Fair Value Measurements and Guarantees
 3 Months Ended
Mar. 31, 2015
Fair Value Disclosures [Abstract]  
Fair Value Measurements
Note 9 – Fair Value Measurements and Guarantees
The following table presents, by level within the fair value hierarchy, certain of our financial assets and liabilities. The carrying values of cash and cash equivalents, accounts receivable, 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 March 31, 2015:
 
 
 
 
 
 
 
 
 
Measured on a recurring basis:
 
 
 
 
 
 
 
 
 
ARO Trust investments
$
60

 
$
60

 
$
60

 
$
—

 
$
—

Energy derivatives assets not designated as hedging instruments
2

 
2

 
—

 
—

 
2

Energy derivatives liabilities not designated as hedging instruments
(2
)
 
(2
)
 
—

 
—

 
(2
)
Additional disclosures:
 
 
 
 
 
 
 
 
 
Notes receivable and other
5

 
5

 
1

 
4

 
—

Long-term debt, including current portion (1)
(17,920
)
 
(18,318
)
 
—

 
(18,318
)
 
—

 
 
 
 
 
 
 
 
 
 
Assets (liabilities) at December 31, 2014:
 
 
 
 
 
 
 
 
 
Measured on a recurring basis:
 
 
 
 
 
 
 
 
 
ARO Trust investments
$
48

 
$
48

 
$
48

 
$
—

 
$
—

Energy derivatives assets not designated as hedging instruments
3

 
3

 
1

 
—

 
2

Energy derivatives liabilities not designated as hedging instruments
(2
)
 
(2
)
 
—

 
—

 
(2
)
Additional disclosures:
 
 
 
 
 
 
 
 
 
Notes receivable and other
5

 
4

 
—

 
4

 
—

Long-term debt, including current portion (1)
(16,325
)
 
(16,607
)
 
—

 
(16,607
)
 
—


 
(1) Excludes capital leases

Fair Value Methods
We use the following methods and assumptions in estimating the fair value of our financial instruments:
Assets and liabilities measured at fair value on a recurring basis
ARO Trust investments: Transco deposits a portion of its collected rates, pursuant to its rate case settlement, into an external trust (ARO Trust) that is specifically designated to fund future asset retirement obligations (ARO). The ARO Trust invests in a portfolio of actively traded mutual funds that are measured at fair value on a recurring basis based on quoted prices in an active market, is classified as available-for-sale, and is reported in Regulatory assets, deferred charges, and other in the Consolidated Balance Sheet. Both realized and unrealized gains and losses are ultimately recorded as regulatory assets or liabilities.
Energy derivatives: Energy derivatives include commodity based exchange-traded contracts and over-the-counter (OTC) contracts, which consist of physical forwards, futures, and swaps that are measured at fair value on a recurring basis. The fair value amounts are presented on a gross basis and do not reflect the netting of asset and liability positions permitted under the terms of our master netting arrangements. Further, the amounts do not include cash held on deposit in margin accounts that we have received or remitted to collateralize certain derivative positions. Energy derivatives assets are reported in Other current assets and Regulatory assets, deferred charges, and other in the Consolidated Balance Sheet. Energy derivatives liabilities are reported in Other accrued liabilities and Regulatory liabilities, deferred income, and other in the Consolidated Balance Sheet.
Reclassifications of fair value between Level 1, Level 2, and Level 3 of the fair value hierarchy, if applicable, are made at the end of each quarter. No transfers between Level 1 and Level 2 occurred during the three months ended March 31, 2015 or 2014.
Additional fair value disclosures
Notes receivable and other: The disclosed fair value of our notes receivable is primarily determined by an income approach which considers the underlying contract amounts and our assessment of our ability to recover these amounts. The current portion is reported in Trade accounts and notes receivable, net and the noncurrent portion is reported in Regulatory assets, deferred charges, and other in the Consolidated Balance Sheet.
Long-term debt: The disclosed fair value of our long-term debt is determined by a market approach using broker quoted indicative period-end bond prices. The quoted prices are based on observable transactions in less active markets for our debt or similar instruments.
Guarantees
We are required by our revolving credit agreements to indemnify lenders for certain taxes required to be withheld from payments due to the lenders and for certain tax payments made by the lenders. The maximum potential amount of future payments under these indemnifications is based on the related borrowings and such future payments cannot currently be determined. These indemnifications generally continue indefinitely unless limited by the underlying tax regulations and have no carrying value. We have never been called upon to perform under these indemnifications and have no current expectation of a future claim.