DEBT AND FINANCING COSTS

6 Months Ended

Jun. 30, 2013

6. DEBT AND FINANCING COSTS

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


	June 30, 2013				December 31, 2012
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
	(In millions)
Uncommitted credit lines	$	78	$	78	$	91	$	91
Commercial paper		1,430		1,430		489		489
Notes and debentures		11,267		11,762		11,765		13,340

Total Debt	$	12,775	$	13,270	$	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).

During the second quarter, Apache repaid the $500 million aggregate principal amount of 5.25-percent notes that matured on April 15, 2013, by borrowing under our commercial paper program. As of June 30, 2013, current debt included $400 million 6.00-percent notes due in September 2013. Additionally, current debt included $78 million and $91 million borrowed on uncommitted credit facilities and overdraft lines as of June 30, 2013 and December 31, 2012, respectively.

As of June 30, 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 June 30, 2013, available borrowing capacity under the Company’s credit facilities was $1.9 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 June 30, 2013, the Company had $1.4 billion in commercial paper outstanding, compared with $489 million as of December 31, 2012.

Financing Costs, Net


	For the Quarter Ended June 30,						For the Six Months Ended June 30,
	2013			2012			2013			2012
	(In millions)
Interest expense	$	143		$	131		$	291		$	239
Amortization of deferred loan costs		2			2			4			3
Capitalized interest		(90	)		(85	)		(183	)		(151	)
Interest income		(4	)		(3	)		(8	)		(6	)

Financing costs, net	$	51		$	45		$	104		$	85

- 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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