PREFERRED SECURITIES OF SUBSIDIARIES

12 Months Ended

Dec. 31, 2011

Preferred Securities Of Subsidiaries

Preferred Securities of Subsidiaries Disclosure [Text Block]

PREFERRED SECURITIES OF SUBSIDIARIES

The following transaction was entered into for the purpose of providing diversified sources of funds to the Company.

In July 1999, Tornado Finance V.O.F., a former consolidated foreign subsidiary of the Company, issued $500 million of preferred securities in the form of preferred partnership units. The units provided a distribution of 7.965 percent, could be redeemed in 2009 or thereafter, and could be called at any time by the subsidiary. The distributions were included in “Net income attributable to noncontrolling interests” in the consolidated statements of income. On June 4, 2009, the preferred partner notified Tornado Finance V.O.F. that the preferred partnership units would be redeemed in full on July 9, 2009, as permitted by the terms of the partnership agreement. On July 9, 2009, the preferred partnership units and accrued dividends were redeemed for a total of $520 million. Upon redemption, Tornado Finance V.O.F. was dissolved.