INDEBTEDNESS

3 Months Ended

6 Months Ended

Mar. 31, 2014

Jun. 30, 2014

The carrying amount for the Series 2005-1 Notes includes an $8.7 million and $10.3 million fair value adjustment on an interest rate hedge at June 30, 2014 and December 31, 2013, respectively.
The carrying amount for the 2010 Senior Notes includes the unamortized discount of $2.1 million and $2.2 million in 2014 and 2013, respectively, and a $3.9 million fair value adjustment on an interest rate hedge at June 30, 2014.

The fair value of the Company’s long-term debt is estimated using discounted cash flows with inputs based on prevailing interest rates available to the Company for borrowings with similar maturities.

NOTE 13. INDEBTEDNESS

The following table summarizes total indebtedness:

			June 30,		December 31,
			2014		2013
2012 Facility			$	-	$	-
Notes Payable:
		4.98% Series 2005-1 Notes, due 2015; includes the fair value of interest rate swap of $8.7 million at 2014 and $10.3 million at 2013		308.7		310.3
		6.06% Series 2007-1 Notes due 2017		300.0		300.0
	5.50% 2010 Senior Notes, due 2020, net of unamortized discount of $2.1 million in 2014 and $2.2 million in 2013; also includes the fair value of interest rate swap of $3.9 million in 2014			501.8		497.8
	4.50% 2012 Senior Notes, due 2022, net of unamortized discount of $3.4 million in 2014 and $3.5 million in 2013			496.6		496.5
	4.875% 2013 Senior Notes, due 2024, net of unamortized discount of $2.6 million in 2014 and $2.8 million in 2013			497.4		497.2

Total long-term debt			$	2,104.5	$	2,101.8

The Company has the capacity to borrow up to $1 billion under its unsecured revolving credit facility which expires in April 2017. Any future borrowings under this facility would accrue interest at LIBOR plus a premium that can range from 77.5 bps to 120 bps per annum based on the Company’s debt/EBITDA ratio.

The Company has entered into interest rate swaps on the Series 2005-1 Notes and the 2010 Senior Notes which are more fully discussed in Note 6 above.

At June 30, 2014, the Company was in compliance with all covenants contained within all of the debt agreements. In addition to the covenants described above, the 2012 Facility, the 2005 Agreement, the 2007 Agreement, the 2010 Senior Notes, the 2012 Senior Notes and the 2013 Senior Notes contain cross default provisions. These provisions state that default under one of the aforementioned debt instruments could in turn permit lenders under other debt instruments to declare borrowings outstanding under those instruments to be immediately due and payable. As of June 30, 2014, there were no such cross defaults.

Interest expense, net

The following table summarizes the components of interest as presented in the consolidated statements of operations:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2014		2013		2014		2013
Income	$	1.7	$	1.2	$	3.3	$	2.4
Expense on borrowings		(25.6)		(20.5)		(51.7)		(41.5)
UTPs and other tax related liabilities*		(2.1)		(2.4)		(1.5)		(4.6)
Capitalized		-		-		0.1		-
Total	$	(26.0)	$	(21.7)	$	(49.8)	$	(43.7)

* The six months ended June 30, 2014 amount includes $2.0 million reversal of an interest accrual relating to the favorable resolution of an international tax matter.

	Six Months Ended
	June 30,
	2014		2013
Interest paid	$	60.5	$	41.4

The Company’s long-term debt is recorded at its carrying amount, which represents the issuance amount plus or minus any issuance premium or discount, except for the Series 2005-1 Notes and the 2010 Senior Notes which are recorded at the carrying amount adjusted for the fair value of an interest rate swap used to hedge the fair value of the note. The fair value and carrying value of the Company’s long-term debt as of June 30, 2014 and December 31, 2013 are as follows:

	June 30, 2014				December 31, 2013
	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Series 2005-1 Notes⁽¹⁾	$	308.7	$	314.5	$	310.3	$	319.2
Series 2007-1 Notes		300.0		338.9		300.0		334.7
2010 Senior Notes⁽²⁾		501.8		565.7		497.8		536.6
2012 Senior Notes		496.6		524.5		496.5		497.0
2013 Senior Notes		497.4		537.5		497.2		501.2
Total	$	2,104.5	$	2,281.1	$	2,101.8	$	2,188.7

The carrying amount for the Series 2005-1 Notes includes an $8.7 million and $10.3 million fair value adjustment on an interest rate hedge at June 30, 2014 and December 31, 2013, respectively.
The carrying amount for the 2010 Senior Notes includes the unamortized discount of $2.1 million and $2.2 million in 2014 and 2013, respectively, and a $3.9 million fair value adjustment on an interest rate hedge at June 30, 2014.

- 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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