Financing Transactions

9 Months Ended

Sep. 30, 2011

Financing Transactions

Financing Transactions

NOTE 8. FINANCING TRANSACTIONS

As of September 30, 2011, the Company was in compliance with all of its debt covenants. The components of the Company's debt as of September 30, 2011 and December 31, 2010 were as follows ($ in millions):

	September 30, 2011		December 31, 2010
U.S. dollar-denominated commercial paper	$	1,562.7	$	180.0
4.5% guaranteed Eurobond Notes due 2013 (€500 million)		669.5		668.9
Floating rate senior notes due 2013		300.0		—
1.3% senior notes due 2014		400.0		—
2.3% senior notes due 2016		500.0		—
5.625% senior notes due 2018		500.0		500.0
5.4% senior notes due 2019		750.0		750.0
3.9% senior notes due 2021		600.0		—
Zero-coupon Liquid Yield Option Notes due 2021		377.6		573.4
Other		235.9		152.4
Subtotal		5,895.7		2,824.7
Less – currently payable		82.3		40.8
Long-term debt	$	5,813.4	$	2,783.9

On June 21, 2011, the Company completed the underwritten public offering of 19,250,000 shares of Danaher common stock at a price to the public of $51.75 per share. The net proceeds, after deducting expenses and the underwriters' discount, were approximately $966 million and were used to fund a portion of the purchase price for the acquisition of Beckman Coulter.

In addition, on June 23, 2011, the Company completed the underwritten public offering of the following four series of senior unsecured notes:

• $300 million aggregate principal amount of floating rate senior notes due 2013 (the "2013 Notes"). The 2013 Notes were issued at 100% of their principal amount, will mature on June 21, 2013 and accrue interest at a floating rate equal to three-month LIBOR plus 0.25% per year.

• $400 million aggregate principal amount of 1.3% senior notes due 2014 (the "2014 Notes"). The 2014 Notes were issued at 99.918% of their principal amount, will mature on June 23, 2014 and accrue interest at the rate of 1.3% per year.

• $500 million aggregate principal amount of 2.3% senior notes due 2016 (the "2016 Notes"). The 2016 Notes were issued at 99.84% of their principal amount, will mature on June 23, 2016 and accrue interest at the rate of 2.3% per year.

• $600 million aggregate principal amount of 3.9% senior notes due 2021 (the "2021 Notes" and together with the 2013 Notes, the 2014 Notes and the 2016 Notes, the "Notes"). The 2021 Notes were issued at 99.975% of their principal amount, will mature on June 23, 2021 and accrue interest at the rate of 3.9% per year.

The net proceeds from the Notes offering, after deducting expenses and the underwriters' discount, were approximately $1.8 billion and were used to fund a portion of the purchase price for the acquisition of Beckman Coulter. The Company pays interest on the 2013 Notes quarterly in arrears on March 21, June 21, September 21 and December 21 of each year. The Company will pay interest on the 2014 Notes, 2016 Notes and 2021 Notes semi-annually in arrears, on June 23 and December 23 of each year, commencing on December 23, 2011. The supplemental indentures under which the Notes were issued contain customary covenants, all of which the Company complied with as of September 30, 2011.

The Company may redeem some or all of the 2014 Notes or the 2016 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. 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.

Also in connection with the acquisition of Beckman Coulter, on June 17, 2011, the Company entered into an unsecured, 364-day revolving credit facility providing for a borrowing capacity of up to $3.0 billion (the "364-Day Facility"). On June 27, 2011, following the completion of the offering of the Notes and in accordance with the terms of the 364-Day Facility, the Company reduced the aggregate commitments under the 364-Day Facility from $3.0 billion to $2.2 billion. On July 21, 2011, following the execution of the Multi-Year Facility (as defined below), the Company further reduced the aggregate commitments under the 364-Day Facility to $1.5 billion. Effective October 1, 2011, the Company reduced the aggregate commitments under the 364-Day Facility to $1.0 billion. The 364-Day Facility expires on June 16, 2012, subject to a one-year extension option at the request of the Company and with the consent of the lenders. In addition, on July 15, 2011, the Company replaced its existing $1.45 billion unsecured multi-year revolving credit facility with a $2.5 billion unsecured multi-year revolving credit facility that expires on July 15, 2016 (the "Multi-Year Facility" and together with the 364-Day Facility, the "Credit Facilities").

Each of the Credit Facilities requires the Company to maintain a consolidated leverage ratio (as defined in the applicable facility) of 0.65 to 1.00 or less, and also contains customary representations, warranties, conditions precedent, events of default, indemnities and affirmative and negative covenants. Under each of the Credit Facilities, borrowings (other than bid loans) bear interest at a rate equal to (at the Company's option) either (1) a LIBOR-based rate plus a margin that varies according to the Company's long-term debt credit rating (the "Eurodollar Rate"), or (2) the highest of (a) the Federal funds rate plus 1/2 of 1%, (b) the prime rate and (c) the Eurodollar Rate plus 1%, plus in each case a margin that varies according to the Company's long-term debt credit rating. Under each of the Credit Facilities, in addition to certain initial fees the Company is obligated to pay a per annum commitment fee that varies according to its long-term debt credit rating.

As of September 30, 2011, the Credit Facilities provided credit support for the issuance of up to the full $4.0 billion of capacity under the Company's U.S. commercial paper program (such credit support was reduced to $3.5 billion when the commitments under the 364-Day Facility were reduced effective October 1, 2011). The Credit Facilities can also be used for working capital and other general corporate purposes. The Company expects to limit any borrowings under the Credit Facilities to amounts that would leave enough credit available under the facilities so that it could borrow, if needed, to repay all of the outstanding commercial paper as it matures. As of September 30, 2011, no borrowings were outstanding under either of the Credit Facilities and the Company was in compliance with all covenants under both facilities.

The Company satisfies its short-term liquidity needs primarily through issuances of commercial paper. Under the Company's U.S. commercial paper program, the Company may issue and sell unsecured, short-term promissory notes with maturities not in excess of 397 days from the date of issue pursuant to an exemption from federal and state securities laws. The commercial paper notes are not redeemable prior to maturity and are not subject to voluntary prepayment. Interest expense on the notes is paid at maturity and is generally based on the ratings assigned by credit rating agencies at the time of the issuance and prevailing market rates measured by reference to LIBOR. The Company issued U.S. dollar commercial paper to fund a portion of the purchase price for Beckman Coulter. During the third quarter, the Company issued additional U.S. dollar commercial paper to fund the retirement of substantially all of the Beckman Coulter debt (see below), and also repaid a portion of the outstanding U.S. dollar commercial paper balances. As of September 30, 2011, $1.6 billion of borrowings were outstanding under the Company's U.S. dollar commercial paper program at a weighted average interest rate of 0.2% and a weighted average maturity of approximately 7 days. There was no outstanding Euro-denominated commercial paper as of September 30, 2011 or at any other time during the nine months ended September 30, 2011. The Company classified its borrowings outstanding under the commercial paper programs at September 30, 2011 as long-term borrowings in the accompanying Consolidated Condensed Balance Sheet as the Company had the intent and ability, as supported by availability under the Multi-Year Facility referenced above, to refinance these borrowings for at least one year from the balance sheet date.

In connection with the acquisition of Beckman Coulter, the Company also assumed indebtedness with a fair value of $1.6 billion (the "Beckman Notes"). During the quarter ended September 30, 2011, the Company retired substantially all of the Beckman Notes using proceeds from the issuance of U.S. dollar commercial paper and recorded an approximate $32.9 million ($20.8 million, after tax or $0.03 per diluted share) charge to earnings due to "make whole" payments associated with the extinguishment of certain of the Beckman Notes. The charge to earnings is reflected as loss on early extinguishment of debt in the accompanying Consolidated Condensed Statement of Earnings.

During the nine months ended September 30, 2011, holders of certain of the Company's LYONs converted such LYONs into an aggregate of approximately 7.5 million shares of Danaher common stock, par value $0.01 per share. The Company's deferred tax liability associated with the book and tax basis difference in the converted LYONs of approximately $53.2 million was transferred to additional paid in capital as a result of the conversions.

For a further description of the Company's other debt financing, please refer to Note 9 of the Company's financial statements as of and for the year ended December 31, 2010 included in the Company's Current Report on Form 8-K filed April 21, 2011.