Debt and Financing Arrangements (Notes)

12 Months Ended

Dec. 31, 2020

DEBT AND FINANCING ARRANGEMENTS

Long-Term Debt

At December 31, 2020 and 2019, long-term debt outstanding was as follows (in thousands):


	2020		2019
Debentures:
7.08% due 2026	$	7,500	$	7,500
7.25% due 2026	200,000		200,000
Total debentures	207,500		207,500

Notes:
7.85% due 2026	1,000,000		1,000,000
4.0% due 2028	400,000		400,000
3.25% due 2030	700,000		—
5.4% due 2041	375,000		375,000
4.45% due 2042	400,000		400,000
4.6% due 2048	600,000		600,000
3.95% due 2050	500,000		—
Total notes	3,975,000		2,775,000

Other financing obligations	1,104,143		1,115,980

Total long-term debt, including current portion	5,286,643		4,098,480
Unamortized debt issuance costs	(32,505)		(22,876)
Unamortized debt premium and discount, net	(14,358)		(10,634)
Long-term debt due within one year	(22,640)		(20,180)

Total long-term debt	$	5,217,140	$	4,044,790

Aggregate minimum maturities (face value) applicable to long-term debt outstanding at December 31, 2020, for the next five years, are as follows (in thousands):



2021: Other financing obligations	$	22,640
2022: Other financing obligations	$	24,762
2023: Other financing obligations	$	27,082
2024: Other financing obligations	$	29,621
2025: Other financing obligations	$	32,397

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

Restrictive Debt Covenants

At December 31, 2020, 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 May 8, 2020, we issued $700 million of 3.25 percent senior unsecured notes due 2030 and $500 million of 3.95 percent senior unsecured notes due 2050 to investors in a private debt placement. As part of the issuance, we entered into a registration rights agreement with the initial purchasers of the unsecured 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 of 1933, as amended, within 365 days from closing and to use commercially reasonable efforts to complete the exchange offer. In the fourth quarter of 2020, we filed the registration statement and completed the exchange offer.

Other Financing Obligations

During the construction of the Atlantic Sunrise and Dalton Expansion projects, we received funding from co-owners for their proportionate share of construction costs. Amounts received were recorded in Advances for construction costs and the costs associated with construction were capitalized in our Consolidated Balance Sheet. Upon placing these projects into service we began utilizing the co-owners' undivided interest in the assets, including the associated pipeline capacity, and reclassified the funding previously received from co-owners from Advances for construction costs to Long-Term Debt. The obligations, which mature in 2038 and 2052, respectively, require monthly interest and principal payments and both bear an interest rate of approximately 9 percent.

Dalton Expansion Project

During 2019, we received $0.7 million of additional 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, 2020, the amount included in Long-Term Debt on our Consolidated Balance Sheet for this financing obligation is $254.4 million, and the amount included in Long-term debt due within one year on our Consolidated Balance Sheet for this financing obligation is $2.3 million. At December 31, 2019, the amount included in Long-Term Debt on our Consolidated Balance Sheet for this financing obligation is $256.8 million, and the amount included in Long-term debt due within one year on our Consolidated Balance Sheet for this financing obligation is $2.1 million.

Atlantic Sunrise Project

During 2020 and 2019, we received $8.7 million and $40.8 million, respectively, of additional funding from a co-owner for its proportionate share of construction costs related to its undivided ownership interest in Atlantic Sunrise. During the fourth quarter of 2019, we also increased our financing obligation by $25 million associated with a payment received by Williams pursuant to a contract settlement with a co-owner of the Atlantic Sunrise project (See Note 9). At December 31, 2020, the amount included in Long-Term Debt on our Consolidated Balance Sheet for this financing obligation is $827.1 million, and the amount included in Long-term debt due within one year on our Consolidated Balance Sheet for this financing obligation is $20.3 million. At December 31, 2019, the amount included in Long-Term Debt on our Consolidated Balance Sheet for this financing obligation is $839.0 million, and the amount included in Long-term debt due within one year on our Consolidated Balance Sheet for this financing obligation is $18.1 million.

Long-Term Debt Due Within One Year

The long-term debt due within one year at December 31, 2020 and 2019 are associated with the previously described other financing obligations.

Credit Facility

In 2018, we, along with Williams and Northwest (the borrowers), the lenders named therein, and an administrative agent entered into a credit agreement (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 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, 2020 no letters of credit have been issued and no loans to Williams were outstanding under the credit facility.

Measured as of December 31, 2020, 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, 2020, Williams had no outstanding commercial paper.