Results of Operations
Years Ended December 31,
Transportation and storage of natural gas
Total operating revenues (1)
Cost of natural gas and other energy
Operating and maintenance
General and administrative
Depreciation and amortization
Total operating expenses
OTHER INCOME (EXPENSE):
Interest expense, net
Interest income - affiliates
Total other expense, net
LOSS BEFORE INCOME TAX BENEFIT
Income tax benefit
Natural gas volumes transported (TBtu): (2)
Reservation revenues comprised 91% and 89% of total operating revenues for the years ended December 31, 2017 and 2016, respectively.
Includes transportation deliveries made throughout the Company’s pipeline network.
The following is a discussion of the significant items and variances impacting the Company’s net income during the periods presented above:
Operating Revenues. Operating revenues decreased for the year ended December 31, 2017 compared to the prior year on Panhandle and Trunkline due to lower customer demand driven by weak spreads and mild weather and on Sea Robin due to producer maintenance and production declines.
Impairment Losses. The Company recorded $389 million impairment losses for the year ended December 31, 2017, which is comprised of $262 million goodwill impairment related to Trunkline primarily due to decreases in projected future revenues and cash flows and $127 million fixed asset impairment for Sea Robin due to lower utilization and expected further decrease in projected future cash flows. For the year ended December 31, 2016, the Company recorded a $133 million impairment related to Sea Robin property, plant and equipment and goodwill impairments of $590 million and $48 million related to PEPL and Sea Robin, respectively, primarily due to decreases in projected future revenues and cash flows driven by declines in commodity prices and changes in the markets that these assets serve.
Interest income - affiliates. The decrease for the year ended December 31, 2017 compared to the prior year is primarily due to the settlement of a note receivable from a subsidiary of ETP in August of 2016.
Income Taxes. The change in the effective rate for the year ended December 31, 2017 was primarily due to the reduction in the federal corporate income rate per the “Tax Cuts and Jobs Act,” as discussed in Note 2 to our consolidated financial