BEC » Topics » Financing Arrangements

This excerpt taken from the BEC 10-Q filed May 7, 2009.

Financing Arrangements

At March 31, 2009 approximately $188 million of unused, uncommitted, short-term lines of credit were available to our subsidiaries outside the U.S. at various interest rates. In the U.S., $40 million in unused, uncommitted, short-term lines of credit at prevailing market rates were available, excluding the accounts receivable securitization program described below.

Our wholly owned subsidiary, Beckman Coulter Finance Company, LLC (“BCFC”), a Delaware limited liability company, entered into an accounts receivable securitization program with several financial institutions. The securitization facility is on a 364-day revolving basis. As part of the securitization program, we transferred our interest in a defined pool of accounts receivable to BCFC. In turn, BCFC sold an ownership interest in the underlying receivables to the multi-seller conduits administered by a third party bank. Sale of receivables under the program is accounted for as a secured borrowing. The cost of funds under this program varies based on changes in interest rates. The term of the agreement extends to October 28, 2009 and the maximum borrowing amount is $125.0 million. We did not have any amounts drawn on the facility as of March 31, 2009.

In January 2005, we entered into an Amended and Restated Credit Agreement (the “Credit Facility”) that will terminate in January 2010. The Credit Facility provides us with a $300.0 million revolving line of credit, which may be increased in $50.0 million increments up to a maximum line of credit of $500.0 million. Interest on advances is determined using formulas specified in the agreement, generally, an approximation of LIBOR plus a 0.275% to 0.875% margin. We also must pay a facility fee of 0.150% per annum on the aggregate average daily amount of each lender’s commitment. We are currently in the process of renewing our Credit Facility. At March 31, 2009, there was no balance drawn on the Credit Facility.

We currently expect to finance the Olympus Diagnostics Acquisition purchase price with a combination of proceeds from a $500 million debt offering, newly issued common stock (representing approximately U.S. $250 million), with the remaining balance being paid from cash.

 

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These excerpts taken from the BEC 10-K filed Feb 23, 2009.

Financing Arrangements

At December 31, 2008, approximately $192.0 million of unused, uncommitted, short-term lines of credit were available to our subsidiaries outside the United States at various interest rates. In the United States, $40.0 million in unused, uncommitted, short-term lines of credit at prevailing market rates were available. At December 31, 2008 we had variable-rate debt representing approximately 1.9% of our total debt.

In October 2007, our wholly owned subsidiary, Beckman Coulter Finance Company, LLC (“BCFC”), a Delaware limited liability company, entered into an accounts receivable securitization program with several financial institutions. The securitization facility is on a 364-day revolving basis. As part of the securitization program, we transferred our interest in a defined pool of accounts receivable to BCFC. In turn, BCFC sold ownership interest in the underlying receivables to the multi-seller conduits administered by a third party bank. Sale of receivables under the program is accounted for as a secured borrowing. The cost of funds under this program varies based on changes in interest rates. On October 29, 2008, we amended the accounts receivable securitization program to extend the term of the agreement from October 29, 2008 to October 28, 2009 as well as reduce the maximum borrowing amount from $175.0 million to $125.0 million. We did not have any amounts drawn on the facility as of December 31, 2008.

In December 2006, we issued $600.0 million of convertible notes. Proceeds were used to repurchase $240.0 million senior notes due in 2008, repay our bridge loan used to finance the acquisition of Lumigen and to repay $58.0 million of our outstanding Credit Facility. Proceeds were also used to repurchase approximately 1.7 million shares of our common stock in 2006 in addition to the 1.6 million shares purchased earlier in the year. Total stock repurchases were $94.4 million, $57.3 million and $188.4 million in 2008, 2007 and 2006, respectively.

In January 2005, we entered into an Amended and Restated Credit Agreement (the “Credit Facility”) that will terminate in January 2010. The Credit Facility provides us with a $300.0 million revolving line of credit, which may be increased in $50.0 million increments up to a maximum line of credit of $500.0 million. Interest on advances is determined using formulas specified in the agreement, generally, an approximation of LIBOR plus a 0.275% to 0.875% margin. We also must pay a facility fee of 0.150% per annum on the aggregate average daily amount of each lender’s commitment. At December 31, 2008, there was no balance drawn on the Credit Facility.

Certain of our borrowing agreements contain covenants that we must comply with, for example, a debt to earnings ratio and a minimum interest coverage ratio. At December 31, 2008, we were in compliance with all such covenants as well as reporting requirements related to these covenants.

 

 

40    BEC 2008 FORM 10-K


Table of Contents

The following is included in long-term debt at December 31, 2008 and 2007 (dollar amounts in millions):

 

     Average Rate of
Interest for 2008
  2008     2007  

Convertible Notes, unsecured, due 2036

   2.50%   $ 598.6     $ 598.6  

Embedded derivative on convertible notes

       0.6       1.6  

Senior Notes, unsecured, due 2011

   6.88%     235.0       235.0  

Debentures, unsecured, due 2026

   7.05%     36.2       44.2  

Revolving credit facility

   3.40%     —         —    

Other long-term debt

   1.99%     37.4       30.6  

Less current maturities

       (4.4 )     (12.8 )
                  

Long term debt, less current maturities

     $ 903.4     $ 897.2  
                  

Our credit ratings at December 31, 2008, were as follows:

 

Rating Agency

   Rating    Outlook

Fitch

   BBB    Stable

Moody’s

   Baa3    Stable

Standard & Poor’s

   BBB    Stable

Factors that can affect our credit ratings include changes in our operating performance, our financial position and changes in our business strategy. We do not currently foresee any reasonable circumstances under which our credit ratings would be significantly downgraded. If a downgrade were to occur, it could adversely impact, among other things, our future borrowing costs and access to capital markets.

In November 2008, we renewed our universal shelf registration statement with the United States Securities and Exchange Commission for the offer and sale of up to $500 million of securities, which may include debt securities, preferred stock, common stock and warrants to purchase debt securities, common stock, preferred stock or depository shares. We have no immediate plans to offer or sell any securities.

Based upon current levels of operations and expected future growth, we believe our cash flows from operations together with available borrowings under our Credit Facility and other sources of liquidity will be adequate to meet our anticipated requirements for interest payments and other debt service obligations, working capital, capital expenditures, lease payments, pension contributions and other operating and investing needs.

Capital Expenditures

Customer leased instruments currently comprise about two-thirds of our total capital expenditures. We expect our OTL instrument balance to increase as the majority of our contracts are from OTL transactions. We expect to incur capital expenditures of $350 million to $375 million in 2009, including capital expenditures of approximately $50 million to $60 million related to renovations and other capital expenditures associated with the Orange County consolidation project. Capital expenditures are funded through cash provided by operating activities, as well as available cash and cash equivalents and short-term investments.

Financing Arrangements

STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%">At December 31, 2008, approximately $192.0 million of unused, uncommitted, short-term lines of credit were available to our subsidiaries outside the
United States at various interest rates. In the United States, $40.0 million in unused, uncommitted, short-term lines of credit at prevailing market rates were available. At December 31, 2008 we had variable-rate debt representing approximately
1.9% of our total debt.

In October 2007, our wholly owned subsidiary, Beckman Coulter Finance Company, LLC (“BCFC”), a Delaware
limited liability company, entered into an accounts receivable securitization program with several financial institutions. The securitization facility is on a 364-day revolving basis. As part of the securitization program, we transferred our
interest in a defined pool of accounts receivable to BCFC. In turn, BCFC sold ownership interest in the underlying receivables to the multi-seller conduits administered by a third party bank. Sale of receivables under the program is accounted for as
a secured borrowing. The cost of funds under this program varies based on changes in interest rates. On October 29, 2008, we amended the accounts receivable securitization program to extend the term of the agreement from October 29, 2008
to October 28, 2009 as well as reduce the maximum borrowing amount from $175.0 million to $125.0 million. We did not have any amounts drawn on the facility as of December 31, 2008.

STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%">In December 2006, we issued $600.0 million of convertible notes. Proceeds were used to repurchase $240.0 million senior notes due in 2008, repay our
bridge loan used to finance the acquisition of Lumigen and to repay $58.0 million of our outstanding Credit Facility. Proceeds were also used to repurchase approximately 1.7 million shares of our common stock in 2006 in addition to the
1.6 million shares purchased earlier in the year. Total stock repurchases were $94.4 million, $57.3 million and $188.4 million in 2008, 2007 and 2006, respectively.

FACE="Times New Roman" SIZE="2">In January 2005, we entered into an Amended and Restated Credit Agreement (the “Credit Facility”) that will terminate in January 2010. The Credit Facility provides us with a $300.0 million revolving line of
credit, which may be increased in $50.0 million increments up to a maximum line of credit of $500.0 million. Interest on advances is determined using formulas specified in the agreement, generally, an approximation of LIBOR plus a 0.275% to 0.875%
margin. We also must pay a facility fee of 0.150% per annum on the aggregate average daily amount of each lender’s commitment. At December 31, 2008, there was no balance drawn on the Credit Facility.

STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%">Certain of our borrowing agreements contain covenants that we must comply with, for example, a debt to earnings ratio and a minimum interest coverage
ratio. At December 31, 2008, we were in compliance with all such covenants as well as reporting requirements related to these covenants.

 


 












40  BEC 2008 FORM 10-K






Table of Contents


The following is included in long-term debt at December 31, 2008 and 2007 (dollar amounts in
millions):

 


















































































































































   Average Rate of
Interest for 2008
 2008  2007 

Convertible Notes, unsecured, due 2036

  2.50% $598.6  $598.6 

Embedded derivative on convertible notes

    0.6   1.6 

Senior Notes, unsecured, due 2011

  6.88%  235.0   235.0 

Debentures, unsecured, due 2026

  7.05%  36.2   44.2 

Revolving credit facility

  3.40%  —     —   

Other long-term debt

  1.99%  37.4   30.6 

Less current maturities

    (4.4)  (12.8)
          

Long term debt, less current maturities

   $903.4  $897.2 
          

Our credit ratings at December 31, 2008, were as follows:

STYLE="font-size:12px;margin-top:0px;margin-bottom:0px"> 


































Rating Agency

  Rating  Outlook

Fitch

  BBB  Stable

Moody’s

  Baa3  Stable

Standard & Poor’s

  BBB  Stable

Factors that can affect our credit ratings include changes in our operating performance, our
financial position and changes in our business strategy. We do not currently foresee any reasonable circumstances under which our credit ratings would be significantly downgraded. If a downgrade were to occur, it could adversely impact, among other
things, our future borrowing costs and access to capital markets.

In November 2008, we renewed our universal shelf registration statement
with the United States Securities and Exchange Commission for the offer and sale of up to $500 million of securities, which may include debt securities, preferred stock, common stock and warrants to purchase debt securities, common stock, preferred
stock or depository shares. We have no immediate plans to offer or sell any securities.

Based upon current levels of operations and
expected future growth, we believe our cash flows from operations together with available borrowings under our Credit Facility and other sources of liquidity will be adequate to meet our anticipated requirements for interest payments and other debt
service obligations, working capital, capital expenditures, lease payments, pension contributions and other operating and investing needs.

SIZE="2">Capital Expenditures

Customer leased instruments currently comprise about two-thirds of our total capital expenditures. We
expect our OTL instrument balance to increase as the majority of our contracts are from OTL transactions. We expect to incur capital expenditures of $350 million to $375 million in 2009, including capital expenditures of approximately $50 million to
$60 million related to renovations and other capital expenditures associated with the Orange County consolidation project. Capital expenditures are funded through cash provided by operating activities, as well as available cash and cash equivalents
and short-term investments.

This excerpt taken from the BEC 10-Q filed Nov 5, 2008.

Financing Arrangements

At September 30, 2008 approximately $162.0 million of unused, uncommitted, short-term lines of credit were available to our subsidiaries outside the U.S. at various interest rates. In the U.S., $16.8 million in unused, uncommitted, short-term lines of credit at prevailing market rates were available, excluding the accounts receivable securitization program described below.

In October 2007, our wholly owned subsidiary, Beckman Coulter Finance Company, LLC (“BCFC”), a Delaware limited liability company, entered into an accounts receivable securitization program with several financial institutions. The securitization facility is on a 364-day revolving basis. As part of the securitization program, we transferred our interest in a defined pool of accounts receivable to BCFC. In turn, BCFC sold ownership interest in the underlying receivables to multi-seller conduits administered by a third party bank. Sale of receivables under the program is accounted for as a secured borrowing. The cost of funds under this program varies based on changes in interest rates. At September 30, 2008 we had no outstanding balance on this facility. On October 29, 2008, we amended the accounts receivable securitization program to extend the term of the agreement from October 29, 2008 to October 28, 2009 as well as reduce the maximum borrowing amount from $175.0 million to $125.0 million.

In January 2005, we entered into an Amended and Restated Credit Agreement (the “Credit Facility”) that will terminate in January 2010. The Credit Facility provides us with a $300.0 million revolving line of credit, which may be increased in $50.0 million increments up to a maximum line of credit of $500.0 million. Interest on advances is determined using formulas specified in the agreement, generally, an approximation of LIBOR plus a 0.275% to 0.875% margin. We also must pay a facility fee of 0.150% per annum on the aggregate average daily amount of each lender’s commitment. At September 30, 2008, there was $35.0 million drawn on the Credit Facility which is subject to a variable rate of interest.

This excerpt taken from the BEC 10-Q filed Aug 6, 2008.

Financing Arrangements

At June 30, 2008 approximately $158.7 million of unused, uncommitted, short-term lines of credit were available to our subsidiaries outside the U.S. at various interest rates. In the U.S., $29.5 million in unused, uncommitted, short-term lines of credit at prevailing market rates were available, excluding the accounts receivable securitization program described below.

In October 2007, our wholly owned subsidiary, Beckman Coulter Finance Company, LLC (“BCFC”), a Delaware limited liability company, entered into an accounts receivable securitization program with several financial institutions. The securitization facility is on a 364-day revolving basis. As part of the securitization program, we transferred our interest in a defined pool of accounts receivable to BCFC. In turn, BCFC sold ownership interest in the underlying receivables to multi-seller conduits administered by a third party bank. Sale of receivables under the program is accounted for as a secured borrowing. The cost of funds under this program varies based on changes in interest rates. At June 30, 2008 we had an outstanding balance of $44.0 million on this facility. Under the accounts receivable securitization program, the maximum borrowing amount can not exceed $175.0 million.

 

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Table of Contents

In January 2005, we entered into an Amended and Restated Credit Agreement (the “Credit Facility”) that will terminate in January 2010. The Credit Facility provides us with a $300.0 million revolving line of credit, which may be increased in $50.0 million increments up to a maximum line of credit of $500.0 million. Interest on advances is determined using formulas specified in the agreement, generally, an approximation of LIBOR plus a 0.275% to 0.875% margin. We also must pay a facility fee of 0.150% per annum on the aggregate average daily amount of each lender’s commitment. At June 30, 2008, there was $30.0 million drawn on the Credit Facility.

Based upon current levels of operations and expected future growth, we believe our cash flows from operations together with available borrowings under our credit facility and other sources of liquidity will be adequate to meet our anticipated requirements for interest payments, other debt service obligations, working capital, capital expenditures, lease payments, pension contributions, future business acquisitions and other operating needs for the next 12 months. There can be no assurance, however, that our business will continue to generate cash flow at or above current levels. Future operating performance and our ability to service or refinance existing indebtedness will be subject to future economic conditions and to financial, business and other factors, many of which are beyond our control.

This excerpt taken from the BEC 10-Q filed May 7, 2008.

Financing Arrangements

At March 31, 2008 approximately $144.2 million of unused, uncommitted, short-term lines of credit were available to our subsidiaries outside the U.S. at various interest rates. In the U.S., $30.7 million in unused, uncommitted, short-term lines of credit at prevailing market rates were available.

In October 2007, our wholly owned subsidiary, Beckman Coulter Finance Company, LLC (“BCFC”), a Delaware limited liability company, entered into an accounts receivable securitization program with several financial institutions. The securitization facility is on a 364-day revolving basis. As part of the securitization program, we transferred our interest in a defined pool of accounts receivable to BCFC. In turn, BCFC sold ownership interest in the underlying receivables to multi-seller conduits administered by a third party bank. Sale of receivables under the program is accounted for as a secured borrowing. The cost of funds under this program varies based on changes in interest rates. At March 31, 2008 we did not have an outstanding balance drawn on this facility. Under the accounts receivable securitization program, the maximum borrowing amount can not exceed $175.0 million.

In January 2005, we entered into an Amended and Restated Credit Agreement (the “Credit Facility”) that will terminate in January 2010. The Credit Facility provides us with a $300.0 million revolving line of credit, which may be increased in $50.0 million increments up to a maximum line of credit of $500.0 million. Interest on advances is determined using formulas specified in the agreement, generally, an approximation of LIBOR plus a 0.275% to 0.875% margin. We also must pay a facility fee of 0.150% per annum on the aggregate average daily amount of each lender’s commitment. At March 31, 2008, there was nothing drawn on the Credit Facility.

Based upon current levels of operations and expected future growth, we believe our cash flows from operations together with available borrowings under our credit facility and other sources of liquidity will be adequate to meet our anticipated requirements for interest payments, other debt service obligations, working capital, capital expenditures, lease payments, pension contributions, future business acquisitions and other operating needs for the next 12 months. There can be no assurance, however, that our business will continue to generate cash flow at or above current levels. Future operating performance and our ability to service or refinance existing indebtedness will be subject to future economic conditions and to financial, business and other factors, many of which are beyond our control.

This excerpt taken from the BEC 10-K filed Feb 29, 2008.

Financing Arrangements

At December 31, 2007, approximately $120.1 million of unused, uncommitted, short-term lines of credit were available to our subsidiaries outside the U.S. at various interest rates. In the U.S., $22.3 million in unused, uncommitted, short-term lines of credit at prevailing market rates were available.

In October 2007, our wholly owned subsidiary, Beckman Coulter Finance Company, LLC (“BCFC”), a Delaware limited liability company, entered into an accounts receivable securitization program with several financial institutions. The securitization facility will be on a 364-day revolving basis. As part of the securitization program, we transferred our interest in a defined pool of accounts receivable to BCFC. In turn, BCFC will sell ownership interest in the underlying receivables to the multi-seller conduits administered by a third party bank. Sale of receivables under the program is accounted for as a secured borrowing. The cost of funds under this program varies based on changes in interest rates. We did not have any amounts drawn on the facility as of December 31, 2007. Under the accounts receivable securitization program, the maximum borrowing amount can not exceed $175.0 million.

In December 2006, we issued $600.0 million of Convertible Notes. Proceeds were used to repurchase $240.0 million Senior Notes due in 2008, repay our bridge loan used to finance the acquisition of Lumigen and to repay $58.0 million of our outstanding Credit Facility. Proceeds were also used to repurchase approximately 1.7 million shares of our common stock in addition to the 1.6 million shares purchased earlier in 2006. Total stock repurchases were $57.3 million and $188.4 million in 2007 and 2006, respectively.

In January 2005, we entered into an Amended and Restated Credit Agreement (the “Credit Facility”) that will terminate in January 2010. The Credit Facility provides us with a $300.0 million revolving line of credit, which may be increased in $50.0 million increments up to a maximum line of credit of $500.0 million. Interest on advances is determined using formulas specified in the agreement, generally, an approximation of LIBOR plus a 0.275% to 0.875% margin. We also must pay a facility fee of 0.150% per annum on the aggregate average daily amount of each lender’s commitment. At December 31, 2007, there was no balance drawn on the Credit Facility.

Certain of our borrowing agreements contain covenants that we must comply with, for example, a debt to earnings ratio and a minimum interest coverage ratio. At December 31, 2007, we were in compliance with all such covenants as well as reporting requirements related to these covenants.

 

41


Table of Contents

The following is included in long-term debt at December 31, 2007 and 2006 (dollar amounts in millions):

 

     Average Rate of
Interest for 2007
  2007    2006

Convertible Notes, unsecured, due 2036

   2.50%   $ 598.6    $ 598.6

Senior Notes, unsecured, due 2008

   7.45%     —        4.9

Senior Notes, unsecured, due 2011

   6.88%     235.0      235.0

Debentures, unsecured, due 2026

   7.05%     44.2      44.2

Revolving credit facility

   5.57%     —        55.0

Other long-term debt

   2.38%     30.6      29.9

Our credit ratings at December 31, 2007, were as follows:

 

Rating Agency

   Rating    Outlook

Fitch

   BBB    Stable

Moody’s

   Baa3    Stable

Standard & Poor’s

   BBB    Negative

Factors that can affect our credit ratings include changes in our operating performance, our financial position and changes in our business strategy. We do not currently foresee any reasonable circumstances under which our credit ratings would be significantly downgraded. If a downgrade were to occur, it could adversely impact, among other things, our future borrowing costs and access to capital markets.

In October 2002, we filed a “universal shelf” registration statement with the U.S. Securities and Exchange Commission for the offer and sale of up to $500 million of securities, which may include debt securities, preferred stock, common stock and warrants to purchase debt securities, common stock, preferred stock or depository shares. We have no immediate plans to offer or sell any securities.

Based upon current levels of operations and expected future growth, we believe our cash flows from operations together with available borrowings under our Credit Facility and other sources of liquidity will be adequate to meet our anticipated requirements for interest payments and other debt service obligations, working capital, capital expenditures, lease payments, pension contributions and other operating needs.

Capital Expenditures

Customer leased instruments currently comprise a substantial portion of our total capital expenditures. We expect our OTL instrument balance to increase as the majority of our contracts are from OTL transactions. We incurred capital expenditures related to OTL instruments of $166.5 million and $193.6 million during the years ended December 31, 2007 and 2006, respectively. Capital expenditures are funded through cash provided by operating activities, as well as available cash and cash equivalents and short-term investments.

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