8. Debt and Interest Expense

Debt The Company’s outstanding debt, excluding the capital lease obligation, is senior unsecured. The following summarizes the Company’s outstanding debt:



millions	June 30, 2015			December 31, 2014
Total debt at face value	$	17,640		$	16,687
Net unamortized discounts and premiums ⁽¹⁾	(1,603		)	(1,616		)
Total borrowings	16,037			15,071
Capital lease obligation	21			21
Less short-term debt	33			—
Total long-term debt⁽²⁾	$	16,025		$	15,092

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


⁽²⁾	Includes WES debt of $2.7 billion at June 30, 2015, and $2.4 billion at December 31, 2014.

Anadarko’s Zero-Coupon Senior Notes due 2036 (Zero Coupons) can be put to the Company in October of each year, in whole or in part, for the then-accreted value, which will be $796 million at the next put date in October 2015. Anadarko’s Zero Coupons 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 variable interest rates are reflective of market rates. The estimated fair value of the Company’s total borrowings was $17.9 billion at June 30, 2015, and $17.4 billion at December 31, 2014.

8. Debt and Interest Expense (Continued)

Debt Activity The following summarizes the Company’s debt activity during the six months ended June 30, 2015:



	Carrying
millions	Value			Description
Balance at December 31, 2014	$	15,071
Issuances	494			WES 3.950% Senior Notes due 2025
	101			Tangible Equity Units - senior amortizing notes
Borrowings	1,500			$5.0 billion revolving credit facility
	1,800			364-Day Facility
	280			WES revolving credit facility
	592			Commercial paper notes, net ⁽¹⁾
Repayments	(1,500		)	$5.0 billion revolving credit facility
	(1,800		)	364-Day Facility
	(520		)	WES revolving credit facility
Other, net	19			Amortization of debt discounts and premiums
Balance at June 30, 2015	$	16,037

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⁽¹⁾	Includes repayments of $37 million related to commercial paper notes with maturities greater than 90 days.

Anadarko Revolving Credit Facilities and Commercial Paper Program In January 2015, upon satisfaction of certain conditions, including the settlement payment related to the Tronox Adversary Proceeding, the Company’s $5.0 billion senior secured revolving credit facility was replaced by a $3.0 billion five-year senior unsecured revolving credit facility (Five-Year Facility), which is expandable to $4.0 billion, and a $2.0 billion 364-day senior unsecured revolving credit facility (364-Day Facility). For additional information, see Note 12—Contingencies—Tronox Litigation.

Borrowings under the Five-Year and 364-Day Facilities generally bear interest under one of two rate options, at Anadarko’s election, using either LIBOR (or Euro Interbank Offered Rate in the case of borrowings under the Five-Year Facility denominated in Euro) or an alternate base rate, in each case plus an applicable margin ranging from 0.00% to 1.65% for the Five-Year Facility and 0.00% to 1.675% for the 364-Day Facility. The applicable margin will vary depending on Anadarko’s credit ratings.

The Five-Year and 364-Day Facilities contain certain customary affirmative and negative covenants, including a financial covenant requiring maintenance of a consolidated indebtedness to total capitalization ratio of no greater than 65% and limitations on certain secured indebtedness, sale-and-leaseback transactions, and mergers and other fundamental changes. At June 30, 2015, the Company had no outstanding borrowings under the Five-Year and 364-Day Facilities and was in compliance with all covenants contained therein.

During the first quarter of 2015, the Company initiated a commercial paper program, which allows a maximum of $3.0 billion of unsecured commercial paper notes and is supported by the Company’s Five-Year Facility. The maturities of the commercial paper notes vary, but may not exceed 397 days. The commercial paper notes are sold under customary terms in the commercial paper market and are issued either at a discounted price to their principal face value or will bear interest at varying interest rates on a fixed or floating basis. Such discounted price or interest amounts are dependent on market conditions and the ratings assigned to the commercial paper program by credit rating agencies at the time of issuance of the commercial paper notes. At June 30, 2015, the Company had $592 million of commercial paper notes outstanding at a weighted-average interest rate of 0.51%. Anadarko classified the outstanding commercial paper notes as long-term debt on the Company’s Consolidated Balance Sheet, as the Company currently intends to refinance these obligations at maturity with additional commercial paper notes supported by Anadarko’s Five-Year Facility.

WES Borrowings During the second quarter of 2015, WES completed a public offering of $500 million aggregate principal amount of 3.950% Senior Notes due 2025. At June 30, 2015, WES was in compliance with all covenants contained in its five-year $1.2 billion senior unsecured revolving credit facility maturing in February 2019 (RCF), which is expandable to $1.5 billion. At June 30, 2015, WES had outstanding borrowings under its RCF of $270 million at an interest rate of 1.49%, had outstanding letters of credit of $13 million, and had available borrowing capacity of $917 million.

8. Debt and Interest Expense (Continued)

Interest Expense The following summarizes interest expense:



	Three Months Ended June 30,						Six Months Ended June 30,
millions	2015			2014			2015			2014
Debt and other	$	244		$	233		$	498		$	473
Capitalized interest	(43		)	(47		)	(81		)	(104		)
Total interest expense	$	201		$	186		$	417		$	369