LONG-TERM DEBT

Net interest expense consists of:



	Thirteen Weeks Ended
	August 25, 2013			August 26, 2012
Long-term debt	$	99.7		$	51.6
Short-term debt	0.3			0.2
Interest income	(0.6		)	(0.8		)
Interest capitalized	(3.8		)	(1.7		)
	$	95.6		$	49.3

Net interest expense for the first quarter of fiscal 2014 and 2013 was reduced by $2.3 million and $2.2 million, respectively, due to the impact of the interest rate swap contracts entered into in the fourth quarter of fiscal 2010. The interest rate swaps effectively changed our interest rates on the senior long-term debt instruments maturing in fiscal 2012 and 2014 from fixed to variable. During the second quarter of fiscal 2011, we terminated the interest rate swap contracts and received proceeds of $31.5 million. The cumulative adjustment to the fair value of the debt instruments that were hedged (the effective portion of the hedge) is being amortized as a reduction of interest expense over the remaining lives of the debt instruments (through fiscal 2014).

As a result of our acquisition of Ralcorp, the senior unsecured notes issued in exchange for senior notes issued by Ralcorp of $716.0 million and the senior notes issued by Ralcorp that remain outstanding of $33.9 million were recorded at fair value. The combined fair value adjustment on these notes was $163.8 million and is being amortized within interest expense over the life of the respective notes. Our net interest expense for the first quarter of fiscal 2014 was reduced by $1.6 million as a result of this amortization.