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Hedging Activities and Fair Value Measurements (Tables)
6 Months Ended
Jun. 30, 2021
Hedging Activities and Fair Value Measurements [Abstract]  
Hedging Instruments Under the FASB's Derivative and Hedging Guidance
The following table summarizes our portfolio of commodity derivative instruments outstanding at June 30, 2021 (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 (billion cubic feet (“Bcf”))
8.9
n/a
Cash flow hedge
Octane enhancement:
     
Forecasted sales of octane enhancement products (MMBbls)
9.2
2.5
Cash flow hedge
Natural gas marketing:
     
Natural gas storage inventory management activities (Bcf)
3.4
n/a
Fair value hedge
NGL marketing:
     
Forecasted purchases of NGLs and related hydrocarbon products (MMBbls)
120.7
2.6
Cash flow hedge
Forecasted sales of NGLs and related hydrocarbon products (MMBbls)
131.2
3.0
Cash flow hedge
NGLs inventory management activities (MMBbls)
1.9
n/a
Fair value hedge
Refined products marketing:
 
   
Forecasted purchases of refined products (MMBbls)
19.2
n/a
Cash flow hedge
Forecasted sales of refined products (MMBbls)
28.2
n/a
Cash flow hedge
Refined products inventory management activities (MMBbls)
0.8
n/a
Fair value hedge
Crude oil marketing:
   
 
Forecasted purchases of crude oil (MMBbls)
12.2
n/a
Cash flow hedge
Forecasted sales of crude oil (MMBbls)
16.0
n/a
Cash flow hedge
Petrochemical marketing:
     
Forecasted purchases of petrochemical products (MMBbls)
0.9
n/a
Cash flow hedge
Forecasted sales of petrochemical products (MMBbls)
1.2
n/a
Cash flow hedge
   Commercial energy:
     
Forecasted purchases of power related to asset operations (terawatt hours (“TWh”))
0.1
0.1
Cash flow hedge
Derivatives not designated as hedging instruments:
     
Natural gas risk management activities (Bcf) (3)
10.0
0.3
Mark-to-market
NGL risk management activities (MMBbls) (3)
36.1
20.4
Mark-to-market
Refined products risk management activities (MMBbls) (3)
8.6
n/a
Mark-to-market
Crude oil risk management activities (MMBbls) (3)
31.9
3.0
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 February 2023, September 2021 and December 2023, respectively.
(3)
Reflects the use of derivative instruments to manage risks associated with our 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
 
June 30, 2021
 
December 31, 2020
 
June 30, 2021
 
December 31, 2020
 
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
$
 
Current assets
$
 
Current
liabilities
$
 
Current
liabilities
$
109.1
Interest rate derivatives
Other assets
 
 
Other assets
 
12.4
 
Other liabilities
 
 
Other liabilities
 
11.0
Total interest rate derivatives
   
     
12.4
     
     
120.1
Commodity derivatives
Current assets
 
508.8
 
Current assets
 
210.5
 
Current
liabilities
 
570.7
 
Current
liabilities
 
234.0
Commodity derivatives
Other assets
 
7.2
 
Other assets
 
0.4
 
Other liabilities
 
17.0
 
Other liabilities
 
6.1
Total commodity derivatives
   
516.0
     
210.9
     
587.7
     
240.1
Total derivatives designated as hedging instruments
 
$
516.0
   
$
223.3
   
$
587.7
   
$
360.2
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Derivatives not designated as hedging instruments
                             
Commodity derivatives
Current assets
$
43.5
 
Current assets
$
18.1
 
Current
liabilities
$
37.3
 
Current
liabilities
$
6.1
Commodity derivatives
Other assets
 
6.6
 
Other assets
 
0.2
 
Other liabilities
 
6.7
 
Other liabilities
 
0.1
Total commodity derivatives
 
 
50.1
 
 
 
18.3
 
 
 
44.0
 
 
 
6.2
Total derivatives not designated as hedging instruments
 
$
50.1
   
$
18.3
   
$
44.0
   
$
6.2
Offsetting Financial Assets

 
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 June 30, 2021:
                                         
Commodity derivatives
 
$
566.1
   
$
   
$
566.1
   
$
(563.8
)
 
$
   
$
   
$
2.3
 
As of December 31, 2020:
                                                       
Interest rate derivatives
 
$
12.4
   
$
   
$
12.4
   
$
   
$
   
$
   
$
12.4
 
Commodity derivatives
   
229.2
     
     
229.2
     
(228.5
)
   
     
     
0.7
 
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
Received
   
Cash
Collateral
Paid
 
 
(i)
 
(ii)
 
(iii) = (i) – (ii)
 
(iv)
 
(v) = (iii) + (iv)
 
As of June 30, 2021:
                                         
Commodity derivatives
 
$
631.7
   
$
   
$
631.7
   
$
(563.8
)
 
$
   
$
(67.0
)
 
$
0.9
 
As of December 31, 2020:
                                                       
Interest rate derivatives
 
$
120.1
   
$
   
$
120.1
   
$
   
$
   
$
   
$
120.1
 
Commodity derivatives
   
246.3
     
     
246.3
     
(228.5
)
   
     
(17.3
)
   
0.5
 
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 June 30,
   
For the Six Months
Ended June 30,
 
 
 
 
2021
   
2020
   
2021
   
2020
 
Commodity derivatives
Revenue
 
$
(67.1
)
 
$
(63.7
)
 
$
(187.1
)
 
$
(49.3
)
Total
 
 
$
(67.1
)
 
$
(63.7
)
 
$
(187.1
)
 
$
(49.3
)

Derivatives in Fair Value
Hedging Relationships
 
Location
 
Gain (Loss) Recognized in
Income on Hedged Item
 
 
  
 
For the Three Months
Ended June 30,
   
For the Six Months
Ended June 30,
 
 
 
 
2021
   
2020
   
2021
   
2020
 
Commodity derivatives
Revenue
 
$
38.8
   
$
126.7
   
$
208.5
   
$
117.3
 
Total
 
 
$
38.8
   
$
126.7
   
$
208.5
   
$
117.3
 
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
 
 
 
For the Three Months
Ended June 30,
   
For the Six Months
Ended June 30,
 
 
 
2021
   
2020
   
2021
   
2020
 
Interest rate derivatives
 
$
   
$
7.8
   
$
182.9
   
$
(270.3
)
Commodity derivatives – Revenue (1)
   
(290.5
)
   
(75.9
)
   
(732.7
)
   
401.9
 
Commodity derivatives – Operating costs and expenses (1)
   
0.1
     
(2.3
)
   
(18.9
)
   
(5.0
)
Total
 
$
(290.4
)
 
$
(70.4
)
 
$
(568.7
)
 
$
126.6
 

(1)
The fair value of these derivative instruments will be reclassified to their respective locations on the Unaudited Condensed Statement of Consolidated Operations when the forecasted transactions affect earnings.
Gain/(Loss) Reclassified from Accumulated Other Comprehensive Income/(Loss) to Income

Derivatives in Cash Flow
Hedging Relationships
Location
 
Gain (Loss) Reclassified from
Accumulated Other Comprehensive Income (Loss) to Income
 
 
  
 
For the Three Months
Ended June 30,
   
For the Six Months
Ended June 30,
 
 
 
 
2021
   
2020
   
2021
   
2020
 
Interest rate derivatives
Interest expense
 
$
(10.2
)
 
$
(9.7
)
 
$
(18.8
)
 
$
(19.3
)
Commodity derivatives
Revenue
   
99.3
     
209.8
     
(498.1
)
   
364.2
 
Commodity derivatives
Operating costs and expenses
   
0.1
     
(1.1
)
   
(18.6
)
   
0.1
 
Total
 
 
$
89.2
   
$
199.0
   
$
(535.5
)
 
$
345.0
 
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 June 30,
   
For the Six Months
Ended June 30,
 
 
 
 
2021
   
2020
   
2021
   
2020
 
Commodity derivatives
Revenue
 
$
79.5
   
$
45.7
   
$
36.4
   
$
98.7
 
Commodity derivatives
Operating costs and expenses
   
(0.9
)
   
0.9
     
     
0.8
 
Total
 
 
$
78.6
   
$
46.6
   
$
36.4
   
$
99.5
 
Fair Value Measurements of Financial Assets and Liabilities Measured on a Recurring Basis
 
 
At June 30, 2021
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:
                       
Value before application of CME Rule 814
 
$
561.8
   
$
1,810.1
   
$
0.4
   
$
2,372.3
 
Impact of CME Rule 814
   
(561.8
)
   
(1,244.4
)
   
     
(1,806.2
)
Total commodity derivatives
   
     
565.7
     
0.4
     
566.1
 
Total
 
$
   
$
565.7
   
$
0.4
   
$
566.1
 
 
                               
Financial liabilities:
                               
Commodity derivatives:
                               
Value before application of CME Rule 814
 
$
1,047.5
   
$
1,887.1
   
$
0.4
   
$
2,935.0
 
Impact of CME Rule 814
   
(1,047.5
)
   
(1,255.8
)
   
     
(2,303.3
)
Total commodity derivatives
   
     
631.3
     
0.4
     
631.7
 
Total
 
$
   
$
631.3
   
$
0.4
   
$
631.7
 

 
 
At December 31, 2020
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
 
$
   
$
12.4
   
$
   
$
12.4
 
Commodity derivatives:
                               
Value before application of CME Rule 814
   
678.6
     
878.6
     
12.9
     
1,570.1
 
Impact of CME Rule 814
   
(678.6
)
   
(650.4
)
   
(11.9
)
   
(1,340.9
)
Total commodity derivatives
   
     
228.2
     
1.0
     
229.2
 
Total
 
$
   
$
240.6
   
$
1.0
   
$
241.6
 
 
                               
Financial liabilities:
                               
Interest rate derivatives
 
$
   
$
120.1
   
$
   
$
120.1
 
Commodity derivatives:
                               
Value before application of CME Rule 814
   
1,065.6
     
1,047.4
     
25.9
     
2,138.9
 
Impact of CME Rule 814
   
(1,065.6
)
   
(807.3
)
   
(19.7
)
   
(1,892.6
)
Total commodity derivatives
   
     
240.1
     
6.2
     
246.3
 
Total
 
$
   
$
360.2
   
$
6.2
   
$
366.4