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Debt and Interest Expense
 12 Months Ended
Dec. 31, 2020
Debt Instruments [Abstract]  
Debt and Interest Expense
13. DEBT AND INTEREST EXPENSE

WES Operating is the borrower for all outstanding debt and is expected to be the borrower for all future debt issuances. The following table presents the outstanding debt:
 December 31, 2020December 31, 2019
thousandsPrincipalCarrying
Value
Fair
Value (1)
PrincipalCarrying
Value
Fair
Value (1)
Short-term debt
5.375% Senior Notes due 2021
$431,081 $430,606 $436,241 $— $— $— 
Finance lease liabilities (2)
8,264 8,264 8,264 7,873 7,873 7,873 
Total short-term debt
$439,345 $438,870 $444,505 $7,873 $7,873 $7,873 
Long-term debt
5.375% Senior Notes due 2021
$— $— $— $500,000 $498,168 $515,042 
4.000% Senior Notes due 2022
580,917 580,555 597,568 670,000 669,322 689,784 
Floating-Rate Senior Notes due 2023
239,978 238,879 235,066 — — — 
3.100% Senior Notes due 2025
1,000,000 992,900 1,028,614 — — — 
3.950% Senior Notes due 2025
500,000 494,866 512,807 500,000 493,830 504,968 
4.650% Senior Notes due 2026
500,000 496,708 524,880 500,000 496,197 513,393 
4.500% Senior Notes due 2028
400,000 395,617 415,454 400,000 395,113 390,920 
4.750% Senior Notes due 2028
400,000 396,555 418,786 400,000 396,190 400,962 
4.050% Senior Notes due 2030
1,200,000 1,189,407 1,342,996 — — — 
5.450% Senior Notes due 2044
600,000 593,598 607,234 600,000 593,470 533,710 
5.300% Senior Notes due 2048
700,000 687,048 694,172 700,000 686,843 610,841 
5.500% Senior Notes due 2048
350,000 342,543 343,928 350,000 342,432 310,198 
5.250% Senior Notes due 2050
1,000,000 983,512 1,100,375 — — — 
RCF
— — — 380,000 380,000 380,000 
Term loan facility— — — 3,000,000 3,000,000 3,000,000 
Finance lease liabilities23,644 23,644 23,644 — — — 
Total long-term debt
$7,494,539 $7,415,832 $7,845,524 $8,000,000 $7,951,565 $7,849,818 
_________________________________________________________________________________________
(1)Fair value is measured using the market approach and Level-2 fair value inputs.
(2)Includes related-party amounts as of December 31, 2019.
13. DEBT AND INTEREST EXPENSE

Debt activity. The following table presents the debt activity for the years ended December 31, 2020 and 2019:
thousandsCarrying Value
Balance at December 31, 2018$5,242,874 
RCF borrowings1,160,000 
Term loan facility borrowings3,000,000 
APCWH Note Payable borrowings11,000 
Finance lease liabilities7,873 
Repayments of RCF borrowings(1,000,000)
Repayment of WGP RCF borrowings(28,000)
Repayment of APCWH Note Payable(439,595)
Other5,286 
Balance at December 31, 2019$7,959,438 
RCF borrowings220,000 
Issuance of Floating-Rate Senior Notes due 2023300,000 
Issuance of 3.100% Senior Notes due 2025
1,000,000 
Issuance of 4.050% Senior Notes due 2030
1,200,000 
Issuance of 5.250% Senior Notes due 2050
1,000,000 
Finance lease liabilities24,035 
Repayments of RCF borrowings(600,000)
Repayment of Term loan facility borrowings(3,000,000)
Repayment of 5.375% Senior Notes due 2021
(68,919)
Repayment of 4.000% Senior Notes due 2022
(89,083)
Repayment of Floating-Rate Senior Notes due 2023(60,022)
Other(30,747)
Balance at December 31, 2020$7,854,702 

WES Operating Senior Notes. In January 2020, WES Operating issued the following notes:

•Fixed-Rate 3.100% Senior Notes due 2025, 4.050% Senior Notes due 2030, and 5.250% Senior Notes due 2050, offered to the public at prices of 99.962%, 99.900%, and 99.442%, respectively, of the face amount (collectively referred to as the “Fixed-Rate Senior Notes”). Including the effects of the issuance prices, underwriting discounts, and interest-rate adjustments (described below), the effective interest rates of the Senior Notes due 2025, 2030, and 2050, were 4.291%, 5.173%, and 6.375%, respectively, at December 31, 2020. These effective interest rates will increase by 0.25% on February 1, 2021, due to credit-rating downgrades. Interest is paid on each such series semi-annually on February 1 and August 1 of each year, beginning August 1, 2020; and

•Floating-Rate Senior Notes due 2023 (the “Floating-Rate Senior Notes”). As of December 31, 2020, the interest rate on the Floating-Rate Senior Notes was 2.07%. Interest is paid quarterly in arrears on January 13, April 13, July 13, and October 13 of each year. Interest is determined at a benchmark rate (which is initially a three-month London Interbank Offered Rate) on the interest determination date plus an initial spread of 0.85%.
13. DEBT AND INTEREST EXPENSE

Net proceeds from the Fixed-Rate Senior Notes and Floating-Rate Senior Notes were used to repay the $3.0 billion in outstanding borrowings under the Term loan facility and outstanding amounts under the RCF, and for general partnership purposes. The interest payable on each of the Fixed-Rate Senior Notes and Floating-Rate Senior Notes is subject to adjustment from time to time if the credit rating assigned to such notes declines below certain specified levels or if credit-rating downgrades are subsequently followed by credit-rating upgrades. In 2020, Fitch Ratings and Standard and Poor’s downgraded WES Operating’s long-term debt from “BBB-” to “BB” and Moody’s Investors Service downgraded WES Operating’s long-term debt from “Ba1” to “Ba2.” As a result of these downgrades, annualized borrowing costs will increase by $43.0 million.
During the year ended December 31, 2020, WES Operating purchased and retired $218.0 million of certain of its senior notes and Floating-Rate Senior Notes via open-market repurchases, and gains of $13.5 million were recognized for the early retirement of these notes.
As of December 31, 2020, the 5.375% Senior Notes due 2021 were classified as short-term debt on the consolidated balance sheet. Subsequent to December 31, 2020, WES Operating delivered notice to redeem the 5.375% Senior Notes due 2021 on March 1, 2021, as per the optional redemption terms in WES Operating’s indenture. At December 31, 2020, WES Operating was in compliance with all covenants under the relevant governing indentures.

WGP RCF. The WGP RCF, which previously was available to purchase WES Operating common units and for general partnership purposes, matured in March 2019, and the $28.0 million of outstanding borrowings were repaid.

Revolving credit facility. The RCF is expandable to a maximum of $2.5 billion and bears interest at the London Interbank Offered Rate (“LIBOR”), plus applicable margins ranging from 1.00% to 1.50%, or an alternate base rate equal to the greatest of (a) the Prime Rate, (b) the Federal Funds Effective Rate plus 0.50%, or (c) LIBOR plus 1.00%, in each case plus applicable margins currently ranging from zero to 0.50%, based on WES Operating’s senior unsecured debt rating. A required quarterly facility fee is paid ranging from 0.125% to 0.250% of the commitment amount (whether drawn or undrawn), which also is based on the senior unsecured debt rating. In December 2019, WES Operating entered into an amendment to the RCF to, among other things, exercise the final one-year extension option to extend the maturity date of the RCF from February 2024 to February 2025, for each extending lender. The maturity date with respect to each non-extending lender, whose commitments represent $100.0 million out of $2.0 billion of total commitments from all lenders, remains February 2024. See Note 1.
As of December 31, 2020, there were no outstanding borrowings and $5.1 million of outstanding letters of credit, resulting in $2.0 billion of available borrowing capacity under the RCF. As of December 31, 2020 and 2019, the interest rate on any outstanding RCF borrowings was 1.64% and 3.04%, respectively. The facility-fee rate was 0.25% and 0.20% at December 31, 2020 and 2019, respectively. At December 31, 2020, WES Operating was in compliance with all covenants under the RCF.
As a result of credit-rating downgrades (see WES Operating Senior Notes above), beginning in the second quarter of 2020, the interest rate on outstanding RCF borrowings increased by 0.20% and the RCF facility-fee rate increased by 0.05%, from 0.20% to 0.25%.

Term loan facility. In December 2018, WES Operating entered into the Term loan facility, the proceeds from which were used to fund substantially all of the cash portion of the consideration under the Merger Agreement and the payment of related transaction costs (see Note 1). As of December 31, 2019, the interest rate on the outstanding borrowings was 3.10%. In January 2020, WES Operating repaid the outstanding borrowings with proceeds from the issuance of the Fixed-Rate Senior Notes and Floating-Rate Senior Notes and terminated the Term loan facility (see WES Operating Senior Notes above). During the first quarter of 2020, a loss of $2.3 million was recognized for the early termination of the Term loan facility.
13. DEBT AND INTEREST EXPENSE

APCWH Note Payable. In June 2017, in connection with funding the construction of the APC water systems that were acquired as part of the AMA acquisition, APCWH entered into an eight-year note payable agreement with Anadarko. This note payable had a maximum borrowing limit of $500.0 million, including accrued interest. The APCWH Note Payable was repaid at Merger completion. See Note 1.

Interest-rate swaps. In December 2018 and March 2019, WES Operating entered into interest-rate swap agreements with an aggregate notional principal amount of $750.0 million and $375.0 million, respectively, to manage interest-rate risk associated with anticipated debt issuances. Pursuant to these swap agreements, WES Operating received a floating interest rate indexed to the three-month LIBOR and paid a fixed interest rate. In November and December 2019, WES Operating entered into additional interest-rate swap agreements with an aggregate notional principal amount of $1,125.0 million, effectively offsetting the swap agreements entered into in December 2018 and March 2019.    
In December 2019, all outstanding interest-rate swap agreements were settled. As part of the settlement, WES Operating made cash payments of $107.7 million and recorded an accrued liability of $25.6 million to be paid quarterly in 2020. For the year ended December 31, 2020, WES Operating made cash payments of $25.6 million. These cash payments were classified as cash flows from operating activities in the consolidated statements of cash flows.
The Partnership did not apply hedge accounting and, therefore, gains and losses associated with the interest-rate swap agreements were recognized in earnings. For the year ended December 31, 2019, non-cash losses of $125.3 million were recognized, which are included in Other income (expense), net in the consolidated statements of operations.

Interest expense. The following table summarizes the amounts included in interest expense:
Year Ended December 31,
thousands202020192018
Third parties
Long-term and short-term debt$(369,815)$(315,872)$(200,454)
Finance lease liabilities(1,510)— — 
Amortization of debt issuance costs and commitment fees(13,501)(12,424)(9,110)
Capitalized interest 4,774 26,980 32,479 
Total interest expense – third parties(380,052)(301,316)(177,085)
Related parties
APCWH Note Payable— (1,833)(6,746)
Finance lease liabilities(6)(137)— 
Total interest expense – related parties(6)(1,970)(6,746)
Interest expense$(380,058)$(303,286)$(183,831)