DEBT, FINANCING ARRANGEMENTS AND LEASES.

Long-Term Debt.

At December 31, 2013 and 2012, long-term debt issues were outstanding as follows (in thousands):



	2013			2012
Debentures:
7.08% due 2026	$	7,500		$	7,500
7.25% due 2026	200,000			200,000
Total debentures	207,500			207,500

Notes:
6.4% due 2016	200,000			200,000
6.05% due 2018	250,000			250,000
5.4% due 2041	375,000			375,000
4.45% due 2042	400,000			400,000
Total notes	1,225,000			1,225,000

Total long-term debt issues	1,432,500			1,432,500
Unamortized debt premium and discount	(4,145		)	(4,177		)

Total long-term debt, less current maturities	$	1,428,355		$	1,428,323

Aggregate minimum maturities (face value) applicable to long-term debt outstanding at December 31, 2013, for the next five years, are as follows (in thousands):



2016: 6.4% Notes		$200,000
2018: 6.05% Notes		$250,000

There are no maturities applicable to long-term debt outstanding for the years 2014, 2015, and 2017.

No property is pledged as collateral under any of our long-term debt issues.

Restrictive Debt Covenants.

At December 31, 2013, none of our debt instruments restrict the amount of distributions to our parent. Our debt agreements contain restrictions on our ability to incur secured debt beyond certain levels.

Credit Facility.

On July 31, 2013, WPZ amended its $2.4 billion credit facility to increase the aggregate commitments to $2.5 billion and extend the maturity date to July 31, 2018. The amended credit facility may also, under certain conditions, be increased up to an additional $500 million. Total letter of credit capacity available to WPZ under the credit facility is $1.3 billion. At December 31, 2013, no letters of credit have been issued and no loans are outstanding under our credit facility. We may borrow up to $500 million under the amended credit facility to the extent not otherwise utilized by WPZ and Northwest Pipeline LLC. At December 31, 2013, the full $500 million under the credit facility was available to us.

Under the credit facility, WPZ is required to maintain a ratio of debt to EBITDA (each as defined in the credit facility) that must be no greater than 5.0 to 1.0. For the fiscal quarter and the two following fiscal quarters in which one or more acquisitions for a total aggregate purchase price equal to or greater than $50 million has been executed, WPZ is required to maintain a ratio of debt to EBITDA of no greater than 5.5 to 1.00. In addition, the ratio of debt to capitalization (defined as net worth plus debt) must be no greater than 65 percent for us and our consolidated subsidiaries. At December 31, 2013, we are in compliance with these financial covenants.

Each time funds are borrowed, the applicable borrower may choose from two methods of calculating interest: a fluctuating base rate equal to Citibank N.A.’s alternate base rate plus an applicable margin, or a periodic fixed rate equal to London Interbank Offered Rate (LIBOR) plus an applicable margin. The applicable borrower is required to pay a commitment fee (currently 0.20 percent) based on the unused portion of the credit facility. The applicable margin and the commitment fee are determined for each borrower by reference to a pricing schedule based on such borrower’s senior unsecured long-term debt ratings. The credit facility contains various covenants that limit, among other things, a borrower’s and its respective material subsidiaries’ ability to grant certain liens supporting indebtedness, a borrower’s ability to merge or consolidate, sell all or substantially all of its assets, enter into certain affiliate transactions, make certain distributions during an event of default, make investments, and allow any material change in the nature of its business.

If an event of default with respect to a borrower occurs under the credit facility, the lenders will be able to terminate the commitments for all borrowers and accelerate the maturity of any loans of the defaulting borrower under the credit facility agreement and exercise other rights and remedies.

WPZ participates in a commercial paper program and WPZ management considers amounts outstanding under this program to be a reduction of available capacity under the credit facility. The program allows a maximum outstanding amount at any time of $2 billion of unsecured commercial paper notes. At December 31, 2013, WPZ had $225 million in outstanding commercial paper.

Issuance and Retirement of Long-Term Debt.

On July 13, 2012, we issued $400 million aggregate principal amount of 4.45 percent senior unsecured notes due 2042 (4.45 percent Notes) to certain institutional investors pursuant to certain exemptions from registration under the Securities Act of 1933, as amended. Interest is payable on February 1 and August 1 of each year, beginning February 1, 2013. A portion of these proceeds was used to repay our $325 million 8.875 percent notes that matured on July 15, 2012. We used the remainder for general corporate purposes, including the funding of capital expenditures.

As part of the new issuance, we entered into a registration rights agreement with the initial purchasers of the 4.45 percent Notes. An offer to exchange these unregistered notes for substantially identical new notes that are registered under the Securities Act of 1933, as amended, was commenced in November 2012 and completed in December 2012.

Lease Obligations.

The future minimum lease payments under our various operating leases are as follows (in thousands):



2014	$	10,154
2015	10,025
2016	10,025
2017	9,971
2018	9,956
Thereafter	22,401
Total net minimum obligations	$	72,532

Our lease expense was $11.4 million in 2013, $10.9 million in 2012, and $9.1 million in 2011.