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, 2023, included in the Company’s 2023 Annual Report and the Company’s Consolidated Condensed Financial Statements and related Notes as of and for the three and six-month periods ended June 28, 2024 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, 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 revenue, expenses, profit, profit margins, pricing, tax rates, tax provisions, cash flows, pension and benefit obligations and funding requirements, asset values, 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, divestitures, spin-offs, split-offs, initial public offerings, other securities offerings, or other distributions, strategic opportunities, stock repurchases, dividends and executive compensation and potential executive stock sales or purchases; growth, declines and other trends in markets we sell into; new or modified laws, regulations and accounting pronouncements; future laws, regulations 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 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,” “should,” “could,” “intend,” “will,” “plan,” “expect,” “estimate,” “project,” “target,” “may,” “possible,” “potential,” “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. 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 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

• 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 based on technological innovation. Our growth can also suffer if 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 (including the impact of military conflicts), both in the United States (“U.S.”) and outside the U.S., can negatively affect our business and financial statements. For example, elections in the U.S. and other countries may result in significant political shifts and/or disruptions, including changes in the regulatory environment, and recent Supreme Court decisions in the U.S. may also result in regulatory uncertainty.

• Uncertainties with respect to the development, deployment, and use of artificial intelligence in our business and products may result in harm to our business and reputation.

• Collaborative 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

• Any inability to consummate acquisitions at our historical rate and appropriate prices, and to make appropriate investments that support our long-term strategy, could negatively impact our business. Our acquisition of businesses, investments, joint ventures and other strategic relationships could 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 and unanticipated use or inadequate disclosure with respect to our products or services, or allegations thereof, can adversely 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.

• Climate change, legal or regulatory measures to address climate change and any inability to address regulatory requirements or stakeholder expectations with respect to climate change, may negatively affect us.

• Our success depends on our ability to recruit, retain and motivate talented employees representing diverse backgrounds, experiences and skill sets.

• Our restructuring actions can have long-term adverse effects on our business and financial statements.

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

• Our outstanding debt has increased significantly as a result of acquisitions, and we may incur additional debt. Such 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. laws or policies 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.

• 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.

• 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 2023 Annual 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, 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 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 and increasing regulation. 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 efficiency and quality and effectively address the demands of an increasingly regulated global environment. The Company is making significant investments, organically and through acquisitions and investments, to address the rapid pace of technological change in its served markets and to globalize its manufacturing, research and development and customer-facing resources (particularly in high-growth markets) 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 second quarter of 2024, the Company’s overall revenues decreased 3.0% compared to the comparable period of 2023. Core sales decreased 3.5% in the second quarter of 2024 compared to the comparable prior year period due primarily to lower core sales in the Biotechnology segment, and to a lesser extent in the Life Sciences segment, partially offset by increases in demand for certain products and services in the Diagnostics segment. The impact of currency translation decreased reported sales 1.5% in the second quarter of 2024 compared to the comparable prior year period and the impact of acquisitions increased reported sales 2.0%. For the six-month period ended June 28, 2024, overall revenues decreased 2.5% and core sales decreased 3.5% compared to the comparable prior year period primarily due to lower core sales in the Biotechnology segment, and to a lesser extent in the Life Sciences segment, partially offset by increases in demand for certain products and services in the Diagnostics segment. The impact of currency translation decreased reported sales 1.0% and the impact of acquisitions increased reported sales 2.0% in the six-month period compared to the comparable prior year period. Price increases contributed 1.0% and 1.5%, respectively, to sales growth on a year-over-year basis during the three and six-month periods ended June 28, 2024 and are reflected as a component of core sales decline above. For the definitions of “core sales” and “acquisitions” refer to “—Results of Operations” below.

Geographically, the Company’s sales in the three-month period ended June 28, 2024 in developed markets decreased year-over-year by 1% and core sales in the developed markets decreased at a low-single digit rate driven primarily by decreased sales in Western Europe, partially offset by increased sales in North America. The decline in core sales in developed markets was primarily driven by reduced demand in the Biotechnology and Life Sciences segments, partially offset by increased demand in the Diagnostics segment. For the same period, sales in high-growth markets decreased year-over-year by 8% and core sales in high-growth markets decreased at a high-single digit rate, due primarily to high-teens core revenue declines in China. The decline in core sales in high-growth markets was primarily driven by declines in the Life Sciences and Biotechnology segments primarily due to weakness in the funding environment and lower underlying activity levels. High-growth markets represented approximately 30% of the Company’s total sales in the second quarter of 2024. For additional information regarding the Company’s sales by geographical region during the three and six-month periods ended June 28, 2024 and June 30, 2023, refer to Note 5 to the accompanying Consolidated Condensed Financial Statements.

The Company’s net earnings from continuing operations for the three and six-month periods ended June 28, 2024 totaled $907 million and approximately $2.0 billion or $1.22 and $2.68 per diluted common share from continuing operations, respectively, compared to $920 million and approximately $2.2 billion or $1.24 and $2.89 per diluted common share from continuing operations, respectively, for the three and six-month periods ended June 30, 2023. Net earnings attributable to common stockholders for the three and six-month periods ended June 28, 2024 totaled $907 million and approximately $2.0 billion or $1.22 and $2.68 per diluted common share, respectively, compared to approximately $1.1 billion and $2.5 billion or $1.49 and $3.42 per diluted common share, respectively, for the three and six-month periods ended June 30, 2023. Decreased core sales and increased other expenses in the 2024 period drove the year-over-year decline in net earnings from continuing operations and diluted net earnings per common share from continuing operations for the three and six-month periods ended June 28, 2024. In addition to the above factors, lower earnings from discontinued operations contributed to the lower net earnings in both the three and six-month periods ended June 28, 2024.

Currency exchange rates decreased reported sales by approximately 1.5% and 1.0% for the three and six-month periods ended June 28, 2024, respectively, compared to the comparable periods of 2023, primarily due to the exchange rates of the U.S. dollar compared to the euro and other major currencies in 2024. Strengthening of the U.S. dollar against other major currencies compared to the exchange rates in effect as of June 28, 2024 would adversely impact the Company’s sales and results of operations on an overall basis, and any weakening of the U.S. dollar against other major currencies compared to the exchange rates in effect as of June 28, 2024 would positively impact the Company’s sales and results of operations for the remainder of the year.

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); and

• the impact of currency translation.

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 (as defined above)); and

• the period-to-period change in revenue (excluding sales from acquired businesses (as defined above)) after applying current period foreign exchange rates to the prior year period.

Core sales (decline) growth 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 this non-GAAP financial measure 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 this non-GAAP financial measure to measure 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 this measure because currency translation is not under management’s control, is subject to volatility and can obscure underlying business trends, and 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.

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 (Decline) Growth and Core Sales (Decline) Growth

			% Change Three-Month Period Ended June 28, 2024 vs. Comparable 2023 Period						% Change Six-Month Period Ended June 28, 2024 vs. Comparable 2023 Period
Total sales (decline) growth (GAAP)			(3.0)		%				(2.5)		%
Impact of:
Acquisitions			(2.0)		%				(2.0)		%
Currency exchange rates			1.5		%				1.0		%
Core sales (decline) growth (non-GAAP)			(3.5)		%				(3.5)		%

Operating Profit Performance

Operating profit margins increased 60 basis points from 19.7% during the three-month period ended June 30, 2023 to 20.3% for the three-month period ended June 28, 2024.

Second quarter 2024 vs. second quarter 2023 operating profit margin comparisons were favorably impacted by:

• Improvements in the Company’s operational and administrative cost structure and 2023 inventory write-offs, net of lower second quarter 2024 core sales and the impact of product mix - 75 basis points

• Second quarter 2023 impairment charges related to technology and other assets in the Biotechnology segment - 70 basis points

Second quarter 2024 vs. second quarter 2023 operating profit margin comparisons were unfavorably impacted by:

• Incremental dilutive effect in 2024 of acquired businesses - 85 basis points

Operating profit margins decreased 110 basis points from 22.6% during the six-month period ended June 30, 2023 to 21.5% for the six-month period ended June 28, 2024.

Year-to-date 2024 vs. year-to-date 2023 operating profit margin comparisons were unfavorably impacted by:

• Incremental dilutive effect in 2024 of acquired businesses - 80 basis points

• Lower first half of 2024 core sales and the impact of product mix, partially offset by improvements in the Company’s operational and administrative cost structure and 2023 inventory write-offs - 45 basis points

• First half of 2024 acquisition-related fair value adjustment to inventory related to the acquisition of Abcam plc (“Abcam”) - 20 basis points

Year-to-date 2024 vs. year-to-date 2023 operating profit margin comparisons were favorably impacted by:

• Second quarter 2023 impairment charges related to technology and other assets in the Biotechnology segment - 35 basis points

Business Segments

Sales by business segment for each of the periods indicated were as follows ($ in millions):

			Three-Month Period Ended												Six-Month Period Ended
			June 28, 2024						June 30, 2023						June 28, 2024						June 30, 2023
Biotechnology			$	1,713					$	1,885					$	3,237					$	3,749
Life Sciences			1,770						1,796						3,515						3,505
Diagnostics			2,260						2,231						4,787						4,607
Total			$	5,743					$	5,912					$	11,539					$	11,861

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 includes the bioprocessing and discovery and medical businesses and offers a broad range of equipment, consumables and services that are primarily used by customers to advance and accelerate the research, development, manufacture and delivery of biological medicines. The biotherapeutics that the Company’s solutions support range from replacement therapies such as insulin, vaccines, recombinant proteins and other biologic drugs, to novel cell, gene, mRNA and other nucleic acid therapies.

Biotechnology Selected Financial Data

			Three-Month Period Ended												Six-Month Period Ended
($ in millions)			June 28, 2024						June 30, 2023						June 28, 2024						June 30, 2023
Sales			$	1,713					$	1,885					$	3,237					$	3,749
Operating profit			462						480						787						1,076
Depreciation			35						39						77						79
Amortization of intangible assets			214						218						432						435
Operating profit as a % of sales			27.0		%				25.5		%				24.3		%				28.7		%
Depreciation as a % of sales			2.0		%				2.1		%				2.4		%				2.1		%
Amortization as a % of sales			12.5		%				11.6		%				13.3		%				11.6		%

Sales (Decline) Growth and Core Sales (Decline) Growth

			% Change Three-Month Period Ended June 28, 2024 vs. Comparable 2023 Period						% Change Six-Month Period Ended June 28, 2024 vs. Comparable 2023 Period
Total sales (decline) growth (GAAP)			(9.0)		%				(13.5)		%
Impact of:
Currency exchange rates			2.0		%				1.5		%
Core sales (decline) growth (non-GAAP)			(7.0)		%				(12.0)		%

Price increases in the segment contributed 2.5% to sales growth on a year-over-year basis during both the three and six-month periods ended June 28, 2024 and are reflected as a component of core sales decline above.

Total segment sales decreased 9.0% and 13.5% during the three and six-month periods, respectively, led by decreased core sales in the bioprocessing business, and to a lesser extent the impact of currency exchange rates. The decrease in total segment core sales was driven by Western Europe and China, and to a lesser extent North America. Core sales in the bioprocessing business decreased year-over-year at a high-single digit rate and a low-double digit rate during the three and six-month periods, respectively, primarily due to lower demand as customers reduced their inventory levels. Revenue declines moderated compared to the first quarter 2024 as the Company believes that its larger customers in the

U.S. and Europe have, in aggregate, reduced the majority of their excess inventory levels and are returning to normal ordering patterns. Additionally, while the Company believes that emerging biotech customers are continuing to manage their liquidity, we also believe they are prioritizing select cell and gene therapy projects, and we further believe that the improvement in the overall funding environment in the period is a positive leading indicator for these customers. The Company expects core revenue for the bioprocessing business to decline for the full year 2024 on a year-over-year basis with an anticipated gradual year-over-year improvement in demand through the remainder of the year. Core sales in the discovery and medical business decreased year-over-year during both the three and six-month periods due primarily to lower demand for equipment, partially offset by an increase in demand for consumables.

Operating Profit Performance

Operating profit margins increased 150 basis points during the three-month period ended June 28, 2024 as compared to the comparable period of 2023.

Second quarter 2024 vs. second quarter 2023 operating profit margin comparisons were favorably impacted by:

• Second quarter 2023 impairment charges related to technology and other assets - 220 basis points

Second quarter 2024 vs. second quarter 2023 operating profit margin comparisons were unfavorably impacted by:

• Lower second quarter 2024 core sales, net of improvements in the Company’s operational and administrative cost structure, the impact of product mix and 2023 inventory write-offs - 70 basis points

Operating profit margins decreased 440 basis points during the six-month period ended June 28, 2024 as compared to the comparable period of 2023.

Year-to-date 2024 vs. year-to-date 2023 operating profit margin comparisons were unfavorably impacted by:

• Lower first half of 2024 core sales and the impact of product mix, net of improvements in the Company’s operational and administrative cost structure and 2023 inventory write-offs - 550 basis points

Year-to-date 2024 vs. year-to-date 2023 operating profit margin comparisons were favorably impacted by:

• Second quarter 2023 impairment charges related to technology and other assets - 110 basis points

Amortization of intangible assets as a percentage of sales increased during both the three and six-month periods ended June 28, 2024 as compared to the comparable periods of 2023, primarily as a result of the decrease in sales.

LIFE SCIENCES

The Life Sciences segment offers a broad range of instruments, consumables, services and software that are primarily used by customers to study genomics and 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												Six-Month Period Ended
($ in millions)			June 28, 2024						June 30, 2023						June 28, 2024						June 30, 2023
Sales			$	1,770					$	1,796					$	3,515					$	3,505
Operating profit			233						340						468						661
Depreciation			41						32						79						61
Amortization of intangible assets			140						104						281						209
Operating profit as a % of sales			13.2		%				18.9		%				13.3		%				18.9		%
Depreciation as a % of sales			2.3		%				1.8		%				2.2		%				1.7		%
Amortization as a % of sales			7.9		%				5.8		%				8.0		%				6.0		%

Sales (Decline) Growth and Core Sales (Decline) Growth

			% Change Three-Month Period Ended June 28, 2024 vs. Comparable 2023 Period						% Change Six-Month Period Ended June 28, 2024 vs. Comparable 2023 Period
Total sales (decline) growth (GAAP)			(1.5)		%				0.5		%
Impact of:
Acquisitions			(6.0)		%				(6.5)		%
Currency exchange rates			2.0		%				1.5		%
Core sales (decline) growth (non-GAAP)			(5.5)		%				(4.5)		%

Price increases in the segment contributed 1.0% and 1.5%, respectively, to sales growth on a year-over-year basis during the three and six-month periods ended June 28, 2024 and are reflected as a component of core sales decline.

Total segment sales decreased 1.5% during the three-month period ended June 28, 2024, primarily as a result of decreased segment core sales, and to a lesser extent the impact of currency exchange rates, partially offset by acquisitions. Total segment sales increased 0.5% during the six-month period, primarily as a result of acquisitions, largely offset by decreased segment core sales, and to a lesser extent the impact of currency exchange rates. Core sales decreased in the three and six-month periods across most major geographic regions, led by China. The core sales decline in the mass spectrometry, flow cytometry and lab automation solutions and microscopy businesses in both periods was primarily the result of demand weakness in equipment, in most major end-markets, partially offset by increased demand for consumables and service. Core sales also declined in the three-month period in the genomics consumables business led by lower core sales in the plasmids, proteins and next-generation sequencing product lines, partially offset by increased demand in the gene writing and editing product line. The core sales decline in the genomics consumables business during the six-month period was driven by lower demand in next-generation sequencing, partially offset by higher demand for plasmids and proteins.

Operating Profit Performance

Operating profit margins decreased 570 basis points during the three-month period ended June 28, 2024 as compared to the comparable period of 2023. The following factors unfavorably impacted year-over-year operating profit margin:

• Lower second quarter 2024 core sales and the impact of product mix, net of improvements in the Company’s operational and administrative cost structure - 340 basis points

• The incremental dilutive effect in 2024 of acquired businesses - 230 basis points

Operating profit margins decreased 560 basis points during the six-month period ended June 28, 2024 as compared to the comparable period of 2023. The following factors unfavorably impacted year-over-year operating profit margin:

• Lower first half of 2024 core sales and the impact of product mix, net of improvements in the Company’s operational and administrative cost structure - 260 basis points

• The incremental dilutive effect in 2024 of acquired businesses - 230 basis points

• First half of 2024 acquisition-related fair value adjustment to inventory related to the acquisition of Abcam - 70 basis points

Depreciation and amortization of intangible assets increased as a percentage of sales during both the three and six-month periods ended June 28, 2024, primarily due to the acquisition of Abcam.

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												Six-Month Period Ended
($ in millions)			June 28, 2024						June 30, 2023						June 28, 2024						June 30, 2023
Sales			$	2,260					$	2,231					$	4,787					$	4,607
Operating profit			556						424						1,386						1,101
Depreciation			100						96						197						189
Amortization of intangible assets			48						50						96						100
Operating profit as a % of sales			24.6		%				19.0		%				29.0		%				23.9		%
Depreciation as a % of sales			4.4		%				4.3		%				4.1		%				4.1		%
Amortization as a % of sales			2.1		%				2.2		%				2.0		%				2.2		%

Sales Growth and Core Sales Growth

			% Change Three-Month Period Ended June 28, 2024 vs. Comparable 2023 Period						% Change Six-Month Period Ended June 28, 2024 vs. Comparable 2023 Period
Total sales growth (GAAP)			1.5		%				4.0		%
Impact of:
Currency exchange rates			1.5		%				1.0		%
Core sales growth (non-GAAP)			3.0		%				5.0		%

Price increases in the segment did not have a significant impact on sales growth on a year-over-year basis during the three-month period but contributed 0.5% to sales growth during the six-month period ended June 28, 2024 and are reflected as a component of core sales growth.

Total segment sales increased 1.5% and 4.0%, respectively, during the three and six-month periods, primarily as a result of increased core sales resulting from the factors discussed below. Changes in currency exchange rates negatively impacted sales in both periods. Overall segment core sales growth in both periods was driven primarily by North America, partially offset by lower year-over-year demand in the high-growth markets. During both the three and six-month periods, core sales in the segment’s clinical diagnostics businesses grew on a year-over-year basis led by the clinical lab business, primarily in North America and the high-growth markets, and to a lesser extent, by the pathology and acute care businesses. Core sales in the molecular diagnostics business declined slightly during the three-month period as lower year-over-year demand in Western Europe and the high-growth markets offset increased core sales of both respiratory and non-respiratory disease tests in North America. For the six-month period, core sales in the molecular diagnostics business grew on a year-over-year basis, led by North America, as the business experienced increased sales of both respiratory and non-respiratory disease tests.

Operating Profit Performance

Operating profit margin increased 560 basis points during the three-month period ended June 28, 2024 as compared to the comparable period of 2023. Year-over-year operating profit margin was favorably impacted by higher second quarter 2024 core sales, improvements in the Company’s operational and administrative cost structure and the impact of product mix.

Operating profit margin increased 510 basis points during the six-month period ended June 28, 2024 as compared to the comparable period of 2023. Year-over-year operating profit margin was favorably impacted by higher first half of 2024 core sales, improvements in the Company’s operational and administrative cost structure and the impact of product mix.

Amortization of intangible assets as a percentage of sales decreased slightly during both the three and six-month periods ended June 28, 2024, primarily as a result of the increase in sales.

COST OF SALES AND GROSS PROFIT

			Three-Month Period Ended												Six-Month Period Ended
($ in millions)			June 28, 2024						June 30, 2023						June 28, 2024						June 30, 2023
Sales			$	5,743					$	5,912					$	11,539					$	11,861
Cost of sales			(2,315)						(2,594)						(4,624)						(4,881)
Gross profit			$	3,428					$	3,318					$	6,915					$	6,980
Gross profit margin			59.7		%				56.1		%				59.9		%				58.8		%

Cost of sales decreased year-over-year during both the three and six-month periods ended June 28, 2024 as compared to the comparable periods in 2023, primarily due to the impact of lower year-over-year sales volumes and $87 million of charges incurred in the second quarter of 2023 related to inventory, partially offset by the impact of recently acquired businesses. Additionally, an acquisition-related charge associated with the fair value adjustment to inventory recorded in connection with the acquisition of Abcam increased cost of sales by $25 million in the six-month period ended June 28, 2024.

Year-over-year gross profit margin increased during both the three and six-month periods ended June 28, 2024 as compared to the comparable period in 2023. These increases were due primarily to inventory charges incurred in the second quarter of 2023 and the positive impact from the gross profit margin of Abcam, net of the impact of product mix and an acquisition-related charge recorded in the first half of 2024 referenced above.

OPERATING EXPENSES

			Three-Month Period Ended												Six-Month Period Ended
($ in millions)			June 28, 2024						June 30, 2023						June 28, 2024						June 30, 2023
Sales			$	5,743					$	5,912					$	11,539					$	11,861
Selling, general and administrative (“SG&A”) expenses			1,869						1,794						3,676						3,566
Research and development (“R&D”) expenses			391						361						759						734
SG&A as a % of sales			32.5		%				30.3		%				31.9		%				30.1		%
R&D as a % of sales			6.8		%				6.1		%				6.6		%				6.2		%

SG&A expenses as a percentage of sales increased during both the three and six-month periods ended June 28, 2024 as compared to the comparable periods in 2023, primarily driven by the impact of the acquisition of Abcam, including the associated amortization expense. To a lesser extent, the increase in SG&A as a percentage of sales was driven by decreased leverage of the Company’s general and administrative cost base, including amortization expense, resulting from lower 2024 sales.

R&D expenses (consisting principally of internal and contract engineering personnel costs) as a percentage of sales increased during both the three and six-month periods ended June 28, 2024 as compared to the comparable periods of 2023 as a result of increased spending on R&D activities and the impact of lower year-over-year sales.

OTHER INCOME (EXPENSE), NET

For a description of the Company’s other income (expense), net during the three and six-month periods ended June 28, 2024 and June 30, 2023, 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 $65 million and $130 million for the three and six-month periods ended June 28, 2024, respectively, was consistent with the comparable periods of 2023.

Interest income of $39 million and $99 million for the three and six-month periods ended June 28, 2024, respectively, was $20 million lower and $8 million lower than the comparable periods of 2023, due primarily to lower average cash balances in 2024 as a result of share repurchases and acquisitions.

INCOME TAXES

The following table summarizes the Company’s effective tax rate:

			Three-Month Period Ended												Six-Month Period Ended
			June 28, 2024						June 30, 2023						June 28, 2024						June 30, 2023
Effective tax rate			16.3		%				19.4		%				15.3		%				18.9		%

The Company operates globally, including in certain jurisdictions with lower tax rates than the U.S. federal statutory rate. Therefore, the impact of operating in such jurisdictions contributes to a lower effective tax rate compared to the U.S. federal statutory tax rate.

The effective tax rate for the three-month period ended June 28, 2024 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 of $9 million related primarily to excess tax benefits from stock-based compensation. The aggregate net discrete benefits reduced the effective tax rate by 0.8% for the three-month period ended June 28, 2024.

The effective tax rate for the six-month period ended June 28, 2024 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 of $45 million related primarily to excess tax benefits from stock-based compensation, release of reserves for uncertain tax positions due to the expiration of statutes of limitation and changes in estimates associated with prior period uncertain tax positions. The aggregate net discrete benefits reduced the effective tax rate by 1.9% for the six-month period ended June 28, 2024.

The effective tax rate for the three-month period ended June 30, 2023 differs from the U.S. federal statutory rate of 21.0% principally due to the impact of its global operations, research tax credits and foreign-derived intangible income, partially offset by net discrete tax charges of $19 million. Net discrete tax charges related primarily to tax costs related to the separation of the Environmental & Applied Solutions business, tax costs related to legal and operational actions taken to realign certain businesses and changes in estimates associated with prior period uncertain tax positions, partially offset by interest on prior year tax refunds. The net discrete charges increased the effective tax rate by 1.7% for the three-month period ended June 30, 2023.

The effective tax rate for the six-month period ended June 30, 2023 differs from the U.S. federal statutory rate of 21.0% principally due to the impact of its global operations, research tax credits and foreign-derived intangible income, partially offset by net discrete tax charges of $19 million. Net discrete tax charges related primarily to tax costs related to the separation of the Environmental & Applied Solutions business, tax costs related to legal and operational actions taken to realign certain businesses and changes in estimates associated with prior period uncertain tax positions, partially offset by excess tax benefits from stock-based compensation and interest on prior year tax refunds. The net discrete charges increased the effective tax rate by 0.7% for the six-month period ended June 30, 2023.

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 domestic and international taxing authorities. The U.S. Internal Revenue Service (“IRS”) has completed the examinations of substantially all of the Company’s federal income tax returns through 2015 and is currently examining certain of the Company’s federal income tax returns for 2016 through 2022. In addition, the Company has subsidiaries in Canada, China, Denmark, France, Germany, India, Italy, Switzerland, the United Kingdom and various other countries, states and provinces that are currently under audit for years ranging from 2004 through 2023.

In the fourth quarter of 2022, the IRS proposed significant adjustments to the Company’s taxable income for the years 2016 through 2018 with respect to the deferral of tax on certain premium income related to the Company’s self-insurance programs. For income tax purposes, the recognition of premium income has been deferred in accordance with U.S. tax laws related to insurance. The proposed adjustments would have increased the Company’s taxable income over the 2016 through 2018 periods by approximately $2.5 billion. In the first quarter of 2023, the Company settled these proposed adjustments with the IRS, although the audit is still open with respect to other matters for the 2016 through 2018 period. The impact of the settlement with respect to the Company’s self-insurance policies was not material to the Company’s financial statements, including cash flows and the effective tax rate. As the settlement with the IRS was specific to the audit period, the settlement does not preclude the IRS from proposing similar adjustments to the Company’s self-

insurance programs with respect to periods subsequent to 2018. Management believes the positions the Company has taken in its U.S. tax returns are in accordance with the relevant tax laws.

The Company expects its effective tax rate for the remainder of 2024 to be approximately 17.5% 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 2024 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 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.

Refer to Note 7 to the Consolidated Condensed Financial Statements for discussion regarding the Company’s significant tax matters.

COMPREHENSIVE INCOME

Comprehensive income increased $764 million for the three-month period ended June 28, 2024 and decreased $700 million for the six-month period ended June 28, 2024, as compared to the comparable periods of 2023. For the three-month period ended June 28, 2024, the increase in comprehensive income was primarily driven by increased gains from foreign currency translation adjustments, partially offset by lower net earnings. For the six-month period ended June 28, 2024, the decrease in comprehensive income was primarily driven by lower net earnings and increased losses from foreign currency translation adjustments. The Company recorded foreign currency translation gains of $121 million for the three-month period ended June 28, 2024 compared to losses of $704 million for the three-month period ended June 30, 2023. The Company recorded foreign currency translation losses of $827 million and $679 million for the six-month periods ended June 28, 2024 and June 30, 2023, respectively. The foreign currency translation gains in the three-month period ended June 28, 2024 and losses in the six-month period ended June 28, 2024 were primarily driven by the change in the exchange rates between the U.S. dollar and the 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 gains of $30 million and losses of $20 million from cash flow hedge adjustments related to the Company’s cross-currency swap derivative contracts for the three and six-month periods ended June 28, 2024, respectively, as compared to losses of $106 million and $25 million for the comparable periods of 2023.

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. 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):

			Six-Month Period Ended
			June 28, 2024						June 30, 2023
Total operating cash provided by operating activities from continuing operations			$	3,156					$	3,452
Total operating cash provided by discontinued operations			—						421
Net cash provided by operating activities			$	3,156					$	3,873
Cash paid for acquisitions			$	(12)					$	—
Payments for additions to property, plant and equipment			(578)						(595)
Proceeds from sales of property, plant and equipment			1						2
Payments for purchases of investments			(127)						(144)
Proceeds from sales of investments			9						4
All other investing activities			26						17
Total investing cash used in continuing operations			(681)						(716)
Total investing cash used in discontinued operations			—						(19)
Total cash used in investing activities			$	(681)					$	(735)
Proceeds from (payments for) the issuance of common stock in connection with stock-based compensation, net			$	76					$	(4)
Payment of dividends			(377)						(422)
Net proceeds from (repayments of) borrowings (maturities of 90 days or less)			15						(7)
Net repayments of borrowings (maturities longer than 90 days)			(974)						—
Payments for repurchase of common stock			(4,530)						—
All other financing activities			(58)						(37)
Total cash used in financing activities			$	(5,848)					$	(470)

• Operating cash flows from continuing operations decreased $296 million, or 9%, during the six-month period ended June 28, 2024 as compared to the comparable period of 2023, due to higher cash used in aggregate for accounts receivables, inventories, trade accounts payable and prepaid and accrued expenses, including deferred taxes, in the 2024 period compared to the 2023 period, partially offset by higher net earnings (after excluding charges for depreciation, amortization (including intangible assets and inventory step-up), stock compensation and unrealized investment gains/losses) in the 2024 period compared to the 2023 period.

• Net cash used in investing activities for continuing operations in the 2024 period consisted primarily of cash paid for capital expenditures and investments and decreased year-over-year as a result of lower cash paid for capital expenditures and investments in the 2024 period compared to the 2023 period.

• As of June 28, 2024, the Company held approximately $2.4 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 from continuing operations were approximately $3.2 billion for the first six months of 2024, a decrease of $296 million, or 9%, as compared to the comparable period of 2023. The year-over-year change in operating cash flows from 2023 to 2024 was primarily attributable to the following factors:

• 2024 operating cash flows reflected a decrease of approximately $165 million in net earnings from continuing operations for the first six months of 2024 as compared to the comparable period in 2023.

• Net earnings from continuing operations for the first six months of 2024 also included $198 million higher noncash charges for depreciation, intangible asset amortization, amortization of an acquisition-related inventory step-up and unrealized investment gains/losses as compared to the comparable period of 2023, net of a decrease in stock compensation expense in the 2024 period compared to the 2023 period. Depreciation expense relates to the Company’s manufacturing and operating facilities as well as instrumentation leased to customers under OTL

arrangements. Depreciation, amortization 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 provided $334 million in operating cash flows during the first six months of 2024, compared to $295 million of operating cash flows provided in the comparable period of 2023. 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 $607 million of operating cash flows during the first six months of 2024, compared to $239 million of operating cash flows used in the comparable period of 2023. The timing of income tax refunds and payments, the timing of cash payments for customer funding, various employee-related liabilities, realized investment returns, and changes in 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 decreased $35 million in the six-month period ended June 28, 2024 compared to the comparable period of 2023, primarily as a result of a decrease in cash paid for capital expenditures and cash used for the purchase of investments, partially offset by an increase in cash paid for acquisitions. For a discussion of the Company’s acquisition during the first six months of 2024 refer to Note 2 to the Consolidated Condensed Financial Statements. In addition, during the six-month periods ended June 28, 2024 and June 30, 2023 the Company invested $127 million and $144 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, replacing equipment, the manufacture of instruments that are used in OTL arrangements that certain of the Company’s businesses enter into with customers, supporting new product development and improving IT systems. Capital expenditures decreased $17 million on a year-over-year basis for the six-month period ended June 28, 2024 compared to the comparable period in 2023.

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 used cash of approximately $5.8 billion during the six-month period ended June 28, 2024 compared to $470 million of cash used in the comparable period of 2023. The year-over-year increase in cash used in financing activities was primarily due to the repurchase of approximately $4.5 billion of the Company’s common stock and higher repayments of borrowings, partially offset by an increase in cash proceeds from the issuance of common stock in connection with stock-based compensation, a decrease in dividends paid primarily due to the conversion of all outstanding shares of the Company’s Mandatory Convertible Preferred Stock (“MCPS”) on April 17, 2023 and an increase in the proceeds received from commercial paper.

For a description of the Company’s outstanding debt as of June 28, 2024 and the Company’s commercial paper programs and credit facility, refer to Note 11 to the accompanying Consolidated Condensed Financial Statements. As of June 28, 2024, the Company was in compliance with all of its respective debt covenants. On April 2, 2024, the Company repaid the €900 million aggregate principal amount of the 2024 Euronotes upon their maturity using cash distributions received from Veralto Corporation (“Veralto”) prior to the completion of the separation of Veralto on September 30, 2023 (“the Separation”).

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 six-month period ended June 28, 2024 were $377 million. Dividend payments on the Company’s common stock were consistent with the comparable period of 2023. Aggregate cash payments for dividends on the Company’s MCPS during the six-month period ended June 30, 2023 were $43 million. The decrease in MCPS dividend payments compared to the comparable period of 2023 primarily relates to the conversion of all outstanding shares of MCPS to common shares on April 17, 2023.

In the second quarter of 2024, the Company declared a regular quarterly dividend of $0.27 per share of Company common stock payable on July 26, 2024 to holders of record as of June 28, 2024.

Cash and Cash Requirements

As of June 28, 2024, the Company held approximately $2.4 billion of cash and cash equivalents that were held 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, $872 million was held within the U.S. and approximately $1.5 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 these 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 Facility, 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 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 other notes scheduled to mature during the remainder of 2024, 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 Facility and/or proceeds from other debt issuances.

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 June 28, 2024, 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 2023 Annual Report.