Notes Payable and Long-Term Debt

As of September 30, 2011 and December 31, 2010, the Company had short-term and long-term debt outstanding as follows:



	September 30,		December 31,
(millions of dollars)	2011		2010
Short-term debt
Short-term borrowings	$	77.9	$	42.4
Receivables securitization	80.0		80.0
Total short-term debt	$	157.9	$	122.4

Long-term debt
3.50% Convertible senior notes due 04/15/12	$	363.3	$	348.5
5.75% Senior notes due 11/01/16 ($150 million par value)	149.4		149.4
8.00% Senior notes due 10/01/19 ($134 million par value)	133.9		133.9
4.625% Senior notes due 09/15/20 ($250 million par value)	247.7		247.5
7.125% Senior notes due 02/15/29 ($121 million par value)	119.3		119.3
Multi-currency revolving credit facility	175.0		—
Term loan facilities & other	21.0		31.6
Unamortized portion of debt derivatives	25.0		27.8
Total long-term debt	1,234.6		1,058.0
Less: current portion	367.4		6.1
Long-term debt, net of current portion	$	867.2	$	1,051.9

The weighted average interest rate on all borrowings outstanding as of September 30, 2011 and December 31, 2010 was 5.6% and 6.4%, respectively.

On June 30, 2011, the Company amended and extended its $550 million multi-currency revolving credit facility (which included a feature that allowed the Company's borrowings to be increased to $600 million) to a $650 million multi-currency revolving credit facility (which includes a feature that allows the Company's borrowings to be increased to $1 billion). The facility provides for borrowings through June 30, 2016 and is guaranteed by the Company's material domestic subsidiaries. The Company has two key financial covenants as part of the credit agreement. These covenants are a debt compared to EBITDA (“Earnings Before Interest, Taxes, Depreciation and Amortization”) test and an interest coverage test. The Company was in compliance with all covenants at September 30, 2011 and expects to remain compliant in future periods. At September 30, 2011, the Company had outstanding borrowings of $175.0 million under this facility. There were no outstanding borrowings under this facility at December 31, 2010.

On September 16, 2010, the Company issued $250 million in 4.625% senior notes due in 2020. Interest is payable semi-annually on March 15 and September 15 of each year, beginning on March 15, 2011.

On September 8, 2010, the Company amended its December 21, 2009 Receivable Purchase Agreement, which increased the accounts receivable securitization facility from $50 million to $80 million. This facility matures on December 21, 2012. The Company paid servicing fees related to these receivables of $0.4 million and $1.1 million for the three and nine months ended September 30, 2011, respectively, and $0.4 million and $0.9 million for the three and nine months ended September 30, 2010, respectively. These amounts are recorded in interest expense and finance charges in the Condensed Consolidated Statements of Operations.

On April 9, 2009, the Company issued $373.8 million in convertible senior notes due April 15, 2012. Under ASC Topic 470, “Accounting for Convertible Debt Instruments That May be Settled in Cash Upon Conversion (Including Partial Cash Settlement)," the Company must account for the convertible senior notes by bifurcating the instruments between their liability and equity components. The value of the debt component is based on the fair value of issuing a similar nonconvertible debt security. The equity component of the convertible debt security is calculated by deducting the value of the liability from the proceeds received at issuance. The Company’s September 30, 2011 Condensed Consolidated Balance Sheet includes current debt of $363.3 million due April 15, 2012 and capital in excess of par value of $36.5 million. Additionally, ASC Topic 470 requires the Company to accrete the discounted carrying value of the convertible notes to their face value over the term of the notes. The Company’s interest expense associated with this amortization is based on the effective interest rate of the convertible senior notes of 9.365%. The total interest expense related to the convertible senior notes in the Company’s Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2011 and 2010 is as follows:



	Three Months Ended September 30,				Nine Months Ended September 30,
(millions of dollars)	2011		2010		2011		2010
Interest expense	$	8.3	$	7.9	$	24.6	$	23.3
Non-cash portion	$	5.0	$	4.6	$	14.8	$	13.5

The notes pay interest semi-annually of $6.5 million, which is at a coupon rate of 3.50% per year.

Holders of the notes may convert their notes at their option at any time prior to the close of business on the second scheduled trading day immediately preceding the maturity date of the notes, in multiples of $1,000 principal amount. The initial conversion rate for the notes is 30.4706 shares of the Company’s common stock per $1,000 principal amount of notes (representing an initial conversion price of approximately $32.82 per share of common stock). The conversion price represents a conversion premium of 27.50% over the last reported sale price of the Company’s common stock on the New York Stock Exchange on April 6, 2009 of $25.74 per share. Since the Company's stock price was above the convertible senior notes conversion price of $32.82, the if-converted value was approximately $315.6 million and $450.2 million higher than the face value of the convertible senior notes at September 30, 2011 and December 31, 2010, respectively. In conjunction with the note offering, the Company entered into a bond hedge overlay at a net pre-tax cost of $25.2 million, effectively raising the conversion premium to 50.0%, or approximately $38.61 per share. Upon conversion, the Company will pay or deliver cash, shares of its common stock or a combination thereof at our election.

As of September 30, 2011 and December 31, 2010, the estimated fair values of the Company’s senior unsecured notes totaled $1,434.9 million and $1,482.3 million, respectively. The estimated fair values were $421.3 million and $483.7 million higher at September 30, 2011 and December 31, 2010, respectively, than their carrying values. Fair market values are developed by the use of estimates obtained from brokers and other appropriate valuation techniques based on information available as of quarter-end and year-end. The fair value estimates do not necessarily reflect the values the Company could realize in the current markets.

The Company had outstanding letters of credit at September 30, 2011 and December 31, 2010 of $50.0 million and $26.5 million, respectively. The letters of credit typically act as guarantees of payment to certain third parties in accordance with specified terms and conditions.