8. Debt Obligations

The Company had notes and short-term obligations at December 31, 2002 and 2001 of $37.8 million and $34.0 million, respectively. The Company also has a $250.0 million 5-year revolving credit facility with a variable interest rate based on LIBOR. There were no borrowings on this facility as of December 31, 2002.

A summary of long-term debt at December 31 is as follows:

		2002		2001
Term A loan - quarterly installments through   2006 (variable rate based on LIBOR)	$	288,270	$	325,000
Term B loan - quarterly installments through   2008 (variable rate based on LIBOR)	231,417		250,000
Senior unsecured notes - due 2011 (8.75%)	350,000		350,000
Industrial development revenue bonds and   other secured notes payable - due 2003   through 2016 (.90% to 6.00%)	26,268		26,329
Capital Securities of Trust Subsidiary -   due 2028 (7.45%)	190,700		190,700
Other debt	25,216		24,982
	1,111,871		1,167,011
Less current portion	104,563		19,546
Total long-term debt	$	1,007,308	$	1,147,465

During 2002, the Company made payments on Term A loan of $36.7 million and on Term B loan of $18.6 million. Debt covenants include certain minimum financial ratios that were all satisfied.

During 2001, the Company obtained a Term A loan for $325.0 million and a Term B loan for $250.0 million. In addition, a long-term bond offering for $350.0 million, due 2011, was completed in November 2001.

The early extinguishment of previous credit facilities in 2001 resulted in a loss of $23.5 million.

Land O'Lakes Capital Trust I (the "Trust") was created for the sole purpose of issuing $200.0 million of Capital Securities and investing the proceeds thereof in an equivalent amount of debentures of the Company. The sole assets of the Trust, $206.2 million principal amount Junior Subordinated Deferrable Interest Debentures (the "Debentures") of the Company, bearing interest at 7.45% and maturing on March 15, 2028, are eliminated upon consolidation. The Capital Securities are guaranteed to the extent set forth in the Offering Memorandum of the Capital Securities by the Company and bear the same interest rate and maturity date as the Debentures.

Interest paid, including interest paid on capital securities and net of amounts capitalized ($0.1 million, $0.1 million and $1.5 million in 2002, 2001 and 2000, respectively), was $80.0 million, $55.7 million and $59.8 million in 2002, 2001 and 2000, respectively.

The weighted average interest rates on short-term borrowings and notes outstanding at December 31, 2002 and 2001 were 6.99% and 6.52%, respectively.

Borrowings under the revolving credit facility and the term loans bear interest at variable rates (either LIBOR or an Alternative Base Rate) plus applicable margins. The margins depend on Land O'Lakes credit ratings. Based upon existing Land O'Lakes credit ratings, the current LIBOR margins are 225 basis points for the revolving credit facility, 275 basis points for the Term A loan and 350 basis points for the Term B loan. Spreads for the Alternative Base Rate are 100 basis points lower than the applicable LIBOR spreads. LIBOR may be set for one, two, three or six month periods at the election of Land O'Lakes. As of December 31, 2002, interest rates on the Term A loan and Term B loan were 4.17% and 4.92%, respectively.

The maturity of long-term debt for the next five years and thereafter is summarized in the table below. The amount for 2003 includes a $50 million voluntary prepayment of Term A and B loans, which was paid on January 24, 2003.

Year	Amount
2003	$	104,563
2004		71,510
2005		90,953
2006		68,732
2007		9,062
2008 and thereafter		767,051

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