8-KEarnings & ResultsExhibits & Filings

DANAHER CORP /DE/ 8-K Report, Financial Results (Jan 10, 2017)

Filed January 10, 2017For Securities:DHR

Summary

Danaher Corporation (DHR) filed an 8-K on January 10, 2017, to furnish presentation slides for their J.P. Morgan Healthcare Conference. The filing primarily provides updated financial performance information for the estimated full year 2016, focusing on non-GAAP measures. Key financial insights include an estimated Free Cash Flow from Continuing Operations of $2.5 billion, derived from estimated Operating Cash Flows of $3.1 billion less capital expenditures of $0.6 billion. The company highlighted a strong Free Cash Flow to Net Earnings conversion ratio of approximately 120%, with estimated Net Earnings from Continuing Operations at $2.1 billion. Management emphasizes that free cash flow is a valuable metric for investors to assess Danaher's ability to generate cash for balance sheet strengthening, business investment, and strategic growth opportunities, although it should be considered alongside GAAP operating cash flow.

Key Highlights

  • 1Danaher Corporation furnished presentation slides on January 10, 2017, for the J.P. Morgan Healthcare Conference.
  • 2The presentation included anticipated financial performance for the estimated full year 2016.
  • 3Estimated Free Cash Flow from Continuing Operations (Non-GAAP) for the year ended December 31, 2016, was $2.5 billion.
  • 4This free cash flow was generated from estimated Operating Cash Flows (GAAP) of $3.1 billion, less capital expenditures of $0.6 billion.
  • 5Estimated Net Earnings from Continuing Operations (GAAP) for the year ended December 31, 2016, were $2.1 billion.
  • 6Danaher reported a strong Non-GAAP Free Cash Flow to Net Earnings Conversion Ratio of approximately 120%.
  • 7The company believes free cash flow provides investors with additional insight into cash generation capabilities for reinvestment and strategic growth.

Frequently Asked Questions

The main purpose of this 8-K filing is to furnish presentation slides that Danaher Corporation used at the J.P. Morgan Healthcare Conference on January 10, 2017. These slides contain updated information on the company's anticipated financial performance for the estimated full year 2016.

For the estimated full year 2016, Danaher anticipated Operating Cash Flows from Continuing Operations (GAAP) of $3.1 billion and Capital Expenditures of $0.6 billion, resulting in Estimated Free Cash Flow from Continuing Operations (Non-GAAP) of $2.5 billion. Estimated Net Earnings from Continuing Operations (GAAP) were $2.1 billion.

The approximately 120% Free Cash Flow to Net Earnings conversion ratio indicates that Danaher generated more free cash flow ($2.5 billion) than its net earnings ($2.1 billion) for the estimated full year 2016. Management views this as a positive indicator of the company's ability to generate substantial cash, which can be used for debt repayment, reinvestment in the business, and strategic acquisitions.

Danaher defines Estimated Free Cash Flow from Continuing Operations as GAAP Operating Cash Flows less estimated purchases of property, plant, and equipment. They believe this non-GAAP measure is useful to investors as it offers an additional perspective on the company's ability to generate cash without needing external financing, allowing for balance sheet strengthening, business investment, and growth through acquisitions.