Danaher 2009 Annual Report Download - page 53

Table of Contents
During 2009, the Company refinanced balances under its commercial paper program as they came due to maintain an outstanding balance throughout the
year. During 2008, the Company utilized its commercial paper program to finance the repayment of the Company’s 6.1% notes that matured in October 2008.
Amounts outstanding under the Company’s U.S. dollar commercial paper program as of December 31, 2009 had a weighted average interest rate of 0.2% and
an average maturity of approximately 5 days.
Our ability to access the commercial paper market, and the related costs of these borrowings, is affected by the strength of our credit rating and market
conditions. Any downgrade in the Company’s credit rating would increase the cost of borrowings under the Company’s commercial paper program and Credit
Facility, and could limit or preclude the Company’s ability to issue commercial paper. If our access to the commercial paper market is adversely affected due
to a change in market conditions or otherwise, we would expect to rely on a combination of available operating cash flow and our Credit Facilities to provide
short-term funding. In such event, the cost of borrowings under our Credit Facilities could be higher than the cost of commercial paper borrowings.
Other Long-Term Indebtedness
In March 2009, the Company completed an underwritten public offering of $750 million aggregate principal amount of 5.40% senior unsecured notes due
2019. The notes were issued at 99.93% of their principal amount. The net proceeds, after expenses and the underwriters’ discount, were approximately $745
million. A portion of the net proceeds were used to repay a portion of the Company’s outstanding commercial paper with the balance of the net proceeds used
for general corporate purposes, including acquisitions. The Company may redeem the notes at any time prior to their maturity at a redemption price equal to
the greater of the principal amount of the notes to be redeemed, or the sum of the present values of the remaining scheduled payments of principal and interest
plus 40 basis points.
In December 2007, the Company completed an underwritten public offering of $500 million aggregate principal amount of 5.625% senior notes due 2018.
The net proceeds, after expenses and the underwriters’ discount, were approximately $493.4 million, which were used to repay a portion of the commercial
paper issued to finance the acquisition of Tektronix. The Company may redeem the notes at any time prior to their maturity at a redemption price equal to the
greater of the principal amount of the notes to be redeemed, or the sum of the present values of the remaining scheduled payments of principal and interest plus
25 basis points.
On July 21, 2006, a financing subsidiary of the Company issued the Eurobond Notes in a private placement outside the U.S. Payment obligations under
these Eurobond Notes are guaranteed by the Company. The net proceeds of the offering, after the deduction of underwriting commissions but prior to the
deduction of other issuance costs, were €496 million ($627 million based on exchange rates in effect at the time the offering closed) and were used to pay
down a portion of the Company’s outstanding commercial paper and for general corporate purposes, including acquisitions. The Company may redeem the
notes upon the occurrence of specified, adverse changes in tax laws, or interpretations under such laws, at a redemption price equal to the principal amount of
the notes to be redeemed.
In 2001, the Company issued $830 million (value at maturity) in LYONs. The net proceeds to the Company were $505 million, of which approximately $100
million was used to pay down debt and the balance was used for general corporate purposes, including acquisitions. The LYONs carry a yield to maturity of
2.375% (with contingent interest payable as described below). Holders of the LYONs may convert each $1,000 of principal amount at maturity into 14.5352
shares of Danaher common stock (in the aggregate for all LYONs, approximately 12.0 million shares of Danaher common stock) at any time on or before the
maturity date of January 22, 2021. As of December 31, 2009, an aggregate of approximately 68,000 shares of Danaher common stock had been issued upon
conversion of LYONs. As of December 31, 2009, the accreted value of the outstanding LYONs was lower than the traded market value of the underlying
common stock issuable upon conversion. The Company may redeem all or a portion of the LYONs for cash at any time at scheduled redemption prices.
Holders may require the Company to purchase all or a portion of the notes for cash and/or Company common stock, at the Company’s option, on
January 22, 2011. The holders had a similar option to require the Company to purchase all or a portion of the notes as of January 22, 2004, which resulted in
notes with an accreted value of $1.1 million being redeemed by the Company for cash.
Under the terms of the LYONs, the Company will pay contingent interest to the holders of LYONs during any six month period from January 23 to July 22
and from July 23 to January 22 if the average market price of a LYON for a
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Source: DANAHER CORP /DE/, 10-K, February 24, 2010 Powered by Morningstar® Document Research℠
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