Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Nov. 03, 2017 | |
Document and Entity Information | ||
Entity Registrant Name | TC PIPELINES LP | |
Entity Central Index Key | 1,075,607 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 69,881,012 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | ||||
Transmission revenues | $ 100 | $ 103 | [1] | $ 313 | $ 315 | [1] | |
Equity earnings (Note 4) | 27 | 22 | [1] | 87 | 75 | [1] | |
Operation and maintenance expenses | (16) | (15) | [1] | (47) | (42) | [1] | |
Property taxes | (7) | (7) | [1] | (21) | (20) | [1] | |
General and administrative | (1) | (1) | [1] | (6) | (5) | [1] | |
Depreciation | (25) | (24) | [1] | (73) | (71) | [1] | |
Financial charges and other (Note 14) | (23) | (18) | [1] | (59) | (53) | [1] | |
Net income before taxes | 55 | 60 | [1] | 194 | 199 | [1] | |
Income taxes (Note 18) | (1) | (1) | [1] | ||||
Net income | 55 | 60 | [1] | 193 | [2] | 198 | [1] |
Net income attributable to non-controlling interests | 1 | 2 | [1] | 7 | 10 | [1] | |
Net income attributable to controlling interests | 54 | 58 | [1] | 186 | 188 | [1] | |
Net income attributable to controlling interest allocation (Note 8) | |||||||
General Partner | 4 | 4 | [1] | 12 | 9 | [1] | |
TransCanada and its subsidiaries | 8 | 11 | [1] | 10 | 15 | [1] | |
Net income attributable to controlling interests | 54 | 58 | [1] | 186 | 188 | [1] | |
Common Units | |||||||
Net income attributable to controlling interest allocation (Note 8) | |||||||
Limited partners | $ 42 | $ 43 | [1] | $ 164 | $ 164 | [1] | |
Net income per common unit (Note 8) - basic (in dollars per unit) | $ 0.61 | $ 0.65 | [1],[3] | $ 2.38 | $ 2.51 | [1],[3] | |
Net income per common unit (Note 8) - diluted (in dollars per unit) | $ 0.61 | $ 0.65 | $ 2.38 | $ 2.51 | |||
Weighted average common units outstanding - basic (in units) | 69.4 | 66.1 | [1] | 68.9 | 65.3 | [1] | |
Weighted average common units outstanding - diluted (in units) | 69.4 | 66.1 | 68.9 | 65.3 | |||
Common units outstanding, end of period (in units) | 69.6 | 66.6 | [1] | 69.6 | 66.6 | [1] | |
[1] | Recast to consolidate PNGTS for all periods presented (Refer to Notes 2 and 6). | ||||||
[2] | Recast to consolidate PNGTS for all periods presented (Refer to Notes 2 and 6). | ||||||
[3] | Net income per common unit prior to recast (Refer to Note 2). |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2017 | Sep. 30, 2016 | [1] | Sep. 30, 2017 | Sep. 30, 2016 | [1] | ||
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | |||||||
Net income | $ 55 | $ 60 | $ 193 | [2] | $ 198 | ||
Other comprehensive income | |||||||
Change in fair value of cash flow hedges (Note 12) | 2 | 1 | (1) | ||||
Amortization of realized loss on derivative financial instruments (Note 12) | 1 | 1 | |||||
Reclassification to net income of gains and losses on cash flow hedges (Note 12) | 1 | ||||||
Comprehensive income | 56 | 62 | 195 | 198 | |||
Comprehensive income attributable to non-controlling interests | 1 | 2 | 7 | 10 | |||
Comprehensive income attributable to controlling interests | $ 55 | $ 60 | $ 188 | $ 188 | |||
[1] | Recast to consolidate PNGTS for all periods presented (Refer to Notes 2 and 6). | ||||||
[2] | Recast to consolidate PNGTS for all periods presented (Refer to Notes 2 and 6). |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 | ||
Current Assets | ||||
Cash and cash equivalents | $ 73 | $ 64 | [1] | |
Accounts receivable and other (Note 13) | 35 | 47 | [1] | |
Inventories | 7 | 7 | [1] | |
Other | 6 | 7 | [1] | |
Total current assets | 121 | 125 | [1] | |
Equity investments (Note 4) | 1,207 | 918 | [1] | |
Plant, property and equipment (Net of $1,158 accumulated depreciation; 2016 - $1,088) | 2,133 | 2,180 | [1] | |
Goodwill | 130 | 130 | [1] | |
Other assets | [1] | 1 | ||
Total assets | 3,591 | 3,354 | [1] | |
Current Liabilities | ||||
Accounts payable and accrued liabilities | 31 | 29 | [1] | |
Accounts payable to affiliates (Note 11) | 5 | 8 | [1] | |
Distribution payable | [1] | 3 | ||
Accrued interest | 21 | 10 | [1] | |
Current portion of long-term debt (Note 5) | 51 | 52 | [1] | |
Total current liabilities | 108 | 102 | [1] | |
Long-term debt, net (Note 5) | 2,427 | 1,859 | [1] | |
Deferred state income taxes (Note 18) | 10 | 10 | [1] | |
Other liabilities | 28 | 28 | [1] | |
Total liabilities | 2,573 | 1,999 | [1] | |
Common units subject to rescission (Note 7) | [1] | 83 | ||
Partners' Equity | ||||
General partner | 23 | 27 | [1] | |
Accumulated other comprehensive loss | [1] | (2) | ||
Controlling interests | 916 | 1,144 | [1] | |
Non-controlling interests | 102 | 97 | [1] | |
Equity of former parent of PNGTS | [1] | 31 | ||
Total partners' equity | [2] | 1,018 | 1,272 | |
Total liabilities and partners' equity | 3,591 | 3,354 | [1] | |
Common Units | ||||
Partners' Equity | ||||
Limited partner | 790 | 1,002 | [1] | |
Class B Units | ||||
Partners' Equity | ||||
Limited partner | $ 103 | $ 117 | [1] | |
[1] | Recast to consolidate PNGTS for all periods presented (Refer to Notes 2 and 6). | |||
[2] | Recast to consolidate PNGTS for all periods presented (Refer to Notes 2 and 6). |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
CONSOLIDATED BALANCE SHEETS | ||
Accumulated depreciation | $ 1,158 | $ 1,088 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 9 Months Ended | ||||
Sep. 30, 2017 | Sep. 30, 2016 | ||||
Cash Generated From Operations | |||||
Net income | $ 193 | [1] | $ 198 | [2] | |
Depreciation | 73 | 71 | [2] | ||
Amortization of debt issue costs reported as interest expense | 1 | 1 | [2] | ||
Amortization of realized loss on derivative instrument | 1 | 1 | [2] | ||
Equity earnings from equity investments (Note 3 and 4) | (87) | (75) | [2] | ||
Distributions received from operating activities of equity investments (Note 3) | 106 | 125 | [2] | ||
Change in operating working capital (Note 10) | 24 | 11 | [2] | ||
Net Cash Provided by (Used in) Operating Activities | 311 | 332 | [2] | ||
Investing Activities | |||||
Distribution received from Iroquois as return of investment (Note 4) | 3 | ||||
Capital expenditures | (26) | (21) | [2] | ||
Other | [2] | 3 | |||
Net Cash Provided by (Used in) Investing Activities | (756) | (215) | [2] | ||
Financing Activities | |||||
Distributions paid to non-controlling interests | (5) | (12) | [2] | ||
Common unit issuance, net (Note 7) | 126 | 35 | [2] | ||
Common unit issuance subject to rescission, net (Note 7) | [2] | 83 | |||
Long-term debt issued, net of discount (Note 5) | 732 | 200 | [2] | ||
Long-term debt repaid (Note 5) | (164) | (196) | [2] | ||
Debt issuance costs | (2) | ||||
Total financing activities | 454 | (95) | [2] | ||
Decrease in cash and cash equivalents | 9 | 22 | [2] | ||
Cash and cash equivalents, beginning of period | [2] | 64 | 55 | ||
Cash and cash equivalents, end of period | 73 | 77 | [2] | ||
Class B Units | |||||
Financing Activities | |||||
Distributions paid (Note 7) | (22) | (12) | [2] | ||
Common units and General Partner interest combined | |||||
Financing Activities | |||||
Distributions paid (Note 9) | (210) | (184) | [2] | ||
Northern Border | |||||
Cash Generated From Operations | |||||
Equity earnings from equity investments (Note 3 and 4) | (50) | (52) | |||
Investing Activities | |||||
Investment/Acquisition of interests | (83) | ||||
Great Lakes | |||||
Cash Generated From Operations | |||||
Equity earnings from equity investments (Note 3 and 4) | (24) | (23) | |||
Investing Activities | |||||
Investment/Acquisition of interests | (4) | (4) | [2] | ||
Portland Natural Gas Transmission System | |||||
Investing Activities | |||||
Investment/Acquisition of interests | [2] | (193) | |||
Financing Activities | |||||
Distributions paid to former parent of PNGTS | (1) | $ (9) | [2] | ||
Portland Natural Gas Transmission System And Iroquois Acquisition | |||||
Investing Activities | |||||
Investment/Acquisition of interests | $ (646) | ||||
[1] | Recast to consolidate PNGTS for all periods presented (Refer to Notes 2 and 6). | ||||
[2] | Recast to consolidate PNGTS for all periods presented (Refer to Notes 2 and 6). |
CONSOLIDATED STATEMENTS OF CAS7
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) | Sep. 30, 2017 | Aug. 01, 2017 | Jun. 01, 2017 | Sep. 30, 2016 |
Portland Natural Gas Transmission System | ||||
Interest acquired (as a percent) | 11.81% | 11.81% | 49.90% | |
Iroquois | ||||
Interest acquired (as a percent) | 49.34% | 49.34% | 49.34% |
CONSOLIDATED STATEMENT OF CHANG
CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' EQUITY - 9 months ended Sep. 30, 2017 - USD ($) shares in Millions, $ in Millions | Limited PartnersCommon Units | Limited PartnersClass B Units | General Partner | Accumulated Other Comprehensive Loss | [1] | Non-Controlling Interest | Equity of former parent of PNGTS | Total | ||||
Partners' Equity at beginning of year at Dec. 31, 2016 | $ 1,002 | $ 117 | $ 27 | $ (2) | [2] | $ 97 | [2] | $ 31 | [2] | $ 1,272 | [2] | |
Partners' Equity at beginning of year (in units) at Dec. 31, 2016 | 67.4 | 1.9 | ||||||||||
Increase (Decrease) in Partners' Equity | ||||||||||||
Net income | [2] | $ 164 | $ 8 | 12 | 7 | 2 | 193 | |||||
Other comprehensive income | [2] | $ 2 | 2 | |||||||||
ATM equity issuance, net (Note 7) | $ 124 | 2 | 126 | [2] | ||||||||
ATM equity issuance, net (Note 7) (in units) | 2.2 | |||||||||||
Reclassification of common units no longer subject to rescission (Note 7) | $ 81 | 2 | 83 | [2] | ||||||||
Acquisition of interests in PNGTS and Iroquois (Note 6) | (383) | (8) | (32) | [2] | (423) | [2] | ||||||
Distributions | [2] | (198) | (22) | (12) | (2) | $ (1) | (235) | |||||
Partners' Equity at end of year at Sep. 30, 2017 | $ 790 | $ 103 | $ 23 | $ 102 | [2] | $ 1,018 | [2] | |||||
Partners' Equity at end of year (in units) at Sep. 30, 2017 | 69.6 | 1.9 | ||||||||||
[1] | Losses related to cash flow hedges reported in Accumulated Other Comprehensive Loss and expected to be reclassified to Net Income in the next 12 months are estimated to be $1 million. These estimates assume constant interest rates over time; however, the amounts reclassified will vary based on actual value of interest rates at the date of settlement.Recast to consolidate PNGTS for all periods presented (Refer to Notes 2 and 6). | |||||||||||
[2] | Recast to consolidate PNGTS for all periods presented (Refer to Notes 2 and 6). |
CONSOLIDATED STATEMENT OF CHAN9
CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' EQUITY (Parenthetical) $ in Millions | 9 Months Ended |
Sep. 30, 2017USD ($) | |
CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' EQUITY | |
Losses expected to be reclassified to Net Income in the next 12 months | $ 1 |
ORGANIZATION
ORGANIZATION | 9 Months Ended |
Sep. 30, 2017 | |
ORGANIZATION | |
ORGANIZATION | NOTE 1 ORGANIZATION TC PipeLines, LP and its subsidiaries are collectively referred to herein as the Partnership. The Partnership was formed by TransCanada PipeLines Limited, a wholly owned subsidiary of TransCanada Corporation (TransCanada Corporation together with its subsidiaries collectively referred to herein as TransCanada), to acquire, own and participate in the management of energy infrastructure assets in North America. The Partnership owns its pipeline assets through three intermediate limited partnerships (ILPs), TC GL Intermediate Limited Partnership, TC PipeLines Intermediate Limited Partnership and TC Tuscarora Intermediate Limited Partnership. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2017 | |
SIGNIFICANT ACCOUNTING POLICIES | |
SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 SIGNIFICANT ACCOUNTING POLICIES The accompanying financial statements and related notes have been prepared in accordance with United States generally accepted accounting principles (GAAP) and amounts are stated in U.S. dollars. The results of operations for the three and nine months ended September 30, 2017 and 2016 are not necessarily indicative of the results that may be expected for the full fiscal year. The accompanying financial statements should be read in conjunction with the audited financial statements and notes thereto for the year ended December 31, 2016 included as exhibit 99.2 in our Current Report on Form 8-K dated August 3, 2017. That report contains a more comprehensive summary of the Partnership’s significant accounting policies. In the opinion of management, the accompanying financial statements contain all of the appropriate adjustments, all of which are normally recurring adjustments unless otherwise noted, and considered necessary to present fairly the financial position of the Partnership, the results of operations and cash flows for the respective periods. Our significant accounting policies are consistent with those disclosed in our audited financial statements and notes thereto for the year ended December 31, 2016 included as exhibit 99.2 in our Current Report on Form 8-K dated August 3, 2017, except as described in Note 3, Accounting Pronouncements. Basis of Presentation The Partnership consolidates its interests in entities over which it is able to exercise control. To the extent there are interests owned by other parties, these interests are included in non-controlling interests. The Partnership uses the equity method of accounting for its investments in entities over which it is able to exercise significant influence. Acquisitions by the Partnership from TransCanada are considered common control transactions. When businesses are acquired from TransCanada that will be consolidated by the Partnership, the historical financial statements are required to be recast, except net income per common unit, to include the acquired entities for all periods presented. When the Partnership acquires an asset or an investment from TransCanada, which will be accounted for by the equity method, the financial information is not required to be recast and the transaction is accounted for prospectively from the date of the acquisition. On June 1, 2017, the Partnership acquired from a subsidiary of TransCanada an additional 11.81 percent interest in PNGTS, that resulted in the Partnership owning a 61.71 percent interest in PNGTS (Refer to Note 6). As a result of the Partnership owning 61.71 percent interest in PNGTS, the Partnership’s historical financial information has been recast, except net income (loss) per common unit, to consolidate PNGTS for all the periods presented in the Partnership’s consolidated financial statements. Additionally, this acquisition was accounted for as transaction between entities under common control, similar to pooling of interests, whereby the assets and liabilities of PNGTS were recorded at TransCanada’s carrying value. Also, on June 1, 2017, the Partnership acquired from subsidiaries of TransCanada a 49.34 percent interest in Iroquois Gas Transmission, L.P. (“Iroquois”) (Refer to Note 6). Accordingly, this transaction was accounted for as a transaction between entities under common control, similar to pooling of interest, whereby the equity investment in Iroquois was recorded at TransCanada’s carrying value and was accounted for prospectively. Use of Estimates The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Although management believes these estimates are reasonable, actual results could differ from these estimates. |
ACCOUNTING PRONOUNCEMENTS
ACCOUNTING PRONOUNCEMENTS | 9 Months Ended |
Sep. 30, 2017 | |
ACCOUNTING PRONOUNCEMENTS | |
ACCOUNTING PRONOUNCEMENTS | NOTE 3 ACCOUNTING PRONOUNCEMENTS Retrospective application of Accounting Standards Update (ASU) No 2016-15 “ Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments” In August 2016, the Financial Accounting Standards Board (FASB) issued an amendment of previously issued guidance, which intends to reduce diversity in practice in how certain transactions are classified in the statement of cash flows. The new guidance is effective January 1, 2018, however, as early adoption is permitted, the Partnership elected to retrospectively apply this guidance effective December 31, 2016. The Partnership has elected to classify distributions received from equity method investees using the nature of distributions approach as it is more representative of the nature of the underlying activities of the investees that generated the distributions. As a result, certain comparative period distributions received from equity method investees, amounting to $50 million for the nine months ended September 30, 2016, have been reclassified from investing activities to cash generated from operations in the consolidated statement of cash flows. Effective January 1, 2017 Inventory In July 2015, the FASB issued new guidance on simplifying the measurement of inventory. The new guidance specifies that an entity should measure inventory within the scope of this update at the lower of cost and net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. This new guidance was effective January 1, 2017, was applied prospectively and did not have a material impact on the Partnership’s consolidated balance sheet. Equity method and joint ventures In March 2016, the FASB issued new guidance that simplifies the transition to equity method accounting. The new guidance eliminates the requirement to retroactively apply the equity method of accounting when an increase in ownership interest in an investment qualifies for equity method accounting. The new guidance is effective January 1, 2017 and was applied prospectively. The application of this guidance did not have a material impact on the Partnership’s consolidated financial statements. Consolidation In October 2016, the FASB issued new guidance on consolidation relating to interests held through related parties that are under common control. The new guidance amends the consolidation requirements such that if a decision maker is required to evaluate whether it is the primary beneficiary of a variable interest entry (VIE), it will need to consider only its proportionate indirect interest in the VIE held through a common control party. The guidance was effective January 1, 2017, was applied retrospectively and did not result in any change to our consolidation conclusions. Future accounting changes Revenue from contracts with customers In 2014, the FASB issued new guidance on revenue from contracts with customers. The new guidance requires that an entity recognize revenue in accordance with a prescribed model. This model is used to depict the transfer of promised goods or services to customers in an amount that reflects the total consideration to which it expects to be entitled during the term of the contract in exchange for those goods or services. The new guidance also requires additional disclosures about the nature, amount, timing and uncertainty of revenue and the related cash flows. The Partnership will adopt the new standard on the effective date of January 1, 2018. There are two methods in which the new standard can be adopted: (1) a full retrospective approach with restatement of all prior periods presented, or (2) a modified retrospective approach with a cumulative-effect adjustment as of the date of adoption. The Partnership will adopt the standard using the modified retrospective approach with the cumulative-effect of the adjustment recognized at the date of adoption, subject to allowable and elected practical expedients. The Partnership has identified all existing customer contracts that are within the scope of the new guidance and is on schedule in the process of analyzing individual contracts or groups of contracts to identify any significant changes in how revenues are recognized as a result of implementing the new guidance. While the Partnership has not identified any material differences in the amount and timing of revenue recognition for the contracts that have been analyzed to date, the evaluation is not complete and the Partnership has not concluded on the overall impact of adopting the new guidance. The Partnership continues its contract analysis to obtain the information necessary to quantify the cumulative-effect adjustment, if any, on prior period revenues and revenue recognized going forward. Although consolidated revenues may not be materially impacted by the new guidance, the Partnership currently anticipates significant changes to disclosures based on the additional requirements prescribed. These new disclosures include information regarding the significant judgments used in evaluating when and how revenue is recognized and information related to contract assets and liabilities. In addition, the new guidance requires that the Partnership’s revenue recognition policy disclosure includes additional detail regarding the various performance obligations and the nature, amount, timing and estimates of revenue and cash flows generated from contracts with customers. The Partnership continues to develop and evaluate disclosures required with a particular focus on the scope of contracts subject to disclosure of remaining performance obligations. The Partnership also continues to address any system and process changes necessary to compile the information to meet the recognition and disclosure requirements of the new guidance. The Partnership continues to monitor additional authoritative or interpretive guidance related to the new guidance as it becomes available. Leases In February 2016, the FASB issued new guidance on the accounting for leases. The new guidance amends the definition of a lease requiring the customer to have both (1) the right to obtain substantially all of the economic benefits from the use of the asset and (2) the right to direct the use of the asset in order for the arrangement to qualify as a lease. The new guidance also establishes a right-of-use (ROU) model that requires a lessee to recognize a ROU asset and corresponding lease liability on the balance sheet for all leases with a term longer than 12 months. Leases will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement. The new guidance does not make extensive changes to lessor accounting. The new guidance is effective on January 1, 2019, with early adoption permitted. A modified retrospective transition approach is required for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. The Partnership is continuing to identify and analyze existing lease agreements to determine the effect of adoption of the new guidance on its consolidated financial statements. The Partnership is also addressing system and process changes necessary to compile the information to meet the recognition and disclosure requirements of the new guidance. Goodwill Impairment In January 2017, the FASB issued new guidance on simplifying the test for goodwill impairment by eliminating the requirement to calculate the implied fair value of goodwill to measure the impairment charge. Instead, entities will record an impairment charge based on the excess of a reporting unit’s carrying amount over its fair value. This new guidance is effective January 1, 2020 and will be applied prospectively. Early adoption is permitted. The Partnership is currently evaluating the impact of the adoption of this guidance and has not yet determined the effect on its consolidated financial statements. Hedge Accounting In August 2017, the FASB issued new guidance on hedge accounting, making more financial and nonfinancial hedging strategies eligible for hedge accounting. The new guidance amends the presentation requirements relating to the change in fair value of a derivative and additional disclosure requirements include cumulative basis adjustments for fair value hedges and the effect of hedging on individual statement of income line items. This new guidance is effective January 1, 2019 and will be applied prospectively with a cumulative-effect adjustment to opening equity on adoption. Early adoption is permitted. The Partnership is currently evaluating the impact of the adoption of this guidance and has not yet determined the effect on its consolidated financial statements. |
EQUITY INVESTMENTS
EQUITY INVESTMENTS | 9 Months Ended |
Sep. 30, 2017 | |
EQUITY INVESTMENTS | |
EQUITY INVESTMENTS | NOTE 4 EQUITY INVESTMENTS The Partnership has equity interests in Northern Border, Great Lakes and effective June 1, 2017, Iroquois. The pipeline systems owned by these entities are regulated by FERC. The pipeline systems of Northern Border and Great Lakes are operated by subsidiaries of TransCanada. The Iroquois pipeline system is operated by Iroquois Pipeline Operating Company, a wholly owned subsidiary of Iroquois. The Partnership uses the equity method of accounting for its interests in its equity investees. The Partnership’s equity investments are held through our ILPs that are considered to be variable interest entities (VIEs) (Refer to Note 17). Ownership Equity Earnings Equity Investments Interest at Three months Nine Months (unaudited) September 30, ended September 30, ended September 30, September 30, December 31, (millions of dollars) 2017 2017 2016 (b) 2017 2016 (b) 2017 2016 (b) Northern Border (a) % Great Lakes % Iroquois % — — — (a) Equity earnings from Northern Border is net of the 12-year amortization of a $10 million transaction fee paid to the operator of Northern Border at the time of the Partnership’s acquisition of an additional 20 percent interest in April 2006. (b) Recast to eliminate equity earnings from PNGTS and consolidate PNGTS for all periods presented (Refer to Notes 2 and 6). Northern Border On September 1, 2017, the Partnership made an equity contribution to Northern Border amounting to $83 million. This amount represents the Partnership’s 50 percent share of $166 million capital contribution request from Northern Border to reduce the outstanding balance of its revolver debt to increase its available borrowing capacity. The Partnership did not have undistributed earnings from Northern Border for the three and nine months ended September 30, 2017 and 2016. The summarized financial information for Northern Border is as follows: (unaudited) (millions of dollars) September 30, 2017 December 31, 2016 ASSETS Cash and cash equivalents Other current assets Plant, property and equipment, net Other assets LIABILITIES AND PARTNERS’ EQUITY Current liabilities Deferred credits and other Long-term debt, including current maturities, net Partners’ equity Partners’ capital Accumulated other comprehensive loss ) ) Three months ended Nine months ended (unaudited) September 30, September 30, (millions of dollars) 2017 2016 2017 2016 Transmission revenues Operating expenses ) ) ) ) Depreciation ) ) ) ) Financial charges and other ) ) ) ) Net income Great Lakes The Partnership made an equity contribution to Great Lakes of $4 million in the first quarter of 2017. This amount represents the Partnership’s 46.45 percent share of a $9 million cash call from Great Lakes to make a scheduled debt repayment. The Partnership did not have undistributed earnings from Great Lakes for the three and nine months ended September 30, 2017 and 2016. The summarized financial information for Great Lakes is as follows: (unaudited) (millions of dollars) September 30, 2017 December 31, 2016 ASSETS Current assets Plant, property and equipment, net LIABILITIES AND PARTNERS’ EQUITY Current liabilities Net long-term debt, including current maturities Partners’ equity Three months ended Nine months ended (unaudited) September 30, September 30, (millions of dollars) 2017 2016 2017 2016 Transmission revenues Operating expenses ) ) ) ) Depreciation ) ) ) ) Financial charges and other ) ) ) ) Net income Iroquois On June 1, 2017, the Partnership acquired a 49.34 percent interest in Iroquois. Also on July 27, 2017, Iroquois declared its second quarter 2017 distribution of $28 million, of which the Partnership received its 49.34 percent share or $14 million on August 1, 2017. The distribution includes the Partnership’s 49.34 percent share of the Iroquois unrestricted cash distribution amounting to approximately $2.6 million (Refer to Note 6). This amount is reported as distributions received as return of investment in the Partnership’s consolidated statement of cash flows. The Partnership recorded no undistributed earnings from Iroquois in the three and nine months ended September 30, 2017. The summarized financial information for Iroquois is as follows: (unaudited) (millions of dollars) September 30, 2017 December 31, 2016 ASSETS Cash and cash equivalents Other current assets Plant, property and equipment, net Other assets LIABILITIES AND PARTNERS’ EQUITY Current liabilities Net long-term debt, including current maturities Other non-current liabilities Partners’ equity Three months ended Nine months ended (unaudited) September 30, September 30, (millions of dollars) 2017 2016 2017 2016 Transmission revenues Operating expenses ) ) ) ) Depreciation ) ) ) ) Financial charges and other ) ) ) ) Net income |
DEBT AND CREDIT FACILITIES
DEBT AND CREDIT FACILITIES | 9 Months Ended |
Sep. 30, 2017 | |
DEBT AND CREDIT FACILITIES | |
DEBT AND CREDIT FACILITIES | NOTE 5 DEBT AND CREDIT FACILITIES (unaudited) September 30, Weighted Average December 31, (a) Weighted Average TC PipeLines, LP Senior Credit Facility due 2021 % % 2013 Term Loan Facility due October 2022 % % 2015 Term Loan Facility due October 2020 % % 4.65% Unsecured Senior Notes due 2021 % (b) % (b) 4.375% Unsecured Senior Notes due 2025 % (b) % (b) 3.90 % Unsecured Senior Notes due 2027 % (b) — — GTN 5.29% Unsecured Senior Notes due 2020 % (b) % (b) 5.69% Unsecured Senior Notes due 2035 % (b) % (b) Unsecured Term Loan Facility due 2019 % % PNGTS 5.90% Senior Secured Notes due December 2018 % (b) % (b) Tuscarora Unsecured Term Loan due 2020 % % 3.82% Series D Senior Notes due August 2017 — % (b) % (b) Less: unamortized debt issuance costs and debt discount Less: current portion (a) Recast to consolidate PNGTS for all periods presented (Refer to Notes 2 and 6). (b) Fixed interest rate TC Pipelines, LP The Partnership’s Senior Credit Facility consists of a $500 million senior revolving credit facility with a banking syndicate, maturing November 10, 2021, under which $255 million was outstanding at September 30, 2017 (December 31, 2016 - $160 million), leaving $245 million available for future borrowing. The LIBOR-based interest rate on the Senior Credit Facility was 2.49 percent at September 30, 2017 (December 31, 2016 — 1.92 percent). On September 29, 2017, the Partnership’s 2013 Term Loan Facility that was due on July 1, 2018 was amended to extend the maturity period through October 2, 2022. As of September 30, 2017, the variable interest rate exposure related to the 2013 Term Loan Facility was hedged by fixed interest rate swap arrangements and our effective interest rate was 2.31 percent (December 31, 2016 — 2.31 percent). Prior to hedging activities, the LIBOR-based interest rate on the 2013 Term Loan Facility was 2.49 percent at September 30, 2017 (December 31, 2016 — 1.87 percent). On September 29, 2017, the Partnership’s 2015 Term Loan Facility that was due on October 1, 2018 was amended to extend the maturity period through October 1, 2020. The LIBOR-based interest rate on the 2015 Term Loan Facility was 2.39 percent at September 30, 2017 (December 31, 2016 — 1.77 percent). The 2013 Term Loan Facility and the 2015 Term Loan Facility (collectively, the Term Loan Facilities) and the Senior Credit Facility require the Partnership to maintain a certain leverage ratio (debt to adjusted cash flow [net income plus cash distributions received, extraordinary losses, interest expense, expense for taxes paid or accrued, and depreciation and amortization expense less equity earnings and extraordinary gains]) no greater than 5.00 to 1.00 for each fiscal quarter, except for the fiscal quarter and the two following fiscal quarters in which one or more acquisitions has been executed, in which case the leverage ratio is to be no greater than 5.50 to 1.00. The leverage ratio was 4.76 to 1.00 as of September 30, 2017. On May 25, 2017, the Partnership closed a $500 million public offering of senior unsecured notes bearing an interest rate of 3.90 percent maturing May 25, 2027. The net proceeds of $497 million were used to fund a portion of the 2017 Acquisition (Refer to Note 6). The indenture for the notes contains customary investment grade covenants. PNGTS PNGTS’ Senior Secured Notes are secured by the PNGTS long-term firm shipper contracts and its partners’ pledge of their equity and a guarantee of debt service for six months. PNGTS is restricted under the terms of its note purchase agreement from making cash distributions unless certain conditions are met. Before a distribution can be made, the debt service reserve account must be fully funded and PNGTS’ debt service coverage ratio for the preceding and succeeding twelve months must be 1.30 or greater. At September 30, 2017, the debt service coverage ratio was 1.71 for the twelve preceding months and 5.31 for the twelve succeeding months. Therefore, PNGTS was not restricted to make any cash distributions. GTN GTN’s Unsecured Senior Notes, along with GTN’s Unsecured Term Loan Facility contain a covenant that limits total debt to no greater than 70 percent of GTN’s total capitalization. GTN’s total debt to total capitalization ratio at September 30, 2017 was 44.2 percent. The LIBOR-based interest rate on the GTN’s Unsecured Term Loan Facility was 2.19 percent at September 30, 2017 (December 31, 2016 — 1.57 percent). Tuscarora On August 21, 2017, Tuscarora refinanced all of its outstanding debt by amending its existing Unsecured Term Loan Facility and issuing a new $25 million variable rate term loan that will require yearly principal payments and will mature on August 21, 2020. Tuscarora’s Unsecured Term Loan contains a covenant that requires Tuscarora to maintain a debt service coverage ratio (cash available from operations divided by a sum of interest expense and principal payments) of greater than or equal to 3.00 to 1.00. As of September 30, 2017, the ratio was 3.08 to 1.00. The LIBOR-based interest rate on the Tuscarora’s Unsecured Term Loan Facility was 2.36 percent at September 30, 2017 (December 31, 2016 — 1.90 percent). At September 30, 2017, the Partnership was in compliance with its financial covenants, in addition to the other covenants which include restrictions on entering into mergers, consolidations and sales of assets, granting liens, material amendments to the Third Amended and Restated Agreement of Limited Partnership (Partnership Agreement), incurring additional debt and distributions to unitholders. The principal repayments required of the Partnership on its debt are as follows: (unaudited) (millions of dollars) 2017 2018 2019 2020 2021 Thereafter |
ACQUISITION
ACQUISITION | 9 Months Ended |
Sep. 30, 2017 | |
ACQUISITION | |
ACQUISITION | NOTE 6 ACQUISITION 2017 Acquisition On June 1, 2017, the Partnership acquired from subsidiaries of TransCanada a 49.34 percent interest in Iroquois, including an option to acquire a further 0.66 percent interest in Iroquois, together with an additional 11.81 percent interest in PNGTS resulting in the Partnership owning a 61.71 percent interest in PNGTS (2017 Acquisition). The total purchase price of the 2017 Acquisition was $765 million plus final purchase price adjustments amounting to $50 million. The purchase price consisted of (i) $710 million for the Iroquois interest (less $164 million, which reflected our 49.34 percent share of Iroquois outstanding debt on June 1, 2017), (ii) $55 million for the additional 11.81 percent interest in PNGTS (less $5 million, which reflected our 11.81% proportionate share in PNGTS’ outstanding debt on June 1, 2017) (iii) final working capital adjustments on PNGTS and Iroquois amounting to $3 million and $19 million, respectively and (iv) additional consideration for Iroquois’ surplus cash amounting to $28 million. Additionally, the Partnership paid $1,000 for the option to acquire TransCanada’s remaining 0.66 percent interest in Iroquois. The Partnership funded the cash portion of the 2017 Acquisition through a combination of proceeds from the May 2017 public debt offering (refer to Note 5) and borrowing under our Senior Credit Facility. At the date of the 2017 Acquisition, there was significant cash on Iroquois’ balance sheet. Pursuant to the Purchase and Sale Agreement associated with the acquisition of the Iroquois interest, as amended, the Partnership agreed to pay $28 million plus interest to TransCanada on August 1, 2017 for its 49.34 percent share of cash determined to be surplus to Iroquois’ operating needs. Additionally, Iroquois’ partners adopted a distribution resolution to address the significant cash on Iroquois’ balance sheet post-closing. The Partnership expects to receive the $28 million of unrestricted cash as part of its quarterly distributions from Iroquois over 11 quarters under the terms of the resolution, which began with Iroquois’ second quarter 2017 distribution on August 1, 2017. As of November 6, 2017 the Partnership has received approximately $5.2 million of the expected $28 million, of which $2.6 million was received on November 1, 2017 (Refer to Note 19). The acquisition of a 49.34 percent interest in Iroquois was accounted for as a transaction between entities under common control, whereby the equity investment in Iroquois was recorded at TransCanada’s carrying value and the total excess purchase price paid was recorded as a reduction in Partners’ Equity. Iroquois’ net purchase price was allocated as follows: (millions of dollars) Net Purchase Price (a) Less: TransCanada’s carrying value of Iroquois at June 1, 2017 Excess purchase price (b) (a) Total purchase price of $710 million plus final working capital adjustment of $19 million and the additional consideration on Iroquois surplus cash amounting to approximately $28 million less the assumption of $164 million of proportional Iroquois debt by the Partnership. (b) The excess purchase price of $370 million was recorded as a reduction in Partners’ Equity. The acquisition of an additional 11.81 percent interest in PNGTS, which resulted in the Partnership owning 61.71 percent in PNGTS, was accounted for as a transaction between entities under common control, similar to a pooling of interests, whereby assets and liabilities of PNGTS were recorded at TransCanada’s carrying value and the Partnership’s historical financial information, except net income per common unit, was recast to consolidate PNGTS for all periods presented. The PNGTS purchase price was recorded as follows: (millions of dollars) Current assets Property, plant and equipment, net Current liabilities ) Deferred state income taxes ) Long-term debt, including current portion ) Non-controlling interest ) Carrying value of pre-existing Investment in PNGTS ) TransCanada’s carrying value of the acquired 11.81 percent interest at June 1, 2017 Excess purchase price over net assets acquired (a) Total cash consideration (b) (a) The excess purchase price of $21 million was recorded as a reduction in Partners’ Equity. (b) Total purchase price of $55 million plus the final working capital adjustment of $3 million less the assumption of $5 million of proportional PNGTS debt by the Partnership. |
PARTNERS' EQUITY
PARTNERS' EQUITY | 9 Months Ended |
Sep. 30, 2017 | |
PARTNERS' EQUITY | |
PARTNERS' EQUITY | NOTE 7 PARTNERS’ EQUITY ATM equity issuance program (ATM program) During the nine months ended September 30, 2017, we issued 2,165,162 common units under our ATM program generating net proceeds of approximately $124 million, plus $2 million contributed by the General Partner to maintain its effective two percent general partner interest. The commissions to our sales agents in the nine months ended September 30, 2017 were approximately $1 million. The net proceeds were used for general partnership purposes. Class B units issued to TransCanada The Class B Units we issued on April 1, 2015 to finance a portion of the 2015 GTN Acquisition represent a limited partner interest in us and entitle TransCanada to an annual distribution based on 30 percent of GTN’s annual distributions as follows: (i) 100 percent of distributions above $20 million through March 31, 2020; and (ii) 25 percent of distributions above $20 million thereafter. For the year ending December 31, 2017, the Class B units’ equity account will be increased by the excess of 30 percent of GTN’s distributions over the annual threshold of $20 million until such amount is declared for distribution and paid in the first quarter of 2018. During the nine months ended September 30, 2017, 30 percent of GTN’s total distributable cash flow was $28 million. As a result of exceeding the $20 million threshold, the Class B units’ equity account was increased by $8 million (Refer to Note 8). For the year ended December 31, 2016, the Class B distribution was $22 million and was declared and paid in the first quarter of 2017. Common unit issuance subject to rescission In connection with a late filing of an employee-related Form 8-K with the SEC in March 2016, the Partnership became ineligible to use the then effective shelf registration statement upon filing of its Annual Report on Form 10-K for the year ended December 31, 2015. As a result, it was determined that the purchasers of the 1.6 million common units that were issued from March 8, 2016 to May 19, 2016 under the Partnership’s ATM program may have had a rescission right for an amount equal to the purchase price paid for the units, plus statutory interest and less any distributions paid, upon the return of such units to the Partnership. The Securities Act of 1933, as amended (Securities Act) generally requires that any claim brought for a violation of Section 5 of the Securities Act be brought within one year of violation. At December 31, 2016, $83 million was recorded as common units subject to rescission on the consolidated balance sheet. The Partnership classified the 1.6 million common units that were sold under its ATM program from March 8, 2016 up to and including May 19, 2016, which may have been subject to rescission rights, outside of equity given the potential redemption feature which was not within the control of the Partnership. These units were treated as outstanding for financial reporting purposes. No unitholder claimed or attempted to exercise any rescission rights prior to their expiry dates and the final rights related to the sales of such units expired on May 19, 2017. As a result of the expiration of these rights, the $83 million was reclassified back to partners’ equity. At September 30, 2017, there were no outstanding common units subject to rescission on the Partnership’s consolidated balance sheet. |
NET INCOME PER COMMON UNIT
NET INCOME PER COMMON UNIT | 9 Months Ended |
Sep. 30, 2017 | |
NET INCOME PER COMMON UNIT | |
NET INCOME PER COMMON UNIT | NOTE 8 NET INCOME PER COMMON UNIT Net income per common unit is computed by dividing net income attributable to controlling interests, after deduction of net income attributable to PNGTS’ former parent, amounts attributable to the General Partner and Class B units, by the weighted average number of common units outstanding. The amounts allocable to the General Partner equals an amount based upon the General Partner’s effective two percent general partner interest, plus an amount equal to incentive distributions. Incentive distributions are paid to the General Partner if quarterly cash distributions on the common units exceed levels specified in the Partnership Agreement. The amount allocable to the Class B units in 2017 equals 30 percent of GTN’s distributable cash flow during the year ended December 31, 2017 less $20 million (December 31, 2016 —$20 million). Net income per common unit was determined as follows: Three months ended Nine months ended (unaudited) (millions of dollars, except per common unit amounts) 2017 2016 (a) 2017 2016 (a) Net income attributable to controlling interests (a) Net income attributable to PNGTS’ former parent (a) (b) — — ) ) Net income attributable to General and Limited Partners Incentive distributions allocated to the General Partner (c) ) ) ) ) Net income attributable to the Class B units (d) ) ) ) ) Net income attributable to the General Partner and common units Net income attributable to General Partner’s effective two percent interest ) ) ) ) Net income attributable to common units Weighted average common units outstanding (millions) — basic and diluted (e) (e ) Net income per common unit — basic and diluted $ $ (f) $ $ (f) (a) Recast to consolidate PNGTS for all periods presented (Refer to Notes 2 and 6). (b) Net income allocable to General and Limited Partners excludes net income attributed to PNGTS’ former parent as it was allocated to TransCanada and was not allocable to either the general partner, common units or Class B units. (c) Under the terms of the Partnership Agreement, for any quarterly period, the participation of the incentive distribution rights (IDRs) is limited to the available cash distributions declared. Accordingly, incentive distributions allocated to the General Partner are based on the Partnership’s available cash during the current reporting period, but declared and paid in the subsequent reporting period. (d) During the three and nine months ended September 30, 2017, 30 percent of GTN’s total distributable cash flow was $28 million. As a result of exceeding the $20 million threshold, $8 million of net income attributable to controlling interests was allocated to the Class B units during the three and nine months ended September 30, 2017. During the six months ended June 30, 2016, the threshold was exceeded and during the nine months ended September 30, 2016, 30 percent of GTN’s total distributable cash flow was $32 million. As a result, $12 million of net income attributable to controlling interests was allocated to the Class B units at September 30, 2016, of which $1 million and $11 million were allocated during the three months ended June 30, 2016 and September 30, 2016, respectively (Refer to Note 7). (e) Includes the common units subject to rescission. These units are treated as outstanding for financial reporting purposes (Refer to Note 7). (f) Net income per common unit prior to recast (Refer to Note 2). |
CASH DISTRIBUTIONS
CASH DISTRIBUTIONS | 9 Months Ended |
Sep. 30, 2017 | |
CASH DISTRIBUTIONS | |
CASH DISTRIBUTIONS | NOTE 9 CASH DISTRIBUTIONS During the three and nine months ended September 30, 2017, the Partnership distributed $1.00 and $2.88 per common unit, respectively (September 30, 2016 — $0.94 and $2.72 per common unit) for a total of $74 million and $210 million, respectively (September 30, 2016 - $65 million and $184 million). The distribution paid to our General Partner during the three months ended September 30, 2017 for its effective two percent general partner interest was $2 million along with an IDR payment of $3 million for a total distribution of $5 million (September 30, 2016 - $1 million for the effective two percent interest and a $2 million IDR payment). The distribution paid to our General Partner during the nine months ended September 30, 2017 for its effective two percent general partner interest was $4 million along with an IDR payment of $7 million for a total distribution of $11 million (September 30, 2016 - $3 million for the effective two percent interest and a $4 million IDR payment). |
CHANGE IN OPERATING WORKING CAP
CHANGE IN OPERATING WORKING CAPITAL | 9 Months Ended |
Sep. 30, 2017 | |
CHANGE IN OPERATING WORKING CAPITAL | |
CHANGE IN OPERATING WORKING CAPITAL | NOTE 10 CHANGE IN OPERATING WORKING CAPITAL (unaudited) Nine months ended September 30, (millions of dollars) 2017 2016 (a) Change in accounts receivable and other Change in other current assets Change in accounts payable and accrued liabilities (b) Change in accounts payable to affiliates ) ) Change in accrued interest Change in operating working capital (a) Recast to consolidate PNGTS for all periods presented (Refer to Notes 2 and 6). (b) The accrual of $10 million for the construction of GTN’s Carty Lateral in December 31, 2015 was paid during the first quarter 2016. Accordingly, the payment was reported as capital expenditures in our 2016 cash flow statement. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Sep. 30, 2017 | |
RELATED PARTY TRANSACTIONS | |
RELATED PARTY TRANSACTIONS | NOTE 11 RELATED PARTY TRANSACTIONS The Partnership does not have any employees. The management and operating functions are provided by the General Partner. The General Partner does not receive a management fee in connection with its management of the Partnership. The Partnership reimburses the General Partner for all costs of services provided, including the costs of employee, officer and director compensation and benefits, and all other expenses necessary or appropriate to the conduct of the business of, and allocable to, the Partnership. Such costs include (i) overhead costs (such as office space and equipment) and (ii) out-of-pocket expenses related to the provision of such services. The Partnership Agreement provides that the General Partner will determine the costs that are allocable to the Partnership in any reasonable manner determined by the General Partner in its sole discretion. For both the three and nine months ended September 30, 2017 and 2016, total costs charged to the Partnership by the General Partner were $1 million and $3 million, respectively. As operator of our pipelines except Iroquois, TransCanada’s subsidiaries provide capital and operating services to our pipeline systems. TransCanada’s subsidiaries incur costs on behalf of our pipeline systems, including, but not limited to, employee salary and benefit costs, and property and liability insurance costs. The Iroquois pipeline system is operated by Iroquois Pipeline Operating Company, a wholly owned subsidiary of Iroquois. Therefore, Iroquois does not receive any capital and operating services from TransCanada. Capital and operating costs charged to our pipeline systems, except for Iroquois, for the three and nine months ended September 30, 2017 and 2016 by TransCanada’s subsidiaries and amounts payable to TransCanada’s subsidiaries at September 30, 2017 and December 31, 2016 are summarized in the following tables: Three months ended Nine months ended (unaudited) (millions of dollars) 2017 2016 2017 2016 Capital and operating costs charged by TransCanada’s subsidiaries to: Great Lakes (a) Northern Border (a) GTN Bison North Baja Tuscarora PNGTS Impact on the Partnership’s net income: Great Lakes (a) Northern Border (a) GTN Bison North Baja Tuscarora PNGTS (b) (unaudited) September 30, (millions of dollars) 2017 December 31, 2016 Net amounts payable to TransCanada’s subsidiaries is as follows: Great Lakes (a) Northern Border (a) GTN Bison North Baja — Tuscarora — PNGTS (a) Represents 100 percent of the costs. (b) Recast to consolidate PNGTS for all periods presented (Refer to Note 2). Great Lakes earns significant transportation revenues from TransCanada and its affiliates, some of which are provided at discounted rates and some at maximum recourse rates. For the three and nine months ended September 30, 2017, Great Lakes earned 44 percent and 53 percent of transportation revenues from TransCanada and its affiliates, respectively (September 30, 2016 — 62 percent and 69 percent). At September 30, 2017, $8 million was included in Great Lakes’ receivables in regards to the transportation contracts with TransCanada and its affiliates (December 31, 2016 — $19 million). Great Lakes operates under a FERC approved 2013 rate settlement that includes a revenue sharing mechanism that requires Great Lakes to share with its shippers certain percentages of any qualifying revenues earned above a certain return on equity threshold. For the year ended December 31, 2016, Great Lakes recorded an estimated 2016 revenue sharing provision of $7.2 million. For the three and nine months ended September 30, 2017, Great Lakes recorded an estimated 2017 revenue sharing provision of $12 million and $22 million, respectively. Great Lakes expects that a significant percentage of this refund will be paid to its affiliates. PNGTS earns transportation revenues from TransCanada and its affiliates. For three and nine months ended September 30, 2017, PNGTS earned approximately nil million and $1 million of its transportation revenues from TransCanada and its affiliates, respectively (2016 — $1 million and $2 million, respectively). At September 30, 2017, nil million was included in PNGTS’ receivables in regards to the transportation contracts with TransCanada and its affiliates (December 31, 2016 — nil). In connection with anticipated future commercial opportunities, PNGTS has entered into an arrangement with its affiliates regarding the construction of certain facilities on their systems that will be required to fulfill future contracts on the PNGTS’ system. In the event the anticipated developments do not proceed, PNGTS will be required to reimburse its affiliates for any costs incurred related to the development of these facilities. At September 30, 2017, PNGTS does not have an obligation for reimbursement under this arrangement. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended |
Sep. 30, 2017 | |
FAIR VALUE MEASUREMENTS | |
FAIR VALUE MEASUREMENTS | NOTE 12 FAIR VALUE MEASUREMENTS (a) Fair Value Hierarchy Under Accounting Standards Codification (ASC) 820, Fair Value Measurements and Disclosures , fair value measurements are characterized in one of three levels based upon the inputs used to arrive at the measurement. The three levels of the fair value hierarchy are as follows: · Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that we have the ability to access at the measurement date. · Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. · Level 3 inputs are unobservable inputs for the asset or liability. When appropriate, valuations are adjusted for various factors including credit considerations. Such adjustments are generally based on available market evidence. In the absence of such evidence, management’s best estimate is used. (b) Fair Value of Financial Instruments The carrying value of cash and cash equivalents, accounts receivable and other, accounts payable and accrued liabilities, accounts payable to affiliates and accrued interest approximate their fair values because of the short maturity or duration of these instruments, or because the instruments bear a variable rate of interest or a rate that approximates current rates. The fair value of the Partnership’s debt is estimated by discounting the future cash flows of each instrument at estimated current borrowing rates. The fair value of interest rate derivatives is calculated using the income approach, which uses period-end market rates and applies a discounted cash flow valuation model. Long-term debt is recorded at amortized cost and classified in Level 2 of the fair value hierarchy for fair value disclosure purposes. Interest rate derivative assets and liabilities are classified in Level 2 for all periods presented where the fair value is determined by using valuation techniques that refer to observable market data or estimated market prices. The estimated fair value of the Partnership’s debt as at September 30, 2017 and December 31, 2016 was $2,555 million and $1,962 million, respectively. Market risk is the risk that changes in market interest rates may result in fluctuations in the fair values or cash flows of financial instruments. The Partnership’s floating rate debt is subject to LIBOR benchmark interest rate risk. The Partnership uses interest rate derivatives to manage its exposure to interest rate risk. We regularly assess the impact of interest rate fluctuations on future cash flows and evaluate hedging opportunities to mitigate our interest rate risk. The Partnership’s interest rate swaps are structured such that the cash flows of the derivative instruments match those of the variable rate of interest on the 2013 Term Loan Facility. The Partnership hedged interest payments on the variable-rate 2013 Term Loan Facility with interest rate swaps maturing July 1, 2018, at a weighted average fixed interest rate of 2.31 percent. At September 30, 2017, the fair value of the interest rate swaps accounted for as cash flow hedges was an asset of $2 million (both on a gross and net basis). At December 31, 2016, the fair value of the interest rate swaps accounted for as cash flow hedges was an asset of $1 million and a liability of $1 million (on a gross basis) and an asset of nil million (on a net basis). The Partnership did not record any amounts in net income related to ineffectiveness for interest rate hedges for the three and nine months ended September 30, 2017 and 2016. The change in fair value of interest rate derivative instruments recognized in other comprehensive income was nil and a gain of $1 million for the three and nine months ended September 30, 2017, respectively (September 30, 2016 — gain of $2 million and a loss of $1 million). For the three and nine months ended September 30, 2017, the net realized loss related to the interest rate swaps was nil, and was included in financial charges and other (September 30, 2016 —$1 million and $2 million) (Refer to Note 14) . As discussed in Note 5, the Partnership’s $500 million 2013 Term Loan that was due July 1, 2018, was amended to extend the maturity period through October 2, 2022. At September 30, 2017, the entire $500 million 2013 Term Loan was hedged until July 1, 2018. As a result of this extension, the Partnership implemented an interest rate hedging strategy during the fourth quarter and hedged the entire $500 million until its October 2, 2022 maturity using forward starting swaps at an average rate of 3.26 percent. The Partnership has no master netting agreements; however, it has derivative contracts containing provisions with rights of offset. The Partnership has elected to present the fair value of derivative instruments with the right to offset on a gross basis in the balance sheet. Had the Partnership elected to present these instruments on a net basis, there would be no effect on the consolidated balance sheet as of September 30, 2017 (net asset of nil million as of December 31, 2016). In anticipation of a debt refinancing in 2003, PNGTS entered into forward interest rate swap agreements to hedge the interest rate on its Senior Secured Notes due in 2018. These interest rate swaps were used to manage the impact of interest rate fluctuations and qualified as derivative financial instruments in accordance with ASC 815, Derivatives and Hedging . PNGTS settled its position with a payment of $20.9 million to counterparties at the time of the refinancing and recorded the realized loss in accumulated other comprehensive income as of the termination date. The previously recorded loss is currently being amortized against earnings over the life of the PNGTS Senior Secured Notes. At September 30, 2017, our 61.71 percent proportionate share of net unamortized loss on PNGTS included in other comprehensive income was $1 million (December 31, 2016 - $2 million). For the three and nine months ended September 30, 2017, our 61.71 percent proportionate share of the amortization of realized loss on derivative instruments was nil and $1 million, respectively (September 30, 2016 —nil and $1 million). |
ACCOUNTS RECEIVABLE AND OTHER
ACCOUNTS RECEIVABLE AND OTHER | 9 Months Ended |
Sep. 30, 2017 | |
ACCOUNTS RECEIVABLE AND OTHER | |
ACCOUNTS RECEIVABLE AND OTHER | NOTE 13 ACCOUNTS RECEIVABLE AND OTHER (unaudited) (millions of dollars) September 30, 2017 December 31, 2016 (a) Trade accounts receivable, net of allowance of nil Imbalance receivable from affiliates — Other (a) Recast as discussed in Notes 2 and 6. |
FINANCIAL CHARGES AND OTHER
FINANCIAL CHARGES AND OTHER | 9 Months Ended |
Sep. 30, 2017 | |
FINANCIAL CHARGES AND OTHER | |
FINANCIAL CHARGES AND OTHER | NOTE 14 FINANCIAL CHARGES AND OTHER Three months ended Nine months ended (unaudited) (millions of dollars) 2017 2016 (b) 2017 2016 (b) Interest expense (a) PNGTS’ amortization of derivative loss on derivative instruments (Note 12) (b) — — Net realized loss related to the interest rate swaps — — Other income — — ) ) (a) Includes amortization of debt issuance costs and discount costs. (b) Recast to consolidate PNGTS for all periods presented (Refer to Note 2). |
CONTINGENCIES
CONTINGENCIES | 9 Months Ended |
Sep. 30, 2017 | |
CONTINGENCIES | |
CONTINGENCIES | NOTE 15 CONTINGENCIES Great Lakes v. Essar Steel Minnesota LLC, et al . — On October 29, 2009, Great Lakes filed suit in the U.S. District Court, District of Minnesota, against Essar Minnesota LLC (Essar Minnesota) and certain Foreign Essar Affiliates (collectively, Essar) for breach of its monthly payment obligation under its transportation services agreement with Great Lakes. Great Lakes sought to recover approximately $33 million for past and future payments due under the agreement. On September 16, 2015, following a jury trial, the federal district court judge entered a judgment in the amount of $32.9 million in favor of Great Lakes. On September 20, 2015, Essar appealed the decision to the United States Court of Appeals for the Eighth Circuit (Eighth Circuit) based on an allegation of improper jurisdiction and a number of other rulings by the federal district judge. Essar was required to post a performance bond for the full value of the judgment pending appeal. The Eighth Circuit heard the appeal on October 20, 2016. A decision on the appeal was received in December 2016 and the Eighth Circuit vacated Great Lakes’ judgment against Essar finding that there was no federal jurisdiction. Great Lakes filed a Request for Rehearing with the Eighth Circuit and it was denied in January 2017. Before the Circuit Court issued its decision, Essar Minnesota filed for bankruptcy in July 2016. The Foreign Essar Affiliates have not filed for bankruptcy. Following the Circuit Court’s decision, the performance bond was released into the bankruptcy court proceedings. Great Lakes filed a claim against Essar Minnesota in the bankruptcy court and its case against the Foreign Essar Affiliates in Minnesota state court remains pending. In April 2017, after Great Lakes agreement with creditors on an allowed claim, the bankruptcy court approved Great Lakes’ claim in the amount of $31.5 million. On May 20, 2017, the federal district court awarded Essar Minnesota approximately $1.2 million for costs, including recovery of the performance bond premium, to be paid by Great Lakes. Great Lakes filed a motion with the bankruptcy court to offset the $1.2 million award of costs against its claim against Essar Minnesota in the bankruptcy proceeding. If Great Lakes’ motion to offset the federal district court’s award of costs is against its claim in the bankruptcy proceeding is not successful, Great Lakes will be responsible to the bankruptcy estate for payment of the award. Great Lakes is unable to estimate the timing or the extent to which its claim will be recoverable in the bankruptcy proceedings. |
REGULATORY
REGULATORY | 9 Months Ended |
Sep. 30, 2017 | |
REGULATORY | |
REGULATORY | NOTE 16 REGULATORY North Baja — On January 6, 2017, North Baja notified FERC that current market conditions do not support the replacement of the compression that was temporarily abandoned in 2013 and requested authorization to permanently abandon two compressor units and a nominal volume of unsubscribed firm capacity. FERC approved the permanent abandonment request on February 16, 2017. The abandonments will not have any impact on existing firm transportation service. Great Lakes - On April 24, 2017, Great Lakes reached an agreement on the terms of a new long-term transportation capacity contract with its affiliate, TransCanada. The contract, which was subject to Canada’s National Energy Board (NEB) approval, is for a term of 10 years and allows TransCanada the ability to transport up to 0.711 billion cubic feet of natural gas per day on the Great Lakes system from the Manitoba/U.S. border to the U.S. border near Dawn Ontario. On September 21, 2017, TransCanada received approval from the NEB and as a result, this contract commenced on November 1, 2017. This contract contains volume reduction options up to full contract quantity beginning in year three. On October 30, 2017, Great Lakes filed a rate settlement with FERC to satisfy its obligations from its 2013 rate settlement for new rates to be in effect by January 1, 2018 (2017 Great Lakes Settlement). The 2017 Great Lakes Settlement, if approved by FERC, will decrease Great Lakes’ maximum transportation rates by 27 percent beginning October 1, 2017. Great Lakes expects that the impact from other changes, including: the recent long-term transportation contract with TransCanada as described above, other revenue opportunities on the system and the elimination of the revenue sharing mechanism with its customers, will more than offset the full year impact of the reduction in Great Lakes’ rates beginning in 2018. The 2017 Great Lakes Settlement does not contain any moratorium and Great Lakes will be required to file for new rates no later than March 31, 2022, with new rates to be effective October 1, 2022. Northern Border- Northern Border and its shippers have been engaged in settlement discussions, and have recently agreed to a settlement-in-principle addressing all rate and service related issues raised during the settlement discussions. Northern Border plans to file a settlement agreement with FERC before the end of the year, reflecting the settlement-in-principle, precluding the need to file a general rate case as contemplated by its 2012 Settlement. Northern Border anticipates that the Commission will accept the settlement agreement and that it will be unopposed. This will provide Northern Border with rate stability over the longer term. At this time, we do not believe that the final outcome of the settlement will have a material impact to the Partnership’s results. Northern Border remains a key competitive pipeline and continues to operate at full capacity connecting major supply basins with communities in Midwestern U.S. |
VARIABLE INTEREST ENTITIES
VARIABLE INTEREST ENTITIES | 9 Months Ended |
Sep. 30, 2017 | |
VARIABLE INTEREST ENTITIES | |
VARIABLE INTEREST ENTITIES | NOTE 17 VARIABLE INTEREST ENTITIES In the normal course of business, the Partnership must re-evaluate its legal entities under the current consolidation guidance to determine if those that are considered to be VIEs are appropriately consolidated or if they should be accounted for under other GAAP. A variable interest entity (VIE) is a legal entity that does not have sufficient equity at risk to finance its activities without additional subordinated financial support or is structured such that equity investors lack the ability to make significant decisions relating to the entity’s operations through voting rights or do not substantively participate in the gains or losses of the entity. A VIE is appropriately consolidated if the Partnership is considered to be the primary beneficiary. The VIE’s primary beneficiary is the entity that has both (1) the power to direct the activities of the VIE that most significantly impact the VIEs economic performance and (2) the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE. As a result of its analysis, the Partnership continues to consolidate all legal entities in which it has a variable interest and for which it is considered to be the primary beneficiary. VIEs where the Partnership is not the primary beneficiary, but has a variable interest in the entity, are accounted for as equity investments. Consolidated VIEs The Partnership’s consolidated VIEs consist of the Partnership’s ILPs that hold interests in the Partnership’s pipeline systems. After considering the purpose and design of the ILPs and the risks that they were designed to create and pass through to the Partnership, the Partnership has concluded that it is the primary beneficiary of these ILPs because of the significant amount of variability that it absorbs from the ILPs’ economic performance. The assets and liabilities held through these VIEs that are not available to creditors of the Partnership and whose investors have no recourse to the credit of the Partnership are held through GTN, Tuscarora, Northern Border, Great Lakes, PNGTS and Iroquois due to their third party debt. The following table presents the total assets and liabilities of these entities that are included in the Partnership’s consolidated balance sheets: (unaudited) (millions of dollars) September 30, 2017 December 31, 2016 (a) ASSETS (LIABILITIES) * Cash and cash equivalents Accounts receivable and other Inventories Other current assets Equity investments Plant, property and equipment Other assets Accounts payable and accrued liabilities ) ) Accounts payable to affiliates, net ) ) Distributions payable — ) Other taxes payable ) — Accrued interest ) ) Current portion of long-term debt ) ) Long-term debt ) ) Other liabilities ) ) Deferred state income tax ) ) * North Baja and Bison, which are also assets held through our consolidated VIEs, are excluded as the assets of these entities can be used for purposes other than the settlement of the VIE’s obligations. (a) Recast to consolidate PNGTS for all periods presented (Refer to Notes 2 and 6). |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2017 | |
INCOME TAXES | |
INCOME TAXES | NOTE 18 INCOME TAXES The Partnership’s income taxes relate to business profits tax (BPT) levied at the partnership (PNGTS) level by the state of New Hampshire. As a result of the BPT, PNGTS recognizes deferred taxes related to temporary differences between the financial statement carrying amount of existing assets and liabilities and their respective tax bases. The deferred taxes at September 30, 2017 and December 31, 2016 relate primarily to utility plant. At September 30, 2017 and December 31, 2016 the New Hampshire BPT effective tax rate was 3.8 percent for both periods and was applied to PNGTS’ taxable income. Three months ended Nine months ended (unaudited) (millions of dollars) 2017 2016 (a) 2017 2016 (a) State income taxes Current — ) Deferred — — — — — (a) Recast to consolidate PNGTS for all periods presented (Refer to Note 2 and 6). |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2017 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | NOTE 19 SUBSEQUENT EVENTS Management of the Partnership has reviewed subsequent events through November 6, 2017, the date the financial statements were issued, and concluded there were no events or transactions during this period that would require recognition or disclosure in the consolidated financial statements other than what is disclosed here and/or those already disclosed in the preceding notes. On October 24, 2017, the board of directors of the General Partner declared the Partnership’s third quarter 2017 cash distribution in the amount of $1.00 per common unit payable on November 14, 2017 to unitholders of record as of November 3, 2017. The declared distribution totaled $75 million and is payable in the following manner: $70 million to common unitholders (including $6 million to the General Partner as a holder of 5,797,106 common units and $11 million to another subsidiary of TransCanada as holder of 11,287,725 common units) and $5 million to the General Partner, which included $2 million for its effective two percent general partner interest and $3 million in respect of its IDRs. Northern Border declared its September 2017 distribution of $14 million on October 9, 2017, of which the Partnership will receive its 50 percent share or $7 million on October 31, 2017. Great Lakes declared its third quarter 2017 distribution of $2 million on October 19, 2017, of which the Partnership will receive its 46.45 percent share or $1 million on November 1, 2017. Iroquois declared its third quarter 2017 distribution of $28 million on October 23, 2017, of which the Partnership received its 49.34 percent share or $14 million on November 1, 2017. The distribution includes our 49.34 percent share of the Iroquois unrestricted cash distribution amounting to approximately $2.6 million (Refer to Note 6). |
SIGNIFICANT ACCOUNTING POLICI29
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
SIGNIFICANT ACCOUNTING POLICIES | |
Basis of Presentation - Consolidation and equity method of accounting | Basis of Presentation The Partnership consolidates its interests in entities over which it is able to exercise control. To the extent there are interests owned by other parties, these interests are included in non-controlling interests. The Partnership uses the equity method of accounting for its investments in entities over which it is able to exercise significant influence. |
Basis of Presentation - Transactions between entities under common control | Acquisitions by the Partnership from TransCanada are considered common control transactions. When businesses are acquired from TransCanada that will be consolidated by the Partnership, the historical financial statements are required to be recast, except net income per common unit, to include the acquired entities for all periods presented. When the Partnership acquires an asset or an investment from TransCanada, which will be accounted for by the equity method, the financial information is not required to be recast and the transaction is accounted for prospectively from the date of the acquisition. On June 1, 2017, the Partnership acquired from a subsidiary of TransCanada an additional 11.81 percent interest in PNGTS, that resulted in the Partnership owning a 61.71 percent interest in PNGTS (Refer to Note 6). As a result of the Partnership owning 61.71 percent interest in PNGTS, the Partnership’s historical financial information has been recast, except net income (loss) per common unit, to consolidate PNGTS for all the periods presented in the Partnership’s consolidated financial statements. Additionally, this acquisition was accounted for as transaction between entities under common control, similar to pooling of interests, whereby the assets and liabilities of PNGTS were recorded at TransCanada’s carrying value. Also, on June 1, 2017, the Partnership acquired from subsidiaries of TransCanada a 49.34 percent interest in Iroquois Gas Transmission, L.P. (“Iroquois”) (Refer to Note 6). Accordingly, this transaction was accounted for as a transaction between entities under common control, similar to pooling of interest, whereby the equity investment in Iroquois was recorded at TransCanada’s carrying value and was accounted for prospectively. |
Use of Estimates | Use of Estimates The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Although management believes these estimates are reasonable, actual results could differ from these estimates. |
EQUITY INVESTMENTS (Tables)
EQUITY INVESTMENTS (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
EQUITY INVESTMENTS | |
Schedule of equity investments and summarized financial information for equity investees | Ownership Equity Earnings Equity Investments Interest at Three months Nine Months (unaudited) September 30, ended September 30, ended September 30, September 30, December 31, (millions of dollars) 2017 2017 2016 (b) 2017 2016 (b) 2017 2016 (b) Northern Border (a) % Great Lakes % Iroquois % — — — (a) Equity earnings from Northern Border is net of the 12-year amortization of a $10 million transaction fee paid to the operator of Northern Border at the time of the Partnership’s acquisition of an additional 20 percent interest in April 2006. (b) Recast to eliminate equity earnings from PNGTS and consolidate PNGTS for all periods presented (Refer to Notes 2 and 6). |
Northern Border | |
EQUITY INVESTMENTS | |
Schedule of equity investments and summarized financial information for equity investees | (unaudited) (millions of dollars) September 30, 2017 December 31, 2016 ASSETS Cash and cash equivalents Other current assets Plant, property and equipment, net Other assets LIABILITIES AND PARTNERS’ EQUITY Current liabilities Deferred credits and other Long-term debt, including current maturities, net Partners’ equity Partners’ capital Accumulated other comprehensive loss ) ) Three months ended Nine months ended (unaudited) September 30, September 30, (millions of dollars) 2017 2016 2017 2016 Transmission revenues Operating expenses ) ) ) ) Depreciation ) ) ) ) Financial charges and other ) ) ) ) Net income |
Great Lakes | |
EQUITY INVESTMENTS | |
Schedule of equity investments and summarized financial information for equity investees | (unaudited) (millions of dollars) September 30, 2017 December 31, 2016 ASSETS Current assets Plant, property and equipment, net LIABILITIES AND PARTNERS’ EQUITY Current liabilities Net long-term debt, including current maturities Partners’ equity Three months ended Nine months ended (unaudited) September 30, September 30, (millions of dollars) 2017 2016 2017 2016 Transmission revenues Operating expenses ) ) ) ) Depreciation ) ) ) ) Financial charges and other ) ) ) ) Net income |
Iroquois | |
EQUITY INVESTMENTS | |
Schedule of equity investments and summarized financial information for equity investees | (unaudited) (millions of dollars) September 30, 2017 December 31, 2016 ASSETS Cash and cash equivalents Other current assets Plant, property and equipment, net Other assets LIABILITIES AND PARTNERS’ EQUITY Current liabilities Net long-term debt, including current maturities Other non-current liabilities Partners’ equity Three months ended Nine months ended (unaudited) September 30, September 30, (millions of dollars) 2017 2016 2017 2016 Transmission revenues Operating expenses ) ) ) ) Depreciation ) ) ) ) Financial charges and other ) ) ) ) Net income |
DEBT AND CREDIT FACILITIES (Tab
DEBT AND CREDIT FACILITIES (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
DEBT AND CREDIT FACILITIES | |
Schedule of debt and credit facilities | (unaudited) September 30, Weighted Average December 31, (a) Weighted Average TC PipeLines, LP Senior Credit Facility due 2021 % % 2013 Term Loan Facility due October 2022 % % 2015 Term Loan Facility due October 2020 % % 4.65% Unsecured Senior Notes due 2021 % (b) % (b) 4.375% Unsecured Senior Notes due 2025 % (b) % (b) 3.90 % Unsecured Senior Notes due 2027 % (b) — — GTN 5.29% Unsecured Senior Notes due 2020 % (b) % (b) 5.69% Unsecured Senior Notes due 2035 % (b) % (b) Unsecured Term Loan Facility due 2019 % % PNGTS 5.90% Senior Secured Notes due December 2018 % (b) % (b) Tuscarora Unsecured Term Loan due 2020 % % 3.82% Series D Senior Notes due August 2017 — % (b) % (b) Less: unamortized debt issuance costs and debt discount Less: current portion (a) Recast to consolidate PNGTS for all periods presented (Refer to Notes 2 and 6). (b) Fixed interest rate |
Schedule of principal repayments required on debt | (unaudited) (millions of dollars) 2017 2018 2019 2020 2021 Thereafter |
ACQUISITION (Tables)
ACQUISITION (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
ACQUISITION | |
Schedule of net purchase price | (millions of dollars) Net Purchase Price (a) Less: TransCanada’s carrying value of Iroquois at June 1, 2017 Excess purchase price (b) (a) Total purchase price of $710 million plus final working capital adjustment of $19 million and the additional consideration on Iroquois surplus cash amounting to approximately $28 million less the assumption of $164 million of proportional Iroquois debt by the Partnership. (b) The excess purchase price of $370 million was recorded as a reduction in Partners’ Equity. |
Schedule of purchase price allocation | (millions of dollars) Current assets Property, plant and equipment, net Current liabilities ) Deferred state income taxes ) Long-term debt, including current portion ) Non-controlling interest ) Carrying value of pre-existing Investment in PNGTS ) TransCanada’s carrying value of the acquired 11.81 percent interest at June 1, 2017 Excess purchase price over net assets acquired (a) Total cash consideration (b) (a) The excess purchase price of $21 million was recorded as a reduction in Partners’ Equity. (b) Total purchase price of $55 million plus the final working capital adjustment of $3 million less the assumption of $5 million of proportional PNGTS debt by the Partnership. |
NET INCOME PER COMMON UNIT (Tab
NET INCOME PER COMMON UNIT (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
NET INCOME PER COMMON UNIT | |
Schedule of net income per common unit | Three months ended Nine months ended (unaudited) (millions of dollars, except per common unit amounts) 2017 2016 (a) 2017 2016 (a) Net income attributable to controlling interests (a) Net income attributable to PNGTS’ former parent (a) (b) — — ) ) Net income attributable to General and Limited Partners Incentive distributions allocated to the General Partner (c) ) ) ) ) Net income attributable to the Class B units (d) ) ) ) ) Net income attributable to the General Partner and common units Net income attributable to General Partner’s effective two percent interest ) ) ) ) Net income attributable to common units Weighted average common units outstanding (millions) — basic and diluted (e) (e ) Net income per common unit — basic and diluted $ $ (f) $ $ (f) (a) Recast to consolidate PNGTS for all periods presented (Refer to Notes 2 and 6). (b) Net income allocable to General and Limited Partners excludes net income attributed to PNGTS’ former parent as it was allocated to TransCanada and was not allocable to either the general partner, common units or Class B units. (c) Under the terms of the Partnership Agreement, for any quarterly period, the participation of the incentive distribution rights (IDRs) is limited to the available cash distributions declared. Accordingly, incentive distributions allocated to the General Partner are based on the Partnership’s available cash during the current reporting period, but declared and paid in the subsequent reporting period. (d) During the three and nine months ended September 30, 2017, 30 percent of GTN’s total distributable cash flow was $28 million. As a result of exceeding the $20 million threshold, $8 million of net income attributable to controlling interests was allocated to the Class B units during the three and nine months ended September 30, 2017. During the six months ended June 30, 2016, the threshold was exceeded and during the nine months ended September 30, 2016, 30 percent of GTN’s total distributable cash flow was $32 million. As a result, $12 million of net income attributable to controlling interests was allocated to the Class B units at September 30, 2016, of which $1 million and $11 million were allocated during the three months ended June 30, 2016 and September 30, 2016, respectively (Refer to Note 7). (e) Includes the common units subject to rescission. These units are treated as outstanding for financial reporting purposes (Refer to Note 7). (f) Net income per common unit prior to recast (Refer to Note 2). |
CHANGE IN OPERATING WORKING C34
CHANGE IN OPERATING WORKING CAPITAL (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
CHANGE IN OPERATING WORKING CAPITAL | |
Schedule of change in operating working capital | (unaudited) Nine months ended September 30, (millions of dollars) 2017 2016 (a) Change in accounts receivable and other Change in other current assets Change in accounts payable and accrued liabilities (b) Change in accounts payable to affiliates ) ) Change in accrued interest Change in operating working capital (a) Recast to consolidate PNGTS for all periods presented (Refer to Notes 2 and 6). (b) The accrual of $10 million for the construction of GTN’s Carty Lateral in December 31, 2015 was paid during the first quarter 2016. Accordingly, the payment was reported as capital expenditures in our 2016 cash flow statement. |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
RELATED PARTY TRANSACTIONS | |
Summary of capital and operating costs charged to pipeline systems by related party | Three months ended Nine months ended (unaudited) (millions of dollars) 2017 2016 2017 2016 Capital and operating costs charged by TransCanada’s subsidiaries to: Great Lakes (a) Northern Border (a) GTN Bison North Baja Tuscarora PNGTS Impact on the Partnership’s net income: Great Lakes (a) Northern Border (a) GTN Bison North Baja Tuscarora PNGTS (b) |
Summary of amount payable to related party for costs charged | (unaudited) September 30, (millions of dollars) 2017 December 31, 2016 Net amounts payable to TransCanada’s subsidiaries is as follows: Great Lakes (a) Northern Border (a) GTN Bison North Baja — Tuscarora — PNGTS (a) Represents 100 percent of the costs. (b) Recast to consolidate PNGTS for all periods presented (Refer to Note 2). |
ACCOUNTS RECEIVABLE AND OTHER (
ACCOUNTS RECEIVABLE AND OTHER (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
ACCOUNTS RECEIVABLE AND OTHER | |
Schedule of accounts receivable and other | (unaudited) (millions of dollars) September 30, 2017 December 31, 2016 (a) Trade accounts receivable, net of allowance of nil Imbalance receivable from affiliates — Other (a) Recast as discussed in Notes 2 and 6. |
FINANCIAL CHARGES AND OTHER (Ta
FINANCIAL CHARGES AND OTHER (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
FINANCIAL CHARGES AND OTHER | |
Schedule of components of financial charges and other | Three months ended Nine months ended (unaudited) (millions of dollars) 2017 2016 (b) 2017 2016 (b) Interest expense (a) PNGTS’ amortization of derivative loss on derivative instruments (Note 12) (b) — — Net realized loss related to the interest rate swaps — — Other income — — ) ) (a) Includes amortization of debt issuance costs and discount costs. (b) Recast to consolidate PNGTS for all periods presented (Refer to Note 2). |
VARIABLE INTEREST ENTITIES (Tab
VARIABLE INTEREST ENTITIES (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
VARIABLE INTEREST ENTITIES | |
Schedule of assets and liabilities held through VIEs whose assets cannot be used for purposes other settlement of their obligations | (unaudited) (millions of dollars) September 30, 2017 December 31, 2016 (a) ASSETS (LIABILITIES) * Cash and cash equivalents Accounts receivable and other Inventories Other current assets Equity investments Plant, property and equipment Other assets Accounts payable and accrued liabilities ) ) Accounts payable to affiliates, net ) ) Distributions payable — ) Other taxes payable ) — Accrued interest ) ) Current portion of long-term debt ) ) Long-term debt ) ) Other liabilities ) ) Deferred state income tax ) ) * North Baja and Bison, which are also assets held through our consolidated VIEs, are excluded as the assets of these entities can be used for purposes other than the settlement of the VIE’s obligations. (a) Recast to consolidate PNGTS for all periods presented (Refer to Notes 2 and 6). |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
INCOME TAXES | |
Schedule of state income taxes of PNGTS | Three months ended Nine months ended (unaudited) (millions of dollars) 2017 2016 (a) 2017 2016 (a) State income taxes Current — ) Deferred — — — — — (a) Recast to consolidate PNGTS for all periods presented (Refer to Note 2 and 6). |
ORGANIZATION - Ownership Intere
ORGANIZATION - Ownership Interests in Natural Gas Pipeline Systems (Details) | 9 Months Ended |
Sep. 30, 2017LimitedPartnership | |
ORGANIZATION | |
Number of intermediate limited partnerships through which pipeline assets are owned | 3 |
SIGNIFICANT ACCOUNTING POLICI41
SIGNIFICANT ACCOUNTING POLICIES - Basis of Presentation (Details) | Sep. 30, 2017 | Aug. 01, 2017 | Jun. 01, 2017 | Sep. 30, 2016 |
Portland Natural Gas Transmission System | ||||
ACQUISITION | ||||
Ownership interest (as a percent) | 11.81% | 11.81% | 49.90% | |
Iroquois | ||||
ACQUISITION | ||||
Ownership interest (as a percent) | 49.34% | 49.34% | 49.34% | |
Portland Natural Gas Transmission System | ||||
ACQUISITION | ||||
Ownership interest (as a percent) | 11.81% | |||
Interest acquired by Partnership (as a percent) | 61.71% |
ACCOUNTING PRONOUNCEMENTS - Sta
ACCOUNTING PRONOUNCEMENTS - Statement of Cash Flows (Details) - USD ($) $ in Millions | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | ||
ACCOUNTING PRONOUNCEMENTS | |||
Cumulative distributions in excess of equity earnings | $ 3 | ||
Distributions from equity investments | $ 106 | $ 125 | [1] |
Adjustment | ASU 2016-15, Statement of Cash Flows | |||
ACCOUNTING PRONOUNCEMENTS | |||
Cumulative distributions in excess of equity earnings | (50) | ||
Distributions from equity investments | $ 50 | ||
[1] | Recast to consolidate PNGTS for all periods presented (Refer to Notes 2 and 6). |
EQUITY INVESTMENTS (Details)
EQUITY INVESTMENTS (Details) - USD ($) $ in Millions | Sep. 01, 2017 | Aug. 01, 2017 | Jul. 27, 2017 | Jun. 01, 2017 | Apr. 30, 2006 | Sep. 30, 2017 | Mar. 31, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Nov. 01, 2017 | Oct. 31, 2017 | Dec. 31, 2016 | ||||
EQUITY INVESTMENTS | |||||||||||||||||
Equity Earnings | $ 27 | $ 22 | [1] | $ 87 | $ 75 | [1] | |||||||||||
Equity Investments | $ 1,207 | 1,207 | $ 918 | [1] | |||||||||||||
Partnership distribution | [2] | 235 | |||||||||||||||
Partnership's share of distributions | 106 | 125 | [1] | ||||||||||||||
Return on investment distribution classified as investing activities | 3 | ||||||||||||||||
Great Lakes | |||||||||||||||||
EQUITY INVESTMENTS | |||||||||||||||||
Total cash call issued to fund debt repayment | $ 9 | ||||||||||||||||
Northern Border | |||||||||||||||||
EQUITY INVESTMENTS | |||||||||||||||||
Ownership interest (as a percent) | 50.00% | 50.00% | 50.00% | 50.00% | |||||||||||||
Equity Earnings | $ 16 | 18 | $ 50 | 52 | |||||||||||||
Equity Investments | 516 | 516 | 444 | ||||||||||||||
Amortization period of transaction fee | 12 years | ||||||||||||||||
Transaction fee | $ 10 | ||||||||||||||||
Additional ownership interest acquired (as a percent) | 20.00% | ||||||||||||||||
Equity contribution | $ 83 | 83 | |||||||||||||||
Capital contribution to reduce the outstanding balance of revolver debt | $ 166 | ||||||||||||||||
Assets | |||||||||||||||||
Cash and cash equivalents | 24 | 24 | 14 | ||||||||||||||
Other current assets | 36 | 36 | 36 | ||||||||||||||
Plant, property and equipment, net | 1,069 | 1,069 | 1,089 | ||||||||||||||
Other assets | 14 | 14 | 14 | ||||||||||||||
Assets, total | 1,143 | 1,143 | 1,153 | ||||||||||||||
LIABILITIES AND PARTNERS' EQUITY | |||||||||||||||||
Current liabilities | 48 | 48 | 38 | ||||||||||||||
Deferred credits and other | 30 | 30 | 28 | ||||||||||||||
Long-term debt, including current maturities, net | 264 | 264 | 430 | ||||||||||||||
Partners' equity | |||||||||||||||||
Partners' equity | 802 | 802 | 659 | ||||||||||||||
Accumulated other comprehensive loss | (1) | (1) | (2) | ||||||||||||||
Liabilities and Partners' Equity, total | 1,143 | 1,143 | 1,153 | ||||||||||||||
Revenues (expenses) | |||||||||||||||||
Transmission revenues | 73 | 74 | 217 | 218 | |||||||||||||
Operating expenses | (20) | (18) | (56) | (53) | |||||||||||||
Depreciation | (15) | (15) | (45) | (44) | |||||||||||||
Financial charges and other | (5) | (5) | (14) | (16) | |||||||||||||
Net income | $ 33 | 36 | $ 102 | 105 | |||||||||||||
Great Lakes | |||||||||||||||||
EQUITY INVESTMENTS | |||||||||||||||||
Ownership interest (as a percent) | 46.45% | 46.45% | 46.45% | ||||||||||||||
Equity Earnings | $ 2 | 4 | $ 24 | 23 | |||||||||||||
Equity Investments | 469 | 469 | 474 | ||||||||||||||
Equity contribution | $ 4 | 4 | 4 | [1] | |||||||||||||
Assets | |||||||||||||||||
Current assets | 56 | 56 | 66 | ||||||||||||||
Plant, property and equipment, net | 705 | 705 | 714 | ||||||||||||||
Assets, total | 761 | 761 | 780 | ||||||||||||||
LIABILITIES AND PARTNERS' EQUITY | |||||||||||||||||
Current liabilities | 41 | 41 | 40 | ||||||||||||||
Long-term debt, including current maturities, net | 269 | 269 | 278 | ||||||||||||||
Partners' equity | |||||||||||||||||
Partners' equity | 451 | 451 | 462 | ||||||||||||||
Liabilities and Partners' Equity, total | 761 | 761 | 780 | ||||||||||||||
Revenues (expenses) | |||||||||||||||||
Transmission revenues | 34 | 36 | 138 | 133 | |||||||||||||
Operating expenses | (19) | (15) | (49) | (45) | |||||||||||||
Depreciation | (7) | (7) | (21) | (21) | |||||||||||||
Financial charges and other | (5) | (6) | (16) | (17) | |||||||||||||
Net income | $ 3 | 8 | $ 52 | 50 | |||||||||||||
Iroquois | |||||||||||||||||
EQUITY INVESTMENTS | |||||||||||||||||
Ownership interest (as a percent) | 49.34% | 49.34% | 49.34% | 49.34% | |||||||||||||
Equity Earnings | $ 9 | $ 13 | |||||||||||||||
Equity Investments | 222 | 222 | |||||||||||||||
Equity contribution | $ 710 | ||||||||||||||||
Undistributed earnings | 0 | 0 | |||||||||||||||
Assets | |||||||||||||||||
Cash and cash equivalents | 93 | 93 | 86 | ||||||||||||||
Other current assets | 33 | 33 | 34 | ||||||||||||||
Plant, property and equipment, net | 592 | 592 | 604 | ||||||||||||||
Other assets | 8 | 8 | 7 | ||||||||||||||
Assets, total | 726 | 726 | 731 | ||||||||||||||
LIABILITIES AND PARTNERS' EQUITY | |||||||||||||||||
Current liabilities | 20 | 20 | 18 | ||||||||||||||
Long-term debt, including current maturities, net | 332 | 332 | 335 | ||||||||||||||
Other non-current liabilities | 9 | 9 | 6 | ||||||||||||||
Partners' equity | |||||||||||||||||
Partners' equity | 365 | 365 | 372 | ||||||||||||||
Liabilities and Partners' Equity, total | 726 | 726 | $ 731 | ||||||||||||||
Revenues (expenses) | |||||||||||||||||
Transmission revenues | 43 | 45 | 142 | 145 | |||||||||||||
Operating expenses | (13) | (13) | (41) | (43) | |||||||||||||
Depreciation | (7) | (9) | (22) | (28) | |||||||||||||
Financial charges and other | (4) | (4) | (13) | (12) | |||||||||||||
Net income | $ 19 | $ 19 | $ 66 | $ 62 | |||||||||||||
Iroquois | Distribution declared | |||||||||||||||||
EQUITY INVESTMENTS | |||||||||||||||||
Partnership distribution | $ 28 | ||||||||||||||||
Iroquois | Cash Distribution Paid | |||||||||||||||||
EQUITY INVESTMENTS | |||||||||||||||||
Partnership's share of distributions | $ 14 | ||||||||||||||||
Return on investment distribution classified as investing activities | $ 2.6 | ||||||||||||||||
[1] | Recast to consolidate PNGTS for all periods presented (Refer to Notes 2 and 6). | ||||||||||||||||
[2] | Recast to consolidate PNGTS for all periods presented (Refer to Notes 2 and 6). |
DEBT AND CREDIT FACILITIES - Am
DEBT AND CREDIT FACILITIES - Amounts Outstanding and Description of Terms (Details) | Aug. 21, 2017USD ($) | May 25, 2017USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2017USD ($)entity | Dec. 31, 2016USD ($) | |
Credit facilities, short-term loan facility and long-term debt | ||||||
Debt and credit facilities | $ 2,491,000,000 | $ 2,491,000,000 | $ 1,920,000,000 | |||
Less: unamortized debt issuance costs and debt discount | 13,000,000 | 13,000,000 | 9,000,000 | |||
Less: current portion | 51,000,000 | 51,000,000 | 52,000,000 | [1] | ||
Long-term debt | $ 2,427,000,000 | $ 2,427,000,000 | 1,859,000,000 | [1] | ||
Senior Credit Facility due in 2021 and the Term Loan Facilities due in 2020 and 2022 | ||||||
Credit facilities, short-term loan facility and long-term debt | ||||||
Leverage ratio, actual (as a percent) | 476.00% | 476.00% | ||||
Senior Credit Facility due in 2021 and the Term Loan Facilities due in 2020 and 2022 | Debt agreement covenants, initial period after occurrence of acquisition | ||||||
Credit facilities, short-term loan facility and long-term debt | ||||||
Additional period immediately following the fiscal quarter in which a specified material acquisition occurs | 6 months | |||||
Senior Credit Facility due in 2021 and the Term Loan Facilities due in 2020 and 2022 | Debt agreement covenants, initial period after occurrence of acquisition | Minimum | ||||||
Credit facilities, short-term loan facility and long-term debt | ||||||
Number of acquisitions | entity | 1 | |||||
Senior Credit Facility due in 2021 and the Term Loan Facilities due in 2020 and 2022 | Debt agreement covenants, initial period after occurrence of acquisition | Maximum | ||||||
Credit facilities, short-term loan facility and long-term debt | ||||||
Leverage ratio, covenant (as a percent) | 550.00% | |||||
Senior Credit Facility due in 2021 and the Term Loan Facilities due in 2020 and 2022 | Debt agreement covenants, periods subsequent to initial period after occurrence of acquisition | Maximum | ||||||
Credit facilities, short-term loan facility and long-term debt | ||||||
Leverage ratio, covenant (as a percent) | 500.00% | |||||
Revolving credit facility | TC Pipelines, LP Senior Credit Facility due 2021 | ||||||
Credit facilities, short-term loan facility and long-term debt | ||||||
Debt and credit facilities | $ 255,000,000 | $ 255,000,000 | $ 160,000,000 | |||
Weighted Average Interest Rate (as a percent) | 2.34% | 1.72% | ||||
Maximum borrowing capacity | 500,000,000 | $ 500,000,000 | ||||
Amount outstanding under credit facility | 255,000,000 | 255,000,000 | $ 160,000,000 | |||
Remaining borrowing capacity | $ 245,000,000 | $ 245,000,000 | ||||
Revolving credit facility | TC Pipelines, LP Senior Credit Facility due 2021 | LIBOR | ||||||
Credit facilities, short-term loan facility and long-term debt | ||||||
Debt interest rate, at period end (as a percent) | 2.49% | 2.49% | 1.92% | |||
Term loan | TC PipeLines, LP 2013 Term Loan Facility due October 2022 | ||||||
Credit facilities, short-term loan facility and long-term debt | ||||||
Debt and credit facilities | $ 500,000,000 | $ 500,000,000 | $ 500,000,000 | |||
Weighted Average Interest Rate (as a percent) | 2.26% | 1.73% | ||||
Term loan | TC PipeLines, LP 2013 Term Loan Facility due October 2022 | LIBOR borrowings | LIBOR | ||||||
Credit facilities, short-term loan facility and long-term debt | ||||||
Debt interest rate, at period end (as a percent) | 2.49% | 2.49% | 1.87% | |||
Term loan | TC PipeLines, LP 2013 Term Loan Facility due October 2022 | LIBOR borrowings | LIBOR | Hedges of cash flows | Interest rate swaps | ||||||
Credit facilities, short-term loan facility and long-term debt | ||||||
Weighted Average Interest Rate (as a percent) | 2.31% | 2.31% | ||||
Term loan | TC PipeLines, LP 2015 Term Loan Facility due October 2020 | ||||||
Credit facilities, short-term loan facility and long-term debt | ||||||
Debt and credit facilities | $ 170,000,000 | $ 170,000,000 | $ 170,000,000 | |||
Weighted Average Interest Rate (as a percent) | 2.15% | 1.63% | ||||
Term loan | TC PipeLines, LP 2015 Term Loan Facility due October 2020 | LIBOR | ||||||
Credit facilities, short-term loan facility and long-term debt | ||||||
Debt interest rate, at period end (as a percent) | 2.39% | 2.39% | 1.77% | |||
Unsecured debt | TC PipeLines, LP 4.65% Senior Notes due 2021 | ||||||
Credit facilities, short-term loan facility and long-term debt | ||||||
Stated interest rate (as a percent) | 4.65% | 4.65% | 4.65% | |||
Debt and credit facilities | $ 350,000,000 | $ 350,000,000 | $ 350,000,000 | |||
Weighted Average Interest Rate (as a percent) | 4.65% | 4.65% | ||||
Unsecured debt | TC PipeLines, LP 4.375% Senior Notes due 2025 | ||||||
Credit facilities, short-term loan facility and long-term debt | ||||||
Stated interest rate (as a percent) | 4.375% | 4.375% | 4.375% | |||
Debt and credit facilities | $ 350,000,000 | $ 350,000,000 | $ 350,000,000 | |||
Weighted Average Interest Rate (as a percent) | 4.375% | 4.375% | ||||
Unsecured debt | TC Pipelines, LP 3.90% Senior Notes due 2027 | ||||||
Credit facilities, short-term loan facility and long-term debt | ||||||
Stated interest rate (as a percent) | 3.90% | 3.90% | 3.90% | |||
Debt and credit facilities | $ 500,000,000 | $ 500,000,000 | ||||
Weighted Average Interest Rate (as a percent) | 3.90% | |||||
Amount of debt | $ 500,000,000 | |||||
Net proceeds | $ 497,000,000 | |||||
Unsecured debt | GTN 5.29% Senior Notes due 2020 | ||||||
Credit facilities, short-term loan facility and long-term debt | ||||||
Stated interest rate (as a percent) | 5.29% | 5.29% | 5.29% | |||
Debt and credit facilities | $ 100,000,000 | $ 100,000,000 | $ 100,000,000 | |||
Weighted Average Interest Rate (as a percent) | 5.29% | 5.29% | ||||
Unsecured debt | GTN 5.69% Senior Notes due 2035 | ||||||
Credit facilities, short-term loan facility and long-term debt | ||||||
Stated interest rate (as a percent) | 5.69% | 5.69% | 5.69% | |||
Debt and credit facilities | $ 150,000,000 | $ 150,000,000 | $ 150,000,000 | |||
Weighted Average Interest Rate (as a percent) | 5.69% | 5.69% | ||||
Unsecured debt | GTN Term Loan Facility due 2019 | ||||||
Credit facilities, short-term loan facility and long-term debt | ||||||
Debt and credit facilities | 55,000,000 | $ 55,000,000 | $ 65,000,000 | |||
Weighted Average Interest Rate (as a percent) | 1.95% | 1.43% | ||||
Unsecured debt | Tuscarora Term Loan due 2020 | ||||||
Credit facilities, short-term loan facility and long-term debt | ||||||
Debt and credit facilities | $ 25,000,000 | $ 25,000,000 | $ 10,000,000 | |||
Weighted Average Interest Rate (as a percent) | 2.18% | 1.64% | ||||
Unsecured debt | Tuscarora Term Loan due 2020 | LIBOR | ||||||
Credit facilities, short-term loan facility and long-term debt | ||||||
Debt interest rate, at period end (as a percent) | 2.36% | 2.36% | 1.90% | |||
Secured debt | PNGTS 5.90% Senior Secured Notes due December 2018 | ||||||
Credit facilities, short-term loan facility and long-term debt | ||||||
Stated interest rate (as a percent) | 5.90% | 5.90% | 5.90% | |||
Debt and credit facilities | $ 36,000,000 | $ 36,000,000 | $ 53,000,000 | |||
Weighted Average Interest Rate (as a percent) | 5.90% | 5.90% | ||||
Secured debt | Tuscarora 3.82% Series D Senior Notes due August 2017 | ||||||
Credit facilities, short-term loan facility and long-term debt | ||||||
Stated interest rate (as a percent) | 3.82% | 3.82% | 3.82% | |||
Debt and credit facilities | $ 12,000,000 | |||||
Weighted Average Interest Rate (as a percent) | 3.82% | 3.82% | ||||
Portland Natural Gas Transmission System | Secured debt | PNGTS 5.90% Senior Secured Notes due December 2018 | ||||||
Credit facilities, short-term loan facility and long-term debt | ||||||
Debt Service, number of months of guarantee | 6 months | |||||
Portland Natural Gas Transmission System | Secured debt | PNGTS 5.90% Senior Secured Notes due December 2018 | Debt agreement covenants, preceding twelve months | ||||||
Credit facilities, short-term loan facility and long-term debt | ||||||
Debt service coverage, actual (as a percent) | 171.00% | |||||
Portland Natural Gas Transmission System | Secured debt | PNGTS 5.90% Senior Secured Notes due December 2018 | Debt agreement covenants, preceding twelve months | Minimum | ||||||
Credit facilities, short-term loan facility and long-term debt | ||||||
Debt service coverage, covenant (as a percent) | 130.00% | |||||
Portland Natural Gas Transmission System | Secured debt | PNGTS 5.90% Senior Secured Notes due December 2018 | Debt agreement covenants, succeeding twelve months | ||||||
Credit facilities, short-term loan facility and long-term debt | ||||||
Debt service coverage, actual (as a percent) | 531.00% | |||||
Portland Natural Gas Transmission System | Secured debt | PNGTS 5.90% Senior Secured Notes due December 2018 | Debt agreement covenants, succeeding twelve months | Minimum | ||||||
Credit facilities, short-term loan facility and long-term debt | ||||||
Debt service coverage, covenant (as a percent) | 130.00% | |||||
GTN | Unsecured debt | Senior Notes and Term Loan Facility due 2019 | ||||||
Credit facilities, short-term loan facility and long-term debt | ||||||
Debt interest rate, at period end (as a percent) | 2.19% | 2.19% | 1.57% | |||
Percentage of debt to total capitalization, actual | 44.20% | 44.20% | ||||
GTN | Unsecured debt | Senior Notes and Term Loan Facility due 2019 | Maximum | ||||||
Credit facilities, short-term loan facility and long-term debt | ||||||
Percentage of debt to total capitalization, covenant | 70.00% | |||||
Tuscarora Gas Transmission Company | Unsecured Term Loan Facility | Tuscarora Term Loan due 2020 | ||||||
Credit facilities, short-term loan facility and long-term debt | ||||||
Amount of debt | $ 25,000,000 | |||||
Debt service coverage, actual (as a percent) | 308.00% | |||||
Tuscarora Gas Transmission Company | Unsecured Term Loan Facility | Tuscarora Term Loan due 2020 | Minimum | ||||||
Credit facilities, short-term loan facility and long-term debt | ||||||
Debt service coverage, covenant (as a percent) | 300.00% | |||||
[1] | Recast to consolidate PNGTS for all periods presented (Refer to Notes 2 and 6). |
DEBT AND CREDIT FACILITIES - Pr
DEBT AND CREDIT FACILITIES - Principal Payments Required (Details) $ in Millions | Sep. 30, 2017USD ($) |
Principal repayments required on debt | |
2,017 | $ 12 |
2,018 | 45 |
2,019 | 36 |
2,020 | 293 |
2,021 | 605 |
Thereafter | 1,500 |
Total debt | $ 2,491 |
ACQUISITION - 2017 Acquisition
ACQUISITION - 2017 Acquisition (Details) | Nov. 06, 2017USD ($) | Nov. 01, 2017USD ($) | Aug. 01, 2017USD ($)item | Jun. 01, 2017USD ($) | Sep. 30, 2017USD ($) |
ACQUISITION | |||||
Return on investment distribution classified as investing activities | $ 3,000,000 | ||||
Iroquois | |||||
ACQUISITION | |||||
Interest acquired (as a percent) | 49.34% | 49.34% | 49.34% | ||
Option to acquire (as a percent) | 0.66 | ||||
Amount of final purchase price adjustments | $ 19,000,000 | ||||
Additional consideration on surplus cash | 28,000,000 | ||||
Net purchase price | 710,000,000 | ||||
Outstanding debt | 164,000,000 | ||||
Payment for option to acquire | 1,000 | ||||
Iroquois net purchase price | |||||
Net Purchase Price | 593,000,000 | ||||
Less: TransCanada's carrying value of Iroquois at June 1, 2017 | 223,000,000 | ||||
Excess purchase price | 370,000,000 | ||||
Purchase price before assumption of debt | 710,000,000 | ||||
Reduction in partner's equity under equity method investments | $ 370,000,000 | ||||
Iroquois | Cash Distribution Paid | |||||
ACQUISITION | |||||
Return on investment distribution classified as investing activities | $ 2,600,000 | ||||
Iroquois | Cash Distribution Paid | Subsequent Events | |||||
ACQUISITION | |||||
Return on investment distribution classified as investing activities | $ 5,200,000 | $ 2,600,000 | |||
Iroquois | Investing Activities | |||||
ACQUISITION | |||||
Return on investment distribution classified as investing activities | $ 28,000,000 | ||||
Number of quarters for distribution of surplus cash | item | 11 | ||||
Iroquois | TransCanada | |||||
ACQUISITION | |||||
Additional consideration on surplus cash | $ 28,000,000 | ||||
Portland Natural Gas Transmission System | |||||
ACQUISITION | |||||
Interest acquired (as a percent) | 11.81% | ||||
Interest acquired by Partnership (as a percent) | 61.71% | ||||
Amount of final purchase price adjustments | $ 3,000,000 | ||||
Net purchase price | 55,000,000 | ||||
Outstanding debt | 5,000,000 | ||||
PNGTS purchase price | |||||
Current assets | 25,000,000 | ||||
Property, plant and equipment, net | 294,000,000 | ||||
Current liabilities | (4,000,000) | ||||
Deferred state income taxes | (10,000,000) | ||||
Long-term debt, including current portion | (41,000,000) | ||||
Net Purchase Price | 264,000,000 | ||||
Non-controlling interest | (100,000,000) | ||||
Carrying value of pre-existing Investment in PNGTS | (132,000,000) | ||||
TransCanada's carrying value of the acquired 11.81 percent interest at June 1, 2017 | 32,000,000 | ||||
Excess purchase price over net assets acquired | 21,000,000 | ||||
Total cash consideration | 53,000,000 | ||||
Purchase price before assumption of debt | 55,000,000 | ||||
Final working capital adjustment | 3,000,000 | ||||
Reduction in partner's equity due to excess purchase price | 21,000,000 | ||||
Portland Natural Gas Transmission System | Iroquois | |||||
ACQUISITION | |||||
Purchase price | 765,000,000 | ||||
Amount of final purchase price adjustments | $ 50,000,000 |
PARTNERS' EQUITY - ATM Equity I
PARTNERS' EQUITY - ATM Equity Issuance Program (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | ||
PARTNERS' EQUITY | |||||
Net proceeds from issuance of common units | [1] | $ 126 | |||
General Partner | |||||
PARTNERS' EQUITY | |||||
Net proceeds from issuance of common units | $ 2 | ||||
TC PipeLines GP, Inc. | General Partner | |||||
PARTNERS' EQUITY | |||||
Ownership interest in the Partnership (as a percent) | 2.00% | 2.00% | 2.00% | 2.00% | |
ATM Equity Issuance Program | Common Units | |||||
PARTNERS' EQUITY | |||||
Units sold | 2,165,162 | ||||
Net proceeds from issuance of common units | $ 124 | ||||
Sales agent commissions | 1 | ||||
ATM Equity Issuance Program | TC PipeLines GP, Inc. | General Partner | |||||
PARTNERS' EQUITY | |||||
Equity contribution | $ 2 | ||||
[1] | Recast to consolidate PNGTS for all periods presented (Refer to Notes 2 and 6). |
PARTNERS' EQUITY - Class B Unit
PARTNERS' EQUITY - Class B Units (Details) - Class B Units - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Mar. 31, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | ||
PARTNERS' EQUITY | |||||
Limited Partners, Distributions paid | $ 22 | $ 22 | $ 12 | [1] | |
GTN | |||||
PARTNERS' EQUITY | |||||
Increase in equity account | 8 | ||||
GTN | |||||
PARTNERS' EQUITY | |||||
30% of GTN's distributable cash flow | $ 28 | ||||
GTN | TransCanada | Distributions | |||||
PARTNERS' EQUITY | |||||
Portion of GTN's annual distributions to which the Class B units are entitled to receive a percentage share of the distributions above threshold (as a percent) | 30.00% | 30.00% | 30.00% | ||
Percentage applied to 30 percent of GTN's distributions above threshold through March 31, 2020 | 100.00% | ||||
Threshold of GTN's total distributable cash flows for payment to Class B units | $ 20 | ||||
Percentage applied to GTN's distributions above threshold after March 31, 2020 | 25.00% | ||||
Percentage applied to GTN's distributable cash flow for the twelve month period ending December 31, 2017 | 30.00% | ||||
30% of GTN's distributable cash flow | $ 28 | $ 28 | $ 32 | ||
[1] | Recast to consolidate PNGTS for all periods presented (Refer to Notes 2 and 6). |
PARTNERS' EQUITY - Reclassifica
PARTNERS' EQUITY - Reclassification of units (Details) - USD ($) shares in Millions, $ in Millions | 2 Months Ended | 4 Months Ended | 9 Months Ended | |||
May 19, 2016 | Sep. 30, 2017 | Sep. 30, 2017 | Dec. 31, 2016 | |||
PARTNERS' EQUITY | ||||||
Common units subject to rescission | [1] | $ 83 | ||||
Reclassification of common units no longer subject to rescission | $ 83 | $ 83 | [2] | |||
ATM Equity Issuance Program | Common Units | ||||||
PARTNERS' EQUITY | ||||||
Reclassification of common unit issuance subject to rescission, net (in units) | 1.6 | |||||
Common units subject to rescission | $ 0 | $ 0 | $ 83 | |||
[1] | Recast to consolidate PNGTS for all periods presented (Refer to Notes 2 and 6). | |||||
[2] | Recast to consolidate PNGTS for all periods presented (Refer to Notes 2 and 6). |
NET INCOME PER COMMON UNIT - Ge
NET INCOME PER COMMON UNIT - General Partner Effective Interest and Allocated Incentive Distributions (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
TC PipeLines GP, Inc. | General Partner | ||||
PARTNERS' EQUITY | ||||
General partner interest (as a percent) | 2.00% | 2.00% | 2.00% | 2.00% |
NET INCOME PER COMMON UNIT - Te
NET INCOME PER COMMON UNIT - Terms of Class B Unit Distributions and Determination of Net Income (Loss) per Common Unit (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Sep. 30, 2017 | Sep. 30, 2016 | Jun. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |||
Net income (loss) per common unit | ||||||||
Net income attributable to controlling interests | $ 54 | $ 58 | [1] | $ 186 | $ 188 | [1] | ||
Net income attributable to PNGTS' former parent | (2) | (3) | ||||||
Net income attributable to General and Limited Partners | 54 | 58 | 184 | 185 | ||||
Incentive distributions allocated to the General Partner | (3) | (2) | (9) | (5) | ||||
Net income attributable to the General Partner and common units | 43 | 45 | 167 | 168 | ||||
Net income attributable to General Partner's effective two percent interest | (1) | (2) | (3) | (4) | ||||
Class B Units | ||||||||
Net income (loss) per common unit | ||||||||
Net income attributable to limited partners | (8) | (11) | (8) | (12) | ||||
Common Units | ||||||||
Net income (loss) per common unit | ||||||||
Net income attributable to limited partners | $ 42 | $ 43 | [1] | $ 164 | $ 164 | [1] | ||
Weighted average common units outstanding - basic (in units) | 69.4 | 66.1 | [1] | 68.9 | 65.3 | [1] | ||
Weighted average common units outstanding - diluted (in units) | 69.4 | 66.1 | 68.9 | 65.3 | ||||
Net income per common unit - basic (in dollars per unit) | $ 0.61 | $ 0.65 | [1],[2] | $ 2.38 | $ 2.51 | [1],[2] | ||
Net income per common unit - diluted (in dollars per unit) | $ 0.61 | $ 0.65 | $ 2.38 | $ 2.51 | ||||
GTN | Class B Units | ||||||||
Distributions | ||||||||
30% of GTN's distributable cash flow | $ 28 | |||||||
GTN | Class B Units | TransCanada | Distributions | ||||||||
Net income (loss) per common unit | ||||||||
Net income attributable to controlling interests | $ 8 | $ 11 | $ 1 | $ 8 | $ 12 | |||
Distributions | ||||||||
Percentage applied to GTN's distributable cash flow for the twelve month period ending December 31, 2017 | 30.00% | |||||||
Threshold of GTN's distributions for payment to Class B units | $ 20 | $ 20 | ||||||
Portion of GTN's annual distributions to which the Class B units are entitled to receive a percentage share of the distributions above threshold (as a percent) | 30.00% | 30.00% | 30.00% | |||||
30% of GTN's distributable cash flow | $ 28 | $ 28 | $ 32 | |||||
[1] | Recast to consolidate PNGTS for all periods presented (Refer to Notes 2 and 6). | |||||||
[2] | Net income per common unit prior to recast (Refer to Note 2). |
CASH DISTRIBUTIONS - Distributi
CASH DISTRIBUTIONS - Distributions Paid (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Common Units | ||||
Distributions | ||||
Per Unit Distribution, paid (in dollars per unit) | $ 1 | $ 0.94 | $ 2.88 | $ 2.72 |
Total cash distribution | $ 74 | $ 65 | $ 210 | $ 184 |
Common units and General Partner interest combined | ||||
Distributions | ||||
Total distribution of general partner interest and IDR payment | 5 | 11 | ||
TC PipeLines GP, Inc. | General Partner | ||||
Distributions | ||||
Total distribution for General Partner interest | $ 2 | $ 1 | $ 4 | $ 3 |
General partner interest (as a percent) | 2.00% | 2.00% | 2.00% | 2.00% |
TC PipeLines GP, Inc. | Common units and General Partner interest combined | ||||
Distributions | ||||
Incentive distribution paid to the General Partner | $ 3 | $ 2 | $ 7 | $ 4 |
CHANGE IN OPERATING WORKING C53
CHANGE IN OPERATING WORKING CAPITAL - Components (Details) - USD ($) $ in Millions | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | ||
CHANGE IN OPERATING WORKING CAPITAL | |||
Change in accounts receivable and other | $ 13 | $ 3 | |
Change in other current assets | 1 | 2 | |
Change in accounts payable and accrued liabilities | 2 | 3 | |
Change in accounts payable to affiliates | (3) | (2) | |
Change in accrued interest | 11 | 5 | |
Change in operating working capital | $ 24 | $ 11 | [1] |
[1] | Recast to consolidate PNGTS for all periods presented (Refer to Notes 2 and 6). |
CHANGE IN OPERATING WORKING C54
CHANGE IN OPERATING WORKING CAPITAL - GTN's Carty Lateral Construction Accrual (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | [1] | Dec. 31, 2016 | Dec. 31, 2015 | |
Non-cash items | |||||
Capital expenditures | $ 26 | $ 21 | |||
GTN | |||||
Non-cash items | |||||
Accruals for capital expenditures | $ 10 | ||||
Capital expenditures | $ 10 | ||||
[1] | Recast to consolidate PNGTS for all periods presented (Refer to Notes 2 and 6). |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||||
Sep. 30, 2017 | Jun. 30, 2017 | Sep. 30, 2016 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Nov. 01, 2017 | Oct. 31, 2017 | Sep. 01, 2017 | Aug. 01, 2017 | Jun. 01, 2017 | ||
Capital and operating costs charged to the pipeline systems and amount payable | |||||||||||||||
Net amounts payable | $ 5 | $ 5 | $ 8 | [1] | |||||||||||
Amount included in receivables from related party | 2 | ||||||||||||||
Great Lakes | |||||||||||||||
Capital and operating costs charged to the pipeline systems and amount payable | |||||||||||||||
Interest acquired (as a percent) | 46.45% | 46.45% | 46.45% | ||||||||||||
Great Lakes | FERC | |||||||||||||||
Capital and operating costs charged to the pipeline systems and amount payable | |||||||||||||||
Estimated revenue sharing provision | $ 12 | $ 22 | 7.2 | ||||||||||||
Northern Border | |||||||||||||||
Capital and operating costs charged to the pipeline systems and amount payable | |||||||||||||||
Interest acquired (as a percent) | 50.00% | 50.00% | 50.00% | 50.00% | |||||||||||
Iroquois | |||||||||||||||
Capital and operating costs charged to the pipeline systems and amount payable | |||||||||||||||
Interest acquired (as a percent) | 49.34% | 49.34% | 49.34% | 49.34% | |||||||||||
Portland Natural Gas Transmission System | |||||||||||||||
Capital and operating costs charged to the pipeline systems and amount payable | |||||||||||||||
Interest acquired (as a percent) | 11.81% | 49.90% | 11.81% | 49.90% | 11.81% | ||||||||||
General Partner | Reimbursement of costs of services provided | |||||||||||||||
Capital and operating costs charged to the pipeline systems and amount payable | |||||||||||||||
Costs charged | $ 1 | $ 1 | $ 3 | $ 3 | |||||||||||
TransCanada's subsidiaries | Great Lakes | |||||||||||||||
Capital and operating costs charged to the pipeline systems and amount payable | |||||||||||||||
Net amounts payable | 3 | 3 | 4 | ||||||||||||
Percentage of capital and operating costs charged | 100.00% | 100.00% | 100.00% | 100.00% | |||||||||||
Amount included in receivables from related party | 8 | 8 | 19 | ||||||||||||
TransCanada's subsidiaries | Great Lakes | Capital and operating costs | |||||||||||||||
Capital and operating costs charged to the pipeline systems and amount payable | |||||||||||||||
Costs charged | $ 10 | $ 8 | $ 27 | $ 22 | |||||||||||
Percentage of capital and operating costs charged | 100.00% | 100.00% | 100.00% | 100.00% | |||||||||||
TransCanada's subsidiaries | Northern Border | |||||||||||||||
Capital and operating costs charged to the pipeline systems and amount payable | |||||||||||||||
Net amounts payable | $ 3 | $ 3 | 4 | ||||||||||||
Percentage of capital and operating costs charged | 100.00% | 100.00% | 100.00% | 100.00% | |||||||||||
TransCanada's subsidiaries | Northern Border | Capital and operating costs | |||||||||||||||
Capital and operating costs charged to the pipeline systems and amount payable | |||||||||||||||
Costs charged | 10 | $ 9 | 30 | $ 25 | |||||||||||
Percentage of capital and operating costs charged | 100.00% | 100.00% | 100.00% | 100.00% | |||||||||||
TransCanada's subsidiaries | Iroquois | |||||||||||||||
Capital and operating costs charged to the pipeline systems and amount payable | |||||||||||||||
Percentage of capital and operating costs charged | 100.00% | 100.00% | |||||||||||||
TransCanada's subsidiaries | Iroquois | Capital and operating costs | |||||||||||||||
Capital and operating costs charged to the pipeline systems and amount payable | |||||||||||||||
Percentage of capital and operating costs charged | 100.00% | 100.00% | |||||||||||||
TransCanada's subsidiaries | GTN | |||||||||||||||
Capital and operating costs charged to the pipeline systems and amount payable | |||||||||||||||
Net amounts payable | 3 | 3 | 3 | ||||||||||||
TransCanada's subsidiaries | GTN | Capital and operating costs | |||||||||||||||
Capital and operating costs charged to the pipeline systems and amount payable | |||||||||||||||
Costs charged | 9 | 8 | 24 | 20 | |||||||||||
Impact on the Partnership's net income attributable to controlling interests | 7 | 7 | 21 | 18 | |||||||||||
TransCanada's subsidiaries | Bison | |||||||||||||||
Capital and operating costs charged to the pipeline systems and amount payable | |||||||||||||||
Net amounts payable | 1 | 1 | 1 | ||||||||||||
TransCanada's subsidiaries | Bison | Capital and operating costs | |||||||||||||||
Capital and operating costs charged to the pipeline systems and amount payable | |||||||||||||||
Costs charged | 2 | 1 | 4 | 1 | |||||||||||
Impact on the Partnership's net income attributable to controlling interests | 2 | 1 | 4 | 2 | |||||||||||
TransCanada's subsidiaries | North Baja Pipeline, LLC | |||||||||||||||
Capital and operating costs charged to the pipeline systems and amount payable | |||||||||||||||
Net amounts payable | 1 | ||||||||||||||
TransCanada's subsidiaries | North Baja Pipeline, LLC | Capital and operating costs | |||||||||||||||
Capital and operating costs charged to the pipeline systems and amount payable | |||||||||||||||
Costs charged | 1 | 1 | 3 | 3 | |||||||||||
Impact on the Partnership's net income attributable to controlling interests | 1 | 1 | 3 | 3 | |||||||||||
TransCanada's subsidiaries | Tuscarora Gas Transmission Company | |||||||||||||||
Capital and operating costs charged to the pipeline systems and amount payable | |||||||||||||||
Net amounts payable | 1 | ||||||||||||||
TransCanada's subsidiaries | Tuscarora Gas Transmission Company | Capital and operating costs | |||||||||||||||
Capital and operating costs charged to the pipeline systems and amount payable | |||||||||||||||
Costs charged | 1 | 1 | 3 | 3 | |||||||||||
Impact on the Partnership's net income attributable to controlling interests | 1 | 1 | 3 | 3 | |||||||||||
TransCanada's subsidiaries | Portland Natural Gas Transmission System | |||||||||||||||
Capital and operating costs charged to the pipeline systems and amount payable | |||||||||||||||
Net amounts payable | 1 | 1 | 1 | ||||||||||||
Amount included in receivables from related party | 0 | 0 | $ 0 | ||||||||||||
TransCanada's subsidiaries | Portland Natural Gas Transmission System | Capital and operating costs | |||||||||||||||
Capital and operating costs charged to the pipeline systems and amount payable | |||||||||||||||
Costs charged | 2 | 2 | 6 | 6 | |||||||||||
TransCanada's subsidiaries | Great Lakes | Capital and operating costs | |||||||||||||||
Capital and operating costs charged to the pipeline systems and amount payable | |||||||||||||||
Impact on the Partnership's net income attributable to controlling interests | $ 4 | $ 3 | $ 11 | $ 9 | |||||||||||
TransCanada's subsidiaries | Great Lakes | Transportation contracts | Total net revenues | Customer concentration risk | |||||||||||||||
Capital and operating costs charged to the pipeline systems and amount payable | |||||||||||||||
Percent of total revenues | 44.00% | 62.00% | 53.00% | 69.00% | |||||||||||
TransCanada's subsidiaries | Northern Border | Capital and operating costs | |||||||||||||||
Capital and operating costs charged to the pipeline systems and amount payable | |||||||||||||||
Impact on the Partnership's net income attributable to controlling interests | $ 4 | $ 3 | $ 11 | $ 9 | |||||||||||
TransCanada's subsidiaries | Portland Natural Gas Transmission System | Capital and operating costs | |||||||||||||||
Capital and operating costs charged to the pipeline systems and amount payable | |||||||||||||||
Impact on the Partnership's net income attributable to controlling interests | 1 | 1 | 4 | 3 | |||||||||||
TransCanada's subsidiaries | Portland Natural Gas Transmission System | Transportation contracts | |||||||||||||||
Capital and operating costs charged to the pipeline systems and amount payable | |||||||||||||||
Revenues from related party | $ 0 | $ 1 | $ 1 | $ 2 | |||||||||||
[1] | Recast to consolidate PNGTS for all periods presented (Refer to Notes 2 and 6). |
FAIR VALUE MEASUREMENTS - Estim
FAIR VALUE MEASUREMENTS - Estimated Fair Value of Debt (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Fair Value | Level 2 | ||
Financial Instruments | ||
Fair value of debt | $ 2,555 | $ 1,962 |
FAIR VALUE MEASUREMENTS - Inter
FAIR VALUE MEASUREMENTS - Interest Rate Swaps (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Interest rate derivatives | |||||||
Fair value of derivative asset, net | $ 0 | ||||||
Amortization of realized gain (loss) on derivative financial instruments | $ 1 | $ 1 | [1] | ||||
Debt and credit facilities | $ 2,491 | 2,491 | 1,920 | ||||
Amortization of derivatives loss | 1 | 1 | |||||
Term loan | TC PipeLines, LP 2013 Term Loan Facility due July 2018 | |||||||
Interest rate derivatives | |||||||
Debt and credit facilities | 500 | 500 | |||||
Term loan | TC PipeLines, LP 2013 Term Loan Facility due October 2022 | |||||||
Interest rate derivatives | |||||||
Debt and credit facilities | $ 500 | 500 | 500 | ||||
Amount of forward starting swaps hedged | $ 500 | ||||||
Average rate of forward starting swaps | 3.26% | ||||||
Portland Natural Gas Transmission System | |||||||
Interest rate derivatives | |||||||
Payments for derivative instruments | $ 20.9 | ||||||
Interest acquired by Partnership (as a percent) | 61.71% | 61.71% | |||||
Net unamortized loss included in other comprehensive income | $ 1 | $ 1 | 2 | ||||
Amortization of derivatives loss | $ 0 | $ 0 | $ 1 | 1 | |||
Interest rate swaps | Term loan | TC PipeLines, LP 2013 Term Loan Facility due July 2018 | |||||||
Interest rate derivatives | |||||||
Weighted average fixed interest rate (as a percent) | 2.31% | 2.31% | |||||
Hedges of cash flows | Interest rate swaps | |||||||
Interest rate derivatives | |||||||
Amortization of realized gain (loss) on derivative financial instruments | $ 0 | 2 | $ 1 | (1) | |||
Hedges of cash flows | Interest rate swaps | Financial charges and other | |||||||
Interest rate derivatives | |||||||
Net realized loss related to the interest rate swaps | 0 | $ 1 | 0 | $ 2 | |||
Hedges of cash flows | Interest rate swaps | Recurring fair value measurement | Level 2 | |||||||
Interest rate derivatives | |||||||
Fair value of derivative asset, net | 2 | 2 | |||||
Designated as hedge | Interest rate swaps | Recurring fair value measurement | Level 2 | |||||||
Interest rate derivatives | |||||||
Fair value of derivative asset, gross | $ 2 | $ 2 | |||||
Fair value of derivative liability, gross | 0 | ||||||
Designated as hedge | Hedges of cash flows | Interest rate swaps | Level 2 | |||||||
Interest rate derivatives | |||||||
Fair value of derivative asset, gross | 1 | ||||||
Fair value of derivative liability, gross | $ 1 | ||||||
[1] | Recast to consolidate PNGTS for all periods presented (Refer to Notes 2 and 6). |
ACCOUNTS RECEIVABLE AND OTHER58
ACCOUNTS RECEIVABLE AND OTHER (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 | |
ACCOUNTS RECEIVABLE AND OTHER | |||
Trade accounts receivable, net of allowance of nil | $ 34 | $ 44 | |
Imbalance receivable from affiliates | 2 | ||
Other | 1 | 1 | |
Accounts receivable and other | 35 | 47 | [1] |
Trade accounts receivable, allowance | $ 0 | $ 0 | |
[1] | Recast to consolidate PNGTS for all periods presented (Refer to Notes 2 and 6). |
FINANCIAL CHARGES AND OTHER (De
FINANCIAL CHARGES AND OTHER (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |||
FINANCIAL CHARGES AND OTHER | ||||||
Interest Expense | $ 23 | $ 17 | $ 59 | $ 52 | ||
PNGTS' amortization of derivative loss on derivative instruments | 1 | 1 | ||||
Net realized loss related to the interest rate swaps | 1 | 2 | ||||
Other Income | (1) | (2) | ||||
Financial charges and other | $ 23 | $ 18 | [1] | $ 59 | $ 53 | [1] |
[1] | Recast to consolidate PNGTS for all periods presented (Refer to Notes 2 and 6). |
CONTINGENCIES (Details)
CONTINGENCIES (Details) - Great Lakes v. Essar Steel Minnesota LLC, et al. - Great Lakes - USD ($) $ in Millions | May 20, 2017 | Sep. 16, 2015 | Oct. 29, 2009 | Apr. 30, 2017 |
Contingencies | ||||
Judgement awarded | $ 31.5 | |||
Essar | ||||
Contingencies | ||||
Recovery sought | $ 33 | |||
Judgement awarded | $ 1.2 | $ 32.9 | ||
Litigation settlement, offset against bankruptcy proceedings | $ 1.2 |
REGULATORY (Details)
REGULATORY (Details) | Oct. 24, 2017Bcf | Apr. 24, 2017 | Jan. 06, 2017item | Oct. 31, 2017 |
Great Lakes Settlement | FERC | ||||
Regulatory Matters | ||||
Settlement rate reduced (as a percent) | 27.00% | |||
Great Lakes Settlement | NEB | Maximum | ||||
Regulatory Matters | ||||
Transportation capacity per day | Bcf | 0.711 | |||
Great Lakes Contracting | NEB | ||||
Regulatory Matters | ||||
Term of contract | 10 years | |||
Termination options beginning | 3 years | |||
North Baja Pipeline, LLC | FERC | ||||
Regulatory Matters | ||||
Number of compression units | item | 2 |
VARIABLE INTEREST ENTITIES - Co
VARIABLE INTEREST ENTITIES - Consolidated VIEs (Details) - USD ($) $ in Millions | 9 Months Ended | |||||||
Sep. 30, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | [1] | Dec. 31, 2015 | [1] | |||
ASSETS (LIABILITIES) | ||||||||
Cash and cash equivalents | $ 73 | $ 64 | [1] | $ 77 | $ 55 | |||
Accounts receivable and other | 35 | 47 | [1] | |||||
Inventories | 7 | 7 | [1] | |||||
Other current assets | 6 | 7 | [1] | |||||
Equity investments | 1,207 | 918 | [1] | |||||
Plant, property and equipment | 2,133 | 2,180 | [1] | |||||
Other assets | [1] | 1 | ||||||
Accounts payable and accrued liabilities | (31) | (29) | [1] | |||||
Accounts payable to affiliates, net | (5) | (8) | [1] | |||||
Distributions payable | [1] | (3) | ||||||
Accrued interest | (21) | (10) | [1] | |||||
Current portion of long-term debt | (51) | (52) | [1] | |||||
Long-term debt | (2,427) | (1,859) | [1] | |||||
Other liabilities | (28) | (28) | [1] | |||||
Consolidated VIEs | Restricted VIEs | ||||||||
ASSETS (LIABILITIES) | ||||||||
Cash and cash equivalents | 19 | 14 | ||||||
Accounts receivable and other | 23 | 33 | ||||||
Inventories | 6 | 6 | ||||||
Other current assets | 4 | 6 | ||||||
Equity investments | 1,207 | 918 | ||||||
Plant, property and equipment | 1,132 | 1,146 | ||||||
Other assets | 1 | 2 | ||||||
Accounts payable and accrued liabilities | (21) | (21) | ||||||
Accounts payable to affiliates, net | (25) | (32) | ||||||
Distributions payable | (3) | |||||||
Other taxes payable | (1) | |||||||
Accrued interest | (5) | (2) | ||||||
Current portion of long-term debt | (51) | (52) | ||||||
Long-term debt | (314) | (337) | ||||||
Other liabilities | (26) | (25) | ||||||
Deferred state income tax | $ (10) | $ (10) | ||||||
[1] | Recast to consolidate PNGTS for all periods presented (Refer to Notes 2 and 6). |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | ||
State income taxes | |||||
Total state income taxes | $ 1 | $ 1 | [1] | ||
Portland Natural Gas Transmission System | |||||
Income Taxes | |||||
Effective income tax rate (as a percent) | 3.80% | 3.80% | |||
State income taxes | |||||
Current | $ (7) | $ 1 | 1 | ||
Deferred | $ 7 | ||||
Total state income taxes | $ 1 | $ 1 | |||
[1] | Recast to consolidate PNGTS for all periods presented (Refer to Notes 2 and 6). |
SUBSEQUENT EVENTS - Distributio
SUBSEQUENT EVENTS - Distributions (Details) - USD ($) $ / shares in Units, $ in Millions | Nov. 30, 2017 | Nov. 01, 2017 | Oct. 31, 2017 | Oct. 24, 2017 | Oct. 23, 2017 | Oct. 19, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 01, 2017 | Jun. 01, 2017 | |||
Distributions | |||||||||||||||
Partnership distribution | [1] | $ 235 | |||||||||||||
Partnership's share of distributions | 106 | $ 125 | [2] | ||||||||||||
Return on investment distribution classified as investing activities | $ 3 | ||||||||||||||
Northern Border | |||||||||||||||
Distributions | |||||||||||||||
Ownership interest (as a percent) | 50.00% | 50.00% | 50.00% | 50.00% | |||||||||||
Great Lakes | |||||||||||||||
Distributions | |||||||||||||||
Ownership interest (as a percent) | 46.45% | 46.45% | 46.45% | ||||||||||||
Portland Natural Gas Transmission System | |||||||||||||||
Distributions | |||||||||||||||
Ownership interest (as a percent) | 11.81% | 49.90% | 11.81% | 49.90% | 11.81% | ||||||||||
Iroquois | |||||||||||||||
Distributions | |||||||||||||||
Ownership interest (as a percent) | 49.34% | ||||||||||||||
Portland Natural Gas Transmission System | |||||||||||||||
Distributions | |||||||||||||||
Ownership interest (as a percent) | 11.81% | ||||||||||||||
Subsequent Events | |||||||||||||||
Distributions | |||||||||||||||
Total cash distribution | $ 75 | ||||||||||||||
Subsequent Events | Distribution declared | Northern Border | |||||||||||||||
Distributions | |||||||||||||||
Partnership distribution | $ 14 | ||||||||||||||
Subsequent Events | Distribution declared | Great Lakes | |||||||||||||||
Distributions | |||||||||||||||
Partnership distribution | $ 2 | ||||||||||||||
Subsequent Events | Distribution declared | Iroquois | |||||||||||||||
Distributions | |||||||||||||||
Partnership distribution | $ 28 | ||||||||||||||
Subsequent Events | Cash Distribution Paid | Northern Border | |||||||||||||||
Distributions | |||||||||||||||
Partnership's share of distributions | $ 7 | ||||||||||||||
Subsequent Events | Cash Distribution Paid | Great Lakes | |||||||||||||||
Distributions | |||||||||||||||
Partnership's share of distributions | $ 1 | ||||||||||||||
Subsequent Events | Cash Distribution Paid | Iroquois | |||||||||||||||
Distributions | |||||||||||||||
Partnership's share of distributions | 14 | ||||||||||||||
Return on investment distribution classified as investing activities | $ 2.6 | ||||||||||||||
General Partner | |||||||||||||||
Distributions | |||||||||||||||
Partnership distribution | [1] | $ 12 | |||||||||||||
TC PipeLines GP, Inc. | Subsequent Events | |||||||||||||||
Distributions | |||||||||||||||
General Partner cash distributions | $ 5 | ||||||||||||||
Ownership interest (as a percent) | 2.00% | ||||||||||||||
Total distribution for General Partner interest | $ 2 | ||||||||||||||
TC PipeLines GP, Inc. | General Partner | |||||||||||||||
Distributions | |||||||||||||||
Total distribution for General Partner interest | $ 2 | $ 1 | 4 | $ 3 | |||||||||||
TC PipeLines GP, Inc. | General Partner | Subsequent Events | Distribution declared | |||||||||||||||
Distributions | |||||||||||||||
Distribution declared for IDRs | $ 3 | ||||||||||||||
Common Units | |||||||||||||||
Distributions | |||||||||||||||
Total cash distribution | $ 74 | $ 65 | $ 210 | $ 184 | |||||||||||
Number of units | 69,600,000 | 66,600,000 | [2] | 69,600,000 | 66,600,000 | [2] | |||||||||
Common Units | Subsequent Events | |||||||||||||||
Distributions | |||||||||||||||
Per Unit Distribution, declared (in dollars per unit) | $ 1 | ||||||||||||||
Limited partners, Distribution declared | $ 70 | ||||||||||||||
Common Units | Limited Partners | |||||||||||||||
Distributions | |||||||||||||||
Partnership distribution | [1] | $ 198 | |||||||||||||
Common Units | TC PipeLines GP, Inc. | Subsequent Events | |||||||||||||||
Distributions | |||||||||||||||
Limited Partners, Distributions paid | 6 | ||||||||||||||
Common Units | TC PipeLines GP, Inc. | Limited Partners | |||||||||||||||
Distributions | |||||||||||||||
Number of units | 5,797,106 | ||||||||||||||
Common Units | TransCanada | Subsequent Events | |||||||||||||||
Distributions | |||||||||||||||
Limited Partners, Distributions paid | $ 11 | ||||||||||||||
Common Units | TransCanada | TC PipeLines GP, Inc. | |||||||||||||||
Distributions | |||||||||||||||
Number of units | 11,287,725 | ||||||||||||||
[1] | Recast to consolidate PNGTS for all periods presented (Refer to Notes 2 and 6). | ||||||||||||||
[2] | Recast to consolidate PNGTS for all periods presented (Refer to Notes 2 and 6). |