<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
-----------
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended June 30, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Transition Period from to
Commission File Number 1-7414
NORTHWEST PIPELINE CORPORATION
-----------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 87-0269236
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
295 Chipeta Way
Salt Lake City, Utah 84108 (Address
----------------------------------------------------
of principal executive offices and Zip Code)
(801) 583-8800
----------------------------------------------------
(Registrant's telephone number, including area code)
No Change
----------------------------------------------------
(Former name, former address and former
fiscal year, if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
----- -----
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding at August 10, 1998
- -------------------------- ------------------------------
Common stock, $1 par value 1,000 shares
The registrant meets the conditions set forth in General Instruction (H)(1)(a)
and (b) of Form 10-Q and is therefore filing this Form 10-Q with the reduced
disclosure format.
<PAGE> 2
NORTHWEST PIPELINE CORPORATION
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
PART I. FINANCIAL INFORMATION:
Item 1. Financial Statements -
Condensed Consolidated Statement of Income, three and six months
ended June 30, 1998 and 1997.............................................................. 1
Condensed Consolidated Balance Sheet as of June 30, 1998 and
December 31, 1997......................................................................... 2
Condensed Consolidated Statement of Cash Flows, six
months ended June 30, 1998 and 1997 ...................................................... 4
Notes to Condensed Consolidated Financial Statements........................................ 5
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations................................................. 8
PART II. OTHER INFORMATION....................................................................... 10
</TABLE>
Certain matters discussed in this report, excluding historical information,
include forward-looking statements. Although Northwest Pipeline Corporation
believes such forward-looking statements are based on reasonable assumptions, no
assurance can be given that every objective will be reached. Such statements are
made in reliance on the "safe harbor" protections provided under the Private
Securities Reform Act of 1995. Additional information about issues that could
lead to material changes in performance is contained in Northwest Pipeline
Corporation's annual report on Form 10-K and 1998 first quarter report on Form
10-Q.
i
<PAGE> 3
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
NORTHWEST PIPELINE CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF INCOME
(Unaudited)
================================================================================
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
-------------------------- -----------------------------
1998 1997 1998 1997
---------- ---------- ------------ ------------
(Thousands)
<S> <C> <C> <C> <C>
OPERATING REVENUES.................................... $ 70,312 $ 66,050 $141,530 $133,256
---------- ---------- ------------ ------------
OPERATING EXPENSES:
General and administrative......................... 8,982 11,821 20,827 24,239
Operation and maintenance.......................... 9,404 7,962 17,671 16,902
Depreciation and amortization...................... 12,825 13,279 25,924 25,268
Taxes, other than income taxes..................... 3,258 3,257 7,021 7,675
---------- ---------- ------------ ------------
34,469 36,319 71,443 74,084
---------- ---------- ------------ ------------
Operating income................................. 35,843 29,731 70,087 59,172
---------- ---------- ------------ ------------
OTHER INCOME - net.................................... 1,158 1,186 2,405 1,969
---------- ---------- ------------ ------------
INTEREST CHARGES:
Interest on long-term debt......................... 7,450 8,275 14,664 16,644
Other interest..................................... 2,521 2,270 5,120 3,555
Allowance for borrowed funds used during
construction .................................. (131) (110) (202) (325)
---------- ---------- ------------ ------------
9,840 10,435 19,582 19,874
---------- ---------- ------------ ------------
INCOME BEFORE INCOME TAXES............................ 27,161 20,482 52,910 41,267
PROVISION FOR INCOME TAXES............................ 9,776 9,121 19,335 15,413
---------- ---------- ------------ ------------
NET INCOME............................................ $ 17,385 $ 11,361 $ 33,575 $ 25,854
========== ========== ============ ============
CASH DIVIDENDS ON COMMON STOCK........................ $ 12,000 $ 21,674 $ 24,000 $ 30,437
========== ========== ============ ============
</TABLE>
- -----------------------------
See accompanying notes.
- 1 -
<PAGE> 4
NORTHWEST PIPELINE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET
(Unaudited)
================================================================================
ASSETS
<TABLE>
<CAPTION>
June 30, December 31,
1998 1997
--------------- ---------------
(Thousands)
<S> <C> <C>
PROPERTY, PLANT AND EQUIPMENT, at cost ............................. $ 1,484,858 $ 1,471,027
Less - Accumulated depreciation and amortization ................ 594,299 570,521
--------------- ---------------
890,559 900,506
Construction work in progress ................................... 27,609 18,819
--------------- ---------------
918,168 919,325
--------------- ---------------
CURRENT ASSETS:
Cash and cash equivalents ....................................... 208 627
Advances to parent .............................................. 64,063 71,823
Accounts receivable -
Trade ......................................................... 14,002 26,873
Affiliated companies .......................................... 1,310 668
Materials and supplies (principally at average cost) ............ 10,891 10,619
Exchange gas due from others .................................... 9,287 12,859
Deferred income taxes ........................................... 21,995 25,867
Prepayments and other ........................................... 1,877 2,597
--------------- ---------------
123,633 151,933
--------------- ---------------
OTHER ASSETS:
Deferred charges ................................................ 53,787 54,181
--------------- ---------------
$ 1,095,588 $ 1,125,439
=============== ===============
</TABLE>
- ----------------
See accompanying notes.
- 2 -
<PAGE> 5
NORTHWEST PIPELINE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET
(Unaudited)
================================================================================
LIABILITIES AND STOCKHOLDER'S EQUITY
<TABLE>
<CAPTION>
June 30, December 31,
1998 1997
--------------- ---------------
(Thousands)
<S> <C> <C>
CAPITALIZATION:
Common stockholder's equity -
Common stock, par value, $1 per share;
authorized and outstanding, 1,000 shares .............................. $ 1 $ 1
Additional paid-in capital .............................................. 262,844 262,844
Retained earnings ....................................................... 172,192 162,617
--------------- ---------------
435,037 425,462
Long-term debt, less current maturities (Note 3) ............................ 406,430 408,287
--------------- ---------------
841,467 833,749
--------------- ---------------
CURRENT LIABILITIES:
Current maturities of long-term debt ........................................ 1,667 1,667
Accounts payable -
Trade ................................................................... 16,784 14,934
Affiliated companies .................................................... 4,850 15,456
Accrued liabilities -
Taxes, other than income taxes .......................................... 5,755 4,044
Interest ................................................................ 11,141 17,227
Employee costs .......................................................... 6,366 8,103
Exchange gas due to others .............................................. 8,243 9,650
Costs refundable through rate adjustments ............................... 1,733 2,766
Reserves for estimated rate refunds ..................................... 57,661 74,083
Other ................................................................... 2,214 8,705
--------------- ---------------
116,414 156,635
--------------- ---------------
DEFERRED INCOME TAXES .......................................................... 130,492 126,801
--------------- ---------------
OTHER DEFERRED CREDITS ......................................................... 7,215 8,254
--------------- ---------------
CONTINGENT LIABILITIES AND COMMITMENTS (Note 4).................................
--------------- ---------------
$ 1,095,588 $ 1,125,439
=============== ===============
</TABLE>
- ----------------
See accompanying notes.
- 3 -
<PAGE> 6
NORTHWEST PIPELINE CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
================================================================================
<TABLE>
<CAPTION>
Six Months Ended
June 30,
----------------------
1998 1997
-------- --------
(Thousands)
<S> <C> <C>
OPERATING ACTIVITIES:
Net Income ................................................................. $ 33,575 $ 25,854
Adjustments to reconcile to cash provided by operations -
Depreciation and amortization ............................................ 25,924 25,268
Provision for deferred income taxes ...................................... 7,563 3,978
Amortization of deferred charges and credits ............................. 259 (747)
Sale of receivables ...................................................... -- 8,000
Allowance for equity funds used during construction ...................... (316) (349)
Increase (decrease) from changes in:
Accounts receivable and exchange gas due from others ................... 15,801 5,086
Inventory .............................................................. (272) (78)
Other current assets ................................................... (313) 9,663
Other assets and deferred charges ...................................... (403) (1,988)
Accounts payable and exchange gas due to others ........................ (7,099) 804
Other accrued liabilities .............................................. (29,024) 20,632
Other deferred credits ................................................. (472) 1,314
Other .................................................................... (7) (479)
-------- --------
Net cash provided by operating activities .................................. 45,216 96,958
-------- --------
INVESTING ACTIVITIES:
Property, plant and equipment -
Capital expenditures ..................................................... (26,182) (23,055)
Proceeds from sales ...................................................... 1,737 822
Changes in accounts payable .............................................. (3,064) (9,636)
Advances to parent ......................................................... 7,760 (25,461)
-------- --------
Net cash used by investing activities ...................................... (19,749) (57,330)
-------- --------
FINANCING ACTIVITIES:
Principal payments on long-term debt ....................................... (1,867) (9,070)
Premium on early retirement of long-term debt .............................. (19) --
Dividends paid ............................................................. (24,000) (30,437)
-------- --------
Net cash used by financing activities ...................................... (25,886) (39,507)
-------- --------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS ........................... (419) 121
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD ............................... 627 240
-------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD ..................................... $ 208 $ 361
======== ========
</TABLE>
- ----------------
See accompanying notes.
- 4 -
<PAGE> 7
NORTHWEST PIPELINE CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
================================================================================
(1) GENERAL
The accompanying, unaudited interim condensed consolidated financial
statements of Northwest Pipeline Corporation ("Pipeline"), included herein, have
been prepared pursuant to the rules and regulations of the Securities and
Exchange Commission. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such rules and
regulations; however, Pipeline believes that the disclosures made are adequate
to make the information presented not misleading. In the opinion of Pipeline,
all adjustments, which include only normal operating adjustments, have been made
to present fairly the financial position of Pipeline as of June 30, 1998 and
December 31, 1997, the results of operations for the three and six month periods
ended June 30, 1998 and 1997, and cash flows for the six month periods ended
June 30, 1998 and 1997. The results of operations for the periods presented are
not necessarily indicative of the results for the respective complete years. It
is suggested that these condensed financial statements be read in conjunction
with the statements and the notes thereto included in Pipeline's 1997 Annual
Report Form 10-K.
Effective May 7, 1998, Pipeline became a wholly-owned subsidiary of
Williams Gas Pipeline Company, which is a wholly-owned subsidiary of The
Williams Companies, Inc. (Williams). Prior to May 7, 1998, Pipeline was a
wholly-owned subsidiary of Williams Interstate Natural Gas Systems, Inc.
(2) BASIS OF PRESENTATION
The financial position of Pipeline as of June 30, 1998 and December 31,
1997, the results of operations for the three and six month periods ended June
30, 1998 and 1997 and cash flows for the six month periods ended June 30, 1998
and 1997 include the operating results of NWP Enterprises ("Enterprises") a
wholly owned subsidiary of Pipeline, since its incorporation on January 2, 1997.
(3) LONG-TERM DEBT AND BANKING ARRANGEMENTS
Pipeline shares in a $1 billion Revolving Credit Facility with Williams
and four affiliated companies. Pipeline's maximum borrowing availability,
subject to prior borrowing by other affiliated companies, is $400 million, none
of which was used by Pipeline at June 30, 1998. Interest rates vary with current
market conditions. The Facility contains restrictions which limit, under certain
circumstances, the issuance of additional debt, the attachment of liens on any
assets and any change of ownership of Pipeline. Any borrowings by Pipeline under
this Facility are not guaranteed by Williams and are based on Pipeline's
financial need and credit worthiness.
Pipeline has also arranged various uncommitted lines-of-credit at market
interest rates. Pipeline's credit facilities are subject to Pipeline's continued
credit worthiness.
(4) CONTINGENT LIABILITIES AND COMMITMENTS
Pending Rate Cases
On April 1, 1993, Pipeline began collecting new rates, subject to
refund, under its rate case filed October 1, 1992 ("1993 Rate Case"). On May 31,
1995, Pipeline received an order from the Federal Energy Regulatory Commission
("FERC") on this rate case, which among other issues, supported an equity rate
of return of 13.2 percent. In a further order issued on July 19, 1996, FERC
required an Administrative Law Judge ("ALJ") to reconsider the long-term growth
component of the equity rate of return formula, and upheld its May 31, 1995
decision on all other issues. On October 22, 1996, the ALJ issued an initial
decision which recommended an equity rate of return of 11.62 percent. Pipeline
took exception to this decision before the FERC. On June 11, 1997, the FERC
issued an order revising its approved equity rate of return to 12.59 percent
based on a new policy for industry-wide application that requires the use of
forecasts of growth in the gross domestic product as the long-term growth
component of the rate of return formula. On July 11, 1997, Pipeline and several
parties in the case sought rehearing of the June 11 rate of return on equity
decision, seeking to have the FERC reconsider various aspects of its new rate of
return on equity policy. On October
- 5 -
<PAGE> 8
NORTHWEST PIPELINE CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
================================================================================
16, 1997, the FERC issued an opinion denying rehearing and reaffirming its
previous policy pronouncements concerning rate of return on equity, but convened
a conference on January 30, 1998 to consider, on an industry-wide basis, issues
with respect to pipeline rates of return. Pipeline made refunds to customers in
June 1998 totaling $27 million, including interest, in this rate case. Pipeline
also sought judicial review of FERC's decision concerning rate of return. In
July 1998, FERC issued orders concerning its rate of return on equity policy in
rate proceedings of other pipelines adopting a formula that gives less weight to
the long-term growth component. If this most recent formula modification were to
be applied in this rate proceeding, the rate of return result would be somewhat
higher. Pipeline has not yet made any changes to its accounting reserves pending
further actions in this proceeding.
On February 1, 1996, Pipeline began collecting new rates, subject to
refund, under the provisions of its rate case filed August 1, 1995 ("1995 Rate
Case"). On October 18, 1996, the Commission issued an order approving a
settlement concerning certain liquid revenue credit issues relating to
Pipeline's agreement with an affiliate to have liquid hydrocarbon products
extracted from Pipeline's transportation stream at Ignacio, Colorado. The
litigation of all remaining issues took place in late 1996. Pipeline's rate
application seeks a revenue increase for increases in rate base related
primarily to the Northwest Natural and Expansion II facilities placed into
service December 1, 1995 and increased operating costs primarily associated with
an increase in headquarters office rent. During the first quarter of 1998, the
ALJ issued an Initial Decision. The ALJ found that the facts of this case
continue to support Pipeline's capital structure of 55% equity and 45% debt. The
ALJ also determined that Pipeline fits within the average risk range for
determining pipeline return on equity. However, the ALJ allowed a return on
equity of 11.2 percent. Pipeline is seeking FERC review of this and other
aspects of the ALJ decision. If the FERC applies its recently announced
modifications to the rate of return formula giving less weight to long-term
growth factors, the resulting rate of return on equity would be somewhat higher.
Pipeline has not yet made any changes to its accounting reserves pending FERC
action in this proceeding.
On March 1, 1997, Pipeline began collecting new rates, subject to
refund, under the provisions of its rate case filed August 30, 1996 ("1996 Rate
Case"). The application sought an increase in rates due to a proposed use of a
higher depreciation rate which also considers a net negative salvage value for
Pipeline's facilities, higher operating costs and a redesign of Pipeline's rates
because of impacts relating to the sale of Pipeline's south-end facilities in
the third quarter of 1996. On July 22, 1997, Pipeline filed a settlement which
would resolve all issues in this rate case. On November 25, 1997, the FERC, over
the objection of one dissenting party, issued an order approving all aspects of
the settlement. The one dissenting party sought and was denied rehearing of the
FERC's order. That party has now sought judicial review of the FERC's decisions.
Pipeline has reflected in its financial statements adjustments, as necessary, to
reflect the provisions of the settlement.
Significant Litigation
In October 1995, Pipeline received a judge's order following a non-jury
trial involving claims arising from a transportation agreement of a former
customer. In the decision, which was amended in January 1996, it was held that
Pipeline was liable to the former customer in the amount of $5.3 million, plus
interest. Pipeline settled this case in May 1998 for an amount that approximated
its previously recorded financial reserve.
Other Legal and Regulatory Matters
In addition to the foregoing, various other proceedings are pending
against Pipeline incidental to its operations.
Summary of Contingent Liabilities
Management believes that the ultimate resolution of the foregoing
matters, after consideration of amounts accrued, insurance coverage or other
indemnification arrangements, will not have a materially adverse effect upon
Pipeline's future financial position, results of operations, and future cash
flow requirements.
- 6 -
<PAGE> 9
NORTHWEST PIPELINE CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
================================================================================
Other Matters
In February 1997, Enterprises entered into a new agreement for the sale,
with limited recourse, of certain receivables of Pipeline. Net proceeds to
Enterprises are limited to $15 million of which $10 million was utilized at June
30, 1998.
- 7 -
<PAGE> 10
Item 2. Management's Discussion and
Analysis of Financial Condition and
Results of Operations
This analysis discusses financial results of Pipeline's operations for
the quarters and six month periods ended June 30, 1998 and 1997. Variances due
to changes in price and volume do not have a significant impact on revenues,
because under its straight-fixed-variable rate design methodology, the majority
of Pipeline's overall cost of service is recovered through fixed demand charges
in its transportation rates.
This analysis should be read in conjunction with the consolidated
financial statements, notes and management's discussion and analysis contained
in Items 7 and 8 of Pipeline's 1997 Annual Report on Form 10-K and in Pipeline's
1998 First Quarter Report on Form 10-Q and with the condensed consolidated
financial statements and notes contained in this report.
RESULTS OF OPERATIONS
Six Months Ended June 30, 1998 vs. Six Months Ended June 30, 1997
Operating revenues increased $8.3 million, or 6%, due primarily to
increased short-term firm transportation revenues, the 1998 reversal of reserves
associated with the 1993 rate case and the 1997 increase in rate reserves,
partially offset by additional 1995 rate case reserves.
Pipeline's transportation service accounted for 95% and 94% of operating
revenues for the six-month periods ended June 30, 1998 and 1997, respectively.
Additionally, 3% and 4% of operating revenues represented gas storage service
for the six-month periods ended June 30, 1998 and 1997, respectively.
Operating expenses decreased $2.6 million, or 4%, due primarily to lower
general and administrative expense, partially offset by higher operation and
maintenance expense.
Operating income increased $10.9 million, or 18%, primarily due to
increased short-term firm transportation revenues, the reversal in 1998 of
reserves associated with the 1993 rate case, the 1997 increase in rate reserves
and decreased general and administrative expense, partially offset by additional
1995 rate case reserves and increased operation and maintenance expense.
Interest on long-term debt decreased $2 million as a result of the 1997
early retirement of over $200 million of high interest debentures under a
Williams-wide debt restructuring plan. Other interest expense increased $1.6
million due to higher revenues subject to refund and increased amortization of
loss on reacquired debt as a result of the 1997 early debt retirements.
The following table summarizes volumes and capacity for the periods
indicated:
<TABLE>
<CAPTION>
Six Months Ended June 30,
-------------------------
1998 1997
---------- ----------
<S> <C> <C>
Total Gas volumes throughput (TBtu) 383 374
Average Daily Transportation Volumes (TBtu) 2.1 2.1
Average Daily Firm Reserved Capacity (TBtu) 2.5 2.4
</TABLE>
FINANCIAL CONDITION AND LIQUIDITY
Pipeline anticipates 1998 capital expenditures will total approximately
$77.2 million, of which $26.2 million has been expended through June 30, 1998.
Funds necessary to complete capital projects are expected to come from several
sources, including Pipeline's operations and the return of funds previously
advanced to Williams. In addition, Pipeline expects to be able to obtain
financing, when necessary, on reasonable terms. To allow flexibility in the
timing of issuance of long-term securities, financing may be provided on an
interim basis with bank debt and from sources discussed below.
- 8 -
<PAGE> 11
Pipeline shares in a $1 billion Revolving Credit Facility with Williams
and four affiliated companies. Pipeline's maximum borrowing availability,
subject to prior borrowing by other affiliated companies, is $400 million, none
of which was used by Pipeline at June 30, 1998. Interest rates vary with current
market conditions. The Facility contains restrictions which limit, under certain
circumstances, the issuance of additional debt, the attachment of liens on any
assets and any change of ownership of Pipeline. Any borrowings by Pipeline under
this Facility are not guaranteed by Williams and are based on Pipeline's
financial need and credit worthiness.
Pipeline has also arranged various uncommitted lines-of-credit at market
interest rates. Pipeline's credit facilities are subject to Pipeline's continued
credit worthiness.
OTHER
Reference is made to Note 4 of Notes to Consolidated Financial
Statements for information about regulatory, judicial and business developments
which cause operating and financial uncertainties.
Year 2000 Compliance
Williams and its wholly-owned subsidiaries which include Pipeline,
initiated an enterprise-wide project in 1997 to address the year 2000 compliance
issue for all technology hardware and software, external interfaces with
customers and suppliers, operations process control, automation and
instrumentation systems, and facility items. The assessment phase of this
project has been substantially completed. Necessary conversion, replacement and
testing activities have begun and will continue throughout the process. Pipeline
has initiated a formal communications process with other companies with which
Pipeline's systems interface or rely on to determine the extent to which those
companies are addressing their year 2000 compliance. Where necessary, Pipeline
will be working with those companies to mitigate any material adverse effect on
Pipeline.
Williams expects to utilize both internal and external resources to
complete this process. Existing resources will be redeployed and previously
planned system replacements will be accelerated during this time. For example,
implementation of previously planned financial and human resources systems is
currently in process. These systems will address the year 2000 compliance issues
in certain areas. Costs incurred for new software and hardware purchases will be
capitalized and other costs will be expensed as incurred. Pipeline considers
costs associated with the year 2000 compliance to be prudent costs incurred in
the ordinary course of business, and, therefore, recoverable through rates.
While the total cost of this project is still being evaluated, Pipeline
estimates that future costs, excluding previously planned system replacements,
necessary to complete the project within the schedule described will not be
significant. Pipeline will update this estimate as additional information
becomes available. The costs of the project and the completion dates are based
on management's best estimates, which were derived utilizing numerous
assumptions of future events including the continued availability of certain
resources, third party year 2000 compliance modification plans and other
factors. There can be no guarantee that these estimates will be achieved and
actual results could differ materially from these estimates.
- 9 -
<PAGE> 12
PART II. OTHER INFORMATION
The information required by items in Part II is omitted because the
items are inapplicable, the answer is negative or substantially the same
information is included elsewhere in this report or has been previously reported
by the Registrant.
- 10 -
<PAGE> 13
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
NORTHWEST PIPELINE CORPORATION
------------------------------
Registrant
By: /s/ Curtis C. Kennedy
------------------------------
Curtis C. Kennedy
Controller
(Duly Authorized Officer and
Chief Accounting Officer)
Date: August 10, 1998
- 11 -
<PAGE> 14
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
<S> <C>
27 Financial Data Schedule
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-30-1998
<CASH> 208
<SECURITIES> 0
<RECEIVABLES> 15,312
<ALLOWANCES> 0
<INVENTORY> 10,891
<CURRENT-ASSETS> 123,633
<PP&E> 1,512,467
<DEPRECIATION> 594,299
<TOTAL-ASSETS> 1,095,588
<CURRENT-LIABILITIES> 116,414
<BONDS> 406,430
0
0
<COMMON> 1
<OTHER-SE> 435,036
<TOTAL-LIABILITY-AND-EQUITY> 1,095,588
<SALES> 0
<TOTAL-REVENUES> 141,530
<CGS> 0
<TOTAL-COSTS> 71,443
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 19,582
<INCOME-PRETAX> 52,910
<INCOME-TAX> 19,335
<INCOME-CONTINUING> 33,575
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 33,575
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
