Danaher 2011 Annual Report Download - page 54

Table of Contents
2018 Notes—In December 2007, the Company completed an underwritten public offering of the 2018 Notes, which were issued at 99.39% of their principal
amount, will mature on January 15, 2018 and accrue interest at the rate of 5.625% per annum. The net proceeds, after expenses and the underwriters’
discount, were approximately $493 million, which were used to repay a portion of the commercial paper issued to finance the acquisition of Tektronix. The
Company pays interest on the 2018 Notes semi-annually in arrears, on January 15 and July 15 of each year.
Eurobond Notes—On July 21, 2006, a financing subsidiary of the Company issued the Eurobond Notes in a private placement outside the United States.
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.
LYONs—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 29.0704 shares of the Company’s common stock (in the aggregate for all LYONs that were originally issued, approximately 24.0 million shares
of the Company’s common stock) at any time on or before the maturity date of January 22, 2021. As of December 31, 2011, an aggregate of approximately
10 million shares of the Company’s common stock had been issued upon conversion of LYONs. As of December 31, 2011, 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 had the right to 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 each of January 22, 2004 and January 22, 2011, which resulted in aggregate
notes with an accreted value of approximately $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 specified measurement period equals 120% or more of the sum of the issue price
and accrued original issue discount for such LYON. The amount of contingent interest to be paid with respect to any quarterly period is equal to the higher of
either 0.0315% of the bonds’ average market price during the specified measurement period or the amount of the common stock dividend paid during such
quarterly period multiplied by the number of shares issuable upon conversion of a LYON. The Company paid approximately $1 million of contingent interest
on the LYONs for the year ended December 31, 2011. Except for the contingent interest described above, the Company will not pay interest on the LYONs
prior to maturity.
Covenants and Redemption Provisions Applicable to the Notes
The Company may redeem some or all of the 2014 Notes, the 2016 Notes, the 2018 Notes and/or the 2019 Notes at any time by paying the principal amount
and a “make-whole” premium, plus accrued and unpaid interest. Prior to March 23, 2021 (three months prior to their maturity date), the Company may
redeem some or all of the 2021 Notes by paying the principal amount and a “make-whole” premium, plus accrued and unpaid interest. On or after March 23,
2021, the Company may redeem some or all of the 2021 Notes for their principal amount plus accrued and unpaid interest. If a change of control triggering
event occurs with respect to the Notes, each holder of Notes may require the Company to repurchase some or all of its Notes at a purchase price equal to 101%
of the principal amount of the Notes, plus accrued interest (100% of the principal amount plus accrued interest in the case of Eurobond Notes). A change of
control triggering event means the occurrence of both a change of control and a rating event, each as defined in the applicable supplemental indenture or
comparable instrument. Except in connection with a change of control triggering event as described above, the Company does not have any credit rating
downgrade triggers that would accelerate the maturity of a material amount of outstanding debt. In addition, the Company may redeem the Eurobond 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.
The indentures and comparable instruments pursuant to which the Notes were issued each contain customary covenants including, for example, limits on the
incurrence of secured debt and sale/leaseback transactions. None of these covenants are considered restrictive to the Company’s operations and as of
December 31, 2011, the Company was in compliance with all of its debt covenants.
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Source: DANAHER CORP /DE/, 10-K, February 24, 2012 Powered by Morningstar® Document Research℠
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