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Hedging Activities and Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2021

Hedging Activities and Fair Value Measurements [Abstract]

Hedging Instruments Under the FASB's Derivative and Hedging Guidance

The following table summarizes our portfolio of commodity derivative instruments outstanding at December 31, 2021 (volume measures as noted):

	Volume (1)		Accounting
Derivative Purpose	Current (2)	Long-Term (2)	Treatment
Derivatives designated as hedging instruments:
Natural gas processing:
Forecasted natural gas purchases for plant thermal reduction (Bcf)	25.9	1.2	Cash flow hedge
Forecasted sales of NGLs (MMBbls)	0.7	n/a	Cash flow hedge
Octane enhancement:
Forecasted sales of octane enhancement products (MMBbls)	23.9	1.2	Cash flow hedge
Natural gas marketing:
Natural gas storage inventory management activities (Bcf)	3.0	n/a	Fair value hedge
NGL marketing:
Forecasted purchases of NGLs and related hydrocarbon products (MMBbls)	134.0	0.6	Cash flow hedge
Forecasted sales of NGLs and related hydrocarbon products (MMBbls)	133.0	2.1	Cash flow hedge
NGLs inventory management activities (MMBbls)	1.2	n/a	Fair value hedge
Refined products marketing:
Forecasted sales of refined products (MMBbls)	0.3	n/a	Cash flow hedge
Crude oil marketing:
Forecasted purchases of crude oil (MMBbls)	4.6	n/a	Cash flow hedge
Forecasted sales of crude oil (MMBbls)	7.4	n/a	Cash flow hedge
Petrochemical marketing:
Forecasted purchases of petrochemical products (MMBbls)	0.1	n/a	Cash flow hedge
Forecasted sales of petrochemical products (MMBbls)	1.3	n/a	Cash flow hedge
Commercial energy:
Forecasted purchases of power related to asset operations (terawatt hours (“TWh”))	2.2	n/a	Cash flow hedge
Derivatives not designated as hedging instruments:
Natural gas risk management activities (Bcf) (3)	26.2	1.0	Mark-to-market
NGL risk management activities (MMBbls) (3)	52.7	6.6	Mark-to-market
Refined products risk management activities (MMBbls) (3)	4.1	n/a	Mark-to-market
Crude oil risk management activities (MMBbls) (3)	21.4	n/a	Mark-to-market

(1)	Volume for derivatives designated as hedging instruments reflects the total amount of volumes hedged whereas volume for derivatives not designated as hedging instruments reflects the absolute value of derivative notional volumes.
(2)	The maximum term for derivatives designated as cash flow hedges, derivatives designated as fair value hedges and derivatives not designated as hedging instruments is December 2023, March 2022 and December 2023, respectively.
(3)	Reflects the use of derivative instruments to manage risks associated with our transportation, processing and storage assets.

Derivative Assets and Liabilities Balance Sheet

The following table provides a balance sheet overview of our derivative assets and liabilities at the dates indicated:

	Asset Derivatives						Liability Derivatives
	December 31, 2021			December 31, 2020			December 31, 2021			December 31, 2020
	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Derivatives designated as hedging instruments
Interest rate derivatives	Current assets	$	–	Current assets	$	–	Current liabilities	$	–	Current liabilities	$	109.1
Interest rate derivatives	Other assets		–	Other assets		12.4	Other liabilities		–	Other liabilities		11.0
Total interest rate derivatives			–			12.4			–			120.1
Commodity derivatives	Current assets		194.5	Current assets		210.5	Current liabilities		212.4	Current liabilities		234.0
Commodity derivatives	Other assets		0.2	Other assets		0.4	Other liabilities		0.8	Other liabilities		6.1
Total commodity derivatives			194.7			210.9			213.2			240.1
Total derivatives designated as hedging instruments		$	194.7		$	223.3		$	213.2		$	360.2

Derivatives not designated as hedging instruments
Commodity derivatives	Current assets	$	42.0	Current assets	$	18.1	Current liabilities	$	41.8	Current liabilities	$	6.1
Commodity derivatives	Other assets		1.8	Other assets		0.2	Other liabilities		0.7	Other liabilities		0.1
Total commodity derivatives			43.8			18.3			42.5			6.2
Total derivatives not designated as hedging instruments		$	43.8		$	18.3		$	42.5		$	6.2

Offsetting Financial Assets

Certain of our commodity derivative instruments are subject to master netting arrangements or similar agreements. The following tables present our derivative instruments subject to such arrangements at the dates indicated:

	Offsetting of Financial Assets and Derivative Assets
										Gross Amounts Not Offset in the Balance Sheet
	Gross Amounts of Recognized Assets			Gross Amounts Offset in the Balance Sheet			Amounts of Assets Presented in the Balance Sheet			Financial Instruments				Cash Collateral Paid		Cash Collateral Received		Amounts That Would Have Been Presented On Net Basis
	(i)			(ii)			(iii) = (i) – (ii)			(iv)								(v) = (iii) + (iv)
As of December 31, 2021:
Commodity derivatives		$	238.5		$	–		$	238.5		$	(233.4	)	$	–	$	–		$	5.1
As of December 31, 2020:
Interest rate derivatives		$	12.4		$	–		$	12.4		$	–		$	–	$	–		$	12.4
Commodity derivatives			229.2			–			229.2			(228.5	)		–		–			0.7

Offsetting Financial Liabilities

	Offsetting of Financial Liabilities and Derivative Liabilities
										Gross Amounts Not Offset in the Balance Sheet
	Gross Amounts of Recognized Liabilities			Gross Amounts Offset in the Balance Sheet			Amounts of Liabilities Presented in the Balance Sheet			Financial Instruments				Cash Collateral Paid				Amounts That Would Have Been Presented On Net Basis
	(i)			(ii)			(iii) = (i) – (ii)			(iv)								(v) = (iii) + (iv)
As of December 31, 2021:
Commodity derivatives		$	255.7		$	–		$	255.7		$	(233.4	)		$	(16.7	)		$	5.6
As of December 31, 2020:
Interest rate derivatives		$	120.1		$	–		$	120.1		$	–			$	–			$	120.1
Commodity derivatives			246.3			–			246.3			(228.5	)			(17.3	)			0.5

Derivative Instruments Effects on Statements of Operations

The following tables present the effect of our derivative instruments designated as fair value hedges on our Statements of Consolidated Operations for the years indicated:

Derivatives in Fair Value Hedging Relationships	Location	Gain (Loss) Recognized in Income on Derivative
		For the Year Ended December 31,
		2021			2020			2019
Commodity derivatives	Revenue	$	(242.7	)	$	(88.0	)	$	2.2
Total		$	(242.7	)	$	(88.0	)	$	2.2

Derivatives in Fair Value Hedging Relationships	Location	Gain (Loss) Recognized in Income on Hedged Item
		For the Year Ended December 31,
		2021		2020		2019
Commodity derivatives	Revenue	$	226.1	$	168.1	$	6.9
Total		$	226.1	$	168.1	$	6.9

Derivative Instruments Effects on Statements of Comprehensive Income

The following tables present the effect of our derivative instruments designated as cash flow hedges on our Statements of Consolidated Operations and Statements of Consolidated Comprehensive Income for the years indicated:

Derivatives in Cash Flow Hedging Relationships	Change in Value Recognized in Other Comprehensive Income (Loss) On Derivative
	For the Year Ended December 31,
	2021				2020				2019
Interest rate derivatives		$	182.9			$	(127.5	)		$	81.4
Commodity derivatives – Revenue (1)			(658.2	)			134.7				55.8
Commodity derivatives – Operating costs and expenses (1)			(19.5	)			(10.3	)			(11.7	)
Total		$	(494.8	)		$	(3.1	)		$	125.5

(1)	The fair value of these derivative instruments will be reclassified to their respective locations on the Statement of Consolidated Operations when the forecasted transactions affect earnings.

Gain/(Loss) Reclassified from Accumulated Other Comprehensive Income/(Loss) to Income

Derivatives in Cash Flow Hedging Relationships	Location	Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) to Income
		For the Year Ended December 31,
		2021			2020			2019
Interest rate derivatives	Interest expense	$	(38.3	)	$	(39.3	)	$	(37.3	)
Commodity derivatives	Revenue		(893.3	)		282.6			152.4
Commodity derivatives	Operating costs and expenses		(14.5	)		(9.9	)		(10.7	)
Total		$	(946.1	)	$	233.4		$	104.4

Gain/(Loss) Recognized in Income on Derivative

The following table presents the effect of our derivative instruments not designated as hedging instruments on our Statements of Consolidated Operations for the years indicated:

Derivatives Not Designated as Hedging Instruments	Location	Gain (Loss) Recognized in Income on Derivative
		For the Year Ended December 31,
		2021		2020			2019
Interest rate derivatives	Interest expense	$	–	$	–		$	(94.9	)
Commodity derivatives	Revenue		150.0		166.0			102.2
Commodity derivatives	Operating costs and expenses		0.8		(0.2	)		(12.4	)
Total		$	150.8	$	165.8		$	(5.1	)

Unrealized mark-to-market gains (losses)

In total and inclusive of both fair value hedges and derivatives not designated as hedging instruments, unrealized mark-to-market gains (losses) included in gross operating margin and interest expense were as follows for the years indicated:

	For the Year Ended December 31,
	2021			2020		2019
Mark-to-market gains (losses) in gross operating margin:
NGL Pipelines & Services	$	39.6		$	48.4	$	(5.5	)
Crude Oil Pipelines & Services		(2.5	)		20.1		80.6
Natural Gas Pipelines & Services		(2.8	)		6.3		(0.2	)
Petrochemical & Refined Products Services		(6.9	)		4.5		(7.2	)
Total mark-to-market impact on gross operating margin		27.4			79.3		67.7
Mark-to-market losses in interest expense		–			–		(94.9	)
Total	$	27.4		$	79.3	$	(27.2	)

Fair Value Measurements of Financial Assets and Liabilities Measured on a Recurring Basis

	At December 31, 2021 Fair Value Measurements Using
	Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1)			Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)		Total
Financial assets:
Commodity derivatives:
Value before application of CME Rule 814	$	121.9		$	1,109.4		$	–	$	1,231.3
Impact of CME Rule 814		(121.9	)		(870.9	)		–		(992.8	)
Total commodity derivatives		–			238.5			–		238.5
Total	$	–		$	238.5		$	–	$	238.5

Financial liabilities:
Commodity derivatives:
Value before application of CME Rule 814	$	198.9		$	1,000.3		$	0.3	$	1,199.5
Impact of CME Rule 814		(198.9	)		(744.9	)		–		(943.8	)
Total commodity derivatives		–			255.4			0.3		255.7
Total	$	–		$	255.4		$	0.3	$	255.7

	At December 31, 2020 Fair Value Measurements Using
	Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1)			Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)			Total
Financial assets:
Interest rate derivatives	$	–		$	12.4		$	–		$	12.4
Commodity derivatives:
Value before application of CME Rule 814		678.6			878.6			12.9			1,570.1
Impact of CME Rule 814		(678.6	)		(650.4	)		(11.9	)		(1,340.9	)
Total commodity derivatives		–			228.2			1.0			229.2
Total	$	–		$	240.6		$	1.0		$	241.6

Financial liabilities:
Interest rate derivatives	$	–		$	120.1		$	–		$	120.1
Commodity derivatives:
Value before application of CME Rule 814		1,065.6			1,047.4			25.9			2,138.9
Impact of CME Rule 814		(1,065.6	)		(807.3	)		(19.7	)		(1,892.6	)
Total commodity derivatives		–			240.1			6.2			246.3
Total	$	–		$	360.2		$	6.2		$	366.4

Reconciliation of Changes in the Fair Value of Level 3 Financial Assets and Liabilities

The following table sets forth a reconciliation of changes in the fair values of our recurring Level 3 financial assets and liabilities on a combined basis for the years indicated:

test		For the Year Ended December 31,
test	Location	2021			2020
Financial liability balance, net, January 1		$	(5.2	)	$	(509.8	)
Total gains (losses) included in:
Net income (1)	Revenue		0.7			(1.6	)
Net income	Other expense, net – Liquidity Option		–			(2.3	)
Other comprehensive income (loss)	Commodity derivative instruments – changes in fair value of cash flow hedges		(0.2	)		(23.7	)
Settlements (1)	Revenue		(1.4	)		3.2
Transfer out of Level 3 – Liquidity Option (2)			–			511.9
Other transfers out of Level 3			5.8			17.1
Financial liability balance, net, December 31		$	(0.3	)	$	(5.2	)

(1)	There were unrealized losses of $0.8 million and unrealized gains of $0.7 million included in these amounts for the years ended December 31, 2021 and 2020, respectively.
(2)	In March 2020, the Liquidity Option settled and was transferred out of Level 3. See Note 8 for information regarding the Liquidity Option.