Goodwill and other intangible assets result from Danaher’s acquisition of existing businesses. In accordance with accounting standards related to business combinations, goodwill is not amortized; however, certain finite-lived identifiable intangible assets, primarily customer relationships and acquired technology, are amortized over their estimated useful lives. Intangible assets with indefinite lives are not amortized. In-process research and development (“IPR&D”) is initially capitalized at fair value and when the IPR&D project is complete, the asset is considered a finite-lived intangible asset and amortized over its estimated useful life. If an IPR&D project is abandoned, an impairment loss equal to the value of the intangible asset is recorded in the period of abandonment. Danaher reviews identified intangible assets and goodwill for impairment whenever events or changes in circumstances indicate that the related carrying amounts may not be recoverable. Danaher also tests intangible assets with indefinite lives and goodwill at least annually for impairment.

Source: 10-K (filing date: 2019-02-21).

Danaher Corp., Statement of Financial Position, Goodwill and Intangible Assets

USD $ in thousands

	Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014
Patents and technology	2,985,300	2,363,500	2,211,300	2,212,200	1,644,100
Customer relationships and other intangibles	7,302,800	7,354,900	6,990,900	6,469,500	4,255,600
Trademarks and trade names	190,700	23,900	–	–	–
Finite-lived intangibles, gross carrying amount	10,478,800	9,742,300	9,202,200	8,681,700	5,899,700
Accumulated amortization	(3,634,500)	(3,001,300)	(2,245,600)	(2,232,400)	(2,021,400)
Finite-lived intangibles, net	6,844,300	6,741,000	6,956,600	6,449,300	3,878,300
Trademarks and trade names	4,828,800	4,926,100	4,861,400	4,821,000	3,490,900
Indefinite-lived intangibles	4,828,800	4,926,100	4,861,400	4,821,000	3,490,900
Intangibles	11,673,100	11,667,100	11,818,000	11,270,300	7,369,200
Goodwill	25,906,000	25,138,600	23,826,900	25,070,300	16,964,200
Goodwill and other intangible assets	37,579,100	36,805,700	35,644,900	36,340,600	24,333,400

Based on: 10-K (filing date: 2019-02-21), 10-K (filing date: 2018-02-21), 10-K (filing date: 2017-02-22), 10-K (filing date: 2016-02-24), 10-K (filing date: 2015-02-25).

Item	Description	The company
Intangibles	Sum of the carrying amounts of all intangible assets, excluding goodwill, as of the balance sheet date, net of accumulated amortization and impairment charges.	Danaher Corp.’s intangibles declined from 2016 to 2017 but then slightly increased from 2017 to 2018.
Goodwill	Amount after accumulated impairment loss of an asset representing future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized.	Danaher Corp.’s goodwill increased from 2016 to 2017 and from 2017 to 2018.
Goodwill and other intangible assets	Sum of the carrying amounts of all intangible assets, including goodwill, as of the balance sheet date, net of accumulated amortization and impairment charges.	Danaher Corp.’s goodwill and other intangible assets increased from 2016 to 2017 and from 2017 to 2018.

Danaher Corp., adjustments to financial data

USD $ in thousands

	Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014
Adjustment to Total Assets
Total assets (as reported)	47,832,500	46,648,600	45,295,300	48,222,200	36,991,700
Less: Goodwill	25,906,000	25,138,600	23,826,900	25,070,300	16,964,200
Total assets (adjusted)	21,926,500	21,510,000	21,468,400	23,151,900	20,027,500
Adjustment to Total Danaher Stockholders’ Equity
Total Danaher stockholders’ equity (as reported)	28,214,400	26,358,200	23,002,800	23,690,300	23,378,100
Less: Goodwill	25,906,000	25,138,600	23,826,900	25,070,300	16,964,200
Total Danaher stockholders’ equity (adjusted)	2,308,400	1,219,600	(824,100)	(1,380,000)	6,413,900

Based on: 10-K (filing date: 2019-02-21), 10-K (filing date: 2018-02-21), 10-K (filing date: 2017-02-22), 10-K (filing date: 2016-02-24), 10-K (filing date: 2015-02-25).

Danaher Corp., Financial Data: Reported vs. Adjusted

Danaher Corp., adjusted ratios

	Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014
Total Asset Turnover
Reported total asset turnover	0.42	0.39	0.37	0.43	0.54
Adjusted total asset turnover	0.91	0.85	0.79	0.89	0.99
Financial Leverage
Reported financial leverage	1.70	1.77	1.97	2.04	1.58
Adjusted financial leverage	9.50	17.64	–	–	3.12
Return on Equity (ROE)
Reported ROE	9.40%	9.45%	11.10%	14.17%	11.11%
Adjusted ROE	114.84%	204.34%	–	–	40.51%
Return on Assets (ROA)
Reported ROA	5.54%	5.34%	5.64%	6.96%	7.02%
Adjusted ROA	12.09%	11.59%	11.90%	14.50%	12.97%

Based on: 10-K (filing date: 2019-02-21), 10-K (filing date: 2018-02-21), 10-K (filing date: 2017-02-22), 10-K (filing date: 2016-02-24), 10-K (filing date: 2015-02-25).

Ratio	Description	The company
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Danaher Corp.’s adjusted total asset turnover improved from 2016 to 2017 and from 2017 to 2018.
Adjusted financial leverage	A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.	Danaher Corp.’s adjusted financial leverage increased from 2016 to 2017 but then slightly declined from 2017 to 2018.
Adjusted ROE	A profitability ratio calculated as net income divided by adjusted shareholders’ equity.	Danaher Corp.’s adjusted ROE improved from 2016 to 2017 but then slightly deteriorated from 2017 to 2018.
Adjusted ROA	A profitability ratio calculated as net income divided by adjusted total assets.	Danaher Corp.’s adjusted ROA deteriorated from 2016 to 2017 but then improved from 2017 to 2018 exceeding 2016 level.

Danaher Corp., Ratios: Reported vs. Adjusted

	Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014
As Reported
Selected Financial Data (USD $ in thousands)
Sales	19,893,000	18,329,700	16,882,400	20,563,100	19,913,800
Total assets	47,832,500	46,648,600	45,295,300	48,222,200	36,991,700
Ratio
Total asset turnover¹	0.42	0.39	0.37	0.43	0.54
Adjusted for Goodwill
Selected Financial Data (USD $ in thousands)
Sales	19,893,000	18,329,700	16,882,400	20,563,100	19,913,800
Adjusted total assets	21,926,500	21,510,000	21,468,400	23,151,900	20,027,500
Ratio
Adjusted total asset turnover²	0.91	0.85	0.79	0.89	0.99

Based on: 10-K (filing date: 2019-02-21), 10-K (filing date: 2018-02-21), 10-K (filing date: 2017-02-22), 10-K (filing date: 2016-02-24), 10-K (filing date: 2015-02-25).

2018 Calculations

¹ Total asset turnover = Sales ÷ Total assets
= 19,893,000 ÷ 47,832,500 = 0.42

² Adjusted total asset turnover = Sales ÷ Adjusted total assets
= 19,893,000 ÷ 21,926,500 = 0.91

Ratio	Description	The company
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Danaher Corp.’s adjusted total asset turnover improved from 2016 to 2017 and from 2017 to 2018.

	Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014
As Reported
Selected Financial Data (USD $ in thousands)
Total assets	47,832,500	46,648,600	45,295,300	48,222,200	36,991,700
Total Danaher stockholders’ equity	28,214,400	26,358,200	23,002,800	23,690,300	23,378,100
Ratio
Financial leverage¹	1.70	1.77	1.97	2.04	1.58
Adjusted for Goodwill
Selected Financial Data (USD $ in thousands)
Adjusted total assets	21,926,500	21,510,000	21,468,400	23,151,900	20,027,500
Adjusted total Danaher stockholders’ equity	2,308,400	1,219,600	(824,100)	(1,380,000)	6,413,900
Ratio
Adjusted financial leverage²	9.50	17.64	–	–	3.12

Based on: 10-K (filing date: 2019-02-21), 10-K (filing date: 2018-02-21), 10-K (filing date: 2017-02-22), 10-K (filing date: 2016-02-24), 10-K (filing date: 2015-02-25).

2018 Calculations

¹ Financial leverage = Total assets ÷ Total Danaher stockholders’ equity
= 47,832,500 ÷ 28,214,400 = 1.70

² Adjusted financial leverage = Adjusted total assets ÷ Adjusted total Danaher stockholders’ equity
= 21,926,500 ÷ 2,308,400 = 9.50

Ratio	Description	The company
Adjusted financial leverage	A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.	Danaher Corp.’s adjusted financial leverage increased from 2016 to 2017 but then slightly declined from 2017 to 2018.

	Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014
As Reported
Selected Financial Data (USD $ in thousands)
Net earnings	2,650,900	2,492,100	2,553,700	3,357,400	2,598,400
Total Danaher stockholders’ equity	28,214,400	26,358,200	23,002,800	23,690,300	23,378,100
Ratio
ROE¹	9.40%	9.45%	11.10%	14.17%	11.11%
Adjusted for Goodwill
Selected Financial Data (USD $ in thousands)
Net earnings	2,650,900	2,492,100	2,553,700	3,357,400	2,598,400
Adjusted total Danaher stockholders’ equity	2,308,400	1,219,600	(824,100)	(1,380,000)	6,413,900
Ratio
Adjusted ROE²	114.84%	204.34%	–	–	40.51%

Based on: 10-K (filing date: 2019-02-21), 10-K (filing date: 2018-02-21), 10-K (filing date: 2017-02-22), 10-K (filing date: 2016-02-24), 10-K (filing date: 2015-02-25).

2018 Calculations

¹ ROE = 100 × Net earnings ÷ Total Danaher stockholders’ equity
= 100 × 2,650,900 ÷ 28,214,400 = 9.40%

² Adjusted ROE = 100 × Net earnings ÷ Adjusted total Danaher stockholders’ equity
= 100 × 2,650,900 ÷ 2,308,400 = 114.84%

Ratio	Description	The company
Adjusted ROE	A profitability ratio calculated as net income divided by adjusted shareholders’ equity.	Danaher Corp.’s adjusted ROE improved from 2016 to 2017 but then slightly deteriorated from 2017 to 2018.

	Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014
As Reported
Selected Financial Data (USD $ in thousands)
Net earnings	2,650,900	2,492,100	2,553,700	3,357,400	2,598,400
Total assets	47,832,500	46,648,600	45,295,300	48,222,200	36,991,700
Ratio
ROA¹	5.54%	5.34%	5.64%	6.96%	7.02%
Adjusted for Goodwill
Selected Financial Data (USD $ in thousands)
Net earnings	2,650,900	2,492,100	2,553,700	3,357,400	2,598,400
Adjusted total assets	21,926,500	21,510,000	21,468,400	23,151,900	20,027,500
Ratio
Adjusted ROA²	12.09%	11.59%	11.90%	14.50%	12.97%

Based on: 10-K (filing date: 2019-02-21), 10-K (filing date: 2018-02-21), 10-K (filing date: 2017-02-22), 10-K (filing date: 2016-02-24), 10-K (filing date: 2015-02-25).

2018 Calculations

¹ ROA = 100 × Net earnings ÷ Total assets
= 100 × 2,650,900 ÷ 47,832,500 = 5.54%

² Adjusted ROA = 100 × Net earnings ÷ Adjusted total assets
= 100 × 2,650,900 ÷ 21,926,500 = 12.09%

Ratio	Description	The company
Adjusted ROA	A profitability ratio calculated as net income divided by adjusted total assets.	Danaher Corp.’s adjusted ROA deteriorated from 2016 to 2017 but then improved from 2017 to 2018 exceeding 2016 level.

Danaher Corp. (DHR)

Analysis of Goodwill and Intangible Assets

Goodwill and Intangible Assets Accounting Policy

Goodwill and Intangible Assets Disclosure

Analyst Adjustments: Removal of Goodwill

Danaher Corp., Financial Data: Reported vs. Adjusted

Adjusted Ratios: Removal of Goodwill (Summary)

Danaher Corp., Ratios: Reported vs. Adjusted

Adjusted Total Asset Turnover

Adjusted Financial Leverage

Adjusted Return on Equity (ROE)

Adjusted Return on Assets (ROA)