Indebtedness

12 Months Ended

Dec. 31, 2011

Indebtedness [Abstract]

INDEBTEDNESS

NOTE 10. INDEBTEDNESS

Total debt consisted of the following at December 31, net of unamortized discount and debt issuance cost:

	2011		2010
5.75% Notes due June 2011 with an effective interest rate of 5.86%		$            -		$        254
6.5% Senior Notes due November 2013 with an effective interest rate of 6.73%		-		522
6.0% Notes due June 2018 with an effective interest rate of 6.29%		265		267
7.5% Senior Notes due November 2018 with an effective interest rate of 7.61%		743		742
3.2% Senior Notes due August 2021 with an effective interest rate of 3.32%		742		-
8.55% Debentures due June 2024 with an effective interest rate of 8.76%		148		148
6.875% Notes due January 2029 with an effective interest rate of 7.08%		393		393
5.125% Notes due September 2040 with an effective interest rate of 5.22%		1,479		1,479
Other debt		299		80
Total debt		4,069		3,885
Less short-term debt and current portion of long-term debt		224		331
Long-term debt		$    3,845		$    3,554

In August 2011, we completed a private placement of $750 million 3.2% unsecured Senior Notes under our existing indenture dated October 28, 2008 that have registration rights and will mature in August 2021. Net proceeds from the offering were approximately $742 million after deducting the underwriting discount and expense of the offering. Interest is payable February 15 and August 15 of each year. The 3.2% Notes are senior unsecured obligations and rank equal in right of payment to all of our existing and future indebtedness; senior in right of payment to any future subordinated indebtedness; and effectively junior to our future secured indebtedness, if any, and structurally subordinated to all existing and future indebtedness of our subsidiaries. We may redeem, at our option, all or part of the 3.2% Notes at any time, at the applicable make-whole redemption prices plus accrued and unpaid interest to the date of redemption. In September 2011, we used $563 million of the net proceeds from the offering to redeem in full our 6.5% Notes, and the remainder will be used for general corporate purposes, which could include funding on-going operations, business acquisitions and repurchases of our common stock. The redemption of our 6.5% Notes resulted in the payment of a redemption premium of $63 million and in a pre-tax loss on the early extinguishment of this debt of $40 million, which includes the redemption premium and the write off of the remaining original debt issuance cost and debt discount, partially offset by the $25 million gain from the termination of two related interest rate swap agreements.

In June 2011, we repaid the $250 million principal amount of our 5.75% Notes using proceeds from U.S. Treasury Bills that matured in May 2011.

In September 2011, we entered into a five-year committed $2.5 billion revolving credit facility maturing in September 2016. The new revolving credit facility replaced our existing committed revolving credit facilities of $500 million maturing in July 2012 and $1.2 billion maturing in March 2013, both of which were terminated in September 2011. There were no direct borrowings under any of the committed revolving credit facilities during 2011. We also have a commercial paper program under which we may issue up to $2.5 billion in commercial paper with maturities of no more than 270 days. The maximum combined borrowing at any point in time under both the commercial paper program and the credit facility is $2.5 billion. At December 31, 2011, we had $130 million of commercial paper outstanding.

Maturities of debt at December 31, 2011 are as follows: 2012 - $224 million; 2013 - $8 million; 2014 - $10 million; 2015 - $13 million; 2016 - $15 million; and $3,799 million thereafter.