Short-term Borrowings and Long-term Debt

12 Months Ended

Dec. 31, 2011

Short-term Borrowings and Long-term Debt [Abstract]

Short-term Borrowings and Long-term Debt

Short-term Borrowings and Long-term Debt

	December 31, 2010					December 31, 2011
	Long-Term			Current(1)		Long-Term			Current(1)
	(in millions)
Short-term borrowings:
Inventory financing	$	—		$	53	$	—		$	62
Total short-term borrowings	—			53		—			62
Long-term debt:
Senior notes 5.95% to 7.875% due 2013 to 2037	2,747			—		2,693			—
Commercial paper (2)	183			—		285			—
Unamortized discount and premium	(5		)	—		(59		)	—
Total long-term debt	2,925			—		2,919			—
Total debt	$	2,925		$	53	$	2,919		$	62

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(1) Includes amounts due or exchangeable within one year of the date noted.

(2) Classified as long-term debt because the termination date of the facility that backstops the commercial paper is more than one year from the date noted.

(a)Short-term Borrowings

Receivables Facility.  CERC's receivables facility terminated pursuant to its terms on September 14, 2011. As of December 31, 2010 the facility size was $160 million and there were no advances under the receivables facility.

Inventory Financing. In October 2009, Gas Operations entered into asset management agreements associated with its utility distribution service in Arkansas, north Louisiana and Oklahoma that extend through 2015. Pursuant to the provisions of the agreements, Gas Operations sells natural gas and agrees to repurchase an equivalent amount of natural gas during the winter heating seasons at the same cost, plus a financing charge. These transactions are accounted for as a financing and they had an associated principal obligation of $53 million and $62 million as of December 31, 2010 and 2011, respectively.

(b) Long-term Debt

CERC Corp. Senior Notes.  In January 2011, CERC Corp. issued $250 million aggregate principal amount of senior notes due 2021 with an interest rate of 4.50% and $300 million aggregate principal amount of senior notes due 2041 with an interest rate of 5.85%.  The proceeds from the issuance of the notes were used for the repayment of $550 million of CERC Corp.’s 7.75% senior notes at their maturity in February 2011. Accordingly, the $550 million senior notes due in February 2011 are reflected as long-term debt as of December 31, 2010.

CERC Corp. Exchange Offer. Also in January 2011, CERC Corp. issued an additional $343 million aggregate principal amount of 4.50% senior notes due 2021 and provided cash consideration of $114 million in exchange for $397 million aggregate principal amount of its 7.875% senior notes due 2013.  The premium of $58 million paid on exchanged notes has been deferred and will be amortized to interest expense over the life of the 4.50% senior notes due 2021.

Revolving Credit Facility.  In the third quarter of 2011, CERC's revolving credit facility was replaced with a five-year revolving credit facility of similar borrowing capacity. As of December 31, 2010 and 2011, CERC had the following revolving credit facilities and utilization of such facilities (in millions):

December 31, 2010								December 31, 2011
Size of Facility		Loans		Letters of Credit		Commercial Paper		Size of Facility		Loans		Letters of Credit		Commercial Paper
$	915	$	—	$	—	$	183	$	950	$	—	$	—	$	285

CERC Corp.’s $950 million credit facility, which is scheduled to terminate September 9, 2016, can be drawn at the London Interbank Offered Rate plus 150 basis points based on CERC Corp.’s current credit ratings. The facility contains a debt to total capitalization covenant, limiting debt to 65% of its total capitalization.

CERC Corp. was in compliance with all debt covenants as of December 31, 2011.

Maturities.  CERC’s consolidated maturities of long-term debt are $-0- in 2012, $365 million in 2013, $160 million in 2014, $-0- in 2015 and $610 million in 2016.