DANAHER CORPORATION (NYSE: DHR) Long Pitch for MII Maya Venkatraman Agenda • Company Overview • Financials • Thesis Points • VAR • Misperceptions • Risks • Summary • Questions 2 Business Overview

• Danaher Corporaon (NYSE: DHR) • Diversified Technology Leader. • Based in DC. • Began in 1969. • Focuses in 6 sectors: • Medical Technologies • Product Idenficaon • Test and Measurement • Environmental • Moon • Dental 3 • Specialty businesses in aerospace & defense, sensors & controls, full-line wheel-service equipment, and vehicle systems sectors.

Divisions

• Accu-Sort • Delta • Gendex • Jacobs Vehicle Messtechnik • SybronEndo Systems, Inc. Consolidated • Gilbarco Veeder- Systems GmbH • Tektronix Industries • AB Sciex Root • Joslyn Clark • OECO • Tektronix • Allen • DEXIS • GLI • KaVo Dental • Orbisphere Communicaons • ALLTEC • DH Instruments • Guardian Vong • K-D Tools • Ormco • Thomson • American Sigma • Dover Systems • Kerr • Pacific Scienfic • Trojan • Amprobe • Dynapar / • G&L Moon • Kistler Morse Instruments Technologies- Northstar Control, Inc Videojet • Anatel • Kobalt Hand • Partlow • Anderson • Eagle-Signal / • Hach Company Tools • Pelton & Crane • Vision Systems Veeder-Root Limited • Arbor Networks • HACH LANGE • Kollmorgen • PMA • Easco Hand (Europe) • Visual Network • Armstrong Tools • Kollmorgen • Polymetron Tools • Harowe Electro-Opcal Systems Ltd • Artus • Portescap • ELE • • West Hart Scienfic • Lachat • • Aviaon Qualitrol Corp Instruments • Electro-Kinecs • HECON Instruments Services • Radiometer • EskoArtwork • Wille • Aviaon • Hengstler GmbH • Leica • Radiometer • Energec Microsystems Services Europe • Hennessy Analycal Materials • Bindicator Industries • Linx Prinng • Raytek • Environmental • Technologies • Holo-Krome • Buhler Montec Test Systems Red Jacket • HTL/Kin-Tech • Matco Tools • Calzoni • Robin • Fisher Pierce • Marsh • Chemtreat • Hydrolab Electronics • Fluke McBerney • Imaging Sciences • • Comark Ltd Corporaon Industries Sata Internaonal • Crasman Hand • Securaplane • Fluke Networks • Invetech • McCrometer 4 Tools Technologies • GearWrench • Namco / Dolan • Iseli • Setra • Danaher Moon • Gems Sensors & Jenner • Jacobs Chuck • • Danaher Tool • Spline Gauges Controls Manufacturing Negele Group • Sunbank DHR Stock Chart

5 Stock Summary

• Share Price………………………………………………………………..……………. 51.96 • Market Capitalizaon..……………………...... 34.25B • P/E……………………………………………………………………………….….……….19.68 • EPS..……………………………………………………………………………………………2.64 • 52-week Range.………………………………………………………..… ..35.24– 53.01 • Average Volume………………………………………...... 3.29M • Revenue Growth……………………………………………………………………….. 18% • Interest Coverage Rao…………………………………………………………….. 20.8 • Gross Profit Margin……………….……………………………………………….. 50.2% • Cash …………………………………………………….……………………………….…1.63B 6 • Free Cash Flow to Net Income Conversion Rao…...... 120% • Forecasted 5yr. Earnings Growth…………………………………………..... 15.0% Revenue Growth

• Revenue growth categorized as “high” in comparison to other conglomerates

7 Financial Highlights

8 DHR is a Long

1 World-wide Industry Leader/Brand Recognion

2 Unique Posioning in the Market

3 Significant Potenal for Growth and Innovaon

4 Prominent in Emerging Markets

9 5 Cost Effecve Business Model (DBS) Leading in All Sectors

10 Danaher is an Industry Leader

• Danaher is an acve acquirer of great, global companies with strong, market-leading brands.

• Well diversified through emerging markets.

• In 2009, Danaher expanded internaonally in response to a declining economy. It profits as the economy recovers, since those acquisions are now generang profits.

• Outstanding, experienced management. 11 Industry Segmentaon

Revenue Distribuon 2% Test & Measurement

22% Environmental 24% Life Sciences & Diagnoscs Dental 14% 21% Industrial Technologies

17% Specialty Businesses 12 Environmental

13 Test & Measurement

14 Industrial Technologies

15 Dental

16 Life Sciences & Diagnoscs

17 Wide-Ranging Product Mix

18 Growth

19 Growth & Innovaon

Acquisions made solely in 2010

20 New Iniaves

• Danaher subsidiary, Hach, created The Virtual Tradeshow, an online tool which lets potenal customers interact with water quality experts through video demonstraons, webex, and live chats.

• Another subsidiary, Pelton Crane started a Denstry Technology Seminar called “Driven to Excellence” where they introduce their newest dental equipment. • Resulted in a $50 million sales 21 funnel

Research & Development

• More than 1800 new products introduced in 2010 alone. • Circa $3.5B of 2010 revenue gained from new products introduced in past 3 years alone.

22 Prominence in Emerging Markets • 20% YTD emerging market growth in sales • Over 50% of annual revenue comes from Internaonal Markets. • Industry leader in BRIC countries. • Introduced major subsidiaries in China: Leica, Hach, & Tektronix.

23 Danaher Business System

If you don’t measure it, you can’t improve it.

Personalized Balance Scorecard. Focus on Quality, Delivery, Cost, & Innovaon 24 Danaher Business System (DBS)

• Danaher Corp. started going “lean” in 1987; one of the earliest companies in the US to do so.

• "Lean," is a producon pracce that considers the expenditure of resources for any goal other than the creaon of value for the customer to be wasteful, and thus a target for eliminaon.

• Even before a deal/acquision is made, the DBS team, works with the acquision target to inject a heavy dose of Danaher DNA.

Synergizing organic and inorganic growth through focus on 3 key factors: Create Value Increase Efficiency 25 Inculcate Growth and Innovaon Perceived Competors

• General Electric (GE) • Sells mainly Capital Intensive products. So, more complex purchasing decisions for buyers. ROI is dissipated over 5-10 years. • Failed to recover from the recession. Low growth rate. • 3M (MMM) • Sensive to product cycles and seasonality. Higher risk. overextended. • Domesc slowdown over the recent past. Revenue from Display & Graphics division directly ed to North American consumer habits. More elasc demand. • Downsizing pharmaceucal sector • Tyco Internaonal (TYC), United Technologies (UTX) • General conglomerates. Operate in different segments . Falsely perceived as competors to DHR by analysts • Low revenue growth. Overextended, currency risks.

26 Conglomerate Industry’s high barriers to success keep compeon in check Mispercepons

• Danaher is compared to general conglomerates • Clarificaon: Analysts oen don’t know where to posion it & with what other companies to compare it. • Danaher is considered overextended • Clarificaon: Danaher has a lot of capacity for growth. Only half the size of 3M but much more efficient • Analysts overlook the potenal value created by Danaher’s acquisions • Danaher’s management team has successfully integrated acquisions by leveraging the companies’ untapped growth potenal and buying very undervalued companies. • Analysts judge Danaher’s value by looking at its net assets alone • Clarificaon: R&D on internally developed assets is overlooked, since it is expensed when incurred • Danaher focuses in the Water market, which is overlooked by Wall Street 27 • Clarificaon: The water market is actually long-term profitable endeavor due to potenal shortage of water.

VAR

“We really didn’t even look at anything else. I think the product’s great. It solves a lot of issues for me.” – Steven O, Senior, Metrologist, Defense Industry, Washington DC (In reference to MET/CAL soware, Test and Measurement, Fluke Calibraons)

“HealOzone has changed the way I pracce denstry.” - Dr. S. Y. P. Cheng, Denst, London (In reference to HealOzone, a root-canal disinfecon product by KaVo)

“Hach Lange has enriched the water and sewage market with many innovave products during their 75-year-old history. Hach Lange does not only sell products, but shows engagement, a pioneer's mind, and customer proximity in order to find praccal soluons and open the market for new measuring and regulatory ideas.” - Dr. G. Seibert-Erling, Consultant Engineer, Water treatment plant, Kressbronn-Langenargen, Germany 28 (In reference to Danaher’s leading water treatment subsidiary, Hach Lange) VAR

• “Danaher is probably the best-run conglomerate in America. It's clearly the best performing: Over 20 years, it has returned a remarkable 25% to shareholders annually, far beer than GE (16%), Berkshire Hathaway (21%), or the Standard & Poor's 500-stock index (12%).” -Brian Hindo, Corporate Strategies Editor, Bloomberg BusinessWeek. 29 Possible Risks

• Danaher uses metals in manufacturing its various products so non-ferrous metal prices may affect its gross margin. • If oil prices soar for long periods of me, it may lessen Danaher’s operang margin. • Ligaon over patents on new products • Risk from changing exchange rates since Danaher is a global company

30 The Boom Line

• Danaher has a niche since it is wide-ranging, but focuses in high-tech products across mulple sectors, demographics, and countries. • Danaher is very futurisc. Danaher understands future world and it is deeply invested in planning for tomorrow’s needs while sasfying today’s. • Due to exceedingly high barriers to success, it is difficult for new compeon to enter and pose a threat to Danaher. • Stable management. They understand the repercussions of what they are doing. • Danaher Corporaon is not dependent on a single vercal industry; it is mulfaceted. Risk is migated due to product 31 diversity.

Quesons?

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