<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 March 31, 2000
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 May 12, 2000
- -------------------------- ---------------------------
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 months
ended March 31, 2000 and 1999.................................. 1
Condensed Consolidated Balance Sheet as of March 31, 2000 and
December 31, 1999 ............................................. 2
Condensed Consolidated Statement of Cash Flows, three
months ended March 31, 2000 and 1999 .......................... 4
Notes to Condensed Consolidated Financial Statements ............. 5
Item 2. Management's Narrative Analysis of the 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.
<PAGE> 3
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
NORTHWEST PIPELINE CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF INCOME
(Unaudited)
================================================================================
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-------------------
2000 1999
-------- --------
(Thousands)
<S> <C> <C>
OPERATING REVENUES ............................................ $ 79,760 $ 70,141
-------- --------
OPERATING EXPENSES:
General and administrative ................................. 11,690 13,344
Operation and maintenance .................................. 8,896 8,890
Depreciation ............................................... 13,815 13,174
Taxes, other than income taxes ............................. 3,957 4,752
-------- --------
38,358 40,160
-------- --------
Operating income ...................................... 41,402 29,981
-------- --------
OTHER INCOME - net ............................................ 5,271 733
-------- --------
INTEREST CHARGES:
Interest on long-term debt ................................. 6,507 6,544
Other interest ............................................. 1,551 1,836
Allowance for borrowed funds used during construction ...... (148) (143)
-------- --------
7,910 8,237
-------- --------
INCOME BEFORE INCOME TAXES .................................... 38,763 22,477
-------- --------
PROVISION FOR INCOME TAXES .................................... 14,783 9,201
-------- --------
NET INCOME .................................................... $ 23,980 $ 13,276
======== ========
CASH DIVIDENDS ON COMMON STOCK ................................ $ 20,000 $ 18,000
======== ========
</TABLE>
- ---------------------
See accompanying notes.
- 1 -
<PAGE> 4
NORTHWEST PIPELINE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET
(Unaudited)
================================================================================
ASSETS
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
---------- ----------
(Thousands)
<S> <C> <C>
PROPERTY, PLANT AND EQUIPMENT, at cost ................... $1,616,937 $1,616,904
Less - Accumulated depreciation ....................... 716,009 701,127
---------- ----------
900,928 915,777
Construction work in progress ......................... 33,737 26,900
---------- ----------
934,665 942,677
---------- ----------
CURRENT ASSETS:
Cash and cash equivalents ............................. 161 342
Advances to affiliates ................................ 41,131 30,842
Accounts receivable -
Trade ............................................ 27,746 17,748
Affiliated companies ............................. 2,084 2,027
Materials and supplies (principally at lower of
average cost or market) ............................. 10,788 10,734
Exchange gas due from others .......................... 6,189 1,389
Deferred income taxes ................................. 14,280 19,741
Prepayments and other ................................. 978 1,139
---------- ----------
103,357 83,962
---------- ----------
OTHER ASSETS:
Deferred charges ...................................... 47,513 47,594
---------- ----------
$1,085,535 $1,074,233
========== ==========
</TABLE>
- --------------
See accompanying notes.
- 2 -
<PAGE> 5
NORTHWEST PIPELINE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET
(Unaudited)
================================================================================
LIABILITIES AND STOCKHOLDER'S EQUITY
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
---------- -----------
(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 .............................. 210,774 206,794
---------- ----------
473,619 469,639
Long-term debt, less current maturities ............ 369,131 370,793
---------- ----------
842,750 840,432
---------- ----------
CURRENT LIABILITIES:
Current maturities of long-term debt ............... 1,667 1,667
Accounts payable -
Trade .......................................... 10,223 10,289
Affiliated companies ........................... 11,492 10,784
Accrued liabilities -
Taxes, other than income taxes ................. 4,464 2,400
Interest ....................................... 17,601 12,030
Employee costs ................................. 6,964 11,413
Exchange gas due to others ..................... 6,878 2,078
Reserves for estimated rate refunds ............ 29,103 29,059
Other .......................................... 1,955 2,001
---------- ----------
90,347 81,721
---------- ----------
DEFERRED INCOME TAXES ................................. 145,037 143,519
---------- ----------
OTHER DEFERRED CREDITS ................................ 7,401 8,561
---------- ----------
CONTINGENT LIABILITIES AND COMMITMENTS ................
---------- ----------
$1,085,535 $1,074,233
========== ==========
</TABLE>
- ----------------
See accompanying notes.
- 3 -
<PAGE> 6
NORTHWEST PIPELINE CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
================================================================================
<TABLE>
<CAPTION>
Three Months Ended
March 31,
--------------------
2000 1999
---------- ---------
(Thousands)
<S> <C> <C>
OPERATING ACTIVITIES:
Net income .............................................. $ 23,980 $ 13,276
Adjustments to reconcile to cash provided by operations -
Depreciation ......................................... 13,815 13,174
Provision for deferred income taxes .................. 6,979 1,250
Amortization of deferred charges and credits ......... (129) 559
Allowance for equity funds used during construction .. (272) (255)
Increase (decrease) from changes in:
Accounts receivable and exchange gas due
from others ...................................... (14,855) 12,402
Materials and supplies ............................. (54) 54
Other current assets ............................... 161 3,511
Other assets and deferred charges .................. (697) 635
Accounts payable and exchange gas due to others .... 9,375 (10,616)
Other accrued liabilities .......................... 3,184 7,894
Other deferred credits ............................. (248) (227)
Other ................................................ -- 1
-------- --------
Net cash provided by operating activities ............... 41,239 41,658
-------- --------
INVESTING ACTIVITIES:
Property, plant and equipment -
Capital expenditures ................................. (6,598) (9,177)
Proceeds from sales .................................. 1,067 126
Changes in accounts payable .......................... (3,933) (4,669)
Advances to affiliates .................................. (10,289) (9,140)
-------- --------
Net cash used by investing activities ................... (19,753) (22,860)
-------- --------
FINANCING ACTIVITIES:
Principal payments on long-term debt .................... (1,667) (1,667)
Dividends paid .......................................... (20,000) (18,000)
-------- --------
Net cash used by financing activities ................... (21,667) (19,667)
-------- --------
NET DECREASE IN CASH AND CASH
EQUIVALENTS ............................................. (181) (869)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD ........... 342 1,164
-------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD ................. $ 161 $ 295
======== ========
</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 March 31, 2000 and
December 31, 1999, and the results of operations and cash flows for the three
month periods ended March 31, 2000 and 1999. 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, the notes thereto and
management's narrative analysis included in Pipeline's 1999 Annual Report on
Form 10-K.
Pipeline is a wholly-owned subsidiary of Williams Gas Pipeline Company
("WGP"). WGP is a wholly-owned subsidiary of The Williams Companies, Inc.
("Williams").
Adoption of Accounting Standards
The Financial Accounting Standards Board has issued Statement of
Financial Accounting Standards No. 133, "Accounting for Derivative Instruments
and Hedging Activities." This standard, as amended, will be effective for
Pipeline beginning January 1, 2001. This standard requires that all derivatives
be recognized as assets or liabilities in the balance sheet and that those
instruments be measured at fair value. The effect of this standard on Pipeline's
results of operations and financial position is being evaluated.
(2) Basis of Presentation
The condensed consolidated financial statements include the operating
results of NWP Enterprises ("Enterprises"), a wholly owned subsidiary of
Pipeline.
(3) Long-Term Debt and Banking Arrangements
Pipeline is a participant in a $1 billion Revolving Credit Facility
with Williams and certain 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 March 31, 2000. Interest rates
vary with current market conditions based on the base rate of Citibank N.A.,
three-month certificates of deposit of major United States money market banks,
federal funds rate or London Interbank Offered Rate ("LIBOR"). 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 that were unused by Pipeline at March 31, 2000. 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, the 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
- 5 -
<PAGE> 8
NORTHWEST PIPELINE CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
================================================================================
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 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, reflecting the FERC's resolution of
all disputed matters in this case. Pipeline and other parties sought judicial
review of the FERC's decision concerning rate of return on equity. One party is
seeking judicial review of the inclusion of unpaid accruals in rate base. In
July 1998, the 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. In April 1999, the Court of Appeals for the
D.C. Circuit remanded the 1993 Rate Case to the FERC for application of its
revised rate of return on equity policy. On July 14, 1999, the FERC issued an
order requiring Pipeline to: (a) submit a surcharge plan to the FERC, (b)
recalculate rates consistent with the new weighting formula favoring short term
growth, and (c) address in a remand hearing the appropriate source for Gross
Domestic Product ("GDP") growth data. The new weighting formula generally
results in a higher authorized rate of return on equity. Pipeline and its
customers resolved by settlement those issues relating to long term GDP growth.
In February 2000, the FERC approved the long-term growth settlement and issued
an order related to return on equity issues requiring Pipeline to incorporate
the effects of the settlement and to calculate its allowed rate of return on
equity consistent with the recently announced policy changes in other
proceedings. As a part of this recalculation of allowed return on equity, the
FERC provided that Pipeline must use the median instead of the midpoint of the
various results of Discounted Cash Flow analysis for a proxy group. This results
in a higher return on equity for Pipeline. On April 3, 2000, Pipeline made the
necessary compliance filings to implement the FERC's decision including the
establishment of surcharges in order to recollect moneys that shippers owe
Pipeline for these corrective actions. During the first quarter of 2000,
Pipeline recorded surcharges of $11.4 million, of which $7 million increased
revenues and $4.4 million, representing interest, increased other income. The
results of these adjustments are reflected in the accompanying statements.
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 sought 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 and allowed a return on equity of 11.2
percent. On June 1, 1999, the FERC issued its order affirming many aspects of
the ALJ's initial decision, but finding that the return on equity issue should
be resolved by using the FERC's new policy concerning rate of return
determinations. This resulted in an allowed return on equity of 12.22 percent.
During the second quarter of 1999, Pipeline reduced its rate refund liabilities
$9.9 million, of which $7.7 million increased revenues and $2.2 million reduced
interest expense, to reflect the FERC's action in this proceeding. Final action
on several issues is still pending before the FERC, based on various requests
for rehearing including Pipeline's.
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 have resolved 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
certain aspects of the FERC's decisions. Pipeline made refunds to customers in
August 1998 totaling $16.7 million, including interest, in this rate case. A
settlement in principle has been reached with the one dissenting party on issues
pending review in the proceeding and on other business related issues which
should lead to the withdrawal of any further judicial challenges in this matter
by mid-year 2000.
- 6 -
<PAGE> 9
NORTHWEST PIPELINE CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
================================================================================
Significant Litigation
In 1998, the United States Department of Justice informed Williams that
Jack Grynberg, an individual, had filed claims in the United States District
Court for the District of Colorado under the False Claims Act against Williams
and certain of its wholly-owned subsidiaries including Pipeline. Mr. Grynberg
had also filed claims against approximately 300 other energy companies and
alleged that the defendants violated the False Claims Act in connection with the
measurement and purchase of hydrocarbons. The relief sought was an unspecified
amount of royalties allegedly not paid to the Federal government, treble
damages, a civil penalty, attorneys' fees and costs. On April 9, 1999, the
United States Department of Justice announced that it was declining to intervene
in any of the Grynberg qui tam cases; including the action filed against the
Williams entities in the United States District Court for the District of
Colorado. On October 21, 1999, the Panel on Multi-District Litigation
transferred all of the Grynberg qui tam cases, including the ones filed against
Williams to the United States District Court for the District of Wyoming for
pre-trial purposes. Motions to dismiss the complaint, filed by various
defendants including Williams, are pending.
Other Legal and Regulatory Matters
On February 9, 2000, the FERC issued a final rule, Order 637, in
response to the comments received on the Notice of Proposed Rulemaking ("NOPR")
and Notice of Inquiry ("NOI"). The FERC adopts in Order 637 certain policies
that it finds are necessary to adjust its current regulatory model to the needs
of the evolving markets, but determines that any fundamental changes to its
regulatory policy, which changes were raised and commented on in the NOPR and
NOI, will be considered after further study and evaluation of the evolving
marketplace. Most significantly, in Order 637, the FERC (i) revises its pricing
policy to waive, for a two-year period, the maximum price ceilings for
short-term releases of capacity of less than one year, and (ii) permits
pipelines to file proposals to implement seasonal rates for short-term services
and term-differentiated rates, subject to certain requirements including the
requirement that a pipeline be limited to recovering its annual revenue
requirement under those rates.
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 cash flow
requirements.
Other Matters
Enterprises participates in an 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 March 31, 2000.
- 7 -
<PAGE> 10
Item 2. Management's Narrative
Analysis of the
Results of Operations
This analysis discusses financial results of Pipeline's operations for
the quarters ended March 31, 2000 and 1999. Variances due to changes in price
and volume have little impact on revenues, because under Pipeline's rate design
methodology, the majority of overall cost of service is recovered through firm
capacity reservation charges in its transportation rates.
RESULTS OF OPERATIONS
Quarter Ended March 31, 2000 vs. Quarter Ended March 31, 1999
Operating revenues increased $9.6 million, or 14%, due primarily to the
recognition of a $7 million surcharge resulting from a favorable FERC decision
on return on equity related to the 1993 rate case and higher short-term firm and
interruptible transportation revenues.
Pipeline's transportation service accounted for 95% and 96% of
operating revenues for the quarters ended March 31, 2000 and 1999, respectively.
Additionally, gas storage service represented 3% of operating revenues in each
of the quarters ended March 31, 2000 and 1999.
Operating expenses decreased $1.8 million, or 4%, due primarily to
lower taxes other than income taxes and accruals in 1999 for damages associated
with pipeline ruptures of $2.3 million, partially offset by higher depreciation
expenses.
Operating income increased $11.4 million, or 38%, due to reasons
identified above.
Other income includes $4.4 million of interest on surcharges related to
the revenue associated with the 1993 rate case as discussed above in operating
revenues.
The following table summarizes volumes and capacity for the periods
indicated:
<TABLE>
<CAPTION>
Quarter Ended March 31,
-----------------------
2000 1999
---------- ----------
<S> <C> <C>
Total Gas volumes throughput (TBtu) 206 192
Average Daily Transportation Volumes (TBtu) 2.3 2.1
Average Daily Firm Reserved Capacity (TBtu) 2.6 2.7
</TABLE>
FINANCIAL CONDITION AND LIQUIDITY
Pipeline anticipates 2000 capital expenditures will total approximately
$66 million, of which $6.6 million has been expended through March 31, 2000.
Funds necessary to complete capital projects are expected to come from several
sources, including Pipeline's operations and available cash. 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.
As of December 31, 1999, Pipeline was a participant in Williams' cash
management program. The advances due Pipeline by Williams were represented by
demand notes. Effective February 1, 2000, Pipeline began participating in WGP's
cash management program. The advances due Pipeline by WGP are represented by
demand notes. The interest rate on intercompany demand notes is the London
Interbank Offered Rate ("LIBOR") on the first day of the month plus an
applicable margin based on the current Standard and Poor's Rating of the
Borrower.
Pipeline has an outstanding registration statement filed with the
Securities and Exchange Commission. At March 31, 2000, approximately $150
million of shelf availability remains under this outstanding registration
- 8 -
<PAGE> 11
statement and may be used to issue debt securities. Interest rates and market
conditions will affect amounts borrowed, if any, under this arrangement.
Pipeline is a participant in a $1 billion Revolving Credit Facility
with Williams and certain 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 March 31, 2000. Interest rates
vary with current market conditions based on the base rate of Citibank N.A.,
three-month certificates of deposit of major United States money market banks,
federal funds rate or LIBOR. 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.
NWP Enterprises ("Enterprises"), a wholly-owned subsidiary of Pipeline,
participates in an 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 March 31, 2000.
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
Pipeline believes that strong economies in the Pacific Northwest and
the growing preference for natural gas in response to environmental concerns
support future expansions of its mainline capacity.
Reference is made to Note 4 of Notes to Condensed Consolidated
Financial Statements for information about regulatory, judicial and business
developments which cause operating and financial uncertainties.
- 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/ Jeffrey R. Valentine
--------------------------------------
Jeffrey R. Valentine
Controller
(Duly Authorized Officer and
Chief Accounting Officer)
Date: May 12, 2000
- 11 -
<PAGE> 14
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Description
- ------- -----------
<S> <C>
27 Financial Data Schedule
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-END> MAR-31-2000
<CASH> 161
<SECURITIES> 0
<RECEIVABLES> 29,830
<ALLOWANCES> 0
<INVENTORY> 10,788
<CURRENT-ASSETS> 103,357
<PP&E> 1,650,674
<DEPRECIATION> 716,009
<TOTAL-ASSETS> 1,085,535
<CURRENT-LIABILITIES> 90,347
<BONDS> 369,131
0
0
<COMMON> 1
<OTHER-SE> 473,618
<TOTAL-LIABILITY-AND-EQUITY> 1,085,535
<SALES> 0
<TOTAL-REVENUES> 79,760
<CGS> 0
<TOTAL-COSTS> 38,358
<OTHER-EXPENSES> (5,271)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 7,910
<INCOME-PRETAX> 38,763
<INCOME-TAX> 14,783
<INCOME-CONTINUING> 23,980
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 23,980
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
