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Debt and Capital Lease Obligations | 12 Months Ended
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Dec. 31, 2012
Debt and Capital Lease Obligations [Abstract] |
DEBT AND CAPITAL LEASE OBLIGATIONS |
11. | DEBT AND CAPITAL LEASE OBLIGATIONS
Debt, at stated values, and capital lease obligations consisted of the following (in millions):
| Final Maturity |  | December 31,
|  | 2012 |  | 2011
Bank credit facilities | Various |  | $ | — |  |  | $ | — |
Industrial revenue bonds: |  |  |  |  |
Tax-exempt Revenue Refunding Bonds: |  |  |  |  |
Series 1997A, 5.45% | 2027 |  | — |  |  | 18 |
Tax-exempt Waste Disposal Revenue Bonds: |  |  |  |  |
Series 1997, 5.6% | 2031 |  | — |  |  | 25 |
Series 1998, 5.6% | 2032 |  | — |  |  | 25 |
Series 1999, 5.7% | 2032 |  | — |  |  | 25 |
Series 2001, 6.65% | 2032 |  | — |  |  | 19 |
4.5% notes | 2015 |  | 400 |  |  | 400 |
4.75% notes | 2013 |  | 300 |  |  | 300 |
4.75% notes | 2014 |  | 200 |  |  | 200 |
6.125% notes | 2017 |  | 750 |  |  | 750 |
6.125% notes | 2020 |  | 850 |  |  | 850 |
6.625% notes | 2037 |  | 1,500 |  |  | 1,500 |
6.875% notes | 2012 |  | — |  |  | 750 |
7.5% notes | 2032 |  | 750 |  |  | 750 |
8.75% notes | 2030 |  | 200 |  |  | 200 |
Debentures: |  |  |  |  |
7.65% | 2026 |  | 100 |  |  | 100 |
8.75% | 2015 |  | 75 |  |  | 75 |
Senior Notes: |  |  |  |  |
6.7% | 2013 |  | 180 |  |  | 180 |
6.75% | 2037 |  | 24 |  |  | 24 |
7.2% | 2017 |  | 200 |  |  | 200 |
7.45% | 2097 |  | 100 |  |  | 100 |
9.375% | 2019 |  | 750 |  |  | 750 |
10.5% | 2039 |  | 250 |  |  | 250 |
Gulf Opportunity Zone Revenue Bonds, Series 2010, 4.0% | 2040 |  | 300 |  |  | — |
Accounts receivable sales facility | 2013 |  | 100 |  |  | 250 |
Net unamortized discount, including fair value adjustments |  |  | (29 | ) |  | (51 | )
Total debt |  |  | 7,000 |  |  | 7,690 |
Capital lease obligations, including unamortized fair value adjustments |  | 49 |  |  | 51 |
Total debt and capital lease obligations |  |  | 7,049 |  |  | 7,741 |
Less current portion |  |  | (586 | ) |  | (1,009 | )
Debt and capital lease obligations, less current portion |  |  | $ | 6,463 |  |  | $ | 6,732 |
Bank Debt and Credit Facilities We have a $3 billion revolving credit facility (the Revolver) that has a maturity date of December 2016. Borrowings under the Revolver bear interest at LIBOR plus a margin, or an alternate base rate as defined under the agreement, plus a margin. We are also charged various fees and expenses in connection with the Revolver, including facility fees and letter of credit fees. The interest rate and fees under the Revolver are subject to adjustment based upon the credit ratings assigned to our non-bank debt. The Revolver has certain restrictive covenants, including a maximum debt-to-capitalization ratio of 60 percent. As of December 31, 2012 and 2011, our debt-to-capitalization ratios, calculated in accordance with the terms of the Revolver, were 23 percent and 29 percent, respectively. We believe that we will remain in compliance with this covenant. In November 2012, one of our Canadian subsidiaries entered into a C$50 million committed revolving credit facility that has a maturity date of November 2013, which replaced the maturing C$115 million Canadian revolving credit facility. During the year ended December 31, 2012, we borrowed and repaid $1.1 billion under the Revolver and had no borrowings or repayments under either of the Canadian credit facilities. During the years ended December 31, 2011 and 2010, we had no borrowings or repayments under the Revolver or the C$115 million Canadian revolving credit facility. We had outstanding letters of credit under our committed lines of credit as follows (in millions):
|  |  |  |  |  | Amounts Outstanding
|  | Borrowing Capacity |  | Expiration |  | December 31, 2012 |  | December 31, 2011
Letter of credit facilities |  | $ | 550 |  |  | June 2013 |  | $ | 418 |  |  | $ | 300 |
Revolver |  | $ | 3,000 |  |  | December 2016 |  | $ | 59 |  |  | $ | 119 |
Canadian revolving credit facility |  | C$ | 50 |  |  | November 2013 |  | C$ | 10 |  |  | C$ | 20 |
We also have various other uncommitted short-term bank credit facilities. As of December 31, 2012 and 2011, we had no borrowings outstanding under our uncommitted short-term bank credit facilities; however, there were letters of credit outstanding under such facilities of $275 million and $391 million, respectively, for which we are charged letter of credit issuance fees. The uncommitted credit facilities have no commitment fees or compensating balance requirements. Non-Bank Debt During the year ended December 31, 2012, the following activity occurred:
• | in June 2012, we remarketed and received proceeds of $300 million related to the 4.0% Gulf Opportunity Zone Revenue Bonds Series 2010 issued by the Parish of St. Charles, State of Louisiana (GO Zone Bonds), which are due December 1, 2040, but are subject to mandatory tender on June 1, 2022;
• | in April 2012, we made scheduled debt repayments of $4 million related to our Series 1997A 5.45% industrial revenue bonds and $750 million related to our 6.875% notes; and
• | in March 2012, we exercised the call provisions on our Series 1997 5.6%, Series 1998 5.6%, Series 1999 5.7%, Series 2001 6.65%, and Series 1997A 5.45% industrial revenue bonds, which were redeemed on May 3, 2012 for $108 million, or 100% of their outstanding stated values.
During the year ended December 31, 2011, the following activity occurred:
• | in December 2011, we redeemed our Series 1997B 5.4% and Series 1997C 5.4% industrial revenue bonds for $56 million, or 100% of their stated values;
• | in May 2011, we made a scheduled debt repayment of $200 million related to our 6.125% senior notes;
• | in April 2011, we made scheduled debt repayments of $8 million related to our Series 1997A 5.45%, Series 1997B 5.4%, and Series 1997C 5.4% industrial revenue bonds;
• | in February 2011, we made a scheduled debt repayment of $210 million related to our 6.75% senior notes; and
• | in February 2011, we paid $300 million to acquire the GO Zone Bonds, which were subject to mandatory tender. These bonds were remarketed in June 2012, as previously discussed.
During the year ended December 31, 2010, the following activity occurred:
• | in December 2010, the Parish of St. Charles, State of Louisiana (Issuer) issued GO Zone Bonds totaling $300 million, with a maturity date of December 1, 2040. The GO Zone Bonds initially bore interest at a weekly rate with interest payable monthly, commencing January 5, 2011. Pursuant to a financing agreement, the Issuer lent the proceeds of the sale of the GO Zone Bonds to us to finance a portion of the construction costs of a hydrocracker project at our St. Charles Refinery. We received proceeds of $300 million. Under the financing agreement, we were obligated to pay the Issuer amounts sufficient for the Issuer to pay principal and interest on the GO Zone Bonds;
• | in June 2010, we made a scheduled debt repayment of $25 million related to our 7.25% debentures;
• | in May 2010, we redeemed our 6.75% senior notes with a maturity date of May 1, 2014 for $190 million, or 102.25% of stated value;
• | in April 2010, we made scheduled debt repayments of $8 million related to our Series 1997A 5.45%, Series 1997B 5.4%, and Series 1997C 5.4% industrial revenue bonds;
• | in March 2010, we redeemed our 7.5% senior notes with a maturity date of June 15, 2015 for $294 million, or 102.5% of stated value; and
• | in February 2010, we issued $400 million of 4.5% notes due February 1, 2015 and $850 million of 6.125% notes due in February 1, 2020 for total net proceeds of $1.2 billion.
Accounts Receivable Sales Facility We have an accounts receivable sales facility with a group of third-party entities and financial institutions to sell eligible trade receivables on a revolving basis. In July 2012, we amended our agreement to increase the facility from $1.0 billion to $1.5 billion and extended the maturity date to July 2013. Under this program, one of our marketing subsidiaries (Valero Marketing) sells eligible receivables, without recourse, to another of our subsidiaries (Valero Capital), whereupon the receivables are no longer owned by Valero Marketing. Valero Capital, in turn, sells an undivided percentage ownership interest in the eligible receivables, without recourse, to the third-party entities and financial institutions. To the extent that Valero Capital retains an ownership interest in the receivables it has purchased from Valero Marketing, such interest is included in our financial statements solely as a result of the consolidation of the financial statements of Valero Capital with those of Valero Energy Corporation; the receivables are not available to satisfy the claims of the creditors of Valero Marketing or Valero Energy Corporation. As of December 31, 2012 and 2011, $3.2 billion and $3.3 billion, respectively, of our accounts receivable composed the designated pool of accounts receivable included in the program. All amounts outstanding under the accounts receivable sales facility are reflected as debt on our balance sheets and proceeds and repayments are reflected as cash flows from financing activities on the statements of cash flows. Changes in the amounts outstanding under our accounts receivable sales facility were as follows (in millions):
| Year Ended December 31,
| 2012 |  | 2011 |  | 2010
Balance as of beginning of year | $ | 250 |  |  | $ | 100 |  |  | $ | 200 |
Proceeds from the sale of receivables | 1,500 |  |  | 150 |  |  | 1,225 |
Repayments | (1,650 | ) |  | — |  |  | (1,325 | )
Balance as of end of year | $ | 100 |  |  | $ | 250 |  |  | $ | 100 |
Capitalized Interest For the years ended December 31, 2012, 2011, and 2010, capitalized interest was $221 million, $152 million, and $90 million, respectively. Other Disclosures In addition to the maximum debt-to-capitalization ratio applicable to the Revolver discussed above under “Bank Credit Facilities,” our bank credit facilities and other debt arrangements contain various customary restrictive covenants, including cross-default and cross-acceleration clauses. Principal payments on our debt obligations and future minimum rentals on capital lease obligations as of December 31, 2012 were as follows (in millions):
| Debt |  | Capital Lease Obligations
2013 | $ | 580 |  |  | $ | 12 |
2014 | 200 |  |  | 10 |
2015 | 475 |  |  | 9 |
2016 | — |  |  | 8 |
2017 | 950 |  |  | 7 |
Thereafter | 4,824 |  |  | 35 |
Net unamortized discount and fair value adjustments | (29 | ) |  | — |
Less interest expense | — |  |  | (32 | )
Total | $ | 7,000 |  |  | $ | 49 |

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- Definition The entire disclosure for debt and capital lease obligations can be reported. Information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. Also includes descriptions and amounts of capital leasing arrangements that consist of direct financing, sales type and leveraged leases. Disclosure may include the effect on the balance sheet and the income statement resulting from a change in lease classification for leases that at inception would have been classified differently had guidance been in effect at the inception of the original lease. + References No definition available. + Details
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