Financing Arrangements

Short-term debt for the years ended December 31 was as follows:



	2012		2011
Variable-rate lines of credit for certain of the Company’s foreign subsidiaries with various banks with interest rates ranging from 0.61% to 2.28% and 2.24% to 11.0% at December 31, 2012 and 2011, respectively	$	14.3	$	22.0
Short-term debt	$	14.3	$	22.0

The lines of credit for certain of the Company’s foreign subsidiaries provide for borrowings up to $225.6 million. Most of these lines of credit are uncommitted. At December 31, 2012, the Company’s foreign subsidiaries had borrowings outstanding of $14.3 million which reduced the availability under these facilities to $211.3 million.

The weighted-average interest rate on short-term debt during the year was 3.2%, 4.1% and 4.3% in 2012, 2011 and 2010, respectively. The weighted-average interest rate on short-term debt outstanding at December 31, 2012 and 2011 was 1.5% and 3.6%, respectively.

On November 30, 2012, the Company entered into a $200 million Amended and Restated Asset Securitization Agreement, which matures on November 30, 2015. Prior to the renewal, the Company's Asset Securitization Agreement was a $150 million committed facility. Under the terms of the Asset Securitization Agreement, the Company sells, on an ongoing basis, certain domestic trade receivables to Timken Receivables Corporation, a wholly-owned consolidated subsidiary that in turn uses the trade receivables to secure borrowings which are funded through a vehicle that issues commercial paper in the short-term market. Borrowings under the Asset Securitization Agreement are limited to certain borrowing base calculations. Any amounts outstanding under this Asset Securitization Agreement would be reported in short-term debt on the Company’s Consolidated Balance Sheets. As of December 31, 2012 and 2011, there were no outstanding borrowings under the Asset Securitization Agreement. However, certain borrowing base limitations reduced the availability of the Asset Securitization Agreement to $154.2 million at December 31, 2012. The cost of this facility, which is the commercial paper rate plus program fees, is considered a financing cost and is included in interest expense in the Consolidated Statements of Income. The yield rate was 1.06%, 1.25% and 1.34%, at December 31, 2012, 2011 and 2010, respectively.

Long-term debt for the years ended December 31 was as follows:



	2012		2011
Fixed-rate Medium-Term Notes, Series A, mature at various dates through May 2028, with interest rates ranging from 6.74% to 7.76%	$	175.0	$	175.0
Fixed-rate Senior Unsecured Notes, maturing on September 15, 2014, with an interest rate of 6.0%	249.9		249.8
Variable-rate State of Ohio Water Development Revenue Refunding Bonds, maturing on November 1, 2025 (0.18% at December 31, 2012)	12.2		12.2
Variable-rate State of Ohio Air Quality Development Revenue Refunding Bonds, maturing on November 1, 2025 (0.30% at December 31, 2012)	9.5		9.5
Variable-rate State of Ohio Pollution Control Revenue Refunding Bonds, maturing on June 1, 2033 (0.30% at December 31, 2012)	8.5		17.0
Variable-rate credit facility with US Bank for Advanced Green Components, LLC, maturing on May 23, 2013	—		5.1
Other	9.6		24.5
Total debt	$	464.7	$	493.1
Less current maturities	9.6		14.3
Long-term debt	$	455.1	$	478.8

The Company has a $500 million Senior Credit Facility, which matures on May 11, 2016. At December 31, 2012, the Company had no outstanding borrowings under the Senior Credit Facility but had letters of credit outstanding totaling $8.6 million, which reduced the availability under the Senior Credit Facility to $491.4 million. Under the Senior Credit Facility, the Company has two financial covenants: a consolidated leverage ratio and a consolidated interest coverage ratio. At December 31, 2012, the Company was in full compliance with the covenants under the Senior Credit Facility.

In 2011, the Company was notified that its variable-rate State of Ohio Pollution Control Revenue Refunding Bonds, maturing on June 1, 2033, had lost their tax-exempt status and would now be taxable to its bondholders. As part of the negotiation with the Internal Revenue Service (IRS), the Company redeemed half of the balance during the third quarter of 2012. The Company now expects to pay off the remaining balance of $8.5 million on December 31, 2022.

As of December 31, 2011, the Company had restricted cash of $3.6 million in a collateral account to secure up to $3.6 million of the indebtedness between AGC, a joint venture of the Company, and US Bank in the event AGC defaulted on its credit facility with US Bank. The $3.6 million collateral account was classified as restricted cash on the Consolidated Balance Sheet as of December 31, 2011. In connection with the sale of AGC, the Company was able to redeem the cash collateral account.

Certain of the Company’s foreign subsidiaries have facilities that also provide for long-term borrowings up to $9.6 million. At December 31, 2012, the Company had borrowings outstanding of $9.6 million, leaving no availability under these long-term facilities.

The maturities of long-term debt for the five years subsequent to December 31, 2012 are as follows: 2013 – $9.6 million; 2014 – $249.9 million; 2015 – zero; 2016 – $15.0 million; and 2017 – $5.0 million.

Interest paid was approximately $32 million in 2012, $35 million in 2011 and $36 million in 2010. This differs from interest expense due to the timing of payments and interest capitalized of $4.9 million in 2012, $1.2 million in 2011 and $0.7 million in 2010.

The Company and its subsidiaries lease a variety of real property and equipment. Rent expense under operating leases amounted to $43.6 million, $44.5 million and $38.1 million in 2012, 2011 and 2010, respectively. At December 31, 2012, future minimum lease payments for noncancelable operating leases totaled $122.2 million and are payable as follows: 2013–$35.4 million; 2014–$29.2 million; 2015–$21.7 million; 2016–$14.9 million; 2017-$9.6 million and $11.4 million thereafter.