Danaher Corp 10-Q for FY2026 Q3
Danaher Corp (DHR)
10-Q
2026-10-21
For: 2026-09-25
View Original
Added on
October 22, 2026
About this 10-Q
Danaher Corp filed this 10-Q on October 21, 2026, covering the quarter ended September 25, 2026 (FY2026 Q3).
Danaher reported third-quarter revenues up 8.5% and core sales up 3.0%, with core sales excluding respiratory testing up 5.5%; nine-month operating margin rose 180 basis points to 19.8%. It acquired Masimo for approximately $9.8 billion on June 10, 2026. AI summary
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________________________________________________
FORM 10-Q
________________________________________________________
(Mark One)
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the quarterly period ended September 25, 2026
OR
| TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the transition period from to
Commission File Number: 001-08089
(Exact name of registrant as specified in its charter)
| (State of Incorporation) | (I.R.S. Employer Identification Number) | ||||||||||
| (Address of Principal Executive Offices) | (Zip Code) | ||||||||||
Registrant’s telephone number, including area code: 202 -828-0850
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| ☒ | Accelerated Filer | ☐ | ||||||||||||||||||
| Non-accelerated Filer | ☐ | Smaller Reporting Company | ||||||||||||||||||
| Emerging Growth Company | ||||||||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes ☐ No ☒
The number of shares of common stock outstanding at October 15, 2026 was 703,530,815 .
DANAHER CORPORATION
INDEX
FORM 10-Q
| Page | ||||||||
| PART I - | FINANCIAL INFORMATION | |||||||
| Item 1. | ||||||||
| Item 2. | ||||||||
| Item 3. | ||||||||
| Item 4. | ||||||||
| PART II - | OTHER INFORMATION | |||||||
| Item 1. | ||||||||
| Item 1A. | ||||||||
| Item 2. | ||||||||
| Item 5. | ||||||||
| Item 6. | ||||||||
DANAHER CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
($ in millions, except per share amount)
(unaudited)
| September 25, 2026 | December 31, 2025 | ||||||||||
| ASSETS | |||||||||||
| Current assets: | |||||||||||
| Cash and equivalents | $ | $ | |||||||||
Trade accounts receivable, less allowance for doubtful accounts of $ | |||||||||||
| Inventories: | |||||||||||
| Finished goods | |||||||||||
| Work in process | |||||||||||
| Raw materials | |||||||||||
| Total inventories | |||||||||||
| Prepaid expenses and other current assets | |||||||||||
| Total current assets | |||||||||||
Property, plant and equipment, net of accumulated depreciation of $ | |||||||||||
| Other long-term assets | |||||||||||
| Goodwill | |||||||||||
| Other intangible assets, net | |||||||||||
| Total assets | $ | $ | |||||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
| Current liabilities: | |||||||||||
| Notes payable and current portion of long-term debt | $ | $ | |||||||||
| Trade accounts payable | |||||||||||
| Accrued expenses and other liabilities | |||||||||||
| Total current liabilities | |||||||||||
| Other long-term liabilities | |||||||||||
| Long-term debt | |||||||||||
| Stockholders’ equity: | |||||||||||
Common stock - $ | |||||||||||
| Additional paid-in capital | |||||||||||
| Treasury stock | ( | ( | |||||||||
| Retained earnings | |||||||||||
| Accumulated other comprehensive income (loss) | ( | ( | |||||||||
| Total Danaher stockholders’ equity | |||||||||||
| Noncontrolling interests | |||||||||||
| Total stockholders’ equity | |||||||||||
| Total liabilities and stockholders’ equity | $ | $ | |||||||||
See the accompanying Notes to the Consolidated Condensed Financial Statements.
1
DANAHER CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS
($ and shares in millions, except per share amounts)
(unaudited)
| Three-Month Period Ended | Nine-Month Period Ended | |||||||||||||||||||||||||||||||
| September 25, 2026 | September 26, 2025 | September 25, 2026 | September 26, 2025 | |||||||||||||||||||||||||||||
| Sales | $ | $ | $ | $ | ||||||||||||||||||||||||||||
| Cost of sales | ( | ( | ( | ( | ||||||||||||||||||||||||||||
| Gross profit | ||||||||||||||||||||||||||||||||
| Operating costs: | ||||||||||||||||||||||||||||||||
| Selling, general and administrative expenses | ( | ( | ( | ( | ||||||||||||||||||||||||||||
| Research and development expenses | ( | ( | ( | ( | ||||||||||||||||||||||||||||
| Operating profit | ||||||||||||||||||||||||||||||||
| Nonoperating income (expense): | ||||||||||||||||||||||||||||||||
| Other income (expense), net | ( | ( | ( | ( | ||||||||||||||||||||||||||||
| Interest expense | ( | ( | ( | ( | ||||||||||||||||||||||||||||
| Interest income | ||||||||||||||||||||||||||||||||
| Earnings before income taxes | ||||||||||||||||||||||||||||||||
| Income taxes | ( | ( | ( | |||||||||||||||||||||||||||||
| Net earnings from continuing operations | ||||||||||||||||||||||||||||||||
| Earnings from discontinued operations, net of income taxes | ||||||||||||||||||||||||||||||||
| Net earnings | $ | $ | $ | $ | ||||||||||||||||||||||||||||
| Net earnings per common share from continuing operations: | ||||||||||||||||||||||||||||||||
| Basic | $ | $ | $ | (a) | $ | |||||||||||||||||||||||||||
| Diluted | $ | $ | $ | (a) | $ | |||||||||||||||||||||||||||
| Net earnings per common share from discontinued operations: | ||||||||||||||||||||||||||||||||
| Basic | $ | $ | $ | $ | ||||||||||||||||||||||||||||
| Diluted | $ | $ | $ | $ | ||||||||||||||||||||||||||||
| Net earnings per common share: | ||||||||||||||||||||||||||||||||
| Basic | $ | $ | $ | (a) | $ | (a) | ||||||||||||||||||||||||||
| Diluted | $ | $ | $ | (a) | $ | (a) | ||||||||||||||||||||||||||
| Average common stock and common equivalent shares outstanding: | ||||||||||||||||||||||||||||||||
| Basic | ||||||||||||||||||||||||||||||||
| Diluted | ||||||||||||||||||||||||||||||||
(a) Net earnings per common share amounts for the relevant three-month periods do not add to the nine-month period amount due to rounding.
See the accompanying Notes to the Consolidated Condensed Financial Statements.
2
DANAHER CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME
($ in millions)
(unaudited)
| Three-Month Period Ended | Nine-Month Period Ended | ||||||||||||||||||||||
| September 25, 2026 | September 26, 2025 | September 25, 2026 | September 26, 2025 | ||||||||||||||||||||
| Net earnings | $ | $ | $ | $ | |||||||||||||||||||
| Other comprehensive income (loss), net of income taxes: | |||||||||||||||||||||||
| Foreign currency translation adjustments | ( | ( | ( | ||||||||||||||||||||
| Pension and postretirement plan benefit adjustments | |||||||||||||||||||||||
| Cash flow hedge adjustments | ( | ( | |||||||||||||||||||||
| Total other comprehensive income (loss), net of income taxes | ( | ( | ( | ||||||||||||||||||||
| Comprehensive income | $ | $ | $ | $ | |||||||||||||||||||
See the accompanying Notes to the Consolidated Condensed Financial Statements.
3
DANAHER CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF STOCKHOLDERS’ EQUITY
($ in millions)
(unaudited)
| Three-Month Period Ended | Nine-Month Period Ended | ||||||||||||||||||||||
| September 25, 2026 | September 26, 2025 | September 25, 2026 | September 26, 2025 | ||||||||||||||||||||
| Common stock: | |||||||||||||||||||||||
| Balance, beginning and end of period | $ | $ | $ | $ | |||||||||||||||||||
| Additional paid-in capital: | |||||||||||||||||||||||
| Balance, beginning of period | $ | $ | $ | $ | |||||||||||||||||||
| Common stock-based award activity and other | |||||||||||||||||||||||
| Common stock issued in connection with acquisitions | |||||||||||||||||||||||
| Balance, end of period | $ | $ | $ | $ | |||||||||||||||||||
| Treasury stock: | |||||||||||||||||||||||
| Balance, beginning of period | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Repurchase of common stock, including excise tax | ( | ( | ( | ||||||||||||||||||||
| Common stock-based award activity | ( | ( | ( | ( | |||||||||||||||||||
| Balance, end of period | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Retained earnings: | |||||||||||||||||||||||
| Balance, beginning of period | $ | $ | $ | $ | |||||||||||||||||||
| Net earnings | |||||||||||||||||||||||
| Common stock dividends declared | ( | ( | ( | ( | |||||||||||||||||||
| Balance, end of period | $ | $ | $ | $ | |||||||||||||||||||
| Accumulated other comprehensive income (loss): | |||||||||||||||||||||||
| Balance, beginning of period | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Other comprehensive income (loss) | ( | ( | ( | ||||||||||||||||||||
| Balance, end of period | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Noncontrolling interests: | |||||||||||||||||||||||
| Balance, beginning of period | $ | $ | $ | $ | |||||||||||||||||||
| Change in noncontrolling interests | |||||||||||||||||||||||
| Balance, end of period | $ | $ | $ | $ | |||||||||||||||||||
| Total stockholders’ equity, end of period | $ | $ | $ | $ | |||||||||||||||||||
See the accompanying Notes to the Consolidated Condensed Financial Statements.
4
DANAHER CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
($ in millions)
(unaudited)
| Nine-Month Period Ended | |||||||||||
| September 25, 2026 | September 26, 2025 | ||||||||||
| Cash flows from operating activities: | |||||||||||
| Net earnings | $ | $ | |||||||||
| Less: earnings from discontinued operations, net of income taxes | ( | ||||||||||
| Net earnings from continuing operations | |||||||||||
| Noncash items: | |||||||||||
| Depreciation | |||||||||||
| Amortization of intangible assets | |||||||||||
| Amortization of acquisition-related inventory fair value step-up | |||||||||||
| Stock-based compensation expense | |||||||||||
| Investment losses and pretax gain on sale of product line | |||||||||||
| Impairment charges | |||||||||||
| Change in trade accounts receivable, net | ( | ( | |||||||||
| Change in inventories | ( | ( | |||||||||
| Change in trade accounts payable | ( | ( | |||||||||
| Change in prepaid expenses and other assets | ( | ||||||||||
| Change in accrued expenses and other liabilities | ( | ( | |||||||||
| Net cash provided by operating activities from continuing operations | |||||||||||
| Cash flows from investing activities: | |||||||||||
| Cash paid for acquisitions | ( | ||||||||||
| Payments for additions to property, plant and equipment | ( | ( | |||||||||
| Proceeds from sales of property, plant and equipment | |||||||||||
| Payments for purchases of investments | ( | ( | |||||||||
| Proceeds from sales of investments | |||||||||||
| Proceeds from sale of product line | |||||||||||
| All other investing activities | |||||||||||
| Total cash used in investing activities for continuing operations | ( | ( | |||||||||
| Cash flows from financing activities: | |||||||||||
| Proceeds from the issuance of common stock in connection with stock-based compensation, net | |||||||||||
| Payment of dividends | ( | ( | |||||||||
| Net proceeds from borrowings (maturities of 90 days or less) | |||||||||||
| Borrowings (maturities longer than 90 days) | |||||||||||
| Repayments of borrowings (maturities longer than 90 days) | ( | ( | |||||||||
| Payments for repurchase of common stock | ( | ( | |||||||||
| All other financing activities | ( | ( | |||||||||
| Total cash provided by (used in) financing activities for continuing operations | ( | ||||||||||
| Effect of exchange rate changes on cash and equivalents | ( | ||||||||||
| Net change in cash and equivalents | ( | ||||||||||
| Beginning balance of cash and equivalents | |||||||||||
| Ending balance of cash and equivalents | $ | $ | |||||||||
| Supplemental disclosures: | |||||||||||
| Cash interest payments | $ | $ | |||||||||
| Cash income tax payments | |||||||||||
See the accompanying Notes to the Consolidated Condensed Financial Statements.
5
DANAHER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(unaudited)
NOTE 1. GENERAL
The Consolidated Condensed Financial Statements included herein have been prepared by Danaher Corporation (“Danaher” or the “Company”) without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). In this quarterly report, the terms “Danaher” or the “Company” refer to Danaher Corporation, Danaher Corporation and its consolidated subsidiaries, or the consolidated subsidiaries of Danaher Corporation, as the context requires. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) have been condensed or omitted pursuant to SEC rules and regulations; however, the Company believes that the disclosures are adequate to make the information presented not misleading. The Consolidated Condensed Financial Statements included herein should be read in conjunction with the financial statements as of and for the year ended December 31, 2025 and the Notes thereto included in the Company’s 2025 Annual Report on Form 10-K filed on February 24, 2026 (the “2025 Annual Report”).
In the opinion of the Company, the accompanying financial statements contain all adjustments (consisting of only normal recurring accruals) necessary to present fairly the financial position of the Company as of September 25, 2026 and December 31, 2025, its results of operations for the three and nine-month periods ended September 25, 2026 and September 26, 2025 and its cash flows for each of the nine-month periods then ended.
There have been no changes to the Company’s significant accounting policies described in the Company’s 2025 Annual Report that have a material impact on the Company’s Consolidated Condensed Financial Statements and the related Notes.
Accounting Standards Recently Adopted—In July 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2025-05, Measurement of Credit Loss for Accounts Receivable and Contract Assets. The ASU provides a practical expedient for the calculation of current expected credit losses for current accounts receivable and contract assets, allowing entities to assume that current conditions as of the balance sheet date will persist through the forecast period. The Company adopted the ASU effective January 1, 2026 on a prospective basis and elected the practical expedient for the calculation of current expected credit losses. The adoption did not have a material impact on the Company’s allowance for doubtful accounts.
Accounting Standards Not Yet Adopted—In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses. The ASU requires disclosure of disaggregated information about certain income statement expenses, including specific expense categories. The ASU is effective for annual periods beginning after December 15, 2026 and for interim periods within fiscal years beginning after December 15, 2027. This accounting standard will increase disclosures in the Company’s annual and interim reporting when adopted.
In September 2025, the FASB issued ASU 2025-06, Targeted Improvements to the Accounting for Internal-Use Software. The ASU updates the requirements for capitalization of internal-use software, removing all reference to prescriptive and sequential software development stages. The ASU is effective for annual periods beginning after December 15, 2027 and for interim periods within those fiscal years. The Company is assessing the impact of the ASU on its consolidated financial statements and related disclosures.
In September 2025, the FASB issued ASU 2025-07, Derivatives and Hedging and Revenue from Contracts with Customers. The derivative scope refinement portion of the ASU excludes from derivative accounting non-exchange-traded contracts with underlyings that are based on operations or activities specific to one of the parties to the contract. The ASU is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods within those annual reporting periods. The Company is assessing the impact of the ASU on its consolidated financial statements and related disclosures.
In December 2025, the FASB issued ASU 2025-10, Accounting for Government Grants Received by Business Entities. The ASU establishes guidance on how to recognize, measure and present government grants, adopting certain principles from the grant accounting model in the International Accounting Standards 20, Accounting for Government Grants and Disclosure of Government Assistance. The ASU is effective for annual reporting periods beginning after December 15, 2028 and interim periods within those fiscal years. The Company is assessing the impact of the ASU on its consolidated financial statements and related disclosures.
In May 2026, the FASB issued ASU 2026-02, Environmental Credits and Environmental Credit Obligations. The ASU establishes guidance on the recognition, measurement, presentation and disclosure of environmental credits and environmental credit obligations. The ASU is effective for annual reporting periods beginning after December 15, 2027
6
NOTE 2. ACQUISITIONS
The Company continually evaluates potential acquisitions that either strategically fit with the Company’s existing portfolio or expand the Company’s portfolio into a new and attractive business area. The Company has completed a number of acquisitions that have been accounted for as purchases and have resulted in the recognition of goodwill in the Company’s financial statements. This goodwill arises because the purchase prices for these businesses exceed the fair value of acquired identifiable net assets due to the purchase prices reflecting a number of factors including the future earnings and cash flow potential of these businesses, the multiple to earnings, cash flow and other factors at which similar businesses have been purchased by other acquirers, the competitive nature of the processes by which the Company acquired the businesses, the avoidance of the time and costs which would be required (and the associated risks that would be encountered) to enhance the Company’s existing product offerings to key target markets and enter into new and profitable businesses and the complementary strategic fit and resulting synergies these businesses bring to existing operations.
The Company makes an initial allocation of the purchase price at the date of acquisition based upon its understanding of the fair value of the acquired assets and assumed liabilities. The Company obtains the information used for the purchase price allocation during due diligence and through other sources. In the months after closing, as the Company obtains additional information about the acquired assets and liabilities, including through tangible and intangible asset appraisals, and learns more about the newly acquired business, it is able to refine the estimates of fair value and more accurately allocate the purchase price. The fair values of acquired intangibles are determined based on estimates and assumptions that are deemed reasonable by the Company. Significant assumptions include the discount rates and certain assumptions that form the basis of the forecasted results of the acquired business including earnings before interest, taxes, depreciation and amortization (“EBITDA”), revenue, revenue growth rates, royalty rates and technology obsolescence rates. These assumptions are forward looking and could be affected by future economic and market conditions. The Company engages third-party valuation specialists who review the Company’s critical assumptions and calculations of the fair value of acquired intangible assets in connection with significant acquisitions. Only facts and circumstances that existed as of the acquisition date are considered for subsequent adjustment.
The Company is continuing to evaluate certain pre-acquisition contingencies including property, plant and equipment, acquired intangible assets, certain acquisition-related liabilities and legal contingencies associated with its 2026 acquisitions and is also in the process of obtaining valuations of certain acquisition-related assets and liabilities in connection with the acquisitions. The Company will make appropriate adjustments to the purchase price allocations, if any, prior to completion of the measurement periods, as required. Refer to Note 13 for additional information related to legal contingencies from the acquisitions.
On June 10, 2026, the Company acquired Masimo Corporation (“Masimo”) by acquiring all of the outstanding shares of Masimo’s common stock for a cash purchase price of approximately $9.8 billion, or $180.00 per share, net of cash acquired (the “Masimo Acquisition”). Masimo develops and produces monitoring technologies, which include innovative measurements, sensors and patient monitors, serving primarily healthcare customers and is now part of the Company’s Diagnostics segment. Masimo generated revenues of approximately $1.5 billion in 2025. The acquisition of Masimo has provided, and is expected to provide, additional sales and earnings opportunities for the Company by expanding product line diversity, including new product offerings supporting acute care settings. The Company financed the Masimo Acquisition using cash on hand and proceeds from the issuance of long-term debt and commercial paper. The Company preliminarily recorded approximately $4.9 billion of goodwill and $5.0 billion of intangible assets (primarily comprised of $3.4 billion of developed technology, $895 million of customer relationships and $660 million of trade names).
In addition to the Masimo Acquisition, during the three and nine-month periods ended September 25, 2026, the Company acquired one 37 79 million of deferred consideration. The business acquired complements existing units of the Company’s Life Sciences segment. The Company preliminarily
7
recorded an aggregate of $26 million of goodwill related to this acquisition and $144 million of identifiable intangible assets, of which a majority related to developed technology intangible assets. The annual sales of this business in its last completed fiscal year prior to the acquisition were approximately $10 million.
The following summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition for the Masimo Acquisition and the other 2026 acquisition ($ in millions):
| Masimo | Other | Total | |||||||||||||||
| Trade accounts receivable | $ | $ | $ | ||||||||||||||
| Inventories | |||||||||||||||||
| Property, plant and equipment | |||||||||||||||||
| Goodwill | |||||||||||||||||
| Other intangible assets, primarily technology, customer relationships and trade names | |||||||||||||||||
| Trade accounts payable | ( | ( | |||||||||||||||
| Deferred tax liabilities | ( | ( | |||||||||||||||
| Other assets and liabilities, net | ( | ( | ( | ||||||||||||||
| Net assets acquired | |||||||||||||||||
| Less non-cash consideration | ( | ( | |||||||||||||||
| Net cash consideration | $ | $ | $ | ||||||||||||||
In connection with the Masimo Acquisition, the Company replaced unvested restricted stock held by Masimo employees with Danaher restricted stock. Of the total fair value, $45 million was attributable to pre-acquisition service and was included in the purchase price. Transaction costs related to the Masimo Acquisition were $51 million for the nine-month period ended September 25, 2026. Transaction costs attributable to the other acquisition were not material for the three and nine-month periods ended September 25, 2026. The Company’s earnings for the three-month period ended September 25, 2026 also reflect the pretax impact of $84 million of nonrecurring acquisition date fair value adjustments to inventory. The Company’s earnings for the nine-month period ended September 25, 2026 also reflect the pretax impact of $158 million of nonrecurring acquisition date fair value adjustments to inventory, the settlement of pre-acquisition share-based payment awards and change-in-control payments.
Pro Forma Financial Information
The unaudited pro forma information for the periods set forth below gives effect to the acquisitions as if they had occurred as of the beginning of the comparable prior annual reporting period, including the results from operations for the acquired businesses as well as the impact of assumed financing of the transaction and the impact of the purchase price allocation (including the amortization of acquired intangible assets). The pro forma information is presented for informational purposes only and is not necessarily indicative of the results of operations that actually would have been achieved had the acquisitions been consummated as of that time ($ in millions, except per share amounts):
| Three-Month Period Ended | Nine-Month Period Ended | ||||||||||||||||||||||
| September 25, 2026 | September 26, 2025 | September 25, 2026 | September 26, 2025 | ||||||||||||||||||||
| Sales | $ | $ | $ | $ | |||||||||||||||||||
Net earnings from continuing operations | |||||||||||||||||||||||
Diluted net earnings per common share from continuing operations | |||||||||||||||||||||||
The unaudited pro forma net earnings from continuing operations for the three and nine-month periods ended September 25, 2026 set forth above were adjusted to exclude the pretax impact of $84 million and $130 million, respectively, of nonrecurring acquisition date fair value adjustments to inventory related to the Masimo Acquisition. Additionally, the unaudited pro forma net earnings from continuing operations for the nine-month period ended September 25, 2026 set forth above were adjusted to exclude the pretax impact of the $28 million related to settlement of pre-acquisition share-based payment awards and change-in-control payments, in each case related to the Masimo Acquisition, reflecting these 2026 charges as if the acquisition had occurred as of January 1, 2025. The nine-month period ended September 26, 2025 was adjusted to include the impact of these items. In addition, acquisition-related transaction costs of $51 million for the nine-month period ended September 25, 2026 were excluded from pro forma net earnings from continuing operations.
8
Subsequent Event Acquisition
NOTE 3. DISCONTINUED OPERATIONS
In both the three and nine-month periods ended September 25, 2026, the Company recorded an income tax benefit of $28
NOTE 4. NET EARNINGS PER COMMON SHARE FROM CONTINUING OPERATIONS
Basic net earnings per common share from continuing operations (“EPS”) is calculated by taking net earnings from continuing operations divided by the weighted average number of common shares outstanding for the applicable period. Diluted net EPS from continuing operations is computed by taking net earnings from continuing operations increased by the number of additional shares that would have been outstanding had the potentially dilutive common shares been issued and reduced by the number of shares the Company could have repurchased with the proceeds from the issuance of the potentially dilutive shares. For the three-month periods ended September 25, 2026 and September 26, 2025, approximately 7.3 million and 6.9 million options to purchase shares, respectively, and for the nine-month periods ended September 25, 2026 and September 26, 2025, approximately 7.1 million and 6.8 million options to purchase shares, respectively, were excluded from the diluted EPS calculation, as the impact of their inclusion would have been anti-dilutive. Basic and diluted EPS are computed independently for each quarter and year-to-date period, and each period involves the use of different weighted average share count figures. As a result, and after factoring in the effect of rounding to the nearest cent per share, the sum of prior quarterly EPS figures may not equal year-to-date EPS.
Information related to the calculation of net earnings per common share from continuing operations is summarized as follows ($ and shares in millions, except per share amounts):
| Three-Month Period Ended | Nine-Month Period Ended | |||||||||||||||||||||||||
| September 25, 2026 | September 26, 2025 | September 25, 2026 | September 26, 2025 | |||||||||||||||||||||||
| Numerator: | ||||||||||||||||||||||||||
Net earnings from continuing operations | $ | $ | $ | $ | ||||||||||||||||||||||
| Denominator: | ||||||||||||||||||||||||||
| Weighted average common shares outstanding used in Basic EPS | ||||||||||||||||||||||||||
| Incremental common shares from: | ||||||||||||||||||||||||||
| Assumed exercise of dilutive options and vesting of dilutive restricted stock units (“RSUs”) and performance stock units (“PSUs”) | ||||||||||||||||||||||||||
| Weighted average common shares outstanding used in Diluted EPS | ||||||||||||||||||||||||||
Basic EPS from continuing operations | $ | $ | $ | $ | ||||||||||||||||||||||
Diluted EPS from continuing operations | $ | $ | $ | $ | ||||||||||||||||||||||
9
NOTE 5. REVENUE
The following tables present the Company’s revenues disaggregated by geographical region and revenue type for the three and nine-month periods ended September 25, 2026 and September 26, 2025 ($ in millions). Sales taxes and other usage-based taxes collected from customers are excluded from revenue.
| Biotechnology | Life Sciences | Diagnostics | Total | ||||||||||||||||||||
| For the Three-Month Period Ended September 25, 2026: | |||||||||||||||||||||||
| Geographical region: | |||||||||||||||||||||||
North America(a) | $ | $ | $ | $ | |||||||||||||||||||
| Western Europe | |||||||||||||||||||||||
Other developed markets(b) | |||||||||||||||||||||||
High-growth markets(c) | |||||||||||||||||||||||
| Total | $ | $ | $ | $ | |||||||||||||||||||
| Revenue type: | |||||||||||||||||||||||
| Recurring | $ | $ | $ | $ | |||||||||||||||||||
| Nonrecurring | |||||||||||||||||||||||
| Total | $ | $ | $ | $ | |||||||||||||||||||
| For the Three-Month Period Ended September 26, 2025: | |||||||||||||||||||||||
| Geographical region: | |||||||||||||||||||||||
North America(a) | $ | $ | $ | $ | |||||||||||||||||||
| Western Europe | |||||||||||||||||||||||
Other developed markets(b) | |||||||||||||||||||||||
High-growth markets(c) | |||||||||||||||||||||||
| Total | $ | $ | $ | $ | |||||||||||||||||||
| Revenue type: | |||||||||||||||||||||||
| Recurring | $ | $ | $ | $ | |||||||||||||||||||
| Nonrecurring | |||||||||||||||||||||||
| Total | $ | $ | $ | $ | |||||||||||||||||||
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| Biotechnology | Life Sciences | Diagnostics | Total | ||||||||||||||||||||
| For the Nine-Month Period Ended September 25, 2026: | |||||||||||||||||||||||
| Geographical region: | |||||||||||||||||||||||
North America(a) | $ | $ | $ | $ | |||||||||||||||||||
| Western Europe | |||||||||||||||||||||||
Other developed markets(b) | |||||||||||||||||||||||
High-growth markets(c) | |||||||||||||||||||||||
| Total | $ | $ | $ | $ | |||||||||||||||||||
| Revenue type: | |||||||||||||||||||||||
| Recurring | $ | $ | $ | $ | |||||||||||||||||||
| Nonrecurring | |||||||||||||||||||||||
| Total | $ | $ | $ | $ | |||||||||||||||||||
| For the Nine-Month Period Ended September 26, 2025: | |||||||||||||||||||||||
| Geographical region: | |||||||||||||||||||||||
North America(a) | $ | $ | $ | $ | |||||||||||||||||||
| Western Europe | |||||||||||||||||||||||
Other developed markets(b) | |||||||||||||||||||||||
High-growth markets(c) | |||||||||||||||||||||||
| Total | $ | $ | $ | $ | |||||||||||||||||||
| Revenue type: | |||||||||||||||||||||||
| Recurring | $ | $ | $ | $ | |||||||||||||||||||
| Nonrecurring | |||||||||||||||||||||||
| Total | $ | $ | $ | $ | |||||||||||||||||||
(a) The Company defines North America as the United States and Canada.
(b) The Company defines other developed markets as all the markets of the world that are not North America, Western Europe or high-growth markets.
(c) The Company defines high-growth markets as developing markets of the world experiencing accelerated growth, over extended periods, in gross domestic product and infrastructure which include Eastern Europe, the Middle East, Africa, Latin America (including Mexico) and Asia (with the exception of Japan, Australia and New Zealand). The Company defines developed markets as all markets of the world that are not high-growth markets.
The Company makes and sells products and services that support life sciences research, biopharmaceutical drug production and medical diagnostics. The Company sells equipment to customers as well as consumables, software and services, some of which customers purchase on a recurring basis. Consumables sold for use with the equipment sold by the Company are typically critical to the use of the equipment and are typically used on a one-time or limited basis, requiring frequent replacement in the customer’s operating cycle. Examples of these consumables include reagents and sensors used in diagnostic tests and monitoring, chromatography resins used for research and bioprocessing and filters used in filtration, separation and purification processes. Additionally, some of the Company’s consumables are used on a standalone basis, such as custom nucleic acids, genomics solutions, antibodies and immunoassays. The Company separates its goods and services between those typically sold to a customer on a recurring basis and those typically sold to a customer on a nonrecurring basis. Recurring revenue includes revenue from consumables (both used with Company equipment and used on a standalone basis), services and operating-type leases (“OTLs”). Nonrecurring revenue includes sales of equipment and sales-type leases (“STLs”). OTLs and STLs are included in the above revenue amounts. For the three-month periods ended September 25, 2026 and September 26, 2025, lease revenue was $147 million and $112 million, respectively. For the nine-month periods ended September 25, 2026 and September 26, 2025, lease revenue was $418 million and $343 million, respectively.
Remaining performance obligations related to Topic 606, Revenue from Contracts with Customers, represent the aggregate transaction price allocated to performance obligations with an original contract term greater than one year which are fully or partially unsatisfied at the end of the period. As of September 25, 2026, the aggregate amount of the transaction price allocated to remaining performance obligations was approximately $7.4 billion. The Company expects to recognize revenue on approximately 41 % of the remaining performance obligations over the next 12 months, 26 % over the subsequent 12 months, and the remainder recognized thereafter.
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The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled receivables (“contract assets”) and deferred revenue, customer deposits and billings in excess of revenue recognized (“contract liabilities”) on the accompanying Consolidated Condensed Balance Sheets. Contract assets and liabilities are reported on a net basis (on a contract-by-contract basis) in the accompanying Consolidated Condensed Balance Sheets at the end of each reporting period.
NOTE 6. SEGMENT INFORMATION
The Company operates and reports its results in three separate business segments consisting of the Biotechnology, Life Sciences and Diagnostics segments. Operating profit represents total revenues less operating expenses, excluding nonoperating income and expense, interest and income taxes. The identifiable assets by segment are those used in each segment’s operations. Intersegment amounts are not significant and are eliminated to arrive at consolidated totals.
The chief operating decision maker (“CODM”) uses segment sales and operating profit to allocate resources (including employees and financial or capital resources), predominantly through the annual budget process, to evaluate and assess the performance of the segments and to evaluate the performance of certain employees for the determination of compensation. The CODM reviews forecast-to-actual variances in segment sales and operating profit on a monthly basis when making decisions about allocating capital and personnel to the segments.
The table below reconciles segment sales to segment operating profit with the expense categories presented reflecting the expenses that the Company has determined to be significant segment expenses. Significant segment expenses are the expense category details regularly provided to the CODM to allocate resources to the segments and to evaluate segment performance. Detailed segment data for the three and nine-month periods ended September 25, 2026 and September 26, 2025 is as follows ($ in millions):
| Biotechnology | Life Sciences | Diagnostics | Total Reportable Segments | Other (a) | Total | ||||||||||||||||||||||||||||||||||||||||||
| For the Three-Month Period Ended September 25, 2026: | |||||||||||||||||||||||||||||||||||||||||||||||
| Sales | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||
| Less: | |||||||||||||||||||||||||||||||||||||||||||||||
| Depreciation | ( | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||
| Amortization of intangible assets | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Impairments (b) | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
Acquisition-related items (c) | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
Other segment items (d) | ( | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||
| Operating profit | $ | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||
| For the Three-Month Period Ended September 26, 2025: | |||||||||||||||||||||||||||||||||||||||||||||||
| Sales | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||
| Less: | |||||||||||||||||||||||||||||||||||||||||||||||
| Depreciation | ( | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||
| Amortization of intangible assets | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Impairments (b) | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||
Other segment items (d) | ( | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||
| Operating profit | $ | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||
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| Biotechnology | Life Sciences | Diagnostics | Total Reportable Segments | Other (a) | Total | ||||||||||||||||||||||||||||||
| For the Nine-Month Period Ended September 25, 2026: | |||||||||||||||||||||||||||||||||||
| Sales | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Less: | |||||||||||||||||||||||||||||||||||
| Depreciation | ( | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||
| Amortization of intangible assets | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||
Impairments (b) | ( | ( | ( | ||||||||||||||||||||||||||||||||
Acquisition-related items (c) | ( | ( | ( | ||||||||||||||||||||||||||||||||
Other segment items (d) | ( | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||
| Operating profit | $ | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||
| For the Nine-Month Period Ended September 26, 2025: | |||||||||||||||||||||||||||||||||||
| Sales | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Less: | |||||||||||||||||||||||||||||||||||
| Depreciation | ( | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||
| Amortization of intangible assets | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||
Impairments (b) | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||
Other segment items (d) | ( | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||
| Operating profit | $ | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||
(a) Other consists of unallocated corporate costs and other costs not considered part of management’s evaluation of reportable segment operating performance.
(b) For information on the impairments, refer to Note 9.
(c) For information on acquisition activity, refer to Note 2.
(d) Other segment items for each reportable segment include cost of sales, selling, general and administrative (“SG&A”) expenses and research and development (“R&D”) expenses, excluding in each case depreciation, amortization of intangible assets, impairments and acquisition-related items. Included within these categories of expenses are overhead expenses, stock compensation expense, restructuring charges and allocated corporate expenses.
The following table presents identifiable assets as of September 25, 2026 and December 31, 2025 ($ in millions):
| September 25, 2026 | December 31, 2025 | ||||||||||
| Biotechnology | $ | $ | |||||||||
| Life Sciences | |||||||||||
| Diagnostics | |||||||||||
| Other | |||||||||||
| Total | $ | $ | |||||||||
The following table presents capital expenditures, gross for the three and nine-month periods ended September 25, 2026 and September 26, 2025 ($ in millions):
| Three-Month Period Ended | Nine-Month Period Ended | ||||||||||||||||||||||
| September 25, 2026 | September 26, 2025 | September 25, 2026 | September 26, 2025 | ||||||||||||||||||||
| Biotechnology | $ | $ | $ | $ | |||||||||||||||||||
| Life Sciences | |||||||||||||||||||||||
| Diagnostics | |||||||||||||||||||||||
| Other | |||||||||||||||||||||||
| Total | $ | $ | $ | $ | |||||||||||||||||||
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NOTE 7. INCOME TAXES
The following table summarizes the Company’s effective tax rate:
| Three-Month Period Ended | Nine-Month Period Ended | ||||||||||||||||||||||
| September 25, 2026 | September 26, 2025 | September 25, 2026 | September 26, 2025 | ||||||||||||||||||||
| Effective tax rate | ( | % | % | % | % | ||||||||||||||||||
The Company operates globally, including in certain jurisdictions with lower tax rates than the United States (“U.S.”) federal statutory rate. Therefore, the impact of Danaher’s global operations and benefits from tax credits and incentives contributes to a lower effective tax rate compared to the U.S. federal statutory tax rate. For each period presented, the effective tax rate differs from the U.S. federal statutory rate of 21.0
For the three-month period ended September 25, 2026, net discrete tax benefits of $263 million decreased the effective tax rate by 23.2 % and related primarily to the release of reserves for uncertain tax positions resulting from audit settlements.
For the three-month period ended September 26, 2025, the effective tax rate was reduced by the tax effect from intangible asset impairments in jurisdictions with higher statutory tax rates than the Company’s effective tax rate, which reduced the effective tax rate by 1.3 %. There was no net discrete tax charge in the three-month period, as a valuation allowance recorded on certain foreign operating losses was offset by benefits from the remeasurement of deferred taxes in a jurisdiction which enacted a tax rate change.
For the nine-month period ended September 25, 2026, net discrete tax benefits of $242 million decreased the effective tax rate by 7.0 % and related primarily to the release of reserves for uncertain tax positions resulting from audit settlements and expiration of statutes of limitations, partially offset by changes in estimates associated with prior period uncertain tax positions.
For the nine-month period ended September 26, 2025, the effective tax rate was reduced by the tax effect from intangible asset impairments in jurisdictions with higher statutory tax rates than the Company’s effective tax rate, the remeasurement of deferred taxes in a jurisdiction which enacted a tax rate change and the release of reserves for uncertain tax positions due to the expiration of statutes of limitations, partially offset by a valuation allowance recorded on certain foreign operating losses and changes in uncertain tax positions. The net impact reduced the effective tax rate by 1.2 %.
For a description of the Company’s significant tax matters, reference is made to the financial statements as of and for the year ended December 31, 2025 and Note 7 thereto included in the Company’s 2025 Annual Report.
NOTE 8. OTHER INCOME (EXPENSE), NET
The following sets forth the components of the Company’s other income (expense), net ($ in millions):
| Three-Month Period Ended | Nine-Month Period Ended | ||||||||||||||||||||||
| September 25, 2026 | September 26, 2025 | September 25, 2026 | September 26, 2025 | ||||||||||||||||||||
| Other components of net periodic benefit costs | $ | $ | $ | $ | |||||||||||||||||||
| Investment gains (losses): | |||||||||||||||||||||||
| Realized investment gains (losses) | ( | ( | ( | ||||||||||||||||||||
| Unrealized investment gains (losses) | ( | ( | ( | ( | |||||||||||||||||||
| Total investment gains (losses) | ( | ( | ( | ( | |||||||||||||||||||
| Gain on sale of product line | |||||||||||||||||||||||
| Total other income (expense), net | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Other Components of Net Periodic Benefit Costs
The Company disaggregates the service cost component of net periodic benefit costs of noncontributory defined benefit pension plans and other postretirement employee benefit plans. The service cost component is presented in cost of goods sold and SG&A expenses. The other components of net periodic benefit costs are presented in other income (expense), net. These other components of net periodic benefit costs include the assumed rate of return on plan assets, partially offset by amortization of actuarial losses and interest.
Pension Plan Termination
During 2026, the Company’s Board of Directors approved the termination of the Company’s U.S. defined benefit pension plan (the “Plan”) with an effective date of September 30, 2026. However, assets were not distributed at that time and the
14
termination process is still ongoing. The Plan's remaining benefit obligations are expected to be settled through lump-sum distributions and the purchase of annuity contracts. The assets of the Plan, less the expenses of liquidation, will be used to pay benefits or to provide for the future payment of benefits in accordance with applicable law, as specified in the Plan. The Company is currently evaluating the impact of the termination, including potential settlement accounting charges, which would be recorded upon the retirement of the pension obligation.
Investment Gains (Losses)
For investments in equity securities without readily available fair values, the Company has elected the measurement alternative to record these investments at cost and to adjust for impairments and observable price changes with a same or similar security from the same issuer within net earnings (the “Fair Value Alternative”). Additionally, the Company is a limited partner in partnerships that invest primarily in early-stage companies. While the partnerships record these investments at fair value, the Company’s investments in the partnerships are accounted for under the equity method of accounting. The investment gains (losses) include realized and unrealized gains and losses related to changes in the fair value of the Company’s investments in equity securities and the Company’s equity in earnings of the partnerships that reflect the changes in fair value of the investments of the partnerships, and related management fees and operating expenses.
Gain on Sale of Product Line
During the nine-month period ended September 26, 2025, the Company divested a product line for a cash purchase price of $9 million and recognized a pretax gain on sale of $9 million ($7 million after-tax). The divested product line generated revenues of approximately $50 million in the Diagnostics segment in 2024. The divestiture of this product line did not represent a strategic shift with a major effect on the Company’s operations and financial results and therefore is not reported as a discontinued operation.
NOTE 9. GOODWILL AND OTHER INTANGIBLE ASSETS
The following is a rollforward of the Company’s goodwill ($ in millions):
| Balance, December 31, 2025 | $ | ||||
| Attributable to the 2026 acquisitions | |||||
| Foreign currency translation and other | ( | ||||
| Balance, September 25, 2026 | $ | ||||
The carrying value of goodwill by segment is summarized as follows ($ in millions):
| September 25, 2026 | December 31, 2025 | ||||||||||
| Biotechnology | $ | $ | |||||||||
| Life Sciences | |||||||||||
| Diagnostics | |||||||||||
| Total | $ | $ | |||||||||
The Company has not identified any “triggering” events which indicate an impairment of goodwill in the third quarter of 2026. The Company has not identified any impairment triggers that resulted in impairments of intangible assets in the third quarter of 2026.
During the second quarter of 2025, the Company decided to reorganize and integrate certain businesses within its Life Sciences segment to better serve the Company’s customers in new market segments and to respond to current market conditions. As a result of these plans, the Company concluded that an indefinite-lived trade name within the genomics consumables business was no longer considered to be indefinite-lived, resulting in an impairment indicator. The Company engaged a third-party valuation specialist to assist in the valuation of the trade name using a relief from royalty method of valuation. The Company recorded a noncash impairment charge of $432 million pretax ($328 million after-tax) related to the trade name for the nine-month period ended September 26, 2025, which is included in SG&A expenses in the accompanying Consolidated Condensed Statement of Earnings. The amount of the impairment was primarily attributable to the conclusion that the trade name was no longer indefinite-lived, as well as current lower levels of demand in the genomics market, including at emerging biotechnology customers and at two large customers. After recognition of the impairment in the second quarter of 2025, the remaining net book value of the trade name was $76 million and is being amortized over the asset’s remaining useful life, as of the date of the impairment, of eight years . The Company continues to monitor for any changes to the business performance or key assumptions.
In connection with the trade name impairment, the Company also tested the related long-lived asset group and the related reporting unit goodwill for impairment, and in both cases the Company identified no
15
During the third quarter of 2025, the Company identified impairment triggers for certain technology assets, a trade name and other intangible assets in the Biotechnology and Diagnostics segments. In the three and nine-month periods ended September 26, 2025, the Company recorded impairment charges of $101 52 15 million impairment related to another facility in the Biotechnology segment, which were both recorded in cost of sales in the accompanying Consolidated Condensed Statements of Earnings.
The reorganization of the Life Sciences segment resulted in a change to the businesses included in two of the Company’s five reporting units for goodwill beginning at the start of the third quarter of 2025. The Company used the relative fair value method to reallocate goodwill between the impacted reporting units within the Life Sciences segment. The Company performed the quantitative goodwill impairment analysis immediately prior to and following the change in the reporting units. As of the date of the 2025 impairment tests, the carrying value of the goodwill included in each individual reporting unit ranged from approximately $1.2 billion to $23.1 billion for both the previous reporting units and for the current reporting units (after the changes within Life Sciences). No impairments of goodwill were identified in either of the impairment evaluations before or immediately after the change in reporting units. The factors used by management in its impairment analysis are inherently subject to uncertainty. If actual results are not consistent with management’s estimates and assumptions, goodwill and other intangible assets may not be recoverable and a charge would need to be taken against net earnings.
NOTE 10. FAIR VALUE MEASUREMENTS
Accounting standards define fair value based on an exit price model, establish a framework for measuring fair value where the Company’s assets and liabilities are required to be carried at fair value and provide for certain disclosures related to the valuation methods used within a valuation hierarchy as established within the accounting standards. This hierarchy prioritizes the inputs into three broad levels as follows. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets in markets that are not active, or other observable characteristics for the asset or liability, including interest rates, yield curves and credit risks, or inputs that are derived principally from, or corroborated by, observable market data through correlation. Level 3 inputs are unobservable inputs based on the Company’s assumptions. A financial asset or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement in its entirety.
A summary of financial assets that are measured at fair value on a recurring basis were as follows ($ in millions):
| Balance | Quoted Prices in Active Market (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||||||||||||||||||||||||||||||||||
| September 25, 2026 | December 31, 2025 | September 25, 2026 | December 31, 2025 | September 25, 2026 | December 31, 2025 | September 25, 2026 | December 31, 2025 | ||||||||||||||||||||||||||||||||||||||||
| Assets: | |||||||||||||||||||||||||||||||||||||||||||||||
| Investment in equity securities | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
| Cross-currency swap derivative contracts | |||||||||||||||||||||||||||||||||||||||||||||||
| Liabilities: | |||||||||||||||||||||||||||||||||||||||||||||||
| Cross-currency swap derivative contracts | |||||||||||||||||||||||||||||||||||||||||||||||
The Company’s investments in equity securities consist of investments in publicly traded equity securities and non-marketable equity securities, which the Company estimates the fair value of using the Fair Value Alternative. The publicly traded securities are classified as Level 1 in the fair value hierarchy as they are measured based on quotes in active markets. The Company’s investments in non-marketable equity securities are not classified in the fair value hierarchy due to the use of the Fair Value Alternative method. Additionally, the Company is a limited partner in partnerships that invest primarily in early-stage companies. While the partnerships record these investments at fair value, the Company’s investments in the partnerships are accounted for under the equity method of accounting and are not subject to the fair value measurement disclosures noted above. As of both September 25, 2026 and December 31, 2025, the Company’s
16
equity method investments included investments in partnerships with a carrying value of approximately $1.4
The cross-currency swap derivative contracts are classified as Level 2 in the fair value hierarchy as they are measured using the income approach with the relevant interest rates and current currency exchange rates and forward curves as inputs. Refer to Note 12 for additional information.
Fair Value of Other Financial Instruments
The carrying amounts and fair values of the Company’s other financial instruments were as follows ($ in millions):
| September 25, 2026 | December 31, 2025 | ||||||||||||||||||||||
| Carrying Amount | Fair Value | Carrying Amount | Fair Value | ||||||||||||||||||||
| Debt obligations: | |||||||||||||||||||||||
| Notes payable and current portion of long-term debt | $ | $ | $ | $ | |||||||||||||||||||
| Long-term debt | |||||||||||||||||||||||
As of September 25, 2026 and December 31, 2025, short and long-term borrowings were categorized as Level 1. The fair value of long-term borrowings was based on quoted market prices. The difference between the fair value and the carrying amounts of long-term borrowings is attributable to changes in market interest rates and/or the Company’s credit ratings subsequent to the incurrence of the borrowing. The fair values of borrowings with original maturities of one year or less, as well as cash and cash equivalents, trade accounts receivable, net and trade accounts payable generally approximate their carrying amounts due to the short-term maturities of these instruments.
NOTE 11. FINANCING
As of September 25, 2026, the Company was in compliance with all of its debt covenants. The components of the Company’s debt were as follows ($ in millions):
| Outstanding Amount | ||||||||||||||
| Description and Aggregate Principal Amount | September 25, 2026 | December 31, 2025 | ||||||||||||
Euro-denominated commercial paper (€ | $ | $ | ||||||||||||
Floating rate senior unsecured notes due 4/29/2028 (€ | ||||||||||||||
17
| Outstanding Amount | ||||||||||||||
| Description and Aggregate Principal Amount | September 25, 2026 | December 31, 2025 | ||||||||||||
| Other | ||||||||||||||
| Total debt | ||||||||||||||
| Less: currently payable | ( | ( | ||||||||||||
| Long-term debt | $ | $ | ||||||||||||
(a) Issued by Danaher Corporation or DH Europe Finance II S.a.r.l. (“Danaher International II”).
(b) Issued by Danaher International II.
(c) Issued by Danaher Corporation.
(d) Issued by DH Switzerland Finance S.a.r.l. (“Danaher Switzerland”).
(e) Issued by DH Japan Finance S.a.r.l. (“Danaher Japan”).
(f) Issued by DH Europe Finance S.a.r.l. (“Danaher International”).
(g) Issued by DH Masi Finance Inc. (“Danaher Masi”).
Debt discounts, premiums and debt issuance costs totaled $126 million and $93 million as of September 25, 2026 and December 31, 2025, respectively, and have been netted against the aggregate principal amounts of the related debt in the components of debt table above. For additional details regarding the Company’s debt financing, refer to Note 13 of the
18
Company’s financial statements as of and for the year ended December 31, 2025 included in the Company’s 2025 Annual Report.
The Company has historically satisfied short-term liquidity needs that are not met through operating cash flow and available cash primarily through issuances of commercial paper under its U.S. dollar and euro-denominated commercial paper programs. The Company’s $5.0 billion unsecured, multi-year revolving credit facility with a syndicate of banks that expires on August 11, 2028 (the “Credit Facility”) is available for direct borrowings and provides credit support for the commercial paper programs. For a description of the Credit Facility, refer to the Company’s 2025 Annual Report. As of September 25, 2026, no borrowings were outstanding under the Credit Facility. As of September 25, 2026, the Company has classified approximately $4.7 billion of its borrowings outstanding under the euro-denominated commercial paper programs as long-term debt in the accompanying Consolidated Condensed Balance Sheet (even though such borrowings are scheduled to mature within one year of September 25, 2026) as the Company had the intent and ability, as supported by availability under the Credit Facility, to refinance these borrowings for at least one year from the balance sheet date. The classification of the Company’s debt is based upon the Company’s refinancing intent, which considers current market conditions, expected liquidity and availability and needs in light of current business operations and upcoming acquisitions.
As of September 25, 2026, borrowings outstanding under the Company’s euro-denominated commercial paper program had a weighted average annual interest rate of 2.8 % and a weighted average remaining maturity of approximately 76 days. There were no borrowings outstanding under the U.S. dollar-denominated commercial paper program as of September 25, 2026.
364-Day Credit Facility
On April 16, 2026, the Company entered into a $5.0 billion 364-day unsecured revolving credit facility (the “364-Day Facility”) with a syndicate of lenders that expires on April 15, 2027 (the “Scheduled Termination Date”). The Company used the 364-Day Facility to provide additional liquidity support for issuances under its commercial paper programs, and used proceeds of such issuances of commercial paper to fund a portion of the purchase price for the Masimo Acquisition.
The Company may elect, upon the payment of a fee equal to 0.50 % of the principal amount of the loans then outstanding and upon the satisfaction of certain conditions, to convert any loans outstanding on the Scheduled Termination Date into term loans that are due and payable one year following the Scheduled Termination Date.
Borrowings under the 364-Day Facility bear interest as follows: (1) Term Secured Overnight Financing Rate (“SOFR”) Loans (as defined in the 364-Day Facility) bear interest at a variable rate equal to the Term SOFR (as defined in the 364-Day Facility) plus a margin of between 58.5 and 108.5 basis points, depending on the Company’s long-term debt credit rating; and (2) Base Rate Loans (as defined in the 364-Day Facility) bear interest at a variable rate per annum equal to the highest of (a) the Federal funds rate (as published by the Federal Reserve Bank of New York from time to time) plus 1/2 of 1%, (b) Bank of America’s “prime rate” as publicly announced from time to time, (c) Term SOFR (based on one-month interest period) plus 1 % and (d) 1 %, plus in each case a margin of between 0.0 and 8.5 basis points depending on Danaher’s long-term debt credit rating. In addition, Danaher is required to pay a per annum facility fee of 4.0 basis points based on the aggregate commitments under the 364-Day Facility, regardless of usage.
The Company’s obligations under the 364-Day Facility are unsecured. The Company has unconditionally and irrevocably guaranteed the obligations of each of its subsidiaries in the event a subsidiary is named a borrower under the 364-Day Facility. The 364-Day Facility contains customary representations, warranties, conditions precedent, events of default, indemnities and affirmative and negative covenants. The 364-Day Facility requires the Company to maintain a Consolidated Leverage Ratio (as defined in the 364-Day Facility) of 0.65 to 1.00 or less. Borrowings under the 364-Day Facility are prepayable at the Company’s option at any time in whole or in part without premium or penalty. The 364-Day Facility is available for liquidity support for Danaher’s commercial paper programs, as discussed above, and for general corporate purposes. There were no borrowings outstanding under the 364-Day Facility as of September 25, 2026.
Long-Term Debt Repayments
On March 18, 2026, the Company repaid the €1.3 billion aggregate principal amount of the 2026 Biopharma Euronotes upon their maturity using available cash and proceeds from the issuance of commercial paper.
In the fourth quarter of 2026, on September 30, 2026, the Company repaid the €800 million aggregate principal amount of the 2026 Euronotes upon their maturity using available cash on hand.
Debt Issuances
On April 23, 2026, Danaher Corporation completed a public offering of Euro-denominated notes due 2028, 2030, 2034, and 2038 (collectively the “Masimo Financing Euronotes”).
On June 3, 2026, Danaher Masi, a wholly-owned finance subsidiary of the Company, completed a private placement of Swiss franc-denominated notes due 2031, 2033, 2036, 2038, 2041, 2046 and 2056 (collectively the “Masimo Financing CHF Notes”).
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The following summarizes the key terms of the offerings in aggregate:
| Aggregate Principal Amount (in millions) | Stated Annual Interest Rate | Maturity Date | Issue Price (as % of Principal Amount) | ||||||||||||||||||||
| 2028 Floating Rate Notes | € | Floating Rate | April 29, 2028 | % | |||||||||||||||||||
| 2030 Euronotes II | % | April 29, 2030 | % | ||||||||||||||||||||
| 2034 Euronotes | % | April 29, 2034 | % | ||||||||||||||||||||
| 2038 Euronotes | % | April 29, 2038 | % | ||||||||||||||||||||
| Total Masimo Financing Euronotes | € | ||||||||||||||||||||||
| 2031 CHF Notes | CHF | % | June 3, 2031 | % | |||||||||||||||||||
| 2033 CHF Notes II | % | June 3, 2033 | % | ||||||||||||||||||||
| 2036 CHF Notes | % | June 3, 2036 | % | ||||||||||||||||||||
| 2038 CHF Notes | % | June 3, 2038 | % | ||||||||||||||||||||
| 2041 CHF Notes | % | June 3, 2041 | % | ||||||||||||||||||||
| 2046 CHF Notes | % | June 3, 2046 | % | ||||||||||||||||||||
| 2056 CHF Notes | % | June 3, 2056 | % | ||||||||||||||||||||
| Total Masimo Financing CHF Notes | CHF | ||||||||||||||||||||||
The Company received net proceeds from the Masimo Financing Euronotes, after underwriting discounts and commissions and offering expenses, of approximately €3.0 billion (approximately $3.5 billion based on currency exchange rates as of the date of the pricing of the Masimo Financing Euronotes). The Company received net proceeds from the Masimo Financing CHF Notes, after underwriting discounts and commissions and offering expenses of approximately CHF 2.4 billion (approximately $3.0 billion based on currency exchange rates as of the date of the pricing of the Masimo Financing CHF Notes). The proceeds from the issuances have been and will be used for the Masimo Acquisition and general corporate purposes, which may include share repurchases, repayment of debt, acquisitions, capital expenditures or other investing activities.
Guarantors of Debt
NOTE 12. HEDGING TRANSACTIONS AND DERIVATIVE FINANCIAL INSTRUMENTS
The Company uses and has used cross-currency swap derivative contracts to partially hedge its net investments in non-U.S. operations against adverse movements in exchange rates between the U.S. dollar and the Danish kroner, Japanese yen, euro and Swiss franc. These contracts are agreements to exchange fixed-rate payments in one currency for fixed-rate payments in another currency and effectively convert U.S. dollar-denominated bonds to obligations denominated in the hedged currency. These contracts also reduce the interest rate from the stated interest rates on the U.S. dollar-denominated debt to the interest rates of the swaps. The changes in the spot rate of these instruments are recorded in accumulated other comprehensive income (loss) (“OCI”) in stockholders’ equity, partially offsetting the foreign currency translation adjustment of the Company’s related net investment that is also recorded in accumulated OCI. The interest income or expense from these swaps are recorded in interest expense in the accompanying Consolidated Condensed Statements of Earnings consistent with the classification of interest expense attributable to the underlying debt. These instruments mature on dates ranging from September 2028 to December 2031.
The Company also uses cross-currency swap derivative contracts to hedge U.S. dollar-denominated long-term debt issuances in a foreign subsidiary whose functional currency is the euro against adverse movements in exchange rates. These contracts effectively convert these U.S. dollar-denominated bonds to obligations denominated in euro. The changes in the fair value of these instruments are recorded in accumulated OCI and are subsequently reclassified to net earnings to offset the remeasurement of the hedged debt that is also recorded in net earnings. The interest income or expense from these swaps are recorded in interest expense in the accompanying Consolidated Condensed Statements of Earnings consistent with the classification of interest expense attributable to the underlying debt. These instruments mature on dates ranging from November 2029 to November 2049.
The Company has also issued foreign currency denominated long-term debt as partial hedges of its net investments in foreign operations against adverse movements in exchange rates between the U.S. dollar and the euro, Japanese yen
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and Swiss franc. These debt issuances are designated and qualify as nonderivative hedging instruments. Accordingly, the foreign currency translation of these debt instruments is recorded in accumulated OCI, offsetting the foreign currency translation adjustment of the Company’s related net investment that is also recorded in accumulated OCI. These instruments mature on dates ranging from September 2026 to October 2045.
The Company used interest rate swap agreements to hedge the variability in cash flows due to changes in benchmark interest rates related to a portion of the debt the Company issued. These contracts effectively fixed the interest rate for a portion of the Company’s debt equal to the notional amount of the swaps to the rate specified in the interest rate swap agreements and were settled in November 2019 and December 2021. The changes in the fair value of these instruments were recorded in accumulated OCI prior to the issuance of the debt and are subsequently being reclassified to interest expense over the life of the related debt.
The following table summarizes the notional values as of September 25, 2026 and September 26, 2025 and pretax impact of changes in the fair values of instruments designated as net investment hedges and cash flow hedges in accumulated OCI for the three and nine-month periods ended September 25, 2026 and September 26, 2025 ($ in millions):
| Original Notional Amount | Notional Amount Outstanding | Gain (Loss) Recognized in OCI | Amounts Reclassified from OCI | ||||||||||||||||||||
| For the Three-Month Period Ended September 25, 2026: | |||||||||||||||||||||||
| Net investment hedges: | |||||||||||||||||||||||
| Cross-currency contracts | $ | $ | $ | ( | $ | ||||||||||||||||||
| Foreign currency denominated debt | |||||||||||||||||||||||
| Cash flow hedges: | |||||||||||||||||||||||
| Cross-currency contracts | ( | ||||||||||||||||||||||
| Interest rate swaps | |||||||||||||||||||||||
| Total | $ | $ | $ | ( | $ | ||||||||||||||||||
| For the Three-Month Period Ended September 26, 2025: | |||||||||||||||||||||||
| Net investment hedges: | |||||||||||||||||||||||
| Cross-currency contracts | $ | $ | $ | $ | |||||||||||||||||||
| Foreign currency denominated debt | |||||||||||||||||||||||
| Cash flow hedges: | |||||||||||||||||||||||
| Cross-currency contracts | ( | ||||||||||||||||||||||
| Interest rate swaps | |||||||||||||||||||||||
| Total | $ | $ | $ | $ | |||||||||||||||||||
| For the Nine-Month Period Ended September 25, 2026: | |||||||||||||||||||||||
| Net investment hedges: | |||||||||||||||||||||||
| Cross-currency contracts | $ | $ | $ | $ | |||||||||||||||||||
| Foreign currency denominated debt | |||||||||||||||||||||||
| Cash flow hedges: | |||||||||||||||||||||||
| Cross-currency contracts | ( | ||||||||||||||||||||||
| Interest rate swaps | |||||||||||||||||||||||
| Total | $ | $ | $ | $ | ( | ||||||||||||||||||
| For the Nine-Month Period Ended September 26, 2025: | |||||||||||||||||||||||
| Net investment hedges: | |||||||||||||||||||||||
| Cross-currency contracts | $ | $ | $ | ( | $ | ||||||||||||||||||
| Foreign currency denominated debt | ( | ||||||||||||||||||||||
| Cash flow hedges: | |||||||||||||||||||||||
| Cross-currency contracts | ( | ||||||||||||||||||||||
| Interest rate swaps | |||||||||||||||||||||||
| Total | $ | $ | $ | ( | $ | ||||||||||||||||||
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Gains or losses related to the net investment hedges are classified as foreign currency translation adjustments in the schedule of changes in OCI in Note 14, as these items are attributable to the Company’s hedges of its net investment in foreign operations. Gains or losses related to the cash flow hedges are classified as cash flow hedge adjustments in the schedule of changes in OCI in Note 14. The amount reclassified from OCI for the cross-currency swap derivative contracts that are cash flow hedges of the Company’s U.S. dollar-denominated debt was equal to the remeasurement amount recorded in the three and nine-month periods on the hedged debt.
The Company did not reclassify any other deferred gains or losses related to net investment hedges or cash flow hedges from accumulated OCI to earnings during the three and nine-month periods ended September 25, 2026 and September 26, 2025. In addition, the Company did not have any ineffectiveness related to net investment hedges or cash flow hedges during the three and nine-month periods ended September 25, 2026 and September 26, 2025. Should any ineffectiveness arise, any ineffective portions of the hedges would be reclassified from accumulated OCI into earnings during the period of change. The cash inflows and outflows associated with the Company’s derivative contracts designated as net investment hedges are classified in all other investing activities in the accompanying Consolidated Condensed Statements of Cash Flows. The cash inflows and outflows associated with the Company’s derivative contracts designated as cash flow hedges are classified in cash flows from operating activities in the accompanying Consolidated Condensed Statements of Cash Flows.
The Company’s derivative instruments, as well as its nonderivative debt instruments designated and qualifying as net investment hedges, were classified in the Company’s Consolidated Condensed Balance Sheets as follows ($ in millions):
| September 25, 2026 | December 31, 2025 | ||||||||||
| Derivative assets: | |||||||||||
| Other long-term assets | $ | $ | |||||||||
| Derivative liabilities: | |||||||||||
| Accrued expenses and other liabilities | |||||||||||
| Nonderivative hedging instruments: | |||||||||||
| Notes payable and current portion of long-term debt | |||||||||||
| Long-term debt | |||||||||||
Amounts related to the Company’s derivatives expected to be reclassified from accumulated OCI to net earnings during the next 12 months, if interest rates and foreign exchange rates remain unchanged, are not significant.
NOTE 13. COMMITMENTS AND CONTINGENCIES
Hawkins Litigation
On July 17, 2023, a putative securities class action was filed in the United States District Court for the District of Columbia, captioned “Hawkins v. Danaher Corporation et al., Case No. 1:23-cv-02055” (“Hawkins Action”). The complaint was amended on December 29, 2023 and names the Company and certain of its current or former officers. The complaint asserts claims under Section 10(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), SEC Rule 10b-5, and Section 20(a) of the Exchange Act, purportedly on behalf of persons and entities who acquired our securities between January 27, 2022 and October 23, 2023 (the “Class Period”). Plaintiffs allege that, during the Class Period, defendants made material misrepresentations or omissions regarding, among other things, the Company’s anticipated revenues for its bioprocessing business that artificially inflated the Company’s stock price. Plaintiffs seek, among other things, damages in an unspecified amount, as well as fees and costs. Defendants moved to dismiss the amended complaint on February 27, 2024, and on August 4, 2025, the court granted in part and denied in part defendants’ motion to dismiss. The parties have executed a settlement agreement to resolve this matter, and based on the terms of the agreement, the Company recorded a settlement liability as well as an offsetting insurance receivable. The court granted final approval of the settlement at a hearing in September 2026 and indicated that a written order would be issued. The settlement will not have a material impact on the Company’s results of operations or cash flows.
In early 2024, putative shareholder derivative cases (relating to substantially the same factual allegations as those made in the Hawkins Action) were filed in the United States District Court for the District of Delaware. These cases were consolidated and captioned “In re Danaher Corporation Derivative Litigation, No. 1:24-cv-00091-GBW” (the “Derivative Action”). On November 10, 2025, the Derivative Action was voluntarily dismissed without prejudice. Beginning in March 2026, putative shareholder derivative cases (relating to substantially the same factual allegations as those made in the Hawkins Action) were filed in the United States District Court for the District of Delaware, the Delaware Court of Chancery, and the United States District Court for the District of Columbia. The outcomes of these proceedings remain uncertain, and the Company is unable to reasonably estimate the possible loss or range of loss, if any.
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Masimo Litigation Matters
On June 10, 2026, the Company acquired Masimo. The legal contingencies described below relate to the Masimo business, all of which existed at the time of acquisition.
Apple Litigation
On January 9, 2020, Masimo filed a complaint against Apple Inc. (“Apple”) in the United States District Court for the Central District of California (“District Court”) for patent infringement, trade secret misappropriation and ownership and correction of inventorship of certain Apple patents. Masimo seeks, among other things, damages. Stemming from an April 2023 jury trial that ended in a mistrial, the District Court granted Apple’s motion for judgment as a matter of law on certain trade secrets and denied the remainder of Apple’s motion. Beginning November 5, 2024, the District Court conducted a bench trial on Masimo’s remaining trade secret, ownership and inventorship claims, finding Masimo proved misappropriation of two trade secrets but had not established its claims for patent ownership and inventorship. After completion of Inter Partes review proceedings, the District Court held a jury trial on Masimo’s patent infringement claims in November 2025. The jury returned a verdict of $634 million. The District Court denied Apple’s post-trial motions and entered final judgment on July 20, 2026. On October 5, 2026, the District Court awarded Masimo approximately $184 million in pre-judgment interest and ordered Apple to pay post-judgment interest on the combined total of the verdict amount and the pre-judgment interest amount. Masimo and Apple filed notices of appeal to the United States Court of Appeals for the Federal Circuit in July and August 2026, respectively.
On June 30, 2021, Masimo filed a complaint with the United States International Trade Commission (“ITC”) against Apple for infringement of certain patents not asserted in the litigation described above. On October 26, 2023, the ITC issued a Notice of Final Determination finding Apple violated Section 337 of the Tariff Act of 1930 by importing and selling certain Apple Watches with light-based pulse oximetry functionality and components that infringe certain of Masimo’s patents. The ITC issued a Limited Exclusion Order (“LEO”) prohibiting the unlicensed entry of infringing devices and a Cease and Desist Order, both of which are currently in effect. Apple appealed to the United States Court of Appeals for the Federal Circuit and the panel ruled in Masimo’s favor. On September 3, 2026, Apple filed a petition for writ of certiorari in the Supreme Court of the United States. Apple’s petition is pending.
On August 1, 2025, the U.S. Customs and Border Protection Exclusion Order Enforcement Branch issued a ruling allowing importation of a redesigned Apple Watch. On November 14, 2025, the ITC instituted a combined enforcement and modification proceeding to evaluate this redesign. On April 17, 2026, the ITC issued a Final Enforcement Determination finding that Apple’s importation of the redesigned Apple Watch does not violate the LEO. Masimo filed a notice of appeal to the United States Court of Appeals for the Federal Circuit in June 2026.
On October 20, 2022, Apple filed two complaints against Masimo in the United States District Court for the District of Delaware alleging that the Masimo W1® watch and charger infringe six utility and four design patents. Apple is seeking damages and injunctive relief. On December 12, 2022, Masimo counterclaimed for antitrust violations, false advertising and patent infringement. Masimo is seeking damages and injunctive relief. The District Court held a jury trial on Apple’s patent claims in October 2024. The jury found that Masimo’s current product offerings do not infringe Apple’s patents, although discontinued versions of two Masimo products were found to infringe. The jury awarded Apple a total of $250 . Masimo’s antitrust, false advertising and patent infringement counterclaims are pending.
Department of Justice Investigation
On February 21, 2024, Masimo received a subpoena from the Department of Justice (“DOJ”) seeking documents and information related to its Rad-G® and Rad-97® products, including information relating to complaints surrounding the products and Masimo’s decision to recall the Rad-G®. On March 25, 2024, Masimo received a civil investigative demand from the DOJ pursuant to the False Claims Act seeking documents and information related to customer returns of Rad-G® and Rad-97® products, including returns related to the recall referenced in the prior sentence. On February 27, 2026, Masimo received a supplemental grand jury subpoena seeking documents and information related to the foregoing matters. Masimo is cooperating with the government. Requests and an investigation of this nature may lead to the assertion of claims or the commencement of legal proceedings against Masimo, which in turn may lead to fines, penalties or other liabilities. The Company believes the reasonably possible range of loss with respect to this matter is between approximately $5 million and $40 million.
Kiani Employment Litigation
On September 19, 2024, Joe Kiani, the former Chairman of the Board and CEO of Masimo, filed suit against Masimo in Orange County Superior Court in California asserting claims related to his Amended Employment Agreement with Masimo dated November 4, 2015, as amended on July 27, 2017 and January 14, 2022 (“Kiani Employment Agreement”). In 2024, Mr. Kiani was not reelected to Masimo’s Board in a shareholder vote and submitted his resignation as CEO. Among other things, Mr. Kiani’s lawsuit seeks declaratory relief that he validly terminated his employment, and that he is entitled to
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certain severance (including the value of 2.7 million shares of Masimo common stock and a $35 million cash payment). Masimo disputes Mr. Kiani’s claims and the case is now in discovery.
Kiani Litigation with Masimo Board
On May 22, 2025, Mr. Kiani filed a lawsuit in the Orange County Superior Court in California against individual members of Masimo’s former board of directors asserting claims for violations of the California Labor Code and the California Unfair Competition Law arising from Masimo’s alleged failure to timely pay him severance and certain wages purportedly owed under the Kiani Employment Agreement. The defendants dispute the claims. The Court denied defendants’ motion for judgment on the pleadings and the case is in discovery.
RTW Litigation
On October 25, 2024, Masimo commenced litigation in the United States District Court for the Southern District of New York against Roderick Wong, Naveen Yalamanchi, RTW Investments, LP, RTW Investments GP, LLC, RTW Master Fund, Ltd., RTW Offshore Fund One, Ltd., RTW Onshore Fund One, LP, RTW Innovation Master Fund, Ltd., RTW Innovation Offshore Fund, Ltd., RTW Innovation Onshore Fund, LP and RTW Fund Group GP, LLC (together, the “RTW Defendants”) and Mr. Kiani, alleging that the defendants formed a stockholder group under Section 13(d) of the Exchange Act holding 10% or more of Masimo’s common stock and engaged in short-swing trading under Section 16(b) of the Exchange Act during 2024 as a part of an empty voting scheme in connection with Masimo’s 2024 annual meeting of shareholders. The case was transferred to the Central District of California, where all claims were voluntarily dismissed except the claim seeking disgorgement of the RTW Defendants’ trading profits under Section 16(b). The case is now in discovery.
Willow Laboratories, Inc. Arbitration
On May 26, 2025, Willow Laboratories, Inc. (“Willow”), formerly known as Cercacor Laboratories, Inc., filed a demand for arbitration against Masimo with the American Arbitration Association. Willow had previously been spun off from Masimo, and Mr. Kiani is the Executive Chairman of Willow. Masimo and Willow are parties to a cross-licensing agreement (“Cross-Licensing Agreement”), which purports to obligate Masimo to pay certain royalties for use of “Rainbow Technology” (e.g., Masimo’s non‑invasive monitoring of carboxyhemoglobin and methemoglobin). Willow seeks a declaratory judgment that Willow is not obligated to repay any past royalty overpayments by Masimo. Willow also claims Masimo breached the Cross-Licensing Agreement and seeks, among other things, (i) monetary damages of at least $6 million, and (ii) specific performance compelling Masimo to supply certain products, place certain technology in escrow, and provide Willow with engineering support.
On January 28, 2026, Masimo asserted counterclaims against Willow and Mr. Kiani, seeking, among other things, (i) repayment of historical royalty overpayments, (ii) re‑assignment to Masimo of intellectual property purportedly owned by Willow, (iii) declaratory judgment that provisions under the Cross-Licensing Agreement are not enforceable, and (iv) to the extent the agreement is enforceable, declaratory judgment on the parties’ respective rights under the Cross-Licensing Agreement, including the scope of Masimo’s royalty obligations, if any.
The arbitration panel has bifurcated the proceedings. A hearing on Willow’s breach claims and Masimo’s overpayment claim is scheduled to take place in November 2026 and a hearing to address most of Masimo’s counterclaims is scheduled to take place in October 2027.
On February 6, 2026, Mr. Kiani filed a lawsuit in the Orange County Superior Court against Masimo, challenging the arbitrability of the claims asserted against him personally. Masimo filed a motion to compel arbitration, which was denied on procedural grounds. Masimo has filed an answer and a motion for summary judgment, which is scheduled for hearing on December 17, 2026.
The outcomes of these proceedings remain uncertain, and except as set forth above the Company is unable to reasonably estimate the possible loss or range of loss, if any. As discussed in Note 2, the Company is continuing to evaluate certain pre-acquisition contingencies, including legal contingencies, associated with the Masimo Acquisition.
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NOTE 14. STOCKHOLDERS' EQUITY AND STOCK-BASED COMPENSATION
Stockholders’ Equity
The Company’s Board of Directors has approved the following programs to repurchase shares of the Company’s common stock:
| Name of program | Date of Board of Directors approval | Number of shares of Company common stock approved for repurchase | Number of shares remaining available for repurchase as of September 25, 2026 | |||||||||||||||||
| 2024 Repurchase Program | July 22, 2024 | |||||||||||||||||||
| 2025 Repurchase Program | September 9, 2025 | |||||||||||||||||||
In each case, the approved program authorized or authorizes the repurchase of up to the specified number of shares of the Company’s common stock from time to time on the open market or in privately negotiated transactions. None of the repurchase programs were or are subject to an expiration date, and the timing and amount of any shares repurchased in the future will be determined by members of the Company’s management based on its evaluation of market conditions and other factors. Any repurchase program with remaining availability may be suspended or discontinued at any time. Repurchased shares are and will be available for use in connection with the Company’s equity compensation plans (or any successor plans) and for other corporate purposes.
During the nine-month period ended September 25, 2026, the Company repurchased approximately 5.0 million shares of the Company’s common stock for $903 million, inclusive of excise taxes. Approximately 2.0 million of these shares were repurchased under the 2024 Repurchase Program and approximately 3.0 million of these shares were repurchased under the 2025 Repurchase Program.
During the three and nine-month periods ended September 26, 2025, the Company repurchased approximately 10.0 million and 14.5 million shares, respectively, of the Company’s common stock for approximately $2.0 billion and $3.1 billion, respectively, inclusive of excise taxes, as part of the 2024 Repurchase Program.
In the nine-month periods ended September 25, 2026 and September 26, 2025, the Company paid $27 million and $56 million in excise taxes related to the 2025 and 2024 share repurchases, respectively. Cash paid for excise taxes on share repurchases is included in all other financing activities in the accompanying Consolidated Condensed Statements of Cash Flows.
The following table summarizes the activity of the Company’s issued shares (shares in millions):
| Three-Month Period Ended | Nine-Month Period Ended | ||||||||||||||||||||||
| September 25, 2026 | September 26, 2025 | September 25, 2026 | September 26, 2025 | ||||||||||||||||||||
| Common stock - shares issued: | |||||||||||||||||||||||
| Balance, beginning of period | |||||||||||||||||||||||
| Common stock-based compensation awards | |||||||||||||||||||||||
| Balance, end of period | |||||||||||||||||||||||
Special Equity Awards
On August 4, 2026, the Company granted special long-term growth awards of non-qualified stock options and RSUs to certain executive officers and other key leaders under the Company’s Amended and Restated Omnibus Incentive Plan. Additionally, the Company granted special non-qualified stock options to purchase 1.0 0.5
The exercise price of each option described above was equal to the closing market price of the Company’s common stock on the grant date of August 4, 2026. The RSUs described above vest over periods ranging from 12 months to five years .
Compensation expense associated with these awards is recognized over the requisite service period. During both the three and nine-month periods ended September 25, 2026, the Company recognized $14
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On October 9, 2026, each of Steven M. Rales and Mitchell P. Rales waived their rights to such RSUs for no consideration. In accordance with the accounting for the cancellation of equity awards under ASC 718, Compensation-Stock Compensation, the Company will recognize a non-cash charge for the remaining $185 million of unrecognized stock-based compensation cost associated with such RSUs in the fourth quarter of 2026. This amount is included in the unrecognized compensation cost described below.
Stock-Based Compensation
For a full description of the Company’s stock-based compensation programs, refer to Note 18 of the Company’s financial statements as of and for the year ended December 31, 2025 included in the Company’s 2025 Annual Report. As of September 25, 2026, approximately 50 million shares of the Company’s common stock were reserved for issuance under the Amended and Restated Danaher Corporation Omnibus Incentive Plan.
The following summarizes the components of the Company’s stock-based compensation expense ($ in millions):
| Three-Month Period Ended | Nine-Month Period Ended | ||||||||||||||||||||||
| September 25, 2026 | September 26, 2025 | September 25, 2026 | September 26, 2025 | ||||||||||||||||||||
| RSUs/PSUs: | |||||||||||||||||||||||
| Pretax compensation expense | $ | $ | $ | $ | |||||||||||||||||||
| Income tax benefit | ( | ( | ( | ( | |||||||||||||||||||
| RSU/PSU expense, net of income taxes | |||||||||||||||||||||||
| Stock options: | |||||||||||||||||||||||
| Pretax compensation expense | |||||||||||||||||||||||
| Income tax benefit | ( | ( | ( | ( | |||||||||||||||||||
| Stock option expense, net of income taxes | |||||||||||||||||||||||
| Total stock-based compensation: | |||||||||||||||||||||||
| Pretax compensation expense | |||||||||||||||||||||||
| Income tax benefit | ( | ( | ( | ( | |||||||||||||||||||
| Total stock-based compensation expense, net of income taxes | $ | $ | $ | $ | |||||||||||||||||||
Stock-based compensation has been recognized as a component of SG&A and R&D expenses in the accompanying Consolidated Condensed Statements of Earnings. As of September 25, 2026, $493 million of total unrecognized compensation cost related to RSUs/PSUs is expected to be recognized over a weighted average period of approximately three years . As of September 25, 2026, $386 million of total unrecognized compensation cost related to stock options is expected to be recognized over a weighted average period of approximately three years . Future compensation amounts will be adjusted for any changes in estimated forfeitures.
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Accumulated Other Comprehensive Income
Accumulated OCI refers to certain gains and losses that under U.S. GAAP are included in comprehensive income (loss) but are excluded from net earnings as these amounts are initially recorded as an adjustment to stockholders’ equity. Foreign currency translation adjustments generally relate to indefinite investments in non-U.S. subsidiaries, as well as the impact from the Company’s hedges of its net investment in foreign operations, including the Company’s cross-currency swap derivatives, net of any income tax impacts.
The changes in accumulated OCI by component are summarized below ($ in millions).
| Foreign Currency Translation Adjustments | Pension and Postretirement Plan Benefit Adjustments | Cash Flow Hedge Adjustments | Accumulated Comprehensive Income (Loss) | ||||||||||||||||||||||||||
For the Three-Month Period Ended September 25, 2026: | |||||||||||||||||||||||||||||
| Balance, June 26, 2026 | $ | ( | $ | ( | $ | $ | ( | ||||||||||||||||||||||
| OCI before reclassifications: | |||||||||||||||||||||||||||||
| Increase (decrease) | ( | ( | ( | ||||||||||||||||||||||||||
| Income tax impact | |||||||||||||||||||||||||||||
| OCI before reclassifications, net of income taxes | ( | ( | ( | ||||||||||||||||||||||||||
| Reclassification adjustments: | |||||||||||||||||||||||||||||
| Increase (decrease) | (a) | (b) | |||||||||||||||||||||||||||
| Income tax impact | ( | ( | |||||||||||||||||||||||||||
| Reclassification adjustments, net of income taxes | |||||||||||||||||||||||||||||
| Net OCI, net of income taxes | ( | ( | ( | ||||||||||||||||||||||||||
| Balance, September 25, 2026 | $ | ( | $ | ( | $ | $ | ( | ||||||||||||||||||||||
| For the Three-Month Period Ended September 26, 2025: | |||||||||||||||||||||||||||||
| Balance, June 27, 2025 | $ | ( | $ | ( | $ | $ | ( | ||||||||||||||||||||||
| OCI before reclassifications: | |||||||||||||||||||||||||||||
| Increase (decrease) | ( | ( | |||||||||||||||||||||||||||
| Income tax impact | ( | ( | |||||||||||||||||||||||||||
| OCI before reclassifications, net of income taxes | ( | ( | |||||||||||||||||||||||||||
| Reclassification adjustments: | |||||||||||||||||||||||||||||
| Increase (decrease) | (a) | (b) | |||||||||||||||||||||||||||
| Income tax impact | ( | ( | |||||||||||||||||||||||||||
| Reclassification adjustments, net of income taxes | ( | ||||||||||||||||||||||||||||
| Net OCI, net of income taxes | ( | ( | |||||||||||||||||||||||||||
Balance, September 26, 2025 | $ | ( | $ | ( | $ | $ | ( | ||||||||||||||||||||||
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| Foreign Currency Translation Adjustments | Pension and Postretirement Plan Benefit Adjustments | Cash Flow Hedge Adjustments | Accumulated Comprehensive Income (Loss) | ||||||||||||||||||||||||||
| For the Nine-Month Period Ended September 25, 2026: | |||||||||||||||||||||||||||||
| Balance, December 31, 2025 | $ | ( | $ | ( | $ | $ | ( | ||||||||||||||||||||||
| OCI before reclassifications: | |||||||||||||||||||||||||||||
| Increase (decrease) | ( | ( | |||||||||||||||||||||||||||
| Income tax impact | ( | ( | |||||||||||||||||||||||||||
| OCI before reclassifications, net of income taxes | ( | ( | |||||||||||||||||||||||||||
| Reclassification adjustments: | |||||||||||||||||||||||||||||
| Increase (decrease) | (a) | ( | (b) | ( | |||||||||||||||||||||||||
| Income tax impact | ( | ( | ( | ||||||||||||||||||||||||||
| Reclassification adjustments, net of income taxes | ( | ( | |||||||||||||||||||||||||||
| Net OCI, net of income taxes | ( | ( | ( | ||||||||||||||||||||||||||
| Balance, September 25, 2026 | $ | ( | $ | ( | $ | $ | ( | ||||||||||||||||||||||
| For the Nine-Month Period Ended September 26, 2025: | |||||||||||||||||||||||||||||
| Balance, December 31, 2024 | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||
| OCI before reclassifications: | |||||||||||||||||||||||||||||
| Increase (decrease) | ( | ||||||||||||||||||||||||||||
| Income tax impact | |||||||||||||||||||||||||||||
| OCI before reclassifications, net of income taxes | ( | ||||||||||||||||||||||||||||
| Reclassification adjustments: | |||||||||||||||||||||||||||||
| Increase (decrease) | (a) | (b) | |||||||||||||||||||||||||||
| Income tax impact | ( | ( | ( | ||||||||||||||||||||||||||
| Reclassification adjustments, net of income taxes | |||||||||||||||||||||||||||||
| Net OCI, net of income taxes | |||||||||||||||||||||||||||||
Balance, September 26, 2025 | $ | ( | $ | ( | $ | $ | ( | ||||||||||||||||||||||
(a) This accumulated other comprehensive income (loss) component is included in the computation of net periodic benefit cost (refer to Note 8 for additional details).
(b) Reflects reclassification to earnings related to cash flow hedges of certain long-term debt (refer to Note 12 for additional details).
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is designed to provide material information relevant to an assessment of Danaher Corporation’s (“Danaher,” the “Company,” “we,” “us” or “our”) financial condition and results of operations, including an evaluation of the amounts and certainty of cash flows from operations and from outside sources. The MD&A is designed to focus specifically on material events and uncertainties known to management that are reasonably likely to cause reported financial information not to be necessarily indicative of future operating results or of future financial condition. This includes descriptions and amounts of matters that have had a material impact on reported operations, as well as matters that are reasonably likely based on management’s assessment to have a material impact on future operations. The Company’s MD&A is divided into five sections:
•Information Relating to Forward-Looking Statements
•Overview
•Results of Operations
•Liquidity and Capital Resources
•Critical Accounting Estimates
You should read this discussion along with the Company’s MD&A and audited financial statements and Notes thereto as of and for the year ended December 31, 2025, included in the Company’s 2025 Annual Report and the Company’s Consolidated Condensed Financial Statements and related Notes as of and for the three and nine-month periods ended September 25, 2026 included in this Quarterly Report on Form 10-Q (“Report”).
INFORMATION RELATING TO FORWARD-LOOKING STATEMENTS
Certain statements included or incorporated by reference in this Report, in other documents we file with or furnish to the Securities and Exchange Commission, in our press releases, webcasts, conference calls, presentations, materials delivered to shareholders and other communications, are “forward-looking statements” within the meaning of the U.S. federal securities laws. All statements other than historical factual information are forward-looking statements, including without limitation statements regarding: projections of tariff or other trade-related impacts, revenue, expenses, profit, profit margins, asset values, pricing, tax rates, tax provisions, cash flows, pension and benefit obligations and funding requirements, our liquidity position or other projected financial measures; management’s plans and strategies for future operations, including statements relating to anticipated operating performance, customer demand, cost reductions, restructuring activities, new product and service developments, competitive strengths or market position, acquisitions and the integration thereof (including our integration of Masimo and the anticipated benefits of such acquisition, which is further described in Note 2 to the accompanying Consolidated Condensed Financial Statements), divestitures, spin-offs, split-offs, initial public offerings, other securities offerings or other distributions, strategic opportunities, stock repurchases, dividends, executive compensation and potential executive stock sales or purchases; growth, declines and other trends in markets we sell into; future, new or modified laws, regulations, accounting pronouncements or public policy changes; regulatory approvals and the timing and conditionality thereof; outstanding claims, legal proceedings, tax audits and assessments and other contingent liabilities; future currency exchange rates and fluctuations in those rates; the potential or anticipated direct or indirect impact of public health crises, climate change, military or geopolitical conflicts or other man-made or natural disasters on our business, results of operations and/or financial condition; general economic and capital markets conditions; the anticipated timing of any of the foregoing; assumptions underlying any of the foregoing; and any other statements that address events or developments that Danaher intends or believes will or may occur in the future. Terminology such as “believe,” “anticipate,” “assume,” “continue,” “should,” “could,” “intend,” “will,” “plan,” “aim,” “expect,” “estimate,” “project,” “target,” “can,” “may,” “possible,” “potential,” “upcoming,” “forecast” and “positioned” and similar references to future periods are intended to identify forward-looking statements, although not all forward-looking statements are accompanied by such words.
Forward-looking statements are based on assumptions and assessments made by our management in light of their experience and perceptions of historical trends, current conditions, expected future developments and other factors they believe to be appropriate. Forward-looking statements are not guarantees of future performance and actual results may differ materially from the results, developments and business decisions contemplated by our forward-looking statements. Accordingly, you should not place undue reliance on any such forward-looking statements. Important factors, risks and
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uncertainties that in the future could cause actual results to differ materially from those envisaged in the forward-looking statements, and that in some cases have affected us in the past, include the following:
Business and Strategic Risks
•Conditions in the global economy, the particular markets we serve and the financial markets can adversely affect our business and financial statements.
•We face intense competition and if we are unable to compete effectively, we may experience decreased demand and decreased market share. Even if we compete effectively, we may be required to reduce the prices we charge.
•Our growth depends on the timely development and commercialization, and customer acceptance, of new and enhanced products and services (in this Report, references to products and services also includes software), based on technological innovation. Our growth also suffers when the markets into which we sell our products and services decline, do not grow as anticipated or experience cyclicality.
•The healthcare industry and related industries that we serve are undergoing significant changes in an effort to reduce (and increase the predictability of) costs, which can adversely affect our business and financial statements.
•Economic, political, geopolitical, legal, compliance, social and business factors, both in the U.S. and outside the U.S., can negatively affect our business and financial statements. For example, the 2025 change in the U.S. administration as well as recent Supreme Court decisions have resulted in policy, regulatory and economic changes, challenges and uncertainty, including with respect to tariffs and healthcare-related topics. In addition, conflict in the Middle East has heightened geopolitical instability and economic uncertainty.
•The development, deployment and use of artificial intelligence in our business and products, and uncertainties with respect thereto, may result in harm to our business and reputation.
•Global health crises, pandemics, epidemics or other outbreaks can adversely impact certain elements of our business and financial statements.
•Business partners and other third-parties we rely on for development, supply and/or marketing of certain products, potential products and technologies could fail to perform sufficiently.
Acquisitions, Divestitures and Investment Risks
•The inability to consummate acquisitions at our historical rate and appropriate prices, realize the economic benefits of consummated acquisitions or to make appropriate investments that support our long-term strategy, can negatively impact our business. Our acquisition of businesses (including our recent acquisition of Masimo), investments, joint ventures and other strategic relationships can also negatively impact our business and financial statements and our indemnification rights may not fully protect us from liabilities related thereto.
•Divestitures or other dispositions could negatively impact our business, and contingent liabilities from businesses that we or our predecessors have previously disposed could adversely affect our business and financial statements. For example, we could incur significant liability if any of the split-off or spin-off transactions we have previously consummated are determined to be a taxable transaction or otherwise pursuant to our indemnification obligations with respect to such transactions.
Operational Risks
•Significant disruptions in, or breaches in security of, our information technology (“IT”) systems or data; data privacy violations; other losses or disruptions to facilities, supply chains, distribution systems or IT systems due to catastrophe; and labor disputes can all adversely affect our business and financial statements.
•Defects, manufacturing problems and unanticipated use or inadequate disclosure with respect to our products or services, or allegations thereof, can adversely affect our business and financial statements.
•Climate change, legal or regulatory measures to address climate change and other sustainability topics and any inability to address regulatory requirements or stakeholder expectations with respect to climate change and other sustainability topics, may negatively affect our business and financial statements.
•Our financial results are subject to fluctuations in the cost and availability of the supplies we use in, and the labor we need for, our operations, as well as adverse changes with respect to key distributors and channel partners.
•Our success depends on our ability to recruit, retain and motivate talented employees.
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Intellectual Property Risks
•Any inability to adequately protect or avoid third-party infringement of our intellectual property, and third-party claims we are infringing intellectual property rights, can adversely affect our business and financial statements.
•The U.S. government has certain rights with respect to incremental production capacity attributable to, and/or the intellectual property we have developed using, government financing. In addition, in times of national emergency the U.S. government could also control our allocation of manufacturing capacity.
Financial and Tax Risks
•From time to time our outstanding debt has increased significantly as a result of acquisitions and other factors, and we expect to incur additional debt. For example, the Company incurred debt to finance a portion of the purchase price for our acquisition of Masimo. Our indebtedness may limit our operations and use of cash flow and negatively impact our credit ratings; and failure to comply with our indebtedness-related covenants could adversely affect our business and financial statements.
•Our business and financial statements can be adversely affected by foreign currency exchange rates, changes in our tax rates (including as a result of changes in tax laws) or income tax liabilities/assessments, the outcome of tax audits, recognition of impairment charges for our goodwill or other intangible assets and fluctuations in the cost and availability of commodities.
Legal, Regulatory, Compliance and Reputational Risks
•Significant developments or changes in national laws or policies to protect or promote domestic interests and/or address foreign competition can have an adverse effect on our business and financial statements.
•Our businesses are subject to extensive regulation (including those applicable to the healthcare industry). Failure to comply with those regulations (including by our employees, agents or business partners) or significant developments or changes in U.S. or non-U.S. laws or policies can adversely affect our business and financial statements.
•We are subject to, or otherwise responsible for, a variety of litigation and other legal and regulatory proceedings in the course of our business that can adversely affect our business and financial statements.
•With respect to the regulated medical devices we offer, product introductions or modifications can require regulatory clearance or authorizations and we can be required to recall or cease marketing such products; off-label marketing can result in penalties; and clinical trials can have results that are unexpected or are perceived unfavorably by the market, all of which can adversely affect our business and financial statements.
•Our operations, products and services also expose us to the risk of environmental, health and safety liabilities, costs and violations that can adversely affect our business and financial statements.
•Our By-law exclusive forum provisions could limit our stockholders’ ability to choose their preferred judicial forum for disputes.
See “Part I—Item 1A. Risk Factors” of the Company’s 2025 Annual Report and Part II-Item 1A of this report for further discussion regarding reasons that actual results may differ materially from the results, developments and business decisions contemplated by our forward-looking statements. Forward-looking statements speak only as of the date of the report, document, press release, webcast, call, presentation, materials or other communication in which they are made. Except to the extent required by applicable law, we do not assume any obligation to update or revise any forward-looking statement, whether as a result of new information, future events and developments or otherwise.
OVERVIEW
General
As a result of the Company’s geographic and industry diversity, the Company faces a variety of opportunities and challenges, including rapid technological development (particularly with respect to computing, automation, artificial intelligence, mobile connectivity and digitization) in most of the Company’s served markets, the expansion and evolution of opportunities in high-growth markets, trends and costs associated with a global labor force, consolidation of the Company’s competitors, increasing regulation and a rapidly evolving global trade environment. The Company operates in a highly competitive business environment in most markets, and the Company’s long-term growth and profitability will depend in particular on its ability to expand its business in high-growth geographies and high-growth market segments, identify, consummate and integrate appropriate acquisitions and identify and consummate appropriate investments and strategic partnerships, develop innovative and differentiated new products and services with higher gross profit margins, expand and improve the effectiveness of the Company’s sales force, continue to reduce costs and improve operating
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efficiency and quality and effectively address the demands of an increasingly regulated global environment and the evolving trade environment. The Company is making significant investments, organically and through acquisitions and investments, to address the rapid pace of technological change and increasing demand for automation in its served markets and to position its manufacturing, research and development and customer-facing resources to be responsive to the Company’s customers throughout the world and improve the efficiency of the Company’s operations.
Business Performance and Outlook
During the third quarter of 2026, the Company’s overall revenues and core sales increased 8.5% and 3.0%, respectively, compared to the comparable period of 2025. Core sales excluding respiratory testing increased 5.5% during the third quarter of 2026 compared to the comparable period of 2025. The increase in core sales excluding respiratory testing in the third quarter of 2026 was due to higher core sales in all three segments. The segments benefited from sequentially strengthened demand from applied, clinical, pharmaceutical, biopharmaceutical and biotechnology customers. Demand from academic and government customers also improved but remained muted overall. Acquisitions contributed 6.5% to the increase in sales while tariff refunds to customers decreased reported sales by 1.0% during the three-month period ended September 25, 2026. For the same period, the impact of foreign currency did not have a significant impact on reported sales. For the nine-month period ended September 25, 2026, the Company’s overall revenues and core sales increased 6.0% and 2.0%, respectively, compared to the comparable period of 2025. The increase in core sales was due to higher core sales in the Biotechnology and Life Sciences segments, partially offset by lower core sales in the Diagnostics segment. Core sales excluding respiratory testing increased 4.5% during the nine-month period ended September 25, 2026 compared to the comparable period of 2025. During the nine-month period ended September 25, 2026, acquisitions contributed 3.0% to the increase in sales and the impact of foreign currency increased reported sales by 1.5%, while tariff refunds to customers decreased sales by 0.5%. Price decreases of 0.5% negatively impacted sales growth on a year-over-year basis during both the three and nine-month periods ended September 25, 2026. Price changes are reflected as a component of core sales above. For the definitions of “core sales,” “core sales excluding respiratory testing,” “acquisitions” and “tariff refunds to customers” refer to “—Results of Operations” below.
Geographically, the Company’s sales in the three-month period ended September 25, 2026 in developed markets increased year-over-year by 5% and core sales in developed markets were flat as a mid-single digit increase in core sales in Western Europe was offset by a low-single digit core sales decrease in North America and declines in other developed markets. The decrease in core sales in North America was primarily driven by the Diagnostics segment due to lower respiratory sales. For the same period, sales in high-growth markets increased year-over-year by 15% and core sales in such markets were up 10% driven by increases across all three segments and across all major high-growth market regions, led by high-single digit core sales growth in China. In China, the Biotechnology and Life Sciences segments were supported by healthy funding and investment levels. High-growth markets represented approximately 31% of the Company’s total sales in the third quarter of 2026. For additional information regarding the Company’s sales by geographical region during the three and nine-month periods ended September 25, 2026 and September 26, 2025, refer to Note 5 to the accompanying Consolidated Condensed Financial Statements.
The Company’s net earnings from continuing operations for the three and nine-month periods ended September 25, 2026 totaled approximately $1.2 billion and $3.1 billion, or $1.71 and $4.38 per diluted common share, respectively, compared to $908 million and approximately $2.4 billion, or $1.27 and $3.37 per diluted common share, respectively, for the three and nine-month periods ended September 26, 2025. Discrete tax benefits related to the release of reserves for uncertain tax positions resulting from audit settlements in 2026 of $263 million (or $0.37 per diluted common share) recorded in the three and nine-month periods ended September 25, 2026 and impairment charges in 2025 of $101 million ($70 million after-tax or $0.10 per diluted common share) and $548 million ($409 million after-tax or $0.57 per diluted common share), recorded in the three and nine-month periods ended September 26, 2025, respectively, drove the year-over-year increase in net earnings from continuing operations and diluted net earnings per common share from continuing operations in both periods.
Currency exchange rates did not have a significant impact on reported sales during the three-month period and increased reported sales by approximately 1.5% for the nine-month period ended September 25, 2026, compared to the comparable periods of 2025, primarily due to the exchange rates of the U.S. dollar compared to the euro and other major currencies. In future periods, strengthening of the U.S. dollar against other major currencies compared to the exchange rates in effect as of September 25, 2026 would adversely impact the Company’s sales and results of operations on an overall basis, and weakening of the U.S. dollar against other major currencies compared to the exchange rates in effect as of September 25, 2026 would positively impact the Company’s sales and results of operations. In addition to the translational 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.
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Danaher operates a diversified global supply chain and sources parts and materials globally. In February 2026, the U.S. Supreme Court ruled that the International Emergency Economic Powers Act (“IEEPA”), which the U.S. administration relied on to impose certain tariffs, does not authorize the imposition of such tariffs. On March 4, 2026, the U.S. Court of International Trade ordered the U.S. Customs and Border Protection (“CBP”) to process refunds of the IEEPA tariffs, and the CBP has begun accepting and processing applications for refunds on certain IEEPA tariffs. The IEEPA tariffs remain subject to ongoing litigation between the administration and other parties. In response to the U.S. Supreme Court ruling mentioned above, the administration implemented new tariffs under alternative statutory authority. The Company intends to pursue any refunds to which it is entitled. The full impact of the U.S. Supreme Court’s ruling and the administration’s response, including the timing and extent of additional refunds and the impact of the new tariffs, remain uncertain. The tariffs enacted in 2025 and in the first nine months of 2026 did not have a material impact on the Company’s business or financial statements in the periods presented. The impact to net earnings of the IEEPA tariff refunds, net of tariff refunds to customers, was less than $100 million.
While the Company did not experience material interruption to its supply chain or operations in the first nine months of 2026 as a result of the conflict in the Middle East, the Company did experience delays and higher logistics costs in the delivery of goods to customers in the region. The conflict has impacted the export of oil and natural gas from the Persian Gulf, creating upward pressure on oil and natural gas prices, and has also disrupted and increased the costs of certain other supplies. Refer to “Part II - Other Information - Item 1A - Risk Factors” for a further discussion of the risks relating to the conflict in the Middle East. To the extent the conflict continues and/or escalates, the negative impacts noted above may continue or increase, the risks referenced above may eventuate and demand for the Company’s products could be adversely affected.
Acquisitions
On June 10, 2026, the Company acquired Masimo by acquiring all of the outstanding shares of Masimo’s common stock for a cash purchase price of approximately $9.8 billion, or $180.00 per share, net of cash acquired. Masimo develops and produces monitoring technologies, which include innovative measurements, sensors and patient monitors, serving primarily healthcare customers and is now part of the Company’s Diagnostics segment. Masimo generated revenues of approximately $1.5 billion in 2025. The acquisition of Masimo has provided, and is expected to provide, additional sales and earnings opportunities for the Company by expanding product line diversity, including new product offerings supporting acute care settings. The Company financed the Masimo Acquisition using cash on hand and proceeds from the issuance of long-term debt and commercial paper. The Company preliminarily recorded approximately $4.9 billion of goodwill and $5.0 billion of intangible assets (primarily comprised of $3.4 billion of developed technology, $895 million of customer relationships and $660 million of trade names).
In addition to the Masimo Acquisition, during the three and nine-month periods ended September 25, 2026, the Company acquired one business for total upfront consideration of $37 million in cash and $79 million of deferred consideration. The business acquired complements existing units of the Company’s Life Sciences segment. The Company preliminarily recorded an aggregate of $26 million of goodwill related to this acquisition and $144 million of identifiable intangible assets, of which a majority related to developed technology intangible assets. The annual sales of this business in its last completed fiscal year prior to the acquisition were approximately $10 million.
RESULTS OF OPERATIONS
Non-GAAP Measures
In this Report, references to the non-GAAP measure of core sales (also referred to as core revenues or sales/revenues from existing businesses) refer to sales calculated according to U.S. GAAP, but excluding:
•sales from acquired businesses (as defined below)
•the impact of currency translation; and
•the impact of tariff refunds received by the Company and returned (or expected to be returned) to customers.
Beginning with this Report, the Company is excluding tariff refunds to customers from core sales. References to tariff refunds to customers refer to the impact of tariff refunds related to tariffs collected by the Company in prior periods that are returned, or to be returned, to customers. The Company believes this adjustment helps investors better understand underlying growth trends in the Company’s business that otherwise may be obscured by the above-noted tariff-related impacts.
References to core sales excluding respiratory testing refer to core sales excluding revenues related to the sale of respiratory testing products in the Company’s molecular diagnostics business in the Diagnostics segment. Demand for respiratory testing depends significantly on the severity levels of influenza and influenza-like illness in a given period, and these severity levels are not under management’s control. As a result, presenting core sales on a basis that combines
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respiratory testing revenue with other business revenues can obscure underlying growth trends. The Company believes that presenting this measure will complement the core sales measure, enhance investors’ understanding of the historical and anticipated performance of the Diagnostics businesses and Danaher as a whole, including with respect to underlying growth trends, and facilitate comparisons of period-to-period performance.
References to sales or operating profit attributable to acquisitions or acquired businesses refer to sales or operating profit, as applicable, from acquired businesses recorded prior to the first anniversary of the acquisition less any sales and operating profit, during the applicable period, attributable to divested product lines not considered discontinued operations. The portion of revenue attributable to currency translation is calculated as the difference between:
•the period-to-period change in revenue (excluding sales from acquired businesses and the impact from tariff refunds to customers for tariffs collected in prior periods (as defined above)); and
•the period-to-period change in revenue (excluding sales from acquired businesses and the impact from tariff refunds to customers for tariffs collected in prior periods (as defined above)) after applying current period foreign exchange rates to the prior year period.
Core sales growth (decline) and the related measure of core sales excluding respiratory testing (collectively, the “core sales measures”) should be considered in addition to, and not as a replacement for or superior to, sales, and may not be comparable to similarly titled measures reported by other companies. Management believes that reporting these non-GAAP financial measures provides useful information to investors by helping identify underlying growth trends in Danaher’s business and facilitating comparisons of Danaher’s revenue performance with its performance in prior and future periods and to Danaher’s peers. Management also uses these measures to assess the Company’s operating and financial performance and uses core sales growth as one of the performance measures in the Company’s executive short-term cash incentive compensation program. The Company excludes the effect of currency translation from these measures because currency translation is not under management’s control, is subject to volatility and can obscure underlying business trends. The Company excludes the effect of acquisitions and divestiture-related items because the nature, size, timing and number of acquisitions and divestitures can vary dramatically from period-to-period and between the Company and its peers and can also obscure underlying business trends and make comparisons of long-term performance difficult. The Company deems acquisition-related transaction costs incurred in a given period to be significant (generally relating to the Company’s larger acquisitions) if it determines that such costs exceed the range of acquisition-related transaction costs typical for Danaher in a given period.
Throughout this discussion, references to sales growth or decline refer to the impact of both price and unit sales and references to productivity improvements generally refer to improved cost-efficiencies resulting from the ongoing application of the Danaher Business System.
Sales Growth and Core Sales Growth
| % Change Three-Month Period Ended September 25, 2026 vs. Comparable 2025 Period | % Change Nine-Month Period Ended September 25, 2026 vs. Comparable 2025 Period | ||||||||||
| Total sales growth (GAAP) | 8.5 | % | 6.0 | % | |||||||
| Impact of: | |||||||||||
| Acquisitions/divestitures | (6.5) | % | (3.0) | % | |||||||
| Currency exchange rates | — | % | (1.5) | % | |||||||
| Tariff refunds to customers | 1.0 | % | 0.5 | % | |||||||
| Core sales growth (non-GAAP) | 3.0 | % | 2.0 | % | |||||||
| Impact of respiratory testing | 2.5 | % | 2.5 | % | |||||||
| Core sales growth excluding respiratory testing (non-GAAP) | 5.5 | % | 4.5 | % | |||||||
Operating Profit Performance
Operating profit margins decreased 10 basis points from 19.1% during the three-month period ended September 26, 2025 to 19.0% for the three-month period ended September 25, 2026.
Third quarter 2026 vs. third quarter 2025 operating profit margin comparisons were unfavorably impacted by:
•Third quarter 2026 acquisition-related fair value adjustment to inventory related to the Masimo Acquisition in the Diagnostics segment - 130 basis points
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•Incremental dilutive effect in 2026 of acquired businesses - 125 basis points
•Third quarter 2026 compensation expense related to special long-term growth equity awards granted to the Company’s founders, certain executive officers and other key leaders in the third quarter of 2026 - 20 basis points
Third quarter 2026 vs. third quarter 2025 operating profit margin comparisons were favorably impacted by:
•Higher third quarter 2026 core sales and the impact of IEEPA tariff refunds, net of changes in leverage in the Company’s operational and administrative cost structure and the impact of product mix - 170 basis points
•Third quarter 2025 impairment charges related to technology and other intangible assets in the Biotechnology segment and a trade name in the Diagnostics segment, net of a third quarter 2026 impairment charge related to a facility in the Biotechnology segment. Refer to Note 9 to the accompanying Consolidated Condensed Financial Statements for additional information - 85 basis points
•Third quarter 2026 settlement of an acquisition-related contingency in the Life Sciences segment - 10 basis points
Operating profit margins increased 180 basis points from 18.0% during the nine-month period ended September 26, 2025 to 19.8% for the nine-month period ended September 25, 2026.
Year-to-date 2026 vs. year-to-date 2025 operating profit margin comparisons were favorably impacted by:
•First nine months of 2025 impairment charges related to trade names in the Life Sciences and Diagnostics segments, and impairment charges related to technology, other intangible assets and a facility in the Biotechnology segment, net of a first nine months of 2026 impairment charge related to a facility in the Biotechnology segment - 280 basis points
•Higher 2026 core sales, the impact of IEEPA tariff refunds and improvements in leverage in the Company’s operational and administrative cost structure, net of the impact of product mix - 65 basis points
•First nine months of 2026 settlement of an acquisition-related contingency in the Life Sciences segment - 5 basis points
Year-to-date 2026 vs. year-to-date 2025 operating profit margin comparisons were unfavorably impacted by:
•First nine months of 2026 fair value adjustments to inventory, transaction costs deemed significant and pre-acquisition share-based and change-in-control payments, in each case related to the Masimo Acquisition in the Diagnostics segment - 110 basis points
•Incremental dilutive effect in 2026 of acquired businesses - 50 basis points
•First nine months of 2026 compensation expense related to special long-term growth equity awards granted to the Company’s founders, certain executive officers and other key leaders in the third quarter of 2026 - 10 basis points
Business Segments
Sales by business segment for each of the periods indicated were as follows ($ in millions):
| Three-Month Period Ended | Nine-Month Period Ended | ||||||||||||||||||||||
| September 25, 2026 | September 26, 2025 | September 25, 2026 | September 26, 2025 | ||||||||||||||||||||
| Biotechnology | $ | 1,807 | $ | 1,798 | $ | 5,524 | $ | 5,260 | |||||||||||||||
| Life Sciences | 1,865 | 1,792 | 5,481 | 5,249 | |||||||||||||||||||
| Diagnostics | 2,882 | 2,463 | 7,765 | 7,221 | |||||||||||||||||||
| Total | $ | 6,554 | $ | 6,053 | $ | 18,770 | $ | 17,730 | |||||||||||||||
For information regarding the Company’s sales by geographical region, refer to Note 5 to the accompanying Consolidated Condensed Financial Statements.
BIOTECHNOLOGY
The Biotechnology segment offers a broad range of equipment, consumables, software and services that are primarily used by customers to advance and accelerate the research, development, manufacture and delivery of biological medicines. The Company’s solutions support a broad range of biotherapeutics including monoclonal antibodies, recombinant proteins, replacement therapies such as insulin and vaccines, as well as novel cell, gene, mRNA and other nucleic acid therapies.
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Biotechnology Selected Financial Data
| Three-Month Period Ended | Nine-Month Period Ended | ||||||||||||||||||||||
| ($ in millions) | September 25, 2026 | September 26, 2025 | September 25, 2026 | September 26, 2025 | |||||||||||||||||||
| Sales | $ | 1,807 | $ | 1,798 | $ | 5,524 | $ | 5,260 | |||||||||||||||
| Operating profit | 477 | 352 | 1,567 | 1,324 | |||||||||||||||||||
| Depreciation | 44 | 38 | 124 | 110 | |||||||||||||||||||
| Amortization of intangible assets | 227 | 231 | 692 | 672 | |||||||||||||||||||
| Operating profit as a % of sales | 26.4 | % | 19.6 | % | 28.4 | % | 25.2 | % | |||||||||||||||
| Depreciation as a % of sales | 2.4 | % | 2.1 | % | 2.2 | % | 2.1 | % | |||||||||||||||
| Amortization as a % of sales | 12.6 | % | 12.8 | % | 12.5 | % | 12.8 | % | |||||||||||||||
Sales Growth and Core Sales Growth
| % Change Three-Month Period Ended September 25, 2026 vs. Comparable 2025 Period | % Change Nine-Month Period Ended September 25, 2026 vs. Comparable 2025 Period | ||||||||||||||||
| Total sales growth (GAAP) | 0.5 | % | 5.0 | % | |||||||||||||
| Impact of: | |||||||||||||||||
| Currency exchange rates | 0.5 | % | (1.5) | % | |||||||||||||
| Tariff refunds to customers | 4.0 | % | 1.0 | % | |||||||||||||
| Core sales growth (non-GAAP) | 5.0 | % | 4.5 | % | |||||||||||||
Price increases in the segment did not have a significant impact on sales growth during the three-month period ended September 25, 2026 and contributed 1.0% to sales growth on a year-over-year basis during the nine-month period ended September 25, 2026 and are reflected as a component of core sales above.
Total segment sales increased 0.5% and 5.0% during the three and nine-month periods, respectively. The increase in segment sales in both the three and nine-month periods was led by increased core sales, partially offset by tariff refunds to customers. The impact of currency exchange rates partially offset the increase in segment sales in the three-month period and contributed to the increase in segment sales in the nine-month period. In the three-month period ended September 25, 2026, the year-over-year increase in total segment core sales was led by increased sales of consumables and equipment. The year-over-year increase in total segment core sales in the nine-month period ended September 25, 2026 was led by increased sales of consumables, partially offset by lower equipment sales. Geographically, the increase in core sales in the three-month period ended September 25, 2026 was led by China and Western Europe. The increase in core sales in the nine-month period ended September 25, 2026 was led by China and Western Europe, partially offset by declines in North America.
Core sales in the bioprocessing business increased towards the upper end of mid-single digits in the three-month period and increased mid-single digits in the nine-month period primarily driven by mid-single digit increases in consumables demand and to a lesser extent, improved equipment sales. Core sales in the discovery and medical business decreased year-over-year in the three-month period and increased slightly in the nine-month period. In the three-month period, higher demand for protein research was more than offset by decreased consumables sales. In the nine-month period, increased consumables demand contributed to the year-over-year increase in core sales.
Operating Profit Performance
Operating profit margins increased 680 basis points during the three-month period ended September 25, 2026 as compared to the comparable period of 2025. The following factors favorably impacted year-over-year operating profit margin:
•Higher third quarter of 2026 core sales, the impact of IEEPA tariff refunds and improvements in leverage in the Company’s operational and administrative cost structure, net of the impact of product mix - 490 basis points
•Third quarter 2025 impairment charges related to technology and other intangible assets, net of a third quarter 2026 impairment charge related to a facility - 190 basis points
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Operating profit margins increased 320 basis points during the nine-month period ended September 25, 2026 as compared to the comparable period of 2025. The following factors favorably impacted year-over-year operating profit margin:
•Higher 2026 core sales, the impact of IEEPA tariff refunds and improvements in leverage in the Company’s operational and administrative cost structure, net of the impact of product mix - 220 basis points
•First nine months of 2025 impairment charges related to technology, other assets and a facility, net of a first nine months of 2026 impairment charge related to a facility - 100 basis points
Depreciation and amortization of intangible assets as a percentage of sales were relatively consistent during both the three and nine-month periods ended September 25, 2026 as compared to the comparable periods of 2025.
LIFE SCIENCES
The Life Sciences segment offers a broad range of instruments, consumables, services and software that are primarily used by customers to study the basic building blocks of life, including DNA and RNA, nucleic acid, proteins, metabolites and cells, in order to understand the causes of disease, identify new therapies, and test and manufacture new drugs, vaccines and gene editing technologies. Additionally, the segment provides products and consumables used to filter and remove contaminants from a variety of liquids and gases in many end-market applications.
Life Sciences Selected Financial Data
| Three-Month Period Ended | Nine-Month Period Ended | ||||||||||||||||||||||
| ($ in millions) | September 25, 2026 | September 26, 2025 | September 25, 2026 | September 26, 2025 | |||||||||||||||||||
| Sales | $ | 1,865 | $ | 1,792 | $ | 5,481 | $ | 5,249 | |||||||||||||||
| Operating profit | 259 | 222 | 728 | 184 | |||||||||||||||||||
| Depreciation | 48 | 47 | 144 | 137 | |||||||||||||||||||
| Amortization of intangible assets | 153 | 154 | 456 | 453 | |||||||||||||||||||
| Operating profit as a % of sales | 13.9 | % | 12.4 | % | 13.3 | % | 3.5 | % | |||||||||||||||
| Depreciation as a % of sales | 2.6 | % | 2.6 | % | 2.6 | % | 2.6 | % | |||||||||||||||
| Amortization as a % of sales | 8.2 | % | 8.6 | % | 8.3 | % | 8.6 | % | |||||||||||||||
Sales Growth and Core Sales Growth
| % Change Three-Month Period Ended September 25, 2026 vs. Comparable 2025 Period | % Change Nine-Month Period Ended September 25, 2026 vs. Comparable 2025 Period | ||||||||||
| Total sales growth (GAAP) | 4.0 | % | 4.5 | % | |||||||
| Impact of: | |||||||||||
| Currency exchange rates | 0.5 | % | (1.0) | % | |||||||
| Core sales growth (non-GAAP) | 4.5 | % | 3.5 | % | |||||||
Price increases in the segment contributed 0.5% to sales growth on a year-over-year basis during the three-month period ended September 25, 2026 and are reflected as a component of core sales above. Price changes did not have a significant impact on sales growth during the nine-month period.
Total segment sales increased 4.0% and 4.5%, respectively, during the three and nine-month periods ended September 25, 2026. The sales increase in both periods was primarily driven by increased core sales, and to a lesser extent currency exchange rates in the nine-month period. In the three-month period the increase in segment sales was partially offset by the impact of currency exchange rates. The year-over-year increase in total segment core sales in both the three and nine-month periods ended September 25, 2026 was driven by an increase in consumables sales, and to a lesser extent higher demand for equipment. Geographically, the core sales increase in the three-month period was led by North America, Western Europe and China. In the nine-month period, the core sales increase was led by Western Europe and China.
The year-over-year increase in segment core sales in both the three and nine-month periods was led by the filtration and the life sciences instruments businesses, and to a lesser extent the life sciences consumables businesses. The year-over-year core sales increase in the filtration business in both periods was driven by higher demand for microelectronic and aerospace products. In both periods, the increase in core sales in the life science instruments businesses was driven
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by higher demand for consumables and equipment in both the flow cytometry and lab automation solutions and mass spectrometry businesses. The mass spectrometry business benefited from strong demand from pharmaceutical and biopharmaceutical customers and a modest improvement in academic spending in the United States.
Operating Profit Performance
Operating profit margins increased 150 basis points during the three-month period ended September 25, 2026 as compared to the comparable period of 2025.
Third quarter 2026 vs. third quarter 2025 operating profit margin comparisons were favorably impacted by:
•Higher third quarter 2026 core sales and the impact of IEEPA tariff refunds, net of the impact of changes in leverage from the Company’s operations and administrative cost structure - 115 basis points
•Third quarter 2026 settlement of an acquisition-related contingency - 45 basis points
Third quarter 2026 vs. third quarter 2025 operating profit margin comparisons were unfavorably impacted by:
•Incremental dilutive effect in 2026 of acquired businesses - 10 basis points
Operating profit margins increased 980 basis points during the nine-month period ended September 25, 2026 as compared to the comparable period of 2025.
Year-to-date 2026 vs. year-to-date 2025 operating profit margin comparisons were favorably impacted by:
•First nine months of 2025 impairment charge related to a trade name - 825 basis points
•Higher 2026 core sales, the impact of IEEPA tariff refunds and improvements in leverage in the Company’s operational and administrative cost structure, net of the impact of product mix - 145 basis points
•First nine months of 2026 settlement of an acquisition-related contingency - 15 basis points
Year-to-date 2026 vs. year-to-date 2025 operating profit margin comparisons were unfavorably impacted by:
•Incremental dilutive effect in 2026 of acquired businesses - 5 basis points
Amortization of intangible assets as a percentage of sales decreased during both the three and nine-month periods ended September 25, 2026 as compared to the comparable periods of 2025, primarily as a result of the increase in sales.
DIAGNOSTICS
The Diagnostics segment offers clinical instruments, consumables, software and services that hospitals, physicians’ offices, reference laboratories and other critical care settings use to diagnose disease and make treatment decisions.
Diagnostics Selected Financial Data
| Three-Month Period Ended | Nine-Month Period Ended | ||||||||||||||||||||||
| ($ in millions) | September 25, 2026 | September 26, 2025 | September 25, 2026 | September 26, 2025 | |||||||||||||||||||
| Sales | $ | 2,882 | $ | 2,463 | $ | 7,765 | $ | 7,221 | |||||||||||||||
| Operating profit | 614 | 665 | 1,704 | 1,937 | |||||||||||||||||||
| Depreciation | 113 | 101 | 322 | 301 | |||||||||||||||||||
| Amortization of intangible assets | 133 | 48 | 262 | 144 | |||||||||||||||||||
| Operating profit as a % of sales | 21.3 | % | 27.0 | % | 21.9 | % | 26.8 | % | |||||||||||||||
| Depreciation as a % of sales | 3.9 | % | 4.1 | % | 4.1 | % | 4.2 | % | |||||||||||||||
| Amortization as a % of sales | 4.6 | % | 1.9 | % | 3.4 | % | 2.0 | % | |||||||||||||||
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Sales Growth and Core Sales Growth (Decline)
| % Change Three-Month Period Ended September 25, 2026 vs. Comparable 2025 Period | % Change Nine-Month Period Ended September 25, 2026 vs. Comparable 2025 Period | ||||||||||
| Total sales growth (GAAP) | 17.0 | % | 7.5 | % | |||||||
| Impact of: | |||||||||||
| Acquisitions | (16.5) | % | (7.0) | % | |||||||
| Currency exchange rates | — | % | (1.0) | % | |||||||
| Core sales growth (decline) (non-GAAP) | 0.5 | % | (0.5) | % | |||||||
| Impact of respiratory testing | 6.5 | % | 5.5 | % | |||||||
| Core sales growth excluding respiratory testing (non-GAAP) | 7.0 | % | 5.0 | % | |||||||
Price decreases in the segment of 1.0% and 1.5%, respectively, in the three and nine-month periods ended September 25, 2026 were primarily attributable to the impact of China’s volume-based procurement program and reimbursement changes, as well as the impact of sales promotions and are reflected as a component of core sales above.
Total segment sales increased 17.0% and 7.5%, respectively, during the three and nine-month periods ended September 25, 2026 primarily as a result of the Masimo Acquisition. In the three-month period ended September 25, 2026, core sales increased as higher demand in the clinical diagnostics businesses more than offset decreased demand for respiratory tests in the molecular diagnostics business. Core sales excluding respiratory testing increased 7.0% during the three-month period ended September 25, 2026. In the nine-month period ended September 25, 2026 the decrease in segment core sales was primarily driven by decreased year-over-year demand for respiratory tests in the molecular diagnostics business, partially offset by increased demand in the clinical diagnostics businesses and higher demand for non-respiratory testing in the molecular diagnostics business. Core sales excluding respiratory testing increased 5.0% during the nine-month period ended September 25, 2026. Geographically, the core sales increase in the three-month period ended September 25, 2026 was led by the high-growth markets, partially offset by North America. Geographically, the core sales decrease in the nine-month period ended September 25, 2026 was led by North America and China, partially offset by an increase in the Middle East. The core sales decrease in China in the nine-month period was partially attributable to the pricing impact of China’s healthcare policy changes. The Company continues to move beyond the most significant year-over-year impacts of these changes that began in late 2024. Core sales increased year-over-year in China in the three-month period.
During both the three and nine-month periods ended September 25, 2026, core sales in the molecular diagnostics business declined year-over-year as increased core sales of non-respiratory tests across most major test categories were more than offset by decreased core sales of respiratory tests. The decreased demand for respiratory tests was driven primarily by lower prevalence of respiratory disease in the nine-month period of 2026 compared to the comparable period of 2025. The relative severity of the upcoming respiratory season and customer purchases in the three and nine-month periods of 2026 in preparation for such respiratory season could adversely impact demand for such tests over the remainder of 2026. In the segment’s clinical diagnostics businesses, core sales increased year-over-year in both the three and nine-month periods, led by the clinical lab business, and to a lesser extent by the pathology diagnostics and acute care diagnostics businesses.
Operating Profit Performance
Operating profit margin decreased 570 basis points during the three-month period ended September 25, 2026 as compared to the comparable period of 2025.
Third quarter 2026 vs. third quarter 2025 operating profit margin comparisons were unfavorably impacted by:
•Incremental dilutive effect in 2026 of acquired businesses - 365 basis points
•Third quarter 2026 acquisition-related fair value adjustment to inventory related to the Masimo Acquisition - 295 basis points
Third quarter 2026 vs. third quarter 2025 operating profit margin comparisons were favorably impacted by:
•Third quarter 2025 impairment charge related to a trade name - 60 basis points
•Higher third quarter 2026 core sales and the impact of IEEPA tariff refunds, net of the impact of product mix and changes in leverage in the segment’s operational and administrative cost structure - 30 basis points
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Operating profit margin decreased 490 basis points during the nine-month period ended September 25, 2026 as compared to the comparable period of 2025.
Year-to-date 2026 vs. year-to-date 2025 operating profit margin comparisons were unfavorably impacted by:
•First nine months of 2026 fair value adjustments to inventory, transaction costs deemed significant and pre-acquisition share-based and change-in-control payments, in each case related to the Masimo Acquisition - 270 basis points
•Incremental dilutive effect in 2026 of acquired businesses - 160 basis points
•Lower 2026 core sales and the impact of product mix, net of improvements in leverage in the Company’s operational and administrative cost structure and the impact of IEEPA tariff refunds - 80 basis points
Year-to-date 2026 vs. year-to-date 2025 operating profit margin comparisons were favorably impacted by:
•First nine months of 2025 impairment charge related to a trade name - 20 basis points
Intangible asset amortization as a percentage of sales increased during both the three and nine-month periods ended September 25, 2026 primarily as a result of the impact of the Masimo Acquisition.
COST OF SALES AND GROSS PROFIT
| Three-Month Period Ended | Nine-Month Period Ended | ||||||||||||||||||||||
| ($ in millions) | September 25, 2026 | September 26, 2025 | September 25, 2026 | September 26, 2025 | |||||||||||||||||||
| Sales | $ | 6,554 | $ | 6,053 | $ | 18,770 | $ | 17,730 | |||||||||||||||
| Cost of sales | (2,717) | (2,530) | (7,731) | (7,173) | |||||||||||||||||||
| Gross profit | $ | 3,837 | $ | 3,523 | $ | 11,039 | $ | 10,557 | |||||||||||||||
| Gross profit margin | 58.5 | % | 58.2 | % | 58.8 | % | 59.5 | % | |||||||||||||||
Cost of sales increased year-over-year during both the three and nine-month periods ended September 25, 2026 as compared to the comparable periods in 2025. In both periods, the increase was primarily due to the impact of recently acquired businesses, and to a lesser extent acquisition-related charges, higher sales volumes and facility impairments. The increase in cost of sales in 2026 included acquisition-related charges associated with the fair value adjustment to inventory recorded in connection with the Masimo Acquisition of $84 million and $130 million recorded in the three and nine-month periods, respectively, and a $52 million impairment charge recorded during the three and nine-month periods ended September 25, 2026, partially offset by a $15 million impairment charge recorded in the nine-month period ended September 26, 2025, in both cases related to facilities in the Biotechnology segment. In both periods, the increase in cost of sales was partially offset by the receipt of IEEPA tariff refunds, which are recorded as a reduction of cost of sales.
Year-over-year gross profit margin increased during the three-month period ended September 25, 2026 as compared to the comparable period in 2025 primarily due to the impact of recently acquired businesses and the receipt of IEEPA tariff refunds, partially offset by the fair value adjustment to inventory in 2026, net facility impairment charges, referenced above and the impact of product mix. Year-over-year gross profit margin decreased during the nine-month period ended September 25, 2026 as compared to the comparable period in 2025 primarily due to the impact of product mix, the fair value adjustment to inventory in 2026 and the net facility impairment charges referenced above, partially offset by the receipt of IEEPA tariff refunds and the impact of recently acquired businesses.
OPERATING EXPENSES
| Three-Month Period Ended | Nine-Month Period Ended | ||||||||||||||||||||||
| ($ in millions) | September 25, 2026 | September 26, 2025 | September 25, 2026 | September 26, 2025 | |||||||||||||||||||
| Sales | $ | 6,554 | $ | 6,053 | $ | 18,770 | $ | 17,730 | |||||||||||||||
| Selling, general and administrative expenses | 2,159 | 1,991 | 6,091 | 6,209 | |||||||||||||||||||
| Research and development expenses | 433 | 378 | 1,232 | 1,160 | |||||||||||||||||||
| SG&A as a % of sales | 32.9 | % | 32.9 | % | 32.5 | % | 35.0 | % | |||||||||||||||
| R&D as a % of sales | 6.6 | % | 6.2 | % | 6.6 | % | 6.5 | % | |||||||||||||||
SG&A expenses as a percentage of sales were consistent year-over-year during the three-month period ended September 25, 2026, as the increase in SG&A expenses corresponded to the increase in sales, while SG&A expenses as a percentage of sales decreased year-over-year during the nine-month period as compared to the comparable period in 2025. In the three-month period, SG&A expenses increased as a result of the impact of the Masimo Acquisition and due to increased stock-based compensation expense of $14 million related to special long-term growth equity awards granted
40
to the Company’s founders, certain executive officers and other key leaders in the third quarter of 2026, partially offset by $101 million of impairment charges recorded in the third quarter of 2025. In the nine-month period, the decrease in SG&A expenses was primarily driven by $548 million of impairment charges recorded during the nine-month period ended September 26, 2025, which more than offset the increase in SG&A expenses in 2026 resulting from additional amortization expense, pre-acquisition share-based and change-in-control payments and transaction costs of $79 million related to the Masimo Acquisition and increased stock-based compensation expense.
R&D expenses (consisting principally of internal and contract engineering personnel costs) as a percentage of sales increased during both the three and nine-month periods ended September 25, 2026 as compared to the comparable periods of 2025, primarily as a result of spending growth related to new product development initiatives.
OTHER INCOME (EXPENSE), NET
For a description of the Company’s other income (expense), net during the three and nine-month periods ended September 25, 2026 and September 26, 2025, refer to Note 8 to the accompanying Consolidated Condensed Financial Statements.
INTEREST COSTS AND FINANCING
For a discussion of the Company’s outstanding indebtedness, refer to Note 11 to the accompanying Consolidated Condensed Financial Statements.
Interest expense of $135 million and $305 million for the three and nine-month periods ended September 25, 2026, respectively, was $68 million higher and $95 million higher than the comparable periods of 2025, due primarily to higher average borrowings in 2026 compared to 2025.
Interest income of $31 million and $119 million for the three and nine-month periods ended September 25, 2026, respectively, was $28 million higher and $102 million higher than the comparable periods of 2025, due primarily to higher average cash balances in 2026 compared to 2025.
INCOME TAXES
The following table summarizes the Company’s effective tax rate:
| Three-Month Period Ended | Nine-Month Period Ended | ||||||||||||||||||||||
| September 25, 2026 | September 26, 2025 | September 25, 2026 | September 26, 2025 | ||||||||||||||||||||
| Effective tax rate | (6.6) | % | 15.6 | % | 9.8 | % | 15.5 | % | |||||||||||||||
The Company operates globally, including in certain jurisdictions with lower tax rates than the U.S. federal statutory rate. Therefore, the impact of Danaher’s global operations and benefits from tax credits and incentives contributes to a lower effective tax rate compared to the U.S. federal statutory tax rate. For each period presented, the effective tax rate differs from the U.S. federal statutory rate of 21.0% principally due to the impact of the Company’s global operations, research tax credits, foreign-derived intangible income and aggregate net discrete benefits or charges.
For the three-month period ended September 25, 2026, net discrete tax benefits of $263 million decreased the effective tax rate by 23.2% and related primarily to the release of reserves for uncertain tax positions resulting from audit settlements.
For the three-month period ended September 26, 2025, the effective tax rate was reduced by the tax effect from intangible asset impairments in jurisdictions with higher statutory tax rates than the Company’s effective tax rate, which reduced the effective tax rate by 1.3%. There was no net discrete tax charge in the three-month period, as a valuation allowance recorded on certain foreign operating losses was offset by benefits from the remeasurement of deferred taxes in a jurisdiction which enacted a tax rate change.
For the nine-month period ended September 25, 2026, net discrete tax benefits of $242 million decreased the effective tax rate by 7.0% and related primarily to the release of reserves for uncertain tax positions resulting from audit settlements and expiration of statutes of limitations, partially offset by changes in estimates associated with prior period uncertain tax positions.
For the nine-month period ended September 26, 2025, the effective tax rate was reduced by the tax effect from intangible asset impairments in jurisdictions with higher statutory tax rates than the Company’s effective tax rate, the remeasurement of deferred taxes in a jurisdiction which enacted a tax rate change and the release of reserves for uncertain tax positions due to the expiration of statutes of limitations, partially offset by a valuation allowance recorded on certain foreign operating losses and changes in uncertain tax positions. The net impact reduced the effective tax rate by 1.2%.
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The Company (including its subsidiaries) conducts business globally, and files numerous consolidated and separate income tax returns in federal, state and foreign jurisdictions. In addition to the Company’s significant presence in the U.S., the Company also has a significant presence in China, Denmark, Germany, Singapore, Sweden, Switzerland and the United Kingdom. Excluding these jurisdictions, the Company believes that a change in the statutory tax rate of any individual foreign country would not have a material impact on the Company’s financial statements given the geographical dispersion of the Company’s taxable income.
The Company and its subsidiaries are routinely examined by various U.S. and non-U.S. taxing authorities. As of the third quarter of 2026, the U.S. Internal Revenue Service had completed substantially all of the examinations of the Company’s federal income tax returns through 2018 and is examining certain of the Company’s federal income tax returns for 2019 through 2022. In addition, the Company has subsidiaries in Canada, China, Denmark, France, Germany, India, Singapore, Spain and various other countries, states and provinces that are currently under audit for years ranging from 2004 through 2024.
The Company expects its effective tax rate for the full year of 2026 to be approximately 17.0% based on its projected mix of earnings. The Company’s effective tax rate could vary as a result of many factors, including but not limited to the following:
•The expected rate for the remainder of 2026 includes the anticipated discrete income tax benefits from excess tax deductions related to the Company’s stock compensation programs, which are reflected as a reduction in tax expense, though the actual benefits (if any) will depend on the Company’s stock price and stock option exercise patterns.
•The actual mix of earnings by jurisdiction could fluctuate from the Company’s projection.
•The tax effects of other discrete items, including accruals related to tax contingencies, the resolution of worldwide tax matters, tax audit settlements, statute of limitations expirations and changes in tax regulations.
•Any additional future changes in tax law or the implementation of increases in tax rates, the impact of future regulations and any related additional tax planning efforts to address these changes.
As a result of the uncertainty in predicting these items, it is reasonably possible that the actual effective tax rate used for financial reporting purposes will change in future periods compared to the estimate above.
Refer to Note 7 to the accompanying Consolidated Condensed Financial Statements for discussion regarding the Company’s significant tax matters.
DISCONTINUED OPERATIONS
In both the three and nine-month periods ended September 25, 2026, the Company recorded an income tax benefit of $28 million related to the release of reserves due to audit settlements associated with uncertain tax positions on certain of the Company’s tax returns which were jointly filed with Veralto Corporation and Fortive Corporation entities prior to the respective separations of those businesses from the Company. This income tax benefit is included in earnings from discontinued operations, net of income taxes in the accompanying Consolidated Condensed Statements of Earnings.
COMPREHENSIVE INCOME
Comprehensive income increased by $278 million and decreased approximately $2.6 billion for the three and nine-month periods ended September 25, 2026, respectively, as compared to the comparable periods of 2025. For the three-month period ended September 25, 2026, the increase in comprehensive income was primarily driven by higher net earnings and decreased losses from foreign currency translation adjustments, partially offset by losses from cash flow hedge adjustments. For the nine-month period ended September 25, 2026, the decrease in comprehensive income was primarily driven by losses from foreign currency translation adjustments and cash flow hedge adjustments, partially offset by higher net earnings. The Company recorded foreign currency translation losses of $53 million and $71 million for the three-month periods ended September 25, 2026 and September 26, 2025, respectively. The Company recorded foreign currency translation losses of $596 million and gains of approximately $2.4 billion for the nine-month periods ended September 25, 2026 and September 26, 2025, respectively. The foreign currency translation losses in the three-month period ended September 25, 2026 were primarily driven by the change in the exchange rate between the U.S. dollar and the Swedish krona. The foreign currency translation losses in the nine-month period ended September 25, 2026 were primarily driven by the change in the exchange rates between the U.S. dollar, Swedish krona and the euro. Foreign currency translation adjustments reflect the gain or loss resulting from the impact of the change in currency exchange rates on the Company’s foreign operations as they are translated to the Company’s reporting currency, the U.S. dollar. The Company recorded losses of $19 million and $65 million from cash flow hedge adjustments related to the Company’s cross-currency swap derivative contracts for the three and nine-month periods ended September 25, 2026, respectively, as compared to gains of $48 million and $217 million for the comparable periods of 2025.
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LIQUIDITY AND CAPITAL RESOURCES
Management assesses the Company’s liquidity in terms of its ability to generate cash to fund its operating, investing and financing activities. The Company continues to generate substantial cash from operating activities and believes that its operating cash flow, cash on hand and other sources of liquidity will be sufficient to allow it to continue investing in existing businesses (including capital expenditures), consummating strategic acquisitions and investments, paying interest and servicing debt, paying dividends and funding restructuring activities, as well as to repurchase common stock when deemed appropriate and manage its capital structure on a short-term and long-term basis.
The Company has relied primarily on borrowings under its commercial paper program to address liquidity requirements that exceed the capacity provided by its operating cash flows and cash on hand, while also accessing the capital markets from time to time including to secure financing for more significant acquisitions or to take advantage of favorable interest rate environments or other market conditions. Subject to any limitations that may result from market disruptions, the Company anticipates following the same approach in the future.
Overview of Cash Flows and Liquidity
Following is an overview of the Company’s cash flows and liquidity ($ in millions):
| Nine-Month Period Ended | |||||||||||
| September 25, 2026 | September 26, 2025 | ||||||||||
| Net cash provided by operating activities from continuing operations | $ | 4,742 | $ | 4,299 | |||||||
| Cash paid for acquisitions | $ | (9,881) | $ | — | |||||||
| Payments for additions to property, plant and equipment | (761) | (785) | |||||||||
| Proceeds from sales of property, plant and equipment | 1 | 10 | |||||||||
| Payments for purchases of investments | (86) | (79) | |||||||||
| Proceeds from sales of investments | — | 12 | |||||||||
| Proceeds from sale of product line | — | 9 | |||||||||
| All other investing activities | 31 | 21 | |||||||||
| Total cash used in investing activities for continuing operations | $ | (10,696) | $ | (812) | |||||||
| Proceeds from the issuance of common stock in connection with stock-based compensation, net | $ | 34 | $ | 39 | |||||||
| Payment of dividends | (790) | (652) | |||||||||
| Net proceeds from borrowings (maturities of 90 days or less) | 3,666 | 22 | |||||||||
| Borrowings (maturities longer than 90 days) | 6,555 | 4 | |||||||||
| Repayments of borrowings (maturities longer than 90 days) | (1,434) | (500) | |||||||||
| Payments for repurchase of common stock | (894) | (3,088) | |||||||||
| All other financing activities | (80) | (108) | |||||||||
| Total cash provided by (used in) financing activities for continuing operations | $ | 7,057 | $ | (4,283) | |||||||
As of September 25, 2026, the Company held approximately $5.7 billion of cash and cash equivalents.
Operating Activities
Cash flows from operating activities can fluctuate significantly from period-to-period as working capital needs and the timing of payments for income taxes, restructuring activities and productivity improvement initiatives and other items impact reported cash flows.
Operating cash flows were approximately $4.7 billion for the first nine months of 2026, an increase of $443 million, or 10%, as compared to the comparable period of 2025. The year-over-year change in operating cash flows from 2025 to 2026 was primarily attributable to the following factors:
•2026 operating cash flows reflected an increase of $689 million in net earnings from continuing operations for the first nine months of 2026 as compared to the comparable period in 2025.
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•Net earnings from continuing operations for the first nine months of 2026 also included $195 million lower year-over-year noncash charges primarily for 2025 impairment charges and unrealized investment gains/losses, net of higher intangible asset amortization, amortization of an acquisition-related inventory fair-value step-up, higher depreciation and additional stock compensation expense. Depreciation expense relates to the Company’s manufacturing and operating facilities as well as instrumentation leased to customers under OTL arrangements. Depreciation, amortization, impairments and stock compensation are noncash expenses that decrease earnings without a corresponding impact to operating cash flows. Unrealized investment gains/losses impact net earnings without immediately impacting cash flows as the cash flow impact from investments occurs when the invested capital is returned to the Company.
•The aggregate of trade accounts receivable, inventories and trade accounts payable used $412 million in operating cash flows during the first nine months of 2026, compared to $441 million of operating cash flows used in the comparable period of 2025. The amount of cash flow generated from or used by the aggregate of trade accounts receivable, inventories and trade accounts payable depends upon how effectively the Company manages the cash conversion cycle, which effectively represents the number of days that elapse from the day it pays for the purchase of raw materials and components to the collection of cash from its customers and can be significantly impacted by the timing of collections and payments in a period.
•The aggregate of prepaid expenses and other assets, deferred income taxes and accrued expenses and other liabilities used $504 million of operating cash flows during the first nine months of 2026, compared to $424 million of operating cash flows used in the comparable period of 2025. The timing of various employee-related liabilities, customer funding, income taxes and accrued expenses drove the majority of this change.
Investing Activities
Cash flows relating to investing activities consist primarily of cash used for acquisitions and capital expenditures, including instruments leased to customers, cash used for investments and cash proceeds from divestitures of businesses or assets.
Net cash used in investing activities from continuing operations increased approximately $9.9 billion in the nine-month period ended September 25, 2026 compared to the comparable period of 2025, primarily as a result of higher cash paid for acquisitions in 2026 related to the Masimo Acquisition. For a discussion of the Masimo Acquisition refer to “—Overview”. In addition, during the nine-month periods ended September 25, 2026 and September 26, 2025, the Company invested $86 million and $79 million, respectively, in non-marketable equity securities and partnerships.
Though the relative significance of particular categories of capital investment can change from period to period, capital expenditures are typically made for increasing manufacturing capacity, the manufacture of instruments that are used in OTL arrangements, replacing equipment, purchasing buildings, supporting new product development and improving information technology systems. Capital expenditures decreased $24 million on a year-over-year basis for the nine-month period ended September 25, 2026 compared to the comparable period in 2025.
Financing Activities and Indebtedness
Cash flows relating to financing activities can consist of cash flows associated with the issuance and repayments of commercial paper, issuance and repayment of long-term debt, borrowings under committed credit facilities, issuance and repurchases of common stock, issuance of preferred stock and payments of cash dividends to shareholders. Financing activities provided cash of approximately $7.1 billion during the nine-month period ended September 25, 2026 compared to approximately $4.3 billion of cash used in the comparable period of 2025. The year-over-year increase in cash provided by financing activities was primarily due to higher proceeds from borrowings in 2026 compared to 2025 and lower cash used to repurchase the Company’s common stock in 2026 compared to 2025, partially offset by the 2026 repayments of long-term borrowings.
For a description of the Company’s outstanding debt as of September 25, 2026, new long-term borrowings, repayments of long-term borrowings, a new credit facility and the Company’s commercial paper programs and other credit facilities, refer to Note 11 to the accompanying Consolidated Condensed Financial Statements. As of September 25, 2026, the Company was in compliance with all of its debt covenants.
Stock Repurchase Program
For information regarding the Company’s stock repurchase program and repurchases of common stock, refer to Part II—Item 2, “Unregistered Sales of Equity Securities and Use of Proceeds”.
Dividends
Aggregate cash payments for dividends on Company common stock during the nine-month period ended September 25, 2026 were $790 million compared to $652 million for the nine-month period ended September 26, 2025. The increase in
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dividend payments on the Company’s common stock compared to the comparable period of 2025 is due to the increase in the quarterly dividend rate for common stock beginning with respect to the dividends paid in the second quarters of 2025 and 2026, partially offset by lower average common stock outstanding.
In the third quarter of 2026, the Company declared a regular quarterly dividend of $0.40 per share of Company common stock payable on October 30, 2026 to holders of record as of September 30, 2026.
Cash and Cash Requirements
As of September 25, 2026, the Company held approximately $5.7 billion of cash and cash equivalents on deposit with financial institutions or invested in highly liquid investment-grade debt instruments with a maturity of 90 days or less. Of the cash and cash equivalents, approximately $1.8 billion was held within the U.S. and approximately $3.9 billion was held outside of the U.S. The Company will continue to have cash requirements to support general corporate purposes, which may include working capital needs, capital expenditures, acquisitions and investments, paying interest and servicing debt, paying taxes and any related interest or penalties, funding its restructuring activities and pension plans as required, paying dividends to shareholders, repurchasing shares of the Company’s common stock and supporting other business needs.
The Company generally intends to use available cash and internally generated funds to meet its cash requirements, but in the event that additional liquidity is required, the Company may also borrow under its commercial paper programs (if available) or borrow under the Company’s credit facilities, enter into new credit facilities and either borrow directly thereunder or use such credit facilities to backstop additional borrowing capacity under its commercial paper programs (if available) and/or access the capital markets (if available). The Company used proceeds from debt financing to pay a portion of the purchase price for the Masimo Acquisition. The Company also may from time to time seek to access the capital markets to take advantage of favorable interest rate environments or other market conditions. With respect to the commercial paper and any other notes scheduled to mature during the next 12 months, the Company expects to repay the principal amounts when due using available cash, proceeds from new issuances of commercial paper (if available), drawing on its credit facilities and/or proceeds from other debt issuances. Refer to Note 11 to the accompanying Consolidated Condensed Financial Statements for additional information regarding the classification of commercial paper and other notes scheduled to mature during the next 12 months.
While repatriation of some cash held outside the U.S. may be restricted by local laws, most of the Company’s foreign cash could be repatriated to the U.S. Following enactment of the Tax Cuts and Jobs Act and the associated Transition Tax, in general, repatriation of cash to the U.S. can be completed with no incremental U.S. tax; however, repatriation of cash could subject the Company to non-U.S. taxes on distributions. The cash that the Company’s non-U.S. subsidiaries hold for indefinite reinvestment is generally used to finance foreign operations and investments, including acquisitions. The income taxes, if any, that would be applicable to the repatriation of such earnings (including basis differences in our foreign subsidiaries) are not readily determinable. As of September 25, 2026, management believes that it has sufficient sources of liquidity to satisfy its cash needs, including its cash needs in the U.S.
CRITICAL ACCOUNTING ESTIMATES
There have been no material changes to the Company’s critical accounting estimates as described in the 2025 Annual Report.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Quantitative and qualitative disclosures about market risk appear in “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Financial Instruments and Risk Management,” in the Company’s 2025 Annual Report.
ITEM 4. CONTROLS AND PROCEDURES
The Company’s management, with the participation of the Company’s President and Chief Executive Officer, and Executive Vice President and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report. Based on such evaluation, the Company’s President and Chief Executive Officer, and Executive Vice President and Chief Financial Officer, have concluded that, as of the end of such period, the Company’s disclosure controls and procedures were effective.
There have been no changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the Company’s most recent completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
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PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
For information regarding legal proceedings, refer to Note 13 in the accompanying Consolidated Condensed Financial Statements and to “Management’s Discussion and Analysis of Financial Condition and Results of Operations-Legal Proceedings” in the Company’s 2025 Annual Report.
Consistent with SEC Regulation S-K Item 103, the Company has elected to disclose those environmental proceedings (if any) with a governmental entity as a party where the Company reasonably believes such proceeding would result in monetary sanctions, exclusive of interest and costs, of $1 million or more.
ITEM 1A. RISK FACTORS
The Company is supplementing the risk factors previously disclosed in the Company’s 2025 Annual Report with the following risk factor. Additional information regarding risk factors can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations-Information Related to Forward-Looking Statements,” in Part I-Item 2 of this Form 10-Q and in Part I-Item 1A of the Company’s 2025 Annual Report.
Military conflicts can adversely affect our business and financial statements.
Military conflicts (such as conflict in the Middle East and the conflict between Russia and Ukraine) can adversely affect our business and financial statements, including as a result of sanctions, embargoes, economic and geopolitical instability, market volatility, adverse impacts on energy supplies and prices, supply chain disruptions and cost increases, inflationary pressures, capital markets dislocation and increased cyber-attacks. Military conflicts also heighten other risks disclosed in our 2025 Annual Report, any of which can adversely affect our business and financial statements.
During 2026, military conflict has occurred across multiple countries in the Middle East. The conflict has disrupted energy supplies and supply chains, increased costs for energy and other supplies and created volatility in the capital markets, among other impacts. For a discussion of the impact of the conflict on the Company, please see “Management’s Discussion and Analysis of Financial Condition and Results of Operations”. The situation remains dynamic, the full impact is highly uncertain and further hostilities may cause the risks noted above to increase or may cause other negative impacts on our business, any of which could adversely affect our business or financial statements.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Neither the Company nor any “affiliated purchaser” repurchased any shares of Company common stock during the three-month period ended September 25, 2026. For an overview of the Company’s share repurchase programs, refer to Note 14 in the accompanying Consolidated Condensed Financial Statements.
The Company expects to fund any future stock repurchases using the Company’s available cash balances or proceeds from the issuance of debt.
ITEM 5. OTHER INFORMATION
Director and Officer Trading Arrangements
Except as described above, none of our directors or executive officers adopted or terminated
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ITEM 6. EXHIBITS
(a)Exhibits:
| 3.1 | ||||||||
| 3.2 | ||||||||
| 10.1 | ||||||||
| 10.2 | ||||||||
| 10.3 | ||||||||
| 10.4 | ||||||||
| 10.5 | ||||||||
| 10.6 | ||||||||
| 10.7 | ||||||||
| 10.8 | ||||||||
| 10.9 | ||||||||
| 22.1 | ||||||||
| 31.1 | ||||||||
| 31.2 | ||||||||
| 32.1 | ||||||||
| 32.2 | ||||||||
| 101.INS | Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | |||||||
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document | |||||||
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |||||||
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | |||||||
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | |||||||
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |||||||
| 104 | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) | |||||||
| * | Indicates management contract or compensatory plan, contract or arrangement. | |||||||
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| DANAHER CORPORATION | |||||||||||
| Date: | October 20, 2026 | By: | /s/ Matthew Gugino | ||||||||
| Matthew Gugino | |||||||||||
| Executive Vice President and Chief Financial Officer | |||||||||||
| Date: | October 20, 2026 | By: | /s/ Christopher M. Bouda | ||||||||
| Christopher M. Bouda | |||||||||||
| Vice President and Chief Accounting Officer | |||||||||||
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AIRCRAFT TIME SHARING AGREEMENT THIS AIRCRAFT TIME SHARING AGREEMENT (this "Agreement") is entered into as of October 1, 2026 by and between Danaher Corporation ("Owner"), a Delaware corporation, with principal offices at 2200 Pennsylvania Avenue, NW, Suite 800W, Washington, DC 20037, and Julie Sawyer Montgomery ("Lessee"). BACKGROUND: A. Owner owns or leases and operates certain civil aircraft identified on Exhibit A to this Agreement (collectively, the "Aircraft" and, individually, an "Aircraft"); B. Owner employs fully qualified flight crews to operate the Aircraft; and C. From time to time, Lessee may desire to lease the Aircraft with a flight crew from Owner for Lessee's personal travel at Lessee's discretion on a non-exclusive time-sharing basis as defined in Section 91.501 (c)(1) of the Federal Aviation Regulations ("FAR"). NOW, THEREFORE, Owner and Lessee agree as follows: 1. This Agreement shall govern personal use of the Aircraft by Lessee or by family members or guests of Lessee as and to the extent set forth in such policy or policies as the Board of Directors of Owner, or the Compensation Committee thereof, shall adopt from time to time. Subject to the terms and conditions of this Agreement, Owner agrees to lease, from time to time on a non-exclusive and non-continuous basis, the Aircraft to Lessee for Lessee's personal travel at Lessee's discretion pursuant to the provisions of FAR Sections 91.501 (b)(6), 91.501 (c)(1) and 91.501 (d) and to provide a fully qualified flight crew for all operations for flights scheduled in accordance with the terms of this Agreement during the period commencing on the date of this Agreement and terminating on the earlier of (a) the termination of this Agreement by consent of Owner and Lessee, (b) the date of Lessee's termination of employment with Owner, and (c) the date of Lessee's death. Owner shall have the right to add or substitute aircraft of similar type, quality, and equipment, and to remove aircraft from the fleet, from time to time during the term of this Agreement. Owner shall send Lessee a revised Exhibit A upon each such change in the Aircraft. 2. For each flight conducted under this Agreement, Lessee shall pay Owner no more than the actual, incremental cost to the Owner of such flight but only to the extent authorized by FAR Section 91.501 (d) as in effect from time to time. As of the date of this Agreement, such payment from Lessee to Owner for any specific flight shall not exceed: (a) fuel, oil, lubricants and other additives; (b) travel expenses of the crew, including food, lodging and ground transportation; (c) hangar and tie down costs away from the Aircraft's base of operation; (d) insurance obtained for the specific flight; (e) landing fees, airport taxes and similar assessments; (f) customs, foreign permit and similar fees directly related to the flight; (g) in-flight food and beverages; (h) passenger ground transportation; 1
DANAHER CORPORATION & SUBSIDIARIES EXECUTIVE DEFERRED INCENTIVE PROGRAM AS AMENDED AND RESTATED
1 DANAHER CORPORATION & SUBSIDIARIES EXECUTIVE DEFERRED INCENTIVE PROGRAM WHEREAS, the Plan Sponsor established this Plan, effective as of March 1, 1995, to further the long-term growth of the Plan Sponsor and its subsidiary Employers by offering deferred compensation in addition to current compensation to a select group of management and highly compensated employees of the Plan Sponsor and its subsidiary Employers who are involved in such growth; and WHEREAS, under Section 7.1 of this Plan, the Plan Sponsor has reserved unto itself the right to amend this Plan; and WHEREAS, the Plan Sponsor previously amended this Plan effective January 1, 1997; and WHEREAS, the Plan Sponsor previously amended and restated this Plan, generally effective as of August 1, 2003, by modifying the Plan’s design to provide a more competitive retirement benefit for the select group of management and highly compensated employees of the Plan Sponsor and its subsidiary Employers; and WHEREAS, the Plan Sponsor again amended and restated this Plan, generally effective as of May 15, 2007, except as otherwise provided, by (i) increasing the number of shares of Common Stock available for issuance hereunder, and (ii) incorporating appropriate anti-dilution provisions to ensure that going forward, the amount of shares of Common Stock available for issuance hereunder is not proportionately reduced as a result of stock splits or other adjustments to the Plan Sponsor’s capital stock; and WHEREAS, the Plan Sponsor previously amended and restated this Plan effective as of January 1, 2008, to comply with Code Section 409A and all formal regulations, rulings, and guidance issued thereunder, as subsequently amended from time to time; and WHEREAS, the Plan Sponsor previously amended and restated this Plan, generally effective as of September 12, 2016, to reflect the increase in the number of shares of Common Stock available for issuance and restate the then-current Plan restatement and all subsequent amendments thereto as a single document; and WHEREAS, the Plan Sponsor previously amended and restated this Plan, effective as of January 1, 2019, to (i) close the Plan to new Participants, (ii) prohibit elective deferrals in the Plan with respect to amounts earned after December 31, 2018, (iii) provide that Participants who affirmatively elect to receive employer credits under the Danaher Excess Contribution Program as Established as a Sub-Plan under the Danaher Corporation 2007 Omnibus Incentive Plan, as Amended and Restated, will not be eligible to receive Performance Shares under this Plan after December 31, 2018, and (iv) make certain administrative clarifications and changes; and WHEREAS, the Plan Sponsor previously amended and restated this Plan, effective as of January 1, 2019, to permit the Plan Sponsor to make discretionary credits to certain Plan participants’ accounts from time to time; and
2 WHEREAS, the Plan Sponsor amended this Plan to reflect the transfer of Plan liabilities and benefits to the Envista Holdings Corporation Executive Deferred Incentive Program as Established as a Sub-Plan Under the Envista Holdings Corporation 2019 Omnibus Incentive Plan; and WHEREAS, the Plan Sponsor desires to amend and restate this Plan, effective as of June 1, 2023, to address the treatment of dividends credited on notional investments in Plan Sponsor common stock under the Plan. NOW, THEREFORE, in order to accomplish such purpose, the Plan Sponsor has adopted this amended and restated Plan, effective as of June 1, 2023. It is intended that this Plan, together with the Trust Agreement, shall be unfunded for purposes of the Code and shall constitute an unfunded pension plan maintained for a select group of management and highly compensated employees for purposes of Title I of ERISA.
3 ARTICLE I DEFINITIONS As used in this Plan, each of the following terms shall have the respective meaning set forth below unless a different meaning is plainly required by the content. 1.1 Administrator. The individual or committee appointed by the Plan Sponsor to administer the Plan pursuant to Article V. 1.2 Applicable Percentage. With respect to a Participant for a Performance Cycle, the applicable percentage determined from the table in Appendix A depending on (a) the Participant’s Target Compensation for the Performance Cycle and (b) the Participant’s exact age on the Cycle Beginning Date or, if later, the Participant’s Participation Date. Effective January 1, 2004, with respect to a Participant for a Performance Cycle beginning on or after January 1, 2004, the applicable percentage determined from the table in Appendix A depending on the Participant’s Years of Participation as of the Cycle Beginning Date. 1.3 Beneficiary. An individual or entity entitled to receive any benefits under this Plan that are payable upon a Participant’s death. 1.4 Benefit Account. With respect to a Participant, the account maintained on behalf of the Participant to record any Benefit Amounts and Performance Shares credited thereto or forfeited therefrom, any earnings credited thereto and any losses debited therefrom in accordance with the terms of this Plan. Amounts credited to this account on a Participant’s behalf on and after January 1, 2013 with respect to Plan Years beginning on or after January 1, 2013, and any earnings credited thereto and any losses deducted therefrom in accordance with the terms of the Plan, shall be recorded by Class Year pursuant to Section 9.4. 1.5 Benefit Amount. With respect to a Participant for a Performance Cycle, the Performance Shares credited pursuant to Section 3.4 and any dollar amounts calculated and credited pursuant to Section 3.4. 1.6 Bonus. With respect to a Participant for a Plan Year, the amount (if any) of the Participant’s Target Bonus for the Plan Year that shall be determined to have been earned by the Participant in accordance with the Plan Sponsor’s bonus program, excluding any amount thereof that shall be contributed on the Participant’s behalf as a Salary Deferral Contribution to the 401(k) Plan. 1.7 Bonus Deferral Amount. With respect to a Participant for a Plan Year, an amount of the Participant’s Target Bonus or Bonus for the last preceding Plan Year that the Participant has elected to defer pursuant to Section 3.3. 1.7A Class Year. Each period commencing on January 1st and ending on December 31st shall be considered a separate “Class Year;” the first Class Year commencing on January 1, 2013 and ending on December 31, 2013 shall be referred to as the “Class Year 2013;” the second Class Year commencing on January 1, 2014 and ending on December 31, 2014 shall be referred to as the “Class Year 2014;” and continuing thereafter each January 1st.
4 1.8 Code. The Internal Revenue Code of 1986, as it may be amended from time to time. 1.9 Common Stock. The common stock of the Plan Sponsor. 1.10 Common Stock Price. With respect to a specified date as of which the price of shares of Common Stock shall be determined, the closing sale price on that date or, if the given date is not a trading day, the closing sale price for the immediately preceding trading day. Notwithstanding the foregoing, with respect to the calculation of any Option Gain with respect to any Options exercised by a Participant and the crediting of any Gain Shares to a Participant’s Option Shares Account, the Common Stock Price determined as of any time shall be the most recent closing price on the New York Stock Exchange of one (1) share of Common Stock. Solely for purposes of documenting administrative practice under the terms of the Plan, in determining the Common Stock Price under this Section 1.10 of the Plan, the terms “closing price on the New York Stock Exchange” and “most recent closing price on the New York Stock Exchange” shall not be construed to mean the adjusted closing price on the New York Stock Exchange. 1.11 Cycle Beginning Date. With respect to a Performance Cycle, the first (1st) day of the Performance Cycle. 1.12 Cycle Ending Date. With respect to a Performance Cycle, the last day of the Performance Cycle or, if earlier, the date during the Performance Cycle as of which this Plan shall terminate. 1.13 Deferral Account. With respect to a Participant, the account (if any) maintained on behalf of the Participant to record the Salary Deferral Amounts (if any) and Bonus Deferral Amounts (if any) that have been credited on the Participant’s behalf and any earnings credited thereto in accordance with the terms of this Plan. Amounts credited to this account on a Participant’s behalf on and after January 1, 2013 with respect to Plan Years beginning on or after January 1, 2013, and any earnings credited thereto and any losses deducted therefrom in accordance with the terms of the Plan, shall be recorded by Class Year pursuant to Section 9.4. 1.13A Discretionary Share Account. With respect to a Participant, the account maintained on behalf of the Participant to record the Performance Shares (if any) that have been credited to the Discretionary Share Account on the Participant’s behalf, and any earnings credited thereto and any losses deducted therefrom in accordance with the terms of the Plan. 1.14 Distributable Amount. With respect to any specified date coincident with or subsequent to the Eligibility Termination Date of a Participant or a deceased Participant, the balance (if any) as of the specified date in the Participant’s Distribution Account (subsequent to any crediting thereof pursuant to Section 3.6 as of such Eligibility Termination Date). 1.15 Distribution Account. With respect to a Participant, the account (if any) maintained on behalf of the Participant to record the amounts to be distributed to the Participant or his or her Beneficiary or Beneficiaries and any earnings credited thereto in accordance with the terms of this Plan. Amounts credited to this account on a Participant’s behalf on and after January 1, 2013 with respect to Plan Years beginning on or after January 1, 2013, and any earnings credited
5 thereto and any losses deducted therefrom in accordance with the terms of the Plan, shall be recorded by Class Year pursuant to Section 9.4. 1.16 Distribution Date. With respect to a Participant or a deceased Participant whose Employment Termination Date has occurred, the date as of which the Distributable Amount and the Participant’s Option Shares Account shall be paid to the Participant or the deceased Participant’s Beneficiary or Beneficiaries, as applicable, or the date as of which the first (1st) installment of the Distributable Amount and the Participant’s Option Shares Account shall be paid to the Participant. 1.17 Dividend Share. One (1) Notional Share credited to a Participant’s Option Shares Account pursuant to Section 3.2. 1.18 ERISA. The Employee Retirement Income Security Act of 1974, as it may be amended from time to time. 1.19 Earnings Credit. With respect to a Participant, a nominal amount determined pursuant to Sections 3.3(f), 3.4(d), 3.5(b), and 3.6(b) of this Plan for crediting to or deducting from the Participant’s Deferral Account, Benefit Account, Rollover Account, Discretionary Share Account and Distribution Account pursuant to Sections 3.3(f), 3.4(d), 3.5(b), and 3.6(b) respectively, of this Plan; provided, however, that, notwithstanding the foregoing, the Plan Sponsor acknowledges that increases and decreases in the value of the Notional Shares and other amounts credited to any of the aforementioned Accounts that are invested in the Common Stock investment option shall arise from increases and decreases in the value of Common Stock rather than from the crediting of earnings. Notwithstanding any provision of the Plan to the contrary and pursuant to Section 9.4, notional amounts described in this Section shall be recorded by Class Year under each of a Participant’s Deferral Account, Benefit Account, Rollover Account, Discretionary Share Account and Distribution Account with respect to amounts credited to such Accounts for Plan Years beginning on or after January 1, 2013. 1.20 Earnings Crediting Rate. With respect to a Participant, the rate at which nominal earnings shall be credited to, or nominal losses shall be deducted from, all or a designated portion of the Participant’s Deferral Account, Benefit Account, Rollover Account, Discretionary Share Account and Distribution Account, as determined pursuant to Sections 3.3, 3.4, 3.5, and 3.6 respectively, of this Plan; provided, however, that, notwithstanding the foregoing, the Plan Sponsor acknowledges that increases and decreases in the value of the Notional Shares and other amounts credited to any of the aforementioned Accounts that are invested in the Common Stock investment option shall arise from increases and decreases in the value of Common Stock rather than from the crediting of earnings. Notwithstanding any provision of the Plan to the contrary and pursuant to Section 9.4, the rate at which nominal earnings shall be credited to, or nominal losses shall be deducted from, all or a designated portion of the Participant’s Deferral Account, Benefit Account, Rollover Account, Discretionary Share Account and Distribution Account shall be administered on the basis of Class Year with respect to amounts credited to such Accounts for Plan Years beginning on or after January 1, 2013. 1.21 Effective Date. The original effective date of this Plan is March 1, 1995. The effective date of the amended and restated Plan is June 1, 2023.
6 1.22 Eligible Compensation. (a) Cycle Beginning Date Prior to January 1, 2004. With respect to a Participant for a Performance Cycle beginning prior to January 1, 2004: (i) Eligible Employee on Cycle Beginning Date. If the Participant’s Participation Date occurs on or before the Cycle Beginning Date of the Performance Cycle and the Participant is an Eligible Employee on such Cycle Beginning Date, the product (rounded to two (2) decimal places) of (i) the Applicable Percentage, (ii) PV Factor 1+2+3, and (iii) the Participant’s Target Compensation. (ii) Eligible Employee After Cycle Beginning Date. If the Participant’s Participation Date occurs after the Cycle Beginning Date of the Performance Cycle but during the Performance Cycle, the product (rounded to two (2) decimal places) of the Applicable Percentage and the amount determined in accordance with Paragraphs (i) through (iii) below, as applicable, depending on the Plan Year in the Performance Cycle during which the Participant’s Participation Date occurs: (A) First Plan Year. If the Participant’s Participation Date occurs during the first (1st) Plan Year in the Performance Cycle, such amount shall equal the sum of (A) the product of (I) PV Factor 0 based on the Months Factor, (II) the Participant’s Target Compensation, (III) the Months Factor, and (IV) one-twelfth (1/12) and (B) the product of (I) PV Factor 1+2 and (II) the Participant’s Target Compensation. (B) Second Plan Year. If the Participant’s Participation Date occurs during the second (2nd) Plan Year in the Performance Cycle, such amount shall equal the sum of (A) the product of (I) PV Factor 0 based on the Months Factor, (II) the Participant’s Target Compensation, (III) the Months Factor, and (IV) one-twelfth (1/12) and (B) the product of (I) PV Factor 1 and (II) the Participant’s Target Compensation. (C) Third Plan Year. If the Participant’s Participation Date occurs during the third (3rd) Plan Year in the Performance Cycle, such amount shall equal the product of (A) PV Factor 0 based on the Months Factor, (B) the Participant’s Target Compensation, (C) the Months Factor, and (D) one-twelfth (1/12). (b) Cycle Beginning Date on or After January 1, 2004. With respect to a Participant for a Performance Cycle beginning on or after January 1, 2004: (i) Eligible Employee on Cycle Beginning Date. If the Participant’s Participation Date occurs on or before the Cycle Beginning Date of the Performance Cycle and the Participant is an Eligible Employee on such Cycle Beginning Date, the product (rounded to two (2) decimal places) of (I) the Applicable Percentage and (II) the Participant’s Target Compensation. (ii) Eligible Employee After Cycle Beginning Date. If the Participant’s Participation Date occurs after the Cycle Beginning Date but during the Performance Cycle, the product (rounded to two (2) decimal places) of (I) the Applicable Percentage, (II) the Participant’s
7 Target Compensation, and (III) the Months Factor for the month in which the Participant’s Participation Date occurs. 1.23 Eligible Employee. (a) An Employee who was hired on or before January 1, 1995, and who is an Initial Participant, (b) an Employee who was hired after January 1, 1995, and whose employment position is listed in the records prepared and maintained by the Administrator, or (c) effective on and after January 1, 1998, an Employee who is a Rollover Participant. Notwithstanding the foregoing sentence, the Administrator, in his or her sole discretion, may determine that an Employee who was hired on or before January 1, 1995, and who is not an Initial Participant shall become an Eligible Employee under such circumstances as the Administrator, in his or her sole discretion, may deem appropriate so long as the Employee has an employment position that is listed in the records prepared and maintained by the Administrator. Notwithstanding anything to the contrary herein, an individual who was not an Eligible Employee on December 31, 2018 may not become an Eligible Employee after December 31, 2018. 1.24 Eligibility Termination Date. With respect to a Participant who is an Eligible Employee, the earliest of (a) the Participant’s Employment Termination Date, or (b) the date that the Participant is no longer an Eligible Employee as defined in Section 1.23(b). 1.25 Employee. An individual who performs services for an Employer. 1.26 Employer. (a) The Plan Sponsor or (b) an employer that is a member of the Plan Sponsor’s “controlled group of corporations, trades, or businesses,” as such term shall be defined in Code Sections 414(b) and 414(c), and that has adopted this Plan by executing an adoption agreement with the Plan Sponsor, the terms of which shall thereupon be incorporated by reference as a part of the Plan. 1.27 Employment Termination Date. With respect to a Participant, the earlier of the date that the Participant ceases being an Employee or the date as of which this Plan is terminated. Notwithstanding the foregoing, with respect to any Section 409A Amount of a Participant, the Participant’s “Employment Termination Date” shall be the date that the Participant separates from service with all Employers, whether by death, retirement, or other termination of employment, in a manner consistent with the definition in Treas. Reg. Section 1.409A-1(h). 1.28 Gain Share. One (1) Notional Share credited to a Participant’s Option Shares Account pursuant to Section 3.2(d). 1.29 Grandfathered Amount. With respect to a Participant, any portion of the following account balances that was vested as of December 31, 2004: the Performance Shares Account, the Benefit Account, the Option Shares Account, the Deferral Account, the Rollover Account, and the Distribution Account; and any earnings credited thereto and any losses deducted therefrom on or after January 1, 2005, in accordance with the terms of the Plan. 1.30 Identification Date. December 31, 2007, and December 31 of each calendar year thereafter.
8 1.31 Initial Participant. An Employee who became a Participant as of March 1, 1995, and is designated as an initial participant in the records prepared and maintained by the Administrator. 1.32 Long-term Rate. With respect to a Performance Cycle, the closing price of the ten (10)-year Treasury bond rate on the business day last preceding the Cycle Beginning Date of the Performance Cycle or such other long-term interest rate as shall be determined for the remainder of the Performance Cycle by the Administrator in his or her sole discretion. 1.33 Months Factor. With respect to a Performance Cycle and a Participant whose Participation Date occurs after the Cycle Beginning Date of the Performance Cycle but during the Performance Cycle, the number of months between the Participant’s Participation Date and the last day of the Plan Year during such Performance Cycle in which his or her Participation Date occurred as provided in Appendix B. 1.33A NetScout Acquired Participant. A Participant who is an Employee of Arbor Networks Inc. or Tektronix Texas LLC as of July 13, 2015 who ceases to be employed by an Employer as a result of the merger of Potomac Holding LLC with and into a subsidiary owned by NetScout Systems, Inc. on or about July 14, 2015. 1.34 Notional Share. One (1) notional share equivalent in value to one (1) share of Common Stock. 1.35 Option. With respect to a Participant, a nonqualified stock option in which the Participant is vested under any stock option plan maintained by the Plan Sponsor. 1.36 Option Exercise Date. With respect to Options held by a Participant, the date (if any) as of which the Participant exercises the Options. 1.37 Option Gain. With respect to the Options exercised by a Participant as of an Option Exercise Date, the product of (a) the number of Options exercised and (b) the difference between (i) the Common Stock Price on the Option Exercise Date and (ii) the exercise price per share of Common Stock. 1.38 Option Shares Account. With respect to a Participant, the account (if any) maintained on behalf of the Participant to record any Gain Shares and any Dividend Shares that have been credited on his or her behalf under this Plan. 1.39 PV Factor 0. With respect to a Performance Cycle with a Cycle Beginning Date before January 1, 2004, and a Participant whose Participation Date occurs after the Cycle Beginning Date of the Performance Cycle but during the Performance Cycle, a present value factor applicable in determining the Participant’s Eligible Compensation for the Performance Cycle, which shall be (a) the factor provided in Appendix B based on the applicable Months Factor and an interest rate of eight percent (8%) per annum, compounded annually, or (b) such other factor as shall be similarly calculated as shall be determined by the Administrator in his or her sole discretion.
9 1.40 PV Factor 1. With respect to a Performance Cycle with a Cycle Beginning Date before January 1, 2004, and a Participant whose Participation Date occurs after the Cycle Beginning Date of the Performance Cycle but during the second (2nd) Plan Year during the Performance Cycle, a present value factor applicable in determining the Participant’s Eligible Compensation for the Performance Cycle, which shall be (a) the factor provided in Appendix B based on an interest rate of eight percent (8%) per annum, compounded annually, or (b) such other factor as shall be similarly calculated as shall be determined by the Administrator in his or her sole discretion. 1.41 PV Factor 1+2. With respect to a Performance Cycle with a Cycle Beginning Date before January 1, 2004, and a Participant whose Participation Date occurs after the Cycle Beginning Date of the Performance Cycle but during the first (1st) Plan Year during the Performance Cycle, a present value factor applicable in determining the Participant’s Eligible Compensation for the Performance Cycle, which shall be (a) the factor provided in Appendix B based on an interest rate of eight percent (8%) per annum, compounded annually, or (b) such other factor as shall be similarly calculated as shall be determined by the Administrator in his or her sole discretion. 1.42 PV Factor 1+2+3. With respect to a Performance Cycle with a Cycle Beginning Date before January 1, 2004, and a Participant whose Participation Date occurs on or before the Cycle Beginning Date of the Performance Cycle, a present value factor applicable in determining the Participant’s Eligible Compensation for the Performance Cycle, which shall be (a) the factor provided in Appendix B based on an interest rate of eight percent (8%) per annum, compounded annually, or (b) such other factor as shall be similarly calculated as shall be determined by the Administrator in his or her sole discretion. 1.43 Participant. An Eligible Employee or former Eligible Employee who is participating in this Plan pursuant to Article II. 1.44 Participation Date. With respect to an Eligible Employee, the date (if any) as of which the Eligible Employee shall become a Participant as determined pursuant to Section 2.1. 1.45 Payroll Period. With respect to an Eligible Employee, a period with respect to which the Eligible Employee receives a pay check or otherwise is paid for services that he or she performs during the period for an Employer. 1.46 Pension Plan. Danaher Corporation & Subsidiaries Pension Plan or any successor plan thereto, as it may be amended from time to time. 1.47 Performance Cycle. The three (3) consecutive Plan Years beginning on March 1, 1995 or any successive period of three (3) consecutive Plan Years. Effective January 1, 2004, a period of one (1) Plan Year. 1.48 Performance Share. One (1) Notional Share. 1.49 Performance Shares Account. With respect to a Participant, the account maintained on behalf of the Participant to record the Performance Shares (if any) that have been credited on the Participant’s behalf for a Performance Cycle. Amounts credited to this account on
10 a Participant’s behalf on and after January 1, 2013 with respect to Plan Years beginning on or after January 1, 2013, and any earnings credited thereto and any losses deducted therefrom in accordance with the terms of the Plan, shall be recorded by Class Year pursuant to Section 9.4. 1.50 Plan. Danaher Corporation & Subsidiaries Executive Deferred Incentive Program, as it is set forth herein and as it may be amended from time to time. 1.51 Plan Sponsor. Danaher Corporation. 1.52 Plan Year. The period beginning on March 1, 1995 and ending on December 31, 1995, or a calendar year beginning on or after January 1, 1996. 1.53 Rollover Account. With respect to a Rollover Participant, the account (if any) maintained on behalf of the Rollover Participant to record the Rollover Amount (if any) that has been credited on the Rollover Participant’s behalf and any earnings credited thereto in accordance with the terms of this Plan. Amounts credited to this account on a Participant’s behalf on and after January 1, 2013 with respect to Plan Years beginning on or after January 1, 2013, and any earnings credited thereto and any losses deducted therefrom in accordance with the terms of the Plan, shall be recorded by Class Year pursuant to Section 9.4. 1.54 Rollover Amount. With respect to a Rollover Participant, the nonforfeitable dollar amount as of a specified date that the Administrator has permitted to be credited under this Plan pursuant to Section 3.5 of this Plan. 1.55 Rollover Participant. An Employee who elects to transfer to this Plan a nonforfeitable dollar amount previously granted to the Employee under another arrangement maintained by an employer as permitted by the Administrator in his or her sole discretion. 1.56 Salary. With respect to a Participant for a Payroll Period, the total cash compensation (if any) that is payable to the Participant by any Employer during the Payroll Period and that would be reportable on the Participant’s federal income tax withholding statement (Form W-2), including, but not limited to, salary and overtime pay, but excluding any Bonus that is payable to the Participant during the Payroll Period, severance benefits, and any amount of such cash compensation that shall be contributed on the Participant’s behalf as a Salary Deferral Contribution to the 401(k) Plan, plus remuneration as defined in Code Section 3401(a)(8)(A) to the extent not otherwise reported on the Participant’s Form W-2 (excluding housing, COLA, tax equalization, hardship and special allowances). Solely for purposes of documenting administrative practice under the terms of the Plan, under this Section 1.56 of the Plan, any hiring bonus paid to a Participant for a Payroll Period may be considered to be part of the Salary that is payable to the Participant by any Employer for the Payroll Period. 1.57 Salary Deferral Amount. With respect to a Participant for a Plan Year, an amount of the Participant’s Salary for a Payroll Period during the Plan Year that the Participant has elected to defer pursuant to Section 3.3. 1.58 Salary Deferral Contribution. The term “Salary Deferral Contribution” shall be defined in this Plan as it shall be defined in the 401(k) Plan.
11 1.59 Section 409A Amount. With respect to a Participant, any of the following amounts: (1) the portion of the Participant’s Benefit Account that is unvested as of December 31, 2004 (if any), determined as the product of (I) the balance in the Participant’s Benefit Account as of December 31, 2004 and (II) the difference between one hundred percent (100%) and the applicable Vesting Percentage attributable to the Participant’s Benefit Amounts as of December 31, 2004, determined in accordance with Section 3.4(e)(iii) of the Plan, and any earnings credited thereto and any losses deducted therefrom on or after January 1, 2005 in accordance with the terms of the Plan; and (2) any and all Benefit Amounts, Bonus Deferral Amounts, Salary Deferral Amounts, Performance Shares, and Rollover Amounts that in accordance with the terms of the Plan are credited on the Participant’s behalf on and after January 1, 2005, and any earnings credited thereto and any losses deducted therefrom in accordance with the terms of the Plan (as well as any Distribution Amounts attributable to the amounts described in this subsection (2)). Any Rollover Amount credited on behalf of a Rollover Participant on or after January 1, 2005 shall be not deemed to be a Section 409A Amount to the extent expressly provided in connection with any merger or consolidation of a nonqualified deferred compensation plan (as defined in Code Section 409A) with and into this Plan. A Participant’s Section 409A Amounts attributable to Plan Years commencing on or after January 1, 2013 shall be determined on the basis of Class Year, and with respect to each Class Year, the aggregate of his or her Salary Deferral Amount (if any), Bonus Deferral Amount (if any), and Benefit Amount (if any) for each Class Year, and any earnings credited thereto and any losses deducted therefrom in accordance with the terms of the Plan, shall be deemed a separate Section 409A Amount for purposes of this Plan. 1.60 Specified Employee. An Employee who is a “key employee” as such term is defined in Code Section 416(i) without regard to Code Section 416(i)(5). For purposes of determining which Employees are key employees, an Employee is a key employee if the Employee meets the requirements of Code Section 416(i)(A)(i), (ii) or (iii) (applied in accordance with the regulations thereunder and disregarding Code Section 416(i)(5)) at any time during the 12-month period ending on an Identification Date; provided, however, that all Employees who are nonresident aliens during the entire 12-month period ending with the relevant Identification Date shall be excluded in any such determination. 1.61 Target Bonus. With respect to a Participant for a Plan Year, the target bonus (if any) that may be earned by the Participant for the Plan Year as determined in accordance with the Plan Sponsor’s bonus program applicable to such Participant as from time to time in effect. 1.62 Target Compensation. With respect to a Participant for a Performance Cycle, the sum of (a) the Participant’s annual base salary for the first (1st) Plan Year in the Performance Cycle or, if later, the Plan Year in the Performance Cycle during which the Participant’s Participation Date occurs and (b) the Participant’s Target Bonus for the same such Plan Year. Effective January 1, 2004, with respect to a Participant for a Performance Cycle, the sum of (a) the Participant’s annual base salary for the Performance Cycle and (b) the Participant’s Target Bonus for the same such Performance Cycle. 1.63 Trust Agreement. Trust Agreement for the Danaher Corporation & Subsidiaries Executive Deferred Incentive Program, as it may be amended from time to time.
12 1.64 Valuation Date. The monthly or other more frequent periodic date selected by the Administrator to value Benefit Accounts, Deferral Accounts, Rollover Accounts, Discretionary Share Accounts and Distribution Accounts; provided, however, that the first Valuation Date shall be August 1, 2003. With respect to a Participant whose Eligibility Termination Date does not coincide with a Valuation Date defined in the preceding sentence, the Participant’s Eligibility Termination Date shall be deemed a Valuation Date solely with respect to that Participant. 1.65 Valuation Period. A period beginning on a Valuation Date and ending on the day before the next succeeding Valuation Date. 1.66 Vesting Percentage. With respect to a Benefit Amount and Performance Shares credited to a Participant’s Benefit Account, the percentage to be applied to such Benefit Amount and Performance Shares to determine the amount thereof to which the Participant shall have a nonforfeitable right, subject to any provision to the contrary in Section 3.4 or 5.9 or the Trust Agreement. 1.67 Vesting Year of Participation. Effective January 1, 2004, with respect to a Participant other than a Rollover Participant, a twelve (12)-consecutive month period beginning on (A) the later of (i) January 1, 2004 or (ii) the Participant’s Participation Date, or (B) an anniversary thereof during which the Participant remains an Eligible Employee, where the term “Eligible Employee” shall be defined only as in Sections 1.23(a) and (b) of this Plan; provided, however, that, in the case of a Participant who shall be absent from employment with an Employer for any reason for more than six (6) consecutive weeks, unless otherwise determined by the Administrator in his or her sole discretion, the Participant shall not be deemed to have remained an Eligible Employee for purposes of this Section and the date as of which any future Years of Participation shall be determined for the Participant shall begin on the date of his or her return (if any) from such absence. 1.68 Year of Participation. With respect to a Participant other than a Rollover Participant, (i) the ten (10)-consecutive month period beginning on March 1, 1995, and (ii) a twelve (12)-consecutive month period beginning on (A) the Participant’s Participation Date, or (B) an anniversary thereof during which the Participant remains an Eligible Employee, where the term “Eligible Employee” shall be defined only as in Sections 1.23(a) and (b) of this Plan; provided, however, that, in the case of a Participant who shall be absent from employment with an Employer for any reason for more than six (6) consecutive weeks, unless otherwise determined by the Administrator in his or her sole discretion, the Participant shall not be deemed to have remained an Eligible Employee for purposes of this Section and the date as of which any future Years of Participation shall be determined for the Participant shall begin on the date of his or her return (if any) from such absence. 1.69 Year of Service. With respect to a Participant, a twelve (12)-consecutive month period beginning on the Participant’s employment date with an Employer or an anniversary thereof during which the Participant remains an Employee; provided, however, that, in the case of a Participant who shall be absent from employment with an Employer for any reason for more than six (6) consecutive weeks, unless otherwise determined by the Administrator in his or her sole discretion, the Participant shall not be deemed to have remained an Employee for purposes of this
13 Section and the date as of which any future Years of Service shall be determined for the Participant shall begin on the date of his or her return (if any) from such absence. 1.70 401(k) Plan. Danaher Corporation & Subsidiaries Savings Plan or any successor thereto, as it may be amended from time to time.
14 ARTICLE II PARTICIPATION 2.1 Commencement of Participation. An Eligible Employee who is an Initial Participant may become a Participant as of March 1, 1995, and any other Eligible Employee may become a Participant as of the date that is the first (1st) day of a month and that coincides with or follows the later of March 1, 1995, or the date that the individual became an Eligible Employee; provided that the Eligible Employee completes an enrollment form and files it with the Administrator within the time period specified by the Administrator. Notwithstanding anything to the contrary herein, an individual who was not a Participant on December 31, 2018 may not become a Participant after December 31, 2018. 2.2 Termination of Participation. (a) Participant Ceases Being an Eligible Employee. A Participant who ceases being an Eligible Employee but remains an Employee shall cease being a Participant as of his or her Eligibility Termination Date if the Participant’s Distributable Amount as of such date (as determined subsequent to any crediting of his or her Distribution Account pursuant to Section 3.6 as of such date) equals zero (0) and his or her Option Shares Account (if any) has a zero (0) balance. (b) Participant Ceases Being an Employee. A Participant who ceases being an Employee shall cease being a Participant as of the earlier of the Participant’s date of death or the date as of which the Participant’s Distributable Amount (as determined subsequent to any crediting of his or her Distribution Account pursuant to Section 3.6 as of his or her Eligibility Termination Date) equals zero (0) and his or her Option Shares Account (if any) has a zero (0) balance.
15 ARTICLE III ACCOUNTS AND VESTING 3.1 Performance Share Accounts. (a) Award of Performance Shares. With respect to each Performance Cycle, the Administrator shall credit Participants’ Performance Shares Accounts with Performance Shares in accordance with the following: (i) Eligible Employee on Cycle Beginning Date. With respect to each Participant whose Participation Date occurred on or before the Cycle Beginning Date of the Performance Cycle, if the Participant shall be an Eligible Employee on the Cycle Beginning Date, the Administrator shall credit the Participant’s Performance Shares Account as of February 1 of the Performance Cycle (but subsequent to any zeroing of such account pursuant to Section 3.4) with a number of Performance Shares equal to the quotient (rounded up to the next whole number) of (A) the Participant’s Eligible Compensation and (B) the Common Stock Price as of the Cycle Beginning Date. For Performance Cycles commencing prior to January 1, 2019, such Performance Shares were credited as of the Cycle Beginning Date (but subsequent to any zeroing of such account pursuant to Section 3.4). Notwithstanding clause (B) of this Section 3.1(a)(i), with respect to the calculation of the number of Performance Shares to be credited to a Participant’s Performance Shares Account pursuant to this Section 3.1(a)(i) for a Performance Cycle commencing on or after January 1, 2027, the number of such Performance Shares shall be equal to the quotient (rounded up to the next whole number) of (X) the Participant’s Eligible Compensation and (Y) the Common Stock Price on the day before the date such Performance Shares are credited pursuant to this Section 3.1(a)(i). (ii) Eligible Employee After Cycle Beginning Date. With respect to each Participant whose Participation Date occurs after the Cycle Beginning Date of the Performance Cycle but during the Performance Cycle, the Administrator shall credit the Participant’s Performance Shares Account as of his or her Participation Date with a number of Performance Shares equal to the quotient (rounded up to the next whole number) of (A) the Participant’s Eligible Compensation and (B) the Common Stock Price as of the Participant’s Participation Date. Notwithstanding anything to the contrary herein, the Administrator shall not credit a Participant’s Performance Shares Account with any Performance Shares with respect to any Performance Cycle commencing after December 31, 2018 if such Participant has affirmatively elected to receive employer credits under the Danaher Excess Contribution Program as Established as a Sub-Plan under the Danaher Corporation 2007 Omnibus Incentive Plan, as Amended and Restated. A Participant who has an Employment Termination Date and is rehired by an Employer after December 31, 2018 shall not be eligible for Performance Shares after the Participant’s rehire date. (b) Limitations With Respect To Performance Shares.
16 (i) No Shareholder Rights. A Performance Share has no legal relation to a share of Common Stock and, accordingly, no Participant who has a balance in his or her Performance Shares Account shall be entitled to any dividend, voting, or other rights of a shareholder of Common Stock with respect to the Performance Shares in his or her Performance Shares Account. (ii) No Right to Payment. No payment shall be made for any one (1) or more of the Performance Shares in a Participant’s Performance Shares Account except as provided in Section 4.2. (iii) Cancellation of Performance Shares. The Administrator may cancel all or any number of the Performance Shares in a Participant’s Performance Shares Account with the written consent of the Participant. 3.2 Option Share Accounts. Notwithstanding anything to the contrary herein, no elections to defer Option Gains are permitted under the terms of this Plan on or after January 1, 2005, and the provisions of this Plan relating to Option Gains shall only apply with respect to elections to defer Option Gains made prior to January 1, 2005. (a) Exercise of Options. With respect to any Option Gain deferred under this Plan, it is the Plan Sponsor’s intent that: (i) the Participant first exercise the associated Options in a stock-for-stock exercise under the terms of the applicable stock option plan maintained by the Plan Sponsor; (ii) the shares to be returned to the Participant in connection with the stock-for-stock exercise of the Options under the stock option plan shall be issued from the shares of Common Stock available under such stock option plan and shall be equal in number to the shares initially tendered by the Participant in connection with the Option exercise; (iii) with respect to the aggregate market value of the Option Gain, (A) the value of such Option Gain shall be credited to the Participant’s Option Shares Account under this Plan, (B) the stock option plan shall not issue any shares of Common Stock thereunder with respect to such Option Gain, and (C) this Plan shall issue any such shares of Common Stock with respect to the Option Gain from the shares of Common Stock available for issuance under this Plan in accordance with the terms of this Plan. (b) Election to Defer. Subject to this Section, a Participant who is an Eligible Employee (i) may elect prior to the last day of a Plan Year to defer any Option Gain realized as a result of any exercise by the Participant of any Options during the last six (6) months of the next succeeding Plan Year, or (ii) may elect prior to the last day of the sixth (6th) month of a Plan Year to defer any Option Gain realized as a result of any exercise by the Participant of any Options during the first six (6) months of the next succeeding Plan Year. (c) Election Procedures. Subject to any further procedures established by the Administrator pursuant to Article V, a Participant shall make any deferral election that he or she desires to make pursuant to Subsection (b) above by properly completing an election form and filing the form with the Administrator. A Participant may not, at any time, revoke a deferral election made pursuant to this Section. (d) Crediting of Gain Shares. Subject to Subsection (e) below, with respect to each Participant who exercises Options subject to a deferral election made pursuant to Subsection
17 (b) above, if the Participant shall be an Eligible Employee on the respective Option Exercise Date, as soon as administratively possible after the Administrator shall have received notice that the Options have been exercised, the Administrator shall credit the Participant’s Option Shares Account with a number of Gain Shares equal to the quotient (rounded to the nearer hundredth) of (i) the Participant’s Option Gain from the exercise of the Options and (ii) the Common Stock Price as of the Option Exercise Date. (e) No Crediting of Gain Shares. Notwithstanding Subsection (d) above, Gain Shares shall be credited to a Participant’s Option Shares Account with respect to the Participant’s exercise of Options subject to a deferral election made pursuant to Subsection (b) above only in the event that: (i) the Participant shall have delivered pursuant to the applicable stock option plan maintained by the Plan Sponsor shares of Common Stock that the Participant has held for at least six (6) months with an aggregate value equal to the aggregate exercise price of the Options exercised (or proof that the Participant owns such shares); (ii) the Participant shall deliver to the Administrator a check for any federal employment taxes applicable to the deferral of the Option Gain on the exercise of the Options; (iii) the Participant shall have exercised at least 1,000 Options; (iv) the Participant has not already exercised any Options in the same calendar month; and (v) the Option Gain is at least $25,000. (f) Crediting of Dividend Shares. With respect to each Participant who has an Option Shares Account, as soon as administratively possible after any dividend payment date with respect to the Common Stock, the Administrator shall credit the Participant’s Option Shares Account with a number of Dividend Shares equal to the quotient (rounded to the nearer hundredth) of (i) the product of (A) the dividend amount per share of Common Stock and (B) the number of Option Shares credited to his or her Option Shares Account and (ii) the Common Stock Price as of the dividend payment date. (g) Limitations With Respect to Option Shares. (i) No Shareholder Rights. No Option Share shall have any legal relation to a share of Common Stock and, accordingly, no Participant who has a balance in his or her Option Shares Account shall be entitled to any dividend, voting, or other rights of a shareholder of Common Stock with respect to the Option Shares in his or her Option Shares Account except as otherwise provided in Subsection (f) above. (ii) No Right to Payment. No payment shall be made for any of the Option Shares in a Participant’s Option Shares Account except as provided in Section 4.3. 3.3 Deferral Accounts. Notwithstanding anything to the contrary herein, no elections to defer any amounts earned after December 31, 2018 are permitted under the terms of this Plan, and the provisions of this Plan relating to elective deferrals shall only apply with respect to amounts earned prior to January 1, 2019. (a) Election to Defer. Subject to this Section: (i) Bonus Deferral Amounts. A Participant who is an Eligible Employee may elect to have an amount of his or her Target Bonus for a Plan Year, a percentage of his or her Bonus for a Plan Year, or any amount of his or her Bonus as exceeds a specified
18 amount deferred as a Bonus Deferral Amount for the next succeeding Plan Year; provided that the actual amount deferred shall not exceed the Participant’s Bonus. Effective for Plan Years beginning on or after January 1, 2013, any election by a Participant to defer of a whole percentage of his or her Bonus for a Plan Year shall not exceed eighty-five percent (85%) of such Bonus for the Plan Year. (ii) Salary Deferral Amounts. A Participant who is an Eligible Employee may elect to have an amount of his or her Salary for each Payroll Period in a Plan Year during which he or she shall be an Eligible Employee deferred as a Salary Deferral Amount. Effective for Plan Years beginning on or after January 1, 2013, with respect to a Participant’s Salary for a Payroll Period during a Plan Year, a Participant may only elect to have deferred as a Salary Deferral Amount a whole percentage not to exceed eighty-five percent (85%) of such Salary for a Payroll Period; elections of fixed dollar amounts shall no longer permitted for Plan Years beginning on or after January 1, 2013. (b) Election Procedures. Subject to any further procedures established by the Administrator pursuant to Article V, any election made by a Participant pursuant to Subsection (a) above shall be subject to the procedures described in Paragraphs (i) through (iv) below: (i) Initial Opportunity to Defer. (A) Bonus Deferral Amounts. The Participant may elect to have a Bonus Deferral Amount deferred on his or her behalf with respect to the Participant’s Target Bonus or Bonus for the Plan Year in which the Participant’s Participation Date occurs by so indicating on the enrollment form required pursuant to Section 2.1. (B) Salary Deferral Amounts. The Participant may elect to have Salary Deferral Amounts deferred on his or her behalf with respect to the Participant’s Salary for the Plan Year in which the Participant’s Participation Date occurs by so indicating on the enrollment form required pursuant to Section 2.1. Such election shall be effective for Payroll Periods during such Plan Year or the remainder of such Plan Year, as applicable, beginning as soon as administratively possible on or after the latest of (I) April 1, 1995, (II) the Participant’s Participation Date, or (III) the date that the Participant files the properly completed enrollment form with the Administrator. (ii) Subsequent Opportunities to Defer. (A) Bonus Deferral Amounts. The Participant may elect to have a Bonus Deferral Amount deferred on his or her behalf with respect to the Participant’s Target Bonus or Bonus for a Plan Year subsequent to the Plan Year in which the Participant’s Participation Date occurs by properly completing an election form and filing the form with the Administrator prior to the first (1st) day of such subsequent Plan Year. (B) Salary Deferral Amounts. The Participant may elect to have Salary Deferral Amounts deferred on his or her behalf with respect to the Participant’s Salary for a Plan Year subsequent to the Plan Year in which the Participant’s Participation Date occurs by properly completing an election form and filing the form with the Administrator prior to the first (1st) day of such subsequent Plan Year. Such election shall be effective for Payroll Periods during
19 the respective Plan Year beginning as soon as administratively possible on or after the first (1st) day of the Plan Year. (iii) No Revocations. A Participant may not, at any time, revoke a previous election with respect to a Bonus Deferral Amount or Salary Deferral Amounts. (iv) Termination of Election. A Participant’s election concerning a Bonus Deferral Amount or Salary Deferral Amounts shall terminate on the earlier of (A) the date as of which the last amount or the only amount, as applicable, designated to be withheld under such election shall be withheld or (B) the Participant’s Eligibility Termination Date. (c) Withholding by Employer. (i) Bonus Deferral Amounts. The Employer of a Participant who has in effect an election with respect to a Bonus Deferral Amount pursuant to Subsection (b) above shall withhold the designated Bonus Deferral Amount from the Participant’s Bonus and shall notify the Administrator that such amount was withheld as soon as administratively possible after the withholding thereof. (ii) Salary Deferral Amounts. The Employer of a Participant who has in effect an election with respect to Salary Deferral Amounts pursuant to Subsection (b) above for a Payroll Period shall withhold the designated Salary Deferral Amount from the Participant’s Salary for the Payroll Period and shall notify the Administrator that such amount was withheld as soon as administratively possible after the withholding thereof; provided, however, that, after the first such notice by the Employer to the Administrator, the Employer shall only notify the Administrator of any change in the withholding of Salary Deferral Amounts. (d) Crediting of Deferral Amounts. As soon as administratively possible after the Administrator shall have received notice (or shall be deemed to have received notice pursuant to Subsection (c)(ii) above) that a Bonus Deferral Amount or a Salary Deferral Amount has been withheld on behalf of a Participant, the Administrator shall credit the Participant’s Deferral Account by such amount. (e) Crediting of Additional Amounts. (i) In General. As of the last day of each Plan Year and as soon as administratively possible thereafter, the Administrator shall credit to the Deferral Account of each Participant with respect to whom the requirements in Paragraph (ii) below shall be met an amount (if any) that shall be determined by the Administrator in his or her sole discretion and that shall be intended to compensate for employer contributions that may have been foregone by the Participant under the 401(k) Plan, the Pension Plan, or any other qualified plan maintained by an Employer due to the fact that a Bonus Deferral Amount and/or Salary Deferral Amounts were credited to the Participant’s Salary Deferral Account for the Plan Year. (ii) Requirements for Additional Amount. A Participant shall be eligible to have an amount credited to his or her Deferral Account for a Plan Year in accordance with Paragraph (i) above if the following requirements are met with respect to the Participant:
20 (A) A Bonus Deferral Amount and/or Salary Deferral Amounts were credited to the Participant’s Salary Deferral Account for the Plan Year; (B) The Participant had completed at least one (1) One Year of Service uninterrupted by a One-year Break in Service as of July 1 of the Plan Year; (C) The Participant’s Eligibility Termination Date had not occurred as of the last day of the Plan Year; and (D) The Participant’s Basic Compensation for the Plan Year does not exceed the Compensation Limitation for the Plan Year; where, for purposes of this Paragraph, the terms “One Year of Service,” “One-year Break in Service,” “Basic Compensation” and “Compensation Limitation” shall be as defined in the 401(k) Plan, the Pension Plan, or other qualified plan maintained by an Employer, as applicable. (f) Crediting of Earnings. (i) Elections. A Participant may elect as the Earnings Crediting Rate that shall apply to all or a designated portion of the Participant’s Deferral Account the earnings rate on one (1) of the investment options that the Administrator shall from time to time designate. A Participant makes his or her initial election of the Earnings Crediting Rate(s) that shall apply to the Participant’s Deferral Account by properly completing an investment option form and filing it with the Administrator. A Participant who has filed an investment option form with the Administrator may elect to change his or her investment election with respect to either the investment of future amounts credited to the Participant’s Deferral Account and/or the investment of all or a designated portion of the current balance of the Participant’s Deferral Account by so designating on a new investment option form and filing the form with the Administrator or, in accordance with procedures adopted by the Administrator, by so notifying the Administrator in any manner acceptable to the Administrator; provided, however, that a Participant may not change his or her investment election with respect to Common Stock and any such election of the Common Stock as an investment option shall be irrevocable and remain in effect until the Participant’s Distributable Amount is distributed pursuant to Section 4.2 of this Plan. Except as otherwise provided by the Administrator with respect to one (1) or more investment options, any initial investment election made pursuant to this Paragraph shall be effective as soon as administratively possible after August 31, 2003, and any subsequent investment election made pursuant to this Paragraph shall be effective as soon as administratively possible after the date that the Participant files the investment option form with the Administrator or otherwise notifies the Administrator of his or her election, and each investment election shall continue in effect until the effective date of a subsequent investment election properly made. The Administrator shall adopt and may amend procedures to be followed by Participants in electing Earnings Crediting Rate(s) and, pursuant thereto, the Administrator may, among other actions, format investment option forms and establish deadlines for elections. (ii) No Election. The Administrator shall from time to time designate a fixed income fund or other investment option that shall be used to establish the Earnings Crediting
21 Rate that shall apply to the Deferral Account of any Participant who has not made an investment option election pursuant to Subparagraph (i) above. (iii) Earnings Credits. As of each Valuation Date, the Administrator shall determine the Earnings Credit applicable to the Deferral Account of each Participant for the Valuation Period ending on the Valuation Date (or the portion thereof during which the Deferral Account was maintained): (i) if only one (1) Earnings Crediting Rate shall have applied to the Deferral Account pursuant to Subsection (i) above, the Earnings Credit shall equal (A) the Earnings Crediting Rate (on an annual basis) times (B) the balance in the Deferral Account as of the later of the last preceding Valuation Date or the date as of which the Deferral Account was established times (C) the days in the Valuation Period (or portion thereof) divided by (D) 365; and (ii) if more than one (1) Earnings Crediting Rate shall have applied to the Deferral Account pursuant to Subsection (i) above, as applicable, the Earnings Credit shall equal the sum of each amount determined as (A) the Earnings Crediting Rate (on an annual basis) times (B) the portion of the balance in the Deferral Account as of the later of the last preceding Valuation Date or the date as of which the Deferral Account was established to which such rate applied times (C) the days in the Valuation Period (or portion thereof) divided by (D) 365. (iv) Accounting. As of each Valuation Date, the balance in each Deferral Account maintained as of the Valuation Date shall be determined as the amount calculated in accordance with the following: (A) The balance (if any) in the Deferral Account as of the later of the last preceding Valuation Date or the date as of which the Deferral Account was established; plus (B) Any amounts credited to the Deferral Account pursuant to Sections 3.3(d) and 3.3(e) of this Plan during the Valuation Period ending on the Valuation Date; plus (C) Any positive Earnings Credit determined for the Deferral Account pursuant to Section 3.3(f)(iii) of this Plan during the Valuation Period ending on the Valuation Date; less (D) Any negative Earnings Credit determined for the Deferral Account pursuant to Section 3.3(f)(iii) during the Valuation Period ending on the Valuation Date. (g) Vesting of Deferral Accounts. With respect to a Participant, the Participant’s Deferral Account shall be at all times nonforfeitable. 3.4 Benefit Accounts. (a) Cyclical Accounting for Performance Cycle Ending December 31, 2003. (i) Crediting of Benefit Amounts. As of December 31, 2003, with respect to a Participant who has a balance in his or her Performance Shares Account, the Administrator shall credit the Participant’s Benefit Account as follows: (1) with a Benefit Amount for the Performance Cycle ending on December 31, 2003, where such Benefit Amount shall equal
22 fifty percent (50%) (rounded to two (2) decimal places) of the product of (i) the number of Performance Shares in the Participant’s Performance Shares Account as of December 31, 2003, and (ii) the Common Stock Price as of December 31, 2003; and (2) with a number of Performance Shares equal to fifty percent (50%) of the number of Performance Shares in the Participant’s Performance Share Account as of December 31, 2003; provided that the Administrator shall account separately for each Benefit Amount credited to a Participant’s Account pursuant to this Subsection. (ii) Effect on Performance Shares Account. The Administrator shall reduce the number of Performance Shares in the Participant’s Performance Shares Account to zero (0). (iii) Annual Accounting. As of December 31, 2003, with respect to each Benefit Amount (if any) in a Participant’s Benefit Account as of such date, the Administrator shall credit earnings on fifty percent (50%) of such Benefit Amount to the Participant’s Benefit Account, where the amount of such earnings shall equal the product (rounded to two (2) decimal places) of (i) the Long-term Rate for the Performance Cycle in which the Plan Year occurs and (ii) the sum of (A) fifty percent (50%) of such Benefit Amount and (B) the aggregate amount (if any) of earnings thereon previously credited to the Participant’s Benefit Account pursuant to this Subsection. (b) Conversion of Other Benefit Amounts to Performance Shares. As of January 1, 2004, the Administrator shall convert all of the Benefit Amounts in a Participant’s Benefit Account that previously were not credited with earnings at the Long-term Rate for a Performance Cycle under Paragraph (a)(iii) above to Performance Shares by crediting the Participant’s Benefit Account with a number of Performance Shares equal to the quotient of (1) the aggregate of such Benefit Amounts, divided by (2) the Common Stock Price on January 1, 2004, and then debiting the Participant’s Benefit Account by the aggregate of such Benefit Amounts. (c) Cyclical Accounting for Performance Cycles Beginning on or After January 1, 2004. Effective January 1, 2004, as of the February 1 of a Performance Cycle, or Participation Date, that the Participant’s Performance Shares Account is credited with Performance Shares pursuant Section 3.1(a), the Administrator shall credit each Participant’s Benefit Account with the number of Performance Shares in the Participant’s Performance Share Account as of such date and then the Administrator shall reduce the number of Performance Shares in the Participant’s Performance Share Account to zero (0). For Performance Cycles commencing prior to January 1, 2019, such Performance Shares were credited as of the Cycle Beginning Date, or Participation Date, that the Participant’s Performance Shares Account was credited with Performance Shares pursuant to Section 3.1(a). (d) Earnings Credits. (i) Performance Shares. The investment option and Earnings Crediting Rate applicable to the Performance Shares in the Benefit Account of each Participant shall be Common Stock. As of each Valuation Date on or after January 1, 2004, the Administrator shall determine the Earnings Credit applicable to the Performance Shares in the Benefit Account of each
23 Participant for the Valuation Period ending on the Valuation Date (or the portion thereof during which the Deferral Account was maintained): the Earnings Credit for the Common Stock investment option shall equal (A) the Earnings Crediting Rate (on an annual basis) times (B) the balance in the Benefit Account as of the later of the last preceding Valuation Date or the date as of which the Benefit Account was established times (C) the days in the Valuation Period (or portion thereof) divided by (D) 365. (ii) Benefit Amounts. As of the last day of each Plan Year beginning on or after January 1, 2004, with respect to each Benefit Amount (if any) in a Participant’s Benefit Account as of the first (1st) day of such Plan Year other than Benefit Amounts consisting of Performance Shares, the Administrator shall credit earnings on such Benefit Amount to the Participant’s Benefit Account, where the amount of such earnings shall equal the product (rounded to two (2) decimal places) of (i) the Long-term Rate for the Performance Cycle in which the Plan Year occurs and (ii) the sum of (A) such Benefit Amount and (B) the aggregate amount (if any) of earnings thereon previously credited to the Participant’s Benefit Account. (iii) Accounting. As of each Valuation Date, the balance in each Benefit Account maintained as of the Valuation Date shall be determined as the amount calculated in accordance with the following: (A) The balance (if any) in the Benefit Account as of the later of the last preceding Valuation Date or the date as of which the Benefit Account was established; plus (B) Any amounts credited to the Benefit Account pursuant to Section 3.4(c) of this Plan during the Valuation Period ending on the Valuation Date; plus (C) Any amounts credited to the Benefit Account pursuant to Section 3.4(e) of this Plan during the Valuation Period ending on the Valuation Date; plus (D) Any positive Earnings Credit determined for the Benefit Account pursuant to Section 3.4(d)(i) and 3.4(d)(ii) of this Plan during the Valuation Period ending on the Valuation Date; less (E) Any negative Earnings Credit determined for the Benefit Account pursuant to Section 3.4(d)(i) during the Valuation Period ending on the Valuation Date. (e) Accounting at Eligibility Termination Date. As of the Eligibility Termination Date of a Participant, the Administrator shall take consecutively the actions in Paragraphs (i) through (iv) below, as applicable, which such actions shall be taken subsequently to the actions to be taken by the Administrator pursuant to Subsections (c) and (d): (i) Discretionary Crediting of Performance Shares. If the Participant’s Eligibility Termination Date precedes the Cycle Ending Date of a Performance Cycle, the Administrator may, in his or her sole discretion, credit the Participant’s Benefit Account with a number of Performance Shares for the Performance Cycle in which such Eligibility Termination Date occurs equal to the number of Performance Shares credited to such Benefit Account on the
24 Cycle Beginning Date of such Performance Cycle. This paragraph shall not apply for Performance Cycles commencing after December 31, 2018. (ii) Effect on Performance Shares Account. Except as otherwise provided in Paragraph (i) above, unless the Participant’s Eligibility Termination Date coincides with the Cycle Ending Date of a Performance Cycle, the Administrator shall reduce the number of Performance Shares in the Participant’s Benefit Account by the number of Performance Shares credited to such Benefit Account on the Cycle Beginning Date for the Performance Cycle or, if later, the Participant’s Participation Date. This paragraph shall not apply for Performance Cycles commencing after December 31, 2018. (iii) Determination of Vesting Percentages. The Administrator shall determine the Vesting Percentage applicable to the Benefit Amounts including Performance Shares and any earnings thereon in the Participant’s Benefit Account, in accordance with the following: (A) Age and Service Vesting. (1) If the Participant has both attained age fifty-five (55) and completed at least five (5) Years of Service, the Participant’s Vesting Percentage applicable to the Benefit Amounts including Performance Shares and any earnings thereon shall be one hundred percent (100%). (2) Effective January 1, 2004, if such Paragraph (A)(1) above does not apply and if the Participant has completed at least five (5) Years of Participation, the Participant’s Vesting Percentage applicable to the Benefit Amounts including Performance Shares and any earnings thereon shall be determined as follows: VESTING YEARS OF PARTICIPATION VESTING PERCENTAGE 1 10% 2 20% 3 30% 4 40% 5 50% 6 60% 7 70% 8 80% 9 90% 10 100% (B) Vesting at Death. If the Participant has died, the Participant’s Vesting Percentage applicable to the Benefit Amounts including Performance Shares and any earnings thereon shall be one hundred percent (100%).
25 (C) Partial Vesting for Initial Participants. If the Participant is an Initial Participant and neither Subparagraph (A)(1) nor Subparagraph (B) above applies to the Participant, the Participant’s Vesting Percentage applicable to the Benefit Amounts including Performance Shares and any earnings thereon that correlate with the Benefit Amounts previously credited for the Performance Cycle beginning on March 1, 1995 shall be sixty-six and two-thirds percent (66-2/3%); provided, however, that an Initial Participant’s Vesting Percentage may increase based upon his or her Vesting Years of Participation pursuant to Subparagraph (A)(2) above (e.g., after completion of five (5) Years of Participation and seven (7) Vesting Years of Participation, an Initial Participant’s Vesting Percentage will be seventy percent (70%)). (D) No Vesting. Except as otherwise provided in Subparagraph (A), (B), or (C) above, the Participant’s Vesting Percentage applicable to each such Benefit Amount including Performance Shares plus any such earnings thereon shall be zero percent (0%). (E) Gross Misconduct Exception to Vesting. Notwithstanding Subparagraph (A), (B) or (C) above, if the Administrator determines, in his or her sole discretion, that the circumstances of and/or surrounding the Participant’s ceasing to be an Eligible Employee constitute gross misconduct on the part of the Participant, the Administrator may, in his or her sole discretion, determine that the Participant’s Vesting Percentage applicable to the Benefit Amounts and the Performance Shares and earnings thereon shall be reduced to as low as zero percent (0%). (F) Special Vesting for NetScout Acquired Participants. Notwithstanding any other Subparagraph in this Paragraph (iii), a NetScout Acquired Participant’s Vesting Percentage applicable to the Benefit Amounts including Performance Shares and any earnings thereon shall be one hundred percent (100%) as of July 13, 2015. (iv) Forfeiture and Reduction of Benefit Account. If the Administrator determines pursuant to Paragraph (iii) above that the Participant’s Vesting Percentage with respect to the Benefit Amounts including Performance Shares and earnings thereon, is less than one hundred percent (100%), the Administrator shall forfeit all or a portion of such Benefit Amount including Performance Shares plus any earnings thereon by (A) reducing pro rata the Benefit Amounts and Performance Shares by the product (rounded to two (2) decimals) of (I) the Benefit Amounts and (II) the difference between one hundred percent (100%) and the applicable Vesting Percentage and (B) reducing any such earnings by the product (rounded to two (2) decimals) of (I) the amount of such earnings and (II) the difference between one hundred percent (100%) and the applicable Vesting Percentage. (v) Crediting of Earnings and Debiting of Losses. In the event that a Participant’s Eligibility Termination Date is neither a Valuation Date nor the last day of a Plan Year, such Eligibility Termination Date shall be deemed to be a Valuation Date and the last day of the Plan Year, and the Administrator shall determine the applicable Earnings Credits (if any) and value the Participant’s Benefit Account in accordance with Section 3.4(d). 3.5 Rollover Accounts. (a) Crediting of Rollover Amount. As soon as administratively possible following the Administrator’s determination of the Rollover Amount with respect to a Rollover
26 Participant, the Administrator shall credit to the Rollover Account of the Rollover Participant the Rollover Amount (if any) that shall be determined by the Administrator in his or her sole discretion. (b) Crediting of Earnings. (i) Elections. A Rollover Participant may elect as the Earnings Crediting Rate that shall apply to all or a designated portion of the Rollover Participant’s Rollover Account the earnings rate on one (1) of the investment options that the Administrator shall from time to time designate. A Rollover Participant make his or her initial election of the Earnings Crediting Rate(s) that shall apply to the Rollover Participant’s Rollover Account by properly completing an investment option form and filing it with the Administrator. A Rollover Participant who has filed an investment option form with the Administrator may elect to change his or her investment election with respect to either the investment of future amounts credited to the Rollover Participant’s Rollover Account and/or the investment of all or a designated portion of the current balance of the Rollover Participant’s Rollover Account by so designating on a new investment option form and filing the form with the Administrator or, in accordance with procedures adopted by the Administrator, by so notifying the Administrator in any manner acceptable to the Administrator; provided, however, that a Participant may not change his or her investment election of Common Stock and any such election of Common Stock as an investment option shall be irrevocable and remain in effect until the Participant’s Distributable Amount is distributed pursuant to Section 4.2 of this Plan. Except as otherwise provided by the Administrator with respect to one (1) or more investment options, any initial investment election made pursuant to this Paragraph shall be effective as soon as administratively possible after August 31, 2003, and any subsequent investment election made pursuant to this Paragraph shall be effective as soon as administratively possible after the date that the Rollover Participant files the investment option form with the Administrator or otherwise notifies the Administrator of his or her election, and each investment election shall continue in effect until the effective date of a subsequent investment election properly made. The Administrator shall adopt and may amend procedures to be followed by Rollover Participants in electing Earnings Crediting Rate(s) and, pursuant thereto, the Administrator may, among other actions, format investment option forms and establish deadlines for elections. (ii) No Election. The Administrator shall from time to time designate a fixed income fund or other investment option that shall be used to establish the Earnings Crediting Rate that shall apply to the Rollover Account of any Rollover Participant who has not made an investment option election pursuant to Subparagraph (i) above. (iii) Earnings Credits. As of each Valuation Date, the Administrator shall determine the Earnings Credit applicable to the Rollover Account of each Rollover Participant for the Valuation Period ending on the Valuation Date (or the portion thereof during which the Rollover Account was maintained): (i) if only one (1) Earnings Crediting Rate shall have applied to the Rollover Account pursuant to Subsection (i) above, the Earnings Credit shall equal (A) the Earnings Crediting Rate (on an annual basis) times (B) the balance in the Rollover Account as of the later of the last preceding Valuation Date or the date as of which the Rollover Account was established times (C) the days in the Valuation Period (or portion thereof) divided
27 by (D) 365; and (ii) if more than one (1) Earnings Crediting Rate shall have applied to the Rollover Account pursuant to Subsection (i) above, as applicable, the Earnings Credit shall equal the sum of each amount determined as (A) the Earnings Crediting Rate (on an annual basis) times (B) the portion of the balance in the Rollover Account as of the later of the last preceding Valuation Date or the date as of which the Rollover Account was established to which such rate applied times (C) the days in the Valuation Period (or portion thereof) divided by (D) 365. (iv) Accounting. As of each Valuation Date, the balance in each Rollover Account maintained as of the Valuation Date shall be determined as the amount calculated in accordance with the following: (A) The balance (if any) in the Rollover Account as of the later of the last preceding Valuation Date or the date as of which the Rollover Account was established; plus (B) Any positive Earnings Credit determined for the Rollover Account pursuant to Section 3.5(b)(iii) of this Plan during the Valuation Period ending on the Valuation Date; less (C) Any negative Earnings Credit determined for the Rollover Account pursuant to Section 3.5(b)(iii) during the Valuation Period ending on the Valuation Date. 3.5A Discretionary Share Accounts. (a) Award of Performance Shares. The Plan Sponsor may elect during any Plan Year to credit Performance Shares to a Participant’s Discretionary Share Account at such time and in such amount as may be determined by the Plan Sponsor in its sole discretion. (b) Limitations With Respect to Performance Shares. The limitations applicable to Performance Shares in a Participant’s Performance Share Account pursuant to Section 3.1(b) shall apply to Performance Shares in a Participant’s Discretionary Share Account. (c) Vesting of Discretionary Share Accounts. With respect to a Participant, the Participant’s vested interest in his or her Discretionary Share Account shall be one hundred percent (100%). Notwithstanding the foregoing, if the Administrator determines, in his or her sole discretion, that the circumstances of and/or surrounding the Participant’s ceasing to be an Eligible Employee constitute gross misconduct on the part of the Participant, the Administrator may, in his or her sole discretion, determine that the Participant’s vested interest in his or her Discretionary Share Account shall be reduced to as low as zero percent (0%). (d) Earnings Credits. (i) Performance Shares. The investment option and Earnings Crediting Rate applicable to the Performance Shares in the Discretionary Share Account of each Participant shall be Common Stock. As of each Valuation Date, the Administrator shall determine the Earnings Credit applicable to the Performance Shares in the Discretionary Share Account of each Participant using the methodology set forth under Section 3.4(d)(i) of this Plan.
28 (ii) Accounting. As of each Valuation Date, the balance in each Benefit Account maintained as of the Valuation Date shall be determined as the amount calculated in accordance with the following: (A) The balance (if any) in the Discretionary Share Account as of the later of the last preceding Valuation Date or the date as of which the Discretionary Share Account was established; plus (B) Any positive Earnings Credit determined for the Discretionary Share Account pursuant to Section 3.5A(d)(i) of this Plan during the Valuation Period ending on the Valuation Date; less (C) Any negative Earnings Credit determined for the Discretionary Share Account pursuant to Section 3.5A(d)(i) during the Valuation Period ending on the Valuation Date. 3.6 Distribution Accounts. (a) Accounting at Eligibility Termination Date. As of the Eligibility Termination Date of a Participant, the Administrator shall take consecutively the actions in Paragraphs (i) and (ii) below, as applicable, which such actions shall be taken subsequently to the actions to be taken by the Administrator pursuant to Sections 3.3(f), 3.4(d), 3.4(e), 3.5(b), and 3.5A(d) (i) Crediting of Distributable Amount. The Administrator shall credit to the Participant’s Distribution Account the sum of (A) the balance (if any) in his or her Benefit Account, and (B) the balance (if any) in his or her Deferral Account (if any), and (C) the balance (if any) in his or her Rollover Account (if any), and (D) the balance (if any) in his or her Discretionary Share Account, and any and all investment elections in effect with respect to each of such balances as of the Participant’s Eligibility Termination Date shall be maintained in full force and effect. (ii) Effect on Benefit Account, Deferral Account, Rollover Account and Discretionary Share Account. The Administrator shall reduce the balance (if any) in the Participant’s Benefit Account, the balance (if any) in the Participant’s Deferral Account, the balance (if any) in the Participant’s Rollover Account, and the balance (if any) in the Participant’s Discretionary Share Account, to zero dollars ($0). (b) Crediting of Earnings. (i) Performance Shares. With respect to the Performance Shares in a Participant’s Distribution Account, the Administrator shall take the following actions during the period beginning on a Participant’s Eligibility Termination Date and ending on the Participant’s Employment Termination Date: (A) Accounting on Valuation Dates. As of each Valuation Date during the aforementioned period, the Administrator shall credit earnings (if any) to the
29 Performance Share in the Participant’s Distribution Account in accordance with the methodology set forth under Section 3.4(d)(i) of this Plan. (B) Accounting at Employment Termination Date. In the event that a Participant’s Employment Termination Date is not a Valuation Date, such Employment Termination Date shall be deemed to be a Valuation Date and the Administrator shall credit earnings (if any) to the Performance Shares in the Participant’s Distribution Account in accordance with the methodology set forth under Section 3.4(d)(i) of this Plan. (ii) Prior Deferral Account and Rollover Account Balances. With respect to the portion of a Participant’s Distribution Account previously transferred from his or her Deferral Account and/or Rollover Account and not consisting of Performance Shares, the Administrator shall take the following actions during the period beginning on a Participant’s Eligibility Termination Date and ending on the Participant’s Employment Termination Date: (A) Accounting on Valuation Dates. As of each Valuation Date during the aforementioned period, the Administrator shall credit earnings (if any) to such portion of the Participant’s Distribution Account in accordance with the methodology set forth under Section 3.3(f)(iii). (B) Accounting at Employment Termination Date. In the event that a Participant’s Employment Termination Date is not a Valuation Date, such Employment Termination Date shall be deemed to be a Valuation Date and the Administrator shall credit earnings (if any) on such portion of a Participant’s Distribution Account in accordance with Section 3.3(f)(iii) and/or 3.5(b)(iii), as applicable. (iii) Balance of Distribution Account. With respect to the balance of a Participant’s Distribution Account after the crediting of earnings under Paragraphs (i) and (ii) above, the Administrator shall take the following actions during the period beginning on the Participant’s Eligibility Termination Date and ending on the Participant’s Employment Termination Date: (A) Annual Accounting Before Employment Termination Date. As of the last day of each Plan Year during the aforementioned period, the Administrator shall credit earnings to the Distribution Account (if any) of each Participant whose Employment Termination Date has not occurred by the last day of the Plan Year, where the amount of such earnings shall equal the product (rounded to two (2) decimal places) of (A) the Long-term Rate for the Performance Cycle in which the Plan Year occurs, (B) the sum of the monthly balances in the Distribution Account during the Plan Year not otherwise credited with earnings under Paragraph (i) or (ii) above, and (C) the quotient (rounded to four (4) decimal places) of (I) the number of whole months during the Plan Year in which the Distribution Account had a balance, and (II) twelve (12). (B) Accounting at Employment Termination Date. As of the Employment Termination Date of a Participant, if such date is later than the Participant’s Eligibility Termination Date, the Administrator shall credit earnings to the Participant’s Distribution Account, where the amount of such earnings shall equal the product (rounded to two
30 (2) decimal places) of (A) the Long-term Rate for the Performance Cycle in which the Participant’s Employment Termination Date occurred, (B) the sum of the monthly balances in the Participant’s Distribution Account during the Plan Year in which his or her Employment Termination Date occurred not otherwise credited with earnings under Paragraph (i) or (ii) above, and (C) the quotient (rounded to four (4) decimal places) of (I) the number of whole months during such Plan Year in which the Participant’s Distribution Account had a balance, and (II) twelve (12). (iv) Annual Accounting Following Employment Termination Date. With respect to a Participant whose Employment Termination Date has occurred but who is receiving, or a deceased Participant whose Beneficiary or Beneficiaries are receiving, installment distributions of the Participant’s Distributable Amount pursuant to Section 4.2, as of each anniversary date of the Participant’s Employment Termination Date, the Administrator shall credit earnings to the Participant’s Distribution Account, where the amount of such earnings shall equal the product (rounded to two (2) decimal places) of (A) the Long-term Rate for the Performance Cycle in which such anniversary date occurs and (B) the balance in the Participant’s Distribution Account as of such anniversary date. 3.7 Dividend Credits. In the event a cash dividend is declared on Common Stock with an ex-dividend date on or after June 1, 2023, each of a Participant’s Accounts shall be credited with an additional amount equal to the product of the dividend rate and the number of Notional Shares in which such Account is deemed invested on the day the dividend is paid. The Earnings Crediting Rate for amounts credited under this Section 3.7 shall be the fixed income fund investment option, or such other investment option as the Administrator shall determine. Following the crediting of an amount under this Section 3.7, a Participant may elect to change the Earnings Crediting Rate applicable to such amount in accordance with rules applicable to the investment of the current balance of the Participant’s Deferral Account under Section 3.3(f), or such other rules as may be determined by the Administrator.
31 ARTICLE IV DISTRIBUTION OF BENEFITS 4.1 Election of Form and Medium of Distribution to Participant. Subject to Article IX, at the time a Participant completes the enrollment form required by Section 2.1 and at any other such times as the Administrator, in his or her sole discretion, may prescribe: (a) The Participant may elect, in accordance with procedures established by the Administrator, to receive the Participant’s Distributable Amount (if any) and/or any shares of Common Stock representing a distribution of the Participant’s Option Shares Account (if any) payable upon his or her Employment Termination Date in one of the following forms of distribution: (i) a lump-sum distribution; or (ii) annual installments over two (2), five (5) or ten (10) years if: (A) with respect to any distribution of the Participant’s Option Shares Account, the Participant has (A) both attained age fifty-five (55) and completed at least five (5) Years of Service or (B) completed fifteen (15) Years of Participation; or (B) with respect to any portion of the Participant’s Distributable Amount attributable to a Grandfathered Amount, the Participant has (A) both attained age fifty- five (55) and completed at least five (5) Years of Service or (B) completed fifteen (15) Years of Participation; or (C) with respect to any portion of the Participant’s Distributable Amount attributable to a Section 409A Amount, the Participant has both attained age fifty-five (55) and completed at least five (5) Years of Service. (b) The Participant may elect, in accordance with procedures established by the Administrator, to receive any such lump-sum distribution or annual installments in cash, in shares of Common Stock, or partially in cash and partially in shares of Common Stock; provided, however, that any Performance Shares and any other portion of the Participant’s Distributable Amount with respect to which the Participant previously elected Common Stock as an investment option shall be paid in shares of Common Stock in accordance with Section 4.2(d). 4.2 Distributions Upon Termination of Employment. Subject to Articles V and IX: (a) Available Benefits. Upon the Employment Termination Date of a Participant, the Participant or his or her Beneficiary or Beneficiaries, if the Participant has died, shall be eligible to receive payment of the Distributable Amount. (b) Form and Medium of Payment.
32 (i) Payment to Participant. A Participant who is eligible for payment of the Distributable Amount pursuant to Subsection (a) above shall receive the Distributable Amount in the form and medium elected by the Participant on the most recent election form filed by the Participant pursuant to Section 4.1 prior to the Plan Year in which his or her Employment Termination Date occurs; provided, however, that: (A) any Performance Shares and any other portion of the Participant’s Distributable Amount with respect to which the Participant previously elected Common Stock as the investment option shall be paid in shares of Common Stock; and (B) subject to Paragraph (A) above and Section 9.2(c), if no such election form was filed with the Administrator, the Distributable Amount shall be paid as a lump- sum distribution in cash. (ii) Payment to Beneficiary. Subject to Section 9.3 with respect to a Section 409A Amount, a Beneficiary of a deceased Participant who is eligible for payment of all or part of the Distributable Amount pursuant to Subsection (a) above shall receive all or such part, as applicable, of the Distributable Amount as a lump-sum distribution in cash and in shares of Common Stock to the extent of the Performance Shares (if any) and any other portion of the Participant’s Distributable Amount with respect to which the Participant previously elected Common Stock as the investment option. (c) Timing of Payment. The Distribution Date for payment of the Distributable Amount in accordance with Subsections (a) and (b) above shall be the earliest date administratively possible within the ninety (90)-day period following the respective Participant’s Employment Termination Date. (d) Payment in Common Stock. If all or part of a Participant’s Distributable Amount shall be paid in shares of Common Stock (treasury shares, authorized and unissued shares, authorized and issued shares, or a combination of the foregoing), the Administrator shall calculate the number of such shares of Common Stock as follows and the whole number of shares so calculated shall be paid, less applicable withholding, in shares of Common Stock and the value of any fractional shares shall be paid in cash. (i) With respect to the portion of the Distributable Amount not represented by Performance Shares, as the quotient (rounded to two decimal places) of (A) such portion of the Distributable Amount and (B) the Common Stock Price as of the Participant’s Employment Termination Date. (ii) With respect to the portion of the Distributable Amount represented by Performance Shares, as the product of (A) the number of Performance Shares and (B) the Common Stock Price as of the Participant’s Employment Termination Date. (e) Payment of Installment Distributions. Subject to Section 9.2(d) with respect to a Section 409A Amount, after the Distribution Date of a Participant who shall receive installment distributions of the Distributable Amount, each subsequent installment distribution that shall be due shall be paid to the Participant as of the next succeeding anniversary of the Participant’s Employment Termination Date; provided, however, that, in the event of the death of
33 the Participant before all such installment distributions shall be made, all or part, as applicable, of the total of the remaining installment distributions shall be paid as of the next succeeding anniversary of the Participant’s Employment Termination Date to the Participant’s Beneficiary or each of his or her Beneficiaries, as applicable; provided, however, that if the Participant elected to receive the Distributable Amount in the form of annual installments and the Participant dies prior to receiving all of such annual installments, the Administrator may, in his or her sole discretion, allow the Beneficiary of the deceased Participant to continue receiving installment payments rather than receiving such remaining payments as a lump sum except as otherwise provided in Section 9.3 with respect to any Section 409A Amounts. (f) Administrative Matters. Subject to Section 8.5, the Administrator may, in his or her sole discretion, delay the Distribution Date for the benefits payable to or on behalf of a Participant to the extent necessary to determine the benefits properly. 4.3 Distribution of Option Shares Accounts. Subject to Article V: (a) Available Benefits. Upon the Employment Termination Date of a Participant, the Participant or his or her Beneficiary or Beneficiaries, if the Participant has died, shall be eligible to receive payment of the Option Shares in the Participant’s Option Shares Account in accordance with this Section. (b) Form of Payment. (i) Payment to Participant. As of the Distribution Date defined in accordance with Section 4.2(c), a Participant who is eligible for payment of the Option Shares in the Participant’s Option Shares Account pursuant to Subsection (a) above shall receive, calculated as of the Participant’s Employment Termination Date, either (A) one (1) payment of a number of shares of Common Stock equal to the whole number of Option Shares in the Participant’s Option Shares Account and cash equal to the value of any fractional Option Shares, or (B) one (1) installment payment of a number of shares of Common Stock equal to the quotient of: (1) the number of Option Shares in the Participant’s Option Shares Account and (2) the number of installment payments elected by the Participant on the most recent election form filed by the Participant pursuant to Section 4.1 prior to the Plan Year in which his or her Employment Termination Date occurs; provided, however, that, if no such election form was filed with the Administrator, a lump-sum distribution shall be paid. (ii) Payment to Beneficiary. As of the Distribution Date determined in accordance with Section 4.2(c), a Beneficiary of a deceased Participant who is eligible for payment of all or some of the Option Shares in the Participant’s Option Shares Account pursuant to Subsection (a) above shall receive, calculated as of the Participant’s Employment Termination Date, the Beneficiary’s share of the number of shares of Common Stock as equals the number of Option Shares in the Participant’s Option Shares Account and cash equal to the value of any fractional Option Shares. (c) Payment of Installment Distributions. After the Distribution Date of a Participant who shall receive installment distributions of the Option Shares in the Participant’s Option Shares Account, each subsequent installment distribution that shall be due shall be paid to
34 the Participant as of the next succeeding anniversary of the Participant’s Employment Termination Date, where the amount of each installment distribution shall be equal to the amount of the first such installment distribution, as calculated pursuant to Subsection (b)(i) above, except that an installment distribution due after any additional Dividend Shares are credited to a Participant’s Option Shares Account pursuant to Section 3.2 shall include such Dividend Shares and a cash payment shall be made of the value of any fractional Option Shares remaining when the final installment distribution shall be paid; provided, however, that, in the event of the death of the Participant before all such installment distributions shall be made, all or part, as applicable, of the total of the remaining installment distributions shall be paid as of the next succeeding anniversary of the Participant’s Employment Termination Date to the Participant’s Beneficiary or each of his or her Beneficiaries, as applicable; provided, however, that if the Participant elected to receive the Option Shares in the form of installments and the Participant dies prior to receiving all of such installments, the Administrator may, in his or her sole discretion, allow the Beneficiary of the deceased Participant to continue receiving installment payments rather than receiving such remaining payments as a lump sum. (d) Cash for Withholding Taxes. Notwithstanding Subsections (b) and (c) above, a Participant or a Beneficiary of a deceased Participant may request, in accordance with procedures established by the Administrator, that a distribution in cash be made to the extent required for him or her to pay any withholding taxes attributable thereto. (e) Administrative Matters. Subject to Section 8.5, the Administrator may, in his or her sole discretion, delay the distribution date for the benefits payable to or on behalf of a Participant to the extent necessary to determine the benefits properly. 4.4 In-service Distribution from Deferral Accounts. The Administrator may, but shall not be required to, establish procedures under which an in-service distribution may be made to a Participant of Bonus Deferral Amounts or Salary Deferral Amounts in his or her Deferral Account (if any) in the event that the Participant has an unforeseeable emergency, as described in Subsection (a) below, and the distribution is reasonably needed to satisfy the unforeseeable emergency, as described in Subsection (b) below: (a) Unforeseeable Emergency. With respect to a Participant, an unforeseeable emergency is severe financial hardship to the Participant resulting from a sudden and unexpected illness or accident of the Participant or of a “dependent” of the Participant, as such term shall be defined in Code Section 152(a); loss of the Participant’s property due to casualty; or another similar extraordinary and unforeseeable set of circumstances arising as a result of events beyond the control of the Participant. (b) Distribution Reasonably Necessary to Satisfy Emergency. A distribution shall be deemed to be reasonably necessary to satisfy a Participant’s unforeseeable emergency if the following requirements are met: (i) The distribution does not exceed the amount of the Participant’s financial need plus amounts necessary to pay any income taxes or penalties reasonably anticipated to result from the distribution;
35 (ii) The Participant’s financial need cannot be relieved: (A) Through reimbursement or compensation by insurance or otherwise, (B) By liquidation of the Participant’s assets, to the extent that such liquidation would not itself cause severe financial hardship, or (C) By the termination of the Participant’s election (if any) with respect to a Bonus Deferral Amount or Salary Deferral Amounts. 4.5 Beneficiaries. The Administrator shall provide to each new Participant a form on which he or she may designate (a) one or more Beneficiaries who shall receive all or a portion of the Distributable Amount upon the Participant’s death, including any Beneficiary who shall receive any such amount only in the event of the death of another Beneficiary; and (b) the percentages to be paid to each such Beneficiary (if there is more than one). A Participant may change his or her or her Beneficiary designation from time to time by filing a new form with the Administrator. No such Beneficiary designation shall be effective unless and until the Participant has properly filed the completed form with the Administrator, and a Beneficiary designation form that designates the spouse of a Participant as his Beneficiary (whether or not any other Beneficiary is also designated) shall be void with respect to the designation of the spouse upon the divorce of the Participant and the spouse with the result that the Participant’s former spouse shall not be a Beneficiary unless the Participant files a new form with the Administrator and designates his or her former spouse as a Beneficiary. If a deceased Participant is not survived by a designated Beneficiary or if no Beneficiary was effectively designated, upon the Participant’s death, any benefit to which the Participant was then entitled shall be paid in a lump-sum distribution in cash to the Participant’s spouse and, if there is no spouse, to the Participant’s estate. If a designated Beneficiary is living at the death of the Participant but dies before receiving any or all of the benefit to which the Beneficiary was entitled, such benefit or the remaining portion of such benefit shall be paid in a lump-sum distribution in cash to the estate of the deceased Beneficiary.
36 ARTICLE V CLAIMS AND ADMINISTRATION 5.1 Applications. A Participant or the Beneficiary of a deceased Participant who is or may be entitled to benefits under this Plan shall apply for such benefits in writing if and as required by the Administrator, in his or her sole discretion. 5.2 Information and Proof. A Participant or the Beneficiary of a deceased Participant shall furnish all information and proof required by the Administrator for the determination of any issue arising under the Plan including, but not limited to, proof of marriage to a Participant or a certified copy of the death certificate of a Participant. The failure by a Participant or the Beneficiary of a deceased Participant to furnish such information or proof promptly and in good faith, or the furnishing of false or fraudulent information or proof by the Participant or Beneficiary, shall be sufficient reason for the denial, suspension, or discontinuance of benefits thereto and the recovery of any benefits paid in reliance thereon. 5.3 Notice of Address Change. Each Participant and any Beneficiary of a deceased Participant who is or may be entitled to benefits under this Plan shall notify the Administrator in writing of any change of his or her address. 5.4 Claims Procedure. (a) Claim Denial. The Administrator shall provide adequate notice in writing to any Participant or Beneficiary of a deceased Participant whose application for benefits, made in accordance with Section 5.1 of this Plan, has been wholly or partially denied. Such notice shall include the reason(s) for denial, including references, when appropriate, to specific Plan or Trust Agreement provisions; a description of any additional information necessary for the claimant to perfect the claim, if applicable and an explanation of why such information is necessary; and a description of the claimant’s right to appeal under Subsection (b) below. The Administrator shall furnish such notice of a claim denial within ninety (90) days after the date that the Administrator received the claim. If special circumstances require an extension of time for deciding a claim, the Administrator shall notify the claimant in writing thereof within such ninety (90)-day period and shall specify the date a decision on the claim shall be made, which shall not be more than one hundred eighty (180) days after the date that the Administrator received the claim. Then, the Administrator shall furnish any denial notice on the claim by the later date so specified. (b) Appeal Procedure. A claimant or his or her duly authorized representative shall have the right to file a written request for review of a claim denial within sixty (60) days after receipt of the denial, to review pertinent documents, records and other information relevant to his or her claim without charge (including items used in the determination, even if not relied upon in making the final determination and items demonstrating consistent application and compliance with this Plan’s administrative processes and safeguards), and to submit comments, documents,
37 records, and other information relating to the claim, even if the information was not submitted or considered in the initial determination. (c) Decision Upon Appeal. In considering an appeal made in accordance with Subsection (b) above, the Administrator shall review and consider any written comments, documents, records, and other information relating to the claim, even if the information was not submitted or considered in the initial determination by the claimant or his or her duly authorized representative. The claimant or his or her representative shall not be entitled to appear in person before any representative of the Administrator. The Administrator shall issue a written decision on an appeal within sixty (60) days after the date the Administrator receives the appeal together with any written comments relating thereto. If special circumstances require an extension of time for a decision on an appeal, the Administrator shall notify the claimant in writing thereof within such sixty (60)-day period. Then, the Administrator shall furnish a written decision on the appeal as soon as possible but no later than one hundred twenty (120) days after the date that the Administrator received the appeal. The decision on the appeal shall be written in a manner calculated to be understood by the claimant and shall include specific references to the pertinent Plan provisions on which the decision is based. If the claimant loses on appeal, the decision shall include the following information provided in a manner calculated to be understood by the claimant: (1) the specific reason(s) for the adverse determination; (2) reference to the specific Plan provisions on which the determination is based; (3) a statement of the claimant’s right to receive at no cost information and copies of documents relevant to the claim, even if such information was not relied upon in making determinations; and (4) a statement of the claimant’s rights to sue under ERISA. 5.5 Status, Responsibilities, Authority and Immunity of Administrator. (a) Appointment and Status of Administrator. The Plan Sponsor shall appoint the Administrator. The Plan Sponsor may remove the Administrator and appoint another Administrator or, if the Administrator is a committee, the Plan Sponsor may remove any or all members of the committee and appoint new members. The Administrator shall be the “administrator” of the Plan, as such term shall be defined in Section 3(16)(A) of ERISA. (b) Responsibilities and Discretionary Authority. The Administrator shall have absolute and exclusive discretion to manage the Plan and to determine all issues and questions arising in the administration, interpretation, and application of the Plan and the Trust Agreement, including, but not limited to, issues and questions relating to a Participant’s eligibility for Plan benefits and to the nature, amount, conditions, and duration of any Plan benefits. Furthermore, the Administrator shall have absolute and exclusive discretion to formulate and to adopt any and all standards for use in calculations required in connection with the Plan and rules, regulations, and procedures that he or she deems necessary or desirable to effectuate the terms of the Plan; provided, however, that the Administrator shall not adopt a rule, regulation, or procedure that shall conflict with this Plan or the Trust Agreement. Subject to the terms of any applicable contract or agreement, any interpretation or application of this Plan or the Trust Agreement by the Administrator, or any rules, regulations, and procedures duly adopted by the Administrator, shall be final and binding upon Employees, Participants, Beneficiaries, and any and all other persons dealing with the Plan.
38 (c) Delegation of Authority and Reliance on Agents. The Administrator may, in his or her discretion, allocate ministerial duties and responsibilities for the operation and administration of the Plan to one or more persons, who may or may not be Employees, and employ or retain one or more persons, including accountants and attorneys, to render advice with regard to any responsibility of the Administrator. (d) Reliance on Documents. The Administrator shall incur no liability in relying or in acting upon any instrument, application, notice, request, letter, or other paper or document believed by the Administrator to be genuine, to contain a true statement of facts, and to have been executed or sent by the proper person. (e) Immunity and Indemnification of Administrator. The Administrator shall not be liable for any of his or her acts or omissions, or the acts or omissions of any employee or agent authorized or retained pursuant to Subsection (c) above by the Administrator, except any act of the Administrator or any such person as constitutes gross negligence or willful misconduct. The Plan Sponsor shall indemnify the Administrator, to the fullest extent permitted by law, if the Administrator is ever made a party or is threatened to be made a party to any threatened, pending, or completed action, suit, claim, or proceeding, whether civil, criminal, administrative, or investigative (including, but not limited to, any action by or in the right of the Plan Sponsor), by reason of the fact that the Administrator is or was, or relating to the Administrator’s actions as, the Administrator, against any expenses (including attorneys’ fees), judgments, fines, and amounts paid in settlement that the Administrator incurs as a result of, or in connection with, such action, suit, claim, or proceeding, provided that the Administrator had no reasonable cause to believe that his or her conduct was unlawful. 5.6 Enrollment, Deferral Election and Other Procedures. The Administrator shall adopt and may amend procedures to be followed by Eligible Employees and Participants in electing to participate in this Plan, in electing to have Bonus Deferral Amounts and Salary Deferral Amounts made on their behalf, in selecting a form of distribution of any Distributable Amount, and in taking any other actions required thereby under this Plan. Notwithstanding the foregoing sentence, any enrollment, deferral election and other procedures relating to Section 409A Amounts shall be subject to the provisions of Article IX of the Plan. 5.7 Correction of Prior Incorrect Allocations. Notwithstanding any other provisions of this Plan, in the event that an adjustment to a Performance Shares Account, Benefit Account, Deferral Account, Option Shares Account, Rollover Account, Discretionary Share Account, or Distribution Account shall be required to correct an incorrect allocation to such account, the Administrator shall take such actions as he or she deems, in his or her sole discretion, to be necessary or desirable to correct such prior incorrect allocation. 5.8 Facility of Payment. If the Administrator shall determine that a Participant or the Beneficiary of a deceased Participant to whom a benefit is payable is unable to care for his or her affairs because of illness, accident or other incapacity, the Administrator may, in his or her discretion, direct that any payment otherwise due to the Participant or Beneficiary be paid to the legal guardian or other representative of the Participant or Beneficiary. Furthermore, the Administrator may, in his or her discretion, direct that any payment otherwise due to a minor Participant or Beneficiary of a deceased Participant be paid to the guardian of the minor or the
39 person having custody of the minor. Any payment made in accordance with this Section to a person other than a Participant or the Beneficiary of a deceased Participant shall, to the extent thereof, be a complete discharge of the Plan’s obligation to the Participant or Beneficiary. 5.9 Unclaimed Benefits. If the Administrator cannot locate a Participant or the Beneficiary of a deceased Participant to whom payment of benefits under this Plan shall be required, following a diligent effort by the Administrator to locate the Participant or Beneficiary, such benefit shall be forfeited.
40 ARTICLE VI STATUS OF PLAN AND TRUST AGREEMENT 6.1 Unfunded Status of Plan. The Plan constitutes a mere promise by the Plan Sponsor to pay benefits in accordance with the terms of the Plan, and, to the extent that any person acquires a right to receive benefits from the Plan Sponsor under this Plan, such right shall be no greater than any right of any unsecured general creditor of the Plan Sponsor. Subject to Section 6.2, nothing contained in this Plan and no action taken pursuant to the provisions of this Plan shall create or be construed so as to create a trust of any kind, or a fiduciary relationship between the Plan Sponsor and any Participant, Beneficiary, or other person. 6.2 Shares to be Issued. Effective as of such date previously approved by the Board of Directors, the aggregate number of shares of Common Stock that may be issued by the Plan Sponsor to satisfy the obligations under the Plan shall not exceed four million eight-hundred-sixty- two thousand one-hundred fifty-four (4,862,154) shares of Common Stock (for the avoidance of doubt, this share amount reflects the shares that have been approved by the shareholders of the Plan Sponsor, as adjusted to reflect the application of the antidilution provisions of this Section 6.2 through January 1, 2019). The Common Stock may come from treasury shares, authorized but unissued shares, or previously issued shares that the Plan Sponsor reacquires, including shares it purchases on the open market. In the event of a nonreciprocal transaction between the Plan Sponsor and its shareholders that causes the per-share fair value of the Common Stock to change, such as a stock dividend, stock split, spin-off, rights offering, or recapitalization through a large nonrecurring cash dividend, this Section 6.2 of the Plan shall be deemed to be proportionately and appropriately amended to adjust the maximum number of shares of Common Stock subject to the Plan pursuant to this Section. Solely for purposes of documenting administrative practice under the terms of the Plan, in the event of such a nonreciprocal transaction between the Plan Sponsor and its shareholders that causes the per-share fair value of the Common Stock to change, such as a stock dividend, stock split, spin-off, rights offering, or recapitalization through a large nonrecurring cash dividend, the Performance Shares Accounts, Option Shares Accounts, Deferral Accounts, Benefit Accounts, Rollover Accounts, Discretionary Share Accounts, and Distribution Accounts under the Plan shall be proportionately and appropriately adjusted in the type(s), class(es), number of shares, and Common Stock Price credited to such Performance Shares Accounts, Option Shares Accounts, Deferral Accounts, Benefit Accounts, Rollover Accounts, Discretionary Share Accounts, and Distribution Accounts under the Plan. The Administrator shall make any such adjustments so that the proportionate interest of each Participant immediately following any of the foregoing events will, to the extent practicable, be the same as immediately preceding any such event, and the Administrator’s adjustments shall be final, binding, and conclusive. Without limitation of the foregoing, and solely for purposes of documenting administrative practice under the terms of the Plan, in connection with the separation of Veralto Corporation and its subsidiaries from the Danaher Corporation controlled group on or about September 30, 2023, a proportionate and appropriate adjustment was made by the Compensation Committee of the Board on February 21, 2024 in accordance with the requirements of this Section 6.2, to Performance Share Accounts,
41 Option Share Accounts, Deferral Accounts, Benefit Accounts, Rollover Accounts, Discretionary Share Accounts, and Distribution Accounts under the Plan (as applicable) in order to preserve, immediately following such separation, the proportionate interest of each Participant immediately preceding such separation. 6.3 Existence and Purposes of Trust Agreement. (a) Existence of Trust Agreement. In accordance with Section 6.1, the Plan Sponsor may enter into a Trust Agreement with a trustee to hold a trust fund that may become the source of Plan benefits as provided in the Trust Agreement, and such trust fund may hold shares of Common Stock. In such event, the trustee would have such powers to hold, invest, reinvest, control, and disburse such trust fund as shall, at such time and from time to time, be set forth in the Trust Agreement or this Plan. (b) Integration of Trust Agreement. The Trust Agreement shall be deemed to be a part of this Plan, and all rights of Participants and Beneficiaries of deceased Participants under this Plan shall be subject to the provisions of the Trust Agreement, if and as applicable. (c) Rights to Any Trust Fund Assets. No Participant or Beneficiary of a deceased Participant, nor any other person, shall have any right to, or interest in, any assets of the trust fund maintained under the Trust Agreement upon termination of such Participant’s employment or otherwise, except as may be specifically provided from time to time in this Plan, the Trust Agreement, or both, and then only to the extent so specifically provided.
42 ARTICLE VII PLAN AMENDMENT OR TERMINATION 7.1 Right to Amend. The Plan Sponsor reserves the right to amend the Plan, by action duly taken by its Board of Directors, at any time and from time to time to any extent that the Plan Sponsor may deem advisable, and any such amendment shall take the form of an instrument in writing duly executed by one or more individuals duly authorized by the Board of Directors. Without limiting the generality of the foregoing, the Plan Sponsor specifically reserves the right to amend the Plan retroactively as may be deemed necessary. Notwithstanding the foregoing sentences, the Plan Sponsor shall not amend the Plan so as to change the method of calculating the Benefit Amount attributable to any Performance Shares in any Participant’s Performance Shares Account as of the date that such an amendment would otherwise be effective; so as to reduce the balance in the Deferral Account, Benefit Account, Option Shares Account, Rollover Account, Discretionary Share Account, or Distribution Account of any Participant as of such otherwise effective date; or so as to reduce the Vesting Percentage applicable to any Benefit Amount of any Participant that shall have been credited to the Participant’s Benefit Account (plus any earnings credited thereon) prior to such otherwise effective date (whether or not such Vesting Percentage shall have been determined pursuant to Section 3.4 as of such date), unless any such amendment shall be reasonably required to comply with applicable law or to preserve the tax treatment of benefits provided under the Plan or is consented to by the affected Participant. 7.2 Right to Terminate. The Plan Sponsor reserves the right to terminate the Plan, by action duly taken by its Board of Directors, at any time as the Plan Sponsor may deem advisable. Upon termination of the Plan, (a) if the trust fund maintained under the Trust Agreement has not become the source for Plan benefits, the Plan Sponsor shall pay or provide for the payment of all liabilities with respect to Participants and Beneficiaries of deceased Participants by distributing amounts to and on behalf of such Participants and Beneficiaries; and (b) if the trust fund maintained under the Trust Agreement has become the source for Plan benefits, the Plan Sponsor shall direct the trustee thereof to pay to or provide for the payment of all reasonable administrative expenses of the Plan and trust fund, and thereafter the Plan Sponsor shall direct such trustee to use and apply the remaining assets of the trust fund to provide for liabilities thereof with respect to Participants and Beneficiaries of deceased Participants by continuing the trust fund and making provision under the Trust Agreement for the payment of such liabilities or by distributing amounts from the trust fund to and on behalf of such Participants and Beneficiaries; provided that, if, after payment or provision for payment of all reasonable administrative expenses of the Plan and trust fund maintained under the Trust Agreement and satisfaction of all liabilities of such trust fund with respect to Participants and Beneficiaries of deceased Participants, there shall be excess assets remaining, the trustee thereof shall pay such excess assets to the Plan Sponsor.
43 ARTICLE VIII MISCELLANEOUS 8.1 No Guarantee of Employment. Nothing contained in this Plan shall be construed as a contract of employment between any Employee and the Plan Sponsor or any Employer, as a right of any Employee to be continued in any employment position with, or the employment of, the Plan Sponsor or any Employer, or as a limitation of the right of the Plan Sponsor or any Employer to discharge any Employee. 8.2 Nonalienation of Benefits. Any benefits or rights to benefits payable under this Plan shall not be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, charge, garnishment, execution, or levy of any kind, either voluntary or involuntary, including any such liability that is for alimony or other payments for the support of a Beneficiary or former Beneficiary, or for the support of any other relative, before payment thereof is received by the Participant, Beneficiary of a deceased Participant, or other person entitled to the benefit under the Plan; and any attempt to anticipate, alienate, sell, transfer, assign, pledge, encumber, charge, or otherwise dispose of any right to benefits payable under this Plan shall be void; provided, however, that this Section shall not prohibit the Administrator from offsetting, pursuant to Section 8.3 of this Plan, any payments due to a Participant, the Beneficiary of a deceased Participant, or any other person who may be entitled to receive a benefit under this Plan. 8.3 Offset of Benefits. Notwithstanding anything in this Plan to the contrary, in the event that a Participant or the Beneficiary of a deceased Participant owes any amount to the Plan, the Plan Sponsor, or any other Employer, whether as a result of an overpayment or otherwise, the Administrator may, in his or her discretion, offset the amount owed or any percentage thereof in any manner against any payments due from the Plan to the Participant or Beneficiary. 8.4 Taxes. Neither the Plan Sponsor nor any Employer represents or guarantees that any particular federal, state, or local income, payroll, personal property or other tax consequence will result from participation in this Plan or payment of benefits under this Plan. Notwithstanding anything in this Plan to the contrary, the Administrator may, in his or her sole discretion, deduct and withhold applicable taxes from any payment of benefits under this Plan. For the avoidance of doubt, each Participant and Beneficiary shall be responsible for any and all taxes, interest, and penalties with respect to his or her Section 409A Amounts. The Administrator also may permit such obligations to be satisfied by the transfer to the Plan Sponsor or any Employer of cash, shares of Common Stock, or other property. 8.5 Timing of Distributions. The provisions of this Section 8.5 shall apply notwithstanding any provisions of the Plan to the contrary. The timing of all distributions under the Plan is subject to the Plan Sponsor’s and any Employer’s deduction limitations under Code Section 162(m). Distributions instituted during a period during which the Plan Sponsor prevents trading in Common Stock (a “blackout period”) will not be effective until the first business day following the end of the blackout period. The Administrator also may, in his or her sole discretion, postpone any distribution to comply with applicable law or internal policies of the Plan Sponsor.
44 8.6 Not Compensation Under Other Benefit Plans. No amounts in a Participant’s Benefit Account, Discretionary Share Account or Deferral Account shall be deemed to be salary or compensation for purposes of the 401(k) Plan or any other employee benefit plan of the Plan Sponsor or any Employer except as and to the extent otherwise specifically provided in any such plan. 8.7 Merger or Consolidation of Plan Sponsor. If the Plan Sponsor is merged or consolidated with another organization, or another organization acquires all or substantially all of the Plan Sponsor’s assets, such organization may become the “Plan Sponsor” hereunder by action of its board of directors and by action of the board of directors of the Plan Sponsor if still existent. Such change in plan sponsors shall not be deemed to be a termination of this Plan. 8.8 Savings Clause. If any term, covenant, or condition of this Plan, or the application thereof to any person or circumstance, shall to any extent be held to be invalid or unenforceable, the remainder of this Plan, or the application of any such term, covenant, or condition to persons or circumstances other than those as to which it has been held to be invalid or unenforceable, shall not be affected thereby, and, except to the extent of any such invalidity or unenforceability, this Plan and each term, covenant, and condition hereof shall be valid and shall be enforced to the fullest extent permitted by law. 8.9 Governing Law. This Plan shall be construed, regulated and administered under the laws of the State of Delaware to the extent not pre-empted by ERISA or any other federal law. 8.10 Construction. As used in this Plan, the masculine and feminine gender shall be deemed to include the neuter gender, as appropriate, and the singular or plural number shall be deemed to include the other, as appropriate, unless the context clearly indicates to the contrary. 8.11 Headings No Part of Agreement. Headings of articles, sections and subsections of this Plan are inserted for convenience of reference; they constitute no part of the Plan and are not to be considered in the construction of the Plan.
45 ARTICLE IX SPECIAL PROVISIONS APPLICABLE TO SECTION 409A AMOUNTS 9.1 Scope. The provisions of this Article IX shall apply to Section 409A Amounts only and shall not apply to any Grandfathered Amounts. If the provisions of this Article IX conflict with any other provisions of the Plan, the provisions of this Article IX shall control. 9.2 Special Provisions. Notwithstanding any provision of Articles III and IV of the Plan and Section 5.6 of the Plan, with respect to a Participant: (a) Elections. With respect to any Section 409A Amount and in addition to any enrollment form and election requirements provided for in the Plan or established by the Administrator, any election for a Plan Year shall be made not later than December 31 of the calendar year immediately preceding such Plan Year; provided, however, that, in the case of the first Plan Year in which a Participant becomes an Eligible Employee, any election for the portion of the Plan Year during with the Participant is an Eligible Employee shall be made within thirty (30) days after the date the Participant first becomes an Eligible Employee. (b) Form and Medium of Distribution. Any election made with respect to a Section 409A Amount pursuant to Section 9.2(a) above shall specify the form and medium of distribution with respect to that Section 409A Amount. The form of distribution so elected by a Participant shall be one of the forms of distribution set forth in Section 4.1(a) of the Plan and shall be subject to the restriction in Section 4.1(a)(ii) of the Plan concerning the availability of installment payments. The medium of distribution shall be specified in accordance with Section 4.1(b) of the Plan. (c) Default Form of Payment. Notwithstanding Section 4.2(b)(i)(B) of the Plan, with respect to any Participant who has both attained age fifty-five (55) and completed at least five (5) Years of Service, if such Participant fails to elect a form of distribution with respect to any Section 409A Amount, the Participant shall be deemed to have elected to have such Section 409A Amount paid in the form of five (5) installment payments in accordance with the payment frequency set forth in Section 9.2(d) below. (d) Timing of Payment. Notwithstanding Article IV of the Plan and specifically Sections 4.2(c) and (e) of the Plan, the Distribution Date for a Section 409A Amount (or the first installment of a Section 409A Amount, if applicable) shall be no earlier than the first day of the month following the last day of the six (6) month period commencing on the Participant’s Employment Termination Date. In accordance with procedures established by the Administrator pursuant to Article V, a Participant may elect one of the following Distribution Dates with respect to each Section 409A Amount: (i) the first day of the month following the last day of the six (6) month period commencing on the Participant’s Employment Termination Date; (ii) the first day of the month following the last day of the twelve (12) month period commencing on the Participant’s Employment Termination Date; or (iii) the first day of the month following the last day of the twenty-four (24) month period commencing on the Participant’s Employment Termination Date.
46 If pursuant to the terms of the Plan a Section 409A Amount is to be distributed in installments, the second installment of the Section 409A Amount shall be made on January 15 of the calendar year following the date of payment of the initial installment, and each subsequent installment thereafter (if any) shall be made on each January 15 thereafter until all installment payments of a Section 409A Amount have been paid to the Participant. In the avoidance of doubt, the amount of each installment payment of a Section 409A Amount shall equal the quotient of (i) the total Section 409A Amount to be distributed, divided by (ii) the number of installment payments remaining in the applicable period of annual installments. (e) Subsequent Changes in Time of Payment and Form of Distribution. With respect to a Section 409A Amount, a Participant may elect to delay a payment of the Section 409A or to change the form of distribution of the Section 409A Amount provided that the following conditions are met: (i) Any election under this Section 9.2(e) shall not take effect until a date that is at least twelve (12) months after the date on which the election is made. (ii) The payment with respect to which an election under this Section 9.2(e) is made shall be deferred for a period of not less than five (5) years from the date such payment would otherwise have been paid. (iii) Any election under this Section 9.2(e) shall be made on a date that is not less than twelve (12) months prior to the date the payment is originally scheduled to be made. (f) Permitted Payment Delays. Notwithstanding Section 8.5 of the Plan and in addition to the foregoing provisions of this Section 9.2, a payment of a Section 409A Amount to a Participant may be delayed to a date after the designated payment date under either of the following two circumstances: (i) Where the Plan Sponsor reasonably anticipates that an Employer’s deduction with respect to the payment of a Section 409A Amount would otherwise be limited or eliminated by application of Code Section 162(m); provided, however, that such payment shall be made to the Participant (i) during the Participant’s first taxable year in which the Plan Sponsor reasonably anticipates that the deduction of such payment will not be limited or eliminated by the application of Code Section 162(m), or, if later, (ii) during the period beginning with the Participant’s Employment Termination Date and ending on the later of (A) the last day of the taxable year of the Plan Sponsor in which the Participant’s Employment Termination Date occurs or (B) the fifteenth (15th) day of the third month following the Participant’s Employment Termination Date. (ii) Where the Plan Sponsor reasonably anticipates that the making of the payment of the Section 409A Amount will violate Federal Securities laws or other applicable law; provided, however, that such payment will be made to the Participant at the earliest date at which the Plan Sponsor reasonably anticipates that the making of such payment will not cause such violation.
47 (g) Unforeseeable Emergency. For the avoidance of doubt, the provisions of Section 4.4 of the Plan shall apply to any Bonus Deferral Amounts and any Salary Deferral Amounts that are considered to be Section 409A Amounts. (h) Plan Termination. Notwithstanding the provisions of Section 7.2 of the Plan, the termination of the Plan shall not accelerate the time and form of payment of any Section 409A Amount except when the Plan Sponsor elects to terminate the Plan in accordance with one of the following: (i) The Plan Sponsor elects to terminate the Plan within twelve (12) months of a corporate dissolution taxed under Code Section 331 or with the approval of a bankruptcy court pursuant to 11 U.S.C. §503(b)(1)(A), provided that the Section 409A Amounts are included in Participants’ gross incomes in the latest of (a) the calendar year in which the Plan termination occurs, (b) the calendar year in which the Section 409A Amount is no longer subject to a substantial risk of forfeiture, or (c) the first calendar year in which the payment of the Section 409A Amount is administratively practical. (ii) The Plan Sponsor elects to terminate the Plan under the following conditions: (a) the Employer terminates all arrangements sponsored by the Employer that would be aggregated with any terminated arrangements under the regulations promulgated under Code Section 409A if the same Participant had deferrals of compensation under all such terminated arrangements; (b) no payments (other than payments that would be payable under the terms of the arrangements if the termination had not occurred) are made within twelve (12) months of the termination of the arrangements; (c) all payments are made within twenty-four (24) months of the termination of the arrangements; and (d) no Employer adopts a new arrangement that would be aggregated with any terminated arrangement under the regulations promulgated under Code Section 409A if the same Participant participated in both arrangements, at any time within five (5) years following the date of termination of the Plan. (iii) The Plan Sponsor elects to terminate the Plan in accordance with any such other events and conditions that the Commissioner of the Internal Revenue Service may prescribe in generally applicable guidance published in the Internal Revenue Bulletin. (iv) The Plan Sponsor has irrevocably terminated the Plan with respect to all NetScout Acquired Participants as of August 18, 2015, consistent with the requirements of Treasury Regulation section 1.409A-3(j)(4)(ix)(B) as a result of the change in control event (as defined by Treasury Regulation section 1.409A-3(i)(5)) on or about July 14, 2015, whereby certain affiliated entities of the Plan Sponsor had a change in control event and became a member of the NetScout Systems, Inc. controlled group. Consistent with this termination, all amounts of compensation deferred under the Plan and amounts subject to Code section 409A under all other plans and arrangements treated as a single plan with the EDIP under Treasury Regulation section 1.409A-1(c)(2) with respect to NetScout Acquired Participants shall be distributed within 12 months of August 18, 2015. (i) Definition of Payment. With respect to a Section 409A Amount, the entitlement to a series of installment payments shall be treated as the entitlement to a single payment, and each such installment payment shall not be considered a separate payment hereunder.
48 (j) Discretionary Share Accounts. Notwithstanding anything herein to the contrary, any amounts attributable to a Participant’s Discretionary Share Account shall be paid as lump-sum distribution in shares of Common Stock on the first day of the month following the last day of the six (6) month period commencing on the Participant’s Employment Termination Date. A Participant may not elect to delay a payment or change the form of distribution of any amount attributable to his or her Discretionary Share Account. 9.3 Payments to a Beneficiary. Notwithstanding Section 4.2(e) of the Plan, with respect to any Section 409A Amounts, if a Participant elected to receive the Distributable Amount in the form of annual installments and the Participant dies prior to receiving all of such annual installments, the Beneficiary of the deceased Participant shall receive such remaining payments as a lump-sum in accordance with Section 4.2(b)(ii) of the Plan. 9.4 Class Year Accounting. Section 409A Amounts credited on a Participant’s behalf with respect to Plan Years beginning on or after January 1, 2013, and any earnings credited thereto and any losses deducted therefrom in accordance with the terms of the Plan, shall be administered under this Plan by Class Year. For the avoidance of doubt, as stated in Section 1.59, the aggregate of a Participant’s Salary Deferral Amount (if any), Bonus Deferral Amount (if any), and Benefit Amount (if any) for each Class Year, and any earnings credited thereto and any losses deducted therefrom in accordance with the terms of the Plan, shall be deemed a separate Section 409A Amount for all purposes under this Plan, including, but not limited to, the provisions of Section 9.2. (a) Elections. In accordance with procedures established by the Administrator pursuant to Article V and Section 9.2, a Participant shall make a separate election for each Class Year, commencing with the Class Year 2013, for which the Participant shall specify (i) the form and medium of distribution and (ii) the time for payment, and each such election for a Class Year shall apply to the aggregate of the Participant’s Salary Deferral Amount (if any), Bonus Deferral Amount (if any), and Benefit Amount (if any) for that Class Year, and any earnings credited thereto and any losses deducted therefrom in accordance with the terms of the Plan. The Plan’s default form of payment and time for payment provisions under Section 4.2(b)(i)(B), Section 9.2(c), and Section 9.2(d), as applicable, shall apply to any Participant who fails to make an election for a Class Year. (b) Subsequent Changes in Class Year Elections. The provisions of Section 9.2(e) permitting payment delays and changes in the form of distribution subject to certain conditions set forth therein shall be administered separately with respect to a Participant’s Section 409A Amount for each Class Year. An election to delay payment, or change the form of distribution, for a Section 409A Amount for one Class Year shall not affect the time for payment and form of distribution elections for the Section 409A Amount for another Class Year.
DANAHER CORPORATION & SUBSIDIARIES EXECUTIVE DEFERRED INCENTIVE PROGRAM A-1 APPENDIX A APPLICABLE PERCENTAGE I. EFFECTIVE PRIOR TO JANUARY 1, 2004: TARGET COMPENSATION AGE OF PARTICIPANT Under 40 40 and Over Less than $150,000 3.5% 4.5% Greater than or equal to $150,000 5.5% 6.5% II. EFFECTIVE ON AND AFTER JANUARY 1, 2004: YEARS OF PARTICIPATION APPLICABLE PERCENTAGE 0-10 6% 11-15 8% Greater than 15 10%
DANAHER CORPORATION & SUBSIDIARIES EXECUTIVE DEFERRED INCENTIVE PROGRAM B-1 APPENDIX B PRESENT VALUE FACTORS PV Factor 1+2+3 2.6 PV Factor 1+2 1.8 PV Factor 1 .9 I. EFFECTIVE PRIOR TO JANUARY 1, 2004: MONTHS FACTORS Months Factor PV Factor O 12 .9 11 .8 10 .8 9 .8 8 .8 7 .9 6 1.0 5 1.0 4 1.0 3 1.0 2 1.0 1 1.0 II. Effective Prior to January 1, 2004: MONTHS FACTORS Eligibility Date Prorata Factor January 1st 1.00 February 1st 0.92 March 1st 0.83 April 1st 0.75 May 1st 0.67 June 1st 0.50 July 1st 0.50 August 1st 0.42 September 1st 0.33 October 1st 0.25 November 1st 0.17 December 1st 0.08
DANAHER CORPORATION & SUBSIDIARIES EXECUTIVE DEFERRED INCENTIVE PROGRAM C-1 APPENDIX C TRANSFER OF LIABILITIES TO FORTIVE EXECUTIVE DEFERRED INCENTIVE PROGRAM On or around July 2, 2016, certain Employers separated from the Danaher Corporation controlled group and became Fortive Corporation and its subsidiaries (“Fortive”). In anticipation of such event, the Plan liabilities and benefits related to those Participants who were to be employed by Fortive (“Fortive Participants”), including amounts not subject to Code Section 409A (i.e., amounts deferred and vested prior to January 1, 2005, and earnings related thereto), were transferred to the Fortive Executive Deferred Incentive Program (“Fortive EDIP”), effective as of the close of the New York Stock Exchange on May 31, 2016. After the transfer of the Plan liabilities to the Fortive EDIP on May 31, 2016, the Plan Sponsor, the Plan, any directors, officers, or employees of the Plan Sponsor, and any successors thereto, have no further obligation or liability to any such individual with respect to any benefit, amount, or right due under the Plan. On and after the transfer of the Plan liabilities to the Fortive EDIP on May 31, 2016, the Employers that were intended to become members of the Fortive controlled group on or around July 2, 2016 ceased to participate in the Plan. On and after the transfer of the Plan liabilities to the Fortive EDIP on May 31, 2016, Fortive Participants ceased participation in the Plan, but became participants in the Fortive EDIP in accordance with the terms therein; provided, that any irrevocable deferral election for 2016 in effect under the Plan for a Fortive Participant at the time of such transfer remained in effect during 2016 in the Fortive EDIP, and provided further that any distribution election applicable to the Plan benefit of a Fortive Participant immediately before the transfer continued to apply to the liabilities and benefits transferred to the Fortive EDIP, in accordance with the terms therein.
DANAHER CORPORATION & SUBSIDIARIES EXECUTIVE DEFERRED INCENTIVE PROGRAM D-1 APPENDIX D TRANSFER OF LIABILITIES TO ENVISTA HOLDINGS CORPORATION EXECUTIVE DEFERRED INCENTIVE PROGRAM AS ESTABLISHED AS A SUB-PLAN UNDER THE ENVISTA HOLDINGS CORPORATION 2019 OMNIBUS INCENTIVE PLAN Certain Employers, including Envista Holdings Corporation and its subsidiaries (“Envista”), are intended to separate from the Danaher Corporation controlled group. In anticipation of such event, the Plan liabilities and benefits related to those Participants who are employed by Envista (“Envista Participants”), including amounts not subject to Code Section 409A (i.e., amounts deferred and vested prior to January 1, 2005, and earnings related thereto), will be transferred to the Envista Holdings Corporation Executive Deferred Incentive Program as Established as a Sub-Plan Under the Envista Holdings Corporation 2019 Omnibus Incentive Plan (“Envista EDIP”), effective as of January 1, 2020, or such earlier date that Envista leaves the Danaher Corporation controlled group. After the transfer of the Plan liabilities to the Envista EDIP on the date specified above, the Plan Sponsor, the Plan, any directors, officers, or employees of the Plan Sponsor, and any successors thereto, shall have no further obligation or liability to any such individual with respect to any benefit, amount, or right due under the Plan. On and after the transfer of the Plan liabilities to the Envista EDIP on January 1, 2020, or such earlier date that Envista leaves the Danaher Corporation controlled group, the Employers that are intended to separate from the Danaher Corporation controlled group shall cease to participate in the Plan. On and after the transfer of the Plan liabilities to the Envista EDIP on January 1, 2020, or such earlier date that Envista leaves the Danaher Corporation controlled group, Envista Participants shall cease participation in the Plan, but shall participate in the Envista EDIP in accordance with the terms therein; provided, that any distribution election applicable to the Plan benefit of an Envista Participant immediately before the transfer will continue to apply to the liabilities and benefits transferred to the Envista EDIP, in accordance with the terms therein.
DANAHER CORPORATION & SUBSIDIARIES EXECUTIVE DEFERRED INCENTIVE PROGRAM E-1 APPENDIX E TRANSFER OF LIABILITIES TO VERALTO CORPORATION & SUBSIDIARIES EXECUTIVE DEFERRED INCENTIVE PROGRAM On or after September 30, 2023, certain Employers, including Veralto Corporation and its subsidiaries (“Veralto”), are intended to separate from the Danaher Corporation controlled group. In anticipation of such event, the Plan liabilities and benefits related to those Participants who are employed by Veralto (“Veralto Participants”), including amounts not subject to Code Section 409A (i.e., amounts deferred and vested prior to January 1, 2005, and earnings related thereto), will be transferred to the Veralto Corporation & Subsidiaries Executive Deferred Incentive Program (“Veralto EDIP”), effective as of September 30, 2023. After the transfer of the Plan liabilities to the Veralto EDIP on the date specified above, the Plan Sponsor, the Plan, any directors, officers, or employees of the Plan Sponsor, and any successors thereto, shall have no further obligation or liability to any such individual with respect to any benefit, amount, or right due under the Plan. On and after the transfer of the Plan liabilities to the Veralto EDIP on September 30, 2023, the Employers that are intended to separate from the Danaher Corporation controlled group shall cease to participate in the Plan. On and after the transfer of the Plan liabilities to the Veralto EDIP on September 30, 2023, Veralto Participants shall cease participation in the Plan, but shall participate in the Veralto EDIP in accordance with the terms therein; provided, that any distribution election applicable to the Plan benefit of a Veralto Participant immediately before the transfer will continue to apply to the liabilities and benefits transferred to the Veralto EDIP, in accordance with the terms therein.
Exhibit 22.1
Subsidiary Issuers of Guaranteed Securities
As of October 20, 2026, Danaher Corporation (Parent Guarantor) was the sole guarantor of the following senior unsecured notes issued by:
DH Europe Finance S.a.r.l., a Luxembourg company and wholly-owned subsidiary of the Parent Guarantor:
•1.2% EUR notes due 2027
DH Europe Finance II S.a.r.l., a Luxembourg company and wholly-owned subsidiary of the Parent Guarantor:
•Euro-denominated commercial paper
•0.45% EUR notes due 2028
•2.6% USD notes due 2029
•0.75% EUR notes due 2031
•1.35% EUR notes due 2039
•3.25% USD notes due 2039
•1.8% EUR notes due 2049
•3.4% USD notes due 2049
DH Switzerland Finance S.a.r.l., a Luxembourg company and wholly-owned subsidiary of the Parent Guarantor:
•0.4773% CHF notes due 2027
•1.125% CHF notes due 2028
•0.8875% CHF notes due 2029
•1.265% CHF notes due 2033
•1.6249% CHF notes due 2037
•1.94% CHF notes due 2045
DH Japan Finance S.a.r.l., a Luxembourg company and wholly-owned subsidiary of the Parent Guarantor:
•0.3% JPY notes due 2027
•0.65% JPY notes due 2032
DH Masi Finance Inc., a Delaware company and wholly-owned subsidiary of the Parent Guarantor:
•1.65% CHF notes due 2031
•1.88% CHF notes due 2033
•2.10% CHF notes due 2036
•2.25% CHF notes due 2038
•2.38% CHF notes due 2041
•2.51% CHF notes due 2046
•2.50% CHF notes due 2056
Exhibit 31.1
Certification
I, Julie Sawyer Montgomery, certify that:
1.I have reviewed this Quarterly Report on Form 10-Q of Danaher Corporation;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a.designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
a.all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b.any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
| Date: | October 20, 2026 | By: | /s/ Julie Sawyer Montgomery | ||||||||
| Julie Sawyer Montgomery | |||||||||||
| President and Chief Executive Officer | |||||||||||
Exhibit 31.2
Certification
I, Matthew Gugino, certify that:
1.I have reviewed this Quarterly Report on Form 10-Q of Danaher Corporation;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a.designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
a.all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b.any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
| Date: | October 20, 2026 | By: | /s/ Matthew Gugino | ||||||||
| Matthew Gugino | |||||||||||
| Executive Vice President and Chief Financial Officer | |||||||||||
Exhibit 32.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I, Julie Sawyer Montgomery, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge, Danaher Corporation’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 25, 2026 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in such Quarterly Report on Form 10-Q fairly presents in all material respects the financial condition and results of operations of Danaher Corporation.
| Date: | October 20, 2026 | By: | /s/ Julie Sawyer Montgomery | ||||||||
| Julie Sawyer Montgomery | |||||||||||
| President and Chief Executive Officer | |||||||||||
This certification accompanies the Quarterly Report on Form 10-Q pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed filed for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section. This certification shall not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that Danaher Corporation specifically incorporates it by reference.
Exhibit 32.2
CERTIFICATION OF CHIEF FINANCIAL OFFICER
PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I, Matthew Gugino, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge, Danaher Corporation’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 25, 2026 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in such Quarterly Report on Form 10-Q fairly presents in all material respects the financial condition and results of operations of Danaher Corporation.
| Date: | October 20, 2026 | By: | /s/ Matthew Gugino | ||||||||
| Matthew Gugino | |||||||||||
| Executive Vice President and Chief Financial Officer | |||||||||||
This certification accompanies the Quarterly Report on Form 10-Q pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed filed for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section. This certification shall not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that Danaher Corporation specifically incorporates it by reference.