Company: DHR
Filing Date: 2025-02-20
Form Type: 10-K
Source: 0000313616-25-000043
Chunk: 295

Company: DANAHER CORP /DE/
Filing Date: 2025-02-20
Form: 10-K
Item: Item 7
Chunk 295
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 debt.  A change in interest rates on fixed-rate debt impacts the fair value of the debt but not the Company’s earnings or cash flow because the interest on such debt is fixed.  Generally, the fair market value of fixed-rate debt will increase as interest rates fall and decrease as interest rates rise.  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).  As these shorter duration obligations mature, the Company expects to issue additional short-term commercial paper obligations to refinance all or part of these borrowings, to the extent commercial paper markets are available.  As a result, the Company’s primary interest rate exposure results from changes in short-term interest rates.  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.

Refer to Note 14 for discussion of the Company’s cross-currency swap derivative contracts and interest rate swap agreements.

Currency Exchange Rate Risk

The Company faces transactional exchange rate risk from transactions with customers in countries outside the United States and from intercompany transactions between affiliates.  Transactional exchange rate risk arises from the purchase and sale of goods and services in currencies other than Danaher’s functional currency or the functional currency of its applicable subsidiary.  The Company also faces translational exchange rate risk related to the translation of financial statements of its foreign operations into U.S. dollars, Danaher’s functional currency.  Costs incurred and sales recorded by subsidiaries operating outside of the United States are translated into U.S. dollars using exchange rates effective during the respective period.  As a result, the Company is exposed to movements in the exchange rates of various currencies against the U.S. dollar.  In particular, the Company has more sales in European currencies than it has expenses in those currencies.  Therefore, when European currencies strengthen or weaken against the U.S