Debt and Interest

9 Months Ended

Sep. 30, 2013

5. Debt and Interest

	September 30		December 31
(millions)	2013		2012
	(unaudited)
Short-term debt
Commercial paper	$	497.3	$	593.7
Notes payable	45.0		44.5
Long-term debt, current maturities	170.9		167.6
Total	$	713.2	$	805.8

As of September 30, 2013, the company had in place a $1.5 billion multi-year credit facility, which expires in September 2016. In August 2013, the company’s $500 million, 364 day credit facility expired and was not replaced. In conjunction with the expiration of the $500 million, 364 day credit facility, the company’s U.S. commercial paper program was decreased from $2.0 billion to $1.5 billion, which is supported by the existing credit facility.

The company’s U.S. commercial paper program, as shown in the previous table, had $497 million and $594 million outstanding as of September 30, 2013 and December 31, 2012, respectively.

	September 30			December 31
(millions)	2013			2012
	(unaudited)

Long-term debt
Description / 2013 Principal Amount
Series A private placement senior euro notes (125 million euro)	$	165.3		$	162.3
Series B private placement senior euro notes (175 million euro)	231.4			227.3
Seven year 2008 senior notes ($250 million)	249.6			249.4
Series A private placement senior notes ($250 million)	250.0			250.0
Series B private placement senior notes ($250 million)	250.0			250.0
Three year 2011 senior notes ($500 million)	499.9			499.8
Five year 2011 senior notes ($1.25 billion)	1,248.4			1,248.1
Ten year 2011 senior notes ($1.25 billion)	1,249.3			1,249.3
Thirty year 2011 senior notes ($750 million)	742.8			742.6
Three year 2012 senior notes ($500 million)	499.8			499.8
Five year 2012 senior notes ($500 million)	499.7			499.6
Term loan ($800 million)	800.0			—
Capital lease obligations	13.0			13.8
Other	9.0			11.7
Total debt	6,708.2			5,903.7
Long-term debt, current maturities	(170.9		)	(167.6		)
Total long-term debt	$	6,537.3		$	5,736.1

In April 2013, in connection with the close of the Champion transaction, the company initiated term loan borrowings of $900 million. Under the agreement, the term loan bears interest at a floating base rate plus a credit rating based margin. The term loan can be repaid in part or in full at any time without penalty, but in any event must be repaid in full by April 2016. In September 2013, the company repaid $100 million of term loan borrowings.

Further information related to the acquisition of Champion is included in Note 3.

The company is in compliance with its debt covenants as of September 30, 2013.

Interest expense and interest income recognized during the third quarter and nine months ended 2013 and 2012 were as follows:

	Third Quarter Ended September 30						Nine Months Ended September 30
(millions)	2013			2012			2013			2012

Interest expense	$	69.2		$	66.8		$	203.0		$	221.6
Interest income	(2.2		)	(2.6		)	(8.3		)	(7.4		)
Interest expense, net	$	67.0		$	64.2		$	194.7		$	214.2

The decrease in interest expense for the nine months ended September 30, 2013 was driven primarily by the inclusion of an $18.2 million loss on extinguishment of Nalco debt, recognized in the first quarter of 2012.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

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