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Derivatives and Risk Management Activities (Tables) | 12 Months Ended
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Dec. 31, 2014
Derivative disclosures |
Impact of derivative activities recognized in earnings |
|  | Year Ended December 31, 2014 |
|  | Derivatives in Hedging Relationships |  |  |  |  |  |
Location of gain/(loss) |  | Gain/(loss) reclassified from AOCI into income (1) (2) |  | Other gain/(loss) recognized in income |  | Derivatives Not Designated as a Hedge |  |  | Total |
Commodity Derivatives |  |  |  |  |  |  |  |  |  |
Supply and Logistics segment revenues |  | $ | (1 | ) | $ | — |  | $ | 206 |  |  | $ | 205 |
Field operating costs |  | — |  | — |  | (21 | ) |  | (21 | )
Interest Rate Derivatives |  |  |  |  |  |  |  |  |  |
Interest expense |  | (5 | ) | — |  | — |  |  | (5 | )
Foreign Currency Derivatives |  |  |  |  |  |  |  |  |  |
Supply and Logistics segment revenues |  | — |  | — |  | (28 | ) |  | (28 | )
Other income/(expense), net |  | 2 |  | — |  | — |  |  | 2 |
Total Gain/(Loss) on Derivatives Recognized in Net Income |  | $ | (4 | ) | $ | — |  | $ | 157 |  |  | $ | 153 |
|  | Year Ended December 31, 2013 |
|  | Derivatives in Hedging Relationships |  |  |  |  |  |
Location of gain/(loss) |  | Gain/(loss) reclassified from AOCI into income (1) |  | Other gain/(loss) recognized in income |  | Derivatives Not Designated as a Hedge |  |  | Total |
Commodity Derivatives |  |  |  |  |  |  |  |  |  |
Supply and Logistics segment revenues |  | $ | 78 |  | $ | (1 | ) | $ | (116 | ) |  | $ | (39 | )
Facilities segment revenues |  | (10 | ) | (1 | ) | — |  |  | (11 | )
Field operating costs |  | — |  | — |  | 8 |  |  | 8 |
Interest Rate Derivatives |  |  |  |  |  |  |  |  |  |
Interest expense |  | (7 | ) | 3 |  | — |  |  | (4 | )
Foreign Currency Derivatives |  |  |  |  |  |  |  |  |  |
Other income/(expense), net |  | 5 |  | — |  | — |  |  | 5 |
Total Gain/(Loss) on Derivatives Recognized in Net Income |  | $ | 66 |  | $ | 1 |  | $ | (108 | ) |  | $ | (41 | )
|  | Year Ended December 31, 2012 |
|  | Derivatives in Hedging Relationships |  |  |  |  |  |
Location of gain/(loss) |  | Gain/(loss) reclassified from AOCI into income (1) |  | Other gain/(loss) recognized in income |  | Derivatives Not Designated as a Hedge |  |  | Total |
Commodity Derivatives |  |  |  |  |  |  |  |  |  |
Supply and Logistics segment revenues |  | $ | 12 |  | $ | — |  | $ | 60 |  |  | $ | 72 |
Facilities segment revenues |  | 3 |  | (1 | ) | 1 |  |  | 3 |
Purchases and related costs |  | 45 |  | — |  | 1 |  |  | 46 |
Field operating costs |  | — |  | — |  | 1 |  |  | 1 |
Interest Rate Derivatives |  |  |  |  |  |  |  |  |  |
Interest expense |  | (4 | ) | 1 |  | — |  |  | (3 | )
Foreign Currency Derivatives |  |  |  |  |  |  |  |  |  |
Supply and Logistics segment revenues |  | — |  | — |  | (1 | ) |  | (1 | )
Other income/(expense), net |  | 6 |  | — |  | — |  |  | 6 |
Total Gain/(Loss) on Derivatives Recognized in Net Income |  | $ | 62 |  | $ | — |  | $ | 62 |  |  | $ | 124 |
| (1) |  | During the years ended December 31, 2014 and 2012, all of our hedged transactions were probable of occurring. During the year ended December 31, 2013, we reclassified gains of $3 million and losses of $1 million from AOCI to Supply and Logistics segment revenues and Facilities segment revenues, respectively, as a result of anticipated hedged transactions that were probable of not occurring.
| (2) |  | During the year ended December 31, 2014 we reclassified gains of $7 million from AOCI to Supply and Logistics segment revenues associated with inventory valuation adjustments on the related hedged inventory.
Summary of derivative assets and liabilities on consolidated balance sheet on a gross basis | The following table summarizes the derivative assets and liabilities on our Consolidated Balance Sheet on a gross basis as of December 31, 2014 (in millions):
|  | Asset Derivatives |  | Liability Derivatives |
|  | Balance Sheet |  | Fair |  | Balance Sheet |  | Fair |
|  | Location |  | Value |  | Location |  | Value |
Derivatives designated as hedging instruments: |  |  |  |  |  |  |  |  |  |
Commodity derivatives |  | Other current assets |  | $ | 23 |  |  | Other current assets |  | $ | (12 | )
|  | Other long-term assets |  | 8 |  |  | Other long-term assets |  | (1 | )
Interest rate derivatives |  |  |  |  |  |  | Other current liabilities |  | (44 | )
|  |  |  |  |  |  | Other long-term liabilities |  | (26 | )
Total derivatives designated as hedging instruments |  |  |  | $ | 31 |  |  |  |  | $ | (83 | )
Derivatives not designated as hedging instruments: |  |  |  |  |  |  |  |  |  |
Commodity derivatives |  | Other current assets |  | $ | 439 |  |  | Other current assets |  | $ | (246 | )
|  | Other long-term assets |  | 23 |  |  | Other long-term assets |  | (3 | )
|  |  |  |  |  |  | Other current liabilities |  | (35 | )
|  |  |  |  |  |  | Other long-term liabilities |  | (5 | )
Foreign currency derivatives |  |  |  |  |  |  | Other current liabilities |  | (12 | )
Total derivatives not designated as hedging instruments |  |  |  | $ | 462 |  |  |  |  | $ | (301 | )
Total derivatives |  |  |  | $ | 493 |  |  |  |  | $ | (384 | )
The following table summarizes the derivative assets and liabilities on our Consolidated Balance Sheet on a gross basis as of December 31, 2013 (in millions):
|  | Asset Derivatives |  | Liability Derivatives |
|  | Balance Sheet Location |  | Fair Value |  | Balance Sheet Location |  | Fair Value |
Derivatives designated as hedging instruments: |  |  |  |  |  |  |  |  |  |
Commodity derivatives |  | Other current assets |  | $ | 36 |  |  | Other current assets |  | $ | (24 | )
|  | Other long-term assets |  | 5 |  |  |  |  |  |
Interest rate derivatives |  | Other long-term assets |  | 26 |  |  |  |  |  |
Total derivatives designated as hedging instruments |  |  |  | $ | 67 |  |  |  |  | $ | (24 | )
Derivatives not designated as hedging instruments: |  |  |  |  |  |  |  |  |  |
Commodity derivatives |  | Other current assets |  | $ | 60 |  |  | Other current assets |  | $ | (117 | )
|  | Other long-term assets |  | 5 |  |  | Other long-term assets |  | (6 | )
|  | Other current liabilities |  | 1 |  |  | Other current liabilities |  | (5 | )
|  |  |  |  |  |  | Other long-term liabilities |  | (1 | )
Foreign currency derivatives |  |  |  |  |  |  | Other current liabilities |  | (4 | )
Total derivatives not designated as hedging instruments |  |  |  | $ | 66 |  |  |  |  | $ | (133 | )
Total derivatives |  |  |  | $ | 133 |  |  |  |  | $ | (157 | )
Schedule of derivatives assets and liabilities that are subject to offsetting, including enforceable master netting arrangements |
|  | December 31, 2014 |  | December 31, 2013 |
|  | Derivative |  | Derivative |  | Derivative |  | Derivative |
|  | Asset Positions |  | Liability Positions |  | Asset Positions |  | Liability Positions |
Netting Adjustments: |  |  |  |  |  |  |  |  |  |
Gross position - asset/(liability) |  | $ | 493 |  | $ | (384 | ) |  | $ | 133 |  | $ | (157 | )
Netting adjustment |  | (262 | ) | 262 |  |  | (148 | ) | 148 |
Cash collateral paid/(received) |  | (133 | ) | — |  |  | 161 |  | — |
Net position - asset/(liability) |  | $ | 98 |  | $ | (122 | ) |  | $ | 146 |  | $ | (9 | )
Balance Sheet Location After Netting Adjustments: |  |  |  |  |  |  |  |  |  |
Other current assets |  | $ | 71 |  | $ | — |  |  | $ | 116 |  | $ | — |
Other long-term assets |  | 27 |  | — |  |  | 30 |  | — |
Other current liabilities |  | — |  | (91 | ) |  | — |  | (8 | )
Other long-term liabilities |  | — |  | (31 | ) |  | — |  | (1 | )
|  | $ | 98 |  | $ | (122 | ) |  | $ | 146 |  | $ | (9 | )
Net deferred gain/(loss), including tax effects, recognized in AOCI for derivatives |
|  | Year Ended December 31, |
|  | 2014 |  | 2013 |  | 2012 |
Commodity derivatives, net |  | $ | 15 |  | $ | 37 |  | $ | 56 |
Interest rate derivatives, net |  | (103 | ) | 72 |  | (12 | )
Foreign currency derivatives, net |  | 2 |  | — |  | — |
Total |  | $ | (86 | ) | $ | 109 |  | $ | 44 |
Derivative financial assets and liabilities within the fair value hierarchy accounted for at fair value on a recurring basis |
|  | Fair Value as of December 31, 2014 |  | Fair Value as of December 31, 2013 |
Recurring Fair Value Measures (1) |  | Level 1 |  | Level 2 |  | Level 3 |  | Total |  | Level 1 |  | Level 2 |  | Level 3 |  | Total |
Commodity derivatives |  | $ | (85 | ) | $ | 261 |  | $ | 15 |  | $ | 191 |  |  | $ | 16 |  | $ | (59 | ) | $ | (3 | ) | $ | (46 | )
Interest rate derivatives |  | — |  | (70 | ) | — |  | (70 | ) |  | — |  | 26 |  | — |  | 26 |
Foreign currency derivatives |  | — |  | (12 | ) | — |  | (12 | ) |  | — |  | (4 | ) | — |  | (4 | )
Total net derivative asset/(liability) |  | $ | (85 | ) | $ | 179 |  | $ | 15 |  | $ | 109 |  |  | $ | 16 |  | $ | (37 | ) | $ | (3 | ) | $ | (24 | )
| (1) |  | Derivative assets and liabilities are presented above on a net basis but do not include related cash margin deposits.
Reconciliation of changes in fair value of derivatives classified as Level 3 |
|  | Year Ended December 31, |
|  | 2014 |  | 2013 |
Beginning Balance |  | $ | (3 | ) | $ | 4 |
Total gains/(losses) for the period: |  |  |  |  |
Included in earnings (1) |  | — |  | (1 | )
Included in other comprehensive income |  | — |  | — |
Settlements |  | 3 |  | (3 | )
Derivatives entered into during the period |  | 15 |  | (3 | )
Transfers out of Level 3 |  | — |  | — |
Ending Balance |  | $ | 15 |  | $ | (3 | )
Change in unrealized gains/(losses) included in earnings relating to Level 3 derivatives still held at the end of the periods |  | $ | 15 |  | $ | (4 | )
| (1) |  | We reported unrealized gains and losses associated with Level 3 commodity derivatives in our Consolidated Statements of Operations as Supply and Logistics segment revenues.
Interest Rate Derivatives |
Derivative disclosures |
Schedule of terms of forward starting interest rate swaps |
Hedged Transaction |  | Number and Types of Derivatives Employed |  | Notional Amount |  | Expected Termination Date |  | Average Rate Locked |  | Accounting Treatment |
Anticipated debt offering |  | 10 forward starting swaps (30-year) |  | $ | 250 |  | 6/15/2015 |  | 3.60% |  | Cash flow hedge |
Anticipated debt offering |  | 8 forward starting swaps (30-year) |  | $ | 200 |  | 6/15/2016 |  | 3.06% |  | Cash flow hedge |
Anticipated debt offering |  | 8 forward starting swaps (30-year) |  | $ | 200 |  | 6/15/2017 |  | 3.14% |  | Cash flow hedge |
Anticipated debt offering |  | 8 forward starting swaps (30-year) |  | $ | 200 |  | 6/15/2018 |  | 3.20% |  | Cash flow hedge |
Summary of activity related to terminated interest rate derivatives |
Hedged Transaction |  | Number and Types of Derivatives Terminated |  | Notional Amount |  | Cash Received/(Paid) |  | Average Rate Locked |
April 2014 senior note issuance |  | 5 treasury lock agreements |  | $ | 250 |  | $ | (7 | ) | 3.62% |
August 2013 senior note issuance (1) |  | 5 forward starting swaps (30-year) |  | $ | 125 |  | $ | 11 |  | 3.39% |
December 2012 senior note issuance |  | 6 forward starting swaps (30-year) |  | $ | 250 |  | $ | (89 | ) | 4.24% |
March 2012 senior note issuance (2) |  | 4 forward starting swaps (10-year) |  | $ | 200 |  | $ | (24 | ) | 3.46% |
| (1) |  | A gain of approximately $3 million was immediately recognized in interest expense attributable to the ineffective portion of these swaps upon termination.
| (2) |  | A loss of approximately $1 million was immediately recognized in interest expense attributable to the ineffective portion of these swaps upon termination.
Foreign Currency Derivatives |
Derivative disclosures |
Open forward exchange contracts | The following table summarizes our open forward exchange contracts as of December 31, 2014 (in millions):
|  |  |  | USD |  | CAD |  | Average Exchange Rate USD to CAD |
Forward exchange contracts that exchange CAD for USD: |  |  |  |  |  |  |  |  |
|  | 2015 |  | $ | 460 |  | $ | 535 |  | $1.00 - $1.16 |
Forward exchange contracts that exchange USD for CAD: |  |  |  |  |  |  |  |  |
|  | 2015 |  | $ | 345 |  | $ | 387 |  | $1.00 - $1.12 |

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