##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 Form 10-K
 (Mark One)
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended December 31, 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
 Securities registered pursuant to Section 12(b) of the Act:
 Title of each class
    
    Name of each exchange on which registered6.85% Senior Debentures, due 2037
    
    New York Stock Exchange
 Securities registered pursuant to Section 12(g) of the Act: None
 o þ
 o þ
 þ o
 þ
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer
þ
    
    Smaller reporting company o(Do not check if a smaller reporting company)
 o þ
 State the aggregate market value of the voting equity held by non-affiliates of the
registrant: None
 Documents Incorporated by Reference: None




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##### 



COLORADO INTERSTATE GAS COMPANY
 TABLE OF CONTENTS
 Caption
    
    PagePART IItem 1.
    
    Business
 
    
    1Item 1A.
    
    Risk Factors
 
    

5Item 1B.
    
    Unresolved Staff Comments 
    

12Item 2.
    
    Properties 
    

12Item 3.
    
    Legal Proceedings 
    

12Item 4.
    
    Submission of Matters to a Vote of Security Holders 
    

12PART IIItem 5.
    
    Market for Registrants Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities
 
    

13Item 6.
    
    Selected Financial Data 
    

13Item 7.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
 
    

14Item 7A.
    
    Quantitative and Qualitative Disclosures About Market Risk 
    

23Item 8.
    
    Financial Statements and Supplementary Data 
    

24Item 9.
    
    Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
 
    

47Item 9A.
    
    Controls and Procedures
 
    

47Item 9A(T).
    
    Controls and Procedures
 
    

47Item 9B.
    
    Other Information 
    

47PART IIIItem 10.
    
    Directors, Executive Officers and Corporate Governance 
    

48Item 11.
    
    Executive Compensation 
    

49Item 12.
    
    Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters 
    

50Item 13.
    
    Certain Relationships and Related Transactions, and Director Independence
 
    

50Item 14.
    
    Principal Accountant Fees and Services 
    

52PART IVItem 15.
    
    Exhibits and Financial Statement Schedules 
    

53Signatures 
    

54Amendment No. 1 to the Receivables Purchase AgreementSubsidiariesCertification of Principal Executive Officer Pursuant to Section 302Certification of Principal Financial Officer Pursuant to Section 302Certification of Principal Executive Officer Pursuant to Section 906Certification of Principal Financial Officer Pursuant to Section 906
   /d
    
    =
    
    per day
    
    MMcf
    
    =
    
    million cubic feetBBtu
    
    =
    
    billion British thermal units
    
    NGL
    
    =
    
    natural gas liquidsBcf
    
    =
    
    billion cubic feet
   i




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PART I
 
 ITEM 1. BUSINESS
 Overview and Strategy
     
    
    Developing new growth projects in our market and supply areas;
    
    Successfully executing on our backlog of committed expansion projects;
    
    Focusing on efficiency and synergies across our system;
    
    Ensuring the safety of our pipeline system and assets;
    
    Successfully recontracting expiring transportation capacity; and
    
    Providing outstanding customer service;
 Pipeline System.
 Storage and Processing Facilities.
 1




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WYCO.
 Markets and Competition
     2




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Customer Information
    
    Contract Information
    
    CompetitionApproximately 120 firm and
interruptible customers.
    
    Approximately 180 firm
transportation contracts.
Weighted average remaining
contract term of
approximately five years.
    
    Competition for our on-system market consists of
an intrastate pipeline, a new interstate pipeline,
local production from the Denver-Julesburg
basin, and long-haul shippers who elect to sell
into this market rather than the off-system
market. Competition for our off-system market
consists of other interstate pipelines that are
directly connected to our supply sources. CIG
faces competition from other existing pipelines
and alternative energy sources that are used to
generate electricity such as hydroelectric power,
wind, solar, coal and fuel oil.Major Customers: 
PSCo
    (187 BBtu/d)
    (9 BBtu/d)
    (1,106 BBtu/d)
    
    Expires
in 2008.
Expires in 2009.
Expire in 2012  2014.
    
    Our most direct competitor in the U.S. Rocky
Mountain region is the Rockies Express Pipeline.
The Rockies Express Pipeline could result in
additional discounting on our system. The Rockies
Express Pipeline could also cause prices in U.S.
Rocky Mountain natural gas supply basins to
increase while prices in our downstream markets
may not increase commensurately, making it more difficult for us to
charge full rates under future contracts.Williams Gas Marketing, Inc.(53 BBtu/d)
    
    Expires in 2009.(113 BBtu/d)
    
    Expires in 2010.(350 BBtu/d)
    
    Expire in 2011  2013.Anadarko PetroleumCorporation(70 BBtu/d)
    
    Expires in 2008.(12 BBtu/d)
    
    Expires in 2009.(80 BBtu/d)
    
    Expires in 2010.(128 BBtu/d)
    
    Expire in 2011  2015.
 Regulatory Environment
  
    
    rates and charges for natural gas transportation and storage and related services;
    
    certification and construction of new facilities;
    
    extension or abandonment of services and facilities;
    
    maintenance of accounts and records;
    
    relationships between pipelines and certain affiliates;
    
    terms and conditions of service;
    
    depreciation and amortization policies;
    
    acquisition and disposition of facilities; and
    
    initiation and discontinuation of services.
 3




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Environmental
  Employees
  4




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ITEM 1A. RISK FACTORS
 CAUTIONARY STATEMENT FOR PURPOSES OF THE SAFE HARBOR PROVISIONS OF
THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
   Risks Related to Our Business
 Our success depends on factors beyond our control.
  
    
    service area competition;
    
    expiration or turn back of significant contracts;
    
    changes in regulation and actions of regulatory bodies;
    
    weather conditions that impact throughput and storage levels;
    
    price competition;
    
    drilling activity and decreased availability of conventional gas supply sources and the
availability and timing of other natural gas supply sources;
    
    decreased natural gas demand due to various factors, including increases in prices and
the availability or increased demand of alternative energy sources such as hydroelectric
power, wind, solar, coal and fuel oil;
    
    continued development of additional sources of gas supply that can be accessed;
    
    availability and cost of capital to fund ongoing maintenance and growth projects;
    
    opposition to energy infrastructure development, especially in environmentally sensitive
areas;
    
    adverse general economic conditions including prolonged recessionary periods that might
negatively impact natural gas demand and the capital markets; and
    
    unfavorable movements in natural gas and NGL prices in certain supply and demand areas.
 
 5




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Our revenues are generated under contracts that must be renegotiated periodically, some of which
are for a substantial portion of our firm transportation capacity.
  
    
    competition by other pipelines, including the change in rates or upstream supply of
existing pipeline competitors, as well as the proposed construction by other companies of
additional pipeline capacity in markets served by our interstate pipeline;
    
    changes in state regulation of local distribution companies, which may cause them to
negotiate short-term contracts or turn back their capacity when their contracts expire;
    
    reduced demand and market conditions in the areas we serve;
    
    the availability of alternative energy sources or natural gas supply points; and
    
    regulatory actions.
  Fluctuations in energy commodity prices could adversely affect our business.
   
    
    regional, domestic and international supply and demand;
    
    availability and adequacy of transportation facilities;
    
    energy legislation;
    
    federal and state taxes, if any, on the transportation and storage of natural gas and
NGL;
 6




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
    
    abundance of supplies of alternative energy sources; and
    
    political unrest among countries producing oil.
 The agencies that regulate us and our customers could affect our profitability.
    7




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Environmental compliance and remediation costs and the costs of environmental liabilities could
exceed our estimates.
   
    
    estimating pollution control and clean up costs, including sites where preliminary site
investigation or assessments have been completed;
    
    discovering new sites or additional information at existing sites;
    
    quantifying liability under environmental laws that impose joint and several liability on
all potentially responsible parties;
    
    evaluating and understanding environmental laws and regulations, including their
interpretation and enforcement; and
    
    changing environmental laws and regulations that may increase our costs.
    8




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Our operations are subject to operational hazards and uninsured risks.
   The expansion of our business by constructing new facilities subjects us to construction and other
risks that may adversely affect our financial results.
  
    
    our ability to obtain necessary approvals and permits by the FERC and other regulatory
agencies on a timely basis and on terms that are acceptable to us;
    
    the ability to obtain continued access to sufficient capital to fund expansion projects;
    
    the availability of skilled labor, equipment, and materials to complete expansion
projects;
    
    potential changes in federal, state and local statutes, regulations and orders, including
environmental requirements, that prevent a project from proceeding or increase the
anticipated cost of the project;
    
    impediments on our ability to acquire rights-of-way or land rights on a timely basis or
on terms that are acceptable to us;
    
    our ability to construct projects within anticipated costs, including the risk that we
may incur cost overruns resulting from inflation or increased costs of equipment, materials,
labor, lack of contractor productivity, or other factors beyond our control, that we may not be able
to recover from our customers which may be material;
    
    the lack of future growth in natural gas supply; and
    
    the lack of transportation, storage or throughput commitments.
  9




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Competition from pipelines, including the Rockies Express pipeline, that may be able to provide our
shippers with capacity at a lower price could cause us to reduce our rates or otherwise reduce our
revenues.
   Adverse changes in general domestic economic conditions could adversely affect our operating
results, financial condition, or liquidity.
  10




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Risks
Related to Our Affiliation with El Paso and the MLP
  We are a majority owned subsidiary of El Paso.
  
    
    decisions on our financing and capital raising activities;
    
    mergers or other business combinations;
    
    our acquisitions or dispositions of assets; and
    
    our participation in El Pasos cash management program.
  Our business requires the retention and recruitment of a skilled workforce and the loss of
employees could result in the failure to implement our business plan.
  Our relationship with El Paso and its financial condition subjects us to potential risks that are
beyond our control.
   Our
relationship with the MLP subjects us to potential conflicts of
interest and they may favor their interests to the detriment of us.
  11




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ITEM 1B. UNRESOLVED STAFF COMMENTS
  
 ITEM 2. PROPERTIES
   
 ITEM 3. LEGAL PROCEEDINGS
  Fort Morgan Storage Field.
 Rawlins Plant Notice of Probable Violation
 Natural Buttes.
 
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  12




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##### Table of Contents



PART II
 
 ITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
   
 ITEM 6. SELECTED FINANCIAL DATA
  As of or for the Year Ended December 31,2007
    
    
    2006
    
    
    2005
    
    
    2004
    
    
    2003(In million)Operating Results Data:Operating revenues
    
    $
    317
    
    
    $
    305
    
    
    $
    302
    
    
    $
    284
    
    
    $
    278Operating income
    
    
    145
    
    
    
    143
    
    
    
    109
    
    
    
    120
    
    
    
    157Income from continuing operations
    
    
    107
    
    
    
    87
    
    
    
    68
    
    
    
    69
    
    
    
    101Financial Position Data:Total assets
    
    $
    1,769
    
    
    $
    2,292
    
    
    $
    2,121
    
    
    $
    1,792
    
    
    $
    1,786Total long-term debt,
less current maturities
    
    
    575
    
    
    
    600
    
    
    
    700
    
    
    
    100
    
    
    
    280Partners capital/stockholders equity
    
    
    1,043
    
    
    
    1,149
    
    
    
    1,009
    
    
    
    1,127
    
    
    
    1,027
 13




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ITEM 7.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
   Overview
 Business
 Percent of TotalType
    
    Description
    
    Revenues in 2007Reservation
    
    Reservation revenues are from customers (referred to as firm
    
    78customers) that reserve capacity on our pipeline system andstorage facilities. These firm customers are obligated topay a monthly reservation or demand charge, regardless ofthe amount of natural gas they transport or store, for theterm of their contracts.Usage and Other
    
    Usage revenues are from both firm customers and
    
    22interruptible customers (those without reserved capacity)that pay usage charges based on the volume of gas actuallytransported, stored, injected or withdrawn. We also earnrevenue from the processing and sale of natural gas liquidsand other miscellaneous sources.
   14




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Percent of Total
    
    
    
    
    
    
    Percent of TotalBBtu/d
    
    
    Contracted Capacity
    
    
    Reservation Revenue
    
    
    Reservation Revenue(In millions)2008
    
    
    401
    
    
    
    13
    
    
    $
    7
    
    
    
    32009
    
    
    197
    
    
    
    6
    
    
    
    16
    
    
    
    72010
    
    
    260
    
    
    
    8
    
    
    
    14
    
    
    
    62011
    
    
    173
    
    
    
    5
    
    
    
    12
    
    
    
    52012
    
    
    560
    
    
    
    17
    
    
    
    25
    
    
    
    102013 and beyond
    
    
    1,661
    
    
    
    51
    
    
    
    166
    
    
    
    69Total
    
    
    3,252
    
    
    
    100
    
    
    $
    240
    
    
    
    100
 Growth
Projects.
 
    
    High Plains Pipeline. The High Plains expansion project involves the
construction of a 164-mile 24 and 30 interstate gas pipeline system extending from the
Cheyenne Hub in northeast Colorado to PsCos Fort St. Vrain
electric generation plant and other points of interconnection with PsCos
system. The High Plains expansion project will add approximately 900 MMcf/d
of overall transportation capacity to our system, with approximately 664 MMcf/d of
increased transportation capacity from the Cheyenne Hub to the greater Denver area and
approximately 236 MMcf/d of increased capacity from the Young storage facility in Colorado
to the greater Denver area. The estimated total cost of the project is $196 million, with
$98 million to be paid by us. The FERC approval process has commenced, and the estimated
in-service date for the High Plains expansion project is November 2008, subject to receipt
of FERC approval. The increased capacity is fully contracted to cover the cost of service
(including a return on our investment) by PSCo and Coral Energy
Resources pursuant to firm
contracts through 2029 and 2019, respectively.
 
    
    Totem Gas Storage. The Totem gas storage expansion project consists
of the development of the Totem storage field, a natural gas storage field that services
and interconnects with the High Plains pipeline. The Totem Gas storage field will have 10.7
Bcf of natural gas storage capacity, 7 Bcf of which will be working gas capacity and 3.7
Bcf of which will be base gas capacity. The Totem Gas storage expansion project has a 200
MMcf/d maximum withdrawal rate and 100 MMcf/d maximum injection rate. The estimated total
cost of the Totem Gas storage expansion project is $120 million, of which $60 million will
be paid by us. The estimated in-service date for the Totem Gas storage expansion project is
July 2009. FERC approval is required for the Totem Gas storage expansion project. All of
the storage capacity of this new storage field is fully contracted to cover the cost of
service (including a return on our investment) with PSCo pursuant to a firm contract
through 2040.
  15




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Results of Operations
  Operating Results:
    
    2007
    
    
    2006
    
    
    2005(In millions, except volumes)Operating revenues
    
    $
    317
    
    
    $
    305
    
    
    $
    302Operating expenses
    
    
    (172
    )
    
    
    (162
    )
    
    
    (193
    )Operating income
    
    
    145
    
    
    
    143
    
    
    
    109Other income, net
    
    
    5
    
    
    
    2
    
    
    
    5EBIT
    
    
    150
    
    
    
    145
    
    
    
    114Interest and debt expense
    
    
    (49
    )
    
    
    (47
    )
    
    
    (29
    )Affiliated interest income, net
    
    
    50
    
    
    
    41
    
    
    
    23Income taxes
    
    
    (44
    )
    
    
    (52
    )
    
    
    (40
    )Income from continuing operations
    
    
    107
    
    
    
    87
    
    
    
    68Discontinued operations, net of income taxes
    
    
    42
    
    
    
    48
    
    
    
    29Net income
    
    $
    149
    
    
    $
    135
    
    
    $
    97Throughput volumes (BBtu/d)
    
    
    2,339
    
    
    
    2,008
    
    
    
    1,902
 EBIT Analysis:
 2007 to 2006
    
    
    2006 to 2005EBIT
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    EBITRevenue
    
    
    Expense
    
    
    Other
    
    
    Impact
    
    
    Revenue
    
    
    Expense
    
    
    Other
    
    
    ImpactFavorable/(Unfavorable)(In millions)Transportation revenues
    
    $
    21
    
    
    $
    
    
    
    $
    
    
    
    $
    21
    
    
    $
    15
    
    
    $
    
    
    
    $
    
    
    
    $
    15Operational gas,
revaluations and
processing revenues
    
    
    (9
    )
    
    
    (3
    )
    
    
    
    
    
    
    (12
    )
    
    
    (6
    )
    
    
    14
    
    
    
    
    
    
    
    8Operating and general
and administrative
expenses
    
    
    
    
    
    
    (4
    )
    
    
    
    
    
    
    (4
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Property taxes
    
    
    
    
    
    
    (4
    )
    
    
    
    
    
    
    (4
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Environmental reserve
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11
    
    
    
    
    
    
    
    11Other(1)
    
    
    
    
    
    
    1
    
    
    
    3
    
    
    
    4
    
    
    
    (6
    )
    
    
    6
    
    
    
    (3
    )
    
    
    (3
    )Total impact on EBIT
    
    $
    12
    
    
    $
    (10
    )
    
    $
    3
    
    
    $
    5
    
    
    $
    3
    
    
    $
    31
    
    
    $
    (3
    )
    
    $
    31
 
 (1)
    
    Consists of individually insignificant items. Transportation Revenues.
 16




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Operational Gas, Revaluations and Processing Revenues.
  Operating and General and Administrative Expenses
 Property Taxes.
 Environmental Reserve.
 Interest and Debt Expense
  Affiliated Interest Income, Net
  17




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Income Taxes
  18




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Liquidity and Capital Resources
 Liquidity Overview
 Overview of Cash Flows
 2007
    
    2006(In millions)Cash flows from continuing operating activities
    
    $
    (86
    )
    
    $
    180Cash flows from continuing investing activities
    
    
    163
    
    
    
    (180
    )Cash flows from continuing financing activities
    
    
    (77
    )
    
    
    
 Operating Activities.
 Investing Activities.
 Capital Expenditures.
 2007
    
    
    2006(In millions)Maintenance
    
    $
    36
    
    
    $
    52Expansion(1)
    
    
    72
    
    
    
    4Total
    
    $
    108
    
    
    $
    56
 
 (1)
    
    Amount includes our share of costs related to our 50 percent joint investment
in WYCO.  19




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Financing Activities.
  Credit Profile
 Contractual Obligations
  Due in
    
    
    Due in
    
    
    Due inless than
    
    
    1 to 3
    
    
    4 to 51 Year
    
    
    Years
    
    
    Years
    
    
    Thereafter
    
    
    Total(In millions)Long-term financing obligations:Principal
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    575
    
    
    $
    575Interest
    
    
    40
    
    
    
    77
    
    
    
    77
    
    
    
    261
    
    
    
    455Other contractual liabilities
    
    
    5
    
    
    
    3
    
    
    
    1
    
    
    
    2
    
    
    
    11Operating leases
    
    
    2
    
    
    
    2
    
    
    
    
    
    
    
    
    
    
    
    4Other
contractual commitments and
purchase obligations:Transportation
commitments
    
    
    6
    
    
    
    12
    
    
    
    8
    
    
    
    2
    
    
    
    28Other
    
    
    25
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    25Total contractual obligations
    
    $
    78
    
    
    $
    94
    
    
    $
    86
    
    
    $
    840
    
    
    $
    1,098
 Long Term Financing Obligations (Principal and Interest).
 Other Contractual Liabilities.
 Operating Leases.
 20




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Other Contractual Commitments.
  Transportation Commitments.
  Other Commitments.
 Commitments and Contingencies
  Off-Balance sheet Arrangements
  Critical Accounting Policies and Estimates
  Cost-Based Regulation. Accounting for the Effects of Certain
Types of Regulation.
 Accounting for Environmental Reserves.
  21




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Accounting for Postretirement Benefits.
  New Accounting Pronouncements Issued But Not Yet Adopted
 New Accounting
Pronouncements Issued But Not Yet Adopted
 22




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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  December 31, 2007Expected Fiscal Year of Maturity
    
    
    
    
    
    December 31, 2006of Carrying Amounts
    
    
    
    
    
    Carrying2015 and Thereafter
    
    Total
    
    Fair Value
    
    Amount
    
    Fair Value(In millions, except for rates)Liabilities:Long-term debt, including
current maturitiesfixed rate
    
    $
    575
    
    
    $
    575
    
    
    $
    598
    
    
    $
    700
    
    
    $
    716Average effective interest rate
    
    
    7.1
    %
  23




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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
 MANAGEMENTS ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
  
    
    Pertain to the maintenance of records that, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of our assets;
    
    Provide reasonable assurance that transactions are recorded as necessary to permit
preparation of the financial statements in accordance with generally accepted accounting
principles, and that our receipts and expenditures are being made only in accordance with
authorizations of our management and directors; and
    
    Provide reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use or disposition of our assets that could have a material effect on the
financial statements.
 Internal Control  Integrated Framework
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Report of Independent Registered Public Accounting Firm
     Accounting for Uncertainty in Income Taxes an interpretation of FASB Statement No. 109; Employers Accounting for Defined Benefit Pension and Other
Postretirement Plans  An Amendment of FASB Statements No. 87, 88, 106, and 132 (R);
  
 25




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Report of Independent Registered Public Accounting Firm
    
 26




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COLORADO INTERSTATE GAS COMPANY
CONSOLIDATED STATEMENTS OF INCOME
(In millions)
 Year Ended December 31,2007
    
    
    2006
    
    
    2005Operating revenues
    
    $
    317
    
    
    $
    305
    
    
    $
    302Operating expensesOperation and maintenance
    
    
    126
    
    
    
    120
    
    
    
    150Depreciation and amortization
    
    
    31
    
    
    
    30
    
    
    
    30Taxes, other than income taxes
    
    
    15
    
    
    
    12
    
    
    
    13172
    
    
    
    162
    
    
    
    193Operating income
    
    
    145
    
    
    
    143
    
    
    
    109Other income, net
    
    
    5
    
    
    
    2
    
    
    
    5Interest and debt expense
    
    
    (49
    )
    
    
    (47
    )
    
    
    (29
    )Affiliated interest income, net
    
    
    50
    
    
    
    41
    
    
    
    23Income before income taxes
    
    
    151
    
    
    
    139
    
    
    
    108Income taxes
    
    
    44
    
    
    
    52
    
    
    
    40Income from continuing operations
    
    
    107
    
    
    
    87
    
    
    
    68Discontinued operations, net of income taxes
    
    
    42
    
    
    
    48
    
    
    
    29Net income
    
    $
    149
    
    
    $
    135
    
    
    $
    97
  27




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##### Table of Contents



COLORADO INTERSTATE GAS COMPANY
CONSOLIDATED BALANCE SHEETS
(In millions, except share amounts)
 December 31,2007
    
    
    2006ASSETSCurrent assetsCash and cash equivalents
    
    $
    
    
    
    $
    Accounts and notes receivableCustomer
    
    
    
    
    
    
    2Affiliates
    
    
    181
    
    
    
    247Other
    
    
    1
    
    
    
    1Materials and supplies
    
    
    5
    
    
    
    5Prepaids and other
    
    
    1
    
    
    
    14Assets of discontinued operations
    
    
    
    
    
    
    22Total current assets
    
    
    188
    
    
    
    291Property, plant and equipment, at cost
    
    
    1,413
    
    
    
    1,283Less accumulated depreciation and amortization
    
    
    392
    
    
    
    372Total property, plant and equipment, net
    
    
    1,021
    
    
    
    911Other assetsNotes receivable from affiliates
    
    
    503
    
    
    
    566Assets from discontinued operations
    
    
    
    
    
    
    477Other
    
    
    57
    
    
    
    47560
    
    
    
    1,090Total assets
    
    $
    1,769
    
    
    $
    2,292LIABILITIES AND PARTNERS CAPITAL/STOCKHOLDERS EQUITYCurrent liabilitiesAccounts payableTrade
    
    $
    14
    
    
    $
    9Affiliates
    
    
    8
    
    
    
    10Other
    
    
    15
    
    
    
    10Current maturities of long-term debt
    
    
    
    
    
    
    100Taxes payable
    
    
    10
    
    
    
    65Regulatory liabilities
    
    
    12
    
    
    
    7Contractual deposits
    
    
    37
    
    
    
    8Liabilities related to discontinued operations
    
    
    
    
    
    
    34Other
    
    
    13
    
    
    
    11Total current liabilities
    
    
    109
    
    
    
    254Long-term debt, less current maturities
    
    
    575
    
    
    
    600Other liabilitiesDeferred income taxes
    
    
    
    
    
    
    188Liabilities related to discontinued operations
    
    
    
    
    
    
    63Other
    
    
    42
    
    
    
    3842
    
    
    
    289Commitments and contingencies (Note 7)Partners
capital/stockholders equityCommon stock, par value $1 per share; 1,000 shares authorized, issued and outstanding
    
    
    
    
    
    
    Additional paid-in capital
    
    
    
    
    
    
    47Retained earnings
    
    
    
    
    
    
    1,097Accumulated other comprehensive income
    
    
    
    
    
    
    5Partners capital
    
    
    1,043
    
    
    
    Total
partners capital/stockholders equity
    
    
    1,043
    
    
    
    1,149Total
liabilities and partners capital/stockholders equity
    
    $
    1,769
    
    
    $
    2,292
  28




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##### Table of Contents



COLORADO INTERSTATE GAS COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
 Year Ended December 31,2007
    
    
    2006
    
    
    2005Cash flows from operating activitiesNet income
    
    $
    149
    
    
    $
    135
    
    
    $
    97Less income from discontinued operations, net of income taxes
    
    
    42
    
    
    
    48
    
    
    
    29Net income before discontinued operations
    
    
    107
    
    
    
    87
    
    
    
    68Adjustments to reconcile net income to net cash from operating activitiesDepreciation and amortization
    
    
    31
    
    
    
    30
    
    
    
    30Deferred income taxes
    
    
    8
    
    
    
    4
    
    
    
    4Other non-cash income items
    
    
    8
    
    
    
    28
    
    
    
    (2
    )Asset and liability changesAccounts receivable
    
    
    3
    
    
    
    41
    
    
    
    (2
    )Accounts payable
    
    
    6
    
    
    
    (9
    )
    
    
    7Taxes payable
    
    
    (56
    )
    
    
    14
    
    
    
    1Current assets
    
    
    6
    
    
    
    8
    
    
    
    (13
    )Current liabilities
    
    
    
    
    
    
    (8
    )
    
    
    14Non-current assets
    
    
    (4
    )
    
    
    (16
    )
    
    
    6Non-current liabilities
    
    
    (195
    )
    
    
    1
    
    
    
    3Cash provided by (used in) continuing activities
    
    
    (86
    )
    
    
    180
    
    
    
    116Cash provided by discontinued activities
    
    
    54
    
    
    
    51
    
    
    
    83Net cash provided by (used in) provided by operating activities
    
    
    (32
    )
    
    
    231
    
    
    
    199Cash flows from investing activitiesAdditions to property, plant and equipment
    
    
    (108
    )
    
    
    (56
    )
    
    
    (84
    )Net change in notes receivable from affiliates
    
    
    271
    
    
    
    (89
    )
    
    
    (227
    )Cash paid for acquisitions of affiliates
    
    
    
    
    
    
    (37
    )
    
    
    Other
    
    
    
    
    
    
    2
    
    
    
    Cash provided by (used in) continuing activities
    
    
    163
    
    
    
    (180
    )
    
    
    (311
    )Cash used in discontinued activities
    
    
    (83
    )
    
    
    (51
    )
    
    
    (53
    )Net cash used in investing activities
    
    
    80
    
    
    
    (231
    )
    
    
    (364
    )Cash flows from financing activitiesNet proceeds from issuance of long-term debt
    
    
    
    
    
    
    
    
    
    
    590Payments to retire long-term debt
    
    
    (128
    )
    
    
    
    
    
    
    (180
    )Contribution from parent
    
    
    7
    
    
    
    
    
    
    
    Distribution
from (contribution to) discontinued operations
    
    
    44
    
    
    
    
    
    
    
    (215
    )Cash provided by (used in) continuing activities
    
    
    (77
    )
    
    
    
    
    
    
    195Cash provided by (used in) discontinued activities
    
    
    29
    
    
    
    
    
    
    
    (30
    )Net cash
provided by (used in) financing activities
    
    
    (48
    )
    
    
    
    
    
    
    165Net change in cash and cash equivalents
    
    
    
    
    
    
    
    
    
    
    Cash and cash equivalentsBeginning of period
    
    
    
    
    
    
    
    
    
    
    End of period
    
    $
    
    
    
    $
    
    
    
    $
    
  29




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##### Table of Contents



COLORADO INTERSTATE GAS COMPANY
CONSOLIDATED STATEMENTS OF PARTNERS CAPITAL/STOCKHOLDERS EQUITY
(In millions, except share amounts)
 AccumulatedAdditional
    
    
    
    
    
    
    other
    
    
    Total
    
    
    TotalCommon stock
    
    
    paid-in
    
    
    Retained
    
    
    comprehensive
    
    
    stockholders
    
    
    partnersShares
    
    
    Amount
    
    
    capital
    
    
    earnings
    
    
    income (loss)
    
    
    equity
    
    

capitalJanuary 1, 2005
    
    
    1,000
    
    
    $
    
    
    
    $
    108
    
    
    $
    1,019
    
    
    $
    
    
    
    $
    1,127
    
    
    $
    Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    97
    
    
    
    
    
    
    
    97Distribution
    
    
    
    
    
    
    
    
    
    
    (61
    )
    
    
    (154
    )
    
    
    
    
    
    
    (215
    )
    
    
    December 31, 2005
    
    
    1,000
    
    
    
    
    
    
    
    47
    
    
    
    962
    
    
    
    
    
    
    
    1,009
    
    
    
    Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    135
    
    
    
    
    
    
    
    135Adoption of SFAS No. 158,
net of income taxes of $3
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5
    
    
    
    5
    
    
    
    December 31, 2006
    
    
    1,000
    
    
    
    
    
    
    
    47
    
    
    
    1,097
    
    
    
    5
    
    
    
    1,149
    
    
    
    Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    111
    
    
    
    
    
    
    
    111Reclassification to
regulatory liability (See
Note 8)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5
    )
    
    
    (5
    )
    
    
    October 31, 2007
    
    
    1,000
    
    
    
    
    
    
    
    47
    
    
    
    1,208
    
    
    
    
    
    
    
    1,255
    
    
    
    Conversion to general partnership (November 1, 2007)
    
    
    (1,000
    )
    
    
    
    
    
    
    (47
    )
    
    
    (1,208
    )
    
    
    
    
    
    
    (1,255
    )
    
    
    1,255Contributions
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    82Distributions
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (332
    )Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    38December 31, 2007
    
    
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    1,043
  30




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##### Table of Contents



COLORADO INTERSTATE GAS COMPANY
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 1. Summary of Significant Accounting Policies
 Basis of Presentation and Principles of Consolidation
    Use of Estimates
  Regulated Operations
 Accounting for the
Effects of Certain Types of Regulation
 Cash and Cash Equivalents
  31




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##### Table of Contents



Allowance for Doubtful Accounts
  Materials and Supplies
  Natural Gas Imbalances
   Property, Plant and Equipment
     32




---



##### Table of Contents



Asset and Investment Impairments
   Revenue Recognition
  Environmental Costs and Other Contingencies
 Environmental Costs.
 33




---



##### Table of Contents



Other Contingencies
 Income Taxes
  Accounting for Uncertainty in Income Taxes, an interpretation of FASB No. 109.
 Accounting for Asset Retirement Obligations
 Accounting
for Asset Retirement Obligations , Accounting for Conditional Asset Retirement Obligations.
   34




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##### Table of Contents



Postretirement Benefits
  Employers Accounting for Defined Benefit
Pension and Other Postretirement Plans  an Amendment of FASB Statements No. 87, 88, 106, and
132(R) .
 New Accounting Pronouncements Issued But Not Yet Adopted
  Fair Value Measurements. Fair Value
Measurements
 Measurement Date of Postretirement Benefits
 Fair Value Option. Fair Value Option for
Financial Assets and Financial Liabilities  ,
Accounting for Certain Investments in Debt and Equity Securities,
 Business Combinations. Business
Combinations,
 35




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##### Table of Contents



Noncontrolling Interests. Noncontrolling
Interests in Consolidated Financial Statements,
 2. Acquisitions and Divestitures
 Acquisitions.
 Divestitures
 2007
    
    
    2006
    
    
    2005(In millions)Revenues
    
    $
    97
    
    
    $
    98
    
    
    $
    81Costs and expenses
    
    
    (41
    )
    
    
    (30
    )
    
    
    (43
    )Other income
    
    
    15
    
    
    
    12
    
    
    
    10Affiliated interest expense, net
    
    
    (8
    )
    
    
    (6
    )
    
    
    (4
    )Income before income taxes
    
    
    63
    
    
    
    74
    
    
    
    44Income taxes
    
    
    21
    
    
    
    26
    
    
    
    15Income from discontinued operations, net of income taxes
    
    $
    42
    
    
    $
    48
    
    
    $
    29
 As ofDecember 31,2006(In millions)Assets of discontinued operationsAccounts and notes receivable
    
    $
    12Other current assets
    
    
    10Property, plant and equipment, net
    
    
    436Other non-current assets
    
    
    41Total assets
    
    $
    499Liabilities of discontinued operationsAccounts payable
    
    $
    11Other current liabilities
    
    
    23Deferred income taxes
    
    
    54Other non-current liabilities
    
    
    9Total liabilities
    
    $
    97
 36




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##### Table of Contents



3. Income Taxes
  Components of Income Taxes.
 2007
    
    
    2006
    
    
    2005(In millions)CurrentFederal
    
    $
    33
    
    
    $
    43
    
    
    $
    33State
    
    
    3
    
    
    
    5
    
    
    
    336
    
    
    
    48
    
    
    
    36DeferredFederal
    
    
    7
    
    
    
    4
    
    
    
    4State
    
    
    1
    
    
    
    
    
    
    
    8
    
    
    
    4
    
    
    
    4Total income taxes
    
    $
    44
    
    
    $
    52
    
    
    $
    40
 Effective Tax Rate Reconciliation.
 2007
    
    
    2006
    
    
    2005(In millions, except for rates)Income taxes at the statutory federal rate of 35%
    
    $
    53
    
    
    $
    49
    
    
    $
    38Increase (decrease)Pretax income not subject to income taxes after conversion to partnership
    
    
    (12
    )
    
    
    
    
    
    
    State income taxes, net of federal income tax benefit
    
    
    3
    
    
    
    3
    
    
    
    2Income taxes
    
    $
    44
    
    
    $
    52
    
    
    $
    40Effective tax rate
    
    
    29
    %
    
    
    37
    %
    
    
    37
    %
 Deferred Tax Assets and Liabilities.
 (In millions)Deferred tax liabilitiesProperty, plant and equipment
    
    $
    182Other
    
    
    18Total deferred tax liability
    
    
    200Deferred tax assetsOther
    
    
    18Total deferred tax asset
    
    
    18Net deferred tax liability
    
    $
    182
 37




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##### Table of Contents



4. Financial Instruments
  2007
    
    
    2006Carrying
    
    
    Fair
    
    
    Carrying
    
    
    FairAmount
    
    
    Value
    
    
    Amount
    
    
    Value(In millions)Long-term debt, including current maturities
    
    $
    575
    
    
    $
    598
    
    
    $
    700
    
    
    $
    716
 5. Regulatory Assets and Liabilities
  2007
    
    
    2006(In millions)Non-current regulatory assetsTaxes on capitalized funds used during construction
    
    $
    12
    
    
    $
    11Unamortized loss on reacquired debt
    
    
    3
    
    
    
    Postretirement benefits
    
    
    3
    
    
    
    4Under-collected income taxes
    
    
    1
    
    
    
    1Total regulatory assets
    
    $
    19
    
    
    $
    16Current regulatory liabilities
    
    $
    12
    
    
    $
    7Non-current regulatory liabilitiesProperty and plant depreciation
    
    
    20
    
    
    
    23Excess recovery of income taxes
    
    
    1
    
    
    
    1Postretirement benefits
    
    
    13
    
    
    
    Total regulatory liabilities
    
    $
    46
    
    
    $
    31
 6. Debt and Credit Facilities
 Debt
 2007
    
    
    2006(In millions)5.95% Senior Notes due March 2015
    
    $
    75
    
    
    $
    2006.80% Senior Notes due November 2015
    
    
    400
    
    
    
    4006.85% Senior Debentures due June 2037
    
    
    100
    
    
    
    100575
    
    
    
    700Less:
Current maturities (1)
    
    
    
    
    
    
    100Total long-term debt, less current maturities
    
    $
    575
    
    
    $
    600
 
 (1)
    
    Our 6.85% senior debentures were reclassified as long-term in our balance sheet
as no holders exercised their early redemption option in June 2007 and the option
expired. 38




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##### Table of Contents



Credit Facilities
  7. 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
   39




---



##### Table of Contents



Balance at January 1, 2007
    
    $
    17Additions/adjustments for remediation activities
    
    
    1Payments for remediation activities
    
    
    (3
    )Balance at December 31, 2007
    
    $
    15
   Regulatory Matter
 Fuel Recovery Mechanisms.
 Commitments, Purchase Obligations and Other Matters
 Commercial Commitments
 40




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##### Table of Contents



Operating
Leases and Other Commercial Commitments.
 Year EndingDecember 31,
    
    (In millions)2008
    
    $
    22009
    
    
    2Total
    
    $
    4
   Guarantees.
 8. Retirement Benefits
 Pension and Retirement Benefits.
 Postretirement 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,
 41




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##### Table of Contents



Change in Accumulated Postretirement Benefit Obligation, Plan Assets and Funded Status
 2007
    
    
    2006(In millions)Change in accumulated postretirement benefit obligation:Accumulated postretirement benefit obligation at beginning of
period
    
    $
    11
    
    
    $
    11Participant contributions
    
    
    
    
    
    
    1Actuarial gain
    
    
    (4
    )
    
    
    (2
    )Benefits paid
    
    
    (1
    )
    
    
    (2
    )Other
    
    
    1
    
    
    
    3Accumulated postretirement benefit obligation at end of period
    
    $
    7
    
    
    $
    11Change in plan assets:Fair value of plan assets at beginning of period
    
    $
    17
    
    
    $
    16Actual return on plan assets
    
    
    2
    
    
    
    1Employer contributions
    
    
    
    
    
    
    1Participant contributions
    
    
    
    
    
    
    1Benefits paid
    
    
    (1
    )
    
    
    (2
    )Fair value of plan assets at end of period
    
    $
    18
    
    
    $
    17Reconciliation of funded status:Fair value of plan assets at September 30
    
    $
    18
    
    
    $
    17Less: accumulated postretirement benefit obligation, end of period
    
    
    7
    
    
    
    11Net asset at December 31
    
    $
    11
    
    
    $
    6
 Expected Payment of Future Benefits.
 Year EndingDecember 31,2008
    
    $
    12009
    
    
    12010
    
    
    12011
    
    
    12012
    
    
    12013 - 2017
    
    
    3
 Components
of Net Benefit Cost (Income).
 2007
    
    
    2006
    
    
    2005(In millions)Interest cost
    
    $
    1
    
    
    $
    
    
    
    $
    Expected return on plan assets
    
    
    (1
    )
    
    
    (1
    )
    
    
    Other
    
    
    (1
    )
    
    
    3
    
    
    
    Net
postretirement benefit cost (income)
    
    $
    (1
    )
    
    $
    2
    
    
    $
    
 Actuarial Assumptions and Sensitivity Analysis
 2007
    
    2006
    
    2005(Percent)Assumptions related to benefit obligations at September 30:Discount rate
    
    
    6.05
    
    
    
    5.50Assumptions related to benefit costs at December 31:Discount rate
    
    
    5.50
    
    
    
    5.25
    
    
    
    5.75Expected return on plan assets(1)
    
    
    8.00
    
    
    
    8.00
    
    
    
    7.50
 
 (1)
    
    The expected return on plan assets is a pre-tax rate of return based on our
targeted portfolio of investments. Our postretirement benefit plans investment earnings are
subject to unrelated business income taxes at a rate of 35%. The expected return on plan
assets for our postretirement benefit plan is calculated using the after-tax rate of return. 42




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##### Table of Contents



Plan Assets.
 Actual
    
    
    ActualAsset Category
    
    Target
    
    
    2007
    
    
    2006(Percent)Equity securities
    
    
    65
    
    
    
    63
    
    
    
    61Debt securities
    
    
    35
    
    
    
    33
    
    
    
    33Cash and
cash equivalents
    
    
    
    
    
    
    4
    
    
    
    6Total
    
    
    100
    
    
    
    100
    
    
    
    100
 9. Transactions with Major Customer
  2007
    
    2006
    
    2005(In millions)PSCo
    
    $
    91
    
    
    $
    95
    
    
    $
    95
 10. Supplemental Cash Flow Information
  2007
    
    2006
    
    2005(In millions)Interest paid, net of capitalized interest
    
    $
    52
    
    
    $
    48
    
    
    $
    22Income tax payments
    
    
    277
    (1)
    
    
    34
    
    
    
    34
 
 (1)  Includes amounts related to the settlement of current and deferred tax balances due
to the conversion to a partnership in November 2007 (see Notes 3
and 11). 11. Investment in Unconsolidated Affiliate and Transactions with Affiliates
 Investment in Unconsolidated Affiliate
  Transactions with Affiliates
 Contributions/Distributions.
  Income Taxes.
 43




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##### Table of Contents



Cash
Management Program.
 Accounts Receivable Sales Program.
 Other Affiliate Balances.
 Affiliate Revenues and Expenses.
   2007
    
    2006
    
    2005(In millions)Revenues from affiliates
    
    $
    20
    
    
    $
    22
    
    
    $
    28Operation and maintenance expenses from affiliates
    
    
    60
    
    
    
    53
    
    
    
    57Reimbursements of operating expenses charged to affiliates
    
    
    20
    
    
    
    18
    
    
    
    17
 44




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##### Table of Contents



12. Supplemental Selected Quarterly Financial Information (Unaudited)
  Quarters EndedMarch 31
    
    June 30
    
    September 30
    
    December 31
    
    Total(In millions)2007Operating revenues
    
    $
    84
    
    
    $
    75
    
    
    $
    67
    
    
    $
    91
    
    
    $
    317Operating income
    
    
    40
    
    
    
    32
    
    
    
    28
    
    
    
    45
    
    
    
    145Income from continuing operations
    
    
    25
    
    
    
    21
    
    
    
    20
    
    
    
    41
    
    
    
    107Discontinued operations, net of income taxes
    
    
    8
    
    
    
    14
    
    
    
    12
    
    
    
    8
    
    
    
    42Net income
    
    
    33
    
    
    
    35
    
    
    
    32
    
    
    
    49
    
    
    
    1492006Operating revenues
    
    $
    82
    
    
    $
    73
    
    
    $
    68
    
    
    $
    82
    
    
    $
    305Operating income
    
    
    46
    
    
    
    34
    
    
    
    21
    
    
    
    42
    
    
    
    143Income from continuing operations
    
    
    27
    
    
    
    21
    
    
    
    14
    
    
    
    25
    
    
    
    87Discontinued operations, net of income taxes
    
    
    14
    
    
    
    12
    
    
    
    11
    
    
    
    11
    
    
    
    48Net income
    
    
    41
    
    
    
    33
    
    
    
    25
    
    
    
    36
    
    
    
    135
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SCHEDULE II
 COLORADO INTERSTATE GAS COMPANY
 VALUATION AND QUALIFYING ACCOUNTS
Years Ended December 31, 2007, 2006 and 2005
 (In millions)
 Balance at
    
    Charged to
    
    
    
    
    
    Charged to
    
    BalanceBeginning
    
    Costs and
    
    
    
    
    
    Other
    
    at EndDescription
    
    of Period
    
    Expenses
    
    Deductions(2)
    
    Accounts
    
    of Period2007(1)Legal reserves
    
    $
    
    
    
    $
    3
    
    
    $
    (3
    )
    
    $
    
    
    
    $
    Environmental reserves
    
    
    17
    
    
    
    1
    
    
    
    (3
    )
    
    
    
    
    
    
    152006(1)Allowance for doubtful accounts
    
    $
    1
    
    
    $
    
    
    
    $
    
    
    
    $
    (1
    )
    
    $
    Environmental reserves
    
    
    23
    
    
    
    2
    
    
    
    (8
    )
    
    
    
    
    
    
    172005(1)Allowance for doubtful accounts
    
    $
    2
    
    
    $
    
    
    
    $
    
    
    
    $
    (1
    )
    
    $
    1Environmental reserves
    
    
    14
    
    
    
    13
    
    
    
    (4
    )
    
    
    
    
    
    
    23
 
 (1)
    
    Amounts reflect the reclassification of certain entities as discontinued operations.(2)
    
    Primarily relates to payments for environmental remediation activities. 46




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##### Table of Contents



ITEM 9.
    
    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
  
 ITEM 9A. CONTROLS AND PROCEDURES
 Evaluation of Disclosure Controls and Procedures
  Changes in Internal Control Over Financial Reporting
  
 ITEM 9A(T). CONTROLS AND PROCEDURES
  
 ITEM 9B. OTHER INFORMATION
  47




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PART III
 
 ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
 Management Committee and Executive Officers
    Name
    
    Age
    
    PositionJames J. Cleary
    
    
    53
    
    
    President and Management Committee MemberJohn R. Sult
    
    
    48
    
    
    Senior Vice President, Chief Financial Officer and ControllerJames C. Yardley
    
    
    56
    
    
    Management Committee MemberDaniel B. Martin
    
    
    51
    
    
    Senior Vice President and Management Committee MemberThomas L. Price
    
    
    52
    
    
    Vice President and Management Committee Member
 James J. Cleary.
 John R. Sult
 48




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##### Table of Contents



James C. Yardley
 Daniel B. Martin
 Thomas L. Price.
 Audit Committee, Compensation Committee and Code of Ethics
 www.elpaso.com
 
 ITEM 11. EXECUTIVE COMPENSATION
   49




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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
   Shares of
    
    SharesCommon
    
    Underlying
    
    Total SharesStock
    
    Options
    
    of CommonOwned
    
    Exercisable
    
    Stock
    
    Percentage of Total SharesDirectly or
    
    Within
    
    Beneficially
    
    of Common StockName of Beneficial Owner
    
    Indirectly
    
    60 Days(1)
    
    Owned
    
    Beneficially Owned(2)James J. Cleary
    
    
    56,165
    
    
    
    238,026
    
    
    
    294,191
    
    
    
    *John R. Sult
    
    
    52,380
    
    
    
    51,452
    
    
    
    103,832
    
    
    
    *James C. Yardley
    
    
    177,722
    
    
    
    332,685
    
    
    
    510,407
    
    
    
    *Daniel B. Martin
    
    
    123,907
    
    
    
    284,002
    
    
    
    407,909
    
    
    
    *Thomas L. Price
    
    
    52,899
    
    
    
    67,112
    
    
    
    120,011
    
    
    
    *All management
committee members and
executive officers as a
group (5 persons)
    
    
    463,073
    
    
    
    973,277
    
    
    
    1,436,350
    
    
    
    *
 
 *
    
    Less than 1%.(1)
    
    The shares indicated represent stock options granted under El Pasos current
or previous stock option plans, which are currently exercisable or which will become
exercisable within 60 days of February 19, 2008. Shares subject to options cannot be
voted.(2)
    
    Based on 700,758,051 shares outstanding as of February 19, 2008. 
 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
 El Paso Master Limited Partnership (MLP)
  Guarantee of WIC Purchases of Natural Gas and Natural Gas Liquids from BP Energy Company
  50




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##### Table of Contents



CIG Operating Agreements
    Transportation Agreements
    51




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##### Table of Contents



Interconnection and Operational Balancing Agreements and Other Inter-Affiliate Agreements
    Other Agreements and Transactions
   
 ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
 Audit Fees
  All Other Fees
  52




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Policy for Approval of Audit and Non-Audit Fees
  
 PART IV
 
 ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
 (a) The following documents are filed as part of this report:
   PageReports of Independent Registered Public Accounting Firms
    
    
    25Consolidated Statements of Income
    
    
    27Consolidated Balance Sheets
    
    
    28Consolidated Statements of Cash Flows
    
    
    29Consolidated
Statements of Partners Capital/Stockholders Equity
    
    
    30Notes to Consolidated Financial Statements
    
    
    312. Financial statement schedulesSchedule II  Valuation and Qualifying Accounts
    
    
    46
    Undertaking
  53




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##### Table of Contents



SIGNATURES
  COLORADO INTERSTATE GAS COMPANYBy:

/s/ James J. ClearyJames J. ClearyPresident  Signature
    
    Title
    
    Date/s/ James J. Cleary
    
    President and Management Committee Member

    March 4, 2008James J. Cleary
    
    (Principal Executive Officer)/s/ John R. Sult
    
    Senior Vice President,
    
    March 4, 2008John R. Sult
    
    Chief Financial Officer and Controller
(Principal Accounting and Financial Officer)/s/ James C. Yardley
    
    Management Committee Member
    
    March 4, 2008James C. Yardley/s/ Daniel B. Martin
    
    Senior Vice President and Management
    
    March 4, 2008Daniel B. Martin
    
    Committee Member/s/ Thomas L. Price
    
    Vice President and Management Committee
    
    March 4, 2008Thomas L. Price
    
    Member
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COLORADO INTERSTATE GAS COMPANY
 
 EXHIBIT INDEX
 December 31, 2007
  ExhibitNumber
    
    Description3.A
    
    Certificate of Conversion (Exhibit 4.A to our Form 8-K filed November 7, 2007).3.B
    
    Statement of Partnership Existence (Exhibit 4.B to our Form 8-K filed November 7, 2007).3.C
    
    General Partnership Agreement dated November 1, 2007 (Exhibit 4.C to our Form 8-K filed
November 7, 2007).4.A
    
    Indenture dated as of June 27, 1997, between Colorado Interstate Gas Company and The
Bank of New York Trust Company, N.A. (successor to Harris Trust and Savings Bank), as
Trustee (Exhibit 4.A to our 2004 Form 10-K); First Supplemental Indenture dated as of
June 27, 1997, between Colorado Interstate Gas Company and The Bank of New York Trust
Company, N.A. (successor to Harris Trust and Savings Bank), as Trustee (Exhibit 4.A.1
to our 2004 Form 10-K); Second Supplemental Indenture dated as of March 9, 2005 between
Colorado Interstate Gas Company and The Bank of New York Trust Company, N.A., as
Trustee (Exhibit 4.A to our Form 8-K filed March 14, 2005); Third Supplemental
Indenture dated as of November 1, 2005 between Colorado Interstate Gas Company and The
Bank of New York Trust Company, N.A., as trustee (Exhibit 4.A to our Form 8-K filed
with the SEC on November 2, 2005); Fourth Supplemental Indenture dated October 15, 2007
by and between CIG and The Bank of New York Trust Company, N.A., as trustee, to
Indenture dated as of June 27, 1999 (Exhibit 4.A to our Form 8-K filed
with the SEC on October 16, 2007); Fifth Supplemental Indenture dated November 1, 2007
by and among CIG, Colorado Interstate Issuing Corporation, and The Bank of New York
Trust Company, N.A., as trustee, to Indenture dated as of June 27, 1997 (Exhibit 4.A to
our Form 8-K filed with the SEC on November 7, 2007).10.A
    
    No-Notice Storage and Transportation Delivery Service Agreement Rate Schedule NNT-1,
dated October 1, 2001, between Colorado Interstate Gas Company and Public Service
Company of Colorado (Exhibit 10.G to our 2005 First Quarter Form 10-Q).10.C
    
    Purchase and Sale Agreement, By and Among CIG Gas Supply Company, Wyoming Gas Supply
Inc., WIC Holdings Inc., El Paso Wyoming Gas Supply Company and Wyoming Interstate
Company, Ltd., dated November 1, 2005 (Exhibit 10.B to our Form 8-K filed with the SEC
on November 2, 2005).10.F
    
    First Tier Receivables Sale Agreement dated November 3, 2006 between Colorado Interstate Gas
Company and CIG Finance Company L.L.C. (Exhibit 10.A to our Form 8-K filed with the SEC on
November 9, 2006).10.G
    
    Second Tier Receivables Sale Agreement dated November 3, 2006 between CIG Finance Company L.L.C.
and CIG Funding Company L.L.C. (Exhibit 10.B to our Form 8-K filed with the SEC on November 9,
2006).10.H
    
    Receivables Purchase Agreement dated November 3, 2006 among CIG Funding Company L.L.C., as Seller,
Colorado Interstate Gas Company, as Servicer, Starbird Funding Corporation, as the initial Conduit
Investor and Committed Investor, the other investors from time to time parties thereto, BNP
Paribas, New York Branch, as the initial Managing Agent, the other Managing Agents from time to
time parties thereto, and BNP Paribas, New York Branch, as Program Agent (Exhibit 10.C to our
Form 8-K filed with the SEC on November 9, 2006).*10.H.1
    
    Amendment No. 1, dated as of November 2, 2007, to the Receivables Purchase Agreement dated as of
November 3, 2006, among CIG Funding Company, L.L.C., Colorado Interstate Gas Company, Starbird
Funding Corporation and the other funding entities from time to time party hereto as Investors,
BNP Paribas, New York Branch, and the other financial institutions from time to time party hereto
as Managing Agents, and BNP Paribas, New York Branch, as Program Agent.
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ExhibitNumber
    
    Description*21
    
    Subsidiaries of Colorado Interstate Gas Company*31.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.
 56