Company: PAGP
Filing Date: 2025-02-28
Form Type: 10-K
Source: 0001581990-25-000006
Chunk: 164

Company: PLAINS GP HOLDINGS LP
Filing Date: 2025-02-28
Form: 10-K
Item: Item 16
Chunk 164
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Other current liabilities4 (28)— (24)1 (64)— (63)Other long-term liabilities and deferred credits2 (16)— (14)1 (15)— (14)Total$42 $(118)$72 $(4)$158 $(158)$(13)$(13)Interest Rate Risk HedgingWe use interest rate derivatives to hedge the benchmark interest rate associated with interest payments occurring as a result of debt issuances. The derivative instruments we use to manage this risk consist of forward starting interest rate swaps and treasury locks. These derivatives are designated as cash flow hedges. As such, changes in fair value are deferred in AOCI and are reclassified to interest expense as we incur the interest expense associated with the underlying debt. The following table summarizes the terms of our outstanding interest rate derivatives as of December 31, 2024 (notional amounts in millions):Hedged TransactionNumber and Types ofDerivatives EmployedNotionalAmountExpectedTermination DateAverage Rate LockedAccountingTreatmentAnticipated interest payments8 forward starting swaps(30-year)$200 6/15/20263.09 %Cash flow hedgeDuring the year ended December 31, 2024, we terminated $100 million of notional interest hedging instruments previously expected to terminate in June 2024 for proceeds of $57 million, which was recorded in AOCI. As of December 31, 2024, there was a net loss of $44 million deferred in AOCI. The deferred net loss recorded in AOCI is expected to be reclassified to future earnings contemporaneously with interest expense accruals associated with underlying debt instruments. The early termination did not result in an impact to the relationship between the hedging instrument and hedged item. We estimate that substantially all of the remaining deferred loss will be reclassified to earnings through 2056 as the underlying hedged transactions impact earnings. A portion of these amounts is based on market prices as of December 31, 2024; thus, actual amounts to be reclassified will differ and could vary materially as a result of changes in market conditions.The following table summarizes the net unrealized gain/(loss) recognized in AOCI for derivatives (in millions):Year Ended December 31,202420232022Interest rate derivatives, net$29 $15 $94 At December 31, 2024, the net fair value of our interest rate