Matt Gugino - Vice President, Investor Relations Tom Joyce - President and CEO Dan Comas - Executive Vice President and CFO.

Steven Winoker - Bernstein Shannon O'Callaghan - UBS Steve Tusa - J.P. Morgan Jeff Sprague - Vertical Research Partners Brandon Couillard - Jefferies Julian Mitchell - Credit Suisse Scott Davis - Barclays Nigel Coe - Morgan Stanley Andrew Obin - Bank of America Merrill Lynch.

Good day. My name is Aaron, and I will be your conference facilitator today. At this time, I would like to welcome everyone to the Danaher Corporation Fourth Quarter 2014 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.

[Operator Instructions] I will now turn the call over to Mr. Matt Gugino, Vice President of Investor Relations. Mr. Gugino, you may begin your conference..

Thanks, Aaron, and good morning, everyone, and thanks for joining us. On the call 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, a slide presentation supplementing today’s call and the reconciling and other information required by SEC Regulation G relating to any non-GAAP financial measures provided during the call are all available in the Investor section of our website, www.danaher.com under the heading Financial Information-Quarterly Earnings and will remain available following the call.

The audio portion of this call will be archived on the Investor section of our website later today under the heading Investor Events and will remain archived until our next quarterly call. A replay of this call will also be available until February 3, 2015. The replay number is (888) 203-1112 U.S.

and (719) 457-0820 internationally and the confirmation code is 1202913. During the presentation, we will describe certain of the more significant factors that impacted year-over-year performance.

Please refer to the supplemental materials and our annual report on Form 10-K when it is filed for additional factors that impacted year-over-year performance.

Unless otherwise noted, all references in these remarks and accompanying presentation to earnings, revenues and other company-specific financial metrics relate to the fourth quarter of 2014 and relate only to the continuing operation of Danaher's business, and all references to period-to-period increases or decreases in financial metrics are year-over-year.

I’d also like to note that we’ll be making some statements during the call that are 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. It is possible that 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 made and we do not assume any obligation to update any forward-looking statements whether as a result of new information, future events and developments or otherwise. With that, I’d like to turn the call over to Tom..

Thanks, Matt, and good morning, everyone. We were very pleased with the strong finish to 2014. The Danaher Business System continue to enhance our competitive advantage driving market share gains, solid core margin expansion and record free cash flow generation.

For the full year our targeted organic investments help drive 3.5% core revenue growth and our total revenue is now just shy of $20 billion.

These investments in new products and go-to-market initiatives enabled us to increase market share in many of our businesses, including Fluke, Hach, Gilbarco Veeder-Root, Radiometer, AB SCIEX, Implant Direct and Videojet. From a portfolio optimization perspective, 2014 was also a very busy year for Danaher.

We announced or closed 18 acquisitions for nearly $4 billion, improving our market-leading positions across the portfolio. Most notable among these are our two large deals, Nobel Biocare and Devicor, which closed in December.

We also announced the combination of our Communications business with NetScout, which we believe will better position these two highly complimentary businesses for long-term success. Finally, we divested the electric vehicle systems and hybrid product lines within our automation platform.

Going forward, we remain focused on building a better, stronger Danaher by utilizing our robust balance sheet and smartly deploying our $8 billion plus of acquisition capacity. In 2014 we generated a record $3.2 billion of free cash flow and our free cash flow to net income conversion ratio was 122%.

This represents the 23rd consecutive year in which our free cash flow exceeded net income, an important metric that represent the quality of the earnings we generate. We also returned more of this cash to shareholders, increasing our annual dividend to $0.40 per share from $0.10 per share.

Turning to the fourth quarter, revenues grew 3% to $5.4 billion, while organic revenue grew 4%, exceeding our expectations. More than half of our platforms delivered mid single-digit core revenue growth, including T&M Instruments, Water Quality, Gilbarco Veeder-Root, Diagnostics, Life Sciences and Product ID.

Acquisitions increased revenues by 2.5%, while currency translation decreased revenues by 3.5%. From a geographic perspective, high-growth markets increased at a mid single-digit rate.

Performance was mixed with solid results in China and double-digit growth in the Middle East, partially offset by slowing growth in Latin America and a high teens decline in Russia. In the developed markets, both the U.S.

and Western Europe, grew at a mid single-digit rate, an acceleration from the low single-digit growth experienced in the first three quarters of the year. Sales in the U.S. increased at the fastest rate since the second quarter of 2011, with our Gilbarco Veeder-Root and Life Sciences platforms up more than 10%.

Our fourth quarter gross margin was 52.5%, excluding the impact of productivity initiatives. Core operating margin increased 70 basis points, with three of our five segments improving greater than a 100 basis points.

Our reported operating margin declined 50 basis points to 16.4%, due primarily to increased productivity charges and the dilutive impact of recent acquisitions. In total, we spent approximately $155 million on productivity initiatives in the fourth quarter.

For the full-year, our gross margin was 52.4% and our gross profit improved nearly $500 million. This allowed us to increase our combined investment in R&D, in sales and marketing over $200 million from 2013, while expanding core operating margin 65 basis points.

We reported fourth quarter adjusted diluted net EPS of $1.04, which compares favorably to our previous guidance of a $1 to a $1.04, and represents an increase of 8% year-on-year. For the full year, adjusted diluted net EPS was $3.68, also up 8% from 2013.

Now turning to our five operating segments, Test & Measurement revenues increased 1.5%, while core revenues were up 0.5%. Reported operating margin improved 130 basis points, while core operating margin declined slightly. Core revenue in our instruments platform increased at a mid-single-digit rate with growth in most major geographies.

This was the platform’s highest quarterly growth rate in over three years, driven by improving market conditions, organic investments and new product innovations such as Fluke Connect.

Fluke core revenues were up mid-single-digits for the second consecutive quarter, with our core industrial and biomedical product lines, each increasing at a high single-digit rate or better. Distribution sellout in North America accelerated sequentially, growing at a high single-digit rate. Demand in Europe was also healthy.

At Tektronix, core sales were up mid-single digits, representing the highest quarterly growth rate since the third quarter of 2011. Demand was strongest in North America with solid growth in the military and government, optical and semiconductor segments.

During the quarter, Tektronix launched the RSA306 radio frequency spectrum analyzer, a portable USB powered device, which offers as much functionality as a bench-top equipment, allowing engineers in the field to ensure radio frequencies of free of distortion and interference. Our communications platform core revenues decreased at a double-digit rate.

Mid-single-digit growth in our security solution and network enterprises businesses was more than offset by a decline in network management solutions where we continued to experience delays from our North American wireless carrier customers.

Despite the weakness on the topline, we were encouraged by our book-to-bill ratio, which was almost 1.2 times for the second half of 2014. And we believe our communications platform will return to growth in 2015.

We continue to expect a combination of our communications business with NetScout to close in mid-2015, subject to approval by NetScout shareholders and the satisfaction of customary closing conditions, including regulatory approvals and the absence of a material adverse change with respect to either our communications business or NetScout.

At Arbor, North American sales increased over 25%, with robust demand from enterprise security customers. During the quarter, Arbor further strengthened its presence in the enterprise segment with the launch of Pravail Security Analytics.

This scalable cloud-based solution allows organizations of any size to detect and view attacks on their global network in real time and in greater detail than ever before. Fluke Networks saw double-digit growth in its network installation tools and enterprise systems products.

FNET bookings also grew at a double-digit rate, surpassing $100 million in the quarter for the first time in its history. Turning to our Environmental segment, revenues grew 5.5% with core revenues up 5%.

Segment operating margin declined 330 basis points, primarily due to the dilutive effect of recent acquisitions and incremental productivity charges. Water quality core revenues increased at a mid-single-digit rate, led by robust growth in our analytical instrumentation and chemical treatment businesses.

Hach had another outstanding quarter, with growth across most major product lines. U.S. municipal sales were up high single digits, as customers are increasing their maintenance project budgets. Sales in China were up over 20%, driven by the government’s continued focus on environmental protection.

And last quarter, we highlighted the SL1000 Portable Parallel Analyzer, a breakthrough product that simplifies the water quality testing process. Hach’s new product introductions, including the SL1000 have exceeded expectations, with revenue from new portable lab products tripling from 2013.

ChemTreat reached another sales milestone in December, achieving 400 million in annual sales for the first time. ChemTreat has now nearly doubled in size from its acquisition in 2007. Notably, this has largely been organic, the result of the development and application of their best-in-class go-to market model.

Gilbarco Veeder-Root's core revenues grew mid-single digits, as sales of point of sale solutions and dispensers in the U.S. increased over 30%. GVR's comprehensive product suite has helped to make a deferred solution among customers, looking to upgrade their payment systems to comply with upcoming EMV security requirements.

Sales were also robust in China, where demand for GVR’s vapor recovery and dispenser products grew double digits. Moving to Life Science & Diagnostics, revenue increased 3% with core revenues up 5%. Core operating margin improved 135 basis points. For the full year, core operating margin expanded 110 basis points.

This marks the fifth consecutive year, segment core operating margin has improved over a 100 basis points. Core revenues in our diagnostics platform grew mid-single digits, with healthy demand in both the high-growth and developed markets.

For the third consecutive quarter, core revenues at Beckman Coulter increased at a mid-single-digit rate, led by immunoassay, chemistry and urinalysis solutions. Beckman also experienced strength in their automation business where new product such as Power Express drove record December shipments. The positive momentum in the U.S.

continued, with our sales team achieving record customer retention and win rates, leading to mid-single-digit growth. Beckman received 510(k) clearance for the Vitamin D Total assay on its access line of instruments.

This represents a significant addition to Beckman’s bone metabolism testing menu, as nearly 1 billion people in the world are estimated to be Vitamin D deficient. Beckman also introduced four immunosuppressant drug assays, allowing doctors to better monitor therapeutic drugs in transplant recipients.

Radiometer’s core revenues were up approximately 10%, with HemoCue sales increasing double-digits and AQT growing over 35%. 2014 marked Radiometer's 10th anniversary with Danaher. The results over the past decade have been extraordinary with the team increasing revenues more than 2.5 times to nearly $800 million, while tripling operating profit.

Leica Biosystems core sales were up high-single digits, with healthy demand across our entire suite of anatomical pathology instrumentation and consumables. Advanced staining finished the year, particularly strong in the U.S., placing a record number of Bond systems in the quarter.

In December, Leica Biosystems acquired Devicor, a leading provider of minimally-invasive biopsy systems and consumables used in breast cancer diagnostics. This acquisition moves Leica further upstream in anatomical pathology to the biopsy, providing better sample control and delivering higher levels of diagnostic quality and confidence.

Core revenues in our Life Science platform were up mid-single digits, led again by the U.S. and Europe. AB SCIEX core revenues grew mid-single digits with strength in clinical, pharma and applied markets.

We've been pleased with the market reception of our new 6600 TripleTOF SWATH Acquisition 2.0 software with demand exceeding expectations since launch in June of last year. Those of you who attended our Investor Day last month heard about OneOmics AB SCIEX’s innovative partnership with Illumina.

OneOmics brings together next-generation sequencing and proteomics data in the cloud to help advance research across multiple diseases such as cancer, diabetes, Alzheimer's and heart disease.

This unique solution has received significant attention in the research community and was named one of the top 15 inventions in 2014 by the Analytical Scientist magazine. Leica Microsystems core sales increased mid-single digits with growth across all major product lines.

The confocal line of microscopes continues to garner industry recognition with the latest SP8 STED 3X receiving a Top 10 Innovation award from The Scientist Magazine. The STED further advanced its research in important fields such as immunology by providing scientist a 3D view of previously unobservable details of living cells.

Turning to Dental; segment revenues increased 6%, while core revenues were up 2.5%. Our core operating margin improved 185 basis points. As we previously mentioned, during the quarter we closed on the acquisition of Nobel Biocare.

We are excited to have Nobel Biocare as part of the Danaher team and the business end 2014 with its seventh consecutive quarter of core revenue growth. While still very early, we've been pleased with the feedback from both associates and customers and we look forward to sharing further updates on Nobel’s performance with you in the coming months.

Dental consumables core revenues were up low-single digits with 30% growth in China and the Middle East, partially offset by continued weakness in the U.S. Implant Direct, our value-oriented implant business continues to perform well growing double digits.

During the quarter we expanded our endodontic product line with the launch of ElementsFree, a cordless hand tool featuring motorized extrusion and precise temperature control, giving endodontist unmatched accuracy and flexibility to perform complex procedures, such as root canals.

Dental technologies core revenues were up low-single digits, led by double-digit growth in hand pieces. Last quarter we launched the i-CAT FLX MV, our most recent advanced in 3D imaging. Customer reception has been exceptional with over 100 systems shipped to-date.

We also expanded our line of dental surgical equipment with the launch of KaVo MASTERsurg LUX. The KaVo MASTERsurg line is our latest innovation in surgical instruments for dental implants and oral surgery improving productivity and clinical accuracy by enabling dentists to store and program settings for multiple procedures.

The MASTERsurg line also provides better surgical command and flexibility with the industry's first wireless foot control. Moving to our Industrial Technology segment; revenues declined 1%, while core revenues were up 5%. Core operating margin expanded 120 basis points and reported operating margin expanded 310 basis points to 20.4%.

Automation core revenues grew at a low-single digit rate, led by strong demand in North American distribution and for industrial automation products in China. This marks the third consecutive quarter of growth for the automation platform.

Core revenues in our Product Identification platform grew mid-single digits, with high-single digit growth in developed markets and double-digit growth in Europe. At Videojet, core revenue was up high-single digits as it continues to gain market share broadly.

During the quarter, Videojet launched remote services, the industry's first virtual troubleshooting solution for printers. With remote services, maintenance technicians can now resolve customer problems up to 90% faster than field visits. Innovative solutions such as these help Videojet increase their service contracts more than 20% in 2014.

X-Rite finished the year strong with both sales and orders growing double digits. In December, Pantone announced Marsala as the 2015 Color of the Year with extensive media coverage online, in-print and on TV.

The Color of the Year and the billions of media impressions it generates solidifies Pantone's iconic brand and was one of the drivers of high-single-digit growth in X-Rite’s color standards business in 2014. So to wrap up, we had a strong finish to the year with core revenue growth exceeding our expectations.

The Danaher business system helped us to gain market share, while also driving solid core margin expansion and record free cash flow. While cognizant of the current macroeconomic challenges, our investments in growth and productivity initiatives, combined with a robust balance sheet, we’re confident in our ability to outperform in 2015 and beyond.

We are initiating first quarter adjusted diluted net EPS guidance of $0.90 to $0.94, which excludes non-cash amortization expense and certain acquisition-related charges. We are assuming first quarter core revenue growth of 4% or better.

We’re also updating our full year 2015 adjusted diluted net earnings per share guidance, which we now expect to be in the range of $4.30 to $4.40. The strengthening of the U.S. dollar since our December investor meeting is expected to reduce 2015 earnings by approximately $0.10 per share.

We anticipate offsetting approximately $0.05 per share of this headwind from savings associated with the incremental fourth quarter productivity initiatives we highlighted, recent acquisitions, including the Siemens microbiology deal which we expect to close in the near-term, as well as other actions.

Core revenue for the full year 2015 is anticipated to grow between 3% and 4%..

Thanks, Tom. That concludes our formal remarks. Aaron, we are now ready for questions..

[Operator Instructions] We will first go to Steven Winoker with Bernstein. Your line is now open..

Thanks and good morning guys..

Good morning Steve..

Hope you’re staying warm and dried down there..

And same to you and to all on the call. Thanks for what might have been a challenging morning for many..

I’m sure none of us have missed this, anyway. Core operating margin in T&M and Environmental, could you just walk us through the slight decline in T&M and a bigger one in Environmental. What drove that? Little more detail there would be great..

Sure Steve. The Test & Measurement in -- obviously the decline this quarter is lot less than it has been in previous quarter and it is largely driven by the communications business, which was again down mid-teen. So a very high contribution margin business and that volume usually impacting Test & Measurement..

And then Environmental?.

Environmental, it was pretty clear we were having a very strong quarter both in GVR and across the water businesses. They have a number of growth initiatives and this created an opportunity to accelerate some of that R&D and go-to-market investment here in the fourth quarter. I don’t think it’s -- I don’t think it’s indicative of a trend in all.

I think it was an opportunity to get ahead of some things given the strength we saw that began early in the fourth quarter..

And Steve, just to add to that, on the Environmental side, certainly talking to water analytics businesses, those businesses continue to perform exceptionally well. They have covered virtually every debt they've made when it came to some incremental investment to drive topline and share gains.

So when those guys come up with an opportunity to put a little bit more at work to drive growth in share, we tend to be supportive of that if we can see our way to cover and form..

Okay, great. And then on currency, maybe you know -- I know we’ve talked about currency a lot in the past. You weren’t able to fully offset that for your guide for the year, just given how bigger drop obviously it’s been even since December.

But are we -- should we -- what’s your ability, I think to sort of provide, you think, maybe additional offset during the year? And then secondly, just -- do you have any competitive issues on pricing what not in any of your markets as given there is such a large move in currency and competitor’s ability to price for that?.

Steve, on the first point, we have -- in no way, we thrown in the towel on the balance of going after that extra $0.05. We’re continuing to challenge the teams as we always do to try to come back on that.

But we’re encouraged by the strong start we've had here coming off of the fourth quarter, encouraged by what we’re seeing in the early stages here of January, so that feels good. But we know the strength of the dollar is a headwind. We’re doing things proactively as we did using the productivity initiatives to get a piece of that back.

Siemens is obviously going to help a bit there. And I think we’d also get a little bit of help and that’s part of the $0.05 that we’ve clawed back from what we think would be a maybe a little bit of deflation that could help us on some commodity costs and perhaps some freight and transport top cost.

So I think we’ve got a few things that give us confidence in getting the first $0.05 back but we’re continuing to work on the balance per share..

I think on the second question about competitively, clearly there has been an impact with the euro on our financial results but competitively we have not seen that impact. We said after the third quarter, we thought we were taking share in Europe. We just posted a mid-single-digit core growth number in Europe.

I suspect that’s going to be towards the top of the class here as all companies would report. So despite the stronger dollar, we are performing extremely well in Europe right now..

All right, guys. I’ll now pass it on. Thanks..

Thanks, Steve..

And our next question comes from Shannon O'Callaghan with UBS. Your line is now open..

Good morning guys..

Hey, Shannon..

Hey, just in terms of the strength that you saw in the U.S., maybe a little more color on what particular piece of that might have surprised you most and what you feel the best about continuing?.

Sure. Well, as I think I mentioned, it was a terrific quarter in the U.S. best since the second quarter of 2011. It was remarkably broad based, Shannon. We saw strength at GVR, saw strength in T&M instruments, the tech and fluid continuing to execute better, saw good sellout associated with the fluid business.

The Hach business continues to perform very well with our muni customers, releasing funds associated with projects. And we’re very encouraged by what we saw in Life Sciences with good performance in that platform. So it was a number of businesses that that had a very good finish to the year in the U.S..

And some times, we’ve had a good fourth quarter and then you kind of catches up a little bit in 1Q.

I mean, this was in sense any kind of boost from just kind of year end flush?.

Yeah. So it’s -- one of my favorite topics, Shannon, in the first week of any January is that we see anything that might cause an air pocket. It looks pretty good from where we sit right now. The early January orders and it is still early, appear pretty good. So we’re encouraged by that and we think we are off to a good start..

And then just on M&A, the world has got more volatile here in the markets certainly in ‘15.

Is that good for you guys from an M&A perspective? I mean, do you feel better about the acquisition environment than you did few months ago or worse? How does that impact you?.

Well, Shannon, generally volatility is kind of a positive for the strong corporate buyer. We’ve seen some of the restrictions being put on private equity here around leverage. That definitely has a favorable impact as well..

Okay. Great. Thanks guys..

Thanks Shannon..

And our next question comes from Steve Tusa with J.P. Morgan. Your line is open..

Hey, good morning..

Good morning, Steve..

Can you just talk about what you're seeing in emerging markets and maybe within some of your more cyclical businesses in emerging markets, China maybe specifically?.

Sure, Steve. We’re continuing to see very good performance in China. But first of all just broadly across high-growth markets, we clearly have seen a narrowing of the delta that we've seen for a long time between the high-growth markets and developed markets in general.

Part of that is a function of some of the strength we've seen in the U.S., certainly our execution in Europe where we gained share in the variety of places. It continues to also support good performance on our side on the developed markets.

On the high-growth market side, again helping it to causing a narrowing of that delta, we’ve got a slower position in China in a macro sense.

Obviously some weakness in smaller markets where we have less exposure but we see a little bit of impact in places like Russia and Brazil, clearly is in a slower growth mode than it has been in the prior couple of years. Probably, a bright spot in the Middle East with excellent performance from our businesses.

But I see, actually we’ve believe a pretty good macro environment there at least at the moment. In China specifically, Steve, we’ve had very good performance across a number of our businesses, the Environmental business, certainly Hach and GVR performing exceptionally well there.

Our dental business continues to grow double-digits in China and probably the core weak spots remains the Life Science business. We've talked quite a bit over the last number of months about some of the issues there relative to some scrutiny around tenders, some slowing of the release of funding.

But we think there -- that we might think that -- there maybe a point of stability that we’ve reached here and maybe some cause for some improvement here in 2015. Dan was actually just there a week or so ago in China and he may have a couple of thoughts..

Yes. Steve, just add one or two things. We grew full year in China kind of 8% or 9%. Q4 was a little slower as more like 6%, but I would say the tone there was pretty good. Clearly, Test & Measurement got better through the year, much better second half than first half.

As Tom alluded to all the -- most of the healthcare businesses, Environmental -- Environmental was up double-digit, Dental was up double-digit, Diagnostic was up double-digit on a very large revenue base and Industrial which was negative had returned to kind of modest growth as well.

Life Sciences was down mid single-digit for the full year kind of in that zone in the fourth quarter, but I think that the tone in early January.

I think, in part, because 2015 will be the -- is the fifth year of their current five-year plan and they are fundamentally, I think, so very committed as a country to Life Sciences research, I think the tone is little better there as well.

I am not saying, we’re going to bounce back to double-digit growth here in Life Sciences, but would not be at all surprised if we turn positive here in ’15..

Great. Thanks for the color..

Thanks, Steve..

And we’ll take our next question from Jeff Sprague with Vertical Research Partners. Your line is open..

Good morning, gents..

Hi, Jeff..

Hi. Just a couple of quick one here too. Could you elaborate a little bit, Tom, on the comments on U.S.

muni? Do you think there is actually a turn going on there or was there just kind of some project activity in the quarter?.

Jeff, I think, in general, we see some macro strength in the muni market, with some of the situations in a variety of municipalities getting marginally better and that’s allowed some projects to get released. I wouldn't say that’s the whole story though.

The Hach business continues to execute exceptionally well, many of their digital marketing initiatives and their expansion of feet on the street, across both the muni market and the Industrial market, I think is help them to continue to gain share.

So I think a combination of a marginally improving macro environment is part of the story and share gains being the other part..

Have you seen any change in kind of seller’s attitude here with kind of all the turmoil in general and kind of the QE in Europe, just any change in tone or activity at this point?.

Jeff, its hart to point anything specific other than last competition from private equity, which is a positive..

Right. Right.

And then could you just elaborate a little bit more on the acceleration you had in Europe? Was there something that stood out? Was it broad based across the businesses?.

We saw -- it was relatively broad based, Jeff. Life Sciences executed extremely well. We saw good growth there. Our Dental business, but particularly on the equipment side, the Dental business also executed very well and PID, those would be at least three that I would highlight.

If I added a fourth, it would probably be the Beckman Diagnostics business also executing very well. So it was markedly broad, but I wouldn’t necessarily think about that as something indicative of a change in the macro environment in Europe. We saw nothing that would perhaps really indicate that.

But instead, we just -- we had some teams that, I think, did an excellent job of some new products and we’re really driving their sales and marketing initiatives very effectively..

And that is in Europe for Europe right.

There is not any kind of export kick out of there on lower euro, right?.

That’s correct. That’s revenue into Western Europe, right..

Perfect. Thanks a lot guys..

And we’ll take our next question from Brandon Couillard with Jefferies. Your line is open..

Thanks. Good morning..

Good morning, Brandon..

Just a quick one on the Nobel deal, do the changes in the FX reality affect, how you view accretion there for the year and any chance you could give us the actual point estimate on the 4Q organic growth to that business?.

Brandon, it won't have much of an impact. They do have some cost base over there as we -- we also have some cost related to some of our other Healthcare businesses. The offset is we all told. We have about $200 million of revenues in Switzerland, so that will be a benefit.

So net-net, neither for Nobel nor the Corporation do we think what’s happened with the Swiss currency. It’s going -- it will be relatively neutral task. That business continues to kind of grow at kind of 2% to 4% clip and that’s been over the last couple of quarters, they were in that zone for Q4 as well..

Excellent. Secondly, on the Dental business, I mean, a number of companies that wanted to strength in the U.S. in the back half of the year? I mean, to what degree at all if you seen any vitality in the developed world, particularly in the U.S.

and is there any sign of optimism in terms of an acceleration perhaps this year?.

Brandon, I think, we’re probably most excited about what we see on the equipment side in Dental. The new product innovation, I think, you saw many of those when we were out in California earlier during the year in 2014.

The digital initiatives and I think, some of the potential that we have as we integrate the components of the workflow that Nobel Biocare can bring to the table along with what the KaVo, Kerr group of businesses bring. I think that’s really where our optimism sits relative to the U.S. Dental market.

On the consumables side, we see it really as a continuing relatively modest growth market. You’ve seen pretty consistent low single-digit growth from us.

We do -- we have seen some inventory de-stocking in the latter part of last year that maybe carrying over here in the first part of this year, but generally that our business has continues to perform pretty well and what arguably is kind a slow growth macro environment there.

Time will tell us to whether or not some of this reduction in oil prices that will translate to cost of filling up a tank ends up improving overall consumer sentiment and give us a little tailwind there, but, boy, probably too early to tell..

Superb. Thank you..

And our next question comes from Julian Mitchell with Credit Suisse. Your line is now open..

Hi. Thank you.

I guess, first of all, I just wanted to see if there was any change in the expectations on core growth by segment for 2015, given you had a pretty good core growth quarter in Q4? And also just on Industrial Tech specifically, you had the highest growth rate pool since mid-2011, similar growth rate in Q3, but a tougher base, so maybe some updates on that?.

Julian, I would say that PID, clearly, the biggest piece of Industrial Tech continues to perform quite well. I don't think they’re really looking for change in that growth trajectory here in 2015. In the first quarter as we highlighted, we think we’ll do 4% or better. Again, we're talking 3% to 4% for the full year.

Our internal numbers right now are rolling up around 4% for the first quarter, but as Tom alluded to, we finished Q4 pretty strong and we’re off to a very good start here in the first three weeks of January. We also have some extra days here in the first quarter that should be a benefit as well.

I think the offset there are two of those extra days are the Thursday and Friday before Easter, which tends to be kind of slow days. Japan which was a big grower last year ahead of the bad increase we’ll likely be down here in Q1 year-on-year.

And as we allude in the call, we expect our tech comp, this will be the last we think really poor quarter for that business similar to what we saw in the second half of 2015. We’re encouraged by what we are seeing in terms of bookings but from shipments we are going to have a tough Q1 as well.

But all up, things are looking pretty good out of the gate here or early in the first quarter..

Thanks and then just secondly. When you talked about the Q1 EPS guidance, I think that was a comment around some M&A charges being excluded.

I just wondered if I’d misheard that or if there was anything new in terms of sort of presentation of adjusted earnings?.

That is correct. I mean consistent with our past practice for deals that are over $1 billion, we call out kind of the early charges, large non-cash charges. So we still have a little bit left in Nobel in the first quarter. And I think that will be about $0.02..

Great. Thank you..

Thanks Julian..

And our next question comes from Scott Davis with Barclays. Your line is open..

Hi. Good morning guys..

Good morning Scott..

And excuse me, I doubt in about 10 minutes later if you commented on price and I apologize but is there -- I mean I know your raw material costs are generally lower and it’s not a big deal for you guys, but are you out there with price increases for 2015 or broadly?.

Scott, if you think about where your question might go specifically , geographically it might go to Europe. And interestingly, we are outperforming in Europe. We think we are taking share in Europe. We saw a broad-based performance across the businesses in Europe. And so no particular concern there.

I think teams are clearly looking very selectively market by market. These currency shifts have not been exclusively in Europe. They’ve been in quite a number of markets. Generally we are pretty well positioned in terms of the functional currency that we transact in.

But where there are issues, our teams are carefully looking at those situations and we’ll take price very selectively where we need to or compete on price, if it comes to that..

I mean, I guess I don’t want to beat a dead horse, but do you anticipate having positive price for 2015 on an ongoing basis?.

Yes, Scott. And again -- where we will get that, in all likelihood will be the 40% of revenues that comes out in the aftermarket..

Yeah.

That’s what I was alluding to if you are in -- if you are already out there, catalogs et cetera with price increases?.

Oh yeah. No that’s absolutely right Scott. That -- Those plans were locked and loaded in the fourth quarter and we are on the street, virtually across the businesses right now with those plans and in the market with those numbers..

Okay. And then just as a follow-up, inverse of Jeff’s question on private equity and competition I mean have you seen the opposite, which means private equity I think for probably the last five years have been buying up industrial and even some healthcare assets.

I mean, have you seen those guys come back to the table and say it's -- they are looking to start unloading?.

Scott, they are always in the market place and clearly there are assets out there held in the hands of private equity that we would have some interest in. I wouldn’t say that’s gotten better or worse here recently, those discussions..

Okay. And last, last but not least I mean I know you changed your -- the cash earnings. Have you changed internally your hurdle rates at all? I mean historically you guys have had a pretty strict discipline around hurdle rates.

I am just wondering and given your lower financing costs as such if that’s dropped at all?.

Scott, we have not changed our internal hurdle rates, that discipline that we've had over a long period of time remains internally around returns for bolt-ons at three years and broad -- and bigger, larger, more adjacent businesses, new businesses over a five year period.

That is discipline has been really important to the overall performance that we’ve demonstrated.

What we have said is that we want to be thoughtful and cognitive in this environment relative to what might be larger transaction that could have significant strategic value for the corporation, where we might need to take a hard look at those returns and the team here and the board.

We support making the right decision strategically for the corporation in the event that those returns maybe not where they we might like them to be. But that’s the bridge we’ll cross when we have that opportunity. And we’ll make the right decision that really drives the long-term strategic competitive advantage of platform or our segment..

Okay. Great. I’ll pass it on. Thanks guys..

Thanks Scott..

And our next question comes from Nigel Coe with Morgan Stanley. Your line is open..

Thanks. Good morning guys..

Hey Nigel..

Yeah. So just couple of questions on core growth pretty strong performance across the portfolio ex-T&M but you self alluding to market share gains. It sounds like ‘15 Europe.

And I am just wondering is that the case Tom and which businesses would you call out where you are gaining share and perhaps may be if you could comment on whether we are seeing the delayed impact from some of the R&D and marketing investments you have made over the last 12 months?.

We are continuing to make those investments, Nigel, in sales and marketing and in R&D as I noted in my opening comments.

The good performance on the topline and the good gross margin expansion that we’ve seen has allowed us to continue to invest aggressively in growth initiatives around both new product innovation and go-to market, feet on the street. The share gains, as we noted earlier were pretty broad based.

And, yes, they were, in some cases specifically in Europe, couple of the businesses that I mentioned earlier were around our life science platform, our dental equipment business and Product ID, just to name of few..

Okay. That’s great. That’s helpful. And then we’ve seen consumables leading the way on topline, I guess this cycle, with equipment lagging behind.

Are we seeing any change, I mean, just seeing or hearing about the comments from U.S and Europe, particularly in Life Sciences & Diagnostics, are we seen an inflection point in equipment?.

We definitely saw a modestly better Q3 and a definitely better Q4 in terms of equipment. So if you look at our 4%, we were 5% aftermarket in 3, or maybe is a little bit over 3 on the equipment side. And that’s one of the better numbers we posted on equipment and that includes our communications business, which came down mid-teens.

So if you adjust for that, our equipment business was probably up more like 4 plus. So we are not quite prepared to kind of call it a trend here, but we are encouraged by what we've seen for last four, five months in terms of our overall equipment orders..

And that 4%-ex comes would be, with the best in how many years?.

Probably, you have to go back to the ‘11 recovery..

Okay. Middle implicate, right.

And then just going back to the comments on the M&A process, little bit of FX and emerging market volatilities, does one that will shake the complacency of sellers? Are you seen any kind of change out from sellers? Are they a bit off spread something now?.

No, as you know, a lot of this has been just in the last 30, 45 days, I think it’s a little early to tell but it’s hard not to be a little bit more optimistic..

Okay. Thanks, Tom..

And we will take your next question from Andrew Obin with Bank of America Merrill Lynch. Your line is open..

Yes. Good morning..

Hi, Andrew..

Good morning, Andrew..

Just a broader long-term question. If I look at the emerging markets, what’s happening in Russia and Brazil, people are talking about euro going to parity. Do you think you need to change anything about your strategy about your manufacturing footprint for the next several years? Even China is growing at 6%.

I’m not sure when was the last time that happened?.

Andrew, we’ve got a long history of moving manufacturing into lower-cost regions. Not all of that has been into China. In some cases, it’s been into Eastern Europe. In some cases, it has been into India and we’ll continue to position our cost structure, I think in a way that is resilient over the long-term.

I think we want to be a little careful not to change our supply chain prematurely or in a disruptive way, not knowing kind of what maybe the sustained currency position is ultimately going to be. So, I think the teams are doing exceptional job positioning that footprint well for the long-term.

And it’s not all about the individual or the cost of individual region. It’s also about the way we execute in any region. And I think we’ve got a number of examples where our business is where that you might say are in higher cost operating regions.

In fact, continued to deliver exceptional profitability and have a real competitive advantage because of their cost structures despite their regional positions. So, I think we feel pretty good about where we are..

That’s very fair. And just a follow-up question on free cash flow.

What should we expect for FY ‘15 versus $3.2 billion you did in ’14, or if you want to talk about cash flow realization?.

It is our early year. We are very pleased with the way we ended the year in terms of free cash flow. So, I think we would be in the sort of zone here. Again, we have got a benefit in ’14, given our cash tax rate was fair amount lower than our actual provision for the year.

It’s probably too early to kind of make a call on that, where we stand right now..

But relatively flat is a good sort of hold for now in the mind..

I think that’s a good starting point..

Thank you so much..

Thanks Andrew.

And ladies and gentlemen, this does conclude the question-and-answer session of today's program. I’d now like turn the program back over to Matt Gugino for any closing remarks..

Thanks, Aaron. We’ll be around all day for questions. Thanks for joining us everyone..

This does conclude today's program. You may disconnect at any time..