NOTES PAYABLE

A summary of notes payable follows:



(In millions)	March 31, 2012			December 31, 2011
8.50% senior notes due May 2019	$	850		$	850
6.45% senior notes due August 2040	448		⁽¹⁾	448		⁽¹⁾
6.90% senior notes due December 2039	396		⁽²⁾	396		⁽²⁾
3.45% senior notes due August 2015	300			300
2.65% senior notes due February 2017	400			0
4.00% senior notes due February 2022	349		⁽³⁾	0
Yen-denominated Uridashi notes:
2.26% notes due September 2016 (principal amount 8 billion yen)	97			103
Yen-denominated Samurai notes:
1.47% notes due July 2014 (principal amount 28.7 billion yen)	349			369
1.87% notes due June 2012 (principal amount 26.6 billion yen)	324			342
1.84% notes due July 2016 (principal amount 15.8 billion yen)	192			203
Variable interest rate notes due July 2014 (1.35% in 2012 and 1.34% in 2011, principal amount 5.5 billion yen)	67			71
Yen-denominated loans:
3.60% loan due July 2015 (principal amount 10 billion yen)	122			129
3.00% loan due August 2015 (principal amount 5 billion yen)	61			64
Capitalized lease obligations payable through 2022	9			10
Total notes payable	$	3,964		$	3,285

⁽¹⁾$450 issuance net of a $2 underwriting discount that is being amortized over the life of the notes

⁽²⁾ $400 issuance net of a $4 underwriting discount that is being amortized over the life of the notes

⁽³⁾$350 issuance net of a $1 underwriting discount that is being amortized over the life of the notes

In February 2012, the Parent Company issued two series of senior notes totaling $750 million through a U.S. public debt offering. The first series, which totaled $400 million, bears interest at a fixed rate of 2.65% per annum, payable semi-annually, and has a five-year maturity. The second series, which totaled $350 million, bears interest at a fixed rate of 4.00% per annum, payable semi-annually, and has a ten-year maturity. We have entered into cross-currency swaps to reduce interest expense by converting the dollar-denominated principal and interest on the senior notes we issued into yen-denominated obligations. By entering into these cross-currency swaps, we economically converted our $400 million liability into a 30.9 billion yen liability and reduced the interest rate on this debt from 2.65% in dollars to 1.22% in yen, and we economically converted our $350 million liability into a 27.0 billion yen liability and reduced the interest rate on this debt from 4.00% in dollars to 2.07% in yen.

We have no restrictive financial covenants related to our notes payable. We were in compliance with all of the covenants of our notes payable at March 31, 2012. No events of default or defaults occurred during the three-month period ended March 31, 2012.

For additional information, see Notes 4 and 8 of the Notes to the Consolidated Financial Statements in our annual report to shareholders for the year ended December 31, 2011.