12. Debt and Interest Expense

Debt The Company’s outstanding debt is senior unsecured, except for borrowings, if any, under the $5.0 billion Facility. See Note 10—Equity-Method Investments for disclosure regarding Anadarko’s notes payable related to its ownership of certain noncontrolling mandatorily redeemable interests that are not included in the Company’s reported debt balance and do not affect consolidated interest expense. The following summarizes the Company’s outstanding debt:



	December 31,
millions	2013			2012
5.750% Senior Notes due 2014	$	275		$	275
7.625% Senior Notes due 2014	500			500
5.950% Senior Notes due 2016	1,750			1,750
6.375% Senior Notes due 2017	2,000			2,000
7.050% Debentures due 2018	114			114
WES 2.600% Senior Notes due 2018	250			—
6.950% Senior Notes due 2019	300			300
8.700% Senior Notes due 2019	600			600
WES 5.375% Senior Notes due 2021	500			500
WES 4.000% Senior Notes due 2022	670			670
6.950% Senior Notes due 2024	650			650
7.500% Debentures due 2026	112			112
7.000% Debentures due 2027	54			54
7.125% Debentures due 2027	150			150
6.625% Debentures due 2028	17			17
7.150% Debentures due 2028	235			235
7.200% Debentures due 2029	135			135
7.950% Debentures due 2029	117			117
7.500% Senior Notes due 2031	900			900
7.875% Senior Notes due 2031	500			500
Zero-Coupon Senior Notes due 2036	2,360			2,360
6.450% Senior Notes due 2036	1,750			1,750
7.950% Senior Notes due 2039	325			325
6.200% Senior Notes due 2040	750			750
7.730% Debentures due 2096	61			61
7.500% Debentures due 2096	78			78
7.250% Debentures due 2096	49			49
Total debt at face value	$	15,202		$	14,952
Net unamortized discounts and premiums ⁽¹⁾	(1,645		)	(1,683		)
Total borrowings	$	13,557		$	13,269
Capital lease obligation	8			—
Less current portion of long-term debt	500			—
Total long-term debt	$	13,065		$	13,269

__________________________________________________________________


⁽¹⁾	Unamortized discounts and premiums are amortized over the term of the related debt.

12. Debt and Interest Expense (Continued)

In a 2006 private offering, Anadarko received $500 million of loan proceeds upon issuing the Zero-Coupon Senior Notes due 2036 (Zero Coupons). The Zero Coupons mature in 2036 and have an aggregate principal amount due at maturity of $2.4 billion, reflecting a yield to maturity of 5.24%. The Zero Coupons can be put to the Company in October of each year, which would cause the Company to repay up to the then-accreted value of the outstanding Zero Coupons. The accreted value of the outstanding Zero Coupons was $727 million at December 31, 2013. Anadarko’s $275 million aggregate principal amount of 5.750% Senior Notes due June 2014 and Zero Coupons, which can be put to the Company in 2014, are classified as long-term debt on the Company’s Consolidated Balance Sheets, as the Company has the ability and intent to refinance these obligations using long-term debt.

Fair Value The Company uses a market approach to determine the fair value of its fixed-rate debt using observable market data, which results in a Level 2 fair-value measurement. The carrying amount of floating-rate debt approximates fair value as the interest rates are variable and reflective of market rates. The estimated fair value of the Company’s total borrowings was $15.3 billion at December 31, 2013, and $16.2 billion at December 31, 2012.

Debt Activity The following summarizes the Company’s debt activity during 2013 and 2012:



millions	Carrying Value			Description
Balance at December 31, 2011	$	15,230
Issuances	674			WES 4.000% Senior Notes due 2022
Borrowings	374			WES revolving credit facility
Repayments	(131		)	6.125% Senior Notes due 2012
	(39		)	5.000% Senior Notes due 2012
	(374		)	WES revolving credit facility
	(2,500		)	$5.0 billion Facility
Other, net	35			Amortization of debt discounts and premiums
Balance at December 31, 2012	$	13,269
Issuances	250			WES 2.600% Senior Notes due 2018
Borrowings	710			WES revolving credit facility
Repayments	(710		)	WES revolving credit facility
Other, net	38			Amortization of debt discounts and premiums
Balance at December 31, 2013	$	13,557

12. Debt and Interest Expense (Continued)

Anadarko Revolving Credit Facility and Letter of Credit Facility In September 2010, the Company entered into the $5.0 billion Facility maturing in September 2015. Borrowings under the $5.0 billion Facility bear interest at LIBOR plus an applicable margin ranging from 1.25% to 2.50%, depending on the Company’s credit rating, or rates at a margin above the one-month LIBOR, the federal funds rate, or prime rates offered by certain designated banks. During 2012, the Company repaid all outstanding borrowings under the $5.0 billion Facility with cash on hand and cash realized from the resolution of the Algeria exceptional profits tax dispute.

Obligations incurred under the $5.0 billion Facility, as well as obligations Anadarko has to lenders or their affiliates pursuant to certain derivative instruments that are supported by the $5.0 billion Facility (as discussed in Note 11—Derivative Instruments), are guaranteed by certain of the Company’s wholly owned domestic subsidiaries, and are secured by a perfected first-priority security interest in certain exploration and production assets located in the United States and 65% of the capital stock of certain wholly owned foreign subsidiaries. At December 31, 2013, the Company was in compliance with applicable covenants and there were no restrictions on its ability to utilize the $5.0 billion Facility.

WES Borrowings In March 2011, WES entered into a five-year, $800 million senior unsecured revolving credit facility maturing in March 2016 (RCF). Borrowings under the RCF bear interest at LIBOR plus an applicable margin ranging from 1.30% to 1.90%, or rates at a margin above the one-month LIBOR, the federal funds rate, or prime rates offered by certain designated banks. During 2013, WES repaid all outstanding borrowings under its RCF with proceeds from debt and equity offerings. At December 31, 2013, WES was in compliance with all covenants contained in its RCF.

In February 2014, WES entered into a five-year, $1.2 billion senior unsecured revolving credit facility maturing in February 2019 (2014 RCF), which amended and restated the RCF. The 2014 RCF is expandable to a maximum of $1.5 billion. Borrowings under the 2014 RCF bear interest at LIBOR plus an applicable margin ranging from 0.975% to 1.45%, or rates at a margin above the one-month LIBOR, the federal funds rate, or prime rates offered by certain designated banks.

Scheduled Maturities Total principal amount of debt maturities for the five years ending December 31, 2018, excluding the potential repayment of the outstanding Zero Coupons that may be put by the holder to the Company annually, were as follows:



millions	Principal Amount of Debt Maturities
2014	$	775
2015	—
2016	1,750
2017	2,000
2018	364

Interest Expense The following summarizes interest expense for the years ended December 31:



millions	2013			2012			2011
Current debt, long-term debt, and other	$	949		$	963		$	986
Capitalized interest	(263		)	(221		)	(147		)
Interest expense	$	686		$	742		$	839