INDEBTEDNESS

9 Months Ended

Sep. 30, 2016

NOTE 14. INDEBTEDNESS

The following table summarizes total indebtedness:

		September 30, 2016
			Principal Amount		Fair Value of Interest Rate Swap⁽¹⁾		Unamortized (Discount) Premium		Unamortized Debt Issuance Costs⁽²⁾		Carrying Value
Notes Payable:
	6.06% Series 2007-1 Notes due 2017	$	300.0	$	-	$	-	$	(0.1)	$	299.9
	5.50% 2010 Senior Notes, due 2020		500.0		20.0		(1.4)		(1.7)		516.9
	4.50% 2012 Senior Notes, due 2022		500.0		-		(2.5)		(2.2)		495.3
	4.875% 2013 Senior Notes, due 2024		500.0		-		(2.1)		(2.8)		495.1
	2.75% 2014 Senior Notes (5-Year), due 2019		450.0		8.0		(0.5)		(1.9)		455.6
	5.25% 2014 Senior Notes (30-Year), due 2044		600.0		-		3.3		(6.0)		597.3
	1.75% 2015 Senior Notes, due 2027		561.9		-		-		(3.9)		558.0
Total debt		$	3,411.9	$	28.0	$	(3.2)	$	(18.6)	$	3,418.1
Current portion											(299.9)
Total long-term debt										$	3,118.2
		December 31, 2015
			Principal Amount		Fair Value of Interest Rate Swap⁽¹⁾		Unamortized (Discount) Premium		Unamortized Debt Issuance Costs⁽²⁾		Carrying Value
Notes Payable:
	6.06% Series 2007-1 Notes due 2017	$	300.0	$	-	$	-	$	(0.2)	$	299.8
	5.50% 2010 Senior Notes, due 2020		500.0		9.4		(1.6)		(2.0)		505.8
	4.50% 2012 Senior Notes, due 2022		500.0		-		(2.8)		(2.5)		494.7
	4.875% 2013 Senior Notes, due 2024		500.0		-		(2.3)		(3.1)		494.6
	2.75% 2014 Senior Notes (5-Year), due 2019		450.0		2.3		(0.5)		(2.4)		449.4
	5.25% 2014 Senior Notes (30-Year), due 2044		600.0		-		3.4		(6.2)		597.2
	1.75% 2015 Senior Notes, due 2027		543.1		-		-		(4.0)		539.1
Total long-term debt		$	3,393.1	$	11.7	$	(3.8)	$	(20.4)	$	3,380.6
⁽¹⁾ The Company has entered into interest rate swaps on the 2010 Senior Notes and the 2014 Senior Notes (5-Year) which are more fully discussed in Note 7 above.
⁽²⁾Pursuant to ASU No. 2015-03, unamortized debt issuance costs are presented as a reduction to the carrying value of the notes payable. See Note 1 for additional discussion.

On August 3, 2016, the Company entered into a private placement commercial paper program under which the Company may issue CP notes up to a maximum amount of $1.0 billion. Borrowings under the CP Program are backstopped by the 2015 Facility. Amounts under the CP Program may be re-borrowed. The maturity of the CP Notes will vary, but may not exceed 397 days from the date of issue. The CP Notes are sold at a discount from par, or alternatively, sold at par and bear interest at rates that will vary based upon market conditions. The rates of interest will depend on whether the CP Notes will be a fixed or floating rate. The interest on a floating rate may be based on the following: (a) certificate of deposit rate; (b) commercial paper rate; (c) the federal funds rate; (d) the LIBOR; (e) prime rate; (f) Treasury rate; or (g) such other base rate as may be specified in a supplement to the private placement agreement. The CP Program contains certain events of default including, among other things: non-payment of principal, interest or fees; entrance into any form of moratorium; and bankruptcy and insolvency events, subject in certain instances to cure periods. The Company has not borrowed under this program through September 30, 2016.

At September 30, 2016, the Company was in compliance with all covenants contained within all of the debt agreements. The 2015 Facility, the 2015 Senior Notes, the 2014 Senior Notes (5-year), the 2014 Senior Notes (30-year), the Series 2007-1 Notes, the 2010 Senior Notes, the 2012 Senior Notes and the 2013 Senior Notes all 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 September 30, 2016, 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				Nine Months Ended
	September 30,				September 30,
	2016		2015		2016		2015
Income	$	2.5	$	2.8	$	8.2	$	7.0
Expense on borrowings		(35.6)		(29.8)		(105.6)		(88.8)
Expense on UTPs and other tax related liabilities ⁽¹⁾		(2.5)		0.4		(7.0)		(6.3)
Legacy Tax		0.2		0.7		0.2		0.7
Capitalized		-		0.1		0.4		0.4
Total	$	(35.4)	$	(25.8)	$	(103.8)	$	(87.0)

(1) The three and nine months ended September 30, 2015 include approximately $2 million in interest income on a tax refund.

The following table shows the cash paid for interest:

	Nine Months Ended
	September 30,
	2016		2015
Interest paid	$	129.3	$	101.0

The fair value and carrying value of the Company’s debt as of September 30, 2016 and December 31, 2015 are as follows:

	September 30, 2016				December 31, 2015
	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Series 2007-1 Notes	$	299.9	$	312.9	$	299.8	$	320.6
2010 Senior Notes		516.9		563.9		505.8		551.2
2012 Senior Notes		495.3		557.8		494.7		530.0
2013 Senior Notes		495.1		568.8		494.6		533.8
2014 Senior Notes (5-Year)		455.6		463.4		449.4		454.3
2014 Senior Notes (30-Year)		597.3		743.7		597.2		617.7
2015 Senior Notes		558.0		600.0		539.1		520.2
Total	$	3,418.1	$	3,810.5	$	3,380.6	$	3,527.8

The fair value of the Company’s debt is estimated based on quoted market prices for similar instruments. Accordingly, the inputs used to estimate the fair value of the Company’s long-term debt are classified as Level 2 inputs within the fair value hierarchy.