Debt

6 Months Ended

Jun. 30, 2011

Debt

Debt

12.    Debt

The Company's outstanding debt is as follows:

(In millions of dollars)	June 30, 2011		December 31, 2010
Short-term:
Current portion of long-term debt		$   260		$       8
Long-term:
Senior notes – 6.25% due 2012 (5.1% effective interest rate)		$   252		$   253
Senior notes – 4.850% due 2013		250		250
Senior notes – 5.875% due 2033		296		296
Senior notes – 5.375% due 2014		653		648
Senior notes – 5.75% due 2015		747		747
Senior notes – 9.25% due 2019		398		398
Mortgage – 5.70% due 2035		435		439
Other		2		3
		3,033		3,034
Less current portion		260		8
		$2,773		$3,026

The senior notes in the table above are publically registered by the Company with no guarantees attached.

On June 27, 2011, the Company commenced tender offers (the "tender offers") to purchase for cash up to a total of $500 million aggregate principal amount of its outstanding 5.375% notes due 2014 (the "2014 Notes") and 5.750% notes due 2015 (the "2015 Notes" and together with the 2014 Notes, the "Outstanding Notes"), of which $650 million and $750 million, respectively, were then outstanding.

On July 15, 2011, the Company purchased a total of $600 million of the Outstanding Notes, $330 million of its 2014 Notes and $270 million of its 2015 Notes. The Company acquired the notes at fair value plus a tender premium, which exceeded its carrying value.

The Company used proceeds from the issuance of 4.80% ten-year $500 million senior notes in the third quarter of 2011 and cash on hand to fund the amounts associated with the tendered bonds.

During the third quarter of 2010, the Company repaid its 5.15% fixed rate $550 million senior notes that matured.

On October 23, 2009, the Company and certain of its foreign subsidiaries entered into a $1.0 billion multi-currency three-year unsecured revolving credit facility, which replaced a $1.2 billion facility. The interest rate on this facility varies based upon the Company's credit ratings and the Company's credit default swap levels subject to floors and caps. The facility requires the Company to maintain certain coverage and leverage ratios which are tested quarterly. There were no borrowings outstanding under this facility at June 30, 2011.

Derivative Financial Instruments

In February 2011, the Company entered into two $125 million 3.5-year interest rate swaps to hedge changes in the fair value of the first $250 million of its 5.375% senior notes due in 2014. Under the terms of the swaps, the counterparties will pay the Company a fixed rate of 5.375% and the Company will pay interest at a floating rate of three-month LIBOR plus a fixed spread of 3.726%. The maturity date of the senior notes and the swaps will match exactly. The floating rate resets quarterly, with every second reset occurring on the interest payment date of the senior notes. The swaps net settle every six months on the senior note coupon payment dates. The swaps are designated as fair value hedging instruments and are deemed to be perfectly effective in accordance with applicable accounting guidance. The fair value of the swaps at inception were zero and subsequent changes in the fair value of the interest rate swaps are reflected in the carrying value of the interest rate swaps and in the consolidated balance sheet. The carrying value of the debt on the balance sheet was adjusted by an equal amount. The gain or loss on the hedged item (fixed rate debt) and the offsetting gain or loss on the interest rate swaps as of June 30, 2011 is as follows:

Income statement classification (In millions of dollars)	Gain on Swaps		Loss on Notes		Net Income Effect
		$4.7		$(4.7)		$—

The amounts earned and owed under the swap agreements are accrued each period and are reported in interest expense. There was no ineffectiveness recognized in the periods presented.