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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 Form 10-Q
 (Mark One)
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE
SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended March 31, 2007
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from                    to
 Commission File Number 1-4874
 Tennessee Gas Pipeline Company
  Delaware
(State or Other Jurisdiction 
of Incorporation or Organization)
    
    74-1056569
(I.R.S. Employer
Identification No.)El Paso Building 
1001 Louisiana Street 
Houston, Texas
(Address of Principal Executive Offices)
    
    77002
(Zip Code)
 Telephone Number: (713) 420-2600
 þ o
  o o þ
 o þ
   TENNESSEE GAS PIPELINE COMPANY MEETS THE CONDITIONS OF GENERAL INSTRUCTION H(1)(a) AND (b) TO
FORM 10-Q AND IS THEREFORE FILING THIS REPORT WITH A REDUCED DISCLOSURE FORMAT AS PERMITTED BY SUCH
INSTRUCTION.




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##### 



TENNESSEE GAS PIPELINE COMPANY
 TABLE OF CONTENTS
 Caption
    
    PagePART I  Financial InformationItem 1.
    
    Financial  Statements
    
    
    1Item 2.
    
    Management's Discussion and Analysis of Financial Condition and Results of Operations
    
    
    9Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    *Item 4T.
    
    Controls and Procedures
    
    
    11PART II  Other InformationItem 1.
    
    Legal Proceedings
    
    
    12Item 1A.
    
    Risk Factors
    
    
    12Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    *Item 3.
    
    Defaults Upon Senior Securities
    
    
    *Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    
    *Item 5.
    
    Other Information
    
    
    12Item 6.
    
    Exhibits
    
    
    12Signatures
    
    
    13Certification of PEO Pursuant to Section 302Certification of CFO Pursuant to Section 302Certification of PEO Pursuant to Section 906Certification of CFO Pursuant to Section 906
  
 *
    
    We have not included a response to this item in this document since no
response is required pursuant to the reduced disclosure format permitted by
General Instruction H to Form 10-Q.     i




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PART I  FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 TENNESSEE
GAS PIPELINE COMPANY
 CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In millions)
(Unaudited)
 Quarter EndedMarch 31,2007
    
    
    2006Operating revenues
    
    $
    226
    
    
    $
    230Operating expensesOperation and maintenance
    
    
    76
    
    
    
    73Depreciation and amortization
    
    
    42
    
    
    
    41Gain on sale of asset
    
    
    (7
    )
    
    
    Taxes, other than income taxes
    
    
    14
    
    
    
    15125
    
    
    
    129Operating income
    
    
    101
    
    
    
    101Earnings from unconsolidated affiliate
    
    
    4
    
    
    
    3Other income, net
    
    
    5
    
    
    
    3Interest and debt expense
    
    
    (32
    )
    
    
    (33
    )Affiliated interest income, net
    
    
    11
    
    
    
    10Income before income taxes
    
    
    89
    
    
    
    84Income taxes
    
    
    34
    
    
    
    32Net income
    
    $
    55
    
    
    $
    52
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TENNESSEE GAS PIPELINE COMPANY
 CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions, except share amounts)
(Unaudited)
 March 31,
    
    
    December 31,2007
    
    
    2006ASSETSCurrent assetsCash and cash equivalents
    
    $
    
    
    
    $
    Accounts and notes receivableCustomer
    
    
    34
    
    
    
    21Affiliates
    
    
    66
    
    
    
    70Other
    
    
    89
    
    
    
    43Materials and supplies
    
    
    30
    
    
    
    28Assets held for sale
    
    
    
    
    
    
    28Deferred income taxes
    
    
    12
    
    
    
    117Other
    
    
    7
    
    
    
    7Total current assets
    
    
    238
    
    
    
    314Property, plant and equipment, at cost
    
    
    3,706
    
    
    
    3,707Less accumulated depreciation and amortization
    
    
    639
    
    
    
    6063,067
    
    
    
    3,101Additional acquisition cost assigned to utility plant, net
    
    
    2,068
    
    
    
    2,079Total property, plant and equipment, net
    
    
    5,135
    
    
    
    5,180Other assetsNotes receivable from affiliates
    
    
    1,144
    
    
    
    1,073Investment in unconsolidated affiliate
    
    
    102
    
    
    
    98Other
    
    
    40
    
    
    
    371,286
    
    
    
    1,208Total assets
    
    $
    6,659
    
    
    $
    6,702LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilitiesAccounts payableTrade
    
    $
    36
    
    
    $
    90Affiliates
    
    
    115
    
    
    
    26Other
    
    
    32
    
    
    
    44Current maturities of long-term debt
    
    
    
    
    
    
    300Taxes payable
    
    
    17
    
    
    
    78Asset retirement obligations
    
    
    32
    
    
    
    33Accrued interest
    
    
    44
    
    
    
    24Contractual deposits
    
    
    31
    
    
    
    28Other
    
    
    8
    
    
    
    12Total current liabilities
    
    
    315
    
    
    
    635Long-term debt, less current maturities
    
    
    1,602
    
    
    
    1,302Other liabilitiesDeferred income taxes
    
    
    1,328
    
    
    
    1,407Other
    
    
    220
    
    
    
    2011,548
    
    
    
    1,608Commitments and contingenciesStockholders equityCommon stock, par value $5 per share; 300 shares
authorized; 208 shares issued and outstanding
    
    
    
    
    
    
    Additional paid-in capital
    
    
    2,208
    
    
    
    2,207Retained earnings
    
    
    986
    
    
    
    947Accumulated other comprehensive income
    
    
    
    
    
    
    3Total stockholders equity
    
    
    3,194
    
    
    
    3,157Total liabilities and stockholders equity
    
    $
    6,659
    
    
    $
    6,702
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TENNESSEE GAS PIPELINE COMPANY
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
 Quarter EndedMarch 31,2007
    
    
    2006Cash flows from operating activitiesNet income
    
    $
    55
    
    
    $
    52Adjustments to reconcile net income to net cash from operating activitiesDepreciation and amortization
    
    
    42
    
    
    
    41Earnings from unconsolidated affiliate
    
    
    (4
    )
    
    
    (3
    )Gain on sale of asset
    
    
    (7
    )
    
    
    Deferred income tax expense
    
    
    101
    
    
    
    13Other non-cash income items
    
    
    (2
    )
    
    
    Asset and liability changes
    
    
    (112
    )
    
    
    (22
    )Net cash provided by operating activities
    
    
    73
    
    
    
    81Cash flows from investing activitiesAdditions to property, plant and equipment
    
    
    (39
    )
    
    
    (58
    )Proceeds from disposal of asset
    
    
    35
    
    
    
    Net change in notes receivable from affiliates
    
    
    (71
    )
    
    
    (23
    )Other
    
    
    2
    
    
    
    Net cash used in investing activities
    
    
    (73
    )
    
    
    (81
    )Net change in cash and cash equivalents
    
    
    
    
    
    
    Cash and cash equivalentsBeginning of period
    
    
    
    
    
    
    End of period
    
    $
    
    
    
    $
    
  3




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TENNESSEE GAS PIPELINE COMPANY
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
 1. Basis of Presentation and Significant Accounting Policies
 Basis of Presentation
  Significant Accounting Policies
  Accounting for Uncertainty in Income Taxes. Accounting for Uncertainty in Income
Taxes. Accounting
for Income Taxes,
 2. Divestitures
  3. Income Taxes
   4




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4. Debt and Credit Facilities
 Debt.
 Credit Facilities.
 5. Commitments and Contingencies
 Legal Proceedings
 Gas Measurement Cases. re: Natural Gas Royalties
Qui Tam Litigation,
 Will Price, et
al. v. Gas Pipelines and Their Predecessors, et al.,
   5




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Environmental Matters
   Balance at January 1, 2007
    
    $
    15Payments for remediation activities
    
    
    (1
    )Balance at March 31, 2007
    
    $
    14
  Polychlorinated Biphenyls (PCB) Cost Recoveries.
 Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) Matters.
  6




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6. Retirement Benefits
 Employers Accounting
for Defined Benefit Pension and Other Postretirement Plans  an amendment of FASB Statements No.
87, 88, 106, and 132(R), Employers Accounting for
Postretirement Benefits Other Than Pensions,
 7. Investment in Unconsolidated Affiliate and Transactions with Affiliates
 Investment in Unconsolidated Affiliate
  2007
    
    2006(In millions)Operating results data:Operating revenues
    
    $
    6
    
    
    $
    4Operating expenses
    
    
    2
    
    
    
    2Income from continuing operations and net income
    
    
    4
    
    
    
    3
 Transactions with Affiliates
 Cash Management Program.
 Notes Receivable
 Accounts Receivable Sales Program.
 Taxes.
 7




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Other Affiliate Balances.
 March 31,
    
    December 31,2007
    
    2006(In millions)Contractual deposits
    
    $
    8
    
    
    $
    8Other non-current liabilities
    
    
    1
    
    
    
    1
 Affiliate Revenues and Expenses.
 2007
    
    2006(In millions)Revenues from affiliates
    
    $
    5
    
    
    $
    5Operation and maintenance expenses from affiliates(1)
    
    
    14
    
    
    
    15Reimbursements of operating expenses charged to affiliates
    
    
    12
    
    
    
    20
 
 (1)
    
    Includes expenses related to a long-term storage contract with an
affiliate. 8




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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
  Results of Operations
   2007
    
    
    2006(In millions,except volumes)Operating revenues
    
    $
    226
    
    
    $
    230Operating expenses
    
    
    (125
    )
    
    
    (129
    )Operating income
    
    
    101
    
    
    
    101Earnings from unconsolidated affiliate
    
    
    4
    
    
    
    3Other income, net
    
    
    5
    
    
    
    3EBIT
    
    
    110
    
    
    
    107Interest and debt expense
    
    
    (32
    )
    
    
    (33
    )Affiliated interest income, net
    
    
    11
    
    
    
    10Income taxes
    
    
    (34
    )
    
    
    (32
    )Net income
    
    $
    55
    
    
    $
    52Throughput volumes (BBtu/d)
    
    
    5,084
    
    
    
    4,936
 EBITRevenue
    
    
    Expense
    
    
    Other
    
    
    ImpactFavorable/(Unfavorable)(In millions)Lower services revenues
    
    $
    (3
    )
    
    $
    
    
    
    $
    
    
    
    $
    (3
    )Gain on sale of asset
    
    
    
    
    
    
    7
    
    
    
    
    
    
    
    7Other(1)
    
    
    (1
    )
    
    
    (3
    )
    
    
    3
    
    
    
    (1
    )Total impact on EBIT
    
    $
    (4
    )
    
    $
    4
    
    
    $
    3
    
    
    $
    3
 
 (1)
    
    Consists of individually insignificant items. Lower Services Revenues.
 Gain on Sale of Asset
 9




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Expansions.
 Income Taxes
 Quarter EndedMarch 31,2007
    
    2006(In millions,except for rates)Income taxes
    
    $
    34
    
    
    $
    32Effective tax rate
    
    
    38
    %
    
    
    38
    %
  Liquidity and Capital Expenditures
 Liquidity Overview
      Debt
   10




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Capital Expenditures
 Quarter Ended
    
    
    2007March 31, 2007
    
    
    Remaining
    
    
    Total(In millions)Maintenance
    
    $
    13
    
    
    $
    133
    
    
    $
    146Expansion
    
    
    14
    
    
    
    210
    
    
    
    224Hurricanes
    
    
    12
    (1)
    
    
    33
    
    
    
    45$
    39
    
    
    $
    376
    
    
    $
    415
 
 (1)
    
    Amount is net of insurance proceeds.  Hurricanes
  Commitments and Contingencies
  
 Item 3. Quantitative and Qualitative Disclosures About Market Risk
  
 Item 4T. Controls and Procedures
 Evaluation of Disclosure Controls and Procedures
  Changes in Internal Control Over Financial Reporting
  11




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PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings
  
 Item 1A. Risk Factors
 CAUTIONARY
STATEMENTS FOR PURPOSES OF THE SAFE HARBOR PROVISIONS
OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
 forward-looking
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
  
 Item 3. Defaults Upon Senior Securities
  
 Item 4. Submission of Matters to a Vote of Security Holders
  
 Item 5. Other Information
  
 Item 6. Exhibits
  12




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SIGNATURES
  TENNESSEE GAS PIPELINE COMPANYDate: May 7, 2007
    
    /s/      JAMES C. YARDLEYJames C. YardleyChairman of the Board and President
(Principal Executive Officer)Date: May 7, 2007
    
    /s/      JOHN R. SULTJohn R. SultSenior Vice President,
Chief Financial Officer and Controller
(Principal Accounting and Financial Officer)
 13




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TENNESSEE GAS PIPELINE COMPANY
 EXHIBIT INDEX
  ExhibitNumber
    
    Description31.A
    
    Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.31.B
    
    Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32.A
    
    Certification of Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.32.B
    
    Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 14