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

3 Months Ended

Mar. 31, 2016

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

Hedging Instruments Under the FASB's Derivative and Hedging Guidance

We may utilize interest rate swaps, forward starting swaps and similar derivative instruments to manage our exposure to changes in interest rates charged on borrowings under certain consolidated debt agreements.  This strategy may be used in controlling our overall cost of capital associated with such borrowings.  The following table summarizes our portfolio of interest rate swaps at March 31, 2016:

Hedged Transaction	Number and Type of Derivatives Outstanding	Notional Amount		Period of Hedge	Rate Swap	Accounting Treatment
Senior Notes OO	10 fixed-to-floating swaps	$	750.0	5/2015 to 5/2018	1.65% to 1.10%	Fair value hedge

The prices of natural gas, NGLs, crude oil, petrochemicals and refined 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, 2016 (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)	32.7	n/a	Cash flow hedge
Forecasted sales of NGLs (MMBbls) (3)	6.5	n/a	Cash flow hedge
Octane enhancement:
Forecasted sales of octane enhancement products (MMBbls)	1.0	n/a	Cash flow hedge
Natural gas marketing:
Forecasted purchases of natural gas for fuel (Bcf)	7.2	n/a	Cash flow hedge
Natural gas storage inventory management activities (Bcf)	8.9	n/a	Fair value hedge
NGL marketing:
Forecasted purchases of NGLs and related hydrocarbon products (MMBbls)	58.3	0.5	Cash flow hedge
Forecasted sales of NGLs and related hydrocarbon products (MMBbls)	66.3	n/a	Cash flow hedge
Refined products marketing:
Forecasted purchases of refined products (MMBbls)	1.8	n/a	Cash flow hedge
Forecasted sales of refined products (MMBbls)	1.5	n/a	Cash flow hedge
Refined products inventory management activities (MMBbls)	5.1	n/a	Fair value hedge
Crude oil marketing:
Forecasted purchases of crude oil (MMBbls)	13.1	n/a	Cash flow hedge
Forecasted sales of crude oil (MMBbls)	20.3	n/a	Cash flow hedge
Crude oil inventory management activities (MMBbls)	0.2	n/a	Fair value hedge
Derivatives not designated as hedging instruments:
Natural gas risk management activities (Bcf) (4,5)	80.9	7.4	Mark-to-market
NGL risk management activities (MMBbls) (5)	4.0	n/a	Mark-to-market
Crude oil risk management activities (MMBbls) (5)	28.5	2.3	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 December 2017, December 2016 and March 2019, respectively. (3)Forecasted sales of NGL volumes under natural gas processing exclude 0.3 MMBbls of additional hedges executed under contracts that have been designated as normal sales agreements. (4)Current and long-term volumes include 51.0 Bcf and 2.1 Bcf, respectively, 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, 2016			December 31, 2015			March 31, 2016			December 31, 2015
	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
Interest rate derivatives	Current assets	$	5.2	Current assets	$	3.2	Other current liabilities	$	--	Other current liabilities	$	--
Interest rate derivatives	Other assets		1.6	Other assets		--	Other liabilities		--	Other liabilities		3.7
Total interest rate derivatives			6.8			3.2			--			3.7
Commodity derivatives	Current assets		153.1	Current assets		253.8	Other current liabilities		220.8	Other current liabilities		137.5
Commodity derivatives	Other assets		0.6	Other assets		0.2	Other liabilities		0.3	Other liabilities		1.4
Total commodity derivatives			153.7			254.0			221.1			138.9
Total derivatives designated as hedging instruments		$	160.5		$	257.2		$	221.1		$	142.6
Derivatives not designated as hedging instruments
Commodity derivatives	Current assets	$	76.6	Current assets	$	1.6	Other current liabilities	$	66.3	Other current liabilities	$	3.1
Commodity derivatives	Other assets		0.7	Other assets		--	Other liabilities		1.8	Other liabilities		1.0
Total commodity derivatives		$	77.3		$	1.6		$	68.1		$	4.1

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, 2016:
Interest rate derivatives		$	6.8		$	--		$	6.8		$	--		$	--		$	--			$	6.8
Commodity derivatives			231.0			--			231.0			(228.9	)		--			--				2.1
As of December 31, 2015:
Interest rate derivatives		$	3.2		$	--		$	3.2		$	(3.2	)	$	--		$	--			$	--
Commodity derivatives			255.6			--			255.6			(143.0	)		(40.1	)		(72.2	)			0.3

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, 2016:
Commodity derivatives		$	289.2		$	--		$	289.2		$	(228.9	)	$	(59.0	)		$	1.3
As of December 31, 2015:
Interest rate derivatives		$	3.7		$	--		$	3.7		$	(3.2	)	$	--			$	0.5
Commodity derivatives			143.0			--			143.0			(143.0	)		--				--

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,
		2016			2015
Interest rate derivatives	Interest expense	$	6.1		$	--
Commodity derivatives	Revenue		(19.0	)		0.7
Total		$	(12.9	)	$	0.7

Derivatives in Fair Value Hedging Relationships	Location	Gain (Loss) Recognized in Income on Hedged Item
		For the Three Months Ended March 31,
		2016			2015
Interest rate derivatives	Interest expense	$	(6.2	)	$	--
Commodity derivatives	Revenue		28.0			8.6
Total		$	21.8		$	8.6

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,
	2016			2015
Commodity derivatives – Revenue (1)	$	3.3		$	32.6
Commodity derivatives – Operating costs and expenses (1)		(4.5	)		(1.8	)
Total	$	(1.2	)	$	30.8
(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,
		2016			2015
Interest rate derivatives	Interest expense	$	(9.2	)	$	(8.7	)
Commodity derivatives	Revenue		58.8			61.1
Commodity derivatives	Operating costs and expenses		(1.6	)		--
Total		$	48.0		$	52.4

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,
		2016		2015
Commodity derivatives	Revenue	$	--	$	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,
		2016			2015
Commodity derivatives	Revenue	$	(1.3	)	$	(0.4	)
Commodity derivatives	Operating costs and expenses		0.1			--
Total		$	(1.2	)	$	(0.4	)

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

The following tables set forth, by level within the Level 1, 2 and 3 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, 2016 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:
Interest rate derivatives	$	--	$	6.8	$	--	$	6.8
Commodity derivatives		114.8		113.9		2.3		231.0
Total	$	114.8	$	120.7	$	2.3	$	237.8
Financial liabilities:
Liquidity Option Agreement	$	--	$	--	$	242.9	$	242.9
Commodity derivatives		126.6		160.9		1.7		289.2
Total	$	126.6	$	160.9	$	244.6	$	532.1

	December 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:
Interest rate derivatives	$	--	$	3.2	$	--	$	3.2
Commodity derivatives		109.5		145.2		0.9		255.6
Total	$	109.5	$	148.4	$	0.9	$	258.8
Financial liabilities:
Liquidity Option Agreement	$	--	$	--	$	245.1	$	245.1
Interest rate derivatives		--		3.7		--		3.7
Commodity derivatives		31.3		109.2		2.5		143.0
Total	$	31.3	$	112.9	$	247.6	$	391.8

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	2016			2015
Financial liability balance, net, January 1		$	(246.7	)	$	(219.3	)
Total gains (losses) included in:
Net income (1)	Revenue		0.7			(0.4	)
Net income	Other expense, net		2.2			--
Other comprehensive income (loss)	Commodity derivative instruments – changes in fair value of cash flow hedges		1.5			(1.5	)
Settlements			(0.1	)		(0.5	)
Transfers out of Level 3			0.1			0.1
Financial liability balance, net, March 31		$	(242.3	)	$	(221.6	)
(1)There were $0.6 million of unrealized gains and $1.0 million of unrealized losses included in these amounts for the three months ended March 31, 2016 and 2015, respectively.

Fair Value Measurements, Valuation Techniques

The followingtable provides quantitative information regarding our recurring Level 3 fair value measurements for commodity derivatives at March 31, 2016:

	Fair Value
	Financial Assets		Financial Liabilities		Valuation Techniques	Unobservable Input	Range
Commodity derivatives – Crude oil	$	1.6	$	1.4	Discounted cash flow	Forward commodity prices	$36.30-$43.03/barrel
Commodity derivatives – Propane		--		0.3	Discounted cash flow	Forward commodity prices	$0.91-$0.93/gallon
Commodity derivatives – Natural gasoline		0.7		--	Discounted cash flow	Forward commodity prices	$0.48/gallon
Total	$	2.3	$	1.7

Noncash Impairment Charges by Segment

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

	For the Three Months Ended March 31,
	2016		2015
NGL Pipelines & Services	$	0.4	$	0.8
Crude Oil Pipelines & Services		0.2		7.8
Natural Gas Pipelines & Services		--		20.7
Petrochemical & Refined Products Services		1.1		0.4
Offshore Pipelines & Services		--		3.6
Total	$	1.7	$	33.3

Nonrecurring Fair Value Measurements

Our non-cash impairment charges for the three months ended March 31, 2016 include $1.1 million related to other current assets, primarily spare parts and materials.  The following table presents categories of long-lived assets, primarily property, plant and equipment, that were subject to non-recurring fair value measurements during the three months ended March 31, 2016:

				Fair Value Measurements at the End of the Reporting Period Using
	Carrying Value at March 31, 2016			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
Long-lived assets disposed of other than by sale		$	--		$	--		$	--		$	--		$	0.6

The following table presents categories of long-lived assets, primarily property, plant and equipment, that were subject to non-recurring fair value measurements during the three months ended March 31, 2015:

				Fair Value Measurements at the End of the Reporting Period 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
Long-lived assets disposed of other than by sale		$	--		$	--		$	--		$	--		$	33.1
Long-lived assets held for sale			0.6			--			--			0.6			0.2
Total														$	33.3