Document And Entity Information
Document And Entity Information - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 31, 2019 | Feb. 07, 2020 | Jun. 30, 2019 | |
Document Information [Line Items] | |||
Entity File Number | 001-36108 | ||
Entity Registrant Name | ONE Gas, Inc. | ||
Title of 12(b) Security | Common Stock, par value $0.01 per share | ||
Entity Incorporation, State or Country Code | OK | ||
Entity Central Index Key | 0001587732 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Common Stock, Shares Outstanding | 52,774,254 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Document Type | 10-K | ||
Document Annual Report | true | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2019 | ||
Document Transition Report | false | ||
Entity Tax Identification Number | 46-3561936 | ||
Entity Address, Address Line One | 15 East Fifth Street | ||
Entity Address, City or Town | Tulsa, | ||
Entity Address, State or Province | OK | ||
Entity Address, Postal Zip Code | 74103 | ||
City Area Code | (918) | ||
Local Phone Number | 947-7000 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Trading Symbol | OGS | ||
Security Exchange Name | NYSE | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 4.5 | ||
Documents Incorporated by Reference [Text Block] | Portions of the definitive proxy statement to be delivered to shareholders in connection with the Annual Meeting of Shareholders to be held May 21, 2020, are incorporated by reference in Part III. |
STATEMENTS OF INCOME
STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenues | $ 1,652,730 | $ 1,633,731 | $ 1,539,633 |
Cost of natural gas | 687,974 | 714,636 | 614,501 |
Operating expenses | |||
Operations and maintenance | 429,126 | 411,702 | 399,290 |
Depreciation and amortization | 180,395 | 160,086 | 151,889 |
General taxes | 59,977 | 58,878 | 57,225 |
Total operating expenses | 669,498 | 630,666 | 608,404 |
Operating income | 295,258 | 288,429 | 316,728 |
Other expense, net | (2,976) | (11,359) | (14,525) |
Interest expense, net | (62,681) | (51,305) | (46,065) |
Income before income taxes | 229,601 | 225,765 | 256,138 |
Income taxes | (42,852) | (53,531) | (93,143) |
Net income | $ 186,749 | $ 172,234 | $ 162,995 |
Earnings per share | |||
Basic | $ 3.53 | $ 3.27 | $ 3.10 |
Diluted | $ 3.51 | $ 3.25 | $ 3.08 |
Average shares (thousands) | |||
Basic | 52,895 | 52,693 | 52,527 |
Diluted | 53,240 | 53,029 | 52,979 |
Dividends declared per share of stock | $ 2 | $ 1.84 | $ 1.68 |
STATEMENTS OF COMPREHENSIVE INC
STATEMENTS OF COMPREHENSIVE INCOME STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Net income | $ 186,749 | $ 172,234 | $ 162,995 |
Other Comprehensive Income (Loss), Net of Tax [Abstract] | |||
Change in pension and other postretirement benefit plans liability, net of tax of $479, $(848), and $486, respectively | (1,435) | 1,407 | (778) |
Other comprehensive income (loss), net of tax | (1,435) | 1,407 | (778) |
Comprehensive income | $ 185,314 | $ 173,641 | $ 162,217 |
STATEMENTS OF COMPREHENSIVE I_2
STATEMENTS OF COMPREHENSIVE INCOME (Parentheticals) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
STATEMENTS OF COMPREHENSIVE INCOME [Abstract] | |||
Pension and other postretirement benefit plans, Tax | $ 479 | $ (848) | $ 486 |
BALANCE SHEETS
BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Property, plant and equipment | ||
Property, plant and equipment | $ 6,433,119 | $ 6,073,143 |
Accumulated depreciation and amortization | 1,867,893 | 1,789,431 |
Net property, plant and equipment | 4,565,226 | 4,283,712 |
Current assets | ||
Cash and cash equivalents | 17,853 | 21,323 |
Accounts receivable, net | 260,012 | 295,421 |
Materials and supplies | 55,732 | 44,333 |
Natural gas in storage | 104,259 | 107,295 |
Regulatory assets | 47,440 | 54,420 |
Other current assets | 20,906 | 20,495 |
Total current assets | 506,202 | 543,287 |
Goodwill and other assets | ||
Regulatory assets | 391,036 | 437,479 |
Goodwill | 157,953 | 157,953 |
Other assets | 87,883 | 46,211 |
Total goodwill and other assets | 636,872 | 641,643 |
Total assets | 5,708,300 | 5,468,642 |
Equity and long-term debt | ||
Common stock, $0.01 par value: authorized 250,000,000 shares; issued and outstanding 52,771,749 shares at December 31, 2019; issued 52,598,005 shares and outstanding 52,564,902 shares at December 31, 2018 | 528 | 526 |
Paid-in capital | 1,733,092 | 1,727,492 |
Retained earnings | 402,509 | 320,869 |
Accumulated other comprehensive income (loss) | (6,739) | (4,086) |
Treasury stock, at cost: 33,103 shares at December 31, 2018 | 0 | (2,145) |
Total equity | 2,129,390 | 2,042,656 |
Long-term debt, excluding current maturities, and net of issuance costs of $10,936 and $11,457, respectively | 1,286,064 | 1,285,483 |
Total equity and long-term debt | 3,415,454 | 3,328,139 |
Current liabilities | ||
Notes payable | 516,500 | 299,500 |
Accounts payable | 120,490 | 174,510 |
Accrued taxes other than income | 47,956 | 47,640 |
Customer deposits | 57,987 | 61,183 |
Regulatory liabilities | 45,201 | 48,394 |
Other current liabilities | 84,603 | 67,664 |
Total current liabilities | 872,737 | 698,891 |
Deferred credits and other liabilities [Abstract] | ||
Deferred income taxes | 682,632 | 652,426 |
Regulatory Liability, Noncurrent | 503,518 | 520,866 |
Employee benefit obligations | 115,657 | 178,720 |
Other deferred credits | 118,302 | 89,600 |
Total deferred credits and other liabilities | 1,420,109 | 1,441,612 |
Commitments and Contingencies | ||
Total liabilities and equity | $ 5,708,300 | $ 5,468,642 |
BALANCE SHEETS BALANCE SHEETS P
BALANCE SHEETS BALANCE SHEETS Parenthetical - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Common Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 |
Common Stock, Shares Authorized | 250,000,000 | 250,000,000 |
Common Stock, Shares, Issued | 52,771,749 | 52,598,005 |
Common Stock, Shares, Outstanding | 52,771,749 | 52,564,902 |
Treasury Stock, Shares | 0 | 33,103 |
Debt issuance costs | $ 10,396 | $ 11,457 |
STATEMENTS OF CASH FLOWS
STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Operating activities | |||
Net income | $ 186,749 | $ 172,234 | $ 162,995 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 180,395 | 160,086 | 151,889 |
Deferred income taxes | 13,307 | 53,242 | 92,393 |
Share-based compensation expense | 9,314 | 8,195 | 8,876 |
Provision for doubtful accounts | 8,994 | 8,506 | 7,323 |
Changes in assets and liabilities: | |||
Accounts receivable | 26,415 | (5,159) | (15,147) |
Materials and supplies | (11,399) | (4,661) | (5,588) |
Natural gas in storage | 3,036 | 22,859 | (4,722) |
Asset removal costs | (47,784) | (52,855) | (52,376) |
Accounts payable | (59,293) | 36,885 | 1,945 |
Accrued taxes other than income | 316 | 6,316 | (1,247) |
Customer deposits | (3,196) | 372 | (398) |
Regulatory assets and liabilities | 28,203 | 109,437 | 29,250 |
Employee benefit obligation | (35,401) | (50,100) | (118,095) |
Other assets and liabilities | 10,689 | 2,337 | (3,298) |
Cash provided by operating activities | 310,345 | 467,694 | 253,800 |
Investing activities | |||
Capital expenditures | (417,322) | (394,450) | (356,361) |
Payments to Acquire Assets, Investing Activities | (7,009) | 0 | 0 |
Payments for (Proceeds from) Other Investing Activities | 0 | 0 | 618 |
Proceeds from Sale of Other Assets, Investing Activities | 1,399 | 0 | 0 |
Cash used in investing activities | (422,932) | (394,450) | (355,743) |
Financing activities | |||
Borrowings (repayment) on notes payable, net | 217,000 | (57,715) | 212,215 |
Repurchase of common stock | 0 | 0 | (17,512) |
Proceeds from Issuance of Long-term Debt | 0 | 395,648 | 0 |
Payments of Financing Costs | 0 | 4,324 | 0 |
Issuance of common stock | 5,116 | 4,803 | 4,457 |
Repayments of Long-term Debt | 0 | (300,000) | 0 |
Dividends paid | (105,424) | (96,594) | (87,951) |
Tax withholdings related to net share settlements of stock compensation | (7,575) | (8,152) | (9,516) |
Cash provided by (used in) financing activities | 109,117 | (66,334) | 101,693 |
Change in cash and cash equivalents | (3,470) | 6,910 | (250) |
Cash and cash equivalents at beginning of period | 21,323 | 14,413 | 14,663 |
Cash and cash equivalents at end of period | 17,853 | 21,323 | 14,413 |
Supplemental cash flow information: | |||
Interest Paid, Excluding Capitalized Interest, Operating Activities | 61,160 | 49,371 | 44,436 |
Cash received for income taxes, net | $ 30,152 | $ 800 | $ (1,389) |
STATEMENT OF CHANGES IN EQUITY
STATEMENT OF CHANGES IN EQUITY - USD ($) $ in Thousands | Total | Retained Earnings [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Treasury Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] |
Adjustment to Additional Paid in Capital, Income Tax Effect from Share-based Compensation, Net | $ 10,982 | $ 10,982 | $ 0 | $ 0 | ||
Common Stock, Dividends, Declared, Annualized Basis | $ 1.68 | |||||
Shares Issued, beginning balance at Dec. 31, 2016 | 52,598,005 | |||||
Equity, beginning balance at Dec. 31, 2016 | $ 1,888,280 | 161,021 | (4,715) | (18,126) | $ 526 | $ 1,749,574 |
Net income | 162,995 | 162,995 | 0 | 0 | 0 | 0 |
Other comprehensive loss | (778) | 0 | (778) | 0 | 0 | 0 |
Repurchase of common stock | (17,512) | 0 | 0 | (17,512) | $ 0 | 0 |
Common stock issued, shares | 0 | |||||
Common stock issued, value | 4,193 | 0 | 0 | 17,142 | $ 0 | (12,949) |
Common stock dividends | (87,951) | (88,877) | 0 | 0 | $ 0 | 926 |
Shares Issued, ending balance at Dec. 31, 2017 | 52,598,005 | |||||
Equity, ending balance at Dec. 31, 2017 | $ 1,960,209 | 246,121 | (5,493) | (18,496) | $ 526 | 1,737,551 |
Common Stock, Dividends, Declared, Annualized Basis | $ 1.84 | |||||
Net income | $ 172,234 | 172,234 | 0 | 0 | 0 | 0 |
Other comprehensive loss | 1,407 | 0 | 1,407 | 0 | $ 0 | 0 |
Common stock issued, shares | 0 | |||||
Common stock issued, value | 5,400 | 0 | 0 | 16,351 | $ 0 | (10,951) |
Common stock dividends | (96,594) | (97,486) | 0 | 0 | $ 0 | 892 |
Shares Issued, ending balance at Dec. 31, 2018 | 52,598,005 | |||||
Equity, ending balance at Dec. 31, 2018 | 2,042,656 | 320,869 | (4,086) | (2,145) | $ 526 | 1,727,492 |
Commitments and Contingencies | ||||||
Common Stock, Dividends, Declared, Annualized Basis | $ 2 | |||||
Net income | $ 186,749 | 186,749 | 0 | 0 | 0 | 0 |
Other comprehensive loss | (1,435) | 0 | (1,435) | 0 | $ 0 | 0 |
Income Tax Effects Allocated Directly to Equity, Cumulative Effect of Change in Accounting Principle | 0 | 1,218 | (1,218) | 0 | ||
Common stock issued, shares | 173,744 | |||||
Common stock issued, value | 6,844 | 0 | 0 | 2,145 | $ 2 | 4,697 |
Common stock dividends | (105,424) | (106,327) | 0 | 0 | $ 0 | 903 |
Shares Issued, ending balance at Dec. 31, 2019 | 52,771,749 | |||||
Equity, ending balance at Dec. 31, 2019 | 2,129,390 | $ 402,509 | $ (6,739) | $ 0 | $ 528 | $ 1,733,092 |
Commitments and Contingencies |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Notes) | 12 Months Ended |
Dec. 31, 2019 | |
Significant Accounting Policies [Line Items] | |
SIGNIFICANT ACCOUNTING POLICIES | 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization and Nature of Operations - We provide natural gas distribution services to our approximately 2.2 million customers through our divisions in Oklahoma, Kansas and Texas through Oklahoma Natural Gas, Kansas Gas Service and Texas Gas Service, respectively. We primarily serve residential, commercial and transportation customers in all three states. We are a corporation incorporated under the laws of the state of Oklahoma, and our common stock is listed on the NYSE under the trading symbol “OGS.” Basis of Presentation - The consolidated financial statements include the accounts of the natural gas distribution business as set forth in “Organization and Nature of Operations” above. All significant balances and transactions between our subsidiaries have been eliminated. Use of Estimates - The preparation of our consolidated financial statements and related disclosures in accordance with GAAP requires us to make estimates and assumptions with respect to values or conditions that cannot be known with certainty that affect the reported amount of assets and liabilities, and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements. These estimates and assumptions also affect the reported amounts of revenue and expenses during the reporting period. Items that may be estimated include, but are not limited to, the economic useful life of assets, fair value of assets and liabilities, provisions for doubtful accounts receivable, unbilled revenues for natural gas delivered but for which meters have not been read, natural gas purchased but for which no invoice has been received, provision for income taxes, including any deferred income tax valuation allowances, the results of litigation and various other recorded or disclosed amounts. We evaluate these estimates on an ongoing basis using historical experience and other methods we consider reasonable based on the particular circumstances. Nevertheless, actual results may differ significantly from the estimates. Any effects on our financial position or results of operations from revisions to these estimates are recorded in the period when the facts that give rise to the revision become known. Cash and Cash Equivalents - Cash equivalents consist of highly liquid investments, which are readily convertible into cash and have original maturities of three months or less. Cost of Natural Gas - Cost of natural gas includes commodity purchases, fuel, storage, transportation and other gas purchase costs recovered through our cost of natural gas regulatory mechanisms and does not include an allocation of general operating costs or depreciation and amortization. In addition, our cost of natural gas regulatory mechanisms provide a method of recovering natural gas costs on an ongoing basis without a profit. See Note 10 for additional discussion of purchased gas cost recoveries. Accounts Receivable - Accounts receivable represent valid claims against nonaffiliated customers for natural gas sold or services rendered, net of allowances for doubtful accounts. We assess the creditworthiness of our customers. Those customers who do not meet minimum standards may be required to provide security, including deposits and other forms of collateral, when appropriate and allowed by our tariffs. With approximately 2.2 million customers across three states, we are not exposed materially to a concentration of credit risk. We maintain an allowance for doubtful accounts based upon factors surrounding the credit risk of customers, historical trends, consideration of the current credit environment and other information. We are able to recover natural gas costs related to doubtful accounts through purchased-gas cost adjustment mechanisms. At December 31, 2019 and 2018 , our allowance for doubtful accounts was $6.6 million and $4.7 million , respectively. Inventories - Natural gas in storage is maintained on the basis of weighted-average cost. Natural gas inventories that are injected into storage are recorded in inventory based on actual purchase costs, including storage and transportation costs. Natural gas inventories that are withdrawn from storage are accounted for in our purchased-gas cost adjustment mechanisms at the weighted-average inventory cost. Materials and supplies inventories are stated at the lower of weighted-average cost or net realizable value. Derivatives and Risk Management Activities - We record all derivative instruments at fair value, with the exception of normal purchases and normal sales that are expected to result in physical delivery. The accounting for changes in the fair value of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship and, if so, the reason for holding it, or if regulatory rulings require a different accounting treatment. If certain conditions are met, we may elect to designate a derivative instrument as a hedge of exposure to changes in fair values or cash flows. We have not elected to designate any of our derivative instruments as hedges. The table below summarizes the various ways in which we account for our derivative instruments and the impact on our consolidated financial statements: Recognition and Measurement Accounting Treatment Balance Sheet Income Statement Normal purchases and normal sales - Fair value not recorded - Change in fair value not recognized in earnings Mark-to-market - Recorded at fair value - Change in fair value recognized in, and recoverable through, the purchased-gas cost adjustment mechanisms See Note 9 for additional information regarding our hedging activities using derivatives. Fair Value Measurements - We define fair value as the price that would be received from the sale of an asset or the transfer of a liability in an orderly transaction between market participants at the measurement date. We use the market and income approaches to determine the fair value of our assets and liabilities and consider the markets in which the transactions are executed. We measure the fair value of a group of financial assets and liabilities consistent with how a market participant would price the net risk exposure at the measurement date. Fair Value Hierarchy - At each balance sheet date, we utilize a fair value hierarchy to classify fair value amounts recognized or disclosed in our consolidated financial statements based on the observability of inputs used to estimate such fair value. The levels of the hierarchy are described below: • Level 1 - Unadjusted quoted prices in active markets for identical assets or liabilities; • Level 2 - Significant observable pricing inputs other than quoted prices included within Level 1 that are, either directly or indirectly, observable as of the reporting date. Essentially, this represents inputs that are derived principally from or corroborated by observable market data; and • Level 3 - May include one or more unobservable inputs that are significant in establishing a fair value estimate. These unobservable inputs are developed based on the best information available and may include our own internal data. We recognize transfers into and out of the levels as of the end of each reporting period. Determining the appropriate classification of our fair value measurements within the fair value hierarchy requires management’s judgment regarding the degree to which market data is observable or corroborated by observable market data. We categorize derivatives for which fair value is determined using multiple inputs within a single level, based on the lowest level input that is significant to the fair value measurement in its entirety. See Note 9 for additional information regarding our fair value measurements. Property, Plant and Equipment - Our properties are stated at cost, which includes direct construction costs such as direct labor, materials, burden and AFUDC. Generally, the cost of our property retired or sold, plus removal costs, less salvage, is charged to accumulated depreciation. Gains and losses from sales or retirement of an entire operating unit or system of our properties are recognized in income. Maintenance and repairs are charged directly to expense. AFUDC represents the cost of borrowed funds used to finance construction activities. We capitalize interest costs during the construction or upgrade of qualifying assets. Capitalized interest is recorded as a reduction to interest expense. Our properties are depreciated using the straight-line method over their estimated useful lives. Generally, we apply composite depreciation rates to functional groups of property having similar economic circumstances. We periodically conduct depreciation studies to assess the economic lives of our assets. These depreciation studies are completed as a part of our regulatory proceedings, and the changes in economic lives, if applicable, are implemented prospectively when the new rates are approved by our regulators and become effective. Changes in the estimated economic lives of our property, plant and equipment could have a material effect on our financial position, results of operations or cash flows. Property, plant and equipment on our Consolidated Balance Sheets includes construction work in process for capital projects that have not yet been placed in service and therefore are not being depreciated. Assets are transferred out of construction work in process when they are substantially complete and ready for their intended use. See Note 11 for additional information regarding our property, plant and equipment. Impairment of Goodwill and Long-Lived Assets - We assess our goodwill for impairment at least annually as of July 1, unless events or a change in circumstances indicate an impairment may have occurred before that time. As part of our goodwill impairment test, we first assess qualitative factors (including macroeconomic conditions, industry and market considerations, cost factors and overall financial performance) to determine whether it is more likely than not that our fair value is less than the carrying amount of our net assets. If further testing is necessary or a quantitative test is elected to refresh our recurring qualitative assessment, we perform a quantitative impairment test for goodwill. Our impairment test is made by comparing our fair value with our book value, including goodwill. If the fair value is less than the book value, an impairment is measured by the amount of our carrying value that exceeds our fair value, not to exceed the carrying amount of our goodwill. To estimate our fair value, we use two generally accepted valuation approaches, an income approach and a market approach, using assumptions consistent with a market participant’s perspective. Under the income approach, we use anticipated cash flows over a period of years plus a terminal value and discount these amounts to their present value using appropriate discount rates. Under the market approach, we apply acquisition multiples to forecasted cash flows. The acquisition multiples used are consistent with historical market transactions. The forecasted cash flows are based on average forecasted cash flows over a period of years. We performed a quantitative analysis in 2019, which did not result in any impairment indicators, nor did our analysis reflect our reporting unit at risk. Our goodwill impairment analysis performed in 2018 and 2017 utilized a qualitative assessment and did not result in any impairment indicators, nor did our analysis reflect our reporting unit at risk. Subsequent to July 1, 2019 , no event has occurred indicating that it is more likely than not that our fair value is less than the carrying value of our net assets. We assess our long-lived assets for impairment whenever events or changes in circumstances indicate that an asset’s carrying amount may not be recoverable. An impairment is indicated if the carrying amount of a long-lived asset exceeds the sum of the undiscounted future cash flows expected to result from the use and eventual disposition of the asset. If an impairment is indicated, we record an impairment loss equal to the difference between the carrying value and the fair value of the long-lived asset. We determined that there were no asset impairments in 2019, 2018 or 2017 . Regulation - We are subject to the rate regulation and accounting requirements of the OCC, KCC, RRC and various municipalities in Texas. We follow the accounting and reporting guidance for regulated operations. During the ratemaking process, regulatory authorities set the framework for what we can charge customers for our services and establish the manner that our costs are accounted for, including allowing us to defer recognition of certain costs and permitting recovery of the amounts through rates over time, as opposed to expensing such costs as incurred. Examples include weather normalization, unrecovered purchased-gas costs, pension and postemployment benefit costs and ad-valorem taxes. This allows us to stabilize rates over time rather than passing such costs on to the customer for immediate recovery. Actions by regulatory authorities could have an effect on the amount recovered from customers. Any difference in the amount recoverable and the amount deferred is recorded as income or expense at the time of the regulatory action. A write-off of regulatory assets and costs not recovered may be required if all or a portion of the regulated operations have rates that are no longer: • established by independent regulators; • designed to recover our costs of providing regulated services; and • set at levels that will recover our costs when considering the demand and competition for our services. See Note 10 for additional information regarding our regulatory assets and liabilities disclosures. Pension and Other Postemployment Employee Benefits - We have defined benefit retirement plans covering eligible employees. We also sponsor welfare plans that provide other postemployment medical and life insurance benefits to eligible employees who retire with at least five years of service. To calculate the costs and liabilities related to our plans, we utilize an outside actuarial consultant, which uses statistical and other factors to anticipate future events. These factors include assumptions about the discount rate, expected return on plan assets, rate of future compensation increases, age and mortality and employment periods. We use tables issued by the Society of Actuaries to estimate mortality rates. In determining the projected benefit obligations and costs, assumptions can change from period to period and may result in material changes in the cost and liabilities we recognize. Income Taxes - Deferred income taxes are recorded for the difference between the financial statement and income tax basis of assets and liabilities and carryforward items, based on income tax laws and rates existing at the time the temporary differences are expected to reverse. The effect on deferred income taxes of a change in tax rates is deferred and amortized for operations regulated by the OCC, KCC, RRC and various municipalities in Texas, if, as a result of an action by a regulator, it is probable that the effect of the change in tax rates will be recovered from or returned to customers through future rates. We continue to amortize previously deferred investment tax credits for ratemaking purposes over the periods prescribed by our regulators. A valuation allowance for deferred income tax assets is recognized when it is more likely than not that some or all of the benefit from the deferred income tax asset will not be realized. To assess that likelihood, we use estimates and judgment regarding our future taxable income, as well as the jurisdiction in which such taxable income is generated, to determine whether a valuation allowance is required. Such evidence can include our current financial position, our results of operations, both actual and forecasted, the reversal of deferred income tax liabilities, as well as the current and forecasted business economics of our industry. We had no valuation allowance at December 31, 2019 and 2018 . We utilize a more-likely-than-not recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position that is taken or expected to be taken in a tax return. We reflect penalties and interest as part of income tax expense as they become applicable for tax provisions that do not meet the more-likely-than-not recognition threshold and measurement attribute. There were no material uncertain tax positions at December 31, 2019 and 2018 . Changes in tax laws or tax rates are recognized in the financial reporting period that includes the enactment date. See Note 14 for additional information regarding income taxes. Asset Retirement Obligations - Asset retirement obligations represent legal obligations associated with the retirement of long-lived assets that result from the acquisition, construction, development and/or normal use of the asset. Certain long-lived assets that comprise our natural gas distribution systems, primarily our pipeline assets, are subject to agreements or regulations that give rise to an asset retirement obligation for removal or other disposition costs associated with retiring the assets in place upon the discontinued use of the natural gas distribution system. We recognize the fair value of a liability for an asset retirement obligation in the period when it is incurred if a reasonable estimate of the fair value can be made. We are not able to estimate reasonably the fair value of the asset retirement obligations for portions of our assets because the settlement dates are indeterminable given our expected continued use of the assets with proper maintenance. We expect our natural gas distribution systems will continue in operation as long as natural gas supply and demand for natural gas distribution service exists. Based on our proximity to significant natural gas reserves and infrastructure and the widespread use of natural gas for heating and cooking activities by residential and commercial customers in our service areas, we expect supply and demand to exist for the foreseeable future. In accordance with long-standing regulatory treatment, we collect through rates the estimated costs of removal on certain regulated properties through depreciation expense, with a corresponding credit to accumulated depreciation and amortization. These removal costs collected through our rates include costs attributable to legal and nonlegal removal obligations. The amounts collected for non-legal asset removal costs that are in excess of costs incurred are accounted for as a regulatory liability for financial reporting purposes. Historically, with the exception of the regulatory authority in Kansas, the regulatory authorities that have jurisdiction over our regulated operations have not required us to quantify or disclose this amount. These costs are addressed prospectively in depreciation rates, rather than as a regulatory liability, in each general rate order. For financial reporting purposes, if the removal costs collected have exceeded our removal cost incurred, we have made an estimate of our regulatory liability using current rates since the last general rate order in each of our jurisdictions. Significant uncertainty exists regarding the future disposition of this regulatory liability, pending, among other issues, clarification of regulatory intent. We continue to monitor the regulatory requirements, and the liability may be adjusted as more information is obtained. We record the estimated asset removal obligation in noncurrent liabilities in other deferred credits on our Consolidated Balance Sheets. To the extent this estimated liability is adjusted, such amounts will be reclassified between accumulated depreciation and amortization and other deferred credits and therefore will not have an impact on earnings. Contingencies - Our accounting for contingencies covers a variety of business activities, including contingencies for legal and environmental exposures. We accrue these contingencies when our assessments indicate that it is probable that a liability has been incurred or an asset will not be recovered and an amount can be estimated reasonably. We expense legal fees as incurred and base our legal liability estimates on currently available facts and our estimates of the ultimate outcome or resolution. Accruals for estimated losses from environmental remediation obligations generally are recognized no later than the completion of a remediation feasibility study. Recoveries of environmental remediation costs from other parties are recorded as assets when their receipt is deemed probable. Actual results may differ from our estimates resulting in an impact, positive or negative, on earnings. See Note 16 for additional information regarding contingencies. Share-Based Payments - We expense the fair value of share-based payments net of estimated forfeitures. We estimate forfeiture rates based on historical forfeitures under our share-based payment plans. Earnings per share - Basic EPS is based on net income and is calculated based upon the daily weighted-average number of common shares outstanding during the periods presented. Also, this calculation includes fully vested stock awards that have not yet been issued as common stock. Diluted EPS includes the above, plus unvested stock awards granted under our compensation plans, but only to the extent these instruments dilute earnings per share. Segments - We operate in one reportable business segment: regulated public utilities that deliver natural gas primarily to residential, commercial and transportation customers. We define reportable business segments as components of an organization for which discrete financial information is available and operating results are evaluated on a regular basis by the chief operating decision maker (“CODM”) in order to assess performance and allocate resources. Our CODM is our Chief Executive Officer. Characteristics of our organization that were relied upon in making this determination include the similar nature of services we provide, the functional alignment of our organizational structure, and the reports that are regularly reviewed by the CODM for the purpose of assessing performance and allocating resources. Our management is functionally aligned and centralized, with performance evaluated based upon results of the entire distribution business. Capital allocation decisions are driven by asset integrity management, operating efficiency, growth opportunities and government relocations, not geographic location or regulatory jurisdiction. In 2019 , 2018 and 2017 , we had no single external customer from which we received 10 percent or more of our gross revenues. Treasury Stock - We record treasury stock purchases at cost, which includes incremental direct transaction costs. Amounts are recorded as reductions in equity in our consolidated balance sheets. We record the reissuance of treasury stock at our weighted average cost of treasury shares recorded in equity in our consolidated balance sheets. Recently Issued Accounting Standards Update - In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes,” which removes certain exceptions for recognizing deferred taxes for investments, performing intraperiod allocation and calculating income taxes in interim periods. The ASU also adds guidance to reduce complexity in certain areas, including recognizing deferred taxes for tax goodwill and allocating taxes to members of a consolidated group. This standard is effective for interim and annual periods in fiscal years beginning after December 15, 2020, and early adoption is permitted. We are currently assessing the timing and impacts of adopting this standard. In August 2018, the FASB issued ASU 2018-15, “Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (a consensus of the FASB Emerging Issues Task Force).” Under this guidance, a company should defer implementation costs that it incurs if the company would capitalize those same costs under the internal-use software guidance for an arrangement that is a software license. This standard is effective for interim and annual periods in fiscal years beginning after December 15, 2019, and early adoption is permitted. We will adopt this new guidance in the first quarter of 2020 using the prospective transition approach and do not expect our adoption will result in a material impact to our consolidated financial statements. In February 2018, the FASB issued ASU 2018-02, “Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income,” which allows a reclassification from accumulated other comprehensive income (loss) to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act of 2017. We adopted this new guidance in the first quarter 2019 and our adoption did not result in a material impact to our consolidated financial statements. This change is reflected in our consolidated statements of equity. In March 2017, the FASB issued ASU 2017-07, “Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost,” which requires (1) separation of net periodic service costs for pension and other postemployment benefits into service cost and other components, (2) presentation of the service cost component in the same line as other compensation costs rendered by pertinent employees during the period, and (3) reporting the other components of net periodic benefit costs separately from the service cost component and outside a subtotal of income from operations. Additionally, only the service cost component is eligible for capitalization for GAAP, when applicable. However, all of our cost components remain eligible for capitalization under the accounting requirements for rate regulated entities. We adopted this guidance in the first quarter of 2018. The presentation changes required for net periodic benefit costs did not impact previously reported net income; however, the reclassification of the other components of benefits costs resulted in an increase in operating income and an increase in other expenses of $17.3 million for the year ended December 31, 2017. We elected the practical expedient to use the retroactive presentation of the amounts disclosed for the various components of net benefit cost in our Employee Benefit Plans footnote as the basis for the retrospective application. In addition, we updated our information systems for the capitalization of service costs to property, plant and equipment and non-service costs to a regulatory asset on a prospective basis, as well as the appropriate accounts for non-service costs to apply retroactive reclassification. In June 2016, the FASB issued ASU 2016-13, “Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments,’’ which introduces new guidance to the accounting for credit losses on instruments within its scope, including trade receivables. It is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, and early adoption is permitted for fiscal years beginning after December 15, 2018. We will adopt this new guidance in the first quarter of 2020 using the modified retrospective method. Our adoption is not expected to result in a cumulative adjustment to our opening retained earnings or a material impact to our consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842),” as amended, (“Topic 842”) which prescribes recognizing lease assets and liabilities on the balance sheet and includes disclosure of key information about leasing arrangements. We adopted this new guidance effective January 1, 2019, and applied the modified retrospective approach to all existing leases. Upon adoption we recognized lease liabilities of approximately $32 million , with corresponding right-of-use assets of the same amount based on the present value of the remaining minimum rental payments for existing operating leases. Our adoption did not result in a material impact to our results of operations or cash flows. We utilized the practical expedients that allow us to: (1) not reassess expired or existing contracts to determine whether they are subject to lease accounting guidance, (2) not reconsider lease classification at transition, and (3) not evaluate previously capitalized initial direct costs under the revised requirements. We also utilized the practical expedients that allowed us to: (1) not evaluate under Topic 842 existing or expired land easements that were not previously accounted for as leases under the current lease guidance in ASC Topic 840 (“Topic 840”) and (2) use an additional transition method in which an entity initially applies the new leases standard at the adoption date and recognizes a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. We adopted an accounting policy that exempts leases with terms of less than one year from the recognition requirements of Topic 842, and disclose such leases in our interim and annual disclosures upon adoption. Our adoption did not result in a cumulative adjustment to our opening retained earnings or a material impact to our consolidated financial statements. See Note 5 for additional information regarding our leases. In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers” (“ASC 606”), which clarifies and converges the revenue recognition principles under GAAP and International Financial Reporting Standards. We adopted this new guidance in the first quarter 2018, using the modified retrospective method. We evaluated all of our sources of revenue to determine the potential effect of the new standard on our financial position, results of operations, cash flows and the related accounting policies and business processes. Our adoption did not result in a cumulative adjustment to our opening retained earnings. Our adoption resulted in a reclassification of certain revenues associated with certain regulatory mechanisms that do not meet the requirements under ASC 606 as revenue from contracts with customers, but will continue to be reflected as other revenues in determining total revenues. The reclassified revenues relate primarily to the weather normalization mechanism in Kansas, where the KCC determines how we reflect variations in weather in our rates billed to customers. See Note 2 for additional information regarding our revenues. |
REVENUE (Notes)
REVENUE (Notes) | 12 Months Ended |
Dec. 31, 2019 | |
Revenue [Policy Text Block] | 2. REVENUE We recognize revenue from contracts with customers to depict the transfers of goods and services to customers at an amount that we expect to be entitled to receive in exchange for these goods and services. Our sources of revenue are disaggregated by natural gas sales, transportation revenues, and miscellaneous revenues, which are primarily one-time service fees, that meet the requirements of ASC 606. Certain revenues that do not meet the requirements of ASC 606 are classified as other revenues in our Notes to Consolidated Financial Statements in this Annual Report. Our natural gas sales to customers represent revenue from contracts with customers through implied contracts established by our tariff rates approved by the regulatory authorities. For natural gas sales, the customer receives the benefits of our performance when the commodity is received and simultaneously consumed by the customer. The performance obligation is satisfied over time as the customer consumes the natural gas. Our transportation revenues represent revenue from contracts with customers through implied contracts established by our tariff rates approved by the regulatory authorities and tariff-based negotiated contracts. The customer receives the benefits of our performance when the commodity is delivered to the customer and the performance obligation is satisfied over time as the customer receives the natural gas. For regulated deliveries of natural gas, we read meters and bill customers on a monthly cycle. We recognize revenues upon the delivery of natural gas commodity or services rendered to customers. The billing cycles for customers do not necessarily coincide with the accounting periods used for financial reporting purposes. We accrue unbilled revenues for natural gas that has been delivered but not yet billed at the end of an accounting period. We use the invoice method practical expedient, where we recognize revenue for volumes delivered for which we have a right to invoice. Our estimate of accrued unbilled revenue is based on a percentage estimate of amounts unbilled each month, which is dependent upon a number of factors, some of which require management’s judgment. These factors include customer consumption patterns and the impact of weather on usage. The accrued unbilled natural gas sales revenue at December 31, 2019 and 2018 were $109.7 million and $127.6 million , respectively, and are included in accounts receivable on our consolidated balance sheets. Our miscellaneous revenues from contracts with customers represent implied contracts established by our tariff rates approved by the regulatory authorities and include miscellaneous utility services with the performance obligation satisfied at a point in time when services are rendered to the customer. Total other revenues consist of revenues associated with regulatory mechanisms that do not meet the requirements of ASC 606 as revenue from contracts with customers, but authorize us to accrue revenues earned based on tariffs approved by the regulatory authorities. Other revenues - natural gas sales related primarily reflect our weather normalization mechanism in Kansas. This mechanism adjusts our revenues earned for the variance between actual and normal HDDs. This mechanism can have either positive (warmer than normal) or negative (colder than normal) effects on revenues. We collect and remit other taxes on behalf of governmental authorities, and we record these amounts in accrued taxes other than income in our consolidated balance sheets. The following table sets forth our revenues disaggregated by source for the periods indicated: Year Ended December 31, 2019 2018 (Thousands of dollars) Natural gas sales to customers $ 1,512,886 $ 1,495,250 Transportation revenues 114,014 109,658 Miscellaneous revenues 20,579 21,710 Total revenues from contracts with customers 1,647,479 1,626,618 Other revenues - natural gas sales related (4,699 ) (2,806 ) Other revenues 9,950 9,919 Total other revenues 5,251 7,113 Total revenues $ 1,652,730 $ 1,633,731 |
CREDIT FACILITY AND SHORT-TERM
CREDIT FACILITY AND SHORT-TERM NOTES PAYABLE (Notes) | 12 Months Ended |
Dec. 31, 2019 | |
Short-term Debt [Line Items] | |
Short-term Debt [Text Block] | 3. CREDIT FACILITY AND SHORT-TERM NOTES PAYABLE In October 2019, we exercised a one-year extension of the ONE Gas Credit Agreement and amended the agreement to provide that we may extend the maturity date by one year, subject to the lenders’ consent, two additional times. The ONE Gas Credit Agreement remains a $700 million revolving unsecured credit facility and includes a $20 million letter of credit subfacility and a $60 million swingline subfacility. We are able to request an increase in commitments of up to an additional $500 million upon satisfaction of customary conditions, including receipt of commitments from either new lenders or increased commitments from existing lenders. The ONE Gas Credit Agreement expires in October 2024 , and is available to provide liquidity for working capital, capital expenditures, acquisitions and mergers, the issuance of letters of credit and for other general corporate purposes. The ONE Gas Credit Agreement contains customary events of default. Upon the occurrence of certain events of default, the obligations under the ONE Gas Credit Agreement may be accelerated and the commitments may be terminated. The ONE Gas Credit Agreement also contains certain financial, operational and legal covenants. Among other things, these covenants include maintaining ONE Gas’ total debt-to-capital ratio of no more than 70 percent at the end of any calendar quarter. The ONE Gas Credit Agreement also contains customary affirmative and negative covenants, including covenants relating to liens, indebtedness of subsidiaries, investments, changes in the nature of business, fundamental changes, transactions with affiliates, burdensome agreements, and use of proceeds. In the event of a breach of certain covenants by ONE Gas, amounts outstanding under the ONE Gas Credit Agreement may become due and payable immediately. At December 31, 2019 , our total debt-to-capital ratio was 46 percent and we were in compliance with all covenants under the ONE Gas Credit Agreement. The ONE Gas Credit Agreement contains provisions for an applicable margin rate and an annual facility fee, both of which adjust with changes in our credit rating. Based on our current credit ratings, borrowings, if any, will accrue interest at LIBOR plus 79.5 basis points, and the annual facility fee is 8 basis points. In the event LIBOR is not available, and such circumstances are unlikely to be temporary, our lenders may establish an alternative interest rate for the impacted loans by replacing LIBOR with one or more secured overnight financing based rates or another alternate benchmark rate. At December 31, 2019 we had $1.2 million in letters of credit issued and no borrowings under the ONE Gas Credit Agreement, with $698.8 million of remaining credit available under the ONE Gas Credit Agreement. We have a commercial paper program under which we may issue unsecured commercial paper up to a maximum amount of $700 million to fund short-term borrowing needs. The maturities of the commercial paper notes may vary, but may not exceed 270 days from the date of issue. The commercial paper notes are sold generally at par less a discount representing an interest factor. At December 31, 2019 , we had $516.5 million of commercial paper outstanding. The ONE Gas Credit Agreement is available to repay the commercial paper notes, if necessary. |
LONG-TERM DEBT (Notes)
LONG-TERM DEBT (Notes) | 12 Months Ended |
Dec. 31, 2019 | |
Debt Instrument [Line Items] | |
Long-term Debt [Text Block] | 4. LONG-TERM DEBT In November 2018, ONE Gas issued $400 million of 4.50 percent senior notes due 2048 . The proceeds from the issuance were used to retire the $300 million of 2.07 percent senior notes due 2019, to reduce the amount of outstanding commercial paper and for general corporate purposes. Our long-term debt includes $300 million of 3.61 percent senior notes due in 2024 , $600 million of 4.658 percent senior notes due 2044 , and $400 million of 4.50 percent senior notes due 2048 . The indenture governing our Senior Notes includes an event of default upon the acceleration of other indebtedness of $100 million or more. Such events of default would entitle the trustee or the holders of 25 percent in the aggregate principal amount of the outstanding Senior Notes to declare those Senior Notes immediately due and payable in full. Depending on the series, we may redeem our Senior Notes at par, plus accrued and unpaid interest to the redemption date, starting three months or six months before their maturity dates. Prior to these dates, we may redeem these Senior Notes, in whole or in part, at a redemption price equal to the principal amount, plus accrued and unpaid interest and a make-whole premium. The redemption price will never be less than 100 percent of the principal amount of the respective note plus accrued and unpaid interest to the redemption date. Our Senior Notes are senior unsecured obligations, ranking equally in right of payment with all of our existing and future unsecured senior indebtedness. |
EQUITY (Notes)
EQUITY (Notes) | 12 Months Ended |
Dec. 31, 2019 | |
Class of Stock [Line Items] | |
Stockholders' Equity Note Disclosure [Text Block] | EQUITY Preferred Stock - At December 31, 2019 , we had 50 million , $0.01 par value, authorized shares of preferred stock available. We have not issued or established any classes or series of shares of preferred stock. Common Stock - At December 31, 2019 , we had approximately 197.2 million shares of authorized common stock available for issuance. Treasury Shares - We are authorized to purchase treasury shares to be used to offset shares issued under our equity compensation plan and the ESPP. Our Board of Directors established an annual limit of $20 million of treasury stock purchases, exclusive of funds received through the dividend reinvestment and the ESPP. Stock purchases may be made in the open market or in private transactions at times, and in amounts that we deem appropriate. There is no guarantee as to the exact number of shares that we purchase, and we can terminate or limit the program at any time. Dividends Declared - In 2019 and 2018, we declared and paid dividends of $2.00 per share ( $0.50 per share quarterly) and $1.84 per share ( $0.46 per share quarterly), respectively. In January 2020, we declared a dividend of $0.54 per share ( $2.16 per share on an annualized basis) for shareholders of record on February 21, 2020, payable March 6, 2020. |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Notes) | 12 Months Ended |
Dec. 31, 2019 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
Comprehensive Income (Loss) Note [Text Block] | ACCUMULATED OTHER COMPREHENSIVE LOSS The following table sets forth the balance in accumulated other comprehensive loss for the periods indicated: Accumulated Other Comprehensive Loss (Thousands of dollars) January 1, 2018 $ (5,493 ) Pension and other postemployment benefit plans obligations Other comprehensive income before reclassification, net of tax of $(577) 596 Amounts reclassified from accumulated other comprehensive loss, net of tax of $(271) 811 Other comprehensive income 1,407 December 31, 2018 (4,086 ) Pension and other postemployment benefit plans obligations Other comprehensive loss before reclassification, net of tax of $692 (2,074 ) Amounts reclassified from accumulated other comprehensive loss, net of tax of $(213) 639 Other comprehensive loss (1,435 ) Reclassification of stranded tax effects (a) (1,218 ) December 31, 2019 $ (6,739 ) (a) Reflects the impact of the adoption of ASU 2018-02 in fiscal year 2019 related to stranded tax effects in accumulated other comprehensive loss as a result of the Tax Cuts and Jobs Act of 2017. See Note 1 for additional information regarding our adoption of this standard. The following table sets forth the effect of reclassifications from accumulated other comprehensive loss on our Consolidated Statements of Income for the periods indicated: Affected Line Item in the Details about Accumulated Other Comprehensive Years Ended December 31, Consolidated Statements of Loss Components 2019 2018 2017 Income ( Thousands of dollars ) Pension and other postemployment benefit plan obligations (a) Amortization of net loss $ 35,283 $ 43,800 $ 42,591 Amortization of unrecognized prior service cost (673 ) (4,567 ) (4,597 ) 34,610 39,233 37,994 Regulatory adjustments (b) (33,758 ) (38,151 ) (37,157 ) 852 1,082 837 Income before income taxes (213 ) (271 ) (322 ) Income tax expense Total reclassifications for the period $ 639 $ 811 $ 515 Net income (a) These components of accumulated other comprehensive loss are included in the computation of net periodic benefit cost. See Note 13 for additional information regarding our net periodic benefit cost. (b) Regulatory adjustments represent pension and other postemployment benefit costs expected to be recovered through rates and are deferred as part of our regulatory assets. See Note 10 for additional information regarding our regulatory assets and liabilities. |
EARNINGS PER SHARE (Notes)
EARNINGS PER SHARE (Notes) | 12 Months Ended |
Dec. 31, 2019 | |
EARNINGS PER SHARE OF COMMON STOCK, BASIC AND DILUTED [Line Items] | |
Earnings Per Share [Text Block] | EARNINGS PER SHARE The following tables set forth the computation of basic and diluted EPS from continuing operations for the periods indicated: Year Ended December 31, 2019 Income Shares Per Share Amount ( Thousands, except per share amounts ) Basic EPS Calculation Net income available for common stock $ 186,749 52,895 $ 3.53 Diluted EPS Calculation Effect of dilutive securities — 345 Net income available for common stock and common stock equivalents $ 186,749 53,240 $ 3.51 Year Ended December 31, 2018 Income Shares Per Share Amount ( Thousands, except per share amounts ) Basic EPS Calculation Net income available for common stock $ 172,234 52,693 $ 3.27 Diluted EPS Calculation Effect of dilutive securities — 336 Net income available for common stock and common stock equivalents $ 172,234 53,029 $ 3.25 Year Ended December 31, 2017 Income Shares Per Share Amount ( Thousands, except per share amounts ) Basic EPS Calculation Net income available for common stock $ 162,995 52,527 $ 3.10 Diluted EPS Calculation Effect of dilutive securities — 452 Net income available for common stock and common stock equivalents $ 162,995 52,979 $ 3.08 |
DERIVATIVE FINANCIAL INSTRUMENT
DERIVATIVE FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Notes) | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Fair Value Disclosures | DERIVATIVE FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS Derivative Instruments - At December 31, 2019 , we held purchased natural gas call options for the heating season ending March 2020, with total notional amounts of 14.3 Bcf, for which we paid premiums of $4.4 million , and which had a fair value of $0.3 million . At December 31, 2018 , we held purchased natural gas call options for the heating season ended March 2019 , with total notional amounts of 14.3 Bcf, for which we paid premiums of $4.1 million , and which had a fair value of $2.1 million . The premiums paid and any cash settlements received are recorded as part of our unrecovered purchased-gas costs in current regulatory assets as these contracts are included in, and recoverable through, the purchased-gas cost adjustment mechanisms. Additionally, changes in fair value associated with these contracts are deferred as part of our unrecovered purchased-gas costs in our consolidated balance sheets. Our natural gas call options are classified as Level 1, as fair value amounts are based on unadjusted quoted prices in active markets including NYMEX-settled prices. There were no transfers between levels for the periods presented. Other Financial Instruments - The approximate fair value of cash and cash equivalents, accounts receivable and accounts payable is equal to book value, due to the short-term nature of these items. Our cash and cash equivalents are comprised of bank and money market accounts and are classified as Level 1. Our other current and noncurrent assets include $2.6 million of corporate bonds and $3.0 million of United States treasury notes, for which the fair value approximates our cost, and are classified as Level 2 and Level 1, respectively. Short-term notes payable and commercial paper are due upon demand and, therefore, the carrying amounts approximate fair value and are classified as Level 1. The book value of our long-term debt, including current maturities, was $1.3 billion at both December 31, 2019 and 2018 . The estimated fair value of our long-term debt, including current maturities, was $1.5 billion and $1.4 billion at December 31, 2019 and 2018 , respectively. The estimated fair value of our long-term debt at December 31, 2019 and December 31, 2018, was determined using quoted market prices, and is considered Level 2. |
REGULATORY ASSETS AND LIABILITI
REGULATORY ASSETS AND LIABILITIES (Notes) | 12 Months Ended |
Dec. 31, 2019 | |
SCHEDULE OF REGULATED ASSETS AND LIABILITIES [Line Items] | |
Schedule of Regulatory Assets and Liabilities | REGULATORY ASSETS AND LIABILITIES The tables below present a summary of regulatory assets, net of amortization, and liabilities for the periods indicated: December 31, 2019 Remaining Recovery Period Current Noncurrent Total ( Thousands of dollars ) Under-recovered purchased-gas costs 1 year $ 17,172 $ — $ 17,172 Pension and other postemployment benefit costs See Note 13 21,213 373,266 394,479 Reacquired debt costs 8 years 812 5,677 6,489 MGP remediation costs 15 years 98 9,709 9,807 Ad-valorem tax 1 year 2,921 — 2,921 Other 1 to 19 years 5,224 2,384 7,608 Total regulatory assets, net of amortization 47,440 391,036 438,476 Federal income tax rate changes (a) (10,297 ) (503,518 ) (513,815 ) Over-recovered purchased-gas costs 1 year (27,623 ) — (27,623 ) Weather normalization 1 year (7,281 ) — (7,281 ) Total regulatory liabilities (45,201 ) (503,518 ) (548,719 ) Net regulatory assets and liabilities $ 2,239 $ (112,482 ) $ (110,243 ) (a) Recovery period varies by jurisdiction. See discussion below for additional information regarding our regulatory liabilities related to federal income tax rate changes. December 31, 2018 Remaining Recovery Period Current Noncurrent Total ( Thousands of dollars ) Under-recovered purchased-gas costs 1 year $ 25,083 $ — $ 25,083 Pension and other postemployment benefit costs See Note 13 23,384 421,726 445,110 Reacquired debt costs 9 years 812 6,487 7,299 MGP remediation costs 15 years — 7,724 7,724 Ad-valorem tax 1 year 1,070 — 1,070 Other 1 to 20 years 4,071 1,542 5,613 Total regulatory assets, net of amortization 54,420 437,479 491,899 Federal income tax rate changes (a) (30,934 ) (520,866 ) (551,800 ) Over-recovered purchased-gas costs 1 year (13,668 ) — (13,668 ) Weather normalization 1 year (3,792 ) — (3,792 ) Total regulatory liabilities (48,394 ) (520,866 ) (569,260 ) Net regulatory assets and liabilities $ 6,026 $ (83,387 ) $ (77,361 ) (a) Recovery period varies by jurisdiction. See discussion below for additional information regarding our regulatory liabilities related to federal income tax rate changes. Regulatory assets in our consolidated balance sheets, as authorized by various regulatory authorities, are probable of recovery. Base rates and certain riders are designed to provide a recovery of costs during the period rates are in effect, but do not generally provide for a return on investment for amounts we have deferred as regulatory assets. All of our regulatory assets are subject to review by the respective regulatory authorities during future regulatory proceedings. We are not aware of any evidence that these costs will not be recoverable through either rate riders or base rates, and we believe that we will be able to recover such costs, consistent with our historical recoveries. Purchased-gas costs represent the natural gas costs that have been over- or under-recovered from customers through the purchased-gas cost adjustment mechanisms, and includes natural gas utilized in our operations and premiums paid and any cash settlements received from our purchased natural gas call options. We amortize reacquired debt costs in accordance with the accounting guidelines prescribed by the OCC and KCC. Weather normalization represents revenue over- or under-recovered through the WNA rider in Kansas. This amount is deferred as a regulatory asset or liability for a 12-month period. Kansas Gas Service then applies an adjustment to the customers’ bills for 12 months to refund the over-collected revenue or bill the under-collected revenue. Ad-valorem tax represents an increase or decrease in Kansas Gas Service’s taxes above or below the amount approved in a rate case. This amount is deferred as a regulatory asset or liability for a 12-month period. Kansas Gas Service then applies an adjustment to the customers’ bills for 12 months to refund the over-collected revenue or bill the under-collected revenue. Recovery through rates resulted in amortization of regulatory assets of approximately $2.5 million , $1.7 million and $1.0 million for the years ended December 31, 2019, 2018 and 2017 , respectively. Federal income tax rate changes represent the effect of the Tax Cuts and Jobs Act of 2017. In each state, we received accounting orders requiring us to establish a regulatory liability for the difference in taxes included in our rates that have been calculated based on a 35 percent federal corporate income tax rate and the new 21 percent federal corporate income tax rate effective in January 2018 and to refund the reduction in ADIT due to the remeasurement resulting from the change in the exacted tax rate. In 2018, we accrued a separate current regulatory liability associated with the change in the federal corporate income tax rates collected in our rates resulting in a reduction to our revenues of $36.6 million for the year ended December 31, 2018. In January 2019, the OCC issued an order that resulted in the establishment of a $15.8 million liability, including interest, at December 31, 2018, for the estimated impact on customer rates of earnings, including amounts attributable to tax savings, above the 9.5 percent approved ROE in the 2018 review period, to be returned to customers within the 2019 PBRC filing. A settlement was reached and the OCC approved a joint stipulation in August 2019. This stipulation included a PBRC credit of $15.6 million to be credited over a 12-month period to Oklahoma customers beginning in the third quarter 2019. In a separate order issued in February 2019, the KCC required Kansas Gas Service to refund the regulatory liability for the portion of its revenue representing the difference between the 21 percent and 35 percent federal corporate income tax rate for the period between January 1, 2018, and through the date on which the KCC issued a final order in Kansas Gas Service’s June 2018 rate case. In 2019 and 2018, we accrued a $2.4 million and $14.2 million , respectively, reduction to revenues for the periods until new rates were implemented in Kansas. The total refund of $16.6 million was issued through a bill credit to Kansas customers in the second quarter 2019. In 2018, Texas Gas Service issued one-time refunds totaling $6.6 million for the reduction in the federal corporate income tax rate for the period between January 1, 2018, to the dates new rates were implemented in its service areas. As a result of the enactment of the Tax Cuts and Jobs Act of 2017, we remeasured our ADIT. As a regulated entity, the change in ADIT was recorded as a noncurrent regulatory liability and is subject to refund to our customers. The Tax Cuts and Jobs Act of 2017 retains the tax normalization provisions of the Code that stipulate how these excess deferred income taxes for certain accelerated tax depreciation benefits are to be refunded to customers. Our customers began receiving refunds as determined by our regulators in 2019. In January 2019, the OCC issued an order in response to Oklahoma Natural Gas’ March 2018 PBRC filing requiring Oklahoma Natural Gas to credit customers for the reduction in ADIT based upon an amortization period in compliance with the tax normalization rules for the portions of EDIT stipulated by the Code and ten years for all other components of EDIT. In February 2019, the KCC issued an order adjusting Kansas Gas Service’s base rates, which included an amortization credit associated with the refund of ADIT based on an amortization period in compliance with the tax normalization rules for the portion of EDIT stipulated by the Code and five years for all other components of EDIT. As a result of the orders in Oklahoma and Kansas, the estimated EDIT is being returned to customers beginning in 2019. Three service areas in Texas have authorized EDIT to be credited to customers annually. The timing of the return of EDIT to customers in our remaining three service areas in Texas will be determined as we work with our regulators. In 2019, we credited income tax expense $12.8 million for the amortization of the regulatory liability associated with EDIT that was returned to customers. See Note 14 for additional information regarding our regulatory liabilities for federal corporate income tax rate changes. |
PROPERTY, PLANT AND EQUIPMENT (
PROPERTY, PLANT AND EQUIPMENT (Notes) | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Line Items] | |
PROPERTY, PLANT AND EQUIPMENT | PROPERTY, PLANT AND EQUIPMENT The following table sets forth our property, plant and equipment by property type, for the periods indicated: December 31, December 31, 2019 2018 ( Thousands of dollars ) Natural gas distribution pipelines and related equipment $ 5,117,496 $ 4,861,340 Natural gas transmission pipelines and related equipment 549,788 517,697 General plant and other 612,984 567,580 Construction work in process 152,851 126,526 Property, plant and equipment 6,433,119 6,073,143 Accumulated depreciation and amortization (1,867,893 ) (1,789,431 ) Net property, plant and equipment $ 4,565,226 $ 4,283,712 We compute depreciation expense by applying composite, straight-line rates of approximately 2.0 percent to 3.0 percent that were approved by various regulatory authorities. We recorded capitalized interest of $4.6 million , $3.4 million and $3.0 million for the years ended December 31, 2019, 2018 and 2017 , respectively. We incurred liabilities for construction work in process that had not been paid at December 31, 2019, 2018 and 2017 of $20.9 million , $15.6 million and $21.7 million , respectively. Such amounts are not included in capital expenditures or in the change of working capital items on our Consolidated Statements of Cash Flows. |
SHARE-BASED PAYMENTS (Notes)
SHARE-BASED PAYMENTS (Notes) | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Payments [Line Items] | |
Disclosure of Compensation Related Costs, Share-based Payments | SHARE-BASED PAYMENTS The ECP provides for the granting of stock-based compensation, including incentive stock options, nonstatutory stock options, stock bonus awards, restricted stock awards, restricted stock unit awards, performance stock awards and performance unit awards to eligible employees and the granting of stock awards to nonemployee directors. At December 31, 2019, we have 4.3 million shares of common stock reserved for issuance under the ECP. In May 2018, shareholders approved making an additional 1.8 million shares available under the ECP, less the number of shares remaining available for future grants on the effective date. At December 31, 2019 , we had approximately 1.8 million shares available for issuance under the ECP, which reflect shares issued and estimated shares expected to be issued upon vesting of outstanding awards granted under the plan, less forfeitures. The plan allows for the deferral of awards granted in stock or cash, in accordance with Internal Revenue Code section 409A requirements. Compensation expense for our share-based payment plans was $6.8 million , net of tax benefits of $2.2 million , for 2019 , $6.1 million , net of tax benefits of $2.1 million , for 2018 , and $4.9 million , net of tax benefits of $3.0 million , for 2017 . Restricted Stock Unit Awards - We have granted restricted stock unit awards to key employees that vest over a service period of generally three years and entitle the grantee to receive shares of our common stock. Restricted stock unit awards granted accrue dividend equivalents in the form of additional restricted stock units prior to vesting. Restricted stock unit awards are measured at fair value as if they were vested and issued on the grant date and adjusted for estimated forfeitures. Compensation expense is recognized on a straight-line basis over the vesting period of the award. A forfeiture rate of 3 percent per year based on historical forfeitures under our share-based payment plans is used. Performance Stock Unit Awards - We have granted performance stock unit awards to key employees. The shares of common stock underlying the performance stock units vest at the expiration of a service period of generally three years if certain performance criteria are met by us as determined by the Executive Compensation Committee of the Board of Directors. Upon vesting, a holder of performance stock units is entitled to receive a number of shares of common stock equal to a percentage (0 percent to 200 percent) of the performance stock units granted, based on our total shareholder return over the vesting period, compared with the total shareholder return of a peer group of other utilities over the same period. If paid, the outstanding performance stock unit awards entitle the grantee to receive shares of our common stock. The outstanding performance stock unit awards are equity awards with a market-based condition, which results in the compensation expense for these awards being recognized on a straight-line basis over the requisite service period, provided that the requisite service period is fulfilled, regardless of when, if ever, the market condition is satisfied. The performance stock unit awards granted accrue dividend equivalents in the form of additional performance stock units prior to vesting. The fair value of these performance stock units was estimated on the grant date based on a Monte Carlo model. The compensation expense on these awards will only be adjusted for forfeitures. A forfeiture rate of 3 percent per year based on historical forfeitures under our share-based payment plans is used. Restricted Stock Unit Award Activity As of December 31, 2019 , there was $3.0 million of total unrecognized compensation expense related to the nonvested restricted stock unit awards, which is expected to be recognized over a weighted-average period of 1.8 years. The following tables set forth activity and various statistics for restricted stock unit awards outstanding under the respective plans for the period indicated: Number of Units Weighted- Average Price Nonvested at December 31, 2018 109,506 $ 63.45 Granted 35,753 $ 83.94 Vested (39,418 ) $ 58.60 Forfeited (1,443 ) $ 69.87 Nonvested at December 31, 2019 104,398 $ 72.21 2019 2018 2017 Weighted-average grant date fair value (per share) $ 83.94 $ 68.17 $ 63.97 Fair value of shares granted (thousands of dollars) $ 3,001 $ 2,583 $ 2,420 The fair value of restricted stock vested was $3.3 million and $4.7 million in 2019 and 2018 , respectively. Performance Stock Unit Award Activity As of December 31, 2019 , there was $6.4 million of total unrecognized compensation expense related to the nonvested performance stock unit awards, which is expected to be recognized over a weighted-average period of 1.8 years. The following tables set forth activity and various statistics related to our performance stock unit awards and the assumptions used by us in the valuations of the 2019, 2018 and 2017 grants at the grant date: Number of Units Weighted- Average Price Nonvested at December 31, 2018 219,331 $ 69.21 Granted 71,237 $ 89.86 Vested (70,548 ) $ 64.06 Forfeited (1,844 ) $ 73.57 Nonvested at December 31, 2019 218,176 $ 77.58 2019 2018 2017 Volatility (a) 18.70% 18.80% 20.70% Dividend yield 2.38% 2.70% 2.63% Risk-free interest rate (b) 2.50% 2.38% 1.48% (a) - Volatility based on historical volatility over three years using daily stock price observations of our peer utilities. (b) - Using 3-year treasury. 2019 2018 2017 Weighted-average grant date fair value (per share) $ 89.86 $ 74.04 $ 68.94 Fair value of shares granted (thousands of dollars) $ 6,401 $ 5,882 $ 5,110 The fair value of performance stock vested was $12.7 million and $13.7 million in 2019 and 2018 , respectively. Employee Stock Purchase Plan We have reserved a total of 700 thousand shares of common stock for issuance under our ESPP. Employees can choose to have up to 10 percent of their annual base pay withheld to purchase our common stock, subject to terms and limitations of the plan. The purchase price of the stock is 85 percent of the lower of the average market price of our common stock on the grant date or exercise date. Approximately 44 percent , 45 percent and 43 percent of employees participated in the plan in 2019, 2018 and 2017 , respectively, and purchased 71,613 shares at $71.42 in 2019 , 76,231 shares at $63.01 in 2018 , and 78,472 shares at $56.80 in 2017 . Compensation expense, before taxes, was $1.5 million , $1.0 million and $1.2 million in 2019, 2018 and 2017 |
EMPLOYEE BENEFIT PLANS (Notes)
EMPLOYEE BENEFIT PLANS (Notes) | 12 Months Ended |
Dec. 31, 2019 | |
EMPLOYEE BENEFIT PLANS [Abstract] | |
Pension and Other Postemployment Benefits Disclosure [Text Block] | EMPLOYEE BENEFIT PLANS Retirement and Other Postemployment Benefit Plans Retirement Plans - We have a defined benefit pension plan and a supplemental executive retirement plan, both of which are closed to new participants. Certain employees of the Texas Gas Service division are entitled to benefits under a frozen cash-balance pension plan. We fund our defined benefit pension costs at a level needed to maintain or exceed the minimum funding levels required by the Employee Retirement Income Security Act of 1974, as amended, and the Pension Protection Act of 2006. Other Postemployment Benefit Plans - We sponsor health and welfare plans that provide postemployment medical and life insurance benefits to certain employees who retire with at least five years of service. The postemployment medical plan is contributory based on hire date, age and years of service, with retiree contributions adjusted periodically, and contains other cost-sharing features such as deductibles and coinsurance. Actuarial Assumptions - The following table sets forth the weighted-average assumptions used to determine benefit obligations for pension and postemployment benefits for the periods indicated: December 31, 2019 2018 Discount rate - pension plans 3.50% 4.40% Discount rate - other postemployment plans 3.40% 4.40% Compensation increase rate 3.10% - 4.00% 3.20% - 4.00% The following table sets forth the weighted-average assumptions used by us to determine the periodic benefit costs for the periods indicated: Years Ended December 31, 2019 2018 2017 Discount rate - pension plans 4.40% 3.80% 4.30% Discount rate - other postemployment plans 4.40% 3.70% 4.20% Expected long-term return on plan assets - pension plans 7.20% 7.25% 7.75% Expected long-term return on plan assets - other postemployment plans 7.35% 7.60% 7.60% Compensation increase rate 3.20% - 4.00% 3.25% - 3.35% 3.25% - 3.40% We determine our discount rates annually. We estimate our discount rate based upon a comparison of the expected cash flows associated with our future payments under our defined benefit pension and other postemployment obligations to a hypothetical bond portfolio created using high-quality bonds that closely match expected cash flows. Bond portfolios are developed by selecting a bond for each of the next 60 years based on the maturity dates of the bonds. Bonds selected to be included in the portfolios are only those rated by Moody’s as AA- or better and exclude callable bonds, bonds with less than a minimum issue size, yield outliers and other filtering criteria to remove unsuitable bonds. We determine our overall expected long-term rate of return on plan assets, based on our review of historical returns and economic growth models. We update our assumed mortality rates to incorporate new tables issued by the Society of Actuaries as needed. Regulatory Treatment - The OCC, KCC and regulatory authorities in Texas have approved the recovery of pension costs and other postemployment benefits costs through rates for Oklahoma Natural Gas, Kansas Gas Service and Texas Gas Service, respectively. The costs recovered through rates are based on current funding requirements and the net periodic benefit cost for defined benefit pension and other postemployment costs. Differences, if any, between the net periodic benefit cost, net of deferrals, and the amount recovered through rates would be reflected in earnings. We historically have recovered defined benefit pension and other postemployment benefit costs through rates. We believe it is probable that regulators will continue to include the net periodic pension and other postemployment benefit costs in our cost of service. Since adoption of ASU 2017-07 on January 1, 2018, we continue to capitalize all eligible service cost and non-service cost components under the accounting requirements of ASC Topic 980 (Regulated Operations) for rate-regulated entities. Our consolidated balance sheets reflect the capitalized non-service cost components as a regulatory asset. We have recognized a regulatory asset of $4.7 million and $1.5 million as of December 31, 2019 and December 31, 2018 , respectively. See Note 10 for additional information. Obligations and Funded Status - The following table sets forth our defined benefit pension and other postemployment benefit plans, benefit obligations and fair value of plan assets for the periods indicated: Pension Benefits Other Postemployment Benefits December 31, December 31, 2019 2018 2019 2018 Changes in Benefit Obligation (Thousands of dollars) Benefit obligation, beginning of period $ 950,510 $ 993,891 $ 220,144 $ 255,040 Service cost 12,030 12,919 1,734 2,354 Interest cost 40,670 36,801 9,318 9,117 Plan participants’ contributions — — 3,697 3,563 Actuarial loss (gain) 98,231 (42,540 ) 13,945 (31,607 ) Benefits paid (50,915 ) (50,561 ) (18,348 ) (18,323 ) Settlements (49,158 ) — — — Benefit obligation, end of period 1,001,368 950,510 230,490 220,144 Change in Plan Assets Fair value of plan assets, beginning of period 814,112 884,804 176,859 190,226 Actual return (loss) on plan assets 162,785 (62,752 ) 38,772 (6,325 ) Employer contributions 29,199 42,386 6,202 7,718 Plan participants’ contributions — — 3,697 3,563 Benefits paid (50,915 ) (50,561 ) (18,348 ) (18,323 ) Settlements (47,207 ) 235 — — Fair value of assets, end of period 907,974 814,112 207,182 176,859 Balance at December 31 $ (93,394 ) $ (136,398 ) $ (23,308 ) $ (43,285 ) Current liabilities $ (1,045 ) $ (962 ) $ — $ — Noncurrent liabilities (92,349 ) (135,436 ) (23,308 ) (43,285 ) Balance at December 31 $ (93,394 ) $ (136,398 ) $ (23,308 ) $ (43,285 ) During 2019, we purchased a group annuity contract for $47.2 million , and transferred to a third-party insurance company liabilities of $49.2 million related to certain participants in our defined benefit pension plan. The accumulated benefit obligation for our defined benefit pension plans was $937.8 million and $890.4 million at December 31, 2019 and 2018 , respectively. In 2020, our required contributions are expected to be $1.1 million and $4.0 million , respectively, to our defined benefit pension plans and other postemployment benefit plans. There are no plan assets expected to be withdrawn and returned to us in 2020 . Components of Net Periodic Benefit Cost - The following tables set forth the components of net periodic benefit cost, prior to regulatory deferrals, for our defined benefit pension and other postemployment benefit plans for the period indicated: Pension Benefits Year Ended December 31, 2019 2018 2017 (Thousands of dollars) Components of net periodic benefit cost Service cost $ 12,030 $ 12,919 $ 12,176 Interest cost (a) 40,670 36,801 40,453 Expected return on assets (a) (61,939 ) (60,579 ) (58,496 ) Amortization of net loss (a) 33,039 39,913 36,107 Net periodic benefit cost $ 23,800 $ 29,054 $ 30,240 (a) These amounts, net of any amounts capitalized as a regulatory asset since adoption of ASU 2017-07 on January 1, 2018, have been recognized as other income (expense), net in the Consolidated Statements of Income. See Note 15 for additional detail of our other income (expense), net. Other Postemployment Benefits Year Ended December 31, 2019 2018 2017 (Thousands of dollars) Components of net periodic benefit cost Service cost $ 1,734 $ 2,354 $ 2,509 Interest cost (a) 9,318 9,117 9,890 Expected return on assets (a) (12,586 ) (14,284 ) (12,590 ) Amortization of unrecognized prior service cost (a) (673 ) (4,567 ) (4,597 ) Amortization of net loss (a) 2,244 3,887 6,484 Net periodic benefit cost (credit) $ 37 $ (3,493 ) $ 1,696 (a) These amounts, net of any amounts capitalized as a regulatory asset since adoption of ASU 2017-07 on January 1, 2018, have been recognized as other income (expense), net in the Consolidated Statements of Income. See Note 15 for additional detail of our other income (expense), net. Other Comprehensive Income (Loss) - The following table sets forth the amounts recognized in other comprehensive income (loss), net of regulatory deferrals, related to our defined benefit pension benefits for the period indicated: Pension Benefits Year Ended December 31, 2019 2018 2017 (Thousands of dollars) Net gain (loss) arising during the period $ (2,766 ) $ 1,173 $ (2,101 ) Amortization of loss 852 1,082 837 Deferred income taxes 479 (848 ) 486 Total recognized in other comprehensive income (loss) $ (1,435 ) $ 1,407 $ (778 ) Due to our regulatory deferrals, there were no amounts recognized in other comprehensive income (loss) related to our other postemployment benefits for the periods presented. The tables below set forth the amounts in accumulated other comprehensive loss that had not yet been recognized as components of net periodic benefit expense for the periods indicated: Pension Benefits December 31, 2019 2018 (Thousands of dollars) Accumulated loss $ (381,633 ) $ (419,238 ) Accumulated other comprehensive loss before regulatory assets (381,633 ) (419,238 ) Regulatory asset for regulated entities 373,025 412,545 Accumulated other comprehensive loss after regulatory assets (8,608 ) (6,693 ) Deferred income taxes 1,869 2,607 Accumulated other comprehensive loss, net of tax $ (6,739 ) $ (4,086 ) Other Postemployment Benefits December 31, 2019 2018 (Thousands of dollars) Prior service credit $ 202 $ 875 Accumulated loss (19,660 ) (34,144 ) Accumulated other comprehensive loss before regulatory assets $ (19,458 ) $ (33,269 ) Regulatory asset for regulated entities 19,458 33,269 Accumulated other comprehensive loss after regulatory assets $ — $ — The following table sets forth the amounts recognized in either accumulated comprehensive income (loss) or regulatory assets expected to be recognized as components of net periodic benefit expense in the next fiscal year: Pension Benefits Other Postemployment Benefits Amounts to be recognized in 2020 (Thousands of dollars) Prior service cost $ — $ (117 ) Actuarial net loss $ 42,319 $ 173 Health Care Cost Trend Rates - The following table sets forth the assumed health care cost-trend rates for the periods indicated: 2019 2018 Health care cost-trend rate assumed for next year 6.50% 7.00% Rate to which the cost-trend rate is assumed to decline (the ultimate trend rate) 5.00% 5.00% Year that the rate reaches the ultimate trend rate 2025 2024 Assumed health care cost-trend rates have a significant effect on the amounts reported for our other postemployment benefit plans. A one percentage point change in assumed health care cost-trend rates would have the following effects: One Percentage One Percentage Point Increase Point Decrease (Millions of dollars) Effect on total of service and interest cost $ 0.1 $ (0.1 ) Effect on other postemployment benefit obligation $ 2.3 $ (2.4 ) Plan Assets - Our investment strategy is to invest plan assets in accordance with sound investment practices that emphasize long-term fundamentals. The goal of this strategy is to maximize investment returns while managing risk in order to meet the plan’s current and projected financial obligations. To achieve this strategy, we have established a liability-driven investment strategy to change the allocations as the funded status of the defined benefit pension plan increases. The plan’s investments include a diverse blend of various domestic and international equities, investment-grade debt securities which mirror the cash flows of our liability, insurance contracts and alternative investments. The current target allocation for the assets of our defined benefit pension plan is as follows: Investment-grade bonds 40.0 % U.S. large-cap equities 18.0 % Alternative investments 14.0 % Developed foreign large-cap equities 10.0 % Mid-cap equities 7.0 % Emerging markets equities 6.0 % Small-cap equities 5.0 % Total 100 % As part of our risk management for the plans, minimums and maximums have been set for each of the asset classes listed above. All investment managers for the plan are subject to certain restrictions on the securities they purchase and, with the exception of indexing purposes, are prohibited from owning our stock. The current target allocation for the assets of our other postemployment benefits plan is 30 percent fixed income securities and 70 percent equity securities. The following tables set forth our pension benefits and other postemployment benefits plan assets by fair value category as of the measurement date: Pension Benefits December 31, 2019 Asset Category Level 1 Level 2 Level 3 Total (Thousands of dollars) Investments: Equity securities (a) $ 323,737 $ 27,267 $ — $ 351,004 Government obligations — 54,726 — 54,726 Corporate obligations (b) — 304,457 — 304,457 Cash and money market funds (c) 1,687 87,422 — 89,109 Insurance contracts and group annuity contracts — — 25,988 25,988 Other investments (d) — 897 81,793 82,690 Total assets $ 325,424 $ 474,769 $ 107,781 $ 907,974 (a) - This category represents securities of the various market sectors from diverse industries. (b) - This category represents bonds from diverse industries. (c) - This category is primarily money market funds. (d) - This category represents alternative investments such as hedge funds and other financial instruments. Pension Benefits December 31, 2018 Asset Category Level 1 Level 2 Level 3 Total (Thousands of dollars) Investments: Equity securities (a) $ 282,668 $ 35,870 $ — $ 318,538 Government obligations — 69,475 — 69,475 Corporate obligations (b) — 240,900 — 240,900 Cash and money market funds (c) 2,419 71,991 — 74,410 Insurance contracts and group annuity contracts — — 30,445 30,445 Other investments (d) — 1,139 79,205 80,344 Total assets $ 285,087 $ 419,375 $ 109,650 $ 814,112 (a) - This category represents securities of the various market sectors from diverse industries. (b) - This category represents bonds from diverse industries. (c) - This category is primarily money market funds. (d) - This category represents alternative investments such as hedge funds and other financial instruments. Other Postemployment Benefits December 31, 2019 Asset Category Level 1 Level 2 Level 3 Total (Thousands of dollars) Investments: Equity securities (a) $ 61,688 $ — $ — $ 61,688 Government obligations — — — — Corporate obligations (b) — 26,852 — 26,852 Cash and money market funds (c) 18,350 682 — 19,032 Insurance contracts and group annuity contracts (d) — 99,610 — 99,610 Total assets $ 80,038 $ 127,144 $ — $ 207,182 (a) - This category represents securities of the various market sectors from diverse industries. (b) - This category represents bonds from diverse industries. (c) - This category is primarily money market funds. (d) - This category includes equity securities and bonds held in a captive insurance product. Other Postemployment Benefits December 31, 2018 Asset Category Level 1 Level 2 Level 3 Total (Thousands of dollars) Investments: Equity securities (a) $ 58,087 $ 2,382 $ — $ 60,469 Government obligations — 74 — 74 Corporate obligations (b) — 25,857 — 25,857 Cash and money market funds (c) 1,249 300 — 1,549 Insurance contracts and group annuity contracts (d) — 88,910 — 88,910 Total assets $ 59,336 $ 117,523 $ — $ 176,859 (a) - This category represents securities of the various market sectors from diverse industries. (b) - This category represents bonds from diverse industries. (c) - This category is primarily money market funds. (d) - This category includes equity securities and bonds held in a captive insurance product. The following table sets forth the reconciliation of Level 3 fair value measurements of our pension plans for the periods indicated: Pension Benefits Insurance Contracts Other Investments Total (Thousands of dollars) January 1, 2018 $ 35,158 $ 78,707 $ 113,865 Net realized and unrealized gains (losses) (611 ) 496 (115 ) Purchases — — — Settlements (4,100 ) — (4,100 ) December 31, 2018 $ 30,445 $ 79,205 $ 109,650 Net realized and unrealized gains (losses) (860 ) 2,588 1,728 Purchases — — — Sales and settlements (3,597 ) — (3,597 ) December 31, 2019 $ 25,988 $ 81,793 $ 107,781 Pension and Other Postemployment Benefit Payments - Benefit payments for our defined benefit pension and other postemployment benefit plans for the period ended December 31, 2019 were $50.9 million and $18.3 million , respectively. The following table sets forth the pension benefits and other postemployment benefits payments expected to be paid in 2020-2029: Pension Benefits Other Postemployment Benefits to be paid in: (Thousands of dollars) 2020 $ 49,631 $ 16,464 2021 $ 50,378 $ 16,308 2022 $ 51,547 $ 16,269 2023 $ 52,628 $ 16,090 2024 $ 53,562 $ 15,757 2025 through 2029 $ 280,547 $ 73,787 The expected benefits to be paid are based on the same assumptions used to measure our benefit obligation at December 31, 2019 , and include estimated future employee service. Other Employee Benefit Plans 401(k) Plan - We have a 401(k) Plan which covers all full-time employees, and employee contributions are discretionary. We match 100 percent of each participant’s eligible contribution up to 6 percent of eligible compensation, subject to certain limits. Our contributions made to the plan were $12.8 million , $12.1 million and $11.7 million in 2019, 2018 and 2017 , respectively. Profit-Sharing Plan - We have a profit-sharing plan for all employees who do not participate in our defined benefit pension plan. We plan to make a contribution to the profit-sharing plan each quarter equal to 1 percent of each participant’s eligible compensation during the quarter. Additional discretionary employer contributions may be made at the end of each year. Employee contributions are not allowed under the plan. Our contributions made to the plan were $8.5 million , $7.4 million and $8.1 million in 2019, 2018 and 2017 , respectively. |
INCOME TAXES (Notes)
INCOME TAXES (Notes) | 12 Months Ended |
Dec. 31, 2019 | |
Income tax [Line Items] | |
INCOME TAXES | INCOME TAXES The following table sets forth our provision for income taxes for the periods indicated: Years Ended December 31, 2019 2018 2017 ( Thousands of dollars ) Current income tax provision Federal $ 24,537 $ — $ — State 5,008 289 750 Total current income tax provision 29,545 289 750 Deferred income tax provision Federal 8,375 42,413 83,138 State 4,932 10,829 9,255 Total deferred income tax provision 13,307 53,242 92,393 Total provision for income taxes $ 42,852 $ 53,531 $ 93,143 The following table is a reconciliation of our income tax provision for the periods indicated: Years Ended December 31, 2019 2018 2017 ( Thousands of dollars ) Income before income taxes $ 229,601 $ 225,765 $ 256,138 Federal statutory income tax rate 21 % 21 % 35 % Provision for federal income taxes 48,215 47,411 89,648 State income taxes, net of federal tax benefit 9,758 8,783 6,503 EDIT not recovered in rates — 74 2,162 Amortization of EDIT regulatory liability (12,828 ) — — Tax benefit of employee share-based compensation (2,116 ) (2,770 ) (5,162 ) Other, net (177 ) 33 (8 ) Total provision for income taxes $ 42,852 $ 53,531 $ 93,143 As a result of the enactment of the Tax Cuts and Jobs Act of 2017, we remeasured our ADIT. As a regulated entity, the change in ADIT was recorded as a regulatory liability and is subject to refund to our customers. The effect on the net deferred income tax liability for the enacted decrease in the federal income tax rate was $518.7 million , of which $520.9 million was recorded as a reduction to the deferred income tax liabilities and deferred as a regulatory liability for ratemaking purposes, offset by $2.2 million recorded as an increase in deferred income tax expense in 2017 attributable to the remeasured deferred income taxes associated with certain expenses not recovered in our rates. These adjustments had no impact on our 2018 or 2017 cash flows. The following table sets forth the tax effects of temporary differences that gave rise to significant portions of the deferred tax assets and liabilities for the periods indicated: December 31, 2019 2018 ( Thousands of dollars ) Deferred tax assets Employee benefits and other accrued liabilities $ 32,036 $ 48,243 Regulatory adjustments for enacted tax rate changes 124,680 129,201 Net operating loss 752 2,778 Lease obligation basis 8,599 — Other 2,772 34 Total deferred tax assets 168,839 180,256 Deferred tax liabilities Excess of tax over book depreciation 742,860 717,903 Purchased-gas cost adjustment 3,556 8,981 Other regulatory assets and liabilities, net 96,456 105,798 Right-of-use asset basis 8,599 — Total deferred tax liabilities 851,471 832,682 Net deferred tax liabilities $ 682,632 $ 652,426 As of December 31, 2019, we have no federal income tax NOL carryforwards and state income tax NOL carryforwards of $13.6 million , which will expire at various dates from 2025 through 2027. We believe that it is more likely than not that the tax benefits of the NOL carryforwards will be utilized prior to their expirations; therefore, no valuation allowance is necessary. We have completed or made a reasonable estimate for the measurement and accounting of the effects of the Tax Cuts and Jobs Act of 2017, which were reflected in our consolidated financial statements for the year 2018. While we still expect additional guidance from the U.S. Department of the Treasury and the IRS, we have finalized our calculations using available guidance. Any additional guidance issued or future actions of our regulators could potentially affect the accounting effects arising from the implementation of the Tax Cuts and Jobs Act of 2017. |
OTHER INCOME AND EXPENSE (Notes
OTHER INCOME AND EXPENSE (Notes) | 12 Months Ended |
Dec. 31, 2019 | |
Other Income and Other Expense Disclosure [Text Block] | OTHER INCOME AND OTHER EXPENSE The following table sets forth the components of other income and other expense for the periods indicated: Years Ended December 31, 2019 2018 2017 ( Thousands of dollars ) Net periodic benefit cost other than service cost $ (5,895 ) $ (8,824 ) $ (17,252 ) Other, net 2,919 (2,535 ) 2,727 Total other expense, net $ (2,976 ) $ (11,359 ) $ (14,525 ) |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Notes) | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies [Line Items] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Commitments - See Note 5 of the Notes to Consolidated Financial Statements in this Annual Report for discussion of operating leases. Environmental Matters - We are subject to multiple historical, wildlife preservation and environmental laws and/or regulations, which affect many aspects of our present and future operations. Regulated activities include, but are not limited to, those involving air emissions, storm water and wastewater discharges, handling and disposal of solid and hazardous wastes, wetland preservation, hazardous materials transportation, and pipeline and facility construction. These laws and regulations require us to obtain and/or comply with a wide variety of environmental clearances, registrations, licenses, permits and other approvals. Failure to comply with these laws, regulations, licenses and permits or the discovery of presently unknown environmental conditions may expose us to fines, penalties and/or interruptions in our operations that could be material to our results of operations. In addition, emission controls and/or other regulatory or permitting mandates under the Clean Air Act and other similar federal and state laws could require unexpected capital expenditures. We cannot assure that existing environmental statutes and regulations will not be revised or that new regulations will not be adopted or become applicable to us. Revised or additional statutes or regulations that result in increased compliance costs or additional operating restrictions could have a material adverse effect on our business, financial condition and results of operations. Our expenditures for environmental investigation and remediation compliance to-date have not been significant in relation to our financial position, results of operations or cash flows, and our expenditures related to environmental matters had no material effects on earnings or cash flows during 2019, 2018 or 2017 . We own or retain legal responsibility for certain environmental conditions at 12 former MGP sites in Kansas. These sites contain contaminants generally associated with MGP sites and are subject to control or remediation under various environmental laws and regulations. A consent agreement with the KDHE governs all environmental investigation and remediation work at these sites. The terms of the consent agreement require us to investigate these sites and set remediation activities based upon the results of the investigations and risk analysis. Remediation typically involves the management of contaminated soils and may involve removal of structures and monitoring and/or remediation of groundwater. Regulatory closure has been achieved at three of the 12 sites, but these sites remain subject to potential future requirements that may result in additional costs. We have completed or are addressing removal of the source of soil contamination at all 12 sites and continue to monitor groundwater at eight of the 12 sites according to plans approved by the KDHE. During the first quarter of 2019, we completed a project to remove the source of contamination and associated contaminated materials at the twelfth site where no active soil remediation had previously occurred. We are also finalizing a study of the feasibility of various options to address the remainder of the site. With regard to one of our former MGP sites in Kansas, periodic monitoring and a 2016 interim site investigation indicated elevated levels of contaminants generally associated with MGP sites. In 2016, we estimated the potential costs associated with additional investigation and remediation to be in the range of $4.0 million to $7.0 million . In the second quarter of 2018, we revised our estimate of the potential costs associated with additional investigation and remediation to be in the range of $5.6 million to $7.0 million . A single reliable estimate of the remediation costs was not feasible due to the amount of uncertainty in the ultimate remediation approach that will be utilized. Accordingly, we recorded in the second quarter of 2018 an adjustment to the reserve of $1.6 million bringing the total to $5.6 million for this site, which also increased our regulatory asset pursuant to our AAO in Kansas. In 2019, the KDHE approved the remediation plan that is the basis of our estimated cost range. In Kansas, we have an AAO that allows Kansas Gas Service to defer and seek recovery of costs necessary for investigation and remediation at, and nearby, these 12 former MGP sites that are incurred after January 1, 2017, up to a cap of $15.0 million , net of any related insurance recoveries. Costs approved for recovery in a future rate proceeding would then be amortized over a 15-year period. The unamortized amounts will not be included in rate base or accumulate carrying charges. At the time future investigation and remediation work, net of any related insurance recoveries, is expected to exceed $15.0 million , Kansas Gas Service will be required to file an application with the KCC for approval to increase the $15.0 million cap. We also own or retain legal responsibility for certain environmental conditions at a former MGP site in Texas. At the request of the Texas Commission on Environmental Quality, we began investigating the level and extent of contamination associated with the site under their Texas Risk Reduction Program. A preliminary site investigation revealed that this site contains contaminants generally associated with MGP sites and is subject to control or remediation under various environmental laws and regulations. Until the investigation is complete, we are unable to determine what, if any, active remediation will be required. A reliable estimate of potential remediation costs is not feasible at this point due to the amount of uncertainty as to the levels and extent of contamination. Our expenditures for environmental evaluation, mitigation, remediation and compliance to date have not been significant in relation to our financial position, results of operations or cash flows, and our expenditures related to environmental matters had no material effects on earnings or cash flows during 2019, 2018 or 2017 . A number of environmental issues may exist with respect to MGP sites that are unknown to us. Accordingly, future costs are dependent on the final determination and regulatory approval of any remedial actions, the complexity of the site, level of remediation required, changing technology and governmental regulations, and to the extent not recovered by insurance or recoverable in rates from our customers, could be material to our financial condition, results of operations or cash flows. We are subject to environmental regulation by federal, state and local authorities. Due to the inherent uncertainties surrounding the development of federal and state environmental laws and regulations, we cannot determine with specificity the impact such laws and regulations may have on our existing and future facilities. With the trend toward stricter standards, greater regulation and more extensive permit requirements for the types of assets operated by us, our environmental expenditures could increase in the future, and such expenditures may not be fully recovered by insurance or recoverable in rates from our customers, and those costs may adversely affect our financial condition, results of operations and cash flows. We do not expect expenditures for these matters to have a material adverse effect on our financial condition, results of operations or cash flows. Pipeline Safety - We are subject to PHMSA regulations, including integrity-management regulations. PHMSA regulations require pipeline companies operating high-pressure transmission pipelines to perform integrity assessments on pipeline segments that pass through densely populated areas or near specifically designated HCAs. In January 2012, the Pipeline Safety, Regulatory Certainty and Job Creation Act was signed into law. The law increased maximum penalties for violating federal pipeline safety regulations and directs the DOT and the Secretary of Transportation to conduct further review or studies on issues that may or may not be material to us. These issues include, but are not limited to, the following: • an evaluation of whether natural gas pipeline integrity-management requirements should be expanded beyond current HCAs; • a verification of records for pipelines in class 3 and 4 locations and HCAs to confirm MAOPs; and • a requirement to test previously untested pipelines operating above 30 percent yield strength in HCAs. In April 2016, PHMSA published a NPRM, the Safety of Gas Transmission & Gathering Lines Rule, in the Federal Register to revise pipeline safety regulations applicable to the safety of onshore natural gas transmission and gathering pipelines. Proposals include changes to pipeline integrity management requirements and other safety-related requirements. The NPRM comment period ended July 7, 2016, and comments are under review by PHMSA. As part of the comment review process, PHMSA is being advised by the Technical Pipeline Safety Standards Committee, informally known by PHMSA as the GPAC, a statutorily mandated advisory committee that advises PHMSA on proposed safety policies for natural gas pipelines. The GPAC reviews PHMSA's proposed regulatory initiatives to assure the technical feasibility, reasonableness, cost-effectiveness and practicality of each proposal. The GPAC has met six times since January 2017 to review public comments and make recommendations to PHMSA. The GPAC completed their review of the NPRM on March 28, 2018, except for gas gathering pipelines. The GPAC met in June 2019 on gas gathering pipelines. In addition to reviewing public and committee comments, PHMSA announced they will split this NPRM into three separate final rulemakings: • the first final rule will address the legislative mandates from the Pipeline Safety, Regulatory Certainty and Jobs Creation Act and will be called the Safety of Gas Transmission Pipelines: MAOP Reconfirmation, Expansion of Assessment Requirements, and Other Related Amendments; • the second final rule will be called the Safety of Gas Transmission Pipelines: Repair Criteria, Integrity Management Improvements, Cathodic Protection, Management of Change, and Other Related Amendments and will cover all remaining elements of the NPRM (except for gas gathering pipelines); and • the third final rule will be called the Safety of Gas Gathering Pipelines and will address gas gathering pipelines. A significant number of recommendations have been made to PHMSA to improve the NPRM. The industry trade associations filed joint comments to the “legislative mandates” rulemaking to amend the federal safety regulations applicable to gas transmission and gathering pipelines. On October 1, 2019, PHMSA published the first of the three final rulemakings referenced above, which addresses the 2011 congressional mandates. This final rule expands integrity management principles beyond HCAs and requires operators to collect traceable, verifiable and complete records moving forward, retain existing and new records for the life of the pipeline, and reconfirm pipeline MAOP in populated areas. The final rule also outlines methods for reconfirming a pipeline’s MAOP within 15 years. The potential capital and operating expenditures associated with compliance with the first final rulemaking are under review but are not expected to be material. PHMSA has indicated it now expects the second pending rulemaking to be issued as a final rule during 2020. The potential capital and operating expenditures associated with compliance with these pending rulemakings are currently being evaluated and could be significant depending on the final regulations. Legal Proceedings - We are a party to various litigation matters and claims that have arisen in the normal course of our operations. While the results of litigation and claims cannot be predicted with certainty, we believe the reasonably possible losses from such matters, individually and in the aggregate, are not material. Additionally, we believe the probable final outcome of such matters will not have a material adverse effect on our results of operations, financial position or cash flows. |
QUARTERLY FINANCIAL DATA (UNAUD
QUARTERLY FINANCIAL DATA (UNAUDITED) (Notes) | 12 Months Ended |
Dec. 31, 2019 | |
Schedule of Quarterly Financial Information [Line Items] | |
QUARTERLY FINANCIAL DATA (UNAUDITED) | QUARTERLY FINANCIAL DATA (UNAUDITED) First Quarter Second Quarter Third Quarter Fourth Quarter Year Ended December 31, 2019 ( Thousands of dollars ) Revenues $ 661,000 $ 290,560 $ 248,563 $ 452,607 Operating income $ 127,619 $ 46,891 $ 38,777 $ 81,971 Net income $ 93,660 $ 24,470 $ 17,457 $ 51,162 Earnings per share Basic $ 1.77 $ 0.46 $ 0.33 $ 0.97 Diluted $ 1.76 $ 0.46 $ 0.33 $ 0.96 First Quarter Second Quarter Third Quarter Fourth Quarter Year Ended December 31, 2018 ( Thousands of dollars ) Revenues $ 638,464 $ 292,521 $ 238,280 $ 464,466 Operating income (a) $ 130,290 $ 41,043 $ 36,241 $ 80,855 Net income $ 90,835 $ 20,419 $ 16,276 $ 44,704 Earnings per share Basic $ 1.73 $ 0.39 $ 0.31 $ 0.85 Diluted $ 1.72 $ 0.39 $ 0.31 $ 0.84 (a) Reflects the impact of the adoption of a new accounting standard in fiscal year 2018 related to the presentation of net periodic benefit costs. See Note 1 for additional information regarding our adoption of this standard. |
LEASES (Notes)
LEASES (Notes) | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Lessee, Operating Leases [Text Block] | 5. LEASES We determine if an arrangement is a lease at inception if the contract conveys the right to control the use and obtain substantially all the economic benefits from the use of an identified asset for a period of time in exchange for consideration. We identify a lease as a finance lease if the agreement includes any of the following criteria: transfer of ownership by the end of the lease term; an option to purchase the underlying asset that the lessee is reasonably certain to exercise; a lease term that represents 75 percent or more of the remaining economic life of the underlying asset; a present value of lease payments and any residual value guaranteed by the lessee that equals or exceeds 90 percent of the fair value of the underlying asset; or an underlying asset that is so specialized in nature that there is no expected alternative use to the lessor at the end of the lease term. A lease that does not meet any of these criteria is considered an operating lease. Lease right-of-use assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Right-of-use assets and liabilities are recognized at the commencement date of a lease based on the present value of lease payments over the lease term. Our lease terms may include options to extend or terminate the lease. We include these extension or termination options in the determination of the lease term when it is reasonably certain that we will exercise that option. We have lease agreements with lease and non-lease components, which are accounted for separately. Additionally, for certain office equipment leases, we apply a portfolio approach to effectively account for the operating lease right-of-use assets and liabilities. We do not recognize leases having a term of less than one year in our consolidated balance sheets. For purposes of determining the present value of the lease payments, we use a lease’s implicit interest rate when readily determinable. As most of our leases do not provide an implicit interest rate, we use an incremental borrowing rate based on available information at the commencement of the lease. Lease cost for operating leases is recognized on a straight-line basis over the lease term. We have operating leases for office facilities, gas storage facilities, information technology equipment and right-of-way contracts. Our leases have remaining lease terms of 1 year to 14 years, some of which include options to extend the leases for up to 10 years , and some of which include options to terminate the leases within specified time frames. We have not entered into any finance leases. Our right-of-use asset is $34.2 million as of December 31, 2019 , and is reported within other assets in our Consolidated Balance Sheets. Operating lease liabilities are reported within our other current liabilities and other liabilities in our consolidated balance sheets. Total operating lease cost including immaterial amounts attributable to short-term operating leases was $8.5 million , $8.2 million , and $8.7 million in 2019, 2018 and 2017 , respectively. In January 2020, we entered into a lease extension resulting in an increase in our right-of-use asset and operating lease liability of $7.2 million and $7.5 million, respectively. December 31, Other information related to operating leases 2019 (Millions of dollars) Weighted-average remaining lease term 7 years Weighted-average discount rate 3.62% Supplemental cash flows information Lease payments $ (8.4 ) Right-of-use assets obtained in exchange for lease obligations $ 9.5 December 31, Future minimum lease payments under non-cancellable operating leases 2019 (Millions of dollars) 2020 $ 7.6 2021 7.2 2022 6.9 2023 5.8 2024 3.1 Thereafter 8.5 Total future minimum lease payments $ 39.1 Imputed interest (4.6 ) Total operating lease liability $ 34.5 Consolidated balance sheets as of December 31, 2019 Current operating lease liability $ 6.5 Long-term operating lease liability 28.0 Total operating lease liability $ 34.5 The following table sets forth the required disclosures for the period prior to adoption of ASC 842: December 31, Future minimum lease payments under non-cancellable operating leases 2018 (Millions of dollars) 2019 $ 6.3 2020 5.1 2021 4.5 2022 4.3 2023 4.2 Thereafter 3.8 Total future minimum lease payments $ 28.2 |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Significant Accounting Policies [Line Items] | |
Basis of Accounting | Basis of Presentation - The consolidated financial statements include the accounts of the natural gas distribution business as set forth in “Organization and Nature of Operations” above. All significant balances and transactions between our subsidiaries have been eliminated. |
Use of Estimates | Use of Estimates - The preparation of our consolidated financial statements and related disclosures in accordance with GAAP requires us to make estimates and assumptions with respect to values or conditions that cannot be known with certainty that affect the reported amount of assets and liabilities, and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements. These estimates and assumptions also affect the reported amounts of revenue and expenses during the reporting period. Items that may be estimated include, but are not limited to, the economic useful life of assets, fair value of assets and liabilities, provisions for doubtful accounts receivable, unbilled revenues for natural gas delivered but for which meters have not been read, natural gas purchased but for which no invoice has been received, provision for income taxes, including any deferred income tax valuation allowances, the results of litigation and various other recorded or disclosed amounts. We evaluate these estimates on an ongoing basis using historical experience and other methods we consider reasonable based on the particular circumstances. Nevertheless, actual results may differ significantly from the estimates. Any effects on our financial position or results of operations from revisions to these estimates are recorded in the period when the facts that give rise to the revision become known. |
Cash and Cash Equivalents | Cash and Cash Equivalents - Cash equivalents consist of highly liquid investments, which are readily convertible into cash and have original maturities of three months or less. |
Cost of Natural Gas [Policy Text Block] | Cost of Natural Gas - Cost of natural gas includes commodity purchases, fuel, storage, transportation and other gas purchase costs recovered through our cost of natural gas regulatory mechanisms and does not include an allocation of general operating costs or depreciation and amortization. In addition, our cost of natural gas regulatory mechanisms provide a method of recovering natural gas costs on an ongoing basis without a profit. See Note 10 for additional discussion of purchased gas cost recoveries. |
Accounts Receivable | Accounts Receivable - Accounts receivable represent valid claims against nonaffiliated customers for natural gas sold or services rendered, net of allowances for doubtful accounts. We assess the creditworthiness of our customers. Those customers who do not meet minimum standards may be required to provide security, including deposits and other forms of collateral, when appropriate and allowed by our tariffs. With approximately 2.2 million customers across three states, we are not exposed materially to a concentration of credit risk. We maintain an allowance for doubtful accounts based upon factors surrounding the credit risk of customers, historical trends, consideration of the current credit environment and other information. We are able to recover natural gas costs related to doubtful accounts through purchased-gas cost adjustment mechanisms. At December 31, 2019 and 2018 , our allowance for doubtful accounts was $6.6 million and $4.7 million , respectively. |
Inventories | Inventories - Natural gas in storage is maintained on the basis of weighted-average cost. Natural gas inventories that are injected into storage are recorded in inventory based on actual purchase costs, including storage and transportation costs. Natural gas inventories that are withdrawn from storage are accounted for in our purchased-gas cost adjustment mechanisms at the weighted-average inventory cost. Materials and supplies inventories are stated at the lower of weighted-average cost or net realizable value. |
Derivatives and Risk Management Activities | Derivatives and Risk Management Activities - We record all derivative instruments at fair value, with the exception of normal purchases and normal sales that are expected to result in physical delivery. The accounting for changes in the fair value of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship and, if so, the reason for holding it, or if regulatory rulings require a different accounting treatment. If certain conditions are met, we may elect to designate a derivative instrument as a hedge of exposure to changes in fair values or cash flows. We have not elected to designate any of our derivative instruments as hedges. The table below summarizes the various ways in which we account for our derivative instruments and the impact on our consolidated financial statements: Recognition and Measurement Accounting Treatment Balance Sheet Income Statement Normal purchases and normal sales - Fair value not recorded - Change in fair value not recognized in earnings Mark-to-market - Recorded at fair value - Change in fair value recognized in, and recoverable through, the purchased-gas cost adjustment mechanisms See Note 9 for additional information regarding our hedging activities using derivatives. |
Fair Value Measurement, Policy [Policy Text Block] | Fair Value Measurements - We define fair value as the price that would be received from the sale of an asset or the transfer of a liability in an orderly transaction between market participants at the measurement date. We use the market and income approaches to determine the fair value of our assets and liabilities and consider the markets in which the transactions are executed. We measure the fair value of a group of financial assets and liabilities consistent with how a market participant would price the net risk exposure at the measurement date. Fair Value Hierarchy - At each balance sheet date, we utilize a fair value hierarchy to classify fair value amounts recognized or disclosed in our consolidated financial statements based on the observability of inputs used to estimate such fair value. The levels of the hierarchy are described below: • Level 1 - Unadjusted quoted prices in active markets for identical assets or liabilities; • Level 2 - Significant observable pricing inputs other than quoted prices included within Level 1 that are, either directly or indirectly, observable as of the reporting date. Essentially, this represents inputs that are derived principally from or corroborated by observable market data; and • Level 3 - May include one or more unobservable inputs that are significant in establishing a fair value estimate. These unobservable inputs are developed based on the best information available and may include our own internal data. We recognize transfers into and out of the levels as of the end of each reporting period. Determining the appropriate classification of our fair value measurements within the fair value hierarchy requires management’s judgment regarding the degree to which market data is observable or corroborated by observable market data. We categorize derivatives for which fair value is determined using multiple inputs within a single level, based on the lowest level input that is significant to the fair value measurement in its entirety. See Note 9 for additional information regarding our fair value measurements. |
Property, Plant and Equipment | Property, Plant and Equipment - Our properties are stated at cost, which includes direct construction costs such as direct labor, materials, burden and AFUDC. Generally, the cost of our property retired or sold, plus removal costs, less salvage, is charged to accumulated depreciation. Gains and losses from sales or retirement of an entire operating unit or system of our properties are recognized in income. Maintenance and repairs are charged directly to expense. AFUDC represents the cost of borrowed funds used to finance construction activities. We capitalize interest costs during the construction or upgrade of qualifying assets. Capitalized interest is recorded as a reduction to interest expense. Our properties are depreciated using the straight-line method over their estimated useful lives. Generally, we apply composite depreciation rates to functional groups of property having similar economic circumstances. We periodically conduct depreciation studies to assess the economic lives of our assets. These depreciation studies are completed as a part of our regulatory proceedings, and the changes in economic lives, if applicable, are implemented prospectively when the new rates are approved by our regulators and become effective. Changes in the estimated economic lives of our property, plant and equipment could have a material effect on our financial position, results of operations or cash flows. Property, plant and equipment on our Consolidated Balance Sheets includes construction work in process for capital projects that have not yet been placed in service and therefore are not being depreciated. Assets are transferred out of construction work in process when they are substantially complete and ready for their intended use. See Note 11 for additional information regarding our property, plant and equipment. |
Impairment of Goodwill and Long-Lived Assets | Impairment of Goodwill and Long-Lived Assets - We assess our goodwill for impairment at least annually as of July 1, unless events or a change in circumstances indicate an impairment may have occurred before that time. As part of our goodwill impairment test, we first assess qualitative factors (including macroeconomic conditions, industry and market considerations, cost factors and overall financial performance) to determine whether it is more likely than not that our fair value is less than the carrying amount of our net assets. If further testing is necessary or a quantitative test is elected to refresh our recurring qualitative assessment, we perform a quantitative impairment test for goodwill. Our impairment test is made by comparing our fair value with our book value, including goodwill. If the fair value is less than the book value, an impairment is measured by the amount of our carrying value that exceeds our fair value, not to exceed the carrying amount of our goodwill. To estimate our fair value, we use two generally accepted valuation approaches, an income approach and a market approach, using assumptions consistent with a market participant’s perspective. Under the income approach, we use anticipated cash flows over a period of years plus a terminal value and discount these amounts to their present value using appropriate discount rates. Under the market approach, we apply acquisition multiples to forecasted cash flows. The acquisition multiples used are consistent with historical market transactions. The forecasted cash flows are based on average forecasted cash flows over a period of years. We performed a quantitative analysis in 2019, which did not result in any impairment indicators, nor did our analysis reflect our reporting unit at risk. Our goodwill impairment analysis performed in 2018 and 2017 utilized a qualitative assessment and did not result in any impairment indicators, nor did our analysis reflect our reporting unit at risk. Subsequent to July 1, 2019 , no event has occurred indicating that it is more likely than not that our fair value is less than the carrying value of our net assets. We assess our long-lived assets for impairment whenever events or changes in circumstances indicate that an asset’s carrying amount may not be recoverable. An impairment is indicated if the carrying amount of a long-lived asset exceeds the sum of the undiscounted future cash flows expected to result from the use and eventual disposition of the asset. If an impairment is indicated, we record an impairment loss equal to the difference between the carrying value and the fair value of the long-lived asset. We determined that there were no asset impairments in 2019, 2018 or 2017 . |
Regulation | Regulation - We are subject to the rate regulation and accounting requirements of the OCC, KCC, RRC and various municipalities in Texas. We follow the accounting and reporting guidance for regulated operations. During the ratemaking process, regulatory authorities set the framework for what we can charge customers for our services and establish the manner that our costs are accounted for, including allowing us to defer recognition of certain costs and permitting recovery of the amounts through rates over time, as opposed to expensing such costs as incurred. Examples include weather normalization, unrecovered purchased-gas costs, pension and postemployment benefit costs and ad-valorem taxes. This allows us to stabilize rates over time rather than passing such costs on to the customer for immediate recovery. Actions by regulatory authorities could have an effect on the amount recovered from customers. Any difference in the amount recoverable and the amount deferred is recorded as income or expense at the time of the regulatory action. A write-off of regulatory assets and costs not recovered may be required if all or a portion of the regulated operations have rates that are no longer: • established by independent regulators; • designed to recover our costs of providing regulated services; and • set at levels that will recover our costs when considering the demand and competition for our services. See Note 10 for additional information regarding our regulatory assets and liabilities disclosures. |
Pension and Other Postretirement Plans | Pension and Other Postemployment Employee Benefits - We have defined benefit retirement plans covering eligible employees. We also sponsor welfare plans that provide other postemployment medical and life insurance benefits to eligible employees who retire with at least five years of service. To calculate the costs and liabilities related to our plans, we utilize an outside actuarial consultant, which uses statistical and other factors to anticipate future events. These factors include assumptions about the discount rate, expected return on plan assets, rate of future compensation increases, age and mortality and employment periods. We use tables issued by the Society of Actuaries to estimate mortality rates. In determining the projected benefit obligations and costs, assumptions can change from period to period and may result in material changes in the cost and liabilities we recognize. |
Income Taxes | Income Taxes - Deferred income taxes are recorded for the difference between the financial statement and income tax basis of assets and liabilities and carryforward items, based on income tax laws and rates existing at the time the temporary differences are expected to reverse. The effect on deferred income taxes of a change in tax rates is deferred and amortized for operations regulated by the OCC, KCC, RRC and various municipalities in Texas, if, as a result of an action by a regulator, it is probable that the effect of the change in tax rates will be recovered from or returned to customers through future rates. We continue to amortize previously deferred investment tax credits for ratemaking purposes over the periods prescribed by our regulators. A valuation allowance for deferred income tax assets is recognized when it is more likely than not that some or all of the benefit from the deferred income tax asset will not be realized. To assess that likelihood, we use estimates and judgment regarding our future taxable income, as well as the jurisdiction in which such taxable income is generated, to determine whether a valuation allowance is required. Such evidence can include our current financial position, our results of operations, both actual and forecasted, the reversal of deferred income tax liabilities, as well as the current and forecasted business economics of our industry. We had no valuation allowance at December 31, 2019 and 2018 . We utilize a more-likely-than-not recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position that is taken or expected to be taken in a tax return. We reflect penalties and interest as part of income tax expense as they become applicable for tax provisions that do not meet the more-likely-than-not recognition threshold and measurement attribute. There were no material uncertain tax positions at December 31, 2019 and 2018 . Changes in tax laws or tax rates are recognized in the financial reporting period that includes the enactment date. See Note 14 for additional information regarding income taxes. |
Asset Retirement Obligations | Asset Retirement Obligations - Asset retirement obligations represent legal obligations associated with the retirement of long-lived assets that result from the acquisition, construction, development and/or normal use of the asset. Certain long-lived assets that comprise our natural gas distribution systems, primarily our pipeline assets, are subject to agreements or regulations that give rise to an asset retirement obligation for removal or other disposition costs associated with retiring the assets in place upon the discontinued use of the natural gas distribution system. We recognize the fair value of a liability for an asset retirement obligation in the period when it is incurred if a reasonable estimate of the fair value can be made. We are not able to estimate reasonably the fair value of the asset retirement obligations for portions of our assets because the settlement dates are indeterminable given our expected continued use of the assets with proper maintenance. We expect our natural gas distribution systems will continue in operation as long as natural gas supply and demand for natural gas distribution service exists. Based on our proximity to significant natural gas reserves and infrastructure and the widespread use of natural gas for heating and cooking activities by residential and commercial customers in our service areas, we expect supply and demand to exist for the foreseeable future. In accordance with long-standing regulatory treatment, we collect through rates the estimated costs of removal on certain regulated properties through depreciation expense, with a corresponding credit to accumulated depreciation and amortization. These removal costs collected through our rates include costs attributable to legal and nonlegal removal obligations. The amounts collected for non-legal asset removal costs that are in excess of costs incurred are accounted for as a regulatory liability for financial reporting purposes. Historically, with the exception of the regulatory authority in Kansas, the regulatory authorities that have jurisdiction over our regulated operations have not required us to quantify or disclose this amount. These costs are addressed prospectively in depreciation rates, rather than as a regulatory liability, in each general rate order. |
Contingencies | Contingencies - Our accounting for contingencies covers a variety of business activities, including contingencies for legal and environmental exposures. We accrue these contingencies when our assessments indicate that it is probable that a liability has been incurred or an asset will not be recovered and an amount can be estimated reasonably. We expense legal fees as incurred and base our legal liability estimates on currently available facts and our estimates of the ultimate outcome or resolution. Accruals for estimated losses from environmental remediation obligations generally are recognized no later than the completion of a remediation feasibility study. Recoveries of environmental remediation costs from other parties are recorded as assets when their receipt is deemed probable. Actual results may differ from our estimates resulting in an impact, positive or negative, on earnings. See Note 16 for additional information regarding contingencies. |
Share-Based Payments | Share-Based Payments - We expense the fair value of share-based payments net of estimated forfeitures. We estimate forfeiture rates based on historical forfeitures under our share-based payment plans. |
Earnings Per Share | Earnings per share - Basic EPS is based on net income and is calculated based upon the daily weighted-average number of common shares outstanding during the periods presented. Also, this calculation includes fully vested stock awards that have not yet been issued as common stock. Diluted EPS includes the above, plus unvested stock awards granted under our compensation plans, but only to the extent these instruments dilute earnings per share. |
Segments | Segments - We operate in one reportable business segment: regulated public utilities that deliver natural gas primarily to residential, commercial and transportation customers. We define reportable business segments as components of an organization for which discrete financial information is available and operating results are evaluated on a regular basis by the chief operating decision maker (“CODM”) in order to assess performance and allocate resources. Our CODM is our Chief Executive Officer. Characteristics of our organization that were relied upon in making this determination include the similar nature of services we provide, the functional alignment of our organizational structure, and the reports that are regularly reviewed by the CODM for the purpose of assessing performance and allocating resources. Our management is functionally aligned and centralized, with performance evaluated based upon results of the entire distribution business. Capital allocation decisions are driven by asset integrity management, operating efficiency, growth opportunities and government relocations, not geographic location or regulatory jurisdiction. In 2019 , 2018 and 2017 , we had no single external customer from which we received 10 percent or more of our gross revenues. |
Treasury Stock | Treasury Stock - We record treasury stock purchases at cost, which includes incremental direct transaction costs. Amounts are recorded as reductions in equity in our consolidated balance sheets. We record the reissuance of treasury stock at our weighted average cost of treasury shares recorded in equity in our consolidated balance sheets. |
Recently Issues Accounting Standards Updates | Recently Issued Accounting Standards Update - In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes,” which removes certain exceptions for recognizing deferred taxes for investments, performing intraperiod allocation and calculating income taxes in interim periods. The ASU also adds guidance to reduce complexity in certain areas, including recognizing deferred taxes for tax goodwill and allocating taxes to members of a consolidated group. This standard is effective for interim and annual periods in fiscal years beginning after December 15, 2020, and early adoption is permitted. We are currently assessing the timing and impacts of adopting this standard. In August 2018, the FASB issued ASU 2018-15, “Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (a consensus of the FASB Emerging Issues Task Force).” Under this guidance, a company should defer implementation costs that it incurs if the company would capitalize those same costs under the internal-use software guidance for an arrangement that is a software license. This standard is effective for interim and annual periods in fiscal years beginning after December 15, 2019, and early adoption is permitted. We will adopt this new guidance in the first quarter of 2020 using the prospective transition approach and do not expect our adoption will result in a material impact to our consolidated financial statements. In February 2018, the FASB issued ASU 2018-02, “Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income,” which allows a reclassification from accumulated other comprehensive income (loss) to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act of 2017. We adopted this new guidance in the first quarter 2019 and our adoption did not result in a material impact to our consolidated financial statements. This change is reflected in our consolidated statements of equity. In March 2017, the FASB issued ASU 2017-07, “Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost,” which requires (1) separation of net periodic service costs for pension and other postemployment benefits into service cost and other components, (2) presentation of the service cost component in the same line as other compensation costs rendered by pertinent employees during the period, and (3) reporting the other components of net periodic benefit costs separately from the service cost component and outside a subtotal of income from operations. Additionally, only the service cost component is eligible for capitalization for GAAP, when applicable. However, all of our cost components remain eligible for capitalization under the accounting requirements for rate regulated entities. We adopted this guidance in the first quarter of 2018. The presentation changes required for net periodic benefit costs did not impact previously reported net income; however, the reclassification of the other components of benefits costs resulted in an increase in operating income and an increase in other expenses of $17.3 million for the year ended December 31, 2017. We elected the practical expedient to use the retroactive presentation of the amounts disclosed for the various components of net benefit cost in our Employee Benefit Plans footnote as the basis for the retrospective application. In addition, we updated our information systems for the capitalization of service costs to property, plant and equipment and non-service costs to a regulatory asset on a prospective basis, as well as the appropriate accounts for non-service costs to apply retroactive reclassification. In June 2016, the FASB issued ASU 2016-13, “Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments,’’ which introduces new guidance to the accounting for credit losses on instruments within its scope, including trade receivables. It is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, and early adoption is permitted for fiscal years beginning after December 15, 2018. We will adopt this new guidance in the first quarter of 2020 using the modified retrospective method. Our adoption is not expected to result in a cumulative adjustment to our opening retained earnings or a material impact to our consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842),” as amended, (“Topic 842”) which prescribes recognizing lease assets and liabilities on the balance sheet and includes disclosure of key information about leasing arrangements. We adopted this new guidance effective January 1, 2019, and applied the modified retrospective approach to all existing leases. Upon adoption we recognized lease liabilities of approximately $32 million , with corresponding right-of-use assets of the same amount based on the present value of the remaining minimum rental payments for existing operating leases. Our adoption did not result in a material impact to our results of operations or cash flows. We utilized the practical expedients that allow us to: (1) not reassess expired or existing contracts to determine whether they are subject to lease accounting guidance, (2) not reconsider lease classification at transition, and (3) not evaluate previously capitalized initial direct costs under the revised requirements. We also utilized the practical expedients that allowed us to: (1) not evaluate under Topic 842 existing or expired land easements that were not previously accounted for as leases under the current lease guidance in ASC Topic 840 (“Topic 840”) and (2) use an additional transition method in which an entity initially applies the new leases standard at the adoption date and recognizes a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. We adopted an accounting policy that exempts leases with terms of less than one year from the recognition requirements of Topic 842, and disclose such leases in our interim and annual disclosures upon adoption. Our adoption did not result in a cumulative adjustment to our opening retained earnings or a material impact to our consolidated financial statements. See Note 5 for additional information regarding our leases. In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers” (“ASC 606”), which clarifies and converges the revenue recognition principles under GAAP and International Financial Reporting Standards. We adopted this new guidance in the first quarter 2018, using the modified retrospective method. We evaluated all of our sources of revenue to determine the potential effect of the new standard on our financial position, results of operations, cash flows and the related accounting policies and business processes. Our adoption did not result in a cumulative adjustment to our opening retained earnings. Our adoption resulted in a reclassification of certain revenues associated with certain regulatory mechanisms that do not meet the requirements under ASC 606 as revenue from contracts with customers, but will continue to be reflected as other revenues in determining total revenues. The reclassified revenues relate primarily to the weather normalization mechanism in Kansas, where the KCC determines how we reflect variations in weather in our rates billed to customers. See Note 2 for additional information regarding our revenues. |
REVENUE Revenue Recognition (Po
REVENUE Revenue Recognition (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Revenue from Contract with Customer [Policy Text Block] | We recognize revenue from contracts with customers to depict the transfers of goods and services to customers at an amount that we expect to be entitled to receive in exchange for these goods and services. Our sources of revenue are disaggregated by natural gas sales, transportation revenues, and miscellaneous revenues, which are primarily one-time service fees, that meet the requirements of ASC 606. Certain revenues that do not meet the requirements of ASC 606 are classified as other revenues in our Notes to Consolidated Financial Statements in this Annual Report. Our natural gas sales to customers represent revenue from contracts with customers through implied contracts established by our tariff rates approved by the regulatory authorities. For natural gas sales, the customer receives the benefits of our performance when the commodity is received and simultaneously consumed by the customer. The performance obligation is satisfied over time as the customer consumes the natural gas. Our transportation revenues represent revenue from contracts with customers through implied contracts established by our tariff rates approved by the regulatory authorities and tariff-based negotiated contracts. The customer receives the benefits of our performance when the commodity is delivered to the customer and the performance obligation is satisfied over time as the customer receives the natural gas. For regulated deliveries of natural gas, we read meters and bill customers on a monthly cycle. We recognize revenues upon the delivery of natural gas commodity or services rendered to customers. The billing cycles for customers do not necessarily coincide with the accounting periods used for financial reporting purposes. We accrue unbilled revenues for natural gas that has been delivered but not yet billed at the end of an accounting period. We use the invoice method practical expedient, where we recognize revenue for volumes delivered for which we have a right to invoice. Our estimate of accrued unbilled revenue is based on a percentage estimate of amounts unbilled each month, which is dependent upon a number of factors, some of which require management’s judgment. These factors include customer consumption patterns and the impact of weather on usage. The accrued unbilled natural gas sales revenue at December 31, 2019 and 2018 were $109.7 million and $127.6 million , respectively, and are included in accounts receivable on our consolidated balance sheets. Our miscellaneous revenues from contracts with customers represent implied contracts established by our tariff rates approved by the regulatory authorities and include miscellaneous utility services with the performance obligation satisfied at a point in time when services are rendered to the customer. Total other revenues consist of revenues associated with regulatory mechanisms that do not meet the requirements of ASC 606 as revenue from contracts with customers, but authorize us to accrue revenues earned based on tariffs approved by the regulatory authorities. Other revenues - natural gas sales related primarily reflect our weather normalization mechanism in Kansas. This mechanism adjusts our revenues earned for the variance between actual and normal HDDs. This mechanism can have either positive (warmer than normal) or negative (colder than normal) effects on revenues. We collect and remit other taxes on behalf of governmental authorities, and we record these amounts in accrued taxes other than income in our consolidated balance sheets. |
LEASES (Policies)
LEASES (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Lessee, Leases [Policy Text Block] | We determine if an arrangement is a lease at inception if the contract conveys the right to control the use and obtain substantially all the economic benefits from the use of an identified asset for a period of time in exchange for consideration. We identify a lease as a finance lease if the agreement includes any of the following criteria: transfer of ownership by the end of the lease term; an option to purchase the underlying asset that the lessee is reasonably certain to exercise; a lease term that represents 75 percent or more of the remaining economic life of the underlying asset; a present value of lease payments and any residual value guaranteed by the lessee that equals or exceeds 90 percent of the fair value of the underlying asset; or an underlying asset that is so specialized in nature that there is no expected alternative use to the lessor at the end of the lease term. A lease that does not meet any of these criteria is considered an operating lease. Lease right-of-use assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Right-of-use assets and liabilities are recognized at the commencement date of a lease based on the present value of lease payments over the lease term. Our lease terms may include options to extend or terminate the lease. We include these extension or termination options in the determination of the lease term when it is reasonably certain that we will exercise that option. We have lease agreements with lease and non-lease components, which are accounted for separately. Additionally, for certain office equipment leases, we apply a portfolio approach to effectively account for the operating lease right-of-use assets and liabilities. We do not recognize leases having a term of less than one year in our consolidated balance sheets. For purposes of determining the present value of the lease payments, we use a lease’s implicit interest rate when readily determinable. As most of our leases do not provide an implicit interest rate, we use an incremental borrowing rate based on available information at the commencement of the lease. Lease cost for operating leases is recognized on a straight-line basis over the lease term. |
REVENUE (Tables)
REVENUE (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Revenues Disaggregated by Source [Table] | The following table sets forth our revenues disaggregated by source for the periods indicated: Year Ended December 31, 2019 2018 (Thousands of dollars) Natural gas sales to customers $ 1,512,886 $ 1,495,250 Transportation revenues 114,014 109,658 Miscellaneous revenues 20,579 21,710 Total revenues from contracts with customers 1,647,479 1,626,618 Other revenues - natural gas sales related (4,699 ) (2,806 ) Other revenues 9,950 9,919 Total other revenues 5,251 7,113 Total revenues $ 1,652,730 $ 1,633,731 |
ACCUMULATED OTHER COMPREHENSI_2
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block] | The following table sets forth the balance in accumulated other comprehensive loss for the periods indicated: Accumulated Other Comprehensive Loss (Thousands of dollars) January 1, 2018 $ (5,493 ) Pension and other postemployment benefit plans obligations Other comprehensive income before reclassification, net of tax of $(577) 596 Amounts reclassified from accumulated other comprehensive loss, net of tax of $(271) 811 Other comprehensive income 1,407 December 31, 2018 (4,086 ) Pension and other postemployment benefit plans obligations Other comprehensive loss before reclassification, net of tax of $692 (2,074 ) Amounts reclassified from accumulated other comprehensive loss, net of tax of $(213) 639 Other comprehensive loss (1,435 ) Reclassification of stranded tax effects (a) (1,218 ) December 31, 2019 $ (6,739 ) |
Reclassification out of Accumulated Other Comprehensive Income [Table Text Block] | The following table sets forth the effect of reclassifications from accumulated other comprehensive loss on our Consolidated Statements of Income for the periods indicated: Affected Line Item in the Details about Accumulated Other Comprehensive Years Ended December 31, Consolidated Statements of Loss Components 2019 2018 2017 Income ( Thousands of dollars ) Pension and other postemployment benefit plan obligations (a) Amortization of net loss $ 35,283 $ 43,800 $ 42,591 Amortization of unrecognized prior service cost (673 ) (4,567 ) (4,597 ) 34,610 39,233 37,994 Regulatory adjustments (b) (33,758 ) (38,151 ) (37,157 ) 852 1,082 837 Income before income taxes (213 ) (271 ) (322 ) Income tax expense Total reclassifications for the period $ 639 $ 811 $ 515 Net income (a) These components of accumulated other comprehensive loss are included in the computation of net periodic benefit cost. See Note 13 for additional information regarding our net periodic benefit cost. (b) Regulatory adjustments represent pension and other postemployment benefit costs expected to be recovered through rates and are deferred as part of our regulatory assets. See Note 10 for additional information regarding our regulatory assets and liabilities. |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
EARNINGS PER SHARE OF COMMON STOCK, BASIC AND DILUTED [Line Items] | |
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | The following tables set forth the computation of basic and diluted EPS from continuing operations for the periods indicated: Year Ended December 31, 2019 Income Shares Per Share Amount ( Thousands, except per share amounts ) Basic EPS Calculation Net income available for common stock $ 186,749 52,895 $ 3.53 Diluted EPS Calculation Effect of dilutive securities — 345 Net income available for common stock and common stock equivalents $ 186,749 53,240 $ 3.51 Year Ended December 31, 2018 Income Shares Per Share Amount ( Thousands, except per share amounts ) Basic EPS Calculation Net income available for common stock $ 172,234 52,693 $ 3.27 Diluted EPS Calculation Effect of dilutive securities — 336 Net income available for common stock and common stock equivalents $ 172,234 53,029 $ 3.25 Year Ended December 31, 2017 Income Shares Per Share Amount ( Thousands, except per share amounts ) Basic EPS Calculation Net income available for common stock $ 162,995 52,527 $ 3.10 Diluted EPS Calculation Effect of dilutive securities — 452 Net income available for common stock and common stock equivalents $ 162,995 52,979 $ 3.08 |
REGULATORY ASSETS AND LIABILI_2
REGULATORY ASSETS AND LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
SCHEDULE OF REGULATED ASSETS AND LIABILITIES [Line Items] | |
SCHEDULE OF REGULATED ASSETS AND LIABILITIES | The tables below present a summary of regulatory assets, net of amortization, and liabilities for the periods indicated: December 31, 2019 Remaining Recovery Period Current Noncurrent Total ( Thousands of dollars ) Under-recovered purchased-gas costs 1 year $ 17,172 $ — $ 17,172 Pension and other postemployment benefit costs See Note 13 21,213 373,266 394,479 Reacquired debt costs 8 years 812 5,677 6,489 MGP remediation costs 15 years 98 9,709 9,807 Ad-valorem tax 1 year 2,921 — 2,921 Other 1 to 19 years 5,224 2,384 7,608 Total regulatory assets, net of amortization 47,440 391,036 438,476 Federal income tax rate changes (a) (10,297 ) (503,518 ) (513,815 ) Over-recovered purchased-gas costs 1 year (27,623 ) — (27,623 ) Weather normalization 1 year (7,281 ) — (7,281 ) Total regulatory liabilities (45,201 ) (503,518 ) (548,719 ) Net regulatory assets and liabilities $ 2,239 $ (112,482 ) $ (110,243 ) (a) Recovery period varies by jurisdiction. See discussion below for additional information regarding our regulatory liabilities related to federal income tax rate changes. December 31, 2018 Remaining Recovery Period Current Noncurrent Total ( Thousands of dollars ) Under-recovered purchased-gas costs 1 year $ 25,083 $ — $ 25,083 Pension and other postemployment benefit costs See Note 13 23,384 421,726 445,110 Reacquired debt costs 9 years 812 6,487 7,299 MGP remediation costs 15 years — 7,724 7,724 Ad-valorem tax 1 year 1,070 — 1,070 Other 1 to 20 years 4,071 1,542 5,613 Total regulatory assets, net of amortization 54,420 437,479 491,899 Federal income tax rate changes (a) (30,934 ) (520,866 ) (551,800 ) Over-recovered purchased-gas costs 1 year (13,668 ) — (13,668 ) Weather normalization 1 year (3,792 ) — (3,792 ) Total regulatory liabilities (48,394 ) (520,866 ) (569,260 ) Net regulatory assets and liabilities $ 6,026 $ (83,387 ) $ (77,361 ) |
PROPERTY, PLANT AND EQUIPMENT_2
PROPERTY, PLANT AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Regulated [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment by Property Type | The following table sets forth our property, plant and equipment by property type, for the periods indicated: December 31, December 31, 2019 2018 ( Thousands of dollars ) Natural gas distribution pipelines and related equipment $ 5,117,496 $ 4,861,340 Natural gas transmission pipelines and related equipment 549,788 517,697 General plant and other 612,984 567,580 Construction work in process 152,851 126,526 Property, plant and equipment 6,433,119 6,073,143 Accumulated depreciation and amortization (1,867,893 ) (1,789,431 ) Net property, plant and equipment $ 4,565,226 $ 4,283,712 |
SHARE-BASED PAYMENTS (Tables)
SHARE-BASED PAYMENTS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Payments [Line Items] | |
Schedule of Share-based Compensation, Restricted Stock Units Activity | The following tables set forth activity and various statistics for restricted stock unit awards outstanding under the respective plans for the period indicated: Number of Units Weighted- Average Price Nonvested at December 31, 2018 109,506 $ 63.45 Granted 35,753 $ 83.94 Vested (39,418 ) $ 58.60 Forfeited (1,443 ) $ 69.87 Nonvested at December 31, 2019 104,398 $ 72.21 2019 2018 2017 Weighted-average grant date fair value (per share) $ 83.94 $ 68.17 $ 63.97 Fair value of shares granted (thousands of dollars) $ 3,001 $ 2,583 $ 2,420 |
Schedule of Nonvested Performance-based Units Activity | The following tables set forth activity and various statistics related to our performance stock unit awards and the assumptions used by us in the valuations of the 2019, 2018 and 2017 grants at the grant date: Number of Units Weighted- Average Price Nonvested at December 31, 2018 219,331 $ 69.21 Granted 71,237 $ 89.86 Vested (70,548 ) $ 64.06 Forfeited (1,844 ) $ 73.57 Nonvested at December 31, 2019 218,176 $ 77.58 2019 2018 2017 Volatility (a) 18.70% 18.80% 20.70% Dividend yield 2.38% 2.70% 2.63% Risk-free interest rate (b) 2.50% 2.38% 1.48% (a) - Volatility based on historical volatility over three years using daily stock price observations of our peer utilities. (b) - Using 3-year treasury. 2019 2018 2017 Weighted-average grant date fair value (per share) $ 89.86 $ 74.04 $ 68.94 Fair value of shares granted (thousands of dollars) $ 6,401 $ 5,882 $ 5,110 |
EMPLOYEE BENEFIT PLANS (Tables)
EMPLOYEE BENEFIT PLANS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Defined Benefit Plans and Other Postemployment Benefit Plans Table Text Block [Line Items] | |
Defined Benefit Plan, Assumptions [Table Text Block] | Actuarial Assumptions - The following table sets forth the weighted-average assumptions used to determine benefit obligations for pension and postemployment benefits for the periods indicated: December 31, 2019 2018 Discount rate - pension plans 3.50% 4.40% Discount rate - other postemployment plans 3.40% 4.40% Compensation increase rate 3.10% - 4.00% 3.20% - 4.00% The following table sets forth the weighted-average assumptions used by us to determine the periodic benefit costs for the periods indicated: Years Ended December 31, 2019 2018 2017 Discount rate - pension plans 4.40% 3.80% 4.30% Discount rate - other postemployment plans 4.40% 3.70% 4.20% Expected long-term return on plan assets - pension plans 7.20% 7.25% 7.75% Expected long-term return on plan assets - other postemployment plans 7.35% 7.60% 7.60% Compensation increase rate 3.20% - 4.00% 3.25% - 3.35% 3.25% - 3.40% |
Schedule of Defined Benefit Plans Disclosures [Table Text Block] | The following table sets forth our defined benefit pension and other postemployment benefit plans, benefit obligations and fair value of plan assets for the periods indicated: Pension Benefits Other Postemployment Benefits December 31, December 31, 2019 2018 2019 2018 Changes in Benefit Obligation (Thousands of dollars) Benefit obligation, beginning of period $ 950,510 $ 993,891 $ 220,144 $ 255,040 Service cost 12,030 12,919 1,734 2,354 Interest cost 40,670 36,801 9,318 9,117 Plan participants’ contributions — — 3,697 3,563 Actuarial loss (gain) 98,231 (42,540 ) 13,945 (31,607 ) Benefits paid (50,915 ) (50,561 ) (18,348 ) (18,323 ) Settlements (49,158 ) — — — Benefit obligation, end of period 1,001,368 950,510 230,490 220,144 Change in Plan Assets Fair value of plan assets, beginning of period 814,112 884,804 176,859 190,226 Actual return (loss) on plan assets 162,785 (62,752 ) 38,772 (6,325 ) Employer contributions 29,199 42,386 6,202 7,718 Plan participants’ contributions — — 3,697 3,563 Benefits paid (50,915 ) (50,561 ) (18,348 ) (18,323 ) Settlements (47,207 ) 235 — — Fair value of assets, end of period 907,974 814,112 207,182 176,859 Balance at December 31 $ (93,394 ) $ (136,398 ) $ (23,308 ) $ (43,285 ) Current liabilities $ (1,045 ) $ (962 ) $ — $ — Noncurrent liabilities (92,349 ) (135,436 ) (23,308 ) (43,285 ) Balance at December 31 $ (93,394 ) $ (136,398 ) $ (23,308 ) $ (43,285 ) |
Schedule of Net Benefit Costs [Table Text Block] | Components of Net Periodic Benefit Cost - The following tables set forth the components of net periodic benefit cost, prior to regulatory deferrals, for our defined benefit pension and other postemployment benefit plans for the period indicated: Pension Benefits Year Ended December 31, 2019 2018 2017 (Thousands of dollars) Components of net periodic benefit cost Service cost $ 12,030 $ 12,919 $ 12,176 Interest cost (a) 40,670 36,801 40,453 Expected return on assets (a) (61,939 ) (60,579 ) (58,496 ) Amortization of net loss (a) 33,039 39,913 36,107 Net periodic benefit cost $ 23,800 $ 29,054 $ 30,240 (a) These amounts, net of any amounts capitalized as a regulatory asset since adoption of ASU 2017-07 on January 1, 2018, have been recognized as other income (expense), net in the Consolidated Statements of Income. See Note 15 for additional detail of our other income (expense), net. Other Postemployment Benefits Year Ended December 31, 2019 2018 2017 (Thousands of dollars) Components of net periodic benefit cost Service cost $ 1,734 $ 2,354 $ 2,509 Interest cost (a) 9,318 9,117 9,890 Expected return on assets (a) (12,586 ) (14,284 ) (12,590 ) Amortization of unrecognized prior service cost (a) (673 ) (4,567 ) (4,597 ) Amortization of net loss (a) 2,244 3,887 6,484 Net periodic benefit cost (credit) $ 37 $ (3,493 ) $ 1,696 |
Schedule of Amounts Recognized in Other Comprehensive Income (Loss) [Table Text Block] | Other Comprehensive Income (Loss) - The following table sets forth the amounts recognized in other comprehensive income (loss), net of regulatory deferrals, related to our defined benefit pension benefits for the period indicated: Pension Benefits Year Ended December 31, 2019 2018 2017 (Thousands of dollars) Net gain (loss) arising during the period $ (2,766 ) $ 1,173 $ (2,101 ) Amortization of loss 852 1,082 837 Deferred income taxes 479 (848 ) 486 Total recognized in other comprehensive income (loss) $ (1,435 ) $ 1,407 $ (778 ) |
Schedule of Net Periodic Benefit Cost Not yet Recognized [Table Text Block] | The tables below set forth the amounts in accumulated other comprehensive loss that had not yet been recognized as components of net periodic benefit expense for the periods indicated: Pension Benefits December 31, 2019 2018 (Thousands of dollars) Accumulated loss $ (381,633 ) $ (419,238 ) Accumulated other comprehensive loss before regulatory assets (381,633 ) (419,238 ) Regulatory asset for regulated entities 373,025 412,545 Accumulated other comprehensive loss after regulatory assets (8,608 ) (6,693 ) Deferred income taxes 1,869 2,607 Accumulated other comprehensive loss, net of tax $ (6,739 ) $ (4,086 ) Other Postemployment Benefits December 31, 2019 2018 (Thousands of dollars) Prior service credit $ 202 $ 875 Accumulated loss (19,660 ) (34,144 ) Accumulated other comprehensive loss before regulatory assets $ (19,458 ) $ (33,269 ) Regulatory asset for regulated entities 19,458 33,269 Accumulated other comprehensive loss after regulatory assets $ — $ — |
Schedule of Amounts in Accumulated Other Comprehensive Income (Loss) to be Recognized over Next Fiscal Year [Table Text Block] | The following table sets forth the amounts recognized in either accumulated comprehensive income (loss) or regulatory assets expected to be recognized as components of net periodic benefit expense in the next fiscal year: Pension Benefits Other Postemployment Benefits Amounts to be recognized in 2020 (Thousands of dollars) Prior service cost $ — $ (117 ) Actuarial net loss $ 42,319 $ 173 |
Schedule of Health Care Cost Trend Rates [Table Text Block] | Health Care Cost Trend Rates - The following table sets forth the assumed health care cost-trend rates for the periods indicated: 2019 2018 Health care cost-trend rate assumed for next year 6.50% 7.00% Rate to which the cost-trend rate is assumed to decline (the ultimate trend rate) 5.00% 5.00% Year that the rate reaches the ultimate trend rate 2025 2024 |
Schedule of Effect of One-Percentage-Point Change in Assumed Health Care Cost Trend Rates [Table Text Block] | Assumed health care cost-trend rates have a significant effect on the amounts reported for our other postemployment benefit plans. A one percentage point change in assumed health care cost-trend rates would have the following effects: One Percentage One Percentage Point Increase Point Decrease (Millions of dollars) Effect on total of service and interest cost $ 0.1 $ (0.1 ) Effect on other postemployment benefit obligation $ 2.3 $ (2.4 ) |
Schedule of Allocation of Plan Assets [Table Text Block] | Plan Assets - Our investment strategy is to invest plan assets in accordance with sound investment practices that emphasize long-term fundamentals. The goal of this strategy is to maximize investment returns while managing risk in order to meet the plan’s current and projected financial obligations. To achieve this strategy, we have established a liability-driven investment strategy to change the allocations as the funded status of the defined benefit pension plan increases. The plan’s investments include a diverse blend of various domestic and international equities, investment-grade debt securities which mirror the cash flows of our liability, insurance contracts and alternative investments. The current target allocation for the assets of our defined benefit pension plan is as follows: Investment-grade bonds 40.0 % U.S. large-cap equities 18.0 % Alternative investments 14.0 % Developed foreign large-cap equities 10.0 % Mid-cap equities 7.0 % Emerging markets equities 6.0 % Small-cap equities 5.0 % Total 100 % As part of our risk management for the plans, minimums and maximums have been set for each of the asset classes listed above. All investment managers for the plan are subject to certain restrictions on the securities they purchase and, with the exception of indexing purposes, are prohibited from owning our stock. The current target allocation for the assets of our other postemployment benefits plan is 30 percent fixed income securities and 70 percent equity securities. The following tables set forth our pension benefits and other postemployment benefits plan assets by fair value category as of the measurement date: Pension Benefits December 31, 2019 Asset Category Level 1 Level 2 Level 3 Total (Thousands of dollars) Investments: Equity securities (a) $ 323,737 $ 27,267 $ — $ 351,004 Government obligations — 54,726 — 54,726 Corporate obligations (b) — 304,457 — 304,457 Cash and money market funds (c) 1,687 87,422 — 89,109 Insurance contracts and group annuity contracts — — 25,988 25,988 Other investments (d) — 897 81,793 82,690 Total assets $ 325,424 $ 474,769 $ 107,781 $ 907,974 (a) - This category represents securities of the various market sectors from diverse industries. (b) - This category represents bonds from diverse industries. (c) - This category is primarily money market funds. (d) - This category represents alternative investments such as hedge funds and other financial instruments. Pension Benefits December 31, 2018 Asset Category Level 1 Level 2 Level 3 Total (Thousands of dollars) Investments: Equity securities (a) $ 282,668 $ 35,870 $ — $ 318,538 Government obligations — 69,475 — 69,475 Corporate obligations (b) — 240,900 — 240,900 Cash and money market funds (c) 2,419 71,991 — 74,410 Insurance contracts and group annuity contracts — — 30,445 30,445 Other investments (d) — 1,139 79,205 80,344 Total assets $ 285,087 $ 419,375 $ 109,650 $ 814,112 (a) - This category represents securities of the various market sectors from diverse industries. (b) - This category represents bonds from diverse industries. (c) - This category is primarily money market funds. (d) - This category represents alternative investments such as hedge funds and other financial instruments. Other Postemployment Benefits December 31, 2019 Asset Category Level 1 Level 2 Level 3 Total (Thousands of dollars) Investments: Equity securities (a) $ 61,688 $ — $ — $ 61,688 Government obligations — — — — Corporate obligations (b) — 26,852 — 26,852 Cash and money market funds (c) 18,350 682 — 19,032 Insurance contracts and group annuity contracts (d) — 99,610 — 99,610 Total assets $ 80,038 $ 127,144 $ — $ 207,182 (a) - This category represents securities of the various market sectors from diverse industries. (b) - This category represents bonds from diverse industries. (c) - This category is primarily money market funds. (d) - This category includes equity securities and bonds held in a captive insurance product. Other Postemployment Benefits December 31, 2018 Asset Category Level 1 Level 2 Level 3 Total (Thousands of dollars) Investments: Equity securities (a) $ 58,087 $ 2,382 $ — $ 60,469 Government obligations — 74 — 74 Corporate obligations (b) — 25,857 — 25,857 Cash and money market funds (c) 1,249 300 — 1,549 Insurance contracts and group annuity contracts (d) — 88,910 — 88,910 Total assets $ 59,336 $ 117,523 $ — $ 176,859 (a) - This category represents securities of the various market sectors from diverse industries. (b) - This category represents bonds from diverse industries. (c) - This category is primarily money market funds. (d) - This category includes equity securities and bonds held in a captive insurance product. |
Schedule of Effect of Significant Unobservable Inputs, Changes in Plan Assets [Table Text Block] | The following table sets forth the reconciliation of Level 3 fair value measurements of our pension plans for the periods indicated: Pension Benefits Insurance Contracts Other Investments Total (Thousands of dollars) January 1, 2018 $ 35,158 $ 78,707 $ 113,865 Net realized and unrealized gains (losses) (611 ) 496 (115 ) Purchases — — — Settlements (4,100 ) — (4,100 ) December 31, 2018 $ 30,445 $ 79,205 $ 109,650 Net realized and unrealized gains (losses) (860 ) 2,588 1,728 Purchases — — — Sales and settlements (3,597 ) — (3,597 ) December 31, 2019 $ 25,988 $ 81,793 $ 107,781 |
Schedule of Expected Benefit Payments [Table Text Block] | The following table sets forth the pension benefits and other postemployment benefits payments expected to be paid in 2020-2029: Pension Benefits Other Postemployment Benefits to be paid in: (Thousands of dollars) 2020 $ 49,631 $ 16,464 2021 $ 50,378 $ 16,308 2022 $ 51,547 $ 16,269 2023 $ 52,628 $ 16,090 2024 $ 53,562 $ 15,757 2025 through 2029 $ 280,547 $ 73,787 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income tax [Line Items] | |
Reconciliation of Income Tax Provision | The following table sets forth our provision for income taxes for the periods indicated: Years Ended December 31, 2019 2018 2017 ( Thousands of dollars ) Current income tax provision Federal $ 24,537 $ — $ — State 5,008 289 750 Total current income tax provision 29,545 289 750 Deferred income tax provision Federal 8,375 42,413 83,138 State 4,932 10,829 9,255 Total deferred income tax provision 13,307 53,242 92,393 Total provision for income taxes $ 42,852 $ 53,531 $ 93,143 |
Schedule of Effective Income Tax Rate Reconciliation | The following table is a reconciliation of our income tax provision for the periods indicated: Years Ended December 31, 2019 2018 2017 ( Thousands of dollars ) Income before income taxes $ 229,601 $ 225,765 $ 256,138 Federal statutory income tax rate 21 % 21 % 35 % Provision for federal income taxes 48,215 47,411 89,648 State income taxes, net of federal tax benefit 9,758 8,783 6,503 EDIT not recovered in rates — 74 2,162 Amortization of EDIT regulatory liability (12,828 ) — — Tax benefit of employee share-based compensation (2,116 ) (2,770 ) (5,162 ) Other, net (177 ) 33 (8 ) Total provision for income taxes $ 42,852 $ 53,531 $ 93,143 |
Schedule of Deferred Tax Assets and Liabilities | The following table sets forth the tax effects of temporary differences that gave rise to significant portions of the deferred tax assets and liabilities for the periods indicated: December 31, 2019 2018 ( Thousands of dollars ) Deferred tax assets Employee benefits and other accrued liabilities $ 32,036 $ 48,243 Regulatory adjustments for enacted tax rate changes 124,680 129,201 Net operating loss 752 2,778 Lease obligation basis 8,599 — Other 2,772 34 Total deferred tax assets 168,839 180,256 Deferred tax liabilities Excess of tax over book depreciation 742,860 717,903 Purchased-gas cost adjustment 3,556 8,981 Other regulatory assets and liabilities, net 96,456 105,798 Right-of-use asset basis 8,599 — Total deferred tax liabilities 851,471 832,682 Net deferred tax liabilities $ 682,632 $ 652,426 |
OTHER INCOME AND EXPENSE (Table
OTHER INCOME AND EXPENSE (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Other Income and Other Expense Disclosure [Text Block] | OTHER INCOME AND OTHER EXPENSE The following table sets forth the components of other income and other expense for the periods indicated: Years Ended December 31, 2019 2018 2017 ( Thousands of dollars ) Net periodic benefit cost other than service cost $ (5,895 ) $ (8,824 ) $ (17,252 ) Other, net 2,919 (2,535 ) 2,727 Total other expense, net $ (2,976 ) $ (11,359 ) $ (14,525 ) |
QUARTERLY FINANCIAL DATA (UNA_2
QUARTERLY FINANCIAL DATA (UNAUDITED) (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Schedule of Quarterly Financial Information [Line Items] | |
Quarterly Financial Data | First Quarter Second Quarter Third Quarter Fourth Quarter Year Ended December 31, 2019 ( Thousands of dollars ) Revenues $ 661,000 $ 290,560 $ 248,563 $ 452,607 Operating income $ 127,619 $ 46,891 $ 38,777 $ 81,971 Net income $ 93,660 $ 24,470 $ 17,457 $ 51,162 Earnings per share Basic $ 1.77 $ 0.46 $ 0.33 $ 0.97 Diluted $ 1.76 $ 0.46 $ 0.33 $ 0.96 First Quarter Second Quarter Third Quarter Fourth Quarter Year Ended December 31, 2018 ( Thousands of dollars ) Revenues $ 638,464 $ 292,521 $ 238,280 $ 464,466 Operating income (a) $ 130,290 $ 41,043 $ 36,241 $ 80,855 Net income $ 90,835 $ 20,419 $ 16,276 $ 44,704 Earnings per share Basic $ 1.73 $ 0.39 $ 0.31 $ 0.85 Diluted $ 1.72 $ 0.39 $ 0.31 $ 0.84 (a) Reflects the impact of the adoption of a new accounting standard in fiscal year 2018 related to the presentation of net periodic benefit costs. See Note 1 for additional information regarding our adoption of this standard. |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Other Information Related to Operating Leases [Table Text Block] | December 31, Other information related to operating leases 2019 (Millions of dollars) Weighted-average remaining lease term 7 years Weighted-average discount rate 3.62% Supplemental cash flows information Lease payments $ (8.4 ) Right-of-use assets obtained in exchange for lease obligations $ 9.5 |
Lessee, Operating Lease, Liability, Maturity [Table Text Block] | December 31, Future minimum lease payments under non-cancellable operating leases 2019 (Millions of dollars) 2020 $ 7.6 2021 7.2 2022 6.9 2023 5.8 2024 3.1 Thereafter 8.5 Total future minimum lease payments $ 39.1 Imputed interest (4.6 ) Total operating lease liability $ 34.5 Consolidated balance sheets as of December 31, 2019 Current operating lease liability $ 6.5 Long-term operating lease liability 28.0 Total operating lease liability $ 34.5 |
Schedule of Future Minimum Rental Payments for Operating Leases Under ASC 840 [Table Text Block] | The following table sets forth the required disclosures for the period prior to adoption of ASC 842: December 31, Future minimum lease payments under non-cancellable operating leases 2018 (Millions of dollars) 2019 $ 6.3 2020 5.1 2021 4.5 2022 4.3 2023 4.2 Thereafter 3.8 Total future minimum lease payments $ 28.2 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Significant Accounting Policies [Line Items] | |||
Segment Reporting, Disclosure of Major Customer | 0 | 0 | 0 |
Impact of reclassification upon adoption of ASU 2017-07 | $ 17,300 | ||
Operating Lease, Right-of-Use Asset | $ 34,200 | $ 32,000 | |
Operating Lease, Liability | $ 34,500 | 32,000 | |
Number of natural gas distribution services customers | 2,200,000 | ||
Accounts Receivable, Allowance for Credit Loss, Current | $ 6,600 | 4,700 | |
Goodwill, Impairment Loss | 0 | 0 | 0 |
Asset Impairment Charges | 0 | 0 | 0 |
Deferred Tax Assets, Valuation Allowance | 0 | 0 | $ 0 |
Liability for Uncertainty in Income Taxes, Current | $ 0 | $ 0 |
REVENUE (Details)
REVENUE (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | |
Unbilled Receivables, Current | $ 109,700 | $ 127,600 | $ 109,700 | $ 127,600 | ||||||
Regulated Operating Revenue, Gas | $ 452,607 | $ 248,563 | $ 290,560 | $ 661,000 | $ 464,466 | $ 238,280 | $ 292,521 | $ 638,464 | 1,647,479 | 1,626,618 |
Regulated Operating Revenue, Other | 9,950 | 9,919 | ||||||||
Regulated Operating Revenue | 1,652,730 | 1,633,731 | ||||||||
Natural gas sales to customers [Member] | ||||||||||
Regulated Operating Revenue, Gas | 1,512,886 | 1,495,250 | ||||||||
Transportation revenues [Member] | ||||||||||
Regulated Operating Revenue, Gas | 114,014 | 109,658 | ||||||||
Miscellaneous revenues [Member] | ||||||||||
Regulated Operating Revenue, Gas | 20,579 | 21,710 | ||||||||
Other revenues - natural gas sales related [Member] | ||||||||||
Other revenues - natural gas sales related | (4,699) | (2,806) | ||||||||
Other revenues [Member] | ||||||||||
Regulated Operating Revenue, Other | $ 5,251 | $ 7,113 |
CREDIT FACILITY AND SHORT-TER_2
CREDIT FACILITY AND SHORT-TERM NOTES PAYABLE (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | |
Line of Credit Facility [Line Items] | ||
Ratio of Indebtedness to Net Capital | 0.46 | |
Commercial paper maximum borrowing capacity | $ 700,000 | |
Commercial Paper | 516,500 | $ 299,500 |
Letters of Credit Outstanding, Amount | 1,200 | |
Short-term Debt | 0 | |
Line of Credit Facility, Remaining Borrowing Capacity | $ 698,800 | |
Line of Credit Facility, Expiration Date | Oct. 1, 2024 | |
Approved Debt Capital Ratio | 0.70 | |
Line of Credit [Member] | ||
Line of Credit Facility [Line Items] | ||
Debt Instrument, Covenant Description | The ONE Gas Credit Agreement contains certain financial, operational and legal covenants. Among other things, these covenants include maintaining ONE Gas’ total debt-to-capital ratio of no more than 70 percent at the end of any calendar quarter. The ONE Gas Credit Agreement also contains customary affirmative and negative covenants, including covenants relating to liens, indebtedness of subsidiaries, investments, changes in the nature of business, fundamental changes, transactions with affiliates, burdensome agreements, and use of proceeds. In the event of a breach of certain covenants by ONE Gas, amounts outstanding under the ONE Gas Credit Agreement may become due and payable immediately. | |
Line of Credit Facility Sublimit | $ 20,000 | |
Swingline subfacility | 60,000 | |
Line of Credit Facility Option to Increase Borrowing Capacity | 500,000 | |
Line of Credit Facility, Maximum Borrowing Capacity | $ 700,000 | |
Line of Credit Facility, Interest Rate Description | Borrowings, if any, will accrue interest at LIBOR plus 79.5 basis points. | |
Line of Credit Facility, Commitment Fee Description | The annual facility fee is 8 basis points. |
LONG-TERM DEBT (Details)
LONG-TERM DEBT (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Debt Instrument [Line Items] | |
Debt Instrument, Covenant Compliance, Default Provision, Indebtnedness Threshold | $ 100 |
Debt Instrument, Covenant Compliance, Default Provision, Debt Holders | 0.25 |
Debt Instrument, Redemption Price, Percentage | 100.00% |
Note Payable Due 2019 [Member] | |
Debt Instrument [Line Items] | |
Debt Instrument, Interest Rate, Stated Percentage | 2.07% |
Extinguishment of Debt, Amount | $ 300 |
Note Payable Due 2024 [Member] | |
Debt Instrument [Line Items] | |
Debt Instrument, Covenant Description | The indenture governing our Senior Notes includes an event of default upon the acceleration of other indebtedness of $100 million or more. Such events of default would entitle the trustee or the holders of 25 percent in the aggregate principal amount of the outstanding Senior Notes to declare those senior notes immediately due and payable in full. |
Long-term Debt, Gross | $ 300 |
Debt Instrument, Interest Rate, Stated Percentage | 3.61% |
Debt Instrument, Call Feature | We may redeem our Senior Notes at par, plus accrued and unpaid interest to the redemption date, starting one month, three months, and six months, respectively, before their maturity dates. Prior to these dates, we may redeem these Senior Notes, in whole or in part, at a redemption price equal to the principal amount, plus accrued and unpaid interest and a make-whole premium. The redemption price will never be less than 100 percent of the principal amount of the respective note plus accrued and unpaid interest to the redemption date. Our Senior Notes are senior unsecured obligations, ranking equally in right of payment with all of our existing and future unsecured senior indebtedness. |
Notes Payable Due 2044 [Member] | |
Debt Instrument [Line Items] | |
Debt Instrument, Covenant Description | The indenture governing our Senior Notes includes an event of default upon the acceleration of other indebtedness of $100 million or more. Such events of default would entitle the trustee or the holders of 25 percent in the aggregate principal amount of the outstanding Senior Notes to declare those senior notes immediately due and payable in full. |
Long-term Debt, Gross | $ 600 |
Debt Instrument, Interest Rate, Stated Percentage | 4.658% |
Debt Instrument, Call Feature | We may redeem our Senior Notes at par, plus accrued and unpaid interest to the redemption date, starting one month, three months, and six months, respectively, before their maturity dates. Prior to these dates, we may redeem these Senior Notes, in whole or in part, at a redemption price equal to the principal amount, plus accrued and unpaid interest and a make-whole premium. The redemption price will never be less than 100 percent of the principal amount of the respective note plus accrued and unpaid interest to the redemption date. Our Senior Notes are senior unsecured obligations, ranking equally in right of payment with all of our existing and future unsecured senior indebtedness. |
Note Payable Due 2048 [Member] | |
Debt Instrument [Line Items] | |
Debt Instrument, Covenant Description | The indenture governing our Senior Notes includes an event of default upon the acceleration of other indebtedness of $100 million or more. Such events of default would entitle the trustee or the holders of 25 percent in the aggregate principal amount of the outstanding Senior Notes to declare those senior notes immediately due and payable in full. |
Long-term Debt, Gross | $ 400 |
Debt Instrument, Interest Rate, Stated Percentage | 4.50% |
Debt Instrument, Call Feature | We may redeem our Senior Notes at par, plus accrued and unpaid interest to the redemption date, starting one month, three months, and six months, respectively, before their maturity dates. Prior to these dates, we may redeem these Senior Notes, in whole or in part, at a redemption price equal to the principal amount, plus accrued and unpaid interest and a make-whole premium. The redemption price will never be less than 100 percent of the principal amount of the respective note plus accrued and unpaid interest to the redemption date. Our Senior Notes are senior unsecured obligations, ranking equally in right of payment with all of our existing and future unsecured senior indebtedness. |
EQUITY (Details)
EQUITY (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 12 Months Ended | ||||||||||
Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Dividends declared per share of stock | $ 0.50 | $ 0.50 | $ 0.50 | $ 0.50 | $ 0.46 | $ 0.46 | $ 0.46 | $ 0.46 | $ 2 | $ 1.84 | $ 1.68 | |
Preferred Stock, Shares Authorized | 50 | 50 | ||||||||||
Preferred Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 | ||||||||||
Common stock authorized and available for issuance | 197.2 | 197.2 | ||||||||||
Stock Repurchase Program, Authorized Amount | $ 20 | $ 20 | ||||||||||
Common Stock, Dividends, Declared, Annualized Basis | $ 2 | $ 1.84 | $ 1.68 | |||||||||
Dividend Declared [Member] | ||||||||||||
Common Stock, Dividends, Per Share, Declared | $ 0.54 | |||||||||||
Common Stock, Dividends, Declared, Annualized Basis | $ 2.16 |
ACCUMULATED OTHER COMPREHENSI_3
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Accumulated Other Comprehensive Income (Loss), beginning balance | $ (4,086) | $ (5,493) | |
Pension and other postretirement benefit plans obligations [Abstract] | |||
Other comprehensive income (loss), before reclassification, net of tax | (2,074) | 596 | |
Amounts reclassified from accumulated other comprehensive income (loss), net of tax | 639 | 811 | |
Other comprehensive income (loss), net of tax | (1,435) | 1,407 | $ (778) |
Accumulated Other Comprehensive Income (Loss), ending balance | (6,739) | (4,086) | (5,493) |
Pension and other postretirement benefit plans obligations [Abstract] | |||
Amortization of net loss | 35,283 | 43,800 | 42,591 |
Amortization of unrecognized prior service cost | (673) | (4,567) | (4,597) |
Other comprehensive income (loss) reclassification adjustment, before tax and regulatory adjustments | 34,610 | 39,233 | 37,994 |
Other comprehensive income (loss) reclassification - regulatory adjustments | (33,758) | (38,151) | (37,157) |
Other comprehensive income (loss) reclassification adjustment, before tax | 852 | 1,082 | 837 |
Other comprehensive income (loss) reclassification adjustment, Tax | (213) | (271) | (322) |
Other comprehensive income (loss) reclassification adjustment, net of tax | 639 | $ 811 | $ 515 |
Stranded Deferred Tax Remeasurement Benefit | $ (1,218) |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
EARNINGS PER SHARE OF COMMON STOCK, BASIC AND DILUTED [Line Items] | |||||||||||
Net income | $ 51,162 | $ 17,457 | $ 24,470 | $ 93,660 | $ 44,704 | $ 16,276 | $ 20,419 | $ 90,835 | $ 186,749 | $ 172,234 | $ 162,995 |
Weighted Average Number of Shares Outstanding, Basic | 52,895,000 | 52,693,000 | 52,527,000 | ||||||||
Earnings Per Share, Basic | $ 0.97 | $ 0.33 | $ 0.46 | $ 1.77 | $ 0.85 | $ 0.31 | $ 0.39 | $ 1.73 | $ 3.53 | $ 3.27 | $ 3.10 |
Dilutive Securities, Effect on Basic Earnings Per Share | $ 0 | $ 0 | $ 0 | ||||||||
Weighted Average Number Diluted Shares Outstanding Adjustment | 345,000 | 336,000 | 452,000 | ||||||||
Net Income (Loss) Available to Common Stockholders, Diluted | $ 186,749 | $ 172,234 | $ 162,995 | ||||||||
Weighted Average Number of Shares Outstanding, Diluted | 53,240,000 | 53,029,000 | 52,979,000 | ||||||||
Earnings Per Share, Diluted | $ 0.96 | $ 0.33 | $ 0.46 | $ 1.76 | $ 0.84 | $ 0.31 | $ 0.39 | $ 1.72 | $ 3.51 | $ 3.25 | $ 3.08 |
Common Stock, Shares, Issued | 52,771,749 | 52,598,005 | 52,771,749 | 52,598,005 |
DERIVATIVE FINANCIAL INSTRUME_2
DERIVATIVE FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Details) | 12 Months Ended | |
Dec. 31, 2019USD ($)MMcf | Dec. 31, 2018USD ($)MMcf | |
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Derivative, Nonmonetary Notional Amount | MMcf | 14,300 | 14,300 |
Premiums recorded in other current assets on natural gas contracts held | $ 4,400,000 | $ 4,100,000 |
Fair Value Assets, Transfers between Levels | 0 | 0 |
Long-term Debt | 1,300,000,000 | |
Corporate bonds in other assets | 2,600,000 | |
Treasury notes in other assets | 3,000,000 | |
Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Fair value of natural gas call options held | 300,000 | 2,100,000 |
Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Long-term Debt, Fair Value | $ 1,500,000,000 | $ 1,400,000,000 |
REGULATORY ASSETS AND LIABILI_3
REGULATORY ASSETS AND LIABILITIES (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||
Mar. 31, 2019 | Sep. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Jun. 30, 2019 | Jan. 31, 2019 | |
SCHEDULE OF REGULATED ASSETS AND LIABILITIES [Line Items] | ||||||||
Federal Statutory Income Tax Rate | 21.00% | 21.00% | 35.00% | |||||
Regulatory Assets, Current | $ 47,440 | $ 54,420 | ||||||
Regulatory Assets, Noncurrent | 391,036 | 437,479 | ||||||
Regulatory Liability, Current | (45,201) | (48,394) | ||||||
Regulatory Liability, Noncurrent | (503,518) | (520,866) | ||||||
Net regulatory assets and liabilities, current | 2,239 | 6,026 | ||||||
Net regulatory assets and liabilities, noncurrent | (112,482) | (83,387) | ||||||
Net Regulatory Assets | (110,243) | (77,361) | ||||||
Amortization of Rate Deferral | 2,500 | 1,700 | $ 1,000 | |||||
Reduction to revenues due to the change in tax rates collected in our rates | 36,600 | |||||||
Oklahoma Natural Gas tax reform regulatory liability | $ 15,800 | |||||||
Oklahoma Natural Gas tax reform regulatory liability as adjusted | $ 15,600 | |||||||
Change in KGS tax reform regulatory liability | $ 2,400 | $ 14,200 | ||||||
Kansas Gas Service tax reform regulatory liability | $ 16,600 | |||||||
Texas Gas Service one-time refunds related to tax reform | $ 6,600 | |||||||
Reduction in income tax expense for the amortization of the regulatory liability associated with excess ADIT that was returned to customers | 12,800 | |||||||
Federal income tax rate changes [Member] | ||||||||
SCHEDULE OF REGULATED ASSETS AND LIABILITIES [Line Items] | ||||||||
Regulatory Liability, Current | (10,297) | (30,934) | ||||||
Regulatory Liability, Noncurrent | (503,518) | (520,866) | ||||||
Regulatory Liabilities | $ (513,815) | $ (551,800) | ||||||
Weather normalization [Member] | ||||||||
SCHEDULE OF REGULATED ASSETS AND LIABILITIES [Line Items] | ||||||||
Regulatory Asset, Amortization Period | 1 year | 1 year | ||||||
Regulatory Liability, Current | $ (7,281) | $ (3,792) | ||||||
Regulatory Liability, Noncurrent | 0 | 0 | ||||||
Regulatory Liabilities | $ (7,281) | $ (3,792) | ||||||
Over-recovered purchased-gas costs [Member] | ||||||||
SCHEDULE OF REGULATED ASSETS AND LIABILITIES [Line Items] | ||||||||
Regulatory Asset, Amortization Period | 1 year | 1 year | ||||||
Regulatory Liability, Current | $ (27,623) | $ (13,668) | ||||||
Regulatory Liability, Noncurrent | 0 | 0 | ||||||
Regulatory Liabilities | (27,623) | (13,668) | ||||||
Total regulated liabilities [Member] | ||||||||
SCHEDULE OF REGULATED ASSETS AND LIABILITIES [Line Items] | ||||||||
Regulatory Liability, Current | (45,201) | (48,394) | ||||||
Regulatory Liability, Noncurrent | (503,518) | (520,866) | ||||||
Regulatory Liabilities | $ (548,719) | $ (569,260) | ||||||
Under-recovered purchased-gas costs [Member] | ||||||||
SCHEDULE OF REGULATED ASSETS AND LIABILITIES [Line Items] | ||||||||
Regulatory Asset, Amortization Period | 1 year | 1 year | ||||||
Regulatory Assets, Current | $ 17,172 | $ 25,083 | ||||||
Regulatory Assets, Noncurrent | 0 | 0 | ||||||
Regulatory Assets | 17,172 | 25,083 | ||||||
Pension and postretirement benefit costs [Member] | ||||||||
SCHEDULE OF REGULATED ASSETS AND LIABILITIES [Line Items] | ||||||||
Regulatory Assets, Current | 21,213 | 23,384 | ||||||
Regulatory Assets, Noncurrent | 373,266 | 421,726 | ||||||
Regulatory Assets | $ 394,479 | $ 445,110 | ||||||
Reacquired debt costs [Member] | ||||||||
SCHEDULE OF REGULATED ASSETS AND LIABILITIES [Line Items] | ||||||||
Regulatory Asset, Amortization Period | 8 years | 9 years | ||||||
Regulatory Assets, Current | $ 812 | $ 812 | ||||||
Regulatory Assets, Noncurrent | 5,677 | 6,487 | ||||||
Regulatory Assets | $ 6,489 | $ 7,299 | ||||||
MGP Costs [Member] | ||||||||
SCHEDULE OF REGULATED ASSETS AND LIABILITIES [Line Items] | ||||||||
Regulatory Asset, Amortization Period | 15 years | 15 years | ||||||
Regulatory Assets, Current | $ 98 | $ 0 | ||||||
Regulatory Assets, Noncurrent | 9,709 | 7,724 | ||||||
Regulatory Assets | $ 9,807 | $ 7,724 | ||||||
Ad valorem tax [Member] | ||||||||
SCHEDULE OF REGULATED ASSETS AND LIABILITIES [Line Items] | ||||||||
Regulatory Asset, Amortization Period | 1 year | 1 year | ||||||
Regulatory Assets, Current | $ 2,921 | $ 1,070 | ||||||
Regulatory Assets, Noncurrent | 0 | 0 | ||||||
Regulatory Assets | $ 2,921 | $ 1,070 | ||||||
Other regulatory assets [Member] | ||||||||
SCHEDULE OF REGULATED ASSETS AND LIABILITIES [Line Items] | ||||||||
Regulatory Asset, Amortization Period | 1 to 19 years | 1 to 20 years | ||||||
Regulatory Assets, Current | $ 5,224 | $ 4,071 | ||||||
Regulatory Assets, Noncurrent | 2,384 | 1,542 | ||||||
Regulatory Assets | 7,608 | 5,613 | ||||||
Total regulatory assets, net of amortization [Member] | ||||||||
SCHEDULE OF REGULATED ASSETS AND LIABILITIES [Line Items] | ||||||||
Regulatory Assets, Current | 47,440 | 54,420 | ||||||
Regulatory Assets, Noncurrent | 391,036 | 437,479 | ||||||
Regulatory Assets | $ 438,476 | $ 491,899 |
PROPERTY, PLANT AND EQUIPMENT_3
PROPERTY, PLANT AND EQUIPMENT (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment | $ 6,433,119 | $ 6,073,143 | |
Accumulated depreciation and amortization | (1,867,893) | (1,789,431) | |
Net property, plant and equipment | 4,565,226 | 4,283,712 | |
Regulated [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment | 6,433,119 | 6,073,143 | |
Accumulated depreciation and amortization | (1,867,893) | (1,789,431) | |
Net property, plant and equipment | $ 4,565,226 | $ 4,283,712 | |
Average depreciation rates, minimum | 2.00% | 2.00% | 2.00% |
Average depreciation rates, maximum | 3.00% | 3.00% | 3.00% |
Interest costs capitalized | $ 4,600 | $ 3,400 | $ 3,000 |
Construction work in process expenditures incurred but not yet paid | 20,900 | 15,600 | $ 21,700 |
Natural gas distribution pipelines and related equipment | Regulated [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment | 5,117,496 | 4,861,340 | |
Natural gas transmission pipelines and related equipment | Regulated [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment | 549,788 | 517,697 | |
General plant and other | Regulated [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment | 612,984 | 567,580 | |
Construction work in process | Regulated [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment | $ 152,851 | $ 126,526 |
SHARE-BASED PAYMENTS (Details)
SHARE-BASED PAYMENTS (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Payments [Line Items] | |||
Common Stock, Capital Shares Reserved for Future Issuance | 4,300,000 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Additional Shares Authorized | 1,800,000 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 1,800,000 | ||
Share-based compensation expense, net of tax | $ 6,800 | $ 6,100 | $ 4,900 |
Share-based compensation, tax benefit | 2,200 | 2,100 | 3,000 |
Share-based compensation expense | $ 9,314 | 8,195 | $ 8,876 |
Employee Stock Purchase Plan [Member] | |||
Share-based Payments [Line Items] | |||
Description | Subject to certain exclusions, all employees who work at least 20 hours per week are eligible to participate in the ESPP. Employees can choose to have up to 10 percent of their annual base pay withheld to purchase our common stock, subject to terms and limitations of the plan. The purchase price of the stock is 85 percent of the lower of the average market price of our common stock on the grant date or exercise date. | ||
Restricted Stock Units (RSUs) [Member] | |||
Share-based Payments [Line Items] | |||
Award vesting period | 3 years | ||
Forfeiture rate maximum (in hundredths) | 3.00% | ||
Total compensation cost not yet recognized | $ 3,000 | ||
Total compensation cost not yet recognized, period for recognition | 1 year 9 months 18 days | ||
Fair value of vested shares | $ 3,300 | $ 4,700 | |
Nonvested beginning balance (in units) | 109,506 | ||
Nonvested beginning balance (in dollars per unit) | $ 63.45 | ||
Granted (in units) | 35,753 | ||
Weighted -average grant date fair value (per unit) | $ 83.94 | $ 68.17 | $ 63.97 |
Vested (in units) | (39,418) | ||
Vested (in dollars per unit) | $ 58.60 | ||
Forfeited (in units) | (1,443) | ||
Forfeited (in dollars per unit) | $ 69.87 | ||
Nonvested ending balance (in units) | 104,398 | 109,506 | |
Nonvested ending balance (in dollars per unit) | $ 72.21 | $ 63.45 | |
Fair value of shares granted (thousands of dollars) | $ 3,001 | $ 2,583 | $ 2,420 |
Performance Unit Awards [Member] | |||
Share-based Payments [Line Items] | |||
Forfeiture rate maximum (in hundredths) | 3.00% | ||
Total compensation cost not yet recognized | $ 6,400 | ||
Total compensation cost not yet recognized, period for recognition | 1 year 9 months 18 days | ||
Fair value of vested shares | $ 12,700 | $ 13,700 | |
Nonvested beginning balance (in units) | 219,331 | ||
Nonvested beginning balance (in dollars per unit) | $ 69.21 | ||
Granted (in units) | 71,237 | ||
Weighted -average grant date fair value (per unit) | $ 89.86 | $ 74.04 | $ 68.94 |
Vested (in units) | (70,548) | ||
Vested (in dollars per unit) | $ 64.06 | ||
Forfeited (in units) | (1,844) | ||
Forfeited (in dollars per unit) | $ 73.57 | ||
Nonvested ending balance (in units) | 218,176 | 219,331 | |
Nonvested ending balance (in dollars per unit) | $ 77.58 | $ 69.21 | |
Fair value of shares granted (thousands of dollars) | $ 6,401 | $ 5,882 | $ 5,110 |
Expected volatility rate | 18.70% | 18.80% | 20.70% |
Expected dividend yield | 2.38% | 2.70% | 2.63% |
Risk-free interest rate | 2.50% | 2.38% | 1.48% |
Description | Upon vesting, a holder of performance stock units is entitled to receive a number of shares of common stock equal to a percentage (0 percent to 200 percent) of the performance stock units granted, based on our total shareholder return over the vesting period, compared with the total shareholder return of a peer group of other utilities over the same period. | ||
Employee Stock Purchase Plan [Member] | |||
Share-based Payments [Line Items] | |||
Common Stock, Capital Shares Reserved for Future Issuance | 700,000 | ||
Maximum allowable percentage of annual base pay withheld to purchase common stock | 10.00% | ||
Purchase price percentage of the lower of its grant date or exercise date market price (in hundredths) | 85.00% | ||
Percent of employees who participated in the Employee Stock Purchase Plan | 44.00% | 45.00% | 43.00% |
Shares sold under employee stock purchase plan | 71,613 | 76,231 | 78,472 |
Share price of shares sold under Employee Stock Purchase Plan in dollars per share | $ 71.42 | $ 63.01 | $ 56.80 |
Employee Stock Purchase Plan Compensation Expense | $ 1,500 | $ 1,000 | $ 1,200 |
EMPLOYEE BENEFIT PLANS (Details
EMPLOYEE BENEFIT PLANS (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Defined Benefit Plans and Other Postemployment Benefit Plans Table Text Block [Line Items] | |||
Regulatory Assets, Noncurrent | $ 391,036,000 | $ 437,479,000 | |
Defined Benefit Plan, Benefit Obligation, Payment for Settlement | $ 47,200,000 | ||
Defined Benefit Plan Assumptions Used To Determine Benefit Obligations Rate of Compensation Increase, Minimum | 3.10% | 3.20% | |
Defined Benefit Plan Assumptions Used To Determine Benefit Obligations Rate of Compensation Increase, Maximum | 4.00% | 4.00% | |
Compensation increase rate - minimum | 3.20% | 3.25% | 3.25% |
Compensation increase rate- maximum | 4.00% | 3.35% | 3.40% |
Description of basis used to determine overall expected long-term rate of return on plan assets | We determine our discount rates annually. We estimate our discount rate based upon a comparison of the expected cash flows associated with our future payments under our defined benefit pension and other postemployment obligations to a hypothetical bond portfolio created using high-quality bonds that closely match expected cash flows. Bond portfolios are developed by selecting a bond for each of the next 60 years based on the maturity dates of the bonds. Bonds selected to be included in the portfolios are only those rated by Moody’s as AA- or better and exclude callable bonds, bonds with less than a minimum issue size, yield outliers and other filtering criteria to remove unsuitable bonds. | ||
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | |||
Settlements | $ 49,200,000 | ||
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | |||
Noncurrent liabilities | (115,657,000) | $ (178,720,000) | |
Assets expected to be withdrawn or returned | 0 | ||
Amortization of unrecognized prior service cost | (673,000) | (4,567,000) | $ (4,597,000) |
Defined Benefit Plan, Amortization of Gain (Loss) | 35,283,000 | 43,800,000 | 42,591,000 |
Total recognized in other comprehensive income (loss) | (1,435,000) | $ 1,407,000 | (778,000) |
Amount recognized in other comprehensive income | $ 0 | ||
Health care cost-trend rate assumed for next year | 6.50% | 7.00% | |
Rate to which the cost-trend rate is assumed to decline (the ultimate trend rate) | 5.00% | 5.00% | |
Year that the rate reaches the ultimate trend rate | 2025 | 2024 | |
Target asset allocation | 100.00% | ||
US Large-Cap Equity [Member] | |||
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | |||
Target asset allocation | 18.00% | ||
Investment-grade bonds [Member] | |||
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | |||
Target asset allocation | 40.00% | ||
Developed foreign large-cap equities [Member] | |||
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | |||
Target asset allocation | 10.00% | ||
Alternative investments [Member] | |||
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | |||
Target asset allocation | 14.00% | ||
Mid-cap equities [Member] | |||
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | |||
Target asset allocation | 7.00% | ||
Emerging market equities [Member] | |||
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | |||
Target asset allocation | 6.00% | ||
Small-cap equities [Member] | |||
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | |||
Target asset allocation | 5.00% | ||
Equity Securities [Member] | |||
Defined Benefit Plans and Other Postemployment Benefit Plans Table Text Block [Line Items] | |||
Defined Benefit Plan, Plan Assets, Investment Policy and Strategy, Description | 70 percent | ||
Fixed Income Funds [Member] | |||
Defined Benefit Plans and Other Postemployment Benefit Plans Table Text Block [Line Items] | |||
Defined Benefit Plan, Plan Assets, Investment Policy and Strategy, Description | 30 percent | ||
Pension Plan [Member] | |||
Defined Benefit Plans and Other Postemployment Benefit Plans Table Text Block [Line Items] | |||
Defined Benefit Plan, Plan Assets, Contributions by Plan Participant | $ 0 | $ 0 | |
Defined Benefit Plan, Benefit Obligation, Contributions by Plan Participant | 0 | 0 | |
Net periodic benefit cost | $ 23,800,000 | $ 29,054,000 | $ 30,240,000 |
Discount rate | 3.50% | 4.40% | |
Weighted average discount rate | 4.40% | 3.80% | 4.30% |
Expected long-term return on plan assets | 7.20% | 7.25% | 7.75% |
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | |||
Benefit obligation, beginning of period | $ 950,510,000 | $ 993,891,000 | |
Service cost | 12,030,000 | 12,919,000 | $ 12,176,000 |
Interest cost | 40,670,000 | 36,801,000 | 40,453,000 |
Actuarial loss (gain) | 98,231,000 | (42,540,000) | |
Benefits paid | (50,915,000) | (50,561,000) | |
Settlements | (49,158,000) | 0 | |
Benefit obligation, end of period | 1,001,368,000 | 950,510,000 | 993,891,000 |
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | |||
Actual return on plan assets | 162,785,000 | (62,752,000) | |
Employer contributions | 29,199,000 | 42,386,000 | |
Settlements | 47,207,000 | 235,000 | |
Fair value of plan assets, end of period | 907,974,000 | 814,112,000 | 884,804,000 |
Balance at December 31 | (93,394,000) | (136,398,000) | |
Current liabilities | (1,045,000) | (962,000) | |
Noncurrent liabilities | (92,349,000) | (135,436,000) | |
Balance at December 31 | (93,394,000) | (136,398,000) | |
Accumulated benefit obligation | 937,800,000 | 890,400,000 | |
Service cost | 12,030,000 | 12,919,000 | 12,176,000 |
Interest cost | 40,670,000 | 36,801,000 | 40,453,000 |
Expected return on assets | (61,939,000) | (60,579,000) | (58,496,000) |
Amortization of unrecognized prior service cost | 852,000 | 1,082,000 | 837,000 |
Defined Benefit Plan, Amortization of Gain (Loss) | 33,039,000 | 39,913,000 | 36,107,000 |
Net loss arising during the period | (2,766,000) | 1,173,000 | (2,101,000) |
Deferred income taxes | 479,000 | (848,000) | 486,000 |
Total recognized in other comprehensive income (loss) | 1,435,000 | (1,407,000) | 778,000 |
Accumulated loss | (381,633,000) | (419,238,000) | |
Accumulated other comprehensive loss before regulatory assets | (381,633,000) | (419,238,000) | |
Regulatory asset for regulated entities | 373,025,000 | 412,545,000 | |
Accumulated other comprehensive loss after regulatory assets | (8,608,000) | (6,693,000) | |
Deferred income taxes | 1,869,000 | 2,607,000 | |
Accumulated other comprehensive loss, net of tax | (6,739,000) | (4,086,000) | |
Prior service credit (cost) expected to be recognized in following fiscal year | 0 | ||
Actuarial net loss, to be recognized in 2017 | 42,319,000 | ||
Effect of a one percentage point change on total of service and interest cost - increase | 100,000 | ||
Effect of a one percentage point change on other postemployment benefit obligation - increase | 2,300,000 | ||
Defined Benefit Plan, Change in Fair Value of Plan Assets, Level 3 Reconciliation [Roll Forward] | |||
Level 3 fair value measurement, January 1 | 109,650,000 | 113,865,000 | |
Net realized and unrealized gains (losses) | 1,728,000 | (115,000) | |
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Purchases | 0 | 0 | |
Settlements | (3,597,000) | (4,100,000) | |
Level 3 fair value measurement, December 31 | 107,781,000 | 109,650,000 | 113,865,000 |
Employer contributions | 29,199,000 | 42,386,000 | |
Expected employer contributions in 2017 | 1,100,000 | ||
2017 | 49,631,000 | ||
2018 | 50,378,000 | ||
2019 | 51,547,000 | ||
2020 | 52,628,000 | ||
2021 | 53,562,000 | ||
2022 through 2027 | 280,547,000 | ||
Defined Benefit Plan, Benefit Obligation, Benefits Paid | (50,915,000) | (50,561,000) | |
Pension Plan [Member] | Equity Securities [Member] | |||
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | |||
Fair value of plan assets, end of period | 351,004,000 | 318,538,000 | |
Pension Plan [Member] | Government Obligations [Member] | |||
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | |||
Fair value of plan assets, end of period | 54,726,000 | 69,475,000 | |
Pension Plan [Member] | Corporate Obligations [Member] | |||
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | |||
Fair value of plan assets, end of period | 304,457,000 | 240,900,000 | |
Pension Plan [Member] | Cash and Money Market Funds [Member] | |||
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | |||
Fair value of plan assets, end of period | 89,109,000 | 74,410,000 | |
Pension Plan [Member] | Insurance contracts and group annuity contracts [Member] | |||
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | |||
Fair value of plan assets, end of period | 25,988,000 | 30,445,000 | |
Defined Benefit Plan, Change in Fair Value of Plan Assets, Level 3 Reconciliation [Roll Forward] | |||
Level 3 fair value measurement, January 1 | 30,445,000 | 35,158,000 | |
Net realized and unrealized gains (losses) | (860,000) | (611,000) | |
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Purchases | 0 | 0 | |
Settlements | (3,597,000) | (4,100,000) | |
Level 3 fair value measurement, December 31 | 25,988,000 | 30,445,000 | 35,158,000 |
Pension Plan [Member] | Other Investments [Member] | |||
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | |||
Fair value of plan assets, end of period | 82,690,000 | 80,344,000 | |
Defined Benefit Plan, Change in Fair Value of Plan Assets, Level 3 Reconciliation [Roll Forward] | |||
Level 3 fair value measurement, January 1 | 79,205,000 | 78,707,000 | |
Net realized and unrealized gains (losses) | 2,588,000 | 496,000 | |
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Purchases | 0 | 0 | |
Settlements | 0 | 0 | |
Level 3 fair value measurement, December 31 | 81,793,000 | 79,205,000 | 78,707,000 |
Pension Plan [Member] | Level 1 [Member] | |||
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | |||
Fair value of plan assets, end of period | 325,424,000 | 285,087,000 | |
Pension Plan [Member] | Level 1 [Member] | Equity Securities [Member] | |||
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | |||
Fair value of plan assets, end of period | 323,737,000 | 282,668,000 | |
Pension Plan [Member] | Level 1 [Member] | Government Obligations [Member] | |||
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | |||
Fair value of plan assets, end of period | 0 | 0 | |
Pension Plan [Member] | Level 1 [Member] | Corporate Obligations [Member] | |||
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | |||
Fair value of plan assets, end of period | 0 | 0 | |
Pension Plan [Member] | Level 1 [Member] | Cash and Money Market Funds [Member] | |||
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | |||
Fair value of plan assets, end of period | 1,687,000 | 2,419,000 | |
Pension Plan [Member] | Level 1 [Member] | Insurance contracts and group annuity contracts [Member] | |||
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | |||
Fair value of plan assets, end of period | 0 | 0 | |
Pension Plan [Member] | Level 1 [Member] | Other Investments [Member] | |||
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | |||
Fair value of plan assets, end of period | 0 | 0 | |
Pension Plan [Member] | Level 2 [Member] | |||
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | |||
Fair value of plan assets, end of period | 474,769,000 | 419,375,000 | |
Pension Plan [Member] | Level 2 [Member] | Equity Securities [Member] | |||
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | |||
Fair value of plan assets, end of period | 27,267,000 | 35,870,000 | |
Pension Plan [Member] | Level 2 [Member] | Government Obligations [Member] | |||
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | |||
Fair value of plan assets, end of period | 54,726,000 | 69,475,000 | |
Pension Plan [Member] | Level 2 [Member] | Corporate Obligations [Member] | |||
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | |||
Fair value of plan assets, end of period | 304,457,000 | 240,900,000 | |
Pension Plan [Member] | Level 2 [Member] | Cash and Money Market Funds [Member] | |||
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | |||
Fair value of plan assets, end of period | 87,422,000 | 71,991,000 | |
Pension Plan [Member] | Level 2 [Member] | Insurance contracts and group annuity contracts [Member] | |||
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | |||
Fair value of plan assets, end of period | 0 | 0 | |
Pension Plan [Member] | Level 2 [Member] | Other Investments [Member] | |||
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | |||
Fair value of plan assets, end of period | 897,000 | 1,139,000 | |
Pension Plan [Member] | Level 3 [Member] | |||
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | |||
Fair value of plan assets, end of period | 107,781,000 | 109,650,000 | |
Pension Plan [Member] | Level 3 [Member] | Equity Securities [Member] | |||
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | |||
Fair value of plan assets, end of period | 0 | 0 | |
Pension Plan [Member] | Level 3 [Member] | Government Obligations [Member] | |||
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | |||
Fair value of plan assets, end of period | 0 | 0 | |
Pension Plan [Member] | Level 3 [Member] | Corporate Obligations [Member] | |||
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | |||
Fair value of plan assets, end of period | 0 | 0 | |
Pension Plan [Member] | Level 3 [Member] | Cash and Money Market Funds [Member] | |||
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | |||
Fair value of plan assets, end of period | 0 | 0 | |
Pension Plan [Member] | Level 3 [Member] | Insurance contracts and group annuity contracts [Member] | |||
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | |||
Fair value of plan assets, end of period | 30,445,000 | ||
Pension Plan [Member] | Level 3 [Member] | Other Investments [Member] | |||
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | |||
Fair value of plan assets, end of period | 79,205,000 | ||
Other Postretirement Benefits Plan [Member] | |||
Defined Benefit Plans and Other Postemployment Benefit Plans Table Text Block [Line Items] | |||
Defined Benefit Plan, Plan Assets, Contributions by Plan Participant | 3,697,000 | 3,563,000 | |
Defined Benefit Plan, Benefit Obligation, Contributions by Plan Participant | 3,697,000 | 3,563,000 | |
Net periodic benefit cost | $ 37,000 | $ (3,493,000) | $ 1,696,000 |
Minimum number of years of service for certain employees to be eligible to participate in shared welfare plans that provide postemployment medical and life insurance benefits | five | ||
Discount rate | 3.40% | 4.40% | |
Weighted average discount rate | 4.40% | 3.70% | 4.20% |
Expected long-term return on plan assets | 7.35% | 7.60% | 7.60% |
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | |||
Benefit obligation, beginning of period | $ 220,144,000 | $ 255,040,000 | |
Service cost | 1,734,000 | 2,354,000 | $ 2,509,000 |
Interest cost | 9,318,000 | 9,117,000 | 9,890,000 |
Actuarial loss (gain) | 13,945,000 | (31,607,000) | |
Benefits paid | (18,348,000) | (18,323,000) | |
Settlements | 0 | 0 | |
Benefit obligation, end of period | 230,490,000 | 220,144,000 | 255,040,000 |
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | |||
Actual return on plan assets | 38,772,000 | (6,325,000) | |
Employer contributions | 6,202,000 | 7,718,000 | |
Settlements | 0 | 0 | |
Fair value of plan assets, end of period | 207,182,000 | 176,859,000 | 190,226,000 |
Balance at December 31 | (23,308,000) | (43,285,000) | |
Current liabilities | 0 | 0 | |
Noncurrent liabilities | (23,308,000) | (43,285,000) | |
Balance at December 31 | (23,308,000) | (43,285,000) | |
Service cost | 1,734,000 | 2,354,000 | 2,509,000 |
Interest cost | 9,318,000 | 9,117,000 | 9,890,000 |
Expected return on assets | (12,586,000) | (14,284,000) | (12,590,000) |
Amortization of unrecognized prior service cost | (673,000) | (4,567,000) | (4,597,000) |
Defined Benefit Plan, Amortization of Gain (Loss) | 2,244,000 | 3,887,000 | 6,484,000 |
Prior service credit (cost) | 202,000 | 875,000 | |
Accumulated loss | (19,660,000) | (34,144,000) | |
Accumulated other comprehensive loss before regulatory assets | (19,458,000) | (33,269,000) | |
Regulatory asset for regulated entities | 19,458,000 | 33,269,000 | |
Accumulated other comprehensive loss after regulatory assets | 0 | 0 | |
Prior service credit (cost) expected to be recognized in following fiscal year | (117,000) | ||
Actuarial net loss, to be recognized in 2017 | 173,000 | ||
Effect of a one percentage point change on total of service and interest cost - decrease | (100,000) | ||
Effect of a one percentage point change on other postemployment benefit obligation - decrease | (2,400,000) | ||
Defined Benefit Plan, Change in Fair Value of Plan Assets, Level 3 Reconciliation [Roll Forward] | |||
Employer contributions | 6,202,000 | 7,718,000 | |
Expected employer contributions in 2017 | 4,000,000 | ||
2017 | 16,464,000 | ||
2018 | 16,308,000 | ||
2019 | 16,269,000 | ||
2020 | 16,090,000 | ||
2021 | 15,757,000 | ||
2022 through 2027 | 73,787,000 | ||
Defined Benefit Plan, Benefit Obligation, Benefits Paid | (18,348,000) | (18,323,000) | |
Other Postretirement Benefits Plan [Member] | Equity Securities [Member] | |||
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | |||
Fair value of plan assets, end of period | 61,688,000 | 60,469,000 | |
Other Postretirement Benefits Plan [Member] | Government Obligations [Member] | |||
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | |||
Fair value of plan assets, end of period | 0 | 74,000 | |
Other Postretirement Benefits Plan [Member] | Corporate Obligations [Member] | |||
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | |||
Fair value of plan assets, end of period | 26,852,000 | 25,857,000 | |
Other Postretirement Benefits Plan [Member] | Cash and Money Market Funds [Member] | |||
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | |||
Fair value of plan assets, end of period | 19,032,000 | 1,549,000 | |
Other Postretirement Benefits Plan [Member] | Insurance contracts and group annuity contracts [Member] | |||
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | |||
Fair value of plan assets, end of period | 99,610,000 | 88,910,000 | |
Other Postretirement Benefits Plan [Member] | Level 1 [Member] | |||
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | |||
Fair value of plan assets, end of period | 80,038,000 | 59,336,000 | |
Other Postretirement Benefits Plan [Member] | Level 1 [Member] | Equity Securities [Member] | |||
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | |||
Fair value of plan assets, end of period | 61,688,000 | 58,087,000 | |
Other Postretirement Benefits Plan [Member] | Level 1 [Member] | Government Obligations [Member] | |||
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | |||
Fair value of plan assets, end of period | 0 | 0 | |
Other Postretirement Benefits Plan [Member] | Level 1 [Member] | Corporate Obligations [Member] | |||
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | |||
Fair value of plan assets, end of period | 0 | 0 | |
Other Postretirement Benefits Plan [Member] | Level 1 [Member] | Cash and Money Market Funds [Member] | |||
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | |||
Fair value of plan assets, end of period | 18,350,000 | 1,249,000 | |
Other Postretirement Benefits Plan [Member] | Level 1 [Member] | Insurance contracts and group annuity contracts [Member] | |||
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | |||
Fair value of plan assets, end of period | 0 | 0 | |
Other Postretirement Benefits Plan [Member] | Level 2 [Member] | |||
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | |||
Fair value of plan assets, end of period | 127,144,000 | 117,523,000 | |
Other Postretirement Benefits Plan [Member] | Level 2 [Member] | Equity Securities [Member] | |||
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | |||
Fair value of plan assets, end of period | 0 | 2,382,000 | |
Other Postretirement Benefits Plan [Member] | Level 2 [Member] | Government Obligations [Member] | |||
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | |||
Fair value of plan assets, end of period | 0 | 74,000 | |
Other Postretirement Benefits Plan [Member] | Level 2 [Member] | Corporate Obligations [Member] | |||
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | |||
Fair value of plan assets, end of period | 26,852,000 | 25,857,000 | |
Other Postretirement Benefits Plan [Member] | Level 2 [Member] | Cash and Money Market Funds [Member] | |||
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | |||
Fair value of plan assets, end of period | 682,000 | 300,000 | |
Other Postretirement Benefits Plan [Member] | Level 2 [Member] | Insurance contracts and group annuity contracts [Member] | |||
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | |||
Fair value of plan assets, end of period | 99,610,000 | 88,910,000 | |
Other Postretirement Benefits Plan [Member] | Level 3 [Member] | |||
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | |||
Fair value of plan assets, end of period | 0 | 0 | |
Other Postretirement Benefits Plan [Member] | Level 3 [Member] | Equity Securities [Member] | |||
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | |||
Fair value of plan assets, end of period | 0 | 0 | |
Other Postretirement Benefits Plan [Member] | Level 3 [Member] | Government Obligations [Member] | |||
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | |||
Fair value of plan assets, end of period | 0 | 0 | |
Other Postretirement Benefits Plan [Member] | Level 3 [Member] | Corporate Obligations [Member] | |||
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | |||
Fair value of plan assets, end of period | 0 | 0 | |
Other Postretirement Benefits Plan [Member] | Level 3 [Member] | Cash and Money Market Funds [Member] | |||
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | |||
Fair value of plan assets, end of period | 0 | 0 | |
Other Postretirement Benefits Plan [Member] | Level 3 [Member] | Insurance contracts and group annuity contracts [Member] | |||
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | |||
Fair value of plan assets, end of period | $ 0 | 0 | |
ONE Gas 401(k) Plan [Member] | |||
Defined Benefit Plan, Change in Fair Value of Plan Assets, Level 3 Reconciliation [Roll Forward] | |||
Percent of employee contributions matched of eligible compensation (in hundredths) | 100.00% | ||
Maximum percentage of each participants eligible compensation subject to certain limits matching (in hundredths) | 6.00% | ||
Contributions made to 401(k) plan | $ 12,800,000 | 12,100,000 | 11,700,000 |
ONE Gas Profit-Sharing Plan [Member] | |||
Defined Benefit Plan, Change in Fair Value of Plan Assets, Level 3 Reconciliation [Roll Forward] | |||
Profit sharing contribution percentage | 1.00% | ||
Contributions made to profit-sharing plan | $ 8,500,000 | 7,400,000 | $ 8,100,000 |
Non-service Costs [Member] | |||
Defined Benefit Plans and Other Postemployment Benefit Plans Table Text Block [Line Items] | |||
Regulatory Assets, Noncurrent | $ 4,700,000 | $ 1,500,000 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||||
Sep. 30, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Jun. 30, 2019 | Jan. 31, 2019 | |
Deferred tax expense, remeasured deferred taxes | $ 2,200,000 | |||||
Decrease in net deferred tax liability due to enacted tax rate changes | 518,700,000 | |||||
Tax Cuts and Jobs Act, Decrease in Deferred Tax Liability due to Transition Tax | 520,900,000 | |||||
Regulatory Liability, Noncurrent | $ 503,518,000 | 520,866,000 | ||||
Reduction to revenues due to the change in tax rates collected in our rates | 36,600,000 | |||||
Deferred Tax Assets, Operating Loss Carryforwards, State and Local | 13,600,000 | |||||
Current income tax provision (benefit) | ||||||
Federal | 24,537,000 | 0 | $ 0 | |||
State | 5,008,000 | 289,000 | 750,000 | |||
Total current income tax provision (benefit) | 29,545,000 | 289,000 | 750,000 | |||
Deferred income tax provision | ||||||
Federal | 8,375,000 | 42,413,000 | 83,138,000 | |||
State | 4,932,000 | 10,829,000 | 9,255,000 | |||
Total deferred income tax provision | 13,307,000 | 53,242,000 | 92,393,000 | |||
Income Tax Reconciliation [Abstract] | ||||||
Income before income taxes | 229,601,000 | 225,765,000 | 256,138,000 | |||
Provision for federal income taxes | 48,215,000 | 47,411,000 | 89,648,000 | |||
State income taxes, net of federal benefit | 9,758,000 | 8,783,000 | 6,503,000 | |||
Effective Income Tax Rate Reconciliation, nonregulated deferred tax rate decrease | 0 | 74,000 | 2,162,000 | |||
Amortization of EDIT regulatory liability | (12,828,000) | 0 | 0 | |||
Effective Income Tax Rate Reconciliation, tax benefit of employee share based compensation | (2,116,000) | (2,770,000) | (5,162,000) | |||
Other, net | (177,000) | 33,000 | (8,000) | |||
Income tax provision | 42,852,000 | 53,531,000 | $ 93,143,000 | |||
Deferred tax assets | ||||||
Deferred tax assets, employee benefits and other accrued liabilities | 32,036,000 | 48,243,000 | ||||
Deferred tax asset, regulatory adjustments | 124,680,000 | 129,201,000 | ||||
Net operating loss | 752,000 | 2,778,000 | ||||
Deferred Tax Assets, Leasing Arrangements | 8,599,000 | 0 | ||||
Other | 2,772,000 | 34,000 | ||||
Total deferred tax assets | 168,839,000 | 180,256,000 | ||||
Deferred tax liabilities | ||||||
Excess of tax over book depreciation | 742,860,000 | 717,903,000 | ||||
Purchased-gas cost adjustment | 3,556,000 | 8,981,000 | ||||
Other regulatory assets and liabilities, net | 96,456,000 | 105,798,000 | ||||
Deferred Tax Liabilities, Leasing Arrangements | 8,599,000 | 0 | ||||
Total deferred tax liabilities | 851,471,000 | 832,682,000 | ||||
Net deferred tax liabilities | $ 682,632,000 | 652,426,000 | ||||
Oklahoma Natural Gas tax reform regulatory liability | $ 15,800,000 | |||||
Kansas Gas Service tax reform regulatory liability | $ 16,600,000 | |||||
Texas Gas Service one-time refunds related to tax reform | $ 6,600,000 | |||||
Minimum [Member] | ||||||
Operating Loss Carryforwards, Expiration Date | Dec. 31, 2025 | |||||
Maximum [Member] | ||||||
Operating Loss Carryforwards, Expiration Date | Dec. 31, 2027 | |||||
Federal income tax rate changes [Member] | ||||||
Regulatory Liability, Noncurrent | $ 503,518,000 | 520,866,000 | ||||
Regulatory Liabilities | $ 513,815,000 | $ 551,800,000 |
OTHER INCOME AND EXPENSE (Detai
OTHER INCOME AND EXPENSE (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Net Periodic Defined Benefits Expense (Reversal of Expense), Excluding Service Cost Component | $ (5,895) | $ (8,824) | $ (17,252) |
Other Nonoperating Expense | 2,919 | 2,535 | 2,727 |
Other Nonoperating Income (Expense) | $ 2,976 | $ 11,359 | $ 14,525 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2018USD ($) | Jun. 30, 2018USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Commitments and Contingencies [Line Items] | ||||||
Number Of Former Manufactured Gas Sites Where We Own Or Retain Legal Responsibility For Environmental Conditions | 12 | |||||
Number of MGP sites for which a remediation reserve was recorded | 1 | |||||
Deferred MGP Costs, Maximum | $ 15,000 | |||||
Regulatory assets | $ 391,036 | $ 437,479 | ||||
Number of sites with ongoing groundwater monitoring | 8 | |||||
Environmental Reserve Estimate Range, Low | $ 5,600 | $ 4,000 | ||||
Environmental Reserve Estimate Range, High | $ 7,000 | $ 7,000 | ||||
Accrual for Environmental Loss Contingencies, Revision in Estimates | $ 1,600 | |||||
Environmental Reserve Estimate, Actual | $ 5,600 | |||||
Percentage yield of high consequence pipeline areas | 30.00% | |||||
Number Of Sites Soil Remediation Is Completed Or Near Completion | 12 | |||||
MGP Costs [Member] | ||||||
Commitments and Contingencies [Line Items] | ||||||
Regulatory assets | $ 9,709 | $ 7,724 |
QUARTERLY FINANCIAL DATA (UNA_3
QUARTERLY FINANCIAL DATA (UNAUDITED) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Schedule of Quarterly Financial Information [Line Items] | |||||||||||
Revenues | $ 452,607 | $ 248,563 | $ 290,560 | $ 661,000 | $ 464,466 | $ 238,280 | $ 292,521 | $ 638,464 | $ 1,647,479 | $ 1,626,618 | |
Operating income | 81,971 | 38,777 | 46,891 | 127,619 | 80,855 | 36,241 | 41,043 | 130,290 | 295,258 | 288,429 | $ 316,728 |
Net income | $ 51,162 | $ 17,457 | $ 24,470 | $ 93,660 | $ 44,704 | $ 16,276 | $ 20,419 | $ 90,835 | $ 186,749 | $ 172,234 | $ 162,995 |
Basic | $ 0.97 | $ 0.33 | $ 0.46 | $ 1.77 | $ 0.85 | $ 0.31 | $ 0.39 | $ 1.73 | $ 3.53 | $ 3.27 | $ 3.10 |
Diluted | $ 0.96 | $ 0.33 | $ 0.46 | $ 1.76 | $ 0.84 | $ 0.31 | $ 0.39 | $ 1.72 | $ 3.51 | $ 3.25 | $ 3.08 |
LEASES (Details)
LEASES (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Lessee, Lease, Description [Line Items] | |||
Operating Leases, Future Minimum Payments Due under ASC 840 | $ 6.3 | ||
Operating Leases, Future Minimum Payments, Due in Two Years | 5.1 | ||
Operating Leases, Future Minimum Payments, Due in Three Years | 4.5 | ||
Operating Leases, Future Minimum Payments, Due in Four Years | 4.3 | ||
Lessee, Operating Lease, Liability, Payments, Due Next Twelve Months | $ 7.6 | ||
Operating Lease, Weighted Average Discount Rate, Percent | 3.62% | ||
Lessee, Operating Lease, Option to Extend | 10 years | ||
Operating Lease, Weighted Average Remaining Lease Term | 7 years | ||
Operating Lease, Right-of-Use Asset | $ 34.2 | 32 | |
Operating Lease, Expense | 8.5 | ||
Operating Leases, Rent Expense | 8.2 | $ 8.7 | |
Operating Lease, Payments | (8.4) | ||
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability | 9.5 | ||
Lessee, Operating Lease, Liability, Payments, Due Year Two | 7.2 | ||
Lessee, Operating Lease, Liability, Payments, Due Year Three | 6.9 | ||
Lessee, Operating Lease, Liability, Payments, Due Year Four | 5.8 | ||
Lessee, Operating Lease, Liability, Payments, Due Year Five | 3.1 | ||
Lessee, Operating Lease, Liability, Payments, Due after Year Five | 8.5 | ||
Lessee, Operating Lease, Liability, Payments, Due | 39.1 | ||
Lessee, Operating Lease, Liability, Undiscounted Excess Amount | (4.6) | ||
Operating Lease, Liability | 34.5 | 32 | |
Operating Lease, Liability, Current | 6.5 | ||
Operating Lease, Liability, Noncurrent | $ 28 | ||
Operating Leases, Future Minimum Payments, Due in Five Years | 4.2 | ||
Operating Leases, Future Minimum Payments, Due Thereafter | 3.8 | ||
Operating Leases, Future Minimum Payments Due | $ 28.2 | ||
Minimum [Member] | |||
Lessee, Lease, Description [Line Items] | |||
Lessee, Operating Lease, Term of Contract | 1 year | ||
Maximum [Member] | |||
Lessee, Lease, Description [Line Items] | |||
Lessee, Operating Lease, Term of Contract | 15 years |