GENERAL

The consolidated condensed financial statements included herein have been prepared by Danaher Corporation (“Danaher” or the “Company”) without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to such rules and regulations; however, the Company believes that the disclosures are adequate to make the information presented not misleading. The consolidated condensed financial statements included herein should be read in conjunction with the financial statements as of and for the year ended December 31, 2015 and the Notes thereto included in the Company’s 2015 Annual Report on Form 10-K.

In the opinion of the Company, the accompanying financial statements contain all adjustments (consisting of only normal recurring accruals) necessary to present fairly the financial position of the Company as of September 30, 2016 and December 31, 2015, its results of operations for the three and nine month periods ended September 30, 2016 and October 2, 2015 and its cash flows for each of the nine month periods then ended. Reclassifications of certain prior year amounts have been made to conform to the current year presentation.

Accumulated Other Comprehensive Income (Loss)—The changes in accumulated other comprehensive income (loss) by component are summarized below ($ in millions). Foreign currency translation adjustments are generally not adjusted for income taxes as they relate to indefinite investments in non-U.S. subsidiaries.



	Foreign Currency Translation Adjustments			Pension & Postretirement Plan Benefit Adjustments				Unrealized Gain (Loss) on Available-For-Sale Securities Adjustments			Total
For the Three Month Period Ended September 30, 2016:
Balance, July 1, 2016	$	(1,758.2	)	$	(636.2	)		$	3.2		$	(2,391.2	)
Other comprehensive income (loss) before reclassifications:
Increase	275.6			—				13.9			289.5
Income tax impact	—			—				(5.1		)	(5.1		)
Other comprehensive income (loss) before reclassifications, net of income taxes	275.6			—				8.8			284.4
Amounts reclassified from accumulated other comprehensive income (loss):
Increase	—			7.2			(a)	—			7.2
Income tax impact	—			(2.5		)		—			(2.5		)
Amounts reclassified from accumulated other comprehensive income (loss), net of income taxes	—			4.7				—			4.7
Net current period other comprehensive income (loss), net of income taxes	275.6			4.7				8.8			289.1
Distribution of Fortive Corporation	(83.5		)	63.3			(b)	—			(20.2		)
Balance, September 30, 2016	$	(1,566.1	)	$	(568.2	)		$	12.0		$	(2,122.3	)
^(a) This accumulated other comprehensive income (loss) component is included in the computation of net periodic pension cost. Refer to Note 7 for additional details.
^(b) This accumulated other comprehensive income (loss) component included an income tax impact of $21 million.



	Foreign Currency Translation Adjustments			Pension & Postretirement Plan Benefit Adjustments				Unrealized Gain (Loss) on Available-For-Sale Securities Adjustments				Total
For the Three Month Period Ended October 2, 2015:
Balance, July 3, 2015	$	(1,456.8	)	$	(713.7	)		$	138.4			$	(2,032.1	)
Other comprehensive income (loss) before reclassifications:
Decrease (increase)	(158.7		)	12.4				(30.6		)		(176.9		)
Income tax impact	—			(2.8		)		11.5				8.7
Other comprehensive income (loss) before reclassifications, net of income taxes	(158.7		)	9.6				(19.1		)		(168.2		)
Amounts reclassified from accumulated other comprehensive income (loss):
Increase (decrease)	—			13.1			(a)	(12.4		)	(b)	0.7
Income tax impact	—			(4.0		)		4.6				0.6
Amounts reclassified from accumulated other comprehensive income (loss), net of income taxes	—			9.1				(7.8		)		1.3
Net current period other comprehensive income (loss), net of income taxes	(158.7		)	18.7				(26.9		)		(166.9		)
Balance, October 2, 2015	$	(1,615.5	)	$	(695.0	)		$	111.5			$	(2,199.0	)
For the Nine Month Period Ended September 30, 2016:
Balance, December 31, 2015	$	(1,797.4	)	$	(647.3	)		$	133.5			$	(2,311.2	)
Other comprehensive income (loss) before reclassifications:
Increase	314.8			—				28.8				343.6
Income tax impact	—			—				(10.7		)		(10.7		)
Other comprehensive income (loss) before reclassifications, net of income taxes	314.8			—				18.1				332.9
Amounts reclassified from accumulated other comprehensive income (loss):
Increase (decrease)	—			23.6			(a)	(223.4		)	(b)	(199.8		)
Income tax impact	—			(7.8		)		83.8				76.0
Amounts reclassified from accumulated other comprehensive income (loss), net of income taxes	—			15.8				(139.6		)		(123.8		)
Net current period other comprehensive income (loss), net of income taxes	314.8			15.8				(121.5		)		209.1
Distribution of Fortive Corporation	(83.5		)	63.3			(c)	—				(20.2		)
Balance, September 30, 2016	$	(1,566.1	)	$	(568.2	)		$	12.0			$	(2,122.3	)
For the Nine Month Period Ended October 2, 2015:
Balance, December 31, 2014	$	(821.8	)	$	(727.8	)		$	115.9			$	(1,433.7	)
Other comprehensive income (loss) before reclassifications:
(Decrease) increase	(793.7		)	12.4				5.4				(775.9		)
Income tax impact	—			(2.8		)		(2.0		)		(4.8		)
Other comprehensive income (loss) before reclassifications, net of income taxes	(793.7		)	9.6				3.4				(780.7		)
Amounts reclassified from accumulated other comprehensive income (loss):
Increase (decrease)	—			33.8			(a)	(12.4		)	(b)	21.4
Income tax impact	—			(10.6		)		4.6				(6.0		)
Amounts reclassified from accumulated other comprehensive income (loss), net of income taxes	—			23.2				(7.8		)		15.4
Net current period other comprehensive income (loss), net of income taxes	(793.7		)	32.8				(4.4		)		(765.3		)
Balance, October 2, 2015	$	(1,615.5	)	$	(695.0	)		$	111.5			$	(2,199.0	)
^(a) This accumulated other comprehensive income (loss) component is included in the computation of net periodic pension cost. Refer to Note 7 for additional details. ^(b) Included in other income in the accompanying Consolidated Condensed Statement of Earnings. Refer to Note 10 for additional details. ^(c) This accumulated other comprehensive income (loss) component included an income tax impact of $21 million.

New Accounting Standards—In August 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-15, Statement of Cash Flows (Topic 230), which addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice in how cash receipts and cash payments are presented in the statement of cash flows. The ASU is effective for public entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years, with early adoption permitted. The amendments should be applied retrospectively to all periods presented. The Company adopted this standard in the third quarter of 2016. The adoption of this ASU resulted in the make-whole premiums of $188 million related to the early extinguishment of borrowings in the third quarter of 2016 being reflected as a financing activity and the tax benefit related to these payments being reflected as an operating activity in the accompanying Consolidated Condensed Statement of Cash Flows for the nine month period ended September 30, 2016.

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which amends the impairment model by requiring entities to use a forward-looking approach based on expected losses to estimate credit losses on certain types of financial instruments, including trade receivables. The ASU is effective for public entities for fiscal years beginning after December 15, 2019, with early adoption permitted. Management has not yet completed its assessment of the impact of the new standard on the Company’s consolidated financial statements.

In March 2016, the FASB issued ASU No. 2016-09, Compensation—Stock Compensation (Topic 718), which aims to simplify several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, classification of certain items on the statement of cash flows and accounting for forfeitures. The ASU is effective for public entities for fiscal years beginning after December 15, 2016, with early adoption permitted. The Company will adopt this standard in fiscal year 2017. The ASU will require that the difference between the actual tax benefit realized upon exercise and the tax benefit recorded based on the fair value of the stock award at the time of grant (the “excess tax benefits”) to be reflected as a reduction of the current period provision for income taxes with any shortfall recorded as an increase in the tax provision rather than as a component of changes to additional paid-in capital. The ASU will also require the excess tax benefit realized be reflected as operating cash flow rather than a financing cash flow. Had this ASU been adopted at January 1, 2015, the provision for income taxes from continuing operations would have been reduced and operating cash flow from continuing operations would have been increased by $66 million for the year ended December 31, 2015 and $34 million for the nine months ended September 30, 2016. The actual benefit realized in future periods is inherently uncertain and will vary based on the timing and relative value realized for future share-based transactions.

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which will require, among other items, lessees to recognize a right-of-use asset and a lease liability for most leases. Extensive quantitative and qualitative disclosures, including significant judgments made by management, will be required to provide greater insight into the extent of revenue and expense recognized and expected to be recognized from existing contracts. The accounting applied by a lessor is largely unchanged from that applied under the current standard. The standard must be adopted using a modified retrospective transition approach and provides for certain practical expedients. The ASU is effective for public entities for fiscal years beginning after December 15, 2018, with early adoption permitted. Management has not yet completed its assessment of the impact of the new standard on the Company’s consolidated financial statements.

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), which impacts virtually all aspects of an entity’s revenue recognition. The core principle of Topic 606 is that revenue should be recognized to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In July 2015, the FASB deferred the effective date of the standard by one year which results in the new standard being effective for the Company at the beginning of its first quarter of fiscal year 2018. In addition, during March, April and May 2016, the FASB issued ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net), ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing and ASU 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients, respectively, which clarified the guidance on certain items such as reporting revenue as a principal versus agent, identifying performance obligations, accounting for intellectual property licenses, assessing collectability and presentation of sales taxes. The Company is currently assessing the impact that the adoption of the new standard will have on its consolidated financial statements and related disclosures, including possible transition alternatives, and expects to adopt this standard in 2018.