Debt

12 Months Ended

Dec. 31, 2022

Debt Disclosure [Abstract]

Debt

Debt

Debt consisted of the following (in millions):

	December 31, 2022		December 31, 2021
SHORT-TERM DEBT
PAA senior notes:
3.65% senior notes due June 2022	$	—	$	750
2.85% senior notes due January 2023	400		—
3.85% senior notes due October 2023	700		—
Other	59		72
Total short-term debt	1,159		822
LONG-TERM DEBT
PAA senior notes:
2.85% senior notes due January 2023	—		400
3.85% senior notes due October 2023	—		700
3.60% senior notes due November 2024	750		750
4.65% senior notes due October 2025	1,000		1,000
4.50% senior notes due December 2026	750		750
3.55% senior notes due December 2029	1,000		1,000
3.80% senior notes due September 2030	750		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	499		499
4.30% senior notes due January 2043	348		348
4.70% senior notes due June 2044	687		687
4.90% senior notes due February 2045	649		649
Unamortized discounts and debt issuance costs	(46)		(54)
PAA senior notes, net of unamortized discounts and debt issuance costs	7,237		8,329
Other long-term debt:
Other	50		69
Total long-term debt	7,287		8,398
Total debt (1)	$	8,446	$	9,220

(1)PAA’s fixed-rate senior notes had a face value of approximately $8.4 billion and $9.1 billion at December 31, 2022 and 2021, respectively. We estimated the aggregate fair value of these notes to be approximately $7.6 billion and $9.9 billion at December 31, 2022 and 2021, respectively. PAA’s 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 the end of the reporting period. We estimate that the carrying value of outstanding borrowings under PAA’s credit facilities and commercial paper program approximates fair value as interest rates reflect current market rates. The fair value estimates for the PAA senior notes, credit facilities and commercial paper program are based upon observable market data and are classified in Level 2 of the fair value hierarchy.

PAA Commercial Paper Program

PAA has a commercial paper program under which it may issue (and have outstanding at any time) up to $2.7 billion in the aggregate of privately placed, unsecured commercial paper notes. Such notes are backstopped by the PAA senior unsecured revolving credit facility and the PAA senior secured hedged inventory facility; as such, any borrowings under the PAA commercial paper program reduce the available capacity under these facilities.

Credit Agreements

PAA senior secured hedged inventory facility. PAA has a credit agreement that provides for a senior secured hedged inventory facility with a committed borrowing capacity of $1.35 billion. Subject to obtaining additional or increased lender commitments and other terms and conditions, the committed capacity of the facility may be increased to $1.9 billion. The credit agreement provides for the issuance of letters of credit of up to $400 million. Proceeds from the facility are primarily used to finance purchased or stored hedged inventory, including NYMEX and ICE margin deposits. Such obligations under the committed facility are secured by the financed inventory and the associated accounts receivable and are repaid from the proceeds of the sale of the financed inventory. Borrowings accrue interest based, at our election, on certain floating rate indices as defined in the credit agreement, in each case plus a margin based on our credit rating at the applicable time. The amended credit agreement also provides for one or more one-year extensions, subject to applicable approval and other terms and conditions. In August 2022, we amended this agreement to, among other things, extend the maturity date of the facility to August 2025 for each existing lender.

PAA senior unsecured revolving credit facility. PAA has a credit agreement that provides for a senior unsecured revolving credit facility with a committed borrowing capacity of $1.35 billion, of which $400 million is available for the issuance of letters of credit. Subject to obtaining additional or increased lender commitments and other terms and conditions, the committed capacity may be increased to $2.1 billion. Borrowings accrue interest based, at our election, on certain floating rate indices as defined in the credit agreement, in each case plus a margin based on our credit rating at the applicable time. The credit agreement provides for one or more one-year extensions, subject to applicable approval and other terms and conditions. In August 2022, we amended this agreement to, among other things, extend the maturity date of the facility to August 2027 for each existing lender.

PAA GO Zone term loans.  In August 2021, in connection with the sale of the Southern Pines natural gas storage facility, we repaid $200 million of term loans (the “Go Zone term loans”) that were initially assumed in connection with our acquisition of that facility. See Note 7 for additional information.

PAA Senior Notes

PAA’s senior notes are co-issued, jointly and severally, by Plains All American Pipeline, L.P. and a 100%-owned consolidated finance subsidiary (neither of which have independent assets or operations) and are unsecured senior obligations of such entities and rank equally in right of payment with existing and future senior indebtedness of the issuers. PAA may, at its option, redeem any series of senior notes at any time in whole or from time to time in part, prior to maturity, at the redemption prices described in the indentures governing the senior notes. PAA’s senior notes are not guaranteed by any of its subsidiaries.

PAA Senior Notes Issuances. The table below summarizes PAA’s issuances of senior unsecured notes during the three years ended December 31, 2022 (in millions):

Year	Description	Maturity	Face Value		Interest Payment Dates
2020	3.80% Senior Notes issued at 99.794% of face value	September 2030	$	750	March 15 and September 15

PAA Senior Notes Repayments. During the three years ended December 31, 2022, PAA repaid the following senior unsecured notes in full (in millions):

Year	Description	Repayment Date
2022	$750 million 3.65% Senior Notes due June 2022	March 2022	(1)
2020	$600 million 5.00% Senior Notes due February 2021	November 2020	(2)

(1)PAA repaid these senior notes with cash on hand and borrowings under our commercial paper program.

(2)These senior notes were repaid with proceeds from PAA’s 3.80% senior notes issued in June 2020 and cash on hand.

On January 31, 2023, PAA redeemed its 2.85%, $400 million senior notes. PAA utilized a combination of cash on hand and borrowings under its commercial paper program to repay these senior notes.

Maturities

The weighted average maturity of PAA’s senior notes outstanding at December 31, 2022 was approximately 9 years. The following table presents the aggregate contractually scheduled maturities of such senior notes for the next five years and thereafter. The amounts presented exclude unamortized discounts and debt issuance costs.

Calendar Year	Payment (in millions)
2023	$	1,100
2024	$	750
2025	$	1,000
2026	$	750
2027	$	—
Thereafter	$	4,783

Covenants and Compliance

The credit agreements for PAA’s revolving credit facilities (which impact the ability to access the PAA commercial paper program because they provide the financial backstop that supports PAA’s short-term credit ratings) and the indentures governing PAA’s senior notes contain cross-default provisions. PAA’s credit agreements prohibit declaration or payments of distributions on, or purchases or redemptions of, units if any default or event of default is continuing. In addition, PAA’s agreements contain various covenants limiting PAA’s ability to, among other things:

•grant liens on certain property;

•incur indebtedness, including finance leases;

•sell substantially all of its assets or enter into a merger or consolidation;

•engage in certain transactions with affiliates; and

•enter into certain burdensome agreements.

The credit agreements for the PAA senior unsecured revolving credit facility and senior secured hedged inventory facility treat a change of control as an event of default and also require PAA to maintain a debt-to-EBITDA coverage ratio that, on a trailing four-quarter basis, will not be greater than 5.00 to 1.00 (or 5.50 to 1.00 on all outstanding debt during an acquisition period (generally, the period consisting of three fiscal quarters following an acquisition greater than $150 million)). For covenant compliance purposes, Consolidated EBITDA may include certain adjustments, including those for material projects and certain non-recurring expenses. Additionally, letters of credit and borrowings to fund hedged inventory and margin requirements are excluded when calculating the debt coverage ratio.

A default under PAA’s credit agreements or indentures would permit the lenders to accelerate the maturity of the outstanding debt. As long as PAA is in compliance with the provisions contained in its credit agreements, PAA’s ability to make distributions of available cash is not restricted. As of December 31, 2022, PAA was in compliance with the covenants contained in its credit agreements and indentures.

Borrowings and Repayments

Total borrowings under PAA’s credit facilities and commercial paper program for the years ended December 31, 2022, 2021 and 2020 were approximately $25.0 billion, $32.5 billion and $29.3 billion, respectively. Total repayments under PAA’s credit facilities and commercial paper program were approximately $25.0 billion, $33.2 billion and $29.0 billion for the years ended December 31, 2022, 2021 and 2020, respectively. The variance in total gross borrowings and repayments is impacted by various business and financial factors including, but not limited to, the timing, average term and method of general partnership borrowing activities.

Letters of Credit

In connection with our merchant activities, we provide certain suppliers with irrevocable standby letters of credit to secure our obligation for the purchase and transportation of crude oil and NGL. These letters of credit are issued under PAA’s senior unsecured revolving credit facility and senior secured hedged inventory facility, and our liabilities with respect to these purchase obligations are recorded in accounts payable on our balance sheet in the month the crude oil or NGL is purchased. Generally, these letters of credit are issued for periods of up to seventy days and are terminated upon completion of each transaction. Additionally, we issue letters of credit to support insurance programs, derivative transactions, including hedging-related margin obligations, and construction activities. At December 31, 2022 and 2021, we had outstanding letters of credit of $102 million and $98 million, respectively.

Debt Issuance Costs

Costs incurred in connection with the issuance of senior notes are recorded as a direct deduction from the related debt liability and are amortized using the straight-line method over the term of the related debt. Use of the straight-line method does not differ materially from the “effective interest” method of amortization.