EMPLOYEE BENEFIT PLANS (Notes)

12 Months Ended

Dec. 31, 2019

EMPLOYEE BENEFIT PLANS [Abstract]

Pension and Other Postemployment Benefits Disclosure [Text Block]

EMPLOYEE BENEFIT PLANS

Retirement and Other Postemployment Benefit Plans

Retirement Plans - We have a defined benefit pension plan and a supplemental executive retirement plan, both of which are closed to new participants. Certain employees of the Texas Gas Service division are entitled to benefits under a frozen cash-balance pension plan. 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,
	2019	2018
Discount rate - pension plans	3.50%	4.40%
Discount rate - other postemployment plans	3.40%	4.40%
Compensation increase rate	3.10% - 4.00%	3.20% - 4.00%

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,
	2019	2018	2017
Discount rate - pension plans	4.40%	3.80%	4.30%
Discount rate - other postemployment plans	4.40%	3.70%	4.20%
Expected long-term return on plan assets - pension plans	7.20%	7.25%	7.75%
Expected long-term return on plan assets - other postemployment plans	7.35%	7.60%	7.60%
Compensation increase rate	3.20% - 4.00%	3.25% - 3.35%	3.25% - 3.40%

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.

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

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 net periodic benefit cost, net of deferrals, and the amount recovered through rates would be reflected in earnings.

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.

Since adoption of ASU 2017-07 on January 1, 2018, we continue to capitalize all eligible service cost and non-service cost components under the accounting requirements of ASC Topic 980 (Regulated Operations) for rate-regulated entities. Our consolidated balance sheets reflect the capitalized non-service cost components as a regulatory asset. We have recognized a regulatory asset of $4.7 million and $1.5 million as of December 31, 2019 and December 31, 2018, respectively. See Note 10 for additional information.

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,
	2019			2018			2019			2018
Changes in Benefit Obligation	(Thousands of dollars)
Benefit obligation, beginning of period	$	950,510		$	993,891		$	220,144		$	255,040
Service cost	12,030			12,919			1,734			2,354
Interest cost	40,670			36,801			9,318			9,117
Plan participants’ contributions	—			—			3,697			3,563
Actuarial loss (gain)	98,231			(42,540		)	13,945			(31,607		)
Benefits paid	(50,915		)	(50,561		)	(18,348		)	(18,323		)
Settlements	(49,158		)	—			—			—
Benefit obligation, end of period	1,001,368			950,510			230,490			220,144
Change in Plan Assets
Fair value of plan assets, beginning of period	814,112			884,804			176,859			190,226
Actual return (loss) on plan assets	162,785			(62,752		)	38,772			(6,325		)
Employer contributions	29,199			42,386			6,202			7,718
Plan participants’ contributions	—			—			3,697			3,563
Benefits paid	(50,915		)	(50,561		)	(18,348		)	(18,323		)
Settlements	(47,207		)	235			—			—
Fair value of assets, end of period	907,974			814,112			207,182			176,859
Balance at December 31	$	(93,394	)	$	(136,398	)	$	(23,308	)	$	(43,285	)
Current liabilities	$	(1,045	)	$	(962	)	$	—		$	—
Noncurrent liabilities	(92,349		)	(135,436		)	(23,308		)	(43,285		)
Balance at December 31	$	(93,394	)	$	(136,398	)	$	(23,308	)	$	(43,285	)

During 2019, we purchased a group annuity contract for $47.2 million, and transferred to a third-party insurance company liabilities of $49.2 million related to certain participants in our defined benefit pension plan.

The accumulated benefit obligation for our defined benefit pension plans was $937.8 million and $890.4 million at December 31, 2019 and 2018, respectively.

In 2020, our required contributions are expected to be $1.1 million and $4.0 million, respectively, to our defined benefit pension plans and other postemployment benefit plans. There are no plan assets expected to be withdrawn and returned to us in 2020.

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,
	2019			2018			2017
	(Thousands of dollars)
Components of net periodic benefit cost
Service cost	$	12,030		$	12,919		$	12,176
Interest cost (a)	40,670			36,801			40,453
Expected return on assets (a)	(61,939		)	(60,579		)	(58,496		)
Amortization of net loss (a)	33,039			39,913			36,107
Net periodic benefit cost	$	23,800		$	29,054		$	30,240

(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 15 for additional detail of our other income (expense), net.

	Other Postemployment Benefits
	Year Ended December 31,
	2019			2018			2017
	(Thousands of dollars)
Components of net periodic benefit cost
Service cost	$	1,734		$	2,354		$	2,509
Interest cost (a)	9,318			9,117			9,890
Expected return on assets (a)	(12,586		)	(14,284		)	(12,590		)
Amortization of unrecognized prior service cost (a)	(673		)	(4,567		)	(4,597		)
Amortization of net loss (a)	2,244			3,887			6,484
Net periodic benefit cost (credit)	$	37		$	(3,493	)	$	1,696

(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 15 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,
	2019			2018			2017
	(Thousands of dollars)
Net gain (loss) arising during the period	$	(2,766	)	$	1,173		$	(2,101	)
Amortization of loss	852			1,082			837
Deferred income taxes	479			(848		)	486
Total recognized in other comprehensive income (loss)	$	(1,435	)	$	1,407		$	(778	)

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,
	2019			2018
	(Thousands of dollars)
Accumulated loss	$	(381,633	)	$	(419,238	)
Accumulated other comprehensive loss   before regulatory assets	(381,633		)	(419,238		)
Regulatory asset for regulated entities	373,025			412,545
Accumulated other comprehensive loss   after regulatory assets	(8,608		)	(6,693		)
Deferred income taxes	1,869			2,607
Accumulated other comprehensive loss,   net of tax	$	(6,739	)	$	(4,086	)

	Other Postemployment Benefits
	December 31,
	2019			2018
	(Thousands of dollars)
Prior service credit	$	202		$	875
Accumulated loss	(19,660		)	(34,144		)
Accumulated other comprehensive loss   before regulatory assets	$	(19,458	)	$	(33,269	)
Regulatory asset for regulated entities	19,458			33,269
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 2020	(Thousands of dollars)
Prior service cost	$	—	$	(117	)
Actuarial net loss	$	42,319	$	173

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

	2019	2018
Health care cost-trend rate assumed for next year	6.50%	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	2025	2024

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	$	0.1	$	(0.1	)
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 funded status of the defined benefit pension plan increases. 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, 2019
Asset Category	Level 1		Level 2		Level 3		Total
	(Thousands of dollars)
Investments:
Equity securities (a)	$	323,737	$	27,267	$	—	$	351,004
Government obligations	—		54,726		—		54,726
Corporate obligations (b)	—		304,457		—		304,457
Cash and money market funds (c)	1,687		87,422		—		89,109
Insurance contracts and group annuity contracts	—		—		25,988		25,988
Other investments (d)	—		897		81,793		82,690
Total assets	$	325,424	$	474,769	$	107,781	$	907,974

(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, 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.

	Other Postemployment Benefits
	December 31, 2019
Asset Category	Level 1		Level 2		Level 3		Total
	(Thousands of dollars)
Investments:
Equity securities (a)	$	61,688	$	—	$	—	$	61,688
Government obligations	—		—		—		—
Corporate obligations (b)	—		26,852		—		26,852
Cash and money market funds (c)	18,350		682		—		19,032
Insurance contracts and group annuity contracts (d)	—		99,610		—		99,610
Total assets	$	80,038	$	127,144	$	—	$	207,182

(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, 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.

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, 2018	$	35,158		$	78,707	$	113,865
Net realized and unrealized gains (losses)	(611		)	496		(115		)
Purchases	—			—		—
Settlements	(4,100		)	—		(4,100		)
December 31, 2018	$	30,445		$	79,205	$	109,650
Net realized and unrealized gains (losses)	(860		)	2,588		1,728
Purchases	—			—		—
Sales and settlements	(3,597		)	—		(3,597		)
December 31, 2019	$	25,988		$	81,793	$	107,781

Pension and Other Postemployment Benefit Payments - Benefit payments for our defined benefit pension and other postemployment benefit plans for the period ended December 31, 2019 were $50.9 million and $18.3 million, respectively. The following table sets forth the pension benefits and other postemployment benefits payments expected to be paid in 2020-2029:

	Pension Benefits		Other Postemployment Benefits
Benefits to be paid in:	(Thousands of dollars)
2020	$	49,631	$	16,464
2021	$	50,378	$	16,308
2022	$	51,547	$	16,269
2023	$	52,628	$	16,090
2024	$	53,562	$	15,757
2025 through 2029	$	280,547	$	73,787

The expected benefits to be paid are based on the same assumptions used to measure our benefit obligation at December 31, 2019, 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 $12.8 million, $12.1 million and $11.7 million in 2019, 2018 and 2017, 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 $8.5 million, $7.4 million and $8.1 million in 2019, 2018 and 2017, respectively.