
12.	SENIOR LONG-TERM DEBT, SUBORDINATED DEBT AND LOAN AGREEMENTS


	2011			2010

Senior Debt
8.25% senior debt due September 2030	$	300.0		$	300.0
7.0% senior debt due October 2028		382.2			382.2
6.7% senior debt due August 2027		9.2			9.2
7.125% senior debt due October 2026		372.4			372.4
7.0% senior debt due April 2019		500.0			500.0
5.819% senior debt due June 2017		500.0			500.0
5.875% senior debt due April 2014		500.0			500.0
6.75% senior debt due September 2011		342.7			342.7
7.875% senior debt due September 2010		—			248.0
2.00% to 9.59% lease financing obligations due on various dates through 2029		105.4			110.9
Other indebtedness		67.0			97.6

Total face value senior debt		3,078.9			3,363.0

Subordinated Debt
9.75% subordinated debt due March 2021		195.9			195.9

Total face value subordinated debt		195.9			195.9

Total debt face value		3,274.8			3,558.9
Unamortized discounts/premiums		(68.3	)		(76.2	)
Adjustment due to hedging activity		27.3			3.9
Less current installments		(363.5	)		(260.2	)

Total long-term debt	$	2,870.3		$	3,226.4

The aggregate minimum principal maturities of the long-term debt for each of the five fiscal years following May 29, 2011, are as follows:


2012	$	362.2
2013		35.3
2014		506.5
2015		79.3
2016		2.8

Lease financing obligations and other indebtedness included $43.5 million and $83.2 million of debt of consolidated variable interest entities at May 29, 2011 and May 30, 2010, respectively.

During the second quarter of fiscal 2011, we repaid the entire principal balance of $248.0 million of our 7.875% senior notes, which were due September 15, 2010.

During the fourth quarter of fiscal 2009, we issued $500 million of senior notes maturing in 2014 and $500 million of senior notes maturing in 2019.

During fiscal 2009, we retired $357.3 million of 6.75% senior long-term debt due September 2011, $27.6 million of 7.125% senior long-term debt due October 2026, $290.8 million of 6.7% senior long-term debt due August 2027, $17.9 million of 7.0% senior long-term debt due October 2028, $252.0 million of 7.875% senior long-term debt due September 2010, and $4.1 million of 9.75% senior subordinated long-term debt due March 2021, prior to the maturity of the long-term debt, resulting in net charges of $49.2 million.

We consolidate the financial statements of Lamb Weston BSW. In fiscal 2011, we repaid $35.4 million of bank borrowings by our Lamb Weston BSW potato processing venture.

Our most restrictive debt agreements (the revolving credit facility and certain privately placed long-term debt) require that our consolidated funded debt not exceed 65% of our consolidated capital base, and that our fixed charges coverage ratio be greater than 1.75 to 1.0. At May 29, 2011, we were in compliance with our debt covenants.

Net interest expense consists of:


	2011			2010			2009

Long-term debt	$	231.1		$	257.7		$	261.9
Short-term debt		0.2			0.1			5.4
Interest income		(42.2	)		(85.2	)		(78.2	)
Interest capitalized		(11.6	)		(12.2	)		(3.1	)

	$	177.5		$	160.4		$	186.0

Interest paid from continuing and discontinued operations was $231.7 million, $244.3 million, and $261.2 million in fiscal 2011, 2010, and 2009, respectively.

Our net interest expense was reduced by $14.5 million and $1.2 million in fiscal 2011 and 2010, respectively, due to the impact of interest rate swap contracts entered into in 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 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 being 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).

Our net interest expense was increased by $1.0 million and $0.7 million in fiscal 2011 and 2010, respectively, due to the net impact of previously terminated interest rate swap agreements.