2018 Annual Report Danaher 2018 Annual Report Financial Operating Highlights (dollars in millions except per share data and number of associates) 2018 2017 Sales $ 19,893.0 $ 18,329.7 Operating Profit $ 3,403.8 $ 2,990.4 Net Earnings $ 2,650.9 $ 2,469.8 Net Earnings Per Share (diluted) $ 3.74 $ 3.50 Operating Cash Flow $ 4,022.0 $ 3,477.8 Investing Cash Flow $ (2,949.4) $ (843.4) Financing Cash Flow $ (797.4) $ (3,098.5) Capital Expenditures $ (655.7) $ (619.6) Capital Disposals $ 6.3 $ 32.6 Free Cash Flow (Operating Cash Flow less Capital Expenditures plus Capital Disposals) $ 3,372.6 $ 2,890.8 Number of Associates 71,000 67,000 Total Assets $ 47,832.5 $ 46,648.6 Total Debt * $ 9,740.3 $ 10,522.1 Stockholders’ Equity $ 28,226.7 $ 26,367.8 Total Capitalization (Total Debt plus Stockholders’ Equity) $ 37,967.0 $ 36,889.9 * Long-Term Debt ($9,688.5 for 2018 and $10,327.4 for 2017) plus Notes Payable and Current Portion of Long-Term Debt ($51.8 for 2018 and $194.7 for 2017) All financial data set forth in this annual report relates solely to continuing operations unless otherwise indicated. 2018 Annual Report Dear Shareholders, As I begin my 30th year at Danaher, it is humbling to reflect on what our team has achieved over that time and exciting to think about the opportunities that still lie ahead. Financially and strategically, 2018 was an outstanding year. With the Danaher Business System (DBS) as our driving force, we strengthened our footholds in attractive, fast-growing markets and enhanced our competitive positions. We meaningfully accelerated our core revenue growth rate, led primarily by the impact of new product innovation and sales & marketing initiatives. Unified by our Shared Purpose—Helping Realize Life’s Potential—we helped our customers by delivering technologies and high-value solutions that advance global health and safety. THOMAS P. JOYCE, JR. President and Chief Executive Officer We are building a better, stronger Danaher. Through a combination of organic and inorganic growth initiatives, we have transformed into a higher growth, higher margin and higher recurring revenue company. Our recently announced pending acquisition* of the GE Life Sciences’ Biopharma business is an important and transformational component in this pursuit. GE Biopharma is an outstanding business with complementary strengths across the bioprocessing workflow that will enhance our biologics customer solutions. The caliber of talent that will be joining Danaher as part of this acquisition is, perhaps, GE Biopharma’s greatest asset, and we look forward to working together to advance our evolution into a higher growth, innovation-driven company. As our portfolio has evolved, the Danaher Business System and our Core Values have remained our foundation. It all starts with The Best Team and ensuring that we continue to focus on customers. The value of continuous improvement will remain a fundamental driver in everything we do. And * The acquisition remains subject to customary conditions, innovation will continue to define our future—probably including regulatory approvals, and is expected to be completed in the fourth quarter of 2019. more so today than ever before. Building The Best Team 2018 Results: We strive to build a diverse and inclusive workplace During the past year, our 71,000 associates that attracts, develops, engages and retains the around the world came together to deliver impressive results: best and brightest talent in the world. And in that workplace, we focus on cultivating strong • Core revenue growth of 6.0%, with our Life leaders who lead the way with DBS. We continue Sciences, Diagnostics, Product ID and Water to advance the depth and breadth of science and Quality platforms all delivering mid-single digit technology talent in order to drive innovation growth or better—a broad-based, meaningful across our businesses. step-up from prior years. • Core operating profit margin expansion of 70 A diverse and inclusive workplace is one where basis points, and gross profit margin at a record collaboration, trust and mutual respect accelerate high level of 55.8%. the pace of innovation and ensure that Danaher products serve our global customer base • 12.0% adjusted diluted net earnings per share effectively. We believe that meaningful technology (EPS) growth. breakthroughs come from teams that combine aspiration and action, value all voices and learn • Free cash flow of $3.4 billion was an increase of 16.5% versus last year, with a free cash flow to from each other’s different ideas, perspectives and net income conversion ratio of 127%—the 27th experiences. A diverse and inclusive workforce is consecutive year in which our free cash flow vital for our sustained success. has exceeded net income. Just as we value the unique contributions of each • We deployed $2.2 billion toward acquisitions, of our associates, we invest in their long-term including Integrated DNA Technologies (IDT), growth as Danaher leaders. One example is the a highly regarded genomics innovator that brings new depth to our Life Sciences platform, recent succession from our longtime Chief Financial and BLUE Software, a fast-growing software Officer Dan Comas to Matt McGrew as of January 1, management company that extends Product 2019. Matt has held various leadership roles during Identification’s position in packaging workflows. more than 15 years at Danaher, most recently serving as a Danaher Group CFO with responsibility for the Diagnostics and Dental platforms. I look forward to working closely with Matt in his new role, and I am incredibly grateful for Dan’s outstanding financial stewardship, thoughtful guidance and longtime friendship, along with his continuing support as an Executive Vice President at Danaher. Over the past few years we have focused on enhancing our DBS Leadership tools, specifically around talent attraction, development and retention. By prioritizing these talent initiatives, Looking Ahead we are helping our associates at every level achieve their full potential by advancing their The pace of change in our world today is careers in a way that is both personally and unprecedented and invigorating. As this rate of professionally fulfilling. change in science and technology accelerates, we remain keenly aware that it is human capital that Creating a Culture of “And” empowers progress—it’s people, who collaborate, innovate and imagine answers that were never In the pages that follow, you’ll see the significant contemplated before. progress we’ve made in our pursuit of a better, stronger Danaher. None of this would be possible At Danaher, we have an outstanding team of without strong leaders who live our Core Values and associates working together every day to support embody our culture at Danaher—a culture of “and.” our customers as they pursue solutions to some of the world’s toughest challenges, from We have always been focused on metrics to ensure improving healthcare to ensuring a safe and that we are driving performance for our customers stable food and water supply. Fueled by the and delivering results for our shareholders. ingenuity of our associates and the power of These metrics are the reflection of hard work DBS, we’ll continue this quest in support of by our associates, and we strive to illuminate our customers. why their contributions matter—it’s about both metrics and meaning. We know that sustainable As I look toward the opportunities in the year outperformance isn’t possible without a dedicated ahead, I am filled with a great sense of gratitude— team making it happen—we focus on performance for our exceptional associates, for the privilege and people. We will continue to drive for results, to do what we do every day and for your support and we take great pride in them, but not without of our endeavors. We know that you have options recognizing those who make it happen—it’s about when you choose where to invest, so thank you for results and recognition. choosing Danaher. We look forward to rewarding your continued support in the years to come. This culture of “and” is at the heart of our goal to create the best place to work, guided by the best leaders across our businesses. We have made tremendous progress toward this goal and are honored to be recognized as one of the Top 200 Best Employers for Diversity by Forbes. We are THOMAS P. JOYCE, JR. committed to improving on these initiatives and President and Chief Executive Officer metrics over time so that we can continue to build an inclusive and fulfilling workplace for our associates. DANAHER SEGMENTS We may describe certain products and devices which have applications submitted and pending for certain regulatory approvals, or are available only in certain markets. Life Sciences 2018 Segment Every day, scientists around the world are Revenue $ working to understand the causes of disease, 6.5B develop new therapies and test new drugs. Our Life Sciences businesses make this 2018 Segment Adjusted leading-edge scientific research possible. Our EBITDA Margin % capabilities extend beyond research to power 26.3 the creation of biopharmaceuticals, cell & gene therapies and more to advance patient health and improve treatment outcomes. 2018 Life Sciences Revenue: • 35% North America • 64% Recurring • 29% Western Europe 27% High-Growth Markets • 36% Nonrecurring • • 9% Other Developed Markets DATA 2018 Highlights: • Half of Pall’s annual revenue growth today is attributable to new products, like Cadence™ Inline Diafiltration (ILDF)—an important device that brings the biopharma industry one step closer to an end-to-end integrated continuous bioprocessing platform. • SCIEX achieved its seventh consecutive year of mid-single digit or better core revenue growth. • Leica Microsystems introduced the SP8 FALCON—a major advancement in confocal imaging that was recognized with a prestigious Cadence™ Inline Diafiltration Modules R&D 100 Award.