Derivative Instruments, Hedging Activities and Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2015

Derivative Instruments, Hedging Activities and Fair Value Measurements [Abstract]

Hedging Instruments Under the FASB's Derivative and Hedging Guidance

The prices of natural gas, NGLs, crude oil, refined products and petrochemical products are subject to fluctuations in response to changes in supply and demand, market conditions and a variety of additional factors that are beyond our control.  In order to manage such price risks, we enter into commodity derivative instruments such as physical forward contracts, futures contracts, fixed-for-float swaps, basis swaps and option contracts.  The following table summarizes our portfolio of commodity derivative instruments outstanding at March 31, 2015 (volume measures as noted):

	Volume (1)		Accounting
Derivative Purpose	Current (2)	Long-Term (2)	Treatment
Derivatives designated as hedging instruments:
Natural gas processing:
Forecasted natural gas purchases for plant thermal reduction (Bcf)	12.8	n/a	Cash flow hedge
Forecasted sales of NGLs (MMBbls) (3)	4.2	n/a	Cash flow hedge
Natural gas marketing:
Forecasted purchases of natural gas (Bcf)	11.1	n/a	Cash flow hedge
Forecasted sales of natural gas (Bcf)	2.1	n/a	Cash flow hedge
Natural gas storage inventory management activities (Bcf)	3.5	n/a	Fair value hedge
NGL marketing:
Forecasted purchases of NGLs and related hydrocarbon products (MMBbls)	18.5	n/a	Cash flow hedge
Forecasted sales of NGLs and related hydrocarbon products (MMBbls)	18.6	n/a	Cash flow hedge
Refined products marketing:
Forecasted purchases of refined products (MMBbls)	1.2	n/a	Cash flow hedge
Forecasted sales of refined products (MMBbls)	1.8	n/a	Cash flow hedge
Refined products inventory management activities (MMBbls)	1.1	n/a	Fair value hedge
Crude oil marketing:
Forecasted purchases of crude oil (MMBbls)	9.3	0.4	Cash flow hedge
Forecasted sales of crude oil (MMBbls)	11.5	0.4	Cash flow hedge
Derivatives not designated as hedging instruments:
Natural gas risk management activities (Bcf) (4,5)	89.5	10.0	Mark-to-market
NGL risk management activities (MMBbls) (5)	1.8	n/a	Mark-to-market
Crude oil risk management activities (MMBbls) (5)	5.5	n/a	Mark-to-market
(1)   Volume for derivatives designated as hedging instruments reflects the total amount of volumes hedged whereas volume for derivatives not designated as hedging instruments reflects the absolute value of derivative notional volumes.
(2)   The maximum term for derivatives designated as cash flow hedges, derivatives designated as fair value hedges and derivatives not designated as hedging instruments is June 2016, February 2016 and March 2018, respectively.
(3)   Forecasted sales of NGL volumes under natural gas processing exclude 1.3 MMBbls of additional hedges executed under contracts that have been designated as normal sales agreements.
(4)   Current volumes include 56.2 Bcf of physical derivative instruments that are predominantly priced at a marked-based index plus a premium or minus a discount related to location differences.
(5)   Reflects the use of derivative instruments to manage risks associated with transportation, processing and storage assets.

Derivative Assets and Liabilities Balance Sheet

The following table provides a balance sheet overview of our derivative assets and liabilities at the dates indicated:

	Asset Derivatives						Liability Derivatives
	March 31, 2015			December 31, 2014			March 31, 2015			December 31, 2014
	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Derivatives designated as hedging instruments
Commodity derivatives	Other current assets	$	123.9	Other current assets	$	217.9	Other current liabilities	$	100.3	Other current liabilities	$	145.3
Commodity derivatives	Other assets		0.7	Other assets		--	Other liabilities		0.9	Other liabilities		--
Total commodity derivatives		$	124.6		$	217.9		$	101.2		$	145.3
Derivatives not designated as hedging instruments
Commodity derivatives	Other current assets	$	7.8	Other current assets	$	8.1	Other current liabilities	$	5.5	Other current liabilities	$	0.7
Commodity derivatives	Other assets		0.3	Other assets		0.6	Other liabilities		1.3	Other liabilities		1.4
Total commodity derivatives		$	8.1		$	8.7		$	6.8		$	2.1

Offsetting Financial Assets

Certain of our commodity derivative instruments are subject to master netting arrangements or similar agreements.  The following tables present our derivative instruments subject to such arrangements at the dates indicated:

	Offsetting of Financial Assets and Derivative Assets
	Gross Amounts of Recognized Assets			Gross Amounts Offset in the Balance Sheet			Amounts of Assets Presented in the Balance Sheet			Gross Amounts Not Offset in the Balance Sheet												Amounts That Would Have Been Presented On Net Basis
										Financial Instruments				Cash Collateral Received				Cash Collateral Paid
	(i)			(ii)			(iii) = (i) – (ii)			(iv)												(v) = (iii) + (iv)
As of March 31, 2015:
Commodity derivatives		$	132.7		$	--		$	132.7		$	(91.2	)		$	--			$	(28.4	)		$	13.1
As of December 31, 2014:
Commodity derivatives		$	226.6		$	--		$	226.6		$	(147.3	)		$	(23.9	)		$	--			$	55.4

Offsetting Financial Liabilities

	Offsetting of Financial Liabilities and Derivative Liabilities
	Gross Amounts of Recognized Liabilities			Gross Amounts Offset in the Balance Sheet			Amounts of Liabilities Presented in the Balance Sheet			Gross Amounts Not Offset in the Balance Sheet							Amounts That Would Have Been Presented On Net Basis
										Financial Instruments				Cash Collateral Paid
	(i)			(ii)			(iii) = (i) – (ii)			(iv)							(v) = (iii) + (iv)
As of March 31, 2015:
Commodity derivatives		$	108.0		$	--		$	108.0		$	(91.2	)		$	--		$	16.8
As of December 31, 2014:
Commodity derivatives		$	147.4		$	--		$	147.4		$	(147.3	)		$	--		$	0.1

Derivative Instruments Effects on Statements of Operations

The following tables present the effect of our derivative instruments designated as fair value hedges on our Unaudited Condensed Statements of Consolidated Operations for the periods indicated:

Derivatives in Fair Value Hedging Relationships	Location	Gain (Loss) Recognized in Income on Derivative
		For the Three Months Ended March 31,
		2015		2014
Interest rate derivatives	Interest expense	$	--	$	(2.9	)
Commodity derivatives	Revenue		0.7		(0.4	)
Total		$	0.7	$	(3.3	)

Derivatives in Fair Value Hedging Relationships	Location	Gain (Loss) Recognized in Income on Hedged Item
		For the Three Months Ended March 31,
		2015		2014
Interest rate derivatives	Interest expense	$	--	$	2.9
Commodity derivatives	Revenue		8.6		(1.4	)
Total		$	8.6	$	1.5

Derivative Instruments Effects on Statements of Comprehensive Income

The following tables present the effect of our derivative instruments designated as cash flow hedges on our Unaudited Condensed Statements of Consolidated Operations and Unaudited Condensed Statements of Consolidated Comprehensive Income for the periods indicated:

Derivatives in Cash Flow Hedging Relationships	Change in Value Recognized in Other Comprehensive Income (Loss) on Derivative (Effective Portion)
	For the Three Months Ended March 31,
	2015			2014
Commodity derivatives – Revenue (1)	$	32.6		$	(10.7	)
Commodity derivatives – Operating costs and expenses (1)		(1.8	)		1.5
Total	$	30.8		$	(9.2	)
(1)    The fair value of these derivative instruments will be reclassified to their respective locations on the Unaudited Condensed Statement of Consolidated Operations upon settlement of the underlying derivative transactions, as appropriate.

Gain/(Loss) Reclassified from Accumulated Other Comprehensive Income/(Loss) to Income (Effective Portion)

Derivatives in Cash Flow Hedging Relationships	Location	Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) to Income (Effective Portion)
		For the Three Months Ended March 31,
		2015			2014
Interest rate derivatives	Interest expense	$	(8.7	)	$	(7.9	)
Commodity derivatives	Revenue		61.1			(16.9	)
Commodity derivatives	Operating costs and expenses		--			0.9
Total		$	52.4		$	(23.9	)

Gain/(Loss) Recognized in Income on Derivative (Ineffective Portion)

Derivatives in Cash Flow Hedging Relationships	Location	Gain (Loss) Recognized in Income on Derivative (Ineffective Portion)
		For the Three Months Ended March 31,
		2015		2014
Commodity derivatives	Revenue	$	0.3	$	(0.1	)
Commodity derivatives	Operating costs and expenses		--		0.1
Total		$	0.3	$	--

Gain/(Loss) Recognized in Income on Derivative

The following table presents the effect of our derivative instruments not designated as hedging instruments on our Unaudited Condensed Statements of Consolidated Operations for the periods indicated:

Derivatives Not Designated as Hedging Instruments	Location	Gain (Loss) Recognized in Income on Derivative
		For the Three Months Ended March 31,
		2015			2014
Commodity derivatives	Revenue	$	(0.4	)	$	(21.0	)

Fair Value Measurements of Financial Assets and Liabilities Measured on a Recurring Basis

The following tables set forth, by level within the fair value hierarchy, the carrying values of our financial assets and liabilities at the dates indicated.  These assets and liabilities are measured on a recurring basis and are classified based on the lowest level of input used to estimate their fair value.  Our assessment of the relative significance of such inputs requires judgment.

	March 31, 2015 Fair Value Measurements Using
	Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Financial assets:
Commodity derivatives	$	19.9	$	112.4	$	0.4	$	132.7
Financial liabilities:
Liquidity Option Agreement	$	--	$	--	$	119.4	$	119.4
Commodity derivatives		10.9		94.8		2.3		108.0
Total	$	10.9	$	94.8	$	121.7	$	227.4

	December 31, 2014 Fair Value Measurements Using
	Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Financial assets:
Commodity derivatives	$	37.8	$	187.8	$	1.0	$	226.6
Financial liabilities:
Liquidity Option Agreement	$	--	$	--	$	119.4	$	119.4
Commodity derivatives		13.8		133.0		0.6		147.4
Total	$	13.8	$	133.0	$	120.0	$	266.8

Reconciliation of Changes in the Fair Value of Level 3 Financial Assets and Liabilities

The following table sets forth a reconciliation of changes in the fair values of our recurring Level 3 financial assets and liabilities on a combined basis for the periods indicated:

		For the Three Months Ended March 31,
	Location	2015			2014
Financial asset (liability) balance, net, January 1		$	(119.0	)	$	3.2
Total gains (losses) included in:
Net income (1)	Revenue		(0.4	)		4.6
Other comprehensive income	Commodity derivative instruments – changes in fair value of cash flow hedges		(1.5	)		--
Settlements	Revenue		(0.5	)		(0.1	)
Transfers out of Level 3			0.1			--
Financial asset (liability) balance, net, March 31		$	(121.3	)	$	7.7
(1)    There were $1.0 million of unrealized losses and $4.5 million of unrealized gains included in these amounts for the three months ended March 31, 2015 and 2014, respectively.

Fair Value Measurements, Valuation Techniques

The followingtable provides quantitative information about our recurring Level 3 fair value measurements at March 31, 2015:

	Fair Value
	Financial Assets		Financial Liabilities		Valuation Techniques	Unobservable Input	Range
Commodity derivatives – Crude oil	$	0.4	$	0.8	Discounted cash flow	Forward commodity prices	$47.63-$57.73/barrel
Commodity derivatives – Natural gasoline		--		1.5	Discounted cash flow	Forward commodity prices	$1.12-$1.13/gallon
Total	$	0.4	$	2.3

Noncash Impairment Charges by Segment

The following table summarizes our non-cash impairment charges by segment during each of the periods indicated:

	For the Three Months Ended March 31,
	2015		2014
NGL Pipelines & Services	$	0.8	$	2.6
Onshore Natural Gas Pipelines & Services		20.7		0.2
Onshore Crude Oil Pipelines & Services		7.8		1.0
Offshore Pipelines & Services		3.6		--
Petrochemical & Refined Products Services		0.4		5.0
Total	$	33.3	$	8.8

Nonrecurring Fair Value Measurements

Our non-cash asset impairment charges for the three months ended March 31, 2015 primarily represent the abandonment of certain natural gas and crude oil pipeline segments in Texas.  The following table summarizes our non-recurring fair value measurements for the three months ended March 31, 2015:

				Fair Value Measurements Using
	Carrying Value at March 31, 2015			Quoted Prices in Active Markets for Identical Assets (Level 1)			Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)			Total Non-Cash Impairment Loss
Impairment of long-lived assets disposed of other than by sale		$	--		$	--		$	--		$	--		$	33.1
Impairment of long-lived assets to be disposed of by sale			0.6			--			--			0.6			0.2
Total														$	33.3

Our non-cash asset impairment charges for the three months ended March 31, 2014 primarily represent the abandonment of assets classified as property, plant and equipment.  The following table summarizes our non-recurring fair value measurements for the three months ended March 31, 2014:

				Fair Value Measurements Using
	Carrying Value at March 31, 2014			Quoted Prices in Active Markets for Identical Assets (Level 1)			Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)			Total Non-Cash Impairment Loss
Impairment of long-lived assets disposed of other than by sale		$	--		$	--		$	--		$	--		$	3.8
Impairment of long-lived assets to be disposed of by sale			0.1			--			--			0.1			5.0
Total														$	8.8