Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2020 | May 04, 2020 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2020 | |
Document Transition Report | false | |
Entity File Number | 1-7584 | |
Entity Registrant Name | TRANSCONTINENTAL GAS PIPE LINE COMPANY, LLC | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 74-1079400 | |
Entity Address, Address Line One | 2800 Post Oak Boulevard | |
Entity Address, City or Town | Houston | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 77056 | |
City Area Code | 713 | |
Local Phone Number | 215-2000 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Central Index Key | 0000099250 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Current Fiscal Year End Date | --12-31 | |
Entity Common Stock, Shares Outstanding | 0 |
Condensed Consolidated Statemen
Condensed Consolidated Statement of Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Revenues [Abstract] | ||
Natural gas sales | $ 19,654 | $ 24,086 |
Natural gas transportation | 566,006 | 534,160 |
Natural gas storage | 38,374 | 36,085 |
Other | 3,334 | 2,762 |
Total operating revenues | 627,368 | 597,093 |
Operating Costs and Expenses: | ||
Cost of natural gas sales | 19,654 | 24,086 |
Cost of natural gas transportation | 13,396 | 14,635 |
Operation and maintenance | 80,689 | 83,448 |
Administrative and general | 42,171 | 48,151 |
Depreciation and amortization | 113,635 | 104,623 |
Taxes - other than income taxes | 22,437 | 20,277 |
Regulatory credit resulting from Tax Reform | (7,688) | (1,749) |
Other expense, net | 3,290 | 13,349 |
Total operating costs and expenses | 287,584 | 306,820 |
Operating Income | 339,784 | 290,273 |
Other (Income) and Other Expenses: | ||
Interest expense | 73,109 | 71,091 |
Allowance for equity and borrowed funds used during construction (AFUDC) | (10,953) | (8,714) |
Equity in earnings losses of unconsolidated affiliates | 0 | (771) |
Miscellaneous other (income) expenses, net | (356) | (1,035) |
Total other (income) and other expenses | 61,800 | 60,571 |
Net Income | 277,984 | 229,702 |
Other comprehensive loss | ||
Equity interest in unrealized gain (loss) on interest rate hedges (includes $(78) for the three months ended March 31, 2019 of accumulated other comprehensive income reclassification for equity interest in realized gains on interest rate hedges) | 0 | (230) |
Comprehensive Income | $ 277,984 | $ 229,472 |
Condensed Consolidated Statem_2
Condensed Consolidated Statement of Comprehensive Income (Unaudited) (Parentheticals) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Accumulated other comprehensive income reclassification for equity interest in realized gains on interest rate hedges | $ (78) |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheet (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Current Assets: | ||
Cash | $ 0 | $ 0 |
Receivables: | ||
Affiliates | 1,685 | 669 |
Trade and other | 233,039 | 253,266 |
Transportation and exchange gas receivables | 5,663 | 6,360 |
Inventories | 63,862 | 64,992 |
Regulatory assets | 62,559 | 69,440 |
Other | 10,753 | 11,240 |
Total current assets | 377,561 | 405,967 |
Property, Plant and Equipment | ||
Natural gas transmission plant | 16,888,643 | 16,764,904 |
Less-Accumulated depreciation and amortization | 4,528,011 | 4,438,077 |
Total property, plant and equipment, net | 12,360,632 | 12,326,827 |
Other Assets: | ||
Regulatory assets | 318,200 | 290,923 |
Right-of-use assets | 83,342 | 84,979 |
Other | 196,426 | 210,017 |
Total other assets | 597,968 | 585,919 |
Total Assets | 13,336,161 | 13,318,713 |
Payables: | ||
Affiliate | 40,767 | 47,740 |
Advances from affiliate | 316,907 | 252,549 |
Trade and other | 118,607 | 183,968 |
Transportation and exchange gas payables | 607 | 3,961 |
Reserve for rate refunds | 248,291 | 188,842 |
Regulatory liabilities | 57,092 | 57,359 |
Accrued liabilities | 158,908 | 199,128 |
Long-term debt due within one year | 20,644 | 20,180 |
Total current liabilities | 961,823 | 953,727 |
Long-Term Debt | 4,041,622 | 4,044,790 |
Other Long-Term Liabilities: | ||
Asset retirement obligations | 431,937 | 426,505 |
Regulatory liabilities | 962,945 | 966,961 |
Deferred revenue | 212,957 | 215,598 |
Lease liability | 83,107 | 84,528 |
Other | 28,003 | 20,821 |
Total other long-term liabilities | 1,718,949 | 1,714,413 |
Contingent Liabilities and Commitments (Note 3) | ||
Members' Equity | ||
Member's capital | 4,428,499 | 4,428,499 |
Retained earnings | 2,185,268 | 2,177,284 |
Total member's equity | 6,613,767 | 6,605,783 |
Total liabilities and member's equity | $ 13,336,161 | $ 13,318,713 |
Condensed Consolidated Statem_3
Condensed Consolidated Statement of Member's Equity (Unaudited) - USD ($) $ in Thousands | Total | Member Units [Member] | Retained Earnings [Member] | AOCI Attributable to Parent [Member] |
Balance at beginning of period at Dec. 31, 2018 | $ 4,428,499 | $ 2,099,567 | $ 534 | |
Cash contributions from parent | 0 | |||
Net Income | $ 229,702 | 229,702 | ||
Cash distributions to parent | (176,000) | (176,000) | ||
Equity interest in unrealized loss in interest rate hedge | (230) | (230) | ||
Balance at end of period at Mar. 31, 2019 | 6,582,072 | 4,428,499 | 2,153,269 | 304 |
Balance at beginning of period at Dec. 31, 2019 | 6,605,783 | 4,428,499 | 2,177,284 | 0 |
Cash contributions from parent | 0 | |||
Net Income | 277,984 | 277,984 | ||
Cash distributions to parent | (270,000) | (270,000) | ||
Equity interest in unrealized loss in interest rate hedge | 0 | 0 | ||
Balance at end of period at Mar. 31, 2020 | $ 6,613,767 | $ 4,428,499 | $ 2,185,268 | $ 0 |
Condensed Consolidated Statem_4
Condensed Consolidated Statement of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Cash flows from operating activities: | ||
Net Income | $ 277,984 | $ 229,702 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 113,635 | 104,623 |
Allowance for equity funds used during construction (equity AFUDC) | (8,121) | (6,510) |
Regulatory credit resulting from Tax Reform | (7,688) | (1,749) |
Equity in earnings losses of unconsolidated affiliates | 0 | (771) |
Distribution from unconsolidated affiliates | 0 | 1,248 |
Changes in operating assets and liabilities: | ||
Receivables - affiliates | (1,016) | 619 |
Receivables - trade and other | 20,227 | (33,047) |
Transportation and exchange gas receivable | 697 | (1,824) |
Inventories | 1,130 | (4,531) |
Payables - afilliates | (6,973) | (4,242) |
Payables - trade | (31,120) | (45,546) |
Accrued liabilities | (40,343) | (35,238) |
Reserve for rate refunds | 59,449 | 22,133 |
Asset retirement obligations | 5,432 | 18,577 |
Deferred revenue | (2,641) | (2,638) |
Other, net | 9,572 | 3,419 |
Net cash provided by operating activities | 390,224 | 244,225 |
Cash flows from financing activities: | ||
Proceeds from other financing obligations | 1,685 | 7,914 |
Payments on other financing obligations | (4,837) | (3,680) |
Cash distributions to parent | (270,000) | (176,000) |
Advances from affiliate, net | 64,358 | 86,580 |
Net cash used in financing activities | (208,794) | (85,186) |
Cash flows from investing activities: | ||
Capital expenditures | (173,184) | (184,556) |
Contributions and advances for construction costs | 10,149 | 10,057 |
Disposal of property, plant and equipment, net | (4,782) | (5,477) |
Advances to affiliate, net | 0 | 33,034 |
Purchase of ARO Trust investments | (28,686) | (19,518) |
Proceeds from sale of ARO Trust investments | 15,073 | 9,767 |
Other, net | 0 | (2,346) |
Net cash used in investing activities | (181,430) | (159,039) |
Increase (decrease) in cash | 0 | 0 |
Cash at beginning of period | 0 | 0 |
Cash at end of period | 0 | 0 |
Increase to property, plant and equipment, exclusive of equity AFUDC | (132,575) | (161,741) |
Changes in related accounts payable and accrued liabilities | (40,609) | (22,815) |
Capital expenditures | $ (173,184) | $ (184,556) |
Basis of Presentation (Notes)
Basis of Presentation (Notes) | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | BASIS OF PRESENTATION In this report, Transco (which includes Transcontinental Gas Pipe Line Company, LLC and, unless the context otherwise requires, all of our majority-owned subsidiaries) is at times referred to in the first person as “we,” “us” or “our.” Transco is indirectly owned by The Williams Companies, Inc. (Williams). General The condensed consolidated unaudited financial statements include our accounts and the accounts of the subsidiaries we control. Companies in which we and our subsidiaries own 20 percent to 50 percent of the voting common stock or otherwise exercise significant influence over operating and financial policies of the company are accounted for under the equity method. Effective December 31, 2019, we distributed to our parent four wholly owned subsidiaries, two of which owned an interest in Pine Needle Operating Company, LLC and Cardinal Operating Company, LLC. The equity method investments prior to December 31, 2019 consisted of Cardinal Pipeline Company, LLC (Cardinal) with an ownership interest of approximately 45 percent and Pine Needle LNG Company, LLC (Pine Needle) with an ownership interest of 35 percent . We received distributions associated with our equity method investments totaling $1.2 million in the three months ended March 31, 2019 . The condensed consolidated unaudited financial statements have been prepared from our books and records. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (GAAP) have been condensed or omitted in this Form 10-Q pursuant to Securities and Exchange Commission rules and regulations. The condensed consolidated unaudited financial statements include all normal recurring adjustments and others which, in the opinion of our management, are necessary to present fairly our interim financial statements. These condensed consolidated unaudited financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in our 2019 Annual Report on Form 10-K. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated unaudited financial statements and accompanying notes. Actual results could differ from those estimates. Income Taxes We generally are not a taxable entity for federal or state and local income tax purposes. The tax on net income is generally borne by our parent, Williams. Net income for financial statement purposes may differ significantly from taxable income of Williams as a result of differences between the tax basis and financial reporting basis of assets and liabilities. Revenue Subject to Refund Federal Energy Regulatory Commission (FERC) regulations promulgate policies and procedures which govern a process to establish the rates that we are permitted to charge customers for natural gas sales and services, including the transportation and storage of natural gas. Key determinants in the ratemaking process are (1) costs of providing service, including depreciation expense, (2) allowed rate of return, including the equity component of the capital structure and related taxes, and (3) contract and volume throughput assumptions. As a result of the ratemaking process, certain revenues collected by us may be subject to refund upon the issuance of final orders by the FERC in pending rate proceedings. We record estimates of rate refund liabilities considering our and other third-party regulatory proceedings, advice of counsel and estimated total exposure, as well as collection and other risks. Depending on the results of these proceedings, the actual amounts allowed to be collected from customers could differ from management's estimate. In addition, as a result of rate orders, tariff provisions or regulations, we are required to refund or credit certain revenues to our customers. (See Note 3) Accounting Standards Issued and Adopted In June 2016, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) 2016-13 “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (ASU 2016-13). ASU 2016-13 changed the impairment model for most financial assets and certain other instruments. For trade and other receivables, held-to-maturity debt securities, loans, and other instruments, entities are required to use a forward-looking “expected loss” model that generally will result in the earlier recognition of allowances for losses. We adopted ASU 2016-13 effective January 1, 2020, which primarily applied to our short-term trade receivables. There was no cumulative effect adjustment to retained earnings upon adoption. The majority of our trade receivable balances are due within 30 days. We monitor the credit quality of our counterparties through review of collection trends, credit ratings, and other analysis, such as bankruptcy monitoring. Financial assets are evaluated as one pool. Changes in counterparty risk factors could lead to reassessment of the composition of our financial assets as one pool. We calculate our allowance for credit losses incorporating an aging method. In estimating our expected credit losses, we utilized historical loss rates over many years. Our expected credit loss estimate considered both internal and external forward-looking commodity price expectations, as well as counterparty credit ratings, and factors impacting their near term liquidity. Past due accounts are generally written off against the allowance for doubtful accounts only after all collection attempts have been exhausted. We do not have a material amount of significantly aged receivables at March 31, 2020. |
Revenue Recognition (Notes)
Revenue Recognition (Notes) | 3 Months Ended |
Mar. 31, 2020 | |
Revenue Recognition [Abstract] | |
Revenue from Contract with Customer [Text Block] | 2. REVENUE RECOGNITION Revenue by Category Our revenue disaggregation by major service line includes Natural gas sales , Natural gas transportation , Natural gas storage , and Other , which are separately presented on the Condensed Consolidated Statement of Comprehensive Income. Contract Liabilities The following table presents a reconciliation of our contract liabilities: Year to Date March 31, 2020 (Thousands) Balance at beginning of period $ 226,164 Payments received and deferred — Recognized in revenue (2,641 ) Balance at end of period $ 223,523 Our remaining performance obligations primarily include reservation charges on contracted capacity on our firm transportation and storage contracts with customers. Amounts from certain contracts included in the table below, which are subject to the periodic review and approval by the FERC, reflect the rates for such services in our current FERC tariffs, net of estimated reserve for refund, for the life of the related contracts; however, these rates may change based on future tariffs approved by the FERC and the amount and timing of these changes is not currently known. This table excludes the variable consideration component for commodity charges. Certain of our contracts contain evergreen provisions for periods beyond the initial term of the contract. The remaining performance obligations as of March 31, 2020, do not consider potential future performance obligations for which the renewal has not been exercised. The table below also does not include contracts with customers for which the underlying facilities have not received FERC authorization to be placed into service. The following table presents the amount of the contract liabilities balance expected to be recognized as revenue when performance obligations are satisfied and the transaction price allocated to the remaining performance obligations under certain contracts as of March 31, 2020. Contract Liabilities Remaining Performance Obligations (Thousands) 2020 (remainder) $ 7,928 $ 1,701,586 2021 10,566 2,142,316 2022 10,566 2,042,192 2023 10,566 1,607,989 2024 10,568 1,394,930 Thereafter 173,329 12,782,399 Total $ 223,523 $ 21,671,412 Accounts Receivable Receivables from contracts with customers are included within Receivables - Trade and other and Receivables - Affiliates in our Condensed Consolidated Balance Sheet. At March 31, 2020 and December 31, 2019, Receivables - Trade and other includes $9.2 million and $13.8 million |
Contingent Liabilities and Comm
Contingent Liabilities and Commitments (Notes) | 3 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingent Liabilities and Commitments | CONTINGENT LIABILITIES AND COMMITMENTS Rate Matters General rate case (Docket No. RP18-1126) On August 31, 2018, we filed a general rate case with the FERC for an overall increase in rates and to comply with the terms of the settlement in our prior rate case to file a rate case no later than August 31, 2018. On September 28, 2018, the FERC issued an order accepting and suspending our general rate filing to be effective March 1, 2019, subject to refund and the outcome of a hearing, except that rates for certain services that were proposed as overall rate decreases were accepted, without suspension, to be effective October 1, 2018. The decreased rates will not be subject to refund but may be subject to decrease prospectively under Section 5 of the Natural Gas Act of 1938, as amended. On March 18, 2019, the FERC accepted our motion to place the rates that were suspended by the September 28, 2018 order into effect on March 1, 2019, subject to refund. On December 31, 2019, we filed a stipulation and agreement with the FERC to resolve all issues in this proceeding without the need for a hearing. On March 24, 2020, the FERC approved the settlement, which will become effective on June 1, 2020. At March 31, 2020 , we have accrued approximately $248.3 million related to Docket No. RP18-1126, which we believe is adequate for any refunds that may be required. Environmental Matters We have had studies underway for many years to test some of our facilities for the presence of toxic and hazardous substances such as polychlorinated biphenyls (PCBs) and mercury to determine to what extent, if any, remediation may be necessary. We have also similarly evaluated past on-site disposal of hydrocarbons at a number of our facilities. We have worked closely with and responded to data requests from the U.S. Environmental Protection Agency (EPA) and state agencies regarding such potential contamination of certain of our sites. We are conducting environmental assessments and implementing a variety of remedial measures that may result in increases or decreases in the total estimated costs. At March 31, 2020 , and December 31, 2019, we had a balance of approximately $2.5 million for the expense portion of these estimated costs, $1.2 million recorded in Accrued liabilities and $1.3 million recorded in Other Long-Term Liabilities - Other in the accompanying Condensed Consolidated Balance Sheet. We have been identified as a potentially responsible party (PRP) at various Superfund and state waste disposal sites. Based on present volumetric estimates and other factors, our estimated aggregate exposure for remediation of these sites is less than $0.5 million . The estimated remediation costs for all of these sites are included in the environmental liabilities discussed above. Liability under the Comprehensive Environmental Response, Compensation and Liability Act and applicable state law can be joint and several with other PRPs. Although volumetric allocation is a factor in assessing liability, it is not necessarily determinative; thus, the ultimate liability could be substantially greater than the amounts described above. The EPA and various state regulatory agencies routinely promulgate and propose new rules, and issue updated guidance to existing rules. These rulemakings include, but are not limited to, rules for reciprocating internal combustion engine and combustion turbine maximum achievable control technology, air quality standards for one-hour nitrogen dioxide emissions, and volatile organic compound and methane new source performance standards impacting design and operation of storage vessels, pressure valves, and compressors. The EPA previously issued its rule regarding National Ambient Air Quality Standards for ground-level ozone. We are monitoring the rule’s implementation as it will trigger additional federal and state regulatory actions that may impact our operations. Implementation of the regulations is expected to result in impacts to our operations and increase the cost of additions to Total property, plant and equipment, net in the Condensed Consolidated Balance Sheet for both new and existing facilities in affected areas. We are unable to reasonably estimate the cost of additions that may be required to meet the regulations at this time due to uncertainty created by various legal challenges to these regulations and the need for further specific regulatory guidance. We consider prudently incurred environmental assessment and remediation costs and the costs associated with compliance with environmental standards to be recoverable through rates. To date, we have been permitted recovery of environmental costs, and it is our intent to continue seeking recovery of such costs through future rate filings. Other Matters Various other proceedings are pending against us and are considered incidental to our operations. Summary We estimate that for all matters for which we are able to reasonably estimate a range of loss, including those noted above and others that are not individually significant, our aggregate reasonably possible losses beyond amounts accrued for all of our contingent liabilities are immaterial to our expected future annual results of operations, liquidity and financial position. These calculations have been made without consideration of any potential recovery from third parties. We have disclosed all significant matters for which we are unable to reasonably estimate a range of possible loss. |
Debt and Financing Arrangements
Debt and Financing Arrangements (Notes) | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Debt and Financing Arrangements | DEBT AND FINANCING ARRANGEMENTS Credit Facility We, along with Williams and Northwest Pipeline LLC (Northwest) (the “borrowers”), are party to a Credit Agreement with aggregate commitments available of $4.5 billion , with up to an additional $500 million increase in aggregate commitments available under certain circumstances. We and Northwest are each subject to a $500 million borrowing sublimit. Letter of credit commitments of $1 billion are, subject to the $500 million borrowing sublimit applicable to us and Northwest, available to the borrowers. At March 31, 2020 , no letters of credit have been issued and loans to Williams of $1.7 billion were outstanding under the credit facility. Williams participates in a commercial paper program and Williams management considers amounts outstanding under this program to be a reduction of available capacity under the credit facility. The program allows a maximum outstanding amount at any time of $4 billion of unsecured commercial paper notes. At March 31, 2020 , Williams had no outstanding commercial paper. Other Financing Obligations Dalton Expansion Project At March 31, 2020 , the amount included in Long-Term Debt on our Condensed Consolidated Balance Sheet for this financing obligation is $256.2 million , and the amount included in Long-term debt due within one year on our Condensed Consolidated Balance Sheet for this financing obligation is $2.1 million . Atlantic Sunrise Project During the first three months of 2020, we received an additional $1.7 million of funding from a co-owner for its proportionate share of construction costs related to its undivided ownership interest in certain parts of the project. This additional funding is reflected in Long-Term Debt on our Condensed Consolidated Balance Sheet. At March 31, 2020 , the amount included in Long-Term Debt on our Condensed Consolidated Balance Sheet for this financing obligation is $835.9 million , and the amount included in Long-term debt due within one year on our Condensed Consolidated Balance Sheet for this financing obligation is $18.5 million . Long-Term Debt Due Within One Year The long-term debt due within one year at March 31, 2020 is associated with the previously described other financing obligations. |
ARO Trust (Notes)
ARO Trust (Notes) | 3 Months Ended |
Mar. 31, 2020 | |
Investments, Debt and Equity Securities [Abstract] | |
ARO Trust | ARO TRUST We are entitled to collect in rates the amounts necessary to fund our asset retirement obligations (ARO). We deposit monthly, into an external trust account (ARO Trust), the revenues specifically designated for ARO. The ARO Trust carries a moderate risk portfolio. The Money Market Funds held in our ARO Trust are considered investments. We measure the financial instruments held in our ARO Trust at fair value. However, in accordance with the ASC Topic 980, Regulated Operations, both realized and unrealized gains and losses of the ARO Trust are recorded as regulatory assets or liabilities. Effective March 1, 2019, the annual funding obligation based on the Docket No. RP18-1126 rate case filing was approximately $35.9 million . Pursuant to the approved stipulation and agreement in Docket No. RP18-1126, the new funding obligation 1) effective March 1, 2019 is approximately $23.8 million , and 2) effective March 1, 2020 is approximately $16.0 million . Investments within the ARO Trust at fair value were as follows (in millions): March 31, 2020 December 31, 2019 Amortized Cost Basis Fair Value Amortized Cost Basis Fair Value Money Market Funds $ 22.4 $ 22.4 $ 15.8 $ 15.8 U.S. Equity Funds 63.3 74.5 55.3 83.3 International Equity Funds 36.8 32.3 31.8 35.4 Municipal Bond Funds 58.2 59.0 64.7 66.1 Total $ 180.7 $ 188.2 $ 167.6 $ 200.6 |
Fair Value Measurements (Notes)
Fair Value Measurements (Notes) | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | FAIR VALUE MEASUREMENTS The following table presents, by level within the fair value hierarchy, certain of our financial assets and liabilities. The carrying values of short-term financial assets (advances to and from affiliate) that have variable interest rates, accounts receivable and accounts payable approximate fair value because of the short-term nature of these instruments. Therefore, these assets and liabilities are not presented in the following table. Fair Value Measurements Using Carrying Amount Fair Value Quoted Prices In Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) (Millions) Assets (liabilities) at March 31, 2020: Measured on a recurring basis: ARO Trust investments $ 188.2 $ 188.2 $ 188.2 $ — $ — Additional disclosures: Long-term debt, including current portion (4,062.3 ) (4,634.9 ) — (4,634.9 ) — Assets (liabilities) at December 31, 2019: Measured on a recurring basis: ARO Trust investments $ 200.6 $ 200.6 $ 200.6 $ — $ — Additional disclosures: Long-term debt, including current portion (4,065.0 ) (5,251.4 ) — (5,251.4 ) — Fair Value Methods The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate that value: ARO Trust investments — We deposit a portion of our collected rates, pursuant to the terms of the Docket No. RP18-1126 rate case settlement, into the ARO Trust which is specifically designated to fund future asset retirement obligations. The ARO Trust invests in a portfolio of actively traded mutual funds that are measured at fair value on a recurring basis based on quoted prices in an active market and are reported in Other Assets-Other in the Condensed Consolidated Balance Sheet. However, both realized and unrealized gains and losses are ultimately recorded as regulatory assets or liabilities. See Note 5 for more information regarding the ARO Trust. Long-term debt — The disclosed fair value of our long-term debt is determined primarily by a market approach using broker quoted indicative period-end bond prices. The quoted prices are based on observable transactions in less active markets for our debt or similar instruments. The fair value of the financing obligations associated with our Dalton and Atlantic Sunrise expansions, which are included within long-term debt, were determined using an income approach (See Note 4). |
Transactions with Affiliates (N
Transactions with Affiliates (Notes) | 3 Months Ended |
Mar. 31, 2020 | |
Related Party Transactions [Abstract] | |
Transactions with Affiliates | TRANSACTIONS WITH AFFILIATES We are a participant in Williams' cash management program, and we receive advances from and make advances to Williams. At March 31, 2020 and December 31, 2019, our advances from Williams totaled approximately $316.9 million and $252.5 million , respectively. These advances are classified as Payables - Advances from affiliate in the accompanying Condensed Consolidated Balance Sheet. Advances are stated at the historical carrying amounts. The interest rate on these intercompany demand notes is based upon the daily overnight investment rate paid on Williams' excess cash at the end of each month. At March 31, 2020 , the interest rate was 0.27 percent . Included in Operating Revenues in the accompanying Condensed Consolidated Statement of Comprehensive Income are revenues received from affiliates of $2.6 million and $3.3 million for the three months ended March 31, 2020 and 2019, respectively. The rates charged to provide sales and services to affiliates are the same as those that are charged to similarly-situated nonaffiliated customers. Included in Cost of natural gas sales in the accompanying Condensed Consolidated Statement of Comprehensive Income are cost of gas purchased from affiliates of $2.5 million and $1.6 million for the three months ended March 31, 2020 and 2019, respectively. All gas purchases are made at market or contract prices. We have no employees. Services necessary to operate our business are provided to us by Williams and certain affiliates of Williams. We reimburse Williams and its affiliates for all direct and indirect expenses incurred or payments made (including salary, bonus, incentive compensation and benefits) in connection with these services. Employees of Williams also provide general, administrative and management services to us, and we are charged for certain administrative expenses incurred by Williams. These charges are either directly identifiable or allocated to our assets. Direct charges are for goods and services provided by Williams at our request. Allocated charges are based on a three-factor formula, which considers revenues; property, plant and equipment; and payroll. In management’s estimation, the allocation methodologies used are reasonable and result in a reasonable allocation to us of our costs of doing business incurred by Williams. We were billed $86.9 million and $92.2 million in the three months ended March 31, 2020 , and 2019, respectively, for these services. Such expenses are primarily included in Operation and maintenance and Administrative and general expenses in the accompanying Condensed Consolidated Statement of Comprehensive Income. We provide services to certain of our affiliates. We recorded reductions in operating expenses for services provided to and reimbursed by our affiliates of $1.0 million and $1.2 million for the three months ended March 31, 2020 , and 2019, respectively. We made equity distributions totaling $270.0 million and $176.0 million during the three months ended March 31, 2020 |
Revenue Recognition Revenue Rec
Revenue Recognition Revenue Recognition (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Revenue Recognition [Abstract] | |
Contract with Customer, Asset and Liability [Table Text Block] | The following table presents a reconciliation of our contract liabilities: Year to Date March 31, 2020 (Thousands) Balance at beginning of period $ 226,164 Payments received and deferred — Recognized in revenue (2,641 ) Balance at end of period $ 223,523 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Table Text Block] | The following table presents the amount of the contract liabilities balance expected to be recognized as revenue when performance obligations are satisfied and the transaction price allocated to the remaining performance obligations under certain contracts as of March 31, 2020. Contract Liabilities Remaining Performance Obligations (Thousands) 2020 (remainder) $ 7,928 $ 1,701,586 2021 10,566 2,142,316 2022 10,566 2,042,192 2023 10,566 1,607,989 2024 10,568 1,394,930 Thereafter 173,329 12,782,399 Total $ 223,523 $ 21,671,412 |
ARO Trust (Tables)
ARO Trust (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Investments, Debt and Equity Securities [Abstract] | |
ARO Trust | Investments within the ARO Trust at fair value were as follows (in millions): March 31, 2020 December 31, 2019 Amortized Cost Basis Fair Value Amortized Cost Basis Fair Value Money Market Funds $ 22.4 $ 22.4 $ 15.8 $ 15.8 U.S. Equity Funds 63.3 74.5 55.3 83.3 International Equity Funds 36.8 32.3 31.8 35.4 Municipal Bond Funds 58.2 59.0 64.7 66.1 Total $ 180.7 $ 188.2 $ 167.6 $ 200.6 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | The following table presents, by level within the fair value hierarchy, certain of our financial assets and liabilities. The carrying values of short-term financial assets (advances to and from affiliate) that have variable interest rates, accounts receivable and accounts payable approximate fair value because of the short-term nature of these instruments. Therefore, these assets and liabilities are not presented in the following table. Fair Value Measurements Using Carrying Amount Fair Value Quoted Prices In Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) (Millions) Assets (liabilities) at March 31, 2020: Measured on a recurring basis: ARO Trust investments $ 188.2 $ 188.2 $ 188.2 $ — $ — Additional disclosures: Long-term debt, including current portion (4,062.3 ) (4,634.9 ) — (4,634.9 ) — Assets (liabilities) at December 31, 2019: Measured on a recurring basis: ARO Trust investments $ 200.6 $ 200.6 $ 200.6 $ — $ — Additional disclosures: Long-term debt, including current portion (4,065.0 ) (5,251.4 ) — (5,251.4 ) — |
Basis of Presentation (Details)
Basis of Presentation (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Schedule of Equity Method Investments [Line Items] | ||
Distribution from unconsolidated affiliates | $ 0 | $ 1,248 |
Cardinal Pipeline Company, LLC [Member] | ||
Schedule of Equity Method Investments [Line Items] | ||
Equity Method Investment, Ownership Percentage | 45.00% | |
Pine Needle LNG Company, LLC [Member] | ||
Schedule of Equity Method Investments [Line Items] | ||
Equity Method Investment, Ownership Percentage | 35.00% |
Revenue Recognition Revenue R_2
Revenue Recognition Revenue Recogntion Contract Liabilities (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | |
Revenue Recognition [Abstract] | ||
Contract with Customer, Liability | $ 223,523 | $ 226,164 |
Payments received and deferred | 0 | |
Recognized in revenue | (2,641) | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-04-01 | ||
Revenue Recognition [Abstract] | ||
Contract with Customer, Liability | 7,928 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | ||
Revenue Recognition [Abstract] | ||
Contract with Customer, Liability | 10,566 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | ||
Revenue Recognition [Abstract] | ||
Contract with Customer, Liability | 10,566 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | ||
Revenue Recognition [Abstract] | ||
Contract with Customer, Liability | 10,566 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | ||
Revenue Recognition [Abstract] | ||
Contract with Customer, Liability | 10,568 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01 | ||
Revenue Recognition [Abstract] | ||
Contract with Customer, Liability | $ 173,329 | |
Remaining Performance Obligations [Member] | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 9 months | |
Remaining Performance Obligations [Member] | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-04-01 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Revenue, Remaining Performance Obligation, Amount | $ 1,701,586 | |
Remaining Performance Obligations [Member] | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Revenue, Remaining Performance Obligation, Amount | $ 2,142,316 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 1 year | |
Remaining Performance Obligations [Member] | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Revenue, Remaining Performance Obligation, Amount | $ 2,042,192 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 1 year | |
Remaining Performance Obligations [Member] | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Revenue, Remaining Performance Obligation, Amount | $ 1,607,989 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 1 year | |
Remaining Performance Obligations [Member] | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Revenue, Remaining Performance Obligation, Amount | $ 1,394,930 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 1 year | |
Remaining Performance Obligations [Member] | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Revenue, Remaining Performance Obligation, Amount | $ 21,671,412 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 1 year | |
Performance Obligations Related To Contract Liabilities [Member] | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-04-01 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 9 months | |
Performance Obligations Related To Contract Liabilities [Member] | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 1 year | |
Performance Obligations Related To Contract Liabilities [Member] | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 1 year | |
Performance Obligations Related To Contract Liabilities [Member] | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 1 year | |
Performance Obligations Related To Contract Liabilities [Member] | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 1 year | |
Performance Obligations Related To Contract Liabilities [Member] | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 1 year |
Revenue Recognition Accounts Re
Revenue Recognition Accounts Receivable (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Other Receivable [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Receivables, Net, Current | $ 9.2 | $ 13.8 |
Contingent Liabilities and Co_2
Contingent Liabilities and Commitments (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Reserve for rate refund | $ 248,300 | |
Environmental assessment and remediation [Member] | ||
Site Contingency [Line Items] | ||
Accrued environmental assessment and remediation costs, total | 2,500 | $ 2,500 |
Accrued environmental assessment and remediation costs, current | 1,200 | 1,200 |
Accrued environmental assessment and remediation costs, noncurrent | 1,300 | $ 1,300 |
Potentially responsible party at various Superfund and state waste disposal sites [Member] | Maximum [Member] | ||
Site Contingency [Line Items] | ||
Site Contingency, Loss Exposure Not Accrued, Best Estimate | $ 500 |
Debt and Financing Arrangemen_2
Debt and Financing Arrangements Line of Credit Facility (Details) | Mar. 31, 2020USD ($) |
Line of Credit Facility [Line Items] | |
Letters of Credit Outstanding, Amount | $ 0 |
Letter of credit [Member] | |
Line of Credit Facility [Line Items] | |
Line of Credit Facility, Maximum Borrowing Capacity | 500,000,000 |
Williams Companies Inc [Member] | Letter of credit [Member] | |
Line of Credit Facility [Line Items] | |
Line of Credit Facility, Maximum Borrowing Capacity | 1,000,000,000 |
Credit Agreement Member] | |
Line of Credit Facility [Line Items] | |
Line of Credit Facility, Maximum Borrowing Capacity | 500,000,000 |
Letters of credit, loans outstanding | 1,700,000,000 |
Commercial paper, outstanding | 0 |
Credit Agreement Member] | Williams Companies Inc [Member] | |
Line of Credit Facility [Line Items] | |
Line of Credit Facility, Maximum Borrowing Capacity | 4,500,000,000 |
Additional Amount By Which Credit Facility Can Be Increased | 500,000,000 |
Commercial Paper [Member] | Williams Companies Inc [Member] | |
Line of Credit Facility [Line Items] | |
Line of Credit Facility, Maximum Borrowing Capacity | $ 4,000,000,000 |
Debt and Financing Arrangemen_3
Debt and Financing Arrangements Long-Term Debt Instruments (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | |
Debt Instrument [Line Items] | ||
Long-Term Debt | $ 4,041,622 | $ 4,044,790 |
Long-term debt due within one year | 20,644 | $ 20,180 |
Dalton Expansion Project | ||
Debt Instrument [Line Items] | ||
Long-Term Debt | 256,200 | |
Long-term debt due within one year | 2,100 | |
Atlantic Sunrise Project [Member] | ||
Debt Instrument [Line Items] | ||
Proceeds from Issuance of Other Long-term Debt | 1,700 | |
Long-Term Debt | 835,900 | |
Long-term debt due within one year | $ 18,500 |
ARO Trust (Details)
ARO Trust (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Mar. 01, 2020 | Dec. 31, 2019 | Mar. 01, 2019 |
Debt Securities, Available-for-sale [Line Items] | ||||
Trading Securities, Equity, Cost | $ 180.7 | $ 167.6 | ||
Trading Securities, Equity | 188.2 | 200.6 | ||
External trust [Member] | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Other Commitment, Due in Next Twelve Months | $ 16 | 35.9 | $ 23.8 | |
Money Market Funds [Member] | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Trading Securities, Equity, Cost | 22.4 | 15.8 | ||
Trading Securities, Equity | 22.4 | 15.8 | ||
U.S. Equity Funds [Member] | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Trading Securities, Equity, Cost | 63.3 | 55.3 | ||
Trading Securities, Equity | 74.5 | 83.3 | ||
International Equity Funds [Member] | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Trading Securities, Equity, Cost | 36.8 | 31.8 | ||
Trading Securities, Equity | 32.3 | 35.4 | ||
Municipal Bond Funds [Member] | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Trading Securities, Equity, Cost | 58.2 | 64.7 | ||
Trading Securities, Equity | $ 59 | $ 66.1 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Fair Value, Inputs, Level 1 [Member] | ||
Additional Fair Value Elements [Abstract] | ||
Long-term debt, including current portion | $ 0 | $ 0 |
Fair Value, Inputs, Level 2 [Member] | ||
Additional Fair Value Elements [Abstract] | ||
Long-term debt, including current portion | (4,634.9) | (5,251.4) |
Fair Value, Inputs, Level 3 [Member] | ||
Additional Fair Value Elements [Abstract] | ||
Long-term debt, including current portion | 0 | 0 |
Reported Value Measurement [Member] | ||
Additional Fair Value Elements [Abstract] | ||
Long-term debt, including current portion | (4,062.3) | (4,065) |
Estimate of Fair Value Measurement [Member] | ||
Additional Fair Value Elements [Abstract] | ||
Long-term debt, including current portion | (4,634.9) | (5,251.4) |
Fair Value, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | ||
ARO Trust investments | 188.2 | 200.6 |
Fair Value, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | ||
ARO Trust investments | 0 | 0 |
Fair Value, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | ||
ARO Trust investments | 0 | 0 |
Fair Value, Recurring [Member] | Reported Value Measurement [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | ||
ARO Trust investments | 188.2 | 200.6 |
Fair Value, Recurring [Member] | Estimate of Fair Value Measurement [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | ||
ARO Trust investments | $ 188.2 | $ 200.6 |
Transactions with Affiliates Re
Transactions with Affiliates Related Party Transations (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020USD ($)employee | Mar. 31, 2019USD ($) | Dec. 31, 2019USD ($) | |
Related Party Transaction [Line Items] | |||
Advances from affiliate | $ 316,900 | $ 252,500 | |
Related party transaction, rate | 0.27% | ||
Entity number of employees | employee | 0 | ||
Expenses, related party | $ 86,900 | $ 92,200 | |
Equity distributions to parent | 270,000 | 176,000 | |
Affiliated Entity [Member] | |||
Related Party Transaction [Line Items] | |||
Operating revenues, related party | 2,600 | 3,300 | |
Cost of natural gas sales, related party | 2,500 | 1,600 | |
Expenses, related party | $ (1,000) | $ (1,200) |