NOTE 9. CREDIT ARRANGEMENTS

The Company has a commercial paper program, which is supported by the Company’s revolving credit facility, under which it can issue short-term, unsecured commercial paper notes on a private placement basis up to $400 million. This program provides access to liquidity at cost effective rates through two commercial paper dealers. The Company’s revolving credit facility of $400 million has a maturity date of November 24, 2012 and includes certain covenants. The Company is required to maintain a minimum interest coverage ratio of not less than 2.50 to 1.00 for the twelve month cumulative period ended August 31, 2011 and for each fiscal quarter on a rolling twelve month cumulative period thereafter. At August 31, 2011, the Company’s interest coverage ratio was 3.35 to 1.00. The agreement also requires the Company to maintain a debt to capitalization ratio covenant not greater than 0.60 to 1.00. At August 31, 2011, the Company’s debt to capitalization ratio was 0.54 to 1.00. The agreement provides for interest based on LIBOR, Eurodollar or Bank of America’s prime rate.

The Company had no amounts outstanding under its commercial paper program at August 31, 2011. There was $10 million outstanding at August 31, 2010. There were no amounts outstanding on the revolving credit facility at August 31, 2011 and 2010. The availability under the revolving credit agreement is reduced by the outstanding amount under the commercial paper program. At August 31, 2011, $400 million was available under the revolving credit agreement.

The Company has numerous uncommitted credit facilities available from domestic and international banks. These credit facilities are used, in general, to support import letters of credit (including accounts payable settled under bankers’ acceptances as described in Note 2, Summary of Significant Accounting Polices), foreign exchange transactions and short term advances which are priced at market rates.

Long-term debt, including the net effect of interest rate swap revaluation adjustments, was as follows as of August 31:


	Weighted Average
(in thousands)	Interest Rate at 2011			2011		2010

5.625% notes due November 2013		3.6	%	$	207,752	$	208,253
6.50% notes due July 2017		4.9	%		414,198		400,000
7.35% notes due August 2018		5.5	%		526,699		524,185
CMCZ term note due May 2013		6.5	%		48,648		69,716
CMCS financing agreement due July 2014		5.0	%		18,476		19,006
Other, including equipment notes					10,632		6,710

					1,226,405		1,227,870
Less current maturities					58,908		30,588

				$	1,167,497	$	1,197,282

Interest on the notes, except for the CMCZ note, is payable semiannually.

Effective May 20, 2011, the Company entered into an interest rate swap transaction to hedge the fair value changes on its 6.50% notes due July 2017 (“2017 Notes”). On March 23, 2010, the Company entered into two interest rate swap transactions on its 5.625% notes due November 2013 (“2013 Notes”) and 7.35% notes due August 2018 (“2018 Notes”). The swap transactions were designated as fair value hedges at inception and effectively convert all fixed rate interest to floating rate interest on the Company’s 2013 Notes, and effectively convert fixed rate interest to floating rate interest with respect to $300 million in principal amount on each of the 2017 Notes and the 2018 Notes and have termination dates of November 15, 2013, July 15, 2017 and August 15, 2018, respectively. Under terms of the swaps, the Company pays the floating LIBOR plus 303 basis points with respect to the 2013 Notes, LIBOR plus 374 basis points with respect to the 2017 Notes and LIBOR plus 367 basis points with respect to the 2018 Notes and receives payments identical to the hedged item fixed rates.

The CMCZ term note was repaid on October 20, 2011. Subsequently, CMCZ entered into uncommitted lines of credit facilities of $43 million with several banks. The outstanding balance at August 31, 2011 is included in current maturities of long-term debt on the consolidated balance sheet.

The CMCS financing agreement is used for capital expenditures and other uses. The note has scheduled principal and interest payments in semiannual installments.

The scheduled maturities of the Company’s long-term debt are as follows:


(in thousands)

2012	$	58,908
2013		8,834
2014		215,771
2015		1,628
2016		244
Thereafter		941,020

Total	$	1,226,405

Interest of $0.8 million, $4.5 million and $12.6 million was capitalized in the cost of property, plant and equipment constructed in 2011, 2010 and 2009, respectively. Interest of $71.4 million, $80.0 million and $91.2 million was paid in 2011, 2010 and 2009, respectively.