Debt Accounting Policy
Capitalized Interest
For significant projects, interest is capitalized as part of the historical cost of developing and constructing assets. Significant oil and gas investments in unproved properties, significant exploration and development projects for which DD&A is not currently recognized, and exploration or development activities that are in progress qualify for interest capitalization. Interest is capitalized until the asset is ready for service. Capitalized interest is determined by multiplying Anadarko's weighted-average borrowing cost on debt by the average amount of qualifying costs incurred. Once an asset subject to interest capitalization is completed and placed in service, the associated capitalized interest is expensed through depreciation or impairment.
Source: Anadarko Petroleum Corp., Annual Report
Total Debt Disclosure
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Anadarko Petroleum Corp., Statement of Financial Position, Debt
Source: Based on data from Anadarko Petroleum Corp., Annual Reports
| Item |
Description |
The company |
| Total debt |
Sum of the carrying values as of the balance sheet date of all debt plus capital lease obligations. |
Anadarko Petroleum Corp.'s total debt increased from 2009 to 2010 and from 2010 to 2011.
|
Interest Costs Incurred
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Anadarko Petroleum Corp.
Source: Based on data from Anadarko Petroleum Corp., Annual Reports
| Item |
Description |
The company |
| Interest expense |
Represents the portion of interest incurred in the period on debt arrangements that was charged against earnings. |
Anadarko Petroleum Corp.'s interest expense increased from 2009 to 2010 but then slightly declined from 2010 to 2011.
|
| Capitalized interest |
The amount of interest that was capitalized during the period. |
Anadarko Petroleum Corp.'s capitalized interest increased from 2009 to 2010 and from 2010 to 2011.
|
| Interest costs incurred |
Total interest costs incurred during the period and either capitalized or charged against earnings. |
Anadarko Petroleum Corp.'s interest costs incurred increased from 2009 to 2010 and from 2010 to 2011.
|
Adjusted Interest Coverage Ratio
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2011 Calculations
| Ratio |
Description |
The company |
| Adjusted interest coverage ratio |
A solvency ratio calculated as EBIT divided by interest payments (including capitalized interest). |
Anadarko Petroleum Corp.'s adjusted interest coverage ratio improved from 2009 to 2010 but then deteriorated significantly from 2010 to 2011.
|
