DEBT

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

As of March 31, 2014, the Company’s short-term borrowings were $1.5 million and consisted of borrowings made by the Company’s subsidiary in Argentina. These short-term borrowings had a weighted-average interest rate of 31.00% as of March 31, 2014. The Company intends to repay these borrowings within 12 months and has the ability to do so.

As of December 31, 2013, the Company’s short-term borrowings totaled $2.0 million and consisted of borrowings made by the Company’s subsidiary in Argentina.

Borrowings from the Company’s five-year revolving credit facility agreement (“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 March 31, 2014.

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.

Long-Term Debt

The components of long-term debt were as follows:



(Dollars in millions)	March 31, 2014			December 31, 2013
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	14.5			16.7
Unamortized bond discount	(1.9		)	(2.0		)
Less amount due within one year	503.9			505.6
Long-term debt	$	1,008.7		$	1,009.1

The Company’s long-term debt includes $500.0 million which is considered short-term as it matures on November 1, 2014. MJN plans to refinance this short-term debt in 2014. Using quoted prices in markets that are not active, the Company determined that the fair value of its long-term debt was $1,611.5 million (Level 2) as of March 31, 2014.

The components of interest expense-net were as follows:



	Three Months Ended March 31,
(In millions)	2014			2013
Interest expense	$	14.8		$	16.0
Interest income	(2.4		)	(1.8		)
Interest expense-net	$	12.4		$	14.2