Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2016 | May. 02, 2016 | |
Document and Entity Information | ||
Entity Registrant Name | TC PIPELINES LP | |
Entity Central Index Key | 1,075,607 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2016 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 65,098,380 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q1 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Transmission revenues | $ 86 | $ 87 |
Equity earnings (Note 4) | 42 | 31 |
Operation and maintenance expenses | (10) | (11) |
Property taxes | (5) | (6) |
General and administrative | (2) | (3) |
Depreciation | (21) | (21) |
Financial charges and other (Note 14) | (17) | (13) |
Net income | 73 | 64 |
Net income attributable to non-controlling interests | 7 | |
Net income attributable to controlling interests | 73 | 57 |
Net income attributable to controlling interest allocation | ||
General Partner | 2 | 1 |
Net income attributable to controlling interests | 73 | 57 |
Common units | ||
Net income attributable to controlling interest allocation | ||
Limited partners | $ 71 | $ 56 |
Net income per common unit (Note 8) - basic (in dollars per unit) | $ 1.10 | $ 0.88 |
Net income per common unit (Note 8) - diluted (in dollars per unit) | $ 1.10 | $ 0.88 |
Weighted average common units outstanding - basic (in units) | 64.4 | 63.6 |
Weighted average common units outstanding - diluted (in units) | 64.4 | 63.6 |
Common units outstanding, end of period (in units) | 64.7 | 63.6 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||
Net income | $ 73 | $ 64 |
Other comprehensive income | ||
Change in fair value of cash flow hedges (Note 12) | (2) | |
Reclassification to net income of gains and losses on cash flow hedges (Note 12) | (1) | |
Comprehensive income | 71 | 63 |
Comprehensive income attributable to non-controlling interests | 7 | |
Comprehensive income attributable to controlling interests | $ 71 | $ 56 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Mar. 31, 2016 | Dec. 31, 2015 |
Current Assets | ||
Cash and cash equivalents | $ 48 | $ 39 |
Accounts receivable and other (Note 13) | 36 | 35 |
Distribution receivable from affiliate (Note 11) | 6 | |
Inventories | 7 | 7 |
Total current assets | 97 | 81 |
Equity investments (Note 4) | 1,083 | 965 |
Plant, property and equipment (Net of $831 accumulated depreciation; 2015 - $811) | 1,928 | 1,949 |
Goodwill | 130 | 130 |
Other assets (Note 3) | 1 | |
Total assets | 3,238 | 3,126 |
Current Liabilities | ||
Accounts payable and accrued liabilities | 24 | 32 |
Accounts payable to affiliates (Note 11) | 4 | 5 |
Accrued interest | 13 | 8 |
Current portion of long-term debt (Note 5) | 14 | 14 |
Total current liabilities | 55 | 59 |
Long-term debt (Notes 3 and 5) | 2,059 | 1,889 |
Other liabilities | 28 | 27 |
Total liabilities | 2,142 | 1,975 |
Partners' Equity | ||
General partner | 24 | 25 |
Accumulated other comprehensive loss | (4) | (2) |
Controlling interests | 1,096 | 1,151 |
Total liabilities and partners' equity | 3,238 | 3,126 |
Common units | ||
Partners' Equity | ||
Limited partner | 981 | 1,021 |
Class B units | ||
Partners' Equity | ||
Limited partner | $ 95 | $ 107 |
CONSOLIDATED BALANCE SHEET (Par
CONSOLIDATED BALANCE SHEET (Parenthetical) - USD ($) $ in Millions | Mar. 31, 2016 | Dec. 31, 2015 |
CONSOLIDATED BALANCE SHEETS | ||
Accumulated depreciation | $ 831 | $ 811 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Cash Generated From Operations | ||
Net income | $ 73 | $ 64 |
Depreciation | 21 | 21 |
Amortization of debt issue costs reported as interest expense (Note 3) | 1 | 1 |
Accruals for costs related to the 2015 GTN Acquisition | 2 | |
Change in operating working capital (Note 10) | 6 | 3 |
Total cash generated from operations | 92 | 87 |
Investing Activities | ||
Capital expenditures | (11) | (3) |
Total investing activities | (200) | (5) |
Financing Activities | ||
Distributions paid to non-controlling interests | (9) | |
ATM equity issuance, net (Note 7) | 19 | 3 |
Long-term debt issued, net of discount (Note 5) | 195 | 349 |
Long-term debt repaid (Note 5) | (25) | (10) |
Debt issuance costs | (2) | |
Total financing activities | 117 | 276 |
Increase/(decrease) in cash and cash equivalents | 9 | 358 |
Cash and cash equivalents, beginning of period | 39 | 26 |
Cash and cash equivalents, end of period | 48 | 384 |
Class B units | ||
Financing Activities | ||
Distributions paid (Note 7) | (12) | |
Common units and General Partner interest combined | ||
Financing Activities | ||
Distributions paid (Note 9) | (60) | (55) |
Northern Border | ||
Investing Activities | ||
Cumulative distributions in excess of equity earnings | 4 | 2 |
Great Lakes | ||
Cash Generated From Operations | ||
Equity earnings in excess of cumulative distributions | (4) | |
Investing Activities | ||
Cumulative distributions in excess of equity earnings | 4 | |
Investment in Great Lakes / Acquisition of PNGTS (Note 6) | (4) | $ (4) |
Portland Natural Gas Transmission System | ||
Cash Generated From Operations | ||
Equity earnings in excess of cumulative distributions | (9) | |
Investing Activities | ||
Investment in Great Lakes / Acquisition of PNGTS (Note 6) | $ (193) |
CONSOLIDATED STATEMENT OF CHANG
CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' EQUITY - 3 months ended Mar. 31, 2016 - USD ($) shares in Millions, $ in Millions | Limited PartnersCommon units | Limited PartnersClass B units | General Partner | Accumulated Other Comprehensive Loss | [1] | Total |
Partners' Equity at beginning of period at Dec. 31, 2015 | $ 1,021 | $ 107 | $ 25 | $ (2) | $ 1,151 | |
Partners' Equity at beginning of period (in units) at Dec. 31, 2015 | 64.3 | 1.9 | ||||
Increase (Decrease) in Partners' Equity | ||||||
Net income | $ 71 | 2 | 73 | |||
Other Comprehensive Loss | (2) | (2) | ||||
ATM Equity Issuance, net (Note 7) | $ 19 | 19 | ||||
ATM Equity Issuance (Note 7) (in units) | 0.4 | |||||
Acquisition of PNGTS (Note 6) | $ (72) | (1) | (73) | |||
Distributions | (58) | $ (12) | (2) | (72) | ||
Partners' Equity at end of period at Mar. 31, 2016 | $ 981 | $ 95 | $ 24 | $ (4) | $ 1,096 | |
Partners' Equity at end of period (in units) at Mar. 31, 2016 | 64.7 | 1.9 | ||||
[1] | Losses related to cash flow hedges reported in Accumulated Other Comprehensive Loss and expected to be reclassified to Net Income in the next 12 months are estimated to be $2 million. These estimates assume constant interest rates over time; however, the amounts reclassified will vary based on actual value of interest rates at the date of settlement. |
CONSOLIDATED STATEMENT OF CHAN8
CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' EQUITY (Parenthetical) $ in Millions | 3 Months Ended |
Mar. 31, 2016USD ($) | |
Losses related to cash flow hedges reported in Accumulated Other Comprehensive Loss | |
Losses expected to be reclassified to Net Income in the next 12 months | $ 2 |
ORGANIZATION
ORGANIZATION | 3 Months Ended |
Mar. 31, 2016 | |
ORGANIZATION | |
ORGANIZATION | NOTE 1 ORGANIZATION TC PipeLines, LP and its subsidiaries are collectively referred to herein as the Partnership. The Partnership was formed by TransCanada PipeLines Limited, a wholly-owned subsidiary of TransCanada Corporation (TransCanada Corporation together with its subsidiaries collectively referred to herein as TransCanada), to acquire, own and participate in the management of energy infrastructure assets in North America. The Partnership owns its pipeline assets through three intermediate limited partnerships (ILPs), TC GL Intermediate Limited Partnership, TC PipeLines Intermediate Limited Partnership and TC Tuscarora Intermediate Limited Partnership. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2016 | |
SIGNIFICANT ACCOUNTING POLICIES | |
SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 SIGNIFICANT ACCOUNTING POLICIES The accompanying financial statements and related notes have been prepared in accordance with United States generally accepted accounting principles (GAAP) and amounts are stated in U.S. dollars. The results of operations for the three months ended March 31, 2016 and 2015 are not necessarily indicative of the results that may be expected for the full fiscal year. The accompanying financial statements should be read in conjunction with the financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2015. That report contains a more comprehensive summary of the Partnership’s significant accounting policies. In the opinion of management, the accompanying financial statements contain all of the appropriate adjustments, all of which are normally recurring adjustments unless otherwise noted, and considered necessary to present fairly the financial position of the Partnership, the results of operations and cash flows for the respective periods. Our significant accounting policies are consistent with those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2015, except as described in Note 3, Accounting Pronouncements. Use of Estimates The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Although management believes these estimates are reasonable, actual results could differ from these estimates. |
ACCOUNTING PRONOUNCEMENTS
ACCOUNTING PRONOUNCEMENTS | 3 Months Ended |
Mar. 31, 2016 | |
ACCOUNTING PRONOUNCEMENTS | |
ACCOUNTING PRONOUNCEMENTS | NOTE 3 ACCOUNTING PRONOUNCEMENTS Effective January 1, 2016 Consolidation In February 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2015-02 “Consolidation (Topic 810),” an amendment of previously issued guidance on consolidation. This updated guidance requires that an entity evaluate whether it should consolidate certain legal entities. All legal entities are subject to reevaluation under the revised consolidation model. This guidance became effective beginning January 1, 2016 and was applied retrospectively to all financial statements presented. The application of this guidance did not result in any change to the Partnership’s consolidation conclusions. Refer to Note 17. Imputation of interest In April 2015, the FASB issued ASU No. 2015-03 “Interest – Imputation of Interest (Subtopic 835-30),” an amendment of previously issued guidance on imputation of interest. This updated guidance requires debt issuance costs be presented in the balance sheet as a direct deduction from the carrying amount of debt liabilities, consistent with debt discount or premiums. In addition, amortization of debt issuance costs should be reported as interest expense. The recognition and measurement for debt issuance costs would not be affected. This guidance is effective from January 1, 2016 and was applied retrospectively resulting in a reclassification of debt issuance costs previously recorded in other assets to an offset of their respective debt liabilities on the Partnership’s consolidated balance sheet. Amortization of debt issuance costs was reported as interest expense in all periods presented in the Partnership’s consolidated statement of income. As a result of the application of ASU No. 2015-03 and similar to the presentation of debt discounts, Debt issuance costs of $7 million at December 31, 2015 previously reported as other assets in the balance sheet were reclassified as an offset against their respective debt liabilities. Earnings per share In April 2015, the FASB issued ASU No.2015-06 “Earnings Per Share (Topic 260),” an amendment of previously issued guidance on earnings per share (EPS) as it is being calculated by master limited partnerships. This updated guidance specifies that for purposes of calculating historical EPS under the two-class method, the earnings (losses) of a transferred business before the date of a dropdown transaction should be allocated entirely to the general partner interest, and previously reported EPS of the limited partners would not change as a result of a dropdown transaction. Qualitative disclosures about how the rights to the earnings (losses) differ before and after the dropdown transaction occurs are also required. This guidance became effective from January 1, 2016 and applies to all dropdown transactions requiring recast. The retrospective application of this guidance did not have a material impact on the Partnership’s consolidated financial statements as our current accounting policy is consistent with the new guidance. Business combinations In September 2015, the FASB issued ASU No. 2015-16 “Business Combinations (Topic 805),” which replaces the requirement that an acquirer in a business combination account for measurement period adjustments retrospectively with a requirement that an acquirer recognize adjustments to the provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The amended guidance requires that the acquirer record, in the same period’s financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. The new guidance is effective January 1, 2016 and was applied prospectively. The application of this guidance did not have a material impact on Partnership’s consolidated financial statements. Future accounting changes Revenue from contracts with customers In May 2014, the FASB issued ASU No. 2014-09 “Revenue from Contracts with Customers (Topic 606).” This guidance supersedes the revenue recognition requirements in Topic 605, Revenue Recognition and most industry-specific guidance. This new guidance requires that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. On July 9, 2015, the FASB voted to defer the effective date by one year to December 15, 2017 for annual reporting periods beginning after that date. The FASB also voted to permit early adoption of the standard, but not before the original effective date of December 15, 2016. This new guidance, once effective, allows two methods in which the amendment can be applied: (1) retrospectively to each prior reporting period presented, or (2) retrospectively with the cumulative effect recognized at the date of initial application. The Partnership is currently evaluating the impact of the adoption of this ASU and has not yet determined the effect on its consolidated financial statements. Leases In February 2016, the FASB issued ASU No. 2016-03 “Leases (Topic 842).” The new guidance requires lessees to recognize most leases, including operating leases, on the balance sheet as lease assets and lease liabilities. In addition, lessees will be required to reassess assumptions associated with existing leases as well as to provide expanded qualitative and quantitative disclosures. The new standard does not make extensive changes to lessor accounting. The new guidance is effective January 1, 2019 and will be applied using a modified retrospective approach. The Partnership is currently evaluating the impact of the adoption of this guidance and has not yet determined the effect on its consolidated financial statements. Equity method and joint ventures In March 2016, the FASB issued ASU No. 2016-07 “Investments – equity method and joint ventures (Topic 323)” that simplifies the transition to equity method accounting. The new guidance eliminates the requirement to retroactively apply the equity method of accounting when an increase in ownership interest in an investment qualifies for equity method accounting. This new guidance is effective January 2017 and will be applied prospectively. The Partnership does not expect the adoption of this new standard to have a material impact on its consolidated financial statements. |
EQUITY INVESTMENTS
EQUITY INVESTMENTS | 3 Months Ended |
Mar. 31, 2016 | |
EQUITY INVESTMENTS | |
EQUITY INVESTMENTS | NOTE 4 EQUITY INVESTMENTS Northern Border, Great Lakes and Portland Natural Gas Transmission System (PNGTS) are regulated by FERC and are operated by TransCanada. The Partnership uses the equity method of accounting for its interests in its equity investees. The Partnership’s equity investments are held through our ILPs that are considered to be variable interest entities (VIEs) (refer to Note 3 and Note 17). Equity Earnings Equity Investments Ownership Interest at Three months (unaudited) March 31, ended March 31, March 31, December 31, (millions of dollars) 2016 2015 2016 2015 Northern Border (a) 18 Great Lakes 15 PNGTS (b) 9 - - 42 (a) Equity earnings from Northern Border is net of the 12-year amortization of a $10 million transaction fee paid to the operator of Northern Border at the time of the Partnership’s additional 20 percent interest acquisition in April 2006. (b) On January 1, 2016, the Partnership acquired a 49.9 percent interest in PNGTS (Refer to Note 6). For the three months ending March 31, 2016, the Partnership recorded no undistributed earnings from PNGTS. Northern Border The Partnership did not have undistributed earnings from Northern Border for the three months ended March 31, 2016 and 2015. The summarized financial information for Northern Border is as follows: (unaudited) (millions of dollars) March 31, 2016 December 31, 2015 ASSETS Cash and cash equivalents Other current assets Plant, property and equipment, net Other assets (a) LIABILITIES AND PARTNERS’ EQUITY Current liabilities Deferred credits and other Long-term debt, including current maturities, net (a) Partners’ equity Partners’ capital Accumulated other comprehensive loss (a) As a result of the application of ASU No. 2015-03 and similar to the presentation of debt discounts, debt issuance costs of $2 million at December 31, 2015 previously reported as other assets in the balance sheet were reclassified as an offset against their respective debt liabilities. Three months ended (unaudited) March 31, (millions of dollars) 2015 Transmission revenues Operating expenses Depreciation Financial charges and other Net income Great Lakes The Partnership made an equity contribution to Great Lakes of $ 4 million in the first quarter of 2016. This amount represents the Partnership’s 46.45 percent share of a $9 million cash call from Great Lakes to make a scheduled debt repayment. The Partnership did not have undistributed earnings from Great Lakes for the three months ended March 31, 2016 and 2015. The summarized financial information for Great Lakes is as follows: (unaudited) (millions of dollars) March 31, 2016 December 31, 2015 (a) ASSETS Current assets Plant, property and equipment, net LIABILITIES AND PARTNERS’ EQUITY Current liabilities Long-term debt, including current maturities, net (a) Partners’ equity (a) The application of ASU No. 2015-03 did not have a material effect of Great Lakes’ financial statements. Three months ended (unaudited) March 31, (millions of dollars) 2016 2015 Transmission revenues Operating expenses Depreciation Financial charges and other Net income |
DEBT AND CREDIT FACILITIES
DEBT AND CREDIT FACILITIES | 3 Months Ended |
Mar. 31, 2016 | |
DEBT AND CREDIT FACILITIES | |
DEBT AND CREDIT FACILITIES | NOTE 5 DEBT AND CREDIT FACILITIES (unaudited) (millions of dollars) March 31, 2016 December 31, 2015 (a) Weighted Average Interest Rate for the Three Months Ended March 31, 2016 TC PipeLines, LP Senior Credit Facility due 2017 370 200 TC PipeLines, LP 2013 Term Loan Facility due 2018 500 500 TC PipeLines, LP 2015 Term Loan Facility due 2018 170 170 TC PipeLines, LP 4.65% Unsecured Senior Notes due 2021 350 350 4.65% (b) TC PipeLines, LP 4.375% Unsecured Senior Notes due 2025 350 350 4.375% (b) GTN 5.29% Unsecured Senior Notes due 2020 100 100 5.29% (b) GTN 5.69% Unsecured Senior Notes due 2035 150 150 5.69% (b) GTN Unsecured Term Loan Facility due 2019 75 75 Tuscarora 3.82% Series D Senior Notes due 2017 16 16 3.82% (b) 2,081 1,911 Less: unamortized debt issuance costs and debt discount (a) 8 8 Less: current portion 14 14 2,059 1,889 (a) As a result of the application of ASU no. 2015-03 and similar to the presentation of debt discounts, debt issuance costs of $7 million at December 31, 2015 previously reported as other assets in the balance sheet were reclassified as an offset against debt (Refer to Note 3). (b) Fixed interest rate The Partnership’s Senior Credit Facility consists of a $500 million senior revolving credit facility with a banking syndicate, maturing November 20, 2017, under which $370 million was outstanding at March 31, 2016 (December 31, 2015 - $200 million), leaving $130 million available for future borrowing. After hedging activity, the interest rate incurred on the 2013 Term Loan Facility averaged 2.20 percent for the three months ended March 31, 2016 (2015 – 1.83 percent). Prior to hedging activities, the LIBOR-based interest rate was 1.69 percent at March 31, 2016 (December 31, 2015 – 1.50 percent) . The 2013 Term Loan Facility and the 2015 Term Loan Facility (Term Loan Facilities) and the Senior Credit Facility require the Partnership to maintain a certain leverage ratio (debt to adjusted cash flow [net income plus cash distributions received, extraordinary losses, interest expense, expense for taxes paid or accrued, and depreciation and amortization expense less equity earnings and extraordinary gains]) be no greater than: · 5.50 to 1.00 for the quarters ending March 31, 2016 to September 30, 2016; · 5.00 to 1.00 for the quarter ending December 31, 2016 and each subsequent fiscal quarter, except for the fiscal quarter and the two following fiscal quarters in which one or more acquisitions has been executed, in which case the leverage ratio is to be no greater than 5.50 to 1.00. The leverage ratio was 4.86 to 1.00 as of March 31, 2016. GTN’s Unsecured Senior Notes, along with GTN’s Unsecured Term Loan Facility contain a covenant that limits total debt to no greater than 70 percent of GTN’s total capitalization. GTN’s total debt to total capitalization ratio at March 31, 2016 was 44.1 percent. The Series D Senior Notes which require yearly principal payments until maturity, are secured by Tuscarora’s transportation contracts, supporting agreements and substantially all of Tuscarora’s property. The note purchase agreements contain certain provisions that include, among other items, limitations on additional indebtedness and distributions to partners. The Series D Senior Notes contain a covenant that limits total debt to no greater than 45 percent of Tuscarora’s total capitalization. Tuscarora’s total debt to total capitalization ratio at March 31, 2016 was 15.1 percent. Additionally, the Series D Senior Notes require Tuscarora to maintain a Debt Service Coverage Ratio (cash available from operations divided by a sum of interest expense and principal payments) of greater than 3.00 to 1.00. The ratio was 4.56 to 1.00 as of March 31, 2016. At March 31, 2016, the Partnership was in compliance with its financial covenants, in addition to the other covenants which include restrictions on entering into mergers, consolidations and sales of assets, granting liens, material amendments to the Third Amended and Restated Agreement of Limited Partnership (Partnership Agreement), incurring additional debt and distributions to unitholders. The principal repayments required of the Partnership on its debt are as follows: (unaudited) (millions of dollars) 2016 2017 2018 2019 2020 Thereafter |
ACQUISITION
ACQUISITION | 3 Months Ended |
Mar. 31, 2016 | |
ACQUISITION | |
ACQUISITION | NOTE 6 ACQUISITION PNGTS Acquisition On January 1, 2016, the Partnership acquired a 49.9 percent interest in PNGTS from a subsidiary of TransCanada (PNGTS Acquisition). The total purchase price of the PNGTS Acquisition was $228 million and consisted of $193 million in cash (including the final purchase price adjustment of $5 million) and the assumption of $35 million in proportional PNGTS debt. The Partnership funded the cash portion of the transaction using proceeds received from our ATM program and additional borrowings under our Senior Credit Facility. The purchase agreement provides for additional payments to TransCanada ranging from $5 million up to a total of $50 million if pipeline capacity is expanded to various thresholds during the fifteen year period following the date of closing. The acquisition was accounted for as a transaction between entities under common control, whereby the equity investment in PNGTS was recorded at TransCanada’s carrying value. (millions of dollars) Net Purchase Price (a) Less: TransCanada’s carrying value of PNGTS’ net assets at January 1, 2016 Excess purchase price (b) (a) Total purchase price of $228 million less the assumption of $35 million of proportional PNGTS debt by the Partnership. (b) The excess purchase price of $73 million was recorded as a reduction in Partners’ Equity. |
PARTNERS' EQUITY
PARTNERS' EQUITY | 3 Months Ended |
Mar. 31, 2016 | |
PARTNERS' EQUITY | |
PARTNERS' EQUITY | NOTE 7 PARTNERS’ EQUITY ATM equity issuance program (ATM program) In the three months ended March 31, 2016, we issued 368,448 common units under our ATM program generating net proceeds of approximately $19 million, plus $0.4 million from the General Partner to maintain its effective two percent interest. The commissions to our sales agents for the three months ended March 31, 2016 were approximately $186,000. The net proceeds were used for general partnership purposes. Class B units issued to TransCanada The Class B Units we issued on April 1, 2015 to finance a portion of the 2015 GTN Acquisition represent a limited partner interest in us and entitle TransCanada to an annual distribution based on 30 percent of GTN’s annual distributions as follows: (i) 100 percent of distributions above $20 million through March 31, 2020; and (ii) 25 percent of distributions above $20 million thereafter. For the year ending December 31, 2016, the Class B units’ equity account will be increased by the excess of 30 percent of GTN’s distributions over the annual threshold of $20 million until such amount is declared for distribution and paid in the first quarter of 2017. For the three months ended March 31, 2016, the threshold has not been exceeded. For the year ended December 31, 2015, the Class B distribution was $12 million and was declared and paid in the first quarter of 2016. |
NET INCOME PER COMMON UNIT
NET INCOME PER COMMON UNIT | 3 Months Ended |
Mar. 31, 2016 | |
NET INCOME PER COMMON UNIT | |
NET INCOME PER COMMON UNIT | NOTE 8 NET INCOME PER COMMON UNIT Net income per common unit is computed by dividing net income attributable to controlling interests, after deduction of amounts attributable to the General Partner and Class B units by the weighted average number of common units outstanding. The amounts allocable to the General Partner equals an amount based upon the General Partner’s effective two percent general partner interest, plus an amount equal to incentive distributions. Incentive distributions are paid to the General Partner if quarterly cash distributions on the common units exceed levels specified in the Partnership Agreement. Incentive distributions allocated to the General Partner for the three months ended March 31, 2016, were $1 million (2015 – $0.3 million). For the year ending December 31, 2016, the amount allocable to the Class B units is equal to 30 percent of GTN’s annual distributable cash flow, less $20 million (Refer to Note 7). During the three months ended March 31, 2016, no amounts were allocated to the Class B units as the annual threshold of $20 million was not exceeded. Net income per common unit was determined as follows: (unaudited) Three months ended March 31, (millions of dollars, except per common unit amounts) 2016 2015 Net income attributable to controlling interests Net income attributable to the General Partner Incentive distributions attributable to the General Partner (a) - Net income attributable to common units Weighted average common units outstanding (millions) – basic and diluted Net income per common unit – basic and diluted $ $ (a) Under the terms of the Partnership Agreement, for any quarterly period, the participation of the incentive distribution rights (IDRs) is limited to the available cash distributions declared. Accordingly, incentive distributions allocated to the General Partner are based on the Partnership’s available cash during the current reporting period, but declared and paid in the subsequent reporting period. |
CASH DISTRIBUTIONS
CASH DISTRIBUTIONS | 3 Months Ended |
Mar. 31, 2016 | |
CASH DISTRIBUTIONS | |
CASH DISTRIBUTIONS | NOTE 9 CASH DISTRIBUTIONS In the three months ended March 31, 2016, the Partnership distributed $0.89 per common unit (2015 – $0.84) for a total of $60 million (2015 - $55 million). The distributions paid in the three months ended March 31, 2016 included an incentive distribution to the General Partner of approximately $1 million (2015- $0.3 million). |
CHANGE IN OPERATING WORKING CAP
CHANGE IN OPERATING WORKING CAPITAL | 3 Months Ended |
Mar. 31, 2016 | |
CHANGE IN OPERATING WORKING CAPITAL | |
CHANGE IN OPERATING WORKING CAPITAL | NOTE 10 CHANGE IN OPERATING WORKING CAPITAL (unaudited) Three months ended March 31, (millions of dollars) 2016 2015 Change in accounts receivable and other Change in accounts payable and accrued liabilities 3 (a) Change in accounts payable to affiliates Change in accrued interest Change in operating working capital (a) The accrual of $10 million for the construction of GTN’s Carty Lateral in December 31, 2015 was paid during the current quarter. Accordingly, the payment was reported as capital expenditures in our cash flow statement during the current quarter. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Mar. 31, 2016 | |
RELATED PARTY TRANSACTIONS | |
RELATED PARTY TRANSACTIONS | NOTE 11 RELATED PARTY TRANSACTIONS The Partnership does not have any employees. The management and operating functions are provided by the General Partner. The General Partner does not receive a management fee in connection with its management of the Partnership. The Partnership reimburses the General Partner for all costs of services provided, including the costs of employee, officer and director compensation and benefits, and all other expenses necessary or appropriate to the conduct of the business of, and allocable to, the Partnership. Such costs include (i) overhead costs (such as office space and equipment) and (ii) out-of-pocket expenses related to the provision of such services. The Partnership Agreement provides that the General Partner will determine the costs that are allocable to the Partnership in any reasonable manner determined by the General Partner in its sole discretion. Total costs charged to the Partnership by the General Partner were $1 million for the three months ended March 31, 2016 and 2015. As operator, TransCanada’s subsidiaries provide capital and operating services to our pipeline systems. TransCanada’s subsidiaries incur costs on behalf of our pipeline systems, including, but not limited to, employee salary and benefit costs, and property and liability insurance costs. Capital and operating costs charged to our pipeline systems for the three months ended March 31, 2016 and 2015 by TransCanada’s subsidiaries and amounts payable to TransCanada’s subsidiaries at March 31, 2016 and December 31, 2015 are summarized in the following tables: Three months ended (unaudited) March 31, (millions of dollars) 2016 2015 Capital and operating costs charged by TransCanada’s subsidiaries to: Great Lakes (a) 7 6 Northern Border (a) 6 7 PNGTS (a), (c) 2 - GTN (a) 6 6 Bison (d) (1) 1 North Baja 1 1 Tuscarora 1 1 Impact on the Partnership’s net income: Great Lakes 3 3 Northern Border 3 3 PNGTS (c) 1 - GTN (b) 5 4 Bison 1 1 North Baja 1 1 Tuscarora 1 1 (unaudited) (millions of dollars) March 31, 2016 December 31, 2015 Net amounts (receivable)/payable to TransCanada’s subsidiaries is as follows: Great Lakes (a) Northern Border (a) PNGTS (a) - GTN Bison - North Baja - - Tuscarora (a) Represents 100 percent of the costs. (b) In April 2015, the Partnership acquired the remaining 30 percent interest in GTN. (c) In January 2016, the Partnership acquired 49.9 percent interest in PNGTS. (d) In March 2016, Bison sold excess pipe (at cost) to an affiliate. Great Lakes’ earns revenues from TransCanada and its affiliates, some of which are provided at discounted rates and some are at maximum recourse rates. Great Lakes earned $46 million of transportation revenues under these contracts for the three months ended March 31, 2016 (2015 - $29 million). These amounts represent 76 percent of total revenues earned by Great Lakes for the three months ended March 31, 2016 (2015 – 61 percent). Accordingly, revenue from TransCanada and its affiliates of $22 million is included in the Partnership’s equity earnings from Great Lakes for the three months ended March 31, 2016 (2015 - $14 million). At March 31, 2016, $15 million was included in Great Lakes’ receivables in regards to the transportation contracts with TransCanada and its affiliates (December 31, 2015 - $17 million). Effective November 1, 2014, Great Lakes executed contracts with an affiliate, ANR Pipeline Company (ANR), to provide firm service in Michigan and Wisconsin. These contracts were at the maximum FERC authorized rate and were intended to replace historical contracts. On December 3, 2014, the FERC accepted and suspended Great Lakes’ tariff records to become effective May 3, 2015, subject to refund. On February 2, 2015, FERC issued an Order granting a rehearing and clarification request submitted by Great Lakes, which allowed additional time for FERC to consider Great Lakes’ request. Following extensive discussions with numerous shippers and other stakeholders, on April 20, 2015, ANR filed a settlement with FERC that included an agreement by ANR to pay Great Lakes the difference between the historical and maximum rates (ANR Settlement). Great Lakes provided service to ANR under multiple service agreements and rates through May 3, 2015 when Great Lakes’ tariff records became effective and subject to refund. Great Lakes deferred an approximate $9 million of revenue related to services performed in 2014 and approximately $14 million of additional revenue related to services performed through May 3, 2015 under such agreements. On October 15, 2015, FERC accepted and approved the ANR Settlement. As a result, Great Lakes recognized the deferred transportation revenue of approximately $23 million in the fourth quarter of 2015. On March 11, 2016, PNGTS declared its first quarter 2016 distribution of $13 million, of which the Partnership received its 49.9 percent share or $6 million on April 18, 2016. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 3 Months Ended |
Mar. 31, 2016 | |
FAIR VALUE MEASUREMENTS | |
FAIR VALUE MEASUREMENTS | NOTE 12 FAIR VALUE MEASUREMENTS (a) Fair Value Hierarchy Under ASC 820, Fair Value Measurements and Disclosures , fair value measurements are characterized in one of three levels based upon the inputs used to arrive at the measurement. The three levels of the fair value hierarchy are as follows: · Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that we have the ability to access at the measurement date. · Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. · Level 3 inputs are unobservable inputs for the asset or liability. When appropriate, valuations are adjusted for various factors including credit considerations. Such adjustments are generally based on available market evidence. In the absence of such evidence, management’s best estimate is used. (b) Fair Value of Financial Instruments The carrying value of cash and cash equivalents, accounts receivable and other, accounts payable and accrued liabilities, accounts payable to affiliates and accrued interest approximate their fair values because of the short maturity or duration of these instruments, or because the instruments bear a variable rate of interest or a rate that approximates current rates. The fair value of the Partnership’s debt is estimated by discounting the future cash flows of each instrument at estimated current borrowing rates. The fair value of interest rate derivatives is calculated using the income approach, which uses period-end market rates and applies a discounted cash flow valuation model. Long-term debt is recorded at amortized cost and classified in Level II of the fair value hierarchy for fair value disclosure purposes. Interest rate derivative assets and liabilities are classified in Level II for all periods presented where the fair value is determined by using valuation techniques that refer to observable market data or estimated market prices. The estimated fair value of the Partnership’s debt as at March 31, 2016 and December 31, 2015 was $2,037 million and $1,873 million, respectively. Market risk is the risk that changes in market interest rates may result in fluctuations in the fair values or cash flows of financial instruments. The Partnership’s floating rate debt is subject to LIBOR benchmark interest rate risk. The Partnership uses interest rate derivatives to manage its exposure to interest rate risk. We regularly assess the impact of interest rate fluctuations on future cash flows and evaluate hedging opportunities to mitigate our interest rate risk. The interest rate swaps are structured such that the cash flows of the derivative instruments match those of the variable rate of interest on the 2013 Term Loan Facility. The Partnership hedged interest payments on the variable-rate 2013 Term Loan Facility with interest rate swaps maturing July 1, 2018, at a weighted average fixed interest rate of 2.31 percent. At March 31, 2016, the fair value of the interest rate swaps accounted for as cash flow hedges was a liability of $4 million (both on a gross and net basis) (December 31, 2015 - $1 million). The Partnership did not record any amounts in net income related to ineffectiveness for interest rate hedges for the three months ended March 31, 2016 and 2015. The change in fair value of interest rate derivative instruments recognized in other comprehensive income was a loss of $2 million for the three months ended March 31, 2016 (2015 – $1 million). For the three months ended March 31, 2016, the net realized loss related to the interest rate swaps was nil million and was included in financial charges and other (2015 – $1 million) (refer to Note 14). The Partnership has no master netting agreements; however, it has derivative contracts containing provisions with rights of offset. The Partnership has elected to present the fair value of derivative instruments with the right to offset on a gross basis in the balance sheet. Had the Partnership elected to present these instruments on a net basis, there would be no effect on the consolidated balance sheet as of March 31, 2016 and December 31, 2015. |
ACCOUNTS RECEIVABLE AND OTHER
ACCOUNTS RECEIVABLE AND OTHER | 3 Months Ended |
Mar. 31, 2016 | |
ACCOUNTS RECEIVABLE AND OTHER | |
ACCOUNTS RECEIVABLE AND OTHER | NOTE 13 ACCOUNTS RECEIVABLE AND OTHER (unaudited) (millions of dollars) March 31, 2016 December 31, 2015 Trade accounts receivable, net of allowance of nil Other |
FINANCIAL CHARGES AND OTHER
FINANCIAL CHARGES AND OTHER | 3 Months Ended |
Mar. 31, 2016 | |
FINANCIAL CHARGES AND OTHER | |
FINANCIAL CHARGES AND OTHER | NOTE 14 FINANCIAL CHARGES AND OTHER Three months ended (unaudited) March 31, (millions of dollars) 2016 2015 Interest Expense (a) Net realized loss related to the interest rate swaps - Other Income - (a) Effective January 1, 2016, interest expense includes debt issuance costs and amortization of discount costs. Refer to Note 3. |
CONTINGENCIES
CONTINGENCIES | 3 Months Ended |
Mar. 31, 2016 | |
CONTINGENCIES | |
CONTINGENCIES | NOTE 15 CONTINGENCIES Great Lakes v. Essar Steel Minnesota LLC, et al . – On October 29, 2009, Great Lakes filed suit in the U.S. District Court, District of Minnesota, against Essar Minnesota LLC and certain Essar affiliates (collectively, Essar) for breach of its monthly payment obligation under its transportation services agreement with Great Lakes. Great Lakes sought to recover approximately $33 million for past and future payments due under the agreement. On September 16, 2015, following a jury trial, the federal district court judge entered a judgment in the amount of $32.9 million in favor of Great Lakes. On September 20, 2015, Essar appealed the decision to the United States Court of Appeals for the 8th Circuit (8th Circuit) based on an allegation of improper jurisdiction and a number of other rulings by the federal district judge. Essar was required to post a performance bond for the full value of the judgment pending appeal. Essar filed its brief in April 2016 and Great Lakes’ brief is due May 18th, 2016. The court will set a hearing date after it received the briefings. The matter is expected to be heard in 2016. Employees Retirement System of the City of St. Louis v. TC PipeLines GP, Inc., et al . – On October 13, 2015, an alleged unitholder of the Partnership filed a class action and derivative complaint in the Delaware Court of Chancery (Chancery Court) against the General Partner, TransCanada American Investments, Ltd. (TAIL) and TransCanada, and the Partnership as a nominal defendant. The complaint alleges direct and derivative claims for breach of contract, breach of the duty of good faith and fair dealing, aiding and abetting breach of contract, and tortious interference in connection with the 2015 GTN Acquisition, including the issuance by the Partnership of $95 million in Class B Units and amendments to the Partnership Agreement to provide for the issuance of the Class B Units. Plaintiff seeks, among other things, to enjoin future issuances of Class B Units to TransCanada or any of its subsidiaries, disgorgement of certain distributions to the General Partner, TransCanada and any related entities, return of some or all of the Class B Units to the Partnership, rescission of the amendments to the Partnership Agreement, monetary damages and attorney fees. To the extent the claims are derivative, the Partnership would be the beneficiary of any monetary award. The Partnership does not expect legal fees or the impact of the decision on plaintiffs’ other requests to be material. In April 2016, the Chancery Court held a hearing on the Partnership and other defendants’ motion to dismiss the plaintiffs’ complaint. A decision on the motion is expected in late second quarter of 2016 or early third quarter 2016. |
REGULATORY
REGULATORY | 3 Months Ended |
Mar. 31, 2016 | |
REGULATORY | |
REGULATORY | NOTE 16 REGULATORY Tuscarora - On January 21, 2016, the FERC issued an Order (the January 21 Order) initiating an investigation pursuant to Section 5 of the NGA to determine whether Tuscarora’s existing rates for jurisdictional services are just and reasonable. On April 5, 2016, Tuscarora filed with the FERC a cost and revenue study as required by the January 21 Order that supported its current rate levels. The Partnership cannot predict the outcome or potential impact of this proceeding to Tuscarora at this time. |
VARIABLE INTEREST ENTITIES
VARIABLE INTEREST ENTITIES | 3 Months Ended |
Mar. 31, 2016 | |
VARIABLE INTEREST ENTITIES | |
VARIABLE INTEREST ENTITIES | NOTE 17 VARIABLE INTEREST ENTITIES In the normal course of business, the Partnership must re-evaluate its legal entities under the newly effective consolidation guidance to determine if those that are considered to be VIEs are appropriately consolidated or if they should be accounted for under other US GAAP. A variable interest entity (VIE) is a legal entity that does not have sufficient equity at risk to finance its activities without additional subordinated financial support or is structured such that equity investors lack the ability to make significant decisions relating to the entity’s operations through voting rights or do not substantively participate in the gains or losses of the entity. A VIE is appropriately consolidated if the Partnership is considered to be the primary beneficiary. The VIE’s primary beneficiary is the entity that has both (1) the power to direct the activities of the VIE that most significantly impact the VIEs economic performance and (2) the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE. As a result of its analysis, the Partnership continues to consolidate all legal entities in which it has a variable interest and for which it is considered to be the primary beneficiary. VIEs where the Partnership is not the primary beneficiary, but has a variable interest in the entity, are accounted for as equity investments. Consolidated VIEs The Partnership’s consolidated VIEs consist of the Partnership’s ILPs that holds interests in the Partnership’s pipeline systems. After considering the purpose and design of the ILPs and the risks that they were designed to create and pass through to the Partnership, the Partnership has concluded that it is the primary beneficiary of these ILPs because of the significant amount of variability that it absorbs from the ILPs’ economic performance. The assets and liabilities held through these VIEs whose assets cannot be used for purposes other the settlement of the VIEs’ obligations are held through GTN, Tuscarora, Northern Border, Great Lakes and PNGTS due to their third party debt. The following table presents the total assets and liabilities of these entities that are included in the Partnership’s Consolidated Balance Sheet: (unaudited) (millions of dollars) March 31, 2016 December 31, 2015 ASSETS (LIABILITIES)* Accounts receivable and other Inventories Equity investments Plant, property and equipment Other assets Accounts payable and accrued liabilities Accounts payable to affiliates Accrued interest Current portion of long-term debt Long-term debt Other liabilities * North Baja and Bison, which are also assets held through our consolidated VIEs, were excluded as the assets of these entities can be used for purposes other than the settlement of the VIEs’ obligations. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2016 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | NOTE 18 SUBSEQUENT EVENTS Management of the Partnership has reviewed subsequent events through May 5, 2016, the date the financial statements were issued, and concluded there were no events or transactions during this period that would require recognition or disclosure in the consolidated financial statements other than what is disclosed here and/or those already disclosed in the preceding notes. On April 21, 2016, the board of directors of our General Partner declared the Partnership’s first quarter 2016 cash distribution in the amount of $0.89 per common unit payable on May 13, 2016 to unitholders of record as of May 2, 2016. Northern Border declared its first quarter 2016 distribution of $45 million on April 19, 2016, of which the Partnership will receive its 50 percent share or $23 million on May 2, 2016. Great Lakes declared its first quarter 2016 distribution of $36 million on April 19, 2016, of which the Partnership will receive its 46.45 percent share or $17 million on May 2, 2016. On April 29, 2016, Tuscarora entered into a $9.5 million unsecured variable rate term loan facility which requires yearly principal payments until its maturity on April 29, 2019. The variable interest is based on LIBOR plus an applicable margin. |
SIGNIFICANT ACCOUNTING POLICI27
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
SIGNIFICANT ACCOUNTING POLICIES | |
Use of Estimates | Use of Estimates The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Although management believes these estimates are reasonable, actual results could differ from these estimates. |
EQUITY INVESTMENTS (Tables)
EQUITY INVESTMENTS (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Equity Investments | |
Schedule of equity investments and summarized financial information for equity investees | Equity Earnings Equity Investments Ownership Interest at Three months (unaudited) March 31, ended March 31, March 31, December 31, (millions of dollars) 2016 2015 2016 2015 Northern Border (a) 18 Great Lakes 15 PNGTS (b) 9 - - 42 (a) Equity earnings from Northern Border is net of the 12-year amortization of a $10 million transaction fee paid to the operator of Northern Border at the time of the Partnership’s additional 20 percent interest acquisition in April 2006. (b) On January 1, 2016, the Partnership acquired a 49.9 percent interest in PNGTS (Refer to Note 6). For the three months ending March 31, 2016, the Partnership recorded no undistributed earnings from PNGTS. |
Northern Border | |
Equity Investments | |
Schedule of equity investments and summarized financial information for equity investees | (unaudited) (millions of dollars) March 31, 2016 December 31, 2015 ASSETS Cash and cash equivalents Other current assets Plant, property and equipment, net Other assets (a) LIABILITIES AND PARTNERS’ EQUITY Current liabilities Deferred credits and other Long-term debt, including current maturities, net (a) Partners’ equity Partners’ capital Accumulated other comprehensive loss (a) As a result of the application of ASU No. 2015-03 and similar to the presentation of debt discounts, debt issuance costs of $2 million at December 31, 2015 previously reported as other assets in the balance sheet were reclassified as an offset against their respective debt liabilities. Three months ended (unaudited) March 31, (millions of dollars) 2015 Transmission revenues Operating expenses Depreciation Financial charges and other Net income |
Great Lakes | |
Equity Investments | |
Schedule of equity investments and summarized financial information for equity investees | (unaudited) (millions of dollars) March 31, 2016 December 31, 2015 (a) ASSETS Current assets Plant, property and equipment, net LIABILITIES AND PARTNERS’ EQUITY Current liabilities Long-term debt, including current maturities, net (a) Partners’ equity (a) The application of ASU No. 2015-03 did not have a material effect of Great Lakes’ financial statements. Three months ended (unaudited) March 31, (millions of dollars) 2016 2015 Transmission revenues Operating expenses Depreciation Financial charges and other Net income |
DEBT AND CREDIT FACILITIES (Tab
DEBT AND CREDIT FACILITIES (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
DEBT AND CREDIT FACILITIES | |
Schedule of debt and credit facilities | (unaudited) (millions of dollars) March 31, 2016 December 31, 2015 (a) Weighted Average Interest Rate for the Three Months Ended March 31, 2016 TC PipeLines, LP Senior Credit Facility due 2017 370 200 TC PipeLines, LP 2013 Term Loan Facility due 2018 500 500 TC PipeLines, LP 2015 Term Loan Facility due 2018 170 170 TC PipeLines, LP 4.65% Unsecured Senior Notes due 2021 350 350 4.65% (b) TC PipeLines, LP 4.375% Unsecured Senior Notes due 2025 350 350 4.375% (b) GTN 5.29% Unsecured Senior Notes due 2020 100 100 5.29% (b) GTN 5.69% Unsecured Senior Notes due 2035 150 150 5.69% (b) GTN Unsecured Term Loan Facility due 2019 75 75 Tuscarora 3.82% Series D Senior Notes due 2017 16 16 3.82% (b) 2,081 1,911 Less: unamortized debt issuance costs and debt discount (a) 8 8 Less: current portion 14 14 2,059 1,889 (a) As a result of the application of ASU no. 2015-03 and similar to the presentation of debt discounts, debt issuance costs of $7 million at December 31, 2015 previously reported as other assets in the balance sheet were reclassified as an offset against debt (Refer to Note 3). (b) Fixed interest rate |
Schedule of principal repayments required on debt | (unaudited) (millions of dollars) 2016 2017 2018 2019 2020 Thereafter |
ACQUISITION (Tables)
ACQUISITION (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Portland Natural Gas Transmission System | |
Equity Investments | |
Schedule of net purchase price of equity investment in PNGTS | (millions of dollars) Net Purchase Price (a) Less: TransCanada’s carrying value of PNGTS’ net assets at January 1, 2016 Excess purchase price (b) (a) Total purchase price of $228 million less the assumption of $35 million of proportional PNGTS debt by the Partnership. (b) The excess purchase price of $73 million was recorded as a reduction in Partners’ Equity. |
NET INCOME PER COMMON UNIT (Tab
NET INCOME PER COMMON UNIT (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
NET INCOME PER COMMON UNIT | |
Schedule of net income per common unit | (unaudited) Three months ended March 31, (millions of dollars, except per common unit amounts) 2016 2015 Net income attributable to controlling interests Net income attributable to the General Partner Incentive distributions attributable to the General Partner (a) - Net income attributable to common units Weighted average common units outstanding (millions) – basic and diluted Net income per common unit – basic and diluted $ $ (a) Under the terms of the Partnership Agreement, for any quarterly period, the participation of the incentive distribution rights (IDRs) is limited to the available cash distributions declared. Accordingly, incentive distributions allocated to the General Partner are based on the Partnership’s available cash during the current reporting period, but declared and paid in the subsequent reporting period. |
CHANGE IN OPERATING WORKING C32
CHANGE IN OPERATING WORKING CAPITAL (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
CHANGE IN OPERATING WORKING CAPITAL | |
Schedule of change in operating working capital | (unaudited) Three months ended March 31, (millions of dollars) 2016 2015 Change in accounts receivable and other Change in accounts payable and accrued liabilities 3 (a) Change in accounts payable to affiliates Change in accrued interest Change in operating working capital (a) The accrual of $10 million for the construction of GTN’s Carty Lateral in December 31, 2015 was paid during the current quarter. Accordingly, the payment was reported as capital expenditures in our cash flow statement during the current quarter. |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
RELATED PARTY TRANSACTIONS | |
Summary of capital and operating costs charged to pipeline systems by related party | Three months ended (unaudited) March 31, (millions of dollars) 2016 2015 Capital and operating costs charged by TransCanada’s subsidiaries to: Great Lakes (a) 7 6 Northern Border (a) 6 7 PNGTS (a), (c) 2 - GTN (a) 6 6 Bison (d) (1) 1 North Baja 1 1 Tuscarora 1 1 Impact on the Partnership’s net income: Great Lakes 3 3 Northern Border 3 3 PNGTS (c) 1 - GTN (b) 5 4 Bison 1 1 North Baja 1 1 Tuscarora 1 1 |
Summary of amount payable to related party for costs charged | (unaudited) (millions of dollars) March 31, 2016 December 31, 2015 Net amounts (receivable)/payable to TransCanada’s subsidiaries is as follows: Great Lakes (a) Northern Border (a) PNGTS (a) - GTN Bison - North Baja - - Tuscarora (a) Represents 100 percent of the costs. (b) In April 2015, the Partnership acquired the remaining 30 percent interest in GTN. (c) In January 2016, the Partnership acquired 49.9 percent interest in PNGTS. (d) In March 2016, Bison sold excess pipe (at cost) to an affiliate. |
ACCOUNTS RECEIVABLE AND OTHER (
ACCOUNTS RECEIVABLE AND OTHER (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
ACCOUNTS RECEIVABLE AND OTHER | |
Schedule of accounts receivable and other | (unaudited) (millions of dollars) March 31, 2016 December 31, 2015 Trade accounts receivable, net of allowance of nil Other |
FINANCIAL CHARGES AND OTHER (Ta
FINANCIAL CHARGES AND OTHER (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
FINANCIAL CHARGES AND OTHER | |
Schedule of components of financial charges and other | Three months ended (unaudited) March 31, (millions of dollars) 2016 2015 Interest Expense (a) Net realized loss related to the interest rate swaps - Other Income - (a) Effective January 1, 2016, interest expense includes debt issuance costs and amortization of discount costs. Refer to Note 3. |
VARIABLE INTEREST ENTITIES (Tab
VARIABLE INTEREST ENTITIES (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
VARIABLE INTEREST ENTITIES | |
Schedule of assets and liabilities held through VIEs whose assets cannot be used for purposes other settlement of their obligations | (unaudited) (millions of dollars) March 31, 2016 December 31, 2015 ASSETS (LIABILITIES)* Accounts receivable and other Inventories Equity investments Plant, property and equipment Other assets Accounts payable and accrued liabilities Accounts payable to affiliates Accrued interest Current portion of long-term debt Long-term debt Other liabilities * North Baja and Bison, which are also assets held through our consolidated VIEs, were excluded as the assets of these entities can be used for purposes other than the settlement of the VIEs’ obligations. |
ORGANIZATION - Ownership Intere
ORGANIZATION - Ownership Interests in Natural Gas Pipeline Systems (Details) | 3 Months Ended |
Mar. 31, 2016LimitedPartnership | |
ORGANIZATION | |
Number of intermediate limited partnerships through which pipeline assets are owned | 3 |
ACCOUNTING PRONOUNCEMENTS - Imp
ACCOUNTING PRONOUNCEMENTS - Imputation of Interest (Details) - USD ($) $ in Millions | Mar. 31, 2016 | Dec. 31, 2015 |
ACCOUNTING PRONOUNCEMENTS | ||
Other assets | $ 1 | |
Long-term debt | $ 2,059 | 1,889 |
ASU 2015-03, Interest - Imputation of Interest | Adjustment | ||
ACCOUNTING PRONOUNCEMENTS | ||
Other assets | (7) | |
Long-term debt | $ (7) |
EQUITY INVESTMENTS (Details)
EQUITY INVESTMENTS (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | |||
Apr. 30, 2006 | Mar. 31, 2016 | Mar. 31, 2015 | Jan. 01, 2016 | Dec. 31, 2015 | |
Equity Investments | |||||
Equity Earnings | $ 42 | $ 31 | |||
Equity Investments | 1,083 | $ 965 | |||
Great Lakes | |||||
Equity Investments | |||||
Total cash call issued to fund debt repayment | $ 9 | ||||
Northern Border | |||||
Equity Investments | |||||
Ownership interest (as a percent) | 50.00% | ||||
Equity Earnings | $ 18 | 20 | |||
Equity Investments | 476 | 480 | |||
Amortization period of transaction fee | 12 years | ||||
Transaction fee | $ 10 | ||||
Additional ownership interest acquired (as a percent) | 20.00% | ||||
Assets | |||||
Cash and cash equivalents | 35 | 27 | |||
Other current assets | 34 | 33 | |||
Plant, property and equipment, net | 1,117 | 1,124 | |||
Other assets | 15 | 16 | |||
Assets, total | 1,201 | 1,200 | |||
LIABILITIES AND PARTNERS' EQUITY | |||||
Current liabilities | 46 | 39 | |||
Deferred credits and other | 26 | 26 | |||
Long-term debt, including current maturities, net | 409 | 409 | |||
Partners' equity | |||||
Partners' equity | 722 | 728 | |||
Accumulated other comprehensive loss | (2) | (2) | |||
Liabilities and Partners' Equity, total | 1,201 | 1,200 | |||
Revenues (expenses) | |||||
Transmission revenues | 74 | 75 | |||
Operating expenses | (16) | (16) | |||
Depreciation | (15) | (15) | |||
Financial charges and other | (6) | (5) | |||
Net income | $ 37 | 39 | |||
Great Lakes | |||||
Equity Investments | |||||
Ownership interest (as a percent) | 46.45% | ||||
Equity Earnings | $ 15 | 11 | |||
Equity Investments | 485 | 485 | |||
Equity contribution | 4 | 4 | |||
Assets | |||||
Current assets | 73 | 86 | |||
Plant, property and equipment, net | 725 | 727 | |||
Assets, total | 798 | 813 | |||
LIABILITIES AND PARTNERS' EQUITY | |||||
Current liabilities | 25 | 31 | |||
Long-term debt, including current maturities, net | 288 | 297 | |||
Partners' equity | |||||
Partners' equity | 485 | 485 | |||
Liabilities and Partners' Equity, total | 798 | 813 | |||
Revenues (expenses) | |||||
Transmission revenues | 61 | 48 | |||
Operating expenses | (15) | (11) | |||
Depreciation | (7) | (7) | |||
Financial charges and other | (6) | (6) | |||
Net income | $ 33 | $ 24 | |||
Portland Natural Gas Transmission System | |||||
Equity Investments | |||||
Ownership interest (as a percent) | 49.90% | 49.90% | |||
Equity Earnings | $ 9 | ||||
Equity Investments | 122 | ||||
Undistributed earnings | 0 | ||||
Equity contribution | $ 193 | ||||
ASU 2015-03, Interest - Imputation of Interest | Adjustment | Northern Border | |||||
Assets | |||||
Other assets | (2) | ||||
LIABILITIES AND PARTNERS' EQUITY | |||||
Long-term debt, including current maturities, net | $ (2) |
DEBT AND CREDIT FACILITIES - Am
DEBT AND CREDIT FACILITIES - Amounts Outstanding and Description of Terms (Details) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2016USD ($)entity | Mar. 31, 2015USD ($) | Dec. 31, 2014 | Dec. 31, 2015USD ($) | |
Credit facilities, short-term loan facility and long-term debt | ||||
Other assets | $ 1,000,000 | |||
Less: unamortized debt issuance costs and debt discount | $ 8,000,000 | 8,000,000 | ||
Less: current portion | 14,000,000 | 14,000,000 | ||
Long-term debt | 2,059,000,000 | 1,889,000,000 | ||
Amount borrowed | $ 195,000,000 | $ 349,000,000 | ||
Senior Credit Facility and the Term Loan Facilities due in 2018 | ||||
Credit facilities, short-term loan facility and long-term debt | ||||
Leverage ratio, actual (as a percent) | 486.00% | |||
Senior Credit Facility and the Term Loan Facilities due in 2018 | Debt agreement covenants, initial period after occurrence of acquisition | ||||
Credit facilities, short-term loan facility and long-term debt | ||||
Additional period immediately following the fiscal quarter in which a specified material acquisition occurs | 6 months | |||
Senior Credit Facility and the Term Loan Facilities due in 2018 | Debt agreement covenants, initial period after occurrence of acquisition | Minimum | ||||
Credit facilities, short-term loan facility and long-term debt | ||||
Number of acquisitions | entity | 1 | |||
Senior Credit Facility and the Term Loan Facilities due in 2018 | Debt agreement covenants, initial period after occurrence of acquisition | Maximum | ||||
Credit facilities, short-term loan facility and long-term debt | ||||
Leverage ratio, covenant (as a percent) | 550.00% | |||
Senior Credit Facility and the Term Loan Facilities due in 2018 | Debt agreement covenants, periods subsequent to initial period after occurrence of acquisition | Maximum | ||||
Credit facilities, short-term loan facility and long-term debt | ||||
Leverage ratio, covenant (as a percent) | 500.00% | |||
Revolving credit facility | TC PipeLines, LP Senior Credit Facility due 2017 | ||||
Credit facilities, short-term loan facility and long-term debt | ||||
Debt and credit facilities | $ 370,000,000 | 200,000,000 | ||
Weighted Average Interest Rate (as a percent) | 1.68% | |||
Maximum borrowing capacity | $ 500,000,000 | |||
Amount outstanding under credit facility | 370,000,000 | 200,000,000 | ||
Remaining borrowing capacity | 130,000,000 | |||
Term loan | TC PipeLines, LP 2013 Term Loan Facility due 2018 | ||||
Credit facilities, short-term loan facility and long-term debt | ||||
Debt and credit facilities | $ 500,000,000 | $ 500,000,000 | ||
Weighted Average Interest Rate (as a percent) | 1.68% | |||
Term loan | TC PipeLines, LP 2013 Term Loan Facility due 2018 | LIBOR borrowings | LIBOR | ||||
Credit facilities, short-term loan facility and long-term debt | ||||
Debt interest rate, at period end (as a percent) | 1.69% | 1.50% | ||
Term loan | TC PipeLines, LP 2013 Term Loan Facility due 2018 | LIBOR borrowings | LIBOR | Hedges of cash flows | Interest rate swaps | ||||
Credit facilities, short-term loan facility and long-term debt | ||||
Weighted Average Interest Rate (as a percent) | 2.20% | 1.83% | 1.83% | |
Term loan | TC PipeLines, LP 2015 Term Loan Facility due 2018 | ||||
Credit facilities, short-term loan facility and long-term debt | ||||
Debt and credit facilities | $ 170,000,000 | $ 170,000,000 | ||
Weighted Average Interest Rate (as a percent) | 1.57% | |||
Unsecured debt | TC PipeLines, LP 4.65% Senior Notes due 2021 | ||||
Credit facilities, short-term loan facility and long-term debt | ||||
Stated interest rate (as a percent) | 4.65% | 4.65% | ||
Debt and credit facilities | $ 350,000,000 | $ 350,000,000 | ||
Weighted Average Interest Rate (as a percent) | 4.65% | |||
Unsecured debt | TC PipeLines, LP 4.375% Senior Notes due 2025 | ||||
Credit facilities, short-term loan facility and long-term debt | ||||
Stated interest rate (as a percent) | 4.375% | 4.375% | ||
Debt and credit facilities | $ 350,000,000 | $ 350,000,000 | ||
Weighted Average Interest Rate (as a percent) | 4.375% | |||
Unsecured debt | GTN 5.29% Senior Notes due 2020 | ||||
Credit facilities, short-term loan facility and long-term debt | ||||
Stated interest rate (as a percent) | 5.29% | 5.29% | ||
Debt and credit facilities | $ 100,000,000 | $ 100,000,000 | ||
Weighted Average Interest Rate (as a percent) | 5.29% | |||
Unsecured debt | GTN 5.69% Senior Notes due 2035 | ||||
Credit facilities, short-term loan facility and long-term debt | ||||
Stated interest rate (as a percent) | 5.69% | 5.69% | ||
Debt and credit facilities | $ 150,000,000 | $ 150,000,000 | ||
Weighted Average Interest Rate (as a percent) | 5.69% | |||
Unsecured debt | GTN Term Loan Facility due 2019 | ||||
Credit facilities, short-term loan facility and long-term debt | ||||
Debt and credit facilities | $ 75,000,000 | $ 75,000,000 | ||
Weighted Average Interest Rate (as a percent) | 1.37% | |||
Secured debt | Tuscarora 3.82% Series D Senior Notes due 2017 | ||||
Credit facilities, short-term loan facility and long-term debt | ||||
Stated interest rate (as a percent) | 3.82% | 3.82% | ||
Debt and credit facilities | $ 16,000,000 | $ 16,000,000 | ||
Weighted Average Interest Rate (as a percent) | 3.82% | |||
GTN | Unsecured debt | Senior Notes and Term Loan Facility due 2019 | ||||
Credit facilities, short-term loan facility and long-term debt | ||||
Percentage of debt to total capitalization, actual | 44.10% | |||
GTN | Unsecured debt | Senior Notes and Term Loan Facility due 2019 | Maximum | ||||
Credit facilities, short-term loan facility and long-term debt | ||||
Percentage of debt to total capitalization, covenant | 70.00% | |||
Tuscarora Gas Transmission Company | Unsecured debt | Tuscarora 3.82% Series D Senior Notes due 2017 | ||||
Credit facilities, short-term loan facility and long-term debt | ||||
Percentage of debt to total capitalization, actual | 15.10% | |||
Debt Service Coverage, Actual (as a percent) | 456.00% | |||
Tuscarora Gas Transmission Company | Unsecured debt | Tuscarora 3.82% Series D Senior Notes due 2017 | Minimum | ||||
Credit facilities, short-term loan facility and long-term debt | ||||
Debt Service Coverage, covenant (as a percent) | 300.00% | |||
Tuscarora Gas Transmission Company | Unsecured debt | Tuscarora 3.82% Series D Senior Notes due 2017 | Maximum | ||||
Credit facilities, short-term loan facility and long-term debt | ||||
Percentage of debt to total capitalization, covenant | 45.00% | |||
ASU 2015-03, Interest - Imputation of Interest | Adjustment | ||||
Credit facilities, short-term loan facility and long-term debt | ||||
Other assets | (7,000,000) | |||
Long-term debt | $ (7,000,000) |
DEBT AND CREDIT FACILITIES - Pr
DEBT AND CREDIT FACILITIES - Principal Payments Required (Details) $ in Millions | Mar. 31, 2016USD ($) |
Principal repayments required on debt | |
2,016 | $ 14 |
2,017 | 392 |
2,018 | 690 |
2,019 | 35 |
2,020 | 100 |
Thereafter | 850 |
Total debt | $ 2,081 |
ACQUISITION - Acquisition of Ow
ACQUISITION - Acquisition of Ownership Interest in PNGTS (Details) - Portland Natural Gas Transmission System - USD ($) $ in Millions | Jan. 01, 2016 | Mar. 31, 2016 |
Acquisition | ||
Interest acquired (as a percent) | 49.90% | 49.90% |
Net purchase price | $ 193 | |
TransCanada | Transaction between entities under common control | ||
Acquisition | ||
Total purchase price | $ 228 | |
Net purchase price | 193 | |
Purchase price adjustments | 5 | |
Assumption of proportional debt | 35 | |
Additional contingent payment, minimum | 5 | |
Additional contingent payment, maximum | $ 50 | |
Period following closing date during which additional payments may be required | 15 years |
ACQUISITION - Net Purchase Pric
ACQUISITION - Net Purchase Price of PNGTS (Details) - USD ($) $ in Millions | Jan. 01, 2016 | Mar. 31, 2016 |
Equity Investments | ||
Reduction in Partners' Equity | $ 73 | |
Portland Natural Gas Transmission System | ||
Equity Investments | ||
Net purchase price | $ 193 | |
Transaction between entities under common control | TransCanada | Portland Natural Gas Transmission System | ||
Equity Investments | ||
Net purchase price | $ 193 | |
Less: TransCanada's carrying value of PNGTS' net assets | (120) | |
Excess purchase price | 73 | |
Total purchase price | 228 | |
Proportional debt | 35 | |
Common units and General Partner interest combined | Transaction between entities under common control | TransCanada | Portland Natural Gas Transmission System | ||
Equity Investments | ||
Reduction in Partners' Equity | $ 73 |
PARTNERS' EQUITY - ATM Equity I
PARTNERS' EQUITY - ATM Equity Issuance Program (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
TC PipeLines GP, Inc. | General Partner | ||
Partners' Equity | ||
Ownership interest in the Partnership (as a percent) | 2.00% | 2.00% |
ATM Equity Issuance Program | Common units | ||
Partners' Equity | ||
Units sold | 368,448 | |
Net proceeds from public offering of common units | $ 19,000,000 | |
Sales agent commissions | 186,000 | |
ATM Equity Issuance Program | TC PipeLines GP, Inc. | General Partner | ||
Partners' Equity | ||
Equity contribution | $ 400,000 |
PARTNERS' EQUITY - Class B Unit
PARTNERS' EQUITY - Class B Units (Details) - Class B units | 3 Months Ended |
Mar. 31, 2016USD ($) | |
Partners' Equity | |
Distribution declared | $ 12,000,000 |
Distribution paid | $ 12,000,000 |
GTN | TransCanada | Distributions | |
Partners' Equity | |
Portion of GTN's annual distributions to which the Class B units are entitled to receive a percentage share of the distributions above threshold (as a percent) | 30.00% |
Percentage applied to 30 percent of GTN's distributions above threshold through March 31, 2020 | 100.00% |
Threshold of GTN's total distributable cash flows for payment to Class B units | $ 20,000,000 |
Percentage applied to GTN's distributions above threshold after March 31, 2020 | 25.00% |
Percentage applied to GTN's distributable cash flow for the twelve month period ending December 31, 2016 | 30.00% |
NET INCOME PER COMMON UNIT - Ge
NET INCOME PER COMMON UNIT - General Partner Effective Interest and Allocated Incentive Distributions (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Partners' Equity | ||
Incentive distributions allocated to the General Partner | $ 1 | |
TC PipeLines GP, Inc. | ||
Partners' Equity | ||
Incentive distributions allocated to the General Partner | $ 1 | $ 0.3 |
TC PipeLines GP, Inc. | General Partner | ||
Partners' Equity | ||
General partner interest (as a percent) | 2.00% | 2.00% |
NET INCOME PER COMMON UNIT - Te
NET INCOME PER COMMON UNIT - Terms of Class B Unit Distributions and Determination of Net Income per Common Unit (Details) - USD ($) $ / shares in Units, shares in Millions | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Net income (loss) per common unit | ||
Net income attributable to controlling interests | $ 73,000,000 | $ 57,000,000 |
Net income attributable to the General Partner | (1,000,000) | (1,000,000) |
Incentive distributions attributable to the General Partner | (1,000,000) | |
Class B units | ||
Net income (loss) per common unit | ||
Net income attributable to limited partners | 0 | |
Common units | ||
Net income (loss) per common unit | ||
Net income attributable to limited partners | $ 71,000,000 | $ 56,000,000 |
Weighted average common units outstanding - basic (in units) | 64.4 | 63.6 |
Weighted average common units outstanding - diluted (in units) | 64.4 | 63.6 |
Net income per common unit - basic (in dollars per unit) | $ 1.10 | $ 0.88 |
Net income per common unit - diluted (in dollars per unit) | $ 1.10 | $ 0.88 |
GTN | Class B units | TransCanada | Distributions | ||
Distributions | ||
Percentage applied to GTN's distributable cash flow for the twelve month period ending December 31, 2016 | 30.00% | |
Threshold of GTN's total distributable cash flows for payment to Class B units | $ 20,000,000 |
CASH DISTRIBUTIONS - Distributi
CASH DISTRIBUTIONS - Distributions Paid (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Distributions | ||
Incentive distribution paid to the General Partner | $ 1 | $ 0.3 |
Common units | ||
Distributions | ||
Per Unit Distribution, paid (in dollars per unit) | $ 0.89 | $ 0.84 |
Common units and General Partner interest combined | ||
Distributions | ||
Total cash distributions | $ 60 | $ 55 |
CHANGE IN OPERATING WORKING C49
CHANGE IN OPERATING WORKING CAPITAL - Components (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
CHANGE IN OPERATING WORKING CAPITAL | ||
Change in accounts receivable and other | $ (1) | $ (1) |
Change in accounts payable and accrued liabilities | 3 | 2 |
Change in accounts payable to affiliates | (1) | (7) |
Change in accrued interest | 5 | 9 |
Change in operating working capital | $ 6 | $ 3 |
CHANGE IN OPERATING WORKING C50
CHANGE IN OPERATING WORKING CAPITAL - GTN's Carty Lateral Construction Accrual (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Non-cash items | |||
Capital expenditures | $ 11 | $ 3 | |
GTN | |||
Non-cash items | |||
Accruals for capital expenditures | $ 10 | ||
Capital expenditures | $ 10 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) $ in Millions | Mar. 31, 2016 | Dec. 31, 2015 | Mar. 31, 2016 | Dec. 31, 2015 | Mar. 31, 2015 | May. 03, 2015 | Dec. 31, 2014 | Jan. 01, 2016 | Apr. 01, 2015 |
Capital and operating costs charged to the pipeline systems and amount payable | |||||||||
Net amounts payable | $ 4 | $ 5 | $ 4 | $ 5 | |||||
Great Lakes | |||||||||
Capital and operating costs charged to the pipeline systems and amount payable | |||||||||
Interest acquired (as a percent) | 46.45% | 46.45% | |||||||
Northern Border | |||||||||
Capital and operating costs charged to the pipeline systems and amount payable | |||||||||
Interest acquired (as a percent) | 50.00% | 50.00% | |||||||
Portland Natural Gas Transmission System | |||||||||
Capital and operating costs charged to the pipeline systems and amount payable | |||||||||
Interest acquired (as a percent) | 49.90% | 49.90% | 49.90% | ||||||
General Partner | Reimbursement of costs of services provided | |||||||||
Capital and operating costs charged to the pipeline systems and amount payable | |||||||||
Costs charged | $ 1 | $ 1 | |||||||
TransCanada's subsidiaries | Great Lakes | |||||||||
Capital and operating costs charged to the pipeline systems and amount payable | |||||||||
Net amounts payable | $ 2 | 3 | 2 | 3 | |||||
Net amounts (receivable) | $ (15) | $ (17) | (15) | (17) | |||||
Percentage of capital and operating costs charged | 100.00% | 100.00% | |||||||
Amount included in receivables from related party | $ 15 | $ 17 | 15 | 17 | |||||
TransCanada's subsidiaries | Great Lakes | Capital and operating costs | |||||||||
Capital and operating costs charged to the pipeline systems and amount payable | |||||||||
Costs charged | $ 7 | $ 6 | |||||||
Percentage of capital and operating costs charged | 100.00% | 100.00% | |||||||
TransCanada's subsidiaries | Great Lakes | Transportation contracts | |||||||||
Capital and operating costs charged to the pipeline systems and amount payable | |||||||||
Revenues from related party | $ 46 | $ 29 | |||||||
TransCanada's subsidiaries | Great Lakes | Transportation contracts | Total revenues | Customer concentration risk | |||||||||
Capital and operating costs charged to the pipeline systems and amount payable | |||||||||
Percent of total revenues | 76.00% | 61.00% | |||||||
TransCanada's subsidiaries | Northern Border | |||||||||
Capital and operating costs charged to the pipeline systems and amount payable | |||||||||
Net amounts payable | $ 2 | $ 5 | $ 2 | 5 | |||||
Percentage of capital and operating costs charged | 100.00% | 100.00% | |||||||
TransCanada's subsidiaries | Northern Border | Capital and operating costs | |||||||||
Capital and operating costs charged to the pipeline systems and amount payable | |||||||||
Costs charged | $ 6 | $ 7 | |||||||
Percentage of capital and operating costs charged | 100.00% | 100.00% | |||||||
TransCanada's subsidiaries | Portland Natural Gas Transmission System | |||||||||
Capital and operating costs charged to the pipeline systems and amount payable | |||||||||
Net amounts payable | $ 1 | $ 1 | |||||||
Percentage of capital and operating costs charged | 100.00% | ||||||||
TransCanada's subsidiaries | Portland Natural Gas Transmission System | Capital and operating costs | |||||||||
Capital and operating costs charged to the pipeline systems and amount payable | |||||||||
Costs charged | $ 2 | ||||||||
Percentage of capital and operating costs charged | 100.00% | ||||||||
TransCanada's subsidiaries | GTN | |||||||||
Capital and operating costs charged to the pipeline systems and amount payable | |||||||||
Net amounts payable | $ 2 | $ 3 | $ 2 | 3 | |||||
TransCanada's subsidiaries | GTN | Capital and operating costs | |||||||||
Capital and operating costs charged to the pipeline systems and amount payable | |||||||||
Costs charged | 6 | $ 6 | |||||||
Impact on the Partnership's net income attributable to controlling interests | $ 5 | $ 4 | |||||||
Percentage of capital and operating costs charged | 100.00% | 100.00% | |||||||
TransCanada's subsidiaries | Bison | |||||||||
Capital and operating costs charged to the pipeline systems and amount payable | |||||||||
Net amounts (receivable) | (1) | $ (1) | |||||||
Amount included in receivables from related party | 1 | 1 | |||||||
TransCanada's subsidiaries | Bison | Capital and operating costs | |||||||||
Capital and operating costs charged to the pipeline systems and amount payable | |||||||||
Costs charged | $ 1 | ||||||||
Revenue, net of costs charged | (1) | ||||||||
Impact on the Partnership's net income attributable to controlling interests | 1 | 1 | |||||||
TransCanada's subsidiaries | North Baja Pipeline, LLC | Capital and operating costs | |||||||||
Capital and operating costs charged to the pipeline systems and amount payable | |||||||||
Costs charged | 1 | 1 | |||||||
Impact on the Partnership's net income attributable to controlling interests | 1 | 1 | |||||||
TransCanada's subsidiaries | Tuscarora Gas Transmission Company | |||||||||
Capital and operating costs charged to the pipeline systems and amount payable | |||||||||
Net amounts payable | $ 1 | $ 1 | 1 | 1 | |||||
TransCanada's subsidiaries | Tuscarora Gas Transmission Company | Capital and operating costs | |||||||||
Capital and operating costs charged to the pipeline systems and amount payable | |||||||||
Costs charged | 1 | 1 | |||||||
Impact on the Partnership's net income attributable to controlling interests | 1 | 1 | |||||||
TransCanada's subsidiaries | Great Lakes | |||||||||
Capital and operating costs charged to the pipeline systems and amount payable | |||||||||
Revenue from TransCanada and its affiliates included in the Partnership's equity earnings | 22 | 14 | |||||||
TransCanada's subsidiaries | Great Lakes | Capital and operating costs | |||||||||
Capital and operating costs charged to the pipeline systems and amount payable | |||||||||
Impact on the Partnership's net income attributable to controlling interests | 3 | 3 | |||||||
TransCanada's subsidiaries | Northern Border | Capital and operating costs | |||||||||
Capital and operating costs charged to the pipeline systems and amount payable | |||||||||
Impact on the Partnership's net income attributable to controlling interests | 3 | $ 3 | |||||||
TransCanada's subsidiaries | Portland Natural Gas Transmission System | Capital and operating costs | |||||||||
Capital and operating costs charged to the pipeline systems and amount payable | |||||||||
Impact on the Partnership's net income attributable to controlling interests | $ 1 | ||||||||
Former parent, TransCanada subsidiaries | Transaction between entities under common control | GTN | |||||||||
Capital and operating costs charged to the pipeline systems and amount payable | |||||||||
Interest acquired (as a percent) | 30.00% | ||||||||
ANR Pipeline Company | Great Lakes | Firm service between Michigan and Wisconsin | |||||||||
Capital and operating costs charged to the pipeline systems and amount payable | |||||||||
Deferred revenue related to services performed | $ 14 | $ 9 | |||||||
Deferred revenue recognized | $ 23 |
RELATED PARTY TRANSACTIONS - Di
RELATED PARTY TRANSACTIONS - Distribution from Affiliate (Details) - USD ($) $ in Millions | Apr. 18, 2016 | Mar. 11, 2016 | Mar. 31, 2016 | Jan. 01, 2016 |
Related party transactions | ||||
Partnership distribution | $ 72 | |||
Portland Natural Gas Transmission System | ||||
Related party transactions | ||||
Ownership interest (as a percent) | 49.90% | 49.90% | ||
Distribution declared | Portland Natural Gas Transmission System | ||||
Related party transactions | ||||
Partnership distribution | $ 13 | |||
Cash Distribution Paid | Portland Natural Gas Transmission System | ||||
Related party transactions | ||||
Partnership's share of distributions declared and payable by investee | $ 6 |
FAIR VALUE MEASUREMENTS - Estim
FAIR VALUE MEASUREMENTS - Estimated Fair Value of Debt (Details) - USD ($) $ in Millions | Mar. 31, 2016 | Dec. 31, 2015 |
Fair Value | Level 2 | ||
Financial Instruments | ||
Fair value of debt | $ 2,037 | $ 1,873 |
FAIR VALUE MEASUREMENTS - Inter
FAIR VALUE MEASUREMENTS - Interest Rate Swaps (Details) - Interest rate swaps - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Term loan | TC PipeLines, LP 2013 Term Loan Facility due 2018 | |||
Interest rate derivatives | |||
Weighted average fixed interest rate (as a percent) | 2.31% | ||
Hedges of cash flows | |||
Interest rate derivatives | |||
Change in fair value of interest rate derivative instruments recognized in other comprehensive income | $ 2 | $ 1 | |
Hedges of cash flows | Financial charges and other | |||
Interest rate derivatives | |||
Net realized loss related to the interest rate swaps | 0 | $ 1 | |
Designated as hedge | Recurring fair value measurement | Level 2 | |||
Interest rate derivatives | |||
Fair value of derivatives, gross | 4 | $ 1 | |
Fair value of derivatives, net | $ 4 | $ 1 |
ACCOUNTS RECEIVABLE AND OTHER55
ACCOUNTS RECEIVABLE AND OTHER (Details) - USD ($) $ in Millions | Mar. 31, 2016 | Dec. 31, 2015 |
ACCOUNTS RECEIVABLE AND OTHER | ||
Trade accounts receivable, net of allowance of nil | $ 30 | $ 31 |
Other | 6 | 4 |
Accounts receivable and other | 36 | 35 |
Trade accounts receivable, allowance | $ 0 | $ 0 |
FINANCIAL CHARGES AND OTHER (De
FINANCIAL CHARGES AND OTHER (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
FINANCIAL CHARGES AND OTHER | ||
Interest Expense | $ 17 | $ 13 |
Net realized loss related to the interest rate swaps | 1 | |
Other Income | (1) | |
Financial charges and other | $ 17 | $ 13 |
CONTINGENCIES (Details)
CONTINGENCIES (Details) $ in Millions | Apr. 01, 2015USD ($) |
Former parent, TransCanada subsidiaries | Transaction between entities under common control | GTN | Partnership interest | Class B units | |
Contingencies | |
Equity issuance | $ 95 |
VARIABLE INTEREST ENTITIES - Co
VARIABLE INTEREST ENTITIES - Consolidated VIEs (Details) - USD ($) $ in Millions | Mar. 31, 2016 | Dec. 31, 2015 |
ASSETS (LIABILITIES) | ||
Accounts receivable and other | $ 36 | $ 35 |
Inventories | 7 | 7 |
Equity investments | 1,083 | 965 |
Plant, property and equipment | 1,928 | 1,949 |
Other assets | 1 | |
Accounts payable and accrued liabilities | (24) | (32) |
Accounts payable to affiliates | (4) | (5) |
Accrued interest | (13) | (8) |
Current portion of long-term debt | (14) | (14) |
Long-term debt | (2,059) | (1,889) |
Other liabilities | (28) | (27) |
Consolidated VIEs | Restricted VIEs | ||
ASSETS (LIABILITIES) | ||
Accounts receivable and other | 22 | 25 |
Inventories | 6 | 6 |
Equity investments | 1,083 | 965 |
Plant, property and equipment | 864 | 872 |
Other assets | 2 | 2 |
Accounts payable and accrued liabilities | (15) | (26) |
Accounts payable to affiliates | (7) | (6) |
Accrued interest | (5) | (1) |
Current portion of long-term debt | (14) | (14) |
Long-term debt | (326) | (326) |
Other liabilities | $ (24) | $ (24) |
SUBSEQUENT EVENTS - Quarter Dis
SUBSEQUENT EVENTS - Quarter Distribution per Common Unit (Details) | Apr. 21, 2016$ / shares |
Subsequent event | Common units | |
Distributions | |
Distribution (in dollars per unit) | $ 0.89 |
SUBSEQUENT EVENTS - Unconsolida
SUBSEQUENT EVENTS - Unconsolidated Affiliate Distributions (Details) - USD ($) $ in Millions | May. 02, 2016 | Apr. 19, 2016 | Mar. 31, 2016 |
Subsequent events | |||
Partnership distribution | $ 72 | ||
Northern Border | |||
Subsequent events | |||
Ownership interest (as a percent) | 50.00% | ||
Great Lakes | |||
Subsequent events | |||
Ownership interest (as a percent) | 46.45% | ||
Subsequent event | Distribution declared | Northern Border | |||
Subsequent events | |||
Partnership distribution | $ 45 | ||
Subsequent event | Distribution declared | Great Lakes | |||
Subsequent events | |||
Partnership distribution | $ 36 | ||
Subsequent event | Cash Distribution Paid | Northern Border | |||
Subsequent events | |||
Partnership's share of distributions | $ 23 | ||
Subsequent event | Cash Distribution Paid | Great Lakes | |||
Subsequent events | |||
Partnership's share of distributions | $ 17 |
SUBSEQUENT EVENTS - Tuscarora F
SUBSEQUENT EVENTS - Tuscarora Financing (Details) $ in Millions | Apr. 29, 2016USD ($) |
Subsequent event | Tuscarora Gas Transmission Company | Unsecured debt | Tuscarora term loan facility | |
Subsequent events | |
Amount of facility | $ 9.5 |