Fair Value Measurements

3 Months Ended

Mar. 31, 2023

FAIR VALUE MEASURESWe have commodity derivatives and interest rate derivatives that are accounted for as assets and liabilities at fair value in our consolidated balance sheets. We determine the fair value of our assets and liabilities subject to fair value measurement by using the highest possible “level” of inputs. Level 1 inputs are observable quotes in an active market for identical assets and liabilities. We consider the valuation of marketable securities and commodity derivatives transacted through a clearing broker with a published price from the appropriate exchange as a Level 1 valuation. Level 2 inputs are inputs observable for similar assets and liabilities. We consider OTC commodity derivatives entered into directly with third parties as a Level 2 valuation since the values of these derivatives are quoted on an exchange for similar transactions. Additionally, we

consider options transacted through a clearing broker as having Level 2 inputs due to the level of activity of these contracts on the exchange in which they trade. The valuation methodologies employed for our interest rate derivatives do not necessitate material judgment, and the inputs are observed from actively quoted public markets and therefore are categorized in Level 2. Level 3 inputs are unobservable. During the three months ended March 31, 2023, no transfers were made between any levels within the fair value hierarchy.

The following tables summarize the gross fair value of our financial assets and liabilities measured and recorded at fair value on a recurring basis as of March 31, 2023 and December 31, 2022 based on inputs used to derive their fair values:


			Fair Value Measurements at March 31, 2023
	Fair Value Total		Level 1		Level 2
Assets:

Commodity derivatives:

Natural Gas:
Basis Swaps IFERC/NYMEX	$	3	$	3	$	—
Swing Swaps IFERC	4		4		—
Fixed Swaps/Futures	31		31		—


Forward Physical Contracts	6		—		6
Power:
Forwards	45		—		45
Futures	9		9		—

Options – Calls	2		2		—
NGLs – Forwards/Swaps	219		219		—
Refined Products – Futures	1		1		—
Crude – Forwards/Swaps	41		41		—

Total commodity derivatives	361		310		51
Other non-current assets	28		18		10
Total assets	$	389	$	328	$	61
Liabilities:
Interest rate derivatives	$	(43)	$	—	$	(43)
Commodity derivatives:
Natural Gas:
Basis Swaps IFERC/NYMEX	(11)		(11)		—
Swing Swaps IFERC	(2)		(2)		—
Fixed Swaps/Futures	(2)		(2)		—


Forward Physical Contracts	(1)		—		(1)
Power:
Forwards	(45)		—		(45)
Futures	(7)		(7)		—
Options – Calls	(1)		(1)		—

NGLs – Forwards/Swaps	(205)		(205)		—
Refined Products – Futures	(16)		(16)		—
Crude – Forwards/Swaps	(19)		(19)		—
Total commodity derivatives	(309)		(263)		(46)
Total liabilities	$	(352)	$	(263)	$	(89)


			Fair Value Measurements at December 31, 2022
	Fair Value Total		Level 1		Level 2
Assets:

Commodity derivatives:

Natural Gas:
Basis Swaps IFERC/NYMEX	$	60	$	60	$	—
Swing Swaps IFERC	75		75		—
Fixed Swaps/Futures	113		113		—


Forward Physical Contracts	10		—		10
Power:
Forwards	52		—		52
Futures	3		3		—


NGLs – Forwards/Swaps	317		317		—
Refined Products – Futures	20		20		—

Crude – Forwards/Swaps	38		38		—

Total commodity derivatives	688		626		62
Other non-current assets	27		18		9
Total assets	$	715	$	644	$	71
Liabilities:
Interest rate derivatives	$	(23)	$	—	$	(23)
Commodity derivatives:
Natural Gas:
Basis Swaps IFERC/NYMEX	(25)		(25)		—
Swing Swaps IFERC	(12)		(12)		—
Fixed Swaps/Futures	(4)		(4)		—


Forward Physical Contracts	(2)		—		(2)
Power:
Forwards	(51)		—		(51)
Futures	(3)		(3)		—

NGLs – Forwards/Swaps	(358)		(358)		—
Refined Products – Futures	(59)		(59)		—

Crude – Forwards/Swaps	(12)		(12)		—

Total commodity derivatives	(526)		(473)		(53)
Total liabilities	$	(549)	$	(473)	$	(76)

Based on the estimated borrowing rates currently available to us and our subsidiaries for loans with similar terms and average maturities, the aggregate fair value and carrying amount of our consolidated debt obligations as of March 31, 2023 were $44.43 billion and $47.23 billion, respectively. As of December 31, 2022, the aggregate fair value and carrying amount of our consolidated debt obligations were $45.42 billion and $48.26 billion, respectively. The fair value of our consolidated debt obligations is a Level 2 valuation based on the respective debt obligations’ observable inputs for similar liabilities.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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