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Benefit Plans
Dec. 31, 2011
Benefit Plans [Abstract]  
BENEFIT PLANS

5. BENEFIT PLANS.

 

       Certain of the benefit costs charged to us by Williams associated with employees who directly support us are described below. Additionally, allocated corporate expenses from Williams to us also include amounts related to these same employee benefits, which are not included in the amounts presented below.

 

Pension and Other Postretirement Benefit Plans.

 

       Williams has noncontributory defined benefit pension plans (Williams Pension Plan, Williams Inactive Employees Pension Plan and The Williams Companies Retirement Restoration Plan) that provide pension benefits for its eligible employees. Pension expense charged to us by Williams was $16.4 million, $16.7 million and $20.3 million for 2011, 2010, and 2009, respectively.

 

Williams provides certain retiree health care and life insurance benefits for eligible participants that generally were employed by Williams on or before December 31, 1991 or December 31, 1995, if they were employees or retirees of Transco Energy Company and its subsidiaries. We recognized other postretirement benefit income of $3.0 million and $4.5 million for 2011 and 2010, respectively, and other postretirement benefit expense of $3.3 million for 2009.

 

We have been allowed by rate case settlements to collect or refund in future rates any differences between the actuarially determined costs and amounts currently being recovered in rates related to other postretirement benefits. Any differences between the annual actuarially determined cost and amounts currently being recovered in rates are recorded as an adjustment to revenues or expense and collected or refunded through future rate adjustments. The amounts of postretirement benefits costs deferred as a regulatory liability at December 31, 2011 and 2010 are $22.0 million and $14.0 million, respectively, and are expected to be refunded through future rates. The amounts of postretirement benefits costs deferred as regulatory assets at December 31, 2011 and 2010 are $5.7 million and $6.8 million, respectively, and are currently being recovered over a ten year period beginning March 1, 2007.

 

Defined Contribution Plan.

 

Williams charged us compensation expense of $6.8 million in 2011, $6.7 million in 2010, and $6.7 million in 2009 for Williams' company matching contributions to this plan.

 

Employee Stock-Based Compensation Plan Information.

 

The Williams Companies, Inc. 2007 Incentive Plan, as amended and restated on February 23, 2010, (Plan) was approved by stockholders on May 20, 2010. The Plan provides for Williams' common stock based awards to both employees and nonmanagement directors. The Plan permits the granting of various types of awards including, but not limited to, restricted stock units and stock options. Awards may be granted for no consideration other than prior and future services or based on certain financial performance targets achieved.

 

Williams currently bills us directly for compensation expense related to stock-based compensation awards based on the fair value of the options. We are also billed for our proportionate share of both WGP's and Williams' stock-based compensation expense through various allocation processes.

 

Total stock-based compensation expense, included in administrative and general expenses, for the years ended December 31, 2011, 2010 and 2009 was $2.4 million, $3.1 million and $3.2 million, respectively, excluding amounts allocated from WGP, WPZ, and Williams.

 

Business Restructuring.

 

In connection with Williams' restructuring, all of our employees were transferred to another Williams affiliate effective as of February 16, 2010. This affiliate provides the personnel to perform the services previously conducted by our employees and charges us for these services according to a new service agreement. (See Note 7.)