XML 51 R14.htm IDEA: XBRL DOCUMENT v3.25.2
RISK-MANAGEMENT AND HEDGING ACTIVITIES USING DERIVATIVES
 6 Months Ended
Jun. 30, 2025
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
RISK-MANAGEMENT AND HEDGING ACTIVITIES USING DERIVATIVES RISK-MANAGEMENT AND HEDGING ACTIVITIES USING DERIVATIVES
Risk-management Activities - We are sensitive to changes in the prices of natural gas, NGLs, Refined Products and crude oil, principally as a result of contractual terms under which these commodities are processed, purchased and sold. We are also subject to the risk of interest-rate fluctuation in the normal course of business. We use physical-forward purchases and sales and financial derivatives to secure a certain price for a portion of our natural gas, NGLs, Refined Products, condensate and crude oil purchases and sales; to reduce our exposure to commodity price and interest-rate fluctuations; and to achieve more predictable cash flows. Additionally, we may use physical-forward purchases and financial derivatives to reduce commodity price risk associated with power and natural gas used to operate our facilities. We follow established policies and procedures to assess risk and approve, monitor and report our risk-management activities. We have not used these instruments for trading purposes.

Commodity price risk - Commodity price risk refers to the risk of loss in cash flows and future earnings arising from adverse changes in the price of natural gas, NGLs, Refined Products and crude oil. We may use commodity derivative instruments to reduce the near-term commodity price risk associated with a portion of our forecasted purchases and sales of commodities. Our exposure to commodity price risk is consistent with that discussed in our Annual Report.

Interest-rate risk - We may manage interest-rate risk through the use of fixed-rate debt, floating-rate debt, Treasury locks and interest-rate swaps. Treasury locks are agreements to pay the difference between the benchmark Treasury rate and the rate that is designated in the terms of the agreement. In the second quarter of 2025, we entered into $700 million notional quantity of Treasury locks to hedge the variability of interest payments on a portion of our forecasted debt issuances, resulting in a total of $700 million notional quantity of Treasury locks outstanding as of June 30, 2025. All of our Treasury locks are designated as cash flow hedges.

Subsequent Event - In July 2025, we entered into an additional $300 million notional quantity of Treasury locks to hedge the variability of interest payments on a portion of our forecasted debt issuances.

At December 31, 2024, we had no outstanding interest-rate derivative instruments.
Fair Values of Derivative Instruments - The following table sets forth the fair values of our derivative instruments presented on a gross basis as of the dates indicated:

June 30, 2025December 31, 2024
Location in our Consolidated Balance SheetsAssets(Liabilities)Assets(Liabilities)
(Millions of dollars)
Derivatives designated as hedging instruments
Commodity contracts (a)(b)Other current assets/liabilities$76 $(50)$39 $(47)
Total derivatives designated as hedging instruments76 (50)39 (47)
Derivatives not designated as hedging instruments
Commodity contracts (a)(b)Other current assets/liabilities20 (25)36 (33)
Other deferred credits— — — (6)
Total derivatives not designated as hedging instruments20 (25)36 (39)
Total derivatives$96 $(75)$75 $(86)
(a) - Derivative assets and liabilities are presented in our Consolidated Balance Sheets on a net basis when a legally enforceable master-netting arrangement exists between the counterparty to a derivative contract and us.
(b) - At December 31, 2024, our derivative net liability positions under master-netting arrangements for financial commodity contracts were offset by cash collateral of $10 million.

Notional Quantities for Derivative Instruments - The following table sets forth the notional quantities for our derivative instruments, consisting of futures, swaps and Treasury locks, held as of the dates indicated:
June 30, 2025December 31, 2024
Net Purchased/Payor
(Sold/Receiver)
Derivatives designated as hedging instruments:
Cash flow hedges
   Fixed price
    - Natural gas (Bcf)
(13.2)(12.2)
    - NGLs, Refined Products and crude oil (MMBbl)
(21.3)(12.2)
   Basis
    - Natural gas (Bcf)
(12.2)(11.2)
    - Crude oil (MMBbl)
0.2 — 
Interest-rate contracts (Billions of dollars)
$0.7 $— 
Derivatives not designated as hedging instruments:
   Fixed price
    - Natural gas (Bcf)
(4.4)(8.0)
    - NGLs, Refined Products and crude oil (MMBbl)
(1.3)(2.7)
   Basis
    - Natural gas (Bcf)
0.1 (3.7)
    - NGLs, Refined Products and crude oil (MMBbl)
— (0.2)
   Swing Swaps
    - Natural gas (Bcf)
(1.6)(0.2)

Cash Flow Hedges - During the three and six months ended June 30, 2025 and 2024, we had no material changes in other comprehensive income related to our commodity derivative instruments.

Credit Risk - We monitor the creditworthiness of our counterparties and compliance with policies and limits established by our Risk Oversight and Strategy Committee. We maintain credit policies with regard to our counterparties that we believe minimize credit risk. Our policies and related credit risk are consistent with those discussed in our Annual Report.