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Debt | 9 Months Ended
--- | ---
Sep. 30, 2012
Debt |
Debt |
Note 7—Debt Debt consisted of the following (in millions):
|  | September 30, |  | December 31, |
|  | 2012 |  | 2011 |
SHORT-TERM DEBT |  |  |  |  |
Credit Facilities (1) : |  |  |  |  |
Senior secured hedged inventory facility bearing a weighted-average interest rate of 1.4% and 1.5% at September 30, 2012 and December 31, 2011, respectively |  | $ | 694 |  | $ | 75 |
PAA senior unsecured revolving credit facility, bearing a weighted-average interest rate of 2.6% and 1.6% at September 30, 2012 and December 31, 2011, respectively (2) |  | 58 |  | 32 |
PNG senior unsecured revolving credit facility, bearing a weighted-average interest rate of 2.1% at both September 30, 2012 and December 31, 2011 (3) |  | 80 |  | 68 |
4.25% senior notes due September 2012 (4) |  | — |  | 500 |
Other |  | 2 |  | 4 |
Total short-term debt |  | 834 |  | 679 |
LONG-TERM DEBT |  |  |  |  |
Senior Notes: |  |  |  |  |
5.63% senior notes due December 2013 |  | 250 |  | 250 |
5.25% senior notes due June 2015 |  | 150 |  | 150 |
3.95% senior notes due September 2015 |  | 400 |  | 400 |
5.88% senior notes due August 2016 |  | 175 |  | 175 |
6.13% senior notes due January 2017 |  | 400 |  | 400 |
6.50% senior notes due May 2018 |  | 600 |  | 600 |
8.75% senior notes due May 2019 |  | 350 |  | 350 |
5.75% senior notes due January 2020 |  | 500 |  | 500 |
5.00% senior notes due February 2021 |  | 600 |  | 600 |
3.65% senior notes due June 2022 (5) |  | 750 |  | — |
6.70% senior notes due May 2036 |  | 250 |  | 250 |
6.65% senior notes due January 2037 |  | 600 |  | 600 |
5.15% senior notes due June 2042 (5) |  | 500 |  | — |
Unamortized discounts |  | (14 | ) | (13 | )
Senior notes, net of unamortized discounts |  | 5,511 |  | 4,262 |
Credit Facilities and Other: |  |  |  |  |
PNG senior unsecured revolving credit facility, bearing a weighted-average interest rate of 2.1% at September 30, 2012 and December 31, 2011 (3) |  | 95 |  | 54 |
PNG GO Bond term loans, bearing a weighted-average interest rate of 1.5% at both September 30, 2012 and December 31, 2011 |  | 200 |  | 200 |
Other |  | 5 |  | 4 |
Total long-term debt |  | 5,811 |  | 4,520 |
Total debt (2) (3) (6) |  | $ | 6,645 |  | $ | 5,199 |
(1) During June 2012, we expanded and extended our senior secured hedged inventory facility and expanded PNG’s credit facility. See “Credit Facilities” below for further discussion. (2) We classify as short-term certain borrowings under our PAA senior unsecured revolving credit facility. These borrowings are primarily designated as working capital borrowings, must be repaid within one year and are primarily for hedged NGL and crude oil inventory and NYMEX and ICE margin deposits. (3) PNG classifies as short-term debt any borrowings under the PNG senior unsecured revolving credit facility that have been designated as working capital borrowings and must be repaid within one year. Such borrowings are primarily related to a portion of PNG’s hedged natural gas inventory. (4) Our $500 million 4.25% senior notes matured in September 2012 and were repaid with proceeds from our credit facilities. The proceeds from the issuance of these senior notes were used to supplement capital available from our hedged inventory facility, to fund working capital needs associated with base levels of waterborne cargos and for seasonal NGL inventory requirements. After the maturity of these senior notes, we are now using our expanded credit facilities for such purposes. See “Credit Facilities” below. (5) In March 2012, we completed the issuance of $750 million, 3.65% senior notes due 2022 and $500 million, 5.15% senior notes due 2042. The senior notes were sold at 99.823% and 99.755% of face value, respectively. Interest payments are due on June 1 and December 1 each year, beginning on December 1, 2012. We used the net proceeds from these offerings to fund a portion of the consideration for the BP NGL Acquisition and for general partnership purposes. See Note 4 for more information regarding this acquisition. (6) Our fixed-rate senior notes had a face value of approximately $5.5 billion and $4.8 billion as of September 30, 2012 and December 31, 2011, respectively. We estimated the aggregate fair value of these notes as of September 30, 2012 and December 31, 2011 to be approximately $6.5 billion and $5.4 billion, respectively. Our fixed-rate senior notes are traded among institutions, and these trades are routinely published by a reporting service. Our determination of fair value is based on reported trading activity near quarter end. We estimate that the carrying value of outstanding borrowings under our credit facilities approximates fair value as interest rates reflect current market rates. The fair value estimates for both our senior notes and credit facilities are based upon observable market data and are classified within Level 2 of the fair value hierarchy. Credit Facilities Senior secured hedged inventory facility. In June 2012, we amended our senior secured hedged inventory facility which, among other things, increased the committed borrowing capacity from $850 million to $1.4 billion, of which $400 million (an increase from $250 million under the original facility) is available for the issuance of letters of credit. Subject to obtaining additional or increased lender commitments, the committed amount of the facility may be increased to $1.9 billion. The amendment also extended the maturity date of the facility by one year to August 2014 and provides for one or more one-year extensions, subject to applicable approval. PNG senior unsecured credit agreement. In June 2012, PNG partially exercised the accordion feature of its original senior unsecured credit agreement and increased from $250 million to $350 million the aggregate amount of revolving credit facility commitments. Also in June 2012, PNG amended this credit agreement to, among other things, provide for the further increase of the committed amount to $550 million, subject to obtaining additional or increased lender commitments. The amendment also provides for one or more one-year extensions of the revolving credit facility maturity date of August 2016 and the GO Bond mandatory put date, as defined in such amendment, in each case subject to lender approvals. Senior unsecured 364-day revolving credit agreement. In December 2011, we entered into a 364-day credit facility agreement with a borrowing capacity of $1.2 billion. Pursuant to its terms, we had the option to activate the facility at any time over a six-month period. In March 2012, we elected to terminate this credit agreement. Letters of Credit In connection with our crude oil supply and logistics activities, we provide certain suppliers with irrevocable standby letters of credit to secure our obligation for the purchase of crude oil. At September 30, 2012 and December 31, 2011, we had outstanding letters of credit of approximately $21 million and $33 million, respectively.

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- Definition The entire disclosure for 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. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.19,20,22) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 02 -Paragraph 19, 20, 22 -Article 5 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 129 -Paragraph 2, 4 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. + Details
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