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Debt and Interest Expense
 9 Months Ended
Sep. 30, 2012
Disclosure Text Block [Abstract]  
Debt and Interest Expense

8.  Debt and Interest Expense

 

Debt   All of the Company's outstanding debt is senior unsecured, except for borrowings under the $5.0 billion Facility. The following presents the Company's outstanding debt:

      
 September 30, December 31,
millions2012 2011
Long-term notes and debentures$14,821 $16,452
WES borrowings 1,020  500
Total debt at face value$15,841 $16,952
Net unamortized discounts and premiums (1) (1,700)  (1,722)
Total borrowings$14,141 $15,230
Less: Current portion of long-term debt 1,039  170
Total long-term debt$13,102 $15,060
      

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(1)       Unamortized discounts and premiums are amortized over the term of the related 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. At September 30, 2012, and December 31, 2011, the estimated fair value of the Company's total borrowings was $17.1 billion and $17.3 billion, respectively.

 

Debt Activity   The following presents the Company's debt activity during the nine months ended September 30, 2012.

       
  Carrying   
millions Value Description
Balance at December 31, 2011 $15,230  
 Borrowings  319 WES revolving credit facility
 Repayments  (131) 6.125% Senior Notes due 2012
    (40) WES revolving credit facility
 Other, net  8 Changes in debt premium or discount
Balance at March 31, 2012 $15,386  
 Issuance  516 WES 4.00% Senior Notes due 2022
 Borrowings  55 WES revolving credit facility
 Repayments  (800) $5.0 billion Facility
    (334) WES revolving credit facility
 Other, net  9 Changes in debt premium or discount
Balance at June 30, 2012 $14,832  
 Repayments  (700) $5.0 billion Facility
 Other, net  9 Changes in debt premium or discount
Balance at September 30, 2012 $14,141  
       

Anadarko Revolving Credit Facility and Letter of Credit Facility   At September 30, 2012, the Company was in compliance with all applicable covenants contained in the $5.0 billion Facility, had outstanding borrowings of $1.0 billion at an interest rate of 1.72%, and had available borrowing capacity of $4.0 billion ($5.0 billion maximum capacity less $1.0 billion of outstanding borrowings). The Company intends to repay the outstanding borrowings under the $5.0 billion Facility within the next year with cash on hand and cash realized from the resolution of the Algeria exceptional profits tax dispute and has classified these borrowings as current portion of long-term debt on the Company's Consolidated Balance Sheet at September 30, 2012.

       In 2011, the Company entered into an agreement with a financial institution to provide up to $400 million of letters of credit (LOC Facility). In the third quarter of 2012, the Company terminated the LOC Facility.

WES Borrowings   During the second quarter of 2012, WES repaid all outstanding borrowings under its five-year $800 million senior unsecured revolving credit facility (RCF) with net proceeds from its public offering of $520 million aggregate principal amount of 4.00% Senior Notes due 2022. At September 30, 2012, WES was in compliance with all covenants contained in the RCF. In October 2012, WES issued an additional $150 million of 4.00% Senior Notes due 2022.

 

Interest Expense   The following summarizes the amounts included in interest expense:

             
  Three Months Ended Nine Months Ended
  September 30, September 30,
millions2012 2011 2012 2011
Current debt, long-term debt, and other$238 $245 $724 $743
Capitalized interest (53)  (39)  (163)  (101)
Total interest expense$185 $206 $561 $642