Indebtedness

6 Months Ended

Jun. 30, 2011

Indebtedness

Indebtedness

6. INDEBTEDNESS

Indebtedness consisted of the following at June 30, 2011 and December 31, 2010 (in millions):

	June 30, 2011			December 31, 2010
6 7/8% Senior subordinated notes due 2014	$	—		$	267.7
4 1/2% Senior unsecured term loan due 2016		289.8			—
1 3/4% Convertible senior subordinated notes due 2033		100.3			161.0
1 1/4% Convertible senior subordinated notes due 2036		179.3			175.2
Securitization facilities		150.7			113.9
Other long-term debt		7.5			0.2
		727.6			718.0
Less: Current portion of long-term debt		(1.0	)		(0.1	)
1 3/4% Convertible senior subordinated notes due 2033		(100.3	)		(161.0	)
Securitization facilities		(150.7	)		(113.9	)
Total indebtedness, less current portion	$	475.6		$	443.0

The Company's $100.3 million of 1 ³/4% convertible senior subordinated notes due December 31, 2033, issued in June 2005, provide for (i) the settlement upon conversion in cash up to the principal amount of the notes with any excess conversion value settled in shares of the Company's common stock, and (ii) the conversion rate to be increased under certain circumstances if the notes had been converted in connection with certain change of control transactions occurring prior to December 10, 2010. The notes are unsecured obligations and are convertible into cash and shares of the Company's common stock upon satisfaction of certain conditions. Interest is payable on the notes at 1 ³/4% per annum, payable semi-annually in arrears in cash on June 30 and December 31 of each year. The notes are convertible into shares of the Company's common stock at an effective price of $22.36 per share, subject to adjustment. This reflects an initial conversion rate for the notes of 44.7193 shares of common stock per $1,000 principal amount of notes.

During the six months ended June 30, 2011, holders of the Company's 1 ³/4% convertible senior subordinated notes converted approximately $60.7 million of principal amount of the notes. The Company issued 1,577,889 shares associated with the $84.2 million excess conversion value of the notes. The Company reflected the repayment of the principal of the notes totaling $60.7 million within "Conversion of convertible senior subordinated notes" within the Company's Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2011.

The Company's $201.3 million of 1 ¹/4% convertible senior subordinated notes due December 15, 2036, issued in December 2006, provide for (i) the settlement upon conversion in cash up to the principal amount of the notes with any excess conversion value settled in shares of the Company's common stock, and (ii) the conversion rate to be increased under certain circumstances if the notes are converted in connection with certain change of control transactions occurring prior to December 15, 2013. The notes are unsecured obligations and are convertible into cash and shares of the Company's common stock upon satisfaction of certain conditions. Interest is payable on the notes at 1 ¹/4% per annum, payable semi-annually in arrears in cash on June 15 and December 15 of each year. The notes are convertible into shares of the Company's common stock at an effective price of $40.73 per share, subject to adjustment. This reflects an initial conversion rate for the notes of 24.5525 shares of common stock per $1,000 principal amount of notes.

The following table sets forth as of June 30, 2011 and December 31, 2010 the carrying amount of the equity component, the principal amount of the liability component, the unamortized discount and the net carrying amount of the Company's convertible senior subordinated notes (in millions):

	June 30, 2011			December 31, 2010
1  3/4% Convertible senior subordinated notes due 2033:
Carrying amount of the equity component	$	—		$	16.1
Principal amount of the liability component	$	100.3		$	161.0
Less: unamortized discount		—			—
Net carrying amount	$	100.3		$	161.0
1  1/4% Convertible senior subordinated notes due 2036:
Carrying amount of the equity component	$	54.3		$	54.3
Principal amount of the liability component	$	201.3		$	201.3
Less: unamortized discount		(22.0	)		(26.1	)
Net carrying amount	$	179.3		$	175.2

The following table sets forth the interest expense recognized relating to both the contractual interest coupon and the amortization of the remaining discount on the liability component, if applicable, for the Company's convertible senior subordinated notes (in millions):

	Three Months Ended June  30,				Six Months Ended June  30,
	2011		2010		2011		2010
1  3/4% Convertible senior subordinated notes:
Interest expense	$	0.4	$	3.0	$	0.9	$	5.9
1  1/4% Convertible senior subordinated notes:
Interest expense	$	2.7	$	2.5	$	5.4	$	5.1

The effective interest rate on the liability component for both notes for the three and six months ended June 30, 2011 and 2010 was 6.1%. The discount for the 1 ³/4% convertible senior subordinated notes was amortized through December 2010 and the unamortized discount for the 1 ¹/4% convertible senior subordinated notes will be amortized through December 2013, as this is the earliest date the notes holders can require the Company to repurchase the notes.

Holders of the Company's convertible senior subordinated notes may convert the notes, if, during any fiscal quarter, the closing sales price of the Company's common stock exceeds 120% of the conversion price of $22.36 per share for the 1 ³/4% convertible senior subordinated notes and $40.73 per share for the 1 ¹/4% convertible senior subordinated notes for at least 20 trading days in the 30 consecutive trading days ending on the last trading day of the preceding fiscal quarter. As of June 30, 2011 and December 31, 2010, the closing sales price of the Company's common stock had exceeded 120% of the conversion price of the 1 ³/4% convertible senior subordinated notes for at least 20 trading days in the 30 consecutive trading days ending June 30, 2011 and December 31, 2010, respectively, and, therefore, the Company classified the notes as a current liability. Future classification of both series of notes between current and long-term debt is dependent on the closing sales price of the Company's common stock during future quarters.

The Company's €200.0 million of 6 ⁷/8% senior subordinated notes due April 15, 2014, issued in April 2004, were redeemed at a price of 101.146% of their principal amount on May 2, 2011, in accordance with the redemption provisions of the indenture agreement. The Company funded the redemption of the notes with a new €200.0 million senior unsecured term loan with Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A., "Rabobank Nederland." The new term loan is due May 2, 2016 and bears interest at a fixed rate of 4 ¹/2%. During the three months ended June 30, 2011, the Company recorded a loss of approximately $3.1 million associated with the premium paid to the holders of the notes and a write-off of approximately $1.2 million of unamortized deferred debt issuance costs associated with the redemption within "interest expense, net" in the Company's Condensed Consolidated Statements of Operations.

At June 30, 2011, the estimated fair values of the Company's 1 ³/4% convertible senior subordinated notes and 1 ¹/4% convertible senior subordinated notes, based on their listed market values, were $234.5 million and $270.5 million, respectively, compared to their carrying values of $100.3 million and $179.3 million, respectively. At December 31, 2010, the estimated fair values of the Company's 6 ⁷/8% senior subordinated notes, 1 ³/4% convertible senior subordinated notes and 1 ¹/4% convertible senior subordinated notes, based on their listed market values, were $271.7 million, $325.1 million and $277.1 million, respectively, compared to their carrying values of $267.7 million, $161.0 million and $175.2 million, respectively.

The Company has arrangements with various banks to issue standby letters of credit or similar instruments, which guarantee the Company's obligations for the purchase or sale of certain inventories and for potential claims exposure for insurance coverage. At June 30, 2011 and December 31, 2010, outstanding letters of credit issued under the revolving credit facility totaled $10.0 million and $9.8 million, respectively.