Document And Entity Information
Document And Entity Information - CAD ($) | 6 Months Ended | ||
Jun. 30, 2018 | Jul. 24, 2018 | Jun. 30, 2017 | |
Entity Registrant Name | Kinder Morgan Canada Ltd | ||
Entity Central Index Key | 1,714,973 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Public Float | $ 1,631,630,700 | ||
Document Fiscal Year Focus | 2,018 | ||
Document Fiscal Period Focus | Q2 | ||
Document Type | 10-Q | ||
Amendment Flag | false | ||
Document Period End Date | Jun. 30, 2018 | ||
Restricted Voting Shares | |||
Entity Common Stock, Shares Outstanding | 104,023,460 | ||
Special Voting Shares | |||
Entity Common Stock, Shares Outstanding | 244,061,460 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME (In millions of Canadian dollars, except per share amounts) (Unaudited) - CAD ($) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Revenues | ||||
Revenues | $ 178 | $ 168.7 | $ 342.2 | $ 333.2 |
Operating Costs, Expenses and Other | ||||
Operations and maintenance | 55.2 | 55.9 | 104.3 | 104.9 |
Depreciation and amortization | 38.2 | 35.6 | 75 | 70.4 |
General and administrative | 20.4 | 15.3 | 38.8 | 32.3 |
Taxes, other than income taxes | 9.5 | 9.8 | 18.8 | 19.6 |
Other (income) expense, net | (8.5) | 0.4 | (8.4) | 2.2 |
Total Operating Costs, Expenses and Other | 114.8 | 117 | 228.5 | 229.4 |
Operating Income | 63.2 | 51.7 | 113.7 | 103.8 |
Other Income (Expense) | ||||
Interest, net | (56.9) | (2.9) | (57.2) | (9.6) |
Foreign exchange loss | (0.2) | (16) | (0.4) | (5.1) |
Capitalized equity financing costs | 13.5 | 6.3 | 25.1 | 11.8 |
Other, net | (0.9) | (0.5) | (1.6) | (1.3) |
Total Other Income | (44.5) | (13.1) | (34.1) | (4.2) |
Income Before Income Taxes | 18.7 | 38.6 | 79.6 | 99.6 |
Income Tax Expense | (5) | (13.5) | (21.5) | (27.7) |
Net Income | 13.7 | 25.1 | 58.1 | 71.9 |
Preferred share dividends | (7.2) | 0 | (14.4) | 0 |
Net Income Attributable to Kinder Morgan Interest | (4.7) | (20.9) | (31.1) | (67.7) |
Net Income Available to Restricted Voting Stockholders | $ 1.8 | $ 4.2 | $ 12.6 | $ 4.2 |
Restricted Voting Shares | ||||
Basic and Diluted Earnings Per Restricted Voting Share | $ 0.02 | $ 0.11 | $ 0.12 | $ 0.11 |
Basic and Diluted Weighted Average Restricted Voting Shares Outstanding | 103.8 | 38.8 | 103.7 | 38.8 |
Dividend Per Restricted Voting Share Declared for the Period | $ 0.1625 | $ 0.0571 | $ 0.3250 | $ 0.0571 |
Services [Member] | ||||
Revenues | ||||
Revenues | $ 177.6 | $ 168.5 | $ 341.5 | $ 332.5 |
Product sales and other [Member] | ||||
Revenues | ||||
Revenues | $ 0.4 | $ 0.2 | $ 0.7 | $ 0.7 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In millions of Canadian dollars) (Unaudited) - CAD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Net Income | ||||
Net income | $ 13.7 | $ 25.1 | $ 58.1 | $ 71.9 |
Other comprehensive income (loss) | ||||
Benefit plans | 0.4 | (1) | 1.1 | (0.6) |
Foreign currency translation adjustments | 1.1 | 0 | 2.3 | (0.5) |
Total other comprehensive income (loss) | 1.5 | (1) | 3.4 | (1.1) |
Comprehensive income | 15.2 | 24.1 | 61.5 | 70.8 |
Comprehensive income attributable to Kinder Morgan interest | (5.7) | (67.1) | (33.4) | (67.1) |
Comprehensive income (loss) attributable to Kinder Morgan Canada Limited | $ 9.5 | $ (43) | $ 28.1 | $ 3.7 |
CONSOLIDATED BALANCE SHEETS (In
CONSOLIDATED BALANCE SHEETS (In millions of Canadian dollars, except share and per share amounts) (Unaudited) - CAD ($) $ in Millions | Jun. 30, 2018 | Dec. 31, 2017 |
Current assets | ||
Cash and cash equivalents | $ 227.2 | $ 238.8 |
Accounts receivable | 76.2 | 69.3 |
Prepayments | 28.9 | 10 |
Inventories | 13.6 | 13.1 |
Other current assets | 8.6 | 9.4 |
Total current assets | 354.5 | 340.6 |
Property, plant and equipment, net | 4,065.2 | 3,708 |
Goodwill | 248 | 248 |
Regulatory assets | 28 | 22.7 |
Deferred charges and other assets | 68 | 133.4 |
Total Assets | 4,763.7 | 4,452.7 |
Current liabilities | ||
Credit facility(Note 2) | 132.6 | 0 |
TMPL Non-recourse credit agreement (Note 2) | 114.5 | 0 |
Accounts payable | 185.2 | 152.1 |
Regulatory liabilities | 113.1 | 107.9 |
Other current liabilities | 61.8 | 38.3 |
Total current liabilities | 607.2 | 298.3 |
Long-term liabilities and deferred credits | ||
Deferred income taxes | 331.7 | 339.5 |
Pension and postretirement benefits | 75.4 | 75.4 |
Regulatory liabilities | 76.8 | 43.3 |
Deferred revenues | 64.4 | 53.5 |
Other deferred credits | 4.7 | 5.1 |
Total long-term liabilities and deferred credits | 553 | 516.8 |
Total Liabilities | 1,160.2 | 815.1 |
Equity | ||
Preferred share capital, 12,000,000 shares of Series 1 and 10,000,000 shares of Series 3, issued and outstanding(Note 3) | 537.2 | 537.2 |
Restricted Voting Share capital, 104,023,460 and 103,366,905 Restricted Voting Shares, respectively, issued and outstanding(Note 3) | 1,720.3 | 1,707.5 |
Retained deficit | (790.2) | (770) |
Accumulated other comprehensive loss | (7.7) | (8.8) |
Total Kinder Morgan Canada Limited equity | 1,459.6 | 1,465.9 |
Kinder Morgan interest, 244,061,460 and 242,882,897 Special Voting Shares, respectively, issued and outstanding(Note 3) | 2,143.9 | 2,171.7 |
Total Equity | 3,603.5 | 3,637.6 |
Total Liabilities and Equity | $ 4,763.7 | $ 4,452.7 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - shares | Jun. 30, 2018 | Dec. 31, 2017 |
Equity | ||
Restricted voting shares issued | 104,023,460 | 103,366,905 |
Restricted voting shares outstanding | 104,023,460 | 103,366,905 |
Special Voting Shares, issued and outstanding | 244,061,460 | 242,882,897 |
Series 1 [Member] | ||
Preferred shares issued | 12,000,000 | 12,000,000 |
Preferred shares outstanding | 12,000,000 | 12,000,000 |
Series 3 [Member] | ||
Preferred shares issued | 10,000,000 | 10,000,000 |
Preferred shares outstanding | 10,000,000 | 10,000,000 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - CAD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Operating Activities | ||
Net income | $ 58.1 | $ 71.9 |
Non-cash items | ||
Depreciation and amortization | 75 | 70.4 |
Deferred income taxes | (8.2) | 26.9 |
Capitalized equity financing costs | (25.1) | (11.8) |
Unrealized foreign exchange (gain) loss | 0.7 | (4.9) |
Write-off of unamortized debt issuance cost | 60.5 | 0 |
Other non-cash items | 0.6 | 3.5 |
Change in operating assets and liabilities | 30.1 | (92.2) |
Cash provided by operating activities | 190.3 | 73.6 |
Investing Activities | ||
Capital expenditures | (349.1) | (214.1) |
Contributions to trusts | (7) | (8.4) |
Sale of property, plant, and equipment, net of removal costs | 16.1 | 0.5 |
Cash used in investing activities | (340) | (222) |
Financing Activities | ||
Issuances of debt | 347.2 | 189.2 |
Repayments of Debt | (100.1) | 0 |
Proceeds received from IPO, net | 0 | 1,673.9 |
Repayments of debt with affiliates | 0 | (1,607.1) |
Cash dividends - restricted shares | (22.9) | 0 |
Dividends - preferred shares | (13.3) | 0 |
Distributions - Kinder Morgan interest | (62) | 0 |
Debt and preferred shares issuance costs | 9.2 | 72.5 |
Cash provided by financing activities | 139.7 | 183.5 |
Effect of exchange rate changes on cash, cash equivalents and restricted deposits | (1.3) | (0.2) |
Net (decrease) increase in Cash, Cash Equivalents and Restricted Deposits | (11.3) | 34.9 |
Cash, Cash Equivalents and Restricted Deposits, beginning of period | 239.5 | 160.3 |
Cash, Cash Equivalents and Restricted Deposits, end of period | 228.2 | 195.2 |
Cash and Cash Equivalents, beginning of period | 238.8 | 159 |
Restricted Deposits, beginning of period | 0.7 | 1.3 |
Cash and Cash Equivalents, end of period | 227.2 | 193.7 |
Restricted Deposits, end of period | 1 | 1.5 |
Supplemental Disclosures of Cash Flow Information | ||
Cash paid including to affiliates during the period for interest (net of capitalized interest) | 0 | 65.4 |
Cash paid during the period for income taxes | 9.2 | 0.4 |
Noncash Investing and Financing Activities | ||
Increase in property, plant and equipment from both accruals and contractor retainage | 70.9 | 31.9 |
Increase (decrease) in property, plant and equipment due to foreign currency translation adjustments | $ 1.9 | $ (2) |
CONSOLIDATED STATEMENT OF STOCK
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY - CAD ($) shares in Millions, $ in Millions | Total | Preferred Shares | Equity attributable to Kinder Morgan pre-IPO | Restricted Voting Share capital | Retained earnings (deficit) | Accumulated other comprehensive loss | Kinder Morgan interest | Restricted Voting SharesVoting Shares | Kinder Morgan interest - Special Voting SharesVoting Shares |
Equity Balance Pre-IPO | $ 1,436 | $ 1,475 | $ 0 | $ (13.1) | $ (25.9) | $ 0 | |||
Voting shares, shares outstanding (in shares), beginning balance at Dec. 31, 2016 | 0 | 0 | |||||||
Activity attributable to Kinder Morgan prior to IPO-Equity interests issued | 126.9 | 126.9 | |||||||
Activity attributable to Kinder Morgan prior to IPO, Distribution | (261.7) | (261.7) | |||||||
Net income | 67.7 | 4.2 | |||||||
Net Income attributable to Kinder Morgan interest | 67.7 | ||||||||
Net income including portion attributable to Kinder Morgan interest | 71.9 | ||||||||
Stock Issued During Period, Shares, New Issues | 102.9 | 242.1 | |||||||
Stock Issued During Period, Value, New Issues | 1,750 | 1,750 | |||||||
Issuance of special voting shares and reallocation of Kinder Morgan pre-IPO carrying basis | 0 | (1,340.2) | 13.1 | 25.9 | 1,301.2 | ||||
Reallocation of equity on Common Control transaction | 0 | (777.9) | (7.5) | 785.4 | |||||
Equity Issuance fees | (69.7) | (69.7) | |||||||
Deferred tax liability adjustments on IPO | 18.8 | 18.8 | |||||||
Other comprehensive income (loss) | (1.1) | (0.5) | (0.6) | ||||||
Voting shares, shares outstanding (in shares), ending balance at Jun. 30, 2017 | 102.9 | 242.1 | |||||||
Stockholders' Equity, ending balance at Jun. 30, 2017 | 3,071.1 | $ 0 | 1,699.1 | (773.7) | (8) | 2,153.7 | |||
Preferred stock, shares outstanding (in shares), beginning balance at Dec. 31, 2017 | 22 | ||||||||
Voting shares, shares outstanding (in shares), beginning balance at Dec. 31, 2017 | 103.4 | 242.9 | |||||||
Stockholders' Equity, beginning balance at Dec. 31, 2017 | 3,637.6 | $ 537.2 | 1,707.5 | (770) | (8.8) | 2,171.7 | |||
Net income | 31.1 | 27 | |||||||
Net Income attributable to Kinder Morgan interest | 31.1 | ||||||||
Net income including portion attributable to Kinder Morgan interest | 58.1 | ||||||||
Preferred share dividends | (13.3) | (13.3) | |||||||
Restricted voting share dividends | (33.9) | (33.9) | |||||||
Special Voting Share Distributions | (81.8) | (81.8) | |||||||
Stock Issued During Period, Shares, Dividend Reinvestment Plan | 0.6 | 1.2 | |||||||
Stock Issued During Period, Value, Dividend Reinvestment Plan | 30.8 | 11 | 19.8 | ||||||
Stock-based compensation | 2.6 | 2.6 | |||||||
Other | 0 | (0.8) | 0.8 | ||||||
Other comprehensive income (loss) | 3.4 | 1.1 | 2.3 | ||||||
Preferred stock, shares outstanding (in shares), ending balance at Jun. 30, 2018 | 22 | ||||||||
Voting shares, shares outstanding (in shares), ending balance at Jun. 30, 2018 | 104 | 244.1 | |||||||
Stockholders' Equity, ending balance at Jun. 30, 2018 | $ 3,603.5 | $ 537.2 | $ 1,720.3 | $ (790.2) | $ (7.7) | $ 2,143.9 |
General (Notes)
General (Notes) | 6 Months Ended |
Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] | General The Company was incorporated under the Business Corporations Act (Alberta) on April 7, 2017. On May 30, 2017, we completed an IPO of our Restricted Voting Shares and used the net proceeds of $1,671.0 million to acquire an approximate 30% indirect interest in the Limited Partnership from certain affiliates of Kinder Morgan, who retained an approximate 70% ownership of the limited partnership units in the Limited Partnership. As of June 30, 2018, we have two business segments: (i) the Pipelines segment, which includes the TMPL that currently transports approximately 300,000 bpd of crude oil and refined petroleum from Edmonton, Alberta to Burnaby, B.C.; Puget Sound serving the state of Washington; Jet Fuel pipeline serving the Vancouver International Airport; KMCI, the employer of Canadian staff; and Cochin, a 12 -inch diameter multi-product pipeline which spans approximately 1,000 kilometers in Saskatchewan and Alberta; and (ii) the Terminals segment, which includes the ownership or operation of liquid product merchant storage and rail terminals in the Edmonton, Alberta market as well as a predominantly dry cargo import/export facility in Vancouver, B.C. Pending Sale of TMPL and TMEP to the Government of Canada On May 29, 2018, we announced that the Government of Canada had agreed to purchase from us the TMPL, TMEP, Puget Sound, and KMCI, the Canadian employer of our staff that operate the business and assets to be sold, for $4.5 billion (the “Transaction”), subject to certain adjustments as provided in the share and unit purchase agreement (the “Purchase Agreement”). As part of the Purchase Agreement, the Government of Canada has agreed to fund the resumption of TMEP planning and construction work by guaranteeing TMEP's expenditures under a separate Federal Government recourse credit facility until the Transaction closes. The parties expect to close the Transaction late in the third quarter or early fourth quarter of 2018, subject to our shareholder and applicable regulatory approvals. Upon our shareholder’s approval of the Transaction, the results of operations of the assets sold will be presented as discontinued operations in our future consolidated financial statements and the Transaction is expected to result in a gain. On July 3, 2018, we filed a six-month outlook summary schedule of our construction plans for the TMEP with the NEB, reflecting both ongoing and planned work. The filed plan is consistent with the "2018 Work Plan" that we agreed on with the Government of Canada. After the closing of the Transaction, we will continue to manage a portfolio of strategic infrastructure assets across Western Canada, including (i) the crude terminal facilities, which constitute one of the largest merchant terminal storage positions in the Edmonton market and one of the largest origination crude by rail loading facilities in North America; (ii) the Vancouver Wharves Terminal, one of the largest mineral concentrate export/import facilities on the west coast of North America; (iii) Jet Fuel pipeline; and (iv) Cochin. Also, see Note 2 “Debt” for information on our temporary Credit Facilities and Note 11 “Litigation and Contingencies” for information on the TMEP litigation. Basis of Presentation General In January 2018, we completed the registration of our Restricted Voting Shares pursuant to Section 12(g) of the United States Securities Exchange Act of 1934 (the “Exchange Act”) and are subject to the reporting requirements of Section 13(a) of the Exchange Act. We have prepared the accompanying unaudited consolidated financial statements in accordance with the accounting principles contained in the FASB Accounting Standards Codification, the single source of U.S. GAAP and referred to in this report as the Codification. U.S. GAAP means generally accepted accounting principles that the SEC has identified as having substantial authoritative support, as supplemented by Regulation S-X under the Exchange Act, as amended from time to time. Under such rules and regulations, all significant intercompany items have been eliminated in consolidation. In our opinion, all adjustments, which are of a normal and recurring nature, considered necessary for a fair statement of our financial position and operating results for the interim periods have been included in the accompanying consolidated financial statements. Interim results are not necessarily indicative of results for a full year; accordingly, you should read these consolidated financial statements in conjunction with our consolidated financial statements and related notes included in our 2017 Form 10-K. Unless otherwise noted, amounts are stated in Canadian dollars, which is the functional currency of most of our operations. Presentation of Kinder Morgan Interest As of and for the reporting periods after May 30, 2017, Kinder Morgan’s economic interest in the Limited Partnership is reflected within “Kinder Morgan interest” in our consolidated balance sheets and earnings attributable to Kinder Morgan’s economic ownership interest in the Limited Partnership is presented in “Net Income Attributable to Kinder Morgan Interest” in our consolidated statements of income. Prior to the IPO, Kinder Morgan controlled all of our equity which is presented as “Equity attributable to Kinder Morgan pre-IPO” in our statement of equity for the six months ended June 30, 2017. For the periods after the IPO, “Kinder Morgan interest” is separately presented in our consolidated statement of equity for the six months ended June 30, 2018 and 2017, and includes its share of our net income and other comprehensive loss, along with its Class B Units distributions and distribution reinvestment plan activities. Accounting Policy Changes Adoption of New Accounting Pronouncements On January 1, 2018, we adopted Accounting Standards Updates (ASU) No. 2014-09, “ Revenue from Contracts with Customers, ” and a series of related accounting standard updates designed to create improved revenue recognition and disclosure comparability in financial statements. For more information, see Note 6. On January 1, 2018, we retroactively adopted ASU 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash.” This ASU requires the statements of cash flows to present the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents are now included with cash and cash equivalents when reconciling the beginning of period and end of period amounts presented on the statements of cash flows. The retrospective application of this new accounting guidance resulted in a decrease of $0.2 million in “Cash used in investing activities,” an increase of $ 1.3 million in “Cash, Cash Equivalents, and Restricted Deposits, beginning of the period,” and an increase of $1.5 million in “Cash, Cash Equivalents, and Restricted Deposits, end of period” in our accompanying consolidated statement of cash flows from what was previously presented for the quarterly period ended June 30, 2017. On January 1, 2018, we adopted ASU No. 2017-07, “ Compensation - Retirement Benefits (Topic 715) .” This ASU requires an employer to disaggregate the service cost component from the other components of net benefit cost, allows only the service cost component of net benefit cost to be eligible for capitalization, and establishes how to present the service cost component and the other components of net benefit cost in the income statement. Topic 715 required us to retrospectively reclassify $1.0 million and $2.0 million of other components of net benefit costs (excluding the service cost component) from “General and administrative” to “Other, net” in our accompanying consolidated statement of income for the three and six months ended June 30, 2017, respectively. We prospectively applied Topic 715 related to net benefit costs eligible for capitalization. |
Debt (Notes)
Debt (Notes) | 3 Months Ended |
Jun. 30, 2018 | |
Debt Disclosure [Abstract] | |
Debt Disclosure [Text Block] | Debt Credit Facilities Pursuant to the Transaction described in Note 1, on May 30, 2018, approximately $100.0 million of borrowings outstanding under our June 16, 2017 revolving credit facilities (the “2017 Credit Facility”) were repaid, the underlying credit facilities were terminated, and approximately $60.5 million of unamortized financing costs associated with the 2017 Credit Facility that were being amortized as interest expense over its term were written off. On May 30, 2018 and concurrently with the termination of our 2017 Credit Facility, we completed a credit agreement with Royal Bank of Canada, as administrative agent, and the lenders party thereto (the “2018 Credit Agreement”) establishing a $500.0 million revolving credit facility (the “2018 Credit Facility”), for general corporate purposes, including working capital. The approximate $100.0 million of borrowings outstanding under the terminated 2017 Credit Facility were repaid pursuant to an initial drawdown under the 2018 Credit Facility The 2018 Credit Facility will mature on the earlier of (i) the date of the closing of the Transaction or (ii) May 29, 2020. Depending on the type of loan requested by us, interest on loans outstanding will be calculated based on (i) a Canadian prime rate of interest plus 0.20% per annum; (ii) a U.S. base rate of interest plus 0.20% per annum; (iii) LIBOR plus 1.20% per annum; or (iv) bankers’ acceptance fees plus 1.20% per annum. Standby fees for the unused portion of the 2018 Credit Facility will be calculated based on a rate of 0.24% per annum. The Credit Agreement contains various financial and other covenants that apply to us and our subsidiaries and are common in such agreements, including a maximum ratio of consolidated total funded debt to consolidated capitalization of 70% and restrictions on the our ability to incur debt, grant liens, make dispositions (although the Transaction is specifically permitted), engage in transactions with affiliates, make restricted payments, make investments, enter into sale leaseback transactions, amend their organizational documents and engage in corporate reorganization transactions. In addition, the Credit Agreement contains customary events of default, including non-payment; non-compliance with covenants (in some cases, subject to grace periods); payment default under, or acceleration events affecting, certain other indebtedness; bankruptcy or insolvency events involving us or guarantors; and changes of control. If an event of default under the Credit Agreement exists and in continuing, the lenders could terminate their commitments and accelerate the maturity of our outstanding obligations under the Credit Agreement. On June 14, 2018, our subsidiary, TMPL, as the borrower, entered into new, non-revolving, unsecured construction credit agreement (the “TMPL Non-recourse Credit Agreement”) among TMPL, Royal Bank of Canada (“RBC”), as administrative agent (“Agent”), and The Toronto-Dominion Bank (together with RBC, the “Lenders”) in an aggregate principal amount of up to approximately $1 billion to facilitate the resumption of the TMEP planning and construction work until closing of the Transaction. The TMPL Non-recourse Credit Agreement provides for a maturity date on the earliest to occur of (i) completion of the Transaction or another disposition of our interest in the entities or material assets that are subject to the Transaction; (ii) termination of the Purchase Agreement; (iii) assignment by us of our rights and obligations under the Purchase Agreement; or (iv) December 31, 2018. The payment obligations of TMPL to the Agent and the Lenders under the TMPL Non-recourse Credit Agreement are guaranteed by Her Majesty in Right of Canada (“Guarantor”) pursuant to an unconditional and irrevocable guarantee (“Guarantee”). The TMPL Non-recourse Credit Agreement is non-recourse to TMPL, its subsidiaries, KML or Kinder Morgan, or any of their respective property, assets and undertakings; the Agent and the Lenders’ sole recourse is to the Guarantor under the Guarantee. In connection with the TMPL Non-recourse Credit Agreement and the Guarantee, TMPL and our subsidiary, Kinder Morgan Cochin ULC (“KMCU”), entered into an indemnity agreement (the “Indemnity Agreement”) in favor of the Guarantor obligating TMPL to reimburse and indemnify the Guarantor for amounts paid under and pursuant to the Guarantee in certain very limited circumstances. In addition, the Indemnity Agreement includes, for the benefit of the Guarantor, limited rights to indemnification in the event of inaccuracies in certain representations, or the failure of KMCU to perform certain covenants, under the Purchase Agreement. Except for the indemnities referred to in this paragraph and certain other limited exceptions, the Guarantor has no recourse to TMPL or KMCU under the Indemnity Agreement. Separately, KML and KMCU entered into an Indemnity Agreement, obligating TMPL to reimburse and indemnify the Guarantor for amounts paid under and pursuant to the Guarantee in certain very limited circumstances. As security for TMPL’s and KMCU’s limited recourse obligations under the Indemnity Agreement, TMPL and its subsidiaries granted second ranking security in favor of the Guarantor against their respective assets, and KMCU granted a limited recourse pledge of its equity in TMPL and the general partner thereof. Also, as of June 30, 2018, we had $132.6 million and $114.5 million outstanding borrowings under our 2018 Credit Facility and TMPL Non-recourse Credit Agreement, respectively, for total borrowings of $247.1 million. As of December 31, 2017, we had no borrowings outstanding under our 2017 Credit Facility. Prior to May 30, 2018, the weighted average interest rate on our 2017 Credit Facility borrowings was 3.24% . As of June 30, 2018, the weighted average interest rates on our 2018 Credit Facility and TMPL Non-recourse Credit Agreement borrowings were 2.86% and 2.00% , respectively. For the three and six months ended June 30, 2018 and 2017, we incurred standby fees of $2.8 million, $6.8 million, $0.7 million and $0.7 million, respectively. Fair Value of Financial Instruments The carrying value and estimated fair value of our debt balances are disclosed below: June 30, 2018 Carrying value Estimated fair value (In millions of Canadian dollars) Total debt 247.1 247.1 Level 2 input values were used to measure the estimated fair value of the long term debt balance as of June 30, 2018. |
Equity (Notes)
Equity (Notes) | 6 Months Ended |
Jun. 30, 2018 | |
Stockholders' Equity Note [Abstract] | |
Shareholders' Equity | Equity As of June 30, 2018, we had (i) 104.0 million and 244.1 million of Restricted Voting Shares and Special Voting Shares outstanding, respectively, with no par value, for an aggregate of 348.1 million voting shares outstanding, (ii) 12.0 million and 10.0 million of Series 1 Preferred Shares and Series 3 Preferred Shares outstanding, respectively, and (iii) 0.8 million of restricted stock awards outstanding. Preferred Share Dividends The following table provides information regarding dividends declared and paid, or to be paid, as applicable, on our Preferred Shares during the six months ended June 30, 2018: Period Total Series 1 quarterly dividend per share for the period Total Series 3 quarterly dividend per share for the period(a) Date of declaration Date of record Date of dividend Total amount of dividends paid in cash (In millions of Canadian dollars, except per share amounts) November 15, 2017 to February 14, 2018 (a) 0.328125 0.22082 January 17, 2018 January 31, 2018 February 15, 2018 6.1 February 15, 2018 to May 14, 2018 0.328125 0.325 April 18, 2018 April 30, 2018 May 15, 2018 7.2 May 15, 2018 to August 14, 2018 0.328125 0.325 July 18, 2018 July 31, 2018 August 15, 2018 ________ (a) Series 3 per share amount reflects that the shares were outstanding for 62 days during the period ended February 14, 2018. Restricted Voting Share Dividends The following table provides information regarding dividends declared and paid, or to be paid, as applicable, on our Restricted Voting Share during the six months ended June 30, 2018. For the three month period ended Dividend rate per share Date of declaration Date of record Date of dividend Total amount of dividends paid in cash(a) Total amount of dividends paid in form of additional shares (In millions of Canadian dollars) December 31, 2017 0.1625 January 17, 2018 January 31, 2018 February 15, 2018 11.8 5.1 March 31, 2018 0.1625 April 18, 2018 April 30, 2018 May 15, 2018 11.1 5.9 June 30, 2018 0.1625 July 18, 2018 July 31, 2018 August 15, 2018 ________ (a) Amount includes notional dividends on outstanding restricted stock awards of $0.3 million . Kinder Morgan Interest Distributions The following table provides information regarding distributions declared and paid, or to be paid, as applicable, to Kinder Morgan during the six months ended June 30, 2018. For the three month period ended Dividend rate per share Date of declaration Date of distribution Total amount of distribution paid in cash Total amount of distribution paid in form of additional shares (In millions of Canadian dollars) December 31, 2017 0.1625 January 17, 2018 February 15, 2018 31.0 9.9 March 31, 2018 0.1625 April 18, 2018 May 15, 2018 31.0 9.9 June 30, 2018 0.1625 July 18, 2018 August 15, 2018 Earnings per Restricted Voting Share We calculate earnings per share using the two-class method. Earnings were allocated to Restricted Voting Shares and participating securities based on the amount of dividends paid in the current period plus an allocation of the undistributed earnings or excess distributions over earnings to the extent that each security participates in earnings or excess distributions over earnings. Our unvested restricted stock awards, which may be settled in Restricted Voting Shares issued to employees and non-employee directors and include dividend equivalent payments, do not participate in excess distributions over earnings. The following table sets forth the allocation of net income available to shareholders of Restricted Voting Shares and participating securities: Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 (In millions of Canadian dollars) Net Income Available to Restricted Voting Stockholders 1.8 4.2 12.6 4.2 Participating securities: Less: Net income allocated to restricted stock awards(a) (0.1 ) — (0.2 ) — Net Income Allocated to Restricted Voting Stockholders 1.7 4.2 12.4 4.2 Basic Weighted Average Restricted Voting Shares Outstanding 103.8 38.8 103.7 38.8 Basic Earnings Per Restricted Voting Share 0.02 0.11 0.12 0.11 _______ (a) As of June 30, 2018, there were approximately 0.8 million unvested restricted stock awards. For the three and six months ended June 30, 2018, the weighted average maximum number of potential Restricted Voting Share equivalents of 0.8 million unvested restricted stock awards are antidilutive and, accordingly, are excluded from the determination of diluted earnings per Restricted Voting Share. |
Related Party Transactions (Not
Related Party Transactions (Notes) | 6 Months Ended |
Jun. 30, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Transactions with Related Parties Affiliate Activities The following table summarizes our related party income statement activity. Revenues, operating costs and capitalized costs are under normal trade terms. Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 (In millions of Canadian dollars) Income Statement location Revenues-Services(a) 15.3 14.8 30.7 29.6 Operations and maintenance and general and administrative expenses 2.8 0.1 4.7 1.2 Interest expense(b) — 7.9 — 19.6 Other Capitalized costs from affiliates in property, plant and equipment 0.1 2.0 0.3 4.0 _________ (a) Amounts represent sales to a customer who is a related party through joint ownership of a joint venture. (b) 2017 amounts primarily represent interest on long-term debt with affiliates (“KMI Loans”) that was repaid with proceeds from our IPO. Accounts receivable and payable Accounts receivable-affiliate and accounts payable-affiliate are non-interest bearing and are settled on demand and, since our IPO, primarily settled monthly. The following table summarizes our affiliate balances: June 30, December 31, 2018 2017 (In millions of Canadian dollars) Accounts receivable(a) 13.7 9.0 Contract accounts receivable(b) 1.0 — Accounts payable(c) 0.8 0.7 ________ (a) Included in “Accounts receivable” on our accompanying Consolidated Balance Sheets. (b) Included in “Other current assets” on our accompanying Consolidated Balance Sheets. (c) Included in “Accounts payable” on our accompanying Consolidated Balance Sheets. |
Risk Management (Notes)
Risk Management (Notes) | 6 Months Ended |
Jun. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Risk Management | Risk Management and Financial Instruments Credit risk We are exposed to credit risk, which is the risk that a customer or other counterparty will fail to perform an obligation or settle a liability, resulting in a financial loss to our business, which is primarily concentrated in the crude oil and refined products transportation industry and is dependent upon the ability of our customers to pay for these services. A majority of our customers operate in the oil and gas exploration and development, or energy marketing or transportation industries. We may be exposed to long-term downturns in energy commodity prices, including the price for crude oil, or other credit events impacting these industries. We limit our exposure to credit risk by requiring shippers who fail to maintain specified credit ratings or a suitable financial position to provide acceptable security, generally in the form of guarantees from credit worthy parties or letters of credit from well rated financial institutions. Our cash and cash equivalents are held with major financial institutions, minimizing the risk of non-performance by counter parties. Interest Rate Risk We are exposed to interest rate risk attributed to floating rate debt, which is used to finance capital expansion projects, including the TMEP, and general corporate operations. The changes in interest rates may impact future cash flows and the fair value of our financial instruments. Foreign Currency Transactions and Translation Foreign currency transaction gains or losses result from a change in exchange rates between the functional currency of an entity and the currency in which a transaction is denominated. Unrealized and realized gains and losses generated from these transactions are recorded in foreign exchange (loss) gain in the accompanying consolidated statements of income and include: • Prior to repayment of the KMI Loans utilizing proceeds from our IPO, we were exposed to foreign currency risk related to the U.S. dollar denominated KMI Loans. For the three and six months ended June 30, 2017, we had unrealized foreign exchange losses of $13.1 million and $3.0 million related to the KMI Loans. • Unrealized foreign exchange gains (losses) for the three and six months ended June 30, 2018 and 2017 were $0.1 million , $(2.5) million , $0.6 million and $(1.8) million , respectively, due to changes in exchange rates between the Canadian dollar and the U.S. dollar on U.S. dollar denominated balances. These currency exchange rate fluctuations affect the expected Canadian dollar cash flows on unsettled U.S. dollar denominated transactions, primarily related to cash bank accounts that are denominated in U.S. dollars and affiliate receivables or payables that are denominated in U.S. dollars. We translate the assets and liabilities of Puget Sound that has the U.S. dollar as its functional currency to Canadian dollars at period-end exchange rates. • Puget Sound operates in the state of Washington, and earns its revenues and incurs most of its expenses in U.S. dollars and Cochin earns its revenues in U.S. dollars. Therefore, fluctuations in the U.S. dollar to Canadian dollar exchange rate can affect the earnings contributed by Puget Sound and Cochin to our overall results. For the three and six months ended June 30, 2018 and 2017, we had realized foreign exchange losses of $0.3 million , $ 0.4 million , $1.0 million , and $0.3 million , respectively. Liquidity risk Liquidity risk is the risk that we will not be able to meet our financial obligations, including commitments, as they become due. We manage our liquidity risk by ensuring access to sufficient funds to meet our obligations. We forecast cash requirements to ensure funding is available to settle financial liabilities when they become due. Our primary sources of liquidity and capital resources are funds generated from operations and our temporary credit facilities, see Note 2. |
Revenue Recognition Revenue Rec
Revenue Recognition Revenue Recognition (Notes) | 6 Months Ended |
Jun. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contract with Customer [Text Block] | Revenue Recognition Adoption of Topic 606 Effective January 1, 2018, we adopted ASU No. 2014-09, “Revenue from Contracts with Customers” and the series of related accounting standard updates that followed (collectively referred to as “Topic 606”). We utilized the modified retrospective method to adopt Topic 606, which required us to apply the new revenue standard to (i) all new revenue contracts entered into after January 1, 2018, and (ii) revenue contracts which were not completed as of January 1, 2018. In accordance with this approach, our consolidated revenues for periods prior to January 1, 2018 were not revised. The cumulative effect of the adoption of Topic 606 as of January 1, 2018 and the impact to the financial statement line items for the current year was not material. Revenue from Contracts with Customers Beginning in 2018, we account for revenue from contracts with customers in accordance with Topic 606. The unit of account in Topic 606 is a performance obligation, which is a promise in a contract to transfer to a customer either a distinct good or service (or bundle of goods and services) or a series of distinct goods or services provided over a period of time. Topic 606 requires that a contract’s transaction price, which is the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer, is to be allocated to each performance obligation in the contract based on relative standalone selling prices and recognized as revenue when (point in time) or as (over time) control of the goods or services transfers to the customer and the performance obligation is satisfied. Our customer service contracts primarily include transportation service and terminaling service contracts, as described below. Generally, for the majority of these contracts: (i) our promise is to transfer (or stand ready to transfer) a series of distinct integrated services over a period of time, which is a single performance obligation; (ii) the transaction price includes fixed and/or variable consideration, which amount is determinable at contract inception and/or at each month end based on our right to invoice at month end for the value of services provided to the customer that month; and (iii) the transaction price is recognized as revenue over the service period specified in the contract (which can be a day, including each day in a series of promised daily services, a month, a year, or other time increment, including a deficiency makeup period) as the services are rendered using a time-based (passage of time) or units-based (units of service transferred) output method for measuring the transfer of control of the services and satisfaction of our performance obligation over the service period, based on the nature of the promised service (e.g., firm or non-firm) and the terms and conditions of the contract (e.g., contracts with or without makeup rights). Firm Services Firm services (also called uninterruptible services) are services that are promised to be available to the customer at all times during the period(s) covered by the contract, with limited exceptions. Our firm service contracts are typically structured with take-or-pay or minimum volume provisions, which specify minimum service quantities a customer will pay for even if it chooses not to receive or use them in the specified service period (referred to as “deficiency quantities”). We typically recognize the portion of the transaction price associated with such provisions, including any deficiency quantities, as revenue depending on whether the contract prohibits the customer from making up deficiency quantities in subsequent periods, or the contract permits this practice, as follows: • Contracts without Makeup Rights: If contractually the customer cannot make up deficiency quantities in future periods, our performance obligation is satisfied, and revenue associated with any deficiency quantities is generally recognized as each service period expires. Because a service period may exceed a reporting period, we determine at inception of the contract and at the beginning of each subsequent reporting period if we expect the customer to take the minimum volume associated with the service period. If we expect the customer to make up all deficiencies in the specified service period (i.e., we expect the customer to take the minimum service quantities), the minimum volume provision is deemed not substantive and we will recognize the transaction price as revenue in the specified service period as the promised units of services are transferred to the customer. Alternatively, if we expect that there will be any deficiency quantities that the customer cannot or will not make up in the specified service period (referred to as “breakage”), we will recognize the estimated breakage amount (subject to the constraint on variable consideration) as revenue ratably over such service period in proportion to the revenue that we will recognize for actual units of service transferred to the customer in the service period. For certain take-or-pay contracts where we make the service, or a part of the service, continuously available over the service period, we typically recognize the take-or-pay amount as revenue ratably over such period based on the passage of time. • Contracts with Makeup Rights: If contractually the customer can acquire the promised service in a future period and make up the deficiency quantities in such future period (the “deficiency makeup period”), we have a performance obligation to deliver those services at the customer’s request (subject to contractual and/or capacity constraints) in the deficiency makeup period. At inception of the contract, and at the beginning of each subsequent reporting period, we estimate if we expect that there will be deficiency quantities that the customer will or will not make up. If we expect the customer will make up all deficiencies it is contractually entitled to, any non-refundable consideration received relating to temporary deficiencies that will be made up in the deficiency makeup period will be deferred as a contract liability, and we will recognize that amount as revenue in the deficiency makeup period when either of the following occurs: (i) the customer makes up the volumes; or (ii) the likelihood that the customer will exercise its right for deficiency volumes then becomes remote (e.g., there is insufficient capacity to make up the volumes, the deficiency makeup period expires). Alternatively, if we expect at inception of the contract, or at the beginning of any subsequent reporting period, that there will be any deficiency quantities that the customer cannot or will not make up (i.e., breakage), we will recognize the estimated breakage amount (subject to the constraint on variable consideration) as revenue ratably over the specified service periods in proportion to the revenue that we will recognize for actual units of service transferred to the customer in those service periods. Non-Firm Services Non-firm services (also called interruptible services) are the opposite of firm services in that such services are provided to a customer on an “as available” basis. Generally, we do not have an obligation to perform these services until we accept a customer’s periodic request for service. For the majority of our non-firm service contracts, the customer will pay only for the actual quantities of services it chooses to receive or use, and we typically recognize the transaction price as revenue as those units of service are transferred to the customer in the specified service period (typically a daily or monthly period). Nature of Revenue by Segment Pipelines Segment We provide crude oil and refined petroleum transportation and storage services on a firm or non-firm basis. The regulated tariffs for TMPL, Cochin and Puget Sound are designed to provide revenues sufficient to recover the costs of providing transportation and storage services to shippers, including a return on invested capital. TMPL and Puget Sound are common carrier pipelines, generally providing services on a non-firm basis. The majority of Cochin’s transportation service is provided on a firm basis under its current contracts. TMPL’s revenue is adjusted according to terms prescribed in its toll settlement with shippers as approved by the NEB. Differences between transportation revenue recognized pursuant to its toll settlement and actual toll receipts are recognized as regulatory assets or liabilities and are settled in future tolls. For Cochin’s firm transportation service, we typically promise to transport on a stand-ready basis the shipper’s minimum volume commitment amount. The shipper is obligated to pay for its volume commitment amount, regardless of whether or not it flows quantities in Cochin’s pipeline. The shipper pays a transaction price typically based on a per-unit rate for quantities transported, including amounts attributable to deficiency quantities. Our non-firm, interruptible transportation and storage services are provided on TMPL, Cochin and Puget Sound pipelines when and to the extent we determine capacity is available in these pipeline systems and/or terminal storage facilities. The shippers typically pay a per-unit rate for actual quantities of product injected into/withdrawn from storage and/or transported. Terminals Segment We provide various types of liquid tank and bulk terminal services. These services are generally comprised of inbound, storage and outbound handling of customer products. Our liquid tank storage and handling service contracts generally include a promised tank storage capacity provision and prepaid volume throughput of the stored product. In these contracts, we have a stand-ready obligation to perform this contracted service each day over the life of the contract. The customer pays a transaction price typically in the form of a fixed monthly charge and is obligated to pay whether or not it uses the storage capacity and throughput service (i.e., a take-or-pay payment obligation). These contracts generally include a per-unit rate for any quantities we handle at the request of the customer in excess of the prepaid volume throughput amount and also typically include per-unit rates for additional, ancillary services that may be periodically requested by the customer. Our bulk storage and handling contracts generally include inbound handling of our customers’ dry bulk material product into our storage facility and outbound handling of these products from our storage facility. These services are provided on both a firm and non-firm basis. In our firm bulk storage and handling contracts, we are committed to handle and store on a stand-ready basis the minimum throughput quantity of bulk materials contracted by the customer. The customer is obligated to pay for its minimum volume commitment amount, regardless of whether or not it uses the storage and handling service. The customer pays a transaction price typically based on a per-unit rate for quantities handled, including amounts attributable to deficiency quantities. For non-firm storage and handling services, the customer pays a transaction price typically based on a per-unit rate for quantities handled on an as requested, non-guaranteed basis. Disaggregation of Revenues The following table presents our revenues disaggregated by revenue source and type of revenue for each revenue source: Three Months Ended June 30, 2018 Pipelines Terminals Total (In millions of Canadian dollars) Revenue from contracts with customers Services Firm services(a) 13.1 63.4 76.5 Fee-based services 79.8 14.1 93.9 Total services revenues 92.9 77.5 170.4 Other revenues(b) 4.6 3.0 7.6 Total revenues 97.5 80.5 178.0 Six Months Ended June 30, 2018 Pipelines Terminals Total (In millions of Canadian dollars) Revenue from contracts with customers Services Firm services(a) 25.8 118.0 143.8 Fee-based services 160.7 30.6 191.3 Total services revenues 186.5 148.6 335.1 Other revenues(b) 1.0 6.1 7.1 Total revenues 187.5 154.7 342.2 ______ (a) Includes non-cancellable firm service customer contracts with take-or-pay or minimum volume commitment elements, including those contracts where both the price and quantity amount are fixed. In these arrangements, the customer is obligated to pay for the rendered service whether or not the customer chooses to utilize the service. Excludes service contracts with indexed-based pricing, which along with revenues from other contracts are reported as Fee-based services. (b) Amounts recognized as revenue under guidance prescribed in Topics of the Accounting Standards Codification other than in Topic 606 and primarily includes regulatory-based adjustments for TMPL and leases. Contract Balances Contract assets and contract liabilities are the result of timing differences between revenue recognition, billings and cash collections. We recognize contract assets in those instances where billing occurs subsequent to revenue recognition and our right to invoice the customer is conditioned on something other than the passage of time. Our contract liabilities are substantially related to (i) capital improvements paid for in advance by certain customers generally in our non-regulated businesses, which we subsequently recognize as revenue on a straight-line basis over the initial term of the related customer contracts, and (ii) consideration received from customers for temporary deficiency quantities under minimum volume contracts that we expect will be made up in a future period, which we subsequently recognize as revenue when the customer makes up the volumes or the likelihood that the customer will exercise its right for deficiency volumes becomes remote (e.g., there is insufficient capacity to make up the volumes, the deficiency makeup period expires). The following table presents the activity in our contract assets and liabilities for the six months ended June 30, 2018: (In millions of Canadian dollars) Contract Assets (a) Balance at December 31, 2017 9.1 Additions 10.0 Transfer to Accounts receivable (17.6 ) Balance at June 30, 2018 1.5 Contract Liabilities (b) Balance at December 31, 2017 67.9 Additions 80.2 Transfer to Revenues (68.8 ) Balance at June 30, 2018 79.3 ______ (a) Includes current balances reported within “Other current assets” in our accompanying consolidated balance sheets at June 30, 2018 and December 31, 2017. (b) Includes current balances of $ 16.4 million and $ 14.4 million reported within “Other current liabilities” in our accompanying consolidated balance sheets at June 31, 2018 and December 31, 2017, respectively, and includes non-current balances of $ 62.9 million and $ 53.5 million reported within “Deferred revenues” in our accompanying consolidated balance sheets at June 30, 2018 and December 31, 2017, respectively. Revenue Allocated to Remaining Performance Obligations The following table presents our estimated revenue allocated to remaining performance obligations for contracted revenue that has not yet been recognized, representing our “contractually committed” revenue as of June 30, 2018 that we will invoice or transfer from contract liabilities and recognize in future periods (in millions of Canadian dollars): Year Estimated Revenue Six months ended December 31, 2018 171.3 2019 325.6 2020 246.9 2021 194.4 2022 154.5 Thereafter 608.5 Total 1,701.2 Our contractually committed revenue for purposes of the tabular presentation above is generally limited to service customer contracts which have fixed pricing and fixed volume terms and conditions, generally including contracts with take-or-pay or minimum volume commitment payment obligations. Our contractually committed revenue amounts generally exclude, based on the following practical expedients that we elected to apply, remaining performance obligations for: (i) contracts with index-based pricing or variable volume attributes in which such variable consideration is allocated entirely to a wholly unsatisfied performance obligation or to a wholly unsatisfied promise to transfer a distinct service that forms part of a series of distinct services; (ii) contracts with an original expected duration of one year or less; and (iii) contracts for which we recognize revenue at the amount for which we have the right to invoice for services performed. |
Reportable Segments (Notes)
Reportable Segments (Notes) | 6 Months Ended |
Jun. 30, 2018 | |
Segment Reporting [Abstract] | |
Reportable Segments | Reportable Segments Our reportable business segments are based on the way management organizes the enterprise. Each of our reportable business segments represent a component of the enterprise that engages in a separate business activity and for which discrete financial information is available. Our reportable business segments are: • Pipelines - the ownership and operation of (i) TMPL that currently transports approximately 300,000 bpd of crude oil and refined petroleum from Edmonton, Alberta to Burnaby, B.C.; (ii) TMEP, an approximately 590,000 bpd of crude oil and refined petroleum pipeline under construction; (iii) Puget Sound serving the state of Washington; (iv) Jet Fuel serving Vancouver International Airport; (v) KMCI, the employer of Canadian staff; and (vi) Cochin, a 12 -inch diameter multi-product pipeline which spans approximately 1,000 kilometers in Saskatchewan and Alberta; and • Terminals - the ownership and operation of liquid product merchant storage and rail terminals in the Edmonton, Alberta market as well as a predominantly dry cargo import/export facility in North Vancouver, B.C. We evaluate the performance of our reportable business segments by evaluating our Segment earnings before depreciation and amortization expenses (“Segment EBDA”). We believe that Segment EBDA is a useful measure of our operating performance because it measures segment operating results before D&A and certain expenses that are generally not controllable by the operating managers of our respective business segments, such as general and administrative expense, interest expense, income tax expense and prior to May 2017, the foreign exchange losses (or gains) on the KMI Loans. Our general and administrative expenses include such items as employee benefits, insurance, rentals, certain litigation and shared corporate services including accounting, information technology, human resources and legal services. Certain general and administrative expenses attributable to Trans Mountain are billable as flow through items to shippers and result in incremental revenues. We consider each period’s earnings before all non-cash D&A expenses to be an important measure of business segment performance for our reporting segments. We account for intersegment sales at market prices, while we account for asset transfers at either market value or, in some instances, book value. Intercompany transactions are eliminated in consolidation. Financial information by segment follows: Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 (In millions of Canadian dollars) Revenues Pipelines 97.5 96.4 187.5 185.9 Terminals 80.5 72.3 154.7 147.3 Total consolidated revenues 178.0 168.7 342.2 333.2 Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 (In millions of Canadian dollars) Segment EBDA (a)(b)(c) Pipelines 68.9 54.2 132.5 110.5 Terminals 66.2 52.3 119.8 106.4 Total Segment EBDA 135.1 106.5 252.3 216.9 D&A (38.2 ) (35.6 ) (75.0 ) (70.4 ) Foreign exchange loss on KMI Loans(c) — (13.1 ) — (3.0 ) General and administrative expenses and corporate charges (21.3 ) (16.3 ) (40.5 ) (34.3 ) Interest expense, net (56.9 ) (2.9 ) (57.2 ) (9.6 ) Income tax expense (5.0 ) (13.5 ) (21.5 ) (27.7 ) Total consolidated net income 13.7 25.1 58.1 71.9 June 30, 2018 December 31, 2017 (In millions of Canadian dollars) Assets Pipelines 3,345.1 3,077.0 Terminals 1,418.6 1,375.7 Total consolidated assets 4,763.7 4,452.7 _______ (a) Includes operations and maintenance expenses, and taxes, other than income taxes. (b) Includes revenues and other (income) expense less operating expenses and other, net. Segment EBDA for the three and six months ended June 30, 2018 , and 2017 includes (i) $ 0.2 million, $ 2.9 million, $ 0.4 million, and $2.1 million, respectively, of foreign exchange losses due to changes in exchange rates between our Canadian dollar and the U.S. dollar on U.S. dollar denominated balances, and (ii) $ 13.5 million , $ 6.3 million , $ 25.1 million , and $ 11.8 million , respectively, of capitalized equity financing costs. (c) The KMI Loans, which represented U.S. dollar denominated long-term notes payable to Kinder Morgan, were settled with proceeds from our IPO. |
Income Taxes (Notes)
Income Taxes (Notes) | 6 Months Ended |
Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Income tax expense included in our accompanying consolidated statements of income is as follows: Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 (In millions of Canadian dollars, except percentages) Income tax expense 5.0 13.5 21.5 27.7 Effective tax rate 26.7 % 35.0 % 27.0 % 27.8 % The effective tax rate for the three and six months ended June 30, 2018 was consistent with the statutory federal and provincial rate of 27% . The effective tax rate for the three months ended June 30, 2017 was considerably higher than the statutory federal and provincial rate of 27% primarily due to the $16.0 million dollar foreign exchange rate loss that arose primarily from the KMI Loans (considered capital losses that are only 50% tax-effected) and valuation allowances on capital loss carryforwards. The effective tax rate for the six months ended June 30, 2017 was higher than the statutory federal and provincial rate of 27% primarily due to the tax impact of pension adjustments and the impact of unrealized foreign exchange rate loss in respect to the KMI Loans and the capital loss carryforwards for which we recorded a full valuation allowance; partially offset by U.S. tax on earnings from Puget Sound for which we are not subject to income taxes to the extent of the ownership interest attributable to Kinder Morgan. As a result of our IPO and subsequent revaluation (or rebalancing) of our investment in the Limited Partnership, our tax basis exceeds our accounting basis in our investment in the Limited Partnership by approximately $874.0 million. This excess tax basis results in a deferred tax asset of approximately $118.0 million. A full valuation allowance was taken against this deferred tax asset as we determined it was more likely than not to not be realized. |
Benefit Plans (Notes)
Benefit Plans (Notes) | 6 Months Ended |
Jun. 30, 2018 | |
Retirement Benefits [Abstract] | |
Pension and Other Postretirement Benefits Disclosure [Text Block] | Benefit Plans Components of net benefit cost related to our pension plans and other postretirement benefit (OPEB) plans are as follows: Three Months Ended June 30, Six Months Ended June 30, Pension OPEB Pension OPEB 2018 2017 2018 2017 2018 2017 2018 2017 (In millions of Canadian dollars) Service cost 2.6 2.1 0.2 0.1 5.3 4.2 0.4 0.3 Interest cost 2.0 1.9 0.1 0.1 4.1 3.9 0.3 0.3 Expected return on assets (2.3 ) (2.0 ) — — (4.6 ) (3.9 ) — — Amortization of prior service costs 0.1 0.1 — — 0.1 0.1 — — Amortization of net actuarial losses 0.9 1.1 — 0.1 1.7 2.1 — 0.1 Total net benefit cost 3.3 3.2 0.3 0.3 6.6 6.4 0.7 0.7 |
Changes in Operating Assets and
Changes in Operating Assets and Liabilities (Notes) | 6 Months Ended |
Jun. 30, 2018 | |
Supplemental Cash Flow Elements [Abstract] | |
Cash Flow, Supplemental Disclosures [Text Block] | Change in Operating Assets and Liabilities Six Months Ended June 30, 2018 2017 (In millions of Canadian dollars) Cash inflow (outflow) Accounts receivable 2.3 (10.9 ) Prepaid expenses and deposits (19.4 ) (9.3 ) Inventories (0.5 ) (0.5 ) Other current assets 1.2 (2.1 ) Deferred charges and other assets (5.0 ) 2.1 Accounts payable (23.9 ) (5.4 ) Accrued interest — (45.2 ) Other current liabilities 30.5 (0.3 ) Pension and postretirement benefits (1.3 ) (0.4 ) Regulatory liabilities and other deferred credits 46.2 (20.2 ) 30.1 (92.2 ) |
Litigation, Environmental and O
Litigation, Environmental and Other Contingencies (Notes) | 6 Months Ended |
Jun. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Litigation, Environmental and Other Contingencies | Litigation and Contingencies Legal Proceedings We and our subsidiaries are parties to various legal, regulatory and other matters arising from the day-to-day operations of our businesses or certain predecessor operations that may result in claims against the Company. Although no assurance can be given, we believe, based on our experiences to date and taking into account established reserves and insurance, that the ultimate resolution of such items will not have a material adverse impact on our business, financial position, results of operations, cash flows, or dividends to our shareholders. We believe we have meritorious defenses to the matters to which we are a party and intend to vigorously defend the Company. When we determine a loss is probable of occurring and is reasonably estimable, we accrue an undiscounted liability for such contingencies based on our best estimate using information available at that time. If the estimated loss is a range of potential outcomes and there is no better estimate within the range, we accrue the amount at the low end of the range. We disclose contingencies where an adverse outcome may be material, or in the judgment of management, we conclude the matter should otherwise be disclosed. We had no accruals for any outstanding legal proceedings as of June 30, 2018 and December 31, 2017. Base Line Terminal Project Litigation On March 2, 2018, Arnett & Burgess Oilfield Construction Limited (“A&B”) filed a statement of claim and certificate of lis pendens, in the Court of Queen’s Bench of Alberta, against Alberta Envirofuels Inc. (“AEF”) and Base Line Terminal East Limited Partnership, by its general partner, KM Canada Rail Holdings GP Limited (“BLTELP”). A&B was a contractor on the Base Line Terminal Project (the “BTT Project”) and has claimed it is owed $21.2 million, inclusive of goods and services tax, asserting that BLTELP failed to pay A&B for work performed on the BTT Project under a construction services agreement. On March 26, 2018, A&B filed a separate statement of claim, in the Court of Queen’s Bench of Alberta, against BLTELP solely, asserting that BLTELP failed to pay for work performed under a separate construction services agreement also related to the BTT Project. With respect to the second claim, A&B has claimed it is owed approximately $1.0 million, inclusive of goods and services tax. We intend to defend both claims vigorously. On June 5, 2018, Barrier Coating Inc. (“Barrier”) filed a statement of claim and certificate of lis pendens in the Court of Queen’s Bench of Alberta against Enbridge Pipelines Inc., AEF, Strathcona County, BLTELP, KM Canada Rail Holdings GP Limited, Keyera Energy Ltd., Trans Mountain Pipeline ULC and Fabricom Inc. (“Fabricom”). Barrier is a subcontractor on the BTT Project and has a construction agreement with Fabricom (the “Fabricom Agreement”). In its claim, Barrier asserts that Fabricom has breached its obligations under the Fabricom Agreement and, as such, Fabricom owes damages to Barrier. The remaining defendants, including BLTELP, KM Canada Rail Holdings GP Limited and Trans Mountain Pipeline ULC, have been named in the claim as parties with registered interests on lands affected by the work performed by Barrier under the Fabricom Agreement. Barrier asserts that these parties were, collectively, unjustly enriched in the amount of $2.5 million. We intend to defend the claim vigorously. TMEP Litigation There are numerous legal challenges pending before the Federal Court of Appeal that have been filed by various governmental and non-governmental organizations, First Nations or other parties seeking judicial review of the recommendation of the NEB and subsequent decision by the Federal Governor in Council to conditionally approve TMEP. The petitions allege, among other things, that additional consultation, engagement or accommodation is required and that various non-economic impacts of TMEP were not adequately considered. The remedies sought include requests that the NEB recommendation be quashed, that additional consultations be undertaken, and that the order of the Governor in Council approving TMEP be quashed. After provincial elections in B.C. on May 9, 2017, the New Democratic Party and Green Party formed a majority government. The new B.C. government sought and was granted limited intervenor status in the Federal Court of Appeal proceedings to argue against the government’s approval of TMEP. A hearing was conducted by the Federal Court of Appeal from October 2 through October 13, 2017. A decision is expected in the coming months, and is subject to potential further appeal to the Supreme Court of Canada. Although we believe that each of the foregoing appeals lacks merit, in the event an applicant is successful at the Supreme Court of Canada, among other potential impacts, the NEB recommendation or Governor in Council’s approval may be quashed, permits may be revoked, TMEP may be subject to additional significant regulatory reviews, there may be significant changes to TMEP plans, further obligations or restrictions may be implemented, or TMEP may be stopped altogether, which could materially impact the overall feasibility or economic benefits of TMEP, which in turn would have a material adverse effect on us. In addition to the judicial reviews of the NEB recommendation report and Governor in Council’s order, two judicial review proceedings were commenced at the Supreme Court of B.C. by the Squamish Nation and the City of Vancouver. The petitions alleged a duty and failure to consult or accommodate First Nations, and generally, among other claims, that the Province should not have approved TMEP, and sought to quash the Environmental Assessment Certificate (EAC) issued by the B.C. Environmental Assessment Office. On September 29, 2017, the B.C. government filed evidence in support of the EAC in the judicial review proceeding involving the Squamish Nation. Hearings were conducted in October and November 2017, respectively, for the City of Vancouver and the Squamish Nation judicial review proceedings, and the Court took the matters under consideration. On May 24, 2018, the Court dismissed both proceedings. On June 22, 2018, the City of Vancouver filed its notice to appeal the decision to the B.C. Court of Appeal, and on June 25, 2018, the Squamish Nation also filed an appeal to the B.C. Court of Appeal. Any decision of the B.C. Court of Appeal may be appealed to the Supreme Court of Canada. Although we believe that each of the foregoing appeals lacks merit, in the event that an applicant for judicial review is successful, among other potential impacts, the EAC may be quashed, provincial permits may be revoked, TMEP may be subject to additional significant regulatory reviews, there may be significant changes to TMEP plans, further obligations or restrictions may be imposed or TMEP may be stopped altogether. On October 26, 2017 and November 14, 2017, Trans Mountain filed motions with the NEB. The first motion sought to resolve delays experienced by Trans Mountain in obtaining preliminary plan approvals from the City of Burnaby. The second motion sought to establish a NEB process to backstop provincial and municipal processes in a fair, transparent and expedited fashion. On December 7, 2017, the NEB issued an order granting the relief requested by Trans Mountain in respect of its motion related to Burnaby (the “Burnaby Order”). On January 19, 2018, the NEB granted, in part, Trans Mountain’s second motion by establishing a generic process to hear any future motions as they relate to provincial and municipal permitting issues. On February 16, 2018, Burnaby and B.C. applied to the Federal Court of Appeal for leave to appeal the Burnaby Order. On March 23, 2018, the Federal Court of Appeal denied the application. On May 9, 2018, Burnaby applied for leave to appeal the decision to the Supreme Court of Canada. A successful appeal at the Supreme Court of Canada could result in the Burnaby Order being quashed. On April 25, 2018, the B.C. Lieutenant Governor in Council referred a question to the B.C. Court of Appeal regarding the constitutionality of draft legislation seeking to impose a requirement for a “hazardous substance permit” on all persons having possession, charge or control of a certain volume of “heavy oil” in the course of operating an industry, trade or business. We believe the draft legislation, if enacted, would apply to TMEP. On June 18, 2018, the Court granted 20 persons participatory status in the reference matter, including Trans Mountain Pipeline ULC. The Court has scheduled a hearing on the referenced matter to begin on March 18, 2019. As a result of the filing or resolution of this or any related reference matter, among other potential impacts, there may be significant changes to TMEP plans, further obligations or restrictions may be imposed or TMEP may be stopped altogether. See Note 1 “ Pending Sale of TMPL and TMEP to the Government of Canada .” Contingencies We and our subsidiaries are subject to various legal and regulatory actions and proceedings which arise in the normal course of business. While the final outcome of such actions and proceedings cannot be predicted with certainty, we believe that the resolution of such actions and proceedings will not have a material impact on our financial position or results of operations. We and our subsidiaries are also subject to environmental cleanup and enforcement actions from time to time. Although we believe our operations are in substantial compliance with applicable environmental law and regulations, risks of additional costs and liabilities are inherent in pipeline and terminal operations, and there can be no assurance that we will not incur significant costs and liabilities. Moreover, it is possible that other developments, such as increasingly stringent environmental laws, regulations and enforcement policies under the terms of authority of those laws, and claims for damages to property or persons resulting from our operations, could result in substantial costs and liabilities to us. Although it is not possible to predict the ultimate outcomes, we believe that the resolution of the environmental matters to which we and our subsidiaries are a party, will not have a material adverse effect on our business, financial position, results of operations or cash flows. As of June 30, 2018 and December 31, 2017, we had $6.9 million and $7.3 million, respectively, accrued for our outstanding matters. TMEP The proposed expansion, which includes capitalized equity and debt financing costs, would increase throughput capacity of the TMPL from approximately 300,000 bpd to 890,000 bpd. Construction related delays could result in increases to the estimated total costs. TMEP has transportation service agreements for a total of 707,500 bpd, representing approximately 80% of the expanded system’s capacity (the maximum amount under the regulated limit imposed by the NEB). On May 19, 2016, the NEB recommended that the Governor in Council approve TMEP, subject to 157 conditions. On November 29, 2016, the Governor in Council approved TMEP, and directed the NEB to issue Amending Orders AO-003-OC-2 and AO-002-OC-49, and Certificate of Public Convenience and Necessity OC-064, authorizing the construction of TMEP. On January 11, 2017, the government of B.C. announced the issuance of the EAC to Trans Mountain for the B.C. portion of TMEP. The EAC includes 37 conditions that are in addition to, and designed to supplement, the 157 conditions required by the NEB. We have spent a cumulative total, net of contributions in aid of construction, of approximately $1,258.4 million on development of TMEP as of May 31, 2018 (December 31, 2017 - $930.0 million). We would expect to fund TMEP capital expenditures through additional borrowings under our TMPL Non-recourse Credit Agreement. |
Recent Accounting Pronoucements
Recent Accounting Pronoucements (Notes) | 6 Months Ended |
Jun. 30, 2018 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Recent New Accounting Pronouncements | Recent Accounting Pronouncements Topic 842 On February 25, 2016, the FASB issued ASU No. 2016-02, “ Leases (Topic 842) .” This ASU requires that a lessee recognizes assets and liabilities on the balance sheet for the present value of the rights and obligations created by all leases with terms of more than 12 months. The ASU also will require disclosures designed to give financial statement users information on the amount, timing, and uncertainty of cash flows arising from leases. On January 25, 2018, the FASB issued ASU No. 2018-01, “ Land Easement Practical Expedient for Transition to Topic 842 .” This ASU permits an entity to elect a transition practical expedient that would not require companies to reconsider its accounting for existing or expired land easements before the adoption of Topic 842 and that were not previously accounted for as leases under Topic 840. We are in the process of assessing contracts to identify leases based on the modified definition of a lease, selecting a lease accounting system, evaluating internal control changes to support management in the accounting for and disclosure of leasing activities, and assessing currently available and proposed transition practical expedients. Topic 842 will be effective for us as of January 1, 2019. ASU No. 2016-13 O n June 16, 2016, the FASB issued ASU No. 2016-13, “ Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. ” This ASU modifies the impairment model to utilize an expected loss methodology in place of the currently used incurred loss methodology, which will result in the more timely recognition of losses. ASU No. 2016-13 will be effective for us as of January 1, 2020. We are currently reviewing the effect of this ASU to our financial statements. ASU No. 2017-04 On January 26, 2017, the FASB issued ASU No. 2017-04, “ Simplifying the Test for Goodwill Impairment (Topic 350) ” to simplify the accounting for goodwill impairment. The guidance removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. Goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. ASU No. 2017-04 will be effective for us as of January 1, 2020. We are currently reviewing the effect of this ASU to our financial statements. |
General General (Policies)
General General (Policies) | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Basis of Accounting, Policy [Policy Text Block] | Basis of Presentation General In January 2018, we completed the registration of our Restricted Voting Shares pursuant to Section 12(g) of the United States Securities Exchange Act of 1934 (the “Exchange Act”) and are subject to the reporting requirements of Section 13(a) of the Exchange Act. We have prepared the accompanying unaudited consolidated financial statements in accordance with the accounting principles contained in the FASB Accounting Standards Codification, the single source of U.S. GAAP and referred to in this report as the Codification. U.S. GAAP means generally accepted accounting principles that the SEC has identified as having substantial authoritative support, as supplemented by Regulation S-X under the Exchange Act, as amended from time to time. Under such rules and regulations, all significant intercompany items have been eliminated in consolidation. In our opinion, all adjustments, which are of a normal and recurring nature, considered necessary for a fair statement of our financial position and operating results for the interim periods have been included in the accompanying consolidated financial statements. Interim results are not necessarily indicative of results for a full year; accordingly, you should read these consolidated financial statements in conjunction with our consolidated financial statements and related notes included in our 2017 Form 10-K. Unless otherwise noted, amounts are stated in Canadian dollars, which is the functional currency of most of our operations. |
Revenue Recognition Revenue R21
Revenue Recognition Revenue Recognition (Policies) | 6 Months Ended |
Jun. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition, Policy [Policy Text Block] | Revenue from Contracts with Customers Beginning in 2018, we account for revenue from contracts with customers in accordance with Topic 606. The unit of account in Topic 606 is a performance obligation, which is a promise in a contract to transfer to a customer either a distinct good or service (or bundle of goods and services) or a series of distinct goods or services provided over a period of time. Topic 606 requires that a contract’s transaction price, which is the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer, is to be allocated to each performance obligation in the contract based on relative standalone selling prices and recognized as revenue when (point in time) or as (over time) control of the goods or services transfers to the customer and the performance obligation is satisfied. Our customer service contracts primarily include transportation service and terminaling service contracts, as described below. Generally, for the majority of these contracts: (i) our promise is to transfer (or stand ready to transfer) a series of distinct integrated services over a period of time, which is a single performance obligation; (ii) the transaction price includes fixed and/or variable consideration, which amount is determinable at contract inception and/or at each month end based on our right to invoice at month end for the value of services provided to the customer that month; and (iii) the transaction price is recognized as revenue over the service period specified in the contract (which can be a day, including each day in a series of promised daily services, a month, a year, or other time increment, including a deficiency makeup period) as the services are rendered using a time-based (passage of time) or units-based (units of service transferred) output method for measuring the transfer of control of the services and satisfaction of our performance obligation over the service period, based on the nature of the promised service (e.g., firm or non-firm) and the terms and conditions of the contract (e.g., contracts with or without makeup rights). Firm Services Firm services (also called uninterruptible services) are services that are promised to be available to the customer at all times during the period(s) covered by the contract, with limited exceptions. Our firm service contracts are typically structured with take-or-pay or minimum volume provisions, which specify minimum service quantities a customer will pay for even if it chooses not to receive or use them in the specified service period (referred to as “deficiency quantities”). We typically recognize the portion of the transaction price associated with such provisions, including any deficiency quantities, as revenue depending on whether the contract prohibits the customer from making up deficiency quantities in subsequent periods, or the contract permits this practice, as follows: • Contracts without Makeup Rights: If contractually the customer cannot make up deficiency quantities in future periods, our performance obligation is satisfied, and revenue associated with any deficiency quantities is generally recognized as each service period expires. Because a service period may exceed a reporting period, we determine at inception of the contract and at the beginning of each subsequent reporting period if we expect the customer to take the minimum volume associated with the service period. If we expect the customer to make up all deficiencies in the specified service period (i.e., we expect the customer to take the minimum service quantities), the minimum volume provision is deemed not substantive and we will recognize the transaction price as revenue in the specified service period as the promised units of services are transferred to the customer. Alternatively, if we expect that there will be any deficiency quantities that the customer cannot or will not make up in the specified service period (referred to as “breakage”), we will recognize the estimated breakage amount (subject to the constraint on variable consideration) as revenue ratably over such service period in proportion to the revenue that we will recognize for actual units of service transferred to the customer in the service period. For certain take-or-pay contracts where we make the service, or a part of the service, continuously available over the service period, we typically recognize the take-or-pay amount as revenue ratably over such period based on the passage of time. • Contracts with Makeup Rights: If contractually the customer can acquire the promised service in a future period and make up the deficiency quantities in such future period (the “deficiency makeup period”), we have a performance obligation to deliver those services at the customer’s request (subject to contractual and/or capacity constraints) in the deficiency makeup period. At inception of the contract, and at the beginning of each subsequent reporting period, we estimate if we expect that there will be deficiency quantities that the customer will or will not make up. If we expect the customer will make up all deficiencies it is contractually entitled to, any non-refundable consideration received relating to temporary deficiencies that will be made up in the deficiency makeup period will be deferred as a contract liability, and we will recognize that amount as revenue in the deficiency makeup period when either of the following occurs: (i) the customer makes up the volumes; or (ii) the likelihood that the customer will exercise its right for deficiency volumes then becomes remote (e.g., there is insufficient capacity to make up the volumes, the deficiency makeup period expires). Alternatively, if we expect at inception of the contract, or at the beginning of any subsequent reporting period, that there will be any deficiency quantities that the customer cannot or will not make up (i.e., breakage), we will recognize the estimated breakage amount (subject to the constraint on variable consideration) as revenue ratably over the specified service periods in proportion to the revenue that we will recognize for actual units of service transferred to the customer in those service periods. Non-Firm Services Non-firm services (also called interruptible services) are the opposite of firm services in that such services are provided to a customer on an “as available” basis. Generally, we do not have an obligation to perform these services until we accept a customer’s periodic request for service. For the majority of our non-firm service contracts, the customer will pay only for the actual quantities of services it chooses to receive or use, and we typically recognize the transaction price as revenue as those units of service are transferred to the customer in the specified service period (typically a daily or monthly period). |
Debt Fair value of long-term de
Debt Fair value of long-term debt (Tables) | 3 Months Ended |
Jun. 30, 2018 | |
Far value of financial instruments [Abstract] | |
Schedule of Carrying Values and Estimated Fair Values of Debt Instruments [Table Text Block] | The carrying value and estimated fair value of our debt balances are disclosed below: June 30, 2018 Carrying value Estimated fair value (In millions of Canadian dollars) Total debt 247.1 247.1 |
Equity Equity (Tables)
Equity Equity (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Equity [Abstract] | |
Schedule of Preferred Stock Dividends [Table Text Block] | Preferred Share Dividends The following table provides information regarding dividends declared and paid, or to be paid, as applicable, on our Preferred Shares during the six months ended June 30, 2018: Period Total Series 1 quarterly dividend per share for the period Total Series 3 quarterly dividend per share for the period(a) Date of declaration Date of record Date of dividend Total amount of dividends paid in cash (In millions of Canadian dollars, except per share amounts) November 15, 2017 to February 14, 2018 (a) 0.328125 0.22082 January 17, 2018 January 31, 2018 February 15, 2018 6.1 February 15, 2018 to May 14, 2018 0.328125 0.325 April 18, 2018 April 30, 2018 May 15, 2018 7.2 May 15, 2018 to August 14, 2018 0.328125 0.325 July 18, 2018 July 31, 2018 August 15, 2018 ________ (a) Series 3 per share amount reflects that the shares were outstanding for 62 days during the period ended February 14, 2018. |
Schedule of Common Stock Dividends [Table Text Block] | Restricted Voting Share Dividends The following table provides information regarding dividends declared and paid, or to be paid, as applicable, on our Restricted Voting Share during the six months ended June 30, 2018. For the three month period ended Dividend rate per share Date of declaration Date of record Date of dividend Total amount of dividends paid in cash(a) Total amount of dividends paid in form of additional shares (In millions of Canadian dollars) December 31, 2017 0.1625 January 17, 2018 January 31, 2018 February 15, 2018 11.8 5.1 March 31, 2018 0.1625 April 18, 2018 April 30, 2018 May 15, 2018 11.1 5.9 June 30, 2018 0.1625 July 18, 2018 July 31, 2018 August 15, 2018 ________ (a) Amount includes notional dividends on outstanding restricted stock awards of $0.3 million . Kinder Morgan Interest Distributions The following table provides information regarding distributions declared and paid, or to be paid, as applicable, to Kinder Morgan during the six months ended June 30, 2018. For the three month period ended Dividend rate per share Date of declaration Date of distribution Total amount of distribution paid in cash Total amount of distribution paid in form of additional shares (In millions of Canadian dollars) December 31, 2017 0.1625 January 17, 2018 February 15, 2018 31.0 9.9 March 31, 2018 0.1625 April 18, 2018 May 15, 2018 31.0 9.9 June 30, 2018 0.1625 July 18, 2018 August 15, 2018 |
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | The following table sets forth the allocation of net income available to shareholders of Restricted Voting Shares and participating securities: Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 (In millions of Canadian dollars) Net Income Available to Restricted Voting Stockholders 1.8 4.2 12.6 4.2 Participating securities: Less: Net income allocated to restricted stock awards(a) (0.1 ) — (0.2 ) — Net Income Allocated to Restricted Voting Stockholders 1.7 4.2 12.4 4.2 Basic Weighted Average Restricted Voting Shares Outstanding 103.8 38.8 103.7 38.8 Basic Earnings Per Restricted Voting Share 0.02 0.11 0.12 0.11 _______ (a) As of June 30, 2018, there were approximately 0.8 million unvested restricted stock awards. |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions [Table Text Block] | The following table summarizes our related party income statement activity. Revenues, operating costs and capitalized costs are under normal trade terms. Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 (In millions of Canadian dollars) Income Statement location Revenues-Services(a) 15.3 14.8 30.7 29.6 Operations and maintenance and general and administrative expenses 2.8 0.1 4.7 1.2 Interest expense(b) — 7.9 — 19.6 Other Capitalized costs from affiliates in property, plant and equipment 0.1 2.0 0.3 4.0 _________ (a) Amounts represent sales to a customer who is a related party through joint ownership of a joint venture. (b) 2017 amounts primarily represent interest on long-term debt with affiliates (“KMI Loans”) that was repaid with proceeds from our IPO. Accounts receivable and payable Accounts receivable-affiliate and accounts payable-affiliate are non-interest bearing and are settled on demand and, since our IPO, primarily settled monthly. The following table summarizes our affiliate balances: June 30, December 31, 2018 2017 (In millions of Canadian dollars) Accounts receivable(a) 13.7 9.0 Contract accounts receivable(b) 1.0 — Accounts payable(c) 0.8 0.7 ________ (a) Included in “Accounts receivable” on our accompanying Consolidated Balance Sheets. (b) Included in “Other current assets” on our accompanying Consolidated Balance Sheets. (c) Included in “Accounts payable” on our accompanying Consolidated Balance Sheets. |
Revenue Recognition Revenue R25
Revenue Recognition Revenue Recognition (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue [Table Text Block] | The following table presents our revenues disaggregated by revenue source and type of revenue for each revenue source: Three Months Ended June 30, 2018 Pipelines Terminals Total (In millions of Canadian dollars) Revenue from contracts with customers Services Firm services(a) 13.1 63.4 76.5 Fee-based services 79.8 14.1 93.9 Total services revenues 92.9 77.5 170.4 Other revenues(b) 4.6 3.0 7.6 Total revenues 97.5 80.5 178.0 Six Months Ended June 30, 2018 Pipelines Terminals Total (In millions of Canadian dollars) Revenue from contracts with customers Services Firm services(a) 25.8 118.0 143.8 Fee-based services 160.7 30.6 191.3 Total services revenues 186.5 148.6 335.1 Other revenues(b) 1.0 6.1 7.1 Total revenues 187.5 154.7 342.2 ______ (a) Includes non-cancellable firm service customer contracts with take-or-pay or minimum volume commitment elements, including those contracts where both the price and quantity amount are fixed. In these arrangements, the customer is obligated to pay for the rendered service whether or not the customer chooses to utilize the service. Excludes service contracts with indexed-based pricing, which along with revenues from other contracts are reported as Fee-based services. (b) Amounts recognized as revenue under guidance prescribed in Topics of the Accounting Standards Codification other than in Topic 606 and primarily includes regulatory-based adjustments for TMPL and leases. |
Contract with Customer, Asset and Liability [Table Text Block] | The following table presents the activity in our contract assets and liabilities for the six months ended June 30, 2018: (In millions of Canadian dollars) Contract Assets (a) Balance at December 31, 2017 9.1 Additions 10.0 Transfer to Accounts receivable (17.6 ) Balance at June 30, 2018 1.5 Contract Liabilities (b) Balance at December 31, 2017 67.9 Additions 80.2 Transfer to Revenues (68.8 ) Balance at June 30, 2018 79.3 ______ (a) Includes current balances reported within “Other current assets” in our accompanying consolidated balance sheets at June 30, 2018 and December 31, 2017. (b) Includes current balances of $ 16.4 million and $ 14.4 million reported within “Other current liabilities” in our accompanying consolidated balance sheets at June 31, 2018 and December 31, 2017, respectively, and includes non-current balances of $ 62.9 million and $ 53.5 million reported within “Deferred revenues” in our accompanying consolidated balance sheets at June 30, 2018 and December 31, 2017, respectively. |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Table Text Block] | The following table presents our estimated revenue allocated to remaining performance obligations for contracted revenue that has not yet been recognized, representing our “contractually committed” revenue as of June 30, 2018 that we will invoice or transfer from contract liabilities and recognize in future periods (in millions of Canadian dollars): Year Estimated Revenue Six months ended December 31, 2018 171.3 2019 325.6 2020 246.9 2021 194.4 2022 154.5 Thereafter 608.5 Total 1,701.2 |
Reportable Segments (Tables)
Reportable Segments (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Segment Reporting Information [Line Items] | |
Schedule of Segment Reporting Information, by Segment | Financial information by segment follows: Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 (In millions of Canadian dollars) Revenues Pipelines 97.5 96.4 187.5 185.9 Terminals 80.5 72.3 154.7 147.3 Total consolidated revenues 178.0 168.7 342.2 333.2 Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 (In millions of Canadian dollars) Segment EBDA (a)(b)(c) Pipelines 68.9 54.2 132.5 110.5 Terminals 66.2 52.3 119.8 106.4 Total Segment EBDA 135.1 106.5 252.3 216.9 D&A (38.2 ) (35.6 ) (75.0 ) (70.4 ) Foreign exchange loss on KMI Loans(c) — (13.1 ) — (3.0 ) General and administrative expenses and corporate charges (21.3 ) (16.3 ) (40.5 ) (34.3 ) Interest expense, net (56.9 ) (2.9 ) (57.2 ) (9.6 ) Income tax expense (5.0 ) (13.5 ) (21.5 ) (27.7 ) Total consolidated net income 13.7 25.1 58.1 71.9 June 30, 2018 December 31, 2017 (In millions of Canadian dollars) Assets Pipelines 3,345.1 3,077.0 Terminals 1,418.6 1,375.7 Total consolidated assets 4,763.7 4,452.7 _______ (a) Includes operations and maintenance expenses, and taxes, other than income taxes. (b) Includes revenues and other (income) expense less operating expenses and other, net. Segment EBDA for the three and six months ended June 30, 2018 , and 2017 includes (i) $ 0.2 million, $ 2.9 million, $ 0.4 million, and $2.1 million, respectively, of foreign exchange losses due to changes in exchange rates between our Canadian dollar and the U.S. dollar on U.S. dollar denominated balances, and (ii) $ 13.5 million , $ 6.3 million , $ 25.1 million , and $ 11.8 million , respectively, of capitalized equity financing costs. (c) The KMI Loans, which represented U.S. dollar denominated long-term notes payable to Kinder Morgan, were settled with proceeds from our IPO. |
Income Taxes schedule of effect
Income Taxes schedule of effective income tax rate reconciliation (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of Effective Income Tax Rate Reconciliation [Table Text Block] | Income tax expense included in our accompanying consolidated statements of income is as follows: Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 (In millions of Canadian dollars, except percentages) Income tax expense 5.0 13.5 21.5 27.7 Effective tax rate 26.7 % 35.0 % 27.0 % 27.8 % |
Benefit Plans (Tables)
Benefit Plans (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Retirement Benefits [Abstract] | |
Schedule of Net Benefit Costs [Table Text Block] | Components of net benefit cost related to our pension plans and other postretirement benefit (OPEB) plans are as follows: Three Months Ended June 30, Six Months Ended June 30, Pension OPEB Pension OPEB 2018 2017 2018 2017 2018 2017 2018 2017 (In millions of Canadian dollars) Service cost 2.6 2.1 0.2 0.1 5.3 4.2 0.4 0.3 Interest cost 2.0 1.9 0.1 0.1 4.1 3.9 0.3 0.3 Expected return on assets (2.3 ) (2.0 ) — — (4.6 ) (3.9 ) — — Amortization of prior service costs 0.1 0.1 — — 0.1 0.1 — — Amortization of net actuarial losses 0.9 1.1 — 0.1 1.7 2.1 — 0.1 Total net benefit cost 3.3 3.2 0.3 0.3 6.6 6.4 0.7 0.7 |
Changes in Operating Assets a29
Changes in Operating Assets and Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Supplemental Cash Flow Elements [Abstract] | |
Schedule of Cash Flow, Supplemental Disclosures [Table Text Block] | Six Months Ended June 30, 2018 2017 (In millions of Canadian dollars) Cash inflow (outflow) Accounts receivable 2.3 (10.9 ) Prepaid expenses and deposits (19.4 ) (9.3 ) Inventories (0.5 ) (0.5 ) Other current assets 1.2 (2.1 ) Deferred charges and other assets (5.0 ) 2.1 Accounts payable (23.9 ) (5.4 ) Accrued interest — (45.2 ) Other current liabilities 30.5 (0.3 ) Pension and postretirement benefits (1.3 ) (0.4 ) Regulatory liabilities and other deferred credits 46.2 (20.2 ) 30.1 (92.2 ) |
General General Additional Deta
General General Additional Detail (Details) $ in Millions | May 30, 2017CAD ($) | Jun. 30, 2018bbl / dkmin | May 29, 2018CAD ($) |
Number of Operating Segments | 2 | ||
Pending Sale | $ 4,500 | ||
ALBERTA | |||
Pipeline Transportation Activity | bbl / d | 300,000 | ||
SASKATCHEWAN | |||
Pipeline Diameter | in | 12 | ||
Kilometers of Pipeline | km | 1,000 | ||
Common shares [Member] | |||
Net Proceeds from Issuance Initial Public Offering | $ 1,671 | ||
Kinder Morgan, Inc. [Member] | Common shares [Member] | |||
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners | 70.00% | ||
Kinder Morgan Canada Limited Partnership [Member] | Common shares [Member] | |||
Controlling Interest, Ownership Percentage by Parent | 30.00% |
General Adoption of ASU (Detail
General Adoption of ASU (Details) (Details) - CAD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2017 | Dec. 31, 2016 | |
Cash Used In Investing Activities, decrease | $ 0.2 | ||
Cash, Cash Equivalents, and Restricted Deposits, increase | $ 1.5 | 1.5 | $ 1.3 |
Other Nonoperating Income (Expense) [Member] | |||
Other, net | $ 1 | $ 2 |
Credit Facility (Details)
Credit Facility (Details) - CAD ($) | May 30, 2018 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 14, 2018 | Dec. 31, 2017 |
Line of Credit Facility [Line Items] | |||||||
Write off of Deferred Debt Issuance Cost | $ 60,500,000 | $ 0 | |||||
Repayments of Debt | 100,100,000 | 0 | |||||
Long-Term Line of Credit, Amount Outstanding | $ 247,100,000 | 247,100,000 | $ 0 | ||||
Credit Facility, weighted average interest rate | 3.24% | ||||||
Credit Facility, Stand by fees | $ 2,800,000 | $ 700,000 | $ 6.8 | $ 700,000 | |||
2017 credit facility [Member] | |||||||
Line of Credit Facility [Line Items] | |||||||
Repayments of Debt | $ 100,000,000 | ||||||
Long-Term Line of Credit, Amount Outstanding | 100,000,000 | ||||||
2018 Credit Facility, 2.86% [Member] | |||||||
Line of Credit Facility [Line Items] | |||||||
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage | 0.24% | ||||||
Ratio of Indebtedness to Net Capital | 0.70 | 0.70 | |||||
Line of Credit Facility, Current Borrowing Capacity | $ 500,000,000 | ||||||
Long-Term Line of Credit, Amount Outstanding | $ 132,600,000 | $ 132,600,000 | |||||
Credit Facility, weighted average interest rate | 2.86% | 2.86% | |||||
2018 Credit Facility, 2.86% [Member] | Prime Rate | |||||||
Line of Credit Facility [Line Items] | |||||||
Debt Instrument, Basis Spread on Variable Rate | 0.20% | ||||||
2018 Credit Facility, 2.86% [Member] | Base Rate | |||||||
Line of Credit Facility [Line Items] | |||||||
Debt Instrument, Basis Spread on Variable Rate | 0.20% | ||||||
2018 Credit Facility, 2.86% [Member] | London Interbank Offered Rate (LIBOR) [Member] | |||||||
Line of Credit Facility [Line Items] | |||||||
Debt Instrument, Basis Spread on Variable Rate | 1.20% | ||||||
2018 Credit Facility, 2.86% [Member] | Bankers Acceptance [Member] | |||||||
Line of Credit Facility [Line Items] | |||||||
Debt Instrument, Basis Spread on Variable Rate | 1.20% | ||||||
TMPL Non-Recourse Credit Agreement | |||||||
Line of Credit Facility [Line Items] | |||||||
Line of Credit Facility, Current Borrowing Capacity | $ 1,000,000,000 | ||||||
Long-Term Line of Credit, Amount Outstanding | $ 114,500,000 | $ 114,500,000 | |||||
Credit Facility, weighted average interest rate | 2.00% | 2.00% |
Fair Value of Debt (Details)
Fair Value of Debt (Details) $ in Millions | Jun. 30, 2018CAD ($) |
Reported Value Measurement [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Debt Instrument, Fair Value Disclosure | $ 247.1 |
Estimate of Fair Value Measurement [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Debt Instrument, Fair Value Disclosure | $ 247.1 |
Equity Equity Note Additional D
Equity Equity Note Additional Details (Details) shares in Millions | Jun. 30, 2018shares |
Voting Shares | |
Voting Shares, Outstanding | 348.1 |
Restricted Voting Shares | Voting Shares | |
Voting Shares, Outstanding | 104 |
Special Voting Shares | Voting Shares | |
Voting Shares, Outstanding | 244.1 |
Cumulative Redeemable Minimum Rate Reset Preferred Shares, Series 1 [Member] | |
Preferred Stock, Shares Outstanding | 12 |
Cumulative Redeemable Minimum Rate Reset Preferred Shares, Series 3 [Member] | |
Preferred Stock, Shares Outstanding | 10 |
Participating Securities | |
Unvested Restricted Stock Awards, Issued and Non Issued | 0.8 |
Equity Preferred Stock (Details
Equity Preferred Stock (Details) - CAD ($) $ / shares in Units, $ in Millions | 3 Months Ended | ||||
Aug. 14, 2018 | Jun. 30, 2018 | May 14, 2018 | Mar. 31, 2018 | Feb. 14, 2018 | |
Cumulative Redeemable Minimum Rate Reset Preferred Shares, Series 1 [Member] | |||||
Class of Stock [Line Items] | |||||
Preferred Stock, Dividends, Per Share, Cash Paid | $ 0.328125 | $ 0.328125 | |||
Preferred Stock, Dividends Paid in Cash to the Public | $ 7.2 | $ 6.1 | |||
Cumulative Redeemable Minimum Rate Reset Preferred Shares, Series 1 [Member] | Subsequent Event [Member] | |||||
Class of Stock [Line Items] | |||||
Dividends Per Share Declared, Preferred Stock | $ 0.328125 | ||||
Cumulative Redeemable Minimum Rate Reset Preferred Shares, Series 3 [Member] | |||||
Class of Stock [Line Items] | |||||
Preferred Stock, Dividends, Per Share, Cash Paid | $ 0.325 | $ 0.22082 | |||
Cumulative Redeemable Minimum Rate Reset Preferred Shares, Series 3 [Member] | Subsequent Event [Member] | |||||
Class of Stock [Line Items] | |||||
Dividends Per Share Declared, Preferred Stock | $ 0.325 |
Equity Common Stock (Details)
Equity Common Stock (Details) - CAD ($) $ / shares in Units, $ in Millions | Jul. 18, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 |
Class of Stock [Line Items] | ||||||
Restricted Voting Shares, Dividends Per Share, Declared | $ 0.1625 | $ 0.0571 | $ 0.3250 | $ 0.0571 | ||
Stock Issued During Period, Value, Dividend Reinvestment Plan | $ 30.8 | |||||
Restricted Stock Awards, Dividends Paid in Cash | $ 0.3 | |||||
Restricted Voting Shares | ||||||
Class of Stock [Line Items] | ||||||
Restricted Voting Shares, Dividends Per Share, Cash Paid | $ 0.1625 | $ 0.1625 | ||||
Restricted Voting Shares, Dividends Paid in Cash to the Public | $ 11.1 | $ 11.8 | ||||
Stock Issued During Period, Value, Dividend Reinvestment Plan | 5.9 | 5.1 | ||||
Restricted Voting Shares | Subsequent Event [Member] | ||||||
Class of Stock [Line Items] | ||||||
Restricted Voting Shares, Dividends Per Share, Declared | $ 0.1625 | |||||
Special Voting Shares | ||||||
Class of Stock [Line Items] | ||||||
Stock Issued During Period, Value, Dividend Reinvestment Plan | 9.9 | 9.9 | ||||
Special Voting Shares, Dividends Paid in Cash | $ 31 | $ 31 | ||||
Kinder Morgan Canada Limited [Member] | Special Voting Shares | ||||||
Class of Stock [Line Items] | ||||||
Special Voting Shares, Dividends Per Share, Cash Paid | $ 0.1625 | $ 0.1625 | ||||
Kinder Morgan Canada Limited [Member] | Special Voting Shares | Subsequent Event [Member] | ||||||
Class of Stock [Line Items] | ||||||
Special Voting Shares, Dividends Per Share, Declared | $ 0.1625 |
Equity Equity Earnings Per Shar
Equity Equity Earnings Per Share (Details) - CAD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||
Net Income Available to Restricted Voting Stockholders | $ 1.8 | $ 4.2 | $ 12.6 | $ 4.2 |
Weighted Average Number of Shares Outstanding, Basic | 103.8 | 38.8 | 103.7 | 38.8 |
Earnings Per Share, Basic | $ 0.02 | $ 0.11 | $ 0.12 | $ 0.11 |
Restricted Stock | ||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||
Incremental Common Shares Attributable to Dilutive Effect of Share-based Payment Arrangements | 0.8 | 0.8 | ||
Participating Securities | ||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||
Net Income Available to Restricted Voting Stockholders | $ (0.1) | $ 0 | $ (0.2) | $ 0 |
Unvested Restricted Stock Awards, Issued and Non Issued | 0.8 | 0.8 | ||
Restricted Voting Shares | ||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||
Net Income Available to Restricted Voting Stockholders | $ 1.7 | $ 4.2 | $ 12.4 | $ 4.2 |
Related Party Transactions Affi
Related Party Transactions Affiliated Activities (Details) - CAD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Related Party Transaction [Line Items] | ||||
Revenues | $ 178 | $ 168.7 | $ 342.2 | $ 333.2 |
Operations and maintenance and general and administrative expenses | 55.2 | 55.9 | 104.3 | 104.9 |
Affiliated Entity [Member] | ||||
Related Party Transaction [Line Items] | ||||
Revenues | 15.3 | 14.8 | 30.7 | 29.6 |
Operations and maintenance and general and administrative expenses | 2.8 | 0.1 | 4.7 | 1.2 |
Interest expense(b) | 0 | 7.9 | 0 | 19.6 |
Capitalized costs from affiliates in property, plant and equipment | $ 0.1 | $ 2 | $ 0.3 | $ 4 |
Related Party Transactions Othe
Related Party Transactions Other Affiliate Balance (Details) - CAD ($) $ in Millions | Jun. 30, 2018 | Dec. 31, 2017 |
Related Party Transaction [Line Items] | ||
Contract accounts receivable(b) | $ 1.5 | $ 9.1 |
Accounts Receivable [Member] | ||
Related Party Transaction [Line Items] | ||
Due from Affiliate, Current | 13.7 | 9 |
Other Current Assets [Member] | ||
Related Party Transaction [Line Items] | ||
Contract accounts receivable(b) | 1 | 0 |
Accounts Payable [Member] | ||
Related Party Transaction [Line Items] | ||
Due to Affiliate, Current | $ 0.8 | $ 0.7 |
Risk Management Foreign Currenc
Risk Management Foreign Currency Transactions and Translation - CAD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Foreign Currency Transactions and Translation [Line Items] | ||||
Foreign Currency Transaction Gain (Loss), Unrealized | $ (0.7) | $ 4.9 | ||
Kinder Morgan, Inc. [Member] | ||||
Foreign Currency Transactions and Translation [Line Items] | ||||
Foreign Currency Transaction Gain (Loss), Unrealized | $ (13.1) | (3) | ||
Puget Sound and Cochin [Member] | ||||
Foreign Currency Transactions and Translation [Line Items] | ||||
Foreign Currency Transaction Gain (Loss), Realized | $ (0.3) | (0.4) | (1) | (0.3) |
Foreign Currency Transaction Gain (Loss), Unrealized | $ 0.1 | $ (2.5) | $ 0.6 | $ (1.8) |
Revenue Recognition Revenue R41
Revenue Recognition Revenue Recognition Disaggregation of Revenue (Details) - CAD ($) $ in Millions | 3 Months Ended | 6 Months Ended |
Jun. 30, 2018 | Jun. 30, 2018 | |
Disaggregation of Revenue [Line Items] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | $ 178 | $ 342.2 |
Pipelines [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | 97.5 | 187.5 |
Terminals [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | 80.5 | 154.7 |
Service Revenue [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | 170.4 | 335.1 |
Service Revenue [Member] | Pipelines [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | 92.9 | 186.5 |
Service Revenue [Member] | Terminals [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | 77.5 | 148.6 |
Firm service | Service Revenue [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | 76.5 | 143.8 |
Firm service | Service Revenue [Member] | Pipelines [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | 13.1 | 25.8 |
Firm service | Service Revenue [Member] | Terminals [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | 63.4 | 118 |
Fee-based services | Service Revenue [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | 93.9 | 191.3 |
Fee-based services | Service Revenue [Member] | Pipelines [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | 79.8 | 160.7 |
Fee-based services | Service Revenue [Member] | Terminals [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | 14.1 | 30.6 |
Other revenues | Other revenue [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Results of Operations, Revenue, Other | 7.6 | 7.1 |
Other revenues | Other revenue [Member] | Pipelines [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Results of Operations, Revenue, Other | 4.6 | 1 |
Other revenues | Other revenue [Member] | Terminals [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Results of Operations, Revenue, Other | $ 3 | $ 6.1 |
Revenue Recognition Revenue R42
Revenue Recognition Revenue Recognition Contract Balances (Details) - CAD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2018 | Dec. 31, 2017 | |
Revenue Recognition and Deferred Revenue [Abstract] | ||
Balance at December 31, 2017 | $ 9.1 | |
Additions | 10 | |
Transfer to Accounts receivable | (17.6) | |
Balance at March 31, 2018 | 1.5 | |
Balance at December 31, 2017 | 67.9 | |
Additions | 80.2 | |
Transfer to Revenues | (68.8) | |
Balance at March 31, 2018 | 79.3 | |
Contract with Customer, Liability, Current | 16.4 | $ 14.4 |
Contract with Customer, Liability, Noncurrent | $ 62.9 | $ 53.5 |
Revenue Recognition Revenue R43
Revenue Recognition Revenue Recognition Revenue Allocated to Remaining Performance Obligations (Details) $ in Millions | Jun. 30, 2018CAD ($) |
Revenue Recognition and Deferred Revenue [Abstract] | |
Nine months ended December 31, 2018 | $ 171.3 |
2,019 | 325.6 |
2,020 | 246.9 |
2,021 | 194.4 |
2,022 | 154.5 |
Thereafter | 608.5 |
Total | $ 1,701.2 |
Reportable Segments Reportable
Reportable Segments Reportable Segments General (Details) - Pipelines [Member] | Jun. 30, 2018bbl / dkmin |
Segment Reporting Information [Line Items] | |
Pipeline Diameter | in | 12 |
Kilometers of Pipeline | km | 1,000 |
TMPL [Member] | |
Segment Reporting Information [Line Items] | |
Pipeline Transportation Activity | 300,000 |
TMEP [Member] | |
Segment Reporting Information [Line Items] | |
Pipeline Transportation Activity | 590,000 |
Reportable Segments Revenues (D
Reportable Segments Revenues (Details) - CAD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Segment Reporting Information [Line Items] | ||||
Revenues | $ 178 | $ 168.7 | $ 342.2 | $ 333.2 |
Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 178 | 168.7 | 342.2 | 333.2 |
Pipelines [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 97.5 | 96.4 | 187.5 | 185.9 |
Terminals [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | $ 80.5 | $ 72.3 | $ 154.7 | $ 147.3 |
Reportable Segments Reportabl46
Reportable Segments Reportable Segments Segment EBDA (Details) - CAD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Segment Reporting Information [Line Items] | ||||
D&A | $ (38.2) | $ (35.6) | $ (75) | $ (70.4) |
General and administrative expenses and corporate charges | (20.4) | (15.3) | (38.8) | (32.3) |
Interest expense, net | (56.9) | (2.9) | (57.2) | (9.6) |
Income tax expense | (5) | (13.5) | (21.5) | (27.7) |
Capitalized equity financing costs | 13.5 | 6.3 | 25.1 | 11.8 |
Net income | 13.7 | 25.1 | 58.1 | 71.9 |
Corporate, Non-Segment [Member] | ||||
Segment Reporting Information [Line Items] | ||||
D&A | (38.2) | (35.6) | (75) | (70.4) |
Foreign exchange loss on KMI Loans(c) | 0 | (13.1) | 0 | (3) |
General and administrative expenses and corporate charges | (21.3) | (16.3) | (40.5) | (34.3) |
Interest expense, net | (56.9) | (2.9) | (57.2) | (9.6) |
Income tax expense | (5) | (13.5) | (21.5) | (27.7) |
Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Segment EBDA(a)(b)(c) | 135.1 | 106.5 | 252.3 | 216.9 |
Pipelines [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Foreign exchange loss, other | 0.2 | 2.9 | 0.4 | 2.1 |
Capitalized equity financing costs | 13.5 | 6.3 | 25.1 | 11.8 |
Pipelines [Member] | Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Segment EBDA(a)(b)(c) | 68.9 | 54.2 | 132.5 | 110.5 |
Terminals | Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Segment EBDA(a)(b)(c) | $ 66.2 | $ 52.3 | $ 119.8 | $ 106.4 |
Reportable Segments Reportabl47
Reportable Segments Reportable Segments Assets (Details) - CAD ($) $ in Millions | Jun. 30, 2018 | Dec. 31, 2017 |
Segment Reporting Information [Line Items] | ||
Assets | $ 4,763.7 | $ 4,452.7 |
Pipelines [Member] | ||
Segment Reporting Information [Line Items] | ||
Assets | 3,345.1 | 3,077 |
Terminals | ||
Segment Reporting Information [Line Items] | ||
Assets | $ 1,418.6 | $ 1,375.7 |
Income Taxes Income Tax Effecti
Income Taxes Income Tax Effective Tax Rate (Details) - CAD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Income Taxes [Abstract] | ||||
Income tax expense | $ 5 | $ 13.5 | $ 21.5 | $ 27.7 |
Effective tax rate | 26.70% | 35.00% | 27.00% | 27.80% |
Income Taxes Income Tax (Detail
Income Taxes Income Tax (Details) - CAD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Income Tax Disclosure [Abstract] | |||
Effective tax rate | 27.00% | 27.00% | 27.00% |
Tax Decrease Resulting from Foreign Currency Translation | $ 16 | ||
Effective Tax Rate on Capital losses | 50.00% | ||
Excess tax basis of investment | $ 874 | ||
Deferred tax assets, investment | $ 118 |
Benefit Plans Benefit Planss (D
Benefit Plans Benefit Planss (Details) - CAD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Pension Plan [Member] | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Service cost | $ 2.6 | $ 2.1 | $ 5.3 | $ 4.2 |
Interest cost | 2 | 1.9 | 4.1 | 3.9 |
Expected return on assets | (2.3) | (2) | (4.6) | (3.9) |
Amortization of prior service costs | 0.1 | 0.1 | 0.1 | 0.1 |
Amortization of net actuarial losses | 0.9 | 1.1 | 1.7 | 2.1 |
Total net benefit cost | 3.3 | 3.2 | 6.6 | 6.4 |
Other Postretirement Benefits Plan [Member] | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Service cost | 0.2 | 0.1 | 0.4 | 0.3 |
Interest cost | 0.1 | 0.1 | 0.3 | 0.3 |
Expected return on assets | 0 | 0 | 0 | 0 |
Amortization of prior service costs | 0 | 0 | 0 | 0 |
Amortization of net actuarial losses | 0 | 0.1 | 0 | 0.1 |
Total net benefit cost | $ 0.3 | $ 0.3 | $ 0.7 | $ 0.7 |
Changes in Operating Assets a51
Changes in Operating Assets and Liabilities (Details) - CAD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Supplemental Cash Flow Elements [Abstract] | ||
Accounts receivable | $ 2.3 | $ (10.9) |
Prepaid expenses and deposits | (19.4) | (9.3) |
Inventories | (0.5) | (0.5) |
Other current assets | 1.2 | (2.1) |
Deferred charges and other assets | (5) | 2.1 |
Accounts payable | (23.9) | (5.4) |
Accrued interest | 0 | (45.2) |
Other current liabilities | 30.5 | (0.3) |
Pension and postretirement benefits | (1.3) | (0.4) |
Regulatory liabilities and other deferred credits | 46.2 | (20.2) |
Change in operating assets and liabilities | $ 30.1 | $ (92.2) |
Litigation, Environmental and52
Litigation, Environmental and Other Contingencies Litigation General (Details) - CAD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2018 | Dec. 31, 2017 | |
Loss Contingencies [Line Items] | ||
Estimated Litigation Liability | $ 0 | $ 0 |
Accrual for Environmental Loss Contingencies | 6.9 | $ 7.3 |
Baseline Terminal Project Litigation [Member] | Initial claim [Member] | ||
Loss Contingencies [Line Items] | ||
Loss Contingency, Damages Sought, Value | 21.2 | |
Baseline Terminal Project Litigation [Member] | 2nd claim [Member] | ||
Loss Contingencies [Line Items] | ||
Loss Contingency, Damages Sought, Value | 1 | |
Baseline Terminal Project Litigation [Member] | Barrier Coating Inc [Member] | ||
Loss Contingencies [Line Items] | ||
Loss Contingency, Damages Sought, Value | $ 2.5 |
Litigation, Environmental and53
Litigation, Environmental and Other Contingencies TMEP (Details) - TMEP [Member] $ in Millions | Jun. 30, 2018CAD ($)bbl / d | Dec. 31, 2017CAD ($) | Jan. 11, 2017 | May 19, 2016 |
Loss Contingencies [Line Items] | ||||
Number of conditions required by the NEB, initial | 157 | |||
Number of conditions required by the NEB, additional | 37 | |||
Construction costs net of contribution in aid of construction, cumulative | $ | $ 1,258.4 | $ 930 | ||
Minimum [Member] | ||||
Loss Contingencies [Line Items] | ||||
Pipeline Transportation Activity | 300,000 | |||
Transportation capacity, subscribed | 707,500 | |||
Capacity Subscribed, Percent | 80.00% | |||
Maximum [Member] | ||||
Loss Contingencies [Line Items] | ||||
Pipeline Transportation Activity | 890,000 |