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Leasing Activities (Tables)
 6 Months Ended
Jun. 30, 2013
Leases [Abstract]  
Cross-Border Energy Lease Investments

The components of the cross-border energy lease investments as of June 30, 2013 and December 31, 2012 are summarized below:

 

                                             
     June 30,
2013		     December 31,
2012		  
     (millions of dollars)  

Scheduled lease payments to PHI, net of non-recourse debt

    $ 223     $ 1,852  

Less: Unearned and deferred income

      (56 )     (615 )
  

 

 

    

 

 

  

Investment in finance leases held in trust

      167       1,237  

Less: Deferred income tax liabilities

      (83 )     (756 )
  

 

 

    

 

 

  

Net investment in finance leases held in trust

    $ 84      $ 481  
  

 

 

    

 

 

  

 
Income Recognized from Cross-Border Energy Lease Investments

Income recognized from cross-border energy lease investments, excluding the losses on terminated leases discussed above, was comprised of the following for the three and six months ended June 30, 2013 and 2012:

 

     Three Months Ended
June 30,		      Six Months Ended
June 30,		  
     2013     2012      2013     2012  
     (millions of dollars)  

Pre-tax income from PHI’s cross-border energy lease investments (included in Other Revenue)

    $ 2     $ 13      $ 7     $ 26  

Non-cash charge to reduce carrying value of PHI’s cross-border energy lease investments

      —         —          (373 )     —    
  

 

 

    

 

 

     

 

 

    

 

 

  

Pre-tax income (loss) from PHI’s cross-border energy lease investments after adjustment

      2       13        (366 )     26  

Income tax expense (benefit) related to PHI’s cross-border energy lease investments

      6       3        (43 )(a)      4  
  

 

 

    

 

 

     

 

 

    

 

 

  

Net (loss) income from PHI’s cross-border energy lease investments

    $ (4 )   $ 10      $ (323 )   $ 22  
  

 

 

    

 

 

     

 

 

    

 

 

  

 

(a) Includes a charge of $64 million for the tax consequences associated with PHI’s change in intent regarding foreign investment opportunities and interest expense on uncertain tax positions of $16 million, each recorded in the first quarter of 2013.
Net Investment in Leases by Published Credit Ratings

The table below shows PHI’s net investment in these leases by the published credit ratings of the lessees as of June 30, 2013 and December 31, 2012:

 

Lessee Rating (a)

    June 30,
2013		      December 31,
2012		  
     (millions of dollars)  

Rated Entities

   

AA/Aa and above

    $ 167       $ 766   

A

      —           471   
  

 

 

     

 

 

  

Total

    $ 167       $ 1,237   
  

 

 

     

 

 

  

 

(a) Excludes the credit ratings associated with collateral posted by the lessees in these transactions.