Debt and Interest Expense

3 Months Ended

Mar. 31, 2014

7. Debt and Interest Expense

Debt The Company’s outstanding debt is senior unsecured, except for borrowings, if any, under the $5.0 billion Facility. The following summarizes the Company’s outstanding debt:



	March 31,			December 31,
millions	2014			2013
Total debt at face value	$	15,202		$	15,202
Net unamortized discounts and premiums ⁽¹⁾	(1,641		)	(1,645		)
Total borrowings	$	13,561		$	13,557
Capital lease obligation	8			8
Less current portion of long-term debt	—			500
Total long-term debt	$	13,569		$	13,065

__________________________________________________________________


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

Anadarko’s $275 million aggregate principal amount of 5.750% Senior Notes due June 2014 and the Zero-Coupon Senior Notes due 2036, which can be put to the Company in October 2014 (the next potential put date) for up to the then-accreted value of $756 million, 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 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 $15.7 billion at March 31, 2014, and $15.3 billion at December 31, 2013.

Debt Activity The following summarizes the Company’s debt activity during the three months ended March 31, 2014:



	Carrying
millions	Value			Description
Balance at December 31, 2013	$	13,557
Issuances	101			WES 2.600% Senior Notes due 2018
	394			WES 5.450% Senior Notes due 2044
Borrowings	430			WES revolving credit facility
Repayments	(500		)	7.625% Senior Notes due 2014
	(430		)	WES revolving credit facility
Other, net	9			Amortization of debt discounts and premiums
Balance at March 31, 2014	$	13,561

WES Borrowings In February 2014, WES entered into a five-year $1.2 billion, expandable to $1.5 billion, senior unsecured revolving credit facility maturing in February 2019 (RCF), which amended and restated its then-existing $800 million senior unsecured revolving credit facility. Borrowings under the 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. During the first quarter of 2014, WES repaid borrowings under its RCF with net proceeds from its public offerings of $100 million aggregate principal amount of 2.600% Senior Notes due 2018 and $400 million aggregate principal amount of 5.450% Senior Notes due 2044. At March 31, 2014, WES was in compliance with all covenants contained in its RCF.

7. Debt and Interest Expense (Continued)

Interest Expense The following summarizes interest expense:



	Three Months Ended March 31,
millions	2014			2013
Debt and other	$	240		$	232
Capitalized interest	(57		)	(68		)
Interest expense	$	183		$	164