EQUITY INVESTMENTS

3 Months Ended

Mar. 31, 2020

Equity Method Investments and Joint Ventures [Abstract]

The Partnership has equity interests in Northern Border, Great Lakes and Iroquois. The pipeline systems owned by these entities are regulated by FERC. The Northern Border and Great Lakes pipeline systems 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.



	Ownership	Equity Earnings		Equity Investments
	Interest at	Three months ended
(unaudited)	March 31,	March 31,		March 31,	December 31,
(millions of dollars)	2020	2020	2019	2020	2019
Northern Border	50.00%	22	21	416	422
Great Lakes	46.45%	20	20	501	491
Iroquois	49.34%	13	13	185	185
		55	54	1,102	1,098

Distributions from Equity Investments

Distributions received from equity investments in the three months ended March 31, 2020 totaled $71 million (March 31, 2019 - $58 million), of which $5.2 million (March 31, 2019 - $2.6 million ), was considered return of capital and 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

During the three months ended March 31, 2020, the Partnership received distributions from Northern Border amounting to $28 million (March 31, 2019 - $28 million).

The Partnership did not have undistributed earnings from Northern Border for the three months ended March 31, 2020 and 2019.

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



(unaudited)
(millions of dollars)	March 31, 2020		December 31, 2019
ASSETS
Cash and cash equivalents	25		21
Other current assets	38		37
Property, plant and equipment, net	979		989
Other assets	12		12
	1,054		1,059
LIABILITIES AND PARTNERS’ EQUITY
Current liabilities	47		42
Deferred credits and other	40		39
Long-term debt, net ^(a)	364		364
Partners’ equity
Partners’ capital	604		615
Accumulated other comprehensive loss	(1	)	(1	)
	1,054		1,059



	Three months ended
(unaudited)	March 31,
(millions of dollars)	2020		2019
Transmission revenues	83		81
Operating expenses	(20	)	(20	)
Depreciation	(15	)	(15	)
Financial charges and other	(4	)	(4	)
Net income	44		42

^(a) No current maturities as of March 31, 2020 and December 31, 2019. At March 31, 2020, Northern Border was in compliance with all its financial covenants.

Great Lakes, a variable interest entity

The Partnership is considered to have a variable interest in Great Lakes, which is accounted for as equity investment since we are not its primary beneficiary. A variable interest entity is a legal entity that either does not have sufficient equity at risk to finance its activities without additional subordinated financial support, is structured such that equity investors lack the ability to make significant decisions relating to the entity’s operations through voting rights or do not substantively participate in the gains or losses of the entity.

The Partnership made an equity contribution to Great Lakes of $5 million during the three months ended March 31, 2020 (March 31, 2019 - $5 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.

During the three months ended March 31, 2020, the Partnership received distributions from Great Lakes amounting to $16 million (March 31, 2019 - $17 million).

The Partnership did not have undistributed earnings from Great Lakes for the three months ended March 31, 2020 and 2019.

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



(unaudited)
(millions of dollars)	March 31, 2020	December 31, 2019
ASSETS
Current assets	78	72
Property, plant and equipment, net	684	685
	762	757
LIABILITIES AND PARTNERS’ EQUITY
Current liabilities	28	33
Net long-term debt, including current maturities^(a)	208	219
Other long term liabilities	7	6
Partners’ equity	519	499
	762	757



	Three months ended
(unaudited)	March 31,
(millions of dollars)	2020		2019
Transmission revenues	72		72
Operating expenses	(16	)	(16	)
Depreciation	(8	)	(8	)
Financial charges and other	(4	)	(4	)
Net income	44		44

^(a) Includes current maturities of $31 million as of March 31, 2020 (December 31, 2019 - $21 million). At March 31, 2020, Great Lakes was in compliance with all its financial covenants.

Iroquois

During the three months ended March 31, 2020, the Partnership received distributions from Iroquois amounting to $27 million (March 31, 2019 - $13 million), which includes the Partnership’s 49.34 percent share of the Iroquois unrestricted cash distribution amounting to approximately $5.2 million (March 31, 2019 - $2.6 million). The unrestricted cash did not represent a distribution of Iroquois’ cash from operations during the period and therefore it was reported as a return of investment in the Partnership’s consolidated statement of cash flows.

The Partnership did not have undistributed earnings from Iroquois for the three months ended March 31, 2020 and 2019.

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



(unaudited)
(millions of dollars)	March 31, 2020	December 31, 2019
ASSETS
Cash and cash equivalents	32	43
Other current assets	86	36
Property, plant and equipment, net	515	570
Other assets	17	16
	650	665
LIABILITIES AND PARTNERS’ EQUITY
Current liabilities	21	34
Long-term debt, net^(a)	317	317
Other non-current liabilities	19	20
Partners’ equity	293	294
	650	665



	Three months ended
(unaudited)	March 31,
(millions of dollars)	2020		2019
Transmission revenues	52		52
Operating expenses	(15	)	(15	)
Depreciation	(8	)	(7	)
Financial charges and other	(3	)	(3	)
Net income	26		27

^(a) Includes current maturities of $3 million as of March 31, 2020 (December 31, 2019 - $3 million). At March 31, 2020, Iroquois was in compliance with all of its financial covenants.