v2.4.0.8
Risk Management (Tables)
 3 Months Ended
Mar. 31, 2014
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Schedule of Derivative Instruments
As of March 31, 2014, KMI and KMP had entered into the following outstanding commodity forward contracts to hedge their forecasted energy commodity purchases and sales:
 
Net open position long/(short)
Derivatives designated as hedging contracts
 
 
 
Crude oil fixed price
(24.0)
 
MMBbl
Natural gas fixed price
(23.0)
 
Bcf
Natural gas basis
(23.0)
 
Bcf
Derivatives not designated as hedging contracts
 
 
 
Crude oil fixed price
(0.7)
 
MMBbl
Crude oil basis
(0.7)
 
MMBbl
Natural gas fixed price
(13.1)
 
Bcf
Natural gas basis
(8.3)
 
Bcf
NGL fixed price
(1.0)
 
MMBbl
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value
The following table summarizes the fair values of our derivative contracts included in our accompanying consolidated balance sheets as of March 31, 2014 and December 31, 2013 (in millions):
Fair Value of Derivative Contracts
 
 
 
 
Asset derivatives
 
Liability derivatives
 
 
 
 
March 31,
2014
 
December 31,
2013
 
March 31,
2014
 
December 31,
2013
 
 
Balance sheet location
 
Fair value
 
Fair value
 
Fair value
 
Fair value
Derivatives designated as hedging contracts
 
 
 
 
 
 
 
 
 
 
Natural gas and crude derivative contracts
 
Other current assets/(Other current liabilities)
 
$
13

 
$
18

 
$
(51
)
 
$
(33
)
 
 
Deferred charges and other assets/(Other long-term liabilities and deferred credits)
 
22

 
58

 
(13
)
 
(30
)
Subtotal
 
 
 
35

 
76

 
(64
)
 
(63
)
Interest rate swap agreements
 
Other current assets/(Other current liabilities)
 
122

 
87

 
—

 
—

 
 
Deferred charges and other assets/(Other long-term liabilities and deferred credits)
 
170

 
172

 
(94
)
 
(116
)
Subtotal
 
 
 
292

 
259

 
(94
)
 
(116
)
Total
 
 
 
327

 
335

 
(158
)
 
(179
)
 
 
 
 
 
 
 
 
 
 
 
Derivatives not designated as hedging contracts
 
 
 
 

 
 
 
 

 
 
Natural gas, crude and NGL derivative contracts
 
Other current assets/(Other current liabilities)
 
6

 
4

 
(9
)
 
(5
)
Subtotal
 
 
 
6

 
4

 
(9
)
 
(5
)
Power derivative contracts
 
Other current assets/(Other current liabilities)
 
2

 
7

 
(49
)
 
(54
)
 
 
Deferred charges and other assets/(Other long-term liabilities and deferred credits)
 
8

 
11

 
(58
)
 
(73
)
Subtotal
 
 
 
10

 
18

 
(107
)
 
(127
)
Total
 
 
 
16

 
22

 
(116
)
 
(132
)
Total derivatives
 
 
 
$
343

 
$
357

 
$
(274
)
 
$
(311
)
Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance
The following three tables summarize the impact of our derivative contracts on our accompanying consolidated statements of income for each of the three months ended March 31, 2014 and 2013 (in millions): 
Derivatives in fair value hedging relationships
 
Location of gain/(loss) recognized in income on derivatives
 
Amount of gain/(loss) recognized in income
 on derivatives and related hedged item(a)
 
 
 
 
Three Months Ended March 31,
 
 
 
 
2014
 
2013
Interest rate swap agreements
 
Interest expense
 
$
55

 
$
(88
)
Total
 
 
 
$
55

 
$
(88
)
 
 
 
 
 
 
 
Fixed rate debt
 
Interest expense
 
$
(55
)
 
$
88

Total
 
 
 
$
(55
)
 
$
88

_______
(a)
Amounts reflect the change in the fair value of interest rate swap agreements and the change in the fair value of the associated fixed rate debt which exactly offset each other as a result of no hedge ineffectiveness.
Derivatives
 in cash flow 
hedging
relationships
 
Amount of gain/(loss)
recognized in OCI 
on derivative(effective portion)(a)
 
Location of
gain/(loss)
reclassified from
Accumulated OCI
into income
(effective
 portion)
 
Amount of gain/(loss) reclassified from
Accumulated OCI
into income
(effective portion)(b)
 
Location of
gain/(loss)
recognized in
income on
derivative
(ineffective
 portion
and amount
excluded from
effectiveness
testing)
 
Amount of gain/(loss)
recognized in income
on derivative
(ineffective portion
and amount
excluded from
effectiveness testing)
 
 
Three Months Ended March 31,
 
 
 
Three Months Ended March 31,
 
 
 
Three Months Ended March 31,
 
 
2014
 
2013
 
 
 
2014
 
2013
 
 
 
2014
 
2013
Energy commodity
 derivative contracts
 
$
(43
)
 
$
(32
)
 
Revenues—Natural
 gas sales
 
$
(9
)
 
$
—

 
Revenues—Natural
 gas sales
 
$
—

 
$
—

 
 

 
 
 
Revenues—Product
 sales and other
 
(6
)
 
5

 
Revenues—Product
 sales and other
 
(5
)
 
(3
)
 
 


 
 
 
Costs of sales
 
1

 
—

 
Costs of sales
 
—

 
—

Interest rate swap
 agreements
 
(2
)
 
1

 
Interest expense
 
—

 
1

 
Interest expense
 
—

 
—

Total
 
$
(45
)
 
$
(31
)
 
Total
 
$
(14
)
 
$
6

 
Total
 
$
(5
)
 
$
(3
)
_______

(a)
We expect to reclassify an approximate $15 million loss associated with energy commodity price risk management activities and included in our accumulated other comprehensive loss and noncontrolling interest balances as of March 31, 2014 into earnings during the next twelve months (when the associated forecasted sales and purchases are also expected to occur), however, actual amounts reclassified into earnings could vary materially as a result of changes in market prices. 
(b)
Amounts reclassified were the result of the hedged forecasted transactions actually affecting earnings (i.e., when the forecasted sales and purchases actually occurred).
Derivatives not designated as accounting hedges
Location of gain/(loss) recognized in income on derivatives
Amount of gain/(loss) recognized in income on derivatives
 
 
Three Months Ended March 31,
 
 
2014
 
2013
Energy commodity derivative contracts
Revenues—Natural gas sales
$
(7
)
 
$
1

 
Revenues—Product sales and other
(1
)
 
2

 
Costs of sales
10

 
—

 
Other expense(income)
(2
)
 
—

Total
 
$
—

 
$
3
Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block]
Changes in the components of our “Accumulated other comprehensive loss” for the three months ended March 31, 2014 and 2013 are summarized as follows (in millions):
 
Net unrealized
gains/(losses)
on cash flow
hedge derivatives
 
Foreign
currency
translation
adjustments
 
Pension and
other
postretirement
liability adjustments
 
Total
accumulated other
comprehensive loss
Balance as of December 31, 2013
$
(3
)
 
$
2

 
$
(23
)
 
$
(24
)
Other comprehensive loss before reclassifications
(19
)
 
(25
)
 
—

 
(44
)
Amounts reclassified from accumulated other comprehensive loss
6

 
—

 
—

 
6

Net current-period other comprehensive loss
(13
)
 
(25
)
 
—

 
(38
)
Balance as of March 31, 2014
$
(16
)
 
$
(23
)
 
$
(23
)
 
$
(62
)
 
Net unrealized
gains/(losses)
on cash flow
hedge derivatives
 
Foreign
currency
translation
adjustments
 
Pension and
other
postretirement
liability adjustments
 
Total
accumulated other
comprehensive
loss
Balance as of December 31, 2012
$
7

 
$
51

 
$
(176
)
 
$
(118
)
Other comprehensive loss before reclassifications
(16
)
 
(17
)
 
(1
)
 
(34
)
Amounts reclassified from accumulated other comprehensive loss
(4
)
 
—

 
—

 
(4
)
Net current-period other comprehensive loss
(20
)
 
(17
)
 
(1
)
 
(38
)
Balance as of March 31, 2013
$
(13
)
 
$
34

 
$
(177
)
 
$
(156
)