Risk Management and Hedging Activities

9 Months Ended

Sep. 30, 2016

Risk Management And Hedging Activities [Abstract]

Risk Management and Hedging Activities

Risk Management and Hedging Activities

We are exposed to the impact of market fluctuations in the prices of NGLs and natural gas purchased as a result of our investment in DCP Midstream and processing operations associated with our U.S. pipeline assets. Exposure to interest rate risk exists as a result of the issuance of variable and fixed-rate debt and commercial paper. We are exposed to foreign currency risk from our Canadian operations. We employ established policies and procedures to manage our risks associated with these market fluctuations, which may include the use of derivatives, mostly around interest rate and commodity exposures. As of April 2016, we ceased entering into new contracts under our Empress risk management program. See Note 2 for further discussion related to the sale of Empress.

DCP Midstream manages their direct exposure to market prices separate from Spectra Energy, and utilizes various risk management strategies, including the use of commodity derivatives.

Other than the interest rate swaps and commodity derivatives as described below, we did not have significant derivatives outstanding during the nine months ended September 30, 2016.

Interest Rate Swaps

At September 30, 2016, we had “pay floating—receive fixed” interest rate swaps outstanding with a total notional amount of $2 billion to hedge against changes in the fair value of our fixed-rate debt that arise as a result of changes in market interest rates. These swaps also allow us to transform a portion of the underlying interest payments related to our long-term fixed-rate debt securities into variable-rate interest payments in order to achieve our desired mix of fixed and variable-rate debt.

Information about our interest rate swaps that had netting or rights of offset arrangements is as follows:

	September 30, 2016						December 31, 2015
	Gross Amounts Presented in the Condensed Consolidated Balance Sheet		Amounts Not Offset in the Condensed Consolidated Balance Sheet		Net Amount		Gross Amounts Presented in the Condensed Consolidated Balance Sheet		Amounts Not Offset in the Condensed Consolidated Balance Sheet		Net Amount
Description	(in millions)
Assets	$	56	$	—	$	56	$	37	$	—	$	37

Commodity Derivatives

At September 30, 2016, we had no commodity mark-to-market derivatives outstanding. At December 31, 2015, we had commodity mark-to-market derivatives outstanding that had netting or rights of offset arrangements as follows:

	December 31, 2015
	Gross  Amounts		Gross Amounts Offset		Net Amount Presented in the Condensed Consolidated Balance Sheet
Description	(in millions)
Assets	$	104	$	63	$	41
Liabilities	63		63		—

Information regarding the impacts of commodity derivatives on our Condensed Consolidated Statements of Operations is as follows:

		Three Months Ended September 30,				Nine Months Ended September 30,
Derivatives	Condensed Consolidated Statements of Operations Caption	2016		2015		2016			2015
		(in millions)
Commodity derivatives	Sales of natural gas liquids	$	8	$	13	$	(8	)	$	25