DHR

MKT CAP $164.4BP/E 41.4DIV YIELD —FCF YIELD 3.32%REV TTM $25.1B +4.6%NET INCOME $4B +17.3%NET DEBT $20.9B52W 161.91 – 242.05SEC XBRL · TTM TO Invalid Date

How DHR rewrote its risk factors

10-K ITEM 1A · FY2024 → FY2025

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Year-Over-Year Changes in the Tax Provision and Effective Tax Rate Year Ended December 31 2025 2024 2023 Effective tax rate from continuing operations 15.0 % 16.1 % 16.3 % The Company operates globally, including in certain jurisdictions with lower tax rates than the U.S. federal statutory rate.
For the year ended December 31, 2025, the effective tax rate was reduced by the tax effect from intangible asset impairments in jurisdictions with higher statutory tax rates than the Company’s effective tax rate and discrete tax benefits from the release of reserves for uncertain tax positions due to audit settlements and the expiration of statutes of limitation and the remeasurement of deferred taxes in a jurisdiction which enacted a tax rate change, partially offset by charges related to changes in estimates associated with prior period uncertain tax positions and valuation allowances recorded on foreign operating losses and tax credits in certain foreign jurisdictions.
These items decreased the reported rate on a net basis by 1.5%.
For the year ended December 31, 2024, the effective tax rate was reduced by the tax effect from intangible asset impairments in a jurisdiction with a higher statutory tax rate than the Company’s effective tax rate and discrete tax benefits from excess tax benefits from stock-based compensation, the release of reserves for uncertain tax positions due to the expiration of statutes of limitation and changes in estimates related to prior year tax filing positions, net of charges related to changes in estimates associated with prior period uncertain tax positions.
Tax authorities in Denmark have issued tax assessments related to interest accrued by certain of the Company’s subsidiaries for the years 2004 through 2015, totaling approximately DKK 2.1 billion including applicable accrued interest (approximately $ 326 million based on the exchange rate as of December 31, 2025).
The Company expects its 2026 effective tax rate to be approximately 17.0% which is higher than the 2025 rate due primarily to the impact of net discrete tax benefits on the 2025 effective tax rate.
Any future legislative changes in the U.S. and/or potential tax reform in other jurisdictions could cause the Company’s 2026 effective tax rate to differ from this estimate.
Numerous countries, including European Union member states, have enacted or are expected to enact related legislation.
On July 4, 2025, the OBBBA was enacted, which includes permanent extensions of most expiring Tax Cuts and Jobs Act (“TCJA”) provisions as well as international tax changes.
The application of the OBBBA to the Company did not have a material impact on its financial statements during the year ended December 31, 2025.
Refer to Note 7 to the accompanying Consolidated Financial Statements for additional information related to income taxes.
DISCONTINUED OPERATIONS As further discussed in Note 3 to the accompanying Consolidated Financial Statements, on September 30, 2023 (the “Distribution Date”), the Company completed the separation (the “Veralto Separation”) of its former Environmental & Applied Solutions business by distributing to Danaher stockholders on a pro rata basis all of the issued and outstanding common stock of Veralto Corporation (“Veralto”), the entity Danaher incorporated to hold such businesses.
The accounting requirements for reporting the Veralto Separation as a discontinued operation were met when the Veralto Separation was completed.
On July 2, 2016, the Company completed the separation (the “Fortive Separation”) of its former Test & Measurement segment, Industrial Technologies segment (excluding the product identification business) and the retail/consumer petroleum businesses by distributing to Danaher stockholders on a pro rata basis all of the issued and outstanding common stock of Fortive Corporation (“Fortive”), the entity the Company incorporated to hold such businesses.
The accounting requirements for reporting the Fortive Separation as a discontinued operation were met when the Fortive Separation was completed.
In 2025, the Company recorded an income tax benefit of $ 14 million related to the release of previously provided reserves due to audit settlements and the expiration of statutes of limitations associated with uncertain tax positions on certain of the Company’s tax returns which were jointly filed with Fortive and Veralto entities.
This income tax benefit is included in earnings from discontinued operations, net of income taxes in the accompanying Consolidated Statements of Earnings.
In 2023, earnings from discontinued operations, net of income taxes, were $543 million and reflected the operating results of the Veralto businesses prior to the Veralto Separation, net of certain costs associated with the Veralto Separation including costs related to establishing Veralto as a stand-alone entity and related legal, accounting and investment banking fees.
COMPREHENSIVE INCOME Comprehensive income increased by approximately $4.2 billion in 2025 as compared to 2024, primarily driven by the impact of gains from foreign currency translation adjustments and cash flow hedges in 2025 compared to losses in 2024, partially offset by lower net earnings in 2025 compared to 2024.
The Company recorded a foreign currency translation gain of approximately $2.7 billion for 2025 compared to a loss of approximately $1.5 billion for 2024.
The foreign currency translation gains recorded in 2025 were primarily driven by the change in the exchange rates between the U.S. dollar and the Swedish krona and the euro.
The Company recorded a pension and postretirement plan benefit gain of $115 million for 2025 compared to a gain of $101 million for 2024.
The Company recorded gains from cash flow hedge adjustments related to the Company’s derivative contracts in 2025 of $231 million compared to losses of $113 million in 2024.
As of December 31, 2025, an increase of 100 basis points in interest rates would have decreased the fair value of the Company’s fixed-rate long-term debt by approximately $1.5 billion.
As of December 31, 2025, the Company had no variable-rate debt obligations.
The interest rates of the Company’s commercial paper borrowings are fixed based on short-term market rates at the time of issuance (refer to Note 13 to the accompanying Consolidated Financial Statements for information regarding the Company’s outstanding commercial paper balances as of December 31, 2025).
In 2025, the average annual interest rate associated with the Company’s outstanding commercial paper borrowings was approximately 2.5%.
A hypothetical increase of this average by 100 basis points would have increased the Company’s 2025 interest expense by approximately $11 million.
Currency exchange rates positively impacted 2025 reported sales on a year-over-year basis primarily due to the weakening of the U.S. dollar against most major currencies during 2025.
Strengthening of the U.S. dollar against other major currencies in 2026 compared to the exchange rates in effect as of December 31, 2025 would adversely impact the Company’s sales and results of operations on an overall basis.
Any weakening of the U.S. dollar against other major currencies in 2026 compared to the exchange rates in effect as of December 31, 2025 would positively impact the Company’s sales and results of operations.
A 10% depreciation in major currencies relative to the U.S. dollar as of December 31, 2025 would have reduced foreign currency-denominated net assets and stockholders’ equity by approximately $1.9 billion.
Refer to Note 14 to the accompanying Consolidated Financial Statements for information regarding the Company’s hedging of a portion of its net investment in non-U.S. operations.
As of December 31, 2025, the Company held no shares of publicly-traded equity securities, excluding equity-method investments.
R efer to Note 11 to the accompanying Consolidated Financial Statements for additional information regarding the Company’s equity investments.
The Company has relied primarily on borrowings under its commercial paper program to address liquidity requirements that exceed the capacity provided by its operating cash flows and cash on hand, while also accessing the capital markets from time to time including to secure financing for more significant acquisitions or to take advantage of favorable interest rate environments or other market conditions.
Overview of Cash Flows and Liquidity Following is an overview of the Company’s cash flows and liquidity for the years ended December 31: ($ in millions) 2025 2024 2023 Total operating cash flows provided by continuing operations $ 6,416 $ 6,688 $ 6,490 Cash paid for acquisitions $ — $ (558) $ (5,610) Payments for additions to property, plant and equipment (1,156) (1,392) (1,383) Proceeds from sales of property, plant and equipment 33 13 12 Payments for purchases of investments (127) (331) (172) Proceeds from sales of investments 12 253 61 Proceeds from sale of product line 9 — — All other investing activities 33 34 44 Total cash used in investing activities from continuing operations (1,196) (1,981) (7,048) Total investing cash used in discontinued operations — — (33) Net cash used in investing activities $ (1,196) $ (1,981) $ (7,081) Proceeds from the issuance of common stock in connection with stock-based compensation $ 85 $ 162 $ 68 Payment of dividends (878) (768) (821) Net (repayments of) proceeds from borrowings (maturities of 90 days or less) (11) 5 (1,006) Borrowings (maturities longer than 90 days) 1,556 — — Repayments of borrowings (maturities longer than 90 days) (500) (1,674) (620) Distribution from discontinued operations — — 2,600 Payments for repurchase of common stock (3,088) (5,979) — All other financing activities (125) (131) (67) Net cash (used in) provided by financing activities for continuing operations (2,961) (8,385) 154 Cash distributions to Veralto Corporation, net — — (427) Net cash used in financing activities $ (2,961) $ (8,385) $ (273) As of December 31, 2025, the Company held approximately $4.6 billion of cash and cash equivalents.
Operating cash flows from continuing operations were approximately $6.4 billion for 2025, a decrease of $272 million, or 4%, as compared to 2024.
The year-over-year change in operating cash flows from 2024 to 2025 was primarily attributable to the following factors: • 2025 operating cash flows from continuing operations reflected a decrease of $299 million in net earnings from continuing operations in 2025 as compared to 2024. • Net earnings from continuing operations for 2025 also included $548 million higher year-over-year noncash charges for impairments, unrealized investment gains/losses, intangible asset amortization and depreciation and stock compensation expense in 2025 as compared to 2024, net of a year-over-year decrease in amortization of an acquisition-related inventory step-up and a 2025 pretax gain on the sale of a product line.
Unrealized investment gains/losses impact net earnings from continuing operations without immediately impacting cash flows as the cash flow impact from investments occurs when the invested capital is returned to the Company. • The aggregate of trade accounts receivable, inventories and trade accounts payable used $265 million in operating cash flows from continuing operations during 2025, compared to $497 million of operating cash flows generated in 2024.

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Gone since FY2024

Year-Over-Year Changes in the Tax Provision and Effective Tax Rate Year Ended December 31 2024 2023 2022 Effective tax rate from continuing operations 16.1 % 16.3 % 11.4 % The Company operates globally, including in certain jurisdictions with lower tax rates than the U.S. federal statutory rate.
For the year ended December 31, 2024, the effective tax rate included the tax effect from intangible asset impairments in a jurisdiction with a higher statutory tax rate than the Company’s effective tax rate and discrete tax benefits from excess tax benefits from stock-based compensation, the release of reserves for uncertain tax positions due to the expiration of statutes of limitation and changes in estimates related to prior year tax filing positions, net of charges related to changes in estimates associated with prior period uncertain tax positions.
For the year ended December 31, 2023, the effective tax rate included discrete tax benefits from changes in estimates related to prior year tax filing positions, the release of reserves for uncertain tax positions due to the expiration of statutes of limitation and excess tax benefits from stock-based compensation, net of charges related to tax costs related to the Separation, tax costs from legal and operational actions undertaken to realign certain of its businesses and changes in estimates associated with prior period uncertain tax positions.
Tax authorities in Denmark have issued tax assessments related to interest accrued by certain of the Company’s subsidiaries for the years 2004 through 2015, totaling approximately DKK 2.1 billion including applicable accrued interest (approximately $ 288 million based on the exchange rate as of December 31, 2024).
The Company expects its 2025 effective tax rate to be approximately 17.5% which is higher than the 2024 rate due primarily to the impact of net discrete tax benefits on the 2024 effective tax rate.
Numerous countries, including European Union member states, have enacted or are expected to enact related legislation, with general implementation of a global minimum tax as of January 1, 2025.
Any future legislative changes in the United States and/or potential tax reform in other jurisdictions could cause the Company’s effective tax rate to differ from this estimate.
Refer to Note 7 to the Consolidated Financial Statements for additional information related to income taxes.
DISCONTINUED OPERATIONS As further discussed in Note 3 to the Consolidated Financial Statements, discontinued operations includes the results of the Veralto business which was disposed on the first day of the fourth quarter of 2023.
In 2023, earnings from discontinued operations, net of income taxes, were $543 million and reflected the operating results of the Veralto businesses prior to the Separation, net of certain costs associated with the Separation including costs related to establishing Veralto as a stand-alone entity and related legal, accounting and investment banking fees.
In 2022, earnings from discontinued operations, net of income taxes, were $881 million and reflect the operations of Veralto.
COMPREHENSIVE INCOME Comprehensive income decreased by approximately $2.5 billion in 2024 as compared to 2023, primarily driven by the impact of losses from foreign currency translation adjustments in 2024 compared to gains in 2023 and lower net earnings in 2024 compared to 2023, partially offset by an increase in income from pension and postretirement plan benefit adjustments in 2024 compared to 2023.
The Company recorded a foreign currency translation loss of approximately $1.5 billion for 2024 compared to a gain of $215 million for 2023.
The foreign currency translation losses recorded in 2024 were primarily driven by the change in the exchange rates between the U.S. dollar and the Swedish krona.
The Company recorded a pension and postretirement plan benefit gain of $101 million for 2024 compared to a loss of $51 million for 2023.
The Company recorded losses from cash flow hedge adjustments related to the Company’s derivative contracts in 2024 of $113 million compared to $14 million in 2023.
As of December 31, 2024, an increase of 100 basis points in interest rates would have decreased the fair value of the Company’s fixed-rate long-term debt by approximately $1.2 billion.
As of December 31, 2024, the Company had no variable-rate debt obligations, however, the interest rates of the Company’s euro-based commercial paper borrowings are fixed based on short-term market rates at the time of issuance (refer to Note 13 to the Consolidated Financial Statements for information regarding the Company’s outstanding commercial paper balances as of December 31, 2024).
In 2024, the average annual interest rate associated with the Company’s outstanding commercial paper borrowings was approximately 4.0%.
A hypothetical increase of this average by 100 basis points would have increased the Company’s 2024 interest expense by approximately $11 million.
Currency exchange rates negatively impacted 2024 reported sales on a year-over-year basis primarily due to the strengthening of the U.S. dollar against most major currencies during 2024.
Strengthening of the U.S. dollar against other major currencies in 2025 compared to the exchange rates in effect as of December 31, 2024 would adversely impact the Company’s sales and results of operations on an overall basis.
Any weakening of the U.S. dollar against other major currencies in 2025 compared to the exchange rates in effect as of December 31, 2024 would positively impact the Company’s sales and results of operations.
A 10% depreciation in major currencies relative to the U.S. dollar as of December 31, 2024 would have reduced foreign currency-denominated net assets and stockholders’ equity by approximately $1.6 billion.
Refer to Note 14 to the Consolidated Financial Statements for information regarding the Company’s hedging of a portion of its net investment in non-U.S. operations.
As of December 31, 2024, the Company held $3 million of publicly-traded equity securities, excluding equity-method investments.
R efer to Note 11 to the Consolidated Financial Statements for additional information regarding the Company’s equity investments.
The Company has relied primarily on borrowings under its commercial paper program to address liquidity requirements that exceed the capacity provided by its operating cash flows and cash on hand, while also accessing the capital markets from time to time including to secure financing for more significant acquisitions.
Overview of Cash Flows and Liquidity Following is an overview of the Company’s cash flows and liquidity for the years ended December 31: ($ in millions) 2024 2023 2022 Total operating cash flows provided by continuing operations $ 6,688 $ 6,490 $ 7,613 Cash paid for acquisitions $ (558) $ (5,610) $ (582) Payments for additions to property, plant and equipment (1,392) (1,383) (1,118) Proceeds from sales of property, plant and equipment 13 12 9 Payments for purchases of investments (331) (172) (523) Proceeds from sales of investments 253 61 18 All other investing activities 34 44 51 Total cash used in investing activities from continuing operations (1,981) (7,048) (2,145) Total investing cash used in discontinued operations — (33) (89) Net cash used in investing activities $ (1,981) $ (7,081) $ (2,234) Proceeds from the issuance of common stock in connection with stock-based compensation $ 162 $ 68 $ 31 Payment of dividends (768) (821) (818) Net proceeds from (repayments of) borrowings (maturities of 90 days or less) 5 (1,006) (723) Repayments of borrowings (maturities longer than 90 days) (1,674) (620) (965) Distribution from discontinued operations — 2,600 — Payments for repurchase of common stock (5,979) — — All other financing activities (131) (67) (95) Net cash (used in) provided by financing activities for continuing operations (8,385) 154 (2,570) Cash distributions to Veralto Corporation, net — (427) — Net cash used in financing activities $ (8,385) $ (273) $ (2,570) As of December 31, 2024, the Company held approximately $2.1 billion of cash and cash equivalents.
Operating cash flows from continuing operations were approximately $6.7 billion for 2024, an increase of $198 million, or 3%, as compared to 2023.
The year-over-year change in operating cash flows from 2023 to 2024 was primarily attributable to the following factors: • 2024 operating cash flows from continuing operations reflected a decrease of $322 million in net earnings from continuing operations in 2024 as compared to 2023. • Net earnings from continuing operations for 2024 also included $248 million higher noncash charges for impairments, intangible asset amortization, depreciation and amortization of an acquisition-related inventory step-up compared to 2023, net of a decrease in unrealized investment gains/losses and stock compensation expense in 2024 as compared to 2023.
Unrealized investment gains/losses impact net earnings from continuing operations without immediately impacting cash flows as the cash flow impact from investments occurs when the invested capital is returned to the Company. • The aggregate of trade accounts receivable, inventories and trade accounts payable provided $497 million in operating cash flows from continuing operations during 2024, compared to $358 million of operating cash flows generated in 2023.
The amount of cash flow generated from or used by the aggregate of trade accounts receivable, inventories and trade accounts payable depends upon how effectively the Company manages the cash conversion cycle, which effectively represents the number of days that elapse from the day it pays for the purchase of raw materials and components to the collection of cash from its customers and can be significantly impacted by the timing of collections and payments in a period. • The aggregate of prepaid expenses and other assets, deferred income taxes and accrued expenses and other liabilities used $695 million in operating cash flows during 2024, compared to $828 million used in 2023.
Net cash used in investing activities was approximately $2.0 billion during 2024 compared to approximately $7.1 billion of net cash used in 2023.
Acquisitions, Divestitures and Sale of Investments For a discussion of the Company’s acquisitions and divestitures refer to “—Overview” and Notes 2 and 3 to the Consolidated Financial Statements.
In addition, in 2024 and 2023, the Company invested $331 million and $172 million, respectively, in non-marketable equity securities and partnerships.
Capital Expenditures Though the relative significance of particular categories of capital investment can change from period to period, capital expenditures are typically made for increasing manufacturing capacity, the manufacture of instruments that are used in OTL arrangements, purchases of buildings, replacing equipment, supporting new product development and improving information technology systems.
Capital expenditures totaled approximately $1.4 billion in both 2024 and 2023.
During 2021, certain agencies of the U.S. government, including the Biomedical Advanced Research and Development Authority (“BARDA”) within the U.S.
Department of Health and Human Services, agreed to finance an expansion of production capacity related to chromatography, liquid cell culture media, buffers and cell culture powder media and single-use consumables at certain of the Company’s Biotechnology businesses and the development of diagnostics testing technologies and the expansion of testing production capacity at certain of the Company’s Diagnostics businesses.

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Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2024 ↗, FY2025 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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