Company: DHR
Filing Date: 2025-02-20
Form Type: 10-K
Source: 0000313616-25-000043
Chunk: 175

Company: DANAHER CORP /DE/
Filing Date: 2025-02-20
Form: 10-K
Item: Item 5
Chunk 175
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 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. dollar, operating profits are increased or decreased, respectively.  The effect of a change in currency exchange rates on the Company’s net investment in non-U.S. subsidiaries is reflected in the accumulated other comprehensive income (loss) component of stockholders’ equity. 

Currency exchange rates negatively impacted 2024 reported sales on a year-over-year basis primarily due to the strengthening of the U.S. dollar against most major currencies during 2024.  Strengthening of the U.S. dollar against other major currencies in 2025 compared to the exchange rates in effect as of December 31, 2024 would adversely impact the Company’s sales and results of operations on an overall basis.  Any weakening of the U.S. dollar against other major currencies in 2025 compared to the exchange rates in effect as of December 31, 2024 would positively impact the Company’s sales and results of operations.

The Company has generally accepted the exposure to exchange rate movements without using derivative financial instruments to manage this transactional exchange risk, although the Company has used foreign currency-denominated debt and cross-currency swaps to hedge a portion of its net investments in non-U.S. operations against adverse movements in exchange rates.  Both positive and negative movements in currency exchange rates against the U.S. dollar will continue to affect the reported amount of sales and net earnings in the Company’s Consolidated Financial Statements.  In addition, the Company has assets and liabilities held in foreign currencies.  A 10% depreciation in major currencies relative