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Debt

12 Months Ended

Dec. 31, 2011

NOTE 6: DEBT

Debt at December 31 is summarized as follows:


in thousands	*2011*		2010

Short-term Borrowings

Bank line of credit		$0		$285,500
Total short-term borrowings		$0		$285,500

Long-term Debt

Bank line of credit		$0		$0

5.60% notes due 2012 ¹		134,508		299,773

6.30% notes due 2013 ²		140,352		249,729

Floating-rate term loan due 2015		0		450,000

10.125% notes due 2015 ³		153,464		149,597

6.50% notes due 2016 ⁴		518,293		0

6.40% notes due 2017 ⁵		349,869		349,852

7.00% notes due 2018 ⁶		399,693		399,658

10.375% notes due 2018 ⁷		248,526		248,391

7.50% notes due 2021 ⁸		600,000		0

7.15% notes due 2037 ⁹		239,545		249,324

Medium-term notes		16,000		21,000

Industrial revenue bonds		14,000		14,000

Other notes		1,189		1,438
Total long-term debt including current maturities		$2,815,439		$2,432,762
Less current maturities of long-term debt		134,762		5,246
Total long-term debt		$2,680,677		$2,427,516
Estimated fair value of long-term debt		$2,796,504		$2,559,059

¹

Includes decreases for unamortized discounts, as follows: December 31, 2011 — $49 thousand and December 31, 2010 — $227 thousand. The effective interest rate for these notes is 6.57%.

²

Includes decreases for unamortized discounts, as follows: December 31, 2011 — $92 thousand and December 31, 2010 — $271 thousand. The effective interest rate for these notes is 7.48%.

³

Includes an increase for the unamortized portion of the deferred gain realized upon the August 2011 settlement of interest rate swaps, as follows: December 31, 2011 — $3,802 thousand. Additionally, includes decreases for unamortized discounts, as follows: December 31, 2011 — $338 thousand and December 31, 2010 — $403 thousand. The effective interest rate for these notes is 9.59%.

⁴

Includes an increase for the unamortized portion of the deferred gain realized upon the August 2011 settlement of interest rate swaps, as follows: December 31, 2011 — $18,293 thousand. The effective interest rate for these notes is 6.02%.

⁵

Includes decreases for unamortized discounts, as follows: December 31, 2011 — $131 thousand and December 31, 2010 — $148 thousand. The effective interest rate for these notes is 7.41%.

⁶

Includes decreases for unamortized discounts, as follows: December 31, 2011 — $307 thousand and December 31, 2010 — $342 thousand. The effective interest rate for these notes is 7.87%.

⁷

Includes decreases for unamortized discounts, as follows: December 31, 2011 — $1,474 thousand and December 31, 2010 — $1,609 thousand. The effective interest rate for these notes is 10.62%.

⁸

The effective interest rate for these notes is 7.75%.

⁹

Includes decreases for unamortized discounts, as follows: December 31, 2011 — $643 thousand and December 31, 2010 — $676 thousand. The effective interest rate for these notes is 8.05%.

Our long-term debt is presented in the table above net of unamortized discounts from par and unamortized deferred gains realized upon settlement of interest rate swaps. Discounts, deferred gains and debt issuance costs are being amortized using the effective interest method over the respective terms of the notes.

The estimated fair value of long-term debt presented in the table above was determined by discounting expected future cash flows based on credit-adjusted interest rates on U.S. Treasury bills, notes or bonds, as appropriate. The fair value estimates were based on information available to us as of the respective balance sheet dates. Although we are not aware of any factors that would significantly affect the estimated fair value amounts, such amounts have not been comprehensively revalued since those dates.

During 2011, we replaced our $1,500,000,000 bank line of credit that was set to expire on November 16, 2012 with a $600,000,000 bank line of credit. The $600,000,000 bank line of credit expires on December 15, 2016 and is secured by certain domestic accounts receivable and inventory. Borrowing capacity fluctuates with the level of eligible accounts receivable and inventory and may be less than $600,000,000 at any point in time.

Borrowings under the $600,000,000 bank line of credit bear interest at a rate determined at the time of borrowing equal to the lower of LIBOR plus a margin ranging from 1.75% to 2.25% based on the level of utilization, or an alternative rate derived from the lender’s prime rate. Borrowings bearing interest at LIBOR plus the margin are made for periods of 1, 2, 3 or 6 months, and may be extended. Borrowings bearing interest at the alternative rate are made on an overnight basis and may be extended each day. As of December 31, 2011, the applicable margin for LIBOR based borrowing was 1.75%.

Borrowings under the $600,000,000 bank line of credit are classified as long-term debt due to our ability to extend borrowings at the end of each borrowing period. Previously, we classified bank line of credit borrowings as short-term debt based on our intent to pay outstanding borrowings within one year.

In June 2011, we issued $1,100,000,000 of long-term notes in two series, as follows: $500,000,000 of 6.50% notes due in 2016 and $600,000,000 of 7.50% notes due in 2021. These notes were issued principally to:

§	repay and terminate our $450,000,000 floating-rate term loan due in 2015

§	fund the purchase through a tender offer of $165,443,000 of our outstanding 5.60% notes due in 2012 and $109,556,000 of our outstanding 6.30% notes due in 2013

§	repay $275,000,000 outstanding under our bank line of credit

§	and for general corporate purposes

The terminated $450,000,000 floating-rate term loan due in 2015 was established in July 2010 in order to repay the $100,000,000 outstanding balance of our floating-rate term loan due in 2011 and all outstanding commercial paper. Unamortized deferred financing costs of $2,423,000 were recognized in June 2011 as a component of interest expense upon the termination of this floating-rate term loan.

The June 2011 purchases of the 5.60% and 6.30% notes cost $294,533,000, including a $19,534,000 premium above the $274,999,000 face value of the notes. This premium primarily reflects the trading price of the notes at the time of purchase relative to par value. Additionally, $4,711,000 of expense associated with a proportional amount of unamortized discounts, deferred financing costs and amounts accumulated in OCI was recognized in 2011 upon the partial termination of the notes. The combined expense of $24,245,000 is presented in the accompanying Consolidated Statements of Comprehensive Income as a component of interest expense for the year 2011.

Scheduled debt payments during 2011 included $5,000,000 due in November to retire a portion of the medium-term notes, and payments under various immaterial notes that either matured at various dates or required monthly payments.

Scheduled debt payments during 2010 included $325,000,000 of floating-rate notes, and payments under various immaterial notes that either matured at various dates or required monthly payments. Additionally, during 2010 we voluntarily prepaid $175,000,000 (the remaining balance) of a floating-rate term loan due in 2011, $15,000,000 (the remaining balance) of our private placement notes and $3,550,000 of our industrial revenue bonds.

In February 2009, we issued $400,000,000 of long-term notes in two related series, as follows: $150,000,000 of 10.125% notes due in 2015 and $250,000,000 of 10.375% notes due in 2018. These notes were issued principally to repay borrowings outstanding under our short- and long-term debt obligations.

The 2008 and 2007 debt issuances described below relate primarily to funding the November 2007 acquisition of Florida Rock and replaced a portion of the short-term borrowings we incurred to initially fund the cash portion of the acquisition.

In June 2008, we established a $300,000,000 floating-rate term loan due in 2011. In addition to the quarterly principal payments of $15,000,000 for five quarters, we made prepayments of $50,000,000 in November 2009, $75,000,000 in January 2010 and paid the remaining $100,000,000 balance in August 2010.

Additionally, in June 2008 we issued $650,000,000 of long-term notes in two series, as follows: $250,000,000 of 6.30% notes due in 2013 and $400,000,000 of 7.00% notes due in 2018. The 6.30% notes due in 2013 were partially terminated in June 2011 with a tender offer as described above.

In December 2007, we issued $1,225,000,000 of long-term notes in four series, as follows: $325,000,000 of floating-rate notes due in 2010, $300,000,000 of 5.60% notes due in 2012, $350,000,000 of 6.40% notes due in 2017 and $250,000,000 of 7.15% notes due in 2037. Concurrent with the issuance of the notes, we entered into an interest rate swap agreement on the $325,000,000 floating-rate notes due in 2010 to convert them to a fixed interest rate of 5.25%. These floating-rate notes were paid in December 2010 as scheduled. The 5.60% notes due in 2012 were partially terminated in June 2011 with a tender offer as described above.

During 1991, we issued $81,000,000 of medium-term notes ranging in maturity from 3 to 30 years, with interest rates from 7.59% to 8.85%. The $16,000,000 in medium-term notes outstanding as of December 31, 2011 has a weighted-average maturity of 4.3 years with a weighted-average interest rate of 8.76%.

The industrial revenue bonds were assumed in November 2007 with the acquisition of Florida Rock. These variable-rate tax-exempt bonds were to have matured as follows: $2,250,000 in June 2012, $1,300,000 in January 2021 and $14,000,000 in November 2022. The first two bond maturities were collateralized by certain property, plant & equipment and were prepaid in September 2010. The remaining $14,000,000 of bonds is backed by a standby letter of credit.

Other notes of $1,189,000 as of December 31, 2011 were issued at various times to acquire land or businesses or were assumed in business acquisitions.

The total (principal and interest) debt payments, excluding any draws, if any, on our bank line of credit, for the five years subsequent to December 31, 2011 are as follows:


in thousands	Total		Principal		Interest

Debt Payments (excluding bank line of credit)
2012	$	335,050	$	134,762	$	200,288
2013		337,546		150,610		186,936
2014		186,956		177		186,779
2015		336,913		150,145		186,768
2016		671,707		500,134		171,573

The $600,000,000 bank line of credit contains limitations on liens, indebtedness, guarantees, certain restricted payments, and acquisitions and divestitures, and a minimum fixed charge coverage ratio that is only applicable if usage exceeds 90% of the lesser of $600,000,000 and the sum of eligible accounts receivable and inventory.

The indentures governing our notes contain a covenant limiting our total debt as a percentage of total capital to 65%. Our total debt as a percentage of total capital was 42.6% as of December 31, 2011 compared with 40.7% as of December 31, 2010.

- 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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