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1. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
• | Level 1 - Unadjusted quoted prices in active markets for identical assets or liabilities; |
• | Level 2 - Significant observable pricing inputs other than quoted prices included within Level 1 that are, either directly or indirectly, observable as of the reporting date. Essentially, this represents inputs that are derived principally from or corroborated by observable market data; and |
• | Level 3 - May include one or more unobservable inputs that are significant in establishing a fair value estimate. These unobservable inputs are developed based on the best information available and may include our own internal data. |
Recognition and Measurement | ||||
Accounting Treatment | Balance Sheet | Income Statement | ||
Normal purchases and normal sales | - | Fair value not recorded | - | Change in fair value not recognized in earnings |
Mark-to-market | - | Recorded at fair value | - | Change in fair value recognized in, and recoverable through, the purchased-gas cost adjustment mechanisms |
• | established by independent regulators; |
• | designed to recover the specific entity’s costs of providing regulated services; and |
• | set at levels that will recover our costs when considering the demand and competition for our services. |
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2. | CREDIT FACILITY AND SHORT-TERM NOTES PAYABLE |
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3. | LONG-TERM DEBT |
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4. | EQUITY |
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5. | ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) |
Accumulated Other Comprehensive Income (Loss) | ||||
(Thousands of dollars) | ||||
January 1, 2016 | $ | (4,401 | ) | |
Pension and other postemployment benefit plans obligations | ||||
Other comprehensive income (loss) before reclassification, net of tax of $486 | (776 | ) | ||
Amounts reclassified from accumulated other comprehensive income (loss), net of tax of $(289) | 462 | |||
Other comprehensive income (loss) | (314 | ) | ||
December 31, 2016 | (4,715 | ) | ||
Pension and other postemployment benefit plans obligations | ||||
Other comprehensive income (loss) before reclassification, net of tax of $808 | (1,293 | ) | ||
Amounts reclassified from accumulated other comprehensive income (loss), net of tax of $(322) | 515 | |||
Other comprehensive income (loss) | (778 | ) | ||
December 31, 2017 | $ | (5,493 | ) |
Affected Line Item in the | |||||||||||||
Details about Accumulated Other Comprehensive Income | Year Ended December 31, | Consolidated Statements of | |||||||||||
(Loss) Components | 2017 | 2016 | 2015 | Income | |||||||||
(Thousands of dollars) | |||||||||||||
Pension and other postemployment benefit plan obligations (a) | |||||||||||||
Amortization of net loss | $ | 42,591 | $ | 40,912 | $ | 47,494 | |||||||
Amortization of unrecognized prior service cost | (4,597 | ) | (3,316 | ) | (1,962 | ) | |||||||
37,994 | 37,596 | 45,532 | |||||||||||
Regulatory adjustments (b) | (37,157 | ) | (36,845 | ) | (44,615 | ) | |||||||
837 | 751 | 917 | Income before income taxes | ||||||||||
(322 | ) | (289 | ) | (353 | ) | Income tax expense | |||||||
Total reclassifications for the period | $ | 515 | $ | 462 | $ | 564 | Net income |
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6. | EARNINGS PER SHARE |
Year Ended December 31, 2017 | ||||||||||
Income | Shares | Per Share Amount | ||||||||
(Thousands, except per share amounts) | ||||||||||
Basic EPS Calculation | ||||||||||
Net income available for common stock | $ | 162,995 | 52,527 | $ | 3.10 | |||||
Diluted EPS Calculation | ||||||||||
Effect of dilutive securities | — | 452 | ||||||||
Net income available for common stock and common stock equivalents | $ | 162,995 | 52,979 | $ | 3.08 |
Year Ended December 31, 2016 | ||||||||||
Income | Shares | Per Share Amount | ||||||||
(Thousands, except per share amounts) | ||||||||||
Basic EPS Calculation | ||||||||||
Net income available for common stock | $ | 140,095 | 52,453 | $ | 2.67 | |||||
Diluted EPS Calculation | ||||||||||
Effect of dilutive securities | — | 510 | ||||||||
Net income available for common stock and common stock equivalents | $ | 140,095 | 52,963 | $ | 2.65 |
Year Ended December 31, 2015 | ||||||||||
Income | Shares | Per Share Amount | ||||||||
(Thousands, except per share amounts) | ||||||||||
Basic EPS Calculation | ||||||||||
Net income available for common stock | $ | 119,030 | 52,578 | $ | 2.26 | |||||
Diluted EPS Calculation | ||||||||||
Effect of dilutive securities | — | 676 | ||||||||
Net income available for common stock and common stock equivalents | $ | 119,030 | 53,254 | $ | 2.24 |
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7. | DERIVATIVE FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS |
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8. | REGULATORY ASSETS AND LIABILITIES |
December 31, 2017 | ||||||||||||||
Remaining Recovery Period | Current | Noncurrent | Total | |||||||||||
(Thousands of dollars) | ||||||||||||||
Under-recovered purchased-gas costs | 1 year | $ | 41,238 | $ | — | $ | 41,238 | |||||||
Pension and other postemployment benefit costs | See Note 11 | 25,156 | 387,582 | 412,738 | ||||||||||
Weather normalization | 1 year | 17,461 | — | 17,461 | ||||||||||
Reacquired debt costs | 10 years | 812 | 7,298 | 8,110 | ||||||||||
MGP remediation costs | 15 years | — | 6,104 | 6,104 | ||||||||||
Other | 1 to 21 years | 3,513 | 4,205 | 7,718 | ||||||||||
Total regulatory assets, net of amortization | 88,180 | 405,189 | 493,369 | |||||||||||
Federal income tax rate changes (a) | See Note 12 | — | (519,421 | ) | (519,421 | ) | ||||||||
Over-recovered purchased-gas costs | 1 year | (9,434 | ) | — | (9,434 | ) | ||||||||
Ad-valorem tax | 1 year | (4 | ) | — | (4 | ) | ||||||||
Total regulatory liabilities | (9,438 | ) | (519,421 | ) | (528,859 | ) | ||||||||
Net regulatory assets and liabilities | $ | 78,742 | $ | (114,232 | ) | $ | (35,490 | ) |
December 31, 2016 | ||||||||||||||
Remaining Recovery Period | Current | Noncurrent | Total | |||||||||||
(Thousands of dollars) | ||||||||||||||
Under-recovered purchased-gas costs | 1 year | $ | 29,901 | $ | — | $ | 29,901 | |||||||
Pension and other postemployment benefit costs | See Note 11 | 31,498 | 427,448 | 458,946 | ||||||||||
Weather normalization | 1 year | 17,661 | — | 17,661 | ||||||||||
Reacquired debt costs | 11 years | 812 | 8,108 | 8,920 | ||||||||||
Other | 1 to 22 years | 3,274 | 4,966 | 8,240 | ||||||||||
Total regulatory assets, net of amortization | 83,146 | 440,522 | 523,668 | |||||||||||
Over-recovered purchased-gas costs | 1 year | (10,154 | ) | — | (10,154 | ) | ||||||||
Ad-valorem tax | 1 year | (1,768 | ) | — | (1,768 | ) | ||||||||
Total regulatory liabilities | (11,922 | ) | — | (11,922 | ) | |||||||||
Net regulatory assets and liabilities | $ | 71,224 | $ | 440,522 | $ | 511,746 |
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9. | PROPERTY, PLANT AND EQUIPMENT |
December 31, | December 31, | |||||||
2017 | 2016 | |||||||
(Thousands of dollars) | ||||||||
Natural gas distribution pipelines and related equipment | $ | 4,572,343 | $ | 4,321,429 | ||||
Natural gas transmission pipelines and related equipment | 497,791 | 481,953 | ||||||
General plant and other | 513,445 | 530,459 | ||||||
Construction work in process | 130,333 | 70,327 | ||||||
Property, plant and equipment | 5,713,912 | 5,404,168 | ||||||
Accumulated depreciation and amortization | (1,706,327 | ) | (1,672,548 | ) | ||||
Net property, plant and equipment | $ | 4,007,585 | $ | 3,731,620 |
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10. | SHARE-BASED PAYMENTS |
Number of Units | Weighted- Average Price | ||||||
Nonvested at December 31, 2016 | 194,900 | $ | 41.68 | ||||
Granted | 37,825 | $ | 63.97 | ||||
Vested | (85,490 | ) | $ | 33.76 | |||
Forfeited | (6,570 | ) | $ | 52.65 | |||
Nonvested at December 31, 2017 | 140,665 | $ | 51.97 |
2017 | 2016 | 2015 | ||||||||||
Weighted-average grant date fair value (per share) | $ | 63.97 | $ | 58.30 | $ | 41.40 | ||||||
Fair value of shares granted (thousands of dollars) | $ | 2,420 | $ | 2,503 | $ | 3,141 |
Number of Units | Weighted- Average Price | ||||||
Nonvested at December 31, 2016 | 288,811 | $ | 46.06 | ||||
Granted | 74,120 | $ | 68.94 | ||||
Vested | (117,626 | ) | $ | 35.98 | |||
Forfeited | (7,981 | ) | $ | 58.58 | |||
Nonvested at December 31, 2017 | 237,324 | $ | 57.78 |
2017 | 2016 | 2015 | |||||
Volatility (a) | 20.70% | 18.20% | 15.90% | ||||
Dividend yield | 2.63% | 2.40% | 2.90% | ||||
Risk-free interest rate | 1.48% | 0.91% | 1.10% | ||||
(a) - Volatility based on historical volatility over three years using daily stock price observations of our peer utilities. |
2017 | 2016 | 2015 | ||||||||||
Weighted-average grant date fair value (per share) | $ | 68.94 | $ | 64.06 | $ | 44.48 | ||||||
Fair value of shares granted (thousands of dollars) | $ | 5,110 | $ | 4,766 | $ | 4,486 |
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11. | EMPLOYEE BENEFIT PLANS |
December 31, | ||||
2017 | 2016 | |||
Discount rate - pension plans | 3.80% | 4.30% | ||
Discount rate - other postemployment plans | 3.70% | 4.20% | ||
Compensation increase rate | 3.25% - 3.35% | 3.25% - 3.40% |
Years Ended December 31, | ||||||||
2017 | 2016 | 2015 | ||||||
Discount rate - pension plans | 4.30% | 4.75% | 4.25%/4.75% | (c) | ||||
Discount rate - other postemployment plans | 4.20% | 4.75%/3.75% | (a) | 4.25%/4.75% | (c) | |||
Expected long-term return on plan assets - pension plans | 7.75% | 7.75% | 7.75% | |||||
Expected long-term return on plan assets - other postemployment plans | 7.60% | 8.00%/7.75% | (b) | 7.75% | ||||
Compensation increase rate | 3.25% - 3.40% | 3.35% - 3.40% | 3.30% - 3.50% |
Pension Benefits | Other Postemployment Benefits | ||||||||||||||
December 31, | December 31, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Changes in Benefit Obligation | (Thousands of dollars) | ||||||||||||||
Benefit obligation, beginning of period | $ | 966,531 | $ | 985,624 | $ | 243,548 | $ | 228,253 | |||||||
Service cost | 12,176 | 12,055 | 2,509 | 2,675 | |||||||||||
Interest cost | 40,453 | 45,550 | 9,890 | 10,235 | |||||||||||
Plan participants’ contributions | — | — | 3,483 | 3,043 | |||||||||||
Actuarial loss (gain) | 76,325 | 25,886 | 12,129 | 14,309 | |||||||||||
Benefits paid | (55,107 | ) | (71,066 | ) | (16,690 | ) | (15,450 | ) | |||||||
Plan amendment | — | — | 171 | 483 | |||||||||||
Settlements | (46,487 | ) | (31,518 | ) | — | — | |||||||||
Benefit obligation, end of period | 993,891 | 966,531 | 255,040 | 243,548 | |||||||||||
Change in Plan Assets | |||||||||||||||
Fair value of plan assets, beginning of period | 739,586 | 785,161 | 166,046 | 155,495 | |||||||||||
Actual return on plan assets | 135,056 | 48,768 | 31,228 | 9,733 | |||||||||||
Employer contributions | 111,936 | 12,441 | 6,159 | 13,225 | |||||||||||
Plan participants’ contributions | — | — | 3,483 | 3,043 | |||||||||||
Benefits paid | (55,107 | ) | (71,066 | ) | (16,690 | ) | (15,450 | ) | |||||||
Settlements | (46,667 | ) | (35,718 | ) | — | — | |||||||||
Fair value of assets, end of period | 884,804 | 739,586 | 190,226 | 166,046 | |||||||||||
Balance at December 31 | $ | (109,087 | ) | $ | (226,945 | ) | $ | (64,814 | ) | $ | (77,502 | ) | |||
Current liabilities | $ | (963 | ) | $ | (941 | ) | $ | — | $ | — | |||||
Noncurrent liabilities | (108,124 | ) | (226,004 | ) | (64,814 | ) | (77,502 | ) | |||||||
Balance at December 31 | $ | (109,087 | ) | $ | (226,945 | ) | $ | (64,814 | ) | $ | (77,502 | ) |
Pension Benefits | |||||||||||
Year Ended December 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
(Thousands of dollars) | |||||||||||
Components of net periodic benefit cost | |||||||||||
Service cost | $ | 12,176 | $ | 12,055 | $ | 13,660 | |||||
Interest cost | 40,453 | 45,550 | 43,542 | ||||||||
Expected return on assets | (58,496 | ) | (61,183 | ) | (61,769 | ) | |||||
Amortization of unrecognized prior service cost | — | — | 266 | ||||||||
Amortization of net loss | 36,107 | 35,543 | 42,226 | ||||||||
Settlements | — | — | 27 | ||||||||
Net periodic benefit cost | $ | 30,240 | $ | 31,965 | $ | 37,952 |
Other Postemployment Benefits | |||||||||||
Year Ended December 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
(Thousands of dollars) | |||||||||||
Components of net periodic benefit cost | |||||||||||
Service cost | $ | 2,509 | $ | 2,675 | $ | 3,257 | |||||
Interest cost | 9,890 | 10,235 | 10,628 | ||||||||
Expected return on assets | (12,590 | ) | (12,370 | ) | (11,892 | ) | |||||
Amortization of unrecognized prior service cost | (4,597 | ) | (3,316 | ) | (2,228 | ) | |||||
Amortization of net loss | 6,484 | 5,369 | 5,268 | ||||||||
Net periodic benefit cost | $ | 1,696 | $ | 2,593 | $ | 5,033 |
Pension Benefits | |||||||||||
Year Ended December 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
(Thousands of dollars) | |||||||||||
Net gain (loss) arising during the period | $ | (2,101 | ) | $ | (1,262 | ) | $ | 339 | |||
Amortization of loss | 837 | 751 | 917 | ||||||||
Deferred income taxes | 486 | 197 | (483 | ) | |||||||
Total recognized in other comprehensive income (loss) | $ | (778 | ) | $ | (314 | ) | $ | 773 |
Pension Benefits | |||||||
December 31, | |||||||
2017 | 2016 | ||||||
(Thousands of dollars) | |||||||
Prior service credit (cost) | $ | — | $ | — | |||
Accumulated loss | (378,595 | ) | (414,757 | ) | |||
Accumulated other comprehensive loss before regulatory assets | (378,595 | ) | (414,757 | ) | |||
Regulatory asset for regulated entities | 369,647 | 407,073 | |||||
Accumulated other comprehensive loss after regulatory assets | (8,948 | ) | (7,684 | ) | |||
Deferred income taxes | 3,455 | 2,969 | |||||
Accumulated other comprehensive loss, net of tax | $ | (5,493 | ) | $ | (4,715 | ) |
Other Postemployment Benefits | |||||||
December 31, | |||||||
2017 | 2016 | ||||||
(Thousands of dollars) | |||||||
Prior service credit (cost) | $ | 5,442 | $ | 10,211 | |||
Accumulated loss | (49,030 | ) | (62,084 | ) | |||
Accumulated other comprehensive loss before regulatory assets | (43,588 | ) | (51,873 | ) | |||
Regulatory asset for regulated entities | 43,588 | 51,873 | |||||
Accumulated other comprehensive loss after regulatory assets | — | — | |||||
Deferred income taxes | — | — | |||||
Accumulated other comprehensive loss, net of tax | $ | — | $ | — |
Pension Benefits | Other Postemployment Benefits | ||||||
Amounts to be recognized in 2018 | (Thousands of dollars) | ||||||
Prior service credit (cost) | $ | — | $ | (4,567 | ) | ||
Actuarial net loss | $ | 39,913 | $ | 3,887 |
2017 | 2016 | ||
Health care cost-trend rate assumed for next year | 7.00% | 7.25% | |
Rate to which the cost-trend rate is assumed to decline (the ultimate trend rate) | 5.00% | 5.00% | |
Year that the rate reaches the ultimate trend rate | 2023 | 2022 |
One Percentage | One Percentage | ||||||
Point Increase | Point Decrease | ||||||
(Thousands of dollars) | |||||||
Effect on total of service and interest cost | $ | 239 | $ | (238 | ) | ||
Effect on other postemployment benefit obligation | $ | 2,906 | $ | (3,006 | ) |
Investment-grade bonds | 40.0 | % |
U.S. large-cap equities | 18.0 | % |
Alternative investments | 14.0 | % |
Developed foreign large-cap equities | 10.0 | % |
Mid-cap equities | 7.0 | % |
Emerging markets equities | 6.0 | % |
Small-cap equities | 5.0 | % |
Total | 100 | % |
Pension Benefits | ||||||||||||
December 31, 2017 | ||||||||||||
Asset Category | Level 1 | Level 2 | Level 3 | Total | ||||||||
(Thousands of dollars) | ||||||||||||
Investments: | ||||||||||||
Equity securities (a) | $ | 301,911 | $ | 91,014 | $ | — | $ | 392,925 | ||||
Government obligations | — | 74,596 | — | 74,596 | ||||||||
Corporate obligations (b) | — | 260,907 | — | 260,907 | ||||||||
Cash and money market funds (c) | 21,139 | 20,787 | — | 41,926 | ||||||||
Insurance contracts and group annuity contracts | — | — | 35,158 | 35,158 | ||||||||
Other investments (d) | — | 585 | 78,707 | 79,292 | ||||||||
Total assets | $ | 323,050 | $ | 447,889 | $ | 113,865 | $ | 884,804 |
Pension Benefits | ||||||||||||
December 31, 2016 | ||||||||||||
Asset Category | Level 1 | Level 2 | Level 3 | Total | ||||||||
(Thousands of dollars) | ||||||||||||
Investments: | ||||||||||||
Equity securities (a) | $ | 371,655 | $ | 58,987 | $ | — | $ | 430,642 | ||||
Government obligations | — | 47,445 | — | 47,445 | ||||||||
Corporate obligations (b) | — | 129,036 | — | 129,036 | ||||||||
Cash and money market funds (c) | 13,786 | 16,114 | — | 29,900 | ||||||||
Insurance contracts and group annuity contracts | — | — | 45,140 | 45,140 | ||||||||
Other investments (d) | — | 71 | 57,352 | 57,423 | ||||||||
Total assets | $ | 385,441 | $ | 251,653 | $ | 102,492 | $ | 739,586 |
Other Postemployment Benefits | ||||||||||||
December 31, 2017 | ||||||||||||
Asset Category | Level 1 | Level 2 | Level 3 | Total | ||||||||
(Thousands of dollars) | ||||||||||||
Investments: | ||||||||||||
Equity securities (a) | $ | 63,180 | $ | 123 | $ | — | $ | 63,303 | ||||
Government obligations | — | 101 | — | 101 | ||||||||
Corporate obligations (b) | — | 25,905 | — | 25,905 | ||||||||
Cash and money market funds (c) | 4,512 | 28 | — | 4,540 | ||||||||
Insurance contracts and group annuity contracts | — | 96,377 | — | 96,377 | ||||||||
Total assets | $ | 67,692 | $ | 122,534 | $ | — | $ | 190,226 |
Other Postemployment Benefits | ||||||||||||
December 31, 2016 | ||||||||||||
Asset Category | Level 1 | Level 2 | Level 3 | Total | ||||||||
(Thousands of dollars) | ||||||||||||
Investments: | ||||||||||||
Equity securities (a) | $ | 39,817 | $ | 7,323 | $ | — | $ | 47,140 | ||||
Government obligations | — | 75 | — | 75 | ||||||||
Corporate obligations (b) | — | 19,948 | — | 19,948 | ||||||||
Cash and money market funds (c) | 74 | 16,989 | — | 17,063 | ||||||||
Insurance contracts and group annuity contracts | — | 81,820 | — | 81,820 | ||||||||
Total assets | $ | 39,891 | $ | 126,155 | $ | — | $ | 166,046 |
Pension Benefits | |||||||||||
Insurance Contracts | Other Investments | Total | |||||||||
(Thousands of dollars) | |||||||||||
January 1, 2016 | $ | 56,465 | $ | 57,972 | $ | 114,437 | |||||
Net realized and unrealized gains (losses) | 4,518 | (620 | ) | 3,898 | |||||||
Settlements | (15,843 | ) | — | (15,843 | ) | ||||||
December 31, 2016 | $ | 45,140 | $ | 57,352 | $ | 102,492 | |||||
Net realized and unrealized gains (losses) | 2,569 | 5,055 | 7,624 | ||||||||
Purchases | — | 16,300 | 16,300 | ||||||||
Sales and settlements | (12,551 | ) | — | (12,551 | ) | ||||||
December 31, 2017 | $ | 35,158 | $ | 78,707 | $ | 113,865 |
Pension Benefits | Other Postemployment Benefits | ||||||
Benefits to be paid in: | (Thousands of dollars) | ||||||
2018 | $ | 50,875 | $ | 17,293 | |||
2019 | $ | 51,635 | $ | 17,383 | |||
2020 | $ | 52,518 | $ | 17,538 | |||
2021 | $ | 53,516 | $ | 17,485 | |||
2022 | $ | 54,289 | $ | 17,558 | |||
2023 through 2027 | $ | 286,188 | $ | 85,543 |
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12. | INCOME TAXES |
Years Ended December 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
(Thousands of dollars) | |||||||||||
Current income tax provision | |||||||||||
Federal | $ | — | $ | (2,016 | ) | $ | 7,135 | ||||
State | 750 | 471 | 2,055 | ||||||||
Total current income tax provision | 750 | (1,545 | ) | 9,190 | |||||||
Deferred income tax provision | |||||||||||
Federal | 83,138 | 76,247 | 56,440 | ||||||||
State | 9,255 | 10,541 | 7,349 | ||||||||
Total deferred income tax provision | 92,393 | 86,788 | 63,789 | ||||||||
Total provision for income taxes | $ | 93,143 | $ | 85,243 | $ | 72,979 |
Years Ended December 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
(Thousands of dollars) | |||||||||||
Income before income taxes | $ | 256,138 | $ | 225,338 | $ | 192,009 | |||||
Federal statutory income tax rate | 35 | % | 35 | % | 35 | % | |||||
Provision for federal income taxes | 89,648 | 78,868 | 67,203 | ||||||||
State income taxes, net of federal tax benefit | 6,503 | 7,158 | 6,114 | ||||||||
Nonregulated deferred tax rate decrease | 2,162 | — | — | ||||||||
Tax benefit of employee share based compensation | (5,162 | ) | — | — | |||||||
Other, net | (8 | ) | (783 | ) | (338 | ) | |||||
Total provision for income taxes | $ | 93,143 | $ | 85,243 | $ | 72,979 |
December 31, | |||||||
2017 | 2016 | ||||||
(Thousands of dollars) | |||||||
Deferred tax assets | |||||||
Employee benefits and other accrued liabilities | $ | 40,277 | $ | 123,333 | |||
Regulatory adjustments for enacted tax rate changes | 129,421 | — | |||||
Net operating loss | 24,712 | 23,094 | |||||
Other | 2,984 | 5,716 | |||||
Total deferred tax assets | 197,394 | 152,143 | |||||
Deferred tax liabilities | |||||||
Excess of tax over book depreciation | 677,249 | 990,682 | |||||
Purchased-gas cost adjustment | 13,805 | 13,822 | |||||
Other regulatory assets and liabilities, net | 106,285 | 186,207 | |||||
Total deferred tax liabilities | 797,339 | 1,190,711 | |||||
Net deferred tax liabilities | $ | 599,945 | $ | 1,038,568 |
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13. | COMMITMENTS AND CONTINGENCIES |
Operating Leases | ||||
(Millions of dollars) | ||||
2018 | $ | 4.7 | ||
2019 | 3.9 | |||
2020 | 3.7 | |||
2021 | 3.3 | |||
2022 | 3.3 | |||
Thereafter | 3.2 | |||
Total | $ | 22.1 |
• | an evaluation of whether natural gas pipeline integrity-management requirements should be expanded beyond current high-consequence areas; |
• | a verification of records for pipelines in class 3 and 4 locations and high-consequence areas to confirm maximum allowable operating pressures; and |
• | a requirement to test previously untested pipelines operating above 30 percent yield strength in high-consequence areas. |
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14. | QUARTERLY FINANCIAL DATA (UNAUDITED) |
First Quarter | Second Quarter | Third Quarter | Fourth Quarter | |||||||||||||
Year Ended December 31, 2017 | ||||||||||||||||
(Thousands of dollars) | ||||||||||||||||
Revenues | $ | 550,408 | $ | 279,689 | $ | 247,142 | $ | 462,394 | ||||||||
Operating income | $ | 125,132 | $ | 44,052 | $ | 40,780 | $ | 89,512 | ||||||||
Net income | $ | 76,456 | $ | 20,623 | $ | 18,797 | $ | 47,119 | ||||||||
Earnings per share | ||||||||||||||||
Basic | $ | 1.45 | $ | 0.39 | $ | 0.36 | $ | 0.90 | ||||||||
Diluted | $ | 1.44 | $ | 0.39 | $ | 0.36 | $ | 0.89 |
First Quarter | Second Quarter | Third Quarter | Fourth Quarter | |||||||||||||
Year Ended December 31, 2016 | ||||||||||||||||
(Thousands of dollars) | ||||||||||||||||
Revenues | $ | 508,364 | $ | 245,923 | $ | 232,191 | $ | 440,754 | ||||||||
Operating income | $ | 116,073 | $ | 43,621 | $ | 30,892 | $ | 78,534 | ||||||||
Net income | $ | 64,743 | $ | 20,300 | $ | 12,737 | $ | 42,315 | ||||||||
Earnings per share | ||||||||||||||||
Basic | $ | 1.23 | $ | 0.39 | $ | 0.24 | $ | 0.81 | ||||||||
Diluted | $ | 1.22 | $ | 0.38 | $ | 0.24 | $ | 0.80 |
|
• | Level 1 - Unadjusted quoted prices in active markets for identical assets or liabilities; |
• | Level 2 - Significant observable pricing inputs other than quoted prices included within Level 1 that are, either directly or indirectly, observable as of the reporting date. Essentially, this represents inputs that are derived principally from or corroborated by observable market data; and |
• | Level 3 - May include one or more unobservable inputs that are significant in establishing a fair value estimate. These unobservable inputs are developed based on the best information available and may include our own internal data. |
Recognition and Measurement | ||||
Accounting Treatment | Balance Sheet | Income Statement | ||
Normal purchases and normal sales | - | Fair value not recorded | - | Change in fair value not recognized in earnings |
Mark-to-market | - | Recorded at fair value | - | Change in fair value recognized in, and recoverable through, the purchased-gas cost adjustment mechanisms |
• | established by independent regulators; |
• | designed to recover the specific entity’s costs of providing regulated services; and |
• | set at levels that will recover our costs when considering the demand and competition for our services. |
|
Accumulated Other Comprehensive Income (Loss) | ||||
(Thousands of dollars) | ||||
January 1, 2016 | $ | (4,401 | ) | |
Pension and other postemployment benefit plans obligations | ||||
Other comprehensive income (loss) before reclassification, net of tax of $486 | (776 | ) | ||
Amounts reclassified from accumulated other comprehensive income (loss), net of tax of $(289) | 462 | |||
Other comprehensive income (loss) | (314 | ) | ||
December 31, 2016 | (4,715 | ) | ||
Pension and other postemployment benefit plans obligations | ||||
Other comprehensive income (loss) before reclassification, net of tax of $808 | (1,293 | ) | ||
Amounts reclassified from accumulated other comprehensive income (loss), net of tax of $(322) | 515 | |||
Other comprehensive income (loss) | (778 | ) | ||
December 31, 2017 | $ | (5,493 | ) |
Affected Line Item in the | |||||||||||||
Details about Accumulated Other Comprehensive Income | Year Ended December 31, | Consolidated Statements of | |||||||||||
(Loss) Components | 2017 | 2016 | 2015 | Income | |||||||||
(Thousands of dollars) | |||||||||||||
Pension and other postemployment benefit plan obligations (a) | |||||||||||||
Amortization of net loss | $ | 42,591 | $ | 40,912 | $ | 47,494 | |||||||
Amortization of unrecognized prior service cost | (4,597 | ) | (3,316 | ) | (1,962 | ) | |||||||
37,994 | 37,596 | 45,532 | |||||||||||
Regulatory adjustments (b) | (37,157 | ) | (36,845 | ) | (44,615 | ) | |||||||
837 | 751 | 917 | Income before income taxes | ||||||||||
(322 | ) | (289 | ) | (353 | ) | Income tax expense | |||||||
Total reclassifications for the period | $ | 515 | $ | 462 | $ | 564 | Net income |
|
Year Ended December 31, 2017 | ||||||||||
Income | Shares | Per Share Amount | ||||||||
(Thousands, except per share amounts) | ||||||||||
Basic EPS Calculation | ||||||||||
Net income available for common stock | $ | 162,995 | 52,527 | $ | 3.10 | |||||
Diluted EPS Calculation | ||||||||||
Effect of dilutive securities | — | 452 | ||||||||
Net income available for common stock and common stock equivalents | $ | 162,995 | 52,979 | $ | 3.08 |
Year Ended December 31, 2016 | ||||||||||
Income | Shares | Per Share Amount | ||||||||
(Thousands, except per share amounts) | ||||||||||
Basic EPS Calculation | ||||||||||
Net income available for common stock | $ | 140,095 | 52,453 | $ | 2.67 | |||||
Diluted EPS Calculation | ||||||||||
Effect of dilutive securities | — | 510 | ||||||||
Net income available for common stock and common stock equivalents | $ | 140,095 | 52,963 | $ | 2.65 |
Year Ended December 31, 2015 | ||||||||||
Income | Shares | Per Share Amount | ||||||||
(Thousands, except per share amounts) | ||||||||||
Basic EPS Calculation | ||||||||||
Net income available for common stock | $ | 119,030 | 52,578 | $ | 2.26 | |||||
Diluted EPS Calculation | ||||||||||
Effect of dilutive securities | — | 676 | ||||||||
Net income available for common stock and common stock equivalents | $ | 119,030 | 53,254 | $ | 2.24 |
|
December 31, 2017 | ||||||||||||||
Remaining Recovery Period | Current | Noncurrent | Total | |||||||||||
(Thousands of dollars) | ||||||||||||||
Under-recovered purchased-gas costs | 1 year | $ | 41,238 | $ | — | $ | 41,238 | |||||||
Pension and other postemployment benefit costs | See Note 11 | 25,156 | 387,582 | 412,738 | ||||||||||
Weather normalization | 1 year | 17,461 | — | 17,461 | ||||||||||
Reacquired debt costs | 10 years | 812 | 7,298 | 8,110 | ||||||||||
MGP remediation costs | 15 years | — | 6,104 | 6,104 | ||||||||||
Other | 1 to 21 years | 3,513 | 4,205 | 7,718 | ||||||||||
Total regulatory assets, net of amortization | 88,180 | 405,189 | 493,369 | |||||||||||
Federal income tax rate changes (a) | See Note 12 | — | (519,421 | ) | (519,421 | ) | ||||||||
Over-recovered purchased-gas costs | 1 year | (9,434 | ) | — | (9,434 | ) | ||||||||
Ad-valorem tax | 1 year | (4 | ) | — | (4 | ) | ||||||||
Total regulatory liabilities | (9,438 | ) | (519,421 | ) | (528,859 | ) | ||||||||
Net regulatory assets and liabilities | $ | 78,742 | $ | (114,232 | ) | $ | (35,490 | ) |
December 31, 2016 | ||||||||||||||
Remaining Recovery Period | Current | Noncurrent | Total | |||||||||||
(Thousands of dollars) | ||||||||||||||
Under-recovered purchased-gas costs | 1 year | $ | 29,901 | $ | — | $ | 29,901 | |||||||
Pension and other postemployment benefit costs | See Note 11 | 31,498 | 427,448 | 458,946 | ||||||||||
Weather normalization | 1 year | 17,661 | — | 17,661 | ||||||||||
Reacquired debt costs | 11 years | 812 | 8,108 | 8,920 | ||||||||||
Other | 1 to 22 years | 3,274 | 4,966 | 8,240 | ||||||||||
Total regulatory assets, net of amortization | 83,146 | 440,522 | 523,668 | |||||||||||
Over-recovered purchased-gas costs | 1 year | (10,154 | ) | — | (10,154 | ) | ||||||||
Ad-valorem tax | 1 year | (1,768 | ) | — | (1,768 | ) | ||||||||
Total regulatory liabilities | (11,922 | ) | — | (11,922 | ) | |||||||||
Net regulatory assets and liabilities | $ | 71,224 | $ | 440,522 | $ | 511,746 |
|
December 31, | December 31, | |||||||
2017 | 2016 | |||||||
(Thousands of dollars) | ||||||||
Natural gas distribution pipelines and related equipment | $ | 4,572,343 | $ | 4,321,429 | ||||
Natural gas transmission pipelines and related equipment | 497,791 | 481,953 | ||||||
General plant and other | 513,445 | 530,459 | ||||||
Construction work in process | 130,333 | 70,327 | ||||||
Property, plant and equipment | 5,713,912 | 5,404,168 | ||||||
Accumulated depreciation and amortization | (1,706,327 | ) | (1,672,548 | ) | ||||
Net property, plant and equipment | $ | 4,007,585 | $ | 3,731,620 |
|
Number of Units | Weighted- Average Price | ||||||
Nonvested at December 31, 2016 | 194,900 | $ | 41.68 | ||||
Granted | 37,825 | $ | 63.97 | ||||
Vested | (85,490 | ) | $ | 33.76 | |||
Forfeited | (6,570 | ) | $ | 52.65 | |||
Nonvested at December 31, 2017 | 140,665 | $ | 51.97 |
2017 | 2016 | 2015 | ||||||||||
Weighted-average grant date fair value (per share) | $ | 63.97 | $ | 58.30 | $ | 41.40 | ||||||
Fair value of shares granted (thousands of dollars) | $ | 2,420 | $ | 2,503 | $ | 3,141 |
Number of Units | Weighted- Average Price | ||||||
Nonvested at December 31, 2016 | 288,811 | $ | 46.06 | ||||
Granted | 74,120 | $ | 68.94 | ||||
Vested | (117,626 | ) | $ | 35.98 | |||
Forfeited | (7,981 | ) | $ | 58.58 | |||
Nonvested at December 31, 2017 | 237,324 | $ | 57.78 |
2017 | 2016 | 2015 | |||||
Volatility (a) | 20.70% | 18.20% | 15.90% | ||||
Dividend yield | 2.63% | 2.40% | 2.90% | ||||
Risk-free interest rate | 1.48% | 0.91% | 1.10% | ||||
(a) - Volatility based on historical volatility over three years using daily stock price observations of our peer utilities. |
2017 | 2016 | 2015 | ||||||||||
Weighted-average grant date fair value (per share) | $ | 68.94 | $ | 64.06 | $ | 44.48 | ||||||
Fair value of shares granted (thousands of dollars) | $ | 5,110 | $ | 4,766 | $ | 4,486 |
|
December 31, | ||||
2017 | 2016 | |||
Discount rate - pension plans | 3.80% | 4.30% | ||
Discount rate - other postemployment plans | 3.70% | 4.20% | ||
Compensation increase rate | 3.25% - 3.35% | 3.25% - 3.40% |
Years Ended December 31, | ||||||||
2017 | 2016 | 2015 | ||||||
Discount rate - pension plans | 4.30% | 4.75% | 4.25%/4.75% | (c) | ||||
Discount rate - other postemployment plans | 4.20% | 4.75%/3.75% | (a) | 4.25%/4.75% | (c) | |||
Expected long-term return on plan assets - pension plans | 7.75% | 7.75% | 7.75% | |||||
Expected long-term return on plan assets - other postemployment plans | 7.60% | 8.00%/7.75% | (b) | 7.75% | ||||
Compensation increase rate | 3.25% - 3.40% | 3.35% - 3.40% | 3.30% - 3.50% |
Pension Benefits | Other Postemployment Benefits | ||||||||||||||
December 31, | December 31, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Changes in Benefit Obligation | (Thousands of dollars) | ||||||||||||||
Benefit obligation, beginning of period | $ | 966,531 | $ | 985,624 | $ | 243,548 | $ | 228,253 | |||||||
Service cost | 12,176 | 12,055 | 2,509 | 2,675 | |||||||||||
Interest cost | 40,453 | 45,550 | 9,890 | 10,235 | |||||||||||
Plan participants’ contributions | — | — | 3,483 | 3,043 | |||||||||||
Actuarial loss (gain) | 76,325 | 25,886 | 12,129 | 14,309 | |||||||||||
Benefits paid | (55,107 | ) | (71,066 | ) | (16,690 | ) | (15,450 | ) | |||||||
Plan amendment | — | — | 171 | 483 | |||||||||||
Settlements | (46,487 | ) | (31,518 | ) | — | — | |||||||||
Benefit obligation, end of period | 993,891 | 966,531 | 255,040 | 243,548 | |||||||||||
Change in Plan Assets | |||||||||||||||
Fair value of plan assets, beginning of period | 739,586 | 785,161 | 166,046 | 155,495 | |||||||||||
Actual return on plan assets | 135,056 | 48,768 | 31,228 | 9,733 | |||||||||||
Employer contributions | 111,936 | 12,441 | 6,159 | 13,225 | |||||||||||
Plan participants’ contributions | — | — | 3,483 | 3,043 | |||||||||||
Benefits paid | (55,107 | ) | (71,066 | ) | (16,690 | ) | (15,450 | ) | |||||||
Settlements | (46,667 | ) | (35,718 | ) | — | — | |||||||||
Fair value of assets, end of period | 884,804 | 739,586 | 190,226 | 166,046 | |||||||||||
Balance at December 31 | $ | (109,087 | ) | $ | (226,945 | ) | $ | (64,814 | ) | $ | (77,502 | ) | |||
Current liabilities | $ | (963 | ) | $ | (941 | ) | $ | — | $ | — | |||||
Noncurrent liabilities | (108,124 | ) | (226,004 | ) | (64,814 | ) | (77,502 | ) | |||||||
Balance at December 31 | $ | (109,087 | ) | $ | (226,945 | ) | $ | (64,814 | ) | $ | (77,502 | ) |
Pension Benefits | |||||||||||
Year Ended December 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
(Thousands of dollars) | |||||||||||
Components of net periodic benefit cost | |||||||||||
Service cost | $ | 12,176 | $ | 12,055 | $ | 13,660 | |||||
Interest cost | 40,453 | 45,550 | 43,542 | ||||||||
Expected return on assets | (58,496 | ) | (61,183 | ) | (61,769 | ) | |||||
Amortization of unrecognized prior service cost | — | — | 266 | ||||||||
Amortization of net loss | 36,107 | 35,543 | 42,226 | ||||||||
Settlements | — | — | 27 | ||||||||
Net periodic benefit cost | $ | 30,240 | $ | 31,965 | $ | 37,952 |
Other Postemployment Benefits | |||||||||||
Year Ended December 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
(Thousands of dollars) | |||||||||||
Components of net periodic benefit cost | |||||||||||
Service cost | $ | 2,509 | $ | 2,675 | $ | 3,257 | |||||
Interest cost | 9,890 | 10,235 | 10,628 | ||||||||
Expected return on assets | (12,590 | ) | (12,370 | ) | (11,892 | ) | |||||
Amortization of unrecognized prior service cost | (4,597 | ) | (3,316 | ) | (2,228 | ) | |||||
Amortization of net loss | 6,484 | 5,369 | 5,268 | ||||||||
Net periodic benefit cost | $ | 1,696 | $ | 2,593 | $ | 5,033 |
Pension Benefits | |||||||||||
Year Ended December 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
(Thousands of dollars) | |||||||||||
Net gain (loss) arising during the period | $ | (2,101 | ) | $ | (1,262 | ) | $ | 339 | |||
Amortization of loss | 837 | 751 | 917 | ||||||||
Deferred income taxes | 486 | 197 | (483 | ) | |||||||
Total recognized in other comprehensive income (loss) | $ | (778 | ) | $ | (314 | ) | $ | 773 |
Pension Benefits | |||||||
December 31, | |||||||
2017 | 2016 | ||||||
(Thousands of dollars) | |||||||
Prior service credit (cost) | $ | — | $ | — | |||
Accumulated loss | (378,595 | ) | (414,757 | ) | |||
Accumulated other comprehensive loss before regulatory assets | (378,595 | ) | (414,757 | ) | |||
Regulatory asset for regulated entities | 369,647 | 407,073 | |||||
Accumulated other comprehensive loss after regulatory assets | (8,948 | ) | (7,684 | ) | |||
Deferred income taxes | 3,455 | 2,969 | |||||
Accumulated other comprehensive loss, net of tax | $ | (5,493 | ) | $ | (4,715 | ) |
Other Postemployment Benefits | |||||||
December 31, | |||||||
2017 | 2016 | ||||||
(Thousands of dollars) | |||||||
Prior service credit (cost) | $ | 5,442 | $ | 10,211 | |||
Accumulated loss | (49,030 | ) | (62,084 | ) | |||
Accumulated other comprehensive loss before regulatory assets | (43,588 | ) | (51,873 | ) | |||
Regulatory asset for regulated entities | 43,588 | 51,873 | |||||
Accumulated other comprehensive loss after regulatory assets | — | — | |||||
Deferred income taxes | — | — | |||||
Accumulated other comprehensive loss, net of tax | $ | — | $ | — |
Pension Benefits | Other Postemployment Benefits | ||||||
Amounts to be recognized in 2018 | (Thousands of dollars) | ||||||
Prior service credit (cost) | $ | — | $ | (4,567 | ) | ||
Actuarial net loss | $ | 39,913 | $ | 3,887 |
2017 | 2016 | ||
Health care cost-trend rate assumed for next year | 7.00% | 7.25% | |
Rate to which the cost-trend rate is assumed to decline (the ultimate trend rate) | 5.00% | 5.00% | |
Year that the rate reaches the ultimate trend rate | 2023 | 2022 |
One Percentage | One Percentage | ||||||
Point Increase | Point Decrease | ||||||
(Thousands of dollars) | |||||||
Effect on total of service and interest cost | $ | 239 | $ | (238 | ) | ||
Effect on other postemployment benefit obligation | $ | 2,906 | $ | (3,006 | ) |
Investment-grade bonds | 40.0 | % |
U.S. large-cap equities | 18.0 | % |
Alternative investments | 14.0 | % |
Developed foreign large-cap equities | 10.0 | % |
Mid-cap equities | 7.0 | % |
Emerging markets equities | 6.0 | % |
Small-cap equities | 5.0 | % |
Total | 100 | % |
Pension Benefits | ||||||||||||
December 31, 2017 | ||||||||||||
Asset Category | Level 1 | Level 2 | Level 3 | Total | ||||||||
(Thousands of dollars) | ||||||||||||
Investments: | ||||||||||||
Equity securities (a) | $ | 301,911 | $ | 91,014 | $ | — | $ | 392,925 | ||||
Government obligations | — | 74,596 | — | 74,596 | ||||||||
Corporate obligations (b) | — | 260,907 | — | 260,907 | ||||||||
Cash and money market funds (c) | 21,139 | 20,787 | — | 41,926 | ||||||||
Insurance contracts and group annuity contracts | — | — | 35,158 | 35,158 | ||||||||
Other investments (d) | — | 585 | 78,707 | 79,292 | ||||||||
Total assets | $ | 323,050 | $ | 447,889 | $ | 113,865 | $ | 884,804 |
Pension Benefits | ||||||||||||
December 31, 2016 | ||||||||||||
Asset Category | Level 1 | Level 2 | Level 3 | Total | ||||||||
(Thousands of dollars) | ||||||||||||
Investments: | ||||||||||||
Equity securities (a) | $ | 371,655 | $ | 58,987 | $ | — | $ | 430,642 | ||||
Government obligations | — | 47,445 | — | 47,445 | ||||||||
Corporate obligations (b) | — | 129,036 | — | 129,036 | ||||||||
Cash and money market funds (c) | 13,786 | 16,114 | — | 29,900 | ||||||||
Insurance contracts and group annuity contracts | — | — | 45,140 | 45,140 | ||||||||
Other investments (d) | — | 71 | 57,352 | 57,423 | ||||||||
Total assets | $ | 385,441 | $ | 251,653 | $ | 102,492 | $ | 739,586 |
Other Postemployment Benefits | ||||||||||||
December 31, 2017 | ||||||||||||
Asset Category | Level 1 | Level 2 | Level 3 | Total | ||||||||
(Thousands of dollars) | ||||||||||||
Investments: | ||||||||||||
Equity securities (a) | $ | 63,180 | $ | 123 | $ | — | $ | 63,303 | ||||
Government obligations | — | 101 | — | 101 | ||||||||
Corporate obligations (b) | — | 25,905 | — | 25,905 | ||||||||
Cash and money market funds (c) | 4,512 | 28 | — | 4,540 | ||||||||
Insurance contracts and group annuity contracts | — | 96,377 | — | 96,377 | ||||||||
Total assets | $ | 67,692 | $ | 122,534 | $ | — | $ | 190,226 |
Other Postemployment Benefits | ||||||||||||
December 31, 2016 | ||||||||||||
Asset Category | Level 1 | Level 2 | Level 3 | Total | ||||||||
(Thousands of dollars) | ||||||||||||
Investments: | ||||||||||||
Equity securities (a) | $ | 39,817 | $ | 7,323 | $ | — | $ | 47,140 | ||||
Government obligations | — | 75 | — | 75 | ||||||||
Corporate obligations (b) | — | 19,948 | — | 19,948 | ||||||||
Cash and money market funds (c) | 74 | 16,989 | — | 17,063 | ||||||||
Insurance contracts and group annuity contracts | — | 81,820 | — | 81,820 | ||||||||
Total assets | $ | 39,891 | $ | 126,155 | $ | — | $ | 166,046 |
Pension Benefits | |||||||||||
Insurance Contracts | Other Investments | Total | |||||||||
(Thousands of dollars) | |||||||||||
January 1, 2016 | $ | 56,465 | $ | 57,972 | $ | 114,437 | |||||
Net realized and unrealized gains (losses) | 4,518 | (620 | ) | 3,898 | |||||||
Settlements | (15,843 | ) | — | (15,843 | ) | ||||||
December 31, 2016 | $ | 45,140 | $ | 57,352 | $ | 102,492 | |||||
Net realized and unrealized gains (losses) | 2,569 | 5,055 | 7,624 | ||||||||
Purchases | — | 16,300 | 16,300 | ||||||||
Sales and settlements | (12,551 | ) | — | (12,551 | ) | ||||||
December 31, 2017 | $ | 35,158 | $ | 78,707 | $ | 113,865 |
Pension Benefits | Other Postemployment Benefits | ||||||
Benefits to be paid in: | (Thousands of dollars) | ||||||
2018 | $ | 50,875 | $ | 17,293 | |||
2019 | $ | 51,635 | $ | 17,383 | |||
2020 | $ | 52,518 | $ | 17,538 | |||
2021 | $ | 53,516 | $ | 17,485 | |||
2022 | $ | 54,289 | $ | 17,558 | |||
2023 through 2027 | $ | 286,188 | $ | 85,543 |
|
Years Ended December 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
(Thousands of dollars) | |||||||||||
Current income tax provision | |||||||||||
Federal | $ | — | $ | (2,016 | ) | $ | 7,135 | ||||
State | 750 | 471 | 2,055 | ||||||||
Total current income tax provision | 750 | (1,545 | ) | 9,190 | |||||||
Deferred income tax provision | |||||||||||
Federal | 83,138 | 76,247 | 56,440 | ||||||||
State | 9,255 | 10,541 | 7,349 | ||||||||
Total deferred income tax provision | 92,393 | 86,788 | 63,789 | ||||||||
Total provision for income taxes | $ | 93,143 | $ | 85,243 | $ | 72,979 |
Years Ended December 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
(Thousands of dollars) | |||||||||||
Income before income taxes | $ | 256,138 | $ | 225,338 | $ | 192,009 | |||||
Federal statutory income tax rate | 35 | % | 35 | % | 35 | % | |||||
Provision for federal income taxes | 89,648 | 78,868 | 67,203 | ||||||||
State income taxes, net of federal tax benefit | 6,503 | 7,158 | 6,114 | ||||||||
Nonregulated deferred tax rate decrease | 2,162 | — | — | ||||||||
Tax benefit of employee share based compensation | (5,162 | ) | — | — | |||||||
Other, net | (8 | ) | (783 | ) | (338 | ) | |||||
Total provision for income taxes | $ | 93,143 | $ | 85,243 | $ | 72,979 |
December 31, | |||||||
2017 | 2016 | ||||||
(Thousands of dollars) | |||||||
Deferred tax assets | |||||||
Employee benefits and other accrued liabilities | $ | 40,277 | $ | 123,333 | |||
Regulatory adjustments for enacted tax rate changes | 129,421 | — | |||||
Net operating loss | 24,712 | 23,094 | |||||
Other | 2,984 | 5,716 | |||||
Total deferred tax assets | 197,394 | 152,143 | |||||
Deferred tax liabilities | |||||||
Excess of tax over book depreciation | 677,249 | 990,682 | |||||
Purchased-gas cost adjustment | 13,805 | 13,822 | |||||
Other regulatory assets and liabilities, net | 106,285 | 186,207 | |||||
Total deferred tax liabilities | 797,339 | 1,190,711 | |||||
Net deferred tax liabilities | $ | 599,945 | $ | 1,038,568 |
|
Operating Leases | ||||
(Millions of dollars) | ||||
2018 | $ | 4.7 | ||
2019 | 3.9 | |||
2020 | 3.7 | |||
2021 | 3.3 | |||
2022 | 3.3 | |||
Thereafter | 3.2 | |||
Total | $ | 22.1 |
|
First Quarter | Second Quarter | Third Quarter | Fourth Quarter | |||||||||||||
Year Ended December 31, 2017 | ||||||||||||||||
(Thousands of dollars) | ||||||||||||||||
Revenues | $ | 550,408 | $ | 279,689 | $ | 247,142 | $ | 462,394 | ||||||||
Operating income | $ | 125,132 | $ | 44,052 | $ | 40,780 | $ | 89,512 | ||||||||
Net income | $ | 76,456 | $ | 20,623 | $ | 18,797 | $ | 47,119 | ||||||||
Earnings per share | ||||||||||||||||
Basic | $ | 1.45 | $ | 0.39 | $ | 0.36 | $ | 0.90 | ||||||||
Diluted | $ | 1.44 | $ | 0.39 | $ | 0.36 | $ | 0.89 |
First Quarter | Second Quarter | Third Quarter | Fourth Quarter | |||||||||||||
Year Ended December 31, 2016 | ||||||||||||||||
(Thousands of dollars) | ||||||||||||||||
Revenues | $ | 508,364 | $ | 245,923 | $ | 232,191 | $ | 440,754 | ||||||||
Operating income | $ | 116,073 | $ | 43,621 | $ | 30,892 | $ | 78,534 | ||||||||
Net income | $ | 64,743 | $ | 20,300 | $ | 12,737 | $ | 42,315 | ||||||||
Earnings per share | ||||||||||||||||
Basic | $ | 1.23 | $ | 0.39 | $ | 0.24 | $ | 0.81 | ||||||||
Diluted | $ | 1.22 | $ | 0.38 | $ | 0.24 | $ | 0.80 |
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