Company: DHR
Filing Date: 2025-07-22
Form Type: 10-Q
Source: 0000313616-25-000153
Chunk: 124

Company: DANAHER CORP /DE/
Filing Date: 2025-07-22
Form: 10-Q
Item: Item 8
Chunk 124
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 least annually or more frequently if events or changes in circumstances indicate that potential impairment exists.  Determining whether an impairment loss occurred for indefinite-lived intangible assets involves calculating the fair value of the indefinite-lived intangible assets and comparing the fair value to their carrying value.  In addition, the Company reviews the useful lives for intangible assets and whether events or changes in circumstances indicate that an indefinite life may no longer be appropriate.  If the fair value is less than the carrying value, the difference is recorded as an impairment loss.  If actual results are not consistent with management’s 

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estimates and assumptions, goodwill and other intangible assets may be overstated, and a charge would need to be taken against net earnings which would adversely affect the Company’s financial statements.  

The Company estimates the fair value of acquired trade names through the use of a relief from royalty method, which values an indefinite-lived intangible asset by estimating the royalties saved through the ownership of an asset.  Under this method, an owner of an indefinite-lived intangible asset determines the arm’s length royalty that likely would have been charged if the owner had to license the asset from a third-party.  The royalty rate, which is based on the estimated rate applied against forecasted sales, is tax-effected and discounted to present value using a discount rate commensurate with the relative risk of achieving the cash flow attributable to the asset.  Management judgment is necessary to determine key assumptions, including revenue growth rates, perpetual revenue growth rates, royalty rates and discount rates.  As further described in Note 8 to the accompanying Consolidated Condensed Financial Statements, in connection with the decision to reorganize and integrate certain genomics consumables businesses in the Life Sciences operating segment, the Company recorded a noncash impairment charge of $432 million pretax ($328 million after-tax) for the three and six-months ended June 27, 2025 related to a trade name.  The charge is included in selling, general and administrative expense in the accompanying Consolidated Condensed Statements of Earnings.  Following this impact, if the fair value of the trade name declined by 10%, the Company estimates it would record an additional impairment charge of $8 million.

Goodwill is evaluated for impairment on a reporting unit basis.  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 re