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Debt And Related Expenses | 12 Months Ended
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Dec. 31, 2011
Debt And Related Expenses [Abstract] |
Debt And Related Expenses | 14. Debt and Related Expenses A summary of Devon's debt is as follows:
| December 31,
| 2011 | 2010
| (In millions)
Commercial paper | $ 3,726 | $ —
Other debentures and notes: |  |
6.875% retired upon maturity on September 30, 2011 | — | 1,750
5.625% due January 15, 2014 | 500 | 500
Non-interest bearing promissory note due June 29, 2014 | 85 | 144
2.40% due July 15, 2016 | 500 | —
8.25% due July 1, 2018 | 125 | 125
6.30% due January 15, 2019 | 700 | 700
4.00% due July 15, 2021 | 500 | —
7.50% due September 15, 2027 | 150 | 150
7.875% due September 30, 2031 | 1,250 | 1,250
7.95% due April 15, 2032 | 1,000 | 1,000
5.60% due July 15, 2041 | 1,250 | —
Other | — | 9
Net discount on other debentures and notes | (6) | 2
Total debt | 9,780 | 5,630
Less amount classified as short-term debt | 3,811 | 1,811
Long-term debt | $ 5,969 | $ 3,819
Debt maturities as of December 31, 2011, excluding premiums and discounts, are as follows (in millions):
2012 | $ 3,811
2013 | —
2014 | 500
2015 | —
2016 | 500
2017 and thereafter | 4,975
Total | $ 9,786
Credit Lines Devon has a $2.65 billion syndicated, unsecured revolving line of credit (the "Senior Credit Facility"). The maturity date for $2.19 billion of the Senior Credit Facility is April 7, 2013. The maturity date for the remaining $0.46 billion is April 7, 2012. All amounts outstanding will be due and payable on the respective maturity dates unless the maturity is extended. Prior to each April 7 anniversary date, Devon has the option to extend the maturity of the Senior Credit Facility for one year, subject to the approval of the lenders. The Senior Credit Facility includes a revolving Canadian subfacility in a maximum amount of U.S. $0.5 billion. Amounts borrowed under the Senior Credit Facility may, at the election of Devon, bear interest at various fixed rate options for periods of up to twelve months. Such rates are generally less than the prime rate. However, Devon may elect to borrow at the prime rate. The Senior Credit Facility currently provides for an annual facility fee of $1.9 million that is payable quarterly in arrears. As of December 31, 2011, there were no borrowings under the Senior Credit Facility. The Senior Credit Facility contains only one material financial covenant. This covenant requires Devon's ratio of total funded debt to total capitalization to be less than 65 percent. The credit agreement contains definitions of total funded debt and total capitalization that include adjustments to the respective amounts reported in the accompanying financial statements. Also, total capitalization is adjusted to add back noncash financial writedowns such as full cost ceiling impairments or goodwill impairments. As of December 31, 2011, Devon was in compliance with this covenant. Devon's debt-to-capitalization ratio at December 31, 2011, as calculated pursuant to the terms of the agreement, was 22.8 percent. Commercial Paper Devon has access to $5.0 billion of short-term credit under its commercial paper program. Commercial paper debt generally has a maturity of between 1 and 90 days, although it can have a maturity of up to 365 days, and bears interest at rates agreed to at the time of the borrowing. The interest rate is generally based on a standard index such as the Federal Funds Rate, LIBOR, or the money market rate as found on the commercial paper market. As of December 31, 2011, Devon's weighted average borrowing rate on its commercial paper borrowings was 0.45 percent. Other Debentures and Notes Following are descriptions of the various other debentures and notes outstanding at December 31, 2011, as listed in the table presented at the beginning of this note. 5.625% Notes due January 15, 2014 and 6.30% Notes due January 15, 2019 In January 2009, Devon issued $1.2 billion of senior notes. The net proceeds were used primarily to repay outstanding commercial paper as of December 31, 2008. These notes are unsecured and unsubordinated obligations of Devon. Non-Interest Bearing Promissory Note due June 29, 2014 In June 2010, Devon issued a four-year $155 million Canadian dollar non-interest bearing promissory note in connection with the formation of the Pike oil sands joint venture. The present value of the note was $139 million on the issue date based upon an effective interest rate of 3.125%. At December 31, 2011, the note had a carrying value of $85 million, which is presented as short-term debt in the accompanying balance sheet because it is expected to be repaid during 2012. 2.40% Notes due July 15, 2016, 4.00% Notes due July 15, 2021 and 5.60% Notes due July 15, 2041 In July 2011, Devon issued $2.25 billion of senior notes. The net proceeds were used to repay outstanding commercial paper debt. These notes are unsecured and unsubordinated obligations of Devon. Ocean Debt On April 25, 2003, Devon merged with Ocean Energy, Inc. and assumed certain debt instruments. The table below summarizes the debt assumed that remains outstanding as of December 31, 2011, including the fair value of the debt at April 25, 2003, and the effective interest rate of the debt after determining the fair values using April 25, 2003, market interest rates. The premiums resulting from fair values exceeding face values are being amortized using the effective interest method. Both notes are general unsecured obligations of Devon.
Debt Assumed | Fair Value of Debt Assumed | Effective Rate of Debt Assumed
| (In millions) |
8.250% due July 2018 (principal of $125 million) | $ 147 | 5.5%
7.500% due September 2027 (principal of $150 million) | $ 169 | 6.5%
7.875% Debentures due September 30, 2031 In October 2001, Devon, through Devon Financing Corporation, U.L.C. ("Devon Financing"), a wholly owned finance subsidiary, sold debentures, which are unsecured and unsubordinated obligations of Devon Financing. Devon has fully and unconditionally guaranteed on an unsecured and unsubordinated basis the obligations of Devon Financing under the debt securities. The proceeds were used to fund a portion of the acquisition of Anderson Exploration. 7.95% Notes due April 15, 2032 In March 2002, Devon sold these notes, which are unsecured and unsubordinated obligations of Devon. The net proceeds were used to retire other indebtedness. Interest Expense The following schedule includes the components of interest expense.
| Year Ended December 31,
| 2011 | 2010 | 2009
| (In millions)
Interest based on debt outstanding | $ 414 | $ 408 | $ 437
Capitalized interest | (72) | (76) | (94)
Early retirement of debt | — | 19 | —
Other | 10 | 12 | 6
Total | $ 352 | $ 363 | $ 349

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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 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 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 129 -Paragraph 2, 4 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 02 -Paragraph 19, 20, 22 -Article 5 Reference 4: 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 + Details
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