ý | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 44-0382470 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Large accelerated filer | ¨ | Accelerated filer | ¨ | |
Non-accelerated filer | ý | Smaller reporting company | ¨ | |
Emerging growth company | ¨ |
ITEM 1. | ||
ITEM 2. | ||
ITEM 3. | ||
ITEM 4. | ||
ITEM 1. | ||
ITEM 1A. | ||
ITEM 6. | ||
Exchange Act | Securities Exchange Act of 1934 | |
FERC | Federal Energy Regulatory Commission | |
GAAP | Accounting principles generally accepted in the United States of America | |
PCBs | Polychlorinated biphenyls | |
Sea Robin | Sea Robin Pipeline Company, LLC | |
SEC | United States Securities and Exchange Commission | |
Southwest Gas | Pan Gas Storage LLC (d.b.a. Southwest Gas) | |
TBtu | Trillion British thermal units | |
Trunkline | Trunkline Gas Company, LLC |
September 30, 2018 | December 31, 2017 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | — | $ | 2 | |||
Accounts receivable, net | 39 | 45 | |||||
Accounts receivable from related companies | 11 | 12 | |||||
Exchanges receivable | 8 | 5 | |||||
Inventories | 86 | 150 | |||||
Other current assets | 6 | 3 | |||||
Total current assets | 150 | 217 | |||||
Property, plant and equipment | 3,251 | 3,199 | |||||
Accumulated depreciation | (504 | ) | (419 | ) | |||
2,747 | 2,780 | ||||||
Other non-current assets, net | 186 | 167 | |||||
Goodwill | 23 | 23 | |||||
Total assets | $ | 3,106 | $ | 3,187 |
September 30, 2018 | December 31, 2017 | ||||||
LIABILITIES AND PARTNERS’ CAPITAL | |||||||
Current liabilities: | |||||||
Current maturities of long-term debt | $ | 154 | $ | 407 | |||
Accounts payable and accrued liabilities | 3 | 3 | |||||
Accounts payable to related companies | 32 | 32 | |||||
Exchanges payable | 71 | 131 | |||||
Other current liabilities | 87 | 53 | |||||
Total current liabilities | 347 | 626 | |||||
Long-term debt, less current maturities | 252 | 411 | |||||
Note payable to related party | 366 | 113 | |||||
Deferred income taxes | 472 | 451 | |||||
Other non-current liabilities | 254 | 241 | |||||
Commitments and contingencies | |||||||
Partners’ capital: | |||||||
Partners’ capital | 1,420 | 1,348 | |||||
Accumulated other comprehensive loss | (5 | ) | (3 | ) | |||
Total partners’ capital | 1,415 | 1,345 | |||||
Total liabilities and partners’ capital | $ | 3,106 | $ | 3,187 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
OPERATING REVENUES: | |||||||||||||||
Transportation and storage of natural gas | $ | 128 | $ | 104 | $ | 401 | $ | 327 | |||||||
Other | 9 | 6 | 19 | 15 | |||||||||||
Total operating revenues | 137 | 110 | 420 | 342 | |||||||||||
OPERATING EXPENSES: | |||||||||||||||
Cost of natural gas and other energy | — | — | 2 | 2 | |||||||||||
Operating and maintenance | 57 | 52 | 158 | 149 | |||||||||||
General and administrative | 10 | 10 | 28 | 27 | |||||||||||
Depreciation and amortization | 31 | 32 | 91 | 95 | |||||||||||
Total operating expenses | 98 | 94 | 279 | 273 | |||||||||||
OPERATING INCOME | 39 | 16 | 141 | 69 | |||||||||||
OTHER INCOME (EXPENSE): | |||||||||||||||
Interest expense, net | (5 | ) | (11 | ) | (23 | ) | (34 | ) | |||||||
Interest expense — affiliates | (5 | ) | — | (8 | ) | — | |||||||||
Interest income — affiliates | — | 1 | — | 9 | |||||||||||
Other, net | 2 | — | 4 | 1 | |||||||||||
INCOME BEFORE INCOME TAX EXPENSE | 31 | 6 | 114 | 45 | |||||||||||
Income tax expense | 8 | 2 | 35 | 19 | |||||||||||
NET INCOME | 23 | 4 | 79 | 26 | |||||||||||
OTHER COMPREHENSIVE INCOME, NET OF TAX | |||||||||||||||
Actuarial gain relating to postretirement benefit plans | 1 | 5 | — | 5 | |||||||||||
COMPREHENSIVE INCOME | $ | 24 | $ | 9 | $ | 79 | $ | 31 |
Partners’ Capital | Accumulated Other Comprehensive Loss | Total | |||||||||
Balance, December 31, 2017 | $ | 1,348 | $ | (3 | ) | $ | 1,345 | ||||
Distributions to partners | (24 | ) | — | (24 | ) | ||||||
Non-cash compensation expense | 2 | — | 2 | ||||||||
Deemed contribution from partners | 11 | — | 11 | ||||||||
Other | 4 | (2 | ) | 2 | |||||||
Net income | 79 | — | 79 | ||||||||
Balance, September 30, 2018 | $ | 1,420 | $ | (5 | ) | $ | 1,415 |
Nine Months Ended September 30, | |||||||
2018 | 2017 | ||||||
OPERATING ACTIVITIES: | |||||||
Net income | $ | 79 | $ | 26 | |||
Reconciliation of net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 91 | 95 | |||||
Deferred income taxes | 22 | 29 | |||||
Amortization of deferred financing fees | (11 | ) | (19 | ) | |||
Other non-cash | 7 | 12 | |||||
Changes in operating assets and liabilities | 18 | (4 | ) | ||||
Net cash flows provided by operating activities | 206 | 139 | |||||
INVESTING ACTIVITIES: | |||||||
Capital expenditures | (37 | ) | (118 | ) | |||
Repayment of note receivable from related party | — | 102 | |||||
Notes receivable issued to related party | — | (40 | ) | ||||
Other | — | 2 | |||||
Net cash flows used in investing activities | (37 | ) | (54 | ) | |||
FINANCING ACTIVITIES: | |||||||
Distributions to partners | (24 | ) | (74 | ) | |||
Repayment of long-term debt | (400 | ) | — | ||||
Note payable issued from related party | 460 | — | |||||
Repayment of note payable from related party | (207 | ) | — | ||||
Net cash flows used in financing activities | (171 | ) | (74 | ) | |||
Net change in cash and cash equivalents | (2 | ) | 11 | ||||
Cash and cash equivalents, beginning of period | 2 | 4 | |||||
Cash and cash equivalents, end of period | $ | — | $ | 15 | |||
SUPPLEMENTAL INFORMATION: | |||||||
Non-cash activity - Accrued capital expenditures | $ | 12 | $ | 15 | |||
Non-cash activity - Settlement of related party payables | $ | 11 | $ | 5 | |||
Cash paid for interest | $ | 20 | $ | 43 |
1. | ORGANIZATION AND BASIS OF PRESENTATION |
• | References herein to “ETP” refer to Energy Transfer Partners, L.P. prior to its name change and Energy Transfer Operating, L.P. following its name change; |
• | References herein to “ETE” refer to Energy Transfer Equity, L.P. prior to its name change and Energy Transfer LP following its name change |
2. | RELATED PARTY TRANSACTIONS |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Operating revenues | $ | 25 | $ | 11 | $ | 72 | $ | 18 | |||||||
Operating and maintenance | — | 1 | 2 | 5 | |||||||||||
General and administrative | 6 | 7 | 17 | 18 | |||||||||||
Interest expense — affiliate | 5 | — | 8 | — | |||||||||||
Interest income — affiliate | — | 1 | — | 9 |
3. | FAIR VALUE MEASURES |
4. | DEBT OBLIGATIONS |
5. | REGULATORY MATTERS, COMMITMENTS, CONTINGENCIES AND ENVIRONMENTAL LIABILITIES |
6. | REVENUE |
Years Ending December 31, | ||||||||||||||||||||
2018 (remainder) | 2019 | 2020 | Thereafter | Total | ||||||||||||||||
Revenue expected to be recognized on contracts with customers existing as of September 30, 2018 | $ | 118 | $ | 438 | $ | 348 | $ | 2,074 | $ | 2,978 |
• | Right to invoice - The Company elected to utilize an output method to recognize revenue that is based on the amount to which the Company has a right to invoice a customer for services performed to date, if that amount corresponds directly with the value provided to the customer for the related performance or its obligation completed to date. As such, the Company recognized revenue in the amount to which it had the right to invoice customers. |
• | Significant financing component - The Company elected not to adjust the promised amount of consideration for the effects of significant financing component if the Company expects, at contract inception, that the period between the transfer of a promised good or service to a customer and when the customer pays for that good or service will be one year or less. |
• | Unearned variable consideration - The Company elected to only disclose the unearned fixed consideration associated with unsatisfied performance obligations related to our various customer contracts which contain both fixed and variable components. |
Nine Months Ended September 30, | ||||||||
2018 | 2017 | |||||||
OPERATING REVENUES: | ||||||||
Transportation and storage of natural gas | $ | 401 | $ | 327 | ||||
Other | 19 | 15 | ||||||
Total operating revenues | 420 | 342 | ||||||
OPERATING EXPENSES: | ||||||||
Cost of natural gas and other energy | 2 | 2 | ||||||
Operating and maintenance | 158 | 149 | ||||||
General and administrative | 28 | 27 | ||||||
Depreciation and amortization | 91 | 95 | ||||||
Total operating expenses | 279 | 273 | ||||||
OPERATING INCOME | 141 | 69 | ||||||
OTHER INCOME (EXPENSE): | ||||||||
Interest expense, net | (23 | ) | (34 | ) | ||||
Interest expense — affiliates | (8 | ) | — | |||||
Interest income — affiliates | — | 9 | ||||||
Other, net | 4 | 1 | ||||||
INCOME BEFORE INCOME TAX EXPENSE | 114 | 45 | ||||||
Income tax expense | 35 | 19 | ||||||
NET INCOME | $ | 79 | $ | 26 | ||||
Panhandle natural gas volumes transported (TBtu): | ||||||||
PEPL | 614 | 452 | ||||||
Trunkline | 495 | 378 | ||||||
Sea Robin | 62 | 56 |
Exhibit Number | Description | ||
101.INS* | XBRL Instance Document | ||
101.SCH* | XBRL Taxonomy Extension Schema Document | ||
101.CAL* | XBRL Taxonomy Calculation Linkbase Document | ||
101.DEF* | XBRL Taxonomy Extension Definitions Document | ||
101.LAB* | XBRL Taxonomy Label Linkbase Document | ||
101.PRE* | XBRL Taxonomy Presentation Linkbase Document |
PANHANDLE EASTERN PIPE LINE COMPANY, LP | ||||
(Registrant) | ||||
Date: | November 8, 2018 | By: | /s/ A. Troy Sturrock | |
A. Troy Sturrock | ||||
Senior Vice President and Controller (duly authorized to sign on behalf of the registrant) |
1. | I have reviewed this quarterly report on Form 10-Q of Panhandle Eastern Pipe Line Company, LP; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ Kelcy L. Warren | |
Kelcy L. Warren | |
Chief Executive Officer |
1. | I have reviewed this quarterly report on Form 10-Q of Panhandle Eastern Pipe Line Company, LP; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ Thomas E. Long | |
Thomas E. Long | |
Chief Financial Officer |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Kelcy L. Warren | |
Kelcy L. Warren | |
Chief Executive Officer |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Thomas E. Long | |
Thomas E. Long | |
Chief Financial Officer |
Document And Entity Information |
9 Months Ended |
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Sep. 30, 2018
shares
| |
Document Information [Abstract] | |
Document Type | 10-Q |
Amendment Flag | false |
Entity Registrant Name | Panhandle Eastern Pipe Line Co LP |
Entity Central Index Key | 0000076063 |
Document Period End Date | Sep. 30, 2018 |
Current Fiscal Year End Date | --12-31 |
Document Fiscal Year Focus | 2018 |
Document Fiscal Period Focus | Q3 |
Entity Filer Category | Non-accelerated Filer |
Entity Common Stock, Shares Outstanding | 0 |
Entity Emerging Growth Company | false |
Entity Small Business | false |
CONSOLIDATED STATEMENT OF PARTNERS' CAPITAL - USD ($) $ in Millions |
Total |
Limited partner |
Accumulated Other Comprehensive Loss |
---|---|---|---|
Stockholders' Equity, Balance | $ 1,345 | $ 1,348 | $ (3) |
Distributions to partners | 24 | 24 | 0 |
Non-cash compensation expense | 2 | 2 | 0 |
Deemed contribution from partners | 11 | 11 | 0 |
Other | (2) | 4 | (2) |
Net income | 79 | 0 | |
Stockholders' Equity, Balance | $ 1,415 | $ 1,420 | $ (5) |
Operations and Organization (Notes) |
9 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2018 | |||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||
Operations and Organization | ORGANIZATION AND BASIS OF PRESENTATION Organization Panhandle Eastern Pipe Line Company, LP (“PEPL”) and its subsidiaries (collectively, the “Company”) primarily operate interstate pipelines that transport natural gas from the Gulf of Mexico, South Texas and the Panhandle region of Texas and Oklahoma to major United States markets in the Midwest and Great Lakes regions and natural gas storage assets and are subject to the rules and regulations of the FERC. The Company’s subsidiaries are Trunkline, Sea Robin and Southwest Gas. In October 2018, Energy Transfer Equity, L.P. (“ETE”) and Energy Transfer Partners, L.P. (“ETP”) completed the previously announced merger of ETP with a wholly-owned subsidiary of ETE in a unit-for-unit exchange. Following the closing of the merger, ETE changed its name to “Energy Transfer LP” and its common units began trading on the New York Stock Exchange under the “ET” ticker symbol on Friday, October 19, 2018. In addition, ETP changed its name to “Energy Transfer Operating, L.P.” For purposes of maintaining clarity, the following references are used herein:
Southern Union Panhandle LLC, an indirect wholly-owned subsidiary of ETP, owns a 1% general partner interest in PEPL and ETP indirectly owns a 99% limited partner interest in PEPL. Basis of Presentation The unaudited financial information included in this Form 10-Q has been prepared on the same basis as the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017. In the opinion of the Company’s management, such financial information reflects all adjustments necessary for a fair presentation of the financial position and the results of operations for such interim periods in accordance with GAAP. All intercompany items and transactions have been eliminated in consolidation. Certain information and footnote disclosures normally included in annual consolidated financial statements prepared in accordance with GAAP have been omitted pursuant to the rules and regulations of the SEC. Use of Estimates The unaudited consolidated financial statements have been prepared in conformity with GAAP, which includes the use of estimates and assumptions made by management that affect the reported amounts of assets, liabilities, revenues, expenses and disclosure of contingent assets and liabilities that exist at the date of the consolidated financial statements. Although these estimates are based on management’s available knowledge of current and expected future events, actual results could be different from those estimates. Recent Accounting Pronouncements ASU 2016-02 In February 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases (Topic 842) (“ASU 2016-02”), which establishes the principles that lessees and lessors shall apply to report information about the amount, timing, and uncertainty of cash flows arising from a lease. The update requires lessees to record virtually all leases on their balance sheets. For lessors, this amended guidance modifies the classification criteria and the accounting for sales-type and direct financing leases. In January 2018, the FASB issued Accounting Standards Update No. 2018-01 (“ASU 2018-01”), which provides an optional transition practical expedient to not evaluate under Topic 842 existing or expired land easements that were not previously accounted for as leases under the existing lease guidance in Topic 840. The Company plans to elect the package of transition practical expedients and will adopt this standard beginning with its first quarter of fiscal 2019 and apply it retrospectively at the beginning of the period of adoption through a cumulative-effect adjustment to retained earnings. The Company has performed several procedures to evaluate the impact of the adoption of this standard on the financial statements and disclosures and address the implications of Topic 842 on future lease arrangements. The procedures include reviewing all forms of leases, performing a completeness assessment over the lease population, establishing processes and controls to timely identify new and modified lease agreements, educating its employees on these new processes and controls and implementing a third-party supported lease accounting information system to account for our leases in accordance with the new standard. However, we are still in the process of quantifying this impact. We expect that upon adoption most of the Company’s lease commitments will be recognized as right of use assets and lease obligations. Recently Adopted Pronouncements ASU 2014-09 In May 2014, the Financial Accounting Standards Board (“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. The Company adopted ASU 2014-09 on January 1, 2018. The Company has made appropriate design and implementation updates to our business processes, systems and internal controls to support recognition and disclosure under the new standard. Utilizing the practical expedients allowed under the modified retrospective adoption method, Accounting Standards Codification (“ASC”) Topic 606 was only applied to existing contracts for which the Company has remaining performance obligations as of January 1, 2018, and new contracts entered into after January 1, 2018. ASC Topic 606 was not applied to contracts that were completed prior to January 1, 2018. The Company has elected to apply the modified retrospective method to adopt the new standard. For contracts in scope of the new revenue standard as of January 1, 2018, the cumulative effect of adjustment to partners’ capital was not material. The comparative information has not been restated under the modified retrospective method and continues to be reported under the accounting standards in effect for those periods. The adoption of the new revenue standard by the Company resulted in no reclassifications between revenue, cost of sales and operating expenses. There were no changes in the timing of recognition of revenue and therefore no impact to the balance sheet upon adoption. ASU 2018-02 In February 2018, the FASB issued Accounting Standards Update No. 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, which allows a reclassification from accumulated other comprehensive income to partners’ capital for stranded tax effects resulting from the Tax Cuts and Jobs Act of 2017. The Company elected to early adopt this ASU in the first quarter of 2018. The effect of the adoption was not material. |
Related Party Transactions (Notes) |
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Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions | RELATED PARTY TRANSACTIONS Accounts receivable from related companies reflected on the consolidated balance sheets primarily related to services provided to ETE, ETP and other affiliates. Accounts payable to related companies reflected on the consolidated balance sheets related to various services provided by ETP and other affiliates. The following table provides a summary of the related party activity included in the consolidated statements of operations:
The Company settled related party payables with a subsidiary of ETP through non-cash contributions during the nine months ended September 30, 2018 and 2017 for $11 million and $5 million, respectively. |
FAIR VALUE MEASURES Fair Value (Notes) |
9 Months Ended |
---|---|
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Disclosures [Text Block] | FAIR VALUE MEASURES The Company had $28 million and $21 million of fair value of available for sale securities, included in other non-current assets, as of September 30, 2018 and December 31, 2017, respectively. At September 30, 2018, $18 million in equity securities were valued at Level 1 and $10 million in fixed income securities were valued at Level 2. At December 31, 2017, $14 million in equity securities were valued at Level 1 and $7 million in fixed income securities were valued at Level 2. The carrying amount of cash and cash equivalents, accounts receivable and accounts payable approximates fair value. Based on the estimated borrowing rates currently available to the Company and its subsidiaries for loans with similar terms and average maturities, the aggregate fair value of the Company’s consolidated debt obligations was $402 million and $830 million at September 30, 2018 and December 31, 2017, respectively. The fair value of the Company’s consolidated debt obligations is a Level 2 valuation based on the observable inputs used for similar liabilities. The Company did not have any Level 3 instruments measured at fair value at September 30, 2018 or December 31, 2017, and there were no transfers between hierarchy levels during the periods presented. |
Commitments and Contingencies |
9 Months Ended |
---|---|
Sep. 30, 2018 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies Disclosure | REGULATORY MATTERS, COMMITMENTS, CONTINGENCIES AND ENVIRONMENTAL LIABILITIES Contingent Residual Support Agreement with ETP Under a contingent residual support agreement with ETP and Citrus ETP Finance LLC, the Company provides contingent, residual support to Citrus ETP Finance LLC (on a non-recourse basis to the Company) with respect to Citrus ETP Finance LLC’s obligations to ETP to support the payment of $2 billion in principal amount of senior notes issued by ETP on January 17, 2012. FERC Audit In March 2016, the FERC commenced an audit of Trunkline for the period from January 1, 2013 to present to evaluate Trunkline’s compliance with the requirements of its FERC gas tariff, the accounting regulations of the Uniform System of Accounts as prescribed by the FERC, and the FERC’s annual reporting requirements. The FERC approved an audit report in October 2018. In response to the findings in the audit report, the Company expects to make certain changes to its processes, policies and procedures; however, the Company does not expect the findings to result in any changes to its financial statements. Environmental Matters The Company’s operations are subject to federal, state and local laws, rules and regulations regarding water quality, hazardous and solid waste management, air quality control and other environmental matters. These laws, rules and regulations require the Company to conduct its operations in a specified manner and to obtain and comply with a wide variety of environmental regulations, licenses, permits, inspections and other approvals. Failure to comply with environmental laws, rules and regulations may expose the Company to significant fines, penalties and/or interruptions in operations. The Company’s environmental policies and procedures are designed to achieve compliance with such applicable laws and regulations. These evolving laws and regulations and claims for damages to property, employees, other persons and the environment resulting from current or past operations may result in significant expenditures and liabilities in the future. The Company engages in a process of updating and revising its procedures for the ongoing evaluation of its operations to identify potential environmental exposures and enhance compliance with regulatory requirements. The Company is responsible for environmental remediation at certain sites on its natural gas transmission systems for contamination resulting from the past use of lubricants containing PCBs in compressed air systems; the past use of paints containing PCBs; and the prior use of wastewater collection facilities and other on-site disposal areas. The Company has implemented a program to remediate such contamination. The primary remaining remediation activity on the Company’s systems is associated with past use of paints containing PCBs or PCB impacts to equipment surfaces and to a building at one location. The PCB assessments are ongoing and the related estimated remediation costs are subject to further change. Other remediation typically involves the management of contaminated soils and may involve remediation of groundwater. Activities vary with site conditions and locations, the extent and nature of the contamination, remedial requirements, complexity and sharing of responsibility. The ultimate liability and total costs associated with these sites will depend upon many factors. If remediation activities involve statutory joint and several liability provisions, strict liability, or cost recovery or contribution actions, the Company could potentially be held responsible for contamination caused by other parties. In some instances, the Company may share liability associated with contamination with other potentially responsible parties. The Company may also benefit from contractual indemnities that cover some or all of the cleanup costs. These sites are generally managed in the normal course of business or operations. The Company’s environmental remediation activities are undertaken in cooperation with and under the oversight of appropriate regulatory agencies, enabling the Company under certain circumstances to take advantage of various voluntary cleanup programs in order to perform the remediation in the most effective and efficient manner. The Company’s consolidated balance sheets reflected $2 million in non-current liabilities as of September 30, 2018 and December 31, 2017 to cover environmental remediation actions where management believes a loss is probable and reasonably estimable. The Company is not able to estimate the possible loss or range of loss in excess of amounts accrued. The Company does not have any material environmental remediation matters assessed as reasonably possible. Liabilities for Litigation and Other Claims The Company records accrued liabilities for litigation and other claim costs when management believes a loss is probable and reasonably estimable. When management believes there is at least a reasonable possibility that a material loss or an additional material loss may have been incurred, the Company discloses (i) an estimate of the possible loss or range of loss in excess of the amount accrued; or (ii) a statement that such an estimate cannot be made. As of September 30, 2018 and December 31, 2017, the Company has litigation and other claim-related accrued liabilities of $20 million and $21 million, respectively, included in other non-current liabilities on the consolidated balance sheets. The Company does not have any material litigation or other claim contingency matters assessed as probable or reasonably possible that would require disclosure in the financial statements. Other Commitments and Contingencies The Company is subject to the laws and regulations of states and other jurisdictions concerning the identification, reporting and escheatment (the transfer of property to the state) of unclaimed or abandoned funds, and is subject to audit and examination for compliance with these requirements. The Company is currently being examined by a third party auditor on behalf of nine states for compliance with unclaimed property laws. |
REVENUE (Notes) |
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Revenues [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Text Block] | REVENUE The following disclosures discuss the Company’s revised revenue recognition policies upon the adoption of ASU 2014-09 on January 1, 2018, as discussed in Note 1. These policies were applied to the current period only, and the amounts reflected in the Company’s consolidated financial statements for the nine months ended September 30, 2017 were recorded under the Company’s previous accounting policies. Our revenues are determined primarily by the amount of capacity our customers reserve as well as the actual volume of natural gas that flows through pipelines. Under transportation and storage contracts, customers are charged (i) a demand fee, which is a fixed fee for the reservation of an agreed amount of capacity on the transportation pipeline for a specified period of time and which obligates the customer to pay even if the customer does not transport natural gas on the respective pipeline, (ii) a transportation fee, which is based on the actual throughput of natural gas by the customer, (iii) fuel retention based on a percentage of gas transported on the pipeline, or (iv) a combination of the three, generally payable monthly. The performance obligation with respect to these contracts is a promise to provide a single type of service daily over the life of the contract, which is fundamentally a “stand-ready” service. While there can be multiple activities required to be performed, these activities are not separable because such activities in combination are required to successfully transfer the overall service for which the customer has contracted. The fixed consideration of the transaction price is allocated ratably over the life of the contract and revenue should be recognized over time because the customer simultaneously receives and consumes the benefit of this service. Contract Balances with Customers The Company satisfies its obligations by transferring goods or services in exchange for consideration from customers. The timing of performance may differ from the timing the associated consideration is paid to or received from the customer, thus resulting in the recognition of a contract asset or a contract liability. The Company recognizes a contract asset when making upfront consideration payments to certain customers or when providing services to customers prior to the time at which the Company is contractually allowed to bill for such services. As of September 30, 2018, no contract assets have been recognized. The Company recognizes a contract liability if the customer's payment of consideration precedes the Company’s fulfillment of the performance obligations. As of September 30, 2018, no contract liabilities have been recognized. Performance Obligation At contract inception, the Company assesses the goods and services promised in its contracts with customers and identifies a performance obligation for each promise to transfer a good or service (or bundle of goods or services) that is distinct. To identify the performance obligations, the Company considers all the goods or services promised in the contract, whether explicitly stated or implied based on customary business practices. For a contract that has more than one performance obligation, the Company allocates the total contract consideration it expects to be entitled to, to each distinct performance obligation based on a standalone-selling price basis. Revenue is recognized when (or as) the performance obligations are satisfied, that is, when the customer obtains control of the good or service. Certain of our contracts contain variable components, which, when combined with the fixed component are considered a single performance obligation. For these types of contacts, only the fixed component of the contracts are included in the table below. As of September 30, 2018, the aggregate amount of transaction price allocated to unsatisfied (or partially satisfied) performance obligations is approximately $2.98 billion and the Company expects to recognize this amount as revenue within the time bands illustrated below:
Practical Expedients Utilized by the Company The Company elected the following practical expedients in accordance with Topic 606:
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OPERATIONS AND ORGANIZATION Operations and Organization (Policies) |
9 Months Ended |
---|---|
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Significant Accounting Policies [Text Block] | Basis of Presentation The unaudited financial information included in this Form 10-Q has been prepared on the same basis as the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017. In the opinion of the Company’s management, such financial information reflects all adjustments necessary for a fair presentation of the financial position and the results of operations for such interim periods in accordance with GAAP. All intercompany items and transactions have been eliminated in consolidation. Certain information and footnote disclosures normally included in annual consolidated financial statements prepared in accordance with GAAP have been omitted pursuant to the rules and regulations of the SEC. |
Use of Estimates, Policy [Policy Text Block] | Use of Estimates The unaudited consolidated financial statements have been prepared in conformity with GAAP, which includes the use of estimates and assumptions made by management that affect the reported amounts of assets, liabilities, revenues, expenses and disclosure of contingent assets and liabilities that exist at the date of the consolidated financial statements. Although these estimates are based on management’s available knowledge of current and expected future events, actual results could be different from those estimates. |
New Accounting Pronouncements, Policy [Policy Text Block] | Recent Accounting Pronouncements ASU 2016-02 In February 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases (Topic 842) (“ASU 2016-02”), which establishes the principles that lessees and lessors shall apply to report information about the amount, timing, and uncertainty of cash flows arising from a lease. The update requires lessees to record virtually all leases on their balance sheets. For lessors, this amended guidance modifies the classification criteria and the accounting for sales-type and direct financing leases. In January 2018, the FASB issued Accounting Standards Update No. 2018-01 (“ASU 2018-01”), which provides an optional transition practical expedient to not evaluate under Topic 842 existing or expired land easements that were not previously accounted for as leases under the existing lease guidance in Topic 840. The Company plans to elect the package of transition practical expedients and will adopt this standard beginning with its first quarter of fiscal 2019 and apply it retrospectively at the beginning of the period of adoption through a cumulative-effect adjustment to retained earnings. The Company has performed several procedures to evaluate the impact of the adoption of this standard on the financial statements and disclosures and address the implications of Topic 842 on future lease arrangements. The procedures include reviewing all forms of leases, performing a completeness assessment over the lease population, establishing processes and controls to timely identify new and modified lease agreements, educating its employees on these new processes and controls and implementing a third-party supported lease accounting information system to account for our leases in accordance with the new standard. However, we are still in the process of quantifying this impact. We expect that upon adoption most of the Company’s lease commitments will be recognized as right of use assets and lease obligations. Recently Adopted Pronouncements ASU 2014-09 In May 2014, the Financial Accounting Standards Board (“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. The Company adopted ASU 2014-09 on January 1, 2018. The Company has made appropriate design and implementation updates to our business processes, systems and internal controls to support recognition and disclosure under the new standard. Utilizing the practical expedients allowed under the modified retrospective adoption method, Accounting Standards Codification (“ASC”) Topic 606 was only applied to existing contracts for which the Company has remaining performance obligations as of January 1, 2018, and new contracts entered into after January 1, 2018. ASC Topic 606 was not applied to contracts that were completed prior to January 1, 2018. The Company has elected to apply the modified retrospective method to adopt the new standard. For contracts in scope of the new revenue standard as of January 1, 2018, the cumulative effect of adjustment to partners’ capital was not material. The comparative information has not been restated under the modified retrospective method and continues to be reported under the accounting standards in effect for those periods. The adoption of the new revenue standard by the Company resulted in no reclassifications between revenue, cost of sales and operating expenses. There were no changes in the timing of recognition of revenue and therefore no impact to the balance sheet upon adoption. ASU 2018-02 In February 2018, the FASB issued Accounting Standards Update No. 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, which allows a reclassification from accumulated other comprehensive income to partners’ capital for stranded tax effects resulting from the Tax Cuts and Jobs Act of 2017. The Company elected to early adopt this ASU in the first quarter of 2018. The effect of the adoption was not material. |
Related Party Transactions (Tables) |
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions [table text block] | The following table provides a summary of the related party activity included in the consolidated statements of operations:
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REVENUE (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenues [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Table Text Block] | As of September 30, 2018, the aggregate amount of transaction price allocated to unsatisfied (or partially satisfied) performance obligations is approximately $2.98 billion and the Company expects to recognize this amount as revenue within the time bands illustrated below:
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Operations and Organizaton (Details) - Panhandle [Member] |
6 Months Ended |
---|---|
Jun. 30, 2018 | |
General partnership | |
Description of the Business | |
General partnership interest | 1.00% |
Limited partner | |
Description of the Business | |
Limited partnership interest | 99.00% |
Related Party Transactions (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Related Party Transactions [Abstract] | ||||
Operating revenues | $ 25 | $ 11 | $ 72 | $ 18 |
Operating and maintenance | 0 | 1 | 2 | 5 |
General and administrative | 6 | 7 | 17 | 18 |
Interest income - affiliates | 0 | 1 | 0 | 9 |
Interest Expense, Related Party | $ 5 | $ 0 | $ 8 | $ 0 |
Related Party (Narrative) (Details) - USD ($) $ in Millions |
9 Months Ended | |
---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Related Party Transactions [Abstract] | ||
Deemed contribution from partners | $ 11 | $ 5 |
FAIR VALUE MEASURES Fair Value Narrative (Details) - USD ($) $ in Millions |
Sep. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Investments, Fair Value Disclosure | $ 28 | $ 21 |
Debt Instrument, Fair Value Disclosure | 402 | 830 |
Equity Securities [Member] | ||
Investments, Fair Value Disclosure | 18 | 14 |
Fixed Income Securities [Member] | ||
Investments, Fair Value Disclosure | $ 10 | $ 7 |
DEBT OBLIGATIONS (Details) $ in Millions |
Jun. 30, 2018
USD ($)
|
---|---|
Senior Notes due 2018 [Member] | |
Senior Notes, Current | $ 400 |
Commitment and Contingenices (Narrative) (Details) - USD ($) $ in Millions |
9 Months Ended | ||
---|---|---|---|
Sep. 30, 2018 |
Jun. 30, 2018 |
Dec. 31, 2017 |
|
Commitments and Contingencies [Abstract] | |||
Contingent Residual Support Agreement, Amount | $ 2,000 | ||
Accrued Environmental Loss Contingencies, Noncurrent | $ 2 | ||
Estimated litigation liability | $ 20 | $ 21 |
REVENUE (Details) |
Sep. 30, 2018
USD ($)
|
---|---|
Revenues [Abstract] | |
Contract with Customer, Asset, Gross | $ 0 |
Contract with Customer, Liability | $ 0 |
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