Debt

3 Months Ended

Mar. 31, 2012

Debt [Abstract]

DEBT

NOTE 10: DEBT

Debt is summarized as follows:

in thousands	March 31 2012		December 31 2011		March 31 2011
Short-term Borrowings
Bank line of credit		$0		$0		$300,000
Total short-term borrowings		$0		$0		$300,000
Long-term Debt
Bank line of credit		$0		$0		$0
5.60% notes due 2012 1		134,521		134,508		299,801
6.30% notes due 2013 2		140,367		140,352		249,754
Floating-rate term loan due 2015		0		0		450,000
10.125% notes due 2015 3		153,284		153,464		149,612
6.50% notes due 2016 4		517,503		518,293		0
6.40% notes due 2017 5		349,874		349,869		349,856
7.00% notes due 2018 6		399,702		399,693		399,666
10.375% notes due 2018 7		248,562		248,526		248,424
7.50% notes due 2021 8		600,000		600,000		0
7.15% notes due 2037 9		239,547		239,545		249,326
Medium-term notes		16,000		16,000		21,000
Industrial revenue bonds		14,000		14,000		14,000
Other notes		1,098		1,189		1,395
Total long-term debt including current maturities		$2,814,458		$2,815,439		$2,432,834
Less current maturities of long-term debt		144,706		134,762		5,238
Total long-term debt		$2,669,752		$2,680,677		$2,427,596
Estimated fair value of long-term debt		$2,864,657		$2,796,504		$2,544,368

¹  Includes decreases for unamortized discounts, as follows: March 31, 2012 — $36 thousand, December 31, 2011 — $49 thousand and March 31, 2011 — $199 thousand. The effective interest rate for these notes is 6.57%.

²  Includes decreases for unamortized discounts, as follows: March 31, 2012 — $77 thousand, December 31, 2011 — $92 thousand and March 31, 2011 — $246 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: March 31, 2012 — $3,604 thousand and December 31, 2011 — $3,802 thousand. Additionally, includes decreases for unamortized discounts, as follows: March 31, 2012 — $320 thousand, December 31, 2011 — $338 thousand, and March 31, 2011 $388 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: March 31, 2012 — $17,503 thousand and December 31, 2011 — $18,293 thousand. The effective interest rate for these notes is 6.02%.

⁵  Includes decreases for unamortized discounts, as follows: March 31, 2012 — $126 thousand, December 31, 2011 — $131 thousand and March 31, 2011 — $144 thousand. The effective interest rate for these notes is 7.41%.

⁶  Includes decreases for unamortized discounts, as follows: March 31, 2012 — $298 thousand, December 31, 2011 — $307 thousand and March 31, 2011 — $334 thousand. The effective interest rate for these notes is 7.87%.

⁷  Includes decreases for unamortized discounts, as follows: March 31, 2012 — $1,438 thousand, December 31, 2011 — $1,474 thousand and March 31, 2011 — $1,576 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: March 31, 2012 — $641 thousand, December 31, 2011 — $643 thousand and March 31, 2011 — $674 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 Level 2 information (as defined in Note 6) 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 March 31, 2012, 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 revolving credit facility

¡ and for general corporate purposes

Unamortized deferred financing costs of $2,423,000 associated with the terminated $450,000,000 floating-rate term loan 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 June 2011 upon the partial termination of the notes. The combined expense of $24,245,000 was recognized as a component of interest expense in June 2011.

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 borrowing capacity derived from 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 42.9% as of March 31, 2012, 42.6% as of December 31, 2011 and 41.2% as of March 31, 2011.