My name is Leo and I will be your conference facilitator this morning. At this time, I would like to welcome everyone to Danaher Corporation's Fourth Quarter 2015 Earnings Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. I will now turn the call over to Mr. Matt Gugino, Vice President of Investor Relations. Mr. Gugino, you may begin your conference.

Thank you, Leo. Good morning, everyone, and thanks for joining us on the call. With us today are: Tom Joyce, our President and Chief Executive Officer; and Dan Comas, our Executive Vice President and Chief Financial Officer. I'd like to point out that our earnings release, the slide presentation supplementing today's call, and other information required by SEC Regulation G relating to any non-GAAP financial measures provided during the call are all available on the Investors section of our website, www.danaher.com under the heading Financial Information. The audio portion of this call will be archived on the Investors section of our website later today under the heading Events & Presentations and will remain archived until our next quarterly call. A replay of this call will also be available until February 2, 2016. The replay number is 888-203-1112 within the U.S. or 719-457-0820 outside the U.S., and the confirmation code is 9714607. During the presentation, we will describe certain of the more significant factors that impacted year-over-year performance; the supplemental materials describe additional factors that impacted year-over-year performance. Unless otherwise noted, all references is in these remarks and supplemental materials to company-specific financial metrics relate to the continuing operations of the company and the fourth quarter of 2015, and all references to period-to-period increases or decreases in financial metrics are year-over-year. During the call, we will make forward-looking statements within the meaning of the federal securities laws, 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 set forth in our SEC filings and actual results might differ materially from any forward-looking statements that we make today. These forward-looking statements speak only as of the date that they are…

Thanks, Tom. That concludes our formal remarks. Leo, we're now ready for questions.

We'll take our first question from Scott Davis of Barclays. Your line is open.

Hi. Good morning, guys. Thomas Patrick Joyce - President, Chief Executive Officer & Director: Good morning, Scott.

I think – I mean given that it's been about a month since you gave the last guidance in mid-December – the formal guidance, I guess – things seemed to have degraded a bit on the macro side. I mean, what confidence do you have? I mean, now that you've seen I guess most of January, I mean, have things stabilized? I mean, your guidance seems to indicate that you think that was a bit of a blip, I suppose, so just a little color there. Thomas Patrick Joyce - President, Chief Executive Officer & Director: Sure, Scott. I think, Scott, what we're assuming is that what we saw with some of the slowing in December is essentially the environment that we're going to see in the near term here. It's clearly impacting our more industrial businesses more than our other businesses, so we're not immune to the slowdown but I think we took some appropriate actions in the fourth quarter. Those actions are going to pay off here certainly from a margin standpoint, but I think the other thing to keep in mind is that the portfolio that we have today truly does differentiate us. And I think when we look at the opportunities that we have in our Life Science businesses, our Diagnostic businesses, some improvement that we're seeing here in our Dental businesses, continued good progress at GVR, while we remain cautious in some respects around the macroenvironment and are not assuming things get materially better there, we're playing offense in a number of areas that I think will bode well. So, I don't think there's anything particularly optimistic in our outlook around the macro, but I think some of the things that we're doing from an investment standpoint and across our growth initiatives should continue to position a very good portfolio and a differentiated portfolio and continue to move it into an even better place.

Yeah. Makes sense. And then just as a follow-up, the emerging market currencies have degraded a fair amount. I mean, are you able to get local price to offset that? I mean, how do you manage that volatility, specifically, just given the exposures you guys have? Thomas Patrick Joyce - President, Chief Executive Officer & Director: Yeah. I mean, it's an issue; I'd probably bifurcate the answer. Where we have the aftermarket business, the consumables, the service, we typically able to get price; with equipment and instruments, we're not able to, and we're taking a little bit of a margin hit there. Fortunately, the euro has stabilized so the overall currency impact is not what it was in 2015, but there's a little bit of a negative right now.

Okay. Good luck. Thanks. I'll pass it on. Thomas Patrick Joyce - President, Chief Executive Officer & Director: Thank you, Scott.

And we'll take our next question from Nigel Coe of Morgan Stanley. Your line is open. Nigel Coe - Morgan Stanley & Co. LLC: Thanks. Good morning, guys. Thomas Patrick Joyce - President, Chief Executive Officer & Director: Morning, Nigel. Daniel L. Comas - Chief Financial Officer & Executive Vice President: Hey, Nigel. Nigel Coe - Morgan Stanley & Co. LLC: Yeah, so just on the $0.40 from Pall, can you maybe just first of all comment on how Pall is tracking or how it tracked through the quarter? Maybe comment on the Industrial versus Life Sciences sides? And yeah, has the composition of the $0.40 in the plan changed at all in the last couple months? Thomas Patrick Joyce - President, Chief Executive Officer & Director: Nigel, we're very, very happy with how we've gotten started with Pall, starting with the team that we have in place, a terrific team, both the Pall leadership team, many of whom have taken on added responsibilities. But in addition, the added resources that we've put in place and the leadership that we have brought to bear in the business, I think together, that team is off to a terrific start. We'll talk to the $0.40 and the cost opportunities that we have here in just a minute, but coming to the growth side of the house, about what we expected: continued very good progress and growth rates on the Life Science side, keeping in mind that that business has an exceptional position in the biopharma market in Life Science. So, we're seeing continued good growth there. We're also seeing outstanding growth in single-use technologies, which are a key part and a key growth driver of the biopharma segment of the Life Science business as time goes on. On the Industrial side, again,…

Very good. Our next question is from Steve Tusa of JPMorgan. Your line is open.

Hey. How's it going? Thomas Patrick Joyce - President, Chief Executive Officer & Director: Hey, Steve. Daniel L. Comas - Chief Financial Officer & Executive Vice President: Hey, Steve.

Can you just maybe talk a little bit more specifically about Pall industrial trends? I mean, what is the organic – what kind of organic are you seeing there and what are you expecting for 2016, a little more precisely? Daniel L. Comas - Chief Financial Officer & Executive Vice President: So, Steve, for the four months that we owned the business on a constant-currency basis, Pall grew about 4% on a combined basis. Clearly, it would've been accretive to our core growth here. Life Science was up high single-digits; Industrial was down low to mid-single digits. We see that for the near-term, not a bad way to be looking at the business. Certainly, the industrial piece is more challenged but more than making up for it with a very strong growth on the Life Science side.

And then, what was Pall's contribution to free cash flow in the quarter? Daniel L. Comas - Chief Financial Officer & Executive Vice President: On the working capital side where we contributed north of $300 million of cash out of working capital, Pall was a nice piece of it, but maybe 15%. The working capital improvements were very broad-based, really exceptional performance across all the five segments. So, it was a nice contributor, but it was not an overwhelming piece.

Okay. Great. And then just one last question. What's the restructuring contingency look like in 2016? Is there any change to that as you kind of exited the year at a bit of a weaker rate, or are you in normal day-to-day planning? How extreme are things around some of the more industrial businesses? Thomas Patrick Joyce - President, Chief Executive Officer & Director: Steve, I think one of the things that we learned from 2015 and we're pleased about is that we did a number of things throughout the course of the year from a productivity perspective. And I think particularly in an environment like this, it's important that we stay cognizant of the fact that there may be opportunities that present themselves, some things that we may need to do. So, we're going to keep the teams active at looking for opportunities throughout the course of the year, and we'll take advantage of those as they come up. So, I think we got a lot done in 2015. We got a lot more done in December than we anticipated, probably $20 million north of what we thought in December. So, that's a good thing; sets us up well a little bit more than we would have anticipated. But again, I think it's important that we stay (31:07) cognizant of the environment business-by-business and look for opportunities to take action where good projects present themselves.

Okay. Great. Thanks a lot. Thomas Patrick Joyce - President, Chief Executive Officer & Director: Thanks.

We'll take our next question from Steven Winoker of Bernstein. Your line is open. Steven Eric Winoker - Sanford C. Bernstein & Co. LLC: Thanks, and good morning, guys. Thomas Patrick Joyce - President, Chief Executive Officer & Director: Morning, Steve. Steven Eric Winoker - Sanford C. Bernstein & Co. LLC: Hey. What was the Fortive versus Danaher core growth, if you split it that way, for the quarter? Thomas Patrick Joyce - President, Chief Executive Officer & Director: Sure. Looking at Fortive probably being rough down 2% to 3% and Danaher go-forward up 1%, 1.5%. So, I think that's roughly the way it would split. Steven Eric Winoker - Sanford C. Bernstein & Co. LLC: Okay. And just a couple of things... Thomas Patrick Joyce - President, Chief Executive Officer & Director: And, Steve – I'm sorry, Steve. Sorry to interrupt. Just wanted to make one other quick point just for clarification on that. It's important to recognize on the Danaher side of the house, that 1% to 1.5%, that side of the house has a higher percentage of consumables and recurring revenue than you do on the Fortive side. And as a result of that, the fewer selling days in the fourth quarter has a little bit greater impact on the Danaher side. So, when you normalize for the days impact on the Danaher side, that's going to be potentially could be 1.5%, 2% maybe even on that side. Again rough numbers, but it has a little bit more of an impact there. Steven Eric Winoker - Sanford C. Bernstein & Co. LLC: Oh, okay. All right. And then just on a couple of the segments, so I think this was the – it's been at least eleven quarters since I've seen Fluke go negative. So, maybe a…

Thank you. We'll take our next question from Jeff Sprague of Vertical Research. Your line is open.

Thank you. Good morning, gentlemen. Thomas Patrick Joyce - President, Chief Executive Officer & Director: Hi, Jeff. Good morning.

Good morning. Thanks for that color on Fluke. I wanted to ask that question a little bit more broadly. To what extent do you think kind of the more industrially-oriented organic growth rates clearly reflect end demand versus maybe a broader channel liquidation? I don't know if you have any good insight into your other channels or any even anecdotal color there would be helpful. Thomas Patrick Joyce - President, Chief Executive Officer & Director: I don't have much there, Jeff. I know the teams are still out talking to customers and trying to get a better sense of that. One reason for a little bit more insight on Fluke than and less so – Fluke's a little bit more concentrated with some big distributor partners that we can get a little bit more transparency a little bit more quickly. Some of the more automation sensors and control businesses and so on, more fragmented channels and it's just taking us a little longer to get any sense of channel inventories.

And just shifting gears a little bit, any thoughts on how the device tax plays through? Do you see any change in demand there or any change in the way people are pricing competitively, and maybe just size what you think the impact could be to your business this year? Thomas Patrick Joyce - President, Chief Executive Officer & Director: Sure. Jeff, when the device tax was first put in place, the impact of that was very fairly modest on us. There's money at stake but overall, not a huge number. So, what comes back in terms of a little bit of a lift to operating margins is also modest. I mean, net-net, it's a good thing for the industry. We didn't see much impact in the market from a pricing standpoint when it all happened – I should say, from a competitive standpoint. We did get some of that back in price over time and probably some competitors did as well, but in terms of real impact to competitive dynamics, I think it's too modest a change, certainly to the scale of our business and maybe to the scale of others to really impact the competitive world. Daniel L. Comas - Chief Financial Officer & Executive Vice President: Jeff, I think we said in 2013 it was about a $0.05 hit. We recovered some of that in price. So, I think it'll be less than a $0.05, but maybe $0.03 benefit here in the year.

Great. Thank you. Thomas Patrick Joyce - President, Chief Executive Officer & Director: Thanks, Jeff.

We'll move next to Ross Muken of Evercore ISI. Your line is open.

Good morning, gentlemen. Maybe on Dental, can you just give us a little bit more color just sort of on the progress you made throughout the year? It looks like ending the year, you had some of your best results obviously adjusting for the days. And so, as we sort of now rolled Nobel into the sort of core and we think about the margin progression of that business over the year, help us think through kind of the pushes and pulls and how happy you are with the progress made. Thomas Patrick Joyce - President, Chief Executive Officer & Director: Sure. Yeah. Thanks, Ross. I think 2015 was a year of very good progress across the platform. You mentioned Nobel; let me just start with that. We have a tremendous team of folks at Nobel. Largely the leadership team that was in place when we acquired the business, they have really embraced DBS and are off to a terrific start, both in terms of continuing to use DBS tools to drive growth, but also in my comments earlier, some great progress on operating margins. And now, as that goes core to the Dental platform, we'll see some impact of that to the good. On the business that existed prior to 2015, I think again 2015 was a year of a lot of progress. I've mentioned a couple of times that we've had outstanding relationships with our distribution partners. We work in a collaborative way with them on channel inventories throughout the course of the year. That was obviously somewhat of a painful process to go through in the sense of the impact on core growth, but net-net, a very good process in terms of positioning the channel efficiently. So we're pleased that the vast majority of that's behind us. There can always be a little bit of a tail to that of stuff we're still moving out in slower-moving inventories, but again, I think a ton of progress. We've also got a very good leadership team in place in our Dental platform today with some new players in place that I think are doing some wonderful things in terms of driving innovation. It was a very good year of new product introductions and I think we'll see the benefit of that as core growth improves this year. So we know we still have work to do there, but good news is there's opportunities for value creation as we go on here.

Great. And maybe just quickly a little color more on the M&A pipeline. Can you just give us a sense – I mean there's obviously been a ton of equity market volatility. We've seen obviously a shift in how the private equity folks are also sort of transacting. Just give us a feel for maybe healthcare versus industrial-oriented assets and the like, whether there is more activity at one side of the spectrum versus the other and how sort of the valuation dislocations have been kind of digested by the various groups, because you're obviously doing smaller things at this point and it's obviously the large end of the market that's probably been most impacted. Thomas Patrick Joyce - President, Chief Executive Officer & Director: Sure. Well, I'll let Dan comment in a second on kind of the environment that we're seeing. But if you just look at what we did in the fourth quarter, which I think is a bit instructive, we got four or five small deals done in the fourth quarter. And by the way, a couple – two or three of those deals were Fortive-related. I mentioned Pacific Laser Systems in my earlier comment, but there were a couple other smaller situations that we were able to complete during the quarter for Fortive's benefit, along with a couple on the Danaher side. So, I think the fourth quarter was indicative perhaps of some things opening up a bit. I think the environment is generally a favorable one for businesses like ours with a balance sheet that's ready to deploy into small and midsized situations. And I think to your question, there are some folks who are perhaps a bit more on the sidelines right now than in previous days.

Great.

Thank you. Our next question comes from Shannon O'Callaghan of UBS. Your line is open.

Morning, guys. Thomas Patrick Joyce - President, Chief Executive Officer & Director: Hey, Shannon.

Hey. So Test & Measurement and Industrial Tech are both generating pretty good core margin expansion here despite these mid-single-digit declines. Can you give a little more color on how they're managing to do that? I mean, both of them have pretty good leverage in the models so that's a lot to offset. And what's going on in those businesses and can they continue? Thomas Patrick Joyce - President, Chief Executive Officer & Director: Yeah. Shannon, it is a real testament to those businesses given the challenging environment they're in from a core growth perspective that they are getting the operating margin lift that they're getting without the benefit of the top line dropping that through. I think it is a testament to the strength of the Danaher Business System, the tools that we use not just in newly-acquired businesses, but in businesses with long histories with Danaher that have gotten a lot done using DBS in the past and are still getting it done. If you think about some of the businesses in T&M, be it Fluke and the associated acquisitions around Fluke that have been done quite a number of years ago, think about other businesses like Qualitrol, like some of the businesses in our automation sensors and controls areas. Those guys are using DBS, whether those are lean tools specifically in the plants or deploying those tools in areas of SG&A, they're just demonstrating that those tools are still highly effective in businesses with long histories with Danaher. So it's kudos to those guys and they continue to get her done.

Okay. Thanks. And then you talked a little bit about the diagnostic comps and things, but Radiometer, that's been one that seemed like it was just going to grow to the sky forever in the equipment business. Thomas Patrick Joyce - President, Chief Executive Officer & Director: Right.

Was a little weaker there. So maybe a little – just color, anything there to be concerned about. Thomas Patrick Joyce - President, Chief Executive Officer & Director: Yeah, no. Radiometer is a tremendous business with a long track record of high single-digit growth at Danaher. I'm sure Matt or Dan can find how many quarters it's been, but it's quite a number of them in a row that we've been high single-digits and taking share. It's a high consumables business. It's probably in the 80% neighborhood of consumables so the days impact was fairly significant there. They also had a challenging comp in the fourth quarter on the instrumentation side, a couple of big orders that had some impact there. So, I think Radiometer is in as good a shape today as it's ever been. No meaningful shift in the competitive dynamics there, so we still feel very good about it. I think there was anything there, Shannon, that wouldn't be unique to Radiometer it's simply the fact that some of the growth that we have seen in the high-growth markets, while still strong in places like China and India, are still now very weak in Latin America, in Russia, in the Middle East. And so, even our best businesses are probably going to feel a little bit the impact there.

Okay. Great. Thanks. Thomas Patrick Joyce - President, Chief Executive Officer & Director: Thanks, Shannon.

Our next question comes from Brandon Couillard of Jefferies. Your line is open.

Thanks. Good morning. Thomas Patrick Joyce - President, Chief Executive Officer & Director: Good morning.

Just back on the Dental business, Dan, any chance you could give us the impact of the fewer days on core growth overall and how should we think about margin expansion for the year? Daniel L. Comas - Chief Financial Officer & Executive Vice President: Well, it has less of an impact on equipment. We were up slightly in the quarter. It's the first time we've been up, albeit modestly, but it impacts consumables probably up, and as Tom alluded, to probably 1.5 points, 2 points when it comes to consumables. Good progress on the margin side granted we had a pretty weak performance a year ago, so part of it was a comp. But we've also took part of our incremental restructuring here in Q4 with the Dental, so we should see some continued margin expansion coming out of Dental hopefully with a little better growth than what we've seen here in 2015.

That's all I got. Thanks. Thomas Patrick Joyce - President, Chief Executive Officer & Director: Thanks, Brandon.

Our next question comes from Julian Mitchell of Credit Suisse. Your line is open. Julian Mitchell - Credit Suisse Securities (USA) LLC (Broker): Hi. Thank you. Thomas Patrick Joyce - President, Chief Executive Officer & Director: Hi, Julian. Julian Mitchell - Credit Suisse Securities (USA) LLC (Broker): Hi. Just a question around Western Europe. I think I heard you say that sales were down slightly in Q4, having been up sort of around a mid-single-digit pace in the nine-month period. I think a lot of other companies have sort of been saying Europe's okay. So maybe just talk a little bit about what you saw there, specific countries or segments that slowed down. Daniel L. Comas - Chief Financial Officer & Executive Vice President: Hey, Julian. I mean I think that was one of the areas versus what we expected at the beginning of the quarter that surprised us a little bit to the downside. It wasn't dramatic. Clearly, our consumables businesses over there were impacted by the selling days and maybe we were not as well calibrated as we should've been. But having gone through all – most of the business here's – in the first couple of weeks here, the tone in Europe is still decent and it doesn't feel like the step-down that our numbers in Q4 would suggest. And we think we'll get back to sort of modest growth here pretty quickly in 2016. Watching that carefully because it probably caught us a little bit by surprise here in the fourth quarter, but again, the tone still seems pretty good. Julian Mitchell - Credit Suisse Securities (USA) LLC (Broker): Understood. Thank you. And you laid out the overall EPS seasonality through the year about just over a month ago. Maybe just talk a little bit about the Pall seasonality of that $0.40, particularly given the industrial organic sales trend in that business right now and how you would contrast that $0.40 impact versus overall Danaher. Daniel L. Comas - Chief Financial Officer & Executive Vice President: Well, the $0.40 should ramp during the year as we go after costs. Again, we were able to get some more things done in December, and that was inclusive of Pall as well, so we're getting it out of the gate a little bit faster in Q1 from a margin perspective. I think the offset, as you suggest, is the industrial side. So I think we'll get nice accretion here in Q1, but it'll clearly ramp through the year. Julian Mitchell - Credit Suisse Securities (USA) LLC (Broker): Great. Thank you. Thomas Patrick Joyce - President, Chief Executive Officer & Director: Thanks, Julian.

Our next question comes from Andrew Kaplowitz of Citigroup. Your line is open.

Hey. Good morning, guys. Obviously good performance in margin in the quarter. Are raw materials – lower raw material costs helping at all with price cost? Did price cost – was it stable in 4Q versus 3Q? Did it improve? I know you mentioned covering FX, but are raw materials helping at all? Daniel L. Comas - Chief Financial Officer & Executive Vice President: I don't have any great analysis on that yet. Given our gross margin, raw materials tend to be less of a factor for us than a lot of other companies you might cover. We are continuing to get price, still getting 60 basis points, 70 basis points, and it's hard not to think raw materials are helping us a little bit, but for us, it's really on the margin.

Okay. Got it. And then how do you get visibility into what to forecast, for example, in the Middle East? I mean, the region looks like it inflected down a bit in 4Q. And with oil's recent leg down, how difficult is it to get visibility? And what do you forecast for 2016? Thomas Patrick Joyce - President, Chief Executive Officer & Director: Andrew, there's a couple of different ways to come at that in the Middle East. One is simply conversations with distribution partners and a lot of what we do in the Middle East does involve some form of a distributor partner, and making sure that we have transparency as much as we possibly can into the opportunity funnels that those distributors are seeing, as well as making sure that the conversations we're having with our own sales team around those funnels as they roll up to our leadership team are as well pressure tested as possible. The key thing about markets like the Middle East is, particularly in businesses like ours, you have a fairly high level of project or tender-related business and – at least on the equipment side. And so, really making sure that we understand opportunity funnels and are not overly optimistic about the timing within which funding will be released, as in many cases that funding has some governmental influence to it, is really important. It is easy to have a sales team get overly optimistic that the timing of funding release is going to be the same as it was a year ago or two years ago when the reality is things may have slowed down and tenders may be being let at a much slower pace. So being diligent about how we pressure test those funnels is key.

So it's fair to say you're being pretty conservative with the Middle East forecast. Thomas Patrick Joyce - President, Chief Executive Officer & Director: We're trying to be increasingly conservative as we see how government funding is being influenced. I think it was interesting watching the course of the year. Oil continued to drop, as you know, throughout the course of the year and yet we actually saw our Middle East numbers hang in there reasonably well throughout the middle part of the year and it wasn't until the latter part of the year that we saw a more acute shift in the Middle East. And so there was a little bit of a lag there and it's taken a bit of time for the team to fully recalibrate.

Thanks, Tom. Thomas Patrick Joyce - President, Chief Executive Officer & Director: Yeah. Thank you.

And we'll take our final question from Deane Dray of RBC Capital Markets. Your line is open. Thomas Patrick Joyce - President, Chief Executive Officer & Director: Morning, Deane.

Thank you. Thank you. Good morning, everyone. Hey, just a quick question on R&D spending overall came in lighter year-over-year and versus our estimates. Did you throttle back on any spending or is that just timing of some of the projects? Thomas Patrick Joyce - President, Chief Executive Officer & Director: Yeah. As you probably saw in the numbers that we put out, Deane, we're showing R&D down about 20 basis points, but the reality is, is that that was primarily influenced by Pall. And R&D spending normalized for the Pall influence was actually up on the quarter. So we're continuing to make sure that innovation is a key priority for the businesses and that R&D spending is maintained to the greatest extent possible for the opportunities that we think have the greatest impact in the next year or two.

Okay. And then just last question from me is the incremental restructuring done in December, did you say what portion of that was Danaher versus Fortive? Daniel L. Comas - Chief Financial Officer & Executive Vice President: It was roughly the split you'd expect, 70%/30%. And that 70% is Danaher inclusive of Pall.

Great. Thank you. Thomas Patrick Joyce - President, Chief Executive Officer & Director: Thanks, Deane.

And I'd be happy to turn the program back over to our hosts.

Thanks, Leo. Thanks, everyone, for joining us. We're around all day for questions.

Thank you. This does conclude today's Danaher Corporation's Fourth Quarter 2015 Earnings Results Conference Call. You may now all disconnect your lines and, everyone, have a great day.