Document And Entity Information
Document And Entity Information | 6 Months Ended |
Jun. 30, 2019shares | |
Document and Entity Information [Abstract] | |
Document Type | 10-Q |
Document Quarterly Report | true |
Document Transition Report | false |
Amendment Flag | false |
Entity Registrant Name | Panhandle Eastern Pipe Line Company, LP |
Entity Central Index Key | 0000076063 |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Document Period End Date | Jun. 30, 2019 |
Entity File Number | 1-2921 |
Entity Address, Address Line One | 8111 Westchester Drive |
Entity Address, Address Line Two | Suite 600 |
Entity Address, City or Town | Dallas |
Entity Address, State or Province | TX |
Entity Address, Postal Zip Code | 75225 |
City Area Code | 214 |
Local Phone Number | 981-0700 |
Current Fiscal Year End Date | --12-31 |
Document Fiscal Year Focus | 2019 |
Document Fiscal Period Focus | Q2 |
Entity Filer Category | Non-accelerated Filer |
Entity Emerging Growth Company | false |
Entity Small Business | false |
Entity Shell Company | false |
Entity Tax Identification Number | 44-0382470 |
Entity Incorporation, State or Country Code | DE |
Entity Common Stock, Shares Outstanding | 0 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 2 | $ 20 |
Accounts receivable, net | 40 | 43 |
Accounts receivable from related companies | 8 | 11 |
Exchanges receivable | 6 | 8 |
Inventories | 70 | 98 |
Other current assets | 4 | 6 |
Total current assets | 130 | 186 |
Property, plant and equipment: | ||
Property, plant and equipment | 3,217 | 3,196 |
Accumulated depreciation | (555) | (507) |
Net property, plant and equipment | 2,662 | 2,689 |
Operating Lease, Right-of-Use Asset | 5 | 0 |
Other non-current assets, net | 118 | 108 |
Goodwill | 12 | 12 |
Total assets | 2,927 | 2,995 |
Current liabilities: | ||
Current maturities of long-term debt | 0 | 152 |
Accounts payable and accrued liabilities | 1 | 6 |
Accounts payable to related companies | 18 | 46 |
Exchanges payable | 53 | 85 |
Other current liabilities | 53 | 69 |
Total current liabilities | 125 | 358 |
Long-term debt, less current maturities | 248 | 249 |
Note payable to related company | 421 | 356 |
Deferred income taxes | 444 | 437 |
Operating Lease, Liability, Noncurrent | 5 | 0 |
Other non-current liabilities | 231 | 233 |
Commitments and contingencies | ||
Partners’ capital: | ||
Partners’ capital | 1,491 | 1,409 |
Accumulated other comprehensive loss | (38) | (47) |
Total partners’ capital | 1,453 | 1,362 |
Total liabilities and partners’ capital | $ 2,927 | $ 2,995 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
OPERATING REVENUES: | ||||
Total operating revenues | $ 139 | $ 134 | $ 297 | $ 283 |
OPERATING EXPENSES: | ||||
Cost of natural gas and other energy | 0 | 1 | 0 | 2 |
Operating and maintenance | 49 | 54 | 96 | 101 |
General and administrative | 8 | 7 | 14 | 14 |
Depreciation and amortization | 30 | 30 | 59 | 60 |
Total operating expenses | 87 | 92 | 169 | 177 |
OPERATING INCOME | 52 | 42 | 128 | 106 |
OTHER INCOME (EXPENSE): | ||||
Interest expense, net | (5) | (8) | (10) | (18) |
Interest Expense, Related Party | (5) | (2) | (9) | (3) |
Other, net | 0 | (1) | 0 | (2) |
INCOME BEFORE INCOME TAX EXPENSE | 42 | 31 | 109 | 83 |
Income tax expense | 11 | 9 | 28 | 27 |
NET INCOME | 31 | 22 | 81 | 56 |
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX | ||||
Actuarial income (loss) relating to postretirement benefit plans | 3 | 0 | 9 | (1) |
COMPREHENSIVE INCOME | 34 | 22 | 90 | 55 |
Natural Gas, US Regulated [Member] | ||||
OPERATING REVENUES: | ||||
Transportation and storage of natural gas | 133 | 131 | 285 | 273 |
Product and Service, Other [Member] | ||||
OPERATING REVENUES: | ||||
Transportation and storage of natural gas | $ 6 | $ 3 | $ 12 | $ 10 |
CONSOLIDATED STATEMENT OF PARTN
CONSOLIDATED STATEMENT OF PARTNERS' CAPITAL - USD ($) $ in Millions | Total | Limited partner | Accumulated Other Comprehensive Loss |
Stockholders' Equity, Balance | $ 1,345 | $ 1,348 | $ (3) |
Other Comprehensive Income (Loss), Net of Tax | (1) | 0 | (1) |
Net income | 34 | 34 | 0 |
Partners' Capital Account, Distributions | (24) | 24 | 0 |
Non-Cash Equity Contribution | 11 | 11 | 0 |
Stockholders' Equity, Other | (2) | (4) | 2 |
Net income | 56 | ||
Stockholders' Equity, Balance | 1,367 | 1,373 | (6) |
Net income | 22 | 22 | 0 |
Stockholders' Equity, Other | (1) | (1) | 0 |
Stockholders' Equity, Balance | 1,390 | 1,396 | (6) |
Stockholders' Equity, Balance | 1,362 | 1,409 | (47) |
Other Comprehensive Income (Loss), Net of Tax | 6 | 0 | 6 |
Net income | 50 | 50 | 0 |
Net income | 81 | ||
Stockholders' Equity, Balance | 1,418 | 1,459 | (41) |
Other Comprehensive Income (Loss), Net of Tax | 3 | 0 | 3 |
Net income | 31 | 31 | 0 |
Stockholders' Equity, Other | 1 | 1 | 0 |
Stockholders' Equity, Balance | $ 1,453 | $ 1,491 | $ (38) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
OPERATING ACTIVITIES: | ||
Net income | $ 81 | $ 56 |
Reconciliation of net income to net cash provided by operating activities: | ||
Depreciation and amortization | 59 | 60 |
Deferred income taxes | 4 | 17 |
Amortization of deferred financing fees | (3) | (9) |
Other non-cash | 7 | 5 |
Changes in operating assets and liabilities | (47) | 16 |
Net Cash Provided by (Used in) Operating Activities | 101 | 145 |
INVESTING ACTIVITIES: | ||
Capital expenditures | (34) | (31) |
Net cash flows used in investing activities | (34) | (31) |
FINANCING ACTIVITIES: | ||
Distributions to partners | 0 | 24 |
Repayments of Long-term Debt | 150 | 400 |
Note payable issued from related company | 152 | 380 |
Repayment of note payable from related company | 87 | 66 |
Net cash flows used in financing activities | (85) | (110) |
Net change in cash and cash equivalents | (18) | 4 |
Cash and cash equivalents, beginning of period | 20 | 2 |
Cash and cash equivalents, end of period | 2 | 6 |
SUPPLEMENTAL INFORMATION: | ||
Capital Expenditures Incurred but Not yet Paid | 11 | 11 |
Non-Cash Contribution | 0 | 11 |
Cash paid for interest | $ 14 | $ 14 |
Operations and Organization (No
Operations and Organization (Notes) | 6 Months Ended |
Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Operations and Organization | ORGANIZATION AND BASIS OF PRESENTATION Organization Panhandle Eastern Pipe Line Company, LP (“PEPL”) and its subsidiaries (collectively, the “Company”) primarily operate interstate pipelines that transport natural gas from the Gulf of Mexico, South Texas and the Panhandle region of Texas and Oklahoma to major United States markets in the Midwest and Great Lakes regions and natural gas storage assets and are subject to the rules and regulations of the FERC. The Company’s subsidiaries include Trunkline, Sea Robin and Southwest Gas. Southern Union Panhandle LLC, an indirect wholly-owned subsidiary of Energy Transfer Operating, L.P. (“ETO”), owns a 1% general partner interest in PEPL and ETO indirectly owns a 99% limited partner interest in PEPL. On July 1, 2019, ETO executed a series of internal restructuring transactions that resulted in PEPL becoming a subsidiary of a non-corporate subsidiary of ETO. As a result, PEPL’s tax status changed from a disregarded entity for federal income tax purposes wholly owned by a corporate entity to a disregarded entity for federal income tax purposes wholly owned by a limited partnership. In connection with this restructuring, PEPL’s tax sharing agreement with its former corporate parent was terminated, and PEPL expects to reverse all of its existing deferred tax assets and liabilities in July 2019, which will result in the recognition of a $444 million non-cash benefit in the consolidated statement of operations. Certain prior period amounts have been reclassified to conform to the 2019 presentation. These reclassifications had no impact on net income, total partners’ capital or cash flows. Basis of Presentation The unaudited financial information included in this Form 10-Q has been prepared on the same basis as the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 . In the opinion of the Company’s management, such financial information reflects all adjustments necessary for a fair presentation of the financial position and the results of operations for such interim periods in accordance with GAAP. All intercompany items and transactions have been eliminated in consolidation. Certain information and footnote disclosures normally included in annual consolidated financial statements prepared in accordance with GAAP have been omitted pursuant to the rules and regulations of the SEC. Use of Estimates The unaudited consolidated financial statements have been prepared in conformity with GAAP, which includes the use of estimates and assumptions made by management that affect the reported amounts of assets, liabilities, revenues, expenses and disclosure of contingent assets and liabilities that exist at the date of the consolidated financial statements. Although these estimates are based on management’s available knowledge of current and expected future events, actual results could be different from those estimates. Change in Accounting Policy Adoption of Lease Accounting Standard In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2016-02, Leases (Topic 842) , which has amended the FASB Accounting Standards Codification (“ASC”) and introduced Topic 842, Leases. On January 1, 2019, the Company has adopted Topic 842, which is effective for interim and annual reporting periods beginning on or after December 15, 2018. Topic 842 requires entities to recognize lease assets and liabilities on the balance sheet for all leases with a term of more than one year, including operating leases, which historically were not recorded on the balance sheet in accordance with the prior standard. To adopt Topic 842, the Company recognized a cumulative catch-up adjustment to the opening balance sheet as of January 1, 2019 related to certain leases that existed as of that date. As permitted, we have not retrospectively modified our consolidated financial statements for comparative purposes. The adoption of the standard had a material impact on our consolidated balance sheet, but did not have an impact on our consolidated statements of operations, comprehensive income or cash flows. As a result of adoption, we have recorded additional net right-of-use (“ROU”) lease assets and lease liabilities of approximately $6 million and $6 million , respectively, as of January 1, 2019. In addition, we have updated our business processes, systems, and internal controls to support the on-going reporting requirements under the new standard. To adopt Topic 842, the Company elected the package of practical expedients permitted under the transition guidance within the standard. The expedient package allowed us not to reassess whether existing contracts contained a lease, the lease classification of existing leases and initial direct cost for existing leases. In addition to the package of practical expedients, the Company has elected not to capitalize amounts pertaining to leases with terms less than twelve months, to use the portfolio approach to determine discount rates, not to separate non-lease components from lease components and not to apply the use of hindsight to the active lease population. Cumulative-effect adjustments made to the opening balance sheet at January 1, 2019 were as follows: Balance at December 31, 2018, as previously reported Adjustments due to Topic 842 (Leases) Balance at January 1, 2019 Assets: Operating lease right-of-use assets $ — $ 6 $ 6 Liabilities: Non-current operating lease liabilities — 6 6 |
(Notes)
(Notes) | 6 Months Ended |
Jun. 30, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | RELATED PARTY TRANSACTIONS Accounts receivable from related companies reflected on the consolidated balance sheets primarily related to services provided to ETO and other affiliates. Accounts payable to related companies reflected on the consolidated balance sheets related to various services provided by ETO and other affiliates. The following table provides a summary of the related party activity included in our consolidated statements of operations: Three Months Ended Six Months Ended 2019 2018 2019 2018 Operating revenues $ 24 $ 24 $ 48 $ 47 Operating and maintenance 1 1 2 2 General and administrative 5 5 9 11 Interest expense — related company 5 2 9 3 As of June 30, 2019 and December 31, 2018 , the Company had $421 million and $356 million , respectively, outstanding under a note payable to a subsidiary of ETO. The note payable accrues interest monthly at an annual interest rate of 5.411% as of June 30, 2019. The note matures on July 31, 2027. |
FAIR VALUE MEASURES (Notes)
FAIR VALUE MEASURES (Notes) | 6 Months Ended |
Jun. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Disclosures [Text Block] | FAIR VALUE MEASURES The Company had $29 million and $26 million of fair value of available for sale securities, included in other non-current assets, as of June 30, 2019 and December 31, 2018 , respectively. At June 30, 2019 , $19 million in equity securities were valued at Level 1 and $10 million in fixed income securities were valued at Level 2. At December 31, 2018 , $17 million in equity securities were valued at Level 1 and $9 million in fixed income securities were valued at Level 2. The carrying amounts of cash and cash equivalents, accounts receivable and accounts payable approximate fair value. Based on the estimated borrowing rates currently available to the Company and its subsidiaries for loans with similar terms and average maturities, the aggregate fair value of the Company’s consolidated debt obligations (excluding related company balances) was $250 million and $392 million at June 30, 2019 and December 31, 2018 , respectively. The fair value of the Company’s consolidated debt obligations is a Level 2 valuation based on the observable inputs used for similar liabilities. The Company did not have any Level 3 instruments measured at fair value at June 30, 2019 or December 31, 2018 , and there were no transfers between hierarchy levels during the periods presented. |
DEBT OBLIGATIONS (Notes)
DEBT OBLIGATIONS (Notes) | 6 Months Ended |
Jun. 30, 2019 | |
Debt Obligations [Abstract] | |
Debt Disclosure [Text Block] | DEBT OBLIGATIONS Panhandle’s 8.125% Senior Notes in the amount of $150 million matured on June 1, 2019 and were repaid with borrowings under an affiliate loan agreement. Compliance with Our Covenants The Company is in compliance with all requirements, tests, limitations, and covenants related to our credit agreements as of June 30, 2019 . |
Regulatory Matters, Commitments
Regulatory Matters, Commitments, Contingencies and Environmental (Notes) | 6 Months Ended |
Jun. 30, 2019 | |
Regulatory Matters, Commitments, Contingencies And Environmental Liabilities [Abstract] | |
Commitments and Contingencies Disclosure | REGULATORY MATTERS, COMMITMENTS, CONTINGENCIES AND ENVIRONMENTAL LIABILITIES Contingent Residual Support Agreement with ETO Under a contingent residual support agreement with ETO and Citrus ETO Finance LLC, the Company provides contingent, residual support to Citrus ETO Finance LLC (on a non-recourse basis to the Company) with respect to Citrus ETO Finance LLC’s obligations to ETO to support the payment of $2 billion in principal amount of senior notes issued by ETO on January 17, 2012. FERC Proceedings By order issued January 16, 2019, the FERC initiated a review of PEPL’s existing rates pursuant to Section 5 of the Natural Gas Act to determine whether the rates currently charged by PEPL are just and reasonable and set the matter for hearing. PEPL filed a cost and revenue study on April 1, 2019. An initial decision is expected to be issued in the first quarter of 2020. By order issued February 19, 2019, the FERC initiated a review of Southwest Gas’s existing rates pursuant to Section 5 of the Natural Gas Act to determine whether the rates currently charged by Southwest Gas are just and reasonable and set the matter for hearing. Southwest Gas filed a cost and revenue study on May 6, 2019. On July 10, 2019, Southwest Gas Storage Company filed an Offer of Settlement in this Section 5 proceeding, which settlement was supported or not opposed by Commission Trial Staff and all active parties. In addition, on November 30, 2018, Sea Robin filed a rate case pursuant to Section 4 of the Natural Gas Act. On July 22, 2019, Sea Robin filed an Offer of Settlement in this Section 4 proceeding, which settlement was supported or not opposed by Commission Trial Staff and all active parties. Environmental Matters The Company’s operations are subject to federal, state and local laws, rules and regulations regarding water quality, hazardous and solid waste management, air quality control and other environmental matters. These laws, rules and regulations require the Company to conduct its operations in a specified manner and to obtain and comply with a wide variety of environmental regulations, licenses, permits, inspections and other approvals. Failure to comply with environmental laws, rules and regulations may expose the Company to significant fines, penalties and/or interruptions in operations. The Company’s environmental policies and procedures are designed to achieve compliance with such applicable laws and regulations. These evolving laws and regulations and claims for damages to property, employees, other persons and the environment resulting from current or past operations may result in significant expenditures and liabilities in the future. The Company engages in a process of updating and revising its procedures for the ongoing evaluation of its operations to identify potential environmental exposures and enhance compliance with regulatory requirements. The Company is responsible for environmental remediation at certain sites on its natural gas transmission systems for contamination resulting from the past use of lubricants containing PCBs in compressed air systems; the past use of paints containing PCBs; and the prior use of wastewater collection facilities and other on-site disposal areas. The Company has implemented a program to remediate such contamination. The primary remaining remediation activity on the Company’s systems is associated with past use of paints containing PCBs or PCB impacts to equipment surfaces and to a building at one location. The PCB assessments are ongoing and the related estimated remediation costs are subject to further change. Other remediation typically involves the management of contaminated soils and may involve remediation of groundwater. Activities vary with site conditions and locations, the extent and nature of the contamination, remedial requirements, complexity and sharing of responsibility. The ultimate liability and total costs associated with these sites will depend upon many factors. If remediation activities involve statutory joint and several liability provisions, strict liability, or cost recovery or contribution actions, the Company could potentially be held responsible for contamination caused by other parties. In some instances, the Company may share liability associated with contamination with other potentially responsible parties. The Company may also benefit from contractual indemnities that cover some or all of the cleanup costs. These sites are generally managed in the normal course of business or operations. The Company’s environmental remediation activities are undertaken in cooperation with and under the oversight of appropriate regulatory agencies, enabling the Company under certain circumstances to take advantage of various voluntary cleanup programs in order to perform the remediation in the most effective and efficient manner. The Company’s consolidated balance sheets reflected $2 million in non-current liabilities as of June 30, 2019 and December 31, 2018 to cover environmental remediation actions where management believes a loss is probable and reasonably estimable. The Company is not able to estimate the possible loss or range of loss in excess of amounts accrued. The Company does not have any material environmental remediation matters assessed as reasonably possible. Liabilities for Litigation and Other Claims The Company records accrued liabilities for litigation and other claim costs when management believes a loss is probable and reasonably estimable. When management believes there is at least a reasonable possibility that a material loss or an additional material loss may have been incurred, the Company discloses (i) an estimate of the possible loss or range of loss in excess of the amount accrued; or (ii) a statement that such an estimate cannot be made. As of June 30, 2019 and December 31, 2018 , the Company has litigation and other claim-related accrued liabilities of $19 million and $20 million , respectively, included in other non-current liabilities on the consolidated balance sheets. The Company does not have any material litigation or other claim contingency matters assessed as probable or reasonably possible that would require disclosure in the financial statements. Other Commitments and Contingencies The Company is subject to the laws and regulations of states and other jurisdictions concerning the identification, reporting and escheatment (the transfer of property to the state) of unclaimed or abandoned funds, and is subject to audit and examination for compliance with these requirements. The Company is currently being examined by a third party auditor on behalf of nine states for compliance with unclaimed property laws. |
LEASES (Notes)
LEASES (Notes) | 6 Months Ended |
Jun. 30, 2019 | |
Leases [Abstract] | |
Lessee, Operating Leases [Text Block] | LEASES The Company leases office space, land, and equipment under non-cancelable operating leases whose initial terms are typically 5 to 10 years, with some real estate leases having terms of 30 years or more, along with options that permit renewals for additional periods. At contract inception, we determine if the arrangement is a lease or contains an embedded lease and review the facts and circumstances of the arrangement to classify lease assets as operating or finance leases under Topic 842. At present, the majority of the Company’s active leases are classified as operating in accordance with Topic 842. Balances related to operating leases are included in operating lease ROU assets, other current liabilities and operating lease liabilities in our consolidated balance sheet. Finance leases represent a small portion of the active lease agreements and are included in property and equipment, other current liabilities, and other long-term liabilities in our consolidated balance sheet. The ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the obligation of the Company to make minimum lease payments arising from the lease for the duration of the lease term. Most leases include one or more options to renew, with renewal terms that can extend the lease term from one to 20 years or greater. The exercise of lease renewal options is typically at the sole discretion of the Company, and lease extensions are evaluated on a lease-by-lease basis. Leases containing early termination clauses typically require the agreement of both parties to the lease. At the inception of a lease, all renewal options reasonably certain to be exercised are considered when determining the lease term. Presently, the Company does not have leases that include options to purchase or automatic transfer of ownership of the leased property to the Company. The depreciable life of lease assets and leasehold improvements are limited by the expected lease term. To determine the present value of future minimum lease payments, we use the implicit rate when readily determinable. Presently, since many of our leases do not provide an implicit rate, the Company applies its incremental borrowing rate based on the information available at the lease commencement date, to determine the present value of minimum lease payments. The operating and finance lease ROU assets include any lease payments made and exclude lease incentives. Minimum rent payments are expensed on a straight-line basis over the term of the lease. In addition, some leases require additional contingent or variable lease payments, which are based on the factors specific to the individual agreement. Variable lease payments the Company is typically responsible for include payment of real estate taxes, maintenance expenses and insurance. For short-term leases (leases that have term of twelve months or less upon commencement), lease payments are recognized on a straight-line basis and no ROU assets are recorded. For the six months ended June 30, 2019, the Company recognized $2 million of short term lease cost, which is reflected in operating and maintenance in the accompanying consolidated statement of operations. The weighted average remaining lease terms and weighted average discount rate as of June 30, 2019 were as follows: June 30, Weighted-average remaining lease term (years) Operating leases 13 Weighted-average discount rate (%) Operating leases 4 % Maturities of operating lease liabilities as of June 30, 2019 are as follows: Operating leases 2019 (remainder) $ — 2020 1 2021 — 2022 1 2023 1 Thereafter 4 Total lease payments 7 Less: present value discount 2 Present value of lease liabilities $ 5 |
REVENUE (Notes)
REVENUE (Notes) | 6 Months Ended |
Jun. 30, 2019 | |
Revenues [Abstract] | |
Revenue from Contract with Customer [Text Block] | REVENUE Contract Balances with Customers The Company satisfies its obligations by transferring goods or services in exchange for consideration from customers. The timing of performance may differ from the timing the associated consideration is paid to or received from the customer, thus resulting in the recognition of a contract asset or a contract liability. The Company recognizes a contract asset when making upfront consideration payments to certain customers or when providing services to customers prior to the time at which the Company is contractually allowed to bill for such services. As of June 30, 2019 , no contract assets have been recognized. The Company recognizes a contract liability if the customer's payment of consideration precedes the Company’s fulfillment of the performance obligations. As of June 30, 2019 , no contract liabilities have been recognized. Performance Obligation At contract inception, the Company assesses the goods and services promised in its contracts with customers and identifies a performance obligation for each promise to transfer a good or service (or bundle of goods or services) that is distinct. To identify the performance obligations, the Company considers all the goods or services promised in the contract, whether explicitly stated or implied based on customary business practices. For a contract that has more than one performance obligation, the Company allocates the total expected contract consideration to each distinct performance obligation based on a standalone-selling price basis. Revenue is recognized when (or as) the performance obligations are satisfied, that is, when the customer obtains control of the good or service. Certain of our contracts contain variable components, which, when combined with the fixed component are considered a single performance obligation. For these types of contracts, only the fixed component of the contracts are included in the table below. As of June 30, 2019 , the aggregate amount of transaction price allocated to unsatisfied (or partially satisfied) performance obligations is approximately $2.74 billion , and the Company expects to recognize this amount as revenue within the time bands illustrated below: Years Ending December 31, 2019 (remainder) 2020 2021 Thereafter Total Revenue expected to be recognized on contracts with customers existing as of June 30, 2019 $ 223 $ 381 $ 311 $ 1,828 $ 2,743 |
OPERATIONS AND ORGANIZATION (Po
OPERATIONS AND ORGANIZATION (Policies) | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Significant Accounting Policies [Text Block] | Basis of Presentation The unaudited financial information included in this Form 10-Q has been prepared on the same basis as the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 . In the opinion of the Company’s management, such financial information reflects all adjustments necessary for a fair presentation of the financial position and the results of operations for such interim periods in accordance with GAAP. All intercompany items and transactions have been eliminated in consolidation. Certain information and footnote disclosures normally included in annual consolidated financial statements prepared in accordance with GAAP have been omitted pursuant to the rules and regulations of the SEC. |
Use of Estimates, Policy [Policy Text Block] | Use of Estimates The unaudited consolidated financial statements have been prepared in conformity with GAAP, which includes the use of estimates and assumptions made by management that affect the reported amounts of assets, liabilities, revenues, expenses and disclosure of contingent assets and liabilities that exist at the date of the consolidated financial statements. Although these estimates are based on management’s available knowledge of current and expected future events, actual results could be different from those estimates. |
New Accounting Pronouncements, Policy [Policy Text Block] | Change in Accounting Policy Adoption of Lease Accounting Standard In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2016-02, Leases (Topic 842) , which has amended the FASB Accounting Standards Codification (“ASC”) and introduced Topic 842, Leases. On January 1, 2019, the Company has adopted Topic 842, which is effective for interim and annual reporting periods beginning on or after December 15, 2018. Topic 842 requires entities to recognize lease assets and liabilities on the balance sheet for all leases with a term of more than one year, including operating leases, which historically were not recorded on the balance sheet in accordance with the prior standard. To adopt Topic 842, the Company recognized a cumulative catch-up adjustment to the opening balance sheet as of January 1, 2019 related to certain leases that existed as of that date. As permitted, we have not retrospectively modified our consolidated financial statements for comparative purposes. The adoption of the standard had a material impact on our consolidated balance sheet, but did not have an impact on our consolidated statements of operations, comprehensive income or cash flows. As a result of adoption, we have recorded additional net right-of-use (“ROU”) lease assets and lease liabilities of approximately $6 million and $6 million , respectively, as of January 1, 2019. In addition, we have updated our business processes, systems, and internal controls to support the on-going reporting requirements under the new standard. To adopt Topic 842, the Company elected the package of practical expedients permitted under the transition guidance within the standard. The expedient package allowed us not to reassess whether existing contracts contained a lease, the lease classification of existing leases and initial direct cost for existing leases. In addition to the package of practical expedients, the Company has elected not to capitalize amounts pertaining to leases with terms less than twelve months, to use the portfolio approach to determine discount rates, not to separate non-lease components from lease components and not to apply the use of hindsight to the active lease population. |
LEASES (Policies)
LEASES (Policies) | 6 Months Ended |
Jun. 30, 2019 | |
Leases [Abstract] | |
Lessee, Leases [Policy Text Block] | The Company leases office space, land, and equipment under non-cancelable operating leases whose initial terms are typically 5 to 10 years, with some real estate leases having terms of 30 years or more, along with options that permit renewals for additional periods. At contract inception, we determine if the arrangement is a lease or contains an embedded lease and review the facts and circumstances of the arrangement to classify lease assets as operating or finance leases under Topic 842. At present, the majority of the Company’s active leases are classified as operating in accordance with Topic 842. Balances related to operating leases are included in operating lease ROU assets, other current liabilities and operating lease liabilities in our consolidated balance sheet. Finance leases represent a small portion of the active lease agreements and are included in property and equipment, other current liabilities, and other long-term liabilities in our consolidated balance sheet. The ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the obligation of the Company to make minimum lease payments arising from the lease for the duration of the lease term. Most leases include one or more options to renew, with renewal terms that can extend the lease term from one to 20 years or greater. The exercise of lease renewal options is typically at the sole discretion of the Company, and lease extensions are evaluated on a lease-by-lease basis. Leases containing early termination clauses typically require the agreement of both parties to the lease. At the inception of a lease, all renewal options reasonably certain to be exercised are considered when determining the lease term. Presently, the Company does not have leases that include options to purchase or automatic transfer of ownership of the leased property to the Company. The depreciable life of lease assets and leasehold improvements are limited by the expected lease term. To determine the present value of future minimum lease payments, we use the implicit rate when readily determinable. Presently, since many of our leases do not provide an implicit rate, the Company applies its incremental borrowing rate based on the information available at the lease commencement date, to determine the present value of minimum lease payments. The operating and finance lease ROU assets include any lease payments made and exclude lease incentives. Minimum rent payments are expensed on a straight-line basis over the term of the lease. In addition, some leases require additional contingent or variable lease payments, which are based on the factors specific to the individual agreement. Variable lease payments the Company is typically responsible for include payment of real estate taxes, maintenance expenses and insurance. For short-term leases (leases that have term of twelve months or less upon commencement), lease payments are recognized on a straight-line basis and no ROU assets are recorded. |
REVENUE (Policies)
REVENUE (Policies) | 6 Months Ended |
Jun. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contract with Customer [Policy Text Block] | Contract Balances with Customers The Company satisfies its obligations by transferring goods or services in exchange for consideration from customers. The timing of performance may differ from the timing the associated consideration is paid to or received from the customer, thus resulting in the recognition of a contract asset or a contract liability. The Company recognizes a contract asset when making upfront consideration payments to certain customers or when providing services to customers prior to the time at which the Company is contractually allowed to bill for such services. As of June 30, 2019 , no contract assets have been recognized. The Company recognizes a contract liability if the customer's payment of consideration precedes the Company’s fulfillment of the performance obligations. As of June 30, 2019 , no contract liabilities have been recognized. Performance Obligation At contract inception, the Company assesses the goods and services promised in its contracts with customers and identifies a performance obligation for each promise to transfer a good or service (or bundle of goods or services) that is distinct. To identify the performance obligations, the Company considers all the goods or services promised in the contract, whether explicitly stated or implied based on customary business practices. For a contract that has more than one performance obligation, the Company allocates the total expected contract consideration to each distinct performance obligation based on a standalone-selling price basis. Revenue is recognized when (or as) the performance obligations are satisfied, that is, when the customer obtains control of the good or service. Certain of our contracts contain variable components, which, when combined with the fixed component are considered a single performance obligation. For these types of contracts, only the fixed component of the contracts are included in the table below. |
OPERATIONS AND ORGANIZATION (Ta
OPERATIONS AND ORGANIZATION (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Leases [Abstract] | |
Schedule of New Accounting Pronouncements and Changes in Accounting Principles [Table Text Block] | Cumulative-effect adjustments made to the opening balance sheet at January 1, 2019 were as follows: Balance at December 31, 2018, as previously reported Adjustments due to Topic 842 (Leases) Balance at January 1, 2019 Assets: Operating lease right-of-use assets $ — $ 6 $ 6 Liabilities: Non-current operating lease liabilities — 6 6 |
(Tables)
(Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions [table text block] | The following table provides a summary of the related party activity included in our consolidated statements of operations: Three Months Ended Six Months Ended 2019 2018 2019 2018 Operating revenues $ 24 $ 24 $ 48 $ 47 Operating and maintenance 1 1 2 2 General and administrative 5 5 9 11 Interest expense — related company 5 2 9 3 |
LEASES (Tables)
LEASES (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Leases [Abstract] | |
Lease, Cost [Table Text Block] | For the six months ended June 30, 2019, the Company recognized $2 million of short term lease cost, which is reflected in operating and maintenance in the accompanying consolidated statement of operations. |
Lessee, Operating Lease, Liability, Maturity [Table Text Block] | The weighted average remaining lease terms and weighted average discount rate as of June 30, 2019 were as follows: June 30, Weighted-average remaining lease term (years) Operating leases 13 Weighted-average discount rate (%) Operating leases 4 % Maturities of operating lease liabilities as of June 30, 2019 are as follows: Operating leases 2019 (remainder) $ — 2020 1 2021 — 2022 1 2023 1 Thereafter 4 Total lease payments 7 Less: present value discount 2 Present value of lease liabilities $ 5 |
REVENUE (Tables)
REVENUE (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Revenues [Abstract] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Table Text Block] | As of June 30, 2019 , the aggregate amount of transaction price allocated to unsatisfied (or partially satisfied) performance obligations is approximately $2.74 billion , and the Company expects to recognize this amount as revenue within the time bands illustrated below: Years Ending December 31, 2019 (remainder) 2020 2021 Thereafter Total Revenue expected to be recognized on contracts with customers existing as of June 30, 2019 $ 223 $ 381 $ 311 $ 1,828 $ 2,743 |
Operations and Organization (De
Operations and Organization (Details) - USD ($) $ in Millions | 1 Months Ended | 6 Months Ended | ||
Jul. 31, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jan. 01, 2019 | |
Description of the Business | ||||
Operating Lease, Liability | $ 5 | $ 6 | ||
Accounting Standards Update 2016-02 [Member] | ||||
Description of the Business | ||||
Lease, Right of Use Asset, Net | $ 6 | |||
Panhandle [Member] | ||||
Description of the Business | ||||
General partnership interest | 1.00% | |||
Limited partnership interest | 99.00% | |||
Subsequent Event [Member] | ||||
Description of the Business | ||||
Unrecognized Tax Benefits, Period Increase (Decrease) | $ (444) |
OPERATIONS AND ORGANIZATION Sch
OPERATIONS AND ORGANIZATION Schedule of Leases (Details) - USD ($) $ in Millions | Jun. 30, 2019 | Jan. 01, 2019 | Dec. 31, 2018 |
Operating Lease, Right-of-Use Asset | $ 5 | $ 6 | $ 0 |
Operating Lease, Liability | 5 | 6 | |
Operating Lease, Liability, Noncurrent | $ 5 | 6 | $ 0 |
Accounting Standards Update 2016-02 [Member] | |||
Operating Lease, Right-of-Use Asset | 6 | ||
Operating Lease, Liability, Noncurrent | $ 6 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Related Party Transactions [Abstract] | ||||
Operating revenues | $ 24 | $ 24 | $ 48 | $ 47 |
Operating and maintenance | 1 | 1 | 2 | 2 |
General and administrative | 5 | 5 | 9 | 11 |
Interest Expense, Related Party | $ 5 | $ 2 | $ 9 | $ 3 |
Related Party (Narrative) (Deta
Related Party (Narrative) (Details) - USD ($) $ in Millions | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Related Party Transaction [Line Items] | |||
Note payable to related company | $ 421 | $ 356 | |
Deemed contribution from partners | $ 0 | $ 11 | |
ETO [Member] | |||
Related Party Transaction [Line Items] | |||
Debt Instrument, Interest Rate, Stated Percentage | 5.411% |
FAIR VALUE MEASURES (Details)
FAIR VALUE MEASURES (Details) - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 |
Investments, Fair Value Disclosure | $ 29 | $ 26 |
Debt Instrument, Fair Value Disclosure | 250 | 392 |
Equity Securities [Member] | ||
Investments, Fair Value Disclosure | 19 | 17 |
Fixed Income Securities [Member] | ||
Investments, Fair Value Disclosure | $ 10 | $ 9 |
DEBT OBLIGATIONS (Details)
DEBT OBLIGATIONS (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2019USD ($) | |
Repayments of Senior Debt | $ 150 |
Regulatory Matters, Commitmen_2
Regulatory Matters, Commitments, Contingencies and Environmental (Details) - USD ($) $ in Millions | 6 Months Ended | ||
Jun. 30, 2019 | Dec. 31, 2018 | Jun. 30, 2018 | |
Regulatory Matters, Commitments, Contingencies And Environmental Liabilities [Abstract] | |||
Contingent Residual Support Agreement, Amount | $ 2,000 | ||
Accrued Environmental Loss Contingencies, Noncurrent | $ 2 | $ 2 | |
Estimated litigation liability | $ 19 | $ 20 |
LEASES (Details)
LEASES (Details) - USD ($) $ in Millions | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jan. 01, 2019 | Dec. 31, 2018 | |
Lessee, Lease, Description [Line Items] | ||||
Operating Lease, Right-of-Use Asset | $ 5 | $ 6 | $ 0 | |
Operating Lease, Weighted Average Remaining Lease Term | 13 years | |||
Lessee, Operating Lease, Liability, Payments, Remainder of Fiscal Year | $ 0 | |||
Lessee, Operating Lease, Liability, Payments, Due Year Two | 1 | |||
Lessee, Operating Lease, Liability, Payments, Due Year Three | 0 | |||
Lessee, Operating Lease, Liability, Payments, Due Year Four | 1 | |||
Lessee, Operating Lease, Liability, Payments, Due Year Five | 1 | |||
Lessor, Operating Lease, Payments to be Received, Thereafter | 4 | |||
Lessee, Operating Lease, Liability, Payments, Due | 7 | |||
Lessee, Operating Lease, Liability, Undiscounted Excess Amount | 2 | |||
Operating Lease, Liability | 5 | 6 | ||
Net Cash Provided by (Used in) Operating Activities | 101 | $ 145 | ||
Net Cash Provided by (Used in) Financing Activities | $ (85) | $ (110) | ||
Operating Lease, Weighted Average Discount Rate, Percent | 4.00% | |||
Short-term Lease, Cost | $ 2 | |||
Operating Lease, Liability, Noncurrent | $ 5 | $ 6 | $ 0 | |
Equipment [Member] | Minimum [Member] | ||||
Lessee, Lease, Description [Line Items] | ||||
Lessee, Operating Lease, Term of Contract | 5 years | |||
Equipment [Member] | Maximum [Member] | ||||
Lessee, Lease, Description [Line Items] | ||||
Lessee, Operating Lease, Term of Contract | 10 years | |||
Real Estate [Member] | ||||
Lessee, Lease, Description [Line Items] | ||||
Lessee, Operating Lease, Term of Contract | 30 years |
REVENUE (Details)
REVENUE (Details) | Jun. 30, 2019USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Contract with Customer, Asset, Gross | $ 0 |
Contract with Customer, Liability | 0 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2018-12-31 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Amount | 223,000,000 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-12-31 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Amount | 381,000,000 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-12-31 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Amount | 311,000,000 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-12-31 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Amount | 1,828,000,000 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: (nil) | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Amount | $ 2,743,000,000 |