XML 31 R24.htm IDEA: XBRL DOCUMENT v3.20.1
Risk Management (Tables)
 3 Months Ended
Mar. 31, 2020
Derivative Instruments and Hedging Activities Disclosures [Line Items]  
Schedule of Notional Amounts of Outstanding Derivative Positions
As of March 31, 2020, we had the following outstanding commodity forward contracts to hedge our forecasted energy commodity purchases and sales: 
 
Net open position long/(short)
Derivatives designated as hedging contracts
 
 
 
Crude oil fixed price
(18.9
)
 
MMBbl
Crude oil basis
(6.2
)
 
MMBbl
Natural gas fixed price
(35.7
)
 
Bcf
Natural gas basis
(31.3
)
 
Bcf
NGL fixed price
(1.2
)
 
MMBbl
Derivatives not designated as hedging contracts
 

 
 
Crude oil fixed price
(0.7
)
 
MMBbl
Crude oil basis
(2.4
)
 
MMBbl
Natural gas fixed price
(17.3
)
 
Bcf
Natural gas basis
23.4

 
Bcf
NGL fixed price
(1.7
)
 
MMBbl
Schedule of Interest Rate Derivatives The following table summarizes our outstanding interest rate contracts as of March 31, 2020 (in millions):
 
 
Notional amount
 
Accounting treatment
 
Maximum term
 
Derivatives designated as hedging instruments
 
 
 
 
 
 
 
 
 
 
Fixed-to-variable interest rate contracts(a)
 
$8,025
 
Fair value hedge
 
March 2035
 
Variable-to-fixed interest rate contracts
 
$250
 
Cash flow hedge
 
January 2023
 
Variable-to-fixed interest rate contracts
 
$2,500
 
Mark-to-Market
 
December 2020
 
_______
(a)
The principal amount of hedged senior notes consisted of $1,300 million included in “Current portion of debt” and $6,725 million included in “Long-term debt” on our accompanying consolidated balance sheet.
Schedule of Foreign Exchange Contracts, Statement of Financial Position The following table summarizes our outstanding foreign currency contracts as of March 31, 2020 (in millions):
 
 
Notional amount
 
Accounting treatment
 
Maximum term
 
Derivatives designated as hedging instruments
 
 
 
 
 
 
 
 
 
 
EUR-to-USD cross currency swap contracts(a)
 
$1,358
 
Cash flow hedge
 
March 2027
 
_______
(a) These swaps eliminate the foreign currency risk associated with all of our Euro-denominated debt.
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value

The following table summarizes the fair values of our derivative contracts included in our accompanying consolidated balance sheets (in millions):
Fair Value of Derivative Contracts
 
 
 
 
Derivatives Asset
 
Derivatives Liability
 
 
 
 
March 31,
2020
 
December 31,
2019
 
March 31,
2020
 
December 31,
2019
 
 
Location
 
Fair value
 
Fair value
Derivatives designated as hedging instruments
 
 
 
 
 
 
 
 
 
 
Energy commodity derivative contracts
 
Fair value of derivative contracts/(Other current liabilities)
 
$
279

 
$
31

 
$
(7
)
 
$
(43
)
 
 
Deferred charges and other assets/(Other long-term liabilities and deferred credits)
 
135

 
17

 
—

 
(8
)
Subtotal
 
 
 
414

 
48

 
(7
)
 
(51
)
Interest rate contracts
 
Fair value of derivative contracts/(Other current liabilities)
 
126

 
45

 
(2
)
 
—

 
 
Deferred charges and other assets/(Other long-term liabilities and deferred credits)
 
666

 
313

 
(9
)
 
(1
)
Subtotal
 
 
 
792

 
358

 
(11
)
 
(1
)
Foreign currency contracts
 
Fair value of derivative contracts/(Other current liabilities)
 
—

 
—

 
(30
)
 
(6
)
 
 
Deferred charges and other assets/(Other long-term liabilities and deferred credits)
 
11

 
46

 
(24
)
 
—

Subtotal
 
 
 
11

 
46

 
(54
)
 
(6
)
Total
 
 
 
1,217

 
452

 
(72
)
 
(58
)
 
 
 
 
 
 
 
 
 
 
 
Derivatives not designated as hedging instruments
 
 
 
 

 
 
 
 

 
 
Energy commodity derivative contracts
 
Fair value of derivative contracts/(Other current liabilities)
 
43

 
8

 
(2
)
 
(7
)
 
 
Deferred charges and other assets/(Other long-term liabilities and deferred credits)
 
4

 
—

 
—

 
—

Subtotal
 
 
 
47

 
8

 
(2
)
 
(7
)
Interest rate contracts
 
Fair value of derivative contracts/(Other current liabilities)
 
—

 
—

 
(4
)
 
—

Subtotal
 
 
 
—

 
—

 
(4
)
 
—

Total
 
 
 
47

 
8

 
(6
)
 
(7
)
Total derivatives
 
 
 
$
1,264

 
$
460

 
$
(78
)
 
$
(65
)
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis
The following two tables summarize the fair value measurements of our derivative contracts based on the three levels established by the ASC (in millions). The tables also identify the impact of derivative contracts which we have elected to present on our accompanying consolidated balance sheets on a gross basis that are eligible for netting under master netting agreements.
 
Balance sheet asset fair value measurements by level
 
 
 
 
 

Level 1
 

Level 2
 

Level 3
 
Gross amount
 
Contracts available for netting
 
Cash collateral held(b)
 
Net amount
As of March 31, 2020
 
 
 
 
 
 
 
 
 
 
 
 
 
Energy commodity derivative contracts(a)
$
6

 
$
455

 
$
—

 
$
461

 
$
(9
)
 
$
(25
)
 
$
427

Interest rate contracts
—

 
792

 
—

 
792

 
(2
)
 
—

 
790

Foreign currency contracts
—

 
11

 
—

 
11

 
(11
)
 
—

 
—

As of December 31, 2019
 

 
 

 
 

 
 
 
 
 
 
 
 
Energy commodity derivative contracts(a)
$
19

 
$
37

 
$
—

 
$
56

 
$
(19
)
 
$
(21
)
 
$
16

Interest rate contracts
—

 
358

 
—

 
358

 
—

 
—

 
358

Foreign currency contracts
—

 
46

 
—

 
46

 
(6
)
 
—

 
40


 
Balance sheet liability
fair value measurements by level
 
 
 
 
 
Level 1
 
Level 2
 
Level 3
 
Gross amount
 
Contracts available for netting
 
Cash collateral posted(b)
 
Net amount
As of March 31, 2020
 
 
 
 
 
 
 
 
 
 
 
 
 
Energy commodity derivative contracts(a)
$
(7
)
 
$
(2
)
 
$
—

 
$
(9
)
 
$
9

 
$
—

 
$
—

Interest rate contracts
—

 
(15
)
 
—

 
(15
)
 
2

 
—

 
(13
)
Foreign currency contracts
—

 
(54
)
 
—

 
(54
)
 
11

 
—

 
(43
)
As of December 31, 2019
 
 
 
 
 
 
 
 
 
 
 
 
 
Energy commodity derivative contracts(a)
$
(3
)
 
$
(55
)
 
$
—

 
$
(58
)
 
$
19

 
$
—

 
$
(39
)
Interest rate contracts
—

 
(1
)
 
—

 
(1
)
 
—

 
—

 
(1
)
Foreign currency contracts
—

 
(6
)
 
—

 
(6
)
 
6

 
—

 
—

_______
(a)
Level 1 consists primarily of NYMEX natural gas futures.  Level 2 consists primarily of OTC WTI swaps, NGL swaps and crude oil basis swaps.
(b)
Any cash collateral paid or received is reflected in this table, but only to the extent that it represents variation margins. Any amount associated with derivative prepayments or initial margins that are not influenced by the derivative asset or liability amounts or those that are determined solely on their volumetric notional amounts are excluded from this table.
Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance
The following tables summarize the pre-tax impact of our derivative contracts in our accompanying consolidated statements of operations and comprehensive (loss) income (in millions): 
Derivatives in fair value hedging relationships
 
Location
 
Gain/(loss) recognized in income
on derivative and related hedged item
 
 
 
 
Three Months Ended March 31,
 
 
 
 
2020
 
2019
 
 
 
 
 
 
 
Interest rate contracts
 
Interest, net
 
$
433

 
$
128

 
 
 
 
 
 
 
Hedged fixed rate debt(a)
 
Interest, net
 
$
(440
)
 
$
(138
)
_______
(a)
As of March 31, 2020, the cumulative amount of fair value hedging adjustments to our hedged fixed rate debt was an increase of $799 million included in “Debt fair value adjustments” on our accompanying consolidated balance sheet.

Derivatives in cash flow hedging relationships
 
Gain/(loss)
recognized in OCI on derivative(a)
 
Location
 
Gain/(loss) reclassified from Accumulated OCI
into income(b)
 
 
Three Months Ended March 31,
 
 
 
Three Months Ended March 31,
 
 
2020
 
2019
 
 
 
2020
 
2019
Energy commodity derivative contracts
 
$
379

 
$
(245
)
 
Revenues—Commodity sales
 
$
(8
)
 
$
13

Interest rate contracts
 
(8
)
 
—

 
Costs of sales
 
(17
)
 
1

Foreign currency contracts
 
(82
)
 
(34
)
 
Other, net
 
(23
)
 
(31
)
Total
 
$
289

 
$
(279
)
 
Total
 
$
(48
)
 
$
(17
)
_______
(a)
We expect to reclassify an approximate $257 million gain associated with cash flow hedge price risk management activities included in our accumulated other comprehensive loss balance as of March 31, 2020 into earnings during the next twelve months (when the associated forecasted transactions are also expected to impact earnings); however, actual amounts reclassified into earnings could vary materially as a result of changes in market prices. 
(b)
Amounts reclassified were the result of the hedged forecasted transactions actually affecting earnings (i.e., when the forecasted sales and purchases actually occurred).
Derivatives in net investment hedging relationships
 
Gain/(loss)
recognized in OCI on derivative
 
 
Three Months Ended March 31,
 
 
2020
 
2019
Foreign currency contracts
 
$
—

 
$
(8
)
Total
 
$
—

 
$
(8
)

Derivatives not designated as hedging instruments
 
Location
 
Gain/(loss) recognized in income on derivatives
 
 
 
 
Three Months Ended March 31,
 
 
 
 
2020
 
2019
Energy commodity derivative contracts
 
Revenues—Commodity sales
 
$
117

 
$
10

 
 
Costs of sales
 
4

 
(2
)
Total(a)
 
 
 
$
121

 
$
8


_______
(a)
The three months ended March 31, 2020 and 2019 amounts include approximate gains of $74 million and $8 million, respectively, associated with natural gas, crude and NGL derivative contract settlements.