TRANSACTIONS WITH MAJOR CUSTOMERS AND AFFILIATES.

Major Customers.

Operating revenues received from our two major customers in 2013, 2012 and 2011 are as follows (in millions):



	2013		2012		2011
Public Service Enterprise Group	$	130.7	$	127.4	$	136.7
National Grid	88.5		93.5		98.2

Affiliates.

We are a participant in WPZ’s cash management program, and we make advances to and receive advances from WPZ. At December 31, 2013 and 2012, our advances to WPZ totaled approximately $526.4 million and $312.2 million, respectively. These advances are represented by demand notes and are classified as Current Assets in the accompanying 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 December 31, 2013, the interest rate was 0.01 percent.

On December 31, 2011, Williams completed the spin-off of its former exploration and production business, WPX, by means of a special stock dividend to its shareholders. Included in our operating revenues and cost of sales listed below for the year 2011 are amounts related to activity with WPX.

Included in Operating Revenues in the accompanying Consolidated Statement of Comprehensive Income for 2013, 2012 and 2011 are revenues received from affiliates of $16.3 million, $17.0 million, and $18.5 million, 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 Consolidated Statement of Comprehensive Income for 2013, 2012 and 2011 is purchased gas cost from affiliates of $6.9 million, $3.9 million, and $8.8 million, 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 $310.3 million, $320.1 million, and $278.6 million during 2013, 2012 and 2011, respectively, for these services. Such expenses are primarily included in Administrative and general and Operation and maintenance expenses in the accompanying Consolidated Statement of Comprehensive Income.

Pursuant to an operating agreement, we serve as contract operator on certain Williams Field Services (WFS) facilities. We recorded reductions in operating expenses for services provided to and reimbursed by WFS of $2.3 million, $4.5 million, and $6.4 million in 2013, 2012 and 2011, respectively, under terms of the operating agreement. In 2013, we received $3.6 million of reimbursements from WFS, related to a capital project. Pursuant to construction agreements, we received pre-payments from WFS of $2.3 million and $4.5 million during 2012 and 2011, respectively, associated with capital projects. We received reimbursements totaling $3.1 million from Williams Gas Processing – Gulf Coast Company, L.P. in 2012 associated with costs related to a transfer and assignment agreement.

We made equity distributions of $250 million, $246 million and $219 million during 2013, 2012 and 2011, respectively. In January 2014, an additional distribution of $112 million was declared and paid.

During 2013, 2012 and 2011, WPO made contributions totaling $264 million, $150 million and $115 million, respectively, to us to fund a portion of our expenditures for additions to property, plant and equipment. In January 2014, WPO made an additional $54 million contribution. During 2012, we received a non-cash contribution of $1.5 million from WPO. During 2011, we made a non-cash return of capital to WPO of approximately $0.5 million.