6. Investment in Unconsolidated Affiliate and Transactions with Affiliates

Investment in Unconsolidated Affiliate

We have a 50 percent investment in WYCO Development LLC (WYCO). At September 30, 2011 and December 31, 2010, our investment balance in WYCO was approximately $15 million and was reflected in other non-current assets on our balance sheets. Our equity earnings for the quarters ended September 30, 2011 and 2010 were less than $1 million. For the nine months ended September 30, 2011 and 2010, our equity earnings were $1 million. We reflect equity earnings in other income on our income statements. Additionally, for the nine months ended September 30, 2011 and 2010, we received cash distributions of $1 million and less than $1 million from WYCO.

Transactions with Affiliates

Other Financing Obligations. We have other financing obligations payable to WYCO related to Totem Gas Storage and High Plains Pipeline. At September 30, 2011 and December 31, 2010, these other financing obligations were $176 million and $179 million. For a further discussion of our other financing obligations, see our 2010 Annual Report on Form 10-K.

Distributions and Contributions. We are required to make distributions to our owners as defined in our partnership and limited liability company agreements on a quarterly basis. During the nine months ended September 30, 2011 and 2010, we paid cash distributions of approximately $126 million and $137 million to our partners. In addition, in October 2011, we paid cash distributions to our members of approximately $29 million. During the nine months ended September 30, 2011, we received cash contributions of approximately $32 million from our partners to fund our expansion projects. In addition, in October 2011, we received cash contributions from our members of approximately $10 million.

Cash Management Program. We participate in EPB’s cash management program which matches our short-term cash surpluses and needs, thus minimizing our total borrowings from outside sources. EPB uses the cash management program to settle intercompany transactions between participating affiliates. At September 30, 2011 and December 31, 2010, we had a note receivable from EPB of approximately $54 million and $63 million. At September 30, 2011, we have classified $32 million of this receivable as current on our balance sheet based on the net amount we anticipate using in the next twelve months considering available cash sources and needs. The interest rate on this note is variable and was 2.2% and 0.8% at September 30, 2011 and December 31, 2010.

Other Affiliate Balances. At September 30, 2011 and December 31, 2010, we had contractual deposits from our affiliates of $7 million.

Affiliate Revenues and Expenses. We enter into transactions with our affiliates within the ordinary course of business. For a further discussion of our affiliated transactions, see our 2010 Annual Report on Form 10-K. The following table shows revenues and charges from our affiliates.


	Quarter Ended				Nine Months Ended
	September 30,				September 30,
	2011		2010		2011		2010
			(In millions)
Revenues	$	3	$	3	$	9	$	9
Operation and maintenance expenses		23		21		70		63
Reimbursement of operating expenses		3		2		7		8