01—Abstract
Summary
Summary of the 10-K/A filed August 14, 2002. Cited figures are marked; the original filing is the authoritative source.
This filing is an amendment to Danaher Corporation's 2001 Form 10-K, providing supplemental information related to related-party transactions.
Key disclosures involve arrangements with Colfax Corporation, a company where the Rales brothers are controlling stockholders, regarding the distribution of "wrap spring clutch" products. Danaher sold approximately $3.1 milliona of these products to Colfax in 2001, under terms consistent with other distributors, and has since entered into a new three-year distribution agreement.
Additionally, the report details cost-sharing agreements for leased aircraft operations and office space with Equity Group Holdings LLC and its affiliates, which Danaher believes result in cost efficiencies. These arrangements, while involving related parties, appear to be conducted on an arm's-length basis and are presented as beneficial to Danaher.
02—Key points
Key Highlights
- Amendment provides supplemental disclosure for the fiscal year ended December 31, 2001.
- Danaher has a distribution arrangement for its "wrap spring clutch" product line with Colfax Corporation, a Rales-controlled entity.
- Sales to Colfax for this product line totaled approximately $3.1 million in 2001.
- A new three-year distribution agreement with Colfax was entered into in January 2002, extending the existing arrangement.
- Danaher shares fixed expenses for leased aircraft operations with Equity Group Holdings LLC and its affiliates (EGH) for cost efficiencies.
- EGH reimbursed Danaher approximately $650,000 in 2001 for its share of shared fixed aircraft operating expenses.
- Danaher also provided office space and reimbursed costs for four EGH employees, receiving approximately $125,000 in reimbursement from EGH.
03—Questions
Frequently Asked Questions
What is the primary purpose of this 10-K/A filing?
This filing is an amendment to Danaher Corporation's 2001 annual report (10-K) to add supplemental information regarding related-party transactions. It clarifies arrangements with Colfax Corporation and Equity Group Holdings LLC and its affiliates.
What is the nature of Danaher's business relationship with Colfax Corporation?
Colfax Corporation acts as the primary distributor and reseller of Danaher's "wrap spring clutch" product line in Europe. Danaher sold approximately $3.1 million of these products to Colfax in 2001 under terms similar to those offered to other distributors. A new, three-year distribution agreement was established in January 2002.
How does Danaher benefit from its arrangements with Equity Group Holdings LLC (EGH)?
Danaher shares certain fixed expenses related to leased aircraft operations with EGH, such as flight crew compensation and hangar rental. Danaher believes this cost-sharing arrangement creates efficiencies and lowers operational costs compared to operating its flight department independently. EGH reimbursed Danaher $650,000 in 2001 for its share of these fixed costs.
Are the transactions with related parties conducted at arm's length?
The filing suggests that the transactions are conducted on terms comparable to those with unrelated parties. For instance, the "wrap spring clutch" products were sold to Colfax at the same discount to list price offered to other distributors. Danaher also believes the cost-sharing arrangement for aircraft operations results in lower costs than stand-alone operations.
04—Continue