NOTE 5 EQUITY INVESTMENTS

The Partnership has equity interests in Northern Border, Great Lakes and Iroquois. The pipeline systems owned by these entities are regulated by FERC. The pipeline systems of Northern Border and Great Lakes are operated by subsidiaries of TC Energy. The Iroquois pipeline system is operated by Iroquois Pipeline Operating Company, a wholly owned subsidiary of Iroquois. The Partnership uses the equity method of accounting for its interests in its equity investees. The Partnership’s equity investments are held through our ILPs that are considered to be variable interest entities (VIEs) (Refer to Note 16).


	Ownership		Equity Earnings		Equity Investments
	Interest at		Three months
(unaudited)	March 31,		Ended March 31,		March 31,	December 31,
(millions of dollars)	2019		2019	2018	2019	2018

Northern Border	50	%	21	17	489	497
Great Lakes	46.45	%	20	24	498	489
Iroquois	49.34	%	13	18	209	210
			54	59	1,196	1,196

Distributions from Equity Investments

Distributions received from equity investments in the three months ended March 31, 2019 were $58 million (March 31, 2018 – $45 million) of which, $2 million (March 31, 2018 - $2 million) was considered a return of capital and is included in “Investing Activities” in the Partnership’s consolidated statement of cash flows. The return of capital was related to our investment in Iroquois (see further discussion below).

Northern Border

The Partnership did not have undistributed earnings from Northern Border for the three months ended March 31, 2019 and 2018.

The summarized financial information provided to us by Northern Border is as follows:


(unaudited)
(millions of dollars)	March 31, 2019	December 31, 2018

ASSETS
Cash and cash equivalents	14	10
Other current assets	38	36
Property, plant and equipment, net	1,023	1,037
Other assets	13	13
	1,088	1,096

LIABILITIES AND PARTNERS’ EQUITY
Current liabilities	41	34
Deferred credits and other	35	35
Long-term debt, net (a)	264	264
Partners’ equity
Partners’ capital	749	764
Accumulated other comprehensive loss	(1)	(1)
	1,088	1,096


	Three months ended
(unaudited)	March 31,
(millions of dollars)	2019	2018

Transmission revenues	81	72
Operating expenses	(20)	(19)
Depreciation	(15)	(15)
Financial charges and other	(4)	(4)
Net income	42	34

(a)No current maturities as of March 31, 2019 and December 31, 2018. At March 31, 2019, Northern Border is in compliance with all its financial covenants.

Great Lakes

The Partnership made an equity contribution to Great Lakes of $5 million in the first quarter of 2019 (March 31, 2018 - $4 million). This amount represents the Partnership’s 46.45 percent share of an $11 million cash call from Great Lakes to make a scheduled debt repayment.

The Partnership did not have undistributed earnings from Great Lakes for the three months ended March 31, 2019 and 2018.

The summarized financial information provided to us by Great Lakes is as follows:


(unaudited)
(millions of dollars)	March 31, 2019	December 31, 2018

ASSETS
Current assets	86	75
Property, plant and equipment, net	685	689
	771	764

LIABILITIES AND PARTNERS’ EQUITY
Current liabilities	25	26
Net long-term debt, including current maturities (a)	229	240
Other long-term liabilities	4	4
Partners' equity	513	494
	771	764


	Three months ended
(unaudited)	March 31,
(millions of dollars)	2019	2018

Transmission revenues	72	81
Operating expenses	(16)	(17)
Depreciation	(8)	(8)
Financial charges and other	(4)	(4)
Net income	44	52

(a) Includes current maturities of $21 million as of March 31, 2019 and as of December 31, 2018. At March 31, 2019, Great Lakes is in compliance with all its financial covenants.

Iroquois

During the three months ended March 31, 2019, the Partnership received distributions from Iroquois amounting to $14 million (March 31, 2018 - $14 million) which includes the Partnership’s 49.34 percent share of the Iroquois unrestricted cash distribution amounting to approximately $2 million (March 31, 2018 - $2 million). The unrestricted cash did not represent a distribution of Iroquois’ cash from operations during the period and therefore it was reported as distributions received as return of investment in the Partnership’s consolidated statement of cash flows.

Iroquois declared its first quarter 2019 distribution of $28 million on April 24, 2019, of which the Partnership received its 49.34 percent share or $14 million on May 1, 2019. The distribution includes our 49.34 percent share of the Iroquois unrestricted cash distribution amounting to approximately $2 million. The Partnership did not have undistributed earnings from Iroquois for the three months ended March 31, 2019 and 2018.

The summarized financial information provided to us by Iroquois is as follows:


(unaudited)
(millions of dollars)	March 31, 2019	December 31, 2018

ASSETS
Cash and cash equivalents	84	80
Other current assets	30	32
Property, plant and equipment, net	576	581
Other assets	16	8
	706	701

LIABILITIES AND PARTNERS’ EQUITY
Current liabilities	19	19
Long-term debt, net (a)	325	325
Other non-current liabilities	20	14
Partners' equity	342	343
	706	701


	Three months ended
(unaudited)	March 31,
(millions of dollars)	2019	2018

Transmission revenues	52	60
Operating expenses	(15)	(14)
Depreciation	(7)	(7)
Financial charges and other	(3)	(4)
Net income	27	35

^(a)

Includes current maturities of $146 million as of March 31, 2019 and as of December 31, 2018. At March 31, 2019, Iroquois is in compliance with all its financial covenants.