Document And Entity Information
Document And Entity Information - CAD ($) | 3 Months Ended | ||
Mar. 31, 2018 | Apr. 24, 2018 | Jun. 30, 2017 | |
Entity Registrant Name | Kinder Morgan Canada Ltd | ||
Entity Central Index Key | 1,714,973 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Public Float | $ 1,631,630,700 | ||
Document Fiscal Year Focus | 2,018 | ||
Document Fiscal Period Focus | Q1 | ||
Document Type | 10-Q | ||
Amendment Flag | false | ||
Document Period End Date | Mar. 31, 2018 | ||
Restricted Voting Shares [Member] | |||
Entity Common Stock, Shares Outstanding | 103,661,302 | ||
Special Voting Shares [Member] | |||
Entity Common Stock, Shares Outstanding | 243,455,654 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME (In millions of Canadian dollars, except per share amounts) (Unaudited) - CAD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Revenues | ||
Services | $ 163.9 | $ 164 |
Product sales and other | 0.3 | 0.5 |
Total Revenues | 164.2 | 164.5 |
Operating Costs, Expenses and Other | ||
Operations and maintenance | 49.1 | 49 |
Depreciation and amortization | 36.8 | 34.8 |
General and administrative | 18.4 | 17 |
Taxes, other than income taxes | 9.3 | 9.8 |
Other expense, net | 0.1 | 1.8 |
Total Operating Costs, Expenses and Other | 113.7 | 112.4 |
Operating Income | 50.5 | 52.1 |
Other Income (Expense) | ||
Interest, net | (0.3) | (6.7) |
Foreign exchange (loss) gain | (0.2) | 10.9 |
Capitalized equity financing costs | 11.6 | 5.5 |
Other, net | (0.7) | (0.8) |
Total Other Income | 10.4 | 8.9 |
Income Before Income Taxes | 60.9 | 61 |
Income Tax Expense | (16.5) | (14.2) |
Net Income | 44.4 | 46.8 |
Preferred share dividends | (7.2) | 0 |
Net Income Attributable to Kinder Morgan Interest | (26.4) | (46.8) |
Net Income Available to Restricted Voting Stockholders | $ 10.8 | $ 0 |
Restricted Voting Shares | ||
Basic and Diluted Earnings Per Restricted Voting Share | $ 0.10 | $ 0 |
Basic and Diluted Weighted Average Restricted Voting Shares Outstanding | 103.5 | 0 |
Dividend Per Restricted Voting Share Declared for the Period | $ 0.1625 | $ 0 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In millions of Canadian dollars) (Unaudited) - CAD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Net Income | ||
Net income | $ 44.4 | $ 46.8 |
Other comprehensive income (loss) | ||
Benefit plans | 0.7 | 0.4 |
Foreign currency translation adjustments | 1.2 | (0.5) |
Total other comprehensive income (loss) | 1.9 | (0.1) |
Comprehensive income | 46.3 | 46.7 |
Comprehensive income attributable to Kinder Morgan interest | (27.7) | (46.7) |
Comprehensive income attributable to Kinder Morgan Canada Limited | $ 18.6 | $ 0 |
CONSOLIDATED BALANCE SHEETS (In
CONSOLIDATED BALANCE SHEETS (In millions of Canadian dollars, except share and per share amounts) (Unaudited) - CAD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Current assets | ||
Cash and cash equivalents | $ 210.3 | $ 238.8 |
Accounts receivable | 74.4 | 60.3 |
Accounts receivable-affiliates | 3.6 | 9 |
Inventories | 13.2 | 13.1 |
Other current assets | 21.3 | 19.4 |
Total current assets | 322.8 | 340.6 |
Property, plant and equipment, net | 3,921.1 | 3,708 |
Goodwill | 248 | 248 |
Regulatory assets | 26.1 | 22.7 |
Deferred charges and other assets | 118.5 | 133.4 |
Total Assets | 4,636.5 | 4,452.7 |
Current liabilities | ||
Current potion of debt | 100 | 0 |
Accounts payable | 191.6 | 151.4 |
Accounts payable-affiliates | 1.8 | 0.7 |
Regulatory liabilities | 115 | 107.9 |
Other current liabilities | 47.5 | 38.3 |
Total current liabilities | 455.9 | 298.3 |
Long-term liabilities and deferred credits | ||
Deferred income taxes | 342.1 | 339.5 |
Pension and postretirement benefits | 75.4 | 75.4 |
Regulatory liabilities | 65.7 | 43.3 |
Deferred revenues | 56.7 | 53.5 |
Other deferred credits | 4.4 | 5.1 |
Total long-term liabilities and deferred credits | 544.3 | 516.8 |
Total Liabilities | 1,000.2 | 815.1 |
Equity | ||
Preferred share capital, 12,000,000 shares of Series 1 and 10,000,000 shares of Series 3, issued and outstanding(Note 3) | 537.2 | 537.2 |
Restricted Voting Share capital, 103,661,302 and 103,366,905 Restricted Voting Shares, respectively, issued and outstanding(Note 3) | 1,713.6 | 1,707.5 |
Retained deficit | (775) | (770) |
Accumulated other comprehensive loss | (8.2) | (8.8) |
Total Kinder Morgan Canada Limited equity | 1,467.6 | 1,465.9 |
Kinder Morgan interest, 243,455,654 and 242,882,897 Special Voting Shares, respectively, issued and outstanding(Note 3) | 2,168.7 | 2,171.7 |
Total Equity | 3,636.3 | 3,637.6 |
Total Liabilities and Equity | $ 4,636.5 | $ 4,452.7 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - shares | Mar. 31, 2018 | Dec. 31, 2017 |
Equity | ||
Restricted voting shares issued | 103,661,302 | 103,366,905 |
Restricted voting shares outstanding | 103,661,302 | 103,366,905 |
Special Voting Shares, issued and outstanding | 243,455,654 | 242,882,897 |
Series 1 [Member] | ||
Preferred shares issued | 12,000,000 | 12,000,000 |
Preferred shares outstanding | 12,000,000 | 12,000,000 |
Series 3 [Member] | ||
Preferred shares issued | 10,000,000 | 10,000,000 |
Preferred shares outstanding | 10,000,000 | 10,000,000 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - CAD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Operating Activities | ||
Net income | $ 44.4 | $ 46.8 |
Non-cash items | ||
Depreciation and amortization | 36.8 | 34.8 |
Deferred income tax | 2.4 | 14.3 |
Capitalized equity financing costs | (11.6) | (5.5) |
Unrealized foreign exchange gain | (0.5) | (10.9) |
Other non-cash items | 5.3 | 2.5 |
Change in operating assets and liabilities | 25.6 | (24.8) |
Cash provided by operating activities | 102.4 | 57.2 |
Investing Activities | ||
Capital expenditures | (173.9) | (42.1) |
Contributions to trusts | (2.8) | (4.4) |
Cash used in investing activities | (176.7) | (46.5) |
Financing Activities | ||
Issuances of debt | 100 | 0 |
Cash dividends - restricted shares | (11.8) | 0 |
Dividends - preferred shares | (6.1) | 0 |
Distributions - Kinder Morgan interest | (31) | 0 |
Debt and preferred shares issuance costs | 4.5 | 0 |
Cash provided by financing activities | 46.6 | 0 |
Effect of exchange rate changes on cash, cash equivalents and restricted deposits | (0.6) | (0.3) |
Net (decrease) increase in Cash, Cash Equivalents and Restricted Deposits | (28.3) | 10.4 |
Cash, Cash Equivalents and Restricted Deposits, beginning of period | 239.5 | 160.3 |
Cash, Cash Equivalents and Restricted Deposits, end of period | 211.2 | 170.7 |
Cash and Cash Equivalents, beginning of period | 238.8 | 159 |
Restricted Deposits, beginning of period | 0.7 | 1.3 |
Cash and Cash Equivalents, end of period | 210.3 | 170.2 |
Restricted Cash and Cash Equivalents, end of period | 0.9 | 0.5 |
Supplemental Disclosures of Cash Flow Information | ||
Cash paid during the period for income taxes | 7.4 | 0.2 |
Noncash Investing and Financing Activities | ||
Increase in property, plant and equipment from both accruals and contractor retainage | 62.7 | 22.1 |
Increase (decrease) in property, plant and equipment due to foreign currency translation adjustments | $ 1.1 | $ (1.4) |
CONSOLIDATED STATEMENT OF STOCK
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY - CAD ($) shares in Millions, $ in Millions | Total | Equity attributable to Kinder Morgan pre-IPO [Member] | Preferred share capital [Member] | Restricted Voting Share capital [Member] | Retained earnings (deficit) | Accumulated other comprehensive loss | Kinder Morgan interest | Preferred Shares [Member]Preferred Shares [Member] | Restricted Voting Shares [Member]Voting Shares | Kinder Morgan interest - Special Voting Shares [Member]Voting Shares |
Parent's capital, beginning balance at Dec. 31, 2016 | $ 1,436 | $ 1,475 | $ (13.1) | $ (25.9) | ||||||
Net income | 46.8 | 46.8 | ||||||||
Net income including portion attributable to Kinder Morgan interest | 46.8 | |||||||||
Other comprehensive income (loss) | (0.1) | (0.1) | ||||||||
Parent's capital,ending balance at Mar. 31, 2017 | 1,482.7 | $ 1,475 | 33.7 | (26) | ||||||
Preferred stock, shares outstanding (in shares), beginning balance at Dec. 31, 2017 | 22 | |||||||||
Voting shares, shares outstanding (in shares), beginning balance at Dec. 31, 2017 | 103.4 | 242.9 | ||||||||
Parent's capital, beginning balance at Dec. 31, 2017 | 1,465.9 | |||||||||
Stockholders' Equity, beginning balance at Dec. 31, 2017 | 3,637.6 | $ 537.2 | $ 1,707.5 | (770) | (8.8) | $ 2,171.7 | ||||
Net income | 26.4 | 18 | ||||||||
Net Income attributable to Kinder Morgan interest | 26.4 | |||||||||
Net income including portion attributable to Kinder Morgan interest | 44.4 | |||||||||
Preferred share dividends | (6.1) | (6.1) | ||||||||
Restricted voting share dividends | (16.9) | (16.9) | ||||||||
Special voting share distributions | (40.9) | (40.9) | ||||||||
Dividend/Distribution reinvestment plan, shares | 0.3 | 0.5 | ||||||||
Dividend reinvestment plan, voting shares | 15 | 5.1 | ||||||||
Distribution reinvestment plan, Kinder Morgan interests | 9.9 | |||||||||
Stock-based compensation | 1.3 | 1.3 | ||||||||
Other | 0 | (0.3) | 0.3 | |||||||
Other comprehensive income (loss) | 1.9 | 0.6 | 1.3 | |||||||
Parent's capital,ending balance at Mar. 31, 2018 | 1,467.6 | |||||||||
Preferred stock, shares outstanding (in shares), ending balance at Mar. 31, 2018 | 22 | |||||||||
Voting shares, shares outstanding (in shares), ending balance at Mar. 31, 2018 | 103.7 | 243.4 | ||||||||
Stockholders' Equity, ending balance at Mar. 31, 2018 | $ 3,636.3 | $ 537.2 | $ 1,713.6 | $ (775) | $ (8.2) | $ 2,168.7 |
Litigation, Environmental and O
Litigation, Environmental and Other Contingencies Litigation Phantom (Details) - CAD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Commitments and Contingencies Disclosure [Abstract] | ||
Estimated Litigation Liability | $ 0 | $ 0 |
General (Notes)
General (Notes) | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] | General The Company was incorporated under the Business Corporations Act (Alberta) on April 7, 2017. On May 30, 2017, we completed an IPO of our Restricted Voting Shares and used the net proceeds of $1,671.0 million to acquire an approximate 30% indirect interest in the Limited Partnership from certain affiliates of Kinder Morgan, who retained an approximate 70% ownership of the limited partnership units in the Limited Partnership. We have two business segments: (i) the Pipelines segment, which includes the TMPL that currently transports approximately 300,000 bpd of crude oil and refined petroleum from Edmonton, Alberta to Burnaby, B.C.; Puget Sound serving the state of Washington; Jet Fuel serving the Vancouver International Airport; KMCI, the employer of Canadian staff; and Cochin, a 12 -inch diameter multi-product pipeline which spans approximately 1,000 kilometers in Saskatchewan and Alberta; and (ii) the Terminals segment, which includes the ownership and operation of liquid product merchant storage and rail terminals in the Edmonton, Alberta market as well as a predominantly dry cargo import/export facility in Vancouver, B.C. Suspension of Non-Essential Spending on Trans Mountain Expansion Project On April 8, 2018, we announced that we were suspending all non-essential activities and related spending on TMEP. We also announced that under current circumstances, specifically including the continued actions in opposition to TMEP by B.C., we will not commit additional shareholder resources to TMEP. We further announced that we will consult with various stakeholders in an effort to reach agreements by May 31, 2018 that may allow TMEP to proceed without putting further KML shareholder capital at risk. The Company stated it is difficult to conceive of any scenario in which it would proceed with TMEP if an agreement is not reached by May 31, 2018. The focus in those consultations will be on two principles: clarity on the path forward, particularly with respect to the ability to construct through B.C., and adequate protection of KML shareholders. We had previously announced a “primarily permitting” strategy for the first half of 2018, focused on advancing the permitting process, rather than spending at full construction levels, until we had obtained greater clarity on outstanding permits, approvals and judicial reviews. Rather than achieving greater clarity, TMEP is now facing unquantifiable risk. Previously, opposition by B.C. was manifesting itself largely through B.C.’s participation in an ongoing judicial review. Unfortunately, B.C. has now been asserting broad jurisdiction and reiterating its intention to use that jurisdiction to stop TMEP. B.C.’s intention in that regard has been neither validated nor quashed, and B.C. has continued to threaten unspecified additional actions to prevent TMEP success. Those actions have created even greater, and growing, uncertainty with respect to the regulatory landscape facing TMEP. In addition, the parties still await judicial decisions on challenges to the original Order in Council and the B.C. Environmental Assessment Certificate approving TMEP. These items, combined with the impending approach of critical construction windows, the lead-time required to ramp up spending, and the imperative that the Company avoid incurring significant debt while lacking the necessary clarity, brought us to the decision we announced on April 8, 2018. Given the current uncertain conditions, we are not updating our cost and schedule estimate at this time. However, construction delays are likely to entail increased costs due to a variety of factors including extended personnel, equipment and facilities charges, storage charges for unused material and equipment, extended debt service, and inflation, among others. In the event that TMEP is terminated, resulting impairments, foregone capitalized equity costs, and potential wind down costs would have a significant effect on our results of operations. Potential impairments would be recognized primarily in the period in which a decision to terminate is made. Also, see Note 11 for further information on TMEP. Basis of Presentation General In January 2018, we completed the registration of our Restricted Voting Shares pursuant to Section 12(g) of the United States Securities Exchange Act of 1934 (the “Exchange Act”) and are subject to the reporting requirements of Section 13(a) of the Exchange Act. We have prepared the accompanying unaudited consolidated financial statements in accordance with the accounting principles contained in the FASB Accounting Standards Codification, the single source of U.S. GAAP and referred to in this report as the Codification. U.S. GAAP means generally accepted accounting principles that the Securities Exchange Commission (“SEC”) has identified as having substantial authoritative support, as supplemented by Regulation S-X under the Exchange Act, as amended from time to time. Under such rules and regulations, all significant intercompany items have been eliminated in consolidation. In our opinion, all adjustments, which are of a normal and recurring nature, considered necessary for a fair statement of our financial position and operating results for the interim periods have been included in the accompanying consolidated financial statements. Interim results are not necessarily indicative of results for a full year; accordingly, you should read these consolidated financial statements in conjunction with our consolidated financial statements and related notes included in our 2017 Form 10-K. Amounts are stated in Canadian dollars unless otherwise noted which is the functional currency of most of our operations. Presentation of Kinder Morgan Interest As of and for the reporting periods after May 30, 2017, Kinder Morgan’s economic interest in the Limited Partnership is reflected within “Kinder Morgan interest” in our consolidated balance sheets and earnings attributable to Kinder Morgan’s economic ownership interest in the Limited Partnership is presented in “Net Income Attributable to Kinder Morgan Interest” in our consolidated statements of income. Prior to the IPO, Kinder Morgan controlled all of our equity which is presented as “ Equity attributable to Kinder Morgan pre-IPO ” in our statement of equity for the three months ended March 31, 2017. For the periods after the IPO, “Kinder Morgan interest” is separately presented in our consolidated statement of equity for the three months ended March 31, 2018, and includes its share of our net income and other comprehensive loss, along with its Class B Units distributions and distribution reinvestment plan activities. Accounting Policy Changes Adoption of New Accounting Pronouncements On January 1, 2018, we adopted Accounting Standards Updates (ASU) No. 2014-09, “ Revenue from Contracts with Customers, ” and a series of related accounting standard updates designed to create improved revenue recognition and disclosure comparability in financial statements. For more information, see Note 6. On January 1, 2018, we retroactively adopted ASU 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash.” This ASU requires the statements of cash flows to present the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents are now included with cash and cash equivalents when reconciling the beginning of period and end of period amounts presented on the statements of cash flows. The retrospective application of this new accounting guidance resulted in a decrease of $0.8 million in “Cash used in investing activities,” an increase of $ 1.3 million in “Cash, Cash Equivalents, and Restricted Deposits, beginning of the period,” and an increase of $0.5 million in “Cash, Cash Equivalents, and Restricted Deposits, end of period” in our accompanying consolidated statement of cash flows from what was previously presented for the three months ended March 31, 2017. On January 1, 2018, we adopted ASU No. 2017-07, “ Compensation - Retirement Benefits (Topic 715) .” This ASU requires an employer to disaggregate the service cost component from the other components of net benefit cost, allows only the service cost component of net benefit cost to be eligible for capitalization, and establishes how to present the service cost component and the other components of net benefit cost in the income statement. Topic 715 required us to retrospectively reclassify $1.0 million of other components of net benefit credits (excluding the service cost component) from “General and administrative” to “Other, net” in our accompany consolidated statement of income for three months ended March 31, 2017. We prospectively applied Topic 715 related to net benefit costs eligible for capitalization. |
Debt (Notes)
Debt (Notes) | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Debt Disclosure [Text Block] | Debt Credit Facility As of March 31, 2018, we were in compliance with all required covenants under our Credit Facility. As of March 31, 2018 and December 31, 2017, we had $100.0 million and no outstanding borrowings on our Credit Facility, respectively. As of March 31, 2018, the weighted average interest rate on our Credit Facility borrowings was 3.14% . For the three months ended March 31, 2018 and 2017, we incurred standby fees of $4.0 million and none , respectively. On January 23, 2018, we entered into an agreement amending certain terms of our Credit Facility to, among other things, provide additional funding certainty with respect to each tranche under our Credit Facility. Material terms of the Credit Facility are further described in Note 9 to our consolidated financial statements included in our 2017 Form 10-K. Fair Value of Financial Instruments The carrying value and estimated fair value of our debt balances are disclosed below: March 31, 2018 December 31, 2017 Carrying value Estimated fair value Carrying value Estimated fair value (In millions of Canadian dollars) Total debt 100.0 100.0 — — Level 2 input values were used to measure the estimated fair value of the long term debt balance as of March 31, 2018. |
Equity (Notes)
Equity (Notes) | 3 Months Ended |
Mar. 31, 2018 | |
Stockholders' Equity Note [Abstract] | |
Shareholders' Equity | Equity As of March 31, 2018, we had (i) 103.7 million and 243.4 million of Restricted Voting Shares and Special Voting Shares outstanding, respectively, with no par value for an aggregate of 347.1 million voting shares outstanding (ii) 12.0 million and 10.0 million of Series 1 Preferred Shares and Series 3 Preferred Shares outstanding, respectively, and (iii) 0.8 million of restricted stock awards outstanding. Preferred Share Dividends The following table provides information regarding dividends paid, and declared, but not yet paid, as applicable, on our Preferred Shares during the three months ended March 31, 2018: Period Total Series 1 quarterly dividend per share for the period Total Series 3 quarterly dividend per share for the period(a) Date of declaration Date of record Date of dividend Total amount of dividends paid in cash (In millions of Canadian dollars, except per share amounts) November 15, 2017 to February 14, 2018 (a) 0.328125 0.22082 January 17, 2018 January 31, 2018 February 15, 2018 6.1 February 15, 2018 to May 14, 2018 0.328125 0.325 April 18, 2018 April 30, 2018 May 15, 2018 ________ (a) Series 3 per share amount reflects that the shares were outstanding for 62 days during the period ended February 14, 2018. Restricted Voting Share Dividends The following table provides information regarding dividends paid and declared, but not yet paid, as applicable, on our Restricted Voting Share during the three months ended March 31, 2018. For the three month period ended Dividend rate per share Date of declaration Date of record Date of dividend Total amount of dividends paid in cash(a) Total amount of dividends paid in form of additional shares (In millions of Canadian dollars) December 31, 2017 0.1625 January 17, 2018 January 31, 2018 February 15, 2018 11.8 5.1 March 31, 2018 0.1625 April 18, 2018 April 30, 2018 May 15, 2018 ________ (a) Amount includes notional dividends on outstanding restricted stock awards of $0.1 million . Kinder Morgan Interest Distributions The following table provides information regarding distributions paid and declared, but not yet paid, as applicable, to Kinder Morgan during the three months ended March 31, 2018. For the three month period ended Dividend rate per share Date of declaration Date of distribution Total amount of distribution paid in cash Total amount of distribution paid in form of additional shares (In millions of Canadian dollars) December 31, 2017 0.1625 January 17, 2018 February 15, 2018 31.0 9.9 March 31, 2018 0.1625 April 18, 2018 May 15, 2018 Earnings per Restricted Voting Share We calculate earnings per share using the two-class method. Earnings were allocated to Restricted Voting Shares and participating securities based on the amount of dividends paid in the current period plus an allocation of the undistributed earnings or excess distributions over earnings to the extent that each security participates in earnings or excess distributions over earnings. Our unvested restricted stock awards, which may be settled in Restricted Voting Shares issued to employees and non-employee directors and include dividend equivalent payments, do not participate in excess distributions over earnings. The following table sets forth the allocation of net income available to shareholders of Restricted Voting Shares and participating securities: Three Months Ended March 31, 2018 (In millions of Canadian dollars) Net Income Available to Restricted Voting Stockholders 10.8 Participating securities: Less: Net income allocated to restricted stock awards(a) (0.1 ) Net Income Allocated to Restricted Voting Stockholders 10.7 Basic Weighted Average Restricted Voting Shares Outstanding 103.5 Basic Earnings Per Restricted Voting Share 0.10 _______ (a) As of March 31, 2018, there were approximately 0.8 million unvested restricted stock awards. For the three months ended March 31, 2018, the weighted average maximum number of potential Restricted Voting Share equivalents of 0.8 million unvested restricted stock awards are antidilutive and, accordingly, are excluded from the determination of diluted earnings per Restricted Voting Share. |
Related Party Transactions (Not
Related Party Transactions (Notes) | 3 Months Ended |
Mar. 31, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Transactions with Related Parties Affiliate Activities The following table summarizes our related party income statement activity. Revenues, operating costs and capitalized costs are under normal trade terms. Three Months Ended March 31, 2018 2017 (In millions of Canadian dollars) Income Statement location Revenues-Services(a) 15.4 14.8 Operations and maintenance and general and administrative expenses 1.9 1.1 Interest expense(b) — 11.7 Other Capitalized costs from affiliates in property, plant and equipment 0.2 2.0 ______ (a) Amounts represent sales to a customer who is a related party through joint ownership of a joint venture. (b) 2017 primarily represents interest on long-term debt with affiliates (“KMI Loans”) that was repaid with proceeds form our IPO. Accounts receivable and payable Accounts receivable-affiliate and accounts payable-affiliate are non-interest bearing and are settled on demand and, since our IPO, settled monthly. Other current assets As of March 31, 2018 , we had an affiliate contract account receivable balance of approximately $1.0 million included in “Other current assets” on our accompanying consolidated balance sheets. |
Risk Management (Notes)
Risk Management (Notes) | 3 Months Ended |
Mar. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Risk Management | Risk Management and Financial Instruments Credit risk We are exposed to credit risk, which is the risk that a customer or other counterparty will fail to perform an obligation or settle a liability, resulting in a financial loss to our business, which is primarily concentrated in the crude oil and refined products transportation industry and is dependent upon the ability of our customers to pay for these services. A majority of our customers operate in the oil and gas exploration and development, or energy marketing or transportation industries. We may be exposed to long-term downturns in energy commodity prices, including the price for crude oil, or other credit events impacting these industries. We limit our exposure to credit risk by requiring shippers who fail to maintain specified credit ratings or a suitable financial position to provide acceptable security, generally in the form of guarantees from credit worthy parties or letters of credit from well rated financial institutions. Our cash and cash equivalents are held with major financial institutions, minimizing the risk of non-performance by counter parties. Interest Rate Risk We are exposed to interest rate risk attributed to floating rate debt, which is used to finance capital expansion projects, including the TMEP, and general corporate operations. The changes in interest rates may impact future cash flows and the fair value of our financial instruments. Foreign Currency Transactions and Translation Foreign currency transaction gains or losses result from a change in exchange rates between the functional currency of an entity and the currency in which a transaction is denominated. Unrealized and realized gains and losses generated from these transactions are recorded in foreign exchange (loss) gain in the accompanying consolidated statements of income and include: • Prior to repayment of the KMI Loans utilizing proceeds from our IPO, we were exposed to foreign currency risk related to the U.S. dollar denominated KMI Loans. For the three months ended March 31, 2017, we had unrealized foreign exchange gain of $10.1 million related to the KMI Loans. • Unrealized foreign exchange gains for the three months ended March 31, 2018 and 2017 were $0.5 million and $0.8 million , respectively, due to changes in exchange rates between the Canadian dollar and the U.S. dollar on U.S. dollar denominated balances. These currency exchange rate fluctuations affect the expected Canadian dollar cash flows on unsettled U.S. dollar denominated transactions, primarily related to cash bank accounts that are denominated in U.S. dollars and affiliate receivables or payables that are denominated in U.S. dollars. We translate the assets and liabilities of Puget Sound that has the U.S. dollar as its functional currency to Canadian dollars at period-end exchange rates. • Puget Sound operates in the state of Washington, and earns its revenues and incurs most of its expenses in U.S. dollars and Cochin earns its revenues in U.S. dollars. Therefore, fluctuations in the U.S. dollar to Canadian dollar exchange rate can affect the earnings contributed by Puget Sound and Cochin to our overall results. For the three months ended March 31, 2018, we had a realized foreign exchange loss of $0.7 million . Liquidity risk Liquidity risk is the risk that we will not be able to meet our financial obligations, including commitments, as they become due. We manage our liquidity risk by ensuring access to sufficient funds to meet our obligations. We forecast cash requirements to ensure funding is available to settle financial liabilities when they become due. Our primary sources of liquidity and capital resources are funds generated from operations and our Credit Facility, see Note 2. |
Revenue Recognition Revenue Rec
Revenue Recognition Revenue Recognition (Notes) | 3 Months Ended |
Mar. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contract with Customer [Text Block] | Revenue Recognition Adoption of Topic 606 Effective January 1, 2018, we adopted ASU No. 2014-09, “Revenue from Contracts with Customers” and the series of related accounting standard updates that followed (collectively referred to as “Topic 606”). We utilized the modified retrospective method to adopt Topic 606, which required us to apply the new revenue standard to (i) all new revenue contracts entered into after January 1, 2018, and (ii) revenue contracts which were not completed as of January 1, 2018. In accordance with this approach, our consolidated revenues for periods prior to January 1, 2018 were not revised. The cumulative effect of the adoption of Topic 606 as of January 1, 2018 and the impact to the financial statement line items for the current year was not material. Revenue from Contracts with Customers Beginning in 2018, we account for revenue from contracts with customers in accordance with Topic 606. The unit of account in Topic 606 is a performance obligation, which is a promise in a contract to transfer to a customer either a distinct good or service (or bundle of goods and services) or a series of distinct goods or services provided over a period of time. Topic 606 requires that a contract’s transaction price, which is the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer, is to be allocated to each performance obligation in the contract based on relative standalone selling prices and recognized as revenue when (point in time) or as (over time) the performance obligation is satisfied. Our customer service contracts primarily include transportation service and terminaling service contracts, as described below. Generally, for the majority of these contracts: (i) our promise is to transfer (or stand ready to transfer) a series of distinct integrated services over a period of time, which is a single performance obligation; (ii) the transaction price includes fixed and/or variable consideration, which amount is determinable at contract inception and/or at each month end based on our right to invoice at month end for the value of services provided to the customer that month; and (iii) the transaction price is recognized as revenue over the service period specified in the contract (which can be a day, including each day in a series of promised daily services, a month, a year, or other time increment, including a deficiency makeup period) as the services are rendered using a time-based (passage of time) or units-based (units of service transferred) method for measuring transfer of control of the services and progress towards satisfying our performance obligation, based on the nature of the promised service (e.g., firm or non-firm) and the terms and conditions of the contract (e.g., contracts with or without makeup rights). Firm Services Firm services (also called uninterruptible services) are services that are promised to be available to the customer at all times during the period(s) covered by the contract, with limited exceptions. Our firm service contracts are typically structured with take-or-pay or minimum volume provisions, which specify minimum service quantities a customer will pay for even if it chooses not to receive or use them in the specified service period (referred to as “deficiency quantities”). We typically recognize the portion of the transaction price associated with such provisions, including any deficiency quantities, as revenue depending on whether the contract prohibits the customer from making up deficiency quantities in subsequent periods, or the contract permits this practice, as follows: • Contracts without Makeup Rights: If contractually the customer cannot make up deficiency quantities in future periods, our performance obligation is satisfied, and revenue associated with any deficiency quantities is generally recognized as each service period expires. Because a service period may exceed a reporting period, we determine at inception of the contract and at each subsequent reporting period if we expect the customer to take the minimum volume associated with the service period. If we expect the customer to make up all deficiencies in the specified service period (i.e., we expect the customer to take the minimum service quantities), the minimum volume provision is deemed not substantive and we will recognize the transaction price as revenue in the specified service period as the promised units of services are transferred to the customer. Alternatively, if we expect that there will be any deficiency quantities that the customer cannot or will not make up in the specified service period (referred to as “breakage”), we will recognize the estimated breakage amount (subject to the constraint on variable consideration) as revenue ratably over such service period in proportion to the revenue that we will recognize for actual units of service transferred to the customer in the service period. For certain take-or-pay contracts where we make the service, or a part of the service, continuously available over the service period, we typically recognize the take-or-pay amount as revenue ratably over such period based on the passage of time. • Contracts with Makeup Rights: If contractually the customer can acquire the promised service in a future period and make up the deficiency quantities in such future period (the “deficiency makeup period”), we have a performance obligation to deliver those services at the customer’s request (subject to contractual and/or capacity constraints) in the deficiency makeup period. At inception of the contract, and at each subsequent reporting period, we estimate if we expect that there will be deficiency quantities that the customer will or will not make up. If we expect the customer will make up all deficiencies it is contractually entitled to, any consideration received relating to temporary deficiencies that will be made up in the deficiency makeup period will be deferred as a contract liability, and we will recognize that amount as revenue in the deficiency makeup period when either of the following occurs: (i) the customer makes up the volumes; or (ii) the likelihood that the customer will exercise its right for deficiency volumes then becomes remote (e.g., there is insufficient capacity to make up the volumes, the deficiency makeup period expires). Alternatively, if we expect at inception of the contract, or at the beginning of any subsequent reporting period, that there will be any deficiency quantities that the customer cannot or will not make up (i.e., breakage), we will recognize the estimated breakage amount (subject to the constraint on variable consideration) as revenue ratably over the specified service periods in proportion to the revenue that we will recognize for actual units of service transferred to the customer in those service periods. Non-Firm Services Non-firm services (also called interruptible services) are the opposite of firm services in that such services are provided to a customer on an “as available” basis. Generally, we do not have an obligation to perform these services until we accept a customer’s periodic request for service. For the majority of our non-firm service contracts, the customer will pay only for the actual quantities of services it chooses to receive or use, and we typically recognize the transaction price as revenue as those units of service are transferred to the customer in the specified service period (typically a daily or monthly period). Nature of Revenue by Segment Pipelines Segment We provide crude oil and refined petroleum transportation and storage services on a firm or non-firm basis. The regulated tariffs for TMPL, Cochin and Puget Sound are designed to provide revenues sufficient to recover the costs of providing transportation and storage services to shippers, including a return on invested capital. TMPL and Puget Sound are common carrier pipelines, generally providing services on a non-firm basis. The majority of Cochin’s transportation service is provided on a firm basis under its current contracts. TMPL’s revenue is adjusted according to terms prescribed in its toll settlement with shippers as approved by the NEB. Differences between transportation revenue recognized pursuant to its toll settlement and actual toll receipts are recognized as regulatory assets or liabilities and are settled in future tolls. For Cochin’s firm transportation service, we typically promise to transport on a stand-ready basis the shipper’s minimum volume commitment amount. The shipper is obligated to pay for its volume commitment amount, regardless of whether or not it flows quantities in Cochin’s pipeline. The shipper pays a transaction price typically based on a per-unit rate for quantities transported, including amounts attributable to deficiency quantities. Our non-firm, interruptible transportation and storage services are provided on TMPL, Cochin and Puget Sound pipelines when and to the extent we determine capacity is available in these pipeline systems and/or terminal storage facilities. The shippers typically pay a per-unit rate for actual quantities of product injected into/withdrawn from storage and/or transported. Terminals Segment We provide various types of liquid tank and bulk terminal services. These services are generally comprised of inbound, storage and outbound handling of customer products. Our liquid tank storage and handling service contracts generally include a promised tank storage capacity provision and prepaid volume throughput of the stored product. In these contracts, we have a stand-ready obligation to perform this contracted service each day over the life of the contract. The customer pays a transaction price typically in the form of a fixed monthly charge and is obligated to pay whether or not it uses the storage capacity and throughput service (i.e., a take-or-pay payment obligation). These contracts generally include a per-unit rate for any quantities we handle at the request of the customer in excess of the prepaid volume throughput amount and also typically include per-unit rates for additional, ancillary services that may be periodically requested by the customer. Our bulk storage and handling contracts generally include inbound handling of our customers’ dry bulk material product into our storage facility and outbound handling of these products from our storage facility. These services are provided on both a firm and non-firm basis. In our firm bulk storage and handling contracts, we are committed to handle and store on a stand-ready basis the minimum throughput quantity of bulk materials contracted by the customer. The customer is obligated to pay for its minimum volume commitment amount, regardless of whether or not it uses the storage and handling service. The customer pays a transaction price typically based on a per-unit rate for quantities handled, including amounts attributable to deficiency quantities. For non-firm storage and handling services, the customer pays a transaction price typically based on a per-unit rate for quantities handled on an as requested, non-guaranteed basis. Disaggregation of Revenues The following table presents our revenues disaggregated by revenue source and type of revenue for each revenue source: Three Months Ended March 31, 2018 Pipelines Terminals Total (In millions of Canadian dollars) Revenue from contracts with customers Services Firm services(a) 12.7 54.6 67.3 Fee-based services 80.9 16.5 97.4 Total revenue from contracts with customers 93.6 71.1 164.7 Other revenues(b) (3.6 ) 3.1 (0.5 ) Total revenues 90.0 74.2 164.2 ______ (a) Includes non-cancellable firm service customer contracts with take-or-pay or minimum volume commitment elements, including those contracts where both the price and quantity amount are fixed. In these arrangements, the customer is obligated to pay for the rendered service whether or not the customer chooses to utilize the service. Excludes service contracts with indexed-based pricing, which along with revenues from other contracts are reported as Fee-based services. (b) Amounts recognized as revenue under guidance prescribed in Topics of the Accounting Standards Codification other than in Topic 606 and primarily includes regulatory-based adjustments for TMPL and leases. Contract Balances Contract assets and contract liabilities are the result of timing differences between revenue recognition, billings and cash collections. We recognize contract assets in those instances where billing occurs subsequent to revenue recognition and our right to invoice the customer is conditioned on something other than the passage of time. Our contract liabilities are substantially related to (i) capital improvements paid for in advance by certain customers generally in our non-regulated businesses, which we subsequently recognize as revenue on a straight-line basis over the initial term of the related customer contracts, and (ii) consideration received from customers for temporary deficiency quantities under minimum volume contracts that we expect will be made up in a future period, which we subsequently recognize as revenue when the customer makes up the volumes or the likelihood that the customer will exercise its right for deficiency volumes becomes remote (e.g., there is insufficient capacity to make up the volumes, the deficiency makeup period expires). The following table presents the activity in our contract assets and liabilities for the three months ended March 31, 2018: (In millions of Canadian dollars) Contract Assets (a) Balance at December 31, 2017 9.1 Additions 3.8 Transfer to Accounts receivable (11.6 ) Balance at March 31, 2018 1.3 Contract Liabilities (b) Balance at December 31, 2017 67.9 Additions 38.1 Transfer to Revenues (37.6 ) Balance at March 31, 2018 68.4 ______ (a) Includes current balances reported within “Other current assets” in our accompanying consolidated balance sheets at March 31, 2018 and December 31, 2017. (b) Includes current balances of $ 11.7 million and $ 14.4 million reported within “Other current liabilities” in our accompanying consolidated balance sheets at March 31, 2018 and December 31, 2017, respectively, and includes non-current balances of $ 56.7 million and $ 53.5 million reported within “Deferred revenues” in our accompanying consolidated balance sheets at March 31, 2018 and December 31, 2017, respectively. Revenue Allocated to Remaining Performance Obligations The following table presents our estimated revenue allocated to remaining performance obligations for contracted revenue that has not yet been recognized, representing our “contractually committed” revenue as of March 31, 2018 that we will invoice or transfer from contract liabilities and recognize in future periods (in millions of Canadian dollars): Year Estimated Revenue Nine months ended December 31, 2018 252.2 2019 258.5 2020 203.1 2021 185.8 2022 151.5 Thereafter 523.6 Total 1,574.7 Our contractually committed revenue for purposes of the tabular presentation above is generally limited to service customer contracts which have fixed pricing and fixed volume terms and conditions, generally including contracts with take-or-pay or minimum volume commitment payment obligations. Our contractually committed revenue amounts generally exclude, based on the following practical expedients that we elected to apply, remaining performance obligations for: (i) contracts with index-based pricing or variable volume attributes in which such variable consideration is allocated entirely to a wholly unsatisfied performance obligation or to a wholly unsatisfied promise to transfer a distinct service that forms part of a series of distinct services; (ii) contracts with an original expected duration of one year or less; and (iii) contracts for which we recognize revenue at the amount for which we have the right to invoice for services performed. |
Reportable Segments (Notes)
Reportable Segments (Notes) | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Reportable Segments | Reportable Segments Our reportable business segments are based on the way management organizes the enterprise. Each of our reportable business segments represent a component of the enterprise that engages in a separate business activity and for which discrete financial information is available. Our reportable business segments are: • Pipelines - the ownership and operation of (i) TMPL that currently transports approximately 300,000 bpd of crude oil and refined petroleum from Edmonton, Alberta to Burnaby, B.C.; (ii) Puget Sound serving the state of Washington; (iii) Jet Fuel serving Vancouver International Airport; (iv) KMCI, the employer of Canadian staff; and (v) Cochin, a 12 -inch diameter multi-product pipeline which spans approximately 1,000 kilometers in Saskatchewan and Alberta; and • Terminals - the ownership and operation of liquid product merchant storage and rail terminals in the Edmonton, Alberta market as well as a predominantly dry cargo import/export facility in North Vancouver, B.C. We evaluate the performance of our reportable business segments by evaluating our Segment earnings before depreciation and amortization expenses (“Segment EBDA”). We believe that Segment EBDA is a useful measure of our operating performance because it measures segment operating results before D&A and certain expenses that are generally not controllable by the operating managers of our respective business segments, such as general and administrative expense, interest expense, income tax expense and prior to May 2017, the foreign exchange losses (or gains) on the KMI Loans. Our general and administrative expenses include such items as employee benefits, insurance, rentals, certain litigation and shared corporate services including accounting, information technology, human resources and legal services. Certain general and administrative expenses attributable to Trans Mountain are billable as flow through items to shippers and result in incremental revenues. We consider each period’s earnings before all non-cash D&A expenses to be an important measure of business segment performance for our reporting segments. We account for intersegment sales at market prices, while we account for asset transfers at either market value or, in some instances, book value. Intercompany transactions are eliminated in consolidation. Financial information by segment follows: Three Months Ended March 31, 2018 2017 (In millions of Canadian dollars) Revenues Pipelines 90.0 89.5 Terminals 74.2 75.0 Total consolidated revenues 164.2 164.5 Three Months Ended March 31, 2018 2017 (In millions of Canadian dollars) Segment EBDA (a)(b)(c) Pipelines 63.6 56.3 Terminals 53.6 54.1 Total Segment EBDA 117.2 110.4 D&A (36.8 ) (34.8 ) Foreign exchange gain (loss) on KMI Loans(c) — 10.1 General and administrative expenses and corporate charges (19.2 ) (18.0 ) Interest expense, net (0.3 ) (6.7 ) Income tax expense (16.5 ) (14.2 ) Total consolidated net income 44.4 46.8 March 31, 2018 December 31, 2017 (In millions of Canadian dollars) Assets Pipelines 3,245.5 3,077.0 Terminals 1,391.0 1,375.7 Total consolidated assets 4,636.5 4,452.7 _______ (a) Includes operations and maintenance expenses, and taxes, other than income taxes. (b) Includes revenues and other (income) expense less operating expenses and other, net. Segment EBDA for the three months ended March 31, 2018, and 2017 includes (i) $ (0.2) million and $0.7 million, respectively, of foreign exchange gains (losses) due to changes in exchange rates between our Canadian dollar and the U.S. dollar on U.S. dollar denominated balances, and (ii) $ 11.6 million and $5.5 million, respectively, of capitalized equity financing costs. (c) The KMI Loans, which represented U.S. dollar denominated long-term notes payable to Kinder Morgan, were settled with proceeds from our IPO. |
Income Taxes (Notes)
Income Taxes (Notes) | 3 Months Ended |
Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Income tax expense included in our accompanying consolidated statements of income is as follows: Three Months Ended March 31, 2018 2017 (In millions of Canadian dollars, except percentages) Income tax expense 16.5 14.2 Effective tax rate 27.1 % 23.4 % The effective tax rate for the three months ended March 31, 2018 was consistent with the statutory federal and provincial rate of 27% . The effective tax rate for the three months ended March 31, 2017 was lower than the statutory federal and provincial rate of 27% primarily due to the impact of exchange rate fluctuations in respect of the KMI Loans which resulted in the release of the valuation allowance. As a result of our IPO and subsequent revaluation (or rebalancing) of our investment in the Limited Partnership, our tax basis exceeds our accounting basis in our investment in the Limited Partnership by approximately $858.0 million. This excess tax basis results in a deferred tax asset of approximately $116.0 million. A full valuation allowance was taken against this deferred tax asset as we determined it was more likely than not to not be realized. |
Benefit Plans (Notes)
Benefit Plans (Notes) | 3 Months Ended |
Mar. 31, 2018 | |
Retirement Benefits [Abstract] | |
Pension and Other Postretirement Benefits Disclosure [Text Block] | Benefit Plans Components of net benefit cost related to our pension plans and other postretirement benefit (OPEB) plans are as follows: Pension OPEB Three Months Ended March 31, 2018 2017 2018 2017 (In millions of Canadian dollars) Service cost 2.7 2.1 0.2 0.2 Interest cost 2.1 2.0 0.2 0.2 Expected return on assets (2.3 ) (1.9 ) — — Amortization of net actuarial losses 0.8 1.0 — — Total net benefit cost 3.3 3.2 0.4 0.4 |
Changes in Operating Assets and
Changes in Operating Assets and Liabilities (Notes) | 3 Months Ended |
Mar. 31, 2018 | |
Supplemental Cash Flow Elements [Abstract] | |
Cash Flow, Supplemental Disclosures [Text Block] | Change in Operating Assets and Liabilities Three Months Ended March 31, 2018 2017 (In millions of Canadian dollars) Cash inflow (outflow) Accounts receivable (14.0 ) (22.8 ) Accounts receivable-affiliates 5.4 (29.2 ) Prepaid expenses and deposits (2.3 ) (4.9 ) Inventories (0.1 ) (0.3 ) Other current assets 0.4 (3.8 ) Deferred charges and other assets (3.7 ) (6.7 ) Accounts payable (4.2 ) (5.6 ) Accounts payable-affiliates 1.1 27.5 Accrued interest-affiliates — 11.7 Other current liabilities 17.6 15.5 Pension and postretirement benefits (0.9 ) (0.9 ) Regulatory liabilities and other deferred credits 26.3 (5.3 ) 25.6 (24.8 ) |
Litigation, Environmental and19
Litigation, Environmental and Other Contingencies (Notes) | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Litigation, Environmental and Other Contingencies | Litigation and Contingencies Legal Proceedings We and our subsidiaries are parties to various legal, regulatory and other matters arising from the day-to-day operations of our businesses or certain predecessor operations that may result in claims against the Company. Although no assurance can be given, we believe, based on our experiences to date and taking into account established reserves and insurance, that the ultimate resolution of such items will not have a material adverse impact on our business, financial position, results of operations, cash flows, or dividends to our shareholders. We believe we have meritorious defenses to the matters to which we are a party and intend to vigorously defend the Company. When we determine a loss is probable of occurring and is reasonably estimable, we accrue an undiscounted liability for such contingencies based on our best estimate using information available at that time. If the estimated loss is a range of potential outcomes and there is no better estimate within the range, we accrue the amount at the low end of the range. We disclose contingencies where an adverse outcome may be material, or in the judgment of management, we conclude the matter should otherwise be disclosed. We had no accruals for any outstanding legal proceedings as of March 31, 2018 and December 31, 2017. Base Line Terminal Project Litigation On March 2, 2018, Arnett & Burgess Oilfield Construction Limited (“A&B”) filed a statement of claim and certificate of lis pendens, in the Court of Queen’s Bench of Alberta, against Alberta Envirofuels Inc. and Base Line Terminal East Limited Partnership, by its general partner, KM Canada Rail Holdings GP Limited (“BLTELP”). A&B was a contractor on the Base Line Terminal Project (the “BTT Project”) and has claimed it is owed $21.2 million, inclusive of goods and services tax, asserting that BLTELP failed to pay A&B for work performed on the BTT Project under a construction services agreement. On March 26, 2018, A&B filed a separate statement of claim, in the Court of Queen’s Bench of Alberta, against BLTELP solely, asserting that BLTELP failed to pay for work performed under a separate construction services agreement also related to the BTT Project. With respect to the second claim, A&B has claimed it is owed approximately $1 million, inclusive of goods and services tax. We intend to defend both claims vigorously. TMEP Litigation There are numerous legal challenges pending before the Federal Court of Appeal which have been filed by various governmental and non-governmental organizations, First Nations or other parties that seek judicial review of the recommendation of the NEB and subsequent decision by the Federal Governor in Council to conditionally approve TMEP. The petitions allege, among other things, that additional consultation, engagement or accommodation is required and that various non-economic impacts of TMEP were not adequately considered. The remedies sought include requests that the NEB recommendation be quashed, that additional consultations be undertaken, and that the order of the Governor in Council approving TMEP be quashed. After provincial elections in B.C. on May 9, 2017, the New Democratic Party and Green Party formed a majority government. The new B.C. government sought and was granted limited intervenor status in the Federal Court of Appeal proceedings to argue against the government’s approval of TMEP. A hearing was conducted by the Federal Court of Appeal from October 2 through October 13, 2017. A decision is expected in the coming months, and is subject to potential further appeal to the Supreme Court of Canada. Although we believe that each of the foregoing appeals lacks merit, in the event an applicant is successful at the Supreme Court of Canada, among other potential impacts, the NEB recommendation or Governor in Council’s approval may be quashed, permits may be revoked, TMEP may be subject to additional significant regulatory reviews, there may be significant changes to TMEP plans, further obligations or restrictions may be implemented, or TMEP may be stopped altogether, which could materially impact the overall feasibility or economic benefits of TMEP, which in turn would have a material adverse effect on us. In addition to the judicial reviews of the NEB recommendation report and Governor in Council’s order, two judicial review proceedings have been commenced at the Supreme Court of B.C. (the Squamish Nation and the City of Vancouver). The petitions allege a duty and failure to consult or accommodate First Nations, and generally, among other claims, that the B.C. government ought not to have approved TMEP. Each applicant seeks to quash the Environmental Assessment Certificate (“EAC”) that was issued by the B.C. Environmental Assessment Office. On September 29, 2017, the B.C. government filed evidence in support of the EAC in the judicial review proceeding involving the Squamish Nation. Hearings were conducted in October and November 2017, respectively, for the City of Vancouver and the Squamish Nation judicial review proceedings and the Court took the matters under consideration with decisions expected in the coming months. Although we believe that each of the foregoing appeals lacks merit, in the event that an applicant for judicial review is successful, among other potential impacts, the EAC may be quashed, provincial permits may be revoked, TMEP may be subject to additional significant regulatory reviews, there may be significant changes to TMEP plans, further obligations or restrictions may be imposed, or TMEP may be stopped altogether. In the event that an applicant is unsuccessful at the Supreme Court of B.C., they may further seek to appeal the decision to the B.C. Court of Appeal. Any decision of the B.C. Court of Appeal may be appealed to the Supreme Court of Canada. A successful appeal at either of these levels could result in the same types of consequences described above. On October 26, 2017 and November 14, 2017, Trans Mountain filed motions with the NEB. The first motion sought to resolve delays experienced by Trans Mountain in obtaining preliminary plan approvals from the City of Burnaby. The second motion sought to establish an NEB process to backstop provincial and municipal processes in a fair, transparent and expedited fashion. On December 7, 2017, the NEB issued an order granting the relief requested by Trans Mountain in respect of its motion related to Burnaby (the “Burnaby Order”). On January 19, 2018, the NEB granted, in part, Trans Mountain’s second motion by establishing a generic process to hear any future motions as they relate to provincial and municipal permitting issues. On February 16, 2018, Burnaby and B.C. applied to the Federal Court of Appeal for leave to appeal the Burnaby Order. On March 23, 2018, the Federal Court of Appeal denied the application. Burnaby or B.C., or both of them, may appeal the decision to the Supreme Court of Canada. A successful appeal at the Supreme Court of Canada could result in the Burnaby Order being quashed. On April 18, 2018, the Attorney General for British Columbia announced that B.C. will file a reference case by April 30, 2018 presenting a constitutional question to the B.C. Court of Appeal. It is anticipated that the question presented will seek to define the extent of B.C.’s constitutional jurisdiction, if any, to regulate marine or environmental risks or the flow of certain petroleum products into B.C. via federally regulated pipelines. The reference question has yet to be publicly disclosed and must be approved by the cabinet of the B.C. government before filing with the court. The federal government as well as all other provinces in Canada and interested parties will be provided with notice of the reference question and an opportunity to participate in the case. A decision by the B.C. Court of Appeal may be appealed to the Supreme Court of Canada. As a result of the filing or resolution of this or any related reference question, among other potential impacts, the project may be stopped altogether or there may be significant changes to TMEP plans. These changes could include further obligations or restrictions on the construction or operation of TMEP, or the prohibition of the construction and operation of TMEP, any one of which could materially impact the overall feasibility or economic benefits of TMEP, which in turn would have a material adverse effect on us. See Note 1 “ Suspension of Non-Essential Spending on Trans Mountain Expansion Project.” Contingencies We are subject to various legal and regulatory actions and proceedings which arise in the normal course of business. While the final outcome of such actions and proceedings cannot be predicted with certainty, we believe that the resolution of such actions and proceedings will not have a material impact on our financial position or results of operations. We and our subsidiaries are also subject to environmental cleanup and enforcement actions from time to time. Although we believe our operations are in substantial compliance with applicable environmental law and regulations, risks of additional costs and liabilities are inherent in pipeline and terminal operations, and there can be no assurance that we will not incur significant costs and liabilities. Moreover, it is possible that other developments, such as increasingly stringent environmental laws, regulations and enforcement policies under the terms of authority of those laws, and claims for damages to property or persons resulting from our operations, could result in substantial costs and liabilities to us. Although it is not possible to predict the ultimate outcomes, we believe that the resolution of the environmental matters to which we and our subsidiaries are a party, will not have a material adverse effect on our business, financial position, results of operations or cash flows. As of March 31, 2018 and December 31, 2017, we had $7.1 million and $7.3 million, respectively, accrued for our outstanding matters. TMEP The proposed estimated $7.4 billion expansion, which includes capitalized equity and debt financing costs, would increase throughput capacity of the TMPL from approximately 300,000 bpd to 890,000 bpd. Construction related delays could result in increases to the estimated total costs. TMEP has transportation service agreements for a total of 707,500 bpd, representing approximately 80% of the expanded system’s capacity (the maximum amount under the regulated limit imposed by the NEB). On May 19, 2016, the NEB recommended that the Governor in Council approve TMEP, subject to 157 conditions. On November 29, 2016, the Governor in Council approved TMEP, and directed the NEB to issue Amending Orders AO-003-OC-2 and AO-002-OC-49, and Certificate of Public Convenience and Necessity OC-064, authorizing the construction of TMEP. On January 11, 2017, the government of B.C. announced the issuance of the EAC to Trans Mountain for the B.C. portion of TMEP. The EAC includes 37 conditions that are in addition to, and designed to supplement, the 157 conditions required by the NEB. We have spent a cumulative total, net of contributions in aid of construction, of approximately $1,135.0 million on development of TMEP as of March 31, 2018 (December 31, 2017 - $930.0 million). We would expect to fund TMEP capital expenditures through: (i) additional borrowings under our Credit Facility; (ii) the issuance of additional Preferred Shares; (iii) the issuance of long-term notes payable; (iv) retained cash flow from operations; and (v) the issuance of additional Restricted Voting Shares; or a combination thereof. |
Recent Accounting Pronoucements
Recent Accounting Pronoucements (Notes) | 3 Months Ended |
Mar. 31, 2018 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Recent New Accounting Pronouncements | Recent Accounting Pronouncements ASU No. 2016-02 On February 25, 2016, the FASB issued ASU No. 2016-02, “ Leases (Topic 842) .” This ASU requires that a lessee recognizes assets and liabilities on the balance sheet for the present value of the rights and obligations created by all leases with terms of more than 12 months. The ASU also will require disclosures designed to give financial statement users information on the amount, timing, and uncertainty of cash flows arising from leases. ASU No. 2016-02 will be effective for us as of January 1, 2019. We are currently reviewing the effect of this ASU to our financial statements. ASU No. 2016-13 O n June 16, 2016, the FASB issued ASU No. 2016-13, “ Financial Instruments - Credit Losses (Topic 326). ” This ASU modifies the impairment model to utilize an expected loss methodology in place of the currently used incurred loss methodology, which will result in the more timely recognition of losses. ASU No. 2016-13 will be effective for us as of January 1, 2020. We are currently reviewing the effect of this ASU to our financial statements. ASU No. 2017-04 On January 26, 2017, the FASB issued ASU No. 2017-04, “ Simplifying the Test for Goodwill Impairment (Topic 350) ” to simplify the accounting for goodwill impairment. The guidance removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. ASU No. 2017-04 will be effective for us as of January 1, 2020. We are currently reviewing the effect of this ASU to our financial statements. ASU No. 2018-01 On January 25, 2018, the FASB issued ASU No. 2018-01, “ Land Easement Practical Expedient for Transition to Topic 842 .” This ASU provides an optional transition on practical expedient that, if elected, would not require companies to reconsider its accounting for existing or expired land easements before the adoption of Topic 842 and that were not previously accounted for as leases under Topic 840. ASU No. 2018-01 will be effective for us as of January 1, 2019, and earlier adoption is permitted. We are currently reviewing the effect of this ASU to our financial statements. |
General General (Policies)
General General (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Basis of Accounting, Policy [Policy Text Block] | Basis of Presentation General In January 2018, we completed the registration of our Restricted Voting Shares pursuant to Section 12(g) of the United States Securities Exchange Act of 1934 (the “Exchange Act”) and are subject to the reporting requirements of Section 13(a) of the Exchange Act. We have prepared the accompanying unaudited consolidated financial statements in accordance with the accounting principles contained in the FASB Accounting Standards Codification, the single source of U.S. GAAP and referred to in this report as the Codification. U.S. GAAP means generally accepted accounting principles that the Securities Exchange Commission (“SEC”) has identified as having substantial authoritative support, as supplemented by Regulation S-X under the Exchange Act, as amended from time to time. Under such rules and regulations, all significant intercompany items have been eliminated in consolidation. In our opinion, all adjustments, which are of a normal and recurring nature, considered necessary for a fair statement of our financial position and operating results for the interim periods have been included in the accompanying consolidated financial statements. Interim results are not necessarily indicative of results for a full year; accordingly, you should read these consolidated financial statements in conjunction with our consolidated financial statements and related notes included in our 2017 Form 10-K. Amounts are stated in Canadian dollars unless otherwise noted which is the functional currency of most of our operations. |
Revenue Recognition, Policy [Policy Text Block] | Revenue from Contracts with Customers Beginning in 2018, we account for revenue from contracts with customers in accordance with Topic 606. The unit of account in Topic 606 is a performance obligation, which is a promise in a contract to transfer to a customer either a distinct good or service (or bundle of goods and services) or a series of distinct goods or services provided over a period of time. Topic 606 requires that a contract’s transaction price, which is the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer, is to be allocated to each performance obligation in the contract based on relative standalone selling prices and recognized as revenue when (point in time) or as (over time) the performance obligation is satisfied. Our customer service contracts primarily include transportation service and terminaling service contracts, as described below. Generally, for the majority of these contracts: (i) our promise is to transfer (or stand ready to transfer) a series of distinct integrated services over a period of time, which is a single performance obligation; (ii) the transaction price includes fixed and/or variable consideration, which amount is determinable at contract inception and/or at each month end based on our right to invoice at month end for the value of services provided to the customer that month; and (iii) the transaction price is recognized as revenue over the service period specified in the contract (which can be a day, including each day in a series of promised daily services, a month, a year, or other time increment, including a deficiency makeup period) as the services are rendered using a time-based (passage of time) or units-based (units of service transferred) method for measuring transfer of control of the services and progress towards satisfying our performance obligation, based on the nature of the promised service (e.g., firm or non-firm) and the terms and conditions of the contract (e.g., contracts with or without makeup rights). Firm Services Firm services (also called uninterruptible services) are services that are promised to be available to the customer at all times during the period(s) covered by the contract, with limited exceptions. Our firm service contracts are typically structured with take-or-pay or minimum volume provisions, which specify minimum service quantities a customer will pay for even if it chooses not to receive or use them in the specified service period (referred to as “deficiency quantities”). We typically recognize the portion of the transaction price associated with such provisions, including any deficiency quantities, as revenue depending on whether the contract prohibits the customer from making up deficiency quantities in subsequent periods, or the contract permits this practice, as follows: • Contracts without Makeup Rights: If contractually the customer cannot make up deficiency quantities in future periods, our performance obligation is satisfied, and revenue associated with any deficiency quantities is generally recognized as each service period expires. Because a service period may exceed a reporting period, we determine at inception of the contract and at each subsequent reporting period if we expect the customer to take the minimum volume associated with the service period. If we expect the customer to make up all deficiencies in the specified service period (i.e., we expect the customer to take the minimum service quantities), the minimum volume provision is deemed not substantive and we will recognize the transaction price as revenue in the specified service period as the promised units of services are transferred to the customer. Alternatively, if we expect that there will be any deficiency quantities that the customer cannot or will not make up in the specified service period (referred to as “breakage”), we will recognize the estimated breakage amount (subject to the constraint on variable consideration) as revenue ratably over such service period in proportion to the revenue that we will recognize for actual units of service transferred to the customer in the service period. For certain take-or-pay contracts where we make the service, or a part of the service, continuously available over the service period, we typically recognize the take-or-pay amount as revenue ratably over such period based on the passage of time. • Contracts with Makeup Rights: If contractually the customer can acquire the promised service in a future period and make up the deficiency quantities in such future period (the “deficiency makeup period”), we have a performance obligation to deliver those services at the customer’s request (subject to contractual and/or capacity constraints) in the deficiency makeup period. At inception of the contract, and at each subsequent reporting period, we estimate if we expect that there will be deficiency quantities that the customer will or will not make up. If we expect the customer will make up all deficiencies it is contractually entitled to, any consideration received relating to temporary deficiencies that will be made up in the deficiency makeup period will be deferred as a contract liability, and we will recognize that amount as revenue in the deficiency makeup period when either of the following occurs: (i) the customer makes up the volumes; or (ii) the likelihood that the customer will exercise its right for deficiency volumes then becomes remote (e.g., there is insufficient capacity to make up the volumes, the deficiency makeup period expires). Alternatively, if we expect at inception of the contract, or at the beginning of any subsequent reporting period, that there will be any deficiency quantities that the customer cannot or will not make up (i.e., breakage), we will recognize the estimated breakage amount (subject to the constraint on variable consideration) as revenue ratably over the specified service periods in proportion to the revenue that we will recognize for actual units of service transferred to the customer in those service periods. Non-Firm Services Non-firm services (also called interruptible services) are the opposite of firm services in that such services are provided to a customer on an “as available” basis. Generally, we do not have an obligation to perform these services until we accept a customer’s periodic request for service. For the majority of our non-firm service contracts, the customer will pay only for the actual quantities of services it chooses to receive or use, and we typically recognize the transaction price as revenue as those units of service are transferred to the customer in the specified service period (typically a daily or monthly period). |
Debt Fair value of long-term de
Debt Fair value of long-term debt (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Far value of financial instruments [Abstract] | |
Schedule of Carrying Values and Estimated Fair Values of Debt Instruments [Table Text Block] | The carrying value and estimated fair value of our debt balances are disclosed below: March 31, 2018 December 31, 2017 Carrying value Estimated fair value Carrying value Estimated fair value (In millions of Canadian dollars) Total debt 100.0 100.0 — — |
Equity Equity (Tables)
Equity Equity (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Equity [Abstract] | |
Schedule of Preferred Stock Dividends [Table Text Block] | Preferred Share Dividends The following table provides information regarding dividends paid, and declared, but not yet paid, as applicable, on our Preferred Shares during the three months ended March 31, 2018: Period Total Series 1 quarterly dividend per share for the period Total Series 3 quarterly dividend per share for the period(a) Date of declaration Date of record Date of dividend Total amount of dividends paid in cash (In millions of Canadian dollars, except per share amounts) November 15, 2017 to February 14, 2018 (a) 0.328125 0.22082 January 17, 2018 January 31, 2018 February 15, 2018 6.1 February 15, 2018 to May 14, 2018 0.328125 0.325 April 18, 2018 April 30, 2018 May 15, 2018 ________ (a) Series 3 per share amount reflects that the shares were outstanding for 62 days during the period ended February 14, 2018. |
Schedule of Common Stock Dividends [Table Text Block] | Restricted Voting Share Dividends The following table provides information regarding dividends paid and declared, but not yet paid, as applicable, on our Restricted Voting Share during the three months ended March 31, 2018. For the three month period ended Dividend rate per share Date of declaration Date of record Date of dividend Total amount of dividends paid in cash(a) Total amount of dividends paid in form of additional shares (In millions of Canadian dollars) December 31, 2017 0.1625 January 17, 2018 January 31, 2018 February 15, 2018 11.8 5.1 March 31, 2018 0.1625 April 18, 2018 April 30, 2018 May 15, 2018 ________ (a) Amount includes notional dividends on outstanding restricted stock awards of $0.1 million . Kinder Morgan Interest Distributions The following table provides information regarding distributions paid and declared, but not yet paid, as applicable, to Kinder Morgan during the three months ended March 31, 2018. For the three month period ended Dividend rate per share Date of declaration Date of distribution Total amount of distribution paid in cash Total amount of distribution paid in form of additional shares (In millions of Canadian dollars) December 31, 2017 0.1625 January 17, 2018 February 15, 2018 31.0 9.9 March 31, 2018 0.1625 April 18, 2018 May 15, 2018 |
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | The following table sets forth the allocation of net income available to shareholders of Restricted Voting Shares and participating securities: Three Months Ended March 31, 2018 (In millions of Canadian dollars) Net Income Available to Restricted Voting Stockholders 10.8 Participating securities: Less: Net income allocated to restricted stock awards(a) (0.1 ) Net Income Allocated to Restricted Voting Stockholders 10.7 Basic Weighted Average Restricted Voting Shares Outstanding 103.5 Basic Earnings Per Restricted Voting Share 0.10 _______ (a) As of March 31, 2018, there were approximately 0.8 million unvested restricted stock awards. |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions [Table Text Block] | The following table summarizes our related party income statement activity. Revenues, operating costs and capitalized costs are under normal trade terms. Three Months Ended March 31, 2018 2017 (In millions of Canadian dollars) Income Statement location Revenues-Services(a) 15.4 14.8 Operations and maintenance and general and administrative expenses 1.9 1.1 Interest expense(b) — 11.7 Other Capitalized costs from affiliates in property, plant and equipment 0.2 2.0 ______ (a) Amounts represent sales to a customer who is a related party through joint ownership of a joint venture. (b) 2017 primarily represents interest on long-term debt with affiliates (“KMI Loans”) that was repaid with proceeds form our IPO. |
Revenue Recognition Revenue R25
Revenue Recognition Revenue Recognition (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue [Table Text Block] | The following table presents our revenues disaggregated by revenue source and type of revenue for each revenue source: Three Months Ended March 31, 2018 Pipelines Terminals Total (In millions of Canadian dollars) Revenue from contracts with customers Services Firm services(a) 12.7 54.6 67.3 Fee-based services 80.9 16.5 97.4 Total revenue from contracts with customers 93.6 71.1 164.7 Other revenues(b) (3.6 ) 3.1 (0.5 ) Total revenues 90.0 74.2 164.2 ______ (a) Includes non-cancellable firm service customer contracts with take-or-pay or minimum volume commitment elements, including those contracts where both the price and quantity amount are fixed. In these arrangements, the customer is obligated to pay for the rendered service whether or not the customer chooses to utilize the service. Excludes service contracts with indexed-based pricing, which along with revenues from other contracts are reported as Fee-based services. (b) Amounts recognized as revenue under guidance prescribed in Topics of the Accounting Standards Codification other than in Topic 606 and primarily includes regulatory-based adjustments for TMPL and leases. |
Contract with Customer, Asset and Liability [Table Text Block] | The following table presents the activity in our contract assets and liabilities for the three months ended March 31, 2018: (In millions of Canadian dollars) Contract Assets (a) Balance at December 31, 2017 9.1 Additions 3.8 Transfer to Accounts receivable (11.6 ) Balance at March 31, 2018 1.3 Contract Liabilities (b) Balance at December 31, 2017 67.9 Additions 38.1 Transfer to Revenues (37.6 ) Balance at March 31, 2018 68.4 ______ (a) Includes current balances reported within “Other current assets” in our accompanying consolidated balance sheets at March 31, 2018 and December 31, 2017. (b) Includes current balances of $ 11.7 million and $ 14.4 million reported within “Other current liabilities” in our accompanying consolidated balance sheets at March 31, 2018 and December 31, 2017, respectively, and includes non-current balances of $ 56.7 million and $ 53.5 million reported within “Deferred revenues” in our accompanying consolidated balance sheets at March 31, 2018 and December 31, 2017, respectively. |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Table Text Block] | The following table presents our estimated revenue allocated to remaining performance obligations for contracted revenue that has not yet been recognized, representing our “contractually committed” revenue as of March 31, 2018 that we will invoice or transfer from contract liabilities and recognize in future periods (in millions of Canadian dollars): Year Estimated Revenue Nine months ended December 31, 2018 252.2 2019 258.5 2020 203.1 2021 185.8 2022 151.5 Thereafter 523.6 Total 1,574.7 |
Reportable Segments (Tables)
Reportable Segments (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting Information [Line Items] | |
Schedule of Segment Reporting Information, by Segment | Financial information by segment follows: Three Months Ended March 31, 2018 2017 (In millions of Canadian dollars) Revenues Pipelines 90.0 89.5 Terminals 74.2 75.0 Total consolidated revenues 164.2 164.5 Three Months Ended March 31, 2018 2017 (In millions of Canadian dollars) Segment EBDA (a)(b)(c) Pipelines 63.6 56.3 Terminals 53.6 54.1 Total Segment EBDA 117.2 110.4 D&A (36.8 ) (34.8 ) Foreign exchange gain (loss) on KMI Loans(c) — 10.1 General and administrative expenses and corporate charges (19.2 ) (18.0 ) Interest expense, net (0.3 ) (6.7 ) Income tax expense (16.5 ) (14.2 ) Total consolidated net income 44.4 46.8 March 31, 2018 December 31, 2017 (In millions of Canadian dollars) Assets Pipelines 3,245.5 3,077.0 Terminals 1,391.0 1,375.7 Total consolidated assets 4,636.5 4,452.7 _______ (a) Includes operations and maintenance expenses, and taxes, other than income taxes. (b) Includes revenues and other (income) expense less operating expenses and other, net. Segment EBDA for the three months ended March 31, 2018, and 2017 includes (i) $ (0.2) million and $0.7 million, respectively, of foreign exchange gains (losses) due to changes in exchange rates between our Canadian dollar and the U.S. dollar on U.S. dollar denominated balances, and (ii) $ 11.6 million and $5.5 million, respectively, of capitalized equity financing costs. (c) The KMI Loans, which represented U.S. dollar denominated long-term notes payable to Kinder Morgan, were settled with proceeds from our IPO. |
Income Taxes schedule of effect
Income Taxes schedule of effective income tax rate reconciliation (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of Effective Income Tax Rate Reconciliation [Table Text Block] | Income tax expense included in our accompanying consolidated statements of income is as follows: Three Months Ended March 31, 2018 2017 (In millions of Canadian dollars, except percentages) Income tax expense 16.5 14.2 Effective tax rate 27.1 % 23.4 % |
Benefit Plans (Tables)
Benefit Plans (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Retirement Benefits [Abstract] | |
Schedule of Net Benefit Costs [Table Text Block] | Components of net benefit cost related to our pension plans and other postretirement benefit (OPEB) plans are as follows: Pension OPEB Three Months Ended March 31, 2018 2017 2018 2017 (In millions of Canadian dollars) Service cost 2.7 2.1 0.2 0.2 Interest cost 2.1 2.0 0.2 0.2 Expected return on assets (2.3 ) (1.9 ) — — Amortization of net actuarial losses 0.8 1.0 — — Total net benefit cost 3.3 3.2 0.4 0.4 |
Changes in Operating Assets a29
Changes in Operating Assets and Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Supplemental Cash Flow Elements [Abstract] | |
Schedule of Cash Flow, Supplemental Disclosures [Table Text Block] | Three Months Ended March 31, 2018 2017 (In millions of Canadian dollars) Cash inflow (outflow) Accounts receivable (14.0 ) (22.8 ) Accounts receivable-affiliates 5.4 (29.2 ) Prepaid expenses and deposits (2.3 ) (4.9 ) Inventories (0.1 ) (0.3 ) Other current assets 0.4 (3.8 ) Deferred charges and other assets (3.7 ) (6.7 ) Accounts payable (4.2 ) (5.6 ) Accounts payable-affiliates 1.1 27.5 Accrued interest-affiliates — 11.7 Other current liabilities 17.6 15.5 Pension and postretirement benefits (0.9 ) (0.9 ) Regulatory liabilities and other deferred credits 26.3 (5.3 ) 25.6 (24.8 ) |
General General Additional Deta
General General Additional Detail (Details) $ in Millions | May 30, 2017CAD ($) | Mar. 31, 2018bbl / dkmin |
Number of Operating Segments | 2 | |
ALBERTA | ||
Pipeline Transportation Activity | bbl / d | 300,000 | |
SASKATCHEWAN | ||
Pipeline Diameter | in | 12 | |
Kilometers of Pipeline | km | 1,000 | |
Common shares [Member] | ||
Net Proceeds from Issuance Initial Public Offering | $ | $ 1,671 | |
Kinder Morgan, Inc. [Member] | Common shares [Member] | ||
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners | 70.00% | |
Kinder Morgan Canada Limited Partnership [Member] | Common shares [Member] | ||
Controlling Interest, Ownership Percentage by Parent | 30.00% |
General Adoption of ASU (Detail
General Adoption of ASU (Details) (Details) - CAD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2016 | |
Net Cash Provided by (Used in) Investing Activities, decrease | $ 0.8 | ||
Restricted Cash Equivalents, increase | $ 0.5 | $ 1.3 | |
Other Nonoperating Income (Expense) [Member] | |||
New Accounting Pronouncement or Change in Accounting Principle, Effect of Adoption, Quantification | $ 1 |
Credit Facility (Details)
Credit Facility (Details) - CAD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |||
Long-Term Line of Credit, Amount Outstanding | $ 100 | $ 0 | |
Credit Facility, weighted average interest rate | 3.14% | ||
Credit Facility, Stand by fees | $ 4 | $ 0 |
Fair Value of Debt (Details)
Fair Value of Debt (Details) - CAD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Reported Value Measurement [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt Instrument, Fair Value Disclosure | $ 100 | $ 0 |
Estimate of Fair Value Measurement [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt Instrument, Fair Value Disclosure | $ 100 | $ 0 |
Equity Equity Note Additional D
Equity Equity Note Additional Details (Details) shares in Millions | Mar. 31, 2018shares |
Voting Shares | |
Voting Shares, Outstanding | 347.1 |
Restricted Voting Shares [Member] | Voting Shares | |
Voting Shares, Outstanding | 103.7 |
Special Voting Shares [Member] | Voting Shares | |
Voting Shares, Outstanding | 243.4 |
Cumulative Redeemable Minimum Rate Reset Preferred Shares, Series 1 [Member] | |
Preferred Stock, Shares Outstanding | 12 |
Cumulative Redeemable Minimum Rate Reset Preferred Shares, Series 3 [Member] | |
Preferred Stock, Shares Outstanding | 10 |
Participating Securities [Member] | |
Unvested Restricted Stock Awards, Issued and Non Issued | 0.8 |
Equity Preferred Stock (Details
Equity Preferred Stock (Details) - CAD ($) $ / shares in Units, $ in Millions | 3 Months Ended | ||
May 14, 2018 | Mar. 31, 2018 | Feb. 14, 2018 | |
Cumulative Redeemable Minimum Rate Reset Preferred Shares, Series 1 [Member] | |||
Class of Stock [Line Items] | |||
Preferred Stock, Dividends, Per Share, Cash Paid | $ 0.328125 | ||
Preferred Stock, Dividends Paid in Cash to the Public | $ 6.1 | ||
Cumulative Redeemable Minimum Rate Reset Preferred Shares, Series 1 [Member] | Subsequent Event [Member] | |||
Class of Stock [Line Items] | |||
Dividends Per Share Declared, Preferred Stock | $ 0.328125 | ||
Cumulative Redeemable Minimum Rate Reset Preferred Shares, Series 3 [Member] | |||
Class of Stock [Line Items] | |||
Preferred Stock, Dividends, Per Share, Cash Paid | $ 0.22082 | ||
Cumulative Redeemable Minimum Rate Reset Preferred Shares, Series 3 [Member] | Subsequent Event [Member] | |||
Class of Stock [Line Items] | |||
Dividends Per Share Declared, Preferred Stock | $ 0.325 |
Equity Common Stock (Details)
Equity Common Stock (Details) - CAD ($) $ / shares in Units, $ in Millions | Apr. 18, 2018 | Mar. 31, 2018 | Mar. 31, 2017 |
Class of Stock [Line Items] | |||
Restricted Voting Shares, Dividends Per Share, Declared | $ 0.1625 | $ 0 | |
Restricted Stock Awards, Dividends Paid in Cash | $ 0.1 | ||
Restricted Voting Shares [Member] | |||
Class of Stock [Line Items] | |||
Restricted Voting Shares, Dividends Per Share, Cash Paid | $ 0.1625 | ||
Restricted Voting Shares, Dividends Paid in Cash to the Public | $ 11.8 | ||
Stock Issued During Period, Value, Dividend Reinvestment Plan | 5.1 | ||
Restricted Voting Shares [Member] | Subsequent Event [Member] | |||
Class of Stock [Line Items] | |||
Restricted Voting Shares, Dividends Per Share, Declared | $ 0.1625 | ||
Special Voting Shares [Member] | |||
Class of Stock [Line Items] | |||
Stock Issued During Period, Value, Dividend Reinvestment Plan | 9.9 | ||
Special Voting Shares, Dividends Paid in Cash | $ 31 | ||
Kinder Morgan Canada Limited [Member] | Special Voting Shares [Member] | |||
Class of Stock [Line Items] | |||
Special Voting Shares, Dividends Per Share, Cash Paid | $ 0.1625 | ||
Kinder Morgan Canada Limited [Member] | Special Voting Shares [Member] | Subsequent Event [Member] | |||
Class of Stock [Line Items] | |||
Special Voting Shares, Dividends Per Share, Declared | $ 0.1625 |
Equity Equity Earnings Per Shar
Equity Equity Earnings Per Share (Details) - CAD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||
Net Income Available to Restricted Voting Stockholders | $ 10.8 | $ 0 |
Weighted Average Number of Shares Outstanding, Basic | 103.5 | |
Earnings Per Share, Basic | $ 0.10 | |
Restricted Stock [Member] | ||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||
Incremental Common Shares Attributable to Dilutive Effect of Share-based Payment Arrangements | 0.8 | |
Participating Securities [Member] | ||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||
Net Income Available to Restricted Voting Stockholders | $ (0.1) | |
Unvested Restricted Stock Awards, Issued and Non Issued | 0.8 | |
Restricted Voting Shares [Member] | ||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||
Net Income Available to Restricted Voting Stockholders | $ 10.7 |
Related Party Transactions Affi
Related Party Transactions Affiliated Activities (Details) - CAD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Related Party Transaction [Line Items] | ||
Revenues-Services(a) | $ 163.9 | $ 164 |
Operations and maintenance and general and administrative expenses | 49.1 | 49 |
Affiliated Entity [Member] | ||
Related Party Transaction [Line Items] | ||
Revenues-Services(a) | 15.4 | 14.8 |
Operations and maintenance and general and administrative expenses | 1.9 | 1.1 |
Interest expense(b) | 0 | 11.7 |
Capitalized costs from affiliates in property, plant and equipment | $ 0.2 | $ 2 |
Related Party Transactions Othe
Related Party Transactions Other current assets (Details) $ in Millions | Mar. 31, 2018CAD ($) |
Affiliated Entity [Member] | |
Contract with Customer, Asset, Net, Current | $ 1 |
Risk Management Foreign Currenc
Risk Management Foreign Currency Transactions and Translation - CAD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Foreign Currency Transactions and Translation [Line Items] | ||
Foreign Currency Transaction Gain (Loss), Realized | $ 0.7 | |
Foreign Currency Transaction Gain (Loss), Unrealized | 0.5 | $ 10.9 |
Kinder Morgan, Inc. [Member] | ||
Foreign Currency Transactions and Translation [Line Items] | ||
Foreign Currency Transaction Gain (Loss), Unrealized | 10.1 | |
Puget Sound [Member] | ||
Foreign Currency Transactions and Translation [Line Items] | ||
Foreign Currency Transaction Gain (Loss), Unrealized | $ 0.5 | $ 0.8 |
Revenue Recognition Revenue R41
Revenue Recognition Revenue Recognition Disaggregation of Revenue (Details) - CAD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Disaggregation of Revenue [Line Items] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | $ 164.2 | |
Other revenues | 0.3 | $ 0.5 |
Pipelines [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | 90 | |
Terminals [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | 74.2 | |
Revenue from Contract with Customer [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | 164.7 | |
Revenue from Contract with Customer [Member] | Pipelines [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | 93.6 | |
Revenue from Contract with Customer [Member] | Terminals [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | 71.1 | |
Firm service | Service Revenue [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | 67.3 | |
Firm service | Service Revenue [Member] | Pipelines [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | 12.7 | |
Firm service | Service Revenue [Member] | Terminals [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | 54.6 | |
Fee-based services | Service Revenue [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | 97.4 | |
Fee-based services | Service Revenue [Member] | Pipelines [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | 80.9 | |
Fee-based services | Service Revenue [Member] | Terminals [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | 16.5 | |
Other revenues | Other revenue [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Other revenues | (0.5) | |
Other revenues | Other revenue [Member] | Pipelines [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Other revenues | (3.6) | |
Other revenues | Other revenue [Member] | Terminals [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Other revenues | $ 3.1 |
Revenue Recognition Revenue R42
Revenue Recognition Revenue Recognition Contract Balances (Details) - CAD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | |
Revenue Recognition and Deferred Revenue [Abstract] | ||
Balance at December 31, 2017 | $ 9.1 | |
Additions | 3.8 | |
Transfer to Accounts receivable | (11.6) | |
Balance at March 31, 2018 | 1.3 | |
Balance at December 31, 2017 | 67.9 | |
Additions | 38.1 | |
Transfer to Revenues | (37.6) | |
Balance at March 31, 2018 | 68.4 | |
Contract with Customer, Liability, Current | 11.7 | $ 14.4 |
Contract with Customer, Liability, Noncurrent | $ 56.7 | $ 53.5 |
Revenue Recognition Revenue R43
Revenue Recognition Revenue Recognition Revenue Allocated to Remaining Performance Obligations (Details) $ in Millions | Mar. 31, 2018CAD ($) |
Revenue Recognition and Deferred Revenue [Abstract] | |
Nine months ended December 31, 2018 | $ 252.2 |
2,019 | 258.5 |
2,020 | 203.1 |
2,021 | 185.8 |
2,022 | 151.5 |
Thereafter | 523.6 |
Total | $ 1,574.7 |
Reportable Segments Reportable
Reportable Segments Reportable Segments General (Details) - Pipelines [Member] | Mar. 31, 2018bbl / dkmin |
Segment Reporting Information [Line Items] | |
Pipeline Transportation Activity | bbl / d | 300,000 |
Pipeline Diameter | in | 12 |
Kilometers of Pipeline | km | 1,000 |
Reportable Segments Revenues (D
Reportable Segments Revenues (Details) - CAD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Segment Reporting Information [Line Items] | ||
Revenues | $ 164.2 | $ 164.5 |
Operating Segments [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | 164.2 | 164.5 |
Pipelines [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | 90 | 89.5 |
Terminals [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | $ 74.2 | $ 75 |
Reportable Segments Reportabl46
Reportable Segments Reportable Segments Segment EBDA (Details) - CAD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Segment Reporting Information [Line Items] | ||
D&A | $ (36.8) | $ (34.8) |
Foreign exchange gain (loss) on KMI Loans(c) | 0 | 10.1 |
General and administrative expenses and corporate charges | (18.4) | (17) |
Income tax expense | (16.5) | (14.2) |
Capitalized equity financing costs | 11.6 | 5.5 |
Net Income | 44.4 | 46.8 |
Corporate, Non-Segment [Member] | ||
Segment Reporting Information [Line Items] | ||
D&A | (36.8) | (34.8) |
General and administrative expenses and corporate charges | (19.2) | (18) |
Interest expense, net | (0.3) | (6.7) |
Income tax expense | (16.5) | (14.2) |
Operating Segments [Member] | ||
Segment Reporting Information [Line Items] | ||
Segment EBDA(a)(b)(c) | 117.2 | 110.4 |
Pipelines [Member] | ||
Segment Reporting Information [Line Items] | ||
Foreign exchange gains (losses), other | (0.2) | 0.7 |
Pipelines [Member] | Operating Segments [Member] | ||
Segment Reporting Information [Line Items] | ||
Segment EBDA(a)(b)(c) | 63.6 | 56.3 |
Terminals | Operating Segments [Member] | ||
Segment Reporting Information [Line Items] | ||
Segment EBDA(a)(b)(c) | $ 53.6 | $ 54.1 |
Reportable Segments Reportabl47
Reportable Segments Reportable Segments Assets (Details) - CAD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Segment Reporting Information [Line Items] | ||
Assets | $ 4,636.5 | $ 4,452.7 |
Pipelines [Member] | ||
Segment Reporting Information [Line Items] | ||
Assets | 3,245.5 | 3,077 |
Terminals | ||
Segment Reporting Information [Line Items] | ||
Assets | $ 1,391 | $ 1,375.7 |
Income Taxes Income Tax Effecti
Income Taxes Income Tax Effective Tax Rate (Details) - CAD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Income Taxes [Abstract] | ||
Income tax expense | $ 16.5 | $ 14.2 |
Effective tax rate | 27.10% | 23.40% |
Income Taxes Income Tax (Detail
Income Taxes Income Tax (Details) - CAD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||
Effective tax rate | 27.00% | 27.00% |
Excess tax basis of investment | $ 858 | |
Deferred tax assets, investment | $ 116 |
Benefit Plans Benefit Planss (D
Benefit Plans Benefit Planss (Details) - CAD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Pension Plan [Member] | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Service cost | $ 2.7 | $ 2.1 |
Interest cost | 2.1 | 2 |
Expected return on plan assets | (2.3) | (1.9) |
Amortization of net actuarial (gains) losses | 0.8 | 1 |
Total net benefit cost | 3.3 | 3.2 |
Other Postretirement Benefits Plan [Member] | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Service cost | 0.2 | 0.2 |
Interest cost | 0.2 | 0.2 |
Expected return on plan assets | 0 | 0 |
Amortization of net actuarial (gains) losses | 0 | 0 |
Total net benefit cost | $ 0.4 | $ 0.4 |
Changes in Operating Assets a51
Changes in Operating Assets and Liabilities (Details) - CAD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Supplemental Cash Flow Elements [Abstract] | ||
Accounts receivable | $ (14) | $ (22.8) |
Accounts receivable-affiliates | 5.4 | (29.2) |
Prepaid expenses and deposits | (2.3) | (4.9) |
Inventories | (0.1) | (0.3) |
Other current assets | 0.4 | (3.8) |
Deferred charges and other assets | (3.7) | (6.7) |
Accounts payable | (4.2) | (5.6) |
Accounts payable-affiliates | 1.1 | 27.5 |
Accrued interest-affiliates | 0 | 11.7 |
Other current liabilities | 17.6 | 15.5 |
Pension and postretirement benefits | (0.9) | (0.9) |
Regulatory liabilities and other deferred credits | 26.3 | (5.3) |
Change in operating assets and liabilities | $ 25.6 | $ (24.8) |
Litigation, Environmental and52
Litigation, Environmental and Other Contingencies Litigation General (Details) - CAD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | |
Loss Contingencies [Line Items] | ||
Estimated Litigation Liability | $ 0 | $ 0 |
Accrual for Environmental Loss Contingencies | 7.1 | $ 7.3 |
Baseline Terminal Project Litigation [Member] | Initial claim [Member] | ||
Loss Contingencies [Line Items] | ||
Loss Contingency, Damages Sought, Value | 21.2 | |
Baseline Terminal Project Litigation [Member] | 2nd claim [Member] | ||
Loss Contingencies [Line Items] | ||
Loss Contingency, Damages Sought, Value | $ 1 |
Litigation, Environmental and53
Litigation, Environmental and Other Contingencies TMEP (Details) - TMEP [Member] $ in Millions | Mar. 31, 2018CAD ($)bbl / d | Dec. 31, 2017CAD ($) | Jan. 11, 2017 | May 19, 2016 |
Loss Contingencies [Line Items] | ||||
Expansion project costs, estimated | $ | $ 7,400 | |||
Number of conditions required by the NEB, initial | 157 | |||
Number of conditions required by the NEB, additional | 37 | |||
Construction costs net of contribution in aid of construction, cumulative | $ | $ 1,135 | $ 930 | ||
Minimum [Member] | ||||
Loss Contingencies [Line Items] | ||||
Pipeline Transportation Activity | 300,000 | |||
Transportation capacity, subscribed | 707,500 | |||
Capacity Subscribed, Percent | 80.00% | |||
Maximum [Member] | ||||
Loss Contingencies [Line Items] | ||||
Pipeline Transportation Activity | 890,000 |