DEBT, FINANCING ARRANGEMENTS AND LEASES

Long-Term Debt

At December 31, 2018 and 2017, long-term debt outstanding was as follows (in thousands):



	2018			2017
Debentures:
7.08% due 2026	$	7,500		$	7,500
7.25% due 2026	200,000			200,000
Total debentures	207,500			207,500

Notes:
6.05% due 2018	—			250,000
7.85% due 2026	1,000,000			1,000,000
4.0% due 2028	400,000			—
5.4% due 2041	375,000			375,000
4.45% due 2042	400,000			400,000
4.6% due 2048	600,000			—
Total notes	2,775,000			2,025,000

Other financing obligation	1,067,286			230,926

Total long-term debt, including current portion	4,049,786			2,463,426
Unamortized debt issuance costs	(24,242		)	(15,377		)
Unamortized debt premium and discount, net	(11,137		)	(5,043		)
Long-term debt due within one year	(15,419		)	(251,430		)

Total long-term debt	$	3,998,988		$	2,191,576

Aggregate minimum maturities (face value) applicable to long-term debt outstanding at December 31, 2018, for the next five years, are as follows (in thousands):



2019: Other financing obligation	$	15,419
2020: Other financing obligation	$	17,042
2021: Other financing obligation	$	18,837
2022: Other financing obligation	$	20,821
2023: Other financing obligation	$	23,014

No property is pledged as collateral under any of our long-term debt issues.

Restrictive Debt Covenants

At December 31, 2018, none of our debt instruments restrict the amount of distributions to our parent, provided, however, that under the credit facility described below, we are restricted from making distributions to our parent during an event of default if we have directly incurred indebtedness under the credit facility. Our debt agreements contain restrictions on our ability to incur secured debt beyond certain levels and to guarantee certain indebtedness. The indenture governing our $1 billion of 7.85 percent Senior Notes due 2026 further restricts our ability to guarantee certain indebtedness.

Issuance and Retirement of Long-Term Debt

On March 15, 2018, we issued $400 million of 4.0 percent senior unsecured notes due 2028 and $600 million of 4.6 percent senior unsecured notes due 2048 to investors in a private debt placement. We used the net proceeds to repay indebtedness, including our $250 million of 6.05 percent senior unsecured notes due 2018 upon their maturity on June 15, 2018, and for general corporate purposes, including the funding of capital expenditures. The notes were issued under an Indenture, dated as of March 15, 2018 between us and The Bank of New York Mellon Trust Company, N.A., as trustee. As part of the issuance, we entered into a registration rights agreement with the initial purchasers of the notes. Under the terms of the agreement, we were obligated to file and consummate a registration statement for an offer to exchange the notes for a new issue of substantially identical notes registered under the Securities Act within 365 days after closing and to use commercially reasonable efforts to complete the exchange offer. We filed a registration statement, which was subsequently declared effective by the SEC, and consummated the exchange offer in the third quarter of 2018.

Other Financing Obligations

Dalton Expansion Project

During the construction of our Dalton Expansion Project, we received funding from a co-owner 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 and 100 percent of the costs associated with construction were capitalized on our Consolidated Balance Sheet. Upon placing the project in service during the third quarter of 2017, we began leasing this co-owner's undivided interest in the lateral, including the associated pipeline capacity, and reclassified approximately $235.8 million of funding previously received from our co-owner from Advances for construction costs to Long-Term Debt on our Consolidated Balance Sheet to reflect the financing obligation payable to our co-owner over an expected term of 35 years. At December 31, 2017, the amount included in Long-Term Debt on our Consolidated Balance Sheet for financing obligation is $229.4 million, and the amount included in Long-term debt due within one year on our Consolidated Balance Sheet is $1.6 million. 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 9 percent.

During 2018, we received an additional $29.8 million of funding from a co-owner for its proportionate share of construction costs related to its undivided ownership interest in the Dalton lateral. At December 31, 2018, the amount included in Long-Term Debt on our Consolidated Balance Sheet for this financing obligation is $258.1 million, and the amount included in Long-term debt due within one year on our Consolidated Balance Sheet for this financing obligation is $1.9 million.

Atlantic Sunrise Project

During the construction of our Atlantic Sunrise Project, we received funding from a co-owner for its proportionate share of construction costs related to an undivided ownership interest in certain parts of the project. Amounts received were recorded in Advances for construction costs and 100 percent of the costs associated with construction were capitalized on our Consolidated Balance Sheet. Upon placing the project into service during October 2018, we began utilizing this co-owner's undivided interest in the lateral, including the associated pipeline capacity, and reclassified $810.3 million of funding previously received from our partner from Advances for construction costs to debt to reflect the financing obligation payable to our co-owner over an expected term of 20 years. During 2018, after the project was placed into service, we received an additional $20.5 million of funding from a co-owner for its proportionate share of construction costs related to its undivided ownership interest in Atlantic Sunrise. At December 31, 2018, the amount included in Long-Term Debt on our Consolidated Balance Sheet for this financing obligation is $793.8 million, and the amount included in Long-term debt due within one year on our Consolidated Balance Sheet for this financing obligation is $13.5 million. 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 2038 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 December 31, 2018 is associated with the previously described other financing obligations.

The long-term debt due within one year at December 31, 2017 is associated with the $250 million of 6.05 percent notes that matured on June 15, 2018 and with the previously described other financing obligation for the Dalton Expansion Project.

Credit Facility

On July 13, 2018, we, along with Williams and Northwest (the “borrowers”), the lenders named therein, and an administrative agent entered into a Credit Agreement with aggregate commitments available of $4.5 billion, with up to an additional $500 million increase in aggregate commitments available under certain circumstances. We and Northwest are each subject to a $500 million borrowing sublimit. The facility made available under the Credit Agreement is initially available for five years from the Credit Agreement Effective Date (the “Maturity Date”). The borrowers may request an extension of the Maturity Date for an additional one-year period up to two times, to allow a Maturity Date as late as the seventh anniversary of the Credit Agreement Effective Date, subject to certain conditions. The Credit Agreement allows for same day swingline borrowings up to an aggregate amount of $200 million, subject to other utilization of the aggregate commitments under the Credit Agreement. Letter of credit commitments of $1.0 billion are, subject to the $500 million borrowing sublimit applicable to us and Northwest, available to the borrowers. At December 31, 2018 no letters of credit have been issued and loans to Williams of $160 million were outstanding under the credit facility.

Measured as of December 31, 2018, we are in compliance with our financial covenant under the credit facility.

Various covenants may limit, among other things, a borrower's and its material subsidiaries' ability to grant certain liens supporting indebtedness, merge or consolidate, sell all or substantially all of its assets, enter into certain affiliate transactions, make certain distributions during an event of default, enter into certain restrictive agreements, and allow any material change in the nature of its business.

If an event of default with respect to a borrower occurs under the credit facility, the lenders will be able to terminate the commitments for the respective borrowers and accelerate the maturity of any loans of the defaulting borrower under the credit facility agreement and exercise other rights and remedies.

Other than swing line loans, each time funds are borrowed, the applicable borrower may choose from two methods of calculating interest: a fluctuating base rate equal to Citibank N.A.'s alternate base rate plus an applicable margin or a periodic fixed rate equal to the London Interbank Offered Rate plus an applicable margin. We are required to pay a commitment fee based on the unused portion of the credit facility. The applicable margin and the commitment fee are determined by reference to a pricing schedule based on the applicable borrower's senior unsecured long-term debt ratings.

Williams participates in a commercial paper program and Williams management considers amounts outstanding under this program to be a reduction of available capacity under the credit facility. The program allows a maximum outstanding amount at any time of $4.0 billion of unsecured commercial paper notes. At December 31, 2018, Williams had no outstanding commercial paper.

Lease Obligations

The future minimum lease payments under our various operating leases are as follows (in thousands):



2019	$	9,044
2020	9,014
2021	8,865
2022	8,808
2023	8,829
Thereafter	65,107
Total net minimum obligations	$	109,667

Our lease expense was $10.8 million in 2018, $11.0 million in 2017, and $10.6 million in 2016.