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Fair Value Measurements
 9 Months Ended
Sep. 30, 2014
Fair Value Measurements [Abstract]  
Fair Value Measurements

18.    Fair Value Measurements

 

The following tables provide carrying value and fair value measurement information for certain of Devon’s financial assets and liabilities. The carrying values of cash, accounts receivable, other current receivables, accounts payable, other current payables and accrued expenses included in the accompanying balance sheets approximated fair value at September 30, 2014 and December 31, 2013. Therefore, such financial assets and liabilities are not presented in the following tables.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fair Value Measurements Using:

 

 

Carrying

 

Total Fair

 

Level 1

 

Level 2

 

Level 3

 

 

Amount

 

Value

 

Inputs

 

Inputs

 

Inputs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(In millions)

September 30, 2014 assets (liabilities):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents

 

$
2,876 

 

$
2,876 

 

$
1,745 

 

$
1,131 

 

$

 —

Commodity derivatives

 

$
297 

 

$
297 

 

$

 —

 

$
297 

 

$

 —

Commodity derivatives

 

$
(80)

 

$
(80)

 

$

 —

 

$
(80)

 

$

 —

EnLink commodity derivatives

 

$
1 

 

$
1 

 

$

 —

 

$
1 

 

$

 —

EnLink commodity derivatives

 

$
(2)

 

$
(2)

 

$

 —

 

$
(2)

 

$

 —

Interest rate derivatives

 

$
1 

 

$
1 

 

$

 —

 

$
1 

 

$

 —

Interest rate derivatives

 

$
(2)

 

$
(2)

 

$

 —

 

$
(2)

 

$

 —

Foreign currency derivatives

 

$
11 

 

$
11 

 

$

 —

 

$
11 

 

$

 —

Debt

 

$
(12,059)

 

$
(13,410)

 

$

 —

 

$
(13,410)

 

$

 —

Capital lease obligations

 

$
(21)

 

$
(21)

 

$

 —

 

$
(21)

 

$

 —

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2013 assets (liabilities):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents

 

$
5,305 

 

$
5,305 

 

$
4,191 

 

$
1,114 

 

$

 —

Long-term investments

 

$
62 

 

$
62 

 

$

 —

 

$

 —

 

$
62 

Commodity derivatives

 

$
103 

 

$
103 

 

$

 —

 

$
103 

 

$

 —

Commodity derivatives

 

$
(120)

 

$
(120)

 

$

 —

 

$
(120)

 

$

 —

Foreign currency derivatives

 

$
(1)

 

$
(1)

 

$

 —

 

$
(1)

 

$

 —

Debt

 

$
(12,022)

 

$
(12,908)

 

$

 —

 

$
(12,908)

 

$

 —

 

The following methods and assumptions were used to estimate the fair values in the tables above.

 

Level 1 Fair Value Measurements

Cash equivalents —  Amounts consist primarily of U.S. and Canadian treasury securities and money market investments. The fair value approximates the carrying value.

 

Level 2 Fair Value Measurements

 

Cash equivalents —  Amounts consist primarily of Canadian agency and provincial securities and commercial paper investments. The fair value approximates the carrying value.

 

Commodity, interest rate and foreign currency derivatives — The fair values of commodity, interest rate and foreign currency derivatives are estimated using internal discounted cash flow calculations based upon forward curves and data obtained from independent third parties for contracts with similar terms or data obtained from counterparties to the agreements.

 

Debt — Devon's debt instruments do not actively trade in an established market. The fair values of its debt are estimated based on rates available for debt with similar terms and maturity. The fair value of Devon’s commercial paper and EnLink’s credit facility is the carrying value.

 

Capital lease obligations —  The fair value was calculated using inputs from third-party banks.

 

Level 3 Fair Value Measurements

 

Long-term investments — Devon’s long-term investments as of December 31, 2013 consisted entirely of auction rate securities. In the first quarter of 2014, Devon redeemed all these securities for approximately $57 million, or $5 million below their carrying value.