Pitney Bowes 2011 Annual Report Download - page 68

PITNEY BOWES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular dollars in thousands, except per share data)
50
8. Debt
December 31,
2011 2010
Notes payable - 50,000
Term loan due 2012 150,000 150,000
4.625% notes due 2012 (1) 400,000 400,000
3.875% notes due 2013 375,000 375,000
4.875% notes due 2014 (2) 450,000 450,000
5.000% notes due 2015 400,000 400,000
4.750% notes due 2016 500,000 500,000
5.750% notes due 2017 500,000 500,000
4.750% notes due 2018 (3) 350,000 350,000
5.600% notes due 2018 (4) 250,000 250,000
6.250% notes due 2019 (5) 300,000 300,000
5.250% notes due 2037 (6) 500,000 500,000
Other (7) 58,909 64,248
Total debt 4,233,909 4,289,248
Notes payable and current portion long-term debt 550,000 50,000
Long-term debt $ 3,683,909 $ 4,239,248
Notes payable consists of commercial paper borrowings. There were no commercial paper borrowings outstanding at December 31,
2011. At December 31, 2010, $50 million of commercial paper borrowings were outstanding at an effective interest rate of 0.32%.
Interest under the Term Loan is based on three-month LIBOR plus 42 basis points. Interest is payable and the interest rate resets
every three months.
(1) In 2009, we entered into interest rate swap agreements with an aggregate notional value of $400 million that effectively convert
the fixed rate interest payments on this debt issue into variable interest rates. We pay a weighted-average variable rate based on one-
month LIBOR plus 249 basis points and receive a fixed rate of 4.625%. The weighted-average rate paid during 2011 and 2010 was
2.8%.
(2) In 2011, we entered into interest rate swap agreements with an aggregate notional value of $450 million that effectively convert
the fixed rate interest payments on this debt issue into variable interest rates. We pay a weighted-average variable rate based on three-
month LIBOR plus 305 basis points and receive a fixed rate of 4.875%. The weighted-average rate paid during 2011 was 3.5%.
(3) In 2008, we received $44 million, excluding accrued interest when we unwound an interest rate swap that effectively converted
the fixed rate interest payments on this debt issue into variable interest rates. This amount is being amortized as a reduction of interest
expense over the remaining term of the notes reducing the effective interest rate to 3.2%.
(4) In 2010, we received $32 million, excluding accrued interest when we unwound two interest rate swaps that effectively converted
the fixed rate interest payments on this debt issue into variable interest rates. This amount is being amortized as a reduction of interest
expense over the remaining term of the notes, reducing the effective interest rate to 3.7%.
(5) In 2009, we issued $300 million, 6.25% 10-year fixed rate notes and simultaneously unwound four forward swap agreements used
to hedge the interest rate risk associated with the forecasted issuance of this fixed rate debt. In connection with the unwinding of these
swaps, we paid $20 million, which is being amortized as additional interest expense over the term of the notes, increasing the effective
interest rate to 6.9%.
(6) This note contains an option that gives bondholders the right to redeem at par, in whole or in part, on January 15, 2017,
outstanding principal plus accrued interest.
(7) Other consists of the unamortized net proceeds received from unwinding of interest rate swaps, the mark-to-market adjustment of
interest rate swaps and debt discounts and premiums.