Debt Obligations

12 Months Ended

Dec. 31, 2013

DEBT OBLIGATIONS:

The following table sets forth the debt obligations of the Company at the dates indicated:



	December 31,
	2013		2012
6.05% Senior Notes due 2013	$	—	$	250
6.20% Senior Notes due 2017	300		300
8.125% Senior Notes due 2019	150		150
7.00% Senior Notes due 2029	66		66
7.00% Senior Notes due 2018	400		400
Term Loan due 2015	—		455
Unamortized fair value adjustments	107		136
Total debt outstanding	1,023		1,757
Current portion of long-term debt	—		(258		)
Total long-term debt	$	1,023	$	1,499

Based on the estimated borrowing rates currently available to us and our subsidiaries for loans with similar terms and average maturities, the aggregate fair value of our consolidated debt obligations at December 31, 2013 and 2012 was $1.06 billion and $1.81 billion, respectively. As of December 31, 2013 and 2012, the aggregate carrying amount of our consolidated debt obligations was $1.02 billion and $1.76 billion, respectively. The fair value of our consolidated debt obligations is a Level 2 valuation based on the observable inputs used for similar liabilities.

Senior Notes

Panhandle’s 6.05% Senior Notes in the amount of $250 million matured on August 15, 2013 and were repaid with intercompany borrowings.

Term Loans

On March 26, 2012, the Company retired the $465 million term loan due June 2012 ($342 million of which was outstanding) of its wholly-owned LNG Holdings subsidiary, utilizing a portion of the merger consideration received in connection with the Citrus Merger.

In February 2012, the Company refinanced LNG Holdings’ $455 million term loan due March 2012 with an unsecured three-year term loan facility due February 2015, with LNG Holdings as borrower and PEPL and Trunkline LNG as guarantors and a floating interest rate tied to LIBOR plus a margin based on the rating of PEPL’s senior unsecured debt.

In September 2013, ETP issued $1.47 billion total principal amount of Senior Notes. Proceeds from this offering were used to repay $455 million of borrowings under the LNG Holdings term loan due February 2015.

As of December 31, 2013, the Company has scheduled long-term debt principal payments as follows:



Years Ended December 31,
2014	$	—
2015	—
2016	—
2017	300
2018	400
Thereafter	216
Total	$	916

Assumption of Southern Union Debt

In connection with the consummation of the Panhandle Merger, Panhandle assumed Southern Union’s long-term debt obligations. As of December 31, 2013, there was $83 million in aggregate principal amount of 7.6% Senior Notes due 2024, $33 million in aggregate principal amount of 8.25% Senior Notes due 2029 and $54 million in aggregate principal amount of Floating Rate Junior Subordinated Notes due 2066 outstanding. See Note 3.

Compliance With Our Covenants

The Company’s notes are subject to certain requirements, such as the maintenance of a fixed charge coverage ratio and a leverage ratio, which if not maintained, restrict the ability of the Company to make certain payments and impose limitations on the ability of the Company to subject its property to liens. Other covenants impose limitations on restricted payments, including dividends and loans to affiliates, and additional indebtedness. As of December 31, 2013, the Company is in compliance with these covenants.

- 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.

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