11. Debt and Interest Expense

Debt The Company’s outstanding debt, excluding the capital lease obligation, is senior unsecured. See Note 8—Equity-Method Investments for disclosure regarding Anadarko’s notes payable related to its ownership of certain noncontrolling mandatorily redeemable interests that are not included in the Company’s reported debt balance and do not affect consolidated interest expense. The following summarizes the Company’s outstanding debt:



	December 31,
millions	2015			2014
Commercial paper	$	250		$	—
5.950% Senior Notes due 2016	1,750			1,750
6.375% Senior Notes due 2017	2,000			2,000
7.050% Debentures due 2018	114			114
Tangible equity units - senior amortizing notes due 2018	85			—
WES 2.600% Senior Notes due 2018	350			350
6.950% Senior Notes due 2019	300			300
8.700% Senior Notes due 2019	600			600
WES 5.375% Senior Notes due 2021	500			500
WES 4.000% Senior Notes due 2022	670			670
3.450% Senior Notes due 2024	625			625
6.950% Senior Notes due 2024	650			650
WES 3.950% Senior Notes due 2025	500			—
7.500% Debentures due 2026	112			112
7.000% Debentures due 2027	54			54
7.125% Debentures due 2027	150			150
6.625% Debentures due 2028	17			17
7.150% Debentures due 2028	235			235
7.200% Debentures due 2029	135			135
7.950% Debentures due 2029	117			117
7.500% Senior Notes due 2031	900			900
7.875% Senior Notes due 2031	500			500
Zero-Coupon Senior Notes due 2036	2,360			2,360
6.450% Senior Notes due 2036	1,750			1,750
7.950% Senior Notes due 2039	325			325
6.200% Senior Notes due 2040	750			750
4.500% Senior Notes due 2044	625			625
WES 5.450% Senior Notes due 2044	400			400
7.730% Debentures due 2096	61			61
7.500% Debentures due 2096	78			78
7.250% Debentures due 2096	49			49
WES revolving credit facility	300			510
Total borrowings at face value	$	17,312		$	16,687
Net unamortized discounts and premiums ⁽¹⁾	(1,581		)	(1,616		)
Total borrowings	$	15,731		$	15,071
Capital lease obligation	20			21
Less current portion of long-term debt	33			—
Total long-term debt ⁽²⁾	$	15,718		$	15,092

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


⁽²⁾	The total long-term debt balance for WES was $2.7 billion at December 31, 2015, and $2.4 billion at December 31, 2014.

11. Debt and Interest Expense (Continued)

In a 2006 private offering, Anadarko received $500 million of loan proceeds upon issuing the Zero-Coupon Senior Notes due 2036 (Zero Coupons). The Zero Coupons mature in 2036 and have an aggregate principal amount due at maturity of approximately $2.4 billion, reflecting a yield to maturity of 5.24%. The Zero Coupons can be put to the Company in October of each year, in whole or in part, for the then-accreted value of the outstanding Zero Coupons. The accreted value of the outstanding Zero Coupons was $806 million at December 31, 2015. Anadarko’s Zero Coupons were classified as long-term debt on the Company’s Consolidated Balance Sheet at December 31, 2015, as the Company has the ability and intent to refinance these obligations using long-term debt, should the put be exercised.

Anadarko’s $1.750 billion 5.950% Senior Notes due September 2016 were classified as long-term debt on the Company’s Consolidated Balance Sheet at December 31, 2015, as Anadarko intends to refinance these obligations prior to or at maturity with new long-term debt issuances or by using the $3.0 billion five-year senior unsecured revolving credit facility (Five-Year Facility).

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 interest rates are variable and reflective of market rates. The estimated fair value of the Company’s total borrowings was $15.7 billion at December 31, 2015, and $17.4 billion at December 31, 2014.

Debt Activity The following summarizes the Company’s debt activity:



millions	Carrying 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
	624			3.450% Senior Notes due 2024
	621			4.500% Senior Notes due 2044
Borrowings	1,160			WES revolving credit facility
Repayments	(500		)	7.625% Senior Notes due 2014
	(275		)	5.750% Senior Notes due 2014
	(650		)	WES revolving credit facility
Other, net	39			Amortization of debt discounts and premiums
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
	400			WES revolving credit facility
	250			Commercial paper notes, net ⁽¹⁾
Repayments	(1,500		)	$5.0 billion revolving credit facility
	(1,800		)	364-Day Facility
	(610		)	WES revolving credit facility
	(16		)	Tangible equity units - senior amortizing notes
Other, net	41			Amortization of debt discounts and premiums
Balance at December 31, 2015	$	15,731

__________________________________________________________________


⁽¹⁾	Includes repayments of $(106) million related to commercial paper notes with maturities greater than 90 days.

11. Debt and Interest Expense (Continued)

Anadarko Revolving Credit Facilities and Commercial Paper Program In June 2014, Anadarko entered into the Five-Year Facility and a $2.0 billion 364-day senior unsecured revolving credit facility (364-Day Facility). In January 2015, upon satisfaction of certain conditions, including the payment of the settlement related to the Tronox Adversary Proceeding, these facilities replaced the $5.0 billion Facility. In December 2015, the Company amended the Five-Year Facility to extend the maturity date to January 2021 and in January 2016, the Company replaced the 364-Day Facility with a new $2.0 billion 364-day senior unsecured revolving facility on identical terms that will mature in 2017.

Borrowings under the Five-Year Facility and the 364-Day Facility (collectivity, the Credit 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 Credit 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% (excluding the effect of non-cash write-downs), and limitations on certain secured indebtedness, sale-and-leaseback transactions, and mergers and other fundamental changes. At December 31, 2015, the Company had no outstanding borrowings under the Credit Facilities and was in compliance with all covenants contained therein.

In January 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 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 December 31, 2015, the Company had $250 million of commercial paper notes outstanding at a weighted-average interest rate of 0.98%. Anadarko classified the outstanding commercial paper notes as long-term debt on the Company’s Consolidated Balance Sheet at December 31, 2015, as the Company currently intends to refinance these obligations at maturity with additional commercial paper notes supported by the Five-Year Facility.

WES Borrowings In February 2014, WES amended and restated its then-existing $800 million senior unsecured revolving credit facility by entering into a five-year, $1.2 billion senior unsecured revolving credit facility maturing in February 2019 (RCF), which is expandable to a maximum of $1.5 billion. Borrowings under the RCF bear interest at LIBOR plus an applicable margin ranging from 0.975% to 1.45% depending on WES’s credit rating, or the greatest of (i) rates at a margin above the one-month LIBOR, (ii) the federal funds rate, or (iii) prime rates offered by certain designated banks. At December 31, 2015, WES was in compliance with all covenants contained in its RCF, had outstanding borrowings under its RCF of $300 million at an interest rate of 1.73%, and had available borrowing capacity of approximately $894 million ($1.2 billion capacity, less $300 million of outstanding borrowings and $6 million of outstanding letters of credit).

11. Debt and Interest Expense (Continued)

Scheduled Maturities Total principal amount of debt maturities for the five years ending December 31, 2020, excluding the potential repayment of the outstanding Zero Coupons that may be put by the holders to the Company annually, were as follows:



millions	Principal Amount of Debt Maturities
2016	$	2,033
2017	2,034
2018	482
2019	1,200
2020	—

Interest Expense The following summarizes interest expense for the years ended December 31:



millions	2015			2014			2013
Debt and other	$	989		$	973		$	949
Capitalized interest	(164		)	(201		)	(263		)
Total interest expense	$	825		$	772		$	686