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Debt and Capital Lease Obligations | 12 Months Ended
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Dec. 31, 2014
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,
|  | 2014 |  | 2013
Bank credit facilities | Various |  | $ | — |  |  | $ | — |
Senior Notes: |  |  |  |  |
4.5% | 2015 |  | 400 |  |  | 400 |
4.75% | 2014 |  | — |  |  | 200 |
6.125% | 2017 |  | 750 |  |  | 750 |
6.125% | 2020 |  | 850 |  |  | 850 |
6.625% | 2037 |  | 1,500 |  |  | 1,500 |
6.75% | 2037 |  | 24 |  |  | 24 |
7.2% | 2017 |  | 200 |  |  | 200 |
7.45% | 2097 |  | 100 |  |  | 100 |
7.5% | 2032 |  | 750 |  |  | 750 |
8.75% | 2030 |  | 200 |  |  | 200 |
9.375% | 2019 |  | 750 |  |  | 750 |
10.5% | 2039 |  | 250 |  |  | 250 |
Debentures: |  |  |  |  |
7.65% | 2026 |  | 100 |  |  | 100 |
8.75% | 2015 |  | 75 |  |  | 75 |
Gulf Opportunity Zone Revenue Bonds, Series 2010, 4.0% | 2040 |  | 300 |  |  | 300 |
Accounts receivable sales facility | 2015 |  | 100 |  |  | 100 |
Other debt | 2015 |  | 26 |  |  | — |
Net unamortized discount, including fair value adjustments |  |  | (21 | ) |  | (24 | )
Total debt |  |  | 6,354 |  |  | 6,525 |
Capital lease obligations, including unamortized fair value adjustments |  | 32 |  |  | 39 |
Total debt and capital lease obligations |  |  | 6,386 |  |  | 6,564 |
Less current portion |  |  | (606 | ) |  | (303 | )
Debt and capital lease obligations, less current portion |  |  | $ | 5,780 |  |  | $ | 6,261 |
Credit Facilities Revolver We have a $3 billion revolving credit facility (the Revolver) with a group of financial institution lenders that has a maturity date of November 2018. We have the option to increase the aggregate commitments under the Revolver to $4.5 billion, subject to, among other things, the consent of the existing lenders whose commitments will be increased or any additional lenders providing such additional capacity. We may request additional one-year extensions, subject to certain conditions, including the consent of the lenders holding the majority of the commitments and each lender extending its individual commitment. The Revolver includes sub-facilities for swingline loans and letters of credit. Outstanding borrowings under the Revolver bear interest, at our option, at either (a) the adjusted LIBO rate (as defined in the Revolver) for the applicable interest period in effect from time to time plus the applicable margin or (b) the alternate base rate (as defined in the Revolver) plus the applicable margin. The interest rate and fees under the Revolver are subject to adjustment based upon the credit ratings assigned to our senior unsecured debt. We are also charged various fees and expenses in connection with the Revolver, including facility fees and letter of credit fees. The Revolver has certain restrictive covenants, including a maximum debt-to-capitalization ratio of 60 percent. Our debt-to-capitalization ratio, calculated in accordance with the terms of the Revolver, was 12 percent as of December 31, 2014 and 2013. VLP Revolver VLP has a $300 million senior unsecured revolving credit facility agreement (the VLP Revolver) with a group of lenders that has a maturity date of December 2018. The VLP Revolver is available only to the operations of VLP, and creditors of VLP do not have recourse against Valero. VLP has the option to increase the aggregate commitments under the VLP Revolver to $500 million, subject to, among other things, the consent of the existing lenders whose commitments will be increased or any additional lenders providing such additional capacity. VLP may request two additional one-year extensions, subject to certain conditions. VLP may terminate the VLP Revolver with notice to the lenders of at least three business days prior to termination. The VLP Revolver includes sub-facilities for swingline loans and letters of credit. VLP’s obligations under the VLP Revolver will be jointly and severally guaranteed by all of VLP’s directly owned material subsidiaries. As of December 31, 2014, the only guarantor under the VLP Revolver was Valero Partners Operating Co. LLC. Outstanding borrowings under the VLP Revolver bear interest, at VLP’s option, at either (a) the adjusted LIBO rate (as defined in the VLP Revolver) for the applicable interest period in effect from time to time plus the applicable margin or (b) the alternate base rate (as defined in the VLP Revolver) plus the applicable margin. The VLP Revolver also provides for customary fees, including administrative agent fees, participation fees, and commitment fees. The VLP Revolver contains certain restrictive covenants, including a ratio of total debt to EBITDA (as defined in the VLP Revolver) for the prior four fiscal quarters of not greater than 5.0 to 1.0 as of the last day of each fiscal quarter, and limitations on VLP’s ability to pay distributions to its unitholders. Canadian Revolver One of our Canadian subsidiaries has a C$50 million committed revolving credit facility (the Canadian Revolver) under which it may borrow and obtain letters of credit that has a maturity date of November 2015. Activities Under Our Credit Facilities During the years ended December 31, 2014 and 2013, we had no borrowings or repayments under the Revolver, the VLP Revolver, or the Canadian Revolver. During the year ended December 31, 2012, we borrowed and repaid $1.1 billion under the Revolver and had no borrowings or repayments under the Canadian Revolver. Letters of Credit We had outstanding letters of credit under our committed lines of credit as follows (in millions):
|  |  |  |  |  | Amounts Outstanding
|  | Borrowing Capacity |  | Expiration |  | December 31,
|  |  |  | 2014 |  | 2013
Letter of credit facilities |  | $ | 550 |  |  | June 2015 |  | $ | 56 |  |  | $ | 278 |
Revolver |  | $ | 3,000 |  |  | November 2018 |  | $ | 54 |  |  | $ | 59 |
VLP Revolver |  | $ | 300 |  |  | December 2018 |  | $ | — |  |  | $ | — |
Canadian Revolver |  | C$ | 50 |  |  | November 2015 |  | C$ | 10 |  |  | C$ | 10 |
We also have various other uncommitted short-term bank credit facilities. As of December 31, 2014 and 2013, we had no borrowings outstanding under our uncommitted short-term bank credit facilities; however, there were letters of credit outstanding under such facilities of $80 million and $189 million, respectively, for which we are charged letter of credit issuance fees. The uncommitted credit facilities have no commitment fees or compensating balance requirements. Bank Debt On March 20, 2013, in anticipation of the separation of our retail business as described in Note 3, CST entered into an $800 million senior secured credit agreement. This credit agreement was retained by CST after the separation from us. Therefore, we have no rights to obtain credit under nor any liabilities in connection with this credit agreement. On April 16, 2013, also in anticipation of the separation of our retail business, we borrowed $550 million under a short-term debt agreement with a third-party financial institution. On May 1, 2013, CST issued $550 million of its senior unsecured bonds to us, and we exchanged those bonds with the third-party financial institution in satisfaction of our short-term debt. On October 24, 2013, we borrowed $525 million under a short-term debt agreement with a third-party financial institution in anticipation of liquidating our retained interest in CST. This liquidation was completed on November 14, 2013 by transferring all remaining shares of CST common stock owned by us to the financial institution in exchange for $467 million of our short-term debt, and we paid the remaining $58 million of short-term debt in cash. After paying $19 million of fees, we recognized a $325 million nontaxable gain. Non-Bank Debt In February 2015, we made a scheduled debt repayment of $400 million related to our 4.5% senior notes. During the year ended December 31, 2014, we made a scheduled debt repayment of $200 million related to our 4.75% senior notes. During the year ended December 31, 2013, we made scheduled debt repayments of $180 million related to our 6.7% senior notes and $300 million related to our 4.75% senior notes. During the year ended December 31, 2012,
• | we redeemed 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 for $108 million, or 100% of their outstanding stated values;
• | 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
• | we received proceeds of $300 million from the remarketing of the 4.0% Gulf Opportunity Zone Revenue Bonds Series 2010 issued by the Parish of St. Charles, State of Louisiana, which are due December 1, 2040, but are subject to mandatory tender on June 1, 2022.
Accounts Receivable Sales Facility We have an accounts receivable sales facility with a group of third-party entities and financial institutions to sell up to $1.5 billion of eligible trade receivables on a revolving basis. In July 2014, we amended this facility to extend the maturity date to July 2015. Proceeds from the sale of receivables under this facility are reflected as debt. 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, 2014 and 2013, $1.7 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,
| 2014 |  | 2013 |  | 2012
Balance as of beginning of year | $ | 100 |  |  | $ | 100 |  |  | $ | 250 |
Proceeds from the sale of receivables | — |  |  | — |  |  | 1,500 |
Repayments | — |  |  | — |  |  | (1,650 | )
Balance as of end of year | $ | 100 |  |  | $ | 100 |  |  | $ | 100 |
Capitalized Interest For the years ended December 31, 2014, 2013, and 2012, capitalized interest was $70 million, $118 million, and $220 million, respectively. Other Disclosures In addition to the maximum debt-to-capitalization ratio applicable to the Revolver discussed above under “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, 2014 were as follows (in millions):
| Debt |  | Capital Lease Obligations
2015 | $ | 601 |  |  | $ | 8 |
2016 | — |  |  | 8 |
2017 | 950 |  |  | 6 |
2018 | — |  |  | 6 |
2019 | 750 |  |  | 6 |
Thereafter | 4,074 |  |  | 18 |
Net unamortized discount and fair value adjustments | (21 | ) |  | 1 |
Less interest expense | — |  |  | (21 | )
Total | $ | 6,354 |  |  | $ | 32 |

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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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