Quantitative and Qualitative Disclosures About Market Risk      

We address our exposure to market risks, principally the market risk of changes in interest rates, through a controlled program of risk management that may include the use of derivative financial instruments. We do not hold or issue derivative financial instruments for trading purposes. We do not believe that our foreign exchange exposure is material to our financial position or results of operations. See Note 2 to the Consolidated Financial Statements for additional discussion of our financial instruments and hedging activities.

At December 31, 2003 and 2002, the fair value of our debt was estimated at $1.2 billion and $899 million, respectively, using quoted market prices and yields for the same or similar types of borrowings, taking into account the underlying terms of the debt instruments. At December 31, 2003 and 2002, the estimated fair value exceeded the carrying value of the debt by approximately $86 million and $77 million, respectively. An assumed 10% increase in interest rates (representing approximately 50 and 60 basis points at December 31, 2003 and 2002, respectively) would potentially reduce the estimated fair value of our debt by approximately $17 million and $21 million, respectively, at December 31, 2003 and 2002.

The Debentures have a contingent interest component that will require us to pay contingent interest based on certain thresholds, as outlined in the indenture governing the Debentures. The contingent interest component, which is more fully described in Note 11 to the Consolidated Financial Statements, is considered to be a derivative instrument subject to SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities”, as amended. As such, the derivative was recorded at its fair value in the consolidated balance sheets and was not material at December 31, 2003 and 2002.

Borrowings under our unsecured revolving credit facility under our Credit Agreement, our term loan facilities and our secured receivables credit facility are subject to variable interest rates, unless fixed through interest rate swaps or other agreements. Interest rates on our unsecured revolving credit facility and term loans are subject to a pricing schedule that can fluctuate based on changes in our credit rating. As such, our borrowing cost under these credit arrangements will be subject to both fluctuations in interest rates and changes in our credit rating. As of December 31, 2003, our borrowing rate for LIBOR-based loans was principally LIBOR plus 1.1875%. At December 31, 2003, there was $305 million outstanding under our term loan due June 2007 and there were no borrowings outstanding under our unsecured revolving credit facility or secured receivables credit facility.

Based on our net exposure to interest rate changes, an assumed 10% change in interest rates on our variable rate indebtedness (representing approximately 12 basis points) would impact annual net interest expense by approximately $0.4 million, assuming no changes to the debt outstanding at December 31, 2003.