Company: DHR
Filing Date: 2025-02-20
Form Type: 10-K
Source: 0000313616-25-000043
Chunk: 184

Company: DANAHER CORP /DE/
Filing Date: 2025-02-20
Form: 10-K
Item: Item 5
Chunk 184
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ization (“EBITDA”), revenue, revenue growth rates, royalty rates and technology obsolescence rates.  These assumptions are forward looking and could be affected by future economic and market conditions.  The Company engages third-party valuation specialists who review the Company’s critical assumptions and calculations of the fair value of acquired intangible assets in connection with significant acquisitions.  In connection with the acquisitions that occurred during the year ended December 31, 2024, the Company recognized aggregate goodwill of $305 million and intangible assets of $419 million.  Refer to Notes 1, 2 and 10 to the Consolidated Financial Statements for a description of the Company’s policies relating to goodwill, acquired intangibles and acquisitions.

In performing its goodwill impairment testing, the Company estimates the fair value of its reporting units primarily using a market-based approach which relies on current trading multiples of forecasted EBITDA for companies operating in businesses similar to each of the Company’s reporting units to calculate an estimated fair value of each reporting unit.  In evaluating the estimates derived by the market-based approach, management makes judgments about the relevance and reliability of the multiples by considering factors unique to its reporting units, including operating results, business plans, economic projections, anticipated future cash flows, and transactions and marketplace data as well as judgments about the comparability of the market proxies selected.  There are inherent uncertainties related to these assumptions and management’s judgment in applying them to the analysis of goodwill impairment. 

As of December 31, 2024, the Company had five reporting units for goodwill impairment testing.  Reporting units resulting from recent acquisitions generally present the highest risk of impairment.  Management believes the impairment risk associated with these reporting units generally decreases as these businesses are integrated into the Company and better positioned for potential future earnings growth.  The Company’s annual goodwill impairment analysis in 2024 indicated that in all instances, the fair values of the Company’s reporting units exceeded their carrying values and consequently did not result in an impairment charge.  The excess of the estimated fair value over carrying value (expressed as a percentage of carrying value for the respective reporting unit) for each of the Company’s reporting units as of the annual testing date ranged from approximately 70% to approximately 450%.  To evaluate the sensitivity of the 

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fair value calculations used in the goodwill impairment test, the Company applied a hypothetical 10% decrease to the fair values of each reporting unit and compared those hypothetical values to the reporting unit carrying values.  Based on this hypothetical 10% decrease,