DEBT

Short-Term Borrowings and Five-Year Revolving Credit Facility Agreement

The Company’s short-term borrowings were primarily from its five-year revolving credit facility agreement (“Credit Facility”) and were $38.2 million and $161.0 million as of June 30, 2013 and December 31, 2012 respectively. For the six months ended June 30, 2013, borrowings from the Credit Facility had a weighted-average interest rate of 1.53%. As of June 30, 2013, borrowings from the Credit Facility had a weighted-average interest rate of 1.50%. The Company intends to repay these borrowings within 12 months and has the ability to do so.

Borrowings from the Credit Facility are used for working capital and other general corporate purposes. The Credit Facility is unsecured and repayable on maturity in June 2016, subject to annual extensions if a sufficient number of lenders agree. The maximum amount of outstanding borrowings and letters of credit permitted at any one time under the Credit Facility is $500.0 million, which may be increased from time to time up to $750.0 million at the Company’s request and with the consent of the lenders, subject to satisfaction of customary conditions. The Credit Facility contains financial covenants, whereby the ratio of consolidated total debt to consolidated Earnings Before Interest, Income Taxes, Depreciation and Amortization (“EBITDA”) cannot exceed 3.25 to 1.0, and the ratio of consolidated EBITDA to consolidated interest expense cannot be less than 3.0 to 1.0. The Company was in compliance with these covenants as of June 30, 2013.

Borrowings under the Credit Facility bear interest at a rate that is determined as a base rate plus a margin. The base rate is either (a) LIBOR for a specified interest period, or (b) a floating rate based upon JPMorgan Chase Bank’s prime rate, the Federal Funds rate or LIBOR. The margin is determined by reference to the Company’s credit rating. The margin can range from 0.075% to 1.45% over the base rate. In addition, the Company incurs an annual 0.2% facility fee on the entire facility commitment of $500.0 million.

Note Payable

On March 15, 2012, the Company completed the Argentine Acquisition described in Note 9. Of the ARS850.7 million purchase price payable in connection with the Argentine Acquisition, ARS377.6 million was financed through a note payable. As of June 30, 2013, the remaining balance of the note payable was $16.8 million, the payment of which was contingent upon receipt of Argentine regulatory approval. The Company received regulatory approval on May 31, 2013 and, accordingly, the entire remaining balance was paid in July 2013. Through March 15, 2013, the annual interest rate for the note payable was 14%. Effective as of March 16, 2013, the note was converted to U.S. dollar-denominated indebtedness and the annual interest rate was automatically modified to be 0.85%, which accrued through the Company’s final payment.

Long-Term Debt

The components of long-term debt were as follows:



(Dollars in millions)	June 30, 2013			December 31, 2012
Principal Value:
3.50% Notes due 2014	$	500.0		$	500.0
4.90% Notes due 2019	700.0			700.0
5.90% Notes due 2039	300.0			300.0
Sub-total	1,500.0			1,500.0
Adjustments to Principal Value:
Unamortized basis adjustment for terminated interest rate swaps	21.3			26.0
Unamortized bond discount	(2.4		)	(2.8		)
Long-term debt	$	1,518.9		$	1,523.2

Using quoted prices in markets that are not active, the Company determined that the fair value of its long-term debt was $1,617.5 million (Level 2) as of June 30, 2013.

The components of interest expense-net were as follows:



	Three Months Ended June 30,						Six Months Ended June 30,
(In millions)	2013			2012			2013			2012
Interest expense	$	14.8		$	18.8		$	30.8		$	35.0
Interest income	(2.4		)	(1.2		)	(4.2		)	(2.9		)
Interest expense-net	$	12.4		$	17.6		$	26.6		$	32.1