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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
_______________

FORM 10-Q


For the quarterly period ended

March 31, 2005



Commission File No. 1-2921

_______________


PANHANDLE EASTERN PIPE LINE COMPANY, LP
(Exact name of registrant as specified in its charter)



Delaware
44-0382470
(State or other jurisdiction of
(I.R.S. Employer
incorporation or organization)
Identification No.)
   
   
5444 Westheimer Road
77056-5306
Houston, Texas
(Zip Code)
(Address of principal executive offices)
  

 
Registrant's telephone number, including area code: (713) 989-7000

Securities Registered Pursuant to Section 12(b) of the Act:

 
Title of each Class
  
Name of each exchange in which registered
4.80% Senior Notes due 2008, Series B
  
New York Stock Exchange
6.05% Senior Notes due 2013, Series B
  
New York Stock Exchange
 

Securities Registered Pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes   ü  No ___


Indicate by check mark whether the registrant is an Accelerated Filer (as defined in Exchange Act Rule 12D-2).
Yes        No   ü    
 





PANHANDLE EASTERN PIPE LINE COMPANY, LP
FORM 10-Q
March 31, 2005
Index

PART I. FINANCIAL INFORMATION:
Page(s)
   
ITEM 1. Financial Statements (Unaudited):
  
   
Consolidated statement of operations - three months ended March 31, 2005 and 2004.
2
   
Consolidated balance sheet - March 31, 2005 and December 31, 2004.
3-4
   
Consolidated statement of cash flows - three months ended March 31, 2005 and 2004.
5
 
 
6
   
7-20
   
21-31
   
31
   
31
   
 
   
31
   
31
   
32
   
32
   
32
 
  
32
   
33
   







1


PANHANDLE EASTERN PIPE LINE COMPANY, LP

CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In Thousands)


           
   
Three Months
 
Three Months
 
   
Ended March 31,
 
Ended March 31,
 
   
2005
  
2004
  
               
Operating revenue
              
Transportation and storage of natural gas 
  
$
120,020
  
$
121,860
  
LNG terminalling revenue 
    
13,208
   
13,762
 
Other revenue 
    
2,172
   
2,547
 
 Total operating revenue
    
135,400
   
138,169
 
               
Operating expenses
              
Operation, maintenance and general 
    
50,183
   
49,725
 
Depreciation and amortization 
    
15,367
   
15,147
 
Taxes, other than on income 
    
7,336
   
7,526
 
 Total operating expenses
    
72,886
   
72,398
 
               
               
Operating income
    
62,514
   
65,771
 
               
Other income (expense)
              
Interest expense, net 
    
(11,848
)
  
(12,155
)
Other, net 
    
897
   
714
 
 Total other income (expense)
    
(10,951
)
  
(11,441
)
               
Earnings before income taxes
    
51,563
   
54,330
 
               
Income taxes
    
20,093
   
21,273
 
               
               
Net earnings
  
$
31,470
  
$
33,057
  
               





 

See accompanying notes.




2


PANHANDLE EASTERN PIPE LINE COMPANY, LP

CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In Thousands)


   
March 31, 2005
  
December 31, 2004
  
Assets
              
               
Property, plant and equipment
              
Plant in service 
  
$
1,956,366
  
$
1,947,524
  
Construction work-in-progress 
    
235,387
   
203,094
 
     
2,191,753
   
2,150,618
 
Less accumulated depreciation and amortization 
    
102,180
   
87,683
 
 Net property, plant and equipment
    
2,089,573
   
2,062,935
 
               
Investment in affiliate
    
1,290
   
1,436
 
               
Current assets
              
Cash and cash equivalents 
    
17,256
   
26,054
 
Accounts receivable, less allowances of $1,289 and $1,289, respectively  
    
49,632
   
48,085
 
Accounts receivable - related parties 
    
7,801
   
7,287
 
Gas imbalances - receivable 
    
36,992
   
36,122
 
System gas and operating supplies 
    
119,391
   
98,250
 
Deferred income taxes, net 
    
10,409
   
10,698
 
Note receivable - Southern Union 
    
93,745
   
90,745
 
Other 
    
9,495
   
11,646
 
 Total current assets
    
344,721
   
328,887
 
               
Intangibles, net 
    
8,377
   
8,496
 
Restricted cash 
    
1,500
   
1,500
 
Debt issuance cost 
    
4,204
   
4,471
 
Non-current system gas 
    
30,033
   
30,471
 
Other 
    
3,094
   
1,964
 
               
Total assets 
  
$
2,482,792
  
$
2,440,160
  
               



 



See accompanying notes.



3


PANHANDLE EASTERN PIPE LINE COMPANY, LP

CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In Thousands)


   
March 31, 2005
  
December 31, 2004
  
Owners' equity
              
Partners' capital 
  
$
833,876
  
$
802,406
  
Accumulated other comprehensive income 
    
2,161
   
1,231
 
Tax sharing note receivable - Southern Union 
    
(57,679
)
  
(70,971
)
 Total owners' equity
    
778,358
   
732,666
 
               
Long-term debt 
    
1,181,064
   
1,174,065
 
 Total capitalization
    
1,959,422
   
1,906,731
 
               
Current liabilities
              
Current portion of long-term debt 
    
-
   
12,548
 
Accounts payable  
    
2,588
   
3,449
 
Accounts payable - overdrafts 
    
3,111
   
20,103
 
Accounts payable - related parties 
    
5,468
   
3,478
 
Gas imbalances - payable 
    
117,928
   
102,567
 
Accrued taxes 
    
12,677
   
10,750
 
Accrued interest 
    
9,385
   
19,119
 
Other 
    
88,831
   
85,239