8. Debt and Interest Expense

Debt Activity The following summarizes the Company’s debt activity, after eliminating the effect of intercompany transactions, during the three months ended March 31, 2016:



	Carrying Value
millions	WES		WGP ⁽¹⁾		Anadarko ⁽²⁾			Anadarko Consolidated			Description
Balance at December 31, 2015	$	2,691	$	—	$	12,957		$	15,648
Issuances	—		—		794			794			4.850% Senior Notes due 2021
	—		—		1,088			1,088			5.550% Senior Notes due 2026
	—		—		1,088			1,088			6.600% Senior Notes due 2046
Borrowings	—		—		1,350			1,350			364-Day Facility
	330		—		—			330			WES RCF
	—		28		—			28			WGP RCF
Repayments	—		—		(1,350		)	(1,350		)	364-Day Facility
	—		—		(250		)	(250		)	Commercial paper notes, net
	—		—		(8		)	(8		)	TEUs - senior amortizing notes
Other, net	—		—		13			13			Amortization of discounts, premiums, and debt issuance costs
Balance at March 31, 2016	$	3,021	$	28	$	15,682		$	18,731

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⁽¹⁾	Excludes WES.


⁽²⁾	Excludes WES and WGP.

8. Debt and Interest Expense (Continued)

Debt The Company’s outstanding debt, excluding the capital lease obligation and any borrowings under the WGP revolving credit facility, is senior unsecured. The following summarizes the Company’s outstanding debt after eliminating the effect of intercompany transactions:



millions	WES			WGP ⁽¹⁾		Anadarko ⁽²⁾			Anadarko Consolidated
March 31, 2016
Total borrowings at face value	$	3,050		$	28	$	17,333		$	20,411
Net unamortized discounts, premiums, and debt issuance costs ⁽³⁾	(29		)	—		(1,651		)	(1,680		)
Total borrowings	3,021			28		15,682			18,731
Capital lease obligation	—			—		20			20
Less short-term debt	—			—		3,025			3,025
Total long-term debt	$	3,021		$	28	$	12,677		$	15,726

December 31, 2015
Total borrowings at face value	$	2,720		$	—	$	14,592		$	17,312
Net unamortized discounts, premiums, and debt issuance costs ⁽³⁾	(29		)	—		(1,635		)	(1,664		)
Total borrowings	2,691			—		12,957			15,648
Capital lease obligation	—			—		20			20
Less short-term debt	—			—		32			32
Total long-term debt	$	2,691		$	—	$	12,945		$	15,636

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⁽¹⁾	Excludes WES.


⁽²⁾	Excludes WES and WGP.


⁽³⁾	Unamortized discounts, premiums, and debt issuance costs are amortized over the term of the related debt. Debt issuance costs related to revolving credit facilities are included in other current assets and other assets on the Company’s Consolidated Balance Sheets.

Anadarko’s $1.750 billion 5.950% Senior Notes due September 2016 and $1.25 billion of the Company’s $2.0 billion 6.375% Senior Notes due September 2017 were classified as short-term debt on the Company’s Consolidated Balance Sheet at March 31, 2016. The Company used proceeds from its $3.0 billion March 2016 Senior Notes issuances to purchase and retire $1.25 billion of its $2.0 billion Senior Notes in April 2016 pursuant to a tender offer and to redeem the $1.750 billion Senior Notes in May 2016.

Anadarko’s 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 $839 million at the next put date in October 2016. Anadarko’s Zero Coupons were classified as long-term debt on the Company’s Consolidated Balance Sheet at March 31, 2016, as the Company has the ability and intent to refinance these obligations using long-term debt, should the put be exercised.

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 $18.9 billion at March 31, 2016, and $15.7 billion at December 31, 2015.

8. Debt and Interest Expense (Continued)

Anadarko Revolving Credit Facilities and Commercial Paper Program Anadarko has a $3.0 billion five-year senior unsecured revolving credit facility maturing in January 2021 (Five-Year Facility). In addition, in January 2016 the Company replaced its previous $2.0 billion 364-day senior unsecured revolving credit facility with a new $2.0 billion 364-day senior unsecured revolving credit facility (364-Day Facility), on identical terms, that will mature in January 2017. At March 31, 2016, the Company had no outstanding borrowings under the Five-Year Facility or the 364-Day Facility and was in compliance with all covenants contained therein.

In January 2015, the Company initiated a commercial paper program, which allows for 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 may vary, but may not exceed 397 days. In February 2016, Moody’s downgraded the Company’s commercial paper program credit rating, which essentially eliminated the Company’s access to the commercial paper market. As a result, the Company has not issued commercial paper notes since the downgrade. At March 31, 2016, the Company had no outstanding borrowings under the commercial paper program.

WES and WGP Borrowings At March 31, 2016, WES was in compliance with all covenants contained in its five-year $1.2 billion senior unsecured revolving credit facility maturing in February 2019 (WES RCF), which is expandable to $1.5 billion. At March 31, 2016, WES had outstanding borrowings under its RCF of $630 million at an interest rate of 1.74%, had outstanding letters of credit of $5 million, and had available borrowing capacity of $565 million.

In March 2016, WGP entered into a three-year $250 million senior secured revolving credit facility maturing in March 2019 (WGP RCF), which is expandable to $500 million, subject to receiving increased or new commitments from lenders and the satisfaction of certain other conditions. Obligations under the WGP RCF are secured by a first priority lien on all of WGP’s assets (not including the consolidated assets of WES), as well as all equity interests owned by WGP. Borrowings under the WGP RCF bear interest at LIBOR (with a floor of 0%), plus applicable margins ranging from 2.00% to 2.75% depending on WGP’s consolidated leverage ratio, or at a base rate equal to the greatest of (i) the prime rate, (ii) the federal funds rate plus 0.50%, or (iii) LIBOR plus 1.00%, in each case plus applicable margins ranging from 1.00% to 1.75% based upon WGP’s consolidated leverage ratio. At March 31, 2016, WGP was in compliance with all covenants contained in its RCF, had outstanding borrowings under its RCF of $28 million at an interest rate of 2.69%, and had available borrowing capacity of $222 million.

Interest Expense The following summarizes interest expense:



	Three Months Ended March 31,
millions	2016			2015
Debt and other	$	258		$	254
Capitalized interest	(38		)	(38		)
Total interest expense	$	220		$	216