þ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
DELAWARE | 26-1157701 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
295 Chipeta Way Salt Lake City, Utah | 84108 | |
(Address of principal executive offices) | (Zip Code) |
Large accelerated filer | ¨ | Accelerated filer | ¨ | |||
Non-accelerated filer | þ (Do not check if a smaller reporting company) | Smaller reporting company | ¨ |
Page | |
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations | |
• | The status, expected timing and expected outcome of the proposed ETC Merger; |
• | Events which may occur subsequent to the proposed ETC Merger including events which directly impact our business; |
• | Amounts and nature of future capital expenditures; |
• | Expansion and growth of our business and operations; |
• | Financial condition and liquidity; |
• | Business strategy; |
• | Cash flow from operations or results of operations; |
• | Rate case filings; |
• | Natural gas prices, supply, and demand; and |
• | Demand for our services. |
• | The timing and likelihood of completion of the proposed ETC Merger, including the satisfaction of conditions to the completion of the proposed ETC Merger; |
• | Energy Transfer's plans for us, following the completion of the prosed ETC Merger; |
• | Disruption from the proposed ETC Merger making it more difficult to maintain business and operational relationships; |
• | Availability of supplies, market demand, and volatility of prices; |
• | Inflation, interest rates, and general economic conditions (including future disruptions and volatility in the global credit markets and the impact of these events on our customers and suppliers); |
• | The strength and financial resources of our competitors and the effects of competition; |
• | Whether we are able to successfully identify, evaluate, and execute investment opportunities; |
• | Development of alternative energy sources; |
• | The impact of operational and development hazards and unforeseen interruptions; |
• | Costs of, changes in, or the results of laws, government regulations (including safety and environmental regulations), environmental liabilities, litigation, and rate proceedings; |
• | Our allocated costs for defined benefit pension plans and other postretirement benefit plans sponsored by our affiliates; |
• | Changes in maintenance and construction costs; |
• | Changes in the current geopolitical situation; |
• | Our exposure to the credit risks of our customers and counterparties; |
• | Risks related to financing, including restrictions stemming from our debt agreements, future changes in our credit ratings, and the availability and cost of capital; |
• | Risks associated with weather and natural phenomena, including climate conditions; |
• | Acts of terrorism, including cybersecurity threats and related disruptions; and |
• | Additional risks described in our filings with the Securities and Exchange Commission (SEC). |
Three months ended March 31, | ||||||||
2016 | 2015 | |||||||
OPERATING REVENUES | $ | 120,448 | $ | 119,264 | ||||
OPERATING EXPENSES: | ||||||||
General and administrative | 13,827 | 14,923 | ||||||
Operation and maintenance | 17,252 | 17,149 | ||||||
Depreciation | 25,315 | 25,081 | ||||||
Regulatory debits | 849 | 598 | ||||||
Taxes, other than income taxes | 4,352 | 4,361 | ||||||
Total operating expenses | 61,595 | 62,112 | ||||||
OPERATING INCOME | 58,853 | 57,152 | ||||||
OTHER (INCOME) AND OTHER EXPENSES: | ||||||||
Interest expense | 11,477 | 11,508 | ||||||
Allowance for equity and borrowed funds used during construction | (383 | ) | (139 | ) | ||||
Miscellaneous other (income) expenses, net | 638 | (625 | ) | |||||
Total other (income) and other expenses | 11,732 | 10,744 | ||||||
NET INCOME | 47,121 | 46,408 | ||||||
CASH FLOW HEDGES: | ||||||||
Amortization of cash flow hedges into Interest expense | (15 | ) | (15 | ) | ||||
COMPREHENSIVE INCOME | $ | 47,106 | $ | 46,393 |
March 31, 2016 | December 31, 2015 | |||||||
ASSETS | ||||||||
CURRENT ASSETS: | ||||||||
Cash | $ | 128 | $ | 169 | ||||
Receivables: | ||||||||
Trade | 41,317 | 42,669 | ||||||
Affiliated companies | 1,702 | 1,441 | ||||||
Advances to affiliate | 198,021 | 171,867 | ||||||
Other | 9,441 | 14,051 | ||||||
Materials and supplies | 10,209 | 10,183 | ||||||
Exchange gas due from others | 1,481 | 3,733 | ||||||
Exchange gas offset | — | 201 | ||||||
Prepayments and other | 4,669 | 6,164 | ||||||
Total current assets | 266,968 | 250,478 | ||||||
PROPERTY, PLANT AND EQUIPMENT, at cost | 3,315,570 | 3,306,205 | ||||||
Less-Accumulated depreciation | 1,392,203 | 1,367,632 | ||||||
Total property, plant and equipment, net | 1,923,367 | 1,938,573 | ||||||
OTHER ASSETS: | ||||||||
Deferred charges | 1,947 | 2,110 | ||||||
Regulatory assets | 39,047 | 40,853 | ||||||
Total other assets | 40,994 | 42,963 | ||||||
Total assets | $ | 2,231,329 | $ | 2,232,014 |
March 31, 2016 | December 31, 2015 | |||||||
LIABILITIES AND OWNER’S EQUITY | ||||||||
CURRENT LIABILITIES: | ||||||||
Payables: | ||||||||
Trade | $ | 11,164 | $ | 14,363 | ||||
Affiliated companies | 10,651 | 11,959 | ||||||
Accrued liabilities: | ||||||||
Taxes, other than income taxes | 14,458 | 11,033 | ||||||
Interest | 15,155 | 4,045 | ||||||
Exchange gas due to others | 938 | 2,252 | ||||||
Exchange gas offset | 635 | — | ||||||
Customer advances | 3,529 | 5,573 | ||||||
Other | 3,071 | 3,417 | ||||||
Long-term debt due within one year | 174,926 | 174,837 | ||||||
Total current liabilities | 234,527 | 227,479 | ||||||
LONG-TERM DEBT | 518,727 | 518,583 | ||||||
OTHER NONCURRENT LIABILITIES: | ||||||||
Asset retirement obligations | 83,730 | 82,454 | ||||||
Regulatory liabilities | 27,737 | 26,802 | ||||||
Other | 5,914 | 6,108 | ||||||
Total other noncurrent liabilities | 117,381 | 115,364 | ||||||
CONTINGENT LIABILITIES AND COMMITMENTS (Note 2) | ||||||||
OWNER’S EQUITY: | ||||||||
Owner’s capital | 1,073,892 | 1,073,892 | ||||||
Retained earnings | 286,789 | 296,668 | ||||||
Accumulated other comprehensive income | 13 | 28 | ||||||
Total owner’s equity | 1,360,694 | 1,370,588 | ||||||
Total liabilities and owner’s equity | $ | 2,231,329 | $ | 2,232,014 |
Three months ended March 31, | ||||||||
2016 | 2015 | |||||||
OPERATING ACTIVITIES: | ||||||||
Net income | $ | 47,121 | $ | 46,408 | ||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||||||||
Depreciation | 25,315 | 25,081 | ||||||
Regulatory debits | 849 | 598 | ||||||
Amortization of deferred charges and credits | (165 | ) | 336 | |||||
Allowance for equity funds used during construction | (262 | ) | (95 | ) | ||||
Changes in current assets and liabilities: | ||||||||
Trade and other accounts receivable | 1,061 | 1,975 | ||||||
Affiliated receivables | (261 | ) | 662 | |||||
Exchange gas due from others | 771 | 1,786 | ||||||
Materials and supplies | (26 | ) | (60 | ) | ||||
Other current assets | 1,495 | (201 | ) | |||||
Trade accounts payable | (2,062 | ) | (1,693 | ) | ||||
Affiliated payables | (1,308 | ) | (2,937 | ) | ||||
Exchange gas due to others | (771 | ) | (1,772 | ) | ||||
Other accrued liabilities | 12,285 | 14,269 | ||||||
Changes in noncurrent assets and liabilities: | ||||||||
Deferred charges | (1,341 | ) | (495 | ) | ||||
Noncurrent liabilities | 2,650 | 2,883 | ||||||
Net cash provided by operating activities | 85,351 | 86,745 | ||||||
FINANCING ACTIVITIES: | ||||||||
Cash distributions to parent | (57,000 | ) | (58,000 | ) | ||||
Other | — | (1,097 | ) | |||||
Net cash used in financing activities | (57,000 | ) | (59,097 | ) | ||||
INVESTING ACTIVITIES: | ||||||||
Property, plant and equipment: | ||||||||
Capital expenditures, net of equity AFUDC* | (12,327 | ) | (10,360 | ) | ||||
Contributions and advances for construction costs | 379 | 751 | ||||||
Disposal of property, plant and equipment, net | (66 | ) | (548 | ) | ||||
Advances to affiliates, net | (26,154 | ) | (17,066 | ) | ||||
Proceeds from insurance | 9,776 | — | ||||||
Net cash used in investing activities | (28,392 | ) | (27,223 | ) | ||||
NET INCREASE (DECREASE) IN CASH | (41 | ) | 425 | |||||
CASH AT BEGINNING OF PERIOD | 169 | 154 | ||||||
CASH AT END OF PERIOD | $ | 128 | $ | 579 | ||||
____________________________________ | ||||||||
* Increases to property, plant and equipment | $ | (5,759 | ) | $ | (11,045 | ) | ||
Changes in related accounts receivable, accounts payable, and accrued liabilities | (6,568 | ) | 685 | |||||
Capital expenditures, net of equity AFUDC | $ | (12,327 | ) | $ | (10,360 | ) |
Exhibit | Description | |
2 | Certificate of Conversion of Northwest Pipeline GP (Exhibit 2.1 to our report on Form 8-K, filed July 3, 2013 (File No. 001-07414)) and incorporated herein by reference. | |
3.1 | Certificate of Formation of Northwest Pipeline LLC (Exhibit 2.2 to our report on Form 8-K, filed July 3, 2013 (File No. 001-07414)) and incorporated herein by reference. | |
3.2 | Operating Agreement of Northwest Pipeline LLC (Exhibit 3.1 to our report on Form 8-K, filed July 3, 2013 (File No. 001-07414)) and incorporated herein by reference. | |
31.1* | Certification of Principal Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) promulgated under the Securities Exchange Act of 1934, as amended and Item 601(b)(31) of Regulation S-K, as adopted pursuant to Section 302 of The Sarbanes-Oxley Act of 2002. | |
31.2* | Certification of Principal Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) promulgated under the Securities Exchange Act of 1934, as amended, and Item 601(b)(31) of Regulation S-K, as adopted pursuant to Section 302 of The Sarbanes-Oxley Act of 2002. | |
32** | Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
101.INS* | XBRL Instance Document. | |
101.SCH* | XBRL Taxonomy Extension Schema. | |
101.CAL* | XBRL Taxonomy Extension Calculation Linkbase. | |
101.DEF* | XBRL Taxonomy Definition Linkbase. | |
101.LAB* | XBRL Taxonomy Extension Label Linkbase. | |
101.PRE* | XBRL Taxonomy Extension Presentation Linkbase. |
* | Filed herewith. |
** | Furnished herewith. |
NORTHWEST PIPELINE LLC | |||
Registrant | |||
By: | /s/ Jeffrey P. Heinrichs | ||
Jeffrey P. Heinrichs Controller (Duly Authorized Officer and Principal Accounting Officer) |
Exhibit | Description | |
2 | Certificate of Conversion of Northwest Pipeline GP (Exhibit 2.1 to our report on Form 8-K, filed July 3, 2013 (File No. 001-07414)) and incorporated herein by reference. | |
3.1 | Certificate of Formation of Northwest Pipeline LLC (Exhibit 2.2 to our report on Form 8-K, filed July 3, 2013 (File No. 001-07414)) and incorporated herein by reference. | |
3.2 | Operating Agreement of Northwest Pipeline LLC (Exhibit 3.1 to our report on Form 8-K, filed July 3, 2013 (File No. 001-07414)) and incorporated herein by reference. | |
31.1* | Certification of Principal Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) promulgated under the Securities Exchange Act of 1934, as amended and Item 601(b)(31) of Regulation S-K, as adopted pursuant to Section 302 of The Sarbanes-Oxley Act of 2002. | |
31.2* | Certification of Principal Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) promulgated under the Securities Exchange Act of 1934, as amended, and Item 601(b)(31) of Regulation S-K, as adopted pursuant to Section 302 of The Sarbanes-Oxley Act of 2002. | |
32** | Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
101.INS* | XBRL Instance Document. | |
101.SCH* | XBRL Taxonomy Extension Schema. | |
101.CAL* | XBRL Taxonomy Extension Calculation Linkbase. | |
101.DEF* | XBRL Taxonomy Definition Linkbase. | |
101.LAB* | XBRL Taxonomy Extension Label Linkbase. | |
101.PRE* | XBRL Taxonomy Extension Presentation Linkbase. |
* | Filed herewith. |
** | Furnished herewith. |
1. | I have reviewed this quarterly report on Form 10-Q of Northwest Pipeline LLC; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
By: | /s/ Walter J. Bennett |
Walter J. Bennett | |
Sr. Vice President—West | |
(Principal Executive Officer) |
1. | I have reviewed this quarterly report on Form 10-Q of Northwest Pipeline LLC; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
By: | /s/ Ted T. Timmermans |
Ted T. Timmermans | |
Vice President and Chief Accounting Officer | |
(Principal Financial Officer) |
(1) | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Walter J. Bennett |
Walter J. Bennett |
Senior Vice President—West |
May 5, 2016 |
/s/ Ted T. Timmermans |
Ted T. Timmermans |
Vice President and Chief Accounting Officer |
May 5, 2016 |
Document and Entity Information - shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
May. 05, 2016 |
|
Entity Information [Line Items] | ||
Entity registrant name | Northwest Pipeline LLC | |
Entity central index key | 0000110019 | |
Document type | 10-Q | |
Document period end date | Mar. 31, 2016 | |
Amendment flag | false | |
Document fiscal year focus | 2016 | |
Document fiscal period focus | Q1 | |
Current fiscal year end date | --12-31 | |
Entity filer category | Non-accelerated Filer | |
Entity common stock, shares outstanding | 0 |
Statement of Comprehensive Income (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
OPERATING REVENUES | $ 120,448 | $ 119,264 |
OPERATING EXPENSES: | ||
General and administrative | 13,827 | 14,923 |
Operation and maintenance | 17,252 | 17,149 |
Depreciation | 25,315 | 25,081 |
Regulatory debits | 849 | 598 |
Taxes, other than income taxes | 4,352 | 4,361 |
Total operating expenses | 61,595 | 62,112 |
OPERATING INCOME | 58,853 | 57,152 |
OTHER (INCOME) AND OTHER EXPENSES: | ||
Interest expense | 11,477 | 11,508 |
Allowance for equity and borrowed funds used during construction | (383) | (139) |
Miscellaneous other (income) expenses, net | 638 | (625) |
Total other (income) and other expenses | 11,732 | 10,744 |
NET INCOME | 47,121 | 46,408 |
CASH FLOW HEDGES: | ||
Amortization of cash flow hedges into Interest expense | (15) | (15) |
COMPREHENSIVE INCOME | $ 47,106 | $ 46,393 |
Basis of Presentation (Notes) |
3 Months Ended |
---|---|
Mar. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | BASIS OF PRESENTATION Northwest Pipeline LLC (Northwest) is indirectly owned by Williams Partners L.P. (WPZ), a publicly traded Delaware limited partnership, which is consolidated by The Williams Companies, Inc. (Williams). On February 2, 2015, WPZ was merged into Access Midstream Partners, L.P. (ACMP), another publicly traded limited partnership consolidated by Williams. ACMP was the surviving partnership and was subsequently renamed WPZ. At March 31, 2016, Williams holds an approximate 60 percent interest in WPZ, comprised of an approximate 58 percent limited partner interest and all of the 2 percent general partner interest. On September 28, 2015, Williams publicly announced in a press release that it had entered into an Agreement and Plan of Merger (Merger Agreement) with Energy Transfer Equity, L.P. (Energy Transfer) and certain of its affiliates. The Merger Agreement provides that, subject to the satisfaction of customary closing conditions, Williams will be merged with and into the newly formed Energy Transfer Corp LP (ETC) (ETC Merger) with ETC surviving the ETC Merger. Energy Transfer formed ETC as a limited partnership that will be treated as a corporation for U.S. federal income tax purposes. Immediately following the completion of the ETC Merger, ETC will contribute to Energy Transfer all of the assets and liabilities of Williams in exchange for the issuance by Energy Transfer to ETC of a number of Energy Transfer Class E common units equal to the number of ETC common shares issued to Williams stockholders in the ETC Merger. WPZ expects to retain its current name and remain a publicly traded limited partnership following the ETC Merger. In this report, Northwest is at times referred to in the first person as “we,” “us,” or “our.” General The accompanying interim financial statements do not include all the notes in our annual financial statements, and therefore, should be read in conjunction with the financial statements and notes thereto in our 2015 Annual Report on Form 10-K. The accompanying unaudited financial statements include all adjustments both normal recurring and others which, in the opinion of our management, are necessary to present fairly our interim financial statements. The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Accounting Standards Issued But Not Yet 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. The new standard 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. The new standard is effective for interim and annual periods beginning after December 15, 2018. Early adoption is permitted. The new standard 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 evaluating the impact of the new standards on our financial statements. In May 2014, the FASB issued ASU 2014-09 establishing Accounting Standards Codification 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 April 2016, the FASB issued ASU 2016-10 "Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing" (ASU 2016-10) to clarify aspects of Topic 606 related to identifying performance obligations and licensing implementation guidance. 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 both the impact of this new standard on our financial statements and the transition method we will utilize for adoption. |
Contingent Liabilities and Commitments (Notes) |
3 Months Ended |
---|---|
Mar. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingent Liabilities and Commitments | 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 Federal Energy Regulatory Commission (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 March 31, 2016, all of the meter stations have been remediated. Initial assessments have been completed at all thirteen compressor stations in Washington. Additional assessments are ongoing at three of these compressor stations. Remediation has been completed at nine of the thirteen compressor stations. On the basis of the findings to date, we estimate that environmental assessment and remediation costs will total approximately $4.1 million, measured on an undiscounted basis, and are expected to be incurred through 2019. At March 31, 2016 and December 31, 2015, we had accrued liabilities totaling approximately $4.1 million and $4.6 million, respectively, for these costs. We are conducting environmental assessments and implementing a variety of remedial measures that may result in increases or decreases in the total estimated costs. 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. Based on the published designations, no Northwest facilities are located within the non-attainment areas. At this time, it is unknown whether future state regulatory actions associated with implementation of the 2008 ozone standard will impact our operations and increase the cost of additions to property, plant and equipment. Until any additional state regulatory actions are proposed, we are unable to estimate the cost of additions that may be required to meet any such new regulation. 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. On January 22, 2010, the EPA set a new one-hour nitrogen dioxide (NO2) NAAQS. The effective date of the new NO2 standard was April 12, 2010. On January 20, 2012, the EPA determined pursuant to available information that no area in the country is violating the 2010 NO2 NAAQS, and thus, designated all areas of the country as “unclassifiable/attainment.” Also, at that time, the EPA noted its plan to deploy an expanded NO2 monitoring network beginning in 2013. However, on October 5, 2012, the EPA proposed a graduated implementation of the monitoring network between January 1, 2014 and January 1, 2017. Once three years of data is collected from the new monitoring network, the EPA will reassess attainment status with the one-hour NO2 NAAQS. Until that time, the EPA or states may require ambient air quality modeling on a case by case basis to demonstrate compliance with the NO2 standard. Because we are unable to predict the outcome of the EPA’s or states’ future assessment using the new monitoring network, we are unable to estimate the cost of additions that may be required to meet this regulation. 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 (Notes) |
3 Months Ended |
---|---|
Mar. 31, 2016 | |
Debt Disclosure [Abstract] | |
Debt and Financing Arrangement | DEBT AND FINANCING ARRANGEMENT Credit Facility We, along with WPZ and Transcontinental Gas Pipe Line Company, LLC (Transco), are a 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 WPZ and Transco. At March 31, 2016, no letters of credit have been issued and $625 million of loans to WPZ are 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 March 31, 2016, WPZ had $135 million of commercial paper outstanding. Long-Term Debt Due Within One Year The long-term debt due within one year at March 31, 2016 is associated with the $175 million 7% senior unsecured notes that mature on June 15, 2016. |
Financial Instruments (Notes) |
3 Months Ended |
---|---|
Mar. 31, 2016 | |
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 $693.7 million and $692.3 million, respectively, at March 31, 2016, and $693.4 million and $721.9 million, respectively, at December 31, 2015. |
Transactions with Affiliates (Notes) |
3 Months Ended |
---|---|
Mar. 31, 2016 | |
Related Party Transactions [Abstract] | |
Transactions with Affiliates | TRANSACTIONS WITH AFFILIATES We are a participant in WPZ’s cash management program. At March 31, 2016 and December 31, 2015, the advances due to us by WPZ totaled approximately $198.0 million and $171.9 million, respectively. These advances are represented by demand notes and are classified as Current Assets in the accompanying Balance Sheet. 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, which was approximately 0.22 percent at March 31, 2016. The interest income from these advances was minimal during the three months ended March 31, 2016 and March 31, 2015. Such interest income is included in Other (Income) and Other Expenses – Miscellaneous other (income) expenses, net on the accompanying Statement of Comprehensive 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 $25.0 million and $25.4 million in the three months ended March 31, 2016 and 2015, respectively, for these services. Such expenses are primarily included in General and administrative and Operation and maintenance expenses on the accompanying Statement of Comprehensive Income. The amount billed to us for the three months ended March 31, 2016 includes $2.0 million for severance and other related costs associated with a reduction in workforce. During the three months ended March 31, 2016 and 2015, we declared and paid cash distributions to our parent of $57.0 million and $58.0 million, respectively. During April 2016, we declared and paid cash distributions of $29.0 million to our parent. We have entered into various other transactions with certain related parties, the amounts of which were not significant. These transactions and the above-described transactions are made on the basis of commercial relationships and prevailing market prices or general industry practices. |
Basis of Presentation (Details) |
3 Months Ended |
---|---|
Mar. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Parent, total ownership percentage | 60.00% |
Parent, limited partner ownership percentage | 58.00% |
Parent, general partner ownership percentage | 2.00% |
Contingent Liabilities and Commitments (Details) - USD ($) $ in Millions |
Mar. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Environmental Matters [Abstract] | ||
Environmental assessment and remediation costs, undiscounted | $ 4.1 | |
Accrued environmental liabilities | $ 4.1 | $ 4.6 |
Debt and Financing Arrangement Long-term Debt Instruments (Details) - USD ($) $ in Thousands |
Mar. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Debt Instrument [Line Items] | ||
Long-term debt due within one year | $ 174,926 | $ 174,837 |
7% senior unsecured notes | 7.00% | |
7% Senior Unsecured Notes due 2016 [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt due within one year | $ 174,926 | |
Williams Partners L.P. [Member] | ||
Debt Instrument [Line Items] | ||
Line of Credit Facility, Maximum Borrowing Capacity | $ 3,500,000 |
Financial Instruments (Details) - USD ($) $ in Millions |
Mar. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
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 | $ 693.7 | $ 693.4 |
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 | $ 692.3 | $ 721.9 |
Transactions with Affiliates (Details) $ in Thousands |
1 Months Ended | 3 Months Ended | ||
---|---|---|---|---|
Apr. 30, 2016
USD ($)
|
Mar. 31, 2016
USD ($)
employee
|
Mar. 31, 2015
USD ($)
|
Dec. 31, 2015
USD ($)
|
|
Related Party Transaction [Line Items] | ||||
Advances to affiliate | $ 198,021 | $ 171,867 | ||
Related party transaction, rate | 0.22% | |||
Entity number of employees | employee | 0 | |||
Related party transaction, expenses from transactions with related party | $ 25,000 | $ 25,400 | ||
Severance and other related costs | 2,000 | |||
Cash distributions to parent | 57,000 | $ 58,000 | ||
Williams Partners L.P. [Member] | ||||
Related Party Transaction [Line Items] | ||||
Advances to affiliate | $ 198,000 | $ 171,900 | ||
Subsequent Event [Member] | ||||
Related Party Transaction [Line Items] | ||||
Cash distributions to parent | $ 29,000 |
H'M8(T/SD&&<5*'DO+1*8B;:]$8W,^;/B3 ET%R4X6>9\
M3%.SDEL+MFO/.E!^,AE->.)AFZ?>6E:84O:P10WX8[W!62DKT2FWH&(W]^8\
MS<99-NT9_M@]R!7&0+_ 1.'@22[$,N/'QV-FASH5W.PR5(-1:W!W3]B>C,_'LDL/]HR7(3R#>O3H[?D9+W J(\KQ/
MB!V$[-IL%7L2OZP$#E!PT.#Q/$Y#%;$ X>_&@@.^5F9ZK5F_L#H"TNM$2_(V
M@XK[4H1(>XJ:),1D( )\4H!F&_8)6"X-&$38&'\O$_..==94!+) W$$>C5)E
M16@#68/BQPRJ-L*WLET/ZLM;GTO[.B?EA!V=*P"\2ZEE*3*]V>8GZ?JD,-:W
M=9 "K*\B644BHD=SNDB2R):&V[M@%-1&)PD9@C4L@@@_X #OE/OS[R!8D*C3
M$F4*20*[P\.@CR!A'8=[) 96(4?PNSQ+S5)UNXG.YHB1M?;,V,6H7#6UMP=WHQ\XGSPV65S?=
MO 0GE$1UVZ>R]0Z^\#2$V)"H[^]%/;C416
&PO
M=V]R:W-H965T
")-H./?D.Z&M( 92AF6^."GK7&C/[A_]JFH/]I?'?ZHD
MH%+7@%)!URQMIRPPBY\UV_6K9GOVIXN(X%CYYH_RE+?DHB-!]=ZR18N:6&;>
MP9M]RTJ:OT)%55?FRDZPEWAFX/B06/"=!!_FU$%H<,UP>9^M6:T'."#=;4!1
MWY/PJ)?A-47(N7N7ESDV6=5)&I],'OA"H^SHV:?[G(81]1(E;!EJ)(S^Y:Y<
M*198U>)S^D37NJNK6YQ7=9G?[!NMNBY@G_BN5HGI63Y$&%NN:_F&%]CQ<.8)
M8\?C41 5]C2K"DJK>[ Y1D<7 DA8-Y:BUD ;WNAFDD]M%)&H[>#Y"Z9&]$>&UV6HCY0')PZ;
MR['!
7881"AL0%ZM>RJ(:3WE$4
MVW84(<.S73.Q(B,PAWQ)1*S**A27,>T2=5VF&\Y#UK+\B8J3-N(4J%.#;:9R
M$>-,<D1I$UB^J:4
M,373M@7,U7CG:,PL+D-A)'U@F9-Q,L*WTVL51B9*7!,A'V,/H3,%-".)$BFB+)@ZE%(:5O@F4YD /L]X(,+I$U1%Q8U1[
MA'EA">>A_S7;Y47YVZZB^=)L
$8TPNVNX>G/HJ-M-?YEV*Q?;EJ7W!]X2 DQ!H8
MS+@W'@*L^$.\OL>RHY(YROV>_N7?&ZY[R?XN+G93>/KF"@%"0)%R@'.F&621
MM HT?35=.;![=,3PL3=#,V _9%-<47!=S8O+O%3CFSJ>OH4#M*9&\%)9C@%W
MC'/ND,;(-G89Y:IC/M4QQK,/IC;Z@3;9X>0Z'+:>4JZK&*@0S@JN-5< 6@RA
M4@UPR/*.Y]O'&-(^&(=Z13C%Z<*C.^NW\V=%Z2 %LA$A ;PQGDC!.59-^CW6
MIQ,I.H!3O#^>!SF VNG@*1#E-#2