v2.3.0.15
Fair Value Measurements
9 Months Ended
Sep. 30, 2011
Fair Value Measurements 
Fair Value Measurements

12.    Fair Value Measurements

 

Certain of Devon's assets and liabilities are reported at fair value in the accompanying consolidated balance sheets. Such assets and liabilities include amounts for both financial and non-financial instruments. The following tables provide carrying value and fair value measurement information for Devon's financial assets and liabilities.

 

The carrying values of cash, accounts receivable, other current receivables, accounts payable and other payables and accrued expenses included in the accompanying consolidated balance sheets approximated fair value at September 30, 2011 and December 31, 2010. These assets and liabilities are not presented in the following tables.

 

 

 

 

Fair Value Measurements Using:

 

Carrying Amount

Total Fair Value

 Level 1

Inputs

Level 2

Inputs

Level 3

Inputs

 

(In millions)

September 30, 2011 assets (liabilities):

 

 

 

 

 

    Cash equivalents

$        5,161

$        5,161

$        1,262

$        3,899

$              —

    Short-term investments

$        1,231

$        1,231

$           289

$           942

$              —

    Long-term investments

$              84

$              84

$              —

$              —

$              84

    Commodity derivatives

$           860

$           860

$              —

$           860

$              —

    Commodity derivatives

$            (58)

$            (58)

$              —

$            (58)

$              —

    Interest rate derivatives

$              56

$              56

$              —

$              56

$              —

    Debt

$       (9,257)

$    (10,625)

$              —

$    (10,533)

$            (92)

 

 

 

 

Fair Value Measurements Using:

 

Carrying Amount

Total Fair Value

 Level 1

Inputs

Level 2

Inputs

Level 3

Inputs

 

(In millions)

December 31, 2010 assets (liabilities):

 

 

 

 

 

    Cash equivalents

$        2,335

$        2,355

$        2,335

$              —

$              —

    Short-term investments

$           145

$           145

$           145

$              —

$              —

    Long-term investments

$              94

$              94

$              —

$              —

$              94

    Commodity derivatives

$           249

$           249

$              —

$           249

$              —

    Commodity derivatives

$          (192)

$          (192)

$              —

$          (192)

$              —

    Interest rate derivatives

$           140

$           140

$              —

$           140

$              —

    Debt

$       (5,630)

$       (6,629)

$              —

$       (6,485)

$          (144)

 

 

Level 1 Fair Value Measurements

 

Cash equivalents – Amounts consist primarily of U.S. treasuries with original maturities less than 90 days, whose carrying value approximates fair value.

 

Short-term investments - Amounts consist primarily of U.S. treasuries with original maturities more than 90 days, whose carrying value approximates fair value.

 

Level 2 Fair Value Measurements

 

Cash equivalents and short-term investments – Amounts consist primarily of commercial paper investments with original maturities more than 90 days. The fair value is based upon quotes from brokers which generally approximate fair value.

 

Debt – The fair value of Devon's variable-rate commercial paper borrowings is the carrying value. The fair value is based upon quotes from brokers which generally approximate fair value.

 

Level 3 Fair Value Measurements

 

Devon's Level 3 fair value measurements included in the table above relate to certain long-term investments and a non-interest bearing promissory note. Included below is a summary of the changes in Devon's Level 3 fair value measurements during the first nine months of 2011 and 2010.

 

 

Nine Months

Ended September 30,

 

2011

2010

 

(In millions)

Long-term investments balance at beginning of period

$               94

$            115

  Redemptions of principal

                (10)

                (20)

Long-term investments balance at end of period

 

$               84

$               95

 

 

Nine Months

Ended September 30,

 

2011

2010

 

(In millions)

Debt balance at beginning of period

$           (144)

$               —

  Issuance of promissory note

                 —

             (139)

  Foreign currency translation

                   3

                  (4)

  Accretion of promissory note

                  (4)

                  (1)

  Redemptions of principal

                 53

                   1

Debt balance at end of period

$             (92)

$           (143)