Financing

9 Months Ended

Oct. 02, 2020

FINANCING

As of October 2, 2020, the Company was in compliance with all of its debt covenants. The components of the Company’s debt were as follows ($ in millions):


	October 2, 2020		December 31, 2019
Euro-denominated commercial paper (€1.6 billion and €4.6 billion, respectively)	$	1,860.8	$	5,146.2


Zero-coupon LYONs due 2021	26.2		33.6
0.352% senior unsecured notes due 2021 (¥30.0 billion aggregate principal amount) (the “2021 Yen Notes”)	284.6		275.8
1.7% senior unsecured notes due 2022 (€800 million aggregate principal amount) (the “2022 Euronotes”)	935.5		894.8
Floating rate senior unsecured notes due 2022 (€250.0 million aggregate principal amount) (the “Floating Rate 2022 Euronotes”)	292.4		279.8
2.05% senior notes due 2022 (the “2022 Biopharma Notes”)	697.8		696.9
0.5% senior unsecured bonds due 2023 (CHF 540.0 million aggregate principal amount) (the “2023 CHF Bonds”)	587.3		558.9
1.7% senior unsecured notes due 2024 (€900.0 million aggregate principal amount) (the “2024 Euronotes”)	1,049.4		—

2.2% senior unsecured notes due 2024 (the “2024 Biopharma Notes”)	696.6		696.2
2.5% senior unsecured notes due 2025 (€800.0 million aggregate principal amount) (the “2025 Euronotes”)	934.0		893.7
3.35% senior unsecured notes due 2025 (the “2025 U.S. Notes”)	497.6		497.3
0.2% senior unsecured notes due 2026 (€1.3 billion aggregate principal amount) (the “2026 Biopharma Euronotes”)	1,455.5		1,392.3
2.1% senior unsecured notes due 2026 (€800.0 million aggregate principal amount) (the “2026 Euronotes”)	933.3		—
0.3% senior unsecured notes due 2027 (¥30.8 billion aggregate principal amount) (the “2027 Yen Notes”)	291.4		282.5
1.2% senior unsecured notes due 2027 (€600.0 million aggregate principal amount) (the “2027 Euronotes”)	698.4		668.0
0.45% senior unsecured notes due 2028 (€1.3 billion aggregate principal amount) (the “2028 Biopharma Euronotes”)	1,453.6		1,390.1
1.125% senior unsecured bonds due 2028 (CHF 210.0 million aggregate principal amount) (the “2028 CHF Bonds”)	231.8		221.0
2.6% senior unsecured notes due 2029 (the “2029 Biopharma Notes”)	794.6		794.8
2.5% senior unsecured notes due 2030 (€800.0 million aggregate principal amount) (the “2030 Euronotes”)	936.8		—
0.75% senior unsecured notes due 2031 (€1.8 billion aggregate principal amount) (the “2031 Biopharma Euronotes”)	2,037.0		1,948.7
0.65% senior unsecured notes due 2032 (¥53.2 billion aggregate principal amount) (the “2032 Yen Notes”)	503.1		487.8
1.35% senior unsecured notes due 2039 (€1.3 billion aggregate principal amount) (the “2039 Biopharma Euronotes”)	1,446.6		1,383.6
3.25% senior unsecured notes due 2029 (the “2039 Biopharma Notes”)	889.2		890.3
4.375% senior unsecured notes due 2045 (the “2045 U.S. Notes”)	499.4		499.4
1.8% senior unsecured notes due 2049 (€750.0 million aggregate principal amount) (the “2049 Biopharma Euronotes”)	868.6		830.9
3.4% senior unsecured notes due 2049 (the “2049 Biopharma Notes”)	888.6		890.2
Other	35.7		76.3
Total debt	21,825.8		21,729.1
Less: currently payable	19.7		212.4
Long-term debt	$	21,806.1	$	21,516.7

For additional details regarding the Company’s debt financing, refer to Note 11 of the Company’s financial statements as of and for the year ended December 31, 2019 included in the Company’s 2019 Annual Report.

The Company has historically satisfied any short-term liquidity needs that are not met through operating cash flow and available cash primarily through issuances of commercial paper under its U.S. dollar and euro-denominated commercial paper programs. The Company’s $5.0 billion unsecured, multi-year revolving credit facility with a syndicate of banks that expires on August 24, 2024 (the “Five-Year Facility”) and the Company’s $2.5 billion 364-day unsecured revolving credit facility with a syndicate of banks (the “364-Day Facility” and collectively with the Five-Year Facility, the “Credit Facilities”) that expires on June 4, 2021 (the “Scheduled Termination Date”) are available for direct borrowings and provide support for the commercial paper programs (on June 5, 2020, the 364-Day Facility replaced the $5.0 billion 364-day unsecured revolving credit facility with a syndicate of banks that was scheduled to expire on August 26, 2020 (the “Superseded 364-Day Facility”)).

Given the adverse impact of COVID-19 on the availability of new borrowings in the commercial paper markets late in the first quarter and in the second quarter of 2020, the Company borrowed under the Five-Year Facility and the Superseded 364-Day Facility during the first and second quarters of 2020. Specifically, on March 24, 2020, the Company borrowed $2.5 billion under the Five-Year Facility to fund a portion of the Cytiva Acquisition and for general corporate purposes, at an annual interest rate of 1.7% through March 31, 2020 and 1.9% beginning April 1, 2020. On April 7, 2020, the Company borrowed $2.5 billion under the Superseded 364-Day Facility for general corporate purposes at an annual interest rate of 2.3%. On May 15, 2020, the Company repaid the borrowings under the Superseded 364-Day Facility and $1.25 billion of outstanding borrowings under the Five-Year Facility. On September 24, 2020, the Company repaid the remaining $1.25 billion of outstanding borrowings under the Five-Year Facility. As of October 2, 2020, the Company was in compliance with all covenants under the Credit Facilities. The Company expects to limit borrowings under the Five-Year Facility and 364-Day Facility to amounts that would leave sufficient borrowing capacity under the facilities so that it could borrow, if needed, to repay all of the outstanding commercial paper as it matures.

On October 6, 2020, the Company notified the holders of the 2022 Euronotes that it has called for redemption all of the €800 million aggregate principal amount of the 2022 Euronotes and intends to redeem the 2022 Euronotes on November 5, 2020. The Company has classified the 2022 Euronotes, LYONs, the 2021 Yen Notes and approximately $1.9 billion of its borrowings outstanding under the commercial paper programs as of October 2, 2020 as long-term debt in the accompanying Consolidated Condensed Balance Sheet as the Company had the intent and ability, as supported by availability under the Five-Year Facility and the Company’s fourth quarter long-term debt issuance (refer to Note 16), to refinance these borrowings for at least one year from the balance sheet date.

As of October 2, 2020, borrowings outstanding under the Company’s euro-denominated commercial paper program had a weighted average annual interest rate of negative 0.08% and a weighted average remaining maturity of approximately 60 days.

Debt discounts, premiums and debt issuance costs totaled $116 million and $112 million as of October 2, 2020 and December 31, 2019, respectively, and have been netted against the aggregate principal amounts of the related debt in the components of debt table above.

2020 Debt Issuances

On March 30, 2020 and April 8, 2020, Danaher Corporation completed underwritten public offerings of senior unsecured Euronotes due 2024, 2026 and 2030 (collectively the “Notes”). The following summarizes the key terms of the offerings in aggregate (€ in millions):


	Issue Date	Aggregate Principal Amount		Stated Annual Interest Rate		Issue Price (as % of Principal Amount)		Maturity Date	Interest Payment Dates (in arrears)
2024 Euronotes	March 30, 2020	€	750.0	1.700	%	99.931	%	March 30, 2024	March 30
2024 Euronotes	April 8, 2020	€	150.0	1.700	%	100.298	%	March 30, 2024	March 30
2026 Euronotes	March 30, 2020	€	500.0	2.100	%	99.717	%	September 30, 2026	September 30
2026 Euronotes	April 8, 2020	€	300.0	2.100	%	100.842	%	September 30, 2026	September 30
2030 Euronotes	March 30, 2020	€	500.0	2.500	%	99.642	%	March 30, 2030	March 30
2030 Euronotes	April 8, 2020	€	300.0	2.500	%	102.166	%	March 30, 2030	March 30

The Company received net proceeds from the notes issued on March 30, 2020, after underwriting discounts and commissions and offering expenses, of approximately €1.7 billion (approximately $1.9 billion based on currency exchange rates as of the date of the pricing of the notes). The Company received net proceeds from the notes issued on April 8, 2020, after underwriting discounts and commissions and offering expenses, of €754 million ($816 million based on currency exchange rates as of the date of the pricing of the notes). Proceeds from these offerings have been and will be used for general corporate purposes, including repayment of a portion of the Company’s outstanding commercial paper borrowings as they mature and repayment of amounts borrowed under the Company’s Credit Facilities.

On October 6, 2020 (during the Company’s fourth quarter), the Company completed the underwritten public offering of $1.0 billion aggregate principal amount of 2.6% senior unsecured notes due 2050. The Company received net proceeds from the notes, after underwriting discounts and commissions and offering expenses, of $980 million. Proceeds from this offering will be used for general corporate purposes, including the redemption of the 2022 Euronotes.

Credit Facilities

For a description of the Five-Year Facility, please see the Company’s 2019 Annual Report.

On June 5, 2020, the Company entered into the 364-Day Facility. The Company may elect, upon the payment of a fee equal to 0.75% of the principal amount of the loans then outstanding and upon the satisfaction of certain conditions, to convert any loans outstanding on the Scheduled Termination Date into term loans that are due and payable one year following the Scheduled Termination Date.

Borrowings under the 364-Day Facility bear interest as follows: (1) Eurodollar Rate Loans (as defined in the 364-Day Facility) bear interest at a variable rate per annum equal to the London inter-bank offered rate plus a margin of between 90.0 and 127.5 basis points, depending on Danaher’s long-term debt credit rating; and (2) Base Rate Loans (as defined in the 364-Day Facility) bear interest at a variable rate per annum equal to the highest of (a) the Federal funds rate (as published by the Federal Reserve Bank of New York from time to time) plus 0.5%, (b) Bank of America’s “prime rate” as publicly announced from time to time and (c) the Eurodollar Rate (as defined in the 364-Day Facility) plus 1.0%, plus in each case a margin of between 0.0 and 27.5 basis points depending on Danaher’s long-term debt credit rating. In addition, Danaher is required to pay a per annum facility fee of between 10.0 and 22.5 basis points (depending on Danaher’s long-term debt credit rating) based on the aggregate commitments under the 364-Day Facility, regardless of usage.

The Company’s obligations under the 364-Day Facility are unsecured. The Company has unconditionally and irrevocably guaranteed the obligations of each of its subsidiaries in the event a subsidiary is named a borrower under the 364-Day Facility. The 364-Day Facility contains customary representations, warranties, conditions precedent, events of default, indemnities and affirmative and negative covenants. The 364-Day Facility requires the Company to maintain a Consolidated Leverage Ratio (as defined in the 364-Day Facility) of 0.65 to 1.00 or less. Borrowings under the 364-Day Facility are prepayable at the Company’s option at any time in whole or in part without premium or penalty.

Guarantors of Debt

The Company has guaranteed long-term debt and commercial paper issued by certain of its wholly-owned subsidiaries. The 2022 Euronotes, Floating Rate 2022 Euronotes, 2025 Euronotes, 2027 Euronotes and euro-denominated commercial paper were issued by DH Europe Finance S.A. (“Danaher International”). The 2022 Biopharma Notes, 2024 Biopharma Notes, 2026 Biopharma Euronotes, 2028 Biopharma Euronotes, 2029 Biopharma Notes, 2031 Biopharma Euronotes, 2039 Biopharma Euronotes, 2049 Biopharma Euronotes, 2049 Biopharma Notes and euro-denominated commercial paper were issued by DH Europe Finance II S.a.r.l. (“Danaher International II”). The 2023 CHF Bonds and 2028 CHF Bonds were issued by DH Switzerland Finance S.A. (“Danaher Switzerland”). The 2021 Yen Notes, 2027 Yen Notes and 2032 Yen Notes were issued by DH Japan Finance S.A. (“Danaher Japan”). Each of Danaher International, Danaher International II, Danaher Switzerland and Danaher Japan are wholly-owned finance subsidiaries of Danaher Corporation. All of the outstanding and future securities issued by each of these entities are or will be fully and unconditionally guaranteed by the Company and these guarantees rank on parity with the Company’s unsecured and unsubordinated indebtedness.

LYONs Redemption

During the nine-month period ended October 2, 2020, holders of certain of the Company’s LYONs converted such LYONs into an aggregate of 294 thousand shares of the Company’s common stock, par value $0.01 per share. The Company’s deferred tax liability of $42 million associated with the book and tax basis difference in converted LYONs was transferred to additional paid-in capital.