Company: DHR
Filing Date: 2025-02-20
Form Type: 10-K
Source: 0000313616-25-000043
Chunk: 174

Company: DANAHER CORP /DE/
Filing Date: 2025-02-20
Form: 10-K
Item: Item 5
Chunk 174
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 gain of $101 million for 2024 compared to a loss of $51 million for 2023.  The Company recorded losses from cash flow hedge adjustments related to the Company’s derivative contracts in 2024 of $113 million compared to $14 million in 2023.

43

FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

The Company is exposed to market risk from changes in interest rates, currency exchange rates, equity prices and commodity prices as well as credit risk, each of which could impact its Consolidated Financial Statements.  The Company generally addresses its exposure to these risks through its normal operating and financing activities.  The Company also periodically uses derivative financial instruments to manage currency exchange risks and interest rate risks.  In addition, the Company’s broad-based business activities help to reduce the impact that volatility in any particular area or related areas may have on its financial statements as a whole.

Interest Rate Risk

The Company manages interest cost using a mixture of fixed-rate and at times variable-rate 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