danaher 06_4Q_Preso

FOURTH QUARTER 2006 EARNINGS RELEASEJANUARY 25, 2007

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FORWARD LOOKING STATEMENTS

Statements in this presentation that are not strictly historical, including statements regarding events or developments that we believe or anticipate will or may occur in the future. These forward-looking statements are subject to a number of risks and uncertainties, including those related to competition, our ability to develop and successfully market new products and technologies, our ability to expand our business in new geographic markets, our ability to identify, consummate and integrate appropriate acquisitions, litigation and other contingent liabilities including intellectual property matters, our compliance with applicable laws and regulations, our ability to achieve projected efficiencies, cost reductions, sales growth and earnings, economic conditions in the end-markets we sell into, commodity costs and surcharges, currency exchange rates, tax audits, and general domestic and international economic conditions. It's possible that actual results might differ materially from any forward-looking statements that we might make today. Additional information regarding the factors that may cause actual results to differ materially from these forward-looking statements is available in our SEC filings, including our 2005 Annual Report on Form 10-K and FOURTH Quarter 2006 Quarterly Report on Form 10-Q. These forward-looking statements speak only as of the date they are made, and we do not intend to update any forward looking statement.

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Q4 05 Q4 062005 2006

$0.78

$1.00 $2.76

$3.48

FOURTH QUARTER 2006PERFORMANCE SUMMARY

EARNINGS PER SHARE REVENUES ($M)+28% +17.5%

Q4 05 Q4 06 2005 2006

$2,264$2,660

$7,985

$9,596

+26% +20%

Core 6.5%Acquisition 13.0%FX 0.5%


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GROSS MARGINS SG & A+140 BPS

Q4 05 Q4 06 2005 2006

26.8%

28.0%27.2%

28.6%

Q4 05 Q4 06 2005 2006

43.0%

44.8%

43.1%

44.2%

+180 BPS +110 BPS +120 BPS

Stock Option Expense Impact:Q4 06: 50 BPS2006: 60 BPS

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Q4 05 Q4 06 2005 2006

15.6%

16.8%

15.8% 15.8%


OPERATING PROFIT ($M) OPERATING MARGINSFLAT

Q4 05 Q4 06 2005 2006

$352

$447 $1,265

$1,518

+27% +20% +120 BPS

Q4 06: Acquisition Impact -40 BPSOption Expense -50 BPS

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NET INTEREST EXPENSE ($M) TAX RATE-370 BPS

Q4 05 Q4 06

27.1%23.4%

Q4 05 Q4 06

$6.8

$24.7

+265%

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Q4 05 Q4 06 2005 2006

$252

$324 $898

$1,122

NET INCOME ($M)+28.5% +25%


*2006 includes $53M related the reduction of previously recorded tax reserves in the first half of 2006 and $16.8M related to a reduced income tax provision in Q4

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2005 2006

$121$138

OPERATING CASH FLOW ($M) CAP EX ($M)

2005 2006

$1,204

$1,547

FREE CASH FLOW ($M)+29% +30%+14%

2005 2006

$1,083

$1,410

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Q4 05 Q4 06 2005 2006

$711

$799$2,601

$2,906

FOURTH QUARTER 2006PROFESSIONAL INSTRUMENTATION

OPERATING MARGINSREVENUES ($M)+200 BPS+12.5%


Q4 05 Q4 06 2005 2006

20.3%

22.3%

20.7% 21.5%

+12% +80BPS



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FOURTH QUARTER 2006ENVIRONMENTAL

Q4 06 vs. Q4 05Revenue Growth 11.0%

Breakdown: Core 6.5%Acquisition 1.5%FX 3.0%

2006 vs. 2005Revenue Growth 10.5%


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FOURTH QUARTER 2006ELECTRONIC TEST




Breakdown: Core 7.0%Acquisition 7.5%

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Q4 05 Q4 06 2005 2006

$459

$697

$1,182

$2,220

FOURTH QUARTER 2006MEDICAL TECHNOLOGIES

OPERATING MARGINSREVENUES ($M)+100 BPS+52%


Q4 05 Q4 06 2005 2006

13.6% 14.6%11.7%

11.8%

+88% +10 BPS



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FOURTH QUARTER 2006INDUSTRIAL TECHNOLOGIES


Q4 05 Q4 06 2005 2006

14.2%

16.3%

14.7%15.6%

Q4 05 Q4 06 2005 2006

$744

$792$2,908 $3,119

+7.5% +90 BPS




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FOURTH QUARTER 2006PRODUCT IDENTIFICATION

Q4 06 vs. Q4 05Revenue Growth (1.5%)

Breakdown: Core (4.5%)FX 3.0%


Breakdown: Core 2.5%FX 1.0%

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FOURTH QUARTER 2006MOTION


Breakdown: Core 4.0%FX 3.5%



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FOURTH QUARTER 2006TOOLS & COMPONENTS


Q4 05 Q4 06 2005 2006

14.6%14.7% 15.4%14.4%

Q4 05 Q4 06 2005 2006

$349

$372$1,294 $1,351

Core 4.5%

+4.5% -100 BPS

Q4 06: Divestiture -65 BPSOption Expense -45 BPS

Core 6.5%

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FOURTH QUARTER 2006MECHANICS HAND TOOLS


Breakdown: Core 7.5%


Breakdown: Core 4.5%

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2007 OUTLOOK

Guidance

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2007 OUTLOOK

Q & A

danaher 06_4Q_Preso

Economy & Finance

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