Fair Value Measurements and Guarantees (Tables)

9 Months Ended

Sep. 30, 2020

Fair Value Assets and Liabilities Measured On Recurring Basis [Table Text Block]

The following table presents, by level within the fair value hierarchy, certain of our significant financial assets and liabilities. The carrying values of cash and cash equivalents, accounts receivable, margin deposits, commercial paper, and accounts payable approximate fair value because of the short-term nature of these instruments. Therefore, these assets and liabilities are not presented in the following table.


					Fair Value Measurements Using
	Carrying Amount		Fair Value		Quoted Prices In Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(Millions)
Assets (liabilities) at September 30, 2020:
Measured on a recurring basis:
ARO Trust investments	$	220	$	220	$	220	$	—	$	—




Additional disclosures:

Long-term debt, including current portion	(22,343)		(26,000)		—		(26,000)		—
Guarantees	(41)		(27)		—		(11)		(16)

Assets (liabilities) at December 31, 2019:
Measured on a recurring basis:
ARO Trust investments	$	201	$	201	$	201	$	—	$	—



Additional disclosures:
Long-term debt, including current portion	(22,288)		(25,319)		—		(25,319)		—
Guarantees	(41)		(27)		—		(11)		(16)

Fair Value Measurements, Nonrecurring [Table Text Block]

The following table presents impairments of assets and equity-method investments associated with certain nonrecurring fair value measurements within Level 3 of the fair value hierarchy, except as specifically noted.


					Impairments
					Nine Months Ended September 30,
	Segment	Date of Measurement	Fair Value		2020		2019
			(Millions)
Impairment of certain assets:
Certain gathering assets (1)	West	June 30, 2019	$	40			$	59
Certain idle gathering assets (2)	West	March 31, 2019	—				12
Other impairments and write-downs							5
Impairment of certain assets							$	76
Impairment of equity-method investments:
RMM (3)	West	March 31, 2020	$	557	$	243
Brazos Permian II (3)	West	March 31, 2020	—		193
Caiman II (4)	Northeast G&P	March 31, 2020	191		229
Appalachia Midstream Investments (4)	Northeast G&P	March 31, 2020	2,700		127
Aux Sable (4)	Northeast G&P	March 31, 2020	7		39
Laurel Mountain (4)	Northeast G&P	March 31, 2020	236		10
Discovery (4)	Transmission & Gulf of Mexico	March 31, 2020	367		97
Laurel Mountain (5)	Northeast G&P	September 30, 2019	242				$	79
Appalachia Midstream Investments (6)	Northeast G&P	September 30, 2019	102				17
Pennant (7)	Northeast G&P	August 31, 2019	11				17
UEOM (8)	Northeast G&P	March 17, 2019	1,210				74
Other					—		(1)
Impairment of equity-method investments					$	938	$	186

_______________

(1)Relates to a gas gathering system in the Eagle Ford Shale region with expected declines in asset utilization and possible idling of the gathering system. The estimated fair value of the Property, plant, and equipment – net was determined using a market approach which incorporated indications of interest from third parties.

(2)Reflects impairment of Property, plant, and equipment – net that is no longer in use for which the fair value was determined to be lower than the carrying value.

(3)Following the previously described declining market conditions during the first quarter of 2020, we evaluated these investments for other-than-temporary impairment. The fair value was measured using an income approach. Both investees operate in primarily oil-driven basins where significant expected reductions in producer activities led to reduced estimates of expected future cash flows. Our fair value estimates also reflected discount rates of approximately 17 percent for these investments. We also considered any debt held at the investee level, and its impact to fair value. The industry weighted-average discount rates utilized were significantly influenced by the recent market declines previously discussed.

(4)Following the previously described declining market conditions during the first quarter of 2020, we evaluated these investments for other-than-temporary impairment. The impairments within our Northeast G&P segment are primarily associated with operations in wet-gas areas where producer drilling activities are influenced by NGL prices which historically trend with crude oil prices. The fair values of our investments in Caiman II and Aux Sable Liquid Products LP (Aux Sable) were estimated using a market approach, reflecting valuation multiples ranging from 5.0x to 6.2x EBITDA (weighted-average 6.0x). The fair values of the other investments, including gathering systems that are part of Appalachia Midstream Investments, were estimated using an income approach, with discount rates ranging from 9.7 percent to 13.5 percent (weighted-average 12.6 percent). We also considered any debt held at the investee level, and its impact to fair value. The assumed valuation multiples and industry weighted-average discount rates utilized were both significantly influenced by the recent market declines previously discussed.

(5)Relates to a gas gathering system in the Marcellus region that was adversely impacted by lower sustained forward natural gas price expectations and changes in expected producer activity. The estimated fair value was determined using an income approach. We utilized a discount rate of 10.2 percent in our analysis.

(6)Relates to a certain gathering system held in Appalachia Midstream Investments that was adversely impacted by changes in the timing of expected producer activity. The estimated fair value was determined using an income approach. We utilized a discount rate of 9.0 percent in our analysis.

(7)The estimated fair value of Pennant Midstream, LLC (Pennant) was determined by a market approach based on recent observable third-party transactions. These inputs resulted in a fair value measurement within Level 2 of the fair value hierarchy.

(8)The estimated fair value was determined by a market approach based on the transaction price for the purchase of the remaining interest in UEOM as finalized just prior to the signing and closing of the acquisition in March 2019 (see Note 2 – Acquisitions). These inputs resulted in a fair value measurement within Level 2 of the fair value hierarchy.