10-Q

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the Quarter Ended September 28, 2007

OR

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

For the transition period from              to             

Commission File Number: 1-8089

DANAHER CORPORATION

(Exact name of registrant as specified in its charter)

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

2099 Pennsylvania Avenue, N.W., 12th Floor

Washington, D.C.	20006
(Address of Principal Executive Offices)	(Zip Code)

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

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

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

Large accelerated filer  x    Accelerated filer  ¨    Non-accelerated filer  ¨

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

The number of shares of common stock outstanding at October 12, 2007 was 310,397,108.

DANAHER CORPORATION

INDEX

FORM 10-Q

			Page
PART I	-	FINANCIAL INFORMATION
Item 1.		Financial Statements
		Consolidated Condensed Balance Sheets at September 28, 2007 and December 31, 2006	1
		Consolidated Condensed Statements of Earnings for the three and nine months ended September 28, 2007 and September 29, 2006	2
		Consolidated Condensed Statement of Stockholders’ Equity for the nine months ended September 28, 2007	3
		Consolidated Condensed Statements of Cash Flows for the nine months ended September 28, 2007 and September 29, 2006	4
		Notes to Consolidated Condensed Financial Statements	5
Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations	18
Item 3.		Quantitative and Qualitative Disclosures About Market Risk	37
Item 4.		Controls and Procedures	37
PART II	-	OTHER INFORMATION
Item 1A.		Risk Factors	37
Item 2.		Unregistered Sales of Equity Securities and Use of Proceeds	37
Item 6.		Exhibits	38
		Signatures	39

DANAHER CORPORATION

CONSOLIDATED CONDENSED BALANCE SHEETS

(000’s omitted)

	September 28, 2007 (unaudited)		December 31, 2006 (Notes 1 and 3)
ASSETS
Current Assets:
Cash and equivalents	$	209,281	$	317,810
Trade accounts receivable, net		1,826,709		1,654,725
Inventories:
Finished goods		466,891		429,740
Work in process		198,608		182,809
Raw material and supplies		415,333		376,160
Total inventories		1,080,832		988,709
Prepaid expenses and other current assets		269,231		475,495
Total current assets		3,386,053		3,436,739
Property, plant and equipment, net of accumulated depreciation of $1,372,580 and $1,267,365, respectively		902,411		868,623
Other assets		305,630		300,226
Goodwill		7,336,697		6,560,239
Other intangible assets, net		1,844,247		1,698,324
Total assets	$	13,775,038	$	12,864,151
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Notes payable and current portion of long-term debt	$	20,360	$	10,855
Trade accounts payable		1,016,023		932,870
Accrued expenses and other liabilities		1,056,035		1,515,989
Total current liabilities		2,092,418		2,459,714
Other liabilities		1,702,423		1,336,916
Long-term debt		1,926,846		2,422,861
Stockholders’ equity:
Common stock—$0.01 par value		3,450		3,412
Additional paid-in capital		1,125,985		1,027,454
Accumulated other comprehensive income		413,845		191,985
Retained earnings		6,510,071		5,421,809
Total stockholders’ equity		8,053,351		6,644,660
Total liabilities and stockholders’ equity	$	13,775,038	$	12,864,151

See the accompanying Notes to Consolidated Condensed Financial Statements.

1

DANAHER CORPORATION

CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS

(000’s omitted, except per share amounts)

(unaudited)

	Three Months Ended						Nine Months Ended
	September 28, 2007			September 29, 2006			September 28, 2007			September 29, 2006
Sales	$	2,731,151		$	2,408,495		$	7,884,740		$	6,840,662
Operating costs and expenses:
Cost of sales		1,481,940			1,319,391			4,294,375			3,823,429
Selling, general and administrative expenses		655,116			584,561			1,943,919			1,645,434
Research and development expenses		131,161			118,680			384,842			330,175
Other (income) expense		—			(762	)		(14,335	)		(16,379	)
Total operating expenses		2,268,217			2,021,870			6,608,801			5,782,659
Operating profit		462,934			386,625			1,275,939			1,058,003
Interest expense		(25,670	)		(26,480	)		(76,909	)		(53,564	)
Interest income		817			941			3,357			6,772
Earnings from continuing operations before income taxes		438,081			361,086			1,202,387			1,011,211
Income taxes		(103,580	)		(97,110	)		(308,614	)		(222,014	)
Earnings from continuing operations		334,501			263,976			893,773			789,197
Earnings from discontinued operations, net of income taxes		149,220			4,095			155,906			9,115
Net earnings	$	483,721		$	268,071		$	1,049,679		$	798,312
Earnings per share from continuing operations:
Basic	$	1.08		$	0.86		$	2.88		$	2.56
Diluted	$	1.03		$	0.82		$	2.75		$	2.45
Earnings per share from discontinued operations:
Basic	$	0.48		$	0.01		$	0.50		$	0.03
Diluted	$	0.45		$	0.01		$	0.47		$	0.03
Net earnings per share:
Basic	$	1.56		$	0.87		$	3.38		$	2.59
Diluted	$	1.48		$	0.83		$	3.22		$	2.48
Average common stock and common equivalent shares outstanding:
Basic		310,324			308,344			309,821			307,680
Diluted		328,136			325,738			327,941			324,595

See the accompanying Notes to Consolidated Condensed Financial Statements.

2

DANAHER CORPORATION

CONSOLIDATED CONDENSED STATEMENT OF STOCKHOLDERS’ EQUITY

(000’s omitted)

(unaudited)

	Common Stock			Additional Paid-In Capital			Retained Earnings			Accumulated Other Comprehensive Income		Comprehensive Income
	Shares	Par Value
Balance, December 31, 2006	341,223	$	3,412	$	1,027,454		$	5,421,809		$	191,985
Cumulative impact of change in accounting for uncertainties in income taxes (FIN 48 – see Note 4)	—		—		—			63,318			—
Net earnings	—		—		—			1,049,679			—	$	1,049,679
Dividends declared	—		—		—			(24,735	)		—		—
Common stock issued for options and restricted stock grants	3,776		38		216,017			—			—		—
Treasury stock purchases (1,642,607 shares)	—		—		(117,486	)		—			—		—
Increase from translation of foreign financial statements	—		—		—			—			221,860		221,860
Balance, September 28, 2007	344,999	$	3,450	$	1,125,985		$	6,510,071		$	413,845	$	1,271,539

See the accompanying Notes to Consolidated Condensed Financial Statements.

3

DANAHER CORPORATION

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

(000’s omitted)

(unaudited)

	Nine Months Ended
	September 28, 2007			September 29, 2006
Cash flows from operating activities:
Net earnings	$	1,049,679		$	798,312
Less: earnings from discontinued operations, net of tax		155,906			9,115
Net earnings from continuing operations		893,773			789,197
Non-cash items, net of the effect of discontinued operations:
Depreciation and amortization		190,411			152,569
Stock compensation expense		50,789			49,520
Change in trade accounts receivable, net		(73,318	)		(27,924	)
Change in inventories		(35,774	)		(47,444	)
Change in accounts payable		35,010			2
Change in prepaid expenses and other assets		158,480			96,039
Change in accrued expenses and other liabilities		(91,377	)		60,058
Total operating cash flows from continuing operations		1,127,994			1,072,017
Total operating cash flows from discontinued operations		(53,533	)		12,036
Net cash flows from operating activities		1,074,461			1,084,053
Cash flows from investing activities:
Payments for additions to property, plant and equipment		(100,186	)		(98,572	)
Proceeds from disposals of property, plant and equipment		14,118			7,869
Cash paid for acquisitions		(790,598	)		(2,173,180	)
Cash paid for investment in acquisition target and other marketable securities		(23,219	)		(84,102	)
Proceeds from sale of investment and divestitures		299,642			98,485
Total investing cash flows from continuing operations		(600,243	)		(2,249,500	)
Total investing cash flows from discontinued operations		(722	)		(717	)
Net cash used in investing activities		(600,965	)		(2,250,217	)
Cash flows from financing activities:
Proceeds from issuance of common stock		165,266			78,274
Payment of dividends		(24,735	)		(18,425	)
Purchase of treasury stock		(117,486	)		—
Net (repayments) proceeds of borrowings (maturities of 90 days or less)		(599,047	)		754,983
Net (repayments) proceeds of borrowings (maturities longer than 90 days)		(11,410	)		295,672
Net cash used in financing activities		(587,412	)		1,110,504
Effect of exchange rate changes on cash and equivalents		5,387			4,061
Net change in cash and equivalents		(108,529	)		(51,599	)
Beginning balance of cash and equivalents		317,810			315,551
Ending balance of cash and equivalents	$	209,281		$	263,952
Supplemental disclosures:
Cash interest payments	$	39,461		$	30,611
Cash income tax payments (including $54.7 million related to gain on sale of Power Quality business, see Note 3)	$	295,497		$	128,845

See the accompanying Notes to Consolidated Condensed Financial Statements.

4

DANAHER CORPORATION

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(unaudited)

NOTE 1. GENERAL

The consolidated condensed financial statements included herein have been prepared by Danaher Corporation (the Company) without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to such rules and regulations; however, the Company believes that the disclosures are adequate to make the information presented not misleading. The condensed financial statements included herein should be read in conjunction with the financial statements and the notes thereto included in the Company’s 2006 Annual Report on Form 10-K.

In the opinion of the registrant, the accompanying financial statements contain all adjustments (consisting of only normal recurring accruals) necessary to present fairly the financial position of the Company at September 28, 2007 and December 31, 2006, and its results of operations for the three and nine months ended September 28, 2007 and September 29, 2006, and its cash flows for the nine months ended September 28, 2007 and September 29, 2006. Please see Note 3 for a discussion of the impact on the financial statement presentation resulting from the Company’s discontinuance of its power quality business.

Total comprehensive income was as follows ($ in millions):

	September 28, 2007		September 29, 2006
Three months ended	$	610	$	260
Nine months ended		1,272		962

Total comprehensive income for 2007 and 2006 includes the change in cumulative foreign translation adjustment.

NOTE 2. ACQUISITIONS AND DIVESTITURES

The Company has completed a number of acquisitions that either were a strategic fit with an existing Company business or were of such a nature and size as to establish a new strategic line of business for growth for the Company. All of these acquisitions have been accounted for as purchases and have resulted in the recognition of goodwill in the Company’s financial statements. This goodwill arises because the purchase prices for these businesses reflect a number of factors including the future earnings and cash flow potential of these businesses; the multiple to earnings, cash flow and other factors at which similar businesses have been purchased by other acquirers; the competitive nature of the process by which the Company acquired the business; and the complementary strategic fit and resulting synergies these businesses bring to existing operations.

The Company makes an initial allocation of the purchase price at the date of acquisition based upon its understanding of the fair market value of the acquired assets and assumed liabilities. The Company obtains this information during due diligence and through other sources. In the months after closing, as the Company obtains additional information about these assets and liabilities and learns more about the newly acquired business, it is able to refine the estimates of fair market value and more accurately allocate the purchase price. Examples of factors and information that the Company uses to refine the allocations include: tangible and intangible asset appraisals; cost data related to redundant facilities; employee/personnel data related to redundant functions; product line integration and rationalization information; management capabilities; and information systems compatibilities. The only items considered for subsequent adjustment are items identified as of the acquisition date. The Company is continuing to evaluate certain pre-acquisition contingencies (as contemplated by SFAS No. 38, “Accounting for Preacquisition Contingencies of Purchased Enterprises”) involving ongoing litigation from its acquisition of Vision Systems Limited (Vision), and will make appropriate adjustments to the purchase price allocation prior to the one-year anniversary of the acquisition, as required.

5

The following briefly describes the Company’s acquisition activity for the nine months ended September 28, 2007. For a description of the Company’s acquisition and divestiture activity for the year ended December 31, 2006, reference is made to Note 2 to the Consolidated Financial Statements included in the 2006 Annual Report on Form 10-K.

In the last quarter of 2006 and first quarter of 2007, the Company acquired all of the outstanding shares of Vision for an aggregate cash purchase price of $525 million, including transaction costs and net of $113 million of cash acquired, and assumed debt of $1.5 million. Of this purchase price, $96 million was paid during 2007 to acquire the remaining shares of Vision that the Company did not own as of December 31, 2006 and for transaction costs. The Company financed the transaction through a combination of available cash and the issuance of commercial paper. Vision, based in Australia, manufactures and markets automated instruments, antibodies and biochemical reagents used for biopsy-based detection of cancer and infectious diseases, and had revenues of $86 million in its last completed fiscal year. The Vision acquisition resulted in the recognition of a preliminary estimate of goodwill of $451 million, of which $76 million was recorded in 2007. Goodwill associated with this acquisition primarily relates to Vision’s future revenue growth and earnings potential.

In July 2007, the Company acquired all of the outstanding shares of ChemTreat, Inc. (ChemTreat) for a cash purchase price of $425 million including transaction costs. No cash was acquired in the transaction. The Company financed the acquisition primarily with proceeds from the issuance of commercial paper and to a lesser extent from available cash. ChemTreat is a leading provider of industrial water treatment products and services, and had annual revenues of $200 million in its most recent completed fiscal year. ChemTreat is part of the Company’s environmental business and its results are reported within the Professional Instrumentation segment. ChemTreat is expected to provide additional sales and earnings growth opportunities for the Company both through the growth of existing products and services and through the potential acquisition of complementary businesses. The Company recorded a preliminary estimate of goodwill of $329 million related to the acquisition of ChemTreat.

In addition, the Company acquired nine other companies or product lines during the first nine months of 2007. Total consideration for these nine acquisitions and the remaining shares of Vision acquired during the first quarter was $366 million in cash, including transaction costs and net of cash acquired. Each company acquired is a manufacturer and assembler of instrumentation products, in market segments including electronic test, dental technologies, product identification, sensors and controls and environmental instruments. These companies were acquired to complement existing units of the Professional Instrumentation, Medical Technologies or Industrial Technologies segments. The Company recorded an aggregate $178 million of goodwill related to its acquisition of these nine other businesses excluding the Vision shares noted above. The aggregate annual sales of these nine acquired businesses (excluding Vision) at the time of their respective acquisitions, in each case based on the company’s revenues for its last completed fiscal year prior to the acquisition, were $123 million.

The following table summarizes the aggregate estimated fair values of the assets acquired and liabilities assumed at the date of acquisition for the acquisitions consummated, including the acquisition of Vision (included in the “Others” column) shares noted above, during the nine months ended September 28, 2007 ($ in 000’s):

	ChemTreat			Others			Total
Accounts receivable	$	33,981		$	17,064		$	51,045
Inventory		6,541			19,440			25,981
Property, plant and equipment		10,655			5,992			16,647
Goodwill		329,447			254,258			583,705
Other intangible assets, primarily tradenames, customer relationships and patents		72,000			88,848			160,848
Accounts payable		(11,468	)		(10,243	)		(21,711	)
Other assets and liabilities, net		(16,490	)		(5,646	)		(22,136	)
Assumed debt		—			(3,781	)		(3,781	)
Net cash consideration	$	424,666		$	365,932		$	790,598

The Company is continuing to evaluate the initial purchase price allocations for the acquisitions completed during the twelve months preceding September 28, 2007 and will adjust the allocations as additional information relative to the estimated integration costs of the acquired businesses and the fair market values of the assets and liabilities of the businesses become known.

6

The unaudited pro forma information for the periods set forth below gives effect to all prior acquisitions as if they had occurred at the beginning of the period. The pro forma information is presented for informational purposes only and is not necessarily indicative of the results of operations that actually would have been achieved had the acquisitions been consummated as of that time (unaudited, $ in 000’s, except per share amounts):

	Three Months Ended				Nine Months Ended
	September 28, 2007		September 29, 2006		September 28, 2007		September 29, 2006
Sales	$	2,732,313	$	2,537,751	$	8,016,693	$	7,492,444
Net earnings from continuing operations		334,588		275,954		900,363		806,701
Diluted earnings per share from continuing operations	$	1.03	$	0.85	$	2.77	$	2.51

In January 2006, the Company commenced an all cash tender offer for all of the outstanding ordinary shares of First Technology plc, a U.K.—based public company. In connection with the offer, the Company acquired an aggregate of 19.5% of First Technology’s issued share capital for $84 million. A competing bidder subsequently made an offer that surpassed the Company’s bid, and as a result the Company allowed its offer for First Technology to lapse. The Company tendered its shares into the other bidder’s offer and on April 7, 2006 received proceeds of $98 million from the sale of these shares, in addition to a $3 million break-up fee paid by First Technology to the Company. The Company recorded a pre-tax gain of $14 million ($8.9 million after-tax, or $0.03 per diluted share) upon the sale of these securities including the related break-up fee, net of related transaction costs during the nine months ended September 29, 2006 which is included in “other (income) expense” in the accompanying Statement of Earnings.

In connection with its acquisitions, the Company assesses and formulates a plan related to the future integration of each acquired entity. This process begins during the due diligence process and is concluded within twelve months of the acquisition. The Company accrues estimates for certain costs, related primarily to personnel reductions and facility closures or restructurings, anticipated at the date of acquisition, in accordance with Emerging Issues Task Force Issue No. 95-3, “Recognition of Liabilities in Connection with a Purchase Business Combination.” Adjustments to these estimates are made up to 12 months from the acquisition date as plans are finalized. To the extent these accruals are not utilized for the intended purpose, the excess is recorded as a reduction of the purchase price, typically by reducing recorded goodwill balances. Costs incurred in excess of the recorded accruals are expensed as incurred. The Company is still finalizing its exit plans with respect to its 2007 acquisitions and certain of its 2006 acquisitions and will adjust current accrual levels to reflect such restructuring plans as such plans are finalized.

Accrued liabilities associated with these exit activities include the following ($ in 000’s, except headcount):

	Involuntary Employee Termination Benefits					Facility Closure and Restructuring
	Headcount		Dollars
Balance, December 31, 2006	465		$	24,415		$	21,948
Headcount / accruals related to 2007 acquisitions	61			1,181			521
Adjustments to previously provided estimates	(95	)		381			(69	)
Reductions and costs incurred in 2007	(46	)		(11,457	)		(6,638	)
Balance, September 28, 2007	385		$	14,520		$	15,762

7

Subsequent Acquisition Activity

On October 14, 2007, the Company and Tektronix, Inc. (Tektronix) entered into a definitive agreement pursuant to which the Company is making a cash tender offer to acquire all of the outstanding shares of common stock of Tektronix for $38.00 per share, for an aggregate price of approximately $2.8 billion, including transaction costs and net of cash acquired, to be followed by a second step cash-out merger at the offer price. The offer is subject to customary conditions, including tender of a majority of the outstanding shares into the offer, regulatory approvals and the absence of a material adverse change with respect to Tektronix. Danaher anticipates completing the offer in the fourth quarter of 2007.

Tektronix is a leading supplier of test, measurement, and monitoring products, solutions and services for engineers in the communications, computer, consumer electronics and education industries, as well as in military/aerospace, semiconductor and a broad range of other industries worldwide. Tektronix had annual revenues of approximately $1.1 billion in its most recently completed fiscal year, and would become part of Danaher’s electronic test platform included in the Professional Instrumentation segment.

Danaher anticipates financing the acquisition initially through borrowings under committed lines of credit that it expects to enter into, through the issuance of commercial paper using such lines of credit as credit support, or through a combination of these financing methods. Danaher anticipates that the ultimate financing for the acquisition will consist of one or more of the following: commercial paper borrowings, the issuance of debt securities and/or the issuance of equity or equity-linked securities.

NOTE 3. DISCONTINUED OPERATIONS

In July 2007, the Company completed the sale of its power quality business for a sale price of $275 million in cash, net of transaction costs, and recorded an after-tax gain of $150 million ($0.45 per diluted share). The power quality business designs, makes and sells power quality and reliability products and services, and prior to the sale was part of the Company’s Industrial Technologies segment. The Company has reported the power quality business as a discontinued operation in this Form 10-Q in accordance with Statement of Financial Accounting Standards No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets. Accordingly, the results of operations for all periods presented have been reclassified to reflect the power quality business as a discontinued operation. The assets and liabilities of the power quality business have been reclassified as held for sale for all periods presented. The Company allocated a portion of the consolidated interest expense to discontinued operations in accordance with EITF 87-24, Allocation of Interest to Discontinued Operations.

The key components of income from discontinued operations related to the power quality business were as follows ($ in 000’s):

	Three Months Ended						Nine Months Ended
	September 28, 2007			September 29, 2006			September 28, 2007			September 29, 2006
Net sales	$	7,478		$	34,228		$	81,141		$	95,486
Operating expense		8,011			28,529			72,239			82,812
Allocated interest expense		50			165			351			356
Income (loss) before taxes		(583	)		5,534			8,551			12,318
Income taxes		169			(1,439	)		(2,279	)		(3,203	)
Income (loss) from discontinued operations		(414	)		4,095			6,272			9,115
Gain on sale, net of $61,369 of related income taxes		149,634			—			149,634			—
Earnings from discontinued operations, net of income taxes	$	149,220		$	4,095		$	155,906		$	9,115

8

The key components of assets and liabilities of discontinued operations related to the power quality businesses which are included in other current assets and other current liabilities in the balance sheet as of December 31, 2006, respectively, consisted of the following ($ in 000’s):

	December 31, 2006
Trade accounts receivable, net	$	20,245
Inventory		16,651
Prepaid expenses		658
Property, plant and equipment, net of accumulated depreciation		5,745
Goodwill		35,884
Other long-term assets		208
Total assets	$	79,391
Trade accounts payable	$	19,467
Accrued expenses		7,862
Non-current liabilities		158
Total liabilities	$	27,487

NOTE 4. INCOME TAXES

The Company adopted the provisions of FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes (FIN 48), on January 1, 2007. As a result of the implementation of FIN 48, the Company recognized a decrease of $63 million in the liability for unrecognized tax benefits, which was accounted for as an increase to the January 1, 2007 balance of retained earnings. As of the date of adoption and after the impact of recognizing the decrease in liability noted above, the Company’s unrecognized tax benefits totaled $254 million. Included in the balance at January 1, 2007, are $16 million of tax positions, the disallowance of which would not affect the annual effective income tax rate. As of September 28, 2007, the Company’s unrecognized tax benefits totaled $328 million.

The Company files numerous consolidated and separate income tax returns in the United States Federal jurisdiction and in many state and foreign jurisdictions. The Company is no longer subject to US Federal income tax examinations for years before 2003 and with few exceptions is no longer subject to state and local, or foreign income tax examinations by tax authorities for years before 1997.

The Internal Revenue Service (IRS) is currently examining certain of the Company’s U.S. Federal income tax returns for 2004 and 2005. To date, no proposed adjustments have been issued that will have a material impact on the Company’s financial position or results of operations. During the third quarter of 2007, the IRS completed an audit of certain subsidiary returns for pre acquisition fiscal years 2003, 2004, and 2005. Resolution of these audits did not have a material impact on the Company’s results of operations, financial position or cash flows. The Danish taxing authorities are currently examining certain of the Company’s subsidiaries in Denmark for the years 2003 through 2005. The German tax authorities commenced audits of certain German income tax returns for years ranging from 2001 through 2005 in the fourth quarter of 2006 and first nine months of 2007. To date, there are no proposed adjustments that will have a material impact on the Company’s financial position or results of operations. The Swedish tax authorities are examining certain Swedish income tax returns for the years 2002 through 2006. The authorities in Sweden have proposed tax adjustments regarding certain of the Company’s tax positions for the years 2004 through 2006. The Company has until the fourth quarter of 2007 to respond to the proposed adjustments. Management does not anticipate the resolution of these matters will result in a material change to its financial position or results of operations. In addition, the Company has subsidiaries in various states, provinces and countries that are currently under audit for years ranging from 1997 through 2005. To date, no material adjustments have been proposed as a result of these audits.

The Company recognizes potential accrued interest and penalties related to unrecognized tax benefits within its global operations in income tax expense. In conjunction with the adoption of FIN 48, the Company recognized $58 million for the payment of interest and penalties at January 1, 2007 which is included as a component of the $254 million unrecognized tax benefit noted above. During the nine months ended September 28, 2007, the Company recognized $25 million in potential interest and penalties associated with uncertain tax positions. To the extent interest and penalties are not assessed with respect to uncertain tax positions, amounts accrued will be reduced and reflected as a reduction of the overall income tax provision.

9

The Company does not anticipate that total unrecognized tax benefits will significantly change due to the settlement of audits and the expiration of statute of limitations prior to September 28, 2008.

The effective tax rate for continuing operations was 23.6% and 25.7% in the three and nine months periods ended September 28, 2007, respectively, as compared to 26.9% and 22.0% in the three and nine months periods ended September 29, 2006, respectively. The Company’s effective tax rate can be affected by changes in the mix of earnings in countries with differing statutory rates (including as a result of business acquisitions and dispositions), changes in the valuation of deferred tax assets and liabilities, the results of audit and examinations of previously filed tax returns and changes in tax laws. The effective tax rate for the three months ended September 28, 2007 benefited from new income tax laws enacted in several taxing jurisdictions, most notably in Germany and Denmark, which reduced income tax rates. Application of these new rates to the Company’s existing deferred tax assets and liabilities reduced the Company’s net deferred tax liabilities in the quarter. The benefit from this tax rate reduction was partially offset by establishing income tax reserves related to uncertain tax positions in various taxing jurisdictions. The tax rate changes and the increase of income tax reserves are treated as discrete items for the quarter in accordance FASB Statement No. 109, Accounting for Income Taxes and will have no continuing impact on the Company’s effective tax rate. The Company expects the effective income tax rate for the balance of 2007 to be approximately 26.2%.

NOTE 5. STOCK-BASED COMPENSATION

Stock options and restricted stock units (RSUs) have been issued to officers and other employees under the Company’s Amended and Restated 1998 Stock Option Plan. On May 15, 2007, the Company’s shareholders approved the 2007 Stock Incentive Plan, and no further equity awards will be issued under the 1998 Stock Option Plan. The 2007 Stock Incentive Plan provides for the grant of stock options, stock appreciation rights, RSUs, restricted stock or any other stock-based award.

Stock options granted under the 2007 Stock Incentive Plan and under the 1998 Stock Option Plan generally vest over a five-year period and terminate ten years from the issuance date, though the specific terms of each grant are determined by the Compensation Committee of the Company’s Board of Directors (Compensation Committee). Option exercise prices equal the closing price on the NYSE of the common stock on the date of grant. RSUs granted under the 2007 Stock Incentive Plan and under the 1998 Stock Option Plan provide for the issuance of a share of the Company’s common stock at no cost to the holder. They are generally subject to performance criteria determined by the Compensation Committee, as well as time-based vesting such that 50% of the RSUs granted vest (subject to satisfaction of the performance criteria) on each of the fourth and fifth anniversaries of the grant date. Prior to vesting, RSUs do not have dividend equivalent rights, do not have voting rights and the shares underlying the RSUs are not considered issued and outstanding. Shares are issued as of the date the RSUs vest.

The options and RSUs generally vest only if the employee is employed by the Company on the vesting date, and unvested options and RSUs are forfeited upon retirement before age 65 unless the Compensation Committee determines otherwise. To cover the exercise of vested options and the vesting of RSUs, the Company generally issues newly-issued shares but may from time to time issue treasury stock. At September 28, 2007, 10 million shares of the Company’s common stock were reserved for issuance under the 2007 Stock Incentive Plan.

The estimated fair value of the options granted was calculated using a Black-Scholes Merton option pricing model (Black-Scholes). The following summarizes the assumptions used in the Black-Scholes model to value options granted during the nine months ended September 28, 2007:

Weighted average Black-Scholes value per share	$	28.03
Risk-free interest rate		4.7	%
Weighted average volatility		22	%
Dividend yield		0.2	%
Expected years until exercise		7.5 - 9.5

The Black-Scholes model incorporates assumptions to value stock-based awards. The risk-free rate of interest for periods within the contractual life of the option is based on a zero-coupon U.S. government instrument over the expected term of the equity instrument. Expected volatility is based on implied volatility from traded options on the Company’s stock and historical volatility of the Company’s stock. The Company generally uses the midpoint between the end of the vesting period and the contractual life of the grant to estimate option exercise timing within the valuation model. This methodology is not materially different from the Company’s historical data on exercise timing.

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At the time of grant, the Company estimates the number of options that it expects will be forfeited based on the Company’s historical experience. Separate groups of employees that have similar behavior with regard to holding options for longer periods and different forfeiture rates are considered separately for valuation and attribution purposes.

The following table summarizes the components of the Company’s stock-based compensation programs reported as a component of selling, general and administrative expenses ($ in thousands):

	Three Months Ended						Nine Months Ended
	September 28, 2007			September 29, 2006			September 28, 2007			September 29, 2006
Restricted Stock Units:
Pre-tax compensation expense	$	3,784		$	2,864		$	11,644		$	8,817
Tax benefit		(1,325	)		(1,002	)		(4,075	)		(3,086	)
Restricted stock expense, net of tax	$	2,459		$	1,862		$	7,569		$	5,731
Stock Options:
Pre-tax compensation expense	$	11,956		$	17,091		$	39,145		$	40,703
Tax benefit		(3,220	)		(4,928	)		(10,988	)		(11,864	)
Stock option expense, net of tax	$	8,736		$	12,163		$	28,157		$	28,839
Total Share-Based Compensation:
Pre-tax compensation expense	$	15,740		$	19,955		$	50,789		$	49,520
Tax benefit		(4,545	)		(5,930	)		(15,063	)		(14,950	)
Total share-based compensation expense, net of tax	$	11,195		$	14,025		$	35,726		$	34,570

As of September 28, 2007, $58 million and $195 million of total unrecognized compensation cost related to RSUs and stock options, respectively, is expected to be recognized over a weighted average period of approximately 2.5 years.

Option activity under the Company’s 1998 and 2007 Stock Option Plan as of September 28, 2007 and changes during the nine months ended September 28, 2007 were as follows:

(in thousands except years and per share values)	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in Years)	Aggregate Intrinsic Value
Outstanding at January 1, 2007	23,959		$	39.65
Granted	2,666			74.48
Exercised	(3,776	)		27.13
Forfeited	(630	)		51.53
Outstanding at September 28, 2007	22,219			45.62	6	$	824,044
Vested and Expected to Vest at September 28, 2007	20,699			44.99	6	$	760,668
Exercisable at September 28, 2007	10,680		$	33.59	5	$	524,638

The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between the Company’s closing stock price on the last trading day of the third quarter of 2007 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on September 28, 2007. The amount of aggregate intrinsic value will change based on the fair market value of the Company’s stock.

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The aggregate intrinsic value of options exercised during the nine months ended September 28, 2007 and September 29, 2006 was $182.4 million and $89.4 million, respectively. Exercise of options during the nine months ended September 28, 2007 and September 29, 2006 resulted in cash receipts of $101.2 million and $78.3 million, respectively. The Company recognized a tax benefit of $60.6 million during the nine months ended September 28, 2007 related to the exercise of employee stock options, which has been recorded as an increase to additional paid-in capital.

The following table summarizes information on unvested RSUs outstanding as of September 28, 2007:

Unvested Restricted Stock Units	Number of Shares (in thousands)		Weighted-Average Grant-Date Fair Value
Unvested at January 1, 2007	1,597		$	54.14
Forfeited	(8	)		62.23
Vested	—			—
Granted	205			74.03
Unvested at September 28, 2007	1,794		$	56.41

NOTE 6. GOODWILL

The following table shows the rollforward of goodwill reflected in the financial statements resulting from the Company’s acquisition activities for the nine months ended September 28, 2007 ($ in millions):

Balance, December 31, 2006	$	6,596
Attributable to 2007 acquisitions		584
Attributable 2007 divestitures		(36	)
Adjustments to purchase price allocations		8
Effect of foreign currency translations		185
Balance, September 28, 2007	$	7,337

The carrying value of goodwill at September 28, 2007 for the Tools & Components, Medical Technologies, Professional Instrumentation and Industrial Technologies segments is $194 million, $3,224 million, $1,918 million and $2,001 million, respectively. Goodwill arises from the excess of the purchase price for acquired businesses exceeding the fair value of tangible and intangible assets acquired. Management assesses goodwill for impairment for each of its reporting units at least annually at the beginning of the fourth quarter or as “triggering” events occur. In making its assessment of goodwill impairment, management relies on a number of factors including operating results, business plans, economic projections, anticipated future cash flows, and transactions and market data. There are inherent uncertainties related to these factors and management’s judgment in applying them to the analysis of goodwill impairment which may affect the carrying value of goodwill. The Company’s annual impairment test was performed in the fourth quarter of 2006 and no impairment was identified.

NOTE 7. FINANCING TRANSACTIONS

The components of the Company’s debt as of September 28, 2007 and December 31, 2006 were as follows:

	September 28, 2007		December 31, 2006
	($ in millions)
Euro-denominated commercial paper (€149 million at September 28, 2007)	$	213	$	787
U.S. dollar-denominated commercial paper		85		80
4.5% guaranteed Eurobond Notes due July 22, 2013 (€500 million)		713		660
Zero coupon Liquid Yield Option Notes due 2021 (“LYONs”)		604		594
6.1% notes due October 2008		250		250
Other borrowings		82		63
Total		1,947		2,434
Less – currently payable		20		11
Long-term debt	$	1,927	$	2,423

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For a full description of the Company’s debt financing, please refer to Note 7 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2006.

Under the Company’s U.S. and Euro commercial paper programs, the Company or its subsidiary may issue and sell unsecured, short-term promissory notes in aggregate principal amount not to exceed $2.2 billion (since the credit facility (described below) provides credit support for the commercial paper program, the $1.5 billion of availability under the credit facility has the practical effect of reducing from $2.2 billion to $1.5 billion the maximum amount of commercial paper that the Company can issue under the commercial paper program). Commercial paper notes are sold at a discount and have a maturity of not more than 90 days from date of issuance. Borrowings under the program are available for general corporate purposes as well as for financing potential acquisitions. The Company issued $2 billion of commercial paper in May 2006 and used the proceeds principally to fund its acquisition of Sybron Dental Specialties, Inc. (Sybron Dental). In late 2006 and through the nine-months ended September 28, 2007, the Company has utilized its commercial paper program to fund the acquisitions of Vision, ChemTreat, and certain smaller acquisitions, as well as the repurchase of the Company’s common shares (see Note 10). The Company has used available cash flow and the proceeds from the 2006 4.5% Eurobond Note offering to reduce outstanding borrowings under the commercial paper programs. As of September 28, 2007, the amounts outstanding under the Euro-denominated commercial paper program had an average interest rate of 4.9% and an average maturity of 33 days and the amounts outstanding under the U.S. Dollar-denominated commercial paper program had an average interest rate of 5.1% and an average maturity of 3 days.

Credit support for the commercial paper programs is provided by an unsecured $1.5 billion multicurrency revolving credit facility which the Company entered into in April 2006 to replace two existing $500 million credit facilities. The Company entered into an agreement with the lenders during the second quarter of 2007 to extend the term of the credit facility by one year, so that it now expires on April 25, 2012, subject to a one-year extension option at the request of Danaher and with the consent of the lenders. The credit facility can also be used for working capital and other general corporate purposes. Interest is based on either (1) a LIBOR-based formula, (2) a formula based on the lender’s prime rate or on the Federal funds rate, or (3) the rate of interest bid by a particular lender for a particular loan under the credit facility. There were no borrowings under the credit facility during the nine months ended September 28, 2007.

The Company has classified the borrowings under the commercial paper programs as long-term borrowings in the accompanying Consolidated Balance Sheet as the Company has the intent and ability, as supported by availability under the above mentioned credit facility, to refinance these borrowings for at least one year from the balance sheet date.

The Company does not have any rating downgrade triggers that would accelerate the maturity of a material amount of outstanding debt. However, a downgrade in the Company’s credit rating would increase the cost of borrowings under the Company’s commercial paper program and credit facilities. Also, a downgrade in the Company’s credit rating could limit, or in the case of a significant downgrade, preclude the Company’s ability to issue commercial paper. The Company’s outstanding indentures and comparable instruments contain customary covenants including for example limits on the incurrence of secured debt and sale/leaseback transactions. None of these covenants are considered restrictive to the Company’s operations and as of September 28, 2007, the Company was in compliance with all of its debt covenants.

NOTE 8. CONTINGENCIES

For a further description of the Company’s litigation and contingencies, reference is made to Note 11 to the Consolidated Financial Statements included in the Company’s 2006 Annual Report on Form 10-K.

The Company generally accrues estimated warranty costs at the time of sale. In general, manufactured products are

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warranted against defects in material and workmanship when properly used for their intended purpose, installed correctly, and appropriately maintained. Warranty period terms depend on the nature of the product and range from 90 days up to the life of the product. The amount of the accrued warranty liability is determined based on historical information such as past experience, product failure rates or number of units repaired, estimated cost of material and labor, and in certain instances estimated property damage. The liability, shown in the following table, is reviewed on a quarterly basis and may be adjusted as additional information regarding expected warranty costs becomes known.

In certain cases the Company will sell extended warranty or maintenance agreements. The proceeds from these agreements are deferred and recognized as revenue over the term of the agreement.

The following is a rollforward of the Company’s warranty accrual for the nine months ended September 28, 2007 ($ in 000’s):

Balance, December 31, 2006	$	98,993
Accruals for warranties issued during the period		69,700
Changes in estimates related to pre-existing warranties		3,209
Settlements made		(74,662	)
Changes due to acquisitions / divestitures		6,077
Balance, September 28, 2007	$	103,317

Accu-Sort, Inc., a subsidiary of the Company, was a defendant in a suit filed by Federal Express Corporation on May 16, 2001. On March 9, 2006 Accu-Sort settled the case with Federal Express for an amount which the Company believes is not material to its financial position, which amount was reflected in the Company’s results of operations in 2005. The purchase agreement pursuant to which the Company acquired Accu-Sort in 2003 provides certain indemnification for the Company with respect to this matter, and an arbitrator ordered the former owners of Accu-Sort to pay the Company a portion of the losses incurred by the Company in connection with this litigation. In April 2007, the Company received this payment from the former owners and recorded a pre-tax gain of $12 million ($7.8 million after-tax, or $0.02 per diluted share) in the second quarter of 2007 which is included in “Other (income) expense” in the accompanying Statement of Earnings for the nine months ended September 28, 2007.

NOTE 9. NET PERIODIC BENEFIT COST – DEFINED BENEFIT PLANS

The following sets forth the components of net periodic benefit cost of the non-contributory defined benefit plans and for the Company’s other post-retirement employee benefit plans for the three and nine months ended September 28, 2007 and September 29, 2006, respectively ($ in millions):

Pension Benefits

	Three Months Ended
	US						Non-US
	September 28, 2007			September 29, 2006			September 28, 2007			September 29, 2006
Service cost	$	0.7		$	2.2		$	3.4		$	2.8
Interest cost		10.5			10.3			5.8			5.0
Expected return on plan assets		(10.4	)		(11.3	)		(4.5	)		(3.5	)
Amortization of prior service credits		—			—			(0.1	)		—
Amortization of loss		3.7			4.9			0.4			0.4
Special termination benefits		—			—			0.1			—
Net periodic cost	$	4.5		$	6.1		$	5.1		$	4.7

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	Nine Months Ended
	US						Non-US
	September 28, 2007			September 29, 2006			September 28, 2007			September 29, 2006
Service cost	$	1.7		$	3.0		$	10.1		$	7.7
Interest cost		29.9			27.0			17.3			14.1
Expected return on plan assets		(32.2	)		(30.7	)		(13.4	)		(9.6	)
Amortization of prior service credits		—			—			(0.2	)		—
Amortization of loss		10.3			12.1			1.1			1.1
Special termination benefits		—			—			0.1			—
Net periodic cost	$	9.7		$	11.4		$	15.0		$	13.3

Other Post-Retirement Benefits

	Three Months Ended						Nine Months Ended
	September 28, 2007			September 29, 2006			September 28, 2007			September 29, 2006
Service cost	$	0.2		$	0.3		$	0.8		$	0.7
Interest cost		1.6			1.5			4.4			4.3
Amortization of prior service credits		(1.8	)		(2.0	)		(5.0	)		(5.2	)
Amortization of loss		1.0			0.9			2.6			3.3
Net periodic cost	$	1.0		$	0.7		$	2.8		$	3.1

Employer Contributions

The Company previously disclosed in its consolidated financial statements included in the 2006 Annual Report Form on Form 10-K that it anticipated no statutory funding requirements for the U.S. defined benefit plans in 2007. As of September 28, 2007, no contributions have been made to the U.S. plan in 2007 and there are no anticipated statutory funding requirements for the remainder of 2007. The Company’s contributions to non-US plans are estimated to be $22 million for the full year 2007.

NOTE 10. EARNINGS PER SHARE AND STOCK TRANSACTIONS

Basic earnings per share (EPS) is calculated by dividing net earnings by the weighted average number of common shares outstanding for the applicable period. Diluted EPS is calculated after adjusting the numerator and the denominator of the basic EPS calculation for the effect of all potential dilutive common shares outstanding during the period. Information related to the calculation of earnings per share of common stock is summarized as follows (in 000’s, except per share amounts):

	Earnings from Continuing Operations (Numerator)		Shares (Denominator)	Per Share Amount
For the Three Months Ended September 28, 2007:
Basic EPS	$	334,501	310,324	$	1.08
Adjustment for interest on convertible debentures		2,548	—
Incremental shares from assumed exercise of dilutive options		—	5,777
Incremental shares from assumed conversion of the convertible debentures		—	12,035
Diluted EPS	$	337,049	328,136	$	1.03

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	Earnings from Continuing Operations (Numerator)		Shares (Denominator)	Per Share Amount
For the Three Months Ended September 29, 2006:
Basic EPS	$	263,976	308,344	$	0.86
Adjustment for interest on convertible debentures		2,526	—
Incremental shares from assumed exercise of dilutive options		—	5,356
Incremental shares from assumed conversion of the convertible debentures		—	12,038
Diluted EPS	$	266,502	325,738	$	0.82
For the Nine Months Ended September 28, 2007:
Basic EPS	$	893,773	309,821	$	2.88
Adjustment for interest on convertible debentures		7,475	—
Incremental shares from assumed exercise of dilutive options		—	6,084
Incremental shares from assumed conversion of the convertible debentures		—	12,036
Diluted EPS	$	901,248	327,941	$	2.75
For the Nine Months Ended September 29, 2006:
Basic EPS	$	789,197	307,680	$	2.56
Adjustment for interest on convertible debentures		6,998	—
Incremental shares from assumed exercise of dilutive options		—	4,877
Incremental shares from assumed conversion of the convertible debentures		—	12,038
Diluted EPS	$	796,195	324,595	$	2.45

On May 15, 2007, the Company’s shareholders voted to approve an amendment to Danaher’s Certificate of Incorporation to increase the number of authorized shares of common stock of Danaher to a total of one billion shares, $.01 par value. Danaher’s Certificate of Incorporation was amended to reflect this change on May 16, 2007.

On April 21, 2005, the Company’s Board of Directors authorized the repurchase of up to 10 million shares of the Company’s common stock from time to time on the open market or in privately negotiated transactions. There is no expiration date for the Company’s repurchase program. During the second quarter of 2007, the Company repurchased 1,642,607 shares of Company common stock in open market transactions at an aggregate cost of $117 million. No shares were repurchased during the third quarter of 2007. The repurchases were funded from borrowings under the Company’s commercial paper program and from available cash. At September 28, 2007, the Company had approximately 3.4 million shares remaining for stock repurchases under the existing Board authorization. The timing and amount of any shares repurchased will be determined by the Company’s management based on its evaluation of market conditions and other factors. The repurchase program may be suspended or discontinued at any time. Any repurchased shares will be available for use in connection with the Company’s 1998 Stock Option Plan and the 2007 Stock Incentive Plan and for other corporate purposes. The Company expects to fund the repurchase program using the Company’s available cash balances, existing lines of credit or commercial paper borrowings.

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NOTE 11. SEGMENT INFORMATION

The Company reports under four segments: Professional Instrumentation, Medical Technologies, Industrial Technologies and Tools & Components. Segment information is presented consistently with the basis described in the 2006 Annual Report. There has been no material change in total assets or liabilities by segment except for the effect of the 2007 acquisitions (see Note 2) and the disposal of the power quality business (see Note 3). Segment results related to continuing operations the three and nine months ended September 28, 2007 and September 29, 2006 are shown below ($ in 000’s):

	Three Months Ended						Nine Months Ended
	September 28, 2007			September 29, 2006			September 28, 2007			September 29, 2006
Sales:
Professional Instrumentation	$	880,003		$	726,920		$	2,440,401		$	2,107,217
Medical Technologies		741,183			620,068			2,131,675			1,522,590
Industrial Technologies		773,178			731,986			2,340,942			2,231,906
Tool and Components		336,787			329,521			971,722			978,949
	$	2,731,151		$	2,408,495		$	7,884,740		$	6,840,662
Operating Profit:
Professional Instrumentation	$	200,122		$	149,732		$	534,275		$	447,190
Medical Technologies		96,405			83,541			260,367			159,516
Industrial Technologies		131,150			118,095			400,431			344,167
Tool and Components		53,391			51,267			132,424			139,550
Other		(18,134	)		(16,010	)		(51,558	)		(32,420	)
	$	462,934		$	386,625		$	1,275,939		$	1,058,003

The Company has reflected the gain on the sale of the First Technologies plc stock (refer to Note 2 for additional information) as a component of “other” in the above operating profit summary for the nine months ended September 29, 2006.

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

Management’s Discussion and Analysis of Financial Condition and Results of Operations is designed to provide a reader of the Company’s financial statements with a narrative from the perspective of Company management. The Company’s MD&A is divided into four main sections:

• Information Relating to Forward-Looking Statements

• Overview

• Results of Operations

• Liquidity and Capital Resources

INFORMATION RELATING TO FORWARD-LOOKING STATEMENTS

Certain information included or incorporated by reference in this document, in press releases, written statements or other documents filed with or furnished to the SEC, or in the Company’s communications and discussions through webcasts, phone calls, conference calls and other presentations and meetings, may be deemed to be “forward-looking statements” within the meaning of the federal securities laws. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including statements regarding: projections of revenue, margins, expenses, tax provisions (or reversals of tax provisions), earnings or losses from operations, cash flows, liquidity position, pension and benefit obligations and funding requirements, synergies, cost-control activities, cost savings or other financial items; plans, strategies and objectives of management for future operations, including statements relating to the Company’s stock repurchase program, potential acquisitions and executive compensation; trends, seasonality, growth or decline in the markets we sell into, future economic conditions or performance; the outcome of outstanding claims or legal proceedings; assumptions underlying any of the foregoing; and any other statements that address activities, events or developments that we believe or anticipate will or may occur in the future. Forward-looking statements may be characterized by terminology such as “believe,” “anticipate,” “should,” “would,” “intend,” “plan,” “will,” “expects,” “estimates,” “projects,” “positioned,” “strategy,” and similar expressions. These statements are based on assumptions and assessments made by the Company’s management in light of its experience and its perception of historical trends, current conditions, expected future developments and other factors it believes to be appropriate. These forward-looking statements are subject to a number of risks and uncertainties, including but not limited to the following:

• We face intense competition and if we are unable to compete effectively, we may face decreased demand or price reductions for our products.

• Technologies, product offerings and customer requirements in many of our markets change rapidly. If we fail to keep up with these changes, we may not be able to meet our customers’ needs and demand for our products may decline. If we pursue technologies that do not become commercially accepted, customers may not buy our products or use our services.

• Our acquisition of businesses could negatively impact our profitability and return on invested capital. Conversely, any inability to consummate acquisitions at our prior rate could negatively impact our growth rate.

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

• The resolution of contingent liabilities from businesses that we have sold could adversely affect our results of operations and financial condition.

• Our success depends on our ability to maintain and protect our intellectual property and avoid claims of infringement or misuse of third party intellectual property.

• We are subject to a variety of litigation in the course of our business that could adversely affect our results of operations and financial condition.

• Our operations expose us to the risk of environmental liabilities, costs, litigation and violations that could adversely affect our financial condition, results of operations and reputation.

• Our businesses are subject to extensive governmental regulation; failure to comply with those regulations could adversely affect our results of operations, financial condition and reputation.

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

• Adverse changes in our relationships with, or the financial condition or performance of, key distributors, resellers and other channel partners could adversely affect our results of operations.

• Any inability to hire, train and retain a sufficient number of skilled officers and other employees could impede our ability to compete successfully.

• Cyclical economic conditions have affected and may continue to adversely affect our financial condition and results of operations.

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

• Foreign currency exchange rates and commodity prices may adversely affect our results of operations and financial condition.

• If we cannot obtain sufficient quantities of materials, components and equipment required for our manufacturing activities at competitive prices and quality and on a timely basis, or if our manufacturing capacity does not meet demand, our business and financial results will suffer.

• Work stoppages, union and works council campaigns, labor disputes and other matters associated with our labor force could adversely impact our results of operations and cause us to incur incremental costs.

• International economic, political, legal, accounting and business factors could negatively affect our results of operations, cash flows and financial condition.

• Audits by tax authorities could result in additional tax payments for prior periods.

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

Any such forward-looking statements are not guarantees of future performance and actual results, developments and business decisions may differ materially from those envisaged by such forward-looking statements. These forward-looking statements speak only as of the date of the report, press release, statement, document, webcast or oral discussion in which they are made. The Company does not intend to update any forward-looking statement, all of which are expressly qualified by the foregoing. See Part I — Item 1A of Danaher’s Annual Report on Form 10-K for the year ended December 31, 2006, for a further discussion regarding some of the reasons that actual results may be materially different from those that we anticipate.

OVERVIEW

General

Danaher Corporation strives to create shareholder value through:

• delivering sales growth, excluding the impact of acquired businesses, in excess of the overall market growth for its products and services;

• upper quartile financial performance when compared against peer companies; and

• upper quartile cash flow generation from operations when compared against peer companies.

To accomplish these goals, the Company uses a set of tools and processes, known as the Danaher Business System (“DBS”), which are designed to continuously improve business performance in critical areas of quality, delivery, cost and innovation. Within the DBS framework, the Company also pursues a number of ongoing strategic initiatives intended to improve its operational performance, including global sourcing and innovative product development. The Company also acquires businesses that it believes can help it achieve the objectives described above, and believes that many acquisition opportunities remain available within its target markets. The Company will acquire businesses when they strategically fit with existing operations or when they are of such a nature and size as to establish a new strategic line of business. The extent to which appropriate acquisitions are made and effectively integrated can affect the Company’s overall growth and operating results. The Company also continually assesses the strategic fit of its existing businesses and may divest businesses that are not deemed to strategically fit with its ongoing operations or are not achieving the desired return on investment.

Danaher is a multinational corporation with global operations. Approximately 49% of Danaher’s sales were derived outside the United States in 2006. As a global business, Danaher’s operations are affected by worldwide, regional and industry economic and political factors. However, Danaher’s geographic and industry diversity, as well as the

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diversity of its product sales and services, has helped limit the impact of any one industry or the economy of any single country on the consolidated operating results. Given the broad range of products manufactured and geographies served, management does not use any indices other than general economic trends to predict the overall outlook for the Company. The Company’s individual businesses monitor key competitors and customers, including to the extent possible their sales, to gauge relative performance and the outlook for the future. In addition, the Company’s order rates are highly indicative of the Company’s future revenue and thus a key measure of anticipated performance. In those industry segments where the Company is a capital equipment provider, revenues depend on the capital expenditure budgets and spending patterns of the Company’s customers, who may delay or accelerate purchases in reaction to changes in their businesses and in the economy.

While differences exist among the Company’s businesses, the Company generally continued to see market growth during the three and nine months ended September 28, 2007. The Company’s year-over-year growth rates for the first nine months of 2007 reflect continued strength in global economic conditions, particularly in Europe and Asia, with more modest results in North America, and the continued shift of the Company’s operations into higher growth sectors of the economy. Growth rates slowed somewhat from the rate experienced in 2006 partially due to difficult comparisons with sales levels in the first nine months of 2006 within the Company’s product identification businesses and the impact of regulatory changes in the Company’s engine retarder business discussed below.

Acquisitions and Divestitures

On October 14, 2007, the Company and Tektronix, Inc. (Tektronix) entered into a definitive agreement pursuant to which the Company is making a cash tender offer to acquire all of the outstanding shares of common stock of Tektronix for $38.00 per share, for an aggregate price of approximately $2.8 billion, including transaction costs and net of cash acquired, to be followed by a second step cash-out merger at the offer price. The offer is subject to customary conditions, including tender of a majority of the outstanding shares into the offer, regulatory approvals and the absence of a material adverse change with respect to Tektronix. Danaher anticipates completing the offer in the fourth quarter of 2007.

Tektronix is a leading supplier of test, measurement, and monitoring products, solutions and services for engineers in the communications, computer, consumer electronics and education industries, as well as in military/aerospace, semiconductor and a broad range of other industries worldwide. Tektronix had annual revenues of approximately $1.1 billion in its most recently completed fiscal year, and would become part of Danaher’s electronic test platform included in the Professional Instrumentation segment.

Danaher anticipates financing the acquisition initially through borrowings under committed lines of credit that it expects to enter into, through the issuance of commercial paper using such lines of credit as credit support, or through a combination of these financing methods. Danaher anticipates that the ultimate financing for the acquisition will consist of one or more of the following: commercial paper borrowings, the issuance of debt securities and/or the issuance of equity or equity-linked securities.

In July 2007, the Company acquired all of the outstanding shares of ChemTreat, Inc. (ChemTreat) for a cash purchase price of $425 million including transaction costs. No cash was acquired in the transaction. ChemTreat is a leading provider of industrial water treatment products and services, and had annual revenues of $200 million in its most recent completed fiscal year. ChemTreat is part of the Company’s environmental business and its results are reported within the Professional Instrumentation segment. ChemTreat is expected to provide additional sales and earnings growth opportunities for the Company both through the growth of existing products and services and through the potential acquisition of complementary businesses. The Company financed the acquisition of ChemTreat primarily with proceeds from the issuance of commercial paper and to a lesser extent from available cash.

Also during July 2007, the Company completed the sale of its power quality business for a cash sales price of $275 million net of transaction costs and recorded an after-tax gain of $150 million ($0.45 per diluted share). Prior to the sale, this business was part of the Industrial Technologies segment. The Company has reported the power quality business as a discontinued operation in this Form 10-Q in accordance with Statement of Financial Accounting Standards No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets. Accordingly, the results of operations for all periods presented have been reclassified to reflect the power quality business as a discontinued operation.

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Outlook

The Company continues to operate in a highly competitive business environment in most markets and geographies served. The Company’s future performance will depend on its ability to address a variety of challenges and opportunities in the markets and geographies served, including trends toward increased utilization of the global labor force, consolidation of competitors, the expansion of market opportunities in Asia, increases in raw material costs and the possibility of slowing growth rates or contraction in some parts of the global economy. The Company will continue to assess market needs with the objective of positioning itself to provide superior products and services to its customers in a cost efficient manner. If Danaher successfully consummates the acquisition of Tektronix, Company management and other personnel will also be required to devote significant attention to the successful integration of that business.

Although the Company has a U.S. Dollar functional currency for reporting purposes, a substantial portion of its sales are generated in foreign currencies. Sales by subsidiaries operating outside of the United States are translated into U.S. Dollars using exchange rates effective during the respective period and as a result are affected by changes in exchange rates. The Company has generally accepted the exposure to exchange rate movements without using derivative financial instruments to manage this risk. Therefore, both positive and negative movements in currency exchange rates against the U.S. Dollar will continue to affect the reported amount of sales, profit, and assets and liabilities in the Company’s consolidated financial statements.

The impact of currency rates increased reported sales by 3% during both the three and nine month periods ended September 28, 2007, compared to the comparable periods of 2006. The following sensitivity analysis demonstrates on a theoretical basis how exchange rates at current levels could impact the Company’s results during the remainder of 2007 compared to 2006. Applying the exchange rates in effect at September 28, 2007 to the translation of the Company’s results of operations for the fourth quarter of 2006 would result in approximately 4% higher overall Company sales during that period than what was actually reported using the rates in effect during 2006. Any further weakening of the U.S. dollar against other major currencies would benefit the Company’s sales and results of operations. Any strengthening of the U.S. dollar against other major currencies would adversely impact the Company’s sales and results of operations.

RESULTS OF OPERATIONS

Consolidated sales from continuing operations for the three months ended September 28, 2007 increased 13.5% over the comparable period of 2006. Sales from existing businesses (references to “sales from existing businesses” in this report include sales from acquired businesses starting from and after the first anniversary of the acquisition, but exclude currency effect) contributed 5% growth. Acquisitions accounted for 5.5% growth. The impact of currency translation on sales increased reported sales by 3% as the U.S. dollar was weaker against other major currencies in the three months ended September 28, 2007 compared to the comparable period of 2006.

For the nine months ended September 28, 2007, consolidated sales from continuing operations increased 15.5% over the comparable period in 2006. Sales from existing businesses contributed 4% growth. Acquisitions accounted for 8.5% growth and currency translation contributed 3% growth.

The growth in sales from acquisitions in the three and nine months ended September 28, 2007 primarily related to acquisitions in the Company’s Medical Technologies segment. The acquisition of Sybron Dental in May 2006, and to a lesser extent the acquisition of Vision at the end of 2006, both of which are part of the Medical Technologies segment, have contributed the majority of this year-over-year acquisition-related revenue growth. In addition, the acquisition of ChemTreat in July 2007, included in the Professional Instrumentation segment, as well as certain other smaller businesses in the Professional Instrumentation and Industrial Technologies segments, has contributed to acquisition growth.

Operating profit margins from continuing operations for the Company were 17% in the three months ended September 28, 2007 compared to 16.1% in the comparable period of 2006. Operating profit margin improvements in the Company’s existing businesses contributed 120 basis points of margin improvement primarily as a result of broad-based operating profit margin improvements across the Company’s business segments. The dilutive impact of acquisitions reduced operating profit margins by 30 basis points for the three months ended September 28, 2007.

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Operating profit margins from continuing operations for the Company were 16.2% for the nine months ended September 28, 2007 compared to 15.5% in the comparable period of 2006. Operating profit margin improvements in the Company’s existing businesses contributed 90 basis points of this margin improvement. The dilutive impact of acquisitions, reduced operating profit margins by 20 basis points for the nine months ended September 28, 2007 compared to the same period of 2006. During the nine months ended September 28, 2007, a pre-tax gain of $12 million was recorded by the Company upon collection of indemnification proceeds related to a lawsuit contributing 15 basis points of operating margin improvement. However, on a year-over-year basis this indemnification gain was more than offset by a gain on the sale of an investment in the second quarter of 2006 which contributed 20 basis points to operating profit margins for the nine months ended September 29, 2006. In addition, the comparison of operating profit margins for the nine months ended September 28, 2007 compared with the comparable period of 2006 was negatively impacted by the 2006 recovery of certain previously written-off receivables which increased operating profit margins by 5 basis points in the nine month period ended September 29, 2006. Further, the comparison of operating profit margins for the nine months ended September 28, 2007 with the comparable period of 2006 benefited from the 2006 period including inventory charges resulting from the acquisition of Sybron Dental which adversely impacted 2006 operating profit margins by 15 basis points.

Operating profit margins from existing businesses for the three and nine month periods ended September 28, 2007 benefited from on-going cost reduction initiatives through application of DBS, low-cost region sourcing and production initiatives and the additional leverage created from sales growth compared with the prior year comparable period. The ongoing application of DBS in each of our segments, and the Company’s low-cost region sourcing and production initiatives, are expected to further improve operating margins at both existing and newly acquired businesses in future periods.

The following table summarizes sales from continuing operations by business segment for each of the periods indicated:

	Three Months Ended				Nine Months Ended
($ in 000’s)	September 28, 2007		September 29, 2006		September 28, 2007		September 29, 2006
Professional Instrumentation	$	880,003	$	726,920	$	2,440,401	$	2,107,217
Medical Technologies		741,183		620,068		2,131,675		1,522,590
Industrial Technologies		773,178		731,986		2,340,942		2,231,906
Tools and Components		336,787		329,521		971,722		978,949
Total	$	2,731,151	$	2,408,495	$	7,884,740	$	6,840,662

PROFESSIONAL INSTRUMENTATION

Businesses in the Professional Instrumentation segment offer professional and technical customers various products and services that are used in connection with the performance of their work. The Professional Instrumentation segment encompasses two strategic businesses: Environmental and Electronic Test. These businesses produce and sell compact, professional electronic test tools and calibration equipment; water quality instrumentation and consumables and ultraviolet disinfection systems; industrial water treatment solutions; and retail/commercial petroleum products and services, including dispensers, payment systems, underground storage tank leak detection and vapor recovery systems.

Professional Instrumentation Selected Financial Data ($ in 000’s):

	Three Months Ended						Nine Months Ended
	September 28, 2007			September 29, 2006			September 28, 2007			September 29, 2006
Sales	$	880,003		$	726,920		$	2,440,401		$	2,107,217
Operating profit		200,122			149,732			534,275			447,190
Depreciation and amortization		14,853			11,957			40,562			36,911
Operating profit as a % of sales		22.7	%		20.6	%		21.9	%		21.2	%
Depreciation and amortization as a % of sales		1.7	%		1.6	%		1.7	%		1.8	%

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Components of Sales Growth	Three Months Ended September 28, 2007 vs. Comparable 2006 Period		Nine Months Ended September 28, 2007 vs. Comparable 2006 Period
Existing Businesses	6.5	%	7.0	%
Acquisitions	11.5	%	6.0	%
Impact of currency translation	3.0	%	3.0	%
Total	21.0	%	16.0	%

Segment Overview

Sales from existing businesses increased in both of the segment’s strategic lines of business. Prices accounted for approximately 1.5% sales growth on a year-over-year basis for both the three and nine month periods ended September 28, 2007 and the impact of that increase is reflected in sales from existing businesses. Lower operating margins of acquired businesses reduced segment operating margins by 80 basis points and 35 basis points for the three and nine months periods ended September 28, 2007, respectively, compared to the comparable periods of 2006. In addition, comparisons of the segment’s operating profit margins for the nine months ended September 28, 2007 with the comparable period in 2006 are impacted by:

• a gain on the sale of real estate in the second quarter of 2006, which increased operating profit margins by 10 basis points in the first nine months of 2006; and

• recovery of certain previously written-off receivables which increased operating profit margins by 20 basis points in the first nine months of 2006.

Overview of Businesses within Professional Instrumentation Segment

Environmental. Sales from the Company’s environmental businesses, representing 65% of segment sales for the three months ended September 28, 2007, increased 21.5% in the third quarter of 2007 compared to the comparable period of 2006. Sales from existing businesses accounted for 5.5% growth, currency translation accounted for 3.5% growth and acquisitions contributed 12.5% growth.

For the nine months ended September 28, 2007, sales from the Company’s environmental business increased 14% compared to the same period of 2006. Sales from existing businesses provided 6% growth. Currency translation accounted for 3.5% growth. Acquisitions contributed 4.5% of growth for the nine month period.

The Company’s water quality businesses reported low-double digit revenue growth for the three and nine month periods ended September 28, 2007, compared to the comparable 2006 periods, primarily as a result of strength in sales of laboratory and process instrumentation products in North America, Europe and Asia. Investment in sales forces and other growth initiatives and continued penetration of the Asian markets helped drive this growth. In addition, strong sales of UV disinfection equipment in the North American wastewater markets and wastewater reclamation projects in Australia contributed to the growth.

The Gilbarco Veeder-Root retail petroleum equipment business reported low-single digit revenue declines for the three month period ended September 28, 2007 and low-single digit growth for the nine month period ended September 28, 2007, compared to the same 2006 periods. The business’ point of sale and payment systems business enjoyed robust growth in the third quarter, primarily in Europe. In addition, the business experienced strong demand for its recently introduced advanced tank gauge product offerings in North America and China in the third quarter. These sales gains were more than offset by difficult prior year comparisons, a result of very strong dispenser sales in the third quarter of 2006 due to extensive refurbishment activity in Europe and regulatory mandates in Mexico.

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Electronic Test. Electronic test sales, representing 35% of segment sales in the three months ended September 28, 2007, increased 21% during the three months ended September 28, 2007 over the comparable 2006 period. Sales from existing businesses accounted for 9% growth compared with 2006. Acquisitions accounted for 9.5% growth. Currency translation accounted for 2.5% growth.

Electronic test sales for the nine months ended September 28, 2007 grew 19.5% compared to the same period in 2006. Sales from existing businesses accounted for 9% growth. Acquisitions accounted for 8% growth. Currency translation accounted for 2.5% growth.

Strong sales in the North American electrical and industrial channels were the primary contributors to the growth in the three months ended September 28, 2007, driven by new product offerings in the thermography, power quality test and process calibration markets. The business experienced lower year-over-year growth in Europe during the third quarter compared with the year-over-year growth rate during the first six months of 2007, as growth in thermography products reached more typical levels following the initial period of a new product introduction. Sales growth rates in Asia and Latin America accelerated from prior levels during the third quarter of 2007. The Company’s network test business reported mid-teens growth in the three month period ended September 28, 2007 and low-double digit growth for the nine month period ended September 28, 2007, compared to the same period of 2006. Cable test equipment sales in Europe and North America and large orders from telecommunications carriers in the United States in the second and third quarters of 2007 were the primary drivers of this growth.

MEDICAL TECHNOLOGIES

The Medical Technologies segment consists of businesses which offer dentists, other doctors and hospital and research professionals various products and services that are used in connection with the performance of their work.

Medical Technologies Selected Financial Data ($ in 000’s):

	Three Months Ended						Nine Months Ended
	September 28, 2007			September 29, 2006			September 28, 2007			September 29, 2006
Sales	$	741,183		$	620,068		$	2,131,675		$	1,522,590
Operating profit		96,405			83,541			260,367			159,516
Depreciation and amortization		28,803			22,281			87,048			53,304
Operating profit as a % of sales		13.0	%		13.5	%		12.2	%		10.5	%
Depreciation and amortization as a % of sales		3.9	%		3.6	%		4.1	%		3.5	%

Components of Sales Growth	Three Months Ended September 28, 2007 vs. Comparable 2006 Period		Nine Months Ended September 28, 2007 vs. Comparable 2006 Period
Existing Businesses	7.5	%	7.5	%
Acquisitions	8.0	%	28.5	%
Impact of currency translation	4.0	%	4.0	%
Total	19.5	%	40.0	%

Segment Overview

Prices accounted for approximately 1% of sales growth on a year-over-year basis in both the three and nine month periods ended September 28, 2007 and the impact of that increase is reflected in sales from existing businesses. Operating profit margin improvements in the segment’s existing operations contributed 40 and 55 basis points to the overall operating margin improvement for the three and nine month periods ended September 28, 2007, respectively. Operating profit margin improvements within the life sciences instrumentation business were partially offset by lower

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operating profit margins in the dental equipment businesses. In addition, operating margins in the third quarter of 2006 were higher than the margins experienced for the full year 2006 reflecting higher than normal profitability within the segment’s Sybron business during the quarter which benefited from particularly strong sales growth in the third quarter of 2006 as a result of sales incentives that were based on the business’ former September 30 year end. Comparisons between periods were also affected by the following:

• Lower operating margins of recently acquired businesses, primarily Vision, reduced margins for the three months ended September 28, 2007 by 90 basis points. For the nine months ended September 28, 2007 compared to the same period of 2006, operating margins of recent acquisitions improved segment operating profit margins by 15 basis points as the higher overall operating profit margins associated with the Sybron Dental business more than offset the dilutive impact of Vision’s margins during the period.

• Operating profit margins for the nine month period ended September 28, 2007 compared with the comparable period of 2006 benefited from the second quarter 2006 period including inventory charges resulting from the acquisition of Sybron Dental. These charges adversely impacted operating profit margins for the first nine months of 2006 by 70 basis points.

Overview of Businesses within Medical Technologies Segment

The segment’s dental business experienced mid-single digit growth in the three and nine month periods ended September 28, 2007 compared to the same periods of 2006. The segment’s dental technology businesses growth rate improved sequentially from the second to the third quarter of 2007. The business experienced growth in the North American and Latin American markets, primarily in its instrument and treatment unit product offerings. Sales declined in Asia reflecting weak overall Japanese market demand as well as product approval delays in South Korea. The Company completed two acquisitions in the first quarter of 2007 to further enhance the business’ imaging product offerings. Growth in the dental consumables business slowed sequentially from the second quarter to third quarter of 2007, as the Company changed the timing of the business’ year end sales bonus. This timing change negatively impacted third quarter sales performance but is expected to positively impact the fourth quarter 2007 performance.

Radiometer’s critical care diagnostics business experienced low-double digit growth in the three months ended September 28, 2007 and high-single digit growth for the nine months ended September 28, 2007 compared to the same periods of 2006. Accelerating sales of diagnostic instruments, with particular strength in Europe and Asia/Pacific and somewhat lower growth rates in North America, drove Radiometer’s sales growth for the three months ended September 28, 2007. The increase in product placements is expected to result in increased consumables sales in future periods. New product introductions resulting from the business’ continued research and development efforts are also contributing to this growth.

Leica Microsystems’ life science instrumentation business experienced low-double digit growth in the three and nine month periods ended September 28, 2007 compared to the same periods of 2006. Increased demand in Europe and the U.S. for confocal microscopes in 2007 drove this growth. The integration of Vision with Leica Microsystems has been completed, but the results of Vision continue to be included as a component of acquisition growth since this business was acquired in November 2006. Vision’s business grew at double-digit rates in the three and nine month periods ended September 28, 2007 compared to the same periods of 2006 when it was a stand-alone company.

INDUSTRIAL TECHNOLOGIES

Businesses in the Industrial Technologies segment manufacture products and sub-systems that are typically incorporated by customers and systems integrators into production and packaging lines as well as incorporated by original equipment manufacturers (OEMs) into various end-products. Many of the businesses also provide services to support their products, including helping customers integrate and install the products and helping ensure product uptime. The Industrial Technologies segment encompasses two strategic businesses, Motion and Product Identification, and two focused niche businesses, Aerospace and Defense, and Sensors & Controls. These businesses produce and sell product identification equipment and consumables; motion, position, speed, temperature, and level instruments and sensing devices; liquid flow and quality measuring devices; safety devices; and electronic and mechanical counting and controlling devices. In the third quarter of 2007, the Company disposed of the power quality businesses that were part of this segment and all current and prior year period results of the segment have been adjusted to exclude the results of these discontinued operations.

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Industrial Technologies Selected Financial Data ($ in 000’s):

	Three Months Ended						Nine Months Ended
	September 28, 2007			September 29, 2006			September 28, 2007			September 29, 2006
Sales	$	773,178		$	731,986		$	2,340,942		$	2,231,906
Operating profit		131,150			118,095			400,431			344,167
Depreciation and amortization		15,030			15,173			46,147			45,276
Operating profit as a % of sales		17.0	%		16.1	%		17.1	%		15.4	%
Depreciation and amortization as a % of sales		1.9	%		2.1	%		2.0	%		2.0	%

Components of Sales Growth	Three Months Ended September 28, 2007 vs. Comparable 2006 Period		Nine Months Ended September 28, 2007 vs. Comparable 2006 Period
Existing Businesses	2.0	%	1.0	%
Acquisitions	0.5	%	1.0	%
Impact of currency translation	3.0	%	3.0	%
Total	5.5	%	5.0	%

Segment Overview

Price accounted for approximately 1.5% of sales growth from continuing operations on a year-over-year basis in both the three and nine month periods ended September 28, 2007 and the impact of that increase is reflected in sales from existing businesses.

Operating profit margin improvements in the segment’s existing operations contributed 90 and 110 basis points to the overall operating margin improvement for the three and nine month periods ended September 28, 2007, respectively. This margin improvement was driven in part by continued margin expansion in the product identification and motion businesses as well as the impact of lower levels of lower-margin United States Postal Service (USPS) sales in 2007 compared to 2006. In addition, during the second quarter of 2007, the segment recorded a pre-tax gain of $12 million upon collection of indemnification proceeds related to a lawsuit, which improved operating profit margins by 55 basis points for the nine month period ended September 28, 2007. Recently acquired businesses had a minor dilutive impact on overall operating profit margins for the nine month period ended September 28, 2007.

Overview of Businesses within Industrial Technologies Segment

Motion. Sales in the Company’s motion business, representing 33% of segment sales in the quarter, declined approximately 0.5% in the three months ended September 28, 2007 over the comparable 2006 period. Sales from existing businesses accounted for a 4% decrease in sales and currency translation accounted for 3.5% growth in sales for the three months ended September 28, 2007 compared with the same period of 2006.

For the nine months ended September 28, 2007, sales from the Company’s motion business increased 1.5% compared to the same period of 2006. Sales from existing businesses accounted for a 2% decrease in sales and currency translation accounted for 3.5% growth in sales for the nine months ended September 28, 2007 compared with the same period of 2006. There were no acquisitions in the business in 2006 or the first nine months of 2007.

The motion business experienced sales growth in custom motors particularly in Asia and North America, and sales growth in OEM applications in Europe. Sales to the elevator and electric vehicle markets and sales of motors into the aerospace and defense markets also increased on a year-over-year basis in the three and nine month periods. However, these factors were more than offset by year-over-year sales declines for the three and nine month periods by weakness in certain technology end markets as well as declines in the miniature motors business reflecting reduced customer demand.

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Product Identification. The product identification businesses accounted for 29% of segment sales in the quarter. For the three months ended September 28, 2007, product identification sales grew 6% compared to the comparable period of 2006. Sales from existing businesses contributed a 1.5% growth, currency translation impacts accounted for 3.5% growth and acquisitions contributed 1% growth.

For the nine months ended September 28, 2007, product identification sales grew 2% compared to the comparable period of 2006. Sales from existing businesses declined 2.5%, acquisitions accounted for 1.5% growth and currency translation impacts accounted for 3% growth.

As previously reported, the year-over-year decline in sales from existing operations for the nine months ended September 28, 2007 resulted from the business completing several large systems installation projects with the USPS during the first nine months of 2006 which did not repeat in the first nine months of 2007. Sales for the business’ non-USPS marking products grew at a mid-single digit rates during the three months ended September 28, 2007 compared with the same period in 2006. Strong equipment and after-market sales across all major regions, drove this growth with particular strength in China, Latin America and Europe, due in part to increased investments in the business’ sales force and new product launches. This growth was partially offset by continued declines in USPS business in the third quarter of 2007 compared with 2006, but at reduced levels from that experienced in the first six months of 2007.

Focused Niche Businesses. The segment’s niche businesses in the aggregate reported approximately 10% sales growth in both the three and nine month periods ended September 28, 2007. This growth was driven by strong sales growth from existing businesses in the Company’s aerospace and defense businesses. The Company’s sensors and controls business experienced year-over-year declines in sales for the three and nine month periods ended September 28, 2007, reflecting continued softness in the semi-conductor and electronic assembly markets.

TOOLS & COMPONENTS

The Tools & Components segment is one of the largest producers and distributors of general purpose and specialty mechanics hand tools. Other products manufactured by the businesses in this segment include toolboxes and storage devices; diesel engine retarders; wheel service equipment; drill chucks; and custom-designed fasteners and components.

Tools & Components Selected Financial Data ($ in 000’s):

	Three Months Ended						Nine Months Ended
	September 28, 2007			September 29, 2006			September 28, 2007			September 29, 2006
Sales	$	336,787		$	329,521		$	971,722		$	978,949
Operating profit		53,391			51,267			132,424			139,550
Depreciation and amortization		4,981			5,372			15,742			16,258
Operating profit as a % of sales		15.9	%		15.6	%		13.6	%		14.3	%
Depreciation and amortization as a % of sales		1.5	%		1.6	%		1.6	%		1.7	%

Components of Sales Growth	Three Months Ended September 28, 2007 vs. Comparable 2006 Period		Nine Months Ended September 28, 2007 vs. Comparable 2006 Period
Existing Businesses	3.0	%	0.0	%
Product Line Divestiture	(1.0	)%	(1.0	)%
Impact of currency translation	0.0	%	0.0	%
Total	2.0	%	(1.0	)%

Prices accounted for 2% sales growth on a year-over-year basis and the impact of that increase is reflected in sales from existing businesses. As previously reported, sales from existing businesses for the three and nine month periods

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ended September 28, 2007 reflect the impact of certain regulatory requirements that became effective at the beginning of 2007 which accelerated demand for the Company’s engine retarder products in 2006 and have adversely impacted demand in 2007.

Operating profit margins for the segment were 15.9% and 13.6% in the three and nine month periods ended September 28, 2007 compared to 15.6% and 14.3% in the respective comparable periods of 2006. Costs associated with workforce reductions and adjustments to production levels to match demand in the engine retarder business decreased operating profit margins by 25 and 90 basis points for the three and nine month periods ended September 28, 2007, respectively, compared with the same periods of 2006. Operating profit margins improved during the three months ended September 28, 2007 due to increases in production volume and favorable product mix during the quarter. The Company expects operating margins to decline in the fourth quarter of 2007 as production levels decline, product mix returns to normal levels, and as a result of planned restructuring activities with the business. In addition, the Company expects lower production levels at the engine retarder business to continue to adversely impact revenues and operating margins for the balance of 2007.

Overview of Businesses within the Tools & Components Segment

Mechanics hand tools sales, representing 69% of segment sales in the quarter, grew 3% and 1.5% for the three and nine months ended September 28, 2007, respectively, compared with the analogous 2006 periods. The segment’s Matco business grew at a modest rate for the three months ended September 28, 2007 as the business benefited from recent product introductions and year over year price increases. The retail hand tool business experienced strength in China and in its export business to Europe in addition to year-over-year sales growth in certain of its retail channels. This performance was partially offset by a year-over-year decline in sales to Sears/K-Mart, the retail hand tools business’ largest customer. Inventory reductions and soft same-store sales continue to adversely impact sales to Sears/K-Mart. The segment’s niche businesses experienced flat sales for the three months ended September 28, 2007 and mid-single digit sales declines for the nine months ended September 28, 2007 compared with the comparable periods of 2006. The impact of the regulatory issue noted above was partially offset by improved performance in the segment’s wheel service business during the third quarter of 2007.

GROSS PROFIT

	Three Months Ended						Nine Months Ended
($ in 000’s)	September 28, 2007			September 29, 2006			September 28, 2007			September 29, 2006
Sales	$	2,731,151		$	2,408,495		$	7,884,740		$	6,840,662
Cost of sales		1,481,940			1,319,391			4,294,375			3,823,429
Gross profit		1,249,211			1,089,104			3,590,365			3,017,233
Gross profit margin		45.7	%		45.2	%		45.5	%		44.1	%

The increase in gross profit margin from continuing businesses in the three and nine month periods ended September 28, 2007 compared to 2006 resulted from leverage on increased sales volume, the on-going manufacturing cost improvements in existing business units driven by our DBS processes and low-cost region initiatives, generally higher gross profit margins in businesses recently acquired, and cost reductions in recently acquired business units. Increases in selling prices also contributed to gross profit margin improvement. Gross profit margins also improved due to lower-margin sales to the United States Postal Service in the product identification business comprising a smaller proportion of sales during the three and nine month period compared to the comparable prior year periods. The gross margins for the nine-month period ended September 28, 2007 also benefited from the inclusion of nine months of gross margin associated with Sybron as compared to the comparable period of the prior year when four months were included as the acquisition occurred in May 2006.

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OPERATING EXPENSES

	Three Months Ended						Nine Months Ended
($ in 000’s)	September 28, 2007			September 29, 2006			September 28, 2007			September 29, 2006
Sales	$	2,731,151		$	2,408,495		$	7,884,740		$	6,840,662
Selling, general and administrative expenses		655,116			584,561			1,943,919			1,645,434
Research and development expenses		131,161			118,680			384,841			330,175
SG&A as a % of sales		24.0	%		24.3	%		24.7	%		24.1	%
R&D as % of sales		4.8	%		4.9	%		4.9	%		4.8	%

During the three months ended September 28, 2007, selling, general and administrative expenses as a percentage of sales decreased 30 basis points from the comparable 2006 period. During the nine months ended September 28, 2007, selling, general and administrative expenses as a percentage of sales increased 60 basis points from 2006 levels. Year-over-year increases in selling, general and administrative expenses resulting from recently acquired businesses (principally Sybron Dental and Vision) which have relatively higher operating expense structures, as well as additional spending to fund growth opportunities throughout the Company were offset in the three months ended September 28, 2007 by operating leverage from higher sales during the period as well as the recovery of certain previously written-off receivable balances.

Research and development expenses, which consist principally of internal and contract engineering personnel costs, were consistent as a percentage of sales in all periods. The Company continues to invest in new product development within all of its businesses, with particular emphasis on the medical technologies, electronic test and environmental businesses.

INTEREST COSTS AND FINANCING TRANSACTIONS

For a description of the Company’s outstanding indebtedness, please refer to “–Liquidity and Capital Resources – Financing Activities and Indebtedness” below.

Interest expense of $25.7 million in the three months ended September 28, 2007 was $0.8 million lower than in the corresponding 2006 period. Interest expense of $76.9 million in the nine months ended September 28, 2007 was $23.3 million higher than in the corresponding 2006 period. The increase in interest expense during the nine months ended September 28, 2007 is primarily due to higher debt levels during the period, primarily due to borrowings incurred to fund the acquisition of Sybron Dental and Vision which occurred in 2006. For the three months ended September 28, 2007, the impact of lower average outstanding debt balances during the period compared to the same period of 2006 was offset by higher overall interest rates on European commercial paper borrowings in the 2007 period.

Interest income of $0.8 million and $3.4 million was recognized in the three and nine month periods ended September 28, 2007, respectively, which represents a reduction in interest income from the corresponding periods of 2006. Average invested cash balances were lower in the first nine months of 2007 compared to 2006 due to employing cash balances to complete several acquisitions in 2006 and the first nine months of 2007 as well as to repurchase shares of Company common stock.

INCOME TAXES

The Company adopted the provisions of FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes, on January 1, 2007. As a result of the implementation of Interpretation No. 48, the Company recognized a decrease in the liability for unrecognized tax benefits of $63 million, which was accounted for as an increase to the January 1, 2007 balance of retained earnings. As of the date of adoption and after the impact of recognizing the decrease in liability noted above, the Company’s unrecognized tax benefits totaled $254 million, and as of September 28, 2007, totaled $328 million. See Note 4 to the Condensed Consolidated Financial Statements for further discussion.

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The Company’s effective tax rate can be affected by changes in the mix of earnings in countries with differing statutory tax rates (including as a result of business acquisitions and dispositions), changes in the valuation of deferred tax assets and liabilities, accruals related to contingent tax liabilities, the results of audits and examinations of previously filed tax returns (as discussed below) and changes in tax laws. The tax effect of significant unusual items or changes in tax regulations is reflected in the period in which they occur. The Company’s effective tax rate for the first nine months of 2007 differs from the United States federal statutory rate of 35% primarily as a result of the lower effective tax rates that apply to certain earnings from operations outside of the United States. No provisions for United States income taxes have been made with respect to earnings that are planned to be reinvested indefinitely outside the United States. The amount of United States income taxes that may be applicable to such earnings is not readily determinable given the various tax planning alternatives the Company could employ should it decide to repatriate these earnings. As of December 31, 2006, the total amount of earnings planned to be reinvested indefinitely outside the United States was $3.4 billion.

The amount of income taxes the Company pays is subject to ongoing audits by federal, state and foreign tax authorities, which often result in proposed assessments. Management performs a comprehensive review of its global tax positions on a quarterly basis and accrues amounts for contingent tax liabilities. Based on these reviews and the result of discussions and resolutions of matters with certain tax authorities and the closure of tax years subject to tax audit, reserves are adjusted as necessary. However, future results may include favorable or unfavorable adjustments to the Company’s estimated tax liabilities in the period the assessments are determined or resolved. Additionally, the jurisdictions in which the Company’s earnings and/or deductions are realized may differ from current estimates.

The effective tax rate for continuing operations was 23.6% and 25.7% in the three and nine months periods ended September 28, 2007, respectively, as compared to 26.9% and 22.0% in the three and nine months periods ended September 29, 2006, respectively. The effective tax rate for the three months ended September 28, 2007 is lower than the rate used for the first six months of the year as revised estimates, primarily related to the mix and taxation of earnings related to US and non-U.S. subsidiaries, resulted in a reduction of the income tax provision of approximately $8 million during the quarter. The Company now expects the effective tax rate for the balance of 2007 to be approximately 26.2%. During the three months ended September 28, 2007, new tax legislation was signed into law in several taxing jurisdictions, most notably in Germany and Denmark, reducing income tax rates for 2008 and future periods. These changes resulted in a reduction in net deferred tax liabilities and a like reduction to income tax expense for the quarter as required under FASB Statement 109, Accounting for Income Taxes. The lower statutory rates are expected to be offset by other statutory changes in these jurisdictions, such that it is expected that the new legislation will not materially reduce the Company’s effective tax rate in future years. The benefit from this tax rate reduction was partially offset by establishing income tax reserves related to uncertain tax positions in various taxing jurisdictions.

INFLATION

The effect of broad based inflation on the Company’s operations has not been significant in either the first nine months of 2007 or 2006. Though market forces have driven significant increases in the costs of steel and petroleum-based products over the last three years, the costs of these materials appear to have stabilized. The costs of non-ferrous metals have also generally increased over the last eighteen months, which have impacted certain of the Company’s businesses. To the extent appropriate, the Company is passing along certain of these cost increases to customers.

FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

The Company is exposed to market risk from changes in interest rates, foreign currency exchange rates and credit risk, which could impact its results of operations and financial condition. The Company addresses its exposure to these risks through its normal operating and financing activities. In addition, the Company’s broad-based business activities help to reduce the impact that volatility in any particular area or related areas may have on its operating earnings as a whole.

Interest Rate Risk

Changes in interest rates would change the fair value of the Company’s fixed-rate long-term debt, due to the difference between the market interest rate and the rate of interest at the date of purchase or issuance of the fixed-rate debt. Sensitivity analysis is one technique used to evaluate this potential impact. Based on a hypothetical, immediate 100 basis-point increase in interest rates at September 28, 2007, the market value of the Company’s fixed-rate long-term

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debt would decrease by $40 million. This methodology has certain limitations, and these hypothetical gains or losses would not be reflected in the Company’s results of operations or financial condition under current accounting principles. In January 2002, the Company entered into two interest rate swap agreements for the term of the $250 million aggregate principal amount of 6.1% notes due 2008 having an aggregate notional principal amount of $100 million whereby the effective interest rate on $100 million of these notes is the six month LIBOR rate plus 0.425%. In accordance with SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities”, as amended, the Company accounts for these swap agreements as fair value hedges. These instruments qualify as “effective” or “perfect” hedges.

Other than the above noted swap arrangements, there were no material derivative financial instrument transactions during any of the periods presented. Additionally, the Company does not have significant commodity contracts or derivatives.

Exchange Rate Risk

The Company has a number of manufacturing sites throughout the world and sells its products globally. Assets and liabilities denominated in a foreign currency, transactions arising from international trade and international financing activities between subsidiaries all expose the Company to market risk from changes in foreign currency exchange rates. The Company is exposed to movements in the exchange rates of various currencies against the United States Dollar and against the currencies of other countries in which it manufactures and sells products and services, or in which it denominates assets and liabilities. In particular, the Company has more sales in European currencies than it has expenses in those currencies. Therefore, when European currencies strengthen or weaken against the U.S. Dollar, operating profits are increased or decreased, respectively. The Eurobond Notes described below, as well as the European component of the commercial paper program which, as of September 28, 2007, had outstanding borrowings equivalent to $926 million, provides a natural hedge to a portion of the Company’s European net asset position.

Credit Risk

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist of cash and temporary investments, interest rate swap agreements and trade accounts receivable. The Company is exposed to credit losses in the event of nonperformance by counter parties to its financial instruments. The Company anticipates, however, that counter parties will be able to fully satisfy their obligations under these instruments. The Company places cash and temporary investments and its interest rate swap agreements with various high-quality financial institutions throughout the world, and exposure is limited at any one institution. Although the Company does not obtain collateral or other security to support these financial instruments, it does periodically evaluate the credit standing of the counter party financial institutions. In addition, concentrations of credit risk arising from trade accounts receivable are limited due to the diversity of its customers. The Company performs ongoing credit evaluations of its customers’ financial conditions and obtains collateral or other security when appropriate.

LIQUIDITY AND CAPITAL RESOURCES

Management assesses the Company’s liquidity in terms of its ability to generate cash to fund its operating, investing and financing activities. The Company continues to generate substantial cash from operating activities and remains in a strong financial position, with resources available for reinvestment in existing businesses, strategic acquisitions and managing its capital structure on a short and long-term basis.

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Overview of Cash Flows and Liquidity

	($ in 000’s)
	Nine Months Ended September 28, 2007			Nine Months Ended September 29, 2006
Operating cash flows from continuing operations	$	1,127,994		$	1,072,039
Operating cash flows from discontinued operations		(53,533	)		12,014
Net cash flows from operating activities		1,074,461			1,084,053
Purchases of property, plant and equipment		(100,186	)		(98,572	)
Cash paid for acquisitions		(790,598	)		(2,173,180	)
Cash paid for investment in acquisition target and other marketable securities		(23,219	)		(84,102	)
Proceeds from sale of investment and divestitures		299,642			98,485
Other sources		14,118			7,869
Investing cash flows from continued operations		(600,243	)		(2,249,500	)
Investing cash flows from discontinued operations		(722	)		(717	)
Net cash used in investing activities		(600,965	)		(2,250,217	)
Proceeds from the issuance of common stock		165,266			78,274
Borrowings, net of repayments		(610,457	)		1,050,655
Purchase of treasury stock		(117,486	)		—
Payment of dividends		(24,735	)		(18,425	)
Net cash provided by (used in) financing activities		(587,412	)		1,110,504

• Operating cash flow from continuing operations, a key source of the Company’s liquidity, was $1,128 million for the first nine months of 2007, an increase of $56 million, or 5% as compared to the comparable period of 2006. Earnings growth contributed an additional $105 million to operating cash flow from continuing operations in the first nine months of 2007 compared to the comparable period of 2006. Non-cash charges for depreciation, amortization and stock compensation included in net earnings contributed an additional $39 million to operating cash flow from continuing operations for the first nine months of 2007 compared with the same period in 2006. The Company paid additional income taxes during the first nine months of 2007 which reduced year-over-year operating cash flow from continuing operations by $112 million and partially offset the positive factors noted above.

• As of September 28, 2007, the Company held $209 million of cash and cash equivalents.

• Acquisitions constituted the most significant use of cash in all periods presented. The Company acquired ten companies and product lines during the first nine months of 2007 and completed the acquisition of the remaining shares of Vision not owned as of December 31, 2006, for total consideration of $791 million in cash, including transaction costs and net of cash acquired. In the three months ended September 28, 2007, the Company acquired three companies for total consideration of $441 million in cash, including transaction costs and net of cash acquired.

• In July 2007, the Company completed the sale of its power quality business generating approximately $275 million of net cash proceeds.

Operating Activities

Cash flows from operating activities can fluctuate significantly from period to period, as working capital needs, tax timing differences, pension funding decisions and other items can significantly impact cash flows.

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On an overall basis, turnover of operating working capital (which the company defines as accounts receivable plus inventory less accounts payable) improved during the nine month period ended September 28, 2007 compared to the same period of 2006. Improvements in inventory turnover and days payables outstanding were partially offset by increases in days sales outstanding resulting in the dollar impact of these items on operating cash flows from continuing operations for the nine months ended September 28, 2007 being essentially the same as the comparable period of 2006. The increases in days sales outstanding were a result of the timing of sales within the quarter and a higher percentage of European sales in the first nine months of 2007, where the customer payment terms are generally longer than the Company average. As discussed above, payment of additional income taxes in the nine month period ended September 28, 2007 also adversely impacted year-over-year operating cash flow from continuing operations comparisons by $112 million.

The Company recorded a gain of $150 million related to the sale of its power quality business in the third quarter of 2007. The cash proceeds from the sale of the power quality business are shown as a component of cash from investing activities. Operating cash flows from discontinued operations includes approximately $55 million of income tax payments related to the gain on the sale of the business.

In connection with its acquisitions, the Company records appropriate accruals for the costs of closing duplicate facilities, severing redundant personnel and integrating the acquired businesses into existing Company operations. Cash flows from operating activities are reduced by the amounts expended against the various accruals established in connection with each acquisition. Please refer to Note 2 to the Notes to the Consolidated Condensed Financial Statements for additional information.

Investing Activities

Cash flows relating to investing activities consist primarily of cash used for acquisitions, capital expenditures and cash flows from divestitures of businesses or assets. Net cash used in investing activities related to continuing operations was $600 million in the first nine months of 2007 compared to $2.2 billion of net cash used in the comparable period of 2006. Gross capital spending of $100 million for the first nine months of 2007 increased marginally from the first nine months of 2006. Capital expenditures are made primarily for increasing capacity, replacing equipment, supporting new product development and improving information technology systems. In 2007, the Company expects capital spending of $150 to $175 million, though actual expenditures will ultimately depend on business conditions.

In July 2007, the Company acquired all of the outstanding shares of ChemTreat for a cash purchase price of $425 million including transaction costs. No cash was acquired in the transaction. The Company financed the acquisition primarily with proceeds from the issuance of commercial paper and to a lesser extent from available cash. ChemTreat is a leading provider of industrial water treatment products and services, and had annual revenues of $200 million in its most recent completed fiscal year. ChemTreat is part of the Company’s environmental business and its results are reported within the Professional Instrumentation segment. ChemTreat is expected to provide additional sales and earnings growth opportunities for the Company both through the growth of existing products and services and through the potential acquisition of complementary businesses.

In addition, the Company acquired nine other companies or product lines during the first nine months of 2007 and completed the acquisition of the remaining shares of Vision not owned by the Company as of December 31, 2006, as discussed below. Total consideration for these nine acquisitions and the remaining shares of Vision acquired during the first quarter was $366 million in cash, including transaction costs and net of cash acquired. Each company acquired is a manufacturer and assembler of instrumentation products, in market segments such as electronic test, dental technologies, product identification, sensors and controls and environmental instruments. These companies were all acquired to complement existing units of the Professional Instrumentation, Medical Technologies or Industrial Technologies segments. The aggregate annual sales of these nine acquired businesses (excluding Vision) at the time of their respective acquisitions, in each case based on the company’s revenues for its last completed fiscal year prior to the acquisition, were $123 million.

In the last quarter of 2006 and first quarter of 2007, the Company acquired all of the outstanding shares of Vision for an aggregate cash purchase price of $525 million, including transaction costs and net of $113 million of cash acquired, and assumed $1.5 million of debt. Of this purchase price, $96 million was paid during 2007 to acquire the remaining shares of Vision that the Company did not own as of December 31, 2006 and for transaction costs. The Company financed the transaction through a combination of available cash and the issuance of commercial paper.

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Vision, based in Australia, manufactures and markets automated instruments, antibodies and biochemical reagents used for biopsy-based detection of cancer and infectious diseases, and had revenues of $86 million in its last completed fiscal year. The pairing of Vision with the Company’s existing life science instrumentation business, Leica, has significantly broadened the Company’s product offerings in the growing anatomical pathology market and is expected to expand the sales and growth opportunities for both the Leica and Vision businesses. The Company believes that the pairing of Leica and Vision will also create a broader base for the acquisition of complementary businesses in the life sciences industry.

In July 2007, the Company completed the sale of its power quality business generating approximately $275 million of net cash proceeds. This business, which was part of the Industrial Technologies segment and designs and manufactures power quality and reliability products and services, had aggregate annual revenues of approximately $130 million in 2006. The Company used the proceeds from this sale for general corporate purposes, including debt reduction and acquisitions.

As noted above, on October 14, 2007, the Company and Tektronix entered into a definitive agreement pursuant to which the Company is making a cash tender offer to acquire all of the outstanding shares of common stock of Tektronix for $38.00 per share, for an aggregate price of approximately $2.8 billion, including transaction costs and net of cash acquired, to be followed by a second step cash-out merger at the offer price. The offer is subject to customary conditions, including tender of a majority of the outstanding shares into the offer, regulatory approvals and the absence of a material adverse change with respect to Tektronix. Danaher anticipates completing the offer in the fourth quarter of 2007.

Tektronix is a leading supplier of test, measurement, and monitoring products, solutions and services for engineers in the communications, computer, consumer electronics and education industries, as well as in military/aerospace, semiconductor and a broad range of other industries worldwide. Tektronix had annual revenues of approximately $1.1 billion in its most recently completed fiscal year, and would become part of Danaher’s electronic test platform included in the Professional Instrumentation segment.

Danaher anticipates financing the acquisition initially through borrowings under committed lines of credit that it expects to enter into, through the issuance of commercial paper using such lines of credit as credit support, or through a combination of these financing methods. Danaher anticipates that the ultimate financing for the acquisition will consist of one or more of the following: commercial paper borrowings, the issuance of debt securities and/or the issuance of equity or equity-linked securities.

Financing Activities and Indebtedness

Financing cash flows consist primarily of borrowings and repayments of indebtedness, sales and repurchases of common stock and payments of dividends to shareholders. Financing activities used cash of $587 million during the first nine months of 2007 compared to cash generated of $1,111 million during the comparable period of 2006.

The components of the Company’s long-term debt as of September 28, 2007 and December 31, 2006 were as follows:

	September 28, 2007		December 31, 2006
	($ in millions)
Euro-denominated commercial paper (€149 million at September 28, 2007)	$	213	$	787
U.S. dollar-denominated commercial paper		85		80
4.5% guaranteed Eurobond Notes due July 22, 2013 (€500 million)		713		660
Zero coupon Liquid Yield Option Notes due 2021 (“LYONs”)		604		594
6.1% notes due October 2008		250		250
Other borrowings		82		63
Total		1,947		2,434
Less – currently payable		20		11
Long-term debt	$	1,927	$	2,423

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For a full description of the Company’s debt financing, please refer to the Company’s Annual Report on Form 10-K for the year ended December 31, 2006.

The Company satisfies its short-term liquidity needs primarily through issuances of U.S. and Euro commercial paper. Under the Company’s U.S. and Euro commercial paper programs, the Company or its subsidiary may issue and sell unsecured, short-term promissory notes in aggregate principal amount not to exceed $2.2 billion (since the credit facility (described below) provides credit support for the commercial paper program, the $1.5 billion of availability under the credit facility has the practical effect of reducing from $2.2 billion to $1.5 billion the maximum amount of commercial paper that the Company can issue under the commercial paper program). Commercial paper notes are sold at a discount and have a maturity of not more than 90 days from date of issuance.

Borrowings under the commercial paper program are available for general corporate purposes as well as for financing potential acquisitions. The Company issued $2 billion of commercial paper in May 2006 and used the proceeds principally to fund its acquisition of Sybron Dental. In late 2006 and during the first nine months of 2007, the Company utilized its commercial paper program to fund the acquisitions of Vision, ChemTreat and certain other smaller acquisitions, as well as repurchases of the Company’s common stock. The Company has used available cash flow and the proceeds from the 2006 4.5% Eurobond Note offering to reduce outstanding borrowings under the commercial paper programs. As of September 28, 2007, the amounts outstanding under the Euro-denominated commercial paper program had an average interest rate of 4.9% and an average maturity of 33 days and the amounts outstanding under the US Dollar-denominated commercial paper program had an average interest rate of 5.1% and an average maturity of 3 days.

Credit support for the commercial paper programs is provided by an unsecured $1.5 billion multicurrency revolving credit facility which the Company entered into in April 2006 to replace two existing $500 million credit facilities. The Company entered into an agreement with the lenders during the second quarter of 2007 to extend the term of the credit facility by one year, so that it now expires on April 25, 2012, subject to a one-year extension option at the request of the Company and with the consent of the lenders. The credit facility can also be used for working capital and other general corporate purposes. Interest is based on either (1) a LIBOR-based formula, (2) a formula based on the lender’s prime rate or on the Federal funds rate, or (3) the rate of interest bid by a particular lender for a particular loan under the credit facility. There were no borrowings under the credit facility during the nine months ended September 28, 2007.

The Company has classified the borrowings under the commercial paper programs as long-term borrowings in the accompanying Consolidated Balance Sheet as the Company has the intent and ability, as supported by availability under the above mentioned credit facility, to refinance these borrowings for at least one year from the balance sheet date.

The Company does not have any rating downgrade triggers that would accelerate the maturity of a material amount of outstanding debt. However, a downgrade in the Company’s credit rating would increase the cost of borrowings under the Company’s commercial paper program and credit facilities. Also, a downgrade in the Company’s credit rating could limit, or in the case of a significant downgrade, preclude the Company’s ability to issue commercial paper. The Company’s outstanding indentures and comparable instruments contain customary covenants including for example limits on the incurrence of secured debt and sale/leaseback transactions. None of these covenants are considered restrictive to the Company’s operations and, as of September 28, 2007, the Company was in compliance with all of its debt covenants.

Holders of the LYONs may convert each of their LYONs into 14.5352 shares of the Company’s common stock (in the aggregate for all LYONs, approximately 12.0 million shares of Company common stock) at any time on or before the maturity date of January 22, 2021. As of September 28, 2007, the accreted value of the outstanding LYONs was $50.15 per share, which, at that date, was lower than the traded market value of the underlying common stock issuable upon conversion. The Company may offer to redeem all or a portion of the LYONs for cash at any time. Holders may require the Company to purchase all or a portion of the notes for cash and/or Company common stock, at the Company’s option, on January 22, 2011.

To benefit from the SEC Securities Offering Reform rules applicable to well-known seasoned issuers, the Company has a shelf registration statement on Form S-3 on file with the SEC that registers an indeterminate amount of debt securities, common stock, preferred stock, warrants, depositary shares, purchase contracts and units for future issuance. No securities have been issued off this shelf registration statement.

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On April 21, 2005, the Company’s Board of Directors authorized the repurchase of up to 10 million shares of the Company’s common stock from time to time on the open market or in privately negotiated transactions. There is no expiration date for the Company’s repurchase program. During the second quarter of 2007, the Company repurchased 1.64 million shares of Company common stock in open market transactions at an aggregate cost of $117 million. The repurchases were funded from available cash and borrowings under the Company’s commercial paper program. At September 28, 2007, the Company had 3.4 million shares remaining for stock repurchases under the existing Board authorization. The timing and amount of any shares repurchased will be determined by the Company’s management based on its evaluation of market conditions and other factors. The repurchase program may be suspended or discontinued at any time. Any repurchased shares will be available for use in connection with the Company’s 1998 Stock Option Plan and the 2007 Stock Incentive Plan and for other corporate purposes. The Company expects to fund the repurchase program using the Company’s available cash balances or existing lines of credit.

The Company increased its regular quarterly dividend to $0.03 per share during the second quarter of 2007, and declared a regular quarterly dividend of $0.03 per share payable on October 26, 2007 to holders of record on September 28, 2007. Aggregate cash payments for dividends during the first nine months of 2007 were $25 million.

Cash and Cash Requirements

As of September 28, 2007, the Company held $209 million of cash and cash equivalents that were invested in highly liquid investment grade debt instruments with a maturity of 90 days or less.

The Company will continue to have cash requirements to support acquisitions (including the anticipated acquisition of Tektronix), working capital needs and capital expenditures, to pay interest and service debt, fund its pension plans as required, pay dividends to shareholders and repurchase shares of the Company’s common stock. With respect to the anticipated acquisition of Tektronix, which will require approximately $2.8 billion of cash and is expected to close in 2007, the Company anticipates financing the acquisition initially through borrowings under committed lines of credit that it expects to enter into, through the issuance of commercial paper using such lines of credit as credit support, or through a combination of these financing methods. Danaher anticipates that the ultimate financing for the acquisition will consist of one or more of the following: commercial paper borrowings, the issuance of debt securities and/or the issuance of equity or equity-linked securities. With respect to the Company’s other cash requirements, it generally intends to use available cash and internally generated funds to meet these cash requirements, supplemented as necessary with borrowings under existing commercial paper programs or credit facilities or by accessing the capital markets. The Company believes that it has sufficient liquidity to satisfy both short-term and long-term requirements.

The Company’s cash balances are generated and held in numerous locations throughout the world, including substantial amounts held outside the United States. The Company utilizes a variety of tax planning and financing strategies in an effort to ensure that its worldwide cash is available in the locations in which it is needed. Wherever possible, cash management is centralized and intercompany financing is used to provide working capital to our operations. Most of the cash balances held outside the United States could be repatriated to the United States, but, under current law, would potentially be subject to United States federal income taxes, less applicable foreign tax credits. Repatriation of some foreign balances is restricted by local laws. Where local restrictions prevent an efficient inter-company transfer of funds, the Company’s intent is that cash balances would remain in the foreign country and it would meet United States liquidity needs through ongoing cash flows, external borrowings, or both.

CONTRACTUAL OBLIGATIONS

There have been no significant changes to the contractual obligations table as disclosed in our Annual Report on Form 10-K for the year ended December 31, 2006, except for a change related to our adoption of FIN 48. The liabilities for unrecognized tax benefits under FIN 48 were $328 million as of September 28, 2007. Because there is a high degree of uncertainty regarding the timing of cash flows related to these unrecognized tax benefit liabilities, we cannot reasonably estimate the settlement periods and amounts.

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CRITICAL ACCOUNTING POLICIES

Management’s discussion and analysis of the Company’s financial condition and results of operations are based upon the Company’s Consolidated Financial Statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, sales and expenses, and related disclosure of contingent assets and liabilities. The Company bases these estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

Management believes there have been no significant changes during the nine months ended September 28, 2007 to the items that the Company disclosed as its critical accounting policies and estimates in Management’s Discussion and Analysis of Financial Condition and Results of Operations in the Company’s Annual Report on Form 10-K for the year ended December 31, 2006.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The information required by this item is included under Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” under the caption “Financial Instruments and Risk Management.”

ITEM 4. CONTROLS AND PROCEDURES

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

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

PART II - OTHER INFORMATION

ITEM 1A. RISK FACTORS

Information regarding risk factors appears in “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Information Related to Forward-Looking Statements,” in Part I — Item 2 of this Form 10-Q and in Part I — Item 1A of Danaher’s Annual Report on Form 10-K for the year ended December 31, 2006. There have been no material changes from the risk factors previously disclosed in Danaher’s Annual Report on Form 10-K.

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

On April 21, 2005, the Company announced that on April 20, 2005, the Company’s Board of Directors authorized the repurchase of up to 10 million shares of the Company’s common stock from time to time on the open market or in privately negotiated transactions. The Company repurchased no shares during the three months ended September 28, 2007, and approximately 3.4 million shares remain available for repurchase under the program. There is no expiration date for the Company’s repurchase program. The timing and amount of any shares repurchased will be determined by the Company’s management based on its evaluation of market conditions and other factors. The repurchase program may be suspended or discontinued at any time. Any repurchased shares will be available for use in connection with the Company’s 1998 Stock Option Plan and 2007 Stock Incentive Plan and for other corporate purposes. The Company expects to fund the repurchase program using the Company’s available cash balances or existing lines of credit.

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On August 23, 2007, a holder of 200 LYONs converted the LYONs into an aggregate of 2,907 shares of Danaher common stock, par value $0.01 per share. The shares of common stock were issued solely to an existing security holder upon conversion of the LYONs pursuant to the exemption from registration provided under Section 3(a)(9) of the Securities Exchange Act 1933, as amended.

ITEM 6. EXHIBITS

(a) Exhibits:

3.1	Restated Certificate of Incorporation of Danaher Corporation (1)
3.2	Amended and Restated By-laws of Danaher Corporation (2)
10.1	Danaher Corporation Non-Employee Directors’ Deferred Compensation Plan
10.2	Form of Election to Defer under the Danaher Corporation Non-Employee Directors’ Deferred Compensation Plan
10.3	Description of Compensation Arrangements for Non-Employee Directors
10.4	Danaher Corporation 2007 Stock Incentive Plan Stock Option Agreement for Non-Employee Directors
12.1	Calculation of ratio of earnings to fixed charges
31.1	Certification of Chief Executive Officer Pursuant to Item 601(b)(31) of Regulation S-K, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Chief Financial Officer Pursuant to Item 601(b)(31) of Regulation S-K, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Chief Executive Officer, Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification of Chief Financial Officer, Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(1) Incorporated by reference from Exhibit 3.1 to Danaher Corporation’s Current Report on Form 8-K filed on September 12, 2007.

(2) Incorporated by reference from Exhibit 3.2 to Danaher Corporation’s Current Report on Form 8-K filed on March 16, 2007.

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SIGNATURES

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

	DANAHER CORPORATION:
Date: October 17, 2007	By:	/s/ Daniel L. Comas
		Daniel L. Comas
		Executive Vice President and Chief Financial Officer
Date: October 17, 2007	By:	/s/ Robert S. Lutz
		Robert S. Lutz
		Vice President and Chief Accounting Officer

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EX-10.1

Exhibit 10.1

Danaher Corporation

Non-Employee Directors’ Deferred Compensation Plan

Effective September 12, 2007

Established under the

Danaher Corporation 2007 Stock Incentive Plan

TABLE OF CONTENTS

		Page
Article 1.	Introduction	1
Article 2.	Definitions	1
Article 3.	Eligibility and Participation	4
Article 4.	Deferral Opportunity	4
Article 5.	Deferred Compensation Accounts	6
Article 6.	Beneficiary Designation	6
Article 7.	Rights of Participants	7

i

Danaher Corporation

Non-Employee Directors’ Deferred Compensation Plan

Article 1. Introduction.

The primary purpose of the Danaher Corporation Non-Employee Directors’ Deferred Compensation Plan (the “Sub-Plan”) is to provide non-employee directors of Danaher Corporation, a Delaware corporation, with the opportunity to voluntarily defer all or a portion of their Compensation, subject to the terms of the Sub-Plan.

The Sub-Plan was established under, and constitutes a part of, the Danaher Corporation 2007 Stock Incentive Plan (the “2007 Stock Incentive Plan”) as of September 12, 2007. For the avoidance of doubt, the Sub-Plan is subject to all applicable terms of the 2007 Stock Incentive Plan, except for Section 11 of the 2007 Stock Incentive Plan.

Article 2. Definitions

Capitalized terms not otherwise defined herein shall have the same meanings set forth in the 2007 Stock Incentive Plan. Whenever used herein, the following terms shall have the meanings set forth below, and, when the defined meaning is intended, the term is capitalized:

(a) “Administrator” means Administrator as defined in Section 2 of the 2007 Stock Incentive Plan and shall include any Employee to whom the Administrator has delegated certain administrative functions related to the operation and maintenance of the Sub-Plan.

(b) “Chairperson Fees” means fees paid by the Company to a Director, in cash, for serving as Chairperson of a Board Committee during the relevant Plan Year and which is exclusive of any Retainer or Meetings Fees earned during such Plan Year.

(c) “Change in Control” of the Company means, and shall be deemed to have occurred upon, any of the following events in accordance with Section 409A of the Code:

(i) a “change in ownership of the Company” which means the date that any one person, or more than one person acting as a group (as defined below), acquires ownership of stock of the Company that, together with stock held by such person or group, constitutes more than 50% of the total fair market value or total voting power of the stock of the Company; provided, that, if any one person or more than one person acting as a group, is considered to own more than 50% of the total fair market value or total voting power of the stock of the Company, the acquisition of additional stock by the same person or persons is not considered to cause a change in the ownership of the Company (or to cause a “change in the effective control” (as defined in subsection (ii) below). An increase in the percentage of stock owned by any one person, or persons acting as a

group, as a result of a transaction in which the Company acquires its stock in exchange for property will be treated as an acquisition of stock for purposes of this section.

(ii) a “change in effective control of the Company,” which means the date that either: (A) any one person, or more than one person acting as a group (as defined below), acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) ownership of stock of the Company possessing 30% or more of the total voting power of the stock of the Company; or (B) a majority of members of the Board are replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of the Board prior to the date of the appointment or election.

(iii) a “change in the ownership of a substantial portion of the Company’s assets,” which means the date that any one person, or more than one person acting as a group (as defined below), acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) assets from the Company that have a total gross fair market value equal to or more than 40% of the total gross fair market value of all of the assets of the Company immediately prior to such acquisition or acquisitions. For this purpose, gross fair market value means the value of the assets of the Company, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets. Notwithstanding the foregoing, a Change of Control shall not occur when there is a transfer to an entity that is controlled by the shareholders of the Company immediately after the transfer, as provided in this paragraph (iii). A transfer of assets by the Company is not treated as a change in the ownership of such assets if the assets are transferred to:

(A) A shareholder of the Company (immediately before the asset transfer) in exchange for or with respect to its stock;

(B) An entity, 50% or more of the total value or voting power of which is owned, directly or indirectly, by the Company;

(C) A person, or more than one person acting as a group, that owns, directly or indirectly, 50% or more of the total value or voting power of all the outstanding stock of the Company; or

(D) An entity, at least 50% of the total value or voting power of which is owned, directly or indirectly, by a person described in paragraph (C).

Persons will not be considered to be acting as a group solely because they purchase assets of the same corporation at the same time, or as a result of the same public offering. However, persons will be considered to be acting as a

2

group if they are owners of a corporation that enters into a merger, consolidation, purchase or acquisition of assets, or similar business transaction with the corporation. If a person, including an entity shareholder, owns stock in both corporations that enter into a merger, consolidation, purchase or acquisition of assets, or similar transaction, such shareholder is considered to be acting as a group with other shareholders in a corporation only to the extent of the ownership in that corporation prior to the transaction giving rise to the change and not with respect to the ownership interest in the other corporation.

(d) “Compensation” means the Retainer, Meeting Fees and, if applicable, Chair- person Fees payable to a Participant by the Company for services performed as a Director during a Plan Year. In no event, however, shall amounts paid in the form of Company stock, stock options or other Company securities qualify as Compensation eligible for deferral under the Sub-Plan.

(e) “Director” means each member of the Board of Directors of the Company who (i) is not an employee of the Company or any Subsidiary of the Company, and (ii) receives a Retainer, Meeting Fees and/or Chairperson Fees for service on the Board of Directors.

(f) “Effective Date” means September 12, 2007.

(g) “Meeting Fees” means fees paid by the Company to a Director, in cash, for attendance at Board and various Board committee meetings during the relevant Plan Year, and which is exclusive of any Retainer or Chairperson Fees earned during such Plan Year. For the purposes of the Sub-Plan, “Meeting Fees” shall not include any fees paid or payable in Company stock, stock options or other Company securities.

(h) “Participant” means any Director who is actively participating in the Sub-Plan.

(i) “Phantom Shares” means a fictitious share of the Company which is a unit of measurement of the amount payable to Participants under the Plan and does not constitute stock or any other equity interest in the Company (or any of its subsidiaries or affiliates) and does not have any rights of equity ownership in the Company. The sole significance of Phantom Shares is to establish a method of measuring the number of shares of Common Stock distributable in respect of amounts deferred under the Plan.

(j) “Plan Year” means the fiscal year of the Company beginning on January 1^st and ending on December 31st.

(k) “Retainer” means the annual cash retainer paid by the Company and earned by a Director during the relevant Plan Year with respect to the Director’s service on the Board, and which is exclusive of Meeting Fees or Chairperson Fees earned during such Plan Year. For purposes of the Sub-Plan, “Retainer” shall not include any retainer paid or payable in Company stock, stock options or other Company securities.

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Article 3. Eligibility and Participation

3.1 Eligibility. Each person who is or becomes a Director on or after the Effective Date shall be eligible to participate in the Sub-Plan.

3.2 Inactive Participant. In the event a Participant no longer meets the requirements for eligibility to participate in the Sub-Plan, such Participant shall become an inactive Participant retaining all of the rights described under the Sub-Plan, except the right to make any further deferrals hereunder. In the event a Participant shall cease to serve as a member of the Board of Directors but shall be designated as a Director Emeritus, such Participant shall become an inactive Participant, and, as a result of such change in status, the Director Emeritus shall not be eligible to make further deferrals under the Sub-Plan but shall not be deemed to have terminated service as a Director until such time as his or her Director Emeritus status shall terminate.

3.3 Participation. The Administrator shall notify a Director as soon as practicable after he or she first becomes eligible to participate in the Sub-Plan. At such time, the Administrator shall provide such Director with an Election to Defer Form which shall be submitted by the Director as provided in Section 4.2 hereof. Except as otherwise provided in Section 3.4 below, a Director, once notified of eligibility to participate in the Sub-Plan, shall be entitled to make deferrals with respect to each subsequent Plan Year by submitting an Election to Defer Form to the Administrator in the time and manner provided in Section 4.2.

3.4 Partial Plan Year Participation. In the event a Director first becomes eligible to participate in the Sub-Plan after the beginning of a Plan Year, the Administrator may, in its discretion, allow such Director to complete an Election to Defer Form within thirty (30) days after the date the Director first becomes eligible to participate, in which case the deferral election shall be valid and applicable for the Plan Year then in progress. An Election to Defer Form submitted pursuant to this Section 3.4 shall apply only to Compensation earned beginning in the first calendar quarter subsequent to the date on which a valid Election to Defer Form is received by the Administrator.

Article 4. Deferral Opportunity

4.1 Amount Which May Be Deferred. A Participant may elect to defer twenty-five percent (25%), fifty percent (50%), seventy-five percent (75%) or one hundred percent (100%) of his or her aggregate Compensation in any Plan Year.

4.2 Deferral Election. A Participant may make an election to defer Compensation under the Sub-Plan with respect to a Plan Year provided he or she makes such election prior to December 31 of the calendar year preceding such Plan Year or not later than thirty (30) calendar days after the date the Director initially became eligible to participate in the Sub-Plan, as applicable. All deferral elections shall be made on an Election to Defer Form, as described herein, which shall specify: (i) the percentage of Compensation which the Participant elects to defer and (ii) the deferral period, as described in Section 4.3 below. A deferral election must be submitted to the Administrator on a timely basis in order to be given effect. Once a Participant has submitted an Election to Defer Form, the Participant may only revoke or change the deferral election if he or she notifies the Administrator in writing of the revocation or change prior to December 31 of the calendar year preceding the Plan Year for which the revocation or change is to be effective.

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4.3 Length of Deferral. Except as otherwise provided herein, all deferrals hereunder shall be maintained in deferred status until the expiration of the deferral period specified by the Participant in the Election to Defer Form. The Participant may elect to defer distribution until (i) termination of his or her service for any reason, or (ii) either the first, second, third, fourth or fifth anniversary of such termination of service. If a Participant fails to specify a deferral period, the deferral period shall expire upon termination of the Participant’s service for any reason.

4.4 Change in Deferral Period. A Participant who elects to receive payment of deferred amounts on the first, second, third, fourth or fifth anniversary of his or her termination of service cannot change such deferral period. A Participant who elects to receive payment of deferred amounts upon termination of service may make one subsequent election to change such deferral period. Such subsequent election (i) may only extend the deferral period to the fifth anniversary of the Participant’s termination of service; (ii) may not be effective until 12 months after the date the subsequent election is made; and (iii) must be made at least 12 months prior to the date the payment would otherwise be made.

4.5 Payments of Deferred Amounts. Each Participant shall receive distribution in respect of Phantom Shares credited to a Participant’s deferred compensation account at the end of the applicable deferral period, as determined under Sections 4.3 and 4.4, as applicable. Each distribution shall be made in whole shares of Common Stock as soon as administratively feasible (but in no event more than 60 days) after the date specified for payment, and shall be equal to the number of Phantom Shares credited to a Participant’s deferred compensation account on the expiration date of the applicable deferral period. Fractional shares shall be taken together as of the expiration date of the applicable deferral period to pay out a whole share. Any remaining fractional shares will be rounded up to a whole share and distributed as described above.

Notwithstanding the foregoing, any undistributed deferred balances shall be distributed to the Participant (or his or her beneficiary) in the event that, at any time prior to full distribution of such deferred balances, the Participant dies or a Change in Control of the Company occurs. In such event, each distribution shall be made in whole shares of Common Stock as soon as administratively feasible (but in no event later than sixty (60) days) after the Participant’s death or the effective date of the Change in Control, as applicable, and shall be equal to the number of Phantom Shares credited to a Participant’s deferred compensation account as of the effective date of the Change in Control.

4.6 Unforeseeable Emergency. If a Participant suffers an unforeseen emergency, as defined herein, the Administrator, in its sole discretion, may pay as soon as administratively feasible to the Participant only that portion, if any, of his or her account that the Administrator determines is necessary to satisfy the emergency need, including any amounts necessary to pay any federal, state or local income taxes reasonably anticipated to result from the distribution. A Participant requesting an emergency payment shall apply for the payment in writing in a form approved by the Administrator and shall provide such additional information as the Administrator may require. For purposes of this paragraph, “unforeseen emergency” means a severe financial

5

hardship to the Participant resulting from a sudden and unexpected illness or accident of the Participant or of a dependent (as described in Section 152 of the Code, without regard to Section 152(b)(1), (b)(2) and (d)(1)(B) of the Code) of the Participant, loss of the Participant’s property due to casualty, or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant. The circumstances constituting an unforeseeable emergency shall depend on the facts of each case, but, in any event, a distribution shall not be made to the extent that such emergency is or may be relieved: (a) through reimbursement or compensation from insurance or otherwise, (b) by liquidation of the Participant’s assets, to the extent the liquidation of such assets would not itself cause severe financial hardship, or (c) by cessation of deferrals under the Sub-Plan.

Article 5. Deferred Compensation Accounts

5.1 Participants’ Accounts. The Company shall establish and maintain an individual bookkeeping account for deferrals made by each Participant under Article 4 herein. Each account shall be credited as of the quarterly date the amount deferred otherwise would have been payable to the Participant. The term “account” and other measures representing the value of a Participant’s deferrals under the Sub-Plan are bookkeeping entries only and shall not constitute property of any kind or any interest in the Company or specific assets thereof.

5.2 Manner of Investment. All amounts deferred under the Sub-Plan shall be credited as Phantom Shares. The number of whole and partial Phantom Shares credited to a Participant’s deferred compensation account will be based upon the dollar amount of the deferrals made by each Participant for the applicable quarterly period, divided by the Fair Market Value of the Company’s Common Stock on the date the amount deferred otherwise would have been paid to the Participant. The value of a Phantom Share credited to a Participant’s deferred compensation account shall thereafter fluctuate pari passu with the Fair Market Value of a share of the Company’s Common Stock. In the event a cash dividend is declared on the Company’s Common Stock, a Participant’s deferred compensation account shall be credited with additional Phantom Shares equal to the dividend on the number of Phantom Shares credited to his or her account divided by the Fair Market Value of the Common Stock on the day the dividend is paid. For the avoidance of doubt, if the outstanding shares of Common Stock increase or decrease or change into or are exchanged for a different number or kind of security by reason of any recapitalization, reclassification, stock split, reverse stock split, combination of shares, exchange of shares, stock dividend, or other distribution payable in capital stock, or some other increase or decrease in such Common Stock occurs without the Company’s receiving consideration, the Administrator will make a proportionate and appropriate adjustment to the number of Phantom Shares in order to prevent dilution or enlargement of rights.

5.3 Charges Against Accounts. There shall be charged against each Participant’s deferred compensation account any payments made to the Participant or to his or her beneficiary.

Article 6. Beneficiary Designation

Each Participant shall designate a beneficiary or beneficiaries who, upon the Participant’s death, will receive the amounts that otherwise would have been paid to the Participant under the Sub-Plan. All designations shall be signed by the Participant, and shall be in such form as prescribed by the Board. Each designation shall be effective as of the date delivered to a Company employee so designated by the Board.

6

Participants may change their designations of beneficiary on such form as prescribed by the Board. The payment of amounts deferred under the Sub-Plan shall be in accordance with the last unrevoked written designation of beneficiary that has been signed by the Participant and delivered by the Participant to the designated employee prior to the Participant’s death.

In the event that all the beneficiaries named by a Participant pursuant to this Article 6 predecease the Participant, the deferred amounts that would have been paid to the Participant or the Participant’s beneficiaries under the Sub-Plan shall be paid to the Participant’s estate.

In the event a Participant does not designate a beneficiary, or for any reason such designation is ineffective, in whole or in part, the amounts that otherwise would have been paid to the Participant or the Participant’s beneficiaries under the Sub-Plan shall be paid to the Participant’s estate.

Article 7. Rights of Participants

7.1 Contractual Obligation. The Sub-Plan shall create a contractual obligation on the part of the Company to make payments from the Participants’ accounts when due.

7.2 Unfunded Plan. The Sub-Plan constitutes an unfunded, unsecured promise of the Company to make distributions in the future of the amounts deferred under the Sub-Plan and is intended to constitute a nonqualified deferred compensation plan which is unfunded for tax purposes and for the purposes of Title I of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). Nothing contained in the Sub-Plan and no action taken pursuant to the provisions of the Sub-Plan shall create, or be construed to create, a trust of any kind, a fiduciary relationship between the Company and any Director or any other person. No special or separate fund shall be established or other segregation of assets made to assure payment of deferred amounts hereunder. No Director or any other person shall have any preferred claim on, or beneficial ownership interest in, any assets of the Company prior to the time that deferred amounts are paid to the Director as provided herein. The rights of a Director to receive benefits from the Company shall be no greater than any general unsecured creditor of the Company.

7.3 Service as a Director. Neither the establishment of the Sub-Plan, nor any action taken hereunder, shall in any way obligate (i) the Company to nominate a Director for reelection or to continue to retain a Director; or (ii) a Director to agree to be nominated for reelection or to continue to serve on the Board.

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EX-10.2

Exhibit 10.2

DANAHER CORPORATION

NON-EMPLOYEE DIRECTORS’ DEFERRED COMPENSATION PLAN

Election to Defer Form

This Agreement made as of                     ,          by and between                     , an individual residing at                                          (the “Participant”), and Danaher Corporation (the “Company”) pursuant to the Danaher Corporation Non-Employee Directors’ Deferred Compensation Plan (the “Sub-Plan”).

WHEREAS, the Company has established the Sub-Plan under the Danaher Corporation 2007 Stock Incentive Plan (the “2007 Stock Incentive Plan”) on behalf of its eligible non-employee Directors, and the Participant is eligible to make an election to defer all or a portion of his or her aggregate cash Compensation as a Director in any Plan Year pursuant to the terms and conditions of the Sub-Plan.

NOW THEREFORE, the parties agree as follows:

(i) General. Capitalized terms not defined herein shall have the same meaning as set forth in the 2007 Stock Incentive Plan or the Sub-Plan. In the event of a conflict or inconsistency between this Election to Defer Form and the Sub-Plan, the Sub-Plan shall control.

(ii) Deferral Amount. The Company and the Participant agree that the percentage of the Participant’s cash Compensation (i.e., cash Retainer, cash Meeting Fees, and cash Chairperson Fees (if any)), designated below, which would otherwise be payable with respect to services performed as a Director during a Plan Year beginning after the date hereof (or with respect to a newly-appointed Director, during the remainder of the Plan Year after this Election to Defer Form is submitted to the Administrator) and each Plan Year thereafter, shall instead be credited to the Participant’s account established under the Sub-Plan:

[Please check one of the following:]

¨  25% of Compensation

¨  50% of Compensation

¨  75% of Compensation

¨  100% of Compensation

(iii) Participant’s Account. The amount so deferred shall be credited to the Participant’s account as of the quarterly date the amount deferred otherwise would have been paid to the Participant. All amounts credited to the Participant’s account shall be credited as Phantom Shares. The number of whole and partial Phantom Shares credited to the Participant’s account will be based upon the dollar amount deferred for the applicable quarterly period divided by the Fair Market Value of the Company’s Common Stock on the date the amount deferred otherwise would have been paid to the Participant. The value of a Phantom Share credited to a Participant’s account shall thereafter fluctuate pari passu with the Fair Market Value of a share of the Company’s Common Stock. Participant acknowledges that (a) Phantom Shares do not constitute stock or any other equity interest in the Company and (b) the value of the shares of Company Common Stock that the Participant receives in respect of Phantom Shares upon distribution may be more or less than the initial deferral amount that relates to such Phantom Shares.

(iv) Deferral Period. Subject to Section 4.6 of the Sub-Plan, the Phantom Shares credited to a Participant’s account shall be converted into shares of Common Stock and distributed to the Participant upon the earliest of (1) the distribution event elected by the Participant below, (2) the date the Participant dies, or (3) a Change in Control of the Company:

[Please check one of the following:]

¨ Termination of service

¨ First anniversary of termination of service

¨ Second anniversary of termination of service

¨ Third anniversary of termination of service

¨ Fourth anniversary of termination of service

¨ Fifth anniversary of termination of service

(v) Change in Deferral Period. Notwithstanding the foregoing and with respect to Participants who have elected distribution upon termination of service only, as provided in Section 4.4 of the Sub-Plan, after making the election to receive a distribution upon termination of service in (iv) above, the Participant may make one subsequent election to change such deferral period; provided, that such subsequent election (1) may only extend the deferral period to the fifth anniversary of the Participant’s termination of service; (2) may not be effective until 12 months after the date the subsequent election is made; and (3) must be made at least 12 months prior to the date the payment would otherwise be made. To effect such subsequent election, the Participant should provide the Administrator with written notice of such subsequent election. For the avoidance of doubt, if the Participant makes such subsequent election, subject to Section 4.6 of the Sub-Plan the Participant’s account balance shall be distributed to the Participant upon the earliest of (1) the fifth anniversary of the Participant’s termination of service, (2) the date the Participant dies, or (3) a Change in Control of the Company.

(vi) Timing and Irrevocability of Election. The provisions of this Election to Defer Form will continue to apply unless and until the Participant revokes this Election to Defer Form or changes his or her deferral election by submitting a new Election to Defer Form. Once a Participant has submitted an Election to Defer Form, the Participant may only revoke the Election to Defer Form, or change his or her deferral election, if he or she notifies the Administrator in writing of the revocation or change prior to December 31 of the calendar year preceding the Plan Year for which the revocation or change is to be effective. If the Participant revokes the Election to Defer Form or changes his or her deferral election, the revocation or change shall be effective beginning with the Plan Year following the calendar year in which the revocation or change is made. With regard only to a Participant’s initial year of eligibility, this Election to Defer Form must be received no later than thirty (30) calendar days after the date the Participant initially becomes eligible to participate in the Sub-Plan in order to be effective.

(vii) Participant Acknowledgement. The Participant acknowledges receipt of the Sub-Plan, the 2007 Stock Incentive Plan and the prospectus relating thereto and agrees to be bound by all the terms and provisions thereof.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written.

	By:
Participant		Name:
		Title:

DANAHER CORPORATION

NON-EMPLOYEE DIRECTORS’ DEFERRED COMPENSATION PLAN

Beneficiary Designation Form

Note: A Participant in the Danaher Corporation Non-Employee Directors’ Deferred Compensation Plan (the “Sub-Plan”) may designate a beneficiary or beneficiaries who, upon the Participant’s death, will receive the shares of Danaher common stock that otherwise would have been distributed to the Participant under the Sub-Plan. Please complete this form and submit it to the Administrator if you would like to so designate any such beneficiary(ies). Please refer to Article 6 of the Sub-Plan for more information.

I hereby designate the following beneficiary(ies) to receive any payment that would otherwise become due to me upon my death under the terms of the Sub-Plan, subject to my right to change the beneficiary in accordance with the provisions of the Sub-Plan. (Print names, indicate relationships and give addresses)

Name	Relationship	Address
Name	Relationship	Address
Name	Relationship	Address
Name	Relationship	Address

If two or more beneficiaries are named, and no statement is made to the contrary, I understand that payment will be made in equal shares to the named beneficiaries who survive me.

Date Participant

EX-10.3

Exhibit 10.3

Description of Compensation Arrangements for Non-Employee Directors

On September 12, 2007, the Board of Directors of Danaher Corporation approved the following compensation arrangement for the chairs of each of the Audit Committee, Compensation Committee and Nominating and Governance Committee. Effective as of September 12, 2007, the chair of each such committee will receive, in addition to the other compensation paid to Danaher’s non-employee directors, an annual retainer of $15,000, paid in quarterly installments. The retainer for 2007 shall be pro rated based on the date this compensation arrangement was approved by the Board.

EX-10.4

Exhibit 10.4

DANAHER CORPORATION

2007 STOCK INCENTIVE PLAN

STOCK OPTION AGREEMENT

(Non-Employee Directors)

Unless otherwise defined herein, the terms defined in the Danaher Corporation 2007 Stock Incentive Plan (the “Plan”) shall have the same defined meanings in this Stock Option Agreement (the “Option Agreement”).

I. NOTICE OF STOCK OPTION GRANT

Name:

Address:

The undersigned Optionee has been granted an Option to purchase Common Stock of the Company, subject to the terms and conditions of the Plan and this Option Agreement, as follows:

Date of Grant	___________________________________________________________
Exercise Price per Share	$___________________________________________________________
Total Number of Shares Granted	___________________________________________________________
Total Exercise Price	$___________________________________________________________
Type of Option	Nonstatutory Stock Option
Expiration Date	Tenth anniversary of Date of Grant
Vesting Schedule	100% vested upon grant

II. AGREEMENT

1. Grant of Option. The Company hereby grants to the Optionee named in the Notice of Stock Option Grant (the “Optionee”), an option (the “Option”) to purchase the number of shares (the “Shares”) set forth in the Notice of Stock Option Grant, at the exercise price per Share set forth in the Notice of Stock Option Grant (the “Exercise Price”), and subject to the terms and conditions of the Plan, which are incorporated herein by reference. In the event of a conflict between the terms and conditions of the Plan and this Option Agreement, the terms and conditions of the Plan shall prevail.

2. Exercise of Option.

(a) Right to Exercise. This Option shall be exercisable during its term in accordance with the applicable provisions of the Plan and this Option Agreement.

(b) Method and Time of Exercise. This Option shall be exercisable by any method made available from time to time by the external third party administrator of the Option awards. An exercise may be made with respect to whole Shares only, and not for a fraction of a Share.

Shares shall not be issued under the Plan unless the issuance and delivery of such Shares comply with (or are exempt from) all applicable requirements of law, including (without limitation) the Securities Act, the rules and regulations promulgated thereunder, state securities laws and regulations, and the regulations of any stock exchange or other securities market on which the Company’s securities may then be traded. The Committee may require the Optionee to take any reasonable action in order to comply with any such rules or regulations. Assuming such compliance, for income tax purposes the Shares shall be considered transferred to the Optionee on the date the Option is exercised with respect to such Shares.

(c) Acknowledgment of Potential Securities Law Restrictions. Unless a registration statement under the Securities Act covers the Shares issued upon exercise of an Option, the Committee may require that the Optionee agree in writing to acquire such Shares for investment and not for public resale or distribution, unless and until the Shares subject to the Award are registered under the Securities Act. The Committee may also require the Optionee to acknowledge that he or she shall not sell or transfer such Shares except in compliance with all applicable laws, and may apply such other restrictions as it deems appropriate. The Optionee also acknowledges that the U.S. federal securities laws prohibit trading in the stock of the Company by persons who are in possession of material, non-public information, and also acknowledges and understands the other restrictions set forth in the Company’s Insider Trading Policy.

3. Method of Payment. Payment of the aggregate Exercise Price shall be by any of the following, or a combination thereof, at the election of the Optionee:

(a) cash, delivered to the external third party administrator of the Option awards in any methodology permitted by such third party administrator;

(b) payment under a cashless exercise program approved by the Company or through a broker-dealer sale and remittance procedure pursuant to which the Optionee (i) shall provide written instructions to a licensed broker acceptable to the Company and acting as agent for the Optionee to effect the immediate sale of some or all of the purchased Shares and to remit to the Company, out of the sale proceeds available on the settlement date, sufficient funds to cover the aggregate Exercise Price payable for the purchased Shares and (ii) shall provide written direction to the Company to deliver the purchased Shares directly to such brokerage firm in order to complete the sale transaction; or

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(c) surrender of other Shares which have been owned by the Optionee for more than six (6) months on the date of surrender, and have a Fair Market Value on the date of surrender equal to the aggregate Exercise Price of the exercised Shares.

4. Termination.

(a) General. In the event the Optionee’s status as an Eligible Director terminates for any reason (other than death or Gross Misconduct), the Optionee shall have a period of three (3) months, commencing with the date the Optionee is no longer an Eligible Director, to exercise the vested portion of any outstanding Options.

(b) Death. Upon Optionee’s death, all unexpired options may be exercised for a period of twelve (12) months thereafter by the personal representative of the Optionee’s estate or any other person to whom the Option is transferred under a will or under the applicable laws of descent and distribution.

(c) Gross Misconduct. If the Optionee is terminated as an Eligible Director by reason of Gross Misconduct, the Optionee’s unexercised Options shall terminate immediately as of the time of termination, without consideration.

(d) Violation of Post-Termination Covenant. To the extent that any of the Optionee’s Options remain outstanding under the terms of the Plan or this Option Agreement after termination of the Optionee’s status as an Eligible Director, such Options shall nevertheless expire as of the date the Optionee violates any covenant not to compete or similar covenant that exists between the Optionee on the one hand and the Company or any subsidiary of the Company, on the other hand.

(e) Substantial Corporate Change. Upon a Substantial Corporate Change, the Optionee’s outstanding Options shall terminate unless provision is made for the assumption or substitution of such Options as provided in Section 16(b) of the Plan.

5. Non-Transferability of Option; Term of Option.

(a) Unless the Committee determines otherwise in advance in writing, this Option may not be transferred in any manner otherwise than by will or by the laws of descent or distribution and may be exercised during the lifetime of Optionee only by Optionee. The terms of the Plan and this Option Agreement shall be binding upon the executors, administrators, heirs and permitted successors and assigns of the Optionee.

(b) This Option may be exercised only prior to the Expiration Date set out in the Notice of Stock Option Grant, and may be exercised during such term only in accordance with the Plan and the terms of this Option Agreement.

6. Amendment of Option or Plan. The Plan and this Option Agreement constitute the entire understanding of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and Optionee with respect to the

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subject matter hereof. Optionee expressly warrants that he or she is not accepting this Option Agreement in reliance on any promises, representations, or inducements other than those contained herein. The Company’s Board may amend, modify or terminate the Plan or any Option in any respect at any time; provided, however, that modifications to this Option Agreement or the Plan that adversely affect the Optionee’s rights hereunder can be made only in an express written contract signed by the Company and the Optionee. Notwithstanding anything to the contrary in the Plan or this Option Agreement, the Company reserves the right to revise this Option Agreement and Optionee’s rights under outstanding Options as it deems necessary or advisable, in its sole discretion and without the consent of the Optionee, (1) upon a Substantial Corporate Change, (2) as required by law, or (3) to comply with Section 409A of the Code (“Section 409A”) or to otherwise avoid imposition of any additional tax or income recognition under Section 409A in connection to this award of Options.

7. Tax Obligations.

(a) Taxes. Regardless of any action the Company takes with respect to any or all federal, state, local or foreign income tax, social insurance, payroll tax, payment on account or other tax related items (“Tax Related Items”), the Optionee acknowledges that the liability for all Tax Related Items associated with the Option is and remains the Optionee’s responsibility and that the Company (i) makes no representations or undertakings regarding the treatment of any Tax Related Items in connection with any aspect of the Option, including, but not limited to, the grant, vesting or exercise of the Option, the subsequent sale of Shares acquired pursuant to such exercise and the receipt of any dividends; and (ii) does not commit to structure the terms of the grant or any aspect of the Option to reduce or eliminate the Optionee’s liability for Tax Related Items.

(b) Code Section 409A. Payments made pursuant to this Plan and the Option Agreement are intended to qualify for an exemption from or comply with Section 409A. Notwithstanding any provision in the Option Agreement, the Company reserves the right, to the extent the Company deems necessary or advisable in its sole discretion, to unilaterally amend or modify the Plan and/or this Option Agreement to ensure that all Options granted to Optionees who are United States taxpayers are made in such a manner that either qualifies for exemption from or complies with Section 409A; provided, however, that the Company makes no representations that the Plan or the Options shall be exempt from or comply with Section 409A and makes no undertaking to preclude Section 409A from applying to the Plan or any Options granted thereunder.

8. Rights as Shareholder. Until all requirements for exercise of the Option pursuant to the terms of this Option Agreement and the Plan have been satisfied, the Optionee shall not be deemed to be a shareholder or to have any of the rights of a shareholder with respect to any Shares.

9. No Right to Continue as Eligible Director. Nothing in the Plan or this Option shall confer upon the Optionee any right to continuation as an Eligible Director.

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10. Board Authority. The Board and/or the Committee shall have the power to interpret this Option Agreement and to adopt such rules for the administration, interpretation and application of the Option Agreement as are consistent therewith and to interpret or revoke any such rules (including, but not limited to, the determination of whether any Options have vested). All interpretations and determinations made by the Board and/or the Committee in good faith shall be final and binding upon Optionee, the Company and all other interested persons and such determinations of the Board and/or the Committee do not have to be uniform nor do they have to consider whether Optionees are similarly situated. No member of the Board and/or the Committee shall be personally liable for any action, determination or interpretation made in good faith with respect to this Option Agreement.

11. Headings. The captions used in this Option Agreement and the Plan are inserted for convenience and shall not be deemed to be a part of the Option for construction and interpretation.

12. Electronic Delivery.

(a) If the Optionee executes this Option Agreement electronically, for the avoidance of doubt Optionee acknowledges and agrees that his or her execution of this Option Agreement electronically (through an on-line system established and maintained by the Company or another third party designated by the Company, or otherwise) shall have the same binding legal effect as would execution of this Option Agreement in paper form. Optionee acknowledges that upon request of the Company he or she shall also provide an executed, paper form of this Option Agreement.

(b) If the Optionee executes this Option Agreement in paper form, for the avoidance of doubt the parties acknowledge and agree that it is their intent that any agreement previously or subsequently entered into between the parties that is executed electronically shall have the same binding legal effect as if such agreement were executed in paper form.

(c) If Optionee executes this Option Agreement multiple times (for example, if the Optionee first executes this Option Agreement in electronic form and subsequently executes the Option Agreement in paper form), the Optionee acknowledges and agrees that (i) no matter how many versions of this Option Agreement are executed and in whatever medium, this Option Agreement only evidences a single Option relating to the number of Shares set forth in the Notice of Stock Option Grant and (ii) this Option Agreement shall be effective as of the earliest execution of this Option Agreement by the parties, whether in paper form or electronically, and the subsequent execution of this Option Agreement in the same or a different medium shall in no way impair the binding legal effect of this Option Agreement as of the time of original execution.

(d) The Company may, in its sole discretion, decide to deliver by electronic means any documents related to the Option, to participation in the Plan, or to future awards granted under the Plan, or otherwise required to be delivered to the Optionee pursuant to the Plan or under applicable law, including but not limited to, the Plan, the Option Agreement, the Plan prospectus and any reports of the Company generally provided to shareholders. Such means of

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electronic delivery may include, but do not necessarily include, the delivery of a link to the Company’s intranet or the internet site of a third party involved in administering the Plan, the delivery of documents via electronic mail (“e-mail”) or such other means of electronic delivery specified by the Company. By executing this Option Agreement, the Optionee hereby consents to receive such documents by electronic delivery. At the Optionee’s written request to the Secretary of the Company, the Company shall provide a paper copy of any document at no cost to the Optionee.

13. Data Privacy. Optionee hereby explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of his or her Data (as defined below) by and among, as necessary and applicable, the Company and its Subsidiaries for the exclusive purpose of implementing, administering and managing Optionee’s participation in the Plan and in the Company’s Amended and Restated 1998 Stock Option Plan (the “1998 Plan”).

Optionee understands that the Company may hold certain personal information about Optionee, including, but not limited to, Optionee’s name, home address and telephone number, date of birth, social security or insurance number or other identification number, salary, nationality, and job title, any Common Stock or directorships held in the Company, and details of the Option or any other option or other entitlement to Shares, canceled, exercised, vested, unvested or outstanding in Optionee’s favor, for the purpose of implementing, administering and managing the Plan (“Data”). Optionee understands that Data may be transferred to any third parties assisting in the implementation, administration and management of the Plan, that these recipients may be located in Optionee’s country or elsewhere, and that the recipients’ country may have different data privacy laws and protections than Optionee’s country. Optionee authorizes the recipients to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing Optionee’s participation in the Plan and/or in the 1998 Plan, including any requisite transfer of such Data as may be required to a broker or other third party with whom Optionee may elect to deposit any Shares acquired upon exercise of the Option or any other option or other entitlement to Shares.

Optionee understands that he or she may request a list with the names and addresses of any potential recipients of the Data by contacting his or her local human resources representative. Optionee understands that Data shall be held as long as is reasonably necessary to implement, administer and manage his or her participation in the Plan and/or the 1998 Plan, and he or she may, at any time, view Data, request additional information about the storage and processing of Data, require any necessary amendments to Data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing his or her local human resources representative. Optionee understands, however, that refusing or withdrawing such consent may affect his or her ability to participate in the Plan and/or the 1998 Plan. In addition, Optionee understands that the Company and its Subsidiaries have separately implemented procedures for the handling of Data which the Company believes permits the Company to use the Data in the manner set forth above notwithstanding Optionee’s withdrawal of such consent. For more information on the consequences of refusal to consent or withdrawal of consent, Optionee understands that he or she may contact his or her local human resources representative.

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14. Waiver of Right to Jury Trial. Each party, to the fullest extent permitted by law, waives any right or expectation against the other to trial or adjudication by a jury of any claim, cause or action arising with respect to the Option or hereunder, or the rights, duties or liabilities created hereby.

15. Agreement Severable. In the event that any provision of this Option Agreement shall be held invalid or unenforceable, such provision shall be severable from, and such invalidity or unenforceability shall not be construed to have any effect on, the remaining provisions of this Option Agreement.

16. Governing Law. The laws of the State of Delaware (other than its choice of law provisions) shall govern this Option Agreement and its interpretation. For purposes of litigating any dispute that arises with respect to this Option, this Option Agreement or the Plan, the parties hereby submit to and consent to the jurisdiction of the State of Delaware, agree that such litigation shall be conducted in the courts of New Castle County, or the federal courts for the United States for the District of Delaware, where this grant is made and/or to be performed.

Optionee acknowledges receipt of a copy of the Plan and the prospectus relating thereto; represents that he or she has read and is familiar with the terms and provisions thereof and has had an opportunity to obtain the advice of counsel prior to executing this Option Agreement and fully understands all provisions of the Option Agreement and the Plan; and hereby accepts this Option subject to all of the terms and provisions thereof. Optionee hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Committee upon any questions arising under the Plan or this Option Agreement. Optionee further agrees to notify the Company upon any change in his or her residence address.

[If the Agreement is signed in paper form, complete and execute the following:]

OPTIONEE	DANAHER CORPORATION
Signature	Signature
Print Name	Print Name
	Title
Residence Address

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EX-12.1

Exhibit 12.1

Danaher Corporation

Statement Regarding Computation of Ratio of Earnings to Fixed Charges

(In Thousands, except ratio data)

	Full Year										9 Months Ended
	2002		2003		2004		2005		2006		September 28, 2007
Fixed Charges
Gross Interest Expense	$	53,926	$	59,049	$	54,984	$	44,933		79,829		76,909
Interest Element of Rental Expense		8,960		9,460		9,672		10,744		12,369		8,299
Interest on FIN 48 liabilities		—		—		—		—		—		—
Total Fixed Charges	$	62,886	$	68,509	$	64,656	$	55,677	$	92,198	$	85,208
Earnings Available for Fixed Charges:
Earnings from Continuing Operations before (a) income taxes, and (b) accounting changes and reduction of income tax reserves related to previously discontinued operation.	$	657,744	$	787,188	$	1,042,667	$	1,218,883		1,428,843		1,202,387
Add fixed charges		62,886		68,509		64,656		55,677		92,198		85,208
Interest on FIN 48 liabilities		—		—		—		—		—		—
Total Earnings Available for Fixed Charges	$	720,630	$	855,697	$	1,107,323	$	1,274,560	$	1,521,041	$	1,287,595
Ratio of Earnings to Fixed Charges		11.5		12.5		17.1		22.9		16.5		15.1

NOTE: These Ratios include Danaher Corporation and its consolidated subsidiaries. The ratio of earnings to fixed charges was computed by dividing earnings by fixed charges for the periods indicated, where “earnings” consist of (1) earnings before (a) income taxes, and (b) accounting changes and reduction of income tax reserves related to discontinued operations, plus (2) fixed charges, and “fixed charges” consist of (A) interest, whether expensed or capitalized, on all indebtedness, (B) amortization of premiums, discounts and capitalized expenses related to indebtedness, and (C) an interest component representing the estimated portion of rental expense that management believes is attributable to interest. Interest on FIN 48 liabilities is included in the tax provision in the Company’s Consolidated Condensed Statements of Earnings and is excluded from the computation of fixed charges.

EX-31.1

Exhibit 31.1

Certification

I, H. Lawrence Culp, Jr., certify that:

1. I have reviewed this report on Form 10-Q of Danaher Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: October 17, 2007		/s/ H. Lawrence Culp, Jr.
	Name:	H. Lawrence Culp, Jr.
	Title:	President and Chief Executive Officer

EX-31.2

Exhibit 31.2

Certification

I, Daniel L. Comas, certify that:

1. I have reviewed this report on Form 10-Q of Danaher Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: October 17, 2007		/s/ Daniel L. Comas
	Name:	Daniel L. Comas
	Title:	Executive Vice President and Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, H. Lawrence Culp, Jr., certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge, Danaher Corporation’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 28, 2007 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in such Quarterly Report on Form 10-Q fairly presents in all material respects the financial condition and results of operations of Danaher Corporation.

Date: October 17, 2007	By:	/s/ H. Lawrence Culp, Jr.
	Name:	H. Lawrence Culp, Jr.
	Title:	President and Chief Executive Officer

This certification accompanies the Quarterly Report on Form 10-Q pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed filed for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section. This certification shall not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that Danaher Corporation specifically incorporates it by reference.

EX-32.2

Exhibit 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Daniel L. Comas, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge, Danaher Corporation’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 28, 2007 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in such Quarterly Report on Form 10-Q fairly presents in all material respects the financial condition and results of operations of Danaher Corporation.

Date: October 17, 2007	By:	/s/ Daniel L. Comas
	Name:	Daniel L. Comas
	Title:	Executive Vice President and Chief Financial Officer

This certification accompanies the Quarterly Report on Form 10-Q pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed filed for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section. This certification shall not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that Danaher Corporation specifically incorporates it by reference.