UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
July 1, 2016
Date of Report (Date of Earliest Event Reported)
Danaher Corporation
(Exact Name of Registrant as Specified in Its Charter)
Delaware | 001-08089 | 59-1995548 | ||
(State or Other Jurisdiction Of Incorporation) |
(Commission File Number) |
(I.R.S. Employer Identification No.) |
2200 Pennsylvania Ave., N.W., Suite 800W,
Washington, D.C. 20037-1701
(Address of principal executive offices)
Registrants telephone number, including area code: 202-828-0850
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 1.01 | Entry Into a Material Definitive Agreement. |
Agreements with Fortive Corporation
On July 1, 2016, Danaher Corporation (Danaher) entered into definitive agreements with Fortive Corporation (Fortive), a wholly owned subsidiary of Danaher at that time, that, among other things, set forth the terms and conditions of the separation of Fortive from Danaher (the Separation) and the distribution of Fortives outstanding common stock, par value $0.01 per share, to Danahers stockholders (provided that fractional Fortive shares that Danaher stockholders would otherwise have been entitled to receive were aggregated and are being sold in the public market by the distribution agent, with the proceeds to be distributed ratably to such Danaher stockholders) (the Distribution). The agreements provide a framework for Danahers relationship with Fortive from and after the Separation, including the allocation between Fortive and Danaher of Danahers and Fortives assets, employees, liabilities and obligations attributable to periods prior to, at and after the Separation. In connection with the Separation, Danaher and Fortive entered into a Separation and Distribution Agreement (the Separation Agreement), an Employee Matters Agreement (the Employee Matters Agreement), a Tax Matters Agreement (the Tax Matters Agreement), a Transition Services Agreement (the Transition Services Agreement), an Intellectual Property Matters Agreement (the Intellectual Property Matters Agreement) and a DBS License Agreement (the DBS License Agreement), each dated as of July 1, 2016. A summary of certain material features of the Separation Agreement, Employee Matters Agreement, the Tax Matters Agreement, the Transition Services Agreement, the Intellectual Property Matters Agreement and the DBS License Agreement, all of which are referenced below, can be found in the section entitled Certain Relationships and Related Person TransactionsAgreements with Danaher in Fortives Information Statement, which is included as Exhibit 99.1 to Fortives Current Report on Form 8-K filed with the Securities and Exchange Commission on June 15, 2016 (the Information Statement). These summaries are incorporated by reference into this Item 1.01 in their entirety.
Separation Agreement
The Separation Agreement sets forth, among other things, the agreements between Danaher and Fortive regarding the principal transactions necessary to effect the Separation and the Distribution. It also sets forth other agreements that govern certain aspects of Danahers ongoing relationship with Fortive after the completion of the Separation and the Distribution. The description of the Separation Agreement set forth under this Item 1.01 is qualified in its entirety by reference to the complete terms and conditions of the Separation Agreement incorporated by reference as Exhibit 2.1 hereto and incorporated herein by reference.
Employee Matters Agreement
The Employee Matters Agreement sets forth, among other things, the allocation of assets, liabilities and responsibilities relating to employee compensation and benefit plans and programs and other related matters in connection with the Separation, including the treatment of outstanding equity and other incentive awards and certain retirement and welfare benefit obligations. The description of the Employee Matters Agreement set forth under this Item 1.01 is qualified in its entirety by reference to the complete terms and conditions of the Employee Matters Agreement incorporated by reference as Exhibit 10.1 hereto and incorporated herein by reference.
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Tax Matters Agreement
The Tax Matters Agreement governs Danahers and Fortives respective rights, responsibilities and obligations after the Distribution with respect to tax liabilities (including taxes, if any, incurred as a result of any failure of the Distribution or certain related transactions to qualify for tax-free treatment for U.S. federal income tax purposes) and benefits, tax attributes, the preparation and filing of tax returns, the control of audits and other tax proceedings and other matters regarding taxes. The description of the Tax Matters Agreement set forth under this Item 1.01 is qualified in its entirety by reference to the complete terms and conditions of the Tax Matters Agreement incorporated by reference as Exhibit 10.2 hereto and incorporated herein by reference.
Transition Services Agreement
The Transition Services Agreement sets forth the terms and conditions pursuant to which Danaher and its subsidiaries and Fortive and its subsidiaries will provide to each other various services. The services to be provided include information technology, facilities, certain accounting and other financial functions, and administrative services. The charges for the transition services generally are expected to allow the providing company to fully recover all out-of-pocket costs and expenses it actually incurs in connection with providing the service, plus, in some cases, the allocated indirect costs of providing the services, generally without profit. The description of the Transition Services Agreement set forth under this Item 1.01 is qualified in its entirety by reference to the complete terms and conditions of the Transition Services Agreement incorporated by reference as Exhibit 10.3 hereto and incorporated herein by reference.
Intellectual Property Matters Agreement
The Intellectual Property Matters Agreement sets forth the terms and conditions pursuant to which Danaher has granted to Fortive a personal, generally irrevocable, non-exclusive, worldwide, and royalty-free license to use certain intellectual property rights retained by Danaher. Fortive will be able to sublicense its rights in connection with activities relating to Fortives and its affiliates business, but not for independent use by third parties.
Fortive has also granted back to Danaher a personal, generally irrevocable, non-exclusive, worldwide, and royalty-free license to continue to use the transferred intellectual property rights. Danaher will be able to sublicense its rights in connection with activities relating to Danahers and its affiliates retained business, but not for independent use by third parties. This license back will permit Danaher to continue to use the transferred intellectual property rights in the conduct of its remaining businesses. The description of the Intellectual Property Matters Agreement set forth under this Item 1.01 is qualified in its entirety by reference to the complete terms and conditions of the Intellectual Property Matters Agreement incorporated by reference as Exhibit 10.4 hereto and incorporated herein by reference.
DBS License Agreement
The DBS License Agreement sets forth the terms and conditions pursuant to which Danaher has granted a non-exclusive, worldwide, non-transferable, perpetual license to Fortive to use DBS solely in support of its businesses. Fortive will be able to sublicense such license solely to direct and indirect, wholly-owned subsidiaries (but only as long as such entities remain direct and indirect, wholly-owned subsidiaries). In addition, each of Danaher and Fortive licensed to the other party improvements made by such party to DBS during the first two years of the term of the DBS License Agreement. The description of the DBS License Agreement set forth under this Item 1.01 is qualified in its entirety by reference to the complete terms and conditions of the DBS License Agreement incorporated by reference as Exhibit 10.5 hereto and incorporated herein by reference.
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Item 2.01 | Completion of Acquisition or Disposition of Assets. |
Immediately prior to the Distribution, Fortive was a 100% owned subsidiary of Danaher. The Distribution was completed effective as of 12:01 a.m. on July 2, 2016. Following the completion of the Distribution, Fortive is now an independent public company trading under the symbol FTV on the New York Stock Exchange, and Danaher retains no ownership interest in Fortive. The distribution was made to Danahers stockholders of record as of the close of business on June 15, 2016 (the Record Date), who received one share of Fortive common stock for every two shares of Danaher common stock held as of the Record Date. Danaher did not issue fractional shares of Fortives common stock in the Distribution. Fractional shares that Danaher stockholders would otherwise have been entitled to receive were aggregated and are being sold in the public market by the distribution agent. The aggregate net cash proceeds of these sales will be distributed ratably to those stockholders who would otherwise have been entitled to receive fractional shares.
Item 7.01 | Regulation FD Disclosure. |
Danaher has made available on the Investor Relations section of its public website (http://www.danaher.com) unaudited pro forma consolidated condensed Statements of Earnings and non-GAAP adjusted pro forma financial data of Danaher for the fiscal years ended December 31, 2013, December 31, 2014 and December 31, 2015 and the fiscal quarters ended April 3, 2015, July 3, 2015, October 2, 2015, December 31, 2015 and April 1, 2016 to assist investors in assessing Danahers historical performance on a basis that excludes the results of operations of Fortive.
This information shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the Exchange Act), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
Item 8.01. | Other Events. |
On July 2, 2016, Danaher issued a press release announcing the completion of the Distribution and the start of Fortives operations as an independent company. A copy of the press release is attached hereto as Exhibit 99.1 and incorporated herein by reference.
Item 9.01. | Financial Statements and Exhibits. |
(b) Pro forma financial information.
The unaudited pro forma consolidated condensed financial statements of Danaher giving effect to the Distribution, and the related notes thereto, required by Article 11 of Regulation S-X, are attached hereto as Exhibit 99.2.
(d) Exhibits
Exhibit |
Description | |
2.1 | Separation and Distribution Agreement, dated as of July 1, 2016, by and between Danaher Corporation and Fortive Corporation (incorporated by reference to Exhibit 2.1 to Amendment No. 1 to Fortive Corporations Registration Statement on Form 10, filed on March 3, 2016) | |
10.1 | Employee Matters Agreement, dated as of July 1, 2016, by and between Danaher Corporation and Fortive Corporation (incorporated by reference to Exhibit 10.2 to Amendment No. 1 to Fortive Corporations Registration Statement on Form 10, filed on March 3, 2016) | |
10.2 | Tax Matters Agreement, dated as of July 1, 2016, by and between Danaher Corporation and Fortive Corporation (incorporated by reference to Exhibit 10.3 to Amendment No. 1 to Fortive Corporations Registration Statement on Form 10, filed on March 3, 2016) | |
10.3 | Transition Services Agreement, dated as of July 1, 2016, by and between Danaher Corporation and Fortive Corporation (incorporated by reference to Exhibit 10.1 to Amendment No. 1 to Fortive Corporations Registration Statement on Form 10, filed on March 3, 2016) | |
10.4 | Intellectual Property Matters Agreement, dated as of July 1, 2016, by and between Danaher Corporation and Fortive Corporation (incorporated by reference to Exhibit 10.4 to Amendment No. 1 to Fortive Corporations Registration Statement on Form 10, filed on March 3, 2016) | |
10.5 | DBS License Agreement, dated as of July 1, 2016, by and between Danaher Corporation and Fortive Corporation (incorporated by reference to Exhibit 10.5 to Amendment No. 1 to Fortive Corporations Registration Statement on Form 10, filed on March 3, 2016) | |
99.1 | Press release of Danaher Corporation, dated as of July 2, 2016 | |
99.2 | Unaudited pro forma consolidated condensed financial statements of Danaher Corporation |
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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 hereunto duly authorized.
DANAHER CORPORATION | ||
By: | /s/ James F. OReilly | |
Name: James F. OReilly | ||
Title: Vice President, Associate General Counsel and Secretary |
Date: July 8, 2016
5
Exhibit Index
Exhibit |
Description | |
2.1 | Separation and Distribution Agreement, dated as of July 1, 2016, by and between Danaher Corporation and Fortive Corporation (incorporated by reference to Exhibit 2.1 to Amendment No. 1 to Fortive Corporations Registration Statement on Form 10, filed on March 3, 2016) | |
10.1 | Employee Matters Agreement, dated as of July 1, 2016, by and between Danaher Corporation and Fortive Corporation (incorporated by reference to Exhibit 10.2 to Amendment No. 1 to Fortive Corporations Registration Statement on Form 10, filed on March 3, 2016) | |
10.2 | Tax Matters Agreement, dated as of July 1, 2016, by and between Danaher Corporation and Fortive Corporation (incorporated by reference to Exhibit 10.3 to Amendment No. 1 to Fortive Corporations Registration Statement on Form 10, filed on March 3, 2016) | |
10.3 | Transition Services Agreement, dated as of July 1, 2016, by and between Danaher Corporation and Fortive Corporation (incorporated by reference to Exhibit 10.1 to Amendment No. 1 to Fortive Corporations Registration Statement on Form 10, filed on March 3, 2016) | |
10.4 | Intellectual Property Matters Agreement, dated as of July 1, 2016, by and between Danaher Corporation and Fortive Corporation (incorporated by reference to Exhibit 10.4 to Amendment No. 1 to Fortive Corporations Registration Statement on Form 10, filed on March 3, 2016) | |
10.5 | DBS License Agreement, dated as of July 1, 2016, by and between Danaher Corporation and Fortive Corporation (incorporated by reference to Exhibit 10.5 to Amendment No. 1 to Fortive Corporations Registration Statement on Form 10, filed on March 3, 2016) | |
99.1 | Press release of Danaher Corporation, dated as of July 2, 2016 | |
99.2 | Unaudited pro forma consolidated condensed financial statements of Danaher Corporation |
6
Exhibit 99.1
DANAHER CORPORATION COMPLETES SEPARATION OF FORTIVE CORPORATION
Washington, D.C., July 2, 2016 Danaher Corporation (NYSE:DHR) announced today that it has completed the separation of its Test & Measurement segment, Industrial Technologies segment (other than its Product Identification platform) and Retail/Commercial Petroleum platform through the spin-off of Fortive Corporation. Fortive will begin regular way trading on the New York Stock Exchange on July 5, 2016, under the symbol FTV.
This is an exciting day for Danaher. The successful spin-off of Fortive is an exceptional opportunity for both Danaher and Fortive to independently build greater shareholder value, to serve customers and to deliver on strategic priorities by investing in high impact organic and inorganic growth opportunities, said Danaher President and Chief Executive Officer Thomas P. Joyce, Jr.
In connection with the separation, Danaher stockholders today received one share of common stock of Fortive for every two shares of Danaher common stock held at the close of business on June 15, 2016 (other than fractional shares, which will be aggregated and sold into the public market and the proceeds distributed to Danaher stockholders that otherwise would have received such fractional shares). Because the separation was completed on a Saturday and not a business day, the shares are expected to be credited to street name stockholders through the Depository Trust Corporation on July 5, 2016. Approximately 345 million shares of Fortive common stock were distributed in the separation.
ABOUT DANAHER
Danaher is a global science and technology innovator committed to helping its customers solve complex challenges and improving quality of life around the world. Its family of world class brands have leadership positions in some of the most demanding and attractive industries, including health care, environmental and industrial. With more than 20 operating companies, Danahers globally diverse team of 59,000 associates is united by a common culture and operating system, the Danaher Business System. For more information please visit www.danaher.com.
FORWARD-LOOKING STATEMENTS
Statements in this release that are not strictly historical, including the statements regarding Danahers opportunities to build shareholder value, deliver on strategic priorities and invest in high impact organic and inorganic growth opportunities, are forward-looking statements within the meaning of the federal securities laws. There are a number of important factors that could cause actual results, developments and business decisions to differ materially from those suggested or indicated by such forward-looking statements and you should not place undue reliance on any such forward-looking statements. These factors include, among other things, deterioration of or instability in the economy, the markets we serve and the financial markets, the impact of our restructuring activities on our ability to grow, contractions or growth rates and
cyclicality of markets we serve, competition, our ability to develop and successfully market new products and technologies and expand into new markets, the potential for improper conduct by our employees, agents or business partners, our ability to successfully identify, consummate and integrate appropriate acquisitions and successfully complete divestitures and other dispositions, contingent liabilities relating to acquisitions and divestitures, our ability to realize the anticipated benefits of the Fortive separation, our compliance with applicable laws and regulations (including regulations relating to medical devices and the healthcare industry) and changes in applicable laws and regulations, our ability to effectively address cost reductions and other changes in the healthcare industry, risks relating to potential impairment of goodwill and other intangible assets, currency exchange rates, tax audits and changes in our tax rate and income tax liabilities, litigation and other contingent liabilities including intellectual property and environmental, health and safety matters, risks relating to product, service or software defects, product liability and recalls, risks relating to product manufacturing, the impact of our debt obligations on our operations and liquidity, our relationships with and the performance of our channel partners, commodity costs and surcharges, our ability to adjust purchases and manufacturing capacity to reflect market conditions, reliance on sole sources of supply, labor matters, international economic, political, legal, compliance and business factors, disruptions relating to man-made and natural disasters, security breaches or other disruptions of our information technology systems and pension plan costs. Additional information regarding the factors that may cause actual results to differ materially from these forward-looking statements is available in our SEC filings, including our 2015 Annual Report on Form 10-K and Quarterly Report on Form 10-Q for the first quarter of 2016. These forward-looking statements speak only as of the date of this release, and Danaher does not assume any obligation to update or revise any forward-looking statement, whether as a result of new information, future events and developments or otherwise.
CONTACT
Matthew E. Gugino
Vice President, Investor Relations
Danaher Corporation
2200 Pennsylvania Avenue, N.W., Suite 800W
Washington, D.C. 20037
Telephone: (202) 828-0850
Fax: (202) 828-0860
2
Exhibit 99.2
UNAUDITED PRO FORMA CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
OVERVIEW
On July 2, 2016, Danaher Corporation (Danaher or the Company), completed the previously announced separation of its business into two independent publicly traded companies (the Separation). Completion of the Separation created a multi-industry, science and technology growth company that retained the Danaher name and a diversified industrial growth company, Fortive Corporation (Fortive). As the Separation occurred during the third quarter of 2016, the Company will classify Fortive as a discontinued operation in its historical financial statements beginning in the third quarter of 2016.
BASIS OF PRESENTATION
The following unaudited pro forma consolidated condensed financial statements of the Company were derived from its historical consolidated financial statements and are being presented to give effect to the Separation. The unaudited pro forma Consolidated Condensed Statements of Earnings for the quarter ended April 1, 2016 and for each of the three years ended December 31, 2015 reflect the Companys results as if the Separation had occurred on January 1, 2013. The unaudited pro forma Consolidated Condensed Balance Sheet as of April 1, 2016 gives effect to the Separation as if it occurred on that date.
The unaudited pro forma consolidated condensed financial statements give effect to the Separation including: (i) the elimination of the historical Fortive financial results on a carve-out basis; (ii) the adjustments to the Fortive carve-out financial statements to meet the requirements of discontinued operations; and (iii) the transfer of certain assets and liabilities between the Company and Fortive upon Separation. The unaudited pro forma consolidated condensed financial statements do not give effect to the following transactions: (i) the cash payment of approximately $3.0 billion from Fortive to the Company as a result of the Separation; and (ii) the intended use of the proceeds from such payment, including the intention to use a portion of such proceeds to repay outstanding Company indebtedness and the related anticipated reduction to interest expense. The Separation adjustments are based on available information and assumptions that the Companys management believes are reasonable, that reflect the impact of events directly attributable to the Separation that are factually supportable, and for purposes of the Consolidated Condensed Statements of Earnings, are expected to have a continuing impact on the Company. The Company has entered into a Transition Services Agreement with Fortive pursuant to which the Company and Fortive will provide each other certain specified services on a temporary basis. These transition services are not expected to have a material impact on the Company and are not recurring in nature and as such have not been included in the Separation adjustments.
The Danaher Historical columns in the unaudited pro forma consolidated condensed financial statements reflect the Companys historical financial statements for the periods presented and do not reflect any adjustments related to the Separation and related events.
The Separation of Fortive columns in the unaudited pro forma consolidated condensed financial statements were derived from Fortives historical combined financial statements included in Exhibit 99.1 to Fortives Current Report on Form 8-K filed with the Securities and Exchange Commission (the SEC) on June 15, 2016 (the Fortive Information Statement).
The Separation Adjustments columns are the adjustments to the Fortive combined financial statements amounts as included in the Fortive Information Statement to reflect Fortive as discontinued operations in the Companys pro forma financial statements. The Separation adjustments represent the Companys current best estimates and may differ from those that will be calculated to report Fortive as discontinued operations in Danahers future filings.
The unaudited pro forma consolidated condensed financial statements are subject to the assumptions and adjustments described in the accompanying notes. Management believes that these assumptions and adjustments are reasonable under the circumstances and given the information available at this time. The unaudited pro forma consolidated condensed financial statements are not intended to be a complete presentation of the Companys financial position or results of operations had the Separation occurred as of and for the periods indicated. In addition, the unaudited pro forma consolidated condensed financial statements are provided for illustrative and informational purposes only, and are not necessarily indicative of the Companys historical or future results of operations or financial condition had the Separation been completed on the dates assumed.
The unaudited pro forma consolidated condensed financial statements should be read in conjunction with (i) the audited consolidated financial statements, the accompanying notes and Managements Discussion and Analysis of Financial Condition and Results of Operations included in the Companys Annual Report on Form 10-K for the year ended December 31, 2015 and (ii) the unaudited consolidated condensed financial statements, the accompanying notes and Managements Discussion and Analysis of Financial Condition and Results of Operations included in the Companys Quarterly Report on Form 10-Q for the three months ended April 1, 2016 which are available at the Companys web site at www.danaher.com.
DANAHER CORPORATION AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED CONDENSED STATEMENT OF EARNINGS
($ and shares in millions, except per share amounts)
Three Month Period Ended April 1, 2016 | ||||||||||||||||
Danaher | Separation of | Separation | Pro Forma | |||||||||||||
Historical | Fortive (a) |
Adjustments |
Danaher | |||||||||||||
Sales |
$ | 5,387.2 | $ | (1,474.7) | $ 11.6 | (b) | $ | 3,924.1 | ||||||||
Cost of sales |
(2,524.6) | 779.5 | (11.7) | (b) | (1,756.8) | |||||||||||
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Gross profit |
2,862.6 | (695.2) | (0.1) | 2,167.3 | ||||||||||||
Operating costs and other: |
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Selling, general and administrative expenses |
(1,660.7) | 338.5 | (5.9) | (c) (d) (e) |
(1,328.1) | |||||||||||
Research and development expenses |
(319.8) | 93.7 | | (226.1) | ||||||||||||
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Operating profit |
882.1 | (263.0) | (6.0) | 613.1 | ||||||||||||
Non-operating income (expense): |
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Other income |
223.4 | | | 223.4 | ||||||||||||
Interest expense |
(61.7) | | 8.8 | (f) | (52.9) | |||||||||||
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Earnings from continuing operations before income taxes |
1,043.8 | (263.0) | 2.8 | 783.6 | ||||||||||||
Income taxes |
(285.4) | 81.0 | 6.6 | (g) | (197.8) | |||||||||||
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Net earnings from continuing operations |
758.4 | (182.0) | 9.4 | 585.8 | ||||||||||||
Earnings from discontinued operations, net of income taxes |
| 182.0 | (9.4) | 172.6 | ||||||||||||
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Net earnings |
$ | 758.4 | $ | | $ | $ | 758.4 | |||||||||
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Net earnings per share from continuing operations: |
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Basic |
$ | 1.10 | $ | (0.26) | $ 0.01 | $ | 0.85 | |||||||||
Diluted |
$ | 1.09 | $ | (0.26) | $ 0.01 | $ | 0.84 | |||||||||
Net earnings per share from discontinued operations: |
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Basic |
$ | | $ | 0.26 | $ (0.01) | $ | 0.25 | |||||||||
Diluted |
$ | | $ | 0.26 | $ (0.01) | $ | 0.25 | |||||||||
Net earnings per share: |
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Basic |
$ | 1.10 | $ | 1.10 | ||||||||||||
Diluted |
$ | 1.09 | $ | 1.09 | ||||||||||||
Average common stock and common equivalent shares outstanding: |
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Basic |
688.6 | 688.6 | ||||||||||||||
Diluted |
697.1 | 697.1 |
See the accompanying Notes to the Unaudited Pro Forma Consolidated Condensed Financial Statements.
DANAHER CORPORATION AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED CONDENSED STATEMENT OF EARNINGS
($ and shares in millions, except per share amounts)
Year Ended December 31, 2015 | ||||||||||||||||
Danaher | Separation of | Separation | Pro Forma | |||||||||||||
Historical | Fortive (a) |
Adjustments |
Danaher | |||||||||||||
Sales |
$ | 20,563.1 | $ | (6,178.8) | $ 49.4 | (b) | $ | 14,433.7 | ||||||||
Cost of sales |
(9,800.6) | 3,183.5 | (45.5) | (b) | (6,662.6) | |||||||||||
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Gross profit |
10,762.5 | (2,995.3) | 3.9 | 7,771.1 | ||||||||||||
Operating costs and other: |
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Selling, general and administrative expenses |
(6,054.3) | 1,347.9 | (41.1) | (c) (d) (e) |
(4,747.5) | |||||||||||
Research and development expenses |
(1,239.1) | 377.7 | | (861.4) | ||||||||||||
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Operating profit |
3,469.1 | (1,269.7) | (37.2) | 2,162.2 | ||||||||||||
Non-operating income (expense): |
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Other income |
12.4 | | | 12.4 | ||||||||||||
Interest expense |
(162.8) | | 23.0 | (f) | (139.8) | |||||||||||
Interest income |
5.3 | | (0.7) | (f) | 4.6 | |||||||||||
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Earnings from continuing operations before income taxes |
3,324.0 | (1,269.7) | (14.9) | 2,039.4 | ||||||||||||
Income taxes |
(725.3) | 405.9 | 26.7 | (g) | (292.7) | |||||||||||
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Net earnings from continuing operations |
2,598.7 | (863.8) | 11.8 | 1,746.7 | ||||||||||||
Earnings from discontinued operations, net of income taxes |
758.7 | 863.8 | (11.8) | 1,610.7 | ||||||||||||
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Net earnings |
$ | 3,357.4 | $ | | $ | $ | 3,357.4 | |||||||||
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Net earnings per share from continuing operations: |
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Basic |
$ | 3.72 | $ | (1.24) | $ 0.02 | $ | 2.50 | |||||||||
Diluted |
$ | 3.67 | $ | (1.22) | $ 0.02 | $ | 2.47 | |||||||||
Net earnings per share from discontinued operations: |
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Basic |
$ | 1.09 | $ | 1.24 | $ (0.02) | $ | 2.31 | |||||||||
Diluted |
$ | 1.07 | $ | 1.22 | $ (0.02) | $ | 2.27 | |||||||||
Net earnings per share: |
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Basic |
$ | 4.81 | $ | 4.81 | ||||||||||||
Diluted |
$ | 4.74 | $ | 4.74 | ||||||||||||
Average common stock and common equivalent shares outstanding: |
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Basic |
698.1 | 698.1 | ||||||||||||||
Diluted |
708.5 | 708.5 |
See the accompanying Notes to the Unaudited Pro Forma Consolidated Condensed Financial Statements.
DANAHER CORPORATION AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED CONDENSED STATEMENT OF EARNINGS
($ and shares in millions, except per share amounts)
Year Ended December 31, 2014 | ||||||||||||||||
Danaher |
Separation of Fortive (a) |
Separation |
Pro Forma |
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Sales |
$ 19,154.0 | $ | (6,337.2) | $ 50.1 | (b) | $ 12,866.9 | ||||||||||
Cost of sales |
(9,261.4) | 3,288.0 | (44.0) | (b) | (6,017.4) | |||||||||||
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Gross profit |
9,892.6 | (3,049.2) | 6.1 | 6,849.5 | ||||||||||||
Operating costs and other: |
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Selling, general and administrative expenses |
(5,389.0) | 1,416.3 | (62.4) | (c) (e) |
(4,035.1) | |||||||||||
Research and development expenses |
(1,157.0) | 387.6 | | (769.4) | ||||||||||||
|
|
|
|
|
||||||||||||
Operating profit |
3,346.6 | (1,245.3) | (56.3) | 2,045.0 | ||||||||||||
Non-operating income (expense): |
||||||||||||||||
Other income |
156.5 | (33.9) | | 122.6 | ||||||||||||
Interest expense |
(119.1) | | 24.4 | (f) | (94.7) | |||||||||||
Interest income |
16.7 | | (3.4) | (f) | 13.3 | |||||||||||
|
|
|
|
|
||||||||||||
Earnings from continuing operations before income taxes |
3,400.7 | (1,279.2) | (35.3) | 2,086.2 | ||||||||||||
Income taxes |
(857.6) | 395.8 | 14.3 | (g) | (447.5) | |||||||||||
|
|
|
|
|
||||||||||||
Net earnings from continuing operations |
2,543.1 | (883.4) | (21.0) | 1,638.7 | ||||||||||||
Earnings from discontinued operations, net of income taxes |
55.3 | 883.4 | 21.0 | 959.7 | ||||||||||||
|
|
|
|
|
||||||||||||
Net earnings |
$ 2,598.4 | $ | | $ | $ 2,598.4 | |||||||||||
|
|
|
|
|
||||||||||||
Net earnings per share from continuing operations: |
||||||||||||||||
Basic |
$ 3.62 | $ | (1.26) | $ (0.03) | $ 2.33 | |||||||||||
Diluted |
$ 3.56 | $ | (1.23) | $ (0.03) | $ 2.29 | * | ||||||||||
Net earnings per share from discontinued operations: |
||||||||||||||||
Basic |
$ 0.08 | $ | 1.26 | $ 0.03 | $ 1.37 | |||||||||||
Diluted |
$ 0.08 | $ | 1.23 | $ 0.03 | $ 1.34 | |||||||||||
Net earnings per share: |
||||||||||||||||
Basic |
$ 3.70 | $ 3.70 | ||||||||||||||
Diluted |
$ 3.63 | ** | $ 3.63 | |||||||||||||
Average common stock and common equivalent shares outstanding: |
||||||||||||||||
Basic |
702.2 | 702.2 | ||||||||||||||
Diluted |
716.1 | 716.1 |
* | Net earnings per share amount does not cross add due to rounding. |
** | Net earnings per share amount does not add due to rounding. |
See the accompanying Notes to the Unaudited Pro Forma Consolidated Condensed Financial Statements.
DANAHER CORPORATION AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED CONDENSED STATEMENT OF EARNINGS
($ and shares in millions, except per share amounts)
Year Ended December 31, 2013 | ||||||||||||||||
Danaher | Separation of | Separation | Pro Forma | |||||||||||||
Historical | Fortive (a) |
Adjustments |
Danaher |
|||||||||||||
Sales |
$ | 18,283.1 | $ | (5,961.9) | $ 39.7 | (b) | $ 12,360.9 | |||||||||
Cost of sales |
(8,941.1) | 3,097.9 | (36.2) | (b) | (5,879.4) | |||||||||||
|
|
|
|
|
|
|||||||||||
Gross profit |
9,342.0 | (2,864.0) | 3.5 | 6,481.5 | ||||||||||||
Operating costs and other: |
||||||||||||||||
Selling, general and administrative expenses |
(5,117.1) | 1,342.5 | (50.9) | (c) (e) |
(3,825.5) | |||||||||||
Research and development expenses |
(1,104.4) | 378.3 | | (726.1) | ||||||||||||
|
|
|
|
|
|
|||||||||||
Operating profit |
3,120.5 | (1,143.2) | (47.4) | 1,929.9 | ||||||||||||
Non-operating income (expense): |
||||||||||||||||
Other income |
431.3 | | | 431.3 | ||||||||||||
Interest expense |
(141.2) | | 29.6 | (f) | (111.6) | |||||||||||
Interest income |
5.7 | | (1.2) | (f) | 4.5 | |||||||||||
|
|
|
|
|
|
|||||||||||
Earnings from continuing operations before income taxes |
3,416.3 | (1,143.2) | (19.0) | 2,254.1 | ||||||||||||
Income taxes |
(825.7) | 312.3 | 2.2 | (g) | (511.2) | |||||||||||
|
|
|
|
|
|
|||||||||||
Net earnings from continuing operations |
2,590.6 | (830.9) | (16.8) | 1,742.9 | ||||||||||||
Earnings from discontinued operations, net of income taxes |
104.4 | 830.9 | 16.8 | 952.1 | ||||||||||||
|
|
|
|
|
|
|||||||||||
Net earnings |
$ | 2,695.0 | $ | | $ | $ 2,695.0 | ||||||||||
|
|
|
|
|
|
|||||||||||
Net earnings per share from continuing operations: |
||||||||||||||||
Basic |
$ | 3.72 | $ | (1.19) | $ (0.02) | $ 2.50 | * | |||||||||
Diluted |
$ | 3.65 | $ | (1.17) | $ (0.02) | $ 2.46 | ||||||||||
Net earnings per share from discontinued operations: |
||||||||||||||||
Basic |
$ | 0.15 | $ | 1.19 | $ 0.02 | $ 1.37 | * | |||||||||
Diluted |
$ | 0.15 | $ | 1.17 | $ 0.02 | $ 1.34 | ||||||||||
Net earnings per share: |
||||||||||||||||
Basic |
$ | 3.87 | $ 3.87 | |||||||||||||
Diluted |
$ | 3.80 | $ 3.80 | |||||||||||||
Average common stock and common equivalent shares outstanding: |
||||||||||||||||
Basic |
696.0 | 696.0 | ||||||||||||||
Diluted |
711.0 | 711.0 |
* | Net earnings per share amount does not cross add due to rounding. |
See the accompanying Notes to the Unaudited Pro Forma Consolidated Condensed Financial Statements.
DANAHER CORPORATION AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED CONDENSED BALANCE SHEET
($ and shares in millions, except per share amounts)
As of April 1, 2016 | ||||||||||||||||
Danaher | Separation of | Separation | Pro Forma | |||||||||||||
Historical | Fortive (a) | Adjustments |
Danaher | |||||||||||||
ASSETS |
||||||||||||||||
Current assets: |
||||||||||||||||
Cash and cash equivalents |
$ | 664.3 | $ | | $ | $ | 664.3 | |||||||||
Trade accounts receivable, net |
3,871.2 | (929.6) | | 2,941.6 | ||||||||||||
Inventories: |
||||||||||||||||
Finished goods |
1,115.2 | (196.5) | | 918.7 | ||||||||||||
Work in process |
346.4 | (80.3) | | 266.1 | ||||||||||||
Raw materials |
776.1 | (276.8) | | 499.3 | ||||||||||||
|
|
|
|
|
|
|
||||||||||
Total inventories |
2,237.7 | (553.6) | | 1,684.1 | ||||||||||||
Prepaid expenses and other current assets |
974.0 | (88.4) | (5.0) | (h) | 880.6 | |||||||||||
Current assets, discontinued operations |
| 1,571.6 | 5.0 | 1,576.6 | ||||||||||||
|
|
|
|
|
|
|
||||||||||
Total current assets |
7,747.2 | | | 7,747.2 | ||||||||||||
Property, plant and equipment, net of accumulated depreciation |
2,872.5 | (519.1) | (8.7) | (h) | 2,344.7 | |||||||||||
Other assets |
1,016.7 | (398.6) | 14.9 | (i) | 633.0 | |||||||||||
Goodwill |
25,485.4 | (3,973.3) | (104.7) | (j) | 21,407.4 | |||||||||||
Other intangible assets, net |
11,263.8 | (750.0) | 31.8 | (j) | 10,545.6 | |||||||||||
Other assets, discontinued operations |
| 5,641.0 | 66.7 | 5,707.7 | ||||||||||||
|
|
|
|
|
|
|
||||||||||
Total assets |
$ | 48,385.6 | $ | | $ | $ | 48,385.6 | |||||||||
|
|
|
|
|
|
|
||||||||||
LIABILITIES AND STOCKHOLDERS EQUITY |
||||||||||||||||
Current liabilities: |
||||||||||||||||
Notes payable and current portion of long-term debt |
$ | 197.0 | $ | | $ | $ | 197.0 | |||||||||
Trade accounts payable |
1,918.8 | (625.6) | | 1,293.2 | ||||||||||||
Accrued expenses and other liabilities |
3,205.5 | (618.8) | (5.0) | (h) | 2,581.7 | |||||||||||
Current liabilities, discontinued operations |
| 1,244.4 | 5.0 | 1,249.4 | ||||||||||||
|
|
|
|
|
|
|
||||||||||
Total current liabilities |
5,321.3 | | | 5,321.3 | ||||||||||||
Other long-term liabilities |
6,292.5 | (706.9) | 195.8 | (h) (i) |
5,781.4 | |||||||||||
Long-term debt |
12,194.7 | | | 12,194.7 | ||||||||||||
Long-term liabilities, discontinued operations |
| 706.9 | (195.8) | 511.1 | ||||||||||||
Stockholders equity: |
||||||||||||||||
Common stock |
8.0 | | | 8.0 | ||||||||||||
Additional-paid-in-capital |
5,072.6 | | | 5,072.6 | ||||||||||||
Retained earnings |
21,660.6 | | | 21,660.6 | ||||||||||||
Accumulated other comprehensive income (loss) |
(2,236.5) | | | (2,236.5) | ||||||||||||
|
|
|
|
|
|
|
||||||||||
Total Danaher stockholders equity |
24,504.7 | | | 24,504.7 | ||||||||||||
Noncontrolling interests |
72.4 | | | 72.4 | ||||||||||||
|
|
|
|
|
|
|
||||||||||
Total stockholders equity |
24,577.1 | | | 24,577.1 | ||||||||||||
|
|
|
|
|
|
|
||||||||||
Total liabilities and stockholders equity |
$ | 48,385.6 | $ | | $ | $ | 48,385.6 | |||||||||
|
|
|
|
|
|
|
See the accompanying Notes to the Unaudited Pro Forma Consolidated Condensed Financial Statements.
DANAHER CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
The unaudited pro forma Consolidated Condensed Statements of Earnings for the three months ended April 1, 2016 and for the years ended December 31, 2015, 2014 and 2013 and the unaudited pro forma Consolidated Condensed Balance Sheet as of April 1, 2016 include the following pro forma adjustments:
(a) | Reflects the operations, assets, liabilities and equity of Fortive, formerly the Companys Test & Measurement segment, Industrial Technologies segment (other than its product identification businesses) and the retail/commercial petroleum business, which was derived from the historical combined financial statements prepared on a carve-out basis of accounting included in the Fortive Information Statement. |
Unaudited Pro Forma Consolidated Condensed Statement of Earnings
(b) | Represents adjustments for intercompany transactions that prior to the Separation were eliminated in consolidation and will no longer be eliminated subsequent to the Separation. |
(c) | Reflects the inclusion of general corporate overhead costs which were historically allocated to Fortive and which will be allocated to the Companys continuing operations as these costs will not be eliminated after the Separation. |
(d) | Reflects the removal of all nonrecurring Separation costs which were incurred and are included in the Companys historical results of operations for the three month period ended April 1, 2016 and the year ended December 31, 2015. These costs were primarily related to investment banker fees, legal fees, third-party consulting and contractor fees and other incremental costs directly related to Separation-related activities that are not expected to have a continuing impact on the Companys results of operations following the completion of the Separation. |
(e) | Represents the removal of carve-out basis adjustments made to the amortization expense related to intangible assets as recorded on the combined financial statements of Fortive. |
(f) | Reflects the removal of interest income and expense which has been allocated to Fortive based on the ratio of Fortives net assets to the Companys consolidated net assets for each period consistent with accounting standards related to the presentation of discontinued operations. |
(g) | Represents the tax impact of the Separation adjustments as well as the adjustments needed to reflect pro forma Danaher earnings from continuing operations. In determining the tax rate to apply to the Separation adjustments, the Company used the applicable statutory rate based on the jurisdiction in which the adjustment relates adjusted to reflect income taxes on Separation activity. |
Unaudited Pro Forma Consolidated Condensed Balance Sheet
(h) | Represents the adjustment of certain assets and liabilities as a result of their transfer between the Company and Fortive upon Separation pursuant to the various agreements entered into as part of the Separation and the distribution of Fortives outstanding common stock to Danahers stockholders (the Distribution). |
(i) | Represents reclassifications of various pension and post-retirement assets and liabilities. |
(j) | Represents the removal of carve-out basis adjustments made to goodwill and intangible assets as recorded on the combined financial statements of Fortive. |