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Debt (Note) | 3 Months Ended
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Mar. 31, 2016
Debt Disclosure [Abstract] |
Debt Disclosure | Debt Our long-term debt consisted of the following as of March 31, 2016 and December 31, 2015:
|  | March 31, 2016 |  | December 31, 2015
|  | Principal Amount |  | Carrying Amount |  | Principal Amount |  | Carrying Amount
|  | ($ in millions)
3.25% senior notes due 2016 |  | $ | — |  |  | $ | — |  |  | $ | 381 |  |  | 381 |
6.25% euro-denominated senior notes due 2017(a) |  | 344 |  |  | 344 |  |  | 329 |  |  | 329 |
6.5% senior notes due 2017 |  | 379 |  |  | 379 |  |  | 453 |  |  | 453 |
7.25% senior notes due 2018 |  | 538 |  |  | 538 |  |  | 538 |  |  | 538 |
Floating rate senior notes due 2019 |  | 1,104 |  |  | 1,104 |  |  | 1,104 |  |  | 1,104 |
6.625% senior notes due 2020 |  | 822 |  |  | 822 |  |  | 822 |  |  | 822 |
6.875% senior notes due 2020 |  | 304 |  |  | 304 |  |  | 304 |  |  | 304 |
6.125% senior notes due 2021 |  | 589 |  |  | 589 |  |  | 589 |  |  | 589 |
5.375% senior notes due 2021 |  | 286 |  |  | 286 |  |  | 286 |  |  | 286 |
4.875% senior notes due 2022 |  | 639 |  |  | 639 |  |  | 639 |  |  | 639 |
8.00% senior secured second lien notes due 2022 |  | 2,425 |  |  | 3,542 |  |  | 2,425 |  |  | 3,584 |
5.75% senior notes due 2023 |  | 384 |  |  | 384 |  |  | 384 |  |  | 384 |
2.75% contingent convertible senior notes due 2035(b) |  | 2 |  |  | 2 |  |  | 2 |  |  | 2 |
2.5% contingent convertible senior notes due 2037(b)(c) |  | 902 |  |  | 846 |  |  | 1,110 |  |  | 1,027 |
2.25% contingent convertible senior notes due 2038(b)(c) |  | 340 |  |  | 293 |  |  | 340 |  |  | 290 |
Revolving credit facility |  | 367 |  |  | 367 |  |  | — |  |  | — |
Debt issuance costs |  | — |  |  | (38 | ) |  | — |  |  | (43 | )
Discount on senior notes |  | — |  |  | (3 | ) |  | — |  |  | (4 | )
Interest rate derivatives(d) |  | — |  |  | 7 |  |  | — |  |  | 7 |
Total debt, net |  | 9,425 |  |  | 10,405 |  |  | 9,706 |  |  | 10,692 |
Less current maturities of long-term debt, net(e) |  | (344 | ) |  | (343 | ) |  | (381 | ) |  | (381 | )
Total long-term debt, net |  | $ | 9,081 |  |  | $ | 10,062 |  |  | $ | 9,325 |  |  | $ | 10,311 |
___________________________________________
(a) | The principal and carrying amounts shown are based on the exchange rate of $1.1380 to €1.00 and $1.0862 to €1.00 as of March 31, 2016 and December 31, 2015, respectively. See Foreign Currency Derivatives in Note 8 for information on our related foreign currency derivatives.
(b) | The repurchase, conversion, contingent interest and redemption provisions of our contingent convertible senior notes are as follows:
Holders’ Demand Repurchase Rights. The holders of our contingent convertible senior notes may require us to repurchase, in cash, all or a portion of their notes at 100% of the principal amount of the notes on any of four dates that are five, ten, fifteen and twenty years before the maturity date. Optional Conversion by Holders. At the holder’s option, prior to maturity under certain circumstances, the notes are convertible into cash and, if applicable, shares of our common stock using a net share settlement process. One triggering circumstance is when the price of our common stock exceeds a threshold amount during a specified period in a fiscal quarter. Convertibility based on common stock price is measured quarterly. During the specified period in the Current Quarter, the price of our common stock was below the threshold level for each series of the contingent convertible senior notes and, as a result, the holders do not have the option to convert their notes into cash and common stock in the second quarter of 2016 under this provision. The notes are also convertible, at the holder’s option, during specified five-day periods if the trading price of the notes is below certain levels determined by reference to the trading price of our common stock. The notes were not convertible under this provision during the Current Quarter and the Prior Quarter. In general, upon conversion of a contingent convertible senior note, the holder will receive cash equal to the principal amount of the note and common stock for the note’s conversion value in excess of the principal amount. Contingent Interest. We will pay contingent interest on the convertible senior notes after they have been outstanding at least ten years during certain periods if the average trading price of the notes exceeds the threshold defined in the indenture. The holders’ demand repurchase dates, the common stock price conversion threshold amounts (as adjusted to give effect to cash dividends on our common stock) and the ending date of the first six-month period in which contingent interest may be payable for the contingent convertible senior notes are as follows:
Contingent Convertible Senior Notes |  | Holders' Demand Repurchase Dates |  | Common Stock Price Conversion Thresholds |  | Contingent Interest First Payable (if applicable)
2.75% due 2035 |  | November 15, 2020, 2025, 2030 |  | $ | 45.02 |  |  | May 14, 2016
2.5% due 2037 |  | May 15, 2017, 2022, 2027, 2032 |  | $ | 59.44 |  |  | November 14, 2017
2.25% due 2038 |  | December 15, 2018, 2023, 2028, 2033 |  | $ | 100.20 |  |  | June 14, 2019
Optional Redemption by the Company. We may redeem the contingent convertible senior notes once they have been outstanding for ten years at a redemption price of 100% of the principal amount of the notes, payable in cash. We may redeem our 2.75% Contingent Convertible Senior Notes due 2035 at any time.
(c) | Discount as of March 31, 2016 and December 31, 2015 included $103 million and $133 million, respectively, associated with the equity component of our contingent convertible senior notes. This discount is amortized based on an effective yield method.
(d) | See Interest Rate Derivatives in Note 8 for further discussion related to these instruments.
(e) | As of March 31, 2016, current maturities of long-term debt, net includes our 6.25% Euro-denominated Senior Notes due 2017.
Chesapeake Senior Notes and Contingent Convertible Senior Notes In the Current Quarter, in addition to the repayment upon maturity of $259 million principal amount of our 3.25% Senior Notes due 2016 (together with $122 million principal amount repurchased in the open market for $115 million prior to maturity), we repurchased in the open market approximately $118 million principal amount of our outstanding 2.5% Contingent Convertible Senior Notes due 2037 (that could have been put to us in May 2017) for $63 million and $59 million principal amount of our outstanding 6.5% Senior Notes due 2017 for $36 million. Additionally, we privately negotiated an exchange of approximately $90 million principal amount of our outstanding 2.5% Contingent Convertible Senior Notes due 2037 for 14,699,368 common shares and $15 million principal amount of our outstanding 6.5% Senior Notes due 2017 for 2,555,979 common shares. We recorded an aggregate gain of approximately $100 million associated with the repurchases and exchanges. Revolving Credit Facility We have a $4.0 billion senior secured revolving credit facility that matures in December 2019. As of March 31, 2016, we had outstanding borrowings of $367 million under the credit facility and had used $619 million of the credit facility for various letters of credit (including the $461 million supersedeas bond with respect to the 2019 Notes litigation discussed in Note 4). The terms of the credit facility include covenants limiting, among other things, our ability to incur additional indebtedness, make investments or loans, create liens, consummate mergers and similar fundamental changes, make restricted payments, make investments in unrestricted subsidiaries and enter into transactions with affiliates. We were in compliance with all financial covenants under the agreement as of March 31, 2016. In April 2016, we entered into the third amendment to our senior revolving credit facility. Pursuant to the amendment, our borrowing base was reaffirmed in the amount of $4.0 billion and the next scheduled borrowing base redetermination review was postponed until June 15, 2017, with the consenting lenders agreeing not to exercise their interim redetermination right prior to that date. The amendment also provides temporary financial covenant relief, with the credit facility’s existing first lien secured leverage ratio and net debt to capitalization ratio suspended until September 30, 2017 and the interest coverage ratio maintenance covenant was reduced as noted below. In addition, we agreed to grant liens and security interests on substantially all of our assets, as well as maintain a minimum liquidity amount (defined as cash and cash equivalents and availability under our revolving credit facility) of $500 million until the suspension of the existing maintenance covenants ends. The amendment reduces the interest coverage ratio from 1.1 to 1.0 to 0.65 to 1.0 through the first quarter of 2017, after which it will increase to 0.70 to 1.0 through the second quarter of 2017, 1.2 to 1.0 through the third quarter of 2017 and 1.25 to 1.0 thereafter. The amendment also includes a collateral value coverage test whereby if the collateral value coverage ratio, tested as of December 31, 2016, falls below 1.1 to 1.0, the $500 million minimum liquidity covenant increases to $750 million, and if the collateral value coverage ratio, tested as of March 31, 2017, falls below 1.25 to 1.0, our borrowing ability will be reduced in order to satisfy such ratio. The amendment also gives us the ability to incur up to $2.5 billion of first lien indebtedness secured on a pari passu basis with the existing obligations under the credit agreement, subject to payment priority in favor of the existing lenders and the other limitations on junior lien debt set forth in the credit agreement. Fair Value of Debt We estimate the fair value of our exchange-traded debt using quoted market prices (Level 1). The fair value of all other debt, including borrowings under our revolving credit facility, is estimated using our credit default swap rate (Level 2). Fair value is compared to the carrying value, excluding the impact of interest rate derivatives, in the table below.
|  | March 31, 2016 |  | December 31, 2015
|  | Carrying Amount |  | Estimated Fair Value |  | Carrying Amount |  | Estimated Fair Value
|  |  |  | ($ in millions) |  |
Short-term debt (Level 1) |  | $ | 343 |  |  | $ | 250 |  |  | $ | 381 |  |  | $ | 366 |
Long-term debt (Level 1) |  | $ | 9,688 |  |  | $ | 4,029 |  |  | $ | 10,347 |  |  | $ | 3,735 |
Long-term debt (Level 2) |  | $ | 367 |  |  | $ | 250 |  |  | $ | — |  |  | $ | — |

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- 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. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.19,20,22) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 + Details
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