EMPLOYEE BENEFIT PLANS (Notes)

12 Months Ended

Dec. 31, 2018

EMPLOYEE BENEFIT PLANS [Abstract]

Pension and Other Postemployment Benefits Disclosure [Text Block]

12. EMPLOYEE BENEFIT PLANS

Retirement and Other Postemployment Benefit Plans

Retirement Plans - We have a defined benefit pension plan covering nonbargaining-unit employees hired before January 1, 2005, and certain bargaining-unit employees hired before December 15, 2011. Nonbargaining-unit employees hired after December 31, 2004; employees represented by Local No. 304 of the International Brotherhood of Electrical Workers (“IBEW”) hired on or after July 1, 2010; employees represented by the United Steelworkers hired on or after December 15, 2011; and employees who accepted a one-time opportunity to opt out of the defined benefit pension plan are covered by a profit-sharing plan. Certain employees of the Texas Gas Service division are entitled to benefits under a frozen cash-balance pension plan. In addition, we have a supplemental executive retirement plan for the benefit of certain officers. No new participants in the supplemental executive retirement plan have been approved since 2005, and it was formally closed to new participants as of January 1, 2014. We fund our defined benefit pension costs at a level needed to maintain or exceed the minimum funding levels required by the Employee Retirement Income Security Act of 1974, as amended, and the Pension Protection Act of 2006.

Other Postemployment Benefit Plans - We sponsor health and welfare plans that provide postemployment medical and life insurance benefits to certain employees who retire with at least five years of service. The postemployment medical plan is contributory based on hire date, age and years of service, with retiree contributions adjusted periodically, and contains other cost-sharing features such as deductibles and coinsurance.

Actuarial Assumptions - The following table sets forth the weighted-average assumptions used to determine benefit obligations for pension and postemployment benefits for the periods indicated:

	December 31,
	2018	2017
Discount rate - pension plans	4.40%	3.80%
Discount rate - other postemployment plans	4.40%	3.70%
Compensation increase rate	3.20% - 4.00%	3.25% - 3.35%

The following table sets forth the weighted-average assumptions used by us to determine the periodic benefit costs for the periods indicated:

	Years Ended December 31,
	2018	2017	2016
Discount rate - pension plans	3.80%	4.30%	4.75%
Discount rate - other postemployment plans	3.70%	4.20%	4.75%/3.75%	(a)
Expected long-term return on plan assets - pension plans	7.25%	7.75%	7.75%
Expected long-term return on plan assets - other postemployment plans	7.60%	7.60%	8.00%/7.75%	(b)
Compensation increase rate	3.25% - 3.35%	3.25% - 3.40%	3.35% - 3.40%

(a) Discount rate for the nine months ended September 30, 2016, and three months ended December 31, 2016, respectively.

(b) Expected long-term return on plan assets for the nine months ended September 30, 2016, and three months ended December 31, 2016, respectively.

We determine our overall expected long-term rate of return on plan assets, based on our review of historical returns and economic growth models. In 2017, we updated our assumed mortality rates to incorporate the new set of mortality tables issued by the Society of Actuaries.

We determine our discount rates annually.  We estimate our discount rate based upon a comparison of the expected cash flows associated with our future payments under our defined benefit pension and other postemployment obligations to a hypothetical bond portfolio created using high-quality bonds that closely match expected cash flows.  Bond portfolios are developed by selecting a bond for each of the next 60 years based on the maturity dates of the bonds.  Bonds selected to be included in the portfolios are only those rated by Moody’s as AA- or better and exclude callable bonds, bonds with less than a minimum issue size, yield outliers and other filtering criteria to remove unsuitable bonds.

Regulatory Treatment - The OCC, KCC and regulatory authorities in Texas have approved the recovery of pension costs and other postemployment benefits costs through rates for Oklahoma Natural Gas, Kansas Gas Service and Texas Gas Service, respectively. The costs recovered through rates are based on current funding requirements and the net periodic benefit cost for defined benefit pension and other postemployment costs. Differences, if any, between the expense and the amount recovered through rates would be reflected in earnings, net of authorized deferrals.

We historically have recovered defined benefit pension and other postemployment benefit costs through rates. We believe it is probable that regulators will continue to include the net periodic pension and other postemployment benefit costs in our cost of service.

Upon adoption of FASB’s ASU 2017-07, we recognized a regulatory asset of $1.5 million, which includes the non-service costs incurred on our pension and other postemployment benefit plans that were capitalized as regulatory assets defined by Topic 980 (Regulated Operations).

Obligations and Funded Status - The following table sets forth our defined benefit pension and other postemployment benefit plans, benefit obligations and fair value of plan assets for the periods indicated:

	Pension Benefits						Other Postemployment Benefits
	December 31,						December 31,
	2018			2017			2018			2017
Changes in Benefit Obligation	(Thousands of dollars)
Benefit obligation, beginning of period	$	993,891		$	966,531		$	255,040		$	243,548
Service cost	12,919			12,176			2,354			2,509
Interest cost	36,801			40,453			9,117			9,890
Plan participants’ contributions	—			—			3,563			3,483
Actuarial loss (gain)	(42,540		)	76,325			(31,607		)	12,129
Benefits paid	(50,561		)	(55,107		)	(18,323		)	(16,690		)
Plan amendment	—			—			—			171
Settlements	—			(46,487		)	—			—
Benefit obligation, end of period	950,510			993,891			220,144			255,040
Change in Plan Assets
Fair value of plan assets, beginning of period	884,804			739,586			190,226			166,046
Actual return (loss) on plan assets	(62,752		)	135,056			(6,325		)	31,228
Employer contributions	42,386			111,936			7,718			6,159
Plan participants’ contributions	—			—			3,563			3,483
Benefits paid	(50,561		)	(55,107		)	(18,323		)	(16,690		)
Settlements	235			(46,667		)	—			—
Fair value of assets, end of period	814,112			884,804			176,859			190,226
Balance at December 31	$	(136,398	)	$	(109,087	)	$	(43,285	)	$	(64,814	)
Current liabilities	$	(962	)	$	(963	)	$	—		$	—
Noncurrent liabilities	(135,436		)	(108,124		)	(43,285		)	(64,814		)
Balance at December 31	$	(136,398	)	$	(109,087	)	$	(43,285	)	$	(64,814	)

During 2017, we purchased group annuity contracts for $46.7 million, and transferred to a third-party insurance company liabilities of approximately $46.5 million related to certain participants in our defined benefit pension plan.

The accumulated benefit obligation for our defined benefit pension plans was $890.4 million and $936.7 million at December 31, 2018 and 2017, respectively.

In 2019, we expect to contribute $1.0 million to our defined benefit pension plans and expect to contribute $3.0 million to our other postemployment benefit plans. There are no plan assets expected to be withdrawn and returned to us in 2019.

Components of Net Periodic Benefit Cost - The following tables set forth the components of net periodic benefit cost, prior to regulatory deferrals, for our defined benefit pension and other postemployment benefit plans for the period indicated:

	Pension Benefits
	Year Ended December 31,
	2018			2017			2016
	(Thousands of dollars)
Components of net periodic benefit cost
Service cost	$	12,919		$	12,176		$	12,055
Interest cost (a)	36,801			40,453			45,550
Expected return on assets (a)	(60,579		)	(58,496		)	(61,183		)
Amortization of net loss (a)	39,913			36,107			35,543
Net periodic benefit cost	$	29,054		$	30,240		$	31,965

(a) These amounts, net of any amounts capitalized as a regulatory asset since adoption of ASU 2017-07 on January 1, 2018, have been recognized as other income (expense), net in the Consolidated Statements of Income. See Note 14 for additional detail of our other income (expense), net.

	Other Postemployment Benefits
	Year Ended December 31,
	2018			2017			2016
	(Thousands of dollars)
Components of net periodic benefit cost
Service cost	$	2,354		$	2,509		$	2,675
Interest cost (a)	9,117			9,890			10,235
Expected return on assets (a)	(14,284		)	(12,590		)	(12,370		)
Amortization of unrecognized prior service cost (a)	(4,567		)	(4,597		)	(3,316		)
Amortization of net loss (a)	3,887			6,484			5,369
Net periodic benefit cost (credit)	$	(3,493	)	$	1,696		$	2,593

(a) These amounts, net of any amounts capitalized as a regulatory asset since adoption of ASU 2017-07 on January 1, 2018, have been recognized as other income (expense), net in the Consolidated Statements of Income. See Note 14 for additional detail of our other income (expense), net.

Other Comprehensive Income (Loss) - The following table sets forth the amounts recognized in other comprehensive income (loss), net of regulatory deferrals, related to our defined benefit pension benefits for the period indicated:

	Pension Benefits
	Year Ended December 31,
	2018			2017			2016
	(Thousands of dollars)
Net gain (loss) arising during the period	$	1,173		$	(2,101	)	$	(1,262	)
Amortization of loss	1,082			837			751
Deferred income taxes	(848		)	486			197
Total recognized in other comprehensive income (loss)	$	1,407		$	(778	)	$	(314	)

Due to our regulatory deferrals, there were no amounts recognized in other comprehensive income (loss) related to our other postemployment benefits for the periods presented.

The tables below set forth the amounts in accumulated other comprehensive loss that had not yet been recognized as components of net periodic benefit expense for the periods indicated:

	Pension Benefits
	December 31,
	2018			2017
	(Thousands of dollars)
Accumulated loss	$	(419,238	)	$	(378,595	)
Accumulated other comprehensive loss   before regulatory assets	(419,238		)	(378,595		)
Regulatory asset for regulated entities	412,545			369,647
Accumulated other comprehensive loss   after regulatory assets	(6,693		)	(8,948		)
Deferred income taxes	2,607			3,455
Accumulated other comprehensive loss,   net of tax	$	(4,086	)	$	(5,493	)

	Other Postemployment Benefits
	December 31,
	2018			2017
	(Thousands of dollars)
Prior service credit (cost)	$	875		$	5,442
Accumulated loss	(34,144		)	(49,030		)
Accumulated other comprehensive loss   before regulatory assets	$	(33,269	)	$	(43,588	)
Regulatory asset for regulated entities	33,269			43,588
Accumulated other comprehensive loss   after regulatory assets	$	—		$	—

The following table sets forth the amounts recognized in either accumulated comprehensive income (loss) or regulatory assets expected to be recognized as components of net periodic benefit expense in the next fiscal year:

	Pension Benefits		Other Postemployment Benefits
Amounts to be recognized in 2019	(Thousands of dollars)
Prior service credit (cost)	$	—	$	(673	)
Actuarial net loss	$	33,039	$	2,244

Health Care Cost Trend Rates - The following table sets forth the assumed health care cost-trend rates for the periods indicated:

	2018	2017
Health care cost-trend rate assumed for next year	7.00%	7.00%
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	2024	2023

Assumed health care cost-trend rates have a significant effect on the amounts reported for our other postemployment benefit plans. A one percentage point change in assumed health care cost-trend rates would have the following effects:

	One Percentage		One Percentage
	Point Increase		Point Decrease
	(Millions of dollars)
Effect on total of service and interest cost	$	0.2	$	(0.2	)
Effect on other postemployment benefit obligation	$	2.3	$	(2.4	)

Plan Assets - Our investment strategy is to invest plan assets in accordance with sound investment practices that emphasize long-term fundamentals. The goal of this strategy is to maximize investment returns while managing risk in order to meet the plan’s current and projected financial obligations. To achieve this strategy, we have established a liability-driven investment strategy to change the allocations as the plan reaches certain funded status. The plan’s investments include a diverse blend of various domestic and international equities, investment-grade debt securities which mirror the cash flows of our liability, insurance contracts and alternative investments. The current target allocation for the assets of our defined benefit pension plan is as follows:

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	%

As part of our risk management for the plans, minimums and maximums have been set for each of the asset classes listed above. All investment managers for the plan are subject to certain restrictions on the securities they purchase and, with the exception of indexing purposes, are prohibited from owning our stock.

The current target allocation for the assets of our other postemployment benefits plan is 30 percent fixed income securities and 70 percent equity securities.

The following tables set forth our pension benefits and other postemployment benefits plan assets by fair value category as of the measurement date:

	Pension Benefits
	December 31, 2018
Asset Category	Level 1		Level 2		Level 3		Total
	(Thousands of dollars)
Investments:
Equity securities (a)	$	282,668	$	35,870	$	—	$	318,538
Government obligations	—		69,475		—		69,475
Corporate obligations (b)	—		240,900		—		240,900
Cash and money market funds (c)	2,419		71,991		—		74,410
Insurance contracts and group annuity contracts	—		—		30,445		30,445
Other investments (d)	—		1,139		79,205		80,344
Total assets	$	285,087	$	419,375	$	109,650	$	814,112

(a) - This category represents securities of the various market sectors from diverse industries.

(b) - This category represents bonds from diverse industries.

(c) - This category is primarily money market funds.

(d) - This category represents alternative investments such as hedge funds and other financial instruments.

	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

(a) - This category represents securities of the various market sectors from diverse industries.

(b) - This category represents bonds from diverse industries.

(c) - This category is primarily money market funds.

(d) - This category represents alternative investments such as hedge funds and other financial instruments.

	Other Postemployment Benefits
	December 31, 2018
Asset Category	Level 1		Level 2		Level 3		Total
	(Thousands of dollars)
Investments:
Equity securities (a)	$	58,087	$	2,382	$	—	$	60,469
Government obligations	—		74		—		74
Corporate obligations (b)	—		25,857		—		25,857
Cash and money market funds (c)	1,249		300		—		1,549
Insurance contracts and group annuity contracts (d)	—		88,910		—		88,910
Total assets	$	59,336	$	117,523	$	—	$	176,859

(a) - This category represents securities of the various market sectors from diverse industries.

(b) - This category represents bonds from diverse industries.

(c) - This category is primarily money market funds.

(d) - This category includes equity securities and bonds held in a captive insurance product.

	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

(a) - This category represents securities of the various market sectors from diverse industries.

(b) - This category represents bonds from diverse industries.

(c) - This category is primarily money market funds.

The following table sets forth the reconciliation of Level 3 fair value measurements of our pension plans for the periods indicated:

	Pension Benefits
	Insurance Contracts			Other Investments		Total
	(Thousands of dollars)
January 1, 2017	$	45,140		$	57,352	$	102,492
Net realized and unrealized gains (losses)	2,569			5,055		7,624
Purchases	—			16,300		16,300
Settlements	(12,551		)	—		(12,551		)
December 31, 2017	$	35,158		$	78,707	$	113,865
Net realized and unrealized gains (losses)	(611		)	496		(115		)
Purchases	—			—		—
Sales and settlements	(4,100		)	—		(4,100		)
December 31, 2018	$	30,445		$	79,205	$	109,650

Pension and Other Postemployment Benefit Payments - Benefit payments for our defined benefit pension and other postemployment benefit plans for the period ended December 31, 2018 were $50.6 million and $18.3 million, respectively. The following table sets forth the pension benefits and other postemployment benefits payments expected to be paid in 2019-2028:

	Pension Benefits		Other Postemployment Benefits
Benefits to be paid in:	(Thousands of dollars)
2019	$	52,368	$	16,746
2020	$	53,332	$	16,737
2021	$	54,245	$	16,632
2022	$	55,474	$	16,603
2023	$	56,477	$	16,424
2024 through 2028	$	295,565	$	77,769

The expected benefits to be paid are based on the same assumptions used to measure our benefit obligation at December 31, 2018 and include estimated future employee service.

Other Employee Benefit Plans

401(k) Plan - We have a 401(k) Plan which covers all full-time employees, and employee contributions are discretionary. We match 100 percent of each participant’s eligible contribution up to 6 percent of eligible compensation, subject to certain limits. Our contributions made to the plan were $12.1 million, $11.7 million and $10.8 million in 2018, 2017 and 2016, respectively.

Profit Sharing Plan - We have a profit sharing plan for all employees who do not participate in our defined benefit pension plan. We plan to make a contribution to the profit sharing plan each quarter equal to 1 percent of each participant’s eligible compensation during the quarter. Additional discretionary employer contributions may be made at the end of each year. Employee contributions are not allowed under the plan. Our contributions made to the plan were $7.4 million, $8.1 million and $6.0 million in 2018, 2017 and 2016, respectively.