Debt and Financing Costs

3 Months Ended

Mar. 31, 2013

6. DEBT AND FINANCING COSTS

The following table presents the carrying amounts and estimated fair values of the Company’s outstanding debt:


	March 31, 2013				December 31, 2012
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
	(In millions)
Uncommitted credit lines	$	94	$	94	$	91	$	91
Commercial paper		619		619		489		489
Notes and debentures		11,766		12,888		11,765		13,340

Total Debt	$	12,479	$	13,601	$	12,345	$	13,920

The Company’s debt is recorded at the carrying amount, net of unamortized discount, on its consolidated balance sheet. The carrying amount of the Company’s commercial paper and uncommitted credit facilities and overdraft lines approximates fair value because the interest rates are variable and reflective of market rates. Apache uses a market approach to determine the fair value of its notes and debentures using estimates provided by an independent investment financial data services firm (a Level 2 fair value measurement).

As of March 31, 2013 and December 31, 2012, current debt included $500 million 5.25-percent notes and $400 million 6.00-percent notes due within the next 12 months. Additionally, current debt included $94 million and $91 million borrowed on uncommitted credit facilities and overdraft lines as of March 31, 2013 and December 31, 2012, respectively.

As of March 31, 2013, the Company had unsecured committed revolving credit facilities totaling $3.3 billion, of which $1.0 billion matures in August 2016 and $2.3 billion matures in June 2017. The facilities consist of a $1.7 billion facility and $1.0 billion facility for the U.S., a $300 million facility for Australia, and a $300 million facility for Canada. As of March 31, 2013, available borrowing capacity under the Company’s credit facilities was $2.7 billion. The Company’s committed credit facilities are used to support Apache’s commercial paper program.

The Company has available a $3.0 billion commercial paper program, which generally enables Apache to borrow funds for up to 270 days at competitive interest rates. The commercial paper program is fully supported by available borrowing capacity under our committed credit facilities. As of March 31, 2013, the Company had $619 million in commercial paper outstanding, compared with $489 million as of December 31, 2012.

Financing Costs, Net


	For the Quarter Ended March 31,
	2013			2012
	(In millions)
Interest expense	$	148		$	108
Amortization of deferred loan costs		2			1
Capitalized interest		(93	)		(66	)
Interest income		(4	)		(3	)

Financing costs, net	$	53		$	40

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

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