Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2019 | Aug. 01, 2019 | |
Entity Information [Line Items] | ||
Lessee, Operating Lease, Term of Contract | 38 years | |
Document type | 10-Q | |
Document Quarterly Report | true | |
Document period end date | Jun. 30, 2019 | |
Document Transition Report | false | |
Entity File Number | 1-7414 | |
Entity registrant name | NORTHWEST PIPELINE LLC | |
Entity Incorporation, State or Country Code | DE | |
Entity Address, Address Line One | 295 Chipeta Way | |
Entity Address, City or Town | Salt Lake City | |
Entity Address, State or Province | UT | |
Entity Tax Identification Number | 26-1157701 | |
Entity Address, Postal Zip Code | 84108 | |
City Area Code | 801 | |
Local Phone Number | 583-8800 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity filer category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity central index key | 0000110019 | |
Amendment flag | false | |
Document fiscal year focus | 2019 | |
Document fiscal period focus | Q2 | |
Current fiscal year end date | --12-31 | |
Entity common stock, shares outstanding | 0 | |
Minimum [Member] | ||
Entity Information [Line Items] | ||
Lessee, Operating Lease, Term of Contract | 1 year |
Statement of Net Income (Unaudi
Statement of Net Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Document period end date | Jun. 30, 2019 | |||
OPERATING REVENUES: | ||||
Natural gas transportation | $ 105,465 | $ 105,209 | $ 215,348 | $ 214,074 |
Natural gas storage | 4,883 | 3,085 | 9,125 | 6,130 |
Other | 15 | (15) | (46) | 1 |
Total operating revenue | 110,363 | 108,279 | 224,427 | 220,205 |
OPERATING EXPENSES: | ||||
General and administrative | 14,056 | 11,804 | 26,776 | 24,537 |
Operation and maintenance | 20,598 | 18,751 | 36,913 | 33,919 |
Depreciation and Amortization | 26,830 | 26,481 | 53,607 | 52,809 |
Regulatory debits | 178 | 908 | 358 | 1,847 |
Taxes, other than income taxes | 4,450 | 4,446 | 7,848 | 9,107 |
Regulatory charges resulting from tax rate changes | 5,879 | 6,338 | 11,693 | 12,152 |
Other expense, net | (120) | (44) | (11) | (359) |
Operating Expenses | 71,871 | 68,772 | 137,206 | 134,730 |
OPERATING INCOME | 38,492 | 39,507 | 87,221 | 85,475 |
OTHER (INCOME) AND OTHER EXPENSES: | ||||
Interest expense | 7,290 | 7,442 | 14,474 | 15,506 |
Allowance for equity and borrowed funds used during construction (AFUDC) | (750) | (576) | (1,256) | (987) |
Miscellaneous other (income) expenses, net | (1,138) | (181) | (2,074) | (661) |
Total other (income) and other expenses | 5,402 | 6,685 | 11,144 | 13,858 |
NET INCOME | $ 33,090 | $ 32,822 | $ 76,077 | $ 71,617 |
Balance Sheet (Unaudited)
Balance Sheet (Unaudited) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
CURRENT ASSETS: | ||
Cash | $ 0 | $ 0 |
Receivables: | ||
Trade | 37,374 | 42,143 |
Affiliated companies | 18 | 18 |
Advances to affiliate | 230,616 | 180,400 |
Other | 1,062 | 970 |
Materials and supplies | 10,070 | 10,046 |
Exchange gas due from others | 1,133 | 4,581 |
Prepayments and other | 3,449 | 8,591 |
Total current assets | 283,722 | 246,749 |
PROPERTY, PLANT AND EQUIPMENT, at cost | 3,491,473 | 3,457,982 |
Less-Accumulated depreciation and amortization | 1,638,367 | 1,596,369 |
Total property, plant and equipment, net | 1,853,106 | 1,861,613 |
OTHER ASSETS: | ||
Deferred charges | 890 | 1,277 |
Right-of-use assets | 17,646 | 0 |
Regulatory assets | 23,035 | 23,992 |
Total other assets | 41,571 | 25,269 |
Total assets | 2,178,399 | 2,133,631 |
Payables: | ||
Trade | 18,656 | 12,839 |
Affiliated companies | 10,153 | 26,532 |
Accrued liabilities: | ||
Taxes, other than income taxes | 11,920 | 11,496 |
Interest | 5,505 | 5,505 |
Exchange gas due to others | 3,297 | 11,660 |
Customer advances | 2,081 | 788 |
Other | 4,653 | 7,386 |
Total current liabilities | 56,265 | 76,206 |
OTHER NONCURRENT LIABILITIES: | ||
Asset retirement obligations | 71,525 | 69,350 |
Regulatory liabilities | 306,586 | 290,430 |
Lease liability | 16,346 | 0 |
Other | 386 | 835 |
Total other noncurrent liabilities | 394,843 | 360,615 |
LONG-TERM DEBT | 576,572 | 576,168 |
CONTINGENT LIABILITIES AND COMMITMENTS (Note 5) | ||
MEMBER'S EQUITY: | ||
Member's capital | 1,073,892 | 1,073,892 |
Retained earnings | 76,827 | 46,750 |
Total member's equity | 1,150,719 | 1,120,642 |
Total liabilities and member's equity | $ 2,178,399 | $ 2,133,631 |
Statement of Member's Equity (U
Statement of Member's Equity (Unaudited) - USD ($) $ in Thousands | Total | MEMBER'S CAPITAL | RETAINED EARNINGS |
Balance at beginning and end of period at Dec. 31, 2017 | $ 1,073,892 | $ 89,288 | |
Net income | $ 71,617 | 71,617 | |
Cash distributions to parent | (87,000) | (87,000) | |
Balance at end of period at Jun. 30, 2018 | 1,147,797 | 73,905 | |
Balance at beginning and end of period at Mar. 31, 2018 | 1,073,892 | 94,083 | |
Net income | 32,822 | 32,822 | |
Cash distributions to parent | (53,000) | ||
Balance at end of period at Jun. 30, 2018 | 1,147,797 | 73,905 | |
Balance at beginning and end of period at Dec. 31, 2018 | 1,120,642 | 1,073,892 | 46,750 |
Net income | 76,077 | 76,077 | |
Cash distributions to parent | (46,000) | (46,000) | |
Balance at end of period at Jun. 30, 2019 | 1,150,719 | 76,827 | |
Balance at beginning and end of period at Mar. 31, 2019 | $ 1,073,892 | 68,737 | |
Net income | 33,090 | 33,090 | |
Cash distributions to parent | (25,000) | ||
Balance at end of period at Jun. 30, 2019 | $ 1,150,719 | $ 76,827 |
Statement of Cash Flows (Unaudi
Statement of Cash Flows (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Cash flows from operating activities: | ||
Net income | $ 76,077 | $ 71,617 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Depreciation and Amortization | 53,607 | 52,809 |
Regulatory debits | 358 | 1,847 |
Regulatory Charge Resulting From Tax Rate Change | (11,693) | (12,152) |
Amortization of deferred charges and credits | 1,129 | (450) |
Allowance for equity funds used during construction (equity AFUDC) | (1,003) | (767) |
Changes in current assets and liabilities: | ||
Trade and other accounts receivable | 3,302 | 4,330 |
Affiliated receivables | 0 | 250 |
Materials and supplies | (25) | 55 |
Other current assets | 8,590 | 538 |
Trade accounts payable | (1,919) | (1,307) |
Affiliated payables | (16,379) | (4,121) |
Other accrued liabilities | (8,031) | (4,197) |
Changes in noncurrent assets and liabilities: | ||
Regulatory liabilities | 1,559 | 1,139 |
Other, net | 931 | (603) |
Net cash provided by operating activities | 127,631 | 134,192 |
Cash flows from financing activities: | ||
Retirement of long-term debt | 0 | 250,000 |
Payments for debt issuance costs | (58) | (177) |
Advances from affiliates, net | 0 | 90,069 |
Cash distributions to parent | (46,000) | (87,000) |
Net cash used in financing activities | (46,058) | (247,108) |
Property, plant and equipment: | ||
Capital expenditures | (31,705) | (25,202) |
Contributions and advances for construction costs | 412 | 1,138 |
Disposal of property, plant and equipment, net | (64) | (686) |
Advances to affiliates, net | (50,216) | 137,666 |
Net cash provided by (used in) investing activities | (81,573) | 112,916 |
NET INCREASE (DECREASE) IN CASH | 0 | 0 |
CASH AT BEGINNING OF PERIOD | 0 | 0 |
CASH AT END OF PERIOD | 0 | 0 |
Increases to property, plant and equipment, exclusive of equity AFUDC | (37,510) | (30,806) |
Changes in related accounts payable and accrued liabilities | 5,805 | 5,604 |
Capital expenditures | $ (31,705) | $ (25,202) |
Basis of Presentation (Notes)
Basis of Presentation (Notes) | 6 Months Ended |
Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | BASIS OF PRESENTATION In this report, Northwest Pipeline LLC (Northwest) is at times referred to in the first person as “we,” “us,” or “our.” Northwest is indirectly owned by The Williams Companies, Inc. (Williams). General The accompanying unaudited interim financial statements have been prepared from our books and records. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (GAAP) have been condensed or omitted in this Form 10-Q pursuant to Securities and Exchange Commission rules and regulations. The unaudited interim financial statements include all normal recurring adjustments and others which, in the opinion of our management, are necessary to present fairly our interim financial statements. These interim unaudited financial statements should be read in conjunction with the financial statements and notes thereto in our 2018 Annual Report on Form 10‑K. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the interim financial statements and accompanying notes. Actual results could differ from those estimates. Income Taxes We generally are not a taxable entity for federal or state and local income tax purposes. The tax on net income is generally borne by our parent, Williams. Net income for financial statement purposes may differ significantly from taxable income of Williams as a result of differences between the tax basis and financial reporting basis of assets and liabilities. Accounting Standards Issued and Adopted In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-02 “Leases (Topic 842)” (ASU 2016-02). ASU 2016-02 establishes a comprehensive new lease accounting model. ASU 2016-02 modifies the definition of a lease, requires a dual approach to lease classification similar to prior lease accounting, and causes lessees to recognize operating leases on the balance sheet as a lease liability measured as the present value of the future lease payments with a corresponding right-of-use asset, with an exception for leases with a term of one year or less. Additional disclosures are required regarding the amount, timing, and uncertainty of cash flows arising from leases. In January 2018, the FASB issued ASU 2018-01 “Leases (Topic 842): Land Easement Practical Expedient for Transition to Topic 842” (ASU 2018-01). Per ASU 2018-01, land easements and rights-of-way are required to be assessed under ASU 2016-02 to determine whether the arrangements are or contain a lease. ASU 2018-01 permits an entity to elect a transition practical expedient to not apply ASU 2016-02 to land easements that exist or expired before the effective date of ASU 2016-02 and that were not previously assessed under the previous lease guidance in Accounting Standards Codification (ASC) Topic 840 “Leases.” In July 2018, the FASB issued ASU 2018-11 “Leases (Topic 842): Targeted Improvements” (ASU 2018-11). Prior to ASU 2018-11, a modified retrospective transition was required for financing or operating leases existing at or entered into after the beginning of the earliest comparative period presented in the financial statements. ASU 2018-11 allows entities an additional transition method to the existing requirements whereby an entity could adopt the provisions of ASU 2016-02 by recognizing a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption without adjustment to the financial statements for periods prior to adoption. ASU 2018-11 also allows a practical expedient that permits lessors to not separate non-lease components from the associated lease component if certain conditions are present. ASU 2016-02 is effective for interim and annual periods beginning after December 15, 2018. We prospectively adopted ASU 2016-02 effective January 1, 2019, and did not adjust prior periods as permitted by ASU 2018-11 (See Note 3). We completed our review of contracts to identify leases based on the modified definition of a lease and implemented changes to our internal controls to support management in the accounting for and disclosure of leasing activities upon adoption of ASU 2016-02. We implemented a financial lease accounting system to assist management in the accounting for leases upon adoption. The most significant changes to our financial statements as a result of adopting ASU 2016-02 relate to the recognition of a $17.8 million lease liability and offsetting right-of-use asset in our Balance Sheet for operating leases. We also evaluated ASU 2016-02’s available practical expedients on adoption. We generally elected to adopt the practical expedients, which includes the practical expedient to not separate lease and non-lease components by both lessees and lessors by class of underlying assets and the land easements practical expedient. Accounting Standards Issued But Not Yet Adopted In June 2016, the FASB issued ASU 2016-13 “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (ASU 2016-13). ASU 2016-13 changes the impairment model for most financial assets and certain other instruments. For trade and other receivables, held-to-maturity debt securities, loans, and other instruments, entities will be required to use a new forward-looking “expected loss” model that generally will result in the earlier recognition of allowances for losses. The guidance also requires increased disclosures. ASU 2016-13 is effective for interim and annual periods beginning after December 15, 2019. We plan to adopt as of January 1, 2020. We anticipate that ASU 2016-13 will primarily apply to our trade receivables. While we do not expect a significant financial impact, we are currently developing additional processes, procedures and internal controls in order to make the necessary credit loss assessments and required disclosures. |
Revenue Recognition (Notes)
Revenue Recognition (Notes) | 6 Months Ended |
Jun. 30, 2019 | |
Revenue Recognition [Abstract] | |
Revenue from Contract with Customer [Text Block] | REVENUE RECOGNITION Revenue by Category Our revenue disaggregation by major service line includes Natural gas transportation , Natural gas storage , and Other, which are separately presented on the Statement of Net Income . We do not have any contract assets or material contract liabilities. Remaining Performance Obligations The following table presents the transaction price allocated to the remaining performance obligations under certain contracts as of June 30, 2019 . These primarily include reservation charges on contracted capacity on our firm transportation and storage contracts with customers. Amounts from certain contracts included in the table below, which are subject to the periodic review and approval by the FERC, reflect the rates for such services in our current FERC tariffs for the life of the related contracts; however, these rates may change based on future rate cases or settlements approved by the FERC and the amount and timing of these changes is not currently known. This table excludes the variable consideration component for commodity charges that will be recognized in future periods. Certain of our contracts contain evergreen provisions for periods beyond the initial term of the contract. The remaining performance obligations as of June 30, 2019 , do not consider potential future performance obligations for which the renewal has not been exercised. The table below also does not include contracts with customers for which the underlying facilities have not received FERC authorization to be placed into service. (Thousands) 2019 (remainder) $ 216,358 2020 419,453 2021 392,995 2022 381,785 2023 350,117 Thereafter 2,951,500 Total $ 4,712,208 Accounts Receivable Receivables from contracts with customers are included within Receivables - Trade and Receivables - Affiliated companies and receivables that are not related to contracts with customers are included within the balance of Receivables - Advances to affiliate and Receivables - Other in our Balance Sheet. |
Leases (Notes)
Leases (Notes) | 6 Months Ended |
Jun. 30, 2019 | |
Leases [Abstract] | |
Leases of Lessee Disclosure [Text Block] | LEASES We are a lessee through noncancellable lease agreements for property and equipment consisting primarily of buildings, land, vehicles, and equipment used in both our operations and administrative functions. We recognize a lease liability with an offsetting right-of-use asset in our Balance Sheet for operating leases based on the present value of the future lease payments. As an accounting policy, we have elected to combine lease and non-lease components for all classes of leased assets in our calculation of the lease liability and the offsetting right-of-use asset. Our lease agreements require both fixed and variable periodic payments, with initial terms typically ranging from one year to 15 years, with some having a term of up to 38 years . Payment provisions in certain of our lease agreements contain escalation factors which may be based on stated rates or a change in a published index at a future time. The amount by which a lease escalates based on the change in a published index, which is not known at lease commencement, is considered a variable payment and is not included in the present value of the future lease payments, which only includes those that are stated or can be calculated based on the lease agreement at lease commencement. In addition to the noncancellable periods, many of our lease agreements provide for one or more extensions of the lease agreement for periods ranging from one year in length to an indefinite number of times following the specified contract term. Other lease agreements provide for extension terms that allow us to utilize the identified leased asset for an indefinite period of time so long as the asset continues to be utilized in our operations. In consideration of these renewal features, we assess the term of the lease agreements, which includes using judgment in the determination of which renewal periods and termination provisions, when at our sole election, will be reasonably certain of being exercised. Periods after the initial term or extension terms that allow for either party to the lease to cancel the lease are not considered in the assessment of the lease term. Additionally, we have elected to exclude leases with an original term of one year or less, including renewal periods, from the calculation of the lease liability and the offsetting right-of-use asset. We used judgment in determining the discount rate upon which the present value of the future lease payments is determined. This rate is based on a collateralized interest rate corresponding to the term of the lease agreement using company, industry, and market information available. Three Months Ended Six Months Ended 2019 (Thousands) Lease Cost: Operating lease cost $ 557 $ 1,077 Variable lease cost 277 538 Total lease cost $ 834 $ 1,615 Cash paid for amounts included in the measurement of operating lease liabilities $ 591 $ 1,026 June 30, 2019 (Thousands) Other Information: Right-of-use assets $ 17,646 Operating lease liabilities: Current (included in Other in our Balance Sheet) $ 1,274 Lease liability $ 16,346 Weighted-average remaining lease term - operating leases (years) 12 Weighted-average discount rate - operating leases 5 % As of June 30, 2019, the following table represents our operating lease maturities, including renewal provisions that we have assessed as being reasonably certain of exercise, for each of the years ended December 31: (Thousands) 2019 (remainder) $ 980 2020 2,045 2021 2,014 2022 2,009 2023 1,943 Thereafter 14,644 Total future lease payments 23,635 Less amount representing interest 6,015 Total obligations under operating leases $ 17,620 |
Rate and Regulatory Matters (No
Rate and Regulatory Matters (Notes) | 6 Months Ended |
Jun. 30, 2019 | |
Public Utilities, Rate Matters [Abstract] | |
Public Utilities, Disclosure of Rate Matters [Text Block] | RATE AND REGULATORY MATTERS FERC Developments On March 21, 2019, the FERC issued a Notice of Inquiry (NOI) in Docket No. PL19-4-000, seeking comments regarding whether and, if so, how FERC should revise its policies for determining the base return on equity (ROE) used in setting rates charged by jurisdictional public utilities. FERC also seeks comment on, among other things, whether FERC should change its ROE policies for interstate natural gas and oil pipelines to align with its policy for electric public utilities. FERC’s action follows a decision from the United States Court of Appeals for the District of Columbia Circuit, which vacated and remanded a series of earlier FERC orders establishing a new base ROE for certain electric transmission owners. Following that decision, FERC proposed in the remanded proceedings that it rely on four financial models to establish ROEs for the affected utilities rather than rely primarily on its long-used, two-step Discounted Cash Flow model. In the NOI, FERC poses a series of questions and invited comments on this proposed new approach, including whether it should apply the new approach to future proceedings involving interstate natural gas and oil pipeline ROEs. We currently are monitoring this proceeding. Our next general rate case must be filed for new rates to become effective no later than January 1, 2023. |
Contingent Liabilities and Comm
Contingent Liabilities and Commitments (Notes) | 6 Months Ended |
Jun. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies Disclosure [Text Block] | CONTINGENT LIABILITIES AND COMMITMENTS Environmental Matters We are subject to the National Environmental Policy Act and other federal and state legislation regulating the environmental aspects of our business. Except as discussed below, our management believes that we are in substantial compliance with existing environmental requirements. Environmental expenditures are expensed or capitalized depending on their future economic benefit and potential for rate recovery. We believe that, with respect to any expenditures required to meet applicable standards and regulations, the FERC would grant the requisite rate relief so that substantially all of such expenditures would be permitted to be recovered through rates. Beginning in the mid-1980s, we evaluated many of our facilities for the presence of toxic and hazardous substances to determine to what extent, if any, remediation might be necessary. We identified polychlorinated biphenyl (PCB) contamination in air compressor systems, soils, and related properties at certain compressor station sites. Similarly, we identified hydrocarbon impacts at these facilities due to the former use of earthen pits, lubricating oil leaks or spills, and excess pipe coating released to the environment. In addition, heavy metals have been identified at these sites due to the former use of mercury containing meters and paint and welding rods containing lead, cadmium, and arsenic. The PCBs were remediated pursuant to a Consent Decree with the U.S. Environmental Protection Agency (EPA) in the late 1980s, and we conducted a voluntary clean-up of the hydrocarbon and mercury impacts in the early 1990s. In 2005, the Washington Department of Ecology required us to re-evaluate our previous clean-ups in Washington. During 2006 to 2015, 129 meter stations were evaluated, of which 82 required remediation. As of June 30, 2019 , all of the meter stations have been remediated. During 2006 to 2018, 14 compressor stations were evaluated, of which 11 required remediation. As of June 30, 2019 , 10 compressor stations have been remediated. At June 30, 2019 we had accrued liabilities totaling approximately $ 1.9 million , $ 1.6 million recorded in Accrued liabilities - Other and $ 0.3 million recorded in Other Noncurrent Liabilities - Other in the accompanying Balance Sheet. At December 31, 2018 we had accrued liabilities totaling approximately $ 2.0 million , $ 1.3 million recorded in Accrued liabilities - Other and $ 0.7 million recorded in Other Noncurrent Liabilities - Other in the accompanying Balance Sheet. We are conducting environmental assessments and implementing a variety of remedial measures that may result in increases or decreases in the total estimated costs. The EPA and various state regulatory agencies routinely promulgate and propose new rules, and issue updated guidance to existing rules. These rulemakings include, but are not limited to, rules for reciprocating internal combustion engine and combustion turbine maximum achievable control technology, air quality standards for one-hour nitrogen dioxide emissions, and volatile organic compound and methane new source performance standards impacting design and operation of storage vessels, pressure valves, and compressors. The EPA previously issued its rule regarding National Ambient Air Quality Standards for ground-level ozone. We are monitoring the rule’s implementation as it will trigger additional federal and state regulatory actions that may impact our operations. Implementation of the regulations is expected to result in impacts to our operations and increase the cost of additions to Property, plant, and equipment - net in the Balance Sheet for both new and existing facilities in affected areas. We are unable to reasonably estimate the cost of additions that may be required to meet the regulations at this time due to uncertainty created by various legal challenges to these regulations and the need for further specific regulatory guidance. Other Matters Various other proceedings are pending against us and are considered incidental to our operations. Summary We estimate that for all matters for which we are able to reasonably estimate a range of loss, including those noted above and others that are not individually significant, our aggregate reasonably possible losses beyond amounts accrued for all of our contingent liabilities are immaterial to our expected future annual results of operations, liquidity and financial position. These calculations have been made without consideration of any potential recovery from third-parties. We have disclosed all significant matters for which we are unable to reasonably estimate a range of possible loss. |
Debt and Financing Arrangement
Debt and Financing Arrangement (Notes) | 6 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
Debt and Financing Arrangement | DEBT AND FINANCING ARRANGEMENT Credit Facility We, along with Williams and Transcontinental Gas Pipe Line Company, LLC (Transco) (the “borrowers”), are party to a Credit Agreement with aggregate commitments available of $4.5 billion , with up to an additional $500 million increase in aggregate commitments available under certain circumstances. We and Transco are each subject to a $500 million borrowing sublimit. Letter of credit commitments of $1.0 billion are, subject to the $500 million borrowing sublimit applicable to us and Transco, available to the borrowers. At June 30, 2019, no letters of credit have been issued and no loans were outstanding under the credit facility. Williams participates in a commercial paper program, and Williams management considers amounts outstanding under this program to be a reduction of available capacity under the credit facility. The program allows a maximum outstanding amount at anytime of $4.0 billion of unsecured commercial paper notes. At June 30, 2019, Williams had no |
Financial Instruments (Notes)
Financial Instruments (Notes) | 6 Months Ended |
Jun. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Financial Instruments | FINANCIAL INSTRUMENTS Fair Value of Financial Instruments The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate that value: Cash and advances to affiliate—The carrying amounts approximate fair value because of the short-term nature of these instruments. Long-term debt—The disclosed fair value of our long-term debt, which we consider as a level 2 measurement, is determined by a market approach using broker quoted indicative period-end bond prices. The quoted prices are based on observable transactions in less active markets for our debt or similar instruments. The carrying amount and estimated fair value of our long-term debt, including current maturities, were $576.6 million and $623.7 million , respectively, at June 30, 2019 , and $576.2 million and $577.1 million , respectively, at December 31, 2018 . |
Transactions with Affiliates (N
Transactions with Affiliates (Notes) | 6 Months Ended |
Jun. 30, 2019 | |
Related Party Transactions [Abstract] | |
Transactions with Affiliates | TRANSACTIONS WITH AFFILIATES We are a participant in Williams’ cash management program, and we make advances to and receive advances from Williams. At June 30, 2019, our advances to Williams totaled approximately $230.6 million and at December 31, 2018 , our advances to Williams totaled approximately $180.4 million . These advances are represented by demand notes and are classified as Receivables - Advances to affiliate in the accompanying Balance Sheet. The interest rate on these intercompany demand notes is based upon the daily overnight investment rate paid on Williams’ excess cash at the end of each month, which was 2.27 percent at June 30, 2019. The interest income from these advances was $1.2 million and $2.2 million for the three and six months ended June 30, 2019, respectively, and $0.4 million and $ 0.9 million for the three and six months ended June 30, 2018, respectively. Such interest income is included in Other (Income) and Other Expenses – Miscellaneous other (income) expenses, net on the accompanying Statement of Net Income. We have no employees. Services necessary to operate our business are provided to us by Williams and certain affiliates of Williams. We reimburse Williams and its affiliates for all direct and indirect expenses incurred or payments made (including salary, bonus, incentive compensation, and benefits) in connection with these services. Employees of Williams also provide general administrative and management services to us, and we are charged for certain administrative expenses incurred by Williams. These charges are either directly identifiable or allocated to our assets. Direct charges are for goods and services provided by Williams at our request. Allocated charges are based on a three-factor formula, which considers revenues; property, plant, and equipment; and payroll. In management’s estimation, the allocation methodologies used are reasonable and result in a reasonable allocation to us of our costs of doing business incurred by Williams. We were billed $26.8 million and $48.9 million in the three and six months ended June 30, 2019 , respectively, and $23.6 million and $45.7 million for the three and six months ended June 30, 2018, respectively, for these services. Such expenses are primarily included in General and administrative and Operation and maintenance expenses on the accompanying Statement of Net Income. The amount billed to us for the six months ended June 30, 2019, includes $3.2 million recognized in the second quarter for estimated severance and related costs driven by a voluntary separation program associated with a review of Williams' enterprise cost structure. During the six months ended June 30, 2019 and 2018 , we declared and paid cash distributions to our parent of $46.0 million and $87.0 million , respectively. During July 2019, we declared and paid an additional cash distribution of $32.0 million to our parent. We have entered into various other transactions with certain related parties, the amounts of which were not significant. These transactions and the above-described transactions are made on the basis of commercial relationships and prevailing market prices or general industry practices. |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Revenue Recognition [Abstract] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Table Text Block] | The following table presents the transaction price allocated to the remaining performance obligations under certain contracts as of June 30, 2019 . These primarily include reservation charges on contracted capacity on our firm transportation and storage contracts with customers. Amounts from certain contracts included in the table below, which are subject to the periodic review and approval by the FERC, reflect the rates for such services in our current FERC tariffs for the life of the related contracts; however, these rates may change based on future rate cases or settlements approved by the FERC and the amount and timing of these changes is not currently known. This table excludes the variable consideration component for commodity charges that will be recognized in future periods. Certain of our contracts contain evergreen provisions for periods beyond the initial term of the contract. The remaining performance obligations as of June 30, 2019 , do not consider potential future performance obligations for which the renewal has not been exercised. The table below also does not include contracts with customers for which the underlying facilities have not received FERC authorization to be placed into service. (Thousands) 2019 (remainder) $ 216,358 2020 419,453 2021 392,995 2022 381,785 2023 350,117 Thereafter 2,951,500 Total $ 4,712,208 |
Leases Leases (Tables)
Leases Leases (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Leases [Abstract] | |
Lease, Cost [Table Text Block] | Three Months Ended Six Months Ended 2019 (Thousands) Lease Cost: Operating lease cost $ 557 $ 1,077 Variable lease cost 277 538 Total lease cost $ 834 $ 1,615 Cash paid for amounts included in the measurement of operating lease liabilities $ 591 $ 1,026 June 30, 2019 (Thousands) Other Information: Right-of-use assets $ 17,646 Operating lease liabilities: Current (included in Other in our Balance Sheet) $ 1,274 Lease liability $ 16,346 Weighted-average remaining lease term - operating leases (years) 12 Weighted-average discount rate - operating leases 5 % |
Lessee, Operating Lease, Liability, Maturity [Table Text Block] | As of June 30, 2019, the following table represents our operating lease maturities, including renewal provisions that we have assessed as being reasonably certain of exercise, for each of the years ended December 31: (Thousands) 2019 (remainder) $ 980 2020 2,045 2021 2,014 2022 2,009 2023 1,943 Thereafter 14,644 Total future lease payments 23,635 Less amount representing interest 6,015 Total obligations under operating leases $ 17,620 |
Basis of Presentation (Details)
Basis of Presentation (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Jan. 01, 2019 | Dec. 31, 2018 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Right-of-use assets | $ 17,646 | $ 0 | |
Lease liability | $ 16,346 | $ 0 | |
Accounting Standards Update 2016-02 [Member] | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Right-of-use assets | $ 17,800 | ||
Lease liability | $ 17,800 |
Revenue Recognition (Details)
Revenue Recognition (Details) - Remaining Performance Obligation [Member] $ in Thousands | Jun. 30, 2019USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-07-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Amount | $ 216,358 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 6 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Amount | $ 419,453 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Amount | $ 392,995 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Amount | $ 381,785 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Amount | $ 350,117 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Amount | $ 4,712,208 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 1 year |
Leases (Details)
Leases (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2019 | Dec. 31, 2018 | |
Lessee, Lease, Description [Line Items] | |||
Document period end date | Jun. 30, 2019 | ||
Lessee, Operating Lease, Term of Contract | 38 years | 38 years | |
Operating lease cost | $ 557 | $ 1,077 | |
Variable lease cost | 277 | 538 | |
Total lease cost | 834 | 1,615 | |
Cash paid for amounts included in the measurement of operating lease liabilities | 591 | 1,026 | |
Right-of-use assets | 17,646 | 17,646 | $ 0 |
Current (included in Other in our Balance Sheet) | 1,274 | 1,274 | |
Lease liability | $ 16,346 | $ 16,346 | $ 0 |
Weighted-average remaining lease term - operating lease (years) | 12 years | 12 years | |
Weighted - average discount rate - operating leases | 5.00% | 5.00% | |
2019 (remainder) | $ 980 | $ 980 | |
2020 | 2,045 | 2,045 | |
2021 | 2,014 | 2,014 | |
2022 | 2,009 | 2,009 | |
2023 | 1,943 | 1,943 | |
Thereafter | 14,644 | 14,644 | |
Total future lease payments | 23,635 | 23,635 | |
Less amount representing interest | 6,015 | 6,015 | |
Total obligations under operating leases | $ 17,620 | $ 17,620 | |
Maximum [Member] | |||
Lessee, Lease, Description [Line Items] | |||
Lessee, Operating Lease, Term of Contract | 15 years | 15 years | |
Minimum [Member] | |||
Lessee, Lease, Description [Line Items] | |||
Lessee, Operating Lease, Term of Contract | 1 year | 1 year |
Contingent Liabilities and Co_2
Contingent Liabilities and Commitments (Details) - Environmental assessment and remediation [Member] - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 |
Site Contingency [Line Items] | ||
Accrued environmental assessment and remediation costs, total | $ 1.9 | $ 2 |
Accrued environmental assessment and remediation costs, current | 1.6 | 1.3 |
Accrued environmental assessment and remediation costs, noncurrent | $ 0.3 | $ 0.7 |
Debt and Financing Arrangemen_2
Debt and Financing Arrangement (Details) $ in Millions | Jun. 30, 2019USD ($) |
Line of Credit Facility [Line Items] | |
Line of credit facility, loans outstanding | $ 0 |
Williams Companies Inc [Member] | |
Line of Credit Facility [Line Items] | |
Commercial paper, outstanding | 0 |
Williams Companies Inc [Member] | Letter of credit | |
Line of Credit Facility [Line Items] | |
Line of Credit Facility, Maximum Borrowing Capacity | 1,000 |
Credit Agreement [Member] | |
Line of Credit Facility [Line Items] | |
Line of Credit Facility, Maximum Borrowing Capacity | 500 |
Credit Agreement [Member] | Williams Companies Inc [Member] | |
Line of Credit Facility [Line Items] | |
Line of Credit Facility, Maximum Borrowing Capacity | 4,500 |
Additional Amount By Which Credit Facility Can Be Increased | 500 |
Letter of credit | |
Line of Credit Facility [Line Items] | |
Line of Credit Facility, Maximum Borrowing Capacity | 500 |
Commercial paper [Member] | Williams Companies Inc [Member] | |
Line of Credit Facility [Line Items] | |
Line of Credit Facility, Maximum Borrowing Capacity | $ 4,000 |
Financial Instruments (Details)
Financial Instruments (Details) - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 |
Carrying (reported) amount, fair value disclosure [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt including current maturities | $ 576.6 | $ 576.2 |
Estimate of fair value, fair value disclosure [Member] | Fair value, inputs, level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt including current maturities | $ 623.7 | $ 577.1 |
Transactions with Affiliates (D
Transactions with Affiliates (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||
Jul. 31, 2019USD ($) | Jun. 30, 2019USD ($)employee | Jun. 30, 2018USD ($) | Jun. 30, 2019USD ($)employee | Jun. 30, 2018USD ($) | Dec. 31, 2018USD ($) | |
Related Party Transaction [Line Items] | ||||||
Advances to affiliate | $ 230,616 | $ 230,616 | $ 180,400 | |||
Related party transaction, rate | 2.27% | |||||
Entity number of employees | employee | 0 | 0 | ||||
Related party transaction, expenses from transactions with related party | $ 26,800 | $ 23,600 | $ 48,900 | $ 45,700 | ||
Severance Costs | 3,200 | |||||
Cash distributions to parent | 46,000 | 87,000 | ||||
Subsequent Event [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Cash distributions to parent | $ 32,000 | |||||
Williams Companies Inc [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Advances to affiliate | 230,600 | 230,600 | $ 180,400 | |||
Interest Income, Related Party | $ 1,200 | $ 400 | $ 2,200 | $ 900 |
Transactions with Affiliates Re
Transactions with Affiliates Related Party Transactions (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||
Jul. 31, 2019 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Related Party Transaction, Expenses from Transactions with Related Party | $ 26,800 | $ 23,600 | $ 48,900 | $ 45,700 | |
Payments of Distributions to Affiliates | 46,000 | 87,000 | |||
Severance Costs | 3,200 | ||||
Subsequent Event [Member] | |||||
Payments of Distributions to Affiliates | $ 32,000 | ||||
Williams Companies Inc [Member] | |||||
Interest Income, Related Party | $ 1,200 | $ 400 | $ 2,200 | $ 900 |