Warner Chilcott likely to apply free cash flow to debt reduction

By Jennifer Lanning Drey

Portland, Ore., Feb. 1 - Warner Chilcott plc will continue to use its free cash flow to reduce debt in 2010 in the absence of a more compelling call on its cash, Paul Herendeen, chief financial officer of Warner Chilcott, said during a company conference call held Friday.

The company planned to fully redeem the remaining $87.5 million of its 8¾% senior subordinated notes on Monday.

Following that redemption, Warner Chilcott will have $2.95 billion of outstanding debt, consisting of a $1 billion term loan A and a $1.95 billion term loan B, he said.

In addition to using free cash flow to reduce debt, Herendeen noted that Warner Chilcott expects its year-end cash balance to be "a fair bit more" than needed due to the over-funding of its acquisition of Procter & Gamble Co.'s global pharmaceuticals business, which was done in order to cover a potential put that was not exercised.

Warner Chilcott also said Friday it expects adjusted total revenues in the range of $2.90 billion to $2.95 billion in 2010 after excluding the impact of its distribution agreement with LEO Pharma A/S.

Warner Chilcott is a specialty pharmaceutical company. The parent company is based in Ardee, Ireland, and the U.S. subsidiary is located in Rockaway, N.J.

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