Document 0JrqzZEnB7Dkn6NZX0BDyRYLk

^""png-term debt at Oecember 31. excluding the current portion, folj (in millions): Notes of Employee Stock Ownership Plan due through 1999 6%% notes due 1999 9% notes due 2001 8% debentures due 2006 (due 1996 at option of debenture holders) 8.9% debentures due 2006 7% debentures due 2011, net ot unamortized discount of $92 minion in 1995 and $93 million in 1994 (effective interest rate 14.6%) 8%% debentures due 2019 (due 2004 at option of debenture holders) 6.1 K debentures due 2022 7%% debentures due 2024 616% debentures due 2025 (due 2005 at option of debenture holders) Unsecured notes (5.6% to 6.1 %) Other 1995 1994 $ 39 100 100 $ 66 100 100 86 86 too 100 108 107 38 38 100 100 100 100 150 142 21 $1,084 210 46 $1,053 The Company has a $500 million revolving credit agreement, which ex pires in 2000, to provide funds for working capital and general corporate purposes. The 8% debentures and unsecured notes are classified as long term debt because the Company intends, and has the ability under the revolving credit agreement, to refinance these debts on a long-term basis, '-"-'otes of the Employee Stock Ownership Plan, which are guaranteed v e Company, consist of $32 million at a floating interest rate (4.5% at Oecember 31,1995) based on UBOR and $21 million at a fixed interest rate of 7.6% ($14 million of these notes are included in current portion of long term debt). The Company has entered into a series of interest rate swaps, which expire ratably through 1999, and which change the interest rate on the $21 million of fixed interest rate notes to fixed interest rates of 7.1 % and 6.9% as to $6 million and $13 million, respectively, and to a floating inter est rate (4.6% at December 31,1995) based on UBOR as to $2 million. In March 1995, the Company entered into an agreement that expires m 1998 which effectively converts $75 million of United States dollar fixed rate debt into Japanese Yen denominated debt. Interest is payable at 3.2% as to $50 million of debt and at a floating interest rate (0.9% at De cember 31.1995) based on Yen UBOR as to $25 million. In September 1995, the Company entered into agreements that expire in 1998 which fix the exchange rate on $50 million of the $75 million principal payment. In January 1996, the Company entered into an agreement that expires in 1998 which fixes the exchange rate on the remaining $25 million princi pal payment. The initial agreement was designated as a hedge of the Company's net investments in affiliated companies. In June 1995, the Company entered into an agreement that expires in 1999 which effectively converts $40 million of United States dollar fixed rate debt into Dutch Guilder denominated debt with a fixed interest rate of 6.5%. This agreement has been designated as a hedge of the Com pany's net investment in a Netherlands subsidiary. The Company has two interest rate swaps aggregating $50 million that expire in 2000 which partially offset (he effect of a $100 million 9% interest rate swap also expiring in 2000. The net effect of these swaps at Decem ber 31,1995 is to convert $50 million of floating rate debt to fixed rate debt at 9% and another $50 million of floating rate debt to UBOR plus 3.1 %. In 1994, the Company terminated, and settled for cash, interest rate swap agreements with notional amounts totaling $200 million which hedged the issuance of the 6%% notes and 7%% debentures. The gain on the termination of the interest rate swap agreements is being amortized to interest expense over the life of the notes and debentures and effectively reduces the annual rate of the notes to 4.8% and the debentures to 7.1 %. Aggregate mandatory sinking fund requirements and annual maturi ties of long-term debt are as follows fin millions): 1996, $20; 1997, $20; 1998, $12:1999, $107; and 2000, $143. The amount for 1999 includes the maturity of the $100 million 6%% notes. The amount for 2000 includes $142 million of unsecured notes due to the expiration of the five-year re volving credit agreement in 2000. Interest capitalized as part of acquisition or construction of major fixed assets (in millions) was $10 in 1995 and 1994, and $12 in 1993. Interest paid (in millions) was $96, $93 and $83 in 1995,1994 and 1993, respectively. Financial instruments outstanding at December 31 are as follows (m millions): 1995 Notion*! Ctnying mount amount _____________ 14 fair Notional Carrying value mount amount Fair vlu Cash and short-term investments Marketable equity investments Marketable debt securities Short-term debt Long-term debt, currenl portion of long-term debt and foreign currency principal swaps Foreign currency forward exchange contracts and options $150 interest rate swaps Fixed to floating 96 Floating to fixed 120 Fixed to fixed 90 interest rate caps Purchased Sold $ 84 42 19 (30) (1,104) (2) 1 (1) 1 42 19 (30) (1.290) (4) 5 (16) 4 ** CD* $ 41 $ 41 51 51 26 26 (14) (14) (1.075) (1.114) $189 76 123 1 (D (5) (D (4) 100 (100) 2 (2) The fair values of short-term investments, marketable equity invest ments and debt securities, short-term and long-term debt, and interest rate swaps and caps are principally based on quoted market prices. The fair value of foreign currency forward exchange contracts and options, which primarily mature in 1996, and foreign currency principal and inter est rate swaps are estimated based on quoted market prices of compa rable contracts, adjusted through interpolation where necessary for maturity differences. 26