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Derivatives and Risk Management Activities (Tables)
 12 Months Ended
Dec. 31, 2016
Derivatives and Risk Management Activities  
Impact of derivative activities recognized in earnings
A summary of the impact of our derivative activities recognized in earnings for the periods indicated is as follows (in millions):

 
 
Year Ended December 31, 2016
Location of Gain/(Loss)
 
Derivatives in
Hedging
Relationships (1)
 
Derivatives
Not Designated
as a Hedge
 
 
Total
Commodity Derivatives
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Supply and Logistics segment revenues
 
$
2

 
$
(344
)
 
 
$
(342
)
 
 
 
 
 
 
 
 
Transportation segment revenues
 
—

 
5

 
 
5

 
 
 
 
 
 
 
 
Interest Rate Derivatives
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest expense, net
 
(14
)
 
—

 
 
(14
)
 
 
 
 
 
 
 
 
Foreign Currency Derivatives
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Supply and Logistics segment revenues
 
—

 
(3
)
 
 
(3
)
 
 
 
 
 
 
 
 
Preferred Distribution Rate Reset Option
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other income/(expense), net
 
—

 
30

 
 
30

 
 
 
 
 
 
 
 
Total Gain/(Loss) on Derivatives Recognized in Net Income
 
$
(12
)
 
$
(312
)
 
 
$
(324
)

 
 
Year Ended December 31, 2015
Location of Gain/(Loss)
 
Derivatives in
Hedging
Relationships (1)
 
Derivatives
Not Designated
as a Hedge
 
 
Total
Commodity Derivatives
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Supply and Logistics segment revenues
 
$
56

 
$
152

 
 
$
208

 
 
 
 
 
 
 
 
Transportation segment revenues
 
—

 
8

 
 
8

 
 
 
 
 
 
 
 
Field operating costs
 
—

 
(18
)
 
 
(18
)
 
 
 
 
 
 
 
 
Interest Rate Derivatives
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest expense, net
 
(11
)
 
—

 
 
(11
)
 
 
 
 
 
 
 
 
Foreign Currency Derivatives
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Supply and Logistics segment revenues
 
—

 
(31
)
 
 
(31
)
 
 
 
 
 
 
 
 
Total Gain/(Loss) on Derivatives Recognized in Net Income
 
$
45

 
$
111

 
 
$
156

 
 
Year Ended December 31, 2014
Location of Gain/(Loss)
 
Derivatives in
Hedging
Relationships (1)
 
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, net
 
(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


 
(1) 
During the year ended December 31, 2016, we reclassified losses of approximately $2 million and $2 million from AOCI to Supply and Logistics segment revenues and Interest expense, net, respectively, due to anticipated hedged transactions being probable of not occurring. During the year ended December 31, 2015, we reclassified a loss of approximately $4 million from AOCI to Interest expense, net due to an anticipated hedged transaction being probable of not occurring. During the year ended December 31, 2014, all of our hedged transactions were probable of occurring.
(2) 
Amounts in Interest expense, net include a loss of $4 million during the year ended December 31, 2016 attributable to the ineffective portion of cash flow hedges. No ineffectiveness was recognized for cash flow hedges during the years ended December 31, 2015 and 2014.
Summary of derivative assets and liabilities on consolidated balance sheets 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, 2016 (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
 
$
—

 
 
 
 
 
 
 
 
 
Interest rate derivatives
 
 
—

 
 
Other current liabilities
 
(23
)
 
 
 
 
 
 
Other long-term liabilities and deferred credits
 
(27
)
Total derivatives designated as hedging instruments
 
 
$
—

 
 
 
 
$
(50
)
 
 
 
 
 
 
 
 
 
Derivatives not designated as hedging instruments:
 
 
 
 
 
 
 
 
Commodity derivatives
Other current assets
 
$
101

 
 
Other current assets
 
$
(344
)
 
Other long-term assets, net
 
2

 
 
Other long-term assets, net
 
(1
)
 
Other long-term liabilities and deferred credits
 
2

 
 
Other current liabilities
 
(14
)
 
 
 
 
 
 
Other long-term liabilities and deferred credits
 
(34
)
 
 
 
 
 
 
 
 
 
Foreign currency derivatives
Other current liabilities
 
3

 
 
Other current liabilities
 
(6
)
 
 
 
 
 
 
 
 
 
Preferred Distribution Rate Reset Option
 
 
—

 
 
Other long-term liabilities and deferred credits
 
(32
)
Total derivatives not designated as hedging instruments
 
 
$
108

 
 
 
 
$
(431
)
 
 
 
 
 
 
 
 
 
Total derivatives
 
 
$
108

 
 
 
 
$
(481
)

The following table summarizes the derivative assets and liabilities on our Consolidated Balance Sheet on a gross basis as of December 31, 2015 (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
 
$
4

 
 
Other current assets
 
$
(2
)
 
 
 
 
 
 
 
 


Interest rate derivatives
Other long-term assets, net
 
1

 
 
Other current liabilities
 
(17
)
 
 
 
 
 
 
Other long-term liabilities and deferred credits
 
(33
)
Total derivatives designated as hedging instruments
 
 
$
5

 
 
 
 
$
(52
)
 
 
 
 
 
 
 
 
 
Derivatives not designated as hedging instruments:
 
 
 
 
 
 
 
 
Commodity derivatives
Other current assets
 
$
265

 
 
Other current assets
 
$
(35
)
 
Other long-term assets, net
 
10

 
 
Other long-term assets, net
 
(1
)
 
 
 
 
 
 
Other current liabilities
 
(13
)
 
 
 
 
 
 
Other long-term liabilities and deferred credits
 
(1
)
 
 
 
 
 
 
 
 
 
Foreign currency derivatives
 
 
 
 
 
Other current liabilities
 
(8
)
Total derivatives not designated as hedging instruments
 
 
$
275

 
 
 
 
$
(58
)
 
 
 
 
 
 
 
 
 
Total derivatives
 
 
$
280

 
 
 
 
$
(110
)
Schedule of due to (from) broker-dealers and clearing organizations
The following table provides the components of our net broker receivable/(payable):
 
 
December 31, 2016
 
December 31, 2015
Initial margin
 
$
119

 
$
91

Variation margin posted/(returned)
 
291

 
(247
)
Net broker receivable/(payable)
 
$
410

 
$
(156
)
Schedule of derivative financial assets and liabilities that are subject to offsetting, including enforceable master netting arrangements
The following table presents information about derivative financial assets and liabilities that are subject to offsetting, including enforceable master netting arrangements (in millions):

 
December 31, 2016
 
 
December 31, 2015
 
Derivative
Asset Positions
 
Derivative
Liability Positions
 
 
Derivative
Asset Positions
 
Derivative
Liability Positions
Netting Adjustments:
 
 
 
 
 
 
 
 
Gross position - asset/(liability)
$
108

 
$
(481
)
 
 
$
280

 
$
(110
)
Netting adjustment
(350
)
 
350

 
 
(38
)
 
38

Cash collateral paid/(received)
410

 
—

 
 
(156
)
 
—

Net position - asset/(liability)
$
168

 
$
(131
)
 
 
$
86

 
$
(72
)
 
 
 
 
 
 
 
 
 
Balance Sheet Location After Netting Adjustments:
 
 
 
 
 
 
 
 
Other current assets
$
167

 
$
—

 
 
$
76

 
$
—

Other long-term assets, net
1

 
—

 
 
10

 
—

Other current liabilities
—

 
(40
)
 
 
—

 
(38
)
Other long-term liabilities and deferred credits
—

 
(91
)
 
 
—

 
(34
)
 
$
168

 
$
(131
)
 
 
$
86

 
$
(72
)
Net deferred gain/(loss), including tax effects, recognized in AOCI for derivatives
The following table summarizes the net deferred gain/(loss), including tax effects, recognized in AOCI for derivatives (in millions):

 
Year Ended December 31,
 
2016
 
2015
 
2014
Commodity derivatives, net
$
—

 
$
33

 
$
15

Interest rate derivatives, net
(33
)
 
(32
)
 
(103
)
Foreign currency derivatives, net
—

 
—

 
2

Total
$
(33
)
 
$
1

 
$
(86
)
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 December 31, 2016
 
 
Fair Value as of December 31, 2015
Recurring Fair Value Measures (1)
 
Level 1
 
Level 2
 
Level 3
 
Total
 
 
Level 1
 
Level 2
 
Level 3
 
Total
Commodity derivatives
 
$
(113
)
 
$
(171
)
 
$
(4
)
 
$
(288
)
 
 
$
126

 
$
90

 
$
11

 
$
227

Interest rate derivatives
 
—

 
(50
)
 
—

 
(50
)
 
 
—

 
(49
)
 
—

 
(49
)
Foreign currency derivatives
 
—

 
(3
)
 
—

 
(3
)
 
 
—

 
(8
)
 
—

 
(8
)
Preferred Distribution Rate Reset Option
 
—

 
—

 
(32
)
 
(32
)
 
 
—

 
—

 
—

 
—

Total net derivative asset/(liability)
 
$
(113
)
 
$
(224
)
 
$
(36
)
 
$
(373
)
 
 
$
126

 
$
33

 
$
11

 
$
170


 
(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):

 
Year Ended December 31,
 
2016
 
2015
Beginning Balance
$
11

 
$
15

Net gains for the period included in earnings
28

 
1

Settlements
(10
)
 
(14
)
Derivatives entered into during the period
(65
)
 
9

Ending Balance
$
(36
)
 
$
11

 
 
 
 
Change in unrealized gains/(losses) included in earnings relating to Level 3 derivatives still held at the end of the period
$
(36
)
 
$
10
Interest Rate Swaps  
Derivatives and Risk Management Activities  
Schedule of terms of forward starting interest rate swaps
The following table summarizes the terms of our outstanding interest rate derivatives as of December 31, 2016 (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

 
6/15/2017
 
3.14
%
 
Cash flow hedge
Anticipated interest payments
 
8 forward starting swaps (30-year)
 
$
200

 
6/15/2018
 
3.20
%
 
Cash flow hedge
Anticipated interest payments
 
8 forward starting swaps (30-year)
 
$
200

 
6/14/2019
 
2.83
%
 
Cash flow hedge
Foreign currency derivatives, net  
Derivatives and Risk Management Activities  
Open forward exchange contracts
The following table summarizes our open forward exchange contracts as of December 31, 2016 (in millions):

 
 
 
USD
 
CAD
 
Average Exchange Rate
USD to CAD
Forward exchange contracts that exchange CAD for USD:
 
 
 
 
 
 
 
 
2017
 
$
274

 
$
363

 
$1.00 - $1.33
 
 
 
 
 
 
 
 
Forward exchange contracts that exchange USD for CAD:
 
 
 
 
 
 
 
 
2017
 
$
492

 
$
652

 
$1.00 - $1.33