##### Table of Contents



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 June 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
(State or Other Jurisdiction 
of Incorporation or Organization)
    
    84-0173305
(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
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer
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
    
    
    8Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    *Item 4T.
    
    Controls and Procedures
    
    
    11PART II  Other InformationItem 1.
    
    Legal Proceedings
    
    
    12Item 1A.
    
    Risk Factors
    
    
    12Item 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
    
    
    12Item 6.
    
    Exhibits
    
    
    12Signatures
    
    
    13Certification 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




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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
    
    
    Six Months EndedJune 30,
    
    
    June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Operating revenues
    
    $
    100
    
    
    $
    96
    
    
    $
    208
    
    
    $
    197Operating expensesOperation and maintenance
    
    
    31
    
    
    
    30
    
    
    
    74
    
    
    
    54Depreciation, depletion and amortization
    
    
    12
    
    
    
    12
    
    
    
    23
    
    
    
    22Taxes, other than income taxes
    
    
    5
    
    
    
    4
    
    
    
    9
    
    
    
    748
    
    
    
    46
    
    
    
    106
    
    
    
    83Operating income
    
    
    52
    
    
    
    50
    
    
    
    102
    
    
    
    114Other income, net
    
    
    2
    
    
    
    1
    
    
    
    4
    
    
    
    4Interest and debt expense
    
    
    (12
    )
    
    
    (11
    )
    
    
    (23
    )
    
    
    (22
    )Affiliated interest income, net
    
    
    13
    
    
    
    12
    
    
    
    24
    
    
    
    21Income before income taxes
    
    
    55
    
    
    
    52
    
    
    
    107
    
    
    
    117Income taxes
    
    
    20
    
    
    
    19
    
    
    
    39
    
    
    
    43Net income
    
    $
    35
    
    
    $
    33
    
    
    $
    68
    
    
    $
    74
  1




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COLORADO INTERSTATE GAS COMPANY
 CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions, except share amounts)
(Unaudited)
 June 30,
    
    
    December 31,2007
    
    
    2006ASSETSCurrent assetsCash and cash equivalents
    
    $
    
    
    
    $
    Accounts and notes receivableCustomer, net of allowance of $1 in 2007 and 2006
    
    
    12
    
    
    
    14Affiliates
    
    
    176
    
    
    
    247Other
    
    
    1
    
    
    
    1Materials and supplies
    
    
    7
    
    
    
    6Other
    
    
    12
    
    
    
    21Total current assets
    
    
    208
    
    
    
    289Property, plant and equipment, at cost
    
    
    1,986
    
    
    
    1,899Less accumulated depreciation, depletion and amortization
    
    
    568
    
    
    
    552Total property, plant and equipment, net
    
    
    1,418
    
    
    
    1,347Other assetsNotes receivable from affiliates
    
    
    696
    
    
    
    599Other
    
    
    60
    
    
    
    55756
    
    
    
    654Total assets
    
    $
    2,382
    
    
    $
    2,290LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilitiesAccounts payableTrade
    
    $
    14
    
    
    $
    17Affiliates
    
    
    12
    
    
    
    11Other
    
    
    11
    
    
    
    12Current maturities of long-term financing obligations
    
    
    1
    
    
    
    101Taxes payable
    
    
    107
    
    
    
    81Regulatory liabilities
    
    
    10
    
    
    
    10Other
    
    
    23
    
    
    
    20Total current liabilities
    
    
    178
    
    
    
    252Long-term financing obligations, less current maturities
    
    
    708
    
    
    
    608Other liabilitiesDeferred income taxes
    
    
    240
    
    
    
    242Other
    
    
    44
    
    
    
    39284
    
    
    
    281Commitments and contingenciesStockholders equityCommon stock, par value $1 per share; 1,000 shares
authorized, issued and outstanding
    
    
    
    
    
    
    Additional paid-in capital
    
    
    47
    
    
    
    47Retained earnings
    
    
    1,165
    
    
    
    1,097Accumulated other comprehensive income
    
    
    
    
    
    
    5Total stockholders equity
    
    
    1,212
    
    
    
    1,149Total liabilities and stockholders equity
    
    $
    2,382
    
    
    $
    2,290
  2




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COLORADO INTERSTATE GAS COMPANY
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
 Six Months EndedJune 30,2007
    
    
    2006Cash flows from operating activitiesNet income
    
    $
    68
    
    
    $
    74Adjustments to reconcile net income to net cash from operating activitiesDepreciation, depletion and amortization
    
    
    23
    
    
    
    22Deferred income taxes
    
    
    11
    
    
    
    5Other non-cash income items
    
    
    8
    
    
    
    (15
    )Asset and liability changes
    
    
    (10
    )
    
    
    17Net cash provided by operating activities
    
    
    100
    
    
    
    103Cash flows from investing activitiesAdditions to property, plant and equipment
    
    
    (74
    )
    
    
    (88
    )Net change in notes receivable from affiliates
    
    
    (25
    )
    
    
    (15
    )Other
    
    
    (1
    )
    
    
    Net cash used in investing activities
    
    
    (100
    )
    
    
    (103
    )Net change in cash and cash equivalents
    
    
    
    
    
    
    Cash and cash equivalentsBeginning of period
    
    
    
    
    
    
    End of period
    
    $
    
    
    
    $
    
  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
    
    
    2Payments for remediation activities
    
    
    (2
    )Balance at June 30, 2007
    
    $
    17
   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
 Cash Management Program.
 Accounts Receivable Sales Program.
 6




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Taxes.
  Other Affiliate Balances.
 Affiliate Revenues and Expenses.
 Quarter Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006(In millions)Revenues from affiliates
    
    $
    5
    
    
    $
    7
    
    
    $
    8
    
    
    $
    11Operation and maintenance expenses from affiliates
    
    
    12
    
    
    
    11
    
    
    
    24
    
    
    
    22Reimbursements of operating expenses charged to affiliates
    
    
    2
    
    
    
    1
    
    
    
    4
    
    
    
    3
 7




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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
    
    $
    208
    
    
    $
    197Operating expenses
    
    
    (106
    )
    
    
    (83
    )Operating income
    
    
    102
    
    
    
    114Other income, net
    
    
    4
    
    
    
    4EBIT
    
    
    106
    
    
    
    118Interest and debt expense
    
    
    (23
    )
    
    
    (22
    )Affiliated interest income, net
    
    
    24
    
    
    
    21Income taxes
    
    
    (39
    )
    
    
    (43
    )Net income
    
    $
    68
    
    
    $
    74Throughput volumes (BBtu/d)(1)
    
    
    4,028
    
    
    
    3,465
 
 (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
    
    $
    13
    
    
    $
    
    
    
    $
    
    
    
    $
    13Expansions
    
    
    4
    
    
    
    (2
    )
    
    
    (1
    )
    
    
    1Operational gas, revaluations and processing revenues
    
    
    (6
    )
    
    
    (14
    )
    
    
    
    
    
    
    (20
    )Other(1)
    
    
    
    
    
    
    (7
    )
    
    
    1
    
    
    
    (6
    )Total impact on EBIT
    
    $
    11
    
    
    $
    (23
    )
    
    $
    
    
    
    $
    (12
    )
 
 (1)
    
    Consists of individually insignificant items. 8




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Transportation Revenues.
 Expansions.
  Operational Gas, Revaluations and Processing Revenues.
 Affiliated Interest Income, Net
  Income Taxes
  Liquidity and Capital Expenditures
 Liquidity Overview.
  9




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Capital Expenditures.
 Six Months Ended
    
    
    2007June 30, 2007
    
    
    Remaining
    
    
    Total(In millions)Expansion(1)
    
    $
    58
    
    
    $
    151
    
    
    $
    209Maintenance
    
    
    16
    
    
    
    30
    
    
    
    46$
    74
    
    
    $
    181
    
    
    $
    255
 
 (1)
    
    Includes our share of costs related to our 50 percent
joint investment in WYCO Development LLC. Commitments and Contingencies
  
 Item 3. Quantitative and Qualitative Disclosures About Market Risk
  10




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Item 4T. Controls and Procedures
 Evaluation of Disclosure Controls and Procedures
  Changes in Internal Control Over Financial Reporting
  11




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PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings
  Fort Morgan Storage Field.
 
 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
  
 Item 4. Submission of Matters to a Vote of Security Holders
  
 Item 5. Other Information
  
 Item 6. Exhibits
  12




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SIGNATURES
  COLORADO INTERSTATE GAS COMPANYDate: August 7, 2007

/s/   JAMES J. CLEARYJames J. ClearyPresident
(Principal Executive Officer) Date: August 7, 2007
    /s/  JOHN R. SULTJohn R. SultSenior Vice President,
Chief Financial Officer and Controller
(Principal Accounting and Financial Officer) 13




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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.
 14