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Summary of Significant Accounting Policies
 12 Months Ended
Dec. 31, 2015
Accounting Policies [Abstract]  
Summary of Significant Accounting Policies
ESTIMATES, SIGNIFICANT ACCOUNTING POLICIES AND BALANCE SHEET DETAIL:
Basis of Presentation. The Company’s consolidated financial statements have been prepared in accordance with GAAP. The consolidated financial statements include the accounts of all majority-owned subsidiaries, after eliminating significant intercompany transactions and balances.  Investments in which the Company has significant influence over the operations of the investee are accounted for using the equity method.
The Company is subject to regulation by certain state and federal authorities. The Company has accounting policies which are in accordance with the accounting requirements and ratemaking practices of the regulatory authorities. The Company does not apply regulatory-based accounting policies, primarily due to the level of discounting from tariff rates and its inability to recover specific costs. If regulatory-based accounting policies were applied, certain transactions would be recorded differently, including, among others, recording of regulatory assets, the capitalization of an equity component of invested funds on regulated capital projects and depreciation differences. The Company periodically reviews its level of discounting and negotiated rate contracts, the length of rate moratoriums and other related factors to determine if the regulatory-based authoritative guidance should be applied.
Restatement of Previously Issued Financial Statements. In connection with the preparation for the Form 10-Q for the three and six months ended June 30, 2016, the Company determined that, due to certain clerical errors, the state tax rate utilized to calculate the tax provision for the Company was incorrect, resulting in income tax expense being understated by $20 million and $36 million for the years ended December 31, 2015 and 2014, respectively. As a result, we have restated our consolidated financial statements, consolidated financial information and notes to the consolidated financial statements as of and for the years ended December 31, 2015 and 2014. The errors did not impact any periods prior to January 1, 2014.
The following tables present the summary of the previously reported balances, adjustments and restated balances on the Company’s consolidated balance sheets by financial statement line item as of the dates indicated:
 
March 31, 2015
 
June 30, 2015
 
(unaudited)
 
(unaudited)
 
As Reported
 
Adjustment
 
As Restated
 
As Reported
 
Adjustment
 
As Restated
Accounts payable to related parties
$
33

 
$
6

 
$
39

 
$
29

 
$
5

 
$
34

Total current liabilities
198

 
6

 
204

 
207

 
5

 
212

 
 
 
 
 
 
 
 
 
 
 
 
Deferred income taxes
1,511

 
31

 
1,542

 
1,528

 
6

 
1,534

Partners' capital
2,957

 
(37
)
 
2,920

 
2,951

 
(11
)
 
2,940

Total partners' capital
2,957

 
(37
)
 
2,920

 
2,952

 
(11
)
 
2,941



 
September 30, 2015
 
December 31, 2015
 
(unaudited)
 
 
 
As Reported
 
Adjustment
 
As Restated
 
As Reported
 
Adjustment
 
As Restated
Accounts payable to related parties
$
57

 
$
6

 
$
63

 
$
99

 
$
26

 
$
125

Total current liabilities
238

 
6

 
244

 
273

 
26

 
299

 
 
 
 
 
 
 
 
 
 
 
 
Deferred income taxes
722

 
57

 
779

 
695

 
30

 
725

Partners' capital
2,874

 
(62
)
 
2,812

 
2,937

 
(56
)
 
2,881

Total partners' capital
2,875

 
(62
)
 
2,813

 
2,939

 
(56
)
 
2,883



 
March 31, 2014
 
June 30, 2014
 
(unaudited)
 
(unaudited)
 
As Reported
 
Adjustment
 
As Restated
 
As Reported
 
Adjustment
 
As Restated
Accounts payable to related parties
$
467

 
$
—

 
$
467

 
$
451

 
$
1

 
$
452

Total current liabilities
776

 
—

 
776

 
726

 
1

 
727

 
 
 
 
 
 
 
 
 
 
 
 
Deferred income taxes
1,469

 
(2
)
 
1,467

 
1,461

 
6

 
1,467

Partners' capital
2,926

 
2

 
2,928

 
2,915

 
(7
)
 
2,908

Total partners' capital
2,928

 
2

 
2,930

 
2,917

 
(7
)
 
2,910



 
September 30, 2014
 
December 31, 2014
 
(unaudited)
 
 
 
As Reported
 
Adjustment
 
As Restated
 
As Reported
 
Adjustment
 
As Restated
Accounts payable to related parties
$
462

 
$
1

 
$
463

 
$
38

 
$
5

 
$
43

Total current liabilities
687

 
1

 
688

 
237

 
5

 
242

 
 
 
 
 
 
 
 
 
 
 
 
Deferred income taxes
1,452

 
6

 
1,458

 
1,508

 
31

 
1,539

Partners' capital
2,925

 
(7
)
 
2,918

 
2,925

 
(36
)
 
2,889

Total partners' capital
2,927

 
(7
)
 
2,920

 
2,925

 
(36
)
 
2,889







The following tables present a summary of the previously reported balances, adjustments and restated balances on the Company’s consolidated statements of operations and comprehensive income by financial statement line item for the periods indicated:
 
Three months ended
 
March 31, 2015
 
March 31, 2014
 
(unaudited)
 
(unaudited)
 
As Reported
 
Adjustment
 
As Restated
 
As Reported
 
Adjustment
 
As Restated
Income tax expense from continuing operations
$
12

 
$
—

 
$
12

 
$
106

 
$
(2
)
 
$
104

Income (loss) from continuing operations
31

 
—

 
31

 
(35
)
 
2

 
(33
)
Net income (loss)
31

 
—

 
31

 
(35
)
 
2

 
(33
)
Income (loss) attributable to partners
31

 
—

 
31

 
(41
)
 
2

 
(39
)
Comprehensive income (loss)
31

 
—

 
31

 
(36
)
 
2

 
(34
)


 
Three months ended
 
June 30, 2015
 
June 30, 2014
 
(unaudited)
 
(unaudited)
 
As Reported
 
Adjustment
 
As Restated
 
As Reported
 
Adjustment
 
As Restated
Income tax expense from continuing operations
$
25

 
$
(25
)
 
$
—

 
$
14

 
$
9

 
$
23

Income (loss) from continuing operations
(6
)
 
25

 
19

 
16

 
(9
)
 
7

Net income (loss)
(6
)
 
25

 
19

 
16

 
(9
)
 
7

Income (loss) attributable to partners
(6
)
 
25

 
19

 
16

 
(9
)
 
7

Comprehensive income (loss)
(6
)
 
25

 
19

 
16

 
(9
)
 
7



 
Six months ended
 
June 30, 2015
 
June 30, 2014
 
(unaudited)
 
(unaudited)
 
As Reported
 
Adjustment
 
As Restated
 
As Reported
 
Adjustment
 
As Restated
Income tax expense from continuing operations
$
37

 
$
(25
)
 
$
12

 
$
120

 
$
7

 
$
127

Income (loss) from continuing operations
25

 
25

 
50

 
(19
)
 
(7
)
 
(26
)
Net income (loss)
25

 
25

 
50

 
(19
)
 
(7
)
 
(26
)
Income (loss) attributable to partners
25

 
25

 
50

 
(25
)
 
(7
)
 
(32
)
Comprehensive income (loss)
26

 
25

 
51

 
(20
)
 
(7
)
 
(27
)


 
Three months ended
 
September 30, 2015
 
September 30, 2014
 
(unaudited)
 
(unaudited)
 
As Reported
 
Adjustment
 
As Restated
 
As Reported
 
Adjustment
 
As Restated
Income tax expense from continuing operations
$
(28
)
 
$
51

 
$
23

 
$
8

 
$
—

 
$
8

Income (loss) from continuing operations
76

 
(51
)
 
25

 
23

 
—

 
23

Net income (loss)
76

 
(51
)
 
25

 
23

 
—

 
23

Income (loss) attributable to partners
76

 
(51
)
 
25

 
23

 
—

 
23

Comprehensive income (loss)
76

 
(51
)
 
25

 
23

 
—

 
23



 
Nine months ended
 
September 30, 2015
 
September 30, 2014
 
(unaudited)
 
(unaudited)
 
As Reported
 
Adjustment
 
As Restated
 
As Reported
 
Adjustment
 
As Restated
Income tax expense from continuing operations
$
9

 
$
26

 
$
35

 
$
128

 
$
7

 
$
135

Income (loss) from continuing operations
101

 
(26
)
 
75

 
4

 
(7
)
 
(3
)
Net income (loss)
101

 
(26
)
 
75

 
4

 
(7
)
 
(3
)
Income (loss) attributable to partners
101

 
(26
)
 
75

 
(2
)
 
(7
)
 
(9
)
Comprehensive income (loss)
102

 
(26
)
 
76

 
3

 
(7
)
 
(4
)


 
Three months ended
 
December 31, 2015
 
December 31, 2014
 
(unaudited)
 
(unaudited)
 
As Reported
 
Adjustment
 
As Restated
 
As Reported
 
Adjustment
 
As Restated
Income tax expense from continuing operations
$
23

 
$
(6
)
 
$
17

 
$
18

 
$
29

 
$
47

Income (loss) from continuing operations
24

 
6

 
30

 
(7
)
 
(29
)
 
(36
)
Net income (loss)
24

 
6

 
30

 
(7
)
 
(29
)
 
(36
)
Income (loss) attributable to partners
24

 
6

 
30

 
(7
)
 
(29
)
 
(36
)
Comprehensive income (loss)
25

 
6

 
31

 
(9
)
 
(29
)
 
(38
)

 
Year ended
 
December 31, 2015
 
December 31, 2014
 
As Reported
 
Adjustment
 
As Restated
 
As Reported
 
Adjustment
 
As Restated
Income tax expense from continuing operations
$
32

 
$
20

 
$
52

 
$
146

 
$
36

 
$
182

Income (loss) from continuing operations
125

 
(20
)
 
105

 
(3
)
 
(36
)
 
(39
)
Net income (loss)
125

 
(20
)
 
105

 
(3
)
 
(36
)
 
(39
)
Income (loss) attributable to partners
125

 
(20
)
 
105

 
(9
)
 
(36
)
 
(45
)
Comprehensive income (loss)
127

 
(20
)
 
107

 
(6
)
 
(36
)
 
(42
)

The following table represents a summary of previously reported balances, adjustments and restated balances on the Company’s consolidated statements of cash flows by financial statement line item for the years ended December 31, 2015 and 2014:
 
Year ended
 
December 31, 2015
 
December 31, 2014
 
As Reported
 
Adjustment
 
As Restated
 
As Reported
 
Adjustment
 
As Restated
Net income (loss)
$
125

 
$
(20
)
 
$
105

 
$
(3
)
 
$
(36
)
 
$
(39
)
Deferred income taxes
14

 
17

 
31

 
(139
)
 
31

 
(108
)
Changes in operating assets and liabilities
(69
)
 
3

 
(66
)
 
192

 
5

 
197


Use of Estimates.  The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.
New Accounting Pronouncements. In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”), which clarifies the principles for recognizing revenue based on the core principle that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In August 2015, the FASB deferred the effective date of ASU 2014-09, which is now effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Early adoption is permitted as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within those annual periods. ASU 2014-09 can be adopted either retrospectively to each prior reporting period presented or as a cumulative-effect adjustment as of the date of adoption. The Company is currently evaluating the impact, if any, that adopting this new accounting standard will have on our revenue recognition policies.
In November 2015, the FASB issued ASU No. 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes (“ASU 2015-17”), which is intended to improve how deferred taxes are classified on organizations’ balance sheets. The ASU eliminates the current requirement for organizations to present deferred tax liabilities and assets as current and noncurrent in a classified balance sheet. Instead, organizations are now required to classify all deferred tax assets and liabilities as noncurrent. We adopted the provisions of ASU 2015-17 upon issuance and prior period amounts have been reclassified to conform to the current period presentation. As of December 31, 2014, $3 million in current deferred tax assets were reclassified in the consolidated balance sheet from other current assets to deferred income taxes liability.
Cash and Cash Equivalents.  Cash equivalents consist of highly liquid investments, which are readily convertible into cash and have original maturities of three months or less. The Company places cash deposits and temporary cash investments with high credit quality financial institutions. At times, cash and cash equivalents may be uninsured or in deposit accounts that exceed the Federal Deposit Insurance Corporation insurance limit.
Non-cash investing and financing activities and supplemental cash flow information are as follows:
 
Years Ended December 31,
 
2015
 
2014
 
2013
Non-cash investing activities:
 
 
 
 
 
Contribution from affiliate
$
—

 
$
376

 
$
—

Note receivable issued in exchange for investment in ETP
(1,369
)
 
—

 
—

Settlement of affiliate liability
793

 
—

 
—

Supplemental cash flow information:
 
 
 
 
 
Accrued capital expenditures
$
21

 
$
15

 
$
13

Cash paid for interest, net of interest capitalized
76

 
75

 
142

Cash received for interest on note receivable from affiliate
16

 
—

 
—


Inventories. System natural gas and operating supplies consist of natural gas held for operations and materials and supplies, both of which are carried at the lower of weighted average cost or market, while natural gas owed back to customers is valued at market. The natural gas held for operations that the Company does not expect to consume in its operations in the next twelve months is reflected in non-current assets.
The following table presents the components of inventory:
 
December 31,
 
2015
 
2014
Natural gas (1)
$
98

 
$
105

Materials and supplies
15

 
14

 
$
113

 
$
119

(1) 
Natural gas volumes held for operations at December 31, 2015 and 2014 were 43.2 TBtu and 34.3 TBtu, respectively.
Natural Gas Imbalances.  Natural gas imbalances occur as a result of differences in volumes of natural gas received and delivered.  The Company records natural gas imbalance in-kind receivables and payables at cost or market, based on whether net imbalances have reduced or increased system natural gas balances, respectively.  Net imbalances that have reduced system natural gas are valued at the cost basis of the system natural gas, while net imbalances that have increased system natural gas and are owed back to customers are priced, along with the corresponding system natural gas, at market.
Fuel Tracker.  The fuel tracker is the cumulative balance of compressor fuel volumes owed to the Company by its customers or owed by the Company to its customers.  The customers, pursuant to each pipeline’s tariff and related contracts, provide all compressor fuel to the pipeline based on specified percentages of the customer’s natural gas volumes delivered into the pipeline.  The percentages are designed to match the actual natural gas consumed in moving the natural gas through the pipeline facilities, with any difference between the volumes provided versus volumes consumed reflected in the fuel tracker.  The tariff of Trunkline Gas, in conjunction with the customers’ contractual obligations, allows the Company to record an asset and direct bill customers for any fuel ultimately under-recovered.  The other FERC-regulated PEPL entities record an expense when fuel is under-recovered or record a credit to expense to the extent any under-recovered prior period balances are subsequently recouped as they do not have such explicit billing rights specified in their tariffs.  Liability accounts are maintained for net volumes of compressor fuel natural gas owed to customers collectively.  The pipelines’ fuel reimbursement is in-kind and non-discountable.
Property, Plant and Equipment.
The following table presents the components of property, plant and equipment:
 
 
 
 
December 31,
 
 
Lives in Years
 
2015
 
2014
Land and improvements
 

 
$
8

 
$
8

Buildings and improvements
 
6 – 22
 
340

 
340

Pipelines and equipment
 
5 – 46
 
2,387

 
2,353

Natural gas storage facilities
 
5 – 46
 
329

 
323

Vehicles
 
5
 
24

 
23

Right of way
 
36 – 40
 
23

 
23

Furniture and fixtures
 
5 – 12
 
34

 
33

Linepack
 

 
57

 
57

Other
 
2 – 19
 
99

 
192

Construction work in progress
 
 
 
37

 
43

Total property, plant and equipment
 
 
 
3,338

 
3,395

Accumulated depreciation and amortization
 
 
 
(286
)
 
(269
)
Net property, plant and equipment
 
 
 
$
3,052

 
$
3,126


Additions.  Ongoing additions of property, plant and equipment are stated at cost. The Company capitalizes all construction-related direct labor and material costs, as well as indirect construction costs. Such indirect construction costs primarily include capitalized interest costs and labor and related costs of departments associated with supporting construction activities.  The indirect capitalized labor and related costs are largely based upon results of periodic time studies or management reviews of time allocations, which provide an estimate of time spent supporting construction projects.  The cost of replacements and betterments that extend the useful life of property, plant and equipment is also capitalized. The cost of repairs and replacements of minor property, plant and equipment items is charged to expense as incurred.
Retirements.  When ordinary retirements of property, plant and equipment occur, the original cost less salvage value is removed by a charge to accumulated depreciation and amortization, with no gain or loss recorded.  When entire regulated operating units of property, plant and equipment are retired or sold, the original cost less salvage value and related accumulated depreciation and amortization accounts are removed, with any resulting gain or loss recorded in earnings.
Depreciation.  The Company computes depreciation expense using the straight-line method.
Interest Cost Capitalized.  The Company capitalizes interest on certain qualifying assets that are undergoing activities to prepare them for their intended use.  Interest costs incurred during the construction period are capitalized and amortized over the life of the assets. 
Asset Impairment.  An impairment loss is recognized when the carrying amount of a long-lived asset used in operations is not recoverable and exceeds its fair value.  The carrying amount of a long-lived asset is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset.  A long-lived asset is tested for recoverability whenever events or changes in circumstances indicate that its carrying amount may not be recoverable.
Goodwill.  Goodwill resulting from a purchase business combination is tested for impairment at the Company’s reporting unit level at least annually during the fourth quarter by applying a fair-value based test.  The annual impairment test is updated if events or circumstances occur that would more likely than not reduce the fair value of the reporting unit below its book carrying value. During 2015, the Partnership voluntarily changed the date of the annual goodwill impairment testing to the first day of the fourth quarter. The Partnership believes this new date is preferable because it allows for more timely completion of the annual goodwill impairment test prior to the end of the annual financial reporting period. This change in accounting principle does not delay, accelerate or avoid any potential impairment loss, nor does the change have a cumulative effect on income from continuing operations, net income or loss, or net assets.  This change was not applied retrospectively, as doing so would require the use of significant estimates and assumptions that include hindsight. Accordingly, the Partnership applied the change in annual goodwill impairment testing date prospectively beginning October 1, 2015.
The Company did not record a goodwill impairment for the years ended December 31, 2015 and 2014. The Company’s annual goodwill impairment test for the year ended December 31, 2013 resulted in a $689 million goodwill impairment related to the Lake Charles LNG reporting unit.
Changes in the carrying amount of goodwill were as follows:
 
Total
Balance, December 31, 2013
$
1,336

Lake Charles LNG Transaction
(184
)
Balance, December 31, 2014
1,152

ETP common units exchange transaction
(229
)
Balance, December 31, 2015
$
923

Related Party Transactions. Related party expenses primarily include payments for services provided by ETE, ETP and other affiliates.  Other income includes interest income on a note receivable from a related party.
PEPL and certain of its subsidiaries are not treated as separate taxpayers for federal and certain state income tax purposes.  Instead, the Company’s income is taxable to its parent, SUG Holding Company.  The Company has entered into a tax sharing agreement with SUG Holding Company pursuant to which the Company will be required to make payments to SUG Holding Company in order to reimburse SUG Holding Company for federal and state taxes that it pays on the Company’s income, or to receive payments from SUG Holding Company to the extent that tax losses generated by the Company are utilized by SUG Holding Company.  In addition, the Company’s subsidiaries that are corporations are included in consolidated and combined federal and state income tax returns filed by SUG Holding Company.  The Company’s liability generally is equal to the liability that the Company and its subsidiaries would have incurred based upon the Company’s taxable income if the Company was a taxpayer filing separately from SUG Holding Company, except that the Company will receive credit under an intercompany note for any increased liability resulting from its tax basis in its assets having been reduced as a result of the like-kind exchange under Section 1031 of the Internal Revenue Code of 1986, as amended.  The tax sharing agreement may be amended from time to time.
Investments in Unconsolidated Affiliates. Investments in unconsolidated affiliates over which the Company may exercise significant influence are accounted for using the equity method. Any excess of the Company’s investment in affiliates, as compared to its share of the underlying equity, that is not recognized as goodwill is amortized over the estimated economic service lives of the underlying assets. Other investments over which the Company may not exercise significant influence are accounted for under the cost method. A loss in value of an investment, other than a temporary decline, is recognized in earnings. Evidence of a loss in value might include, but would not necessarily be limited to, absence of an ability to recover the carrying amount of the investment or inability of the investee to sustain an earnings capacity that would justify the carrying amount of the investment. A current fair value of an investment that is less than its carrying amount may indicate a loss in value of the investment. All of the above factors are considered in the Company’s review of its equity method investments.
Other Current Liabilities. Accrued and other current liabilities consisted of the following:
 
December 31,
 
2015
 
2014
Accrued capital expenditures
$
21

 
$
15

Accrued property taxes
5

 
9

Other
29

 
32

Total other current liabilities
$
55

 
$
56


Environmental Expenditures.  Environmental expenditures that relate to an existing condition caused by past operations that do not contribute to current or future revenue generation are expensed.  Environmental expenditures relating to current or future revenues are expensed or capitalized as appropriate.  Liabilities are recorded when environmental assessments and/or clean-ups are probable and the costs can be reasonably estimated.  Remediation obligations are not discounted because the timing of future cash flow streams is not predictable.
Revenues.  The Company’s revenues from transportation and storage of natural gas are based on capacity reservation charges and, to a lesser extent, commodity usage charges.  Reservation revenues are based on contracted rates and capacity reserved by the customers and are recognized monthly.  Revenues from commodity usage charges are also recognized monthly, based on the volumes received from or delivered for the customer, based on the tariff of that particular PEPL entity, with any differences in volumes received and delivered resulting in an imbalance.  Volume imbalances generally are settled in-kind with no impact on revenues, with the exception of Trunkline, which settles certain imbalances in cash pursuant to its tariff, and records gains and losses on such cashout sales as a component of revenue, to the extent not owed back to customers. Because PEPL is subject to FERC regulation, revenues collected during the pendency of a rate proceeding may be required by FERC to be refunded in the final order. PEPL establishes reserves for such potential refunds, as appropriate.
Accounts Receivable and Allowance for Doubtful Accounts.  The Company has a concentration of customers in the electric and gas utility industries as well as oil and natural gas producers and municipalities. This concentration of customers may impact our overall exposure to credit risk, either positively or negatively, in that the customers may be similarly affected by changes in economic or other conditions. The Company manages trade credit risk to mitigate credit losses and exposure to uncollectible trade receivables. Prospective and existing customers are reviewed regularly for creditworthiness based upon pre-established standards consistent with FERC filed tariffs to manage credit risk within approved tolerances. Customers that do not meet minimum credit standards are required to provide additional credit support in the form of a letter of credit, prepayment, or other forms of security.
The Company establishes an allowance for doubtful accounts on trade receivables based on the expected ultimate recovery of these receivables and considers many factors including historical customer collection experience, general and specific economic trends, and known specific issues related to individual customers, sectors, and transactions that might impact collectability. Increases in the allowance are recorded as a component of operating expenses; reductions in the allowance are recorded when receivables are subsequently collected or written-off. Past due receivable balances are written-off when the Company’s efforts have been unsuccessful in collecting the amount due.
Amounts related to the allowance for doubtful accounts were not material as of and during the years ended December 31, 2015 and 2014.
The following table presents the relative contribution to the Company’s total operating revenue from continuing operations of each customer that comprised at least 10% of its operating revenues:
 
Years Ended December 31,
 
2015
 
2014
 
2013
Customer A(1)
—
%
 
—
%
 
10
%
Customer B(2)
—

 
—

 
22

Customer C
11

 
11

 
6

Customer D
10

 
—

 
—

Other top 10 customers
28

 
40

 
20

Remaining customers
51

 
49

 
42

Total percentage
100
%
 
100
%
 
100
%

(1) 
SUGS, which was deconsolidated on April 30, 2013, had contracted to sell its entire owned or controlled output of NGL equity volumes to Customer A. Pricing for the NGL equity volumes sold to Customer A throughout the contract period was OPIS pricing based at Mont Belvieu, Texas delivery points.
(2) 
Customer B is the sole customer of Lake Charles LNG, which was deconsolidated effective January 1, 2014.
Accumulated Other Comprehensive Income. The main components of accumulated other comprehensive income are a net actuarial gain and prior service costs on pension and other postretirement benefit plans at December 31, 2015.
Retirement Benefits.  Employers are required to recognize in their balance sheets the overfunded or underfunded status of defined benefit pension and other postretirement plans, measured as the difference between the fair value of the plan assets and the benefit obligation (the projected benefit obligation for pension plans and the accumulated postretirement benefit obligation for other postretirement plans).  Each overfunded plan is recognized as an asset and each underfunded plan is recognized as a liability.   Employers must recognize the change in the funded status of the plan in other comprehensive income in partners’ capital in the year in which the change occurs.
Derivatives and Hedging Activities.  All derivatives are recognized on the consolidated balance sheet at their fair value.  On the date the derivative contract is entered into, the Company designates the derivative as (i) a hedge of the fair value of a recognized asset or liability or of an unrecognized firm commitment (a fair value hedge);  (ii) a hedge of a forecasted transaction or the variability of cash flows to be received or paid in conjunction with a recognized asset or liability (a cash flow hedge); or (iii) an instrument that is held for trading or non-hedging purposes (a trading or economic hedging instrument).  For derivatives treated as a fair value hedge, the effective portion of changes in fair value is recorded as an adjustment to the hedged item.  The ineffective portion of a fair value hedge is recognized in earnings.  Upon termination of a fair value hedge of a debt instrument, the resulting gain or loss is amortized to earnings through the maturity date of the debt instrument.  For derivatives treated as a cash flow hedge, the effective portion of changes in fair value is recorded in accumulated other comprehensive income until the related hedged items impact earnings.  Any ineffective portion of a cash flow hedge is reported in current-period earnings.  For derivatives treated as trading or economic hedging instruments, changes in fair value are reported in current-period earnings.  Fair value is determined based upon quoted market prices and pricing models using assumptions that market participants would use.  
Fair Value Measurement.  Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.  The Company utilizes market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about nonperformance risk, which is primarily comprised of credit risk (both the Company’s own credit risk and counterparty credit risk) and the risks inherent in the inputs to any applicable valuation techniques.  The Company places more weight on current market information concerning credit risk (e.g. current credit default swap rates) as opposed to historical information (e.g. historical default probabilities and credit ratings).  These inputs can be readily observable, market corroborated, or generally unobservable.  The Company endeavors to utilize the best available information, including valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs.  A three-tier fair value hierarchy, which prioritizes the inputs used to measure fair value, is as follows:
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Level 1 – Observable inputs such as quoted prices in active markets for identical assets or liabilities;
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Level 2 – Observable inputs such as: (i) quoted prices for similar assets or liabilities in active markets; (ii) quoted prices for identical or similar assets or liabilities in markets that are not active and do not require significant adjustment based on unobservable inputs; or (iii) valuations based on pricing models, discounted cash flow methodologies or similar techniques where significant inputs (e.g., interest rates, yield curves, etc.) are derived principally from observable market data, or can be corroborated by observable market data, for substantially the full term of the assets or liabilities; and
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Level 3 – Unobservable inputs, including valuations based on pricing models, discounted cash flow methodologies or similar techniques where at least one significant model assumption or input is unobservable.  Unobservable inputs are used to the extent that observable inputs are not available and reflect the Company’s own assumptions about the assumptions market participants would use in pricing the assets or liabilities.  Unobservable inputs are based on the best information available in the circumstances, which might include the Company’s own data.
Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.  The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of these assets and liabilities and their placement within the fair value hierarchy.
The Company did not have any material assets or liabilities that are measured at fair value on a recurring basis at December 31, 2015 and 2014. The carrying amount of cash and cash equivalents, accounts receivable and accounts payable approximates fair value.
Asset Retirement Obligations.  Legal obligations associated with the retirement of long-lived assets are recorded at fair value at the time the obligations are incurred, if a reasonable estimate of fair value can be made.  Present value techniques are used which reflect assumptions such as removal and remediation costs, inflation,  and profit margins that third parties would demand to settle the amount of the future obligation.  The Company did not include a market risk premium for unforeseeable circumstances in its fair value estimates because such a premium could not be reliably estimated.  Upon initial recognition of the liability, costs are capitalized as a part of the long-lived asset and allocated to expense over the useful life of the related asset.  The liability is accreted to its present value each period with accretion being recorded to operating expense with a corresponding increase in the carrying amount of the liability.  To the extent the Company is permitted to collect and has reflected in its financials amounts previously collected from customers and expensed, such amounts serve to reduce what would be reflected as capitalized costs at the initial establishment of an ARO.
Income Taxes.  Income taxes are accounted for under the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rate is recognized in earnings in the period that includes the enactment date. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts more likely than not to be realized.
The determination of the provision for income taxes requires significant judgment, use of estimates, and the interpretation and application of complex tax laws. Significant judgment is required in assessing the timing and amounts of deductible and taxable items and the probability of sustaining uncertain tax positions. The benefits of uncertain tax positions are recorded in our financial statements only after determining a more-likely-than-not probability that the uncertain tax positions will withstand challenge, if any, from taxing authorities. When facts and circumstances change, we reassess these probabilities and record any changes through the provision for income taxes.
As a limited partnership, the Company is treated as a disregarded entity for federal income tax purposes.  Accordingly, the Company and its subsidiaries are not treated as separate taxpayers; instead, their income is directly taxable to the Company’s parent. Under the Company’s tax sharing arrangement with its parent, the Company pays its share of taxes based on taxable income, which will generally equal the liability that the Company would have incurred as a separate taxpayer.
Commitments and Contingencies. The Company is subject to proceedings, lawsuits and other claims related to environmental and other matters. Accounting for contingencies requires significant judgment by management regarding the estimated probabilities and ranges of exposure to potential liability.