-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, IJbdt+NhdS1LYMGco9Dq5YT/fl88cKg10pw5nVZGeApXTqtlCFvSJ8A+0zQXnCS0 ux6W+hvDEHglKLx8j5nXxA== 0000313616-95-000001.txt : 19950616 0000313616-95-000001.hdr.sgml : 19950616 ACCESSION NUMBER: 0000313616-95-000001 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19941231 FILED AS OF DATE: 19950323 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: DANAHER CORP /DE/ CENTRAL INDEX KEY: 0000313616 STANDARD INDUSTRIAL CLASSIFICATION: AIR COND & WARM AIR HEATING EQUIP & COMM & INDL REFRIG EQUIP [3585] IRS NUMBER: 591995548 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-08089 FILM NUMBER: 95522651 BUSINESS ADDRESS: STREET 1: 1250 24TH ST NW STREET 2: SUITE 800 CITY: WASHINGTON STATE: DC ZIP: 20037 BUSINESS PHONE: 2028280850 MAIL ADDRESS: STREET 1: 1250 24TH STREET NW STREET 2: SUITE 800 CITY: WASHINGTON STATE: DC ZIP: 20037 FORMER COMPANY: FORMER CONFORMED NAME: DMG INC DATE OF NAME CHANGE: 19850221 10-K 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE [ X ] SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 1994 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____to___Commission File Number:1-8089 DANAHER CORP ORATION (Exact name of registrant as specified in its charter) Delaware 59-1995548 (State of incorporation) (I.R.S.Employer Identification number) 1250 24th Street, N.W., Suite 800 Washington, D.C. 20037 (Address of Principal (Zip Code) Executive Offices) Registrant's telephone number, including area code: 202-828-0850 Securities Registered Pursuant to Section 12(b) of the Act: Name of Exchanges Title of each class on which registered Common Stock $.01 par Value New York Stock Exchange, Inc. Pacific Stock Exchange, Inc. Securities registered pursuant to Section 12(g) of the Act: NONE (Title of Class) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days. Yes X No Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10- K. [X] As of March 20, 1995, the number of shares of common stock outstanding was 58,438,288 and were held by approximately 2,800 holders. The aggregate market value of common shares held by non-affiliates of the Registrant on such date was approximately $900 million, based upon the closing price of the Company's common shares as quoted on the New York Stock Exchange composite tape on such date. EXHIBIT INDEX APPEARS ON PAGE 8 DOCUMENTS INCORPORATED BY REFERENCE Part II and Part IV incorporate certain information by reference from the registrant's Annual Report to Shareholders for the year ended December 31, 1994. With the exception of the pages of the Annual Report to Shareholders specifically incorporated herein by reference, the Annual Report to Shareholders is not deemed to be filed as part of this Form 10-K. Part III incorporates certain information by reference from the registrant's proxy statement for its 1995 annual meeting of stockholders. With the exception of the pages of the 1995 proxy statement specifically incorporated herein by reference, the 1995 proxy statement is not deemed to be filed as part of this Form 10-K. ITEM 1. BUSINESS General Danaher Corporation ("Danaher" or the "Company"), originally DMG, Inc., was organized in 1969 as a Massachusetts real estate investment trust. In 1978 it was reorganized as a Florida corporation under the name Diversified Mortgage Investors, Inc. ("DMI") which in a second reorganization in 1980 became a subsidiary of a newly created holding company named DMG, Inc. The Company adopted the name Danaher in 1984 and was reincorporated as a Delaware corporation following the 1986 annual meeting of shareholders. The Company conducts its operations through three business segments: Tools, Process/Environmental Controls and Transportation Products. Tools The Tools segment is comprised of the Danaher Tool Group (including Special Markets and Professional Tool Division, which includes Armstrong Bros. Tool Co., a premier manufacturer and marketer of industrial hand tools), Matco Tools ("Matco"), Jacobs Chuck Manufacturing Company ("Jacobs"), Iseli Company ("Iseli") and Delta Consolidated Industries, which was acquired in November, 1994. This segment is one of the largest domestic producers and distributors of general purpose mechanics' hand tools and automotive specialty tools. Other products manufactured by these companies include drill chucks, custom designed headed tools and components, high quality precision fasteners, tool boxes and storage containers, and high quality miniature precision parts. The Company's Tools business strategy is focused on increasing sales to existing customers, broadening channels of distribution, developing new products and achieving production efficiencies and enhanced quality and customer service through "Just-In-Time" and related manufacturing techniques. Danaher Tool Group (DTG) is one of the largest domestic producers of general purpose mechanics' hand tools (primarily ratchets, sockets and wrenches) and specialized automotive service tools for the professional and "do-it-yourself" markets. DTG has been the principal manufacturer of Sears, Roebuck and Co.'s Craftsman line of mechanics' hand tools for over 50 years. Approximately 80% of the over 100 million pieces sold to Sears annually are sold in tool sets that include from three to 900 pieces. Net sales to Sears were approximately 17% of total sales in 1994. DTG's Special Markets Group sells to Sears under a five year evergreen agreement, that requires Sears to purchase a significant portion of its annual requirements for its private-label Craftsman mechanics' hand tool line from DTG. For over 30 years, DTG has also been a primary supplier of specialized automotive service tools to NAPA, which has approximately 6,500 outlets at present. In addition, DTG has been the designated supplier of general purpose mechanics' hand tools to NAPA since 1983. DTG specialized automotive service tools are also sold under the K-D Tools brand, its industrial tools and products are also sold under the Armstrong and Allen brand names, and fastener products under the Holo-Krome name are sold to independent distributors and other customers in the "do-it-yourself," professional automotive, commercial and industrial markets. Professional mechanics' tools are distributed by Matco which has approximately 1,100 independent mobile distributors who sell primarily to individual professional mechanics. Matco is one of the leading suppliers in this market. Jacobs is the market leader in the drill chuck business with its highly respected and well recognized brand name and Iseli is a leader in the manufacture of miniature precision parts produced on Swiss screw machines. Delta is the market leader in boxes and other storage containers serving the vehicle aftermarket and manufactures and markets containers serving numerous specialty areas. The major raw materials used by this segment, including high quality steel, are available from a variety of sources in sufficient quantities. Process/Environmental Controls The Process/Environmental Controls segment is comprised of the Veeder-Root Company ("Veeder-Root"), the Danaher Instruments Group (comprised of Danaher Controls, Partlow Corporation, Gulton Industries-Graphic Instruments, Eagle Signal Instruments, LFE Instruments West Instruments, Ltd., and QualiTROL Corporation), Hengstler GmbH (which was acquired in December, 1994) and the A.L. Hyde Company. These companies produce and sell underground storage tank leak detection systems and temperature, level and position sensing devices, liquid flow measuring devices and electronic and mechanical counting and controlling devices. These products are distributed by the Company's sales personnel and independent representatives to original equipment manufacturers, distributors and other end users. The Company's strategy in the Process/ Environmental Controls segment is to concentrate on the rapid expansion of its environmental controls product line, including the Veeder-Root TM storage tank leak detection systems business. The Company believes that Veeder-Root is the premier manufacturer of state-of-the-art tank measuring and leak detection systems for underground fuel storage tanks and, accordingly, is uniquely positioned to respond to the increased demand for these products fueled by environmental regulations. Veeder-Root is also the predominant worldwide supplier of mechanical gasoline pump computing devices and a manufacturer of other measuring and counting devices. Other business lines within this segment include extruded thermoplastic mill shapes and custom molded plastic products. The raw materials utilized by companies in this segment are stock items, principally metals and plastic, electrical and electronic components. These materials are readily available from a number of sources in sufficient quantities.Transportation The Transportation segment includes Hennessy Industries, Inc. ("Hennessy"), Jacobs Brake and Fayette Tubular Products ("Fayette"). These companies are leading manufacturers and distributors of automotive and transportation products used by the automotive aftermarket and original equipment manufacturers. Products in this segment include wheel service equipment, diesel engine retarders and automobile air conditioning components. The results of the Transportation Products business are affected by the level of sales in the automotive aftermarket, heavy duty diesel truck and domestic automobile industries. The Company's strategy is to reduce the impact of the cyclicality in this business segment by expanding its customer base for the wheel service equipment products and "Jake Brake" and achieving production efficiencies and enhanced quality and customer service through "Just-In-Time" and related manufacturing techniques. Wheel service equipment is manufactured under the Coats, Bada and Ammco brand names. Products include tire changers, wheel balancers, wheel weights and brake service equipment. Wheel service equipment is sold primarily to wholesale distributors and national accounts. These markets are served by the Company's sales personnel. Diesel engine retarders are manufactured at Jacobs. The "Jake Brake" technology was developed by Jacobs and represents the premier brand of engine retarders. The product is sold by Jacobs' sales personnel to original equipment manufacturers and aftermarket distributors. Automotive air-conditioning components and other tubular products are produced by Fayette which sells its products to original equipment manufacturers through its direct sales force. The major raw materials used by this segment include high quality steel forgings and castings, aluminum and steel tubing, rubber hose, metal couplings, paints, adhesives and chemical coatings. These materials are available in sufficient quantities from a variety of sources. Patents, Licenses, etc. The Company has patents of its own and has acquired licenses under patents of others. The Company does not consider that its business, as a whole, is dependent on any single patent, group of patents, trademark or franchise. The Company does, however, offer many patented products and is periodically engaged in litigation concerning patents and licenses. Seasonal Nature of Business As a whole, the Company's businesses are not subject to material seasonal fluctuations. Backlog The Company's products are manufactured primarily in advance of order and either shipped or assembled from stock. Backlogs are not significant as sales are often dependent on orders requiring immediate shipment from inventory. Employee Relations At December 31, 1994, the Company employed approximately 9,960 persons. Of these, approximately 1,800 were hourly-rated unionized employees. The Company considers its labor relations to be good. Research and Development The Company's research and development expenditures were $26,800,000 for 1994, $24,000,000 for 1993 and $19,300,000 for 1992. Environmental and Safety Regulations Certain of the Company's operations are subject to federal, state and local environmental laws and regulations which impose limitations on the discharge of pollutants into the air and water and establish standards for treatment, storage and disposal of solid and hazardous wastes. The Company believes that it is in substantial compliance with applicable environmental laws and regulations. In addition to environmental compliance costs, the Company may incur costs related to alleged environmental damage associated with past or current waste disposal practices or other hazardous materials handling practices. For example, generators of hazardous substances found in disposal sites at which environmental problems are alleged to exist, as well as the owners of those sites and certain other classes of persons, are subject to claims brought by state and federal regulatory agencies pursuant to statutory authority. The Company believes that its liability, if any, for past or current waste handling practices will not have a material adverse effect on its financial condition. The Company must also comply with various federal, state and local safety regulations in connection with its operations. The Company's compliance with these regulations has had no material adverse effect on its financial condition. Major Customers The Company has a customer in the tools segment, Sears, Roebuck and Co. ("Sears"), which accounted for 17% of consolidated sales in 1994. Although the relationship with Sears is long-standing, the Company believes the loss of this business could have an adverse effect on its operations. ITEM 2. PROPERTIES The Company occupies over 4 million square feet of manufacturing, distribution, service and office space at various domestic and foreign locations. The principal properties are listed below and are constructed of concrete, brick and cement, cinderblock or some combination of these materials. The Company believes that its plants have adequate productive capacity and are suitably used for the manufacture of its products and that its warehouses, distribution centers and sales offices are suitably located and utilized for the marketing of its products and services. Location Principal Use Owned/Leased Approx. Sq.Ft of Floor Area Tools Springdale, AK Manufacturing Owned 207,000 Springfield,MA Manufacturing Owned 276,000 Gastonia, NC Manufacturing Leased 225,000 Fayetteville,AK (2) Manufacturing Owned 134,000 Baltimore, MD Distribution Leased 167,000 Brampton, Ontario Distribution Leased 14,000 Chicago, IL Manufacturing Owned 216,000 Lakewood, NY Manufacturing Owned 112,000 Nashville, TN Distribution Owned 132,000 Stow, OH Distribution Owned 50,000 West Hartford, CT Manufacturing Owned 234,000 Terryville, CT Manufacturing Owned 120,000 Walworth, WI Manufacturing Owned 85,000 Dundee, Scotland Manufacturing Owned 114,000 Sheffield, England Manufacturing Owned 146,000 Clemson, SC Manufacturing Owned 74,000 Jonesboro, AK Manufacturing Owned 77,000 Jonesboro, AK Manufacturing Leased 315,000 Raleigh, NC Manufacturing Leased 215,000 Process/ Environmental Controls Altoona, PA Manufacturing Owned 146,000 Elizabethtown, NC Manufacturing Owned 182,000 Marketharborough, England Manufacturing Leased 10,000 Sao Paulo, Brazil Manufacturing Owned 52,000 New Hartford & Fairport, NY Manufacturing Owned 121,000 Gurnee, Il Manufacturing Leased 36,000 Grenloch, NJ Manufacturing Owned 93,000 Providence, RI Manufacturing Owned 58,000 Brighton, England Manufacturing Leased 26,000 Chesterland, OH Manufacturing Owned 44,000 Aldingen, Germany Manufacturing Owned 216,000 Aldingen, Germany (2) Manufacturing Leased 85,000 Wehingen, Germany (2) Manufacturing Leased 48,000 Eatontown, NJ Distribution Leased 22,700 Aulmay-sons-Bois, France Manufacturing Owned 41,000 Broxbounrem, England Distribution Leased 25,000 Transportation Fayette, OH Manufacturing Owned 200,000 Reading, MI Manufacturing Owned 73,000 Livingston, TN Manufacturing Owned 60,000 Bloomfield, CT Manufacturing Owned 283,000 LaVergne, TN Manufacturing Owned 172,000 Bowling Green, KY Manufacturing Owned 103,000 In addition to the facilities listed, the Company owns or leases various facilities including offices or properties in Washington, District of Columbia; Simsbury, Connecticut; Troy, Michigan; as well as facilities in Uppermill, Livingston, Gloucester and Richmond, Great Britain; Melbourne and Sydney, Australia; Nagoya, Osaka and Tokyo, Japan; Toronto, Canada; Paris, Bron, Toulouse, Bordeaux, Tours and Selestat, France; and Stuttgart, Germany. ITEM 3. LEGAL PROCEEDINGS A former subsidiary of the Company is engaged in litigation in six states with respect to product liability. The Company sold the subsidiary in 1987. Under the terms of the sale agreement, the Company agreed to indemnify the buyer of the subsidiary for product liability related to tools manufactured by the subsidiary prior to June 4, 1987. The cases involve approximately 3,000 plaintiffs, in state and federal courts in six states. All other major U.S. air tool manufacturers are also defendants. The gravamen of these complaints is that the defendants' air tools, when used in different types of manufacturing environments over extended periods of time, were defective in design and caused various physical injuries. The plaintiffs seek compensatory and punitive damages. The cases are in preliminary stages of discovery and pleading and the Company intends to defend its position vigorously. The Company's maximum indemnification obligation under the contract is approximately $85,000,000. The Company believes it has insurance coverage for all or a substantial part of the damages, if any. The outcome of this litigation is not currently predictable. In addition to the litigation noted above, the Company and its subsidiaries are from time to time subject to ordinary routine litigation incidental to their business. The Company believes that the results of the above noted litigation and other pending legal proceedings would not have a materially adverse effect on the Company's financial condition. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDER No matters were submitted to a vote of security holders during the fourth quarter of 1994. PART II ITEMS 5 THROUGH 8. The information required under Items 5 through 8 is included in the Registrant's Annual Report to its Shareholders for the year ended December 31, 1994, and is incorporated herein by reference. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE NONE PART III ITEMS 10 THROUGH 13. The information required under Items 10 through 13 is included in the Registrant's Proxy Statement for its 1995 annual meeting, and is incorporated herein by reference. PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K a) Document List 1. Financial Statements Response to this portion of Item 14 is submitted per the Index to Financial Statement Schedules on page 8 of this report. 2. Supplementary Data and Financial Statement Schedules Response to this portion of Item 14 is submitted per the Index to Financial Statement Schedules on page 8 of this report. 3. An Index of Exhibits is on page 9 of this report. b) Reports on Form 8-K filed in the fourth quarter of 1994. NONE DANAHER CORPORATION INDEX TO FINANCIAL STATEMENTS, SUPPLEMENTARY DATA AND FINANCIAL STATEMENT SCHEDULES Page Number in Annual Report Annual Report Form 10K To Share- holders Report of Independent Public Accountants on Schedules: 11 Financial Statements: Consolidated Statements of Earnings, year ended December 31, 1994, 1993, and 1992. . . . . . 14 Consolidated Balance Sheets, December 31, 1994 and 1993.. 15 Consolidated Statements of Cash Flows, years ended December 31, 1994, 1993, and 1992. 16 Consolidated Statements of Stockholders' Equity, years ended December 31, 1994, 1993, and 1992. . . . . . . . 17 Notes to Consolidated Financial Statements. . . . . . 18 Supplemental Data: Selected Financial Data. . . . . . . 10 Market Prices of Common Stock. . . . . 26 Schedules: II - Valuation and Qualifying Accounts. 12 Schedules other than those listed above have been omitted from this Annual Report because they are not required, are not applicable or the required information is included in the financial state-ments or the notes thereto. Exhibits (3) Articles of Incorporation and By-Laws. (a) The Articles of Incorporation of Danaher (filed as Annex B to Danaher's Proxy Statement dated October 7, 1986). Incorporated By Reference (b) The By-Laws of Danaher. Incorporated By Reference (10) Material Contracts: (a) Employment Agreement between Danaher Corporation and George M. Sherman dated as of January 2, 1990 Incorporated By Reference (b) Credit Agreement Dated As of September 7, 1990. Among Danaher Corporation, the Financial Institutions Listed Therein and Bankers Trust Company as Agent. Incorporated By Reference (c) Agreement as of November 1, 1990 between Danaher Corporation, Easco Hand Tools, Inc. and Sears, Roebuck and Co. Incorporated By Reference (d) Note Agreement as of November 1, 1992 Between Danaher Corporation and Lenders Referenced Therein. Incorporated By Reference (e) Note Agreement as of April 1, 1993 Between Danaher Corporation and Lenders Referenced Therein. Incorporated By Reference (13) Annual Report to Securityholders (22) Subsidiaries of Registrant. (24) Consent of Independent Public Accountants. 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 By: /s/ GEORGE M.SHERMAN George M. Sherman President and Chief Executive Officer Date: March 20, 1995 /s/ GEORGE M. SHERMAN President and Chief George M. Sherman Executive Officer /s/ STEVEN M. RALES Chairman of the Steven M. Rales Board /s/ MITCHELL P. RALES Chairman of the Mitchell P. Rales Executive Committee /s/ WALTER G. LOHR, JR. Director Walter G. Lohr, Jr. /s/ DONALD J. EHRILCH Director Donald J. Ehrlich /s/ MORTIMER M. CAPLIN Director Mortimer M. Caplin /s/ A. EMMET STEPHENSON, JR. Director A. Emmet Stephenson, Jr. /s/PATRICK W. ALLENDER Senior Vice Patrick W. Allender President-Chief Financial Officer and Secretary /s/ C. SCOTT BRANNAN Vice President and C. Scott Brannan Controller REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS ON THE FINANCIAL STATEMENT SCHEDULES To Danaher Corporation: We have audited in accordance with generally accepted auditing standards, the financial statements included in Danaher Corporation and Subsidiaries' Annual Report to Shareholders incorporated by reference in this Form 10-K, and have issued our report thereon dated January 25, 1995. Our audit was made for the purpose of forming an opinion on those statements taken as a whole. The schedules listed in the index are the responsibility of the Company's management and are presented for the purpose of complying with the Securities and Exchange Commission's rules and are not part of the basic financial statements. These schedules have been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, fairly state in all material respects the financial data required to be set forth therein in relation to the financial statements taken as a whole. ARTHUR ANDERSEN LLP Washington, D.C. January 25, 1995 EXHIBIT 24 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation of our reports included (or incorporated by reference) in this Form 10-K, into the Company's previously filed Registration Statement File No. 33-32402. ARTHUR ANDERSEN LLP Washington, D.C. March 20, 1995 DANAHER CORPORATION AND SUBSIDIARIES SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS (000's omitted) Additions Classification Balance at Begin- ning of Period Charged to Costs & Expense s Charg ed to other Accou nts Write Offs Write downs & deduct ions Balanc e at End of Period Year Ended December 31, 1994 Allowances deducted from asset accounts: Allowance for doubtful accounts. . . . . . $8,043 $6,630 $487 a $3,522 $11,63 8 Year Ended December 31, 1993 Allowances deducted from asset accounts: Allowance for doubtful accounts. . . . . . $6,350 $4,188 $ - $2,495 $8,043 Year Ended December 31, 1992 Allowances deducted from asset accounts: Allowance for doubtful accounts. . . . . . $5,613 $2,360 $ - $1,623 $6,350 Note (a) - Amounts related to businesses acquired. EX-13 2 DANAHER CORPORATION 1994 ANNUAL REPORT SELECTED FINANCIAL DATA (000's omitted except per share* data) 1994 1993 1992 1991 1990 Net revenues $1,288,684 $1,075,529 $955,518 $837,386 $845,316 Operating profit 145,836 101,434 67,565 40,802 80,900 Earnings before cumulative effect of accounting change 81,650 53,749 31,601 13,321 35,709 Per share 1.40 .93 .55 .24 .67 Cumulative effect of accounting change** - (36,000) - - - Per share** - (.62) - - - Net earnings 81,650 17,749 31,601 13,321 35,709 Earnings per common share 1.40 .31 .55 .24 .67 Total assets 1,134,941 872,472 769,815 734,955 744,502 Total debt 185,286 133,585 168,768 184,506 187,051 Dividends declared 3,710 3,412 - - - Dividends per share .065 .06 - - - * All periods presented reflect the common stock split effective on January 20, 1995. ** Adoption of accrual method specified by SFAS No. 106 for post retirement benefits. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results of Operations Danaher Corporation (the "Company") operates a variety of businesses through its wholly-owned subsidiaries. These businesses are conducted in three business segments: Tools, Process/ Environmental Controls and Transportation. The Company is the principal manufacturer of Sears, Roebuck and Co.'s Craftsman line, National Automotive Parts Association line, K-D automotive line, and the Allen line of mechanics' hand tools. The Company also manufactures Allen wrenches and Jacobs drill chucks and is a leading supplier of mechanics' hand tools through Matco Tools. In its Process/Environmental Controls segment, the Company is a leading producer of leak detection sensors for underground fuel storage tanks and motion, temperature, pressure and flow control devices. The Company's Transportation business manufactures wheel service equipment, diesel engine retarders and automotive air conditioning components which are sold under such brand names as Coats, Ammco and "Jake Brake". Presented below is a summary of revenues broken down by business segment (000's omitted). 1994 1993 1992 $ % $ % $ % Tools $581,610 45.1% $502,130 46.7% $462,207 48.4% Process/Environ- mental Controls 303,984 23.6 244,400 22.7 209,718 22.0 Transportation 403,090 31.3 327,110 30.4 282,175 29.5 Other - - 1,889 0.2 1,418 0.1 $1,288,684 100.0% $1,075,529 100.0% $955,518 100.0% Tools The Tools segment is comprised of the Danaher Tool Group (including Special Markets and Professional Tools divisions), Matco Tools, Jacobs Chuck Manufacturing Company, Iseli Company and Delta Consolidated Industries, which was acquired in November, 1994. This segment is one of the largest domestic producers and distributors of general purpose and specialty mechanics' hand tools. Other products manufactured by these companies include tool boxes and storage devices, drill chucks, custom designed headed tools and components, high quality precision socket screws, fasteners, and high quality miniature precision parts. 1994 COMPARED TO 1993 Revenues in this segment increased 16% from 1993. Of this increase, acquisitions accounted for 2%, higher unit volumes of shipments accounted for 13%, and increase in average pricing of 1% provided the balance. Sales levels were benefited by particularly strong demand for consumer mechanics hand tools and drill chucks. Operating margins increased to 10% from 9% in 1993. This reflects principally the impact of continued manufacturing process improvements, particularly within the hand tool manufacturing plants, and the effect of increased volume. 1993 COMPARED TO 1992 Revenues in 1993 were 9% higher than 1992. Higher unit volumes accounted for 8% of this improvement and increased average pricing provided 1%. Sales of consumer and professional hand tools were both substantially higher in 1993, and keyless chuck volumes were also significantly greater in 1993. Operating profit increased 41%, reflecting both process improvements and higher volume leverage on fixed costs. Hand tool production efficiencies and service levels both reached record highs. Process/Environmental Controls The Process/Environmental Controls segment is comprised of the Veeder-Root Company, The Danaher Instruments Group (comprised of Danaher Controls, Partlow/Anderson Instrument, Gulton Industries-Graphic Instruments, West Instruments, Ltd., and Qualitrol Corporation), A.L. Hyde Company and Hengstler, which was acquired on December 30, 1994. Hence, the results of operations do not include Hengstler for any periods. These companies produce and sell underground storage tank leak detection systems and temperature, level and position sensing devices, liquid flow measuring devices and electronic and mechanical counting and controlling devices. These products are distributed by the Company's sales personnel and independent representatives to original equipment manufacturers, distributors and other end users. 1994 COMPARED TO 1993 Revenues in this segment in 1994 increased 24% from 1993. The full year effect of business acquisitions made in June, 1993 within this segment contributed 14% of this increase. The balance of the increase was caused by higher unit volumes of 8% and price increases averaging 2%. Demand was very strong in the North American market, particularly for the leak detector sensor line. In addition, demand continued to strengthen in overseas markets. Operating profit increased 32% from 1993, reflecting the higher volume levels and the benefit of plant realignment and cost reductions. 1993 COMPARED TO 1992 Revenues in 1993 were 17% higher than in 1992 in this segment. Business acquisitions in the segment, net of the revenues associated with a business sold at the end of 1992, contributed 10% of the increase. Of the remaining increase, higher unit volumes contributed 4% and increased average pricing provided 3%. International revenues showed some strengthening and demand for underground storage tank monitoring equipment remained strong. Operating margins increased to 18% in 1993 from 15%, reflecting process improvements, the positive effects of higher volumes, cost reductions associated with restructuring actions taken in 1992 and the disposition of a nonstrategic product line. Transportation The Transportation segment includes Hennessy Industries, Inc., Jacobs Vehicle Equipment Company and Fayette Tubular Products, Inc. These companies are leading manufacturers and distributors of automotive and transportation products used by the automotive aftermarket and original equipment manufacturers. Products in this segment include wheel service equipment, diesel engine retarders and automobile and light truck air conditioning components. 1994 COMPARED TO 1993 Revenues in 1994 were 23% higher than in 1993. Shipments were benefited by higher build rates for automobiles and diesel trucks in North America in 1994. Of this net increase, higher unit volumes of shipments accounted for 24%, offset by a decrease in average pricing of 1%. The wheel service equipment market rebounded strongly from 1993 levels as well. In addition, 1994 reflected increased engine retarder customers outside North America, including the largest truck manufacturer in the Japanese market. Operating margins in 1994 increased to 11% from 7% in 1993, reflecting the incremental margins on the sales increase and improved productivity. This was partially offset by a nonrecurring charge associated with the consolidation of manufacturing locations within the wheel service equipment market and other administrative cost reduction steps taken at Hennessy Industries. 1993 COMPARED TO 1992 Revenues in this segment for 1993 increased 16% from 1992. Higher unit volumes contributed 15% of the gain and increased average pricing provided 1%. Record production levels for heavy diesel trucks and higher build rates for automobiles enabled the engine retarder and air conditioning components businesses to outperform the segment as a whole. The sluggish economy contributed to decreased demand for wheel service equipment. Operating margins increased to 7.1% from 5.6% in 1992, as higher volume levels improved contribution margins. This was offset somewhat by restructuring costs in the wheel service unit as steps were taken to bring costs in line with demand levels. Gross Profit Gross profit margin in 1994 was 27.5%, a 1.3 percentage point improvement compared to 1993. Productivity improvements were achieved in all business segments and increased volume improved fixed cost leverage. A shift in mix to the higher margin products of the Process/Environmental Controls business segment also contributed to the improvement. Gross profit, as a percentage of sales, in 1993 was 26.2%, reflecting a slight improvement compared to the 26.0% achieved in 1992. Productivity improvements, combined with increased fixed cost leverage, resulted in margin improvement. This was partially offset by a shift in product mix towards the lower margin consumer tools and transportation segment products. Operating Expenses In 1994, selling, general and administrative expenses were 16.2% of sales, a decrease of .6 percentage points from 1993 levels. Total expenses increased 16%, substantially less than the 20% increase in total revenues. This reflects continued streamlining and cost reduction action as well as the fixed nature of certain costs. Selling, general and administrative expenses for 1993 as a percentage of sales were approximately 2 percentage points lower than the 1992 level. This reflects continued streamlining and contribution from earlier restructuring and other cost reduction actions. Interest Costs and Financing Transactions On December 15, 1992, the Company received the proceeds from a $100 million privately placed debt financing. The notes have a final maturity on December 15, 1999, an average life of approximately 5.5 years, and an average interest cost of 7.28%. In April 1993, the Company received an additional $30 million from a private placement which matures in April 2003 and has an interest cost of 6.99% per annum. These proceeds were used to reduce borrowing under the revolving credit facility. The Company's revolving credit facility provides for senior financing of $200 million for general corporate purposes. The interest rates for borrowing under the facility float with base rates. The Company's financing requirements in these years were satisfied by the financings discussed above and through borrowings under uncommitted bank lines. Interest expense in 1994 was 10% lower than in 1993, due to lower average borrowing levels. Interest expense in 1993 was 5% less than in 1992, as the longer-term fixed rate financing which carried a higher interest rate than borrowings under the bank facility was offset by lower average debt levels. Income Taxes The effective tax rate decreased 0.8 percentage points in 1994 to 40.2% of pre-tax income. This decrease is principally due to the lesser impact of nondeductible goodwill amortization. The effective tax rate of 41% of pre-tax income in 1993 was approximately 3 percentage points lower than in 1992. This reflects the non-recurrence of the nondeductible loss on a business disposition, and a lesser impact of nondeductible goodwill amortization given higher pre-tax earnings, offset by the one percent increase in the corporate tax rate enacted in 1993. As of January 1, 1993, the Company adopted the liability method of accounting for income taxes specified by SFAS No. 109. Its adoption had no impact on the results of operations and resulted in certain reclassifications to the Company's balance sheet. The one percent increase in the Corporate tax rate enacted in 1993 did not materially impact deferred tax balances reflected on the Company's balance sheet. Other The $3,500,000 reflected in Other expenses in 1992 represents the loss on a sale of a non-strategic business unit. The effect of inflation on the Company's operations has been minimal in 1994, 1993, and 1992. Liquidity and Capital Resources In 1994, the Company acquired Delta Consolidated Industries, Hengstler GmbH, Armstrong Brothers Tool Company and several smaller entities. Aggregate consideration for these transactions was approximately $167 million including approximately $31 million in common stock. These acquisitions had no significant impact on the 1994 results of operations as the larger acquisitions were not completed until the fourth quarter. These entities have combined annual sales levels of $220 million. The year-end balance sheet reflects the additional debt associated with these transactions. As discussed previously, $130 million of the Company's debt is fixed at an average interest cost of 7.2%, with no principal amounts due until December 15, 1995. Substantially all remaining borrowings are short-term in nature and float with referenced base rates. As of December 31, 1994, the Company has unutilized commitments under its revolving credit facility of $200 million. Cash flow has been strong in all periods from 1992 through 1994. Operations generated $144 million, $136 million and $73 million in cash in 1994, 1993 and 1992, respectively. The principal use of funds has been capital expenditures of $55 million, $40 million and $34 million in 1994, 1993 and 1992, respectively and cash paid for acquisitions of $136 million in 1994, $54 million in 1993 and $23 million in 1992. The net result of the above, combined with working capital changes was an increase in debt of $52 million in 1994 and a reduction in debt of $35 million in 1993 and $18 million in 1992. The Company's funds provided from operations, as well as the existing bank facility and available credit lines, should provide sufficient available funds to meet the Company's working capital, capital expenditure, dividend and debt service requirements for the foreseeable future. REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To the Shareholders and Board of Directors of Danaher Corporation: We have audited the accompanying consolidated balance sheets of Danaher Corporation (a Delaware corporation) and Subsidiaries as of December 31, 1994 and 1993, and the related consolidated statements of earnings, stockholders' equity, and cash flows for each of the three years in the period ended December 31, 1994. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform an audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Danaher Corporation and Subsidiaries as of December 31, 1994 and 1993, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 1994, in conformity with generally accepted accounting principles. As explained in Notes 1 and 6 to the financial statements, effective January 1, 1993, the Company changed its methods of accounting for income taxes and post retirement benefits other than pensions. Washington, D.C. January 25, 1995 DANAHER CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS (in thousands of dollars, except per share data) Year Ended December 31, 1994 1993 1992 Net revenues. . . . . . . . . . . . . . . . . . . . . . . . . . $1,288,684 $1,075,529 $955,518 Cost of sales.. . . . . . . . . . . . . . . . . . . . . . . . . 934,332 793,859 707,360 Selling, general and administrative expenses. . 208,516 180,236 177,093 Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - - 3,500 Total operating expenses.. . . . . . . . . . . . . 1,142,848 974,095 887,953 Operating profit. . . . . . . . . . . . . . . . . . . . . . . . 145,836 101,434 67,565 Interest expense. . . . . . . . . . . . . . . . . . . . . . . . 9,313 10,345 10,864 Earnings before income taxes and cumulative effect of accounting change. . . . . . . . . . . . . . 136,523 91,089 56,701 Income taxes. . . . . . . . . . . . .. . . . . . . . . . . . . . 54,873 37,340 25,100 Earnings before cumulative effect of accounting change. . . . . . . . . . . . . . . . . . . . . . 81,650 53,749 31,601 Cumulative effect of accounting change (net of tax benefit of $20,000). . . . . . . . . . . . . . . . . . - (36,000) - Net earnings. . . . . . . . . . . . . . . . . . . . .. . . $81,650 $17,749 $31,601 Per share: Before accounting change. . . . . . . . . . . . . Cumulative effect of change. . . . . . . . . . . Net earnings. . . . . . . . . . . . . . . . . . . . . . $1.40 - $1.40 $ .93 (.62) $ .31 $ .55 - $ .55 Average common stock and common equivalent shares outstanding. . . . . . . . . . . . . 58,326,572 57,793,672 57,444,552 The accompanying Notes to Consolidated Financial Statements are an integral part of these statements. DANAHER CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands of dollars) Year Ended December 31, ASSETS 1994 1993 Current assets: Cash and equivalents. . . . . . . . . . . . . . . . . . . . . . . . . $1,978 $ 6,767 Trade accounts receivable, less allowance for doubtful accounts of $11,638 and $8,043 . . . . . . . . . . . . . . . . . 193,364 135,445 Inventories. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142,390 107,569 Prepaid expenses and other. . . . . . . . . . . . . . . . . . . . . . . . . 50,955 27,982 Total current assets . . . . .. . . . . . . . . . . . . . . . . . 388,687 277,763 Property, plant and equipment, net.. . . . . . . . . . . . . . . . . . 273,076 235,666 Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30,523 21,477 Excess of cost over net assets of acquired companies, less amortization of $61,487 and $51,722 . . . . . . . . . . . . . . 442,655 337,566 $1,134,941 $872,472 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Notes payable and current portion of debt . . . . . . . . . . . . . . $68,771 $ 2,235 Trade accounts payable. . . . . . . . . . . . . . . . . . . . . . . 94,609 72,445 Accrued expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . 232,855 160,685 Total current liabilities. . . . . . . . . . . . . . . . . . . . 396,235 235,365 Other liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . 146,091 142,091 Long-term debt . . . . . . . . . . . . . . . . . . . . . . 116,515 131,350 Stockholders' equity: Common stock, one cent par value; 125,000,000 shares authorized; 63,198,208 and 61,800,328 issued; 58,295,002 and 56,897,122 outstanding. . . . . . . . . . . . 632 309 Additional paid-in capital. . . . . . . . . . . . . . . . . . . . . . 311,648 279,532 Cumulative foreign translation adjustment. . . . . . . . . . . . . . 590 (1,781) Retained earnings. . . . . . . . . . . . . . . . . . . . . . . . . 200,719 123,095 Treasury stock, at cost; 4,903,206 shares. . . . . . . . . . . . . (37,489) (37,489) Total stockholders' equity. . . . . . . . . . . . . . . . . . . 476,100 363,666 $1,134,941 $872,472 The accompanying Notes to Consolidated Financial Statements are an integral part of these balance sheets. DANAHER CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands of dollars) Year Ended December 31, 1994 1993 1992 Cash flows from operating activities: Earnings before cumulative effect of accounting change. . $81,650 $ 53,749 $ 31,601 Depreciation and amortization. . . . . . . . . . . . . . . . . . . . . 44,554 40,884 37,105 Increase in accounts receivable. . . . . . . . . . . . . . . . . . . . . (20,257) (7,601) (27,885) (Increase) decrease in inventories . . . . . . . . . . . . . . . . .. Increase (decrease) in accounts payable. . . . . . . . . . . . .. . (1,328) 9,038 5,283 7,318 9,211 (734) Change in other assets and liabilities. . . . . . . . . . . . . . . .. . 30,713 36,185 23,610 Total operating cash flows. . . . . . . . . . . . . . . . . . 144,370 135,818 72,908 Cash flows from investing activities: Payments for additions to property, plant and equipment . Proceeds from sales of property, plant and equipment. . . . (54,543) 13,929 (40,335) - (33,924) - Investments in equity securities. . . . . . . . . . . . . . . . . . . . . (22,032) - - Cash paid for acquisitions. . . . . . . . . . . . . . . . . . . . . . . Net cash used in investing activities . . . . . . . . . . (136,055) (198,701) (53,960) (94,295) (22,507) (56,431) Cash flows from financing activities: Proceeds from issuance of common stock. . . . . . . . . . . 992 1,301 2,861 Dividends paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,420) (2,559) - Borrowings (repayments) of debt. . . . . . . . . . . . . . . . . . . . 51,701 (65,183) (117,771) Proceeds from notes payable. . . . . . . . . . . . . . . . . . . . . . . - 30,000 100,000 Net cash provided by (used in) financing activities. . . . 49,273 (36,441) (14,910) Effect of exchange rate changes on cash. .. . . . . . . . . . . . . 269 (6) 120 Net change in cash and equivalents. . . . . . . . . . . . . . . . .. (4,789) 5,076 1,687 Beginning balance of cash and equivalents. . . . . . . . . . . . . 6,767 1,691 4 Ending balance of cash and equivalents . . . . . . . . . . . . . . . $ 1,978 $ 6,767 $ 1,691 Supplemental disclosures: Cash interest payments. . . . . . . . . . . . . . . . . . . . Cash income tax payments . . . . . . . . . . . . . . . . . . .. $ 9,505 $ 65,837 $ 10,677 $ 37,331 $ 12,210 $ 20,218 The accompanying Notes to Consolidated Financial Statements are an integral part of these statements. DANAHER CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (in thousands of dollars) Common Stock Shares Amount Additional Paid-in Capital Retained Earnings Treasury Stock Cumulative Foreign Translation Adjustment Balance, January 1, 1992. . . . . . . . . . . . Net earnings for the year. . . . . . . . . . Common stock issued for options exercised. . . . . . . . . . . . . . . . . . . . . . Employee stock compensation . . . . . Decrease from translation of foreign financial statements. . . . . . . . . . . . 61,414,060 - 285,956 - - $307 - 1 - - $275,372 - 2,044 816 - $77,157 31,601 - - - $(37,489) - - - - $3,905 - - - (5,335) Balance, December 31, 1992. . . . . . . . . Net earnings for the year. . . . . . . . . . Dividends declared. . . . . . . . . . . . . . Common stock issued for options exercised. . . . . . . . . . . . . . .. . . . . . Decrease from translation of foreign financial statements. . . . . . . . . . . . 61,700,016 - - 100,312 - 308 - - 1 - 278,232 - - 1,300 - 108,758 17,749 (3,412) - - $(37,489) - - - - $(1,430) - - - (351) Balance, December 31, 1993. . . . . . . . . Net earnings for the year. . .. . . . . . . Dividends declared. . . . . . . . . . . . . . Common stock issued for options exercised. . . . . . . . . . . . . . .. . . . . . Common stock issued for acquisitions Two-for-one common stock split Increase from translation of foreign financial statements. . . . . . 61,800,328 - - 58,774 1,339,106 - - 309 - - - 7 316 - 279,532 - - 992 31,124 - - 123,095 81,650 (3,710) - - (316) - $(37,489) - - - - - - $(1,781) - - - - - 2,371 Balance, December 31, 1994 63,198,208 $632 $311,648 $200,719 $(37,489) $590 The accompanying Notes to Consolidated Financial Statements are an integral part of these statements. (1) Summary of Significant Accounting Policies: Principles of Consolidation - The consolidated financial statements include the accounts of the Company and its subsidiaries. The accounts of certain of the Company's foreign subsidiaries are included on the basis of a fiscal year ending November 30. This procedure was adopted to allow sufficient time to include these companies in the consolidated financial statements. All significant intercompany balances and transactions have been eliminated upon consolidation. Inventory Valuation - Inventories include material, labor and overhead and are stated principally at the lower of cost or market using the last-in, first-out method (LIFO). Property, Plant and Equipment - Property, plant and equipment are carried at cost. The provision for depreciation has been computed principally by the straight-line method based on the estimated useful lives (3 to 35 years) of the depreciable assets. Other Assets - Other assets include principally deferred income taxes, equity securities, noncurrent trade receivables and capitalized costs associated with obtaining financing which are being amortized over the term of the related debt. In 1994, approximately $16 million of equity securities were acquired and are classified as available-for-sale securities. Cost approximates fair market value for these securities. There were no dispositions or unrealized gains or losses in 1994. Post Retirement Benefits - As of January 1, 1993, the Company changed its method of accounting for post retirement benefits from recognizing expense as claims are paid to the accrual method specified by SFAS No. 106. The Company elected to recognize this liability immediately and its adoption is not expected to significantly impact the Company's ongoing results of operations. This change is reflected net of its tax benefit as the cumulative effect of accounting change in the accompanying Consolidated Statements of Earnings. Fair Value of Financial Instruments - For cash and equivalents, the carrying amount is a reasonable estimate of fair value. For long-term debt, rates available for debt with similar terms and remaining maturities are used to estimate the fair value of existing debt. Other Expenses - Other expenses reflect the loss on the sale of a non-strategic business unit. Excess of Cost Over Net Assets of Acquired Companies - This asset is being amortized on a straight-line basis over forty years. $ 9,765,000, $9,427,000 and $8,940,000 of amortization was charged to expense for the years ended December 31, 1994, 1993, and 1992, respectively. Foreign Currency Translation - Exchange adjustments resulting from foreign currency transactions are generally recognized in net earnings, whereas adjustments resulting from the translation of financial statements are reflected as a separate component of stockholders' equity. Net foreign currency transaction gains or losses are not material in any of the years presented. Statements of Cash Flows - The Company considers all highly liquid investments with a maturity of three months or less at date of purchase to be cash equivalents. Income Taxes - The Company provides income taxes for unremitted earnings of foreign subsidiaries which are not considered permanently reinvested in that operation. As of January 1, 1993, the Company adopted the liability method of accounting for income taxes specified by SFAS No. 109. Its adoption had no impact on the results of operations and resulted in certain reclassifications to the Company's balance sheet. Earnings Per Share - The computation of earnings per share is based on the weighted average number of common shares and common stock equivalents outstanding during the year, and relects the stock split effective January 20, 1995. Acquisitions - In 1994, the Company acquired Delta Consolidated Industries, Hengstler GmbH, Armstrong Brothers Tool Company and several smaller entities. Aggregate consideration for these transactions was approximately $167 million, consisting of $136 million in cash and $31 million in common stock. The fair value of the assets acquired was approximately $240 million and approximately $73 million of liabilities were assumed in these acquisitions. The transactions have been accounted for as purchases. These acquisitions had no significant impact on 1994 results of operations as the larger acquisitions were not completed until the fourth quarter. These entities have combined annual sales levels of approximately $220 million. The purchase price allocations have been completed on a preliminary basis, subject to adjustment should new or additional facts about the business become known. In 1993, the Company acquired certain businesses for its process/environmental controls segment. Annual sales levels of the acquired businesses are approximately $65 million. The transactions have been accounted for as purchases. (2) Inventory: The major classes of inventory are summarized as follows (000's omitted): December 31, 1994 December 31, 1993 Finished goods. . . . . . . . . . . $71,293 $59,916 Work in process. . . . . . . . . . 33,668 19,900 Raw material . . . . . . . . . . . . 37,429 27,753 $142,390 $107,569 If the first-in, first-out (FIFO) method had been used for inventories valued at LIFO cost, such inventories would have been $12,679,000 and $11,448,000 higher at December 31, 1994 and 1993, respectively. (3) Property, Plant and Equipment: The major classes of property, plant and equipment are summarized as follows (000's omitted): December 31, 1994 December 31, 1993 Land and improvements . . .. $ 9,684 $ 7,268 Buildings . . . . . .. . . . . . . . . 84,424 72,772 Machinery and equipment. . 327,564 278,260 421,672 358,300 Less accumulated depreciation.. (148,596) (122,634) Property, plant and equipment.. $273,076 $235,666 (4) Financing: Financing consists of the following (000's omitted): December 31, 1994 December 31, 1993 Notes payable, due 2003. . . $130,000 $130,000 Bank credit facility. . . . . . . . - - Other . . . . . . . . . . . . . . . . . . 55,286 3,585 185,286 133,585 Less-currently payable. . . . . 68,771 2,235 $116,515 $131,350 The Notes had an original average life of approximately 6.5 years and an average interest cost of 7.2%. Principal amortization begins in December 1995 and continues through April 2003. The estimated fair value of the $130 million of Notes is $123 million as of December 31, 1994. Other includes principally short-term borrowings under uncommitted lines of credit which are payable upon demand. The carrying amount approximates fair value. The Company's bank credit facility provides for revolving credit through August 1, 1997, of up to $200 million. The Company has complied with covenants relating to maintenance of working capital, net worth, debt levels, interest coverage, and payment of dividends applicable to the notes and the revolving credit facility. The facility provides funds for general corporate purposes at an interest rate of LIBOR plus .35%. The weighted average interest rate for variable rate debt was 5.1%, 3.8% and 4.7% for each of the three years ended December 31, 1994. Weighted average borrowings under the bank facilities were $2,986,000, $48,886,000, and $191,000,000 for the years ended December 31, 1994, 1993 and 1992. Maximum amounts outstanding for these years were $33,525,000, $79,000,000 and $210,000,000 respectively. The Company is charged a fee of .1% per annum on the unused portion of the facility. Commitment fees of $258,000, $521,000 and $444,000 were incurred in 1994, 1993 and 1992. The minimum principal payments, during the next five years are as follows: 1995 - $68,771,000; 1996 - $15,135,000; 1997 - $15,135,000; 1998 - $15,135,000; 1999 - $15,135,000 and $55,975,000 thereafter. (5) Accrued Expenses and Other Liabilities: Selected accrued expenses and other liabilities include the following (000's omitted): December 31, 1994 December 31, 1993 Employee compensation . . . . . . . . . $42,481 $32,315 Insurance including self insurance . . 41,797 33,270 Post retirement benefits. . . . . . . . . . 60,897 58,186 Approximately $18 million of accrued expenses and other liabilities were guaranteed by bank letters of credit. (6) Pension and Employee Benefit Plans: The Company has noncontributory defined benefit pension plans which cover certain of its domestic hourly employees. It is the Company's policy to fund, at a minimum, amounts required by the Internal Revenue Service. Net periodic pension cost included the following components: PENSION EXPENSE (000's omitted) 1994 1993 1992 Service cost-benefits earned during the period. . . . . . $1,209 $ 1,079 $ 823 Interest cost on projected benefit obligation. . . . . . . . 5,633 5,947 5,639 Actual (return) loss on plan assets . . . . . . . . . . . . . . 690 (9,079) (4,287) Net amortization and deferrals. . . . . . . . . . . . . . . . . (7,119) 2,901 (1,450) Net periodic pension cost. . . . . . . . . . . . . . . . . . . . . $ 413 $ 848 $ 725 The following sets forth the funded status of the plans as of the most recent actuarial valuations (000's omitted): 1994 1993 Assets Exceed Accumulated Benefits Accumulated Benefits Exceed Assets Assets Exceed Accumulated Benefits Accumulated Benefits Exceed Assets Actuarial present value of benefit obligations: Vested benefit obligation. . . . . . . . . . . . . . . . . . . Accumulated benefit obligation. . . . . . . . . . . . . . $(15,459) (15,696) $(56,480) (56,966) $(26,469) (26,982) $(55,798) (56,195) Projected benefit obligation. . . . . . . . . . . . . . . . . . . $(15,696) $(56,966) $(26,982) $(56,195) Fair value of plan assets (consisting of stocks, bonds and temporary cash investments). . . . . . . . . . . . . . . . 16,781 53,776 30,455 46,626 Projected benefit obligation (in excess of) or less than plan assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,085 (3,190) 3,473 (9,569) Unrecognized net loss. . . . . . . . . . . . . . . . . . . . . 800 1,243 1,305 1,155 Unrecognized prior service cost. . . . . . . . . . . . . . . . . 640 1,019 151 1,737 Unrecognized net asset . . . . . . . . . . . . . . . . . . .. . (975) (1,218) (1,509) (1,014) Pension (liability) prepaid recognized in the balance sheet. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,550 $(2,146) $ 3,420 $(7,691) The expected long-term rate of return on plan assets was 10%. The discount rates used in determining pension cost and benefit obligations was 7.25% at January 1, 1994 and 8.5% at December 31, 1994. Substantially all employees not covered by defined benefit plans are covered by defined contribution plans which generally provide funding based on a percentage of compensation. Pension expense for all plans amounted to $9,430,000, $8,898,000 and $8,161,000 for the years ended December 31, 1994, 1993 and 1992, respectively. In addition to providing pension benefits, the Company provides certain healthcare and life insurance benefits for some of its retired employees. Certain employees may become eligible for these benefits as they reach normal retirement age while working for the Company. The cost of retiree healthcare and life insurance benefits was recognized as expense when claims were paid through 1992. The cost of these benefits was $3,731,000 for the year ended December 31, 1992. As of January 1, 1993, the Company began providing for post retirement benefits under the accrual method. Post retirement benefits cost included the following components (000's omitted): 1994 1993 Service cost . . . . . . . . . . . . . . . . . . . . . . . $ 256 $ 222 Interest cost . . . . . . . . . . . . . . . . . . . . . 3,995 4,566 Net amortization and deferrals. . . . . . . . . - - $4,251 $4,788 The following sets forth the program's funded status (000's omitted): December 31, 1994 December 31, 1993 Accumulated Post Retirement Benefit Obligation (APBO); Retirees. . . . . . . . . . . . . . . . . . . .. Fully eligible active participants. . . . Other active participants. . . . . . . . . . . $40,419 6,733 4,205 $51,402 7,771 4,231 Total APBO 51,357 63,404 Net Gains (Losses) 9,540 (5,218) Plan assets - - Accrued Liability $60,897 $58,186 A 12% annual rate of increase in per capita costs of covered healthcare benefits was assumed for 1994, decreasing to 6% by 2002. A 1% increase in the assumed cost trend assumption would increase the APBO by $4.3 million and would have increased 1994 costs by approximately $400,000. A discount rate of 7.25% was used as of January 1, 1994. A discount rate of 8.5% was used to determine the APBO as of December 31, 1994. (7) Stock Transactions: In 1987, the Company adopted a non-qualified stock option plan for which it is authorized to grant options to purchase up to 3,600,000 shares. Under the plan, options are granted at not less than 85% of existing market prices and expire ten years from the date of grant. An option to acquire 1,000,000 shares was granted to a senior executive outside of the plan in 1990. The common stock of the Company was split two-for- one to holders of record as of December 16, 1994. All common stock and per share amounts have been restated to reflect the stock split for all periods presented. Changes in stock options were as follows: Number of Shares Under Option Outstanding at January 1, 1992 2,168,176 Granted (average $10.06 per share) 460,800 Exercised (average $5.28 per share) (285,956) Cancelled (177,844) Outstanding at December 31, 1992 2,165,176 Granted (average $16.40 per share) 1,072,200 Exercised (average $7.23 per share) (100,312) Cancelled (91,688) Outstanding at December 31, 1993 3,045,376 Granted (average $23.06 per share) 456,100 Exercised (average $8.38 per share) (58,774) Cancelled (41,600) Outstanding at December 31, 1994 3,401,102 As of December 31, 1994, options covering 1,583,802 shares are exercisable at $3.81 to $18.25 per share. (8) Leases and Commitments: The Company's leases extend for varying periods of time up to 10 years and, in some cases, contain renewal options. Future minimum rental payments for all operating leases having initial or remaining noncancelable lease terms in excess of one year are $15,480,000 in 1995, $12,267,000 in 1996, $9,857,000 in 1997, $8,261,000 in 1998, and $6,023,000 in 1999. Total rent expense charged to income for all operating leases was $10,806,000, $11,842,000, and $14,920,000 for the years ended December 31, 1994, 1993, and 1992, respectively. (9) Litigation and Contingencies: A former subsidiary of the Company is engaged in litigation in six states with respect to product liability. The Company sold the subsidiary in 1987. Under the terms of the sale agreement, the Company agreed to indemnify the buyer of the subsidiary for product liability related to tools manufactured by the subsidiary prior to June 4, 1987. The cases involve approximately 3,000 plaintiffs, in state and federal courts in six states. All other major U.S. air tool manufacturers are also defendants. The gravamen of these complaints is that the defendants' air tools, when used in different types of manufacturing environments over extended periods of time, were defective in design and caused various physical injuries. The plaintiffs seek compensatory and punitive damages. The cases are in preliminary stages of discovery and pleading and the Company intends to defend its position vigorously. The Company's maximum indemnification obligation under the contract is approximately $85,000,000. The Company believes it has insurance coverage for all or a substantial part of the damages, if any. The outcome of this litigation is not currently predictable. In addition to the litigation noted above, the Company is from time to time subject to routine litigation incidental to its business. These lawsuits primarily involve claims for damages arising out of the use of the Company's products, some of which include claims for punitive as well as compensatory damages. The Company is also involved in proceedings with respect to environmental matters including sites where the Company has been identified as a potentially responsible party under federal and state environmental laws and regulations. The Company believes that the results of the above noted litigation and other pending legal proceedings will not have a materially adverse effect on the Company's financial condition. A subsidiary of the Company has sold, with limited recourse, certain of its accounts and notes receivable. A provision for estimated losses as a result of the limited recourse has been included in accrued expenses. No gain or loss arose from these transactions. (10) Income Taxes: The provision for income taxes for the years ended December 31 consists of the following (000's omitted): 1994 1993 1992 Federal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $45,563 $31,640 $21,025 State and local.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,100 4,200 2,100 Foreign. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,210 1,500 1,975 $54,873 $37,340 $25,100 Income tax expense currently payable was $70,865,000, $46,140,000 and $26,800,000 for the years ended December 31, 1994, 1993 and 1992, respectively. Deferred income taxes are reflected in prepaid expenses and other current assets and in other assets. Deferred tax assets (the valuation allowances relate to foreign jurisdictions where operating loss carryforwards exist and for capital loss carryforwards) consist of the following (000's omitted): 1994 1993 Bad debt allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4,100 $ 2,900 Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,700 600 Property, plant and equipment . . . . . . . . . . . . . . . . . . . . (20,900) (23,500) Post retirement benefits. . . . . . . . . . . . . . . . . . . . . . . .. . 21,300 20,400 Other accruals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46,700 36,500 All other accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,500 1,900 Operating loss carryforwards . . . . . . . . . . . . . . . . . . . 800 1,000 Capital loss carryforwards. . . . . . . . . . . . . . . . . . . . . . 1,300 7,000 Gross deferred tax asset. . . . . . . .. . . . . . . . . . . . . . . . 56,500 46,800 Valuation allowances. .. . . . . . . . . . . . . . . . . . . . . . . . (2,100) (8,000) Net deferred tax asset . . . . . . . . . . . . . . . . . . . . . . . . $54,400 $ 38,800 The effective income tax rate for the years ended December 31 varies from the statutory Federal income tax rate as follows: Percentage of Pre-Tax Earnings 1994 1993 1992 Statutory Federal income tax rate. . . . . . . . . . . . . . . . . . . . 35.0 % 35.0 % 34.0 % Increase (decrease) in tax rate resulting from: Permanent differences in amortization of certain assets for tax and financial reporting purposes. . . . . . . . . . . . . . 2.8 3.7 5.6 State income taxes (net of Federal income tax benefit). . . . . 2.9 3.0 2.4 Business disposition. . . . . . . . . . . . . . . . . . . . . . . . . - - 1.9 Taxes on foreign earnings. . . . . . . . . . . . . . . . . . . . . (0.5) (0.7) 0.4 Effective income tax rate. . .. . . . . . . . . . . . . . . . . . . . 40.2 % 41.0 % 44.3 % (11) Segment Data: As of December 31, 1994 the Company operated within three major business segments: Tools, Process/Environmental Controls and Transportation. The Tools segment has a customer which accounted for approximately 17%, 18% and 18% of sales in 1994, 1993 and 1992, respectively. Operating profit represents total revenues less operating expenses, excluding interest and taxes on income. The identifiable assets by segment are those used in each segment's operations. Intersegment receivables are eliminated to arrive at consolidated totals. The detail segment data is presented in the following table (000's omitted): Operations in Different Industries - Year Ended December 31, 1994 1993 1992 Total Revenues: Tools Process/Environmental Controls Transportation Other $ 581,610 303,984 403,090 - $1,288,684 $ 502,130 244,400 327,110 1,889 $1,075,529 $462,207 209,718 282,175 1,418 $955,518 Operating Profit: Tools Process/Environmental Controls Transportation Other $ 58,867 56,632 44,005 (13,668) $ 145,836 $ 47,552 42,781 23,267 (12,166) $ 101,434 $ 33,696 32,189 15,667 (13,987) $ 67,565 Identifiable Assets: Tools Process/Environmental Controls Transportation Other $ 533,487 340,952 237,499 23,003 $1,134,941 $ 394,969 240,712 236,072 719 $ 872,472 $ 371,938 181,605 215,248 1,024 $ 769,815 Depreciation and Amortization: Tools Process/Environmental Controls Transportation Other $ 20,664 10,334 13,556 - $ 44,554 $ 19,409 8,835 12,640 - $ 40,884 $ 18,762 6,358 11,565 420 $ 37,105 Capital Expenditures: Tools Process/Environmental Controls Transportation $ 27,366 8,348 18,829 $ 19,891 5,242 15,202 $ 20,828 6,079 7,017 $ 54,543 $ 40,335 $ 33,924 Operations in Geographical Areas - Year Ended December 31, 1994 1993 1992 Total Revenues: United States. . . . . . . . . . . . . . . . . . . . . . . . Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other. . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . $1,179,408 77,126 32,150 $1,288,684 $ 992,163 52,195 31,171 $1,075,529 $856,646 68,786 30,086 $955,518 Operating Profit: United States. . . . . . . . . . . . . . . . . . . . . . . . . Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 136,998 7,179 1,659 $ 145,836 $ 95,583 3,568 2,283 $ 101,434 $ 64,389 2,502 674 $ 67,565 Identifiable Assets: United States. . . . . . . . . . . . . . . . . . . . . . . . . . Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,059,121 62,833 12,987 $1,134,941 $ 806,599 51,246 14,627 $ 872,472 $696,054 61,499 12,262 $769,815 Export sales were approximately $91 million, $75 million and $60 million for the years ended December 31, 1994, 1993 and 1992. (12) Quarterly Data-Unaudited (000's omitted except per share data) 1994 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Net revenues. . . . . . . . . . . . . . . . . . . . . . . . . $289,153 $318,082 $326,386 $355,063 Gross profit. . . . . . . . . . . . . . . . . . . . . . . . . . . 75,699 87,617 94,375 96,661 Operating profit. . . . . . . . . . . . . . . . . . . . . . . 27,056 35,032 40,777 42,971 Net earnings. . . . . . . . . . . . . . . . . . . . . . . . . . 14,528 19,266 23,098 24,758 Earnings per share. . . . . . . . . . . .. . . . . . . . . . $ .25 $ .33 $ .40 $ .42 1993 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Net revenues. . . . . . . . . . . . . . . . . . . . $ 248,384 $ 258,902 $ 281,017 $ 287,226 Gross profit. . . . . . . . . . . . . . . . . . . . . 63,899 68,795 74,222 74,754 Operating profit. . . . . . . . . . . . . . . . . . 19,909 24,903 27,653 28,969 Earnings before accounting change. . . . . . . . . . 10,085 12,795 14,468 16,401 Cumulative effect of accounting change. . . . . .. (36,000) - - - Net earnings. . . . . . . . . . . . . . . . . . . . . . (25,915) 12,795 14,468 16,401 Per Share: Before Accounting change. . . . . . . . . . . . . Cumulative effect of accounting change. . $ .17 (.62) $ .22 - $ .25 - $ .28 - Net earnings. . . . . . . . . . . . . . . . . . . . . $ (.45) $ .22 $ .25 $ .28 Danaher Corporation and Subsidiaries Operating Executives Danaher Controls James W. Appelgren President Fayet te Tubular Prod ucts, Inc. Georg e Mach Presi dent A.L. Hyde Company Richa rd L. Garthwaite Presi dent Iseli Company Oege Luiting Presi dent Jacob s Vehicle Equip- ment Company Grego ry T.H. Davies Presi dent Jacob s Chuck Manu- fact uring Company Denni s D. Claramunt Presi dent Matco Tools Corpo ration / Henne ssy Industries, Inc. Patri ck W. Allender Actin g President Partl ow Corporation/ Ande rson Instrument Comp any Lawre nce C. Curtis Presi dent Quali trol Corporation Alex A. Joseph Presi dent Delta Consolidated Indus tries Marku s Isenrich Presi dent Hengs tler Industries Udo S tingl Presi dent Veede r-Root Company H. La wrence Culp, Jr. Presi dent Danah er Tool Group Profe ssional Tools Divis ion Frank A. Feraco Presi dent Danah er Tool Group Speci al Markets Divis ion Thoma s Sulentic Presi dent Gulto n-Graphic Instr uments Willi am Brewster Presi dent West Instruments, Ltd. Phili p R. Sheridan Manag ing Director Offic ers and Senior Exec utives Georg e M. Sherman Presi dent and Chief Execu tive Officer Patri ck W. Allender Senio r Vice President Chief Financial Offic er and Secretary C. Sc ott Brannan Vice President - Admin istration and Contr oller Denni s D. Claramunt Vice Presient and Group Executive James H. Ditkoff Vice President - Finan ce & Tax John P. Watson Vice President and Group Executive Direc tors Morti mer M. Caplin Partn er Capli n & Drysdale Donal d J. Ehrlich Presi dent Wabas h National Corp. Walte r G. Lohr, Jr. Partn er Hogan & Hartson Mitch ell P. Rales Partn er Equit y Group Holdings Chair man of the Exec- utive Committee Danah er Corporation Steve n M. Rales Partn er Equit y Group Holdings Chair man of the Board Danah er Corporation Georg e M. Sherman Presi dent and Chief Execu tive Officer Danah er Corporation A. Em met Stephenson, Jr. Presi dent Steph enson and Compa ny Auditors Arthur And ersen LLP Washington , D.C. Shareholde rs' Information Shareholde r requests for information or assistance , please write or call our corporate office. Danaher Co rporation c/o Invest or Relations 1250 24th Street, N.W. Suite 800 Washington , D.C. 20037 (202) 828- 0850 Stock List ing Symbol: DH R New York a nd Pacific Stock Exchanges Transfer A gent Mellon Sec urities Trust Company Pittsburgh , Pennsylvania Form 10-K A copy of the Annual Report to the Secu- rities and Exchange Commission on Form 10-K may b e obtained by writing to Danaher Co rporation MARKET PRI CES OF COMMON STOCK 1994 1993 High Low High Low First Quarter . . . . . . . . .. . . . . . . . . . 20 1/4 18 14 11/16 12 1/16 Second Quarter . . . . . . . . . . . . . . . . . 21 7/8 18 5/16 16 5/8 13 3/8 Third Quarter. . . . . . . . . . . . . . . . . 23 1/2 20 15/16 18 3/8 14 7/8 Fourth Quarter. . . . . . . . . . . . . . . . . 26 9/16 21 5/8 19 5/8 16 1/8 High and low per share data are as quoted on the New York Stock Exchange, adjusted for the stock split. EX-22 3 Danaher Corporation and Subsidiaries Exhibit to 1994 Annual Report on Form 10K (22) Subsidiaries of Registrant STATE OR DOING JURISDICTION OF BUSINESS NO. CORPORATION INCORPORATION AS(DBA) 1 Danaher Corporation Delaware - 2 DHR Services Delaware - 3 DMG Plastics, Inc. Delaware - 4 FJ900 Inc. Delaware - 5 Armstrong Tools, Inc. Delaware - 6 Armstrong Realty Company Illinois - 7 Diversified Mortgage Investors, Inc. Florida - 8 DMG Services, Inc. Florida - 9 Point Aquarius Corporation Texas - 10 SCH Management Corp. New York - 11 Sleepy Hollow Holding Corporation New York - 12 Utica Holding Company Delaware - 13 Ten Rociada Corporation New Mexico - 14 Twelve Weed Corporation California - 15 DH Holdings Corp. Delaware - 16 Easco Hand Tools Inc. Delaware Danaher Tool Group 17 Hand Tool Design Corporation Delaware - 18 KD Tools of Puerto Rico, Inc. Delaware - 19 KD Tools of Canada, Inc. Canada - 20 Beamco, Inc. Wisconsin - 21 Old Tide Corp. Califonia - 22 Dynapar Corporation Illinois Danaher Controls 23 Encoders Incorporated Delaware - 24 DISC Leasing Delaware - 25 FTP, Inc. Delaware - 26 Paragon Technologies, Inc. Delaware - 27 Fayette Tubular Products, Inc. Ohio - 28 Automotive Fluid Systems Company Delaware - 29 Michigan Special Products Company Delaware - 30 Hennessy Industries Inc. Delaware Hennessy/Ammco 31 Service Station Products Company Delaware - 32 Hennessy Industries Canada Inc. Canada - 33 Ammco Tools Inc. Illinois Hennessy/Ammco 34 Wheel Service Equipment Corporation Delaware - 35 Hennessy Industries Australia Australia - 36 Jacobs Vehicle Equipment Company Delaware - 37 Diesal Engine Retarders, Inc. Delaware - 38 Jacobs Chuck Manufacturing Company Delaware - 39 Jacobs Japan Inc. Delaware - 40 Power Tool Holders Incorporated Delaware - 41 Danaher Tool Group Holdings Ltd. (37% Holo-Krome Co.) U.K. - 42 Jacobs Manufacturing Co. Ltd. U.K. - 43 Holo-Krome Ltd. U.K. - 44 FTP Europe Ltd. U.K. - 45 Matco Tools Corporation New Jersey - 46 Chicago Pneumatic Tool Company West Germany Delaware - 47 Chicago Pneumatic World Trade Corp. Delaware - 48 Mechanics Custom Tools Corporation Delaware - 49 B.V. Chicago Pneumatick Netherlands - 50 NMTC, Inc. Delaware Matco Tools Corporation 51 Qualitrol Corporation New York - 52 Power Transformer Controls Company Delaware - 53 Qualitrol Canada Canada - 54 Qualitrol GmbH Germany - 55 Hengstler Verwaltungsgesell- schaft GmbH Germany - 56 Hengstler GmbH Germany - 57 Hengstler Systemtechnik GmbH Germany - 58 Hengstler Bauelement GmbH Germany - 59 Hengstler Feinwerktechnik GmbH Germany - 60 Hengstler Japan Corp. Japan - 61 Hengstler Controle Numerique SARL France - 62 SCI Hengstler France - 63 Hengstler Italia SRL Italy - 64 Hengstler Espana SA Spain - 65 Hengstler Canada Inc. Canada - 66 Hengstler Belgium SPRL Belgium - 67 Hengstler Nederland BV Netherlands - 68 Hengstler Tid och Passage AB Sweden - 69 The Partlow Corporation New York Partlow/ Anderson 70 Time & Temperature Controls Corp. Delaware - 71 Anderson Instrument Company New York Partlow/ Anderson 72 Flow Measurement Corporation Delaware - 73 Western Pacific Industries Delaware Iseli Company 74 Swiss Precision Parts Corp. Delaware - 75 A.L. Hyde Company Delaware - 76 Extrusions Plastics, Inc. Delaware - 77 World Plastic Extruders, Inc. New York - 78 Holo-Krome Company Delaware Danaher Tool Group 79 The Allen Manufacturing Company Delaware Danaher Tool Group 80 Industrial Fasteners Inc. Delaware - 81 Holo-Krome Uniform Fasteners Inc.California - 82 Holo-Krome Australia Australia - 83 Quality Wire Inc. Delaware Danaher Tool Group 84 Veeder-Root Company Delaware - 85 Petroleum Industry Controls, Inc.Delaware - 86 Veeder-Root of N.C. Inc. Delaware Danaher Controls 87 Eagle Acquisition Company Delaware Danaher Controls 88 Veeder-Root do Brazil Brazil - 89 Veeder-Root Canada Ltd. Canada - 90 Veeder-Root GmbH Germany - 91 Veeder-Root Australia Australia - 92 Veeder-Root SARL France - 93 Launchchange Limited U.K. - 94 West Instruments Ltd. U.K. - 95 Veeder-Root Ltd. U.K. - 96 Veeder-Root Environmental Systems Ltd. U.K. - 97 Gwendolene Holdings Ltd. U.K. - 98 Qualitrol Ltd. U.K. - 99 CGF Automation Ltd. U.K. - 100 Contents Measuring Systems Limited U.K. - 101 Hengstler Industries Ltd. U.K. - 102 Hengstler Great Britain Ltd. U.K. - 103 Hengstler Flexitime Ltd. U.K. - 104 Hengstler Leasing Ltd. U.K. - 105 GID Acquisition Companu Delaware GID Instruments 106 Data Recorders Incorporated Delaware - 107 LFE Acquisition Company Delaware LFE Instruments 108 Middle Road Company Delaware - 109 Chillicothe Road Company Delaware - 110 CEI Acquisition Company Delaware Veeder-Root Company 111 Warrick Controls, Inc. Delaware - 112 Danaher Finance Company Delaware - 113 Normandy Court Company Delaware - 114 Houma Realty Company Delaware - 115 Commercial Avenue Company Delaware - 116 JS Technology, Inc. Delaware - 117 DCI Consolidated Industries, Inc. Delaware - 118 Delta Consolidated Industries, Inc. Arkansas - 119 Truck Storage Incorporated Delaware - 120 Hecon Industries Inc. New Jersey - 121 Hecon Properties New Jersey - EX-24 4 EXHIBIT 24 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation of our reports included (or incorporated by reference) in this Form 10-K, into the Company's previously filed Registration Statement File No. 33-32402. ARTHUR ANDERSEN LLP Washington, D.C. March 20, 1995 -----END PRIVACY-ENHANCED MESSAGE-----