DEBT

Revolving Credit Facility

In October 2011, the Company entered into a $1.0 billion five-year unsecured revolving credit facility with a group of lenders. Borrowings under the revolving credit facility will bear interest, at the Company's option, at a rate per annum equal to either (i) the adjusted LIBOR for the interest period in effect for such borrowing plus an applicable margin ranging from 1.00% to 1.50%; or (ii) the greatest of (a) JPMorgan Chase Bank, National Association's prime lending rate, (b) the federal funds rate plus 0.50%, and (c) an adjusted LIBOR for an interest period of one month plus 1.00%, plus an applicable margin ranging from 0.00% to 0.50%. Undrawn balances available under the revolving credit facility are subject to commitment fees at the applicable rate ranging from 0.10% to 0.25%.

The revolving credit facility provides for the issuance of up to $100 million of letters of credit as well as borrowings of up to $50 million on same-day notice, referred to as swingline loans. Borrowings under the revolving credit facility may be made in U.S. dollars, Euros, Pounds Sterling and any other foreign currency agreed to by the lenders. The proceeds of loans made under the facility will be used for working capital and general corporate purposes. As of December 31, 2011, there were no borrowings under the facility, and approximately $1.9 million of letters of credit were issued under the facility.

Upon entering into this new revolving credit facility, the Company terminated its $175.0 million five-year committed revolving credit facility entered into in September 2007. This revolving credit facility provided for the issuance of up to $50.0 million of letters of credit as well as swingline loans. As of December 31, 2010, there were no borrowings outstanding and approximately $1.6 million of letters of credit issued under this revolving credit facility. Undrawn balances available under the revolving credit facility were subject to commitment fees at the applicable rate ranging from 0.25% to 0.375%.

Convertible Debt

Convertible debt as of December 31, 2011 consists of the following (in thousands):



December 31, 2011	Outstanding Principal Amount		Unamortized Debt Discount			Carrying Value
1.25% Convertible Senior Notes due March 2015	$	575,000	$	(77,360	)	$	497,640

Convertible debt as of December 31, 2010 consisted of the following (in thousands):



December 31, 2010	Outstanding Principal Amount		Unamortized Debt Discount			Carrying Value
1.25% Convertible Senior Notes due March 2015	$	575,000	$	(98,770	)	$	476,230
0.75% Convertible Senior Notes due September 2013	213		(38		)	175
Outstanding convertible debt	$	575,213	$	(98,808	)	$	476,405

Based upon the closing price of the Company’s common stock for the prescribed measurement periods during the three months ended December 31, 2011, the contingent conversion threshold of the 2015 Notes was exceeded. Therefore, the 2015 Notes are convertible at the option of the holders. Accordingly, the Company reported the carrying value of the 2015 Notes as a current liability as of December 31, 2011. Since these notes are convertible at the option of the holders and the principal amount is required to be paid in cash, the difference between the principal amount and the carrying value is reflected as convertible debt in the mezzanine section on the Company's Consolidated Balance Sheet. Therefore, with respect to the 2015 Notes, the Company reclassified $77.4 million before tax from additional paid-in-capital to convertible debt in the mezzanine section on the Company's Consolidated Balance Sheet. The contingent conversion threshold on the 2015 Notes was not exceeded at December 31, 2010, and therefore on that date the debt was reported as a non-current liability. The determination of whether or not the 2015 Notes are convertible must continue to be performed on a quarterly basis. Consequently, the 2015 Notes may not be convertible in future quarters, and therefore may again be classified as long-term debt, if the contingent conversion threshold is not met in such quarters.

Based upon the closing price of the Company's common stock for the prescribed measurement period during the three months ended December 31, 2010, the contingent consideration threshold on the 2013 Notes was exceeded. As a result, the 2013 Notes were convertible at the option of the holders as of December 31, 2010, and accordingly were classified as a current liability as of that date. The remaining outstanding principal amount of the 2013 Notes was converted during the three months ended June 30, 2011.

If the note holders exercise their option to convert, the Company delivers cash to repay the principal amount of the notes and delivers shares of common stock or cash, at its option, to satisfy the conversion value in excess of the principal amount. In cases where holders decide to convert prior to the maturity date, the Company writes off the proportionate amount of remaining debt issuance costs to interest expense. In the year ended December 31, 2011, the Company delivered cash of $0.2 million to repay the principal amount and issued 4,869 shares of its common stock in satisfaction of the conversion value in excess of the principal amount for convertible debt that was converted prior to maturity. The Company delivered cash of $195.6 million to repay the principal amount, and issued 3,457,828 shares of its common stock and delivered $99.8 million in cash in satisfaction of the conversion value in excess of the principal amount for convertible debt converted prior to maturity for the year ended December 31, 2010.

As of December 31, 2011 and 2010, the estimated market value of the outstanding senior notes was approximately $0.9 billion for both periods. Fair value was estimated based upon actual trades at the end of the reporting period or the most recent trade available as well as the Company’s stock price at the end of the reporting period. A substantial portion of the market value of the Company’s debt in excess of the outstanding principal amount relates to the conversion premium on the bonds.

Description of Senior Notes

In March 2010, the Company issued in a private placement $575.0 million aggregate principal amount of Convertible Senior Notes due March 15, 2015, with an interest rate of 1.25% (the "2015 Notes"). The Company paid $13.3 million in debt financing costs associated with the 2015 Notes for the year ended December 31, 2010. The 2015 Notes are convertible, subject to certain conditions, into the Company’s common stock at a conversion price of approximately $303.06 per share. The 2015 Notes are convertible, at the option of the holder, prior to March 15, 2015 upon the occurrence of specified events, including, but not limited to a change in control, or if the closing sales price of the Company’s common stock for at least 20 trading days in the period of the 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is more than 150% of the applicable conversion price in effect for the notes on the last trading day of the immediately preceding quarter. In the event that all or substantially all of the Company’s common stock is acquired on or prior to the maturity of the 2015 Notes in a transaction in which the consideration paid to holders of the Company’s common stock consists of all or substantially all cash, the Company would be required to make additional payments in the form of additional shares of common stock to the holders of the 2015 Notes in aggregate value ranging from $0 to approximately $132.7 million depending upon the date of the transaction and the then current stock price of the Company. As of December 15, 2014, holders will have the right to convert all or any portion of the 2015 Notes. The 2015 Notes may not be redeemed by the Company prior to maturity. The holders may require the Company to repurchase the 2015 Notes for cash in certain circumstances. Interest on the 2015 Notes is payable on March 15 and September 15 of each year.

In 2006, the Company issued in a private placement $172.5 million aggregate principal amount of Convertible Senior Notes due September 30, 2013, with an interest rate of 0.75% (the "2013 Notes"). The 2013 Notes were convertible, subject to certain conditions, into the Company’s common stock at a conversion price of approximately $40.38 per share. The 2013 Notes were convertible, at the option of the holder, prior to June 30, 2013 upon the occurrence of specified events, including, but not limited to a change in control, or if the closing sale price of the Company’s common stock for at least 20 consecutive trading days in the period of the 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter was more than 120% of the applicable conversion price in effect for the notes on the last trading day of the immediately preceding quarter. The 2013 Notes could not be redeemed by the Company prior to maturity. As mentioned above, the remaining outstanding principal amount at December 31, 2010 was converted during the three months ended June 30, 2011.

In 2006, the Company entered into hedge transactions relating to potential dilution of the Company’s common stock upon conversion of the 2013 Notes (the "Conversion Spread Hedges"). Under the Conversion Spread Hedges, the Company is entitled to purchase from Goldman Sachs and Merrill Lynch approximately 4.3 million shares of the Company’s common stock (the number of shares underlying the 2013 Notes) at a strike price of $40.38 per share (subject to adjustment in certain circumstances) in 2013, and the counterparties are entitled to purchase from the Company approximately 4.3 million shares of the Company’s common stock at a strike price of $50.47 per share (subject to adjustment in certain circumstances) in 2013. The Conversion Spread Hedges are separate transactions entered into by the Company with the counterparties and are not part of the terms of the 2013 Notes. The Conversion Spread Hedges did not immediately hedge against the associated dilution from early conversions of the 2013 Notes prior to their stated maturities. Therefore, upon early conversion of the 2013 Notes, the Company has delivered any related conversion premium in shares of stock or a combination of shares or cash that would offset the dilution associated with the early conversion activity. Because of this timing difference, the number of shares, if any, that the Company receives from the Conversion Spread Hedges can differ materially from the number of shares that it was required to deliver to the holders of the 2013 Notes upon their early conversion. The actual number of shares to be received will depend upon the Company's stock price on the date the Conversion Spread Hedges are exercisable, which coincides with the scheduled maturity of the 2013 Notes.

In 2006, the Company also issued in a private placement $172.5 million aggregate principal amount of Convertible Senior Notes due September 30, 2011 (the "2011 Notes"). The remaining outstanding principal amount at December 31, 2009 for these 2011 Notes was converted during 2010. Also in 2006, the Company entered into hedge transactions relating to the potential dilution of the Company's common stock upon conversion of the 2011 Notes. During the year ended December 31, 2010, the Company and the counterparties agreed to terminate the Conversion Spread Hedges associated with 4.3 million shares underlying the 2011 Notes. The Company recorded the $43 million cash received as an increase to paid-in-capital.

Accounting guidance requires that cash-settled convertible debt, such as the Company’s convertible senior notes, be separated into debt and equity at issuance and each be assigned a value. The value assigned to the debt component is the estimated fair value, as of the issuance date, of a similar bond without the conversion feature. The difference between the bond cash proceeds and this estimated fair value, representing the value assigned to the equity component, is recorded as a debt discount. Debt discount is amortized using the effective interest method over the period from origination or modification date through the earlier of the first stated put date or the stated maturity date. The Company estimated the straight debt borrowing rates at debt origination to be 5.89% for the 2015 Notes and 8.0% for the 2013 Notes. The yield to maturity was estimated at an at-market coupon priced at par.

Debt discount after tax of $69.1 million ($115.2 million before tax) partially offset by financing costs associated with the equity component of convertible debt of $1.6 million after tax were recorded in additional paid-in capital related to the 2015 Notes at December 31, 2010. The Company reclassified $77.4 million before tax out of additional paid-in-capital to the mezzanine section in the Company's Consolidated Balance Sheet at December 31, 2011 because the 2015 Notes were convertible at the option of the holders.

For the years ended December 31, 2011, 2010 and 2009, the Company recognized interest expense of $30.6 million, $27.6 million and $22.1 million, respectively, related to convertible notes, comprised of $7.2 million, $5.8 million and $2.9 million, respectively, for the contractual coupon interest, $21.4 million, $20.1 million and $18.2 million, respectively, related to the amortization of debt discount and $2.0 million, $1.7 million and $1.0 million, respectively, related to the amortization of debt issuance costs. In addition, unamortized debt issuance costs written off to interest expense related to debt conversions in 2010 and 2009 was $1.4 million, and $1.2 million, respectively, while costs associated with 2011 debt conversions were insignificant. The remaining period for amortization of debt discount and debt issuance costs is the stated maturity dates for the respective debt. The effective interest rates for the years ended December 31, 2011, 2010, and 2009 are 6.3%, 6.7% and 8.5%, respectively.

In addition, if the Company’s convertible debt is redeemed or converted prior to maturity, a gain or loss on extinguishment will be recognized. The gain or loss is the difference between the fair value of the debt component immediately prior to extinguishment and its carrying value. To estimate the fair value at each conversion date, the Company used an applicable LIBOR rate plus an applicable credit default spread based upon the Company’s credit rating at the respective conversion dates. In the years ended December 31, 2010 and 2009, the Company recognized a loss of $11.3 million ($6.8 million after tax) and a loss of $1.0 million ($0.6 million after tax), respectively, in "Foreign currency transactions and other" in the Consolidated Statements of Operations. The loss recognized for the year ended December 31, 2011 for debt conversions was insignificant.