Williams Natural Gas
Hidden Assets
Storage Operations Manager Mike Murphy is shown at a Williams Natural Gas Storage Field south of greater Kansas City, one of the company's major market areas.
Williams Natural gas 6,300-mile system provides interstate natural gas transportation from basins in Kansas, Oklahoma, Texas Wyoming adn Colorado to markets in the Midcontinent. System design capacity is 2.2 Bcfd; seasonal storage capacity is 43 Bcf.
T he proximity of our underground storage fields to major markets ensures reliable, peak-day deliveries of natural gas in the coldest weather, while the physical location of our system provides a gateway for long-lived supplies from the Midcontinent and the Rockies. Dedicated employees and these "hidden assets" enable us to continue to be the least-cost provider of storage and transportation services everywhere we serve.
| Selected Financial Data (dollars in millions) | 1995 | 1994 | 1993 |
| Revenues | $174.30 | $231.30 | $294.10 |
| Operating profit | 45 | 48.8 | 41 |
| Identifiable assets* | 709.2 | 719.8 | 697 |
| Operating profit as % of average assets | 6.30% | 6.90% | 5.80% |
| Capital expenditures | 43.5 | 32.9 | 54.9 |
| Depreciation | 27.3 | 27.2 | 27.3 |
| Operating Statistics | |||
| Throughput (TBtu) | 334 | 346 | 395 |
| Employees (December 31) | 650 | 711 | 724 |
| *Defined in Note 16 of the Notes to Consolidated Financial Statements, page 53. | |||
Key Points
- We reached an agreement to expand service to City Utilities of Springfield, Mo. The long-term contract adds 23 MMcfd of firm transportation to this major customer's current contract load of 102 MMcfd. We will complete a 28-mile expansion by November 1996 to serve future requirements in this growing, highly competitive market area.
- Saved about $7 million in expenses as a result of a cost-containment program. "Ideas at Work," seeking employee suggestions, accounted for $2 million of that total.
- Realized an additional $3.7 million in operating profit as a result of a FERC decision that allowed us to recover certain purchased gas adjustment costs related to Order 636 restructuring in 1993.
- Filed a rate case reflecting increased cost of service and the transfer of our gathering facilities to Williams Field Services. Subject to refund, the rates went into effect in August 1995 and helped improve third- and fourth-quarter earnings.
- Opposed contracts arising out of a settlement between a competitor and one of our largest customers. The contracts hold the potential to move about one-third of our Kansas City area business to the competing pipeline, even though our rates are substantially lower. Williams Natural Gas representatives, officials from several Kansas City-area towns and the Kansas Corporation Commission (KCC) staff testified and requested that the KCC not approve the contracts. In October, the FERC asserted its jurisdiction over the competing pipeline. We believe FERC action will level the regulatory playing field, allowing customers to select the lowest priced services and helping us retain market share in this vital area.
- Because of the absence of the one-time recovery of certain gas adjustment costs mentioned earlier, we expect operating profit in 1996 to be similar to 1995's. However, results from continuing operations should improve via our ongoing cost- containment program, the full-year impact of new rates and the addition of new business. We will reduce costs while improving our service-delivery process, enabling customers to do business more efficiently on our system.
