in which the stockholders immediately prior to such event do not own at least a majority of the
outstanding shares of the surviving entity, or (iii) a sale or other disposition of all or substantially all of
Plains Offshore’s assets to a person other than us or our affiliates. The liquidation preference is equal
to (i) the greater of (a) 1.25 times the initial offering price and (b) the sum of (1) the fair market value of
the shares of common stock issuable upon conversion of the preferred stock and (2) the applicable tax
adjustment amount, plus (ii) any accrued dividends and accumulated dividends.
The non-detachable warrants may be exercised at any time on the earlier of (i) the eighth
anniversary of the original issue date or (ii) a termination event. Under the terms of the securities
purchase agreement, a termination event is defined as the occurrence of any of (a) the conversion of
the preferred stock, (b) the redemption of the preferred stock, (c) the repurchase by us or any of our
affiliates of the preferred stock or (d) a liquidation event described above. The non-detachable warrants
are considered to be embedded instruments for accounting purposes as the instrument cannot be both
legally detached and separately exercised from the host preferred stock, nor can the non-detachable
warrants be transferred or sold without also transferring the ownership in the preferred stock.
The preferred stock of Plains Offshore is classified as permanent equity in our consolidated
balance sheet since redemption for cash of the preferred interests is within our and Plains Offshore’s
control.
In December 2011, Plains Offshore announced a quarterly dividend on the preferred stock of $1.4
million, or $3.11 per share of preferred stock, 75% of which was paid in cash with the remaining 25%
deferred.
Note 5
—
Long-Term Debt
At December 31, 2011 and 2010, long-term debt consisted of (in thousands):
December 31,
2011
2010
Senior revolving credit facility . . . . . . . . . . . . . . . . . . . . . . . . . $ 735,000 $ 620,000
Plains Offshore senior credit facility . . . . . . . . . . . . . . . . . . . .
-
-
7
3
⁄
4
% Senior Notes due 2015 . . . . . . . . . . . . . . . . . . . . . . . .
79,281
600,000
10% Senior Notes due 2016
(1)
. . . . . . . . . . . . . . . . . . . . . . .
175,385
530,812
7% Senior Notes due 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . .
76,901
500,000
7
5
⁄
8
% Senior Notes due 2018 . . . . . . . . . . . . . . . . . . . . . . . .
400,000
400,000
8
5
⁄
8
% Senior Notes due 2019
(2)
. . . . . . . . . . . . . . . . . . . . . .
394,385
393,905
7
5
⁄
8
% Senior Notes due 2020 . . . . . . . . . . . . . . . . . . . . . . . .
300,000
300,000
6
5
⁄
8
% Senior Notes due 2021 . . . . . . . . . . . . . . . . . . . . . . . .
600,000
-
6
3
⁄
4
% Senior Notes due 2022 . . . . . . . . . . . . . . . . . . . . . . . . 1,000,000
-
$ 3,760,952 $ 3,344,717
(1) The amount is net of unamortized discount of $9.5 million and $34.2 million at December 31, 2011 and December 31, 2010,
respectively.
(2) The amount is net of unamortized discount of $5.6 million and $6.1 million at December 31, 2011 and December 31, 2010,
respectively.
As of December 31, 2011, aggregate total maturities of long-term debt in the next five years are
$999.2 million, including $79.3 million in 2015 and $919.9 million in 2016.
F-17