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Derivatives and Risk Management Activities (Tables) | 3 Months Ended
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Mar. 31, 2021
Derivatives and Risk Management Activities |
Impact of derivatives recognized in earnings | A summary of the impact of our commodity derivatives recognized in earnings as follows (in millions):
|  |  | Three Months Ended March 31,
|  |  |  |  | 2021 |  | 2020
Supply and Logistics segment revenues |  |  |  |  | $ | (314) |  |  | $ | 149 |
Field operating costs |  |  |  |  | 39 |  |  | 1 |
Net gain/(loss) from commodity derivative activity |  |  |  |  | $ | (275) |  |  | $ | 150 |
Schedule of net broker receivable/(payable) | The following table provides the components of our net broker receivable/(payable) (in millions):
| March 31, 2021 |  | December 31, 2020
Initial margin | $ | 62 |  |  | $ | 91 |
Variation margin posted/(returned) | 259 |  |  | 290 |
Letters of credit | (52) |  |  | (63) |
Net broker receivable/(payable) | $ | 269 |  |  | $ | 318 |
Summary of derivative assets and liabilities on condensed consolidated balance sheets on a gross basis | The following table reflects the Condensed Consolidated Balance Sheet line items that include the fair values of our commodity derivative assets and liabilities and the effect of the collateral netting. Such amounts are presented on a gross basis, before the effects of counterparty netting. However, we have elected to present our commodity derivative assets and liabilities with the same counterparty on a net basis on our Condensed Consolidated Balance Sheet when the legal right of offset exists. Amounts in the table below are presented in millions.
|  | March 31, 2021 |  |  | December 31, 2020
|  |  |  |  |  | Effect of Collateral Netting |  | Net Carrying Value Presented on the Balance Sheet |  |  |  |  |  |  | Effect of Collateral Netting |  | Net Carrying Value Presented on the Balance Sheet
|  | Commodity Derivatives |  |  |  |  | Commodity Derivatives |  |
|  | Assets |  | Liabilities |  |  |  |  | Assets |  | Liabilities |  |
Derivative Assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Other current assets |  | $ | 97 |  |  | $ | (261) |  |  | $ | 269 |  |  | $ | 105 |  |  |  | $ | 71 |  |  | $ | (314) |  |  | $ | 318 |  |  | $ | 75 |
Other long-term assets, net |  | 4 |  |  | — |  |  | — |  |  | 4 |  |  |  | 5 |  |  | — |  |  | — |  |  | 5 |
Derivative Liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Other current liabilities |  | 3 |  |  | (156) |  |  | — |  |  | (153) |  |  |  | 9 |  |  | (40) |  |  | — |  |  | (31) |
Other long-term liabilities and deferred credits |  | 1 |  |  | (58) |  |  | — |  |  | (57) |  |  |  | — |  |  | (32) |  |  | — |  |  | (32) |
Total |  | $ | 105 |  |  | $ | (475) |  |  | $ | 269 |  |  | $ | (101) |  |  |  | $ | 85 |  |  | $ | (386) |  |  | $ | 318 |  |  | $ | 17 |
Net unrealized gain/(loss) recognized in AOCI for derivatives | The following table summarizes the net unrealized gain/(loss) recognized in AOCI for derivatives (in millions):
|  |  | Three Months Ended March 31,
|  |  |  |  | 2021 |  | 2020
Interest rate derivatives, net |  |  |  |  | $ | 68 |  |  | $ | (79) |
Schedule of derivative financial assets and liabilities accounted for at fair value on a recurring basis, by level within the fair value hierarchy | The following table sets forth by level within the fair value hierarchy our financial assets and liabilities that were accounted for at fair value on a recurring basis (in millions):
|  | Fair Value as of March 31, 2021 |  |  | Fair Value as of December 31, 2020
Recurring Fair Value Measures (1) |  | Level 1 |  | Level 2 |  | Level 3 |  | Total |  |  | Level 1 |  | Level 2 |  | Level 3 |  | Total
Commodity derivatives |  | $ | (241) |  |  | $ | (118) |  |  | $ | (11) |  |  | $ | (370) |  |  |  | $ | (143) |  |  | $ | (143) |  |  | $ | (15) |  |  | $ | (301) |
Interest rate derivatives |  | — |  |  | 114 |  |  | — |  |  | 114 |  |  |  | — |  |  | 46 |  |  | — |  |  | 46 |
Foreign currency derivatives |  | — |  |  | 1 |  |  | — |  |  | 1 |  |  |  | — |  |  | 2 |  |  | — |  |  | 2 |
Preferred Distribution Rate Reset Option |  | — |  |  | — |  |  | (81) |  |  | (81) |  |  |  | — |  |  | — |  |  | (14) |  |  | (14) |
Total net derivative asset/(liability) |  | $ | (241) |  |  | $ | (3) |  |  | $ | (92) |  |  | $ | (336) |  |  |  | $ | (143) |  |  | $ | (95) |  |  | $ | (29) |  |  | $ | (267) |
(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 | The following table provides a reconciliation of changes in fair value of the beginning and ending balances for our derivatives classified as Level 3 (in millions):
|  |  | Three Months Ended March 31,
|  |  |  |  | 2021 |  | 2020
Beginning Balance |  |  |  |  | $ | (29) |  |  | $ | (51) |
Net losses for the period included in earnings |  |  |  |  | (67) |  |  | (10) |
Settlements |  |  |  |  | 4 |  |  | — |
Ending Balance |  |  |  |  | $ | (92) |  |  | $ | (61) |
Change in unrealized losses included in earnings relating to Level 3 derivatives still held at the end of the period |  |  |  |  | $ | (67) |  |  | $ | (10) |
Commodity Derivatives |
Derivatives and Risk Management Activities |
Summary of open derivative positions | The following table summarizes our open derivative positions utilized to hedge the price risk associated with anticipated purchases and sales related to our natural gas processing and NGL fractionation activities as of March 31, 2021:
|  | Notional Volume |  |
|  | (Short)/Long |  | Remaining Tenor
Natural gas purchases |  | 52.5 Bcf |  | March 2022
Propane sales |  | (9.6) MMbls |  | March 2022
Butane sales |  | (3.0) MMbls |  | March 2022
Condensate sales (WTI position) |  | (1.0) MMbls |  | March 2022
Fuel gas requirements (1) |  | 12.5 Bcf |  | December 2022
Power supply requirements (1) |  | 0.8 TWh |  | December 2023
(1)Positions to hedge a portion of our power supply and fuel gas requirements at our Canadian natural gas processing and fractionation plants.
Interest Rate Derivatives |
Derivatives and Risk Management Activities |
Schedule of terms of outstanding interest rate derivatives | The following table summarizes the terms of our outstanding interest rate derivatives as of March 31, 2021 (notional amounts in millions):
Hedged Transaction |  | Number and Types of Derivatives Employed |  | Notional Amount |  | Expected Termination Date |  | Average Rate Locked |  | Accounting Treatment
Anticipated interest payments |  | 8 forward starting swaps (30-year) |  | $ | 200 |  |  | 6/15/2023 |  | 1.38 | % |  | Cash flow hedge
Anticipated interest payments |  | 8 forward starting swaps (30-year) |  | $ | 200 |  |  | 6/14/2024 |  | 0.73 | % |  | Cash flow hedge
Foreign Currency Derivatives |
Derivatives and Risk Management Activities |
Summary of open derivative positions | The following table summarizes our open forward exchange contracts as of March 31, 2021 (in millions):
|  |  |  | USD |  | CAD |  | Average Exchange Rate USD to CAD
Forward exchange contracts that exchange CAD for USD: |  |  |  |  |  |  |  |
|  | 2021 |  | $ | 167 |  |  | $ | 210 |  |  | $1.00 - $1.25
Forward exchange contracts that exchange USD for CAD: |  |  |  |  |  |  |  |
|  | 2021 |  | $ | 227 |  |  | $ | 285 |  |  | $1.00 - $1.26

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