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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 Form 10-Q
 (Mark One)
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 For the quarterly period ended September 30, 2007
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from                    to
 Commission File Number 1-4874
 
 Colorado Interstate Gas Company
  Delaware
    
    84-0173305(State or Other Jurisdiction 
of Incorporation or Organization)
    
    (I.R.S. Employer
Identification No.)El Paso Building 
1001 Louisiana Street 
Houston, Texas
(Address of Principal Executive Offices)
    
    77002
(Zip Code)
 Telephone Number: (713) 420-2600
 þ o
  o o þ
 o þ
   COLORADO INTERSTATE GAS COMPANY MEETS THE CONDITIONS OF GENERAL INSTRUCTION H(1)(a) AND
(b) TO FORM 10-Q AND IS THEREFORE FILING THIS REPORT WITH A REDUCED DISCLOSURE FORMAT AS PERMITTED
BY SUCH INSTRUCTION.




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##### 



COLORADO INTERSTATE GAS COMPANY
 TABLE OF CONTENTS
 Caption
    
    PagePART I  Financial InformationItem  1.
    
    Financial Statements
    
    
    1Item  2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    9Item  3.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    *Item  4T.
    
    Controls and Procedures
    
    
    13PART II  Other InformationItem  1.
    
    Legal Proceedings
    
    
    14Item  1A.
    
    Risk Factors
    
    
    14Item  2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    *Item  3.
    
    Defaults Upon Senior Securities
    
    
    *Item  4.
    
    Submission of Matters to a Vote of Security Holders
    
    
    *Item  5.
    
    Other Information
    
    
    15Item  6.
    
    Exhibits
    
    
    15Signatures
    
    
    16Certification of Principal Executive Officer Pursuant to Section 302Certification of Chief Financial Officer Pursuant to Section 302Certification of Principal Executive Officer Pursuant to Section 906Certification of Chief Financial Officer Pursuant to Section 906
  
 *
    
    We have not included a response to this item in this document since no
response is required pursuant to the reduced disclosure format permitted by
General Instruction H to Form 10-Q.  /d
    
    = per day
    
    MMcf = million cubic feetBBtu
    
    = billion British thermal units
 When we refer to cubic feet measurements, all measurements are at a pressure
of 14.73 pounds per square inch.When we refer to us, we, our, ours or CIG, we are describing
Colorado Interstate Gas Company and/or our subsidiaries.




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PART I  FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 COLORADO
INTERSTATE GAS COMPANY
 CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In millions)
(Unaudited)
 Quarter Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Operating revenues
    
    $
    92
    
    
    $
    91
    
    
    $
    300
    
    
    $
    288Operating expensesOperation and maintenance
    
    
    29
    
    
    
    37
    
    
    
    103
    
    
    
    91Depreciation, depletion and amortization
    
    
    11
    
    
    
    11
    
    
    
    34
    
    
    
    33Taxes, other than income taxes
    
    
    6
    
    
    
    4
    
    
    
    15
    
    
    
    1146
    
    
    
    52
    
    
    
    152
    
    
    
    135Operating income
    
    
    46
    
    
    
    39
    
    
    
    148
    
    
    
    153Other income, net
    
    
    3
    
    
    
    1
    
    
    
    7
    
    
    
    5Interest and debt expense
    
    
    (11
    )
    
    
    (12
    )
    
    
    (34
    )
    
    
    (34
    )Affiliated interest income, net
    
    
    14
    
    
    
    12
    
    
    
    38
    
    
    
    33Income before income taxes
    
    
    52
    
    
    
    40
    
    
    
    159
    
    
    
    157Income taxes
    
    
    20
    
    
    
    15
    
    
    
    59
    
    
    
    58Net income
    
    $
    32
    
    
    $
    25
    
    
    $
    100
    
    
    $
    99
  1




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COLORADO
INTERSTATE GAS COMPANY
 CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions, except share amounts)
(Unaudited)
 September 30,
    
    
    December 31,2007
    
    
    2006ASSETSCurrent assetsCash and cash equivalents
    
    $
    1
    
    
    $
    Accounts and notes receivableCustomer, net of allowance of $1 in 2007 and 2006
    
    
    13
    
    
    
    14Affiliates
    
    
    147
    
    
    
    247Other
    
    
    1
    
    
    
    1Materials and supplies
    
    
    6
    
    
    
    6Other
    
    
    12
    
    
    
    21Total current assets
    
    
    180
    
    
    
    289Property, plant and equipment, at cost
    
    
    2,083
    
    
    
    1,899Less accumulated depreciation, depletion and amortization
    
    
    576
    
    
    
    552Total property, plant and equipment, net
    
    
    1,507
    
    
    
    1,347Other assetsNotes receivable from affiliates
    
    
    722
    
    
    
    599Other
    
    
    58
    
    
    
    55780
    
    
    
    654Total assets
    
    $
    2,467
    
    
    $
    2,290LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilitiesAccounts payableTrade
    
    $
    12
    
    
    $
    17Affiliates
    
    
    10
    
    
    
    11Other
    
    
    39
    
    
    
    12Current maturities of long-term financing obligations
    
    
    1
    
    
    
    101Taxes payable
    
    
    126
    
    
    
    81Accrued interest
    
    
    13
    
    
    
    7Regulatory liabilities
    
    
    12
    
    
    
    10Other
    
    
    15
    
    
    
    13Total current liabilities
    
    
    228
    
    
    
    252Long-term financing obligations, less current maturities
    
    
    708
    
    
    
    608Other liabilitiesDeferred income taxes
    
    
    246
    
    
    
    242Other
    
    
    41
    
    
    
    39287
    
    
    
    281Commitments and contingencies (Note 4)Stockholders equityCommon stock, par value $1 per share; 1,000 shares
authorized, issued and outstanding
    
    
    
    
    
    
    Additional paid-in capital
    
    
    47
    
    
    
    47Retained earnings
    
    
    1,197
    
    
    
    1,097Accumulated other comprehensive income
    
    
    
    
    
    
    5Total stockholders equity
    
    
    1,244
    
    
    
    1,149Total liabilities and stockholders equity
    
    $
    2,467
    
    
    $
    2,290
  2




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COLORADO
INTERSTATE GAS COMPANY
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
 Nine Months EndedSeptember 30,2007
    
    
    2006Cash flows from operating activitiesNet income
    
    $
    100
    
    
    $
    99Adjustments to reconcile net income to net cash from operating activitiesDepreciation, depletion and amortization
    
    
    34
    
    
    
    33Deferred income taxes
    
    
    15
    
    
    
    6Other
    
    
    7
    
    
    
    (17
    )Asset and liability changes
    
    
    21
    
    
    
    44Net cash provided by operating activities
    
    
    177
    
    
    
    165Cash flows from investing activitiesAdditions to property, plant and equipment
    
    
    (157
    )
    
    
    (106
    )Net change in notes receivable from affiliates
    
    
    (19
    )
    
    
    (59
    )Net cash used in investing activities
    
    
    (176
    )
    
    
    (165
    )Net change in cash and cash equivalents
    
    
    1
    
    
    
    Cash and cash equivalentsBeginning of period
    
    
    
    
    
    
    End of period
    
    $
    1
    
    
    $
    
  3




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COLORADO
INTERSTATE GAS COMPANY
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
 1. Basis of Presentation and Significant Accounting Policies
 Basis of Presentation
  Significant Accounting Policies
  Accounting for Uncertainty in Income Taxes. Accounting for Uncertainty in Income
Taxes . Accounting for Income Taxes,
 2. Income Taxes
  4




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3. Debt and Credit Facilities
 Debt
 Credit Facilities
  4. Commitments and Contingencies
 Legal Proceedings
 Gas Measurement Cases. re: Natural Gas Royalties
Qui Tam Litigation,
 Will Price, et
al. v. Gas Pipelines and Their Predecessors, et al.,
  Environmental Matters
  5




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Balance at January 1, 2007
    
    $
    17Additions/adjustments for remediation activities
    
    
    1Payments for remediation activities
    
    
    (2
    )Balance at September 30, 2007
    
    $
    16
   Regulatory Matters
 Fuel Recovery Mechanisms.
   6




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5. Retirement Benefits
 Employers Accounting
for Defined Benefit Pension and Other Postretirement Plans  an amendment of FASB Statements No.
87, 88, 106, and 132(R) Employers Accounting for Postretirement Benefits Other Than Pensions,
 6. Transactions with Affiliates
 El
Paso Master Limited Partnership (MLP).
 Cash Management Program.
 Accounts Receivable Sales Program.
 Taxes.
  7




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Other Affiliate Balances.
 Affiliate Revenues and Expenses.
 Quarter Ended
    
    Nine Months EndedSeptember 30,
    
    September 30,2007
    
    2006
    
    2007
    
    2006(In millions)Revenues from affiliates
    
    $
    4
    
    
    $
    6
    
    
    $
    12
    
    
    $
    17Operation and maintenance expenses from affiliates
    
    
    12
    
    
    
    11
    
    
    
    36
    
    
    
    33Reimbursements of operating expenses charged to affiliates
    
    
    2
    
    
    
    2
    
    
    
    6
    
    
    
    5
 8




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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
  Results of Operations
  2007
    
    
    2006(In millions,except volumes)Operating revenues
    
    $
    300
    
    
    $
    288Operating expenses
    
    
    (152
    )
    
    
    (135
    )Operating income
    
    
    148
    
    
    
    153Other income, net
    
    
    7
    
    
    
    5EBIT
    
    
    155
    
    
    
    158Interest and debt expense
    
    
    (34
    )
    
    
    (34
    )Affiliated interest income, net
    
    
    38
    
    
    
    33Income taxes
    
    
    (59
    )
    
    
    (58
    )Net income
    
    $
    100
    
    
    $
    99Throughput volumes (BBtu/d)(1)
    
    
    4,076
    
    
    
    3,601
 
 (1)
    
    Throughput volumes include billable transportation throughput
volumes for storage activities and exclude throughput transported by the Wyoming Interstate
Company, Ltd. (WIC) system on behalf of the CIG system. EBITRevenue
    
    
    Expense
    
    
    Other
    
    
    ImpactFavorable/(Unfavorable)(In millions)Transportation revenues
    
    $
    18
    
    
    $
    
    
    
    $
    
    
    
    $
    18Expansions
    
    
    5
    
    
    
    (2
    )
    
    
    1
    
    
    
    4Operational gas, revaluations and processing revenues
    
    
    (10
    )
    
    
    (4
    )
    
    
    
    
    
    
    (14
    )Operating, general and administrative expenses
    
    
    
    
    
    
    (5
    )
    
    
    
    
    
    
    (5
    )Property taxes
    
    
    
    
    
    
    (3
    )
    
    
    
    
    
    
    (3
    )Other(1)
    
    
    (1
    )
    
    
    (3
    )
    
    
    1
    
    
    
    (3
    )Total impact on EBIT
    
    $
    12
    
    
    $
    (17
    )
    
    $
    2
    
    
    $
    (3
    )
 
 (1)
    
    Consists of individually insignificant items. Transportation Revenues.
 9




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Expansions.
   Operational
Gas, Revaluations and Processing Revenues.
   Operating, General and Administrative Expenses
 Property Taxes.
 Affiliated Interest Income, Net
  Income Taxes
  10




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Liquidity and Capital Expenditures
 Liquidity Overview.
      11




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Capital
Expenditures.
 Nine Months Ended
    
    
    2007September 30, 2007
    
    
    Remaining(1)
    
    
    Total(In millions)Expansion(2)
    
    $
    132
    
    
    $
    91
    
    
    $
    223Maintenance
    
    
    25
    
    
    
    24
    
    
    
    49$
    157
    
    
    $
    115
    
    
    $
    272
 
 (1)
    
    Amount includes expansion and maintenance capital of
approximately $73 million and
$1 million respectively related to WIC.(2)
    
    Amount includes our share of costs related to our 50 percent
joint investment in WYCO Development LLC. 12




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Commitments and Contingencies
  
 Item 3. Quantitative and Qualitative Disclosures About Market Risk
  
 Item 4T. Controls and Procedures
 Evaluation of Disclosure Controls and Procedures
  Changes in Internal Control Over Financial Reporting
  13




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PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings
  Fort Morgan Storage Field.
 Rawlins Plant Notice of Probable Violation
 
 Item 1A. Risk Factors
 CAUTIONARY STATEMENTS FOR PURPOSES OF THE SAFE HARBOR PROVISIONS OF
THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
   
  Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
  
 Item 3. Defaults Upon Senior Securities
  14




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Item 4. Submission of Matters to a Vote of Security Holders
  
 Item 5. Other Information
  
 Item 6. Exhibits
  15




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SIGNATURES
  COLORADO INTERSTATE GAS COMPANYDate: November 5, 2007
    
    /s/       JAMES J. CLEARY

James J. ClearyPresident
(Principal Executive Officer)Date: November 5, 2007
    
    /s/       JOHN R. SULT

John R. SultSenior Vice President,
Chief Financial Officer and Controller
(Principal Accounting and Financial Officer)
 16




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COLORADO
INTERSTATE GAS COMPANY
 EXHIBIT INDEX
  ExhibitNumber
    
    Description31.A
    
    Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.31.B
    
    Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32.A
    
    Certification of Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.32.B
    
    Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 17