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3. Debt
December 31
(in millions) 2009 2008
Bank debt:
Commercial paper, 0.3% at December 31, 2009 and 3.0% at December 31, 2008 $ 622 $ 72
Revolving credit facility due April 1, 2013, 2. 4% at December 31, 2008 — 1,825
Term loan due April 1, 2013, 0.7% at December 31, 2009 and 1.9% at December 31, 2008 500 500
Term loan due February 5, 2013, 0.6% at December 31, 2009 and 2.3% at December 31, 2008 100 100
Senior notes:
5.00%, due August 1, 2010 250 250
7.50%, due April 15, 2012 350 350
5.90%, due August 1, 2012 550 550
6.25%, due April 15, 2013 400 400
4.625%, due June 15, 2013 400 400
5.75%, due December 15, 2013 500 500
4.90%, due February 1, 2014 500 500
5.00%, due January 31, 2015 348 350
5.30%, due June 30, 2015 400 400
5.65%, due April 1, 2016 400 400
6.25%, due August 1, 2017 735 750
5.50%, due June 15, 2018 773 800
6.50%, due December 15, 2018 1,000 1,000
6.10%, due April 1, 2036 591 600
6.75%, due August 1, 2037 1,399 1,450
6.375%, due June 15, 2038 704 800
Net discount on senior notes (35) (38)

Total debt 10,487 11,959

Less current portion (250) —

Long−term debt $10,237 $11,959

Because we had both the intent and ability to refinance the commercial paper balance outstanding with borrowings under our revolving credit facility
due in April 2013, we have classified these borrowings as long−term debt in our consolidated balance sheets. Before the stated maturities of April 2013, we
may renegotiate the revolving credit agreement and term loans to increase the borrowing commitment and/or extend the maturity. Maturities of long−term
debt as of December 31, 2009, excluding net discounts, are as follows:
(in millions)
2010 $ 250
2011 —
2012 900
2013 2,522
2014 500
Remaining 6,350

Total $10,522

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Commercial Paper
Our commercial paper program availability is $2.84 billion. Borrowings under the commercial paper program reduce our available capacity under the
revolving credit facility on a dollar−for−dollar basis. The commercial paper borrowings may have terms up to 397 days and bear interest at rates agreed to at
the time of the borrowing. The interest rate is based on a standard index such as the Federal Funds Rate, LIBOR, or the money market rate as found on the
commercial paper market. On December 31, 2009, borrowings under our commercial paper program were $622 million at a weighted average interest rate
of 0.3%. The weighted average interest rate on commercial paper borrowings was 0.6% during 2009.

Bank Debt
On December 31, 2009, we had no borrowings under our revolving credit agreement with commercial banks, and we had available borrowing
capacity of $2.22 billion net of our commercial paper borrowings. We use the facility for general corporate purposes and as a backup facility for our
commercial paper program. We have the option, with bank approval, to increase the commitment up to an additional $660 million. The interest rate on any
borrowing is generally based on LIBOR plus 0.40%. When utilization of available commitments is greater than 50%, then the interest rate on our
borrowings is increased by 0.05%. Interest is paid at maturity, or quarterly if the term is for a period of 90 days or more. We also incur a commitment fee on
unused borrowing commitments, which is 0.09%. The agreement requires us to maintain a debt−to−total capitalization ratio of not more than 65%. The
weighted average interest rate on revolver borrowings was 1.7% until all outstanding borrowings were repaid in mid−January 2009.

In February 2008, we amended our $300 million term loan credit agreement to increase outstanding borrowings to $500 million and to extend the
maturity date to April 1, 2013. The proceeds were used for general corporate purposes. The weighted average interest rate on this term loan borrowing was
0.8% during 2009.

Additionally in February 2008, we borrowed $100 million under a five−year unsecured term loan agreement in a single advance that matures
February 5, 2013. The proceeds were used for general corporate purposes. The weighted average interest rate on this term loan borrowing was 0.7% during
2009.

We have unsecured and uncommitted lines of credit with commercial banks totaling $100 million. As of December 31, 2009, there were no
borrowings under these lines.

Repurchase of Senior Notes

In 2009, we repurchased $200 million total face amount of senior notes, including $2 million of our 5.00% senior notes due 2015, $15 million of our
6.25% senior notes due 2017, $27 million of our 5.50% senior notes due 2018, $9 million of our 6.10% senior notes due 2036, $51 million of our 6.75%
senior notes due 2037 and $96 million of our 6.375% senior notes due 2038. In connection with these repurchases, we recognized a $17 million gain on
extinguishment of debt, net of unamortized discounts and the write−off of deferred debt offering costs. These gains were netted against interest expense in
the consolidated income statements.

Senior Notes

In July 2007, we sold $300 million of 5.9% senior notes due August 1, 2012, $450 million of 6.25% senior notes due August 1, 2017 and $500
million of 6.75% senior notes due August 1, 2037. In August 2007, we sold an additional $250 million of the 5.9% senior notes, $300 million of the 6.25%
senior notes and $450 million of the 6.75% senior notes that constituted a further issuance of the senior notes issued in July 2007. Together, the 5.9% senior
notes were issued at 100.585% of par to yield 5.761% to maturity. The 6.25% senior notes were issued at 100.419% of par to yield 6.193% to maturity. The
6.75% senior notes were issued at 100.022% of par to yield 6.748% to maturity. Interest is payable on each series of notes on February 1 and August 1 of
each year, beginning February 1, 2008. Net proceeds of $2.24 billion were used to fund a portion of the acquisition of properties from Dominion Resources,
Inc. (Note 14) and to pay down outstanding commercial paper borrowings.
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In April 2008, we sold $400 million of 4.625% senior notes due June 15, 2013, $800 million of 5.50% senior notes due June 15, 2018 and $800
million of 6.375% senior notes due June 15, 2038. The 4.625% senior notes were issued at 99.888% of par to yield 4.651% to maturity. The 5.50% senior
notes were issued at 99.539% of par to yield 5.561% to maturity. The 6.375% senior notes were issued at 99.864% of par to yield 6.386% to maturity. Net
proceeds of $1.98 billion were used to fund property acquisitions that closed during the second and third quarters of 2008 (Note 14), to pay down
outstanding commercial paper borrowings and for general corporate purposes.

In August 2008, we sold $250 million of 5.00% senior notes due August 1, 2010, $500 million of 5.75% senior notes due December 15, 2013, $1.0
billion of 6.50% senior notes due December 15, 2018 and $500 million of 6.75% senior notes due August 1, 2037. The notes due 2037 constitute a further
issuance of the 6.75% senior notes issued in July 2007. The 5.00% senior notes were issued at 99.988% of par to yield 5.007% to maturity. The 5.75%
senior notes were issued at 99.931% of par to yield 5.767% to maturity. The 6.50% senior notes were issued at 99.713% of par to yield 6.540% to maturity.
The 6.75% senior notes were issued at 94.391% of par to yield 7.214% to maturity. Net proceeds of $2.2 billion were used to partially fund the cash portion
of the Hunt acquisition (Note 14).

The senior notes require no sinking fund. We may redeem all or a part of the senior notes at any time at a price of 100% of their principal balance plus
accrued interest and a make−whole premium payment. The make−whole premium is calculated as any excess over the principal balance of the present value
of remaining principal and interest payments at the U.S. Treasury rate for a comparable maturity plus no more than 0.375%.

If we are the subject of a change in control, such as the proposed merger with ExxonMobil, we are required to offer to purchase at 101% of par our
7.50% senior notes due 2012 and our 6.25% senior notes due 2013. Our other senior notes are not subject to this provision.

4. Income Tax
The following reconciles our income tax expense to the amount calculated at the statutory federal income tax rate:
(in millions) 2009 2008 2007
Income tax expense at the federal statutory rate (35%) $1,107 $1,059 $925
State and local income taxes and other 37 55 26

Income tax expense $1,144 $1,114 $951

Components of income tax expense are as follows:

(in millions) 2009 2008 2007
Current income tax (a) $ 333 $ 140 $292
Deferred income tax 811 974 659

Income tax expense $1,144 $1,114 $951

(a) The current income tax provision exceeds cash tax expense by the benefit realized upon exercise of stock options or vesting of stock awards in excess
of amounts expensed in the financial statements. This benefit, which is recorded in additional paid−in capital, was $20 million in 2009, $69 million in
2008 and $64 million in 2007.

Deferred tax assets and liabilities are the result of temporary differences between the financial statement carrying values and tax bases of assets and
liabilities. Our net deferred tax assets and liabilities are recorded as a current liability of $342 million and a long−term liability of $5.5 billion at
December 31, 2009 and as a current
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