ASSET RETIREMENT OBLIGATIONS:

The Company’s recorded asset retirement obligations are primarily related to owned natural gas storage wells and offshore lines and platforms. At the end of the useful life of these underlying assets, the Company is legally or contractually required to abandon in place or remove the asset. An ARO is required to be recorded when a legal obligation to retire an asset exists and such obligation can be reasonably estimated. Although a number of other onshore assets in the Company’s system are subject to agreements or regulations that give rise to an ARO upon the Company’s discontinued use of these assets, AROs were not recorded because these assets have an indeterminate removal or abandonment date given the expected continued use of the assets with proper maintenance or replacement.

Individual component assets have been and will continue to be replaced, but the pipeline system will continue in operation as long as supply and demand for natural gas exists. Based on the widespread use of natural gas in industrial and power generation activities, management expects supply and demand to exist for the foreseeable future. The Company has in place a rigorous repair and maintenance program that keeps the pipeline system in good working order. Therefore, although some of the individual assets may be replaced, the pipeline system itself will remain intact indefinitely.

The Company had recorded AROs related to (i) retiring natural gas storage wells, (ii) retiring offshore platforms and lines and (iii) removing asbestos. Amounts reflected in long-lived assets related to AROs aggregated approximately $18 million and $13 million and were reflected as other non-current assets on our balance sheet as of December 31, 2014 and 2013, respectively.

As of December 31, 2014, the Company had no material legally restricted funds for the purpose of settling AROs.

The following table is a reconciliation of the carrying amount of the ARO liability reflected as liabilities on our balance sheet for the periods presented. Changes in assumptions regarding the timing, amount, and probabilities associated with the expected cash flows, as well as the difference in actual versus estimated costs, will result in a change in the amount of the liability recognized.



	Successor									Predecessor
	Year Ended December 31, 2014			Year Ended December 31, 2013			Period from Acquisition (March 26, 2012) to December 31, 2012			Period from January 1, 2012 to March 25, 2012
Beginning balance	$	55		$	46		$	46		$	46
Revisions	3			11			3			—
Settled	(3		)	(1		)	(5		)	—
Disposals	—			(4		)	—			—
Accretion expense	3			3			2			—
Ending balance	$	58		$	55		$	46		$	46

During 2013, the Company recorded an $11 million upward revision to its prior ARO liability estimates, primarily due to changes in ARO liabilities as a result of a third party evaluation. Also in 2013, the Company disposed of $4 million in ARO liabilities in the SUGS Contribution.