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Fair Value Measurements (Tables)
 9 Months Ended
Sep. 30, 2018
Fair Value Measurements [Abstract]  
Carrying Amount and Estimated Fair Values of Financial Instruments





 

 

 

 

 

 

 

 

 

 

 

 



September 30, 2018

 

December 31, 2017

 



Carrying

 

Fair

 

Carrying

 

Fair

 

(in millions)

Amount

 

Value

 

Amount

 

Value

 

Cash and cash equivalents

$

 9 

 

$

 9 

 

$

 916 

 

$

 916 

 

2018 revolving credit facility due April 2023

 

 360 

 

 

 360 

 

 

–  

 

 

–  

 

2016 term loan facility due December 2020 (1)(2)

 

–  

 

 

–  

 

 

 1,191 

 

 

 1,191 

 

Senior notes (3)

 

 3,242 

 

 

 3,303 

 

 

 3,242 

 

 

 3,358 

 

Derivative instruments, net (4)

 

 (6)

(5)

 

 (6)

(5)

 

 77 

(6)

 

 77 

(6)

Derivative instruments classified as held for sale, net

 

 (15)

 

 

 (15)

 

 

–  

 

 

–  

 



(1)

Excludes unamortized debt issuance costs and debt discounts.



(2)

Concurrent with the closing of the new 2018 credit facility agreement, the Company repaid the $1,191 million secured term loan balance on April 26, 2018.



(3)

In September 2018, the Company announced the initial results from its tender offers to repurchase certain outstanding senior notes contingent upon the closing of its Fayetteville Shale divestiture.  Based on the tenders received, the Company expects to repurchase $900 million of its outstanding senior notes.



(4)

Excludes derivatives classified as held for sale assets or liabilities.



(5)

Includes $22 million in premiums paid related to certain natural gas fixed price swaps recognized as a component of derivative assets within current assets on the consolidated balance sheet.



(6)

Includes $1 million in premiums paid related to certain natural gas call options recognized as a component of derivatives assets within current assets on the consolidated balance sheet.

Summary of Assets and Liabilities Measured at Fair Value on Recurring Basis





 

 

 

 

 

 

 

 

 

 

 

 



 

September 30, 2018



 

Fair Value Measurements Using:

 

 

 

(in millions)

 

Quoted Prices in Active Markets (Level 1)

 

Significant Other Observable Inputs

(Level 2)

 

Significant Unobservable Inputs

(Level 3)

 

Assets (Liabilities) at Fair Value

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Sold fixed price swap - natural gas (1)

 

$

–  

 

$

 86 

 

$

–  

 

$

 86 

Two-way costless collar - natural gas

 

 

–  

 

 

 14 

 

 

–  

 

 

 14 

Three-way costless collar - natural gas

 

 

–  

 

 

 64 

 

 

–  

 

 

 64 

Sold basis swap - natural gas

 

 

–  

 

 

 5 

 

 

–  

 

 

 5 

Purchased call option - natural gas

 

 

–  

 

 

 4 

 

 

–  

 

 

 4 

Interest rate swap

 

 

–  

 

 

 2 

 

 

–  

 

 

 2 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Sold fixed price swap - natural gas (1)

 

 

–  

 

 

 (55)

 

 

–  

 

 

 (55)

Sold fixed price swap - propane

 

 

–  

 

 

 (21)

 

 

–  

 

 

 (21)

Sold fixed price swap - ethane

 

 

–  

 

 

 (33)

 

 

–  

 

 

 (33)

Two-way costless collar - natural gas

 

 

–  

 

 

 (6)

 

 

–  

 

 

 (6)

Three-way costless collar - natural gas

 

 

–  

 

 

 (45)

 

 

–  

 

 

 (45)

Sold basis swap - natural gas

 

 

–  

 

 

 (15)

 

 

–  

 

 

 (15)

Sold call option - natural gas

 

 

–  

 

 

 (16)

 

 

–  

 

 

 (16)

Sold call option - oil

 

 

–  

 

 

 (5)

 

 

–  

 

 

 (5)

Total

 

$

–  

 

$

 (21)

 

$

–  

 

$

 (21)



(1)

Includes derivatives classified as held for sale (see Note 8).





 

 

 

 

 

 

 

 

 

 

 

 



 

December 31, 2017



 

Fair Value Measurements Using:

 

 

 

(in millions)

 

Quoted Prices in Active Markets (Level 1)

 

Significant Other Observable Inputs (Level 2)

 

Significant Unobservable Inputs (Level 3)

 

Assets (Liabilities) at Fair Value

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Sold fixed price swap - natural gas

 

$

–  

 

$

 56 

 

$

–  

 

$

 56 

Two-way costless collar - natural gas

 

 

–  

 

 

–  

 

 

 5 

 

 

 5 

Three-way costless collar - natural gas

 

 

–  

 

 

–  

 

 

 121 

 

 

 121 

Purchased call option - natural gas (1)

 

 

–  

 

 

–  

 

 

 3 

 

 

 3 

Sold basis swap - natural gas

 

 

–  

 

 

–  

 

 

 2 

 

 

 2 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Sold fixed price swap - natural gas

 

 

–  

 

 

 (1)

 

 

–  

 

 

 (1)

Two-way costless collar - natural gas

 

 

–  

 

 

–  

 

 

 (1)

 

 

 (1)

Three-way costless collar - natural gas

 

 

–  

 

 

–  

 

 

 (66)

 

 

 (66)

Sold basis swap - natural gas

 

 

–  

 

 

–  

 

 

 (23)

 

 

 (23)

Sold call option - natural gas

 

 

–  

 

 

–  

 

 

 (18)

 

 

 (18)

Interest rate swap

 

 

–  

 

 

 (1)

 

 

–  

 

 

 (1)

Total

 

$

–  

 

$

 54 

 

$

 23 

 

$

 77 



(1)

Includes $1 million in premiums paid related to certain natural gas call options recognized as a component of derivative assets within current assets on the consolidated balance sheet at December 31, 2017.
Reconciliations for Change in Net Fair Value of Derivative Assets and Liabilities Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs (Level 3)







 

 

 

 

 

 

 

 

 

 

 

 



 

For the three months ended

 

For the nine months ended



 

September 30,

 

September 30,

(in millions)

 

2018

 

2017

 

2018

 

2017

Balance at beginning of period

 

$

–  

 

$

 (52)

 

$

 22 

 

$

 (195)

Total gains (losses):

 

 

   

 

 

 

 

 

 

 

 

 

Included in earnings

 

 

–  

 

 

 42 

 

 

 (17)

 

 

 141 

Settlements

 

 

–  

 

 

 (10)

 

 

 1 

(1)

 

 34 

Transfers into/out of Level 3 (2)

 

 

–  

 

 

–  

 

 

 (6)

 

 

–  

Balance at end of period

 

$

–  

 

$

 (20)

 

$

–  

 

$

 (20)

Change in gains (losses) included in earnings relating to derivatives still held as of September 30

 

$

–  

 

$

 32 

 

$

–  

 

$

 175 



(1)

Includes $1 million amortization of premiums paid related to certain natural gas call options for the nine months ended September 30, 2018.



(2)

Commodity derivatives previously presented as Level 3 were transferred to Level 2 in the second quarter of 2018 as the Company moved from using proprietary volatility inputs and forward curves to more widely available published information, increasing market observability.