Note 4 – Asset Sales and Other Accruals

On June 13, 2013, an explosion and fire occurred at WPZ’s Geismar olefins plant located south of Baton Rouge, Louisiana, in an industrial complex, that resulted in the tragic deaths of two employees and injuries of additional employees and contractors. The fire was extinguished on the day of the incident. The incident (Geismar Incident) rendered the facility temporarily inoperable and resulted in significant human, financial and operational effects.

We have substantial insurance coverage for repair and replacement costs, lost production and additional expenses related to the incident as follows:


•	Property damage and business interruption coverage with a combined per-occurrence limit of $500 million and retentions (deductibles) of $10 million per occurrence for property damage and a waiting period of 60 days per occurrence for business interruption;


•	General liability coverage with per-occurrence and aggregate annual limits of $610 million and retentions (deductibles) of $2 million per occurrence;


•	Workers’ compensation coverage with statutory limits and retentions (deductibles) of $1 million total per occurrence.

We have expensed $4 million and $10 million during the three and nine months ended September 30, 2013, respectively, of costs under our insurance deductibles in operating and maintenance expenses in the Consolidated Statement of Income. Recoveries under our business interruption policy will be recognized upon resolution of any contingencies with the insurer associated with the claim. Through September 30, 2013, we have recognized $50 million of insurance recoveries related to this incident as a gain to other (income) expense – net within costs and expenses in our Consolidated Statement of Income.

Included in selling, general, and administrative expenses are charges of $6 million and $14 million during the three and nine months ended September 30, 2012, respectively, related to our engagement of a consulting firm to assist in better aligning resources to support our business strategy following the spin-off of WPX Energy, Inc. (WPX). During the second quarter of 2012, we incurred acquisition transaction costs of $16 million related to the acquisition of 100 percent of the ownership interests in Caiman Eastern Midstream, LLC. These costs are also included in selling, general, and administrative expenses.

Other (income) expense – net within costs and expenses, in addition to the insurance recoveries mentioned above, includes:

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Charges of $9 million and $15 million for the three and nine months ended September 30, 2013, respectively, related to the portion of the Eminence abandonment regulatory asset that will not be recovered through rates, pursuant to Transco’s agreement in principle associated with its general rate case filing (See Note 12 – Contingent Liabilities.). We also recognized income of $3 million and $15 million for the three and nine months ended September 30, 2013, respectively, related to insurance recoveries associated with this event;


•	Charges of $2 million during the nine months ended September 30, 2013 and $2 million and $17 million during the three and nine months ended September 30, 2012, respectively, related to project development costs associated with natural gas pipeline expansion projects;


•	A $9 million accrued loss in the three and nine months ended September 30, 2013 for a contingent liability associated with a pending producer claim against us;


•	Charges of $8 million and $15 million during the three and nine months ended September 30, 2013 and $2 million and $5 million during the three and nine months ended September 30, 2012 related to the amortization of regulatory assets associated with asset retirement obligations.

Other investing income – net includes $11 million and $37 million of interest income for the three and nine months ended September 30, 2013, respectively, associated with a receivable related to the sale of certain former Venezuela assets (see Note 3 – Discontinued Operations). This amount reflects a current year increase in yield associated with a revision in our estimate of the cash flows expected to be received as a result of continued timely payment by the counterparty. In the nine months ended September 30, 2012, other investing income – net includes $63 million of income, including $10 million of interest, related to the 2010 sale of our interest in Accroven SRL. As part of a settlement regarding certain Venezuelan assets in the first quarter of 2012 (see Note 3 – Discontinued Operations), we also received payment for all outstanding balances due from this sale, including interest. Income had previously been recognized upon receipt of payments, as future collections were not reasonably assured.

Also included in other investing income – net for the nine months ended September 30, 2013, is a $26 million gain resulting from Access Midstream Partners’ equity issuance in April 2013. This equity issuance resulted in the dilution of our ownership interest from approximately 24 percent to 23 percent, which is accounted for as though we sold a portion of our investment.