NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1: Corporate Structure
Boardwalk Pipeline Partners, LP (the Company) is a Delaware limited partnership formed in 2005 to own and operate the business conducted by its primary subsidiary Boardwalk Pipelines, LP (Boardwalk Pipelines) and its operating subsidiaries, Gulf South Pipeline Company, LP (Gulf South), Texas Gas Transmission, LLC (Texas Gas), Gulf Crossing Pipeline Company LLC (Gulf Crossing), Boardwalk Louisiana Midstream, LLC (Louisiana Midstream), Boardwalk Petrochemical Pipeline, LLC and Boardwalk Texas Intrastate, LLC (together, the operating subsidiaries), which consists of integrated natural gas and natural gas liquids and other hydrocarbons (herein referred to together as NGLs) pipeline and storage systems. All of the Company’s operations are conducted by the operating subsidiaries. Effective January 1, 2020, Gulf South converted from a limited partnership to a limited liability company. Immediately subsequent to the conversion, Gulf Crossing was merged into Gulf South.
As of December 31, 2019, Boardwalk Pipelines Holding Corp. (BPHC), a wholly-owned subsidiary of Loews Corporation (Loews), owned directly or indirectly, 100% of the Company's capital.
Note 2: Basis of Presentation and Accounting Policies
Basis of Presentation
The accompanying consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S.) (GAAP).
Accounting Pronouncements Adopted in 2019 - Leases
In February 2016, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) 2016-02, Leases (Topic 842) (ASU 2016-02). ASU 2016-02 supersedes Accounting Standards Codification Topic 840, Leases (ASC 840), and requires, among other things, the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under GAAP.
Effective January 1, 2019, the Company implemented ASU 2016-02 using the modified retrospective method as of the adoption date, with no adjustment to the comparative period information, which remains reported under ASC 840, and no cumulative effect adjustment to partners’ capital. In addition, the Company elected to apply the following practical expedients that are available to entities: (1) practical expedient package to all of its leases, which allows an entity to (i) not reassess whether expired or existing contracts are or contain leases; (ii) not reassess the lease classification for any expired or existing leases; and (iii) not reassess initial direct costs for any existing leases; (2) the practical expedient related to existing and expired land easements that were not previously accounted for as leases, which allows an entity not to assess whether existing or expired land easements contain a lease under ASU 2016-02 if the land easement had not previously been accounted for as a lease; and (3) combining lease and nonlease components in a contract, which eliminates the need for a lessee to separately account for lease and nonlease components of a contract. The Company also elected to not apply the recognition requirements in ASU 2016-02 to short-term leases and to not apply the hindsight practical expedient when considering lessee options to extend or terminate a lease.
The implementation of ASU 2016-02 resulted in the recording of a right-of-use asset of $18.0 million and a lease liability of $20.8 million and the derecognition of prepaid assets and deferred rent related to the Company's operating lease agreements on the Company’s Consolidated Balance Sheets as of January 1, 2019. Note 4 contains more information about the Company’s leases.
Principles of Consolidation
The consolidated financial statements include the Company’s accounts and those of its wholly-owned subsidiaries after elimination of intercompany transactions.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses and disclosure of contingent assets and
liabilities and the fair values of certain items. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, which form the basis for making judgments about the carrying amounts of assets and liabilities that are not readily apparent from other sources. Actual results could differ from such estimates.
Segment Information
The Company operates in one reportable segment - the operation of interstate natural gas and NGLs pipeline systems and integrated storage facilities. This segment consists of interstate natural gas pipeline systems which are located in the Gulf Coast region, Oklahoma, Arkansas and the Midwestern states of Tennessee, Kentucky, Illinois, Indiana and Ohio, and the Company's NGL pipelines and storage facilities in Louisiana and Texas.
Regulatory Accounting
Most of the Company's natural gas pipeline subsidiaries are regulated by the Federal Energy Regulatory Commission (FERC). When certain criteria are met, GAAP requires that certain rate-regulated entities account for and report assets and liabilities consistent with the economic effect of the manner in which independent third-party regulators establish rates (regulatory accounting). This basis of accounting is applicable to operations of the Company’s Texas Gas subsidiary, which records certain costs and benefits as regulatory assets and liabilities in order to provide for recovery from or refunds to customers in future periods, but is not applicable to operations associated with the Fayetteville and Greenville Laterals due to rates charged under negotiated rate agreements and a portion of the storage capacity due to the regulatory treatment associated with the rates charged for that capacity.
The Company applies regulatory accounting for its fuel trackers on Gulf South and Gulf Crossing, under which the value of fuel received from customers paying the maximum tariff rate and the related value of fuel used in transportation are recorded to a regulatory asset or liability depending on whether Gulf South or Gulf Crossing uses more fuel than it collects from customers or collects more fuel than it uses. Prior to the implementation of the fuel trackers and ASU 2014-09, Revenue from Contracts with Customers (Topic 606), (ASC 606) and the application of regulatory accounting, the value of fuel received from customers was reflected in operating revenues and the value of fuel used was reflected in operating expenses. Other than as described for Texas Gas and for the fuel trackers on Gulf South and Gulf Crossing, regulatory accounting is not applicable to the Company’s other FERC-regulated operations.
The Company monitors the regulatory and competitive environment in which it operates to determine whether its regulatory assets continue to be probable of recovery. If the Company determines that all or a portion of its regulatory assets no longer meets the criteria for recognition as regulatory assets, that portion which is not recoverable will be written off, net of any regulatory liabilities.
Note 10 contains more information regarding the Company’s regulatory assets and liabilities.
Fair Value Measurements
Fair value refers to an exit price that would be received to sell an asset or paid to transfer a liability in an orderly transaction in the principal market in which the reporting entity transacts based on the assumptions market participants would use when pricing the asset or liability assuming its highest and best use. A fair value hierarchy has been established that prioritizes the information used to develop those assumptions giving priority, from highest to lowest, to quoted prices in active markets for identical assets and liabilities (Level 1); observable inputs not included in Level 1, for example, quoted prices for similar assets and liabilities (Level 2); and unobservable data (Level 3), for example, a reporting entity’s own internal data based on the best information available in the circumstances. The Company uses fair value measurements to account for asset retirement obligations (ARO) and any impairment charges.
Notes 6 and 12 contain more information regarding fair value measurements.
Cash and Cash Equivalents
Cash equivalents are highly liquid investments with an original maturity of three months or less and are stated at cost plus accrued interest, which approximates fair value. The Company had no restricted cash at December 31, 2019 and 2018.
Cash Management
The operating subsidiaries participate in an intercompany cash management program, with those that are FERC-regulated participating to the extent they are permitted under FERC regulations. Under the cash management program, depending on whether a participating subsidiary has short-term cash surpluses or cash requirements, Boardwalk Pipelines either provides cash to them or they provide cash to Boardwalk Pipelines. The transactions are represented by demand notes and are stated at historical carrying amounts. Interest income and expense are recognized on an accrual basis when collection is reasonably assured. The interest rate on intercompany demand notes is London Interbank Offered Rate (LIBOR) plus 1% and is adjusted every three months.
Trade and Other Receivables
Trade and other receivables are stated at their historical carrying amount, net of allowances for doubtful accounts. The Company establishes an allowance for doubtful accounts on a case-by-case basis when it believes the required payment of specific amounts owed is unlikely to occur. Uncollectible receivables are written off when a settlement is reached for an amount that is less than the outstanding historical balance or a receivable amount is deemed otherwise unrealizable.
Gas Stored Underground and Gas Receivables and Payables
Certain of the Company's operating subsidiaries have underground gas in storage which is utilized for system management and operational balancing, as well as for services including firm and interruptible storage associated with certain no-notice and parking and lending (PAL) services. Gas stored underground includes the historical cost of natural gas volumes owned by the operating subsidiaries, at times reduced by certain operational encroachments upon that gas.
The operating subsidiaries provide storage services whereby they store natural gas or NGLs on behalf of customers and also periodically hold customer gas under PAL services. Since the customers retain title to the gas held by the Company in providing these services, the Company does not record the related gas on its Consolidated Balance Sheets. Certain of the Company's operating subsidiaries also periodically lend gas and NGLs to customers.
In the course of providing transportation and storage services to customers, the operating subsidiaries may receive different quantities of gas from shippers and operators than the quantities delivered on behalf of those shippers and operators. This results in transportation and exchange gas receivables and payables, commonly known as imbalances, which are primarily settled in cash or the receipt or delivery of gas in the future. Settlement of imbalances requires agreement between the pipelines and shippers or operators as to allocations of volumes to specific transportation contracts and timing of delivery of gas based on operational conditions. The receivables and payables are valued at market price for operations where regulatory accounting is not applicable and are valued at the historical value of gas in storage for operations where regulatory accounting is applicable.
Materials and Supplies
Materials and supplies are carried at average cost and are included in Other Assets on the Consolidated Balance Sheets. The Company expects its materials and supplies to be used for projects related to its property, plant and equipment (PPE) and for future growth projects. At December 31, 2019 and 2018, the Company held approximately $21.8 million and $21.4 million of materials and supplies.
Property, Plant and Equipment and Repair and Maintenance Costs
PPE is recorded at its original cost of construction or fair value of assets purchased. Construction costs and expenditures for major renewals and improvements which extend the lives of the respective assets are capitalized. Construction work in progress is included in the financial statements as a component of PPE. Repair and maintenance costs are expensed as incurred.
Depreciation of PPE related to operations for which regulatory accounting does not apply is provided for using the straight-line method of depreciation over the estimated useful lives of the assets, which range from 3 to 35 years. The ordinary sale or retirement of PPE for these assets could result in a gain or loss. Depreciation of PPE related to operations for which regulatory accounting is applicable is provided for primarily on the straight-line method at FERC-prescribed rates over estimated useful lives of 5 to 62 years. Reflecting the application of composite depreciation, gains and losses from the ordinary sale or retirement of PPE for these assets are not recognized in earnings and generally do not impact PPE, net.
Note 7 contains more information regarding the Company’s PPE.
Goodwill and Intangible Assets
Goodwill represents the excess of the cost of an acquisition over the fair value of the net identifiable assets acquired and liabilities assumed. Goodwill is tested for impairment at the reporting unit level at least annually, as of November 30, or more frequently when events occur and circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. To test goodwill, a quantitative analysis is performed under a two-step impairment test to measure whether the fair value of the reporting unit is less than its carrying amount. If based upon a quantitative analysis the fair value of the reporting unit is less than its carrying amount, including goodwill, the Company performs an analysis of the fair value of all the assets and liabilities of the reporting unit. If the implied fair value of the reporting unit's goodwill is determined to be less than its carrying amount, an impairment loss is recognized for the difference.
Intangible assets are those assets which provide future economic benefit but have no physical substance. The Company recorded intangible assets for customer relationships obtained through its acquisitions. The customer relationships, which are included in Other Assets on the Consolidated Balance Sheets, have a finite life and are being amortized over their estimated useful lives.
Note 8 contains more information regarding the Company's goodwill and intangible assets.
Impairment of Long-lived Assets (including Tangible and Definite-lived Intangible Assets)
The Company evaluates its long-lived and intangible assets for impairment when, in management’s judgment, events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. When such a determination has been made, management’s estimate of undiscounted future cash flows attributable to the remaining economic useful life of the asset is compared to the carrying amount of the asset to determine whether an impairment has occurred. If an impairment of the carrying amount has occurred, the amount of impairment recognized in the financial statements is determined by estimating the fair value of the assets and recording a loss to the extent that the carrying amount exceeds the estimated fair value.
Capitalized Interest and Allowance for Funds Used During Construction (AFUDC)
The Company records capitalized interest, which represents the cost of borrowed funds used to finance construction activities for operations where regulatory accounting is not applicable. The Company records AFUDC, which represents the cost of funds, including equity funds, applicable to regulated natural gas transmission plant under construction as permitted by FERC regulatory practices, in connection with the Company’s operations where regulatory accounting is applicable. Capitalized interest and the allowance for borrowed funds used during construction are recognized as a reduction to Interest expense and the allowance for equity funds used during construction is included in Miscellaneous other income, net within the Consolidated Statements of Income. The following table summarizes capitalized interest and the allowance for borrowed funds and allowance for equity funds used during construction (in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Year Ended
December 31,
|
|
2019
|
|
2018
|
|
2017
|
Capitalized interest and allowance for borrowed funds used during construction
|
$
|
5.6
|
|
|
$
|
8.5
|
|
|
$
|
19.2
|
|
Allowance for equity funds used during construction
|
1.5
|
|
|
0.5
|
|
|
1.9
|
|
Income Taxes
The Company is not a taxable entity for federal income tax purposes. As such, it does not directly pay federal income tax. The Company’s taxable income or loss, which may vary substantially from the net income or loss reported in the Consolidated Statements of Income, is includable in the federal income tax returns of each of its partners. The aggregate difference in the basis of the Company's net assets for financial and income tax purposes is $5.8 billion. The subsidiaries of the Company directly incur some income-based state taxes which are presented in Income taxes on the Consolidated Statements of Income.
Note 13 contains more information regarding the Company’s income taxes.
Asset Retirement Obligations
The accounting requirements for existing legal obligations associated with the future retirement of long-lived assets require entities to record the fair value of a liability for an ARO in the period during which the liability is incurred. The liability is initially recognized at fair value and is increased with the passage of time as accretion expense is recorded, until the liability is ultimately settled. The accretion expense is included within Operation and maintenance costs within the Consolidated Statements of Income. An amount corresponding to the amount of the initial liability is capitalized as part of the carrying amount of the related long-lived asset and depreciated over the useful life of that asset.
Note 9 contains more information regarding the Company’s ARO.
Environmental Liabilities
The Company records environmental liabilities based on management’s estimates of the undiscounted future obligation for probable costs associated with environmental assessment and remediation of operating sites. These estimates are based on evaluations and discussions with counsel and operating personnel and the current known facts and circumstances related to these environmental matters.
Note 5 contains more information regarding the Company’s environmental liabilities.
Defined Benefit Plans
The Company maintains postretirement benefit plans for certain employees. The Company funds these plans through periodic contributions which are invested until the benefits are paid out to the participants, and records an asset or liability based on the overfunded or underfunded status of the plan. The net benefit costs of the plans are recorded in the Consolidated Statements of Income. Any deferred amounts related to unrecognized gains and losses or changes in actuarial assumptions are recorded as either a regulatory asset or liability or recorded as a component of accumulated other comprehensive income (AOCI) until those gains or losses are recognized in the Consolidated Statements of Income.
Note 12 contains more information regarding the Company’s pension and postretirement benefit obligations.
Long-Term Compensation
Prior to the purchase of the Company's issued and outstanding common units by the Company’s general partner in the third quarter 2018 (Purchase Transaction), the Company provided awards of phantom common units (Phantom Common Units) to certain employees under its Long-Term Incentive Plan (LTIP). The Company also provides to certain employees awards of long-term cash bonuses (Long-Term Cash Bonuses) under the Boardwalk Pipeline Partners Unit Appreciation Rights (UAR) and Cash Bonus Plan. Beginning in 2019, the Company provided awards of performance awards (Performance Awards) to certain of its employees under its 2018 Long-Term Incentive Plan (2018 LTIP). A Performance Award is a long-term incentive award with a stated target amount which is payable in cash, after adjustments, upon vesting based on certain specified performance criteria being met.
The Company measures the cost of an award issued in exchange for employee services based on the grant-date fair value of the award, or the stated amount in the case of Long-Term Cash Bonuses or the stated target amount for Performance Awards. All outstanding awards are required to be settled in cash and are classified as a liability until settlement. Prior to the Purchase Transaction, unit-based compensation awards were remeasured each reporting period until the final amount of awards were determined. Outstanding phantom units after the Purchase Transaction are valued at the $12.06 cash purchase price per unit of the Purchase Transaction. The related compensation expense, less an estimate of forfeitures, is recognized over the period that employees are required to provide services in exchange for the awards, usually the vesting period.
Note 12 contains more information regarding the Company’s long-term compensation.
Partner Capital Accounts
For purposes of maintaining capital accounts prior to the Purchase Transaction, items of income and loss of the Company are allocated among the partners each period, or portion thereof, in accordance with the partnership agreement, based on their respective ownership interests.
Revenue Recognition
Nature of Contracts
The Company primarily earns revenues from contracts with customers by providing transportation and storage services for natural gas and NGLs on a firm and interruptible basis. The Company also provides interruptible natural gas PAL services. The Company’s customers choose, based upon their particular needs, the applicable mix of services depending upon availability of pipeline and storage capacity, the price of services and the volume and timing of customer requirements. The maximum rates that may be charged by the majority of the Company’s operating subsidiaries are established through the FERC's cost-based rate-making process; however, rates actually charged by those operating subsidiaries may be less than those allowed by the FERC. Under the FERC regulations, certain revenues that the Company's subsidiaries collect may be subject to possible refunds to customers. Accordingly, during a rate case, estimated refund liabilities are recorded considering regulatory proceedings, advice of counsel and estimated risk-adjusted total exposure, as well as other factors. The Company's service contracts can range from one to twenty years although the Company may enter into shorter- or longer-term contracts, and services are invoiced monthly with payment from the customer generally expected within ten to thirty days, depending on the terms of the contract.
Firm Service Contracts: The Company offers firm services to its customers. The Company’s customers can reserve a specific amount of pipeline capacity at specified receipt and delivery points on the Company’s pipeline system (transportation service) or can reserve a specific amount of storage capacity at specified injection and withdrawal points at the Company’s storage facilities (storage service). The Company accounts for firm services as a single promise to stand ready each month of the contract term to provide the committed capacity for either transportation or storage services when needed by the customer, which represents a series of distinct monthly services that are substantially the same with the same pattern of transfer to the customer. Although several activities may be required to provide the firm service, the individual activities do not represent distinct performance obligations because all of the activities must be performed in combination in order for the Company to provide the firm service.
The transaction price for firm service contracts is comprised of a fixed fee based on the quantity of capacity reserved, regardless of use (capacity reservation fee), plus variable fees in the form of a usage fee paid on the volume of commodity actually transported or injected and withdrawn from storage. Both the fixed and usage fees are allocated to the single performance obligation of providing transportation or storage service and recognized over time based upon the output measure of time as the Company completes its stand-ready obligation to provide contracted capacity and the customer receives and consumes the benefit of the reserved capacity, which corresponds with the transfer of control to the customer. The fixed fee is recognized ratably over the contract term, representative of the proportion of the committed stand-ready capacity obligation that has been fulfilled to date, and the usage fee is recognized upon satisfaction of each distinct monthly performance obligation, consistent with the allocation objective and based upon the level of effort required to satisfy the stand-ready obligation in a given month. Capacity reservation revenues derived from a firm service contract are generally consistent during the contract term, but can be higher in winter periods than the rest of the year based upon seasonal rates.
Interruptible Service Contracts: In providing interruptible services to customers, the Company agrees to transport or store natural gas or NGLs for a customer when capacity is available. The Company does not account for interruptible services with a customer as a contract until the customer nominates for service and the Company accepts the nomination based upon available pipeline or storage capacity because there are no enforceable rights and obligations until that time. The nomination and acceptance process is a daily activity and acceptance is granted based upon priority of service and availability of capacity. Upon acceptance, the Company accounts for interruptible services similarly to its firm services.
The transaction price for interruptible service contracts is comprised of a variable fee in the form of a usage fee paid on the volume of commodity actually transported or injected and withdrawn from storage. The usage fee is allocated to the single performance obligation of providing interruptible service. Interruptible service revenues are generally recognized over time based on the output measure of volume transported or stored when services are rendered upon the successful allocation of the services provided to the customer’s account, which best depicts the transfer of control to the customer and satisfaction of the promised service. Interruptible services are recognized in the month services are provided because the Company has a right to consideration from customers in amounts that correspond directly to the value that the customer receives from the Company's performance. The rates charged may vary on a daily, monthly or seasonal basis.
Minimum Volume Commitment (MVC) Contracts: Certain of the Company’s transportation or storage contracts require customers to transport or store a minimum volume of commodity over a specified time period. If a customer fails to meet its MVC for the specified time period, the customer is obligated to pay a contractually-determined deficiency fee based upon the shortfall between the actual volumes transported or stored and the MVC for that period. MVC contracts are similar in nature to a firm service contract where the performance obligation is a stand-ready obligation that is a series of distinct services that are substantially the same with the same pattern of transfer to the customer. The transaction price for an MVC is a fee for the volume of commodity
actually transported or stored, which is allocated to each distinct monthly performance obligation, consistent with the allocation objective and based upon the level of effort required to satisfy the obligation of the transacted service in a given month. Revenues are generally recognized over time based on the output measure of volume transported or stored, with the recognition of the deficiency fee in the period when it is known the customer cannot make up the deficient volume in the specified period.
Other: Periodically, the Company may enter into contracts with customers for the sale of natural gas or NGLs. The Company recognizes revenues for these transactions at the point in time of the physical sale of the commodity, which corresponds with the transfer of control of the commodity to the customer and the consideration is measured as the stated sales price in the contract.
Contract Balances
The Company records contract assets primarily related to performance obligations completed but not billed as of the reporting date. The Company records contract liabilities, or deferred income, when payment is received in advance of satisfying its performance obligations.
Note 3: Revenues
The Company operates in one reportable segment and contracts directly with producers of natural gas, with end-use customers, including local distribution companies, marketers, electric power generators, exporters of liquefied natural gas and industrial users, and with interstate and intrastate pipelines, who, in turn, provide transportation and storage services for end-users. The following table presents the Company's revenues disaggregated by type of service for the years ended December 31, 2019 and 2018 (in millions):
|
|
|
|
|
|
|
|
|
|
For the Year Ended December 31,
|
|
2019
|
|
2018
|
Revenues from Contracts with Customers
|
|
|
|
Firm Service (1)
|
$
|
1,228.3
|
|
|
$
|
1,161.7
|
|
Interruptible Service
|
29.0
|
|
|
32.2
|
|
Other revenues
|
9.1
|
|
|
11.6
|
|
Total revenues from contracts with customers
|
1,266.4
|
|
|
1,205.5
|
|
|
|
|
|
Other operating revenues(2)
|
28.8
|
|
|
18.2
|
|
Total Operating Revenues
|
$
|
1,295.2
|
|
|
$
|
1,223.7
|
|
(1) Revenues earned from contracts with MVCs are included in firm service given the stand-ready nature of the performance obligation and the guaranteed nature of the fees over the contract term. The year ended December 31, 2019, contains $26.2 million of proceeds received related to the bankruptcy of a customer as discussed in Note 5.
(2) Other operating revenues include certain revenues earned from operating leases, pipeline management fees and other activities that are not considered central and ongoing major business operations of the Company and do not represent revenues earned from contracts with customers.
Contract Balances
As of December 31, 2019 and 2018, the Company had receivables recorded in Trade Receivables from contracts with customers of $117.2 million and $139.2 million and contract liabilities recorded in Other Liabilities from contracts with customers of $11.8 million and $9.2 million. As of December 31, 2019, the Company had contract assets recorded in Other Assets from contracts with a customer of $1.5 million and did not have any contract assets recorded as of December 31, 2018.
As of December 31, 2019, contract liabilities are expected to be recognized through 2024. Significant changes in the contract liabilities balances during the year ended December 31, 2019, are as follows (in millions):
|
|
|
|
|
|
|
|
Contract Liabilities
|
Balance as of December 31, 2018
|
|
$
|
9.2
|
|
Revenues recognized that were included in the contract liability
balance at the beginning of the period
|
|
(2.1
|
)
|
Increases due to cash received, excluding amounts recognized as
revenues during the period
|
|
4.7
|
|
Balance as of December 31, 2019
|
|
$
|
11.8
|
|
Significant changes in the contract liabilities balances during the year ended December 31, 2018, are as follows (in millions):
|
|
|
|
|
|
|
|
Contract Liabilities
|
Balance as of December 31, 2017
|
|
$
|
1.9
|
|
Cumulative effect adjustment from the implementation of
ASC 606
|
|
6.4
|
|
Revenues recognized that were included in the contract liability
balance at the beginning of the period
|
|
(3.2
|
)
|
Increases due to cash received, excluding amounts recognized as
revenues during the period
|
|
4.1
|
|
Balance as of December 31, 2018
|
|
$
|
9.2
|
|
Performance Obligations
The following table includes estimated operating revenues expected to be recognized in the future related to agreements that contain performance obligations that were unsatisfied as of December 31, 2019. The amounts presented primarily consist of fixed fees or MVCs which are typically recognized over time as the performance obligation is satisfied, as in accordance with firm service contracts. Additionally, for the Company’s customers that are charged maximum tariff rates related to its FERC-regulated operating subsidiaries, the amounts below reflect the current tariff rate for such services for the term of the agreements; however, the tariff rates may be subject to future adjustment. The Company has elected to exclude the following from the table: (a) unsatisfied performance obligations from usage fees associated with its firm services because of the stand-ready nature of such services; (b) consideration in contracts that are recognized in revenue as invoiced, such as for interruptible services; and (c) consideration that was received prior to December 31, 2019, that will be recognized in future periods, such as recorded in contract liabilities. The estimated revenues reflected in the table may include estimated revenues that are anticipated under executed precedent transportation agreements for projects that are subject to regulatory approvals.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In millions
|
|
|
2020
|
|
2021
|
|
Thereafter
|
|
Total
|
|
|
|
|
|
|
|
|
|
Estimated revenues from contracts with customers
from unsatisfied performance obligations as of
December 31, 2019
|
|
$
|
1,041.5
|
|
|
$
|
986.5
|
|
|
$
|
7,032.0
|
|
|
$
|
9,060.0
|
|
Operating revenues which are fixed and
determinable (operating leases)
|
|
23.5
|
|
|
23.5
|
|
|
222.0
|
|
|
269.0
|
|
Total projected operating revenues under committed
firm agreements as of December 31, 2019
|
|
$
|
1,065.0
|
|
|
$
|
1,010.0
|
|
|
$
|
7,254.0
|
|
|
$
|
9,329.0
|
|
Note 4: Leases
The Company has various operating lease commitments extending through 2028, generally covering office space and equipment rentals, some of which contain options to renew or extend the lease term. The Company also has a finance lease related to the lease of an office building in Owensboro, Kentucky, that has a fifteen-year term with two twenty-year renewal options.
Operating lease right-of-use assets and lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. The discount rate used to determine the commencement date present value of lease payments is typically the Company’s secured borrowing rate, as most of the Company’s leases do not provide an implicit rate. The components of lease cost were as follows (in millions):
|
|
|
|
|
|
|
|
For the Year Ended
|
|
|
December 31, 2019
|
Operating lease cost
|
|
$
|
4.3
|
|
Short-term lease cost
|
|
2.6
|
|
Finance lease cost:
|
|
|
Amortization of right-of-use asset
|
|
0.7
|
|
Interest on lease liabilities
|
|
0.5
|
|
Total lease cost
|
|
$
|
8.1
|
|
The following provides supplemental balance sheet information related to the Company’s leases:
|
|
|
|
|
|
As of December 31, 2019
|
Right-of-use assets (in millions)
|
|
Operating leases (recorded in Other Assets)
|
$
|
15.0
|
|
Finance lease (recorded in Property, Plant and Equipment)
|
6.1
|
|
Lease liabilities (in millions)
|
|
Operating leases (recorded in Other Liabilities, current and
non-current)
|
17.5
|
|
Finance lease
|
7.5
|
|
Weighted-average remaining lease term (years)
|
|
Operating leases
|
4.4
|
|
Finance lease
|
8.6
|
|
Weighted-average discount rate
|
|
Operating leases
|
4.68
|
%
|
Finance lease
|
5.89
|
%
|
The table below presents the maturities of lease liabilities (in millions):
|
|
|
|
|
|
|
|
|
|
As of December 31, 2019
|
|
Operating
Leases
|
|
Finance
Lease
|
2020
|
$
|
4.7
|
|
|
$
|
1.1
|
|
2021
|
4.4
|
|
|
1.1
|
|
2022
|
4.3
|
|
|
1.1
|
|
2023
|
3.8
|
|
|
1.1
|
|
2024
|
1.3
|
|
|
1.1
|
|
Thereafter
|
0.8
|
|
|
4.0
|
|
Total
|
19.3
|
|
|
9.5
|
|
Less: discount
|
(1.8
|
)
|
|
(2.0
|
)
|
Total lease liabilities
|
$
|
17.5
|
|
|
$
|
7.5
|
|
The following table summarizes minimum future commitments to be made under non-cancelable operating leases as of December 31, 2018 (in millions):
|
|
|
|
|
2019
|
$
|
4.8
|
|
2020
|
4.7
|
|
2021
|
4.6
|
|
2022
|
4.5
|
|
2023
|
4.1
|
|
Thereafter
|
1.9
|
|
Total
|
$
|
24.6
|
|
Note 5: Commitments and Contingencies
Legal Proceedings and Settlements
The Company and its subsidiaries are parties to various legal actions arising in the normal course of business. Management believes the disposition of these outstanding legal actions, including the legal actions identified below, will not have a material impact on the Company's financial condition, results of operations or cash flows.
Mishal and Berger Litigation
On May 25, 2018, plaintiffs Tsemach Mishal and Paul Berger (on behalf of themselves and the purported class, Plaintiffs) initiated a purported class action in the Court of Chancery of the State of Delaware (the Court) against the following defendants: the Company, Boardwalk GP, LP (Boardwalk GP), Boardwalk GP, LLC and BPHC (together, Defendants), regarding the potential exercise by Boardwalk GP of its right to purchase the issued and outstanding common units of the Company not already owned by Boardwalk GP or its affiliates (Purchase Right).
On June 25, 2018, Plaintiffs and Defendants entered into a Stipulation and Agreement of Compromise and Settlement, subject to the approval of the Court (the Proposed Settlement). Under the terms of the Proposed Settlement, the lawsuit would be dismissed, and related claims against the Defendants would be released by the Plaintiffs, if BPHC, the sole member of the general partner of Boardwalk GP, elected to cause Boardwalk GP to exercise its Purchase Right for a cash purchase price, as determined by the Company's Third Amended and Restated Agreement of Limited Partnership, as amended (the Limited Partnership Agreement), and gave notice of such election as provided in the Limited Partnership Agreement within a period specified by the Proposed Settlement. On June 29, 2018, Boardwalk GP elected to exercise the Purchase Right and gave notice within the period specified by the Proposed Settlement. On July 18, 2018, Boardwalk GP completed the purchase of the Company's common units pursuant to the Purchase Right.
On September 28, 2018, the Court denied approval of the Proposed Settlement. On February 11, 2019, a substitute verified class action complaint was filed in this proceeding. The Defendants filed a motion to dismiss, which was heard by the Court in July 2019. In October 2019, the Court ruled on the motion and granted a partial dismissal, with certain aspects of the case proceeding to trial. The case will be set for trial in early 2021.
City of New Orleans Litigation
Gulf South, along with several other energy companies operating in Southern Louisiana, has been named as a defendant in a petition for damages and injunctive relief in state district court for Orleans Parish, Louisiana, (Case No. 19-3466) by the City of New Orleans. The case was filed on March 29, 2019. The lawsuit claims include, among other things, negligence, strict liability, nuisance and breach of contract, alleging that the defendants’ drilling, dredging, pipeline and industrial operations since the 1930s have caused increased storm surge risk, increased flood protection costs and unspecified damages to the City of New Orleans.
Letter of Credit Proceeds
In the second quarter 2019, a customer of Texas Gas declared bankruptcy and rejected the transportation agreements it had with Texas Gas as part of the bankruptcy proceedings. Subsequent to the bankruptcy declaration, Texas Gas pursued and received proceeds of $27.7 million from existing letters of credit provided to Texas Gas as credit support. In June 2019, the
bankruptcy court approved the rejection of the transportation agreements, which relieved Texas Gas from providing further transportation services to its customer. As a result, Texas Gas first applied the proceeds from the letters of credit to outstanding receivables and then recognized as transportation revenues the remaining $26.2 million of proceeds, which represent a portion of the future performance obligations that were eliminated under the transportation agreements.
Environmental and Safety Matters
The operating subsidiaries are subject to federal, state and local environmental laws and regulations in connection with the operation and remediation of various operating sites. As of December 31, 2019 and 2018, the Company had an accrued liability of approximately $3.8 million and $4.5 million related to assessment and/or remediation costs associated with the historical use of polychlorinated biphenyls, petroleum hydrocarbons and mercury. The liability represents management’s estimate of the undiscounted future obligations based on evaluations and discussions with counsel and operating personnel and the current known facts and circumstances related to these matters. The related expenditures are expected to occur over the next six years. As of December 31, 2019 and 2018, approximately $1.0 million was recorded in Other current liabilities and approximately $2.8 million and $3.5 million were recorded in Other Liabilities and Deferred Credits.
Clean Air Act and Climate Change
The Company’s pipelines and associated facilities are subject to the Clean Air Act (CAA) and comparable state laws and regulations, which regulate the emission of air pollutants from many sources and impose various compliance monitoring and reporting requirements. Under the CAA, the Company may be required to obtain pre-approval for the construction or modification of certain projects or facilities expected to produce or significantly increase air emissions, obtain and strictly comply with stringent air permit requirements or utilize specific equipment or technologies to control emissions. The need to obtain permits has the potential to delay the development or expansion of the Company’s projects. Over the next several years, the Company may be required to incur certain capital expenditures for air pollution control equipment or other air emissions related issues. For example, in 2015, the Environmental Protection Agency (EPA) issued a final rule under the CAA, lowering the National Ambient Air Quality Standard (NAAQS) for ground-level ozone to 70 parts per billion under both the primary and secondary standards to provide requisite protection of public health and welfare, respectively. In 2017 and 2018, the EPA issued area designations with respect to ground-level ozone as either "attainment/unclassifiable," "unclassifiable" or "non-attainment." Additionally, in November 2018, the EPA issued final requirements that apply to state, local and tribal air agencies for implementing the 2015 NAAQS for ground-level ozone. States are expected to implement more stringent regulations that could apply to the Company's operations. Compliance with this final rule could, among other things, require installation of new emission controls on some of the Company's equipment, result in longer permitting timelines and significantly increase its capital expenditures and operating costs. Additionally, the threat of climate change continues to attract considerable attention in the U.S. and in foreign countries. Numerous proposals have been made and could continue to be made at the international, national, regional and state levels of government to monitor and limit existing emissions of greenhouse gases (GHGs) as well as to restrict or eliminate future emissions through such efforts as GHG cap and trade programs, carbon taxes, reporting and tracking programs and restriction of emissions, such as methane emissions, from certain sources. The EPA has determined that GHG emissions endanger public health and the environment and, as a result, has adopted regulations under the CAA related to GHG emissions.
Commitments for Construction
The Company’s future capital commitments are comprised of binding commitments under purchase orders for materials ordered but not received and firm commitments under binding construction service agreements. The commitments as of December 31, 2019, were approximately $174.2 million, all of which are expected to be settled within the next twelve months.
Pipeline Capacity Agreements
The Company’s operating subsidiaries have entered into pipeline capacity agreements with third-party pipelines that allow the operating subsidiaries to transport gas to off-system markets on behalf of customers. The Company incurred expenses of $3.8 million, $4.6 million and $6.2 million related to pipeline capacity agreements for the years ended December 31, 2019, 2018 and 2017. The future commitments related to pipeline capacity agreements as of December 31, 2019, were (in millions):
|
|
|
|
|
2020
|
$
|
3.0
|
|
2021
|
1.7
|
|
2022
|
1.4
|
|
2023
|
—
|
|
2024
|
—
|
|
Thereafter
|
—
|
|
Total
|
$
|
6.1
|
|
Note 6: Other Comprehensive Income and Fair Value Measurements
Other Comprehensive Income
The Company estimates that approximately $0.9 million of net losses reported in AOCI as of December 31, 2019, are expected to be reclassified into earnings within the next twelve months related to cash flow hedges. The amounts related to cash flow hedges are from treasury rate locks used in hedging interest payments associated with debt offerings that were settled in previous periods and are being amortized to earnings over the terms of the related interest payments, generally the terms of the related debt.
Financial Assets and Liabilities
As of December 31, 2019 and 2018, the Company had no assets and liabilities which were recorded at fair value on a recurring basis. The following methods and assumptions were used in estimating the fair value amounts included in the disclosures for financial assets and liabilities:
Cash and Cash Equivalents: For cash and short-term financial assets, the carrying amount is a reasonable estimate of fair value due to the short maturity of those instruments.
Long-Term Debt: The estimated fair value of the Company's publicly traded debt is based on quoted market prices at December 31, 2019 and 2018. The fair market value of the debt that is not publicly traded is based on market prices of similar debt at December 31, 2019 and 2018. The carrying amount of the Company's variable-rate debt at December 31, 2019 and 2018, approximated fair value because the instruments bear a floating market-based interest rate.
The carrying amounts and estimated fair values of the Company's financial assets and liabilities which were not recorded at fair value on the Consolidated Balance Sheets as of December 31, 2019 and 2018, were as follows (in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31, 2019
|
|
|
|
Estimated Fair Value
|
Financial Assets
|
|
Carrying Amount
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
Cash and cash equivalents
|
|
$
|
3.7
|
|
|
$
|
3.7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3.7
|
|
Financial Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt
|
|
$
|
3,565.7
|
|
(1)
|
$
|
—
|
|
|
$
|
3,798.3
|
|
|
$
|
—
|
|
|
$
|
3,798.3
|
|
(1) The carrying amount of long-term debt excludes a $6.8 million long-term finance lease obligation and
$6.4 million of unamortized debt issuance costs.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31, 2018
|
|
|
|
Estimated Fair Value
|
Financial Assets
|
|
Carrying Amount
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
Cash and cash equivalents
|
|
$
|
3.6
|
|
|
$
|
3.6
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3.6
|
|
Financial Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt
|
|
$
|
3,700.9
|
|
(1)
|
$
|
—
|
|
|
$
|
3,714.6
|
|
|
$
|
—
|
|
|
$
|
3,714.6
|
|
(1) The carrying amount of long-term debt excludes a $7.5 million long-term finance lease obligation and
$7.1 million of unamortized debt issuance costs.
Note 7: Property, Plant and Equipment
The following table presents the Company’s PPE as of December 31, 2019 and 2018 (in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Category
|
|
2019
Amount
|
|
Weighted-Average
Useful Lives
(Years)
|
|
2018
Amount
|
|
Weighted-Average
Useful Lives
(Years)
|
Depreciable plant:
|
|
|
|
|
|
|
|
|
Transmission
|
|
$
|
10,025.2
|
|
|
37
|
|
$
|
9,719.3
|
|
|
37
|
Storage
|
|
804.2
|
|
|
38
|
|
818.0
|
|
|
38
|
Gathering
|
|
107.9
|
|
|
23
|
|
109.9
|
|
|
23
|
General
|
|
219.3
|
|
|
14
|
|
212.4
|
|
|
14
|
Rights of way and other
|
|
149.2
|
|
|
34
|
|
146.1
|
|
|
35
|
Total utility depreciable plant
|
|
11,305.8
|
|
|
37
|
|
11,005.7
|
|
|
37
|
|
|
|
|
|
|
|
|
|
Non-depreciable:
|
|
|
|
|
|
|
|
|
|
|
Construction work in progress
|
|
253.9
|
|
|
|
|
150.2
|
|
|
|
Storage
|
|
139.4
|
|
|
|
|
126.7
|
|
|
|
Land
|
|
44.3
|
|
|
|
|
43.0
|
|
|
|
Total non-depreciable assets
|
|
437.6
|
|
|
|
|
319.9
|
|
|
|
|
|
|
|
|
|
|
|
|
Total PPE
|
|
11,743.4
|
|
|
|
|
11,325.6
|
|
|
|
Less: accumulated depreciation
|
|
3,263.7
|
|
|
|
|
2,939.8
|
|
|
|
|
|
|
|
|
|
|
|
|
Total PPE, net
|
|
$
|
8,479.7
|
|
|
|
|
$
|
8,385.8
|
|
|
|
The non-depreciable assets were not included in the calculation of the weighted-average useful lives.
The Company holds undivided interests in certain assets, including the Bistineau storage facility of which the Company owns 92%, the Mobile Bay Pipeline of which the Company owns 64% and offshore and other assets, comprised of pipeline and gathering assets in which the Company holds various ownership interests. In addition, the Company owns 83% of two ethylene wells and supporting surface facilities in Choctaw, Louisiana, and certain ethylene and propylene pipelines connecting Louisiana Midstream’s storage facilities in Choctaw to chemical manufacturing plants in Geismar, Louisiana.
On September 23, 2019, the Company entered into an agreement to purchase the 8% undivided interest in the Bistineau storage facility in Louisiana that it did not already own for approximately $19.0 million. Until such time as the purchase closes, the current owner will continue to utilize this facility to provide storage services to its customers. The FERC approved the purchase in 2020 and the Company anticipates the purchase to close on April 1, 2020.
The proportionate share of investment associated with these interests has been recorded as PPE on the Consolidated Balance Sheets. The Company records its portion of direct operating expenses associated with the assets in Operation and maintenance expense. The following table presents the gross PPE investment and related accumulated depreciation for the Company’s undivided interests as of December 31, 2019 and 2018 (in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2019
|
|
2018
|
|
Gross PPE
Investment
|
|
Accumulated Depreciation
|
|
Gross PPE
Investment
|
|
Accumulated Depreciation
|
Bistineau storage
|
$
|
89.4
|
|
|
$
|
29.3
|
|
|
$
|
84.5
|
|
|
$
|
26.6
|
|
Mobile Bay Pipeline
|
14.5
|
|
|
6.7
|
|
|
14.0
|
|
|
6.3
|
|
NGL pipelines and facilities
|
34.8
|
|
|
7.2
|
|
|
34.8
|
|
|
6.2
|
|
Offshore and other assets
|
14.5
|
|
|
11.6
|
|
|
14.6
|
|
|
11.4
|
|
Total
|
$
|
153.2
|
|
|
$
|
54.8
|
|
|
$
|
147.9
|
|
|
$
|
50.5
|
|
Asset Disposition and Impairments
In May 2017, the Company sold its Flag City Processing Partners, LLC subsidiary, which owned the Flag City processing plant and related assets, to a third party for $63.6 million, including customary adjustments. The Company recognized losses and impairment charges, reported within Total operating costs and expenses, of $47.1 million on the sale.
The Company recognized $0.1 million, $0.5 million and $5.8 million of asset impairment charges for the years ended December 31, 2019, 2018 and 2017.
Note 8: Goodwill and Intangible Assets
Goodwill
As of December 31, 2019 and 2018, the Company had recorded on its Consolidated Balance Sheets $237.4 million of goodwill. The Company performed its annual goodwill impairment test for its reporting units as of November 30, 2019. The results of the quantitative goodwill impairment test indicated that the fair value of the Company’s reporting units significantly exceeded their carrying amounts. No impairment charge related to goodwill was recorded for any of the Company’s reporting units during 2019, 2018 or 2017.
Intangible Assets
The following table contains information regarding the Company's intangible assets, which includes customer relationships acquired as part of its acquisitions (in millions):
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
2019
|
|
2018
|
Gross carrying amount
|
$
|
59.4
|
|
|
$
|
59.4
|
|
Accumulated amortization
|
(13.4
|
)
|
|
(11.5
|
)
|
Net carrying amount
|
$
|
46.0
|
|
|
$
|
47.9
|
|
For each of the years ended December 31, 2019, 2018 and 2017, amortization expense for intangible assets was $1.9 million, $2.0 million and $2.0 million and was recorded in Depreciation and amortization on the Consolidated Statements of Income. Amortization expense for the next five years and in total thereafter as of December 31, 2019, is expected to be as follows (in millions):
|
|
|
|
|
2020
|
$
|
1.9
|
|
2021
|
1.9
|
|
2022
|
1.9
|
|
2023
|
1.9
|
|
2024
|
2.0
|
|
Thereafter
|
36.4
|
|
Total
|
$
|
46.0
|
|
The weighted-average remaining useful life of the Company's intangible assets as of December 31, 2019, was 24 years.
Note 9: Asset Retirement Obligations
The Company has identified and recorded legal obligations associated with the abandonment of certain pipeline and storage assets, brine ponds, offshore facilities and the abatement of asbestos consisting of removal, transportation and disposal when removed from certain compressor stations and meter station buildings. Legal obligations exist for the main pipeline and certain other Company assets; however, the fair value of these obligations cannot be determined because the lives of the assets are indefinite. As a result, cash flows associated with retirement of the assets cannot be estimated with the degree of accuracy necessary to establish a liability for the obligations.
The following table summarizes the aggregate carrying amount of the Company’s ARO as of December 31, 2019 and 2018 (in millions):
|
|
|
|
|
|
|
|
|
|
2019
|
|
2018
|
Balance at beginning of year
|
$
|
62.3
|
|
|
$
|
55.1
|
|
Liabilities recorded
|
1.0
|
|
|
10.3
|
|
Liabilities settled
|
(5.1
|
)
|
|
(5.0
|
)
|
Accretion expense
|
2.2
|
|
|
1.9
|
|
Balance at end of year
|
60.4
|
|
|
62.3
|
|
Less: Current portion of ARO
|
(3.6
|
)
|
|
(5.9
|
)
|
Long-term ARO
|
$
|
56.8
|
|
|
$
|
56.4
|
|
For the Company’s operations where regulatory accounting is applicable, depreciation rates for PPE are comprised of two components. One component is based on economic service life (capital recovery) and the other is based on estimated costs of removal (as a component of negative salvage) which is collected in rates and does not represent an existing legal obligation. The Company has reflected $75.1 million and $68.5 million as of December 31, 2019 and 2018, on the Consolidated Balance Sheets as Provision for other asset retirement related to the estimated cost of removal collected in rates.
Note 10: Regulatory Assets and Liabilities
The amounts recorded as regulatory assets and liabilities on the Consolidated Balance Sheets as of December 31, 2019 and 2018, are summarized in the table below. The table also includes amounts related to unamortized debt expense and unamortized discount on long-term debt, which while not regulatory assets and liabilities, are a critical component of the embedded cost of debt financing utilized in Texas Gas' rate proceedings. The tax effect of the equity component of AFUDC represents amounts recoverable from rate payers for the tax recorded in regulatory accounting. Certain amounts in the table are reflected as a negative, or a reduction, to be consistent with the regulatory books of account. The period of recovery for the regulatory assets included in rates varies from one to eighteen years. The remaining period of recovery for regulatory assets not yet included in rates would be determined in future rate proceedings. None of the regulatory assets shown below were earning a return as of December 31, 2019 and 2018 (in millions):
|
|
|
|
|
|
|
|
|
|
2019
|
|
2018
|
Regulatory Assets:
|
|
|
|
Pension
|
$
|
10.6
|
|
|
$
|
10.6
|
|
Tax effect of AFUDC equity
|
0.8
|
|
|
1.0
|
|
Fuel tracker
|
4.4
|
|
|
23.6
|
|
Other
|
0.5
|
|
|
—
|
|
Total regulatory assets
|
$
|
16.3
|
|
|
$
|
35.2
|
|
|
|
|
|
|
|
|
|
|
Regulatory Liabilities:
|
|
|
|
Cashout and fuel tracker
|
$
|
9.5
|
|
|
$
|
8.0
|
|
Provision for other asset retirement
|
75.1
|
|
|
68.5
|
|
Unamortized debt expense and premium on reacquired debt
|
(3.1
|
)
|
|
(4.3
|
)
|
Unamortized discount on long-term debt
|
(0.4
|
)
|
|
(0.6
|
)
|
Postretirement benefits other than pension
|
56.8
|
|
|
51.6
|
|
Total regulatory liabilities
|
$
|
137.9
|
|
|
$
|
123.2
|
|
Note 11: Financing
Long-Term Debt
The following table presents all long-term debt issuances outstanding as of December 31, 2019 and 2018 (in millions):
|
|
|
|
|
|
|
|
|
|
2019
|
|
2018
|
Notes and Debentures:
|
|
|
|
Boardwalk Pipelines
|
|
|
|
5.75% Notes due 2019 (Boardwalk Pipelines 2019 Notes)
|
$
|
—
|
|
|
$
|
350.0
|
|
3.375% Notes due 2023
|
300.0
|
|
|
300.0
|
|
4.95% Notes due 2024
|
600.0
|
|
|
600.0
|
|
5.95% Notes due 2026
|
550.0
|
|
|
550.0
|
|
4.45% Notes due 2027
|
500.0
|
|
|
500.0
|
|
4.80% Notes due 2029
|
500.0
|
|
|
—
|
|
|
|
|
|
Gulf South
|
|
|
|
|
|
4.00% Notes due 2022
|
300.0
|
|
|
300.0
|
|
|
|
|
|
Texas Gas
|
|
|
|
|
|
4.50% Notes due 2021
|
440.0
|
|
|
440.0
|
|
7.25% Debentures due 2027
|
100.0
|
|
|
100.0
|
|
Total notes and debentures
|
3,290.0
|
|
|
3,140.0
|
|
|
|
|
|
Revolving Credit Facility:
|
|
|
|
|
|
Gulf Crossing
|
—
|
|
|
285.0
|
|
Gulf South
|
295.0
|
|
|
295.0
|
|
Total revolving credit facility
|
295.0
|
|
|
580.0
|
|
|
|
|
|
Finance lease obligation
|
6.8
|
|
|
7.5
|
|
|
3,591.8
|
|
|
3,727.5
|
|
Less:
|
|
|
|
Unamortized debt discount
|
(19.3
|
)
|
|
(19.1
|
)
|
Unamortized debt issuance costs
|
(6.4
|
)
|
|
(7.1
|
)
|
Total Long-Term Debt and Finance Lease Obligation
|
$
|
3,566.1
|
|
|
$
|
3,701.3
|
|
Maturities of the Company’s long-term debt for the next five years and in total thereafter are as follows (in millions):
|
|
|
|
|
2020
|
$
|
—
|
|
2021
|
440.0
|
|
2022
|
595.0
|
|
2023
|
300.0
|
|
2024
|
600.0
|
|
Thereafter
|
1,650.0
|
|
Total long-term debt
|
$
|
3,585.0
|
|
Notes and Debentures
As of December 31, 2019 and 2018, the weighted-average interest rate of the Company's notes and debentures was 5.06% and 5.17%. The Company did not have any debt issuances for the year ended December 31, 2018. For the years ended December 31, 2019 and 2017, the Company completed the following debt issuances (in millions, except interest rates):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Date of
Issuance
|
|
Issuing Subsidiary
|
|
Amount of
Issuance
|
|
Purchaser
Discounts
and
Expenses
|
|
Net
Proceeds
|
|
Interest
Rate
|
|
Maturity Date
|
|
Interest
Payable
|
May 2019
|
|
Boardwalk Pipelines
|
|
$
|
500.0
|
|
|
$
|
4.8
|
|
|
$
|
495.2
|
|
(1)
|
4.80
|
%
|
|
May 3, 2029
|
|
May 3 and November 3
|
January 2017
|
|
Boardwalk Pipelines
|
|
$
|
500.0
|
|
|
$
|
6.0
|
|
|
$
|
494.0
|
|
(2)
|
4.45
|
%
|
|
July 15, 2027
|
|
January 15 and July 15
|
|
|
(1)
|
The net proceeds of this offering were used to retire the outstanding $350.0 million aggregate principal amount of Boardwalk Pipelines 2019 Notes at maturity and for general partnership purposes. Initially, the Company used the net proceeds to reduce outstanding borrowings under its revolving credit facility. Subsequently, in September 2019, the Company retired all of the outstanding aggregate principal amount of Boardwalk Pipelines 2019 Notes at maturity with borrowings under its revolving credit facility.
|
|
|
(2)
|
The net proceeds of this offering were used to retire the outstanding $275.0 million aggregate principal amount of Gulf South's 6.30% notes due 2017 at maturity and to fund growth capital expenditures.
|
The Company’s notes and debentures are redeemable, in whole or in part, at the Company’s option at any time, at a redemption price equal to the greater of 100% of the principal amount of the notes to be redeemed or a “make whole” redemption price based on the remaining scheduled payments of principal and interest discounted to the date of redemption at a rate equal to the Treasury rate plus 20 to 50 basis points depending upon the particular issue of notes, plus accrued and unpaid interest, if any. Other customary covenants apply, including those concerning events of default.
The indentures governing the notes and debentures have restrictive covenants which provide that, with certain exceptions, neither the Company nor any of its subsidiaries may create, assume or suffer to exist any lien upon any property to secure any indebtedness unless the debentures and notes shall be equally and ratably secured. All of the Company's debt obligations are unsecured. At December 31, 2019, Boardwalk Pipelines and its operating subsidiaries were in compliance with their debt covenants.
Revolving Credit Facility
The Company has a revolving credit facility that includes Boardwalk Pipelines, Texas Gas and Gulf South as borrowers (Borrowers). Interest is determined, at the Company's election, by reference to (a) the base rate which is the highest of (1) the prime rate, (2) the federal funds rate plus 0.50% and (3) the one month Eurodollar Rate plus 1.00%, plus an applicable margin, or (b) the one-month LIBOR plus an applicable margin. The applicable margin ranges from 0.00% to 0.75% for loans bearing interest based on the base rate and ranges from 1.00% to 1.75% for loans bearing interest based on the LIBOR rate, in each case determined based on the individual Borrower's credit rating from time to time. The Third Amended and Restated Revolving Credit Agreement (amended credit agreement) provides for a quarterly commitment fee charged on the average daily unused amount of the revolving credit facility ranging from 0.10% to 0.275% which is determined based on the individual Borrower's credit rating from time to time. The revolving credit facility has a borrowing capacity of $1.5 billion through May 26, 2020, and a borrowing capacity of $1.475 billion from May 27, 2020, to May 26, 2022.
The revolving credit facility contains various restrictive covenants and other usual and customary terms and conditions, including restrictions regarding the incurrence of additional debt, the sale of assets and sale-leaseback transactions. The financial covenants under the revolving credit facility require the Company and its subsidiaries to maintain, among other things, a ratio of total consolidated debt to consolidated EBITDA (as defined in the amended credit agreement) measured for the previous twelve months of not more than 5.0 to 1.0, or up to 5.5 to 1.0 for the three quarters following a qualified acquisition or series of acquisitions, where the purchase price exceeds $100.0 million over a rolling 12-month period. The Company and its subsidiaries were in compliance with all covenant requirements under the revolving credit facility as of December 31, 2019.
Outstanding borrowings under the Company's revolving credit facility as of December 31, 2019 and 2018, were $295.0 million and $580.0 million, with weighted-average borrowing rates of 3.00% and 3.69%. As of February 10, 2020, the Company had $390.0 million outstanding borrowings and approximately $1.1 billion of available borrowing capacity under the revolving credit facility.
Cash Distributions
For each of the years ended December 31, 2019, 2018 and 2017, the Company paid distributions of $102.2 million in cash distributions to its partners as determined by Boardwalk GP. For 2018 and 2017, the Company paid no amounts with respect to the incentive distribution rights (IDRs) because the quarterly target distribution levels for IDR payout were not met.
Note 12: Employee Benefits
Retirement Plans
Defined Benefit Retirement Plans
Texas Gas employees hired prior to November 1, 2006, are covered under a non-contributory, defined benefit pension plan (Pension Plan). The Texas Gas Supplemental Retirement Plan (SRP) provides pension benefits for the portion of an eligible employee’s pension benefit under the Pension Plan that becomes subject to compensation limitations under the Internal Revenue Code. Collectively, the Company refers to the Pension Plan and the SRP as Retirement Plans. The Company uses a measurement date of December 31 for its Retirement Plans.
As a result of the Texas Gas rate case settlement in 2006, the Company is required to fund the amount of annual net periodic pension cost associated with the Pension Plan, including a minimum of $3.0 million, which is the amount included in rates. In 2019 and 2018, the Company funded $4.7 million and $3.0 million to the Pension Plan and expects to fund an additional $3.0 million to the plan in 2020. In 2019, there were no payments made to the SRP. In 2018, the Company funded $0.8 million to the SRP.
The Company recognizes in expense each year the actuarially determined amount of net periodic pension cost associated with the Retirement Plans, including a minimum amount of $3.0 million related to its Pension Plan, in accordance with the 2006 rate case settlement. Texas Gas is permitted to seek future rate recovery for amounts of annual Pension Plan costs in excess of $6.0 million and is precluded from seeking future recovery of annual Pension Plan costs between $3.0 million and $6.0 million. As a result, the Company would recognize a regulatory asset for amounts of annual Pension Plan costs in excess of $6.0 million and would reduce its regulatory asset to the extent that annual Pension Plan costs are less than $3.0 million. Annual Pension Plan costs between $3.0 million and $6.0 million will be charged to expense.
Postretirement Benefits Other Than Pension (PBOP)
Texas Gas provides postretirement medical benefits and life insurance to retired employees who were employed full time, hired prior to January 1, 1996, and have met certain other requirements. In 2019 and 2018, the Company contributed $0.1 million and $0.2 million to the PBOP plan. The PBOP plan is in an overfunded status; therefore, the Company does not expect to make any contributions to the plan in 2020. The Company does not anticipate that any plan assets will be returned to the Company during 2020. The Company uses a measurement date of December 31 for its PBOP plan.
Projected Benefit Obligation, Fair Value of Assets and Funded Status
The projected benefit obligation, fair value of assets, funded status and the amounts not yet recognized as components of net periodic pension and postretirement benefits cost for the Retirement Plans and PBOP at December 31, 2019 and 2018, were as follows (in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retirement Plans
|
|
PBOP
|
|
For the Year Ended
December 31,
|
|
For the Year Ended
December 31,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Change in benefit obligation:
|
|
|
|
|
|
|
|
Benefit obligation at beginning of period
|
$
|
125.1
|
|
|
$
|
140.7
|
|
|
$
|
35.6
|
|
|
$
|
41.4
|
|
Service cost
|
3.0
|
|
|
3.3
|
|
|
0.1
|
|
|
0.1
|
|
Interest cost
|
3.9
|
|
|
4.5
|
|
|
1.4
|
|
|
1.5
|
|
Plan participants’ contributions
|
—
|
|
|
—
|
|
|
1.1
|
|
|
1.0
|
|
Actuarial (gain) loss
|
5.9
|
|
|
(4.6
|
)
|
|
1.9
|
|
|
(4.0
|
)
|
Benefits paid
|
(0.5
|
)
|
|
(0.4
|
)
|
|
(3.6
|
)
|
|
(4.4
|
)
|
Settlement
|
(15.2
|
)
|
|
(18.4
|
)
|
|
—
|
|
|
—
|
|
Benefit obligation at end of period
|
$
|
122.2
|
|
|
$
|
125.1
|
|
|
$
|
36.5
|
|
|
$
|
35.6
|
|
|
|
|
|
|
|
|
|
Change in plan assets:
|
|
|
|
|
|
|
|
|
|
|
|
Fair value of plan assets at beginning of period
|
$
|
100.3
|
|
|
$
|
118.9
|
|
|
$
|
85.0
|
|
|
$
|
88.2
|
|
Actual return on plan assets
|
12.5
|
|
|
(3.6
|
)
|
|
8.2
|
|
|
—
|
|
Benefits paid
|
(0.5
|
)
|
|
(0.4
|
)
|
|
(3.6
|
)
|
|
(4.4
|
)
|
Settlement
|
(15.2
|
)
|
|
(18.4
|
)
|
|
—
|
|
|
—
|
|
Company contributions
|
4.6
|
|
|
3.8
|
|
|
0.1
|
|
|
0.2
|
|
Plan participants’ contributions
|
—
|
|
|
—
|
|
|
1.1
|
|
|
1.0
|
|
Fair value of plan assets at end of period
|
$
|
101.7
|
|
|
$
|
100.3
|
|
|
$
|
90.8
|
|
|
$
|
85.0
|
|
|
|
|
|
|
|
|
|
Funded status
|
$
|
(20.5
|
)
|
|
$
|
(24.8
|
)
|
|
$
|
54.3
|
|
|
$
|
49.4
|
|
|
|
|
|
|
|
|
|
Items not recognized as components of net periodic cost:
|
|
|
|
|
|
|
|
|
|
Net actuarial loss
|
$
|
20.6
|
|
|
$
|
25.8
|
|
|
$
|
1.1
|
|
|
$
|
4.4
|
|
At December 31, 2019 and 2018, the following aggregate information relates only to the underfunded plans (in millions):
|
|
|
|
|
|
|
|
|
|
Retirement Plans
|
|
For the Year Ended
December 31,
|
|
2019
|
|
2018
|
Projected benefit obligation
|
$
|
122.2
|
|
|
$
|
125.1
|
|
Accumulated benefit obligation
|
115.4
|
|
|
117.3
|
|
Fair value of plan assets
|
101.7
|
|
|
100.3
|
|
Components of Net Periodic Benefit Cost
Components of net periodic benefit cost for both the Retirement Plans and PBOP for the years ended December 31, 2019, 2018 and 2017, were as follows (in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retirement Plans
|
|
PBOP
|
|
For the Year Ended
December 31,
|
|
For the Year Ended
December 31,
|
|
2019
|
|
2018
|
|
2017
|
|
2019
|
|
2018
|
|
2017
|
Service cost
|
$
|
3.0
|
|
|
$
|
3.3
|
|
|
$
|
3.5
|
|
|
$
|
0.1
|
|
|
$
|
0.1
|
|
|
$
|
0.1
|
|
Interest cost
|
3.9
|
|
|
4.5
|
|
|
4.4
|
|
|
1.4
|
|
|
1.5
|
|
|
1.6
|
|
Expected return on plan assets
|
(6.4
|
)
|
|
(7.5
|
)
|
|
(7.8
|
)
|
|
(3.0
|
)
|
|
(4.6
|
)
|
|
(4.4
|
)
|
Amortization of unrecognized net loss
|
2.2
|
|
|
1.4
|
|
|
2.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Settlement charge
|
2.9
|
|
|
3.0
|
|
|
1.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Net periodic benefit cost
|
$
|
5.6
|
|
|
$
|
4.7
|
|
|
$
|
3.8
|
|
|
$
|
(1.5
|
)
|
|
$
|
(3.0
|
)
|
|
$
|
(2.7
|
)
|
Due to the Texas Gas rate case settlement in 2006, Texas Gas is permitted to seek future rate recovery for amounts of annual Pension Plan costs in excess of $6.0 million.
Estimated Future Benefit Payments
The following table shows benefit payments, which reflect expected future service, as appropriate, which are expected to be paid for both the Retirement Plans and PBOP (in millions):
|
|
|
|
|
|
|
|
|
|
Retirement Plans
|
|
PBOP
|
2020
|
$
|
20.3
|
|
|
$
|
2.6
|
|
2021
|
11.7
|
|
|
2.6
|
|
2022
|
13.0
|
|
|
2.5
|
|
2023
|
11.9
|
|
|
2.4
|
|
2024
|
12.0
|
|
|
2.4
|
|
2025-2029
|
46.9
|
|
|
10.2
|
|
Weighted–Average Assumptions
Weighted-average assumptions used to determine benefit obligations for the years ended December 31, 2019 and 2018, were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retirement Plans
|
|
PBOP
|
|
For the Year Ended
December 31,
|
|
For the Year Ended
December 31,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
Pension
|
|
SRP
|
|
Pension
|
|
SRP
|
|
|
|
|
Discount rate
|
2.70
|
%
|
|
2.70
|
%
|
|
4.00
|
%
|
|
4.10
|
%
|
|
3.30
|
%
|
|
4.30
|
%
|
Expected return on plan assets
|
7.00
|
%
|
|
7.00
|
%
|
|
7.00
|
%
|
|
7.00
|
%
|
|
3.61
|
%
|
|
5.30
|
%
|
Rate of compensation increase
|
3.00
|
%
|
|
3.00
|
%
|
|
3.86
|
%
|
|
3.86
|
%
|
|
—
|
|
|
—
|
|
Weighted-average assumptions used to determine net periodic benefit cost for the periods indicated were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retirement Plans
|
|
PBOP
|
|
For the Year Ended
December 31,
|
|
For the Year Ended
December 31,
|
|
2019
|
|
2018
|
|
2017
|
|
2019
|
|
2018
|
|
2017
|
|
Pension
|
|
SRP
|
|
Pension
|
|
SRP
|
|
Pension
|
|
SRP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discount rate
|
(1)
|
|
4.10
|
%
|
|
(1)
|
|
3.40
|
%
|
|
(1)
|
|
3.85
|
%
|
|
4.30
|
%
|
|
3.70
|
%
|
|
4.20
|
%
|
Expected return on plan assets
|
7.00%
|
|
7.00
|
%
|
|
7.25%
|
|
7.25
|
%
|
|
7.25%
|
|
7.25
|
%
|
|
3.61
|
%
|
|
5.30
|
%
|
|
5.30
|
%
|
Rate of compensation increase
|
3.86%
|
|
3.86
|
%
|
|
3.86%
|
|
3.86
|
%
|
|
3.86%
|
|
3.86
|
%
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
(1)
|
Pension expense was remeasured quarterly in 2019, 2018 and 2017. The quarterly remeasurements for each quarter in 2019, 2018 and 2017 were as follows: Quarter 1: 3.80%, 3.75% and 3.45%; Quarter 2: 3.25%, 3.85% and 3.30%; Quarter 3: 2.60%, 3.95% and 3.20%; and Quarter 4: 2.70%, 4.00% and 3.25%.
|
The long-term rate of return for plan assets was determined based on widely-accepted capital market principles, long-term return analysis for global fixed income and equity markets as well as the active total return oriented portfolio management style. Long-term trends are evaluated relative to market factors such as inflation, interest rates and fiscal and monetary policies, in order to assess the capital market assumptions as applied to the plan. Consideration of diversification needs and rebalancing is maintained.
Pension Plan and PBOP Asset Allocation and Investment Strategy
Pension Plan
The Pension Plan investments are held in a trust account and consist of an undivided interest in an investment account of the Loews Corporation Employees Retirement Trust (Master Trust), established by Loews and its participating subsidiaries. Use of the Master Trust permits the co-investing of trust assets of the Pension Plan with the assets of the Loews Corporation Cash Balance Retirement Plan for investment and administrative purposes. Although assets of all plans are co-invested in the Master Trust, the custodian maintains supporting records for the purpose of allocating the net gain or loss of the investment account to the participating plans. The net investment income of the investment assets is allocated by the custodian to each participating plan based on the relationship of the interest of each plan to the total of the interests of the participating plans. The Master Trust assets are measured at fair value. The fair value of the interest in the assets of the Master Trust associated with the Pension Plan as of December 31, 2019 and 2018, was $101.7 million (or 48.1%) and $100.3 million (or 48.2%), of the total Master Trust assets.
Equity securities are publicly traded securities which are valued using quoted market prices and are considered a Level 1 investment under the fair value hierarchy. Short-term investments that are actively traded or have quoted prices, such as money market funds, are considered Level 1 investments. Fixed income mutual funds include highly liquid government securities and exchange traded bonds and redeemable preferred stock, valued using quoted market prices, and are considered a Level 1 investment. The limited partnership investments held within the Master Trust are recorded at fair value, which represents the Master Trust’s shares of the net asset value of each partnership, as determined by the general partner. The limited partnership and other invested assets consist primarily of hedge fund strategies that generate returns through investing in marketable securities in the public fixed income and equity markets.
The following table sets forth, by level within the fair value hierarchy, a summary of the Master Trust’s investments measured at fair value on a recurring basis at December 31, 2019 (in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Master Trust Assets
|
|
Measured under Fair Value Hierarchy
|
|
Measured at Net Asset Value
|
|
Total Master Trust Assets
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
Equity securities
|
$
|
33.3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
33.3
|
|
|
$
|
—
|
|
|
$
|
33.3
|
|
Short-term investments
|
6.6
|
|
|
—
|
|
|
—
|
|
|
6.6
|
|
|
—
|
|
|
6.6
|
|
Fixed income mutual funds
|
97.9
|
|
|
—
|
|
|
—
|
|
|
97.9
|
|
|
—
|
|
|
97.9
|
|
Total assets measured at fair
value
|
137.8
|
|
|
—
|
|
|
—
|
|
|
137.8
|
|
|
—
|
|
|
137.8
|
|
Total limited partnerships
measured at net asset value
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
73.6
|
|
|
73.6
|
|
Total
|
$
|
137.8
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
137.8
|
|
|
$
|
73.6
|
|
|
$
|
211.4
|
|
The following table sets forth, by level within the fair value hierarchy, a summary of the Master Trust’s investments measured at fair value on a recurring basis at December 31, 2018 (in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Master Trust Assets
|
|
Measured under Fair Value Hierarchy
|
|
Measured at Net Asset Value
|
|
Total Master Trust Assets
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
Equity securities
|
$
|
34.1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
34.1
|
|
|
$
|
—
|
|
|
$
|
34.1
|
|
Short-term investments
|
8.8
|
|
|
—
|
|
|
—
|
|
|
8.8
|
|
|
—
|
|
|
8.8
|
|
Fixed income mutual funds
|
90.3
|
|
|
—
|
|
|
—
|
|
|
90.3
|
|
|
—
|
|
|
90.3
|
|
Total assets measured at fair
value
|
133.2
|
|
|
—
|
|
|
—
|
|
|
133.2
|
|
|
—
|
|
|
133.2
|
|
Total limited partnerships
measured at net asset value
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
74.8
|
|
|
74.8
|
|
Total
|
$
|
133.2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
133.2
|
|
|
$
|
74.8
|
|
|
$
|
208.0
|
|
PBOP
The PBOP plan assets are held in a trust and are measured at fair value. Short-term investments that are actively traded or have quoted prices, such as money market or mutual funds, are considered Level 1 investments. Fixed income mutual funds are actively traded and valued using quoted market prices and are considered Level 1 investments. Tax exempt securities, consisting of municipal securities, corporate and other taxable bonds and asset-backed securities are valued using a methodology based on information generated by market transactions involving identical or comparable assets, a discounted cash flow methodology or a combination of both when necessary. Common inputs for tax exempt securities include pricing for similar securities, marketplace quotes, benchmark yields, spreads off benchmark yields, interest rates and U.S. Treasury or swap curves and other pricing models utilizing observable inputs and are considered Level 2 investments. Specifically for asset-backed securities, key inputs include prepayment and default projections based on past performance of the underlying collateral and current market data.
The following table sets forth, by level within the fair value hierarchy, a summary of the PBOP trust investments measured at fair value on a recurring basis at December 31, 2019 (in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PBOP Trust Assets
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
Short-term investments
|
$
|
3.4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3.4
|
|
Fixed income mutual funds
|
17.6
|
|
|
—
|
|
|
—
|
|
|
17.6
|
|
Asset-backed securities
|
—
|
|
|
16.4
|
|
|
—
|
|
|
16.4
|
|
Corporate bonds
|
—
|
|
|
22.3
|
|
|
—
|
|
|
22.3
|
|
Tax exempt securities
|
—
|
|
|
31.1
|
|
|
—
|
|
|
31.1
|
|
Total investments
|
$
|
21.0
|
|
|
$
|
69.8
|
|
|
$
|
—
|
|
|
$
|
90.8
|
|
The following table sets forth, by level within the fair value hierarchy, a summary of the PBOP trust investments measured at fair value on a recurring basis at December 31, 2018 (in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PBOP Trust Assets
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
Short-term investments
|
$
|
4.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4.0
|
|
Fixed income mutual funds
|
15.8
|
|
|
—
|
|
|
—
|
|
|
15.8
|
|
Asset-backed securities
|
—
|
|
|
11.1
|
|
|
—
|
|
|
11.1
|
|
Corporate bonds
|
—
|
|
|
23.6
|
|
|
—
|
|
|
23.6
|
|
Tax exempt securities
|
—
|
|
|
30.5
|
|
|
—
|
|
|
30.5
|
|
Total investments
|
$
|
19.8
|
|
|
$
|
65.2
|
|
|
$
|
—
|
|
|
$
|
85.0
|
|
Investment Strategy
Pension Plan: The Company employs a total-return approach using a mix of equities and fixed income securities to maximize the long-term return on plan assets for a prudent level of risk and generate cash flows adequate to meet plan requirements. The intent of this strategy is to minimize plan expenses by generating investment returns that exceed the growth of the plan liabilities over the long run. Risk tolerance is established through careful consideration of the plan liabilities, plan funded status and corporate financial conditions. The target allocation of plan assets is 40% to 60% of the investment portfolio to equity and alternative investments, including limited partnerships, with the remainder primarily invested in fixed income securities. The investment portfolio contains a diversified blend of fixed income, equity and short-term securities. Alternative investments, including limited partnerships, have been used to enhance risk adjusted long-term returns while improving portfolio diversification. At December 31, 2019, the pension trust had committed $2.7 million to future capital calls from various third party limited partnership investments in exchange for an ownership interest in the related partnerships. Investment risk is monitored through annual liability measurements, periodic asset and liability studies and quarterly investment portfolio reviews.
PBOP: The investment strategy for the PBOP assets is to reduce the volatility of plan investments while protecting the initial investment given the overfunded status of the plan. At December 31, 2019 and 2018, all of the PBOP investments were in fixed income securities.
Defined Contribution Plan
Texas Gas employees hired on or after November 1, 2006, and all other employees of the Company are provided retirement benefits under a defined contribution plan, which also provides 401(k) plan benefits to its employees. Costs related to the Company’s defined contribution plan were $11.5 million, $11.1 million and $11.0 million for the years ended December 31, 2019, 2018 and 2017.
Long-Term Incentive Compensation Plans
The Company grants to selected employees long-term compensation awards under the LTIP (prior to 2019), the UAR and Cash Bonus Plan and the 2018 LTIP. These awards are intended to align the interests of the employees with those of the Company, encourage superior performance, attract and retain employees who are essential for the Company’s growth and profitability and to encourage employees to devote their best efforts to advancing the Company’s business over both long and short-term time horizons. The Company also made annual grants of common units to certain of its directors under the LTIP prior to the Purchase Transaction.
LTIP
Prior to the Purchase Transaction, the Company had reserved 3,525,000 common units for grants of units, restricted units, unit options and UARs to officers and directors of the Company’s general partner and for selected employees under the LTIP. The Company has outstanding Phantom Common Units which were granted under the plan. Each outstanding Phantom Common Unit includes a tandem grant of Distribution Equivalent Rights (DERs). The grantee selected one of two irrevocable payment elections shortly after the award was granted. If the first payment election was selected, an amount equal to the fair market value of the vested portion of the Phantom Common Units (as defined in the plan) and associated DERs will become payable to the grantee in cash on each of the two vesting dates. If the second payment election option was selected, the Phantom Common Units and associated DERs will become payable in cash on the second vesting date. In the case of retirement, any outstanding and unvested awards would become fully vested upon retirement and the Phantom Common Units will be paid pursuant to the elected payment option. Prior to the Purchase Transaction, the economic value of the Phantom Common Units was directly tied to the value of the Company’s common units, but these awards did not confer any rights of ownership to the grantee. The fair value of the awards was recognized ratably over the vesting period and prior to the Purchase Transaction, was remeasured each quarter until settlement, based on the market price of the Company’s common units and amounts credited under the DERs. Outstanding phantom units after the Purchase Transaction are valued at the $12.06 cash purchase price per unit of the Purchase Transaction plus amounts credited under the DERs and will be settled based on the payment election made by the grantee shortly after the award was granted. As a result of the Purchase Transaction, no further grants of Phantom Common Units or common units, which had previously been granted to the Company’s directors, will be made under the LTIP.
A summary of the status of the Phantom Common Units granted under the Company’s LTIP as of December 31, 2019 and 2018, and changes during the years ended December 31, 2019 and 2018, is presented below:
|
|
|
|
|
|
|
|
|
|
|
|
Phantom Common Units
|
|
Total Fair Value
(in millions)
|
|
Weighted-Average Vesting Period
(in years)
|
Outstanding at January 1, 2018
|
972,895
|
|
|
$
|
13.1
|
|
|
1.0
|
|
Granted
|
651,531
|
|
|
8.6
|
|
|
2.3
|
|
Paid
|
(677,169
|
)
|
|
(8.9
|
)
|
|
—
|
|
Forfeited
|
(57,555
|
)
|
|
—
|
|
|
—
|
|
Outstanding at December 31, 2018
|
889,702
|
|
|
11.2
|
|
|
1.2
|
|
Granted
|
—
|
|
|
—
|
|
|
—
|
|
Paid
|
(520,753
|
)
|
|
(6.7
|
)
|
|
—
|
|
Forfeited
|
(21,493
|
)
|
|
—
|
|
|
—
|
|
Outstanding at December 31, 2019
|
347,456
|
|
|
$
|
4.5
|
|
|
0.6
|
|
The fair value of the awards at the date of grant was based on the closing market price of the Company’s common units on or directly preceding the date of grant. Outstanding phantom units after the Purchase Transaction are fair valued at the $12.06 cash purchase price per common unit of the Purchase Transaction plus amounts credited under the DERs. The fair value of the awards will be recognized ratably over the vesting period until settlement in accordance with the treatment of awards classified as liabilities, and taking into account the payment elections selected by the grantees. The Company recorded $4.6 million, $7.3 million and $7.8 million in Administrative and general expenses during 2019, 2018 and 2017 for the Phantom Common Unit awards. The total estimated remaining unrecognized compensation expense related to the Phantom Common Units outstanding at December 31, 2019 and 2018, was $1.0 million and $5.6 million.
In 2018, the general partner purchased 17,980 of the Company’s common units in the open market at a price of $11.15 per unit. These units were granted under the LTIP to the independent directors as part of their director compensation. Any outstanding common units owned by the independent directors were acquired by Boardwalk GP as part of the Purchase Transaction.
UAR and Cash Bonus Plan
The UAR and Cash Bonus Plan provides for grants of UARs and Long-Term Cash Bonuses to selected employees of the Company. In 2018, the Company granted to certain employees $2.9 million of Long-Term Cash Bonuses, which will vest and become payable to the holders in cash equal to the amount of the grant after the vesting dates. The Company recorded compensation expense of $1.6 million, $2.2 million and $1.1 million for the years ended December 31, 2019, 2018 and 2017, related to the Long-Term Cash Bonuses. As of December 31, 2019, the Company had $0.4 million remaining unrecognized compensation expense related to the Long-Term Cash Bonuses. After the Purchase Transaction, there will be no further UARs or Long-Term Cash Bonuses granted under the UAR and Cash Bonus Plan.
2018 LTIP
The 2018 LTIP provides for grants of Performance Awards to selected employees of the Company. A Performance Award is a long-term incentive award with a stated target amount which is payable in cash, after adjustments, upon vesting based on certain specified performance criteria being met. The stated target can be adjusted based on the level of achievement of the performance goals for the vesting period, but not to be below 90% or to exceed 110% of the target amount. In the case of retirement, any outstanding and unvested awards would become fully vested upon retirement and the Performance Awards will be paid at the original vesting date. In 2019, the Company granted to certain employees $12.0 million of Performance Awards. The Company recorded compensation expense of $6.1 million for the year ended December 31, 2019, and has $5.6 million remaining unrecognized compensation expense related to the Performance Awards.
Note 13: Income Taxes
The Company is not a taxable entity for federal income tax purposes. The following is a summary of the provision for income taxes for the periods ended December 31, 2019, 2018 and 2017 (in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Year Ended December 31,
|
|
2019
|
|
2018
|
|
2017
|
Current expense:
|
|
|
|
|
|
State
|
$
|
0.4
|
|
|
$
|
0.4
|
|
|
$
|
0.7
|
|
Total
|
0.4
|
|
|
0.4
|
|
|
0.7
|
|
Deferred provision:
|
|
|
|
|
|
|
|
|
State
|
0.1
|
|
|
0.2
|
|
|
0.3
|
|
Total
|
0.1
|
|
|
0.2
|
|
|
0.3
|
|
Income taxes
|
$
|
0.5
|
|
|
$
|
0.6
|
|
|
$
|
1.0
|
|
The Company’s tax years 2016 through 2019 remain subject to examination by the Internal Revenue Service and the states in which it operates. There were no differences between the provision at the statutory rate to the income tax provision at December 31, 2019, 2018 and 2017. As of December 31, 2019 and 2018, there were no significant deferred income tax assets or liabilities.
Note 14: Credit Risk
Major Customers
For the years ended December 31, 2019, 2018 and 2017, no customer comprised 10% or more of the Company’s operating revenues.
Gas Loaned to Customers
Natural gas price volatility can cause changes in credit risk related to gas and NGLs loaned to customers. As of December 31, 2019, the amount of gas owed to the operating subsidiaries of the Company due to gas imbalances and gas loaned under PAL and certain firm service agreements was approximately 12.8 trillion British thermal units (TBtu). Assuming an average market price during December 2019 of $2.08 per million British thermal unit (MMBtu), the market value of that gas was approximately $26.6 million. As of December 31, 2018, the amount of gas owed to the operating subsidiaries due to gas imbalances and gas loaned under PAL and certain firm service agreements was approximately 13.5 TBtu. Assuming an average market price during December 2018 of $3.68 per MMBtu, the market value of that gas was approximately $49.7 million. As of December 31, 2019 and 2018, there were no outstanding NGL imbalances owed to the operating subsidiaries. If any significant customer should have credit or financial problems resulting in a delay or failure to repay the gas owed to the operating subsidiaries, it could have a material adverse effect on the Company’s financial condition, results of operations or cash flows.
Note 15: Related Party Transactions
Loews provides a variety of corporate services to the Company under services agreements, including information technology, tax, risk management, internal audit and corporate development services and also charges the Company for allocated overheads. The Company incurred charges related to these services of $5.7 million, $6.2 million and $6.6 million for the years ended December 31, 2019, 2018 and 2017.
Distributions paid to BPHC and Boardwalk GP were $102.2 million, $77.2 million and $52.2 million for each of the years ended December 31, 2019, 2018 and 2017. The distribution paid to BPHC and Boardwalk GP in 2019 and 2018 was impacted by the increase in ownership by Boardwalk GP in the third quarter 2018.
Note 16: Supplemental Disclosure of Cash Flow Information (in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Year Ended December 31,
|
|
2019
|
|
2018
|
|
2017
|
Cash paid during the period for:
|
|
|
|
|
|
Interest (net of amount capitalized)
|
$
|
171.5
|
|
|
$
|
166.0
|
|
|
$
|
163.7
|
|
Income taxes, net
|
0.3
|
|
|
0.8
|
|
|
0.5
|
|
Non-cash adjustments:
|
|
|
|
|
|
|
|
|
Accounts payable and PPE
|
42.7
|
|
|
39.3
|
|
|
58.8
|
|
Right-of-use assets obtained in exchange for lease obligations
|
18.3
|
|
|
—
|
|
|
—
|
|
Note 17: Selected Quarterly Financial Data (Unaudited)
The following tables summarize selected quarterly financial data for 2019 and 2018 for the Company (in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2019
|
|
For the Quarter Ended:
|
|
December 31
|
|
September 30
|
|
June 30
|
|
March 31
|
Operating revenues
|
$
|
327.2
|
|
|
$
|
294.8
|
|
|
$
|
327.3
|
|
|
$
|
345.9
|
|
Operating expenses
|
216.4
|
|
|
207.4
|
|
|
204.9
|
|
|
192.8
|
|
Operating income
|
110.8
|
|
|
87.4
|
|
|
122.4
|
|
|
153.1
|
|
Interest expense, net
|
42.5
|
|
|
45.4
|
|
|
45.5
|
|
|
45.0
|
|
Other (income) expense
|
(1.2
|
)
|
|
(0.6
|
)
|
|
1.1
|
|
|
(0.2
|
)
|
Income before income taxes
|
69.5
|
|
|
42.6
|
|
|
75.8
|
|
|
108.3
|
|
Income taxes
|
0.1
|
|
|
0.1
|
|
|
0.1
|
|
|
0.2
|
|
Net income
|
$
|
69.4
|
|
|
$
|
42.5
|
|
|
$
|
75.7
|
|
|
$
|
108.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2018
|
|
For the Quarter Ended:
|
|
December 31
|
|
September 30
|
|
June 30
|
|
March 31
|
Operating revenues
|
$
|
325.1
|
|
|
$
|
277.9
|
|
|
$
|
285.3
|
|
|
$
|
335.4
|
|
Operating expenses
|
217.8
|
|
|
197.1
|
|
|
199.6
|
|
|
194.7
|
|
Operating income
|
107.3
|
|
|
80.8
|
|
|
85.7
|
|
|
140.7
|
|
Interest expense, net
|
44.8
|
|
|
43.5
|
|
|
43.2
|
|
|
44.1
|
|
Other (income) expense
|
(0.7
|
)
|
|
(0.7
|
)
|
|
0.2
|
|
|
(0.8
|
)
|
Income before income taxes
|
63.2
|
|
|
38.0
|
|
|
42.3
|
|
|
97.4
|
|
Income taxes
|
0.2
|
|
|
0.1
|
|
|
0.1
|
|
|
0.2
|
|
Net income
|
$
|
63.0
|
|
|
$
|
37.9
|
|
|
$
|
42.2
|
|
|
$
|
97.2
|
|
Note 18: Guarantee of Securities of Subsidiaries
Boardwalk Pipelines (Subsidiary Issuer) has issued securities which have been fully and unconditionally guaranteed by the Company (Parent Guarantor). The Subsidiary Issuer is 100% owned by the Parent Guarantor. The Company's subsidiaries had no significant restrictions on their ability to pay distributions or make loans to the Company except as noted in their debt covenants and had no restricted assets as of December 31, 2019 and 2018. Note 11 contains additional information regarding the Company's debt and related covenants.
Condensed Consolidating Balance Sheets as of December 31, 2019
(Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets
|
|
Parent
Guarantor
|
|
Subsidiary
Issuer
|
|
Non-guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated Boardwalk Pipeline Partners, LP
|
Cash and cash equivalents
|
|
$
|
—
|
|
|
$
|
2.1
|
|
|
$
|
1.6
|
|
|
$
|
—
|
|
|
$
|
3.7
|
|
Receivables
|
|
—
|
|
|
—
|
|
|
132.4
|
|
|
—
|
|
|
132.4
|
|
Receivables - affiliate
|
|
—
|
|
|
—
|
|
|
7.0
|
|
|
(7.0
|
)
|
|
—
|
|
Costs recoverable from customers
|
|
—
|
|
|
—
|
|
|
4.4
|
|
|
—
|
|
|
4.4
|
|
Prepayments
|
|
0.3
|
|
|
—
|
|
|
15.7
|
|
|
—
|
|
|
16.0
|
|
Advances to affiliates
|
|
—
|
|
|
33.7
|
|
|
1.6
|
|
|
(35.3
|
)
|
|
—
|
|
Other current assets
|
|
—
|
|
|
—
|
|
|
15.6
|
|
|
(4.4
|
)
|
|
11.2
|
|
Total current assets
|
|
0.3
|
|
|
35.8
|
|
|
178.3
|
|
|
(46.7
|
)
|
|
167.7
|
|
Investment in consolidated subsidiaries
|
|
3,059.4
|
|
|
7,230.5
|
|
|
—
|
|
|
(10,289.9
|
)
|
|
—
|
|
Property, plant and equipment, gross
|
|
0.6
|
|
|
—
|
|
|
11,742.8
|
|
|
—
|
|
|
11,743.4
|
|
Less–accumulated depreciation and
amortization
|
|
0.6
|
|
|
—
|
|
|
3,263.1
|
|
|
—
|
|
|
3,263.7
|
|
Property, plant and equipment, net
|
|
—
|
|
|
—
|
|
|
8,479.7
|
|
|
—
|
|
|
8,479.7
|
|
Advances to affiliates – noncurrent
|
|
2,004.9
|
|
|
377.1
|
|
|
127.8
|
|
|
(2,509.8
|
)
|
|
—
|
|
Other noncurrent assets
|
|
—
|
|
|
3.8
|
|
|
491.0
|
|
|
0.9
|
|
|
495.7
|
|
Total other assets
|
|
2,004.9
|
|
|
380.9
|
|
|
618.8
|
|
|
(2,508.9
|
)
|
|
495.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Assets
|
|
$
|
5,064.6
|
|
|
$
|
7,647.2
|
|
|
$
|
9,276.8
|
|
|
$
|
(12,845.5
|
)
|
|
$
|
9,143.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Partners' Capital
|
|
Parent
Guarantor
|
|
Subsidiary
Issuer
|
|
Non-guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated Boardwalk Pipeline Partners, LP
|
Payables
|
|
$
|
0.5
|
|
|
$
|
0.1
|
|
|
$
|
76.8
|
|
|
$
|
—
|
|
|
$
|
77.4
|
|
Payable to affiliates
|
|
0.5
|
|
|
—
|
|
|
7.0
|
|
|
(7.0
|
)
|
|
0.5
|
|
Advances from affiliates
|
|
4.1
|
|
|
1.6
|
|
|
33.7
|
|
|
(35.3
|
)
|
|
4.1
|
|
Other current liabilities
|
|
—
|
|
|
23.0
|
|
|
168.3
|
|
|
(3.8
|
)
|
|
187.5
|
|
Total current liabilities
|
|
5.1
|
|
|
24.7
|
|
|
285.8
|
|
|
(46.1
|
)
|
|
269.5
|
|
Long-term debt and finance lease
obligation
|
|
—
|
|
|
2,428.7
|
|
|
1,137.4
|
|
|
—
|
|
|
3,566.1
|
|
Advances from affiliates - noncurrent
|
|
—
|
|
|
2,132.7
|
|
|
377.1
|
|
|
(2,509.8
|
)
|
|
—
|
|
Other noncurrent liabilities
|
|
—
|
|
|
1.7
|
|
|
246.0
|
|
|
0.3
|
|
|
248.0
|
|
Total other liabilities and deferred
credits
|
|
—
|
|
|
2,134.4
|
|
|
623.1
|
|
|
(2,509.5
|
)
|
|
248.0
|
|
Total partners’ capital
|
|
5,059.5
|
|
|
3,059.4
|
|
|
7,230.5
|
|
|
(10,289.9
|
)
|
|
5,059.5
|
|
Total Liabilities and Partners' Capital
|
|
$
|
5,064.6
|
|
|
$
|
7,647.2
|
|
|
$
|
9,276.8
|
|
|
$
|
(12,845.5
|
)
|
|
$
|
9,143.1
|
|
Condensed Consolidating Balance Sheets as of December 31, 2018
(Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets
|
|
Parent
Guarantor
|
|
Subsidiary
Issuer
|
|
Non-guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated Boardwalk Pipeline Partners, LP
|
Cash and cash equivalents
|
|
$
|
0.3
|
|
|
$
|
1.6
|
|
|
$
|
1.7
|
|
|
$
|
—
|
|
|
$
|
3.6
|
|
Receivables
|
|
—
|
|
|
—
|
|
|
153.7
|
|
|
—
|
|
|
153.7
|
|
Receivables - affiliate
|
|
—
|
|
|
—
|
|
|
9.5
|
|
|
(9.5
|
)
|
|
—
|
|
Costs recoverable from customers
|
|
—
|
|
|
—
|
|
|
23.6
|
|
|
—
|
|
|
23.6
|
|
Prepayments
|
|
0.3
|
|
|
—
|
|
|
21.0
|
|
|
—
|
|
|
21.3
|
|
Advances to affiliates
|
|
—
|
|
|
—
|
|
|
2.0
|
|
|
(2.0
|
)
|
|
—
|
|
Other current assets
|
|
—
|
|
|
—
|
|
|
14.3
|
|
|
(4.2
|
)
|
|
10.1
|
|
Total current assets
|
|
0.6
|
|
|
1.6
|
|
|
225.8
|
|
|
(15.7
|
)
|
|
212.3
|
|
Investment in consolidated subsidiaries
|
|
2,828.1
|
|
|
7,136.6
|
|
|
—
|
|
|
(9,964.7
|
)
|
|
—
|
|
Property, plant and equipment, gross
|
|
0.6
|
|
|
—
|
|
|
11,325.0
|
|
|
—
|
|
|
11,325.6
|
|
Less–accumulated depreciation
and amortization
|
|
0.6
|
|
|
—
|
|
|
2,939.2
|
|
|
—
|
|
|
2,939.8
|
|
Property, plant and equipment, net
|
|
—
|
|
|
—
|
|
|
8,385.8
|
|
|
—
|
|
|
8,385.8
|
|
Advances to affiliates – noncurrent
|
|
2,034.2
|
|
|
460.1
|
|
|
431.8
|
|
|
(2,926.1
|
)
|
|
—
|
|
Other noncurrent assets
|
|
0.2
|
|
|
2.5
|
|
|
446.5
|
|
|
1.4
|
|
|
450.6
|
|
Total other assets
|
|
2,034.4
|
|
|
462.6
|
|
|
878.3
|
|
|
(2,924.7
|
)
|
|
450.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Assets
|
|
$
|
4,863.1
|
|
|
$
|
7,600.8
|
|
|
$
|
9,489.9
|
|
|
$
|
(12,905.1
|
)
|
|
$
|
9,048.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Partners' Capital
|
|
Parent
Guarantor
|
|
Subsidiary
Issuer
|
|
Non-guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated Boardwalk Pipeline Partners, LP
|
Payables
|
|
$
|
0.6
|
|
|
$
|
0.1
|
|
|
$
|
70.4
|
|
|
$
|
—
|
|
|
$
|
71.1
|
|
Payable to affiliates
|
|
0.5
|
|
|
—
|
|
|
9.5
|
|
|
(9.5
|
)
|
|
0.5
|
|
Advances from affiliates
|
|
—
|
|
|
2.0
|
|
|
—
|
|
|
(2.0
|
)
|
|
—
|
|
Other current liabilities
|
|
0.1
|
|
|
24.3
|
|
|
164.2
|
|
|
(2.8
|
)
|
|
185.8
|
|
Total current liabilities
|
|
1.2
|
|
|
26.4
|
|
|
244.1
|
|
|
(14.3
|
)
|
|
257.4
|
|
Long-term debt and finance lease
obligation
|
|
—
|
|
|
2,280.1
|
|
|
1,421.2
|
|
|
—
|
|
|
3,701.3
|
|
Advances from affiliates - noncurrent
|
|
—
|
|
|
2,466.0
|
|
|
460.1
|
|
|
(2,926.1
|
)
|
|
—
|
|
Other noncurrent liabilities
|
|
—
|
|
|
0.2
|
|
|
227.9
|
|
|
—
|
|
|
228.1
|
|
Total other liabilities and deferred
credits
|
|
—
|
|
|
2,466.2
|
|
|
688.0
|
|
|
(2,926.1
|
)
|
|
228.1
|
|
Total partners’ capital
|
|
4,861.9
|
|
|
2,828.1
|
|
|
7,136.6
|
|
|
(9,964.7
|
)
|
|
4,861.9
|
|
Total Liabilities and Partners' Capital
|
|
$
|
4,863.1
|
|
|
$
|
7,600.8
|
|
|
$
|
9,489.9
|
|
|
$
|
(12,905.1
|
)
|
|
$
|
9,048.7
|
|
Condensed Consolidating Statements of Income for the Year Ended December 31, 2019
(Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Parent
Guarantor
|
|
Subsidiary
Issuer
|
|
Non-guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated Boardwalk Pipeline Partners, LP
|
Operating Revenues:
|
|
|
|
|
|
|
|
|
|
Transportation
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,228.2
|
|
|
$
|
(82.0
|
)
|
|
$
|
1,146.2
|
|
Storage, parking and lending
|
—
|
|
|
—
|
|
|
92.8
|
|
|
(0.8
|
)
|
|
92.0
|
|
Other
|
—
|
|
|
—
|
|
|
57.0
|
|
|
—
|
|
|
57.0
|
|
Total operating revenues
|
—
|
|
|
—
|
|
|
1,378.0
|
|
|
(82.8
|
)
|
|
1,295.2
|
|
|
|
|
|
|
|
|
|
|
|
Operating Costs and Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Fuel and transportation
|
—
|
|
|
—
|
|
|
96.6
|
|
|
(82.8
|
)
|
|
13.8
|
|
Operation and maintenance
|
—
|
|
|
—
|
|
|
219.1
|
|
|
—
|
|
|
219.1
|
|
Administrative and general
|
—
|
|
|
—
|
|
|
141.1
|
|
|
—
|
|
|
141.1
|
|
Other operating costs and expenses
|
0.4
|
|
|
—
|
|
|
447.1
|
|
|
—
|
|
|
447.5
|
|
Total operating costs and expenses
|
0.4
|
|
|
—
|
|
|
903.9
|
|
|
(82.8
|
)
|
|
821.5
|
|
Operating (loss) income
|
(0.4
|
)
|
|
—
|
|
|
474.1
|
|
|
—
|
|
|
473.7
|
|
|
|
|
|
|
|
|
|
|
|
Other Deductions (Income):
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
—
|
|
|
128.0
|
|
|
50.7
|
|
|
—
|
|
|
178.7
|
|
Interest (income) expense - affiliates, net
|
(68.9
|
)
|
|
59.8
|
|
|
9.1
|
|
|
—
|
|
|
—
|
|
Interest income
|
—
|
|
|
—
|
|
|
(0.3
|
)
|
|
—
|
|
|
(0.3
|
)
|
Equity in earnings of subsidiaries
|
(227.2
|
)
|
|
(415.0
|
)
|
|
—
|
|
|
642.2
|
|
|
—
|
|
Miscellaneous other income, net
|
—
|
|
|
—
|
|
|
(0.9
|
)
|
|
—
|
|
|
(0.9
|
)
|
Total other (income) deductions
|
(296.1
|
)
|
|
(227.2
|
)
|
|
58.6
|
|
|
642.2
|
|
|
177.5
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before income taxes
|
295.7
|
|
|
227.2
|
|
|
415.5
|
|
|
(642.2
|
)
|
|
296.2
|
|
Income taxes
|
—
|
|
|
—
|
|
|
0.5
|
|
|
—
|
|
|
0.5
|
|
Net income (loss)
|
$
|
295.7
|
|
|
$
|
227.2
|
|
|
$
|
415.0
|
|
|
$
|
(642.2
|
)
|
|
$
|
295.7
|
|
Condensed Consolidating Statements of Income for the Year Ended December 31, 2018
(Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Parent
Guarantor
|
|
Subsidiary
Issuer
|
|
Non-guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated Boardwalk Pipeline Partners, LP
|
Operating Revenues:
|
|
|
|
|
|
|
|
|
|
Transportation
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,166.5
|
|
|
$
|
(82.9
|
)
|
|
$
|
1,083.6
|
|
Storage, parking and lending
|
—
|
|
|
—
|
|
|
91.0
|
|
|
(0.6
|
)
|
|
90.4
|
|
Other
|
—
|
|
|
—
|
|
|
49.7
|
|
|
—
|
|
|
49.7
|
|
Total operating revenues
|
—
|
|
|
—
|
|
|
1,307.2
|
|
|
(83.5
|
)
|
|
1,223.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Costs and Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Fuel and transportation
|
—
|
|
|
—
|
|
|
102.5
|
|
|
(83.5
|
)
|
|
19.0
|
|
Operation and maintenance
|
—
|
|
|
—
|
|
|
205.6
|
|
|
—
|
|
|
205.6
|
|
Administrative and general
|
(0.2
|
)
|
|
—
|
|
|
136.5
|
|
|
—
|
|
|
136.3
|
|
Other operating costs and expenses
|
0.4
|
|
|
—
|
|
|
447.9
|
|
|
—
|
|
|
448.3
|
|
Total operating costs and expenses
|
0.2
|
|
|
—
|
|
|
892.5
|
|
|
(83.5
|
)
|
|
809.2
|
|
Operating (loss) income
|
(0.2
|
)
|
|
—
|
|
|
414.7
|
|
|
—
|
|
|
414.5
|
|
|
|
|
|
|
|
|
|
|
|
Other Deductions (Income):
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
—
|
|
|
121.2
|
|
|
54.5
|
|
|
—
|
|
|
175.7
|
|
Interest (income) expense - affiliates, net
|
(67.7
|
)
|
|
55.1
|
|
|
12.6
|
|
|
—
|
|
|
—
|
|
Interest income
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
|
—
|
|
|
(0.1
|
)
|
Equity in earnings of subsidiaries
|
(172.8
|
)
|
|
(349.1
|
)
|
|
—
|
|
|
521.9
|
|
|
—
|
|
Miscellaneous other income, net
|
—
|
|
|
—
|
|
|
(2.0
|
)
|
|
—
|
|
|
(2.0
|
)
|
Total other (income) deductions
|
(240.5
|
)
|
|
(172.8
|
)
|
|
65.0
|
|
|
521.9
|
|
|
173.6
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before income taxes
|
240.3
|
|
|
172.8
|
|
|
349.7
|
|
|
(521.9
|
)
|
|
240.9
|
|
Income taxes
|
—
|
|
|
—
|
|
|
0.6
|
|
|
—
|
|
|
0.6
|
|
Net income (loss)
|
$
|
240.3
|
|
|
$
|
172.8
|
|
|
$
|
349.1
|
|
|
$
|
(521.9
|
)
|
|
$
|
240.3
|
|
Condensed Consolidating Statements of Income for the Year Ended December 31, 2017
(Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Parent
Guarantor
|
|
Subsidiary
Issuer
|
|
Non-guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated Boardwalk Pipeline Partners, LP
|
Operating Revenues:
|
|
|
|
|
|
|
|
|
|
Transportation
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,244.5
|
|
|
$
|
(88.3
|
)
|
|
$
|
1,156.2
|
|
Storage, parking and lending
|
—
|
|
|
—
|
|
|
102.0
|
|
|
(0.3
|
)
|
|
101.7
|
|
Other
|
—
|
|
|
—
|
|
|
64.7
|
|
|
—
|
|
|
64.7
|
|
Total operating revenues
|
—
|
|
|
—
|
|
|
1,411.2
|
|
|
(88.6
|
)
|
|
1,322.6
|
|
|
|
|
|
|
|
|
|
|
|
Operating Costs and Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fuel and transportation
|
—
|
|
|
—
|
|
|
143.4
|
|
|
(88.6
|
)
|
|
54.8
|
|
Operation and maintenance
|
—
|
|
|
—
|
|
|
204.2
|
|
|
—
|
|
|
204.2
|
|
Administrative and general
|
(0.3
|
)
|
|
—
|
|
|
129.3
|
|
|
—
|
|
|
129.0
|
|
Other operating costs and expenses
|
0.6
|
|
|
—
|
|
|
470.0
|
|
|
—
|
|
|
470.6
|
|
Total operating costs and expenses
|
0.3
|
|
|
—
|
|
|
946.9
|
|
|
(88.6
|
)
|
|
858.6
|
|
Operating (loss) income
|
(0.3
|
)
|
|
—
|
|
|
464.3
|
|
|
—
|
|
|
464.0
|
|
|
|
|
|
|
|
|
|
|
|
Other Deductions (Income):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
—
|
|
|
129.6
|
|
|
41.4
|
|
|
—
|
|
|
171.0
|
|
Interest (income) expense - affiliates, net
|
(47.3
|
)
|
|
39.9
|
|
|
7.4
|
|
|
—
|
|
|
—
|
|
Interest income
|
—
|
|
|
(0.2
|
)
|
|
(0.2
|
)
|
|
—
|
|
|
(0.4
|
)
|
Equity in earnings of subsidiaries
|
(250.0
|
)
|
|
(419.3
|
)
|
|
—
|
|
|
669.3
|
|
|
—
|
|
Miscellaneous other income, net
|
—
|
|
|
—
|
|
|
(4.6
|
)
|
|
—
|
|
|
(4.6
|
)
|
Total other (income) deductions
|
(297.3
|
)
|
|
(250.0
|
)
|
|
44.0
|
|
|
669.3
|
|
|
166.0
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before income taxes
|
297.0
|
|
|
250.0
|
|
|
420.3
|
|
|
(669.3
|
)
|
|
298.0
|
|
Income taxes
|
—
|
|
|
—
|
|
|
1.0
|
|
|
—
|
|
|
1.0
|
|
Net income (loss)
|
$
|
297.0
|
|
|
$
|
250.0
|
|
|
$
|
419.3
|
|
|
$
|
(669.3
|
)
|
|
$
|
297.0
|
|
Condensed Consolidating Statements of Comprehensive Income for the Year Ended December 31, 2019
(Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Parent
Guarantor
|
|
Subsidiary
Issuer
|
|
Non-guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated Boardwalk Pipeline Partners, LP
|
Net income (loss)
|
$
|
295.7
|
|
|
$
|
227.2
|
|
|
$
|
415.0
|
|
|
$
|
(642.2
|
)
|
|
$
|
295.7
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
Reclassification adjustment transferred to
Net income from cash flow hedges
|
0.9
|
|
|
0.9
|
|
|
0.7
|
|
|
(1.6
|
)
|
|
0.9
|
|
Pension and other postretirement
benefit costs, net of tax
|
3.2
|
|
|
3.2
|
|
|
3.2
|
|
|
(6.4
|
)
|
|
3.2
|
|
Total Comprehensive Income (Loss)
|
$
|
299.8
|
|
|
$
|
231.3
|
|
|
$
|
418.9
|
|
|
$
|
(650.2
|
)
|
|
$
|
299.8
|
|
Condensed Consolidating Statements of Comprehensive Income for the Year Ended December 31, 2018
(Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Parent
Guarantor
|
|
Subsidiary
Issuer
|
|
Non-guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated Boardwalk Pipeline Partners, LP
|
Net income (loss)
|
$
|
240.3
|
|
|
$
|
172.8
|
|
|
$
|
349.1
|
|
|
$
|
(521.9
|
)
|
|
$
|
240.3
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
Reclassification adjustment transferred to
Net income from cash flow hedges
|
1.2
|
|
|
1.2
|
|
|
0.7
|
|
|
(1.9
|
)
|
|
1.2
|
|
Pension and other postretirement
benefit costs, net of tax
|
(5.4
|
)
|
|
(5.4
|
)
|
|
(5.4
|
)
|
|
10.8
|
|
|
(5.4
|
)
|
Total Comprehensive Income (Loss)
|
$
|
236.1
|
|
|
$
|
168.6
|
|
|
$
|
344.4
|
|
|
$
|
(513.0
|
)
|
|
$
|
236.1
|
|
Condensed Consolidating Statements of Comprehensive Income for the Year Ended December 31, 2017
(Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Parent
Guarantor
|
|
Subsidiary
Issuer
|
|
Non-guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated Boardwalk Pipeline Partners, LP
|
Net income (loss)
|
$
|
297.0
|
|
|
$
|
250.0
|
|
|
$
|
419.3
|
|
|
$
|
(669.3
|
)
|
|
$
|
297.0
|
|
Other comprehensive (loss) income:
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) gain on cash flow hedges
|
(1.5
|
)
|
|
(1.5
|
)
|
|
—
|
|
|
1.5
|
|
|
(1.5
|
)
|
Reclassification adjustment transferred to
Net Income from cash flow hedges
|
2.5
|
|
|
2.5
|
|
|
0.7
|
|
|
(3.2
|
)
|
|
2.5
|
|
Pension and other postretirement
benefit costs, net of tax
|
(1.9
|
)
|
|
(1.9
|
)
|
|
(1.9
|
)
|
|
3.8
|
|
|
(1.9
|
)
|
Total Comprehensive Income (Loss)
|
$
|
296.1
|
|
|
$
|
249.1
|
|
|
$
|
418.1
|
|
|
$
|
(667.2
|
)
|
|
$
|
296.1
|
|
Condensed Consolidating Statements of Cash Flow for the Year Ended December 31, 2019
(Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Parent
Guarantor
|
|
Subsidiary
Issuer
|
|
Non-guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated Boardwalk Pipeline Partners, LP
|
Net cash provided by (used in) operating activities
|
$
|
68.5
|
|
|
$
|
(185.3
|
)
|
|
$
|
778.8
|
|
|
$
|
—
|
|
|
$
|
662.0
|
|
|
|
|
|
|
|
|
|
|
|
INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures
|
—
|
|
|
—
|
|
|
(429.0
|
)
|
|
—
|
|
|
(429.0
|
)
|
Proceeds from sale of operating assets
|
—
|
|
|
—
|
|
|
5.7
|
|
|
—
|
|
|
5.7
|
|
Advances to affiliates, net
|
29.3
|
|
|
49.3
|
|
|
(20.6
|
)
|
|
(58.0
|
)
|
|
—
|
|
Net cash provided by (used in) investing activities
|
29.3
|
|
|
49.3
|
|
|
(443.9
|
)
|
|
(58.0
|
)
|
|
(423.3
|
)
|
|
|
|
|
|
|
|
|
|
|
FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from long-term debt, net of
issuance cost
|
—
|
|
|
495.2
|
|
|
—
|
|
|
—
|
|
|
495.2
|
|
Repayment of borrowings from long-term
debt
|
—
|
|
|
(350.0
|
)
|
|
—
|
|
|
—
|
|
|
(350.0
|
)
|
Proceeds from borrowings on revolving
credit agreement
|
—
|
|
|
—
|
|
|
660.0
|
|
|
—
|
|
|
660.0
|
|
Repayment of borrowings on revolving
credit agreement
|
—
|
|
|
—
|
|
|
(945.0
|
)
|
|
—
|
|
|
(945.0
|
)
|
Principal payment of finance lease
obligation
|
—
|
|
|
—
|
|
|
(0.7
|
)
|
|
—
|
|
|
(0.7
|
)
|
Advances from affiliates, net
|
4.1
|
|
|
(8.7
|
)
|
|
(49.3
|
)
|
|
58.0
|
|
|
4.1
|
|
Distributions paid
|
(102.2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(102.2
|
)
|
Net cash (used in) provided by financing activities
|
(98.1
|
)
|
|
136.5
|
|
|
(335.0
|
)
|
|
58.0
|
|
|
(238.6
|
)
|
|
|
|
|
|
|
|
|
|
|
(Decrease) increase in cash and cash equivalents
|
(0.3
|
)
|
|
0.5
|
|
|
(0.1
|
)
|
|
—
|
|
|
0.1
|
|
Cash and cash equivalents at
beginning of period
|
0.3
|
|
|
1.6
|
|
|
1.7
|
|
|
—
|
|
|
3.6
|
|
Cash and cash equivalents
at end of period
|
$
|
—
|
|
|
$
|
2.1
|
|
|
$
|
1.6
|
|
|
$
|
—
|
|
|
$
|
3.7
|
|
Condensed Consolidating Statements of Cash Flow for the Year Ended December 31, 2018
(Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Parent
Guarantor
|
|
Subsidiary
Issuer
|
|
Non-guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated Boardwalk Pipeline Partners, LP
|
Net cash provided by (used in)
operating activities
|
$
|
67.3
|
|
|
$
|
(172.6
|
)
|
|
$
|
670.9
|
|
|
$
|
—
|
|
|
$
|
565.6
|
|
|
|
|
|
|
|
|
|
|
|
INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures
|
—
|
|
|
—
|
|
|
(486.7
|
)
|
|
—
|
|
|
(486.7
|
)
|
Proceeds from sale of operating assets
|
—
|
|
|
—
|
|
|
1.0
|
|
|
—
|
|
|
1.0
|
|
Advances to affiliates, net
|
35.9
|
|
|
(4.6
|
)
|
|
(394.9
|
)
|
|
363.5
|
|
|
(0.1
|
)
|
Net cash provided by (used in)
investing activities
|
35.9
|
|
|
(4.6
|
)
|
|
(880.6
|
)
|
|
363.5
|
|
|
(485.8
|
)
|
|
|
|
|
|
|
|
|
|
|
FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Repayment of borrowings from long-term
debt
|
—
|
|
|
(185.0
|
)
|
|
—
|
|
|
—
|
|
|
(185.0
|
)
|
Proceeds from borrowings on revolving
credit agreement
|
—
|
|
|
—
|
|
|
640.0
|
|
|
—
|
|
|
640.0
|
|
Repayment of borrowings on revolving
credit agreement
|
—
|
|
|
—
|
|
|
(445.0
|
)
|
|
—
|
|
|
(445.0
|
)
|
Principal payment of finance lease
obligation
|
—
|
|
|
—
|
|
|
(0.6
|
)
|
|
—
|
|
|
(0.6
|
)
|
Advances from affiliates, net
|
(1.0
|
)
|
|
359.2
|
|
|
4.3
|
|
|
(363.5
|
)
|
|
(1.0
|
)
|
Distributions paid
|
(102.2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(102.2
|
)
|
Net cash (used in) provided by
financing activities
|
(103.2
|
)
|
|
174.2
|
|
|
198.7
|
|
|
(363.5
|
)
|
|
(93.8
|
)
|
|
|
|
|
|
|
|
|
|
|
Decrease in cash and cash equivalents
|
—
|
|
|
(3.0
|
)
|
|
(11.0
|
)
|
|
—
|
|
|
(14.0
|
)
|
Cash and cash equivalents at
beginning of period
|
0.3
|
|
|
4.6
|
|
|
12.7
|
|
|
—
|
|
|
17.6
|
|
Cash and cash equivalents at end of period
|
$
|
0.3
|
|
|
$
|
1.6
|
|
|
$
|
1.7
|
|
|
$
|
—
|
|
|
$
|
3.6
|
|
Condensed Consolidating Statements of Cash Flow for the Year Ended December 31, 2017
(Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Parent
Guarantor
|
|
Subsidiary
Issuer
|
|
Non-guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated Boardwalk Pipeline Partners, LP
|
Net cash provided by (used in)
operating activities
|
$
|
46.9
|
|
|
$
|
(161.5
|
)
|
|
$
|
751.6
|
|
|
$
|
—
|
|
|
$
|
637.0
|
|
|
|
|
|
|
|
|
|
|
|
INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures
|
—
|
|
|
—
|
|
|
(708.4
|
)
|
|
—
|
|
|
(708.4
|
)
|
Proceeds from sale of operating assets
|
—
|
|
|
—
|
|
|
63.8
|
|
|
—
|
|
|
63.8
|
|
Advances to affiliates, net
|
54.9
|
|
|
(434.4
|
)
|
|
(460.4
|
)
|
|
839.9
|
|
|
—
|
|
Net cash provided by (used in)
investing activities
|
54.9
|
|
|
(434.4
|
)
|
|
(1,105.0
|
)
|
|
839.9
|
|
|
(644.6
|
)
|
|
|
|
|
|
|
|
|
|
|
FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from long-term debt, net of
issuance cost
|
—
|
|
|
494.0
|
|
|
—
|
|
|
—
|
|
|
494.0
|
|
Repayment of borrowings from long-term
debt
|
—
|
|
|
(300.0
|
)
|
|
(275.0
|
)
|
|
—
|
|
|
(575.0
|
)
|
Proceeds from borrowings on revolving
credit agreement
|
—
|
|
|
—
|
|
|
765.0
|
|
|
—
|
|
|
765.0
|
|
Repayment of borrowings on revolving
credit agreement, including financing fees
|
—
|
|
|
(0.8
|
)
|
|
(560.0
|
)
|
|
—
|
|
|
(560.8
|
)
|
Principal payment of finance lease
obligation
|
—
|
|
|
—
|
|
|
(0.5
|
)
|
|
—
|
|
|
(0.5
|
)
|
Advances from affiliates, net
|
0.1
|
|
|
405.5
|
|
|
434.4
|
|
|
(839.9
|
)
|
|
0.1
|
|
Distributions paid
|
(102.2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(102.2
|
)
|
Net cash (used in) provided by
financing activities
|
(102.1
|
)
|
|
598.7
|
|
|
363.9
|
|
|
(839.9
|
)
|
|
20.6
|
|
|
|
|
|
|
|
|
|
|
|
(Decrease) increase in cash and cash equivalents
|
(0.3
|
)
|
|
2.8
|
|
|
10.5
|
|
|
—
|
|
|
13.0
|
|
Cash and cash equivalents at
beginning of period
|
0.6
|
|
|
1.8
|
|
|
2.2
|
|
|
—
|
|
|
4.6
|
|
Cash and cash equivalents at end of period
|
$
|
0.3
|
|
|
$
|
4.6
|
|
|
$
|
12.7
|
|
|
$
|
—
|
|
|
$
|
17.6
|
|