SHORT-TERM BORROWINGS

12 Months Ended

Dec. 31, 2012

SHORT-TERM BORROWINGS

SHORT-TERM BORROWINGS

7.     Short-Term Borrowings

        At December 31, 2012, total short-term borrowings consisted of $24.0 million in commercial paper and no borrowings from our line of credit. During 2012 and 2011 our short-term borrowings outstanding averaged (in millions)

	2012		2011
Average borrowings outstanding	$	17.8	$	8.8
Highest month end balance	$	55.7	$	18.5

        The weighted average interest rates and the weighted average interest rate of borrowings outstanding at December 31, 2012 and 2011 were:.

	2012			2011
Weighted average interest rate		1.05	%		0.98	%
Weighted average interest rate of borrowings outstanding		0.91	%		0.85	%

        On January 17, 2012, we entered into the Third Amended and Restated Unsecured Credit Agreement which amended and restated our Second Amended and Restated Unsecured Credit Agreement dated January 26, 2010. This agreement extended the termination date of the revolving credit facility from January 26, 2013 to January 17, 2017. The agreement also removes the letter of credit facility and includes a swingline loan facility with a $15 million swingline loan sublimit. The aggregate amount of the revolving credit commitments remains $150 million, inclusive of the $15 million swingline loan sublimit. In addition, the pricing and fees under the facility were amended. Interest on borrowings under the facility accrues at a rate equal to, at our option, (i) the highest of (A) the bank's prime commercial rate, (B) the federal funds effective rate plus 0.5% or (C) one month LIBOR plus 1.0%, plus a margin or (ii) one month, two month or three month LIBOR, in each case, plus a margin. Each margin is based on our current credit ratings and the pricing schedule in the facility. As of the date hereof, and based on our current credit ratings, the LIBOR margin under the facility is 1.25%. A facility fee is payable quarterly on the full amount of the commitments under the facility based on our current credit ratings (the fee is currently 0.25%). In addition, upon entering into the amended and restated facility, we paid an upfront fee to the revolving credit banks of $262,500 in the aggregate. There were no other material changes to the terms of the facility.

        The facility is used for working capital, general corporate purposes and to back-up our use of commercial paper. This facility requires our total indebtedness to be less than 62.5% of our total capitalization at the end of each fiscal quarter and our EBITDA (defined as net income plus interest, taxes, depreciation and amortization) to be at least two times our interest charges for the trailing four fiscal quarters at the end of each fiscal quarter. Failure to maintain these ratios will result in an event of default under the credit facility and will prohibit us from borrowing funds thereunder. As of December 31, 2012, we are in compliance with these ratios. Our total indebtedness is 49.9% of our total capitalization as of December 31, 2012 and our EBITDA is 4.9 times our interest charges. This credit facility is also subject to cross-default if we default on in excess of $10 million in the aggregate on our other indebtedness. This arrangement does not serve to legally restrict the use of our cash in the normal course of operations. There were no outstanding borrowings under this agreement at December 31, 2012. However, $24.0 million was used to back up our outstanding commercial paper.