Company: DHR
Filing Date: 2025-10-21
Form Type: 10-Q
Source: 0000313616-25-000182
Chunk: 149

Company: DANAHER CORP /DE/
Filing Date: 2025-10-21
Form: 10-Q
Item: Item 2
Chunk 149
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ational exchange rate risk to sales, the Company also faces transactional exchange rate risk from transactions with customers in countries outside the U.S. and from intercompany transactions between affiliates.  Transactional exchange rate risk (and any resulting gains or losses) arises from the purchase and sale of goods and services in currencies other than the Company’s functional currency or the functional currency of its applicable subsidiary.

Danaher operates a diversified global supply chain and sources parts and materials globally.  During 2025, the U.S. has implemented significant new tariffs on imports from a wide range of countries, which has also prompted retaliatory tariffs by a number of countries, including tariffs and export restrictions on certain manufacturing components imposed by China and tariffs pursuant to trade agreements the U.S. has entered into with certain countries.  In addition, a number of new tariffs have been threatened and the U.S. and other countries continue to negotiate trade arrangements and tariff levels.  In August 2025, the U.S. Court of Appeals for the Federal Circuit ruled against certain of the U.S. tariffs that have been implemented.  The U.S. administration has appealed this ruling and the U.S. Supreme Court has agreed to hear the case, with oral arguments anticipated in November 2025.  

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Based on the tariffs enacted and in effect as of October 19, 2025 (the “enacted tariffs”), the Company anticipates incurring incremental tariff costs for the full year 2025 of several hundred million dollars.  These incremental costs from the enacted tariffs reflect their impact on the costs of parts and materials used by the Company to produce products, as well as costs the Company incurs on finished goods shipped to customers.  The Company expects to, and has thus far, largely offset the operating profit impact of the enacted tariffs with manufacturing footprint changes, supply chain adjustments, surcharges and additional productivity and cost savings actions.  To the extent the Company is unable to continue to offset the incremental cost from the enacted tariffs, the enacted tariffs negatively impact demand or the export restrictions negatively impact manufacturing, the Company’s revenue and profitability would be adversely impacted.  If delayed tariffs come into effect or other additional tariffs are adopted, the Company would incur additional tariff costs that could be material and the Company’s revenue and profitability could be adversely impacted. 

In addition to changes in trade policy, the new U.S. administration has implemented a number of other regulatory, policy and personnel changes, including the elimination, downsizing and reduced funding of certain government agencies and programs and the cancellation