2015 ANNUAL REPORT FINANCIAL OPERATING HIGHLIGHTS (Dollars in Millions Except Per Share Data and Number of Associates) 2015 2014 Sales* $ 20,563.1 $ 19,154.0 Operating Profit* $ 3,469.1 $ 3,346.6 Net Earnings * $ 2,598.7 $ 2,543.1 Net Earnings Per Share (diluted) * $ 3.67 $ 3.56 Operating Cash Flow* $ 3,828.0 $ 3,618.0 Capital Expenditures* $ 633.0 $ 580.6 Free Cash Flow $ 3,195.0 $ 3,037.4 (Operating Cash Flow less Capital Expenditures) * Number of Associates 81,000 71,000 Total Assets $ 48,222.2 $ 36,991.7 Total Debt ** $ 12,870.4 $ 3,473.4 Stockholders’ Equity $ 23,764.0 $ 23,449.8 Total Capitalization $ 36,634.4 $ 26,923.2 (Total Debt plus Stockholders’ Equity) * From Continuing Operations ** Long-Term Debt ($12,025.2 for 2015 and $3,401.5 for 2014) plus Notes Payable and Current Portion of Long-Term Debt ($845.2 for 2015 and $71.9 for 2014) Environmental Our products help protect the global water supply, facilitate environmental stewardship, enhance the safety of personal data and improve business efficiencies. Our Water Quality platform provides instrumentation and disinfection systems to help analyze, treat and manage the quality of ultra-pure, potable, waste, ground and ocean water in residential, commercial, industrial and natural resource applications. Our Gilbarco Veeder-Root platform is a leading worldwide provider of solutions and services focused on fuel dispensing, remote fuel management, point-of-sale and payment systems, environmental compliance, vehicle tracking and fleet management. With a lightweight, compact and rugged design, the Surveyor HL and Hydrolab HL4 from OTT Hydromet, a division of Hach, help environmentalists measure a variety of water quality parameters in real-time, or for continuous unattended monitoring. Test & Measurement Our essential products, software and services help our customers create actionable intelligence through measurement and monitoring. We offer test, measurement and monitoring products that are used in the design and development of electronic, industrial, video and other advanced technologies and components, as well as for installation, service and maintenance of electrical, industrial, electronic and calibration applications. We also manufacture and distribute professional tools, toolboxes and automotive diagnostic equipment for professional mechanics through a network of franchised mobile distributors. With over 20 different wireless test tools and software, Fluke Connect helps engineers identify and diagnose problems quickly and confidently, while securely sharing critical data in the cloud—all without leaving the field. Industrial Technologies Our solutions help protect the world’s food supply, improve packaging design and quality, verify pharmaceutical dosages and authenticity, and power innovative machines. Our Product Identification platform develops and manufactures equipment, consumables and software for various printing, marking, coding, design and color management applications on consumer and industrial products. Our Automation platform provides electromechanical and electronic motion control solutions and mechanical components for the industrial automation market and various precision motion applications. A unique set of 3D design, communication and visualization tools, Esko’s Studio helps packaging design professionals produce artwork on a variety of packaging materials. Life Sciences & Diagnostics We are at the leading edge of scientific research and development, and advancing patient health with high diagnostic confidence. Our Diagnostics platform offers analytical instruments, reagents, consumables, software and services that hospitals, physician’s offices, reference laboratories and other critical care settings use to diagnose disease, monitor and guide treatment and therapy, assist in managing chronic disease and assess patient status. Our Life Sciences platform offers a broad range of research tools that scientists use to study the basic building blocks of life in order to understand the causes of disease, identify new therapies, and test new drugs and vaccines. With the addition of Pall, we are also a leading provider of filtration, separation and purification technologies to the biopharmaceutical, food and beverage, medical, aerospace, microelectronics and general industrial markets. The Aperio LV1 is Leica Biosystems’ real-time, live view digital pathology system for researchers new to digital pathology. Its intuitive interface, small footprint, minimal IT requirements and versatility help research laboratories deliver results faster. Dental We enable a broad spectrum of dental professionals, from general dentists and specialists to lab techs and university students, to provide high level of patient care and confidently optimize their work environments. Our products are used to diagnose, treat and prevent disease and ailments of the teeth, gums and supporting bone, as well as improve the aesthetics of the human smile. We are a leading worldwide provider of a broad range of dental consumables, equipment and services, and are dedicated to driving technological innovations that help dental professionals improve clinical outcomes and enhance productivity. The DEXIS Platinum Sensor and DEXIS Eleven Imaging Suite aid dental practitioners in diagnosing problems and planning treatment by providing highly detailed images, automated workflow features, easy-to-use imaging tools and cloud-based storage options. DEAR SHAREHOLDERS, 2015 was an extraordinary year for Danaher. We completed the largest acquisition in our history with Pall Corporation, announced the pending launch of Fortive Corporation, and drove excellent overall financial results. Despite a challenging economic backdrop, Danaher continued to execute well and create shareholder value. n We generated more than $20 billion in revenue, with $5.5 billion in the high growth markets, including over $2 billion in China alone. n The growth tools of the Danaher Business System (DBS) helped us continue to build our competitive advantage and gain market share across a number of operating companies. n We achieved more than 8% year-over-year Adjusted Diluted Net Earnings Per Share growth – among the best in our peer set. n We generated a record $3.2 billion in free cash flow, one of the best indicators of our execution quality. Our free cash flow to net income conversion ratio was 123%, the 24th consecutive year in which our free cash flow has exceeded net income. n We deployed more than $14 billion in acquisition related THOMAS P. JOYCE, JR. capital, announcing or completing 13 transactions, President and Chief Executive Officer in addition to Pall, with each of our five business segments executing at least one acquisition. While Danaher today is larger than it was a year ago, our goal is not exclusively to build a bigger Danaher, but to build a better Danaher. Perhaps the most significant affirmation of this goal was our announcement in May to establish a new industrial growth company, Fortive Corporation, which we expect to launch in the third quarter of 2016. Following the separation, Danaher will be a $16 billion multi-industry, science and technology growth company, well positioned to grow organically, improve profitability, deploy capital and generate substantial earnings growth for our shareholders. DBS will remain the core of our operating model, the cornerstone of our culture and the foundation upon which we build our competitive advantage. We expect Danaher’s market-leading brands to benefit from favorable secular growth trends, while generating high recurring revenues and gross margins with lower overall cyclicality. Our portfolio will include Danaher’s current Life Sciences, Diagnostics, Dental, Water Quality and Product Identification platforms, and Pall. EXECUTING ON OUR 2015 PRIORITIES Optimizing Our Portfolio To complement our focused organic initiatives, we continued Danaher delivered outstanding overall financial results in 2015 our strategic approach to capital allocation. Our acquisition by focusing our businesses on three strategic priorities: of Pall Corporation exemplifies how we continue to add important and highly strategic operating companies to Enhancing Our Competitive Position with DBS Danaher’s portfolio. DBS is our ultimate competitive advantage. It empowers us with the tools and processes to drive improvement Pall is a leading global provider in all aspects of our business. Using DBS growth tools, of filtration, separation and we strengthened our competitive advantage and gained purification solutions used share across a number of operating companies, including to remove contaminants or ChemTreat, Qualitrol, Gilbarco Veeder-Root, Hach, SCIEX, separate substances from Radiometer and Matco Tools. a variety of solids, liquids and gases. Decades of work At Matco, advancements by the company’s filtration in our transformative engineers and scientists have marketing initiative enabled Pall to build a globally generated a record number respected business that customers rely on to help solve of new franchise leads their most difficult filtration and purification problems across in 2015. The thoughtful a broad spectrum of high-growth life sciences and industrial implementation of DBS applications. Pall filters are used in the discovery, development tools, such as Transactional and production of biological drugs, vaccines, cell therapies and Process Improvement, other pharmaceuticals, and have additional applications in the further enhanced Matco’s microelectronics, aerospace, fuels,