FINANCING

As of July 1, 2016, the Company was in compliance with all of its debt covenants. The components of the Company’s debt were as follows ($ in millions):



	July 1, 2016		December 31, 2015
Euro-denominated commercial paper (€2.4 billion and €2.8 billion, respectively)	$	2,639.2	$	3,096.9
U.S. dollar-denominated commercial paper	—		920.0
2.3% senior unsecured notes due 2016	—		500.0
4.0% senior unsecured bonds due 2016 (CHF 120.0 million aggregate principal amount)	126.2		122.6
Floating rate senior unsecured notes due 2017 (€500.0 million aggregate principal amount)	558.3		544.8
0.0% senior unsecured bonds due 2017 (CHF 100.0 million aggregate principal amount)	102.5		99.7
1.65% senior unsecured notes due 2018	497.6		497.1
5.625% senior unsecured notes due 2018	500.0		500.0
1.0% senior unsecured notes due 2019 (€600.0 million aggregate principal amount)	667.3		651.0
5.4% senior unsecured notes due 2019	750.0		750.0
2.4% senior unsecured notes due 2020	496.4		495.9
5.0% senior unsecured notes due 2020	406.7		410.7
Zero-coupon Liquid Yield Option Notes (LYONs) due 2021	72.4		72.6
0.352% senior unsecured notes due 2021 (¥30.0 billion aggregate principal amount)	291.2		—
3.9% senior unsecured notes due 2021	600.0		600.0
1.7% senior unsecured notes due 2022 (€800.0 million aggregate principal amount)	888.3		866.8
0.5% senior unsecured bonds due 2023 (CHF 540.0 million aggregate principal amount)	557.0		541.6
2.5% senior unsecured notes due 2025 (€800.0 million aggregate principal amount)	888.9		867.9
3.35% senior unsecured notes due 2025	495.6		495.3
1.125% senior unsecured bonds due 2028 (CHF 110.0 million aggregate principal amount)	113.8		110.7
4.375% senior unsecured notes due 2045	499.3		499.3
Other	130.0		227.5
Subtotal	11,280.7		12,870.4
Fortive debt:
U.S. dollar-denominated commercial paper	392.9		—
Variable interest rate term loan facility	500.0		—
1.8% senior unsecured notes due 2019	297.9		—
2.35% senior unsecured notes due 2021	744.3		—
3.15% senior unsecured notes due 2026	889.7		—
4.3% senior unsecured notes due 2046	546.7		—
Total Fortive debt	3,371.5		—
Total debt	14,652.2		12,870.4
Less: currently payable	2,644.5		845.2
Long-term debt	$	12,007.7	$	12,025.2

For additional details regarding the Company’s debt financing as of December 31, 2015, reference is made to Note 9 of the Company’s financial statements as of and for the year ended December 31, 2015 included in the Company’s 2015 Annual Report on Form 10-K.

The Company satisfies 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. and Euro commercial paper programs. Credit support for the commercial paper programs is provided by the Company's $4.0 billion unsecured, multi-year revolving credit facility with a syndicate of banks that expires on July 10, 2020 (the “Credit Facility”), which can also be used for working capital and other general corporate purposes. The Company's $1.0 billion 364-day unsecured revolving credit facility with a syndicate of banks (the “364-Day Facility”) expired in accordance with its terms on July 8, 2016. There were no amounts outstanding under the 364-Day Facility at any time during the term of the facility. Since the 364-Day Facility provided a portion of the liquidity support for the Company's commercial paper programs, upon such expiration the capacity under the Company’s U.S. and Euro commercial paper programs effectively decreased by the same amount. As of July 1, 2016, borrowings outstanding under the Company’s U.S. and Euro commercial paper programs (including the Fortive commercial paper program) had a weighted average annual interest rate of 0.1% and a weighted average remaining maturity of approximately 54 days.

The Company classified its borrowings outstanding under the commercial paper programs as of July 1, 2016 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 Credit Facility and the Fortive senior unsecured revolving credit facility referenced below, to refinance these borrowings for at least one year from the balance sheet date.

As of July 1, 2016, no borrowings were outstanding under either the Credit Facility or the 364-Day Facility, and the Company was in compliance with all covenants under each facility. In addition to the Credit Facility, the Company has also entered into reimbursement agreements with various commercial banks to support the issuance of letters of credit.

Debt discounts and debt issuance costs totaled $35 million (including $21 million related to the Fortive debt) and $9 million as of July 1, 2016 and December 31, 2015, respectively, and have been netted against the aggregate principal amounts of the related debt in the components of debt table above.

2016 Long-Term Debt Issuances

Long-Term Indebtedness Related to Danaher

On February 28, 2016, DH Japan Finance S.A., a wholly-owned finance subsidiary of the Company, completed the private placement of ¥30.0 billion aggregate principal amount of 0.352% senior unsecured notes due March 16, 2021 (the “2021 Yen Notes”). The 2021 Yen Notes were issued at 100% of their principal amount.

The 2021 Yen Notes are fully and unconditionally guaranteed by the Company. The Company received net proceeds, after offering expenses, of approximately ¥29.9 billion (approximately $262 million based on currency exchange rates as of the date of issuance) and used the net proceeds from the offering to repay a portion of the commercial paper borrowings incurred in connection with the 2015 acquisition of Pall. Interest on the 2021 Yen Notes is payable semi-annually in arrears on March 16 and September 16 of each year, commencing on September 16, 2016.

Long-Term Indebtedness Related to the Fortive Separation

In June 2016, the Company received net cash distributions of approximately $3.0 billion from Fortive as consideration for the Company’s contribution of assets to Fortive in connection with the Separation. Fortive financed these cash payments through issuance of approximately $3.4 billion of debt, consisting of $500 million aggregate principal amount of borrowings under a three-year, senior unsecured term loan facility with variable interest rates (the “Term Loan Facility”), $393 million of commercial paper borrowings supported by a five-year, $1.5 billion senior unsecured revolving credit facility (the “Revolving Credit Facility” and together with the Term Loan Facility the “Fortive Credit Facilities”), $300 million aggregate principal amount of 1.8% senior unsecured notes due 2019, $750 million aggregate principal amount of 2.35% senior unsecured notes due 2021, $900 million aggregate principal amount of 3.15% senior unsecured notes due 2026 and $550 million aggregate principal amount of 4.3% senior unsecured notes due 2046 (collectively, the “Fortive Debt”). Danaher initially guaranteed the Fortive Debt, and the guarantee terminated effective as of the Distribution Date. As of July 1, 2016, Fortive was a wholly-owned, consolidated subsidiary of the Company, and as a result, the Company’s Consolidated Condensed Balance Sheet as of July 1, 2016 includes the Fortive Debt. The transfer of the liabilities associated with the Fortive Debt, as well as all other assets and liabilities transferred to Fortive, will be reflected in the Company's financial statements in the third quarter of 2016. As of July 1, 2016, the Company was in compliance with all covenants under the Fortive Credit Facilities.

Danaher used a portion of the proceeds from the cash distribution it received from Fortive to repay the Company’s $500 million aggregate principal amount of 2.3% senior unsecured notes due in June 2016 and intends to use a portion of the cash distribution proceeds to redeem as of August 15, 2016 all of the Company's $500 million aggregate principal amount of 5.625% senior unsecured notes due 2018, $750 million aggregate principal amount of 5.4% senior unsecured notes due 2019 and $600 million aggregate principal amount of 3.9% senior unsecured notes due 2021 (collectively the “Notes”) in each case at a redemption price equal to the outstanding principal amount of such redeemed series of Notes and a make-whole premium as specified in the applicable indenture, plus accrued and unpaid interest. As a result, the Notes have been included in notes payable and current portion of long-term debt in the accompanying Consolidated Condensed Balance Sheet. Danaher currently expects to incur an expense of approximately $190 million in the third quarter of 2016 due to the make-whole payments required in connection with the early extinguishment of the Notes. This amount may change based on changes in interest rates near the redemption date. The Company also intends to use a portion of the cash proceeds it received from Fortive to fund certain of the Company’s regular, quarterly cash dividends to shareholders.

LYONs Redemption and Conversion Ratio

During the six month period ended July 1, 2016, holders of certain of the Company’s LYONs converted such LYONs into an aggregate of approximately 36 thousand shares of the Company’s 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 $0.5 million was transferred to additional paid-in capital as a result of the conversions.

Pursuant to the terms of the indenture that governs the Company’s LYONs, effective as of the record date of the distribution of the Fortive shares, the conversion ratio of the LYONs was adjusted so that each $1,000 of principal amount at maturity may be converted into 38.1998 shares of Danaher common stock at any time on or before the maturity date of January 22, 2021.