarily related to the 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. These items decreased the reported rate on a net basis by %.

The Company made income tax payments related to both continuing and discontinued operations of approximately $ billion, $ billion and $ billion in 2023, 2022 and 2021, respectively. Current income taxes payable related to both continuing and discontinued operations has been reduced by $ million, $ million and $ million in 2023, 2022 and 2021, respectively, for tax deductions attributable to stock-based compensation, of which, the excess tax benefit over the amount recorded for financial reporting purposes for both continuing and discontinued operations was $ million, $ million and $ million, respectively. The excess tax benefits have been recorded as reductions to the current income tax provision and are reflected as operating cash inflows in the accompanying Consolidated Statements of Cash Flows.

Included in deferred income taxes as of December 31, 2023 are tax benefits for U.S. and non-U.S. net operating loss carryforwards totaling $ million ($ million of which the Company does not expect to realize and have corresponding valuation allowances). Certain of the losses can be carried forward indefinitely and others can be carried forward to various dates from 2024 through 2043. In addition, the Company had general business and non-U.S. tax credit carryforwards of $ million ($ million of which the Company does not expect to realize and have corresponding valuation allowances) as of December 31, 2023, which can be carried forward to various dates from 2024 to 2033. In

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million of valuation allowances related to other deferred tax asset balances that are not more likely than not of being realized.

As of December 31, 2023, gross unrecognized tax benefits totaled approximately $ billion (approximately $ billion, net of the impact of $ million of indirect tax benefits offset by $ million associated with potential interest and penalties). As of December 31, 2022, gross unrecognized tax benefits totaled approximately $ billion (approximately $ billion (of which $ million related to discontinued operations), net of the impact of $ million of indirect tax benefits offset by $ million associated with potential interest and penalties). The Company recognized approximately $ million and $ million of net tax expense from potential interest and penalties during 2023 and 2022, respectively, and $ million of net tax benefits from the reversal of potential interest and penalties during 2021, related to both continuing and discontinued operations associated with uncertain tax positions. The net tax expense for potential interest and penalties related to discontinued operations were $ million and $ million in 2023 and 2022, respectively, and $ million of net tax benefit in 2021. To the extent unrecognized tax benefits (including interest and penalties) are recognized with respect to uncertain tax positions, approximately $ billion and $ billion as of December 31, 2023 and 2022, respectively, would reduce the tax expense and effective tax rate in future periods, of which $ million related to discontinued operations in 2022. The Company recognized interest and penalties related to unrecognized tax benefits within income taxes in the accompanying Consolidated Statements of Earnings. Unrecognized tax benefits and associated accrued interest and penalties are included in taxes, income and other accrued expenses as detailed in Note 13.

$ $ Additions based on tax positions related to the current year Additions for tax positions of prior years Reductions for tax positions of prior years()()()Acquisitions, divestitures and other() Lapse of statute of limitations()()()Settlements()()()Effect of foreign currency translation ()()Unrecognized tax benefits, end of year$ $ $

The Company conducts business globally and files numerous consolidated and separate income tax returns in the U.S. federal and state and non-U.S. jurisdictions. The non-U.S. countries in which the Company has a significant presence include China, Denmark, Germany, Singapore, Sweden, Switzerland and the United Kingdom. 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. The Internal Revenue Service (“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. In addition, the Company has subsidiaries in Canada, China, Denmark, France, Germany, India, Italy, Switzerland, the United Kingdom and various other countries, states and provinces that are currently under audit for years ranging from 2004 through 2022.

Similar to the position it took in connection with the audit of the Company’s taxable income for the years 2012 through 2015, in the fourth quarter of 2022, the IRS proposed significant adjustments to the Company’s taxable income for the years 2016 through 2018 with respect to the deferral of tax on certain premium income related to the Company’s self-insurance programs. 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. 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 $ billion. In the first quarter of 2023, the Company settled these proposed adjustments with the IRS, although the audit is still open with respect to other matters for the 2016 through 2018 period. The impact of the settlement with respect to the Company’s self-insurance policies was not material to the Company’s financial statements, including cash flows and the effective tax rate. As the settlement with the IRS was specific to the audit period, the settlement does not preclude the IRS from proposing similar adjustments to the

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billion including applicable accrued interest (approximately $ million based on the exchange rate as of December 31, 2023). During 2023, the Danish National Tax Tribunal lifted the suspension of the Company’s appeal of the tax assessments and the appeal will now proceed in due course. Management believes the positions the Company has taken in Denmark are in accordance with the relevant tax laws and is vigorously defending its positions. The Company intends on pursuing this matter through the Danish High Court and the Danish Supreme Court should the appeal to the Danish National Tax Tribunal be unsuccessful. While the ultimate resolution of this matter is uncertain and could take many years, taking into account the payments the Company has previously made related to these assessments in order to mitigate further interest accrual claims, the Company does not expect the resolution of this matter will have a future material adverse impact to the Company’s financial statements, including its cash flow and effective tax rate.

Management estimates that it is reasonably possible that the amount of unrecognized tax benefits related to continuing operations may be reduced by approximately $ million within 12 months as a result of resolution of worldwide tax matters, net of payments for tax audit settlements and/or statute of limitations expirations. Future resolution of uncertain tax positions related to discontinued operations may result in additional charges or credits to earnings from discontinued operations in the accompanying Consolidated Statements of Earnings (refer to Note 3).

The Company operates in various non-U.S. jurisdictions where income tax incentives and rulings have been granted for specific periods of time. In Puerto Rico, Singapore and Switzerland, the Company has various tax rulings and tax holiday arrangements which reduce the overall effective tax rate of the Company. The various rulings and tax holidays expire between 2024 and 2027. As of December 31, 2023, the Company had satisfied the conditions enumerated in these agreements. Included in the accompanying Consolidated Financial Statements are tax benefits of $ million, $ million and $ million (or $, $ and $ per diluted common share) for 2023, 2022 and 2021, respectively, from these rulings and tax holidays.

NOTE 8.

million per year through 2029 (subject to proration in 2021). The Company engaged a third-party valuation specialist to assist in determining the value of the elements of the transaction. The present value of the payments to Quidel was estimated to be $ million, of which $ million was recorded as a pretax contract settlement expense primarily due to the unfavorable nature of the prior arrangement (consisting of a cash charge of $ million and a noncash charge of $ million) in 2021 related to the modification and partial termination of the prior commercial arrangement and resolution of the associated litigation. The Company also capitalized $ million in intangible assets, comprised of proprietary technology, customer relationships and the use of a trade name acquired in the settlement, which represent a noncash investing activity. Due to the extended payment terms of the arrangement, the arrangement represents a noncash financing activity of $ million. Over the period of the arrangement, the cash payments related to servicing the obligation due to Quidel are recorded as cash outflows from financing activities and the payments related to the imputed interest on the obligation due to Quidel are recorded as cash outflows from operating activities in the accompanying Consolidated Statements of Cash Flows.

NOTE 9.

$ $ Investment gains (losses):Realized investment gains (losses) Unrealized investment gains (losses)()() Total investment gains (losses)()() Gain on sale of product lines

(a) Includes short-term leases and sublease income, both of which were immaterial.

2025 2026 2027 2028 Thereafter Total operating lease payments Less: imputed interest()Total operating lease liabilities$

As of December 31, 2023, the Company had no additional significant operating or finance leases that had not yet commenced.

NOTE 11.

reporting units for goodwill impairment testing. As of the date of the 2023 annual impairment test, the carrying value of the goodwill included in each individual reporting unit ranged from approximately $ billion to $ billion. goodwill impairment charges were recorded for any of the years ended December 31, 2023, 2022 and 2021 and no “triggering” events have occurred subsequent to the performance of the 2023 annual impairment test. The factors used by management in its impairment analysis are inherently subject to uncertainty. 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.

As a result of the Company’s change to its reportable segments in the fourth quarter of 2022 (refer to Note 6 for additional information), the Company also changed its reporting units for goodwill aggregation and impairment testing. The Company used the relative fair value method to reallocate goodwill to the associated reporting units impacted by the change in reportable segments in the fourth quarter of 2022, resulting in the allocation of goodwill of approximately $ billion (including the impact of 2022 acquisitions prior to the allocation date) to the Biotechnology reportable segment from the Life Sciences reportable segment.

$ $ $

Attributable to acquisitions (a)

Adjustments due to finalization of purchase price adjustments () Foreign currency translation and other ()()()Balance, before resegmentation

Reallocation among new reporting units (a)

() Attributable to acquisitions Adjustments due to finalization of purchase price allocations () ()Foreign currency translation and other Balance, December 31, 2022 Attributable to 2023 acquisitions Adjustments due to finalization of purchase price allocations Foreign currency translation and other Balance, December 31, 2023$ $ $ $

billion of goodwill was allocated to the Biotechnology reportable segment, of which $ million is shown on the Attributable to acquisitions line before resegmentation as it relates to a 2022 acquisition that occurred prior to the allocation date.

Finite-lived intangible assets are amortized over their legal or estimated useful life.

$()$ $()Customer relationships, trade names and other intangibles () ()Total finite-lived intangibles () ()Indefinite-lived intangibles:Trademarks and trade names — — Total intangibles$ $()$ $()

During 2023, the Company acquired finite-lived intangible assets, consisting primarily of developed technology, trade names and customer relationships, with a weighted average life of years as a result of the Abcam Acquisition. During

years. Refer to Note 2 for additional information on the intangible assets acquired.

The Company reviews identified intangible assets for impairment whenever events or changes in circumstances indicate that the related carrying amounts may not be recoverable. Indefinite-lived intangibles are subject to impairment testing at least annually or more frequently if events or changes in circumstances indicate that potential impairment exists. The Company identified impairment triggers during the second quarter of 2023 in the Biotechnology segment, the fourth quarter of 2023 in the Diagnostics and Biotechnology segments and the first quarter of 2021 in the Diagnostics segment which resulted in the impairment of certain long-lived assets, including technology-based intangible assets and other assets. In 2023 and 2021, the Company recorded impairment charges totaling $ million and $ million, respectively, related to these long-lived assets in selling, general and administrative expenses in the accompanying Consolidated Statements of Earnings. During 2022 there were impairments of intangible assets.

Total intangible amortization expense in 2023, 2022 and 2021 was $ million, $ million and $ million, respectively. Based on the intangible assets recorded as of December 31, 2023, amortization expense is estimated to be approximately $ billion during 2024, $ billion during 2025, $ billion during 2026, $ billion during 2027 and $ billion during 2028.

NOTE 12.

$ $ $ $ $ $ $ Investment in equity securities Cross-currency swap derivative contracts

Available-for-sale debt securities, which are included in other long-term assets in the accompanying Consolidated Balance Sheets, are measured at fair value using quoted prices reported by investment brokers and dealers based on the underlying terms of the security and comparison to similar securities traded on an active market. As of December 31, 2023 and 2022, available-for-sale debt securities primarily included U.S. Treasury Notes and corporate debt securities.

The Company’s investments in equity securities consist of investments in publicly traded equity securities and investments in non-marketable equity securities. The publicly traded securities are classified as Level 1 in the fair value hierarchy as they are measured based on quotes in active markets. For the non-marketable equity securities, the Company estimates the fair value of the investments in equity securities based on the measurement alternative and adjusts for impairments and observable price changes with a same or similar security from the same issuer within net earnings (the “Fair Value Alternative”). The Company’s investments in these equity securities are not classified in the fair value hierarchy due to the use of these measurement methods. Additionally, the Company is a limited partner in partnerships that invest primarily in early-stage companies. While the partnerships record these investments at fair value, the Company’s investments in the partnerships are accounted for under the equity method of accounting and are not subject to fair value measurement disclosures. As of December 31, 2023 and 2022, the Company’s equity method investments included investments in partnerships with a carrying value of approximately $ billion and $ billion, respectively. During the years ended December 31, 2023 and 2022, the Company recorded net realized and unrealized losses of $ million and $ million, respectively, related to changes in the fair value of the Company’s investments in equity securities and the Company’s

$ $ $ Long-term debt

As of December 31, 2023 and 2022, short and long-term borrowings were categorized as Level 1. The fair value of long-term borrowings was based on quoted market prices. The difference between the fair value and the carrying amounts of long-term borrowings is attributable to changes in market interest rates and/or the Company’s credit ratings subsequent to the incurrence of the borrowing. The fair values of borrowings with original maturities of one year or less, as well as cash and cash equivalents, trade accounts receivable, net and trade accounts payable generally approximate their carrying amounts due to the short-term maturities of these instruments.

Refer to Note 16 for information related to the fair value of the Company sponsored defined benefit pension plan assets.

NOTE 13.

$ $ $ Pension and postretirement benefits Taxes, income and other Contract liabilities Sales and product allowances Operating lease liabilities

Amounts related to the Company’s derivatives expected to be reclassified from accumulated other comprehensive income (loss) to net earnings during the next 12 months, if interest rates and foreign exchange rates remain unchanged, are not significant.

NOTE 16.

)$()$()$()$()$()Service cost ()() Interest cost()()()()()()Employee/retiree contributions ()()()()Benefits and other expenses paid Actuarial (loss) gain () () () Amendments, settlements and curtailments Foreign exchange rate impact and other () Benefit obligation at end of year()()()()()()Change in plan assets:Fair value of plan assets at beginning of year Actual return on plan assets () () Employer contributions Employee contributions Amendments and settlements() ()() Benefits and other expenses paid()()()()()()Foreign exchange rate impact and other () Fair value of plan assets at end of year Funded status$ $()$()$()$()$()

The largest contributor to the net actuarial losses affecting the benefit obligations in 2023 U.S. pension, non-U.S. pension plans and the postretirement benefit plans is decreases in the discount rates compared to the rates in the prior year.

$ $ $ $ $ Fair value of plan assets

$ $ $ Fair value of plan assets

% % % % % %Rate of compensation increaseN/AN/A % %N/AN/A

In 2023, the medical trend rate used to determine the postretirement benefit obligation was %. The rate decreases gradually to an ultimate rate of % by 2048 and remains at that level thereafter. In 2022, the medical trend rate used to determine the postretirement benefit obligation was %, gradually decreasing to an ultimate rate of % by 2046 and remaining at that level thereafter. The trend rate is a significant factor in determining the amounts reported.

$ $()$()$ $ Interest cost()()()()()()Expected return on plan assets Amortization of prior service (cost) credit()() Amortization of net (loss) gain()() () ()Curtailment and settlement gains (losses) recognized () Net periodic pension benefit (cost)$ $ $()$()$()$()

The components of the net periodic benefit (cost) of the noncontributory defined benefit pension plans and other postretirement employee benefit plans other than service cost are included in other income (expense), net in the accompanying Consolidated Statements of Earnings.

% % % %Expected long-term return on plan assets % % % %Rate of compensation increaseN/AN/A % %

The discount rate reflects the market rate on December 31 of the prior year for high-quality fixed-income investments with maturities corresponding to the Company’s benefit obligations and is subject to change each year. For non-U.S. pension plans, rates appropriate for each plan are determined based on investment-grade instruments with maturities approximately equal to the average expected benefit payout under the plan.

Included in accumulated other comprehensive income (loss) as of December 31, 2023 are the following amounts that have not yet been recognized in net periodic pension cost: unrecognized prior service credit of $ million ($ million, after-tax) and unrecognized actuarial losses of approximately $ million ($ million, after-tax). The unrecognized losses and prior service cost, net, is calculated as the difference between the actuarially determined projected benefit obligation and the value of the plan assets less accrued pension costs as of December 31, 2023.

Included in accumulated other comprehensive income (loss) as of December 31, 2023 are the following amounts that have not yet been recognized in net periodic postretirement benefit cost: unrecognized prior service credits of $ million ($ million, after-tax) and unrecognized actuarial losses of $ million ($ million, after-tax). The unrecognized losses and

% for its U.S. defined benefit pension plan. The Company intends to use an expected long-term rate of return assumption of % for 2024 for such plan. This expected rate of return reflects the asset allocation of the plan, and is based primarily on broad, publicly-traded equity and fixed-income indices and forward-looking estimates of active portfolio and investment management. Long-term rate of return on asset assumptions for the non-U.S. plans were determined on a plan-by-plan basis based on the composition of assets and ranged from % to % in 2023 and % to % in 2022, with a weighted average rate of return assumption of % in 2023 and % in 2022.

Pension Plan Assets

The U.S. pension plan’s goal is to maintain between % and % of its assets in equity portfolios, which are invested in individual equity securities or funds that are expected to mirror broad market returns for equity securities or in assets with characteristics similar to equity investments, such as venture capital funds and partnerships. Asset holdings are periodically rebalanced when equity holdings are outside this range. The balance of the U.S. plan asset portfolio is invested in bond funds, real estate funds, various absolute and real return funds and private equity funds. Non-U.S. plan assets are invested in various insurance contracts, equity and debt securities as determined by the administrator of each plan. The value of the plan assets directly affects the funded status of the Company’s pension plans recorded in the Consolidated Financial Statements.

The Company has certain investments that are valued using Net Asset Value (“NAV”) as the practical expedient. In addition, certain of the investments valued using NAV as the practical expedient have limits on their redemption to monthly, quarterly, semiannually or annually and require up to days prior written notice. These investments valued using NAV consist of mutual funds, venture capital funds, partnerships, real estate, and other private investments, which allow the Company to allocate investments across a broad array of types of funds and diversify the portfolio.

$ $ $ $ $ $ $ Equity securities:Common stock

Other Matters

Substantially all employees not covered by defined benefit plans are covered by defined contribution plans, which generally provide for Company funding based on a percentage of compensation.

The Company’s expenses for all defined benefit and defined contribution pension plans amounted to $ million, $ million and $ million for the years ended December 31, 2023, 2022 and 2021, respectively.

NOTE 17.

billion and the majority of these obligations are expected to be settled during 2024.

NOTE 18.

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million for environmental matters which are known or considered probable and reasonably estimable (of which $ million are noncurrent), which reflects the Company’s best estimate of the costs to be incurred with respect to such matters.

While the Company actively pursues insurance recoveries, as well as recoveries from other potentially responsible parties, it does not recognize any insurance recoveries for environmental liability claims until realized or until such time as a sustained pattern of collections is established related to historical matters of a similar nature and magnitude.

The Company’s Restated Certificate of Incorporation requires it to indemnify to the full extent authorized or permitted by law any person made, or threatened to be made a party to any action or proceeding by reason of his or her service as a director or officer of the Company, or by reason of serving at the request of the Company as a director or officer of any other entity, subject to limited exceptions. Danaher’s Amended and Restated By-laws provide for similar indemnification rights. In addition, Danaher has executed with each director and executive officer of Danaher Corporation an indemnification agreement which provides for substantially similar indemnification rights and under which Danaher has agreed to pay expenses in advance of the final disposition of any such indemnifiable proceeding. While the Company maintains insurance for this type of liability, a significant deductible applies to this coverage and any such liability could exceed the amount of the insurance coverage.

As of December 31, 2023, the Company had approximately $ million of guarantees consisting primarily of outstanding standby letters of credit, bank guarantees and performance and bid bonds. These guarantees have been provided in connection with certain arrangements with vendors, customers, insurance providers, financing counterparties and governmental entities to secure the Company’s obligations and/or performance requirements related to specific transactions. The Company believes that if the obligations under these instruments were triggered, it would not have a material effect on its Consolidated Financial Statements.

NOTE 19.

million shares of the Company’s common stock from time to time on the open market or in privately negotiated transactions. There is no expiration date for the Repurchase Program, and the timing and amount of any shares repurchased under the program will be determined by the Company’s management based on its evaluation of market conditions and other factors. The Repurchase Program may be suspended or discontinued at any time. Any repurchased shares will be available for use in connection with the Company’s equity compensation plans (or any successor plan) and for other corporate purposes. On July 22, 2022, the Company repurchased shares of the Company’s common stock for $ million as part of the Repurchase Program. As of December 31, 2023, approximately million shares remained available for repurchase pursuant to the Repurchase Program. The Company expects to fund any future stock repurchases using the Company’s available cash balances or proceeds from the issuance of debt.

Except as discussed above, neither the Company nor any “affiliated purchaser” repurchased any shares of Company common stock during 2023, 2022 or 2021.

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Conversion of MCPS to common stock()() Balance, end of period Common stock - shares issued:Balance, beginning of period Issuance of common stock attributable to stock-based compensation Conversion of MCPS to common stock Common stock issued in connection with acquisitions Common stock issued in connection with LYONs’ conversions Balance, end of period

As of April 17, 2023, all outstanding shares of the Company’s % MCPS Series B converted to common shares at a rate of common shares per share of preferred stock into an aggregate of million shares of the Company’s common stock, pursuant to the terms of the Certificate of Designation governing the Series B Preferred Stock. Danaher issued cash in lieu of fractional shares of common stock in the conversion. The final quarterly cash dividend of $ per share was paid on April 17, 2023.

On April 15, 2022, all outstanding shares of the Company’s % MCPS Series A converted to common shares at a rate of common shares per share of preferred stock into an aggregate of million shares of the Company’s common stock, pursuant to the terms of the Certificate of Designation governing the Series A Preferred Stock. Danaher issued cash in lieu of fractional shares of common stock in the conversion. The final quarterly cash dividend of $ per share was paid on April 15, 2022.

Stock-Based Compensation

Stock options, RSUs and PSUs have been issued to directors, officers and other employees under the Company’s 2007 Omnibus Incentive Plan. The 2007 Omnibus Incentive Plan provides for the grant of stock options, stock appreciation rights, RSUs, restricted stock, PSUs or any other stock-based award and cash-based awards. A total of approximately million shares of Danaher common stock have been authorized for issuance under the 2007 Omnibus Incentive Plan since the plan’s inception. As of December 31, 2023, approximately million shares of the Company’s common stock remain available for issuance under the 2007 Omnibus Incentive Plan (excluding shares underlying outstanding awards).

Stock options granted prior to 2022 under the 2007 Omnibus Incentive Plan generally vest pro rata over a period and terminate from the grant date, although executive officers and certain other employees have been awarded options with different vesting criteria. Stock options granted subsequent to December 31, 2021 under the 2007 Omnibus Incentive Plan generally vest pro rata over a period and terminate from the grant date, although executive officers and certain other employees have been awarded options with different vesting criteria. Options granted to outside directors under the 2007 Omnibus Incentive Plan are fully vested as of the grant date. Option exercise prices for options granted by the Company equal the closing price of the Company’s common stock on the New York Stock Exchange on the date of grant.

RSUs issued under the 2007 Omnibus Incentive Plan provide for the issuance of a share of the Company’s common stock at no cost to the holder. RSUs granted prior to 2022 to employees under the 2007 Omnibus Incentive Plan generally provide for pro rata time-based vesting over a period, although executive officers and certain other employees have been awarded RSUs with different vesting criteria. RSUs granted subsequent to December 31, 2021 to employees under the 2007 Omnibus Incentive Plan generally vest pro rata over a period, although certain employees have been awarded RSUs with different vesting criteria. The RSUs that have been granted to directors under the 2007 Omnibus Incentive Plan vest on the earlier of the first anniversary of the grant date or the date of, and immediately prior to, the next annual meeting of the Company’s shareholders following the grant date, but the underlying shares are not issued until the earlier of the director’s death or the first day of the seventh month following the director’s retirement from the Board. Prior to vesting, RSUs granted under the 2007 Omnibus Incentive Plan do not have dividend equivalent rights, do not have voting rights and the shares underlying the RSUs are not considered issued and outstanding.

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– %

Weighted average volatility % % %Dividend yield % % %Expected years until exercise

–

The Black-Scholes model incorporates assumptions to value stock-based awards. The risk-free rate of interest for periods within the contractual life of the option is based on a zero-coupon U.S. government instrument whose maturity period equals or approximates the option’s expected term. Expected volatility is based on implied volatility from traded options on the Company’s stock and historical volatility of the Company’s stock. The dividend yield is calculated by dividing the Company’s annual common stock dividend, based on the most recent quarterly dividend rate, by the closing stock price on the grant date. To estimate the option exercise timing used in the valuation model (which impacts the risk-free interest rate and the expected years until exercise), in addition to considering the vesting period and contractual term of the option, the Company analyzes and considers actual historical exercise experience for previously granted options. The Company stratifies its employee population into multiple groups for option valuation and attribution purposes based upon distinctive patterns of forfeiture rates and option holding periods, as indicated by the ranges set forth in the table above for the risk-free interest rate and the expected years until exercise.

The amount of stock-based compensation expense recognized during a period is also based on the portion of the awards that are ultimately expected to vest. The Company estimates pre-vesting forfeitures at the time of grant by analyzing historical data and revises those estimates in subsequent periods if actual forfeitures differ from those estimates. Ultimately, the total expense recognized over the vesting period will equal the fair value of awards that actually vest.

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$ $ Income tax benefit()()()RSU/PSU expense, net of income taxes Stock options:Pretax compensation expense Income tax benefit()()()Stock option expense, net of income taxes Total stock-based compensation:Pretax compensation expense Income tax benefit()()()Total stock-based compensation expense, net of income taxes$ $ $

Stock-based compensation has been recognized as a component of selling, general and administrative expenses in the accompanying Consolidated Statements of Earnings. As of December 31, 2023, $ million of total unrecognized compensation cost related to RSUs/PSUs is expected to be recognized over a weighted average period of approximately . As of December 31, 2023, $ million of total unrecognized compensation cost related to stock options is expected to be recognized over a weighted average period of approximately . Future compensation amounts will be adjusted for any changes in estimated forfeitures.

$ Granted Exercised () Cancelled/forfeited () ))) ) ))) ) ) ) )

*Indicates management contract or compensatory plan, contract or arrangement.(1)In accordance with Instruction 2 to Item 601(a)(4) of Regulation S-K, FJ900, Inc. (a subsidiary of Danaher) has entered into a management agreement with Stonehavens Global LLC that is substantially identical in all material respects to the form of agreement referenced as Exhibit 10.23, except as to the referenced aircraft and the name of the counterparty.(2)In accordance with Instruction 2 to Item 601(a)(4) of Regulation S-K, Danaher Corporation or a subsidiary thereof has entered into additional interchange agreements with each of Joust Capital II, LLC and Joust Capital III, LLC that are substantially identical in all material respects to the form of agreement attached as Exhibit 10.24, except as to the referenced aircraft and, in certain cases, the name of the counterparty.(3)In accordance with Instruction 2 to Item 601(a)(4) of Regulation S-K, Danaher Corporation has entered into an aircraft time sharing agreement with Matthew R. McGrew that is substantially identical in all material respects to the form of agreement referenced as Exhibit 10.25.(4)Attached as Exhibit 101 to this report are the following documents formatted in Inline XBRL (Inline Extensible Business Reporting Language): (i) Consolidated Balance Sheets as of December 31, 2023 and 2022, (ii) Consolidated Statements of Earnings for the years ended December 31, 2023, 2022 and 2021, (iii) Consolidated Statements of Comprehensive Income for the years ended December 31, 2023, 2022 and 2021, (iv) Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2023, 2022 and 2021, (v) Consolidated Statements of Cash Flows for the years ended December 31, 2023, 2022 and 2021 and (vi) Notes to Consolidated Financial Statements.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

DANAHER CORPORATION

Date:

February 21, 2024

By:

/s/ RAINER M. BLAIR

Rainer M. Blair

President and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this annual report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the date indicated:


Name, Title and Signature						Date

/s/ STEVEN M. RALES						February 21, 2024
Steven M. Rales
Chairman of the Board

/s/ MITCHELL P. RALES						February 21, 2024
Mitchell P. Rales
Chairman of the Executive Committee

/s/ RAINER M. BLAIR						February 21, 2024
Rainer M. Blair
President, Chief Executive Officer and Director

/s/ LINDA FILLER						February 21, 2024
Linda Filler
Director

/s/ FEROZ DEWAN						February 21, 2024
Feroz Dewan
Director

/s/ TERI LIST						February 21, 2024
Teri List
Director

/s/ WALTER G. LOHR, JR.						February 21, 2024
Walter G. Lohr, Jr.
Director

/s/ JESSICA L. MEGA, M.D., MPH						February 21, 2024
Jessica L. Mega, M.D, MPH
Director

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/s/ PARDIS C. SABETI, M.D., D.Phil						February 21, 2024
Pardis C. Sabeti, M.D., D.Phil
Director

/s/ A. SHANE SANDERS						February 21, 2024
A. Shane Sanders
Director

/s/ JOHN T. SCHWIETERS						February 21, 2024
John T. Schwieters
Director

/s/ ALAN G. SPOON						February 21, 2024
Alan G. Spoon
Director

/s/ RAYMOND C. STEVENS, Ph.D.						February 21, 2024
Raymond C. Stevens, Ph.D.
Director

/s/ ELIAS A. ZERHOUNI, M.D.						February 21, 2024
Elias A. Zerhouni, M.D.
Director

/s/ MATTHEW R. MCGREW						February 21, 2024
Matthew R. McGrew
Executive Vice President and Chief Financial Officer

/s/ CHRISTOPHER M. BOUDA						February 21, 2024
Christopher M. Bouda
Vice President and Chief Accounting Officer

113

Table of Contents

()$ Year ended December 31, 2022:Allowances deducted from asset accountAllowance for doubtful accounts$ () ()$ Year ended December 31, 2021:Allowances deducted from asset accountAllowance for doubtful accounts$ () ()$

(a) Amounts include allowance for doubtful accounts classified as current and noncurrent.

(b) Amounts related to businesses acquired.

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DANAHER CORP /DE/ - Annual Report: 2023 (Form 10-K)

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