| |
11. | DEBT AND CAPITAL LEASE OBLIGATIONS |
Debt, at stated values, and capital lease obligations consisted of the following (in millions):
|
| | | | | | | | | |
| Final Maturity | | December 31, |
| | 2013 | | 2012 |
Bank credit facilities | Various | | $ | — |
| | $ | — |
|
Senior Notes: | | | | | |
4.5% | 2015 | | 400 |
| | 400 |
|
4.75% | 2013 | | — |
| | 300 |
|
4.75% | 2014 | | 200 |
| | 200 |
|
6.125% | 2017 | | 750 |
| | 750 |
|
6.125% | 2020 | | 850 |
| | 850 |
|
6.625% | 2037 | | 1,500 |
| | 1,500 |
|
6.7% | 2013 | | — |
| | 180 |
|
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 | 2014 | | 100 |
| | 100 |
|
Net unamortized discount, including fair value adjustments | | | (24 | ) | | (29 | ) |
Total debt | | | 6,525 |
| | 7,000 |
|
Capital lease obligations, including unamortized fair value adjustments | | 39 |
| | 49 |
|
Total debt and capital lease obligations | | | 6,564 |
| | 7,049 |
|
Less current portion | | | (303 | ) | | (586 | ) |
Debt and capital lease obligations, less current portion | | | $ | 6,261 |
| | $ | 6,463 |
|
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. As of December 31, 2013 and 2012, our debt-to-capitalization ratios, calculated in accordance with the terms of the Revolver, were 12 percent and 23 percent, respectively. We believe that we will remain in compliance with this covenant.
VLP Revolver
On November 14, 2013, VLP entered into a $300 million senior unsecured revolving credit facility agreement (the VLP Revolver) with a group of lenders. 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. The VLP Revolver has a maturity date of December 2018 and 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, 2013, 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 described 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 described 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 Facility
In addition to the Revolver and the VLP Revolver, one of our Canadian subsidiaries has a C$50 million committed revolving credit facility under which it may borrow and obtain letters of credit that has a maturity date of November 2014. This facility replaced the maturing C$115 million Canadian revolving credit facility in November 2012.
Activities of Our Credit Facilities
During the years ended December 31, 2013 and 2011, we had no borrowings or repayments under the Revolver, the VLP Revolver, or under our Canadian 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 the Canadian 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, 2013 | | December 31, 2012 |
Letter of credit facilities | | $ | 550 |
| | June 2014 | | $ | 278 |
| | $ | 418 |
|
Revolver | | $ | 3,000 |
| | November 2018 | | $ | 59 |
| | $ | 59 |
|
Canadian revolving credit facility | | C$ | 50 |
| | November 2014 | | C$ | 10 |
| | C$ | 10 |
|
We also have various other uncommitted short-term bank credit facilities. As of December 31, 2013 and 2012, we had no borrowings outstanding under our uncommitted short-term bank credit facilities; however, there were letters of credit outstanding under such facilities of $189 million and $275 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
During the year ended December 31, 2013, the following activity occurred:
| |
• | in January 2013, we made a scheduled debt repayment of $180 million related to our 6.7% senior notes; and |
| |
• | in June 2013, we made a scheduled debt repayment of $300 million related to our 4.75% senior notes. |
During the year ended December 31, 2012, the following activity occurred:
| |
• | 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; |
| |
• | 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 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. |
During the year ended December 31, 2011, the following activity occurred:
| |
• | in February 2011, we paid $300 million to acquire the GO Zone Bonds, which had originally been issued in December 2010. These bonds were remarketed in June 2012, as previously discussed; |
| |
• | in February 2011, we made a scheduled debt repayment of $210 million related to our 6.75% 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 May 2011, we made a scheduled debt repayment of $200 million related to our 6.125% senior notes; and |
| |
• | 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. |
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 2013, we amended this facility to extend the maturity date to July 2014. 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, 2013 and 2012, $3.3 billion and $3.2 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, |
| 2013 | | 2012 | | 2011 |
Balance as of beginning of year | $ | 100 |
| | $ | 250 |
| | $ | 100 |
|
Proceeds from the sale of receivables | — |
| | 1,500 |
| | 150 |
|
Repayments | — |
| | (1,650 | ) | | — |
|
Balance as of end of year | $ | 100 |
| | $ | 100 |
| | $ | 250 |
|
Capitalized Interest
For the years ended December 31, 2013, 2012, and 2011, capitalized interest was $118 million, $221 million, and $152 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, 2013 were as follows (in millions):
|
| | | | | | | |
|
Debt | | Capital Lease Obligations |
2014 | $ | 300 |
| | $ | 8 |
|
2015 | 475 |
| | 8 |
|
2016 | — |
| | 7 |
|
2017 | 950 |
| | 7 |
|
2018 | — |
| | 6 |
|
Thereafter | 4,824 |
| | 27 |
|
Net unamortized discount and fair value adjustments | (24 | ) | | 1 |
|
Less interest expense | — |
| | (25 | ) |
Total | $ | 6,525 |
| | $ | 39 |
|
