Company: DHR
Filing Date: 2025-10-21
Form Type: 10-Q
Source: 0000313616-25-000182
Chunk: 136

Company: DANAHER CORP /DE/
Filing Date: 2025-10-21
Form: 10-Q
Item: Item 8
Chunk 136
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 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 nine-month period ended September 26, 2025 related to a trade name.  The charge is included in SG&A expenses in the accompanying Consolidated Condensed Statement 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 reorganization and integration of certain businesses in the Life Sciences operating segment at the beginning of the third quarter of 2025, as described in the previous paragraph, changed two of its five goodwill reporting units and triggered a goodwill impairment analysis.  The Company performed goodwill impairment analyses prior to, and after, the change in reporting units and in both instances, the fair values of the Company’s reporting units exceeded their carrying values and consequently did not result in an impairment charge.  In the test of the prior reporting units, 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 previous reporting units as of the testing date ranged from approximately 30% to approximately 365%.  The excess of the estimated fair value over carrying value for each of the Company’s current reporting units as of the testing date ranged from approximately 40% to approximately 365%.  The decrease in the excess of the estimated fair value over carrying value from the Company’s 202