Note 5 – Related Party Transactions

Reimbursement of Expenses of Our General Partner

The employees of our operated assets are employees of Williams. Williams directly charges us for the payroll and benefit costs associated with operations employees and carries the obligations for many employee-related benefits in its financial statements, including the liabilities related to employee retirement, medical plans, and paid time off. Our share of the costs is charged to us through affiliate billings and reflected in Operating and maintenance expenses in the Consolidated Statement of Comprehensive Income (Loss) and Property, plant, and equipment – net in the Consolidated Balance Sheet.

In addition, employees of Williams provide general and administrative services to us, and we are charged for certain administrative expenses incurred by Williams. These charges are either directly identifiable or allocated to our assets. Direct charges are for goods and services provided by Williams at our request. Allocated charges are based on a three-factor formula, which considers revenues; property, plant, and equipment; and payroll. Our share of direct and allocated administrative expenses is reflected in Selling, general, and administrative expenses in the Consolidated Statement of Comprehensive Income (Loss) and Property, plant, and equipment – net in the Consolidated Balance Sheet.

In management’s estimation, the allocation methodologies used are reasonable and result in a reasonable allocation to us of our costs of doing business incurred by Williams.

Transactions with Affiliates and Equity-Method Investees

Product costs, in the Consolidated Statement of Comprehensive Income (Loss), include charges for the following types of transactions with equity-method investees:


•	Purchases of NGLs for resale from Discovery.


•	Payments to OPPL for transportation of NGLs from certain natural gas processing plants.

Summary of the related party transactions discussed in all sections above.



	Years Ended December 31,
	2015		2014		2013
	(Millions)
Product costs	$	169	$	186	$	147
Operating and maintenance expenses - employee costs	498		413		339
Selling, general, and administrative expenses:
Employee direct costs	368		331		270
Employee allocated costs	195		171		169

HB Construction Company Ltd., a subsidiary of Williams, provides construction services to us. Charges for these construction services as well as other capitalized payroll and benefit costs charged by Williams described above are capitalized within Property, plant, and equipment – net in the Consolidated Balance Sheet and totaled $187 million and $81 million during December 2015 and 2014, respectively.

The Accounts payable — affiliate in the Consolidated Balance Sheet represents the payable positions that result from the transactions with affiliates discussed above. We also have $12 million and $13 million in Accounts payable — trade in the Consolidated Balance Sheet with our equity-method investees at December 31, 2015 and 2014, respectively.

Operating Agreements with Equity-Method Investees

We have operating agreements with certain equity-method investees. These operating agreements typically provide for reimbursement or payment to us for certain direct operational payroll and employee benefit costs, materials, supplies, and other charges and also for management services. Williams supplied a portion of these services, primarily those related to employees since we do not have any employees, to certain equity-method investees. The total gross charges to equity-method investees for these fees included in the Consolidated Statement of Comprehensive Income (Loss) are $64 million, $65 million, and $67 million for the years ended December 31, 2015, 2014, and 2013, respectively.

Omnibus Agreement

Under this agreement, Williams is obligated to reimburse us for certain items including (i) maintenance capital expenditure amounts incurred by us or our subsidiaries for certain U.S. Department of Transportation projects, up to a maximum of $50 million, and (ii) an amount based on the amortization over time of deferred revenue amounts that relate to cash payments received by Williams prior to the closing of the contribution transaction for services to be rendered by us in the future at the Devils Tower floating production platform. Net amounts received under this agreement for the years ended December 31, 2015, 2014 and 2013 were $12 million, $11 million, and $12 million, respectively.

We have a contribution receivable from our general partner of $3 million at December 31, 2015, for amounts reimbursable to us under omnibus agreements presented within Total partners’ equity in the Consolidated Balance Sheet.

Acquisitions and Equity Issuances

Basis of Presentation in Note 1 – General, Description of Business, Basis of Presentation, and Summary of Significant Accounting Policies includes related party transactions for the ACMP Merger, Canada Acquisition, and Other. The Canadian operations previously participated in Williams’ cash management program under a credit agreement with Williams. Net changes in amounts due to/from Williams prior to the Canada Acquisition are reflected within Contributions from The Williams Companies, Inc. - net within the Consolidated Statement of Changes in Equity.

Note 14 – Partners’ Capital includes a related party transaction for the sale of Pre-merger WPZ common units to Williams in March 2013.

Board of Directors

A member of Williams’ Board of Directors, who was elected in 2013, is also the current chairman, president, and chief executive officer of an energy services company that is a customer of ours. We recorded $111 million, $115 million and $131 million in Service revenues in Consolidated Statement of Comprehensive Income (Loss) from this company for transportation and storage of natural gas for the years ended December 31, 2015, 2014, and 2013, respectively.