Financing (Notes)

9 Months Ended

Sep. 30, 2011

Financing

Long-Term Debt

The following table summarizes the Company's long-term debt (in millions, except percentages):



	As of
	September 30, 2011
	Amount			Effective Interest Rate
Senior notes:
3.10% fixed-rate notes, due 2016	$	300.0		3.12	%
4.60% fixed-rate notes, due 2021	300.0			4.63	%
5.95% fixed-rate notes, due 2041	400.0			6.01	%
Total senior notes	1,000.0
Unaccreted discount	(1.0		)
Total	$	999.0

In March 2011, the Company issued $300.0 million aggregate principal amount of 3.10% senior notes due 2016 (the "2016 notes"), $300.0 million aggregate principal amount of 4.60% senior notes due 2021 (the "2021 notes"), and $400.0 million aggregate principal amount of 5.95% senior notes due 2041 (the "2041 notes" and, together with the 2016 notes and the 2021 notes the "notes"). Interest on the notes is payable in cash semiannually. The Company may redeem the notes, at any time in whole or from time to time in part, subject to a make-whole premium, and, in the event of a change in control, the holders of the notes may require the Company to repurchase for cash all or part of the notes at a purchase price equal to 101% of the aggregate principle amount, plus accrued and unpaid interest, if any. The indenture that governs the notes also contains various covenants, including limitations on the Company's ability to incur liens or enter into sale-leaseback transactions over certain dollar thresholds.

The effective rates for the notes include the interest on the notes, accretion of the discount, and amortization of issuance costs. At September 30, 2011, the estimated fair value of the notes included in long-term debt was approximately $1,051.1 million based on quoted market prices (Level 1). The Company had no debt at December 31, 2010.

Customer Financing Arrangements

The Company has customer financing arrangements to sell its accounts receivable to a major third-party financing provider. The program does not and is not intended to affect the timing of revenue recognition because the Company only recognizes revenue upon sell-through. Under the financing arrangements, proceeds from the financing provider are due to the Company 30 days from the sale of the receivable. In these transactions with the financing provider, the Company surrendered control over the transferred assets. The accounts receivable were isolated from the Company and put beyond the reach of creditors, even in the event of bankruptcy. The Company does not maintain effective control over the transferred assets through obligations or rights to redeem, transfer, or repurchase the receivables after they have been transferred.

Pursuant to the financing arrangements for the sale of receivables, the Company sold net receivables of $153.4 million and $153.1 million during the three months ended September 30, 2011, and 2010, respectively, and $552.4 million and $435.5 million during the nine months ended September 30, 2011, and 2010, respectively.

The Company received cash proceeds from the financing provider of $142.8 million and $147.0 million during the three months ended September 30, 2011, and 2010, respectively, and $544.7 million and $423.5 million during the nine months ended September 30, 2011, and 2010, respectively. The amounts owed by the financing provider recorded as accounts receivable on the Company’s condensed consolidated balance sheets as of September 30, 2011, and December 31, 2010, was $122.9 million and $127.4 million, respectively.

The portion of the receivable financed that has not been recognized as revenue is accounted for as a financing arrangement and is included in other accrued liabilities and other long-term liabilities in the condensed consolidated balance sheet. As of September 30, 2011, and December 31, 2010, the estimated cash received from the financing provider not recognized as revenue from distributors was $41.5 million and $49.1 million, respectively.