-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, MCuq67PO8h2KxkW1+rLq+ihM9mP0HDF4TJlU4W8uSsJReTrJC4wFQY8HFwUr3CsZ pJoobwxXBPkVtkx4k4RxqQ== 0000950134-01-501500.txt : 20010514 0000950134-01-501500.hdr.sgml : 20010514 ACCESSION NUMBER: 0000950134-01-501500 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20010331 FILED AS OF DATE: 20010511 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NORTHWEST PIPELINE CORP CENTRAL INDEX KEY: 0000110019 STANDARD INDUSTRIAL CLASSIFICATION: NATURAL GAS TRANSMISSION [4922] IRS NUMBER: 870269236 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-07414 FILM NUMBER: 1629808 BUSINESS ADDRESS: STREET 1: 295 CHIPETA WAY CITY: SALT LAKE CITY STATE: UT ZIP: 84158-0900 BUSINESS PHONE: 8015838800 MAIL ADDRESS: STREET 1: 295 CHIPETA WAY CITY: SALT LAKE STATE: UT ZIP: 84158 10-Q 1 d87078e10-q.txt FORM 10-Q FOR QUARTER ENDED MARCH 31, 2001 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended March 31, 2001 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition Period from to Commission File Number 1-7414 NORTHWEST PIPELINE CORPORATION ------------------------------------------------------ (Exact name of registrant as specified in its charter) DELAWARE 87-0269236 - ------------------------------- ------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 295 Chipeta Way Salt Lake City, Utah 84108 ----------------------------------------------------- (Address of principal executive offices and Zip Code) (801) 583-8800 ---------------------------------------------------- (Registrant's telephone number, including area code) No Change ---------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- --- Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.
Class Outstanding at May 11, 2001 - -------------------------- --------------------------- Common stock, $1 par value 1,000 shares
The registrant meets the conditions set forth in General Instruction (H)(1)(a) and (b) of Form 10-Q and is therefore filing this Form 10-Q with the reduced disclosure format. 2 NORTHWEST PIPELINE CORPORATION TABLE OF CONTENTS
Page ---- PART I. FINANCIAL INFORMATION: Item 1. Financial Statements - Condensed Statement of Income, three months ended March 31, 2001 and 2000.................................................... 1 Condensed Balance Sheet as of March 31, 2001 and December 31, 2000 ............................................................... 2 Condensed Statement of Cash Flows, three months ended March 31, 2001 and 2000 ............................................ 4 Notes to Condensed Financial Statements ............................................ 5 Item 2. Management's Narrative Analysis of the Results of Operations ................. 8 PART II. OTHER INFORMATION .............................................................. 10
Certain matters discussed in this report, excluding historical information, include forward-looking statements. Although Northwest Pipeline Corporation believes such forward-looking statements are based on reasonable assumptions, no assurance can be given that every objective will be reached. Such statements are made in reliance on the "safe harbor" protections provided under the Private Securities Reform Act of 1995. Additional information about issues that could lead to material changes in performance is contained in Northwest Pipeline Corporation's annual report on Form 10-K. i 3 PART I. FINANCIAL INFORMATION Item 1. Financial Statements NORTHWEST PIPELINE CORPORATION CONDENSED STATEMENT OF INCOME (Unaudited) ================================================================================
Three Months Ended March 31, ------------------------- 2001 2000 ---------- ---------- (Thousands) OPERATING REVENUES ............................................. $ 71,198 $ 79,760 ---------- ---------- OPERATING EXPENSES: General and administrative .................................. 10,213 11,690 Operation and maintenance ................................... 8,374 8,896 Depreciation ................................................ 14,013 13,815 Taxes, other than income taxes .............................. 4,161 3,957 ---------- ---------- 36,761 38,358 ---------- ---------- Operating income ....................................... 34,437 41,402 ---------- ---------- OTHER INCOME - net ............................................. 1,860 5,271 ---------- ---------- INTEREST CHARGES: Interest on long-term debt .................................. 6,469 6,507 Other interest .............................................. 1,686 1,551 Allowance for borrowed funds used during construction ....... 8 (148) ---------- ---------- 8,163 7,910 ---------- ---------- INCOME BEFORE INCOME TAXES ..................................... 28,134 38,763 ---------- ---------- PROVISION FOR INCOME TAXES ..................................... 10,602 14,783 ---------- ---------- NET INCOME ..................................................... $ 17,532 $ 23,980 ========== ========== CASH DIVIDENDS ON COMMON STOCK ................................. $ 10,000 $ 20,000 ========== ==========
- ---------- See accompanying notes. -1- 4 NORTHWEST PIPELINE CORPORATION CONDENSED BALANCE SHEET (Unaudited) ================================================================================ ASSETS
March 31, December 31, 2001 2000 ------------ ------------ (Thousands of Dollars) PROPERTY, PLANT AND EQUIPMENT, at cost ......................... $ 1,701,023 $ 1,691,935 Less - Accumulated depreciation ............................. 771,959 758,375 ------------ ------------ 929,064 933,560 ------------ ------------ CURRENT ASSETS: Cash and cash equivalents ................................... 390 1,890 Advances to affiliates ...................................... 68,001 53,882 Accounts receivable - Trade .................................................. 10,654 12,227 Affiliated companies ................................... 1,676 3,149 Materials and supplies (principally at lower of average cost or market) ........................................... 10,826 10,798 Exchange gas due from others ................................ 18,264 28,371 Deferred income taxes ....................................... 2,345 2,244 Prepayments and other ....................................... 13,639 9,238 ------------ ------------ 125,795 121,799 ------------ ------------ OTHER ASSETS: Deferred charges ............................................ 49,631 48,720 ------------ ------------ $ 1,104,490 $ 1,104,079 ============ ============
- ---------- See accompanying notes. -2- 5 NORTHWEST PIPELINE CORPORATION CONDENSED BALANCE SHEET (Unaudited) ================================================================================ LIABILITIES AND STOCKHOLDER'S EQUITY
March 31, December 31, 2001 2000 ------------ ------------ (Thousands of Dollars) CAPITALIZATION: Common stockholder's equity - Common stock, par value $1 per share; authorized and outstanding, 1,000 shares ..... $ 1 $ 1 Additional paid-in capital ..................... 262,844 262,844 Retained earnings .............................. 214,068 206,536 ------------ ------------ 476,913 469,381 Long-term debt, less current maturities ............ 367,488 369,146 ------------ ------------ 844,401 838,527 ------------ ------------ CURRENT LIABILITIES: Current maturities of long-term debt ............... 1,662 1,667 Accounts payable - Trade .......................................... 6,397 12,729 Affiliated companies ........................... 4,441 6,351 Accrued liabilities - Income taxes due to affiliate .................. 7,712 8,067 Taxes, other than income taxes ................. 5,445 2,701 Interest ....................................... 21,106 15,310 Employee costs ................................. 7,039 9,512 Exchange gas due to others ..................... 29,450 35,475 Reserves for estimated rate refunds ............ 16,230 16,198 Other .......................................... 2,034 2,029 ------------ ------------ 101,516 110,039 ------------ ------------ DEFERRED INCOME TAXES ................................. 152,063 149,072 ------------ ------------ OTHER DEFERRED CREDITS ................................ 6,510 6,441 ------------ ------------ CONTINGENT LIABILITIES AND COMMITMENTS ................ ------------ ------------ $ 1,104,490 $ 1,104,079 ============ ============
- ---------- See accompanying notes. -3- 6 NORTHWEST PIPELINE CORPORATION CONDENSED STATEMENT OF CASH FLOWS (Unaudited) ================================================================================
Three Months Ended March 31, -------------------------- 2001 2000 ---------- ---------- (Thousands) OPERATING ACTIVITIES: Net income .................................................... $ 17,532 $ 23,980 Adjustments to reconcile to cash provided by operations - Depreciation ............................................... 14,013 13,815 Provision for deferred income taxes ........................ 2,890 6,979 Amortization of deferred charges and credits ............... 962 (129) Allowance for equity funds used during construction ........ 14 (272) Changes in: Accounts receivable and exchange gas due from others ............................................ 13,153 (19,317) Materials and supplies ................................... (28) (54) Other current assets ..................................... (4,401) (797) Other assets and deferred charges ........................ (1,637) (697) Accounts payable, income taxes due to affiliate and exchange gas due to others ............................. (13,027) 14,795 Other accrued liabilities ................................ 5,749 3,184 Other deferred credits ................................... (163) (248) ---------- ---------- Net cash provided by operating activities ..................... 35,057 41,239 ---------- ---------- INVESTING ACTIVITIES: Property, plant and equipment - Capital expenditures ....................................... (9,102) (6,598) Proceeds from sales ........................................ -- 1,067 Asset removal cost ......................................... (429) -- Changes in accounts payable ................................ (1,240) (3,933) Advances to affiliates ........................................ (14,119) (10,289) ---------- ---------- Net cash used by investing activities ......................... (24,890) (19,753) ---------- ---------- FINANCING ACTIVITIES: Principal payments on long-term debt .......................... (1,667) (1,667) Dividends paid ................................................ (10,000) (20,000) ---------- ---------- Net cash used by financing activities ......................... (11,667) (21,667) ---------- ---------- NET DECREASE IN CASH AND CASH EQUIVALENTS ................................................... (1,500) (181) CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD ................. 1,890 342 ---------- ---------- CASH AND CASH EQUIVALENTS AT END OF PERIOD ....................... $ 390 $ 161 ========== ==========
- ---------- See accompanying notes. -4- 7 NORTHWEST PIPELINE CORPORATION NOTES TO CONDENSED FINANCIAL STATEMENTS (Unaudited) ================================================================================ (1) General The accompanying, unaudited interim condensed financial statements of Northwest Pipeline Corporation ("Pipeline"), included herein, have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to such rules and regulations; however, Pipeline believes that the disclosures made are adequate to make the information presented not misleading. In the opinion of Pipeline, all adjustments, which include only normal operating adjustments, have been made to present fairly the financial position of Pipeline as of March 31, 2001 and December 31, 2000, and the results of operations and cash flows for the three month periods ended March 31, 2001 and 2000. The results of operations for the periods presented are not necessarily indicative of the results for the respective complete years. It is suggested that these condensed financial statements be read in conjunction with the statements, the notes thereto and management's narrative analysis included in Pipeline's 2000 Annual Report on Form 10-K. Pipeline is a wholly-owned subsidiary of Williams Gas Pipeline Company LLC ("WGP"). WGP is a wholly-owned subsidiary of The Williams Companies, Inc. ("Williams"). Adoption of Accounting Standards In June 1998, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 133, "Accounting for Derivative Instruments and Hedging Activities." This was followed in June 2000 by the issuance of SFAS No. 138, "Accounting for Certain Derivative Instruments and Certain Hedging Activities," which amends SFAS No. 133. SFAS No. 133 and No. 138 establish accounting and reporting standards for derivative financial instruments. The standards require that all derivative financial instruments be recorded on the balance sheet at their fair value. Changes in the fair value of derivatives will be recorded each period in earnings if the derivative is not a hedge. If a derivative is a hedge, changes in the fair value of the derivative will either be recognized in earnings along with the change in the fair value of the hedged asset, liability or firm commitment also recognized in earnings or recognized in other comprehensive income until the hedged item is recognized in earnings. For a derivative recognized in other comprehensive income, the ineffective portion of the derivative's change in fair value will be recognized immediately in earnings. Pipeline adopted these standards effective January 1, 2001. The adoption of these standards had no impact on Pipeline's financial position or results of operations. The FASB issued SFAS No. 140, "Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities." The Statement provides guidance for determining whether a transfer of financial assets should be accounted for as a sale or a secured borrowing, and whether a liability has been extinguished. The Statement is effective for recognition and reclassification of collateral and for disclosures that relate to securitization transactions and collateral for fiscal years ending after December 15, 2000. The Statement is effective for transfers and servicing of financial assets and extinguishments of liabilities occurring after March 31, 2001. The initial application of SFAS No. 140 did not have a material impact to Pipeline's results of operations and financial position. Reclassifications Certain reclassifications have been made in the 2000 financial statements to conform to the 2001 presentation. (2) Basis of Presentation Pipeline's 1983 acquisition by Williams has been accounted for using the purchase method of accounting. Accordingly, an allocation of the purchase price was assigned to the assets and liabilities of Pipeline, based on their estimated fair values at the time of the acquisition. Williams has not pushed down the purchase price allocation (amounts in excess of original cost) of $96.4 million, as of March 31, 2001, to Pipeline as current Federal Energy Regulatory Commission ("FERC") policy does not permit Pipeline to recover through -5- 8 NORTHWEST PIPELINE CORPORATION NOTES TO CONDENSED FINANCIAL STATEMENTS (Unaudited) ================================================================================ its rates amounts in excess of original cost. The accompanying financial statements reflect Pipeline's original basis in its assets and liabilities. (3) Long-Term Debt and Banking Arrangements Pipeline is a participant in a $700 million Revolving Credit Facility with Williams and certain affiliated companies. Pipeline's maximum borrowing availability, subject to prior borrowing by other affiliated companies, is $400 million, none of which was used by Pipeline at March 31, 2001. Interest rates vary with current market conditions based on the base rate of Citibank N.A., federal funds rate or the London Interbank Offered Rate ("LIBOR"). This Facility contains restrictions, which limit, under certain circumstances, the issuance of additional debt, the attachment of liens on any assets and any change of ownership of Pipeline. Any borrowings by Pipeline under this Facility are not guaranteed by Williams and are based on Pipeline's financial need and credit worthiness. (4) Contingent Liabilities and Commitments Pending Rate Cases On April 1, 1993, Pipeline began collecting new rates, subject to refund, under its rate case filed October 1, 1992 ("1993 Rate Case"). Pipeline made refunds to customers in June 1998 totaling $27 million, including interest, reflecting the FERC's resolution of all disputed matters in this case. Pipeline and other parties sought judicial review of the FERC's decision concerning rate of return on equity. One party sought judicial review of the inclusion of unpaid accruals in rate base. In July 1998, the FERC issued orders concerning its rate of return on equity policy in rate proceedings of other pipelines adopting a formula that gives less weight to the long-term growth component. In April 1999, the Court of Appeals for the D.C. Circuit remanded the 1993 Rate Case to the FERC for application of its revised rate of return on equity policy. On July 14, 1999, the FERC issued an order requiring Pipeline to: (a) submit a surcharge plan to the FERC, (b) recalculate rates consistent with the new weighting formula favoring short term growth, and (c) address in a remand hearing the appropriate source for Gross Domestic Product ("GDP") growth data. The new weighting formula generally results in a higher authorized rate of return on equity. Pipeline and its customers resolved by settlement those issues relating to long term GDP growth. In February 2000, the FERC approved the long-term growth settlement and issued an order related to return on equity issues requiring Pipeline to incorporate the effects of the settlement and to calculate its allowed rate of return on equity consistent with the recently announced policy changes in other proceedings. As a part of this recalculation of allowed return on equity, the FERC provided that Pipeline must use the median instead of the midpoint of the various results of Discounted Cash Flow ("DCF") analysis for a proxy group. This results in a 13.67 percent return on equity for Pipeline. On April 3, 2000, Pipeline made the necessary compliance filings to implement the FERC's decision including the establishment of surcharges in order to recollect moneys that shippers owe Pipeline for these corrective actions. During the first quarter of 2000, Pipeline recorded surcharges of $11.4 million, of which $7 million increased revenues and $4.4 million, representing interest, increased other income. On July 14, 2000, the FERC issued an order denying customer rehearing requests and approving Pipeline's compliance filing. The order reaffirmed Pipeline's right to use the median result from the DCF proxy group analysis. The FERC's action resulted in Pipeline's booking $3.2 million of additional revenues and $2.6 million of interest income in July 2000. Some of Pipeline's customers have sought judicial review concerning the FERC's orders with respect to return on equity issues. On February 1, 1996, Pipeline began collecting new rates, subject to refund, under the provisions of its rate case filed August 1, 1995 ("1995 Rate Case"). On October 18, 1996, the Commission issued an order approving a settlement concerning certain liquid revenue credit issues relating to Pipeline's agreement with an affiliate to have liquid hydrocarbon products extracted from Pipeline's transportation stream at Ignacio, Colorado. The litigation of all remaining issues took place in late 1996. Pipeline's rate application sought a revenue increase for increases in rate base related primarily to the Northwest Natural and Expansion II facilities placed into service December 1, 1995 and increased operating costs primarily associated with an increase in headquarters office rent. During the first quarter of 1998, the ALJ issued an Initial Decision. The ALJ found that the facts of this case continue to support Pipeline's capital structure of 55% equity and 45% debt. The ALJ also determined that Pipeline fits within the average risk range for determining pipeline return on equity and allowed a return on equity of 11.2 percent. On June 1, 1999, the FERC issued its order affirming many aspects of the ALJ's initial decision, but finding that the return on equity issue should be resolved by using the FERC's new policy concerning rate of return determinations. This resulted in an allowed return on equity of 12.22 percent. During the second quarter of 1999, Pipeline reduced its rate refund liabilities $9.9 million, of which -6- 9 NORTHWEST PIPELINE CORPORATION NOTES TO CONDENSED FINANCIAL STATEMENTS (Unaudited) ================================================================================ $7.7 million increased revenues and $2.2 million reduced interest expense, to reflect the FERC's action in this proceeding. On September 29, 2000, the FERC issued its Order on Rehearing, which, for the most part, reaffirmed the FERC's earlier June 1, 1999 decision. Pipeline made a compliance filing on October 16, 2000. Upon approval, Pipeline will issue appropriate refunds to its customers, and does not anticipate other changes to current rate refund liabilities related to this rate case. Significant Litigation In 1998, the United States Department of Justice informed Williams that Jack Grynberg, an individual, had filed claims in the United States District Court for the District of Colorado under the False Claims Act against Williams and certain of its wholly-owned subsidiaries including Pipeline. Mr. Grynberg had also filed claims against approximately 300 other energy companies and alleged that the defendants violated the False Claims Act in connection with the measurement and purchase of hydrocarbons. The relief sought was an unspecified amount of royalties allegedly not paid to the Federal government, treble damages, a civil penalty, attorneys' fees and costs. On April 9, 1999, the United States Department of Justice announced that it was declining to intervene in any of the Grynberg qui tam cases; including the action filed against the Williams entities in the United States District Court for the District of Colorado. On October 21, 1999, the Panel on Multi-District Litigation transferred all of the Grynberg qui tam cases, including the ones filed against Williams to the United States District Court for the District of Wyoming for pre-trial purposes. Motions to dismiss the complaint, filed by various defendants including Williams, are pending. Other Legal and Regulatory Matters In addition to the foregoing, various other proceedings are pending against Pipeline incidental to its operations. Summary of Contingent Liabilities Management believes that the ultimate resolution of the foregoing matters, based on advise of counsel and after consideration of amounts accrued, insurance coverage, potential recovery from customers, and other indemnification arrangements, will not have a materially adverse effect upon Pipeline's future financial position, results of operations, and cash flow requirements. -7- 10 Item 2. Management's Narrative Analysis of the Results of Operations This analysis discusses financial results of Pipeline's operations for the quarters ended March 31, 2001 and 2000. Variances due to changes in price and volume have little impact on revenues, because under Pipeline's rate design methodology, the majority of overall cost of service is recovered through firm capacity reservation charges in its transportation rates. This analysis should be read in conjunction with the financial statements, notes and management's narrative analysis of the results of operations contained in Items 7 and 8 of Pipeline's 2000 Annual Report on Form 10-K and with the condensed financial statements and notes contained in this report. RESULTS OF OPERATIONS Quarter Ended March 31, 2001 vs. Quarter Ended March 31, 2000 Operating revenues decreased $8.6 million, or 11%, due primarily to the recognition in 2000 of a $7 million surcharge resulting from a favorable FERC decision on return on equity related to the 1993 rate case. Pipeline's transportation service accounted for 93% and 95% of operating revenues for the quarters ended March 31, 2001 and 2000, respectively. Additionally, gas storage service represented 3% of operating revenues in each of the quarters ended March 31, 2001 and 2000. Operating expenses decreased $1.6 million, or 4%, due primarily to lower general and administrative and operation and maintenance expenses. Operating income decreased $7 million, or 17%, due to the reasons identified above. Other income decreased $3.4 million primarily resulting from the 2000 recognition of $4.4 million of interest on surcharges related to the revenue associated with the 1993 rate case as discussed above in operating revenues. The following table summarizes volumes and capacity for the periods indicated:
Quarter Ended March 31, ----------------------- 2001 2000 -------- -------- Total Gas volumes throughput (TBtu) 205 206 Average Daily Transportation Volumes (TBtu) 2.3 2.3 Average Daily Firm Reserved Capacity (TBtu) 2.8 2.6
FINANCIAL CONDITION AND LIQUIDITY On April 10, 2001, under the terms of the note agreement, Pipeline gave notice of its intent to prepay, without penalty, the outstanding $1.7 million balance of its adjustable rate notes with accrued interest on May 15, 2001. Prepayment will be made from Pipeline's operations and available cash. Pipeline anticipates 2001 capital expenditures will total approximately $116.5 million, of which $9.1 million has been expended through March 31, 2001. Funds necessary to complete capital projects are expected to come from several sources, including Pipeline's operations and available cash. In addition, Pipeline expects to be able to obtain financing, when necessary, on reasonable terms. To allow flexibility in the timing of issuance of long-term securities, financing may be provided on an interim basis with bank debt and from sources discussed below. -8- 11 As a participant in Williams' cash management program, Pipeline has advances to and from Williams through Pipeline's parent company, WGP. The advances are represented by demand notes. The interest rate on intercompany demand notes is the London Interbank Offered Rate ("LIBOR") on the first day of the month plus an applicable margin based on the current Standard and Poor's Rating of Pipeline. Pipeline has an outstanding registration statement filed with the Securities and Exchange Commission. At March 31, 2000, approximately $150 million of shelf availability remains under this outstanding registration statement and may be used to issue debt securities. Interest rates and market conditions will affect amounts borrowed, if any, under this arrangement. Pipeline is a participant in a $700 million Revolving Credit Facility with Williams and certain affiliated companies. Pipeline's maximum borrowing availability, subject to prior borrowing by other affiliated companies, is $400 million, none of which was used by Pipeline at March 31, 2001. Interest rates vary with current market conditions based on the base rate of Citibank N.A., federal funds rate or LIBOR. The Facility contains restrictions, which limit, under certain circumstances, the issuance of additional debt, the attachment of liens on any assets and any change of ownership of Pipeline. Any borrowings by Pipeline under this Facility are not guaranteed by Williams and are based on Pipeline's financial need and credit worthiness. Pipeline has an agreement to sell, on an ongoing basis, certain of its accounts receivable to a special-purpose entity ("SPE"). At March 31, 2001, Pipeline sold $15 million of its accounts receivable in exchange for $15 million in cash. OTHER Pipeline believes that strong economies in the Pacific Northwest and the growing preference for natural gas in response to environmental concerns support future expansions of its mainline capacity. Reference is made to Note 4 of Notes to Condensed Financial Statements for information about regulatory, judicial and business developments which cause operating and financial uncertainties. -9- 12 PART II. OTHER INFORMATION The information required by items in Part II is omitted because the items are inapplicable, the answer is negative or substantially the same information is included elsewhere in this report or has been previously reported by the Registrant. -10- 13 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. NORTHWEST PIPELINE CORPORATION ----------------------------------- Registrant By: /s/ Darrell R. Swensen ----------------------------------- Darrell R. Swensen Controller (Duly Authorized Officer and Chief Accounting Officer) Date: May 11, 2001 -11- -----END PRIVACY-ENHANCED MESSAGE-----