Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Nov. 02, 2017 | |
Entity [Abstract] | ||
Entity Registrant Name | Transcontinental Gas Pipe Line Company, LLC | |
Entity Central Index Key | 99,250 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2017 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 0 |
Condensed Consolidated Statemen
Condensed Consolidated Statement of Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Operating Revenues: | ||||
Natural gas sales | $ 26,763 | $ 31,244 | $ 74,867 | $ 67,474 |
Natural gas transportation | 389,080 | 346,004 | 1,116,891 | 1,042,547 |
Natural gas storage | 33,954 | 34,258 | 102,778 | 88,315 |
Other | 2,255 | 1,343 | 3,734 | 3,396 |
Total operating revenues | 452,052 | 412,849 | 1,298,270 | 1,201,732 |
Operating Costs and Expenses: | ||||
Cost of natural gas sales | 26,763 | 31,244 | 74,867 | 67,474 |
Cost of natural gas transportation | 5,828 | 4,689 | 15,282 | 15,501 |
Operation and maintenance | 113,101 | 83,916 | 267,914 | 225,975 |
Administrative and general | 43,110 | 40,604 | 132,020 | 125,997 |
Depreciation and amortization | 82,826 | 76,755 | 239,368 | 231,110 |
Taxes - other than income taxes | 15,333 | 14,584 | 49,131 | 45,154 |
Other expense, net | 13,475 | 12,894 | 43,112 | 41,541 |
Total operating costs and expenses | 300,436 | 264,686 | 821,694 | 752,752 |
Operating Income | 151,616 | 148,163 | 476,576 | 448,980 |
Other (Income) and Other Expenses: | ||||
Interest expense | 41,304 | 37,318 | 115,797 | 113,957 |
Allowance for equity and borrowed funds used during construction (AFUDC) | (22,334) | (19,922) | (70,783) | (45,656) |
Equity in earnings of unconsolidated affiliates | (912) | (1,455) | (3,322) | (4,447) |
Miscellaneous other (income) expenses, net | (774) | 309 | (5,972) | 655 |
Total other (income) and other expenses | 17,284 | 16,250 | 35,720 | 64,509 |
Net Income | 134,332 | 131,913 | 440,856 | 384,471 |
Other comprehensive income (loss): | ||||
Equity interest in unrealized gain (loss) on interest rate hedges (includes $38 and $41 for the three months ended and $ 75 and $140 for the nine months ended September 30, 2017 and September 30,2016, respectively, of accumulated other comprehensive income reclassification for equity interest in realized losses on interest rate hedges) | 72 | 156 | 108 | (128) |
Comprehensive Income | $ 134,404 | $ 132,069 | $ 440,964 | $ 384,343 |
Condensed Consolidated Stateme3
Condensed Consolidated Statement of Comprehensive Income (Unaudited) (Parentheticals) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Accumulated other comprehensive income reclassification for realized losses on interest rate hedges | $ 38 | $ 41 | $ 75 | $ 140 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheet (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Current Assets: | ||
Cash | $ 0 | $ 0 |
Receivables: | ||
Affiliates | 326 | 489 |
Advances to affiliate | 299,059 | 811,693 |
Trade and other | 146,471 | 144,315 |
Transportation and exchange gas receivables | 944 | 1,827 |
Inventories | 47,685 | 55,209 |
Regulatory assets | 90,367 | 87,059 |
Other | 14,179 | 13,305 |
Total current assets | 599,031 | 1,113,897 |
Investments, at cost plus equity in undistributed earnings | 39,571 | 42,403 |
Property, Plant and Equipment: | ||
Natural gas transmission plant | 13,136,224 | 11,996,454 |
Less-Accumulated depreciation and amortization | 3,833,689 | 3,687,473 |
Total property, plant and equipment, net | 9,302,535 | 8,308,981 |
Other Assets: | ||
Regulatory assets | 269,000 | 264,001 |
Other | 132,052 | 102,198 |
Total other assets | 401,052 | 366,199 |
Total Assets | 10,342,189 | 9,831,480 |
Payables: | ||
Affiliates | 23,483 | 29,455 |
Trade and other | 305,949 | 251,872 |
Transportation and exchange gas payables | 3,555 | 1,571 |
Accrued liabilities | 160,087 | 197,697 |
Long-term debt due within one year | 251,320 | 0 |
Total current liabilities | 744,394 | 480,595 |
Long-Term Debt | 2,197,717 | 2,210,754 |
Other Long-Term Liabilities: | ||
Asset retirement obligations | 271,211 | 248,518 |
Regulatory liabilities | 501,201 | 449,391 |
Advances for construction costs | 261,487 | 283,028 |
Transportation prepayments | 11,115 | 11,837 |
Deferred Revenue | 228,258 | 0 |
Other | 4,573 | 6,088 |
Total other long-term liabilities | 1,277,845 | 998,862 |
Contingent Liabilities and Commitments (Note 2) | ||
Owner's Equity: | ||
Member's capital | 3,788,499 | 3,678,499 |
Retained earnings | 2,333,616 | 2,462,760 |
Accumulated other comprehensive income | 118 | 10 |
Total owner's equity | 6,122,233 | 6,141,269 |
Total liabilities and owner's equity | $ 10,342,189 | $ 9,831,480 |
Condensed Consolidated Stateme5
Condensed Consolidated Statement of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Cash flows from operating activities: | ||
Net income | $ 440,856 | $ 384,471 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 239,368 | 231,110 |
Allowance for equity funds used during construction (equity AFUDC) | (53,867) | (37,285) |
Changes in operating assets and liabilities: | ||
Receivables - affiliates | 163 | 341 |
Receivables - trade and other | (2,156) | 17,045 |
Transportation and exchange gas receivable | 883 | (216) |
Inventories | 7,524 | 13,617 |
Payables - affiliates | (5,972) | (23,340) |
Payables - trade | (28,536) | 6,041 |
Accrued liabilities | (41,137) | 61,484 |
Asset retirement obligations - non-current | 45,629 | 3,761 |
Asset retirement obligations - removal costs | (1,708) | (2,688) |
Deferred revenue | (2,142) | 0 |
Other, net | (4,691) | 23,451 |
Net cash provided by operating activities | 594,214 | 677,792 |
Cash flows from financing activities: | ||
Proceeds from long-term debt | 0 | 998,250 |
Retirements of long-term debt | 0 | (200,000) |
Payments on other financing obligation | (241) | 0 |
Payments for debt issuance costs | (13) | (8,235) |
Cash distributions to parent | (330,000) | (350,000) |
Cash contributions from parent | 110,000 | 372,000 |
Net cash provided by financing activities | (220,254) | 812,015 |
Cash flows from investing activities: | ||
Property, plant and equipment additions, net of equity AFUDC | (1,089,917) | (906,105) |
Contributions and advances for construction costs | 252,249 | 157,545 |
Disposal of property, plant and equipment, net | (33,281) | (4,439) |
Advances to affiliate, net | 512,634 | (718,279) |
Return of capital from unconsolidated affiliates | 2,729 | 2,106 |
Purchase of ARO Trust investments | (46,709) | (61,086) |
Proceeds from sale of ARO Trust investments | 27,520 | 38,330 |
Proceeds from insurance | 3,200 | 2,121 |
Other, net | 2,385 | 0 |
Net cash used in investing activities | (373,960) | (1,489,807) |
Increase (decrease) in cash | 0 | 0 |
Cash at beginning of period | 0 | 0 |
Cash at end of period | 0 | 0 |
Increase to property, plant and equipment, net of equity AFUDC | (1,154,317) | (907,023) |
Changes in related accounts payable and accrued liabilities | 64,400 | 918 |
Property, plant and equipment additions, net of equity AFUDC | $ (1,089,917) | $ (906,105) |
Basis of Presentation (Notes)
Basis of Presentation (Notes) | 9 Months Ended |
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | BASIS OF PRESENTATION In this report, Transco (which includes Transcontinental Gas Pipe Line Company, LLC and, unless the context otherwise requires, all of our majority-owned subsidiaries) is at times referred to in the first person as “we,” “us” or “our.” Transco is indirectly owned by Williams Partners L.P. (WPZ), a publicly traded Delaware limited partnership, which is consolidated by The Williams Companies, Inc. (Williams). In January 2017, Williams permanently waived the WPZ general partner's incentive distribution rights, converted its 2 percent general partner interest in WPZ to a non-economic interest and purchased additional WPZ common units. At September 30, 2017 , Williams owns a 74 percent limited partner interest in WPZ. General The condensed consolidated unaudited financial statements include our accounts and the accounts of the subsidiaries we control. Companies in which we and our subsidiaries own 20 percent to 50 percent of the voting common stock or otherwise exercise significant influence over operating and financial policies of the company are accounted for under the equity method. The equity method investments as of September 30, 2017 and December 31, 2016 consist of Cardinal Pipeline Company, LLC (Cardinal) with an ownership interest of approximately 45 percent and Pine Needle LNG Company, LLC (Pine Needle) with an ownership interest of 35 percent. We received distributions associated with our equity method investments totaling $6.3 million and $6.5 million in the nine months ended September 30, 2017 and September 30, 2016 , respectively. Included in the distributions are $2.7 million and $2.1 million return of capital in 2017 and 2016, respectively. The condensed consolidated unaudited 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 condensed consolidated unaudited 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 condensed consolidated unaudited financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in our 2016 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 condensed consolidated unaudited financial statements and accompanying notes. Actual results could differ from those estimates. Accounting Standards Issued But Not Yet Adopted In August 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-15 “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments” (ASU 2016-15). ASU 2016-15 provides specific guidance on eight cash flow classification issues, including debt prepayment or debt extinguishment costs and distributions received from equity method investees, to reduce diversity in practice. ASU 2016-15 is effective for interim and annual periods beginning after December 15, 2017. Early adoption is permitted. ASU 2016-15 requires a retrospective transition. We do not expect ASU 2016-15 to have a material impact on our consolidated financial statements. 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. Early adoption is permitted. ASU 2016-13 requires varying transition methods for the different categories of amendments. We do not expect ASU 2016-13 to have a significant impact on our consolidated financial statements. In February 2016, the FASB issued ASU 2016-02 “Leases (Topic 842)” (ASU 2016-02). ASU 2016-02 establishes a comprehensive new lease accounting model. ASU 2016-02 clarifies the definition of a lease, requires a dual approach to lease classification similar to current lease classifications, and causes lessees to recognize leases on the balance sheet as a lease liability with a corresponding right-of-use asset. ASU 2016-02 is effective for interim and annual periods beginning after December 15, 2018. Early adoption is permitted. ASU 2016-02 requires a modified retrospective transition for capital or operating leases existing at or entered into after the beginning of the earliest comparative period presented in the financial statements. We are in the process of reviewing contracts to identify leases, as well as evaluating the applicability of ASU 2016-02 to contracts involving easement/rights-of-way. In May 2014, the FASB issued ASU 2014-09 establishing Accounting Standards Codification (ASC) Topic 606, “Revenue from Contracts with Customers” (ASC 606). ASC 606 establishes a comprehensive new revenue recognition model designed to depict the transfer of goods or services to a customer in an amount that reflects the consideration the entity expects to be entitled to receive in exchange for those goods or services and requires significantly enhanced revenue disclosures. In August 2015, the FASB issued ASU 2015-14 “Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date” (ASU 2015-14). Per ASU 2015-14, the standard is effective for interim and annual reporting periods beginning after December 15, 2017. ASC 606 allows either full retrospective or modified retrospective transition and early adoption is permitted for annual periods beginning after December 15, 2016. We continue to evaluate the impact ASC 606 may have on our financial statements. For each revenue contract type, we are conducting a formal contract review process to evaluate the impact, if any, that ASC 606 may have. We continue to evaluate contracts with a significant financing component, which may exist in situations where the timing of the consideration we receive varies significantly from the timing of when we provide the service, as well as a certain contract with prepayments for services. We are unable to determine the potential impact upon the amount and the timing of our revenue recognition. We continue to develop and evaluate disclosures required under the new standard, with a particular focus on the scope of contracts subject to disclosure of remaining performance obligations. Additionally, we have identified possible financial system and internal control changes necessary for adoption. We currently anticipate utilizing a modified retrospective transition upon the adoption of ASC 606 as of January 1, 2018. |
Contingent Liabilities and Comm
Contingent Liabilities and Commitments (Notes) | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingent Liabilities and Commitments | CONTINGENT LIABILITIES AND COMMITMENTS Rate Matters General rate case (Docket No. RP06-569) On August 31, 2006, we submitted to the Federal Energy Regulatory Commission (FERC) a general rate filing principally designed to recover increased costs. The rates became effective March 1, 2007, subject to refund and the outcome of a hearing. All issues in this proceeding except one have been resolved by settlement. The one issue reserved for litigation or further settlement relates to our proposal to change the design of the rates for service under our WSS-OA storage rate schedule, which was implemented subject to refund on March 1, 2007. Following a hearing, the FERC issued an opinion approving our proposed incremental rate design, and subsequently denied requests for rehearing of that approval. On February 21, 2014, the U. S. Court of Appeals for the D.C. Circuit (D.C. Circuit) issued an opinion that vacated and remanded the FERC's order because the FERC did not adequately support its conclusions. On March 17, 2016, the FERC issued an order addressing the issues raised by the D.C. Circuit's opinion. In the March 17 order, the FERC reversed its prior opinion and found that Transco's incremental rate design is unjust and unreasonable. The FERC directed Transco to design its WSS-OA rates on a rolled-in basis, to file revised WSS-OA rates reflecting the findings in the order, and to refund the amounts collected in excess of those rates since March 1, 2007. On April 18, 2016, we submitted the compliance filing reflecting rolled-in rates for WSS-OA service consistent with the March 17 order, and began charging those rates beginning April 19, 2016. We also filed a request for rehearing of the March 17 order. On October 4, 2017, the FERC issued an order denying all requests for rehearing of the March 17 order, accepting our April 18, 2016 compliance filing, and directing us to make refunds. As of September 30, 2017, we have accrued a liability for refunds of $19.3 million in Payables - Trade and other in the accompanying Condensed Consolidated Balance Sheet. Assuming no further request for rehearing of the order is filed, we expect to issue refunds in the fourth quarter of 2017. Station 62 Incident On October 8, 2015, an explosion and fire occurred at our Compressor Station No. 62 in Gibson, Louisiana. At the time of the incident, planned facility maintenance was being performed at the station and the facility was not operational. The incident was related to maintenance work being performed on the slug catcher at the station. Four contractor employees were killed in the incident and others were injured. In responding to the incident, we cooperated with local, state and federal authorities, including the Louisiana State Police, Terrebonne Parish, the Louisiana Department of Environmental Quality, the U.S. Environmental Protection Agency (Region 6), the Occupational Safety and Health Administration, and the U.S. Department of Transportation's Pipeline and Hazardous Materials Safety Administration (PHMSA). On July 29, 2016, PHMSA issued a Notice of Probable Violation (NOPV), which includes a $1.6 million proposed civil penalty to us in connection with the incident. This penalty was accrued in the second quarter of 2016 and would not be covered by our insurance policies. We filed a response to the NOPV on August 25, 2016, and on July 14, 2017, PHMSA held a hearing on the NOPV. The incident did not cause any rupture of the gas pipeline or any damage to the building containing the compressor engines. In anticipation of the planned maintenance, our Southeast Louisiana Lateral was taken out of service on October 4, 2015, which affected approximately 200 MMcf/d of natural gas production. The lateral was restored to service in early 2016 after repairs were made to the facilities damaged in the incident. We are a defendant in lawsuits seeking damages for wrongful death, personal injury and property damages. We believe it is reasonably possible that losses will be incurred on some lawsuits. However, in management's judgment, the ultimate resolution of these matters will not have a material effect on our financial condition, results of operations or cash flows. While we also have claims for indemnification, we believe that it is probable that any ultimate losses incurred will be covered by our general liability insurance policy. Environmental Matters We have had studies underway for many years to test some of our facilities for the presence of toxic and hazardous substances such as polychlorinated biphenyls (PCBs) and mercury to determine to what extent, if any, remediation may be necessary. We have also similarly evaluated past on-site disposal of hydrocarbons at a number of our facilities. We have worked closely with and responded to data requests from the U.S. Environmental Protection Agency (EPA) and state agencies regarding such potential contamination of certain of our sites. On the basis of the findings to date, we estimate that environmental assessment and remediation costs under various federal and state statutes will total approximately $6 million to $8 million (including both expense and capital expenditures), measured on an undiscounted basis, and will substantially be spent over the next four to six years. This estimate depends on a number of assumptions concerning the scope of remediation that will be required at certain locations and the cost of the remedial measures. We are conducting environmental assessments and implementing a variety of remedial measures that may result in increases or decreases in the total estimated costs. At September 30, 2017 , we had a balance of approximately $3.9 million for the expense portion of these estimated costs, $2.1 million recorded in Accrued liabilities and $1.8 million recorded in Other Long-Term Liabilities - Other in the accompanying Condensed Consolidated Balance Sheet. At December 31, 2016 , we had a balance of approximately $4.2 million for the expense portion of these estimated costs, $2.1 million recorded in Accrued liabilities and $2.1 million recorded in Other Long-Term Liabilities - Other in the accompanying Condensed Consolidated Balance Sheet. We have been identified as a potentially responsible party (PRP) at various Superfund and state waste disposal sites. Based on present volumetric estimates and other factors, our estimated aggregate exposure for remediation of these sites is less than $0.5 million. The estimated remediation costs for all of these sites are included in the $6 million to $8 million range discussed above. Liability under the Comprehensive Environmental Response, Compensation and Liability Act and applicable state law can be joint and several with other PRPs. Although volumetric allocation is a factor in assessing liability, it is not necessarily determinative; thus, the ultimate liability could be substantially greater than the amounts described above. In March 2008, the EPA promulgated a new, lower National Ambient Air Quality Standard (NAAQS) for ground-level ozone. In May 2012, the EPA completed designation of new eight-hour ozone non-attainment areas. Several of our facilities are located in 2008 ozone non-attainment areas. To date, no federal actions have been proposed to mandate additional emission controls at these facilities. Pursuant to recently finalized state regulatory actions associated with implementation of the 2008 ozone standard, we anticipate that some facilities may be subject to increased controls within five years. As a result, the cost of additions to property, plant, and equipment is expected to increase. We are unable at this time to estimate with any certainty the cost of additions that may be required to meet the proposed regulations. In December 2014, the EPA proposed to further reduce the ground-level ozone NAAQS from the March 2008 levels and subsequently finalized a rule on October 1, 2015. We are monitoring the rule's implementation as the reduction will trigger additional federal and state regulatory actions that may impact our operations. As a result, the cost of additions to property, plant and equipment is expected to increase. We are unable at this time to estimate with any certainty the cost of additions that may be required to meet new regulations. In February 2010, the EPA set a new one-hour nitrogen dioxide (NO 2 ) NAAQS. In January 2012, the EPA determined pursuant to available information that no area in the country is violating the 2010 NO 2 NAAQS and thus designated all areas of the country as “unclassifiable/attainment.” However, the EPA or states may require ambient air quality modeling on a case by case basis to demonstrate compliance with the NO 2 standard. Because we are unable to predict the outcome of the EPA’s or states’ assessment of NO 2 compliance, we are unable to estimate the cost of additions that may be required to meet this regulation. We consider prudently incurred environmental assessment and remediation costs and the costs associated with compliance with environmental standards to be recoverable through rates. To date, we have been permitted recovery of environmental costs, and it is our intent to continue seeking recovery of such costs through future rate filings. As a result, as estimated costs of environmental assessment and remediation are incurred, they are recorded as regulatory assets in the Condensed Consolidated Balance Sheet until collected through rates. At September 30, 2017, we had a balance of approximately $1.6 million of uncollected environmental related regulatory assets, $1.2 million recorded in Current Assets - Regulatory assets and $0.4 million recorded in Other Assets - Regulatory assets in the accompanying Condensed Consolidated Balance Sheet. At December 31, 2016, we had a balance of approximately $2.5 million of uncollected environmental related regulatory assets, $1.2 million recorded in Current Assets - Regulatory assets and $1.3 million recorded in Other Assets - Regulatory assets in the accompanying Condensed Consolidated Balance Sheet. 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 Arrangements
Debt and Financing Arrangements (Notes) | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Debt and Financing Arrangements | DEBT AND FINANCING ARRANGEMENTS Credit Facility We along with WPZ and Northwest Pipeline LLC, are party to a credit agreement with aggregate commitments available of $3.5 billion, with up to an additional $500 million increase in aggregate commitments available under certain circumstances. Total letter of credit capacity available to WPZ under this credit facility is $1.125 billion. We are able to borrow up to $500 million under this credit facility to the extent not otherwise utilized by the other co-borrowers. At September 30, 2017, no letters of credit have been issued and no loans were outstanding under the credit facility. WPZ participates in a commercial paper program, and WPZ 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 any time of $3 billion of unsecured commercial paper notes. At September 30, 2017 , no commercial paper was outstanding under the commercial paper program. Other Financing Obligation During the construction of our Dalton Expansion Project, we received funding from a partner for its proportionate share of construction costs related to its undivided ownership interest in the Dalton lateral. Amounts received were recorded in Advances for construction costs on our Condensed Consolidated Balance Sheet. Upon placing the project in service during the third quarter of 2017, we began leasing this partner's undivided interest in the lateral, including the associated pipeline capacity, and reclassified approximately $235.8 million of funding previously received from our partner from Advances for construction costs to Long-Term Debt on our Condensed Consolidated Balance Sheet to reflect the financing obligation payable to our partner over an expected term of 35 years. As this transaction did not meet the criteria for sale leaseback accounting due to our continued involvement, it was accounted for as a financing arrangement over the course of the capacity agreement. The obligation matures in July 2052, requires monthly interest and principal payments, and bears an interest rate of approximately 10 percent. Long-Term Debt Due Within One Year The long-term debt due within one year at September 30, 2017 is associated with the $250 million of 6.05 percent notes maturing on June 15, 2018 and $1.5 million associated with the previously described other financing obligation. |
ARO Trust (Notes)
ARO Trust (Notes) | 9 Months Ended |
Sep. 30, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
ARO Trust | ARO TRUST Available-for-Sale Investments We are entitled to collect in rates the amounts necessary to fund our asset retirement obligations (ARO). We deposit monthly, into an external trust account (ARO Trust), the revenues specifically designated for ARO. The ARO Trust carries a moderate risk portfolio. We measure the financial instruments held in our ARO Trust at fair value. However, in accordance with the ASC Topic 980, Regulated Operations, both realized and unrealized gains and losses of the ARO Trust are recorded as regulatory assets or liabilities. Effective March 1, 2013, the annual funding obligation is approximately $36.4 million, with deposits made monthly. Investments in available-for-sale securities within the ARO Trust at fair value were as follows (in millions): September 30, 2017 December 31, 2016 Amortized Cost Basis Fair Value Amortized Cost Basis Fair Value Cash and Money Market Funds $ 8.5 $ 8.5 $ 5.0 $ 5.0 U.S. Equity Funds 35.9 47.7 29.4 36.5 International Equity Funds 20.7 23.7 19.2 18.6 Municipal Bond Funds 46.8 47.1 36.7 36.3 Total $ 111.9 $ 127.0 $ 90.3 $ 96.4 |
Fair Value Measurements (Notes)
Fair Value Measurements (Notes) | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | FAIR VALUE MEASUREMENTS The following table presents, by level within the fair value hierarchy, certain of our financial assets and liabilities. The carrying values of cash, short-term financial assets (advances to affiliate) that have variable interest rates, accounts receivable and accounts payable approximate fair value because of the short-term nature of these instruments. Therefore, these assets and liabilities are not presented in the following table. Fair Value Measurements Using Carrying Amount Fair Value Quoted Prices In Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) (Millions) Assets (liabilities) at September 30, 2017: Measured on a recurring basis: ARO Trust investments $ 127.0 $ 127.0 $ 127.0 $ — $ — Additional disclosures: Long-term debt, including current portion (2,449.0 ) (3,051.1 ) — (3,051.1 ) — Assets (liabilities) at December 31, 2016: Measured on a recurring basis: ARO Trust investments $ 96.4 $ 96.4 $ 96.4 $ — $ — Additional disclosures: Long-term debt (2,210.8 ) (2,507.5 ) — (2,507.5 ) — Fair Value of Methods 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: ARO Trust investments — We deposit a portion of our collected rates, pursuant to the terms of the Docket No. RP12-993 rate case settlement, into the ARO Trust which is specifically designated to fund future asset retirement obligations. The ARO Trust invests in a portfolio of actively traded mutual funds that are measured at fair value on a recurring basis based on quoted prices in an active market, are classified as available-for-sale and are reported in Other Assets-Other in the Condensed Consolidated Balance Sheet. However, both realized and unrealized gains and losses are ultimately recorded as regulatory assets or liabilities. See Note 4 for more information regarding the ARO Trust. Long-term debt — The disclosed fair value of our long-term debt is determined primarily 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 fair value of the financing obligation associated with our Dalton lateral, which is included within long-term debt, was determined using an income approach (See Note 3 - Debt and Financing Arrangements). Reclassifications of fair value between Level 1, Level 2, and Level 3 of the fair value hierarchy, if applicable, are made at the end of each quarter. No transfers between Level 1 and Level 2 occurred during the nine months ended September 30, 2017 or 2016 . |
Transactions with Affiliates (N
Transactions with Affiliates (Notes) | 9 Months Ended |
Sep. 30, 2017 | |
Related Party Transactions [Abstract] | |
Transactions with Affiliates | TRANSACTIONS WITH AFFILIATES We are a participant in WPZ’s cash management program, and we make advances to and receive advances from WPZ. At September 30, 2017 and December 31, 2016 , our advances to WPZ totaled approximately $299.1 million and $811.7 million , respectively. These advances are represented by demand notes and are classified as Receivables - Advances to affiliate in the accompanying Condensed Consolidated Balance Sheet. Advances are stated at the historical carrying amounts. Interest income is recognized when chargeable and collectability is reasonably assured. The interest rate on these intercompany demand notes is based upon the daily overnight investment rate paid on WPZ’s excess cash at the end of each month. At September 30, 2017 , the interest rate was 0.91 percent. Included in Operating Revenues in the accompanying Condensed Consolidated Statement of Comprehensive Income are revenues received from affiliates of $2.5 million and $8.9 million for the three and nine months ended September 30, 2017 , respectively, and $4.8 million and $8.9 million for the three and nine months ended September 30, 2016, respectively. The rates charged to provide sales and services to affiliates are the same as those that are charged to similarly-situated nonaffiliated customers. Included in Cost of natural gas sales in the accompanying Condensed Consolidated Statement of Comprehensive Income are cost of gas purchased from affiliates of $1.0 million and $2.9 million for the three and nine months ended September 30, 2017 , respectively, and $1.8 million and $3.3 million for the three and nine months ended September 30, 2016, respectively. All gas purchases are made at market or contract prices. 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 $91.4 million and $261.1 million in the three and nine months ended September 30, 2017 , respectively and $78.4 million and $234.7 million in the three and nine months ended September 30, 2016, respectively, for these services. Such expenses are primarily included in Operation and maintenance and Administrative and general expenses in the accompanying Condensed Consolidated Statement of Comprehensive Income. The amount billed to us for the nine months ended September 30, 2016, includes $6.3 million recognized in the first quarter for severance and other related costs associated with a reduction in workforce. We provide services to certain of our affiliates. We recorded reductions in operating expenses for services provided to and reimbursed by our affiliates of $0.9 million and $2.7 million for the three and nine months ended September 30, 2017, respectively, and $1.0 million and $3.4 million for the three and nine months ended September 30, 2016, respectively. We made equity distributions totaling $330.0 million and $350.0 million during the nine months ended September 30, 2017 and 2016 , respectively. During October 2017, we made an additional distribution of $100.0 million. Our parent made contributions to us totaling $110.0 million and $372.0 million in the nine months ended September 30, 2017 and 2016 , respectively, to fund a portion of our expenditures for additions to property, plant and equipment. During July 2017, we recorded deferred revenue and recognized a non-cash distribution to our parent of $240 million associated with funds received by WPZ related to the March 2016 WPZ agreement with the member-sponsors of Sabal Trail regarding the Hillabee Expansion and Sabal Trail projects. Although the agreement was between WPZ and the member-sponsors, since the agreement was, in part, related to furthering the completion of Hillabee, this deferred revenue is assigned to our results of operations over the 25-year term of the capacity agreement with Sabal Trail. |
Other (Notes)
Other (Notes) | 9 Months Ended |
Sep. 30, 2017 | |
Other Income and Expenses [Abstract] | |
Other | OTHER For the nine months ended September 30, 2017 and 2016, we capitalized $0.2 million and $1.4 million, respectively, of project feasibility costs, which had been expensed in prior periods in Other expense, net , upon determining that the project was probable of development. The Advances for construction costs on the accompanying Condensed Consolidated Balance Sheet are associated with advances received from third parties related to construction costs on the Atlantic Sunrise and Dalton projects. This balance increases as we receive additional advances. After construction of the respective projects are completed, the related liabilities will be reclassified to Long-Term Debt and reduced by payments we make to the third parties under terms of the applicable lease agreements. In the third quarter 2017, the advances received from a third party related to construction costs on the Dalton lateral was reclassified to Long-Term Debt on our Condensed Consolidated Balance Sheet. |
ARO Trust (Tables)
ARO Trust (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
ARO Trust | Investments in available-for-sale securities within the ARO Trust at fair value were as follows (in millions): September 30, 2017 December 31, 2016 Amortized Cost Basis Fair Value Amortized Cost Basis Fair Value Cash and Money Market Funds $ 8.5 $ 8.5 $ 5.0 $ 5.0 U.S. Equity Funds 35.9 47.7 29.4 36.5 International Equity Funds 20.7 23.7 19.2 18.6 Municipal Bond Funds 46.8 47.1 36.7 36.3 Total $ 111.9 $ 127.0 $ 90.3 $ 96.4 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | The following table presents, by level within the fair value hierarchy, certain of our financial assets and liabilities. The carrying values of cash, short-term financial assets (advances to affiliate) that have variable interest rates, accounts receivable and accounts payable approximate fair value because of the short-term nature of these instruments. Therefore, these assets and liabilities are not presented in the following table. Fair Value Measurements Using Carrying Amount Fair Value Quoted Prices In Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) (Millions) Assets (liabilities) at September 30, 2017: Measured on a recurring basis: ARO Trust investments $ 127.0 $ 127.0 $ 127.0 $ — $ — Additional disclosures: Long-term debt, including current portion (2,449.0 ) (3,051.1 ) — (3,051.1 ) — Assets (liabilities) at December 31, 2016: Measured on a recurring basis: ARO Trust investments $ 96.4 $ 96.4 $ 96.4 $ — $ — Additional disclosures: Long-term debt (2,210.8 ) (2,507.5 ) — (2,507.5 ) — |
Basis of Presentation (Details)
Basis of Presentation (Details) - USD ($) $ in Thousands | 1 Months Ended | 9 Months Ended | ||
Jan. 31, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | ||||
Parent, limited partner ownership percentage | 74.00% | |||
Schedule of Equity Method Investments [Line Items] | ||||
Equity method investment, distributions | $ 6,300 | $ 6,500 | ||
Equity method investment, return of capital | $ 2,729 | $ 2,106 | ||
Financial Repositioning [Member] | ||||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | ||||
Parent, general partner ownership percentage | 2.00% | |||
Cardinal Pipeline Company, LLC [Member] | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Equity method investment, ownership percentage | 45.00% | 45.00% | ||
Pine Needle LNG Company, LLC [Member] | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Equity method investment, ownership percentage | 35.00% | 35.00% |
Contingent Liabilities and Co16
Contingent Liabilities and Commitments (Details) - USD ($) $ in Thousands | 1 Months Ended | 9 Months Ended | |
Jul. 31, 2017 | Sep. 30, 2017 | Dec. 31, 2016 | |
Site Contingency [Line Items] | |||
Trade and other | $ 305,949 | $ 251,872 | |
Regulatory assets, current | 90,367 | 87,059 | |
Regulatory assets, noncurrent | 269,000 | 264,001 | |
Duration Of Period For Deferred Revenue Recognition | 25 years | ||
Environmental assessment and remediation [Member] | |||
Site Contingency [Line Items] | |||
Accrued environmental assessment and remediation costs, total | 3,900 | 4,200 | |
Accrued environmental assessment and remediation costs, current | 2,100 | 2,100 | |
Accrued environmental assessment and remediation costs, noncurrent | 1,800 | 2,100 | |
Regulatory assets, total | 1,600 | 2,500 | |
Regulatory assets, current | 1,200 | 1,200 | |
Regulatory assets, noncurrent | 400 | 1,300 | |
Environmental assessment and remediation [Member] | Minimum [Member] | |||
Site Contingency [Line Items] | |||
Environmental assessment and remediation costs, best estimate | $ 6,000 | ||
Expected duration of environmental assessment and remediation spending | 4 years | ||
Environmental assessment and remediation [Member] | Maximum [Member] | |||
Site Contingency [Line Items] | |||
Environmental assessment and remediation costs, best estimate | $ 8,000 | ||
Expected duration of environmental assessment and remediation spending | 6 years | ||
Potentially responsible party at various Superfund and state waste disposal sites [Member] | Maximum [Member] | |||
Site Contingency [Line Items] | |||
Environmental assessment and remediation costs, best estimate | $ 500 | ||
Potential refund obligation | |||
Site Contingency [Line Items] | |||
Trade and other | $ 19,300 | ||
Accrued Liabilities | |||
Site Contingency [Line Items] | |||
Notice of Penalty | $ 1,600 |
Debt and Financing Arrangemen17
Debt and Financing Arrangements (Details) $ in Millions | Sep. 30, 2017USD ($) |
Williams Partners L.P. [Member] | |
Line of Credit Facility [Line Items] | |
Line of Credit Facility, Maximum Borrowing Capacity | $ 3,500 |
Commercial paper, outstanding | 0 |
$3.5 billion credit facility [Member] | |
Line of Credit Facility [Line Items] | |
Letters of credit outstanding, amount | 0 |
Additional Amount By Which Credit Facility Can Be Increased | 500 |
Line of credit facility, amount outstanding | 0 |
$3.5 billion credit facility [Member] | Williams Partners L.P. [Member] | Commercial paper [Member] | |
Line of Credit Facility [Line Items] | |
Line of Credit Facility, Maximum Borrowing Capacity | 3,000 |
$3.5 billion credit facility [Member] | Williams Partners L.P. [Member] | Letter of credit [Member] | |
Line of Credit Facility [Line Items] | |
Line of Credit Facility, Maximum Borrowing Capacity | $ 1,125 |
Debt and Financing Arrangemen18
Debt and Financing Arrangements Long-Term Debt Instruments (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | ||
Long-term debt due within one year | $ 251,320 | $ 0 |
6.05% due 2018 [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt due within one year | $ 250,000 | |
Long-term debt, Interest Rate | 6.05% | |
Dalton Expansion Project [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt due within one year | $ 1,500 | |
10% due 2052 [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt, Interest Rate | 10.00% | |
Other Financing Obligations | $ 235,800 |
ARO Trust (Details)
ARO Trust (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Investments, Debt and Equity Securities [Abstract] | ||
Annual funding obligation | $ 36.4 | |
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities, amortized cost basis | 111.9 | $ 90.3 |
Available-for-sale securities, fair value | 127 | 96.4 |
Cash and Money Market Funds [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities, amortized cost basis | 8.5 | 5 |
Available-for-sale securities, fair value | 8.5 | 5 |
U.S. Equity Funds [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities, amortized cost basis | 35.9 | 29.4 |
Available-for-sale securities, fair value | 47.7 | 36.5 |
International Equity Funds [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities, amortized cost basis | 20.7 | 19.2 |
Available-for-sale securities, fair value | 23.7 | 18.6 |
Municipal Bond Funds [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities, amortized cost basis | 46.8 | 36.7 |
Available-for-sale securities, fair value | $ 47.1 | $ 36.3 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 | Sep. 30, 2016 |
Fair Value, Assets, Liabilities and Stockholders' Equity Measured on Recurring Basis [Abstract] | |||
ARO Trust investments | $ 127,000,000 | $ 96,400,000 | |
Fair Value, Transfers Between Level 1 and Level 2, Description and Policy [Abstract] | |||
Fair Value, Assets, Level 1 to Level 2 Transfers, Amount | 0 | $ 0 | |
Fair Value, Assets, Level 2 to Level 1 Transfers, Amount | 0 | 0 | |
Fair Value, Liabilities, Level 1 to Level 2 Transfers, Amount | 0 | 0 | |
Fair Value, Liabilities, Level 2 to Level 1 Transfers, Amount | 0 | $ 0 | |
Fair Value, Inputs, Level 1 [Member] | |||
Additional Fair Value Elements [Abstract] | |||
Long-term debt, including current portion | 0 | 0 | |
Fair Value, Inputs, Level 2 [Member] | |||
Additional Fair Value Elements [Abstract] | |||
Long-term debt, including current portion | (3,051,100,000) | (2,507,500,000) | |
Fair Value, Inputs, Level 3 [Member] | |||
Additional Fair Value Elements [Abstract] | |||
Long-term debt, including current portion | 0 | 0 | |
Reported Value Measurement [Member] | |||
Additional Fair Value Elements [Abstract] | |||
Long-term debt, including current portion | (2,449,000,000) | (2,210,800,000) | |
Estimate of Fair Value Measurement [Member] | |||
Additional Fair Value Elements [Abstract] | |||
Long-term debt, including current portion | (3,051,100,000) | (2,507,500,000) | |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | |||
Fair Value, Assets, Liabilities and Stockholders' Equity Measured on Recurring Basis [Abstract] | |||
ARO Trust investments | 127,000,000 | 96,400,000 | |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | |||
Fair Value, Assets, Liabilities and Stockholders' Equity Measured on Recurring Basis [Abstract] | |||
ARO Trust investments | 0 | 0 | |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | |||
Fair Value, Assets, Liabilities and Stockholders' Equity Measured on Recurring Basis [Abstract] | |||
ARO Trust investments | 0 | 0 | |
Fair Value, Measurements, Recurring [Member] | Reported Value Measurement [Member] | |||
Fair Value, Assets, Liabilities and Stockholders' Equity Measured on Recurring Basis [Abstract] | |||
ARO Trust investments | 127,000,000 | 96,400,000 | |
Fair Value, Measurements, Recurring [Member] | Estimate of Fair Value Measurement [Member] | |||
Fair Value, Assets, Liabilities and Stockholders' Equity Measured on Recurring Basis [Abstract] | |||
ARO Trust investments | $ 127,000,000 | $ 96,400,000 |
Transactions with Affiliates (D
Transactions with Affiliates (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||
Oct. 31, 2017USD ($) | Jul. 31, 2017USD ($) | Sep. 30, 2017USD ($)employee | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($)employee | Sep. 30, 2016USD ($) | Dec. 31, 2016USD ($) | |
Related Party Transaction [Line Items] | |||||||
Advances to affiliate | $ 299,059 | $ 299,059 | $ 811,693 | ||||
Related party transaction, rate | 0.91% | ||||||
Entity number of employees | employee | 0 | 0 | |||||
Expenses, related party | $ 91,400 | $ 78,400 | $ 261,100 | $ 234,700 | |||
Severance Costs | 6,300 | ||||||
Cash distributions to parent | 330,000 | 350,000 | |||||
Cash contributions from parent | 110,000 | 372,000 | |||||
Noncash distribution to Parent | $ 240,000 | ||||||
Duration Of Period For Deferred Revenue Recognition | 25 years | ||||||
Affiliated Entity [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Operating revenues, related party | 2,500 | 4,800 | 8,900 | 8,900 | |||
Cost of natural gas sales, related party | 1,000 | 1,800 | 2,900 | 3,300 | |||
Expenses, related party | (900) | $ (1,000) | (2,700) | $ (3,400) | |||
Williams Partners L.P. [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Advances to affiliate | $ 299,100 | $ 299,100 | $ 811,700 | ||||
Subsequent Event [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Cash distributions to parent | $ 100,000 |
Other (Details)
Other (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Other Income and Expenses [Abstract] | ||
Capitalization of project feasibility costs previously expensed | $ 0.2 | $ 1.4 |