sv4
As filed with the Securities and Exchange Commission on
May 12, 2010
Registration
No. 333-
UNITED STATES SECURITIES AND
EXCHANGE COMMISSION
Washington, D.C.
20549
Form S-4
REGISTRATION
STATEMENT
UNDER
THE SECURITIES ACT OF
1933
Williams Partners
L.P.
(Exact Name of Registrant as
Specified in Its Charter)
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Delaware
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4922
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20-2485124
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(State or Other Jurisdiction
of
Incorporation or Organization)
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(Primary Standard Industrial
Classification Code Number)
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(I.R.S. Employee
Identification Number)
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One Williams Center
Tulsa, Oklahoma 74172-0172
(918) 573-2000
(Address, Including Zip Code,
and Telephone Number, Including Area Code, of Registrants
Principal Executive Offices)
James J. Bender, Esq.
General Counsel
Williams Partners GP LLC
One Williams Center, Suite 4900
Tulsa, Oklahoma 74172-0172
(918) 573-2000
(Name, Address, Including Zip
Code, and Telephone Number, Including Area Code, of Agent For
Service)
With a copy to:
Richard M. Russo
Gibson, Dunn & Crutcher LLP
1801 California Street, Suite 4200
Denver, Colorado 80202
(303) 298-5700
Approximate date of commencement of proposed sale to the
public: As soon as practicable after this
registration statement becomes effective.
If the securities being registered on this Form are being
offered in connection with the formation of a holding company
and there is compliance with General Instruction G, check
the following
box. o
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act,
check the following box and list the Securities Act registration
statement number of the earlier effective registration statement
for the same
offering. o
If this Form is a post-effective amendment filed pursuant to
Rule 462(d) under the Securities Act, check the following
box and list the Securities Act registration statement number of
the earlier effective registration statement for the same
offering. o
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated
filer, or a smaller reporting company. See the definitions of
large accelerated filer, accelerated
filer and smaller reporting company in Rule
12b-2 of the
Exchange Act. (Check one):
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Large
accelerated
filer þ
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Accelerated
filer o
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Non-accelerated
filer o
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Smaller reporting
company o
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(Do not check if a smaller
reporting company)
** If applicable, place an X in the box to designate the
appropriate rule provision relied upon in conducting this
transaction:
Exchange Act
Rule 13e-4(i)
(Cross-Border Issuer Tender
Offer) o
Exchange Act
Rule 14d-1(d)
(Cross-Border Third-Party Tender
Offer) o
CALCULATION
OF REGISTRATION FEE
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Proposed
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Proposed Maximum
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Amount of
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Title of Each Class of
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Amount
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Maximum Offering
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Aggregate
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Registration
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Securities to be Registered
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to be Registered
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Price per Unit(1)
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Offering Price(1)
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Fee
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3.800% Senior Notes due 2015
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$750,000,000
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100%
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$750,000,000
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$53,475
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5.250% Senior Notes due 2020
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$1,500,000,000
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100%
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$1,500,000,000
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$106,950
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6.300% Senior Notes due 2040
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$1,250,000,000
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100%
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$1,250,000,000
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$89,125
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Total
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$3,500,000,000
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100%
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$3,500,000,000
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$249,550
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(1) |
Exclusive of accrued interest, if any, and estimated solely for
the purpose of calculating the registration fee in accordance
with Rule 457(f) under the Securities Act of 1933, as
amended. A registration fee of $91,860 has already been
previously paid with respect to $858,512,500 aggregate initial
offering price of securities that were previously registered
pursuant to the registration statement on
Form S-3
(SEC File
No. 333-137562),
filed by the registrant on September 22, 2006, which
securities were not sold thereunder. Pursuant to Rule 457(p)
under the Securities Act, such unutilized filing fee is being
applied to the filing fee payable pursuant to this registration
statement.
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The Registrant hereby amends this Registration Statement on
such date or dates as may be necessary to delay its effective
date until the Registrant shall file a further amendment which
specifically states that this Registration Statement shall
thereafter become effective in accordance with Section 8(a)
of the Securities Act of 1933, as amended, or until this
Registration Statement shall become effective on such date as
the Commission, acting pursuant to said Section 8(a), may
determine.
The
information in this prospectus is not complete and may be
changed. This prospectus is not an offer to sell these
securities nor a solicitation of an offer to buy these
securities in any jurisdiction where the offer or sale is not
permitted. We may not sell these securities until the
registration statement filed with the Securities and Exchange
Commission is effective.
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SUBJECT TO COMPLETION, DATED
May 12, 2010
PROSPECTUS
$3,500,000,000
Williams Partners
L.P.
Exchange Offer for All Outstanding
$750,000,000 aggregate amount of 3.800% Senior Notes due
2015
(CUSIP Nos. 96950FAA2 and U96956AA2)
for new 3.800% Senior Notes due 2015
that have been registered under the Securities Act of 1933
and
$1,500,000,000 aggregate amount of 5.250% Senior Notes
due 2020
(CUSIP Nos. 96950FAC8 and U96956AB0)
for new 5.250% Senior Notes due 2020
that have been registered under the Securities Act of 1933
and
$1,250,000,000 aggregate amount of 6.300% Senior Notes
due 2040
(CUSIP Nos. 96950FAE4 and U96956AC8)
for new 6.300% Senior Notes due 2040
that have been registered under the Securities Act of 1933
This exchange offer will expire at 5:00 p.m., New
York City time,
on ,
2010, unless extended.
The
Exchange Notes:
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The terms of the 3.800% Senior Notes due 2015,
5.250% Senior Notes due 2020, and 6.300% Senior Notes
due 2040 to be issued in the exchange offer are substantially
identical to the terms of the outstanding 3.800% Senior
Notes due 2015, 5.250% Senior Notes due 2020, and
6.300% Senior Notes due 2040, respectively, except that
provisions relating to transfer restrictions, registration
rights, and additional interest will not apply to the exchange
notes.
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We are offering the exchange notes pursuant to a registration
rights agreement that we entered into in connection with the
issuance of the outstanding notes.
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Material
Terms of the Exchange Offer:
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The exchange offer expires at 5:00 p.m., New York City
time,
on ,
2010, unless extended.
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Upon expiration of the exchange offer, all outstanding notes
that are validly tendered and not validly withdrawn will be
exchanged for an equal principal amount of the applicable series
of exchange notes.
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You may withdraw tendered outstanding notes at any time at or
prior to the expiration of the exchange offer.
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The exchange offer is not subject to any minimum tender
condition, but is subject to customary conditions.
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The exchange of the exchange notes for outstanding notes will
not be a taxable exchange for U.S. federal income tax
purposes.
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There is no existing public market for the outstanding notes or
the exchange notes.
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Each broker-dealer that receives exchange notes for its own
account in the exchange offer must acknowledge that it acquired
the outstanding notes for its own account as a result of
market-making or other trading activities and must agree that it
will deliver a prospectus meeting the requirements of the
Securities Act of 1933, as amended, in connection with any
resale of the exchange notes. A participating broker-dealer may
use this prospectus, as it may be amended or supplemented from
time to time, in connection with resales of exchange notes
received in exchange for outstanding notes where such
outstanding notes were acquired as a result of market-making
activities or other trading activities.
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See Risk Factors
beginning on page 11.
Neither the Securities and Exchange Commission nor any
state securities commission has approved or disapproved of these
securities or passed upon the adequacy or the accuracy of this
prospectus. Any representation to the contrary is a criminal
offense.
Prospectus
dated ,
2010
TABLE OF
CONTENTS
You should rely only upon the information contained or
incorporated by reference in this prospectus. We have not
authorized anyone to provide you with different information. If
anyone provides you with different or inconsistent information,
you should not rely on it. If you are in a jurisdiction where
offers to sell, or solicitations of offers to purchase, the
securities offered by this document are unlawful, or if you are
a person to whom it is unlawful to direct these types of
activities, then the offer presented in this document does not
extend to you. You should assume the information appearing in
this prospectus and the documents incorporated by reference
herein are accurate only as of their respective dates. Our
business, financial condition, results of operations, and
prospects may have changed since those dates.
WHERE YOU
CAN FIND MORE INFORMATION
We are subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the Exchange
Act), and we file annual, quarterly and other reports and
other information with the Securities and Exchange Commission
(the SEC). You may read and copy any document we
file with the SEC at the SECs public reference room at
100 F Street NE, Washington, D.C.
20549-2521.
Please call
1-800-SEC-0330
for further information on the operation of the public reference
room. Our SEC filings are also available on the SECs web
site at
http://www.sec.gov.
Unless specifically listed under Incorporation by
Reference below, the information contained on the SEC web
site is not intended to be incorporated by reference in this
prospectus and you should not consider that information a part
of this prospectus. You can also obtain information about us at
the offices of the New York Stock Exchange, 20 Broad
Street, New York, New York 10005.
We make available free of charge on or through our Internet
website,
http://www.williamslp.com,
our Annual Report on
Form 10-K,
Quarterly Reports on
Form 10-Q,
Current Reports on
Form 8-K
and amendments to those reports filed or furnished pursuant to
Section 13(a) or 15(d) of the Exchange Act as soon as
reasonably practicable after we electronically file such
material with, or furnish it to, the SEC. Information contained
on our Internet website is not part of this prospectus and does
not constitute a part of this prospectus.
This prospectus incorporates important business and financial
information about us that is not included in or delivered with
this prospectus. We will provide this information and any and
all of the documents referred to herein, including the
registration rights agreement and the indenture for the notes,
which are summarized in this prospectus, without charge to each
person to whom a copy of this prospectus has been delivered, who
makes a request by writing or calling us at the following
address or telephone number:
Investor Relations
Williams Partners L.P.
One Williams Center
Tulsa, Oklahoma
74172-0712
(918) 573-2078
In order to ensure timely delivery, you must request the
information no later than five business days before the
expiration of the exchange offer.
INCORPORATION
BY REFERENCE
We incorporate by reference in this prospectus the
following documents that we have previously filed with the SEC.
This means that we are disclosing important information to you
without actually including the specific information in this
prospectus by referring you to other documents filed separately
with the SEC. The information incorporated by reference is an
important part of this prospectus. Information that we later
provide to the SEC, and which is deemed filed with
the SEC, will automatically update information previously filed
with the SEC, and may replace information in this prospectus and
information previously filed with the SEC:
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our annual report on
Form 10-K
for the year ended December 31, 2009 (our 2009
10-K);
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our quarterly report on
Form 10-Q
for the quarter ended March 31, 2010 (our 2010 First
Quarter
10-Q); and
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our current reports on
Form 8-K
filed with the SEC on January 19, 2010, January 22,
2010 (two filed on this date), February 2, 2010,
February 3, 2010, February 10, 2010, February 22,
2010, April 20, 2010 (two filed on this date),
April 29, 2010, and May 12, 2010.
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We also incorporate by reference each of the documents that we
file with the SEC (excluding those filings made under
Items 2.02 or 7.01 of
Form 8-K
and corresponding information furnished under Item 9.01 of
Form 8-K
or included as an exhibit, or other information furnished to the
SEC) under Sections 13(a), 13(c), 14, or 15(d) of the
Exchange Act on or after the date of the initial registration
statement and prior to
ii
effectiveness of the registration statement and on or after the
date of this prospectus and prior to the completion of the
exchange offer. Any statements made in such documents will
automatically update and supersede the information contained in
this prospectus, and any statements made in this prospectus
update and supersede the information contained in past SEC
filings incorporated by reference into this prospectus.
SPECIAL
NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain matters discussed in this prospectus include
forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. These
forward-looking statements relate to anticipated financial
performance, managements plans and objectives for future
operations, business prospects, outcome of regulatory
proceedings, market conditions, and other matters.
All statements, other than statements of historical facts,
included in this report that address activities, events or
developments that we expect, believe or anticipate will exist or
may occur in the future are forward-looking statements.
Forward-looking statements can be identified by various forms of
words such as anticipates, believes,
seeks, could, may,
should, continues,
estimates, expects,
forecasts, intends, might,
goals, objectives, targets,
planned, potential,
projects, scheduled, will,
or other similar expressions. These statements are based on
managements beliefs and assumptions and on information
currently available to management and include, among others,
statements regarding:
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amounts and nature of future capital expenditures;
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expansion and growth of our business and operations;
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financial condition and liquidity;
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business strategy;
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cash flow from operations or results of operations;
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the levels of cash distributions to unitholders;
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seasonality of certain business segments; and
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natural gas and NGL prices and demand.
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Forward-looking statements are based on numerous assumptions,
uncertainties, and risks that could cause future events or
results to be materially different from those stated or implied
in this prospectus or in the documents incorporated herein by
reference. You should carefully consider the risk factors
discussed below in addition to the other information in this
prospectus. If any of the following risks were actually to
occur, our business, results of operations and financial
condition could be materially adversely affected. Many of the
factors that could adversely affect our business, results of
operations and financial condition are beyond our ability to
control or predict. Specific factors that could cause actual
results to differ from results contemplated by the
forward-looking statements include, among others, the following:
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whether we have sufficient cash from operations to enable us to
maintain current levels of cash distributions or to pay the
minimum quarterly distribution following establishment of cash
reserves and payment of fees and expenses, including payments to
our general partner;
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availability of supplies (including the uncertainties inherent
in assessing and estimating future natural gas reserves), market
demand, volatility of prices, and the availability and cost of
capital;
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inflation, interest rates and general economic conditions
(including future disruptions and volatility in the global
credit markets and the impact of these events on our customers
and suppliers);
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the strength and financial resources of our competitors;
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development of alternative energy sources;
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the impact of operational and development hazards;
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costs of, changes in, or the results of laws, government
regulations (including proposed climate change legislation),
environmental liabilities, litigation, and rate proceedings;
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our allocated costs for defined benefit pension plans and other
postretirement benefit plans sponsored by our affiliates;
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changes in maintenance and construction costs;
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changes in the current geopolitical situation;
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our exposure to the credit risks of our customers;
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risks related to strategy and financing, including restrictions
stemming from our debt agreements, future changes in our credit
ratings, and the availability and cost of credit;
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risks associated with future weather conditions;
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acts of terrorism; and
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additional risks described in our filings with the SEC.
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Given the uncertainties and risk factors that could cause our
actual results to differ materially from those contained in any
forward-looking statement, we caution investors not to unduly
rely on our forward-looking statements. We disclaim any
obligations to and do not intend to update the above list to
announce publicly the result of any revisions to any of the
forward-looking statements to reflect future events or
developments.
In addition to causing our actual results to differ, the factors
listed above and referred to below may cause our intentions to
change from those statements of intention set forth in this
prospectus. Such changes in our intentions may also cause our
results to differ. We may change our intentions, at any time and
without notice, based upon changes in such factors, our
assumptions, or otherwise.
Because forward-looking statements involve risks and
uncertainties, we caution that there are important factors, in
addition to those listed above, that may cause actual results to
differ materially from those contained in the forward-looking
statements. These factors include the risks set forth under the
caption Risk Factors in this prospectus and in our
2009 10-K,
which is incorporated herein by reference.
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CERTAIN
DEFINITIONS
We use the following oil and gas measurements and industry terms
in this prospectus:
British Thermal Units (Btu): When used in
terms of volumes, Btu is used to refer to the amount of natural
gas required to raise the temperature of one pound of water by
one degree Fahrenheit at one atmospheric pressure.
BBtu/d: One billion Btus per day.
Dth: One dekatherm, which is the approximate
energy content of 1,000 cubic feet of natural gas.
MMdt: One million dekatherms or approximately
one trillion Btus.
TBtu: One trillion Btus.
Other terms used in this prospectus include:
Contributed Entities: refers to the ownership
interests that were contributed to us in the Dropdown (as
defined below).
FERC: Federal Energy Regulatory Commission.
Fractionation: The process by which a mixed
stream of natural gas liquids is separated into its constituent
products, such as ethane, propane and butane.
LNG: Liquefied natural gas.
NGLs: Natural gas liquids. Natural gas liquids
result from natural gas processing and crude oil refining and
are used as petrochemical feedstocks, heating fuels and gasoline
additives, among other applications.
Partially Owned Entities: Entities in which we
do not own a 100% ownership interest, including principally
Discovery Producer Services LLC, Gulfstream Natural Gas System,
L.L.C., Northwest Pipeline GP, and Laurel Mountain Midstream LLC.
Pipeline Entities: Our regulated pipeline
entities, including principally Northwest Pipeline GP,
Transcontinental Gas Pipe Line Company, LLC, Gulfstream Natural
Gas System, L.L.C., Discovery Producer Services LLC, and Black
Marlin Pipeline LLC.
Throughput: The volume of product transported
or passing through a pipeline, plant, terminal or other facility.
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PROSPECTUS
SUMMARY
This summary highlights some of the information contained or
incorporated by reference in this prospectus. This summary may
not contain all of the information that may be important to you.
For a more complete understanding of this exchange offer, you
should read this entire prospectus and the documents
incorporated by reference herein. You should carefully consider
the issues discussed in the Risk Factors section of
this prospectus and in our 2009
10-K, which
is incorporated by reference in this prospectus. Unless we have
indicated otherwise or the context otherwise requires,
references in this prospectus to Williams Partners,
we, us, our, or like terms
refer to Williams Partners L.P. and its subsidiaries and
references to Williams refer to The Williams
Companies, Inc. and its subsidiaries.
Our
Company
We are a publicly traded Delaware limited partnership formed by
Williams in February 2005 to own, operate and acquire a
diversified portfolio of complementary energy assets. Our
operations are divided into two business segments: Gas Pipeline
and Midstream Gas & Liquids.
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Gas Pipeline this segment includes our
interstate natural gas pipelines, including our 100% interest in
Transcontinental Gas Pipe Line Company, LLC
(Transco) and our 65% interest in Northwest Pipeline
GP (Northwest Pipeline). Transco and Northwest
Pipeline own and operate a combined total of approximately
13,900 miles of pipelines with a total annual throughput of
approximately 2,700 TBtu of natural gas and
peak-day
delivery capacity of approximately 12 MMdt of natural gas.
Gas Pipeline also holds interests in joint venture interstate
and intrastate natural gas pipeline systems including a 24.5%
interest in Gulfstream Natural Gas System, L.L.C.
(Gulfstream), which owns an approximate
745-mile
pipeline with the capacity to transport approximately
1.26 million Dth per day of natural gas. Gas Pipeline also
includes our indirect 45.7% limited partner interest and 2%
general partner interest in Williams Pipeline Partners L.P.
(WMZ), a publicly traded master limited partnership
that was formed by Williams in 2007 and holds the remaining 35%
interest in Northwest Pipeline.
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Midstream Gas & Liquids this
segment includes our natural gas gathering, treating and
processing businesses and has primary service areas concentrated
in major producing basins in Colorado, New Mexico, Wyoming,
the Gulf of Mexico and Pennsylvania. Midstream Gas &
Liquids primary businesses natural gas
gathering, treating, and processing; NGL fractionation, storage
and transportation; and oil transportation fall
within the middle of the process of taking raw natural gas and
crude oil from the producing fields to the consumer.
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On February 17, 2010, we closed a transaction with our
general partner, our operating company, Williams and certain
subsidiaries of Williams, pursuant to which Williams (through
such subsidiaries) contributed to us the ownership interests in
the entities that made up Williams Gas Pipeline and
Midstream Gas & Liquids businesses, to the extent not
already owned by us, including Williams limited and
general partner interests in WMZ, but excluding Williams
Canadian, Venezuelan and olefin operations and 25.5% of
Gulfstream (the Dropdown). This contribution was
made in exchange for aggregate consideration of:
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$3.5 billion in cash, less certain expenses incurred by us
relating to the Dropdown. This cash consideration was financed
through the private issuance of $3.5 billion of our senior
unsecured notes;
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203 million of our Class C limited partnership units,
which are identical to our common limited partnership units
except with respect to distributions for the first quarter of
2010, in which they will receive a prorated quarterly
distribution since they were not outstanding during the full
quarterly period. The Class C units automatically converted
into our common limited partnership units on May 10, 2010,
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the first business day following the record date for the
distribution with respect to the first quarter of 2010; and
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an increase in the capital account of our general partner to
allow it to maintain its 2% general partner interest.
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In connection with the Dropdown, we entered into a new
$1.75 billion senior unsecured revolving three-year credit
facility with Transco and Northwest Pipeline, as co-borrowers
with borrowing sublimits of $400 million each, Citibank,
N.A., as administrative agent, and other lenders named therein
(the Credit Facility). The Credit Facility replaced
our then existing $450 million senior unsecured credit
facility. At the closing of the Dropdown, we borrowed
$250 million under the Credit Facility to repay the term
loan outstanding under our then existing credit facility.
Our principal executive offices are located at One Williams
Center, Tulsa, Oklahoma 74172, and our telephone number is
(918) 573-2000.
2
SUMMARY
OF THE EXCHANGE OFFER
The following is a summary of the principal terms of the
exchange offer. A more detailed description is contained in the
section The Exchange Offer. The term
outstanding notes refers collectively to our
outstanding 3.800% Senior Notes due 2015,
5.250% Senior Notes due 2020, and 6.300% Senior Notes
due 2040, all of which were issued on February 9, 2010. The
term exchange notes refers collectively to our
3.800% Senior Notes due 2015, 5.250% Senior Notes due
2020, and 6.300% Senior Notes due 2040 offered by this
prospectus, which have been registered under the Securities Act
of 1933, as amended (the Securities Act). The term
notes refers collectively to the outstanding notes
and the exchange notes offered in the exchange offer. The term
indenture refers to the indenture that governs both
the outstanding notes and the exchange notes.
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The Exchange Offer |
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We are offering to exchange $1,000 principal amount of exchange
notes, which have been registered under the Securities Act, for
each $1,000 principal amount of each applicable series of
outstanding notes, subject to a minimum exchange of $2,000. As
of the date of this prospectus, $3,500,000,000 aggregate
principal amount of the outstanding notes is outstanding,
consisting of: |
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$750,000,000 aggregate principal amount of 3.800% Senior
Notes due 2015 (together with the exchange notes of the same
series, the 2015 notes); |
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$1,500,000,000 aggregate principal amount of 5.250% Senior
Notes due 2020 (together with the exchange notes of the same
series, the 2020 notes); and |
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$1,250,000,000 aggregate principal amount of 6.300% of Senior
Notes due 2040 (together with the exchange notes of the same
series, the 2040 notes). |
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We issued the outstanding notes in a private transaction for
resale pursuant to Rule 144A and Regulation S under
the Securities Act. The terms of the exchange notes are
substantially identical to the terms of the outstanding notes,
except that provisions relating to transfer restrictions,
registration rights, and rights to increased interest in
addition to the stated interest rate on the outstanding notes
(Additional Interest) will not apply to the exchange
notes. |
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In order to exchange your outstanding notes for exchange notes,
you must properly tender them at or prior to the expiration of
the exchange offer. |
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Expiration Time |
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The exchange offer will expire at 5:00 p.m., New York City
time,
on ,
2010, unless the exchange offer is extended, in which case the
expiration time will be the latest date and time to which the
exchange offer is extended. See The Exchange
Offer Terms of the Exchange Offer; Expiration
Time. |
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Procedures for Tendering Outstanding Notes |
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You may tender your outstanding notes through book-entry
transfer in accordance with The Depository
Trust Companys Automated Tender Offer Program, known
as ATOP. If you wish to accept the exchange offer, you must: |
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complete, sign, and date the accompanying letter of
transmittal, or a facsimile of the letter of transmittal, in
accordance with the instructions contained in the letter of
transmittal, and mail or otherwise deliver the letter of
transmittal, together with your
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3
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outstanding notes, to the exchange agent at the address set
forth under The Exchange Offer The Exchange
Agent; or |
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arrange for The Depository Trust Company to
transmit to the exchange agent certain required information,
including an agents message forming part of a book-entry
transfer in which you agree to be bound by the terms of the
letter of transmittal, and transfer the outstanding notes being
tendered into the exchange agents account at The
Depository Trust Company.
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You may tender your outstanding notes for the applicable series
of exchange notes in whole or in part in minimum denominations
of $2,000 and integral multiples of $1,000 in excess of $2,000. |
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See The Exchange Offer How to Tender
Outstanding Notes for Exchange. |
|
Guaranteed Delivery Procedures |
|
If you wish to tender your outstanding notes and time will not
permit your required documents to reach the exchange agent by
the expiration time, or the procedures for book-entry transfer
cannot be completed by the expiration time, you may tender your
outstanding notes according to the guaranteed delivery
procedures described in The Exchange Offer
Guaranteed Delivery Procedures. |
|
Special Procedures for Beneficial Owners |
|
If you beneficially own outstanding notes registered in the name
of a broker, dealer, commercial bank, trust company, or other
nominee and you wish to tender your outstanding notes in the
exchange offer, you should contact the registered holder
promptly and instruct it to tender on your behalf. See The
Exchange Offer How to Tender Outstanding Notes for
Exchange. |
|
Withdrawal of Tenders |
|
You may withdraw your tender of outstanding notes at any time at
or prior to the expiration time by delivering a written notice
of withdrawal to the exchange agent in conformity with the
procedures discussed under The Exchange Offer
Withdrawal Rights. |
|
Acceptance of Outstanding Notes and Delivery of Exchange Notes |
|
Upon consummation of the exchange offer, we will accept any and
all outstanding notes that are properly tendered in the exchange
offer and not withdrawn at or prior to the expiration time. The
exchange notes issued pursuant to the exchange offer will be
delivered promptly after acceptance of the tendered outstanding
notes. See The Exchange Offer Terms of the
Exchange Offer; Expiration Time. |
|
Registration Rights Agreement |
|
We are making the exchange offer pursuant to the registration
rights agreement that we entered into on February 9, 2010,
with the initial purchasers of the outstanding notes. |
|
Resales of Exchange Notes |
|
We believe that the exchange notes issued in the exchange offer
may be offered for resale, resold, or otherwise transferred by
you without compliance with the registration and prospectus
delivery requirements of the Securities Act, provided that: |
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you are not an affiliate of ours;
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the exchange notes you receive pursuant to the
exchange offer are being acquired in the ordinary course of your
business;
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4
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you have no arrangement or understanding with any
person to participate in the distribution of the exchange notes
issued to you in the exchange offer;
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if you are not a broker-dealer, you are not engaged
in, and do not intend to engage in, a distribution of the
exchange notes issued in the exchange offer; and
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if you are a broker-dealer, you will receive the
exchange notes for your own account, the outstanding notes were
acquired by you as a result of market-making or other trading
activities, and you will deliver a prospectus when you resell or
transfer any exchange notes issued in the exchange offer. See
Plan of Distribution for a description of the
prospectus delivery obligations of broker-dealers in the
exchange offer.
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If you do not meet these requirements, your resale of the
exchange notes must comply with the registration and prospectus
delivery requirements of the Securities Act. |
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Our belief is based on interpretations by the staff of the SEC,
as set forth in no-action letters issued to third parties. The
staff of the SEC has not considered this exchange offer in the
context of a
no-action
letter, and we cannot assure you that the staff of the SEC would
make a similar determination with respect to this exchange offer. |
|
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If our belief is not accurate and you transfer an exchange note
without delivering a prospectus meeting the requirements of the
federal securities laws or without an exemption from these laws,
you may incur liability under the federal securities laws. We do
not and will not assume, or indemnify you against, this
liability. |
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See The Exchange Offer Consequences of
Exchanging Outstanding Notes. |
|
Consequences of Failure to Exchange Your Outstanding Notes |
|
If you do not exchange your outstanding notes in the exchange
offer, your outstanding notes will continue to be subject to the
restrictions on transfer provided in the outstanding notes and
in the indenture. In general, the outstanding notes may not be
offered or sold unless registered or sold in a transaction
exempt from registration under the Securities Act and applicable
state securities laws. If a substantial amount of the
outstanding notes is exchanged for a like amount of the exchange
notes, the liquidity and the trading market for your untendered
outstanding notes could be adversely affected. |
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See The Exchange Offer Consequences of Failure
to Exchange Outstanding Notes. |
|
Exchange Agent |
|
The exchange agent for the exchange offer is The Bank of
New York Mellon Trust Company, N.A. For additional
information, |
5
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see The Exchange Offer Exchange Agent
and the accompanying letter of transmittal. |
|
Material U.S. Federal Income Tax Considerations |
|
The exchange of your outstanding notes for exchange notes will
not be a taxable exchange for United States federal income tax
purposes. You should consult your own tax advisor as to the
tax consequences to you of the exchange offer, as well as tax
consequences of the ownership and disposition of the exchange
notes. For additional information, see Material U.S.
Federal Income Tax Considerations. |
6
SUMMARY
OF THE TERMS OF THE EXCHANGE NOTES
The terms of the exchange notes are substantially the same as
the outstanding notes, except that provisions relating to
transfer restrictions, registration rights, and Additional
Interest will not apply to the exchange notes. The following is
a summary of the principal terms of the exchange notes. A more
detailed description is contained in the section
Description of Notes in this prospectus.
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Issuer |
|
Williams Partners L.P. |
|
Securities Offered |
|
$3,500,000,000 aggregate principal amount of our senior notes
consisting of: |
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$750,000,000 aggregate principal amount of 2015 notes; |
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$1,500,000,000 aggregate principal amount of 2020 notes; and |
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$1,250,000,000 aggregate principal amount of 2040 notes. |
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The notes will not be listed on any securities exchange. |
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Maturity Date |
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The 2015 notes have a maturity date of February 15, 2015. |
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The 2020 notes have a maturity date of March 15, 2020. |
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The 2040 notes have a maturity date of April 15, 2040. |
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Interest |
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Interest began accruing on February 9, 2010. The interest
rate on each series of the notes is: |
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2015 notes: 3.800% |
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2020 notes: 5.250% |
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2040 notes: 6.300% |
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Interest Payment Dates |
|
Interest on the 2015 notes is payable semi-annually in arrears
on February 15 and August 15, commencing on August 15,
2010, and is payable to holders of record at the close of
business on the February 1 or August 1 immediately
preceding the interest payment date (whether or not a business
day). |
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Interest on the 2020 notes is payable semi-annually in arrears
on March 15 and September 15, commencing on
September 15, 2010, and is payable to holders of record at
the close of business on the March 1 or September 1 immediately
preceding the interest payment date (whether or not a business
day). |
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Interest on the 2040 notes is payable semi-annually in arrears
on April 15 and October 15, commencing on October 15,
2010, and is payable to holders of record at the close of
business on the April 1 or October 1 immediately preceding the
interest payment date (whether or not a business day). |
|
Ratings |
|
The notes are rated BBB- by S&P, Baa3 by Moodys, and
BBB- by Fitch. Credit ratings are not recommendations to buy,
sell or hold the notes. Ratings are subject to revision or
withdrawal at any time by the ratings agencies. |
|
Optional Redemption |
|
We may redeem each series of the notes, in whole or in part, at
our option at any time or from time to time, at the applicable
redemption prices described in this prospectus. See
Description of Notes Optional Redemption. |
7
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Ranking |
|
The notes are our senior unsecured indebtedness. Your right to
payment under the notes is equal in right of payment with all of
our existing and future senior unsecured indebtedness. The notes
are effectively subordinated to all of our future secured
indebtedness and are structurally subordinated to all existing
and future indebtedness of our subsidiaries. The notes rank
senior to all of our future subordinated indebtedness. |
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Certain Covenants |
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The indenture governing the notes contains limitations on, among
other things: |
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The incurrence of liens on assets to secure certain
debt; and
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Certain mergers or consolidations and transfers of
assets.
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These covenants are subject to exceptions. See Description
of Notes Certain Covenants. |
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Form and Denomination |
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Each series of notes will be represented by one or more global
notes. The global notes will be deposited with the trustee, as
custodian for The Depository Trust Company, or DTC. |
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Ownership of beneficial interests in the global notes will be
shown on, and transfers of such interest will be effected only
through, records maintained in book-entry form by DTC and its
direct and indirect participants, including in the case of notes
sold under Regulation S, the depositaries for Clearstream
Banking Luxembourg, or Euroclear Bank S.A./N.V., as operator of
the Euroclear System. |
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The exchange notes will be issued in minimum denominations of
$2,000 and in integral multiples of $1,000 in excess of thereof. |
|
Governing Law |
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The notes of each series and the indenture are governed by the
law of the State of New York. |
|
Trustee |
|
The Bank of New York Mellon Trust Company, N.A. |
|
Risk Factors |
|
See Risk Factors for a discussion of certain
risks you should carefully consider. |
8
SELECTED
HISTORICAL CONSOLIDATED FINANCIAL DATA
The following table shows our selected financial and operating
data for the periods and as of the dates indicated and has been
recast to reflect the consummation of the Dropdown. The selected
historical financial information as of December 31, 2009
and 2008, and for the years ended December 31, 2009, 2008
and 2007 was derived from our audited consolidated financial
statements filed with our Current Report on
Form 8-K
on May 12, 2010 (the May 12, 2010
8-K),
which is incorporated by reference in this prospectus. The
selected historical financial information as of March 31,
2010 and for the three months ended March 31, 2010 and 2009
was derived from our unaudited consolidated financial statements
included in our 2010 First Quarter
10-Q, which
is incorporated by reference in this prospectus. All other
selected historical financial information presented for us has
been prepared from unaudited financial statements not
incorporated by reference in this prospectus.
You should read the financial information presented below in
conjunction with the historical consolidated financial
statements and the related notes contained in the May 12,
2010 8-K, and the Managements Discussion and
Analysis of Financial Condition and Results of Operations
filed with our Current Report on Form 8-K on April 20, 2010
(the April 20, 2010 8-K) and the 2010 First
Quarter 10-Q.
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|
|
|
|
|
|
|
|
|
Years Ended December 31,
|
|
Three Months Ended March 31,
|
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2005
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|
2006
|
|
2007
|
|
2008
|
|
2009
|
|
2009
|
|
2010
|
|
|
(Millions of dollars, except per-unit amounts)
|
|
Statement of Income Data:
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|
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|
|
|
|
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|
|
|
|
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|
|
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|
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|
|
|
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Revenues
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|
$
|
3,994
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|
|
$
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4,711
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|
|
$
|
5,616
|
|
|
$
|
5,762
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|
|
$
|
4,512
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|
|
$
|
957
|
|
|
$
|
1,458
|
|
Income before cumulative effect of change in accounting principle
|
|
|
553
|
|
|
|
822
|
|
|
|
1,449
|
|
|
|
2,102
|
|
|
|
1,031
|
|
|
|
183
|
|
|
|
313
|
|
Net income
|
|
|
552
|
|
|
|
822
|
|
|
|
1,449
|
|
|
|
2,102
|
|
|
|
1,031
|
|
|
|
183
|
|
|
|
313
|
|
Net income attributable to controlling interests
|
|
|
552
|
|
|
|
822
|
|
|
|
1,449
|
|
|
|
2,077
|
|
|
|
1,004
|
|
|
|
176
|
|
|
|
307
|
|
Income before cumulative effect of change in accounting
principal per limited partner unit:
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Common unit
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|
$
|
0.49
|
(1)
|
|
$
|
1.73
|
|
|
$
|
1.99
|
|
|
$
|
3.08
|
|
|
$
|
2.88
|
|
|
$
|
0.36
|
|
|
$
|
0.61
|
|
Subordinated unit
|
|
$
|
0.49
|
(1)
|
|
$
|
1.73
|
|
|
$
|
1.99
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
Net income per limited partner unit:
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common unit
|
|
$
|
0.44
|
(1)
|
|
$
|
1.73
|
|
|
$
|
1.99
|
|
|
$
|
3.08
|
|
|
$
|
2.88
|
|
|
$
|
0.36
|
|
|
$
|
0.61
|
|
Subordinated unit
|
|
$
|
0.44
|
(1)
|
|
$
|
1.73
|
|
|
$
|
1.99
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
Cash dividends declared per unit
|
|
$
|
0.1484
|
|
|
$
|
1.605
|
|
|
$
|
2.045
|
|
|
$
|
2.435
|
|
|
$
|
2.540
|
|
|
$
|
0.6350
|
|
|
$
|
0.6575
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31,
|
|
As of March 31,
|
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|
2005
|
|
2006
|
|
2007
|
|
2008
|
|
2009
|
|
2009
|
|
2010
|
|
|
(Millions of dollars)
|
|
Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
9,473
|
|
|
$
|
10,297
|
|
|
$
|
11,064
|
|
|
$
|
11,676
|
|
|
$
|
11,984
|
|
|
$
|
11,730
|
|
|
$
|
12,136
|
|
Short-term notes payable and long-term debt due within one year
|
|
|
8
|
|
|
|
253
|
|
|
|
75
|
|
|
|
|
|
|
|
15
|
|
|
|
|
|
|
|
9
|
|
Long-term debt
|
|
|
1,513
|
(2)
|
|
|
2,386
|
(2)
|
|
|
2,821
|
(2)
|
|
|
2,971
|
(2)
|
|
|
2,981
|
(2)
|
|
|
2,971
|
(2)
|
|
|
6,330
|
|
Total equity
|
|
|
5,991
|
|
|
|
5,472
|
|
|
|
5,867
|
|
|
|
7,389
|
|
|
|
7,627
|
|
|
|
7,514
|
|
|
|
4,349
|
|
|
|
|
(1) |
|
Commencing on August 23, 2005, the date of Williams
Partners initial public offering. |
|
(2) |
|
Does not reflect borrowings of $3.5 billion entered into in
February 2010 related to the Dropdown. |
9
RATIO OF
EARNINGS TO FIXED CHARGES
The following table sets forth our consolidated ratio of
earnings to fixed charges for each of the periods indicated,
revised to reflect the consummation of the Dropdown.
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|
|
|
|
|
|
|
|
|
|
|
|
Three Months
|
|
|
|
|
|
|
|
|
|
|
|
|
Ended
|
|
Year Ended December 31,
|
|
|
March 31, 2010
|
|
2009
|
|
2008
|
|
2007
|
|
2006
|
|
2005
|
|
Ratio of Earnings to Fixed Charges(a)(b)
|
|
|
4.64
|
|
|
|
4.97
|
|
|
|
5.37
|
|
|
|
6.40
|
|
|
|
7.10
|
|
|
|
6.29
|
|
|
|
|
(a) |
|
For purposes of computing the ratio of earnings to fixed
charges, earnings is the aggregate of the following
items: pre-tax income or loss from continuing operations before
income or loss from equity investees; plus fixed charges; plus
distributed income of equity investees; less our share of
pre-tax losses of equity investees for which charges arising
from guarantees are included in fixed charges; and less
capitalized interest. The term fixed charges means
the sum of the following: interest expensed and capitalized;
amortized premiums, discounts and capitalized expenses related
to indebtedness; and an estimate of the interest within rental
expense; and our share of interest from equity investees where
the related pre-tax loss has been included in earnings. |
|
(b) |
|
Because the entities acquired in the Dropdown were affiliates of
Williams at the time of the acquisition, this transaction is
accounted for as a combination of entities under common control,
similar to a pooling of interests, whereby the assets and
liabilities of the acquired entities are combined with ours at
their historical amounts. As a result,
pre-tax
income from continuing operations includes net income applicable
to
pre-partnership
operations, which is fully allocated to our general partner. |
10
RISK
FACTORS
The exchange notes involve substantial risks similar to those
associated with the outstanding notes. To understand these risks
you should carefully consider the risk factors set forth below
and included in our 2009
10-K, which
is incorporated herein by reference, together with all of the
other information in this prospectus and the documents
incorporated herein by reference. If any of the risks discussed
below or in the foregoing documents were actually to occur, our
business, prospects, financial condition, results of operations,
cash flows and, in some cases, our reputation, could be
materially adversely affected. In that case, we might not be
able to pay interest on, or the principal of, the notes.
Additional risks and uncertainties not currently known to us or
those we currently deem to be immaterial may also materially and
adversely affect us. In any such case, you may lose all or part
of your original investment and not realize any return that you
may have expected thereon. See Certain Definitions
for definitions of certain terms used in this section.
Risks
Related to the Exchange
We
cannot assure you that an active trading market for the exchange
notes will exist if you desire to sell the exchange
notes.
There is no existing public market for the outstanding notes or
the exchange notes. The liquidity of any trading market in the
exchange notes, and the market prices quoted for the exchange
notes, may be adversely affected by changes in the overall
market for these types of securities, and by changes in our
financial performance or prospects or in the prospects for
companies in our industry generally. As a result, we cannot
assure you that you will be able to sell the exchange notes or
that, if you can sell your exchange notes, you will be able to
sell them at an acceptable price.
You
may have difficulty selling any outstanding notes that you do
not exchange.
If you do not exchange your outstanding notes for exchange notes
in the exchange offer, you will continue to hold outstanding
notes subject to restrictions on their transfer. Those transfer
restrictions are described in the indenture governing the
outstanding notes and in the legend contained on the outstanding
notes, and arose because we originally issued the outstanding
notes under an exemption from the registration requirements of
the Securities Act.
Outstanding notes that are not tendered or are tendered but not
accepted for exchange will, following the consummation of the
exchange offer, continue to be subject to the provisions in the
indenture and the legend contained on the outstanding notes
regarding the transfer restrictions of the outstanding notes. In
general, outstanding notes, unless registered under the
Securities Act, may not be offered or sold except pursuant to an
exemption from, or in a transaction not subject to, the
Securities Act and applicable state securities laws. We do not
currently anticipate that we will take any action to register
under the Securities Act or under any state securities laws the
outstanding notes that are not tendered in the exchange offer or
that are tendered in the exchange offer but are not accepted for
exchange. If a substantial amount of the outstanding notes is
exchanged for a like amount of the exchange notes issued in the
exchange offer, the liquidity of your outstanding notes could be
adversely affected. See The Exchange Offer
Consequences of Failure to Exchange Outstanding Notes for
a discussion of additional consequences of failing to exchange
your outstanding notes.
Risks
Related to the Notes
Our
partnership agreement limits our ability to accumulate cash,
which may limit cash available to service the notes or to repay
them at maturity.
Our partnership agreement requires us to distribute on a
quarterly basis, 100% of our available cash to our unitholders
of record and our general partner. Available cash is generally
all of our cash on hand at the end of each quarter, after
payment of fees and expenses and the establishment of cash
reserves by our general partner. Our general partner determines
the amount and timing of cash distributions and has broad
discretion
11
to establish and make additions to our reserves or the reserves
of our operating subsidiaries in amounts our general partner
determines to be necessary or appropriate:
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|
|
to provide for the proper conduct of our business and the
businesses of our operating subsidiaries (including reserves for
future capital expenditures and for our anticipated future
credit needs);
|
|
|
|
to provide funds for distributions to our unitholders and our
general partner for any one or more of the next four calendar
quarters; or
|
|
|
|
to comply with applicable law or any of our loan or other
agreements.
|
Depending on the timing and amount of our cash distributions to
unitholders and because we are not required to accumulate cash
for the purpose of meeting obligations to holders of any notes,
such distributions could significantly reduce the cash available
to us in subsequent periods to pay the interest on, and
principal of, the notes.
Our
indebtedness could impair our financial condition and our
ability to fulfill our debt obligations, including our
obligations under the notes.
Our total outstanding long-term debt as of March 31, 2010,
was approximately $6.3 billion.
Our debt service obligations and restrictive covenants in the
Credit Facility, the indenture governing the notes and the
indentures governing our other senior unsecured notes could have
important consequences to you. For example, they could:
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make it more difficult for us to satisfy our obligations with
respect to the notes and our other indebtedness, which could in
turn result in an event of default on such other indebtedness or
the notes;
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impair our ability to obtain additional financing in the future
for working capital, capital expenditures, acquisitions, general
partnership purposes or other purposes;
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diminish our ability to withstand a continued or future downturn
in our business or the economy generally;
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require us to dedicate a substantial portion of our cash flow
from operations to debt service payments, thereby reducing the
availability of cash for working capital, capital expenditures,
acquisitions, general corporate purposes or other purposes;
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limit our flexibility in planning for, or reacting to, changes
in our business and the industry in which we operate; and
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place us at a competitive disadvantage compared to our
competitors that have proportionately less debt.
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Our ability to repay, extend or refinance our existing debt
obligations, to make payments of interest on, and the principal
of, the notes, and to obtain future credit will depend primarily
on our operating performance, which will be affected by general
economic, financial, competitive, legislative, regulatory,
business and other factors, many of which are beyond our
control. Our ability to refinance existing debt obligations or
obtain future credit will also depend upon the current
conditions in the credit markets and the availability of credit
generally. If we are unable to meet our debt service
obligations, we could be forced to restructure or refinance our
indebtedness, seek additional equity capital or sell assets. We
may be unable to obtain financing or sell assets on satisfactory
terms, or at all.
We are not prohibited under the indentures governing the notes
or our existing senior unsecured notes from incurring additional
indebtedness in addition to the notes. Our incurrence of
significant additional indebtedness would exacerbate the
negative consequences mentioned above, and could adversely
affect our ability to pay the interest on, and principal of, the
notes.
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We
have a holding company structure in which our subsidiaries
conduct our operations and own our operating assets, which may
affect our ability to make payments on the notes.
We have a holding company structure, and our subsidiaries
conduct all of our operations and own all of our operating
assets. We have no significant assets other than the ownership
interests in these subsidiaries. As a result, our ability to
make required payments on the notes depends on the performance
of our subsidiaries and their ability to distribute funds to us.
The ability of our subsidiaries to make distributions to us may
be restricted by, among other things, applicable state
partnership and limited liability company laws and other laws
and regulations. If we are unable to obtain the funds necessary
to pay the principal amount at maturity of the notes, we may be
required to adopt one or more alternatives, such as a
refinancing of the notes. We cannot assure you that we would be
able to refinance the notes.
Our
debt agreements and Williams public indentures contain
financial and operating restrictions that may limit our access
to credit and affect our ability to operate our business. In
addition, our ability to obtain credit in the future will be
affected by Williams credit ratings.
Our public indentures contain various covenants that, among
other things, limit our ability to grant certain liens to
support indebtedness, merge, or sell substantially all of our
assets. In addition, our Credit Facility contains certain
financial covenants and restrictions on our ability and our
subsidiaries ability to incur indebtedness, to consolidate
or allow any material change in the nature of our business,
enter into certain affiliate transactions and make certain
distributions during an event of default. These covenants could
adversely affect our ability to finance our future operations or
capital needs or engage in, expand or pursue our business
activities and prevent us from engaging in certain transactions
that might otherwise be considered beneficial to us. Our ability
to comply with these covenants may be affected by events beyond
our control, including prevailing economic, financial and
industry conditions. If market or other economic conditions
deteriorate, our current assumptions about future economic
conditions turn out to be incorrect or unexpected events occur,
our ability to comply with these covenants may be significantly
impaired.
Williams public indentures contain covenants that restrict
Williams and our ability to incur liens to support
indebtedness. These covenants could adversely affect our ability
to finance our future operations or capital needs or engage in,
expand or pursue our business activities and prevent us from
engaging in certain transactions that might otherwise be
considered beneficial to us. Williams ability to comply
with the covenants contained in its debt instruments may be
affected by events beyond our and Williams control,
including prevailing economic, financial and industry
conditions. If market or other economic conditions deteriorate,
Williams ability to comply with these covenants may be
negatively impacted.
Our failure to comply with the covenants in our debt agreements
could result in events of default. Upon the occurrence of such
an event of default, the lenders could elect to declare all
amounts outstanding under a particular facility to be
immediately due and payable and terminate all commitments, if
any, to extend further credit. Certain payment defaults or an
acceleration under our public indentures or other material
indebtedness could cause a cross-default or cross-acceleration
of our Credit Facility. Such a cross-default or
cross-acceleration could have a wider impact on our liquidity
than might otherwise arise from a default or acceleration of a
single debt instrument. If an event of default occurs, or if our
Credit Facility cross-defaults, and the lenders under the
affected debt agreements accelerate the maturity of any loans or
other debt outstanding to us, we may not have sufficient
liquidity to repay amounts outstanding under such debt
agreements. For more information regarding our debt agreements,
please read Description of Other Indebtedness in
this prospectus and Managements Discussion and
Analysis of Financial Condition and Results of
Operations Managements Discussion and Analysis
of Financial Condition and Liquidity in Exhibit 99.1
to the April 20, 2010
8-K.
Substantially all of Williams operations are conducted
through its subsidiaries. Williams cash flows are
substantially derived from loans, dividends and distributions
paid to it by its subsidiaries. Williams cash flows are
typically utilized to service debt and pay dividends on the
common stock of Williams, with the balance, if any, reinvested
in its subsidiaries as loans or contributions to capital. Due to
our relationship with Williams, our ability to obtain credit
will be affected by Williams credit ratings. If Williams
were to experience a
13
deterioration in its credit standing or financial condition, our
access to credit and our ratings could be adversely affected.
Any future downgrading of a Williams credit rating would
likely also result in a downgrading of our credit rating. A
downgrading of a Williams credit rating could limit our
ability to obtain financing in the future upon favorable terms,
if at all.
Our
subsidiaries are not prohibited from incurring indebtedness by
their organizational documents, which may affect our ability to
pay interest on, and the principal of, the notes.
Our subsidiaries are not prohibited by the terms of their
respective organizational documents from incurring indebtedness.
If they were to incur significant amounts of indebtedness, such
occurrence may inhibit their ability to make distributions to
us. An inability by our subsidiaries to make distributions to us
would materially and adversely affect our ability to pay
interest on, and the principal of, the notes because we expect
distributions we receive from our subsidiaries to represent a
significant portion of the cash we use to pay interest on, and
the principal of, the notes.
The
notes are structurally subordinated to liabilities and
indebtedness of our subsidiaries and effectively subordinated to
any of our secured indebtedness to the extent of the assets
securing such indebtedness.
We currently have no secured indebtedness outstanding, but
holders of any secured indebtedness that we may incur in the
future would have claims with respect to our assets constituting
collateral for such indebtedness that are effectively prior to
your claims under the notes. In the event of a default on such
secured indebtedness or our bankruptcy, liquidation or
reorganization, those assets would be available to satisfy
obligations with respect to the indebtedness secured thereby
before any payment could be made on the notes. Accordingly, any
such secured indebtedness would effectively be senior to the
notes to the extent of the value of the collateral securing the
indebtedness. While the indenture governing the notes places
some limitations on our ability to create liens, there are
significant exceptions to these limitations that will allow us
to secure some kinds of indebtedness without equally and ratably
securing the notes. To the extent the value of the collateral is
not sufficient to satisfy the secured indebtedness, the holders
of that indebtedness would be entitled to share with the holders
of the notes and the holders of other claims against us with
respect to our other assets. Holders of the notes will
participate ratably with all holders of our unsecured
indebtedness that is deemed to be of the same class as the
notes, and potentially with all of our other general creditors,
based upon the respective amounts owed to each holder or
creditor, in our remaining assets. In any of the foregoing
events, we cannot assure you that there will be sufficient
assets to pay amounts due on the notes. As a result, holders of
notes may receive less, ratably, than holders of secured
indebtedness.
In addition, the notes are not guaranteed by our subsidiaries
and our subsidiaries are generally not prohibited under the
indenture from incurring additional indebtedness (in particular,
Transco and Northwest Pipeline collectively had approximately
$2.0 billion of indebtedness outstanding as of
March 31, 2010 and are likely to incur additional
indebtedness in the future). As a result, holders of the notes
will be structurally subordinated to claims of third party
creditors, including holders of indebtedness, of these
subsidiaries. Claims of those other creditors, including trade
creditors, secured creditors, governmental authorities, and
holders of indebtedness or guarantees issued by the
subsidiaries, will generally have priority as to the assets of
the subsidiaries over claims by the holders of the notes. As a
result, rights of payment of holders of our indebtedness,
including the holders of the notes, will be structurally
subordinated to all those claims of creditors of our
subsidiaries.
Cost
reimbursements due to our general partner and its affiliates
will reduce cash available to pay interest on, and the principal
of, the notes.
We will reimburse our general partner and its affiliates,
including Williams, for various general and administrative
services they provide for our benefit, including costs for
rendering administrative staff and support services to us, and
overhead allocated to us. Our general partner determines the
amount of these reimbursements in its sole discretion. Payments
for these services will be substantial and will reduce the
amount of cash available for payments of interest on, and the
principal of, the notes. In addition, under Delaware partnership
law, our general partner has unlimited liability for our
obligations, such as our debts and
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environmental liabilities, except for our contractual
obligations that are expressly made without recourse to our
general partner. To the extent our general partner incurs
obligations on our behalf, we are obligated to reimburse or
indemnify it. If we are unable or unwilling to reimburse or
indemnify our general partner, our general partner may take
actions to cause us to make payments of these obligations and
liabilities. Any such payments adversely affect our ability to
pay interest on, and the principal of, the notes.
Risks
Inherent in an Investment in Us
We may
not realize the anticipated benefits from the
Dropdown.
We may not realize the benefits that we anticipate from the
Dropdown for a number of reasons, including, but not limited to,
if any of the matters identified as risks in the Risk Factors
section in this prospectus or in our 2009
10-K were to
occur. If we do not realize the anticipated benefits from the
Dropdown for any reason, our business may be materially
adversely affected.
Williams
did not seek a vote of its shareholders in connection with the
Dropdown. If there is a determination that such a vote was
required, the resulting consequences could impact
us.
Section 271 of the Delaware General Corporation Law
generally requires a corporation to obtain authorization from
the holders of a majority of its outstanding shares if the
corporation intends to sell all or substantially all of its
assets. Williams does not believe the Dropdown constituted a
sale of all or substantially all of its assets
because of, among other things, the portion of Williams
assets involved, the significance of its assets and businesses
that were not transferred and the fact that Williams retains
control of all of the assets involved and over an 80% interest
in the cash flows therefrom. As such, Williams did not seek a
vote of its shareholders in connection with the Dropdown. There
is a limited body of Delaware case law interpreting the phrase
all or substantially all, and there is no precise
established definition. We cannot assure you that the Dropdown
did not constitute a sale of all or substantially
all of Williams assets and, therefore, that a
shareholder vote was not required. If such a shareholder vote
were determined to be required, the resulting consequences could
impact us and could include (among other consequences)
shareholders of Williams asserting claims against us, some or
all of which could ultimately be successful.
We
have certain indemnification obligations in favor of Williams as
a result of the completion of the Dropdown.
In connection with the Dropdown, we have agreed to indemnify
Williams, its affiliates (other than us and our securityholders,
officers, directors and employees) and their respective
securityholders, officers, directors and employees against
certain losses resulting from any breach of our representations,
warranties, covenants or agreements contained in the
Contribution Agreement. These indemnification obligations could
be material. We cannot determine whether we will have to
indemnify Williams or its affiliates for any substantial
obligations in connection with the Dropdown. We also cannot
provide any assurance that, if Williams has to indemnify us for
any substantial obligations in connection with the Dropdown,
Williams will be able to satisfy such obligations.
Affiliates
of our general partner, including Williams, may not be limited
in their ability to compete with us. Williams is also not
obligated to offer us the opportunity to acquire additional
assets or businesses from it, which could limit our commercial
activities or our ability to grow. In addition, all of the
executive officers and certain of the directors of our general
partner are also officers and/or directors of Williams, and
these persons will also owe fiduciary duties to
it.
While our relationship with Williams and its affiliates is a
significant attribute, it is also a source of potential
conflicts. For example, Williams is in the natural gas business
and is not restricted from competing with us. Williams and its
affiliates may compete with us. Williams and its affiliates may
acquire, construct or dispose of natural gas industry assets in
the future, some or all of which may compete with our assets,
without any obligation to offer us the opportunity to purchase
or construct such assets. In addition, all of the executive
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officers and certain of the directors of our general partner are
also officers
and/or
directors of Williams and certain of its affiliates and will owe
fiduciary duties to those entities as well as our unitholders
and us.
Our
allocation from Williams for costs for its defined benefit
pension plans and other postretirement benefit plans are
affected by factors beyond our and Williams
control.
As we have no employees, employees of Williams and its
affiliates provide services to us. As a result, we are allocated
a portion of Williams costs in defined benefit pension
plans covering substantially all of Williams or its
affiliates employees providing services to us, as well as
a portion of the costs of other postretirement benefit plans
covering certain eligible participants providing services to us.
The timing and amount of our allocations under the defined
benefit pension plans depend upon a number of factors Williams
controls, including changes to pension plan benefits, as well as
factors outside of Williams control, such as asset
returns, interest rates and changes in pension laws. Changes to
these and other factors that can significantly increase our
allocations could have a significant adverse effect on our
financial condition and results of operations.
Risks
Inherent in Our Business
We may
not be able to grow or effectively manage our
growth.
A principal focus of our strategy is to continue to grow by
expanding our business. Our future growth will depend upon our
ability to successfully identify, finance, acquire, integrate
and operate projects and businesses. Failure to achieve any of
these factors would adversely affect our ability to achieve
anticipated growth in the level of cash flows or realize
anticipated benefits.
We may acquire new facilities or expand our existing facilities
to capture anticipated future growth in natural gas production
that does not ultimately materialize. As a result, our new or
expanded facilities may not achieve profitability. In addition,
the process of integrating newly acquired or constructed assets
into our operations may result in unforeseen operating
difficulties, may absorb significant management attention and
may require financial resources that would otherwise be
available for the ongoing development and expansion of our
existing operations. Future acquisitions or construction
projects may require substantial new capital and could result in
the incurrence of indebtedness, additional liabilities and
excessive costs that could have a material adverse effect on our
business, results of operations, financial condition and our
ability to pay interest on, and the principal of, the notes.
Further, any limitations on our access to capital, including
limitations caused by illiquidity in the capital markets, may
impair our ability to complete future acquisitions and
construction projects on favorable terms, if at all.
Prices
for natural gas liquids, natural gas and other commodities are
volatile and this volatility could adversely affect our
financial results, cash flows, access to capital and ability to
maintain existing businesses.
Our revenues, operating results, future rate of growth and the
value of certain segments of our businesses depend primarily
upon the prices of NGLs, natural gas, or other commodities, and
the differences between prices of these commodities. Price
volatility can impact both the amount we receive for our
products and services and the volume of products and services we
sell. Prices affect the amount of cash flow available for
capital expenditures and our ability to borrow money or raise
additional capital. Any of the foregoing can also have an
adverse effect on our business, results of operations and
financial condition and our ability to pay interest on, and the
principal of, the notes.
The markets for NGLs, natural gas and other commodities are
likely to continue to be volatile. Wide fluctuations in prices
might result from relatively minor changes in the supply of and
demand for these commodities, market uncertainty and other
factors that are beyond our control, including:
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worldwide and domestic supplies of and demand for natural gas,
NGLs, petroleum, and related commodities;
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turmoil in the Middle East and other producing regions;
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the activities of the Organization of Petroleum Exporting
Countries;
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terrorist attacks on production or transportation assets;
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weather conditions;
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the level of consumer demand;
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the price and availability of other types of fuels;
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the availability of pipeline capacity;
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supply disruptions, including plant outages and transportation
disruptions;
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the price and level of foreign imports;
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domestic and foreign governmental regulations and taxes;
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volatility in the natural gas markets;
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the overall economic environment;
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the credit of participants in the markets where products are
bought and sold; and
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the adoption of regulations or legislation relating to climate
change.
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We
might not be able to successfully manage the risks associated
with selling and marketing products in the wholesale energy
markets.
Our portfolio of derivative and other energy contracts may
consist of wholesale contracts to buy and sell commodities,
including contracts for natural gas, NGLs and other commodities
that are settled by the delivery of the commodity or cash
throughout the United States. If the values of these contracts
change in a direction or manner that we do not anticipate or
cannot manage, it could negatively affect our results of
operations. In the past, certain marketing and trading companies
have experienced severe financial problems due to price
volatility in the energy commodity markets. In certain instances
this volatility has caused companies to be unable to deliver
energy commodities that they had guaranteed under contract. If
such a delivery failure were to occur in one of our contracts,
we might incur additional losses to the extent of amounts, if
any, already paid to, or received from, counterparties. In
addition, in our businesses, we often extend credit to our
counterparties. Despite performing credit analysis prior to
extending credit, we are exposed to the risk that we might not
be able to collect amounts owed to us. If the counterparty to
such a transaction fails to perform and any collateral that
secures our counterpartys obligation is inadequate, we
will suffer a loss. Downturns in the economy or disruptions in
the global credit markets could cause more of our counterparties
to fail to perform than we expect.
Any
decrease in NGL prices or a change in NGL prices relative to the
price of natural gas could affect our processing, fractionation
and storage businesses.
The relationship between natural gas prices and NGL prices
affects our profitability. When natural gas prices are low
relative to NGL prices, it is more profitable for us and our
customers to process natural gas. When natural gas prices are
high relative to NGL prices, it is less profitable to process
natural gas both because of the higher value of natural gas and
because of the increased cost of separating the mixed NGLs from
the natural gas. Higher natural gas prices relative to NGL
prices may also make it uneconomical to recover ethane, which
may further negatively impact sales volumes and margins.
Finally, higher natural gas prices relative to NGL prices could
also reduce volumes of gas processed generally, reducing the
volumes of mixed NGLs available for fractionation.
The
long-term financial condition of our natural gas transportation
and midstream businesses is dependent on the continued
availability of natural gas supplies in the supply basins that
we access, demand for those supplies in our traditional markets,
and the prices of and market demand for natural
gas.
The development of the additional natural gas reserves that are
essential for our gas transportation and midstream businesses to
thrive requires significant capital expenditures by others for
exploration and
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development drilling and the installation of production,
gathering, storage, transportation and other facilities that
permit natural gas to be produced and delivered to our pipeline
systems. Low prices for natural gas, regulatory limitations,
including environmental regulations, or the lack of available
capital for these projects could adversely affect the
development and production of additional reserves, as well as
gathering, storage, pipeline transportation and import and
export of natural gas supplies, adversely impacting our ability
to fill the capacities of our gathering, transportation and
processing facilities.
Production from existing wells and natural gas supply basins
with access to our pipeline systems will also naturally decline
over time. The amount of natural gas reserves underlying these
wells may also be less than anticipated, and the rate at which
production from these reserves declines may be greater than
anticipated. Additionally, the competition for natural gas
supplies to serve other markets could reduce the amount of
natural gas supply for our customers. Accordingly, to maintain
or increase the contracted capacity or the volume of natural gas
transported on our pipeline systems and cash flows associated
with the transportation of natural gas, our customers must
compete with others to obtain adequate supplies of natural gas.
In addition, if natural gas prices in the supply basins
connected to our pipeline systems are higher than prices in
other natural gas producing regions, our ability to compete with
other transporters may be negatively impacted on a short term
basis, as well as with respect to our long-term recontracting
activities. If new supplies of natural gas are not obtained to
replace the natural decline in volumes from existing supply
areas, if natural gas supplies are diverted to serve other
markets, or if environmental regulators restrict new natural gas
drilling, the overall volume of natural gas transported and
stored on our system would decline, which could have a material
adverse effect on our business, financial condition, results of
operations, and our ability to pay interest on, and the
principal of, the notes. In addition, new LNG import facilities
built near our markets could result in less demand for our
gathering and transportation facilities.
Our
risk measurement and hedging activities might not be effective
and could increase the volatility of our results.
Although we have systems in place that use various methodologies
to quantify commodity price risk associated with our businesses,
these systems might not always be followed or might not always
be effective. Further, such systems do not in themselves manage
risk, particularly risks outside of our control, and adverse
changes in energy commodity market prices, volatility, adverse
correlation of commodity prices, the liquidity of markets,
changes in interest rates and other risks discussed in this
prospectus might still adversely affect our earnings, cash flows
and balance sheet under applicable accounting rules, even if
risks have been identified.
In an effort to manage our financial exposure related to
commodity price and market fluctuations, we have entered into
contracts to hedge certain risks associated with our assets and
operations. In these hedging activities, we have used
fixed-price, forward, physical purchase and sales contracts,
futures, financial swaps and option contracts traded in the
over-the-counter
markets or on exchanges. Nevertheless, no single hedging
arrangement can adequately address all risks present in a given
contract. For example, a forward contract that would be
effective in hedging commodity price volatility risks would not
hedge the contracts counterparty credit or performance
risk. Therefore, unhedged risks will always continue to exist.
While we attempt to manage counterparty credit risk within
guidelines established by our credit policy, we may not be able
to successfully manage all credit risk and as such, future cash
flows and results of operations could be impacted by
counterparty default.
Our use of hedging arrangements through which we attempt to
reduce the economic risk of our participation in commodity
markets could result in increased volatility of our reported
results. Changes in the fair values (gains and losses) of
derivatives that qualify as hedges under generally accepted
accounting principles (GAAP), to the extent that
such hedges are not fully effective in offsetting changes to the
value of the hedged commodity, as well as changes in the fair
value of derivatives that do not qualify or have not been
designated as hedges under GAAP, must be recorded in our income.
This creates the risk of volatility in earnings even if no
economic impact to us has occurred during the applicable period.
The impact of changes in market prices for NGLs and natural gas
on the average prices paid or received by us may be reduced
based on the level of our hedging activities. These hedging
arrangements may limit or
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enhance our margins if the market prices for NGLs or natural gas
were to change substantially from the price established by the
hedges. In addition, our hedging arrangements expose us to the
risk of financial loss in certain circumstances, including
instances in which:
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volumes are less than expected;
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the hedging instrument is not perfectly effective in mitigating
the risk being hedged; and
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the counterparties to our hedging arrangements fail to honor
their financial commitments.
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Our
industry is highly competitive, and increased competitive
pressure could adversely affect our business and operating
results.
We have numerous competitors in all aspects of our businesses,
and additional competitors may enter our markets. Some of our
competitors are large oil, natural gas and petrochemical
companies that have greater access to supplies of natural gas
and NGLs than we do. In addition, current or potential
competitors may make strategic acquisitions or have greater
financial resources than we do, which could affect our ability
to make investments or acquisitions. Other companies with which
we compete may be able to respond more quickly to new laws or
regulations or emerging technologies or to devote greater
resources to the construction, expansion or refurbishment of
their facilities than we can. In addition, current or potential
competitors may make strategic acquisitions or have greater
financial resources than we do, which could affect our ability
to make investments or acquisitions. There can be no assurance
that we will be able to compete successfully against current and
future competitors and any failure to do so could have a
material adverse effect on our business, results of operations,
financial condition and our ability to pay interest on, and the
principal of, the notes.
We are
exposed to the credit risk of our customers, and our credit risk
management may not be adequate to protect against such
risk.
We are subject to the risk of loss resulting from nonpayment
and/or
nonperformance by our customers in the ordinary course of our
business. Generally, our customers are rated investment grade,
are otherwise considered creditworthy or are required to make
prepayments or provide security to satisfy credit concerns.
However, our credit procedures and policies may not be adequate
to fully eliminate customer credit risk. We cannot predict to
what extent our business would be impacted by deteriorating
conditions in the economy, including declines in our
customers creditworthiness. If we fail to adequately
assess the creditworthiness of existing or future customers,
unanticipated deterioration in their creditworthiness and any
resulting increase in nonpayment
and/or
nonperformance by them could cause us to write down or write off
doubtful accounts. Such write downs or write offs could
negatively affect our operating results in the periods in which
they occur, and, if significant, could have a material adverse
effect on our business, results of operations, cash flows, and
financial condition and our ability to pay interest on, and the
principal of, the notes.
The
failure of counterparties to perform their contractual
obligations could adversely affect our operating results,
financial condition and cash available to pay interest on, and
the principal of, the notes.
Despite performing credit analysis prior to extending credit, we
are exposed to the credit risk of our contractual counterparties
in the ordinary course of business even though we monitor these
situations and attempt to take appropriate measures to protect
ourselves. In addition to credit risk, counterparties to our
commercial agreements, such as product sales, gathering,
treating, storage, transportation, processing and fractionation
agreements, may fail to perform their other contractual
obligations. A failure of counterparties to perform their
contractual obligations, including Williams, could cause us to
write down or write off doubtful accounts, which could
materially adversely affect our operating results, financial
condition and our ability to pay interest on, and the principal
of, the notes.
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If
third-party pipelines and other facilities interconnected to our
pipelines and facilities become unavailable to transport natural
gas and NGLs or to treat natural gas, our revenues and cash
available to repay the notes could be adversely
affected.
We depend upon third-party pipelines and other facilities that
provide delivery options to and from our pipelines and
facilities for the benefit of our customers. Because we do not
own these third-party pipelines or facilities, their continuing
operation is not within our control. If these pipelines or
facilities were to become temporarily or permanently unavailable
for any reason, or if throughput were reduced because of
testing, line repair, damage to pipelines or facilities, reduced
operating pressures, lack of capacity, increased credit
requirements or rates charged by such pipelines or facilities or
other causes, we and our customers would have reduced capacity
to transport, store or deliver natural gas or NGL products to
end use markets or to receive deliveries of mixed NGLs, thereby
reducing our revenues. Further, although there are laws and
regulations designed to encourage competition in wholesale
market transactions, some companies may fail to provide fair and
equal access to their transportation systems or may not provide
sufficient transportation capacity for other market participants.
Any temporary or permanent interruption at any key pipeline
interconnect or in operations on third-party pipelines or
facilities that would cause a material reduction in volumes
transported on our pipelines or our gathering systems or
processed, fractionated, treated or stored at our facilities
could have a material adverse effect on our business, results of
operations, financial condition and our ability to repay the
notes.
Future
disruptions in the global credit markets may make equity and
debt markets less accessible, create a shortage in the
availability of credit and lead to credit market volatility,
which could disrupt our financing plans and limit our ability to
grow.
In 2008, public equity markets experienced significant declines,
and global credit markets experienced a shortage in overall
liquidity and a resulting disruption in the availability of
credit. Future disruptions in the global financial marketplace,
including the bankruptcy or restructuring of financial
institutions, could make equity and debt markets inaccessible
and adversely affect the availability of credit already arranged
and the availability and cost of credit in the future. We have
availability under our Credit Facility, but our ability to
borrow under that facility could be impaired if one or more of
our lenders fails to honor its contractual obligation to lend to
us.
As a publicly traded partnership, these developments could
significantly impair our ability to make acquisitions or finance
growth projects. We distribute all of our available cash to our
unitholders on a quarterly basis. We typically rely upon
external financing sources, including the issuance of debt and
equity securities and bank borrowings, to fund acquisitions or
expansion capital expenditures. Any limitations on our access to
external capital, including limitations caused by illiquidity or
volatility in the capital markets, may impair our ability to
complete future acquisitions and construction projects on
favorable terms, if at all. As a result, we may be at a
competitive disadvantage as compared to businesses that reinvest
all of their available cash to expand ongoing operations,
particularly under adverse economic conditions.
Adverse
economic conditions could negatively affect our results of
operations.
A slowdown in the economy has the potential to negatively impact
our businesses in many ways. Included among these potential
negative impacts are reduced demand and lower prices for our
products and services, increased difficulty in collecting
amounts owed to us by our customers and a reduction in our
credit ratings (either due to tighter rating standards or the
negative impacts described above), which could result in
reducing our access to credit markets, raising the cost of such
access or requiring us to provide additional collateral to our
counterparties.
A
downgrade of our credit rating could impact our liquidity,
access to capital and our costs of doing business, and
maintaining credit ratings is under the control of independent
third parties.
A downgrade of our credit rating might increase our cost of
borrowing and could require us to post collateral with third
parties, negatively impacting our available liquidity. Our
ability to access capital markets
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could also be limited by a downgrade of our credit rating and
other disruptions. Such disruptions could include:
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economic downturns;
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deteriorating capital market conditions;
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declining market prices for natural gas, NGLs and other
commodities;
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terrorist attacks or threatened attacks on our facilities or
those of other energy companies; and
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the overall health of the energy industry, including the
bankruptcy or insolvency of other companies.
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Credit rating agencies perform independent analysis when
assigning credit ratings. The analysis includes a number of
criteria including, but not limited to, business composition,
market and operational risks, as well as various financial
tests. Credit rating agencies continue to review the criteria
for industry sectors and various debt ratings and may make
changes to those criteria from time to time. Our current credit
ratings after the Dropdown from Moodys is Baa3, from
S&P is BBB-, and from Fitch is BBB-. Credit ratings are not
recommendations to buy, sell or hold investments in the rated
entity. Ratings are subject to revision or withdrawal at any
time by the ratings agencies and no assurance can be given that
we will maintain our current credit ratings.
We are
subject to risks associated with climate change.
There is a growing belief that emissions of greenhouse gases may
be linked to climate change. Climate change and the costs that
may be associated with its impacts and the regulation of
greenhouse gases have the potential to affect our business in
many ways, including negatively impacting the costs we incur in
providing our products and services, the demand for and
consumption of our products and services (due to change in both
costs and weather patterns), and the economic health of the
regions in which we operate, all of which can create financial
risks. For further information regarding risks to our business
arising from climate change related legislation, please read the
discussion below under Our operations are subject to
governmental laws and regulations relating to the protection of
the environment, which may expose us to significant costs and
liabilities and could exceed current expectations.
Our
assets and operations can be affected by weather and other
natural phenomena.
Our assets and operations can be adversely affected by
hurricanes, floods, earthquakes, tornadoes and other natural
phenomena and weather conditions, including extreme
temperatures, making it more difficult for us to realize the
historic rates of return associated with these assets and
operations. Insurance may be inadequate, and in some instances,
we have been unable to obtain insurance on commercially
reasonable terms or insurance has not been available at all. A
significant disruption in operations or a significant liability
for which we were not fully insured could have a material
adverse effect on our business, results of operations and
financial condition and our ability to pay interest on, and the
principal of, the notes.
Our customers energy needs vary with weather conditions.
To the extent weather conditions are affected by climate change
or demand is impacted by regulations associated with climate
change, customers energy use could increase or decrease
depending on the duration and magnitude of the changes, leading
either to increased investment or decreased revenues.
We
depend on certain key customers and producers for a significant
portion of our revenues and supply of natural gas and NGLs. If
we lost any of these key customers or producers or contracted
volumes, our revenues and cash available to pay interest on, and
the principal of, the notes could decline.
We rely on a limited number of customers for a significant
portion of our revenues. Although some of these customers are
subject to long-term contracts, we may be unable to negotiate
extensions or replacements of these contracts on favorable
terms, if at all. The loss of all, or even a portion of, the
revenues from natural gas, NGLs or contracted volumes, as
applicable, supplied by these customers, as a result of
competition, creditworthiness, inability to negotiate extensions
or replacements of contracts or otherwise, could have a
21
material adverse effect on our business, results of operations,
financial condition and our ability to pay interest on, and the
principal of, the notes unless we are able to acquire comparable
volumes from other sources.
We do
not own all of the interests in Partially Owned Entities, which
could adversely affect our ability to operate and control these
assets in a manner beneficial to us.
Because we do not control the Partially Owned Entities except
Northwest Pipeline, we may have limited flexibility to control
the operation of or cash distributions received from these
assets. Any future disagreements with the other co owners of
these assets could adversely affect our ability to respond to
changing economic or industry conditions, which could have a
material adverse effect on our business, results of operations,
financial condition and ability to make payments on the notes.
The
Partially Owned Entities may reduce their cash distributions to
us in some situations.
The Partially Owned Entities organizational documents
require distribution of their available cash to their members on
a quarterly basis. In each case, available cash is reduced, in
part, by reserves appropriate for operating their respective
businesses.
Significant
prolonged changes in natural gas prices could affect supply and
demand, cause a reduction in or termination of the long-term
transportation and storage contracts or throughput on the
Pipeline Entities systems, and adversely affect our cash
available to repay the notes.
Higher natural gas prices over the long term could result in a
decline in the demand for natural gas and, therefore, in the
Pipeline Entities long-term transportation and storage
contracts or throughput on their respective systems. Also, lower
natural gas prices over the long term could result in a decline
in the production of natural gas resulting in reduced contracts
or throughput on their systems. As a result, significant
prolonged changes in natural gas prices could have a material
adverse effect on our Pipeline Entities business,
financial condition, results of operations and cash flows, and
on our ability to pay interest on, and the principal of, the
notes.
The
Pipeline Entities natural gas sales, transportation and
storage operations are subject to regulation by FERC, which
could have an adverse impact on their ability to establish
transportation and storage rates that would allow them to
recover the full cost of operating their respective pipelines,
including a reasonable rate of return.
The Pipeline Entities natural gas sales, transmission and
storage operations are subject to federal, state and local
regulatory authorities. Specifically, their interstate pipeline
transportation and storage service is subject to regulation by
FERC. The federal regulation extends to such matters as:
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transportation and sale for resale of natural gas in interstate
commerce;
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rates, operating terms and conditions of service, including
initiation and discontinuation of service;
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the types of services the Pipeline Entities may offer to their
customers;
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certification and construction of new facilities;
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acquisition, extension, disposition or abandonment of facilities;
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accounts and records;
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depreciation and amortization policies;
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relationships with affiliated companies who are involved in
marketing functions of the natural gas business; and
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market manipulation in connection with interstate sales,
purchases or transportation of natural gas.
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Under the Natural Gas Act (NGA), FERC has authority
to regulate providers of natural gas pipeline transportation and
storage services in interstate commerce, and such providers may
only charge rates that have
22
been determined to be just and reasonable by FERC. In addition,
FERC prohibits providers from unduly preferring or unreasonably
discriminating against any person with respect to pipeline rates
or terms and conditions of service.
Regulatory actions in these areas can affect our business in
many ways, including decreasing tariff rates and revenues,
decreasing volumes in our pipelines, increasing our costs and
otherwise altering the profitability of our pipeline business.
The FERC Standards of Conduct govern the relationship between
natural gas transmission providers and their marketing function
employees as defined by the rule. The standards of conduct are
intended to prevent natural gas transmission providers from
preferentially benefiting gas marketing functions by requiring
the employees of a transmission provider that perform
transmission functions to function independently from marketing
function employees and by restricting the information that
transmission providers may provide to gas marketing employees.
The inefficiencies created by the restrictions on the sharing of
employees and information may increase our costs, and the
restriction on the sharing of information may have an adverse
impact on our senior managements ability to effectively
obtain important information about our business.
Unlike other pipelines that own facilities in the offshore Gulf
of Mexico, Transco charges its transportation customers a
separate fee to access its offshore facilities. The separate
charge that it assesses, referred to as an IT feeder
charge, is charged only when the facilities are used and
typically is paid by producers or marketers. This means that
Transco recovers the costs included in the IT feeder charge only
if its facilities are used, and because it is typically paid by
producers and marketers, it generally results in netback prices
to producers that are slightly lower than the netbacks realized
by producers transporting on other interstate pipelines. Longer
term, this rate design disparity could result in producers
bypassing Transcos offshore facilities in favor of
alternative transportation facilities. Transco has asked FERC to
allow it to eliminate the IT feeder charge and charge for
transportation on its offshore facilities in the same manner as
other pipelines. Transcos requests have been denied.
The rates, terms and conditions for the Pipeline Entities
interstate pipeline services are set forth in their respective
FERC-approved tariffs. Any successful complaint or protest
against the Pipeline Entities rates could have an adverse
impact on their revenues associated with providing
transportation services. In addition, there is a risk that rates
set by FERC in future rate cases filed by the Pipeline Entities
will be inadequate to recover increases in operating costs or to
sustain an adequate return on capital investments. There is also
the risk that higher rates would cause their customers to look
for alternative ways to transport natural gas.
The
Pipeline Entities could be subject to penalties and fines if
they fail to comply with FERC regulations.
The Pipeline Entities transportation and storage
operations are regulated by FERC. Should the Pipeline Entities
fail to comply with all applicable FERC administered statutes,
rules, regulations and orders, they could be subject to
substantial penalties and fines. Under the Energy Policy Act of
2005, FERC has civil penalty authority under the NGA to impose
penalties for current violations of up to $1,000,000 per day for
each violation. Any material penalties or fines imposed by FERC
could have a material adverse impact on the Pipeline
Entities business, financial condition, results of
operations and cash flows, and on our ability to pay interest
on, or the principal of, the notes.
The
outcome of certain FERC proceedings involving FERC policy
statements is uncertain and could affect the level of return on
equity that the Pipeline Entities may be able to achieve in any
future rate proceeding.
In an effort to provide some guidance and to obtain further
public comment on FERCs policies concerning return on
equity determinations, on July 19, 2007, FERC issued its
Proposed Proxy Policy Statement, Composition of Proxy
Groups for Determining Gas and Oil Pipeline Return on
Equity. In the Proposed Proxy Policy Statement, FERC
proposes to permit inclusion of publicly traded partnerships in
the proxy group analysis relating to return on equity
determinations in rate proceedings, provided that the analysis
be limited to actual publicly traded partnership distributions
capped at the level of the pipelines earnings.
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After receiving public comment on the proposed policy statement,
on April 17, 2008, FERC issued a final policy statement
rejecting the concept of capping distributions in favor of an
adjustment to the long-term growth rate used to calculate the
equity cost of capital for publicly traded partnerships which
are included in the proxy group.
On January 19, 2009, FERC applied the policy statement to a
pipeline rate case and determined that the pipelines
return on equity should be 11.55 percent. It is difficult
to know how instructive this case is for purposes of
anticipating rates of return in future rate cases, because FERC
determined the composition of the proxy group using data from
2004 when the case was filed.
The effect of the application of FERCs policy to the
Pipeline Entities future rate proceedings is not certain,
and we cannot ensure that such application would not adversely
affect our ability to achieve a reasonable level of return on
equity.
The
outcome of future rate cases to set the rates the Pipeline
Entities can charge customers on their respective pipelines
might result in rates that lower their return on the capital
invested in those pipelines.
There is a risk that rates set by FERC in the Pipeline
Entities future rate cases will be inadequate to recover
increases in operating costs or to sustain an adequate return on
capital investments. There is also the risk that higher rates
will cause their customers to look for alternative ways to
transport their natural gas.
The
outcome of future rate cases will determine the amount of income
taxes the Pipeline Entities will be allowed to
recover.
In May 2005, FERC issued a statement of general policy
permitting a pipeline to include in its
cost-of-service
computations an income tax allowance provided that an entity or
individual has an actual or potential income tax liability on
income from the pipelines public utility assets. The
extent to which owners of pipelines have such actual or
potential income tax liability will be reviewed by FERC on a
case-by-case
basis in rate cases where the amounts of the allowances will be
established.
Legal
and regulatory proceedings and investigations relating to the
energy industry and capital markets have adversely affected the
Pipeline Entities businesses and may continue to do
so.
Public and regulatory scrutiny of the energy industry and of the
capital markets has resulted in increased regulation being
either proposed or implemented. Such scrutiny has also resulted
in various inquiries, investigations and court proceedings in
which the Pipeline Entities or their affiliates are named
as defendants. Both the shippers on the Pipeline Entities
pipelines and regulators have rights to challenge the rates they
charge under certain circumstances. Any successful challenge
could materially affect the Pipeline Entities results of
operations.
Certain inquiries, investigations and court proceedings are
ongoing. Adverse effects may continue as a result of the
uncertainty of these ongoing inquiries and proceedings, or
additional inquiries and proceedings by federal or state
regulatory agencies or private plaintiffs. In addition, we
cannot predict the outcome of any of these inquiries or whether
these inquiries will lead to additional legal proceedings
against the Pipeline Entities, civil or criminal fines or
penalties, or other regulatory action, including legislation,
which might be materially adverse to the operation of the
Pipeline Entities businesses and our revenues and net
income or increase their operating costs in other ways. Current
legal proceedings or other matters against us including
environmental matters, suits, regulatory appeals and similar
matters might result in adverse decisions against the Pipeline
Entities. The result of such adverse decisions, either
individually or in the aggregate, could be material and may not
be covered fully or at all by insurance.
Increased
competition from alternative natural gas transportation and
storage options and alternative fuel sources could have a
significant financial impact on us.
We compete primarily with other interstate pipelines and storage
facilities in the transportation and storage of natural gas.
Some of our competitors may have greater financial resources and
access to greater
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supplies of natural gas than we do. Some of these competitors
may expand or construct transportation and storage systems that
would create additional competition for natural gas supplies or
the services we provide to our customers. Moreover, Williams and
its other affiliates may not be limited in their ability to
compete with us. Further, natural gas also competes with other
forms of energy available to our customers, including
electricity, coal, fuel oils and other alternative energy
sources.
The principal elements of competition among natural gas
transportation and storage assets are rates, terms of service,
access to natural gas supplies, flexibility and reliability.
FERCs policies promoting competition in natural gas
markets are having the effect of increasing the natural gas
transportation and storage options for our traditional customer
base. As a result, we could experience some turnback
of firm capacity as the primary terms of existing agreements
expire. If we are unable to remarket this capacity or can
remarket it only at substantially discounted rates compared to
previous contracts, we or our remaining customers may have to
bear the costs associated with the turned back capacity.
Increased competition could reduce the amount of transportation
or storage capacity contracted on our system or, in cases where
we do not have long-term fixed rate contracts, could force us to
lower our transportation or storage rates. Competition could
intensify the negative impact of factors that significantly
decrease demand for natural gas or increase the price of natural
gas in the markets served by our pipeline system, such as
competing or alternative forms of energy, a regional or national
recession or other adverse economic conditions, weather, higher
fuel costs and taxes or other governmental or regulatory actions
that directly or indirectly increase the price of natural gas or
limit the use of natural gas. Our ability to renew or replace
existing contracts at rates sufficient to maintain current
revenues and cash flows could be adversely affected by the
activities of our competitors. All of these competitive
pressures could have a material adverse effect on our business,
financial condition, results of operations and cash flows and
our ability to pay interest on, and the principal of, the notes.
We may
not be able to maintain or replace expiring natural gas
transportation and storage contracts at favorable rates or on a
long-term basis.
The Pipeline Entities primary exposure to market risk
occurs at the time the terms of existing transportation and
storage contracts expire and are subject to termination.
Although none of our material contracts are terminable in 2010,
upon expiration of the terms we may not be able to extend
contracts with existing customers to obtain replacement
contracts at favorable rates or on a long-term basis.
The extension or replacement of existing contracts depends on a
number of factors beyond our control, including:
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the level of existing and new competition to deliver natural gas
to our markets;
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the growth in demand for natural gas in our markets;
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whether the market will continue to support long-term firm
contracts;
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whether our business strategy continues to be successful;
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the level of competition for natural gas supplies in the
production basins serving us; and
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the effects of state regulation on customer contracting
practices.
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Any failure to extend or replace a significant portion of our
existing contracts may have a material adverse effect on our
business, financial condition, results of operations and cash
flows and our ability to pay interest on, and the principal of,
the notes.
Competitive
pressures could lead to decreases in the volume of natural gas
contracted or transported through the Pipeline Entities
pipeline systems.
Although most of the Pipeline Entities pipeline
systems current capacity is fully contracted, FERC has
taken certain actions to strengthen market forces in the natural
gas pipeline industry that have led to increased competition
throughout the industry. In a number of key markets, interstate
pipelines are now facing competitive pressure from other major
pipeline systems, enabling local distribution companies and end
users to
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choose a transmission provider based on considerations other
than location. Other entities could construct new pipelines or
expand existing pipelines that could potentially serve the same
markets as our pipeline system. Any such new pipelines could
offer transportation services that are more desirable to
shippers because of locations, facilities, or other factors.
These new pipelines could charge rates or provide service to
locations that would result in greater net profit for shippers
and producers and thereby force us to lower the rates charged
for service on our pipeline in order to extend our existing
transportation service agreements or to attract new customers.
We are aware of proposals by competitors to expand pipeline
capacity in certain markets we also serve which, if the proposed
projects proceed, could increase the competitive pressure upon
us. There can be no assurance that we will be able to compete
successfully against current and future competitors and any
failure to do so could have a material adverse effect on our
business, results of operations, and our ability to pay interest
on, and the principal of, the notes.
Decreases
in demand for natural gas could adversely affect our
business.
Demand for our transportation services depends on the ability
and willingness of shippers with access to our facilities to
satisfy their demand by deliveries through our system. Any
decrease in this demand could adversely affect our business.
Demand for natural gas is also affected by weather, future
industrial and economic conditions, fuel conservation measures,
alternative fuel requirements, governmental regulation, or
technological advances in fuel economy and energy generation
devices, all of which are matters beyond our control.
Additionally, in some cases, new LNG import facilities built
near our markets could result in less demand for our gathering
and transmission facilities.
The
failure of new sources of natural gas production or LNG import
terminals to be successfully developed in North America could
increase natural gas prices and reduce the demand for our
services.
New sources of natural gas production in the United States and
Canada, particularly in areas of shale development, are expected
to become an increasingly significant component of future
U.S. natural gas supply in North America. Additionally,
increases in LNG supplies are expected to be imported through
new LNG import terminals, particularly in the Gulf Coast region.
If these additional sources of supply are not developed, natural
gas prices could increase and cause consumers of natural gas to
turn to alternative energy sources, which could have a material
adverse effect on our business, financial condition, results of
operations and cash flows and our ability to pay interest on,
and the principal of, the notes.
Certain
of the Pipeline Entities services are subject to
long-term, fixed-price contracts that are not subject to
adjustment, even if our cost to perform such services exceeds
the revenues received from such contracts.
The Pipeline Entities provide some services pursuant to
long-term, fixed price contracts. It is possible that costs to
perform services under such contracts will exceed the revenues
they collect for their services. Although most of the services
are priced at cost-based rates that are subject to adjustment in
rate cases, under FERC policy, a regulated service provider and
a customer may mutually agree to sign a contract for service at
a negotiated rate that may be above or below the
FERC-regulated, cost-based rate for that service. These
negotiated rate contracts are not generally subject
to adjustment for increased costs that could be produced by
inflation or other factors relating to the specific facilities
being used to perform the services.
Our
operations are subject to operational hazards and unforeseen
interruptions for which they may not be adequately
insured.
There are operational risks associated with the gathering,
transporting, storage, processing and treating of natural gas
and the fractionation and storage of NGLs, including:
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hurricanes, tornadoes, floods, fires, extreme weather conditions
and other natural disasters;
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aging infrastructure and mechanical problems;
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damages to pipelines and pipeline blockages;
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uncontrolled releases of natural gas (including sour gas), NGLs,
brine or industrial chemicals;
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collapse of NGL storage caverns;
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operator error;
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damage inadvertently caused by third party activity, such as
operation of construction equipment;
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pollution and other environmental risks;
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fires, explosions, craterings and blowouts;
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risks related to truck and rail loading and unloading;
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risks related to operating in a marine environment; and
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terrorist attacks or threatened attacks on our facilities or
those of other energy companies.
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Any of these risks could result in loss of human life, personal
injuries, significant damage to property, environmental
pollution, impairment of our operations and substantial losses
to us. In accordance with customary industry practice, we
maintain insurance against some, but not all, of these risks and
losses, and only at levels we believe to be appropriate. The
location of certain segments of our facilities in or near
populated areas, including residential areas, commercial
business centers and industrial sites, could increase the level
of damages resulting from these risks. In spite of our
precautions, an event such as those described above could cause
considerable harm to people or property, and could have a
material adverse effect on our financial condition and results
of operations, particularly if the event is not fully covered by
insurance. Accidents or other operating risks could further
result in loss of service available to our customers.
Some
portions of our current pipeline infrastructure and other assets
have been in use for many decades, which may adversely affect
our business.
Some portions of our assets, including our pipeline
infrastructure, have been in use for many decades. The current
age and condition of our assets could result in a material
adverse impact on our business, financial condition and results
of operations if the costs of maintaining our facilities exceed
current expectations.
Our
operations are subject to governmental laws and regulations
relating to the protection of the environment, which may expose
us to significant costs and liabilities and could exceed current
expectations.
The risk of substantial environmental costs and liabilities is
inherent in natural gas gathering, transportation, storage,
processing and treating, and in the fractionation and storage of
NGLs, and we may incur substantial environmental costs and
liabilities in the performance of these types of operations. Our
operations are subject to extensive federal, state and local
environmental laws and regulations governing environmental
protection, the discharge of materials into the environment and
the security of chemical and industrial facilities. These laws
include:
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Clean Air Act (CAA) and analogous state laws, which
impose obligations related to air emissions;
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Clean Water Act (CWA) and analogous state laws,
which regulate discharge of wastewaters from our facilities to
state and federal waters;
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Comprehensive Environmental Response, Compensation, and
Liability Act (CERCLA) and analogous state laws,
which regulate the cleanup of hazardous substances that may have
been released at properties currently or previously owned or
operated by us or locations to which we have sent wastes for
disposal; and
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Resource Conservation and Recovery Act (RCRA) and
analogous state laws, which impose requirements for the handling
and discharge of solid and hazardous waste from our facilities.
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Various governmental authorities, including the
U.S. Environmental Protection Agency (EPA) and
analogous state agencies and the U.S. Department of
Homeland Security, have the power to enforce
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compliance with these laws and regulations and the permits
issued under them, oftentimes requiring difficult and costly
actions. Failure to comply with these laws, regulations, and
permits may result in the assessment of administrative, civil,
and criminal penalties, the imposition of remedial obligations,
the imposition of stricter conditions on or revocation of
permits, and the issuance of injunctions limiting or preventing
some or all of our operations.
There is inherent risk of the incurrence of environmental costs
and liabilities in our business, some of which may be material,
due to our handling of the products we gather, transport,
process, fractionate and store, air emissions related to our
operations, historical industry operations, waste disposal
practices, and the prior use of flow meters containing mercury.
Joint and several, strict liability may be incurred without
regard to fault under certain environmental laws and
regulations, including CERCLA, RCRA, and analogous state laws,
for the remediation of contaminated areas and in connection with
spills or releases of natural gas and wastes on, under, or from
our properties and facilities. Private parties, including the
owners of properties through which our pipeline and gathering
systems pass and facilities where our wastes are taken for
reclamation or disposal, may have the right to pursue legal
actions to enforce compliance as well as to seek damages for
non-compliance with environmental laws and regulations or for
personal injury or property damage arising from our operations.
Some sites we operate are located near current or former
third-party hydrocarbon storage and processing operations, and
there is a risk that contamination has migrated from those sites
to ours. In addition, increasingly strict laws, regulations and
enforcement policies could materially increase our compliance
costs and the cost of any remediation that may become necessary.
Our insurance may not cover all environmental risks and costs or
may not provide sufficient coverage if an environmental claim is
made against us.
Our business may be adversely affected by increased costs due to
stricter pollution control requirements or liabilities resulting
from non-compliance with required operating or other regulatory
permits. Also, we might not be able to obtain or maintain from
time to time all required environmental regulatory approvals for
our operations. If there is a delay in obtaining any required
environmental regulatory approvals, or if we fail to obtain and
comply with them, the operation of our facilities could be
prevented or become subject to additional costs, resulting in
potentially material adverse consequences to our business,
financial condition, results of operations and cash flows.
We make assumptions and develop expectations about possible
expenditures related to environmental conditions based on
current laws and regulations and current interpretations of
those laws and regulations. If the interpretation of laws or
regulations, or the laws and regulations themselves, change, our
assumptions may change, and any new capital costs incurred to
comply with such changes may not be recoverable under our
regulatory rate structure or our customer contracts. In
addition, new environmental laws and regulations might adversely
affect our products and activities, including processing,
fractionation, storage and transportation, as well as waste
management and air emissions. For instance, federal and state
agencies could impose additional safety requirements, any of
which could affect our profitability. In addition, recent
scientific studies have suggested that emissions of certain
gases, commonly referred to as greenhouse gases
(GHGs), may be contributing to warming of the
earths atmosphere, and various governmental bodies have
considered legislative and regulatory responses in this area.
Legislative and regulatory responses related to GHGs and climate
change creates the potential for financial risk. The
U.S. Congress and certain states have for some time been
considering various forms of legislation related to GHG
emissions. There have also been international efforts seeking
legally binding reductions in emissions of GHGs. In addition,
increased public awareness and concern may result in more state,
regional
and/or
federal requirements to reduce or mitigate GHG emissions.
Several bills have been introduced in the U.S. Congress
that would compel GHG emission reductions. On June 26,
2009, the U.S. House of Representatives passed the
American Clean Energy and Security Act which is
intended to decrease annual GHG emissions through a variety of
measures, including a cap and trade system which
limits the amount of GHGs that may be emitted and incentives to
reduce the nations dependence on traditional energy
sources. The U.S. Senate is currently considering similar
legislation, and numerous states have also announced or adopted
programs to stabilize and reduce GHGs. In addition, on
December 7, 2009, the EPA issued a final determination that
six GHGs are a threat to public safety and
28
welfare. This determination could ultimately lead to the direct
regulation of GHG emissions in our industry under the CAA. While
it is not clear whether or when any federal or state climate
change laws or regulations will be passed, any of these actions
could result in increased costs to (i) operate and maintain
our facilities, (ii) install new emission controls on our
facilities, and (iii) administer and manage any GHG
emissions program. If we are unable to recover or pass through a
significant level of our costs related to complying with climate
change regulatory requirements imposed on us, it could have a
material adverse effect on our results of operations and our
ability to pay interest on, and the principal of, the notes. To
the extent financial markets view climate change and GHG
emissions as a financial risk, this could negatively impact our
cost of and access to capital.
We do
not insure against all potential losses and could be seriously
harmed by unexpected liabilities or by the ability of the
insurers we do use to satisfy our claims.
We are not fully insured against all risks inherent to our
business, including environmental accidents that might occur. In
addition, we do not maintain business interruption insurance in
the type and amount to cover all possible risks of loss. We
currently maintain excess liability insurance with limits of
$610 million per occurrence and in the aggregate annually
and a deductible of $2 million per occurrence. This
insurance covers us, our subsidiaries, and certain of our
affiliates for legal and contractual liabilities arising out of
bodily injury, personal injury or property damage, including
resulting loss of use to third parties. This excess liability
insurance includes coverage for sudden and accidental pollution
liability for full limits, with the first $135 million of
insurance also providing gradual pollution liability coverage
for natural gas and NGL operations. Pollution liability coverage
excludes: release of pollutants subsequent to their disposal;
release of substances arising from the combustion of fuels that
result in acidic deposition; and testing, monitoring,
clean-up,
containment, treatment or removal of pollutants from property
owned, occupied by, rented to, used by or in the care, custody
or control of us, our subsidiaries, or certain of our affiliates.
We do not insure onshore underground pipelines for physical
damage, except at river crossings and at certain locations such
as compressor stations. We maintain coverage of
$300 million per occurrence for physical damage to onshore
assets and resulting business interruption caused by terrorist
acts. We also maintain coverage of $100 million per
occurrence for physical damage to offshore assets caused by
terrorist acts, except for our Devils Tower spar where we
maintain limits of $450 million per occurrence for physical
damage caused by terrorist acts. We purchase insurance for
business interruption arising from physical loss or damage
resulting from terrorist acts only for certain offshore assets.
Also, all of our insurance is subject to deductibles. If a
significant accident or event occurs for which we are not fully
insured, it could adversely affect our operations and financial
condition. We may not be able to maintain or obtain insurance of
the type and amount we desire at reasonable rates. Changes in
the insurance markets subsequent to hurricanes losses in recent
years have impacted named windstorm insurance coverage, rates
and availability for Gulf of Mexico area exposures, and we may
elect to self insure a portion of our asset portfolio. We cannot
assure you that we will in the future be able to obtain the
levels or types of insurance we would otherwise have obtained
prior to these market changes or that the insurance coverage we
do obtain will not contain large deductibles or fail to cover
certain hazards or cover all potential losses. The occurrence of
any operating risks not fully covered by insurance could have a
material adverse effect on our business, financial condition,
results of operations and cash flows, and our ability to repay
the notes.
In addition, certain insurance companies that provide coverage
to us, including American International Group, Inc., have
experienced negative developments that could impair their
ability to pay any of our potential claims. As a result, we
could be exposed to greater losses than anticipated and may have
to obtain replacement insurance, if available, at a greater cost.
Execution
of our capital projects subjects us to construction risks,
increases in labor costs and materials, and other risks that may
adversely affect financial results.
Our growth may be dependent upon the construction of new natural
gas gathering, transportation, processing or treating pipelines
and facilities or natural gas liquids fractionation or storage
facilities, as well as
29
the expansion of existing facilities. Construction or expansion
of these facilities is subject to various regulatory,
development and operational risks, including:
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the ability to obtain necessary approvals and permits by
regulatory agencies on a timely basis and on acceptable terms;
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the availability of skilled labor, equipment, and materials to
complete expansion projects;
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potential changes in federal, state and local statutes and
regulations, including environmental requirements, that prevent
a project from proceeding or increase the anticipated cost of
the project;
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impediments on our ability to acquire
rights-of-way
or land rights on a timely basis and on acceptable terms;
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the ability to construct projects within estimated costs,
including the risk of cost overruns resulting from inflation or
increased costs of equipment, materials, labor or other factors
beyond our control, that may be material; and
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the ability to access capital markets to fund construction
projects.
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Any of these risks could prevent a project from proceeding,
delay its completion or increase its anticipated costs. As a
result, new facilities may not achieve expected investment
return, which could adversely affect our results of operations,
financial position, or cash flows and our ability to pay
interest on, and the principal of, the notes.
Our
operating results for certain segments of our business might
fluctuate on a seasonal and quarterly basis.
Revenues from certain segments of our business can have seasonal
characteristics. In many parts of the country, demand for
natural gas and other fuels peaks during the winter. As a
result, our overall operating results in the future might
fluctuate substantially on a seasonal basis. Demand for natural
gas and other fuels could vary significantly from our
expectations depending on the nature and location of our
facilities and pipeline systems and the terms of our natural gas
transportation arrangements relative to demand created by
unusual weather patterns.
We do
not operate all of our assets. This reliance on others to
operate our assets and to provide other services could adversely
affect our business and operating results.
Williams and other third parties operate certain of our assets.
We have a limited ability to control these operations and the
associated costs. The success of these operations is therefore
dependent upon a number of factors that are outside our control,
including the competence and financial resources of the
operators.
We rely on Williams for certain services necessary for us to be
able to conduct our business. Williams may outsource some or all
of these services to third parties, and a failure of all or part
of Williams relationships with its outsourcing providers
could lead to delays in or interruptions of these services. Our
reliance on Williams and others as operators and on
Williams outsourcing relationships, and our limited
ability to control certain costs could have a material adverse
effect on our business, results of operations, financial
condition and ability to pay interest on, and the principal of,
the notes.
We do
not own all of the land on which our pipelines and facilities
are located, which could disrupt our operations.
We do not own all of the land on which our pipelines and
facilities have been constructed. As such, we are subject to the
possibility of increased costs to retain necessary land use. We
obtain the rights to construct and operate our pipelines and
gathering systems on land owned by third parties and
governmental agencies for a specific period of time. Our loss of
these rights, through our inability to renew
right-of-way
contracts or otherwise, could have a material adverse effect on
our business, results of operations, and financial condition and
ability to pay interest on, and the principal of, the notes.
30
Potential
changes in accounting standards might cause us to revise our
financial results and disclosures in the future, which might
change the way analysts measure our business or financial
performance.
Regulators and legislators continue to take a renewed look at
accounting practices, financial disclosures, retirement plan
practices and companies relationships with their
independent public accounting firms. It remains unclear what new
laws or regulations will be adopted, and we cannot predict the
ultimate impact that any such new laws or regulations could
have. In addition, the Financial Accounting Standards Board, the
SEC or FERC could enact new accounting standards or FERC orders
that might impact how we are required to record revenues,
expenses, assets and liabilities. Any significant change in
accounting standards or disclosure requirements could have a
material adverse effect on our business, results of operations,
and financial condition and ability to pay interest on, and the
principal of, the notes.
Institutional
knowledge residing with current employees nearing retirement
eligibility might not be adequately preserved.
In our business, institutional knowledge resides with employees
who have many years of service. As these employees reach
retirement age, we may not be able to replace them with
employees of comparable knowledge and experience. In addition,
we may not be able to retain or recruit other qualified
individuals, and our efforts at knowledge transfer could be
inadequate. If knowledge transfer, recruiting and retention
efforts are inadequate, access to significant amounts of
internal historical knowledge and expertise could become
unavailable to us.
Failure
of or disruptions to our outsourcing relationships might
negatively impact our ability to conduct our
business.
Some studies indicate a high failure rate of outsourcing
relationships. Although Williams has taken steps to build a
cooperative and mutually beneficial relationship with its
outsourcing providers and to closely monitor their performance,
a deterioration in the timeliness or quality of the services
performed by the outsourcing providers or a failure of all or
part of these relationships could lead to loss of institutional
knowledge and interruption of services necessary for us to be
able to conduct our business. The expiration of such agreements
or the transition of services between providers could lead to
similar losses of institutional knowledge or disruptions.
Certain of our accounting, information technology, application
development, and help desk services are currently provided by
Williams outsourcing provider from service centers outside
of the United States. The economic and political conditions in
certain countries from which Williams outsourcing
providers may provide services to us present similar risks of
business operations located outside of the United States,
including risks of interruption of business, war, expropriation,
nationalization, renegotiation, trade sanctions or nullification
of existing contracts and changes in law or tax policy, that are
greater than in the United States.
Acts
of terrorism could have a material adverse effect on our
financial condition, results of operations and cash
flows.
Our assets and the assets of our customers and others may be
targets of terrorist activities that could disrupt our business
or cause significant harm to our operations, such as full or
partial disruption to our ability to produce, process, transport
or distribute natural gas, natural gas liquids or other
commodities. Acts of terrorism as well as events occurring in
response to or in connection with acts of terrorism could cause
environmental repercussions that could result in a significant
decrease in revenues or significant reconstruction or
remediation costs, which could have a material adverse effect on
our financial condition, results of operations, and cash flows
and on our ability to pay interest on, or the principal of, the
notes.
31
USE OF
PROCEEDS
We will not receive any cash proceeds from the issuance of the
exchange notes.
CAPITALIZATION
The following table sets forth our historical cash and cash
equivalents and capitalization as of March 31, 2010. This
table should be read in conjunction with the Selected
Historical Consolidated Financial and Operating Data
included in this prospectus and our consolidated financial
statements and the related notes in our 2010 First Quarter
10-Q, which
is incorporated by reference herein.
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As of
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March 31, 2010
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(Unaudited)
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($ in millions)
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Cash and cash equivalents
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$
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128
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Short-term Debt
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Long-term debt due within one year
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9
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Long-term Debt (less unamortized debt discount):
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Credit Facility(1)
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108
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Outstanding notes
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6,222
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Total debt
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6,339
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Equity:
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Common units
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1,648
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Class C Units
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3,683
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General Partner
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(1,319
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Accumulated other comprehensive loss
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(10
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Noncontrolling interests in consolidated subsidiaries
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347
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Total equity
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4,349
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Total capitalization
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$
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10,688
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(1) |
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In connection with the Dropdown, we established the Credit
Facility in an amount of $1.75 billion. Under certain
conditions, the amount of the Credit Facility may be increased
by up to an additional $250 million. The Credit Facility
has a term of three years and replaced our existing
$450 million unsecured credit agreement. We borrowed
$250 million under the Credit Facility upon its closing to
repay the term loan under our then existing credit facility. As
of March 31, 2010, loans outstanding under the Credit
Facility were reduced to $108 million using available cash. |
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THE
EXCHANGE OFFER
Purpose
of the Exchange Offer
This exchange offer is being made pursuant to the registration
rights agreement we entered into with the initial purchasers of
the outstanding notes on February 9, 2010. The summary of
the registration rights agreement contained herein does not
purport to be complete and is qualified in its entirety by
reference to the registration rights agreement. A copy of the
registration rights agreement is filed as an exhibit to the
registration statement of which this prospectus forms a part.
Terms of
the Exchange Offer; Expiration Time
This prospectus and the accompanying letter of transmittal
together constitute the exchange offer. Subject to the terms and
conditions in this prospectus and the letter of transmittal, we
will accept for exchange outstanding notes that are validly
tendered at or prior to the expiration time and are not validly
withdrawn as permitted below. The expiration time for the
exchange offer is 5:00 p.m., New York City time,
on ,
2010, or such later date and time to which we, in our sole
discretion, extend the exchange offer.
We expressly reserve the right, in our sole discretion:
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to extend the expiration time;
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if any one of the conditions set forth below under
Conditions to the Exchange Offer has not
been satisfied, to terminate the exchange offer and not accept
any outstanding notes for exchange; and
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to amend the exchange offer in any manner.
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We will give oral or written notice of any extension, delay,
non-acceptance, termination, or amendment as promptly as
practicable by a public announcement, and in the case of an
extension, no later than 9:00 a.m., New York City time, on
the next business day after the previously scheduled expiration
time.
During an extension, all outstanding notes previously tendered
will remain subject to the exchange offer and may be accepted
for exchange by us, upon expiration of the exchange offer,
unless validly withdrawn.
Each broker-dealer that receives exchange notes for its own
account in exchange for outstanding notes, where such
outstanding notes were acquired by such broker-dealer as a
result of market-making activities or other trading activities,
must acknowledge in the letter of transmittal that it will
deliver a prospectus in connection with any resale of such
exchange notes. See Plan of Distribution.
How to
Tender Outstanding Notes for Exchange
Only a record holder of outstanding notes may tender in the
exchange offer. When the holder of outstanding notes tenders and
we accept outstanding notes for exchange, a binding agreement
between us and the tendering holder is created, subject to the
terms and conditions in this prospectus and the accompanying
letter of transmittal. Except as set forth below, a holder of
outstanding notes who desires to tender outstanding notes for
exchange must, at or prior to the expiration time:
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transmit a properly completed and duly executed letter of
transmittal, the outstanding notes being tendered and all other
documents required by such letter of transmittal, to The Bank of
New York Mellon Trust Company, N.A., the exchange agent, at
the address set forth below under the heading
The Exchange Agent; or
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if outstanding notes are tendered pursuant to the book-entry
procedures set forth below, an agents message must be
transmitted by The Depository Trust Company
(DTC), to the exchange agent at the address set
forth below under the heading The Exchange
Agent, and the exchange agent must receive, at or prior to
the expiration time, a confirmation of the book-entry transfer
of the outstanding notes being tendered into the exchange
agents account at DTC, along with the agents
message; or
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if time will not permit the required documentation to reach the
exchange agent before the expiration time, or the procedures for
book-entry transfer cannot be completed by the expiration time,
the holder may effect a tender by complying with the guaranteed
delivery procedures described below.
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The term agents message means a message that:
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is transmitted by DTC;
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is received by the exchange agent and forms a part of a
book-entry transfer;
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states that DTC has received an express acknowledgement that the
tendering holder has received and agrees to be bound by, and
makes each of the representations and warranties contained in,
the letter of transmittal; and
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states that we may enforce the letter of transmittal against
such holder.
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The method of delivery of the outstanding notes, the letter of
transmittal or agents message, and all other required
documents to the exchange agent is at the election and sole risk
of the holder. If such delivery is by mail, we recommend
registered mail, properly insured, with return receipt
requested. In all cases, you should allow sufficient time to
assure timely delivery. No letters of transmittal or outstanding
notes should be sent directly to us.
Signatures on a letter of transmittal must be guaranteed unless
the outstanding notes surrendered for exchange are tendered:
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by a holder of outstanding notes who has not completed the box
entitled Special Issuance Instructions or
Special Delivery Instructions on the letter of
transmittal; or
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for the account of a recognized member in good standing of a
Medallion Signature Guarantee Program recognized by the exchange
agent, such as a firm which is a member of a registered national
securities exchange, a member of the National Association of
Securities Dealers, Inc., a commercial bank or trust company
having an office or correspondent in the United States, or
certain other eligible institutions, each of the foregoing being
referred to herein as an eligible institution.
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If signatures on a letter of transmittal or notice of withdrawal
are required to be guaranteed, the guarantor must be an eligible
institution. If outstanding notes are registered in the name of
a person other than the person who signed the letter of
transmittal, the outstanding notes tendered for exchange must be
endorsed by, or accompanied by a written instrument or
instruments of transfer or exchange, in satisfactory form as
determined by us in our sole discretion, duly executed by the
registered holder with the registered holders signature
guaranteed by an eligible institution.
We will determine in our sole discretion all questions as to the
validity, form, eligibility (including time of receipt), and
acceptance of outstanding notes tendered for exchange and all
other required documents. We reserve the absolute right to:
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reject any and all tenders of any outstanding note not validly
tendered;
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refuse to accept any outstanding note if, in our judgment or the
judgment of our counsel, acceptance of the outstanding note may
be deemed unlawful;
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waive any defects or irregularities or conditions of the
exchange offer, either before or after the expiration
time; and
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determine the eligibility of any holder who seeks to tender
outstanding notes in the exchange offer.
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Our determinations, either before or after the expiration time,
under, and of the terms and conditions of, the exchange offer,
including the letter of transmittal and the instructions to it,
or as to any questions with respect to the tender of any
outstanding notes, will be final and binding on all parties. To
the extent we waive any conditions to the exchange offer, we
will waive such conditions as to all outstanding notes. Holders
must cure any defects and irregularities in connection with
tenders of outstanding notes for exchange within such reasonable
period of time as we will determine, unless we waive such
defects or irregularities. Neither we, the
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exchange agent, nor any other person will be under any duty to
give notification of any defect or irregularity with respect to
any tender of outstanding notes for exchange, nor will any of us
incur any liability for failure to give such notification.
If you beneficially own outstanding notes registered in the name
of a broker, dealer, commercial bank, trust company, or other
nominee and you wish to tender your outstanding notes in the
exchange offer, you should contact the registered holder
promptly and instruct it to tender on your behalf.
WE MAKE NO RECOMMENDATION TO THE HOLDERS OF THE OUTSTANDING
NOTES AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING ALL
OR ANY PORTION OF THEIR OUTSTANDING NOTES IN THE EXCHANGE
OFFER. IN ADDITION, WE HAVE NOT AUTHORIZED ANYONE TO MAKE ANY
SUCH RECOMMENDATION. HOLDERS OF THE OUTSTANDING NOTES MUST
MAKE THEIR OWN DECISION AS TO WHETHER TO TENDER PURSUANT TO THE
EXCHANGE OFFER, AND, IF SO, THE AGGREGATE AMOUNT OF OUTSTANDING
NOTES TO TENDER, AFTER READING THIS PROSPECTUS AND THE
LETTER OF TRANSMITTAL AND CONSULTING WITH THEIR ADVISERS, IF
ANY, BASED ON THEIR FINANCIAL POSITIONS AND REQUIREMENTS.
Book-Entry
Transfers
Any financial institution that is a participant in DTCs
system must make book-entry delivery of outstanding notes by
causing DTC to transfer the outstanding notes into the exchange
agents account at DTC in accordance with DTCs
Automated Tender Offer Program, known as ATOP. Such participant
should transmit its acceptance to DTC at or prior to the
expiration time or comply with the guaranteed delivery
procedures described below. DTC will verify such acceptance,
execute a book-entry transfer of the tendered outstanding notes
into the exchange agents account at DTC and then send to
the exchange agent confirmation of such book-entry transfer. The
confirmation of such book-entry transfer will include an
agents message. The letter of transmittal or facsimile
thereof or an agents message, with any required signature
guarantees and any other required documents, must be transmitted
to and received by the exchange agent at the address set forth
below under The Exchange Agent at or
prior to the expiration time of the exchange offer, or the
holder must comply with the guaranteed delivery procedures
described below.
Guaranteed
Delivery Procedures
If a holder of outstanding notes desires to tender such notes
and the holders notes are not immediately available, or
time will not permit such holders outstanding notes or
other required documents to reach the exchange agent at or prior
to the expiration time, or the procedure for book-entry transfer
cannot be completed on a timely basis, a tender may be effected
if:
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at or prior to the expiration time, the exchange agent receives
from an eligible institution a validly completed and executed
notice of guaranteed delivery, substantially in the form
accompanying this prospectus, by facsimile transmission, mail,
or hand delivery, setting forth the name and address of the
holder of the outstanding notes being tendered and the amount of
the outstanding notes being tendered. The notice of guaranteed
delivery will state that the tender is being made and guarantee
that within three New York Stock Exchange trading days after the
date of execution of the notice of guaranteed delivery, the
certificates for all physically tendered outstanding notes, in
proper form for transfer, or a book-entry confirmation, as the
case may be, together with a validly completed and executed
letter of transmittal with any required signature guarantees, or
an agents message, and any other documents required by the
letter of transmittal, will be transmitted to the exchange
agent; and
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the exchange agent receives the certificates for all physically
tendered outstanding notes, in proper form for transfer, or a
book-entry confirmation, as the case may be, together with a
validly completed and executed letter of transmittal with any
required signature guarantees or an agents message and any
other documents required by the letter of transmittal, within
three New York Stock Exchange trading days after the date of
execution of the notice of guaranteed delivery.
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The notice of guaranteed delivery must be received at or prior
to the expiration time.
Withdrawal
Rights
You may withdraw tenders of your outstanding notes at any time
at or prior to the expiration time.
For a withdrawal to be effective, a written notice of
withdrawal, by facsimile or by mail, must be received by the
exchange agent, at the address set forth below under
The Exchange Agent, at or prior to the
expiration time. Any such notice of withdrawal must:
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specify the name of the person having tendered the outstanding
notes to be withdrawn;
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identify the outstanding notes to be withdrawn, including the
principal amount of such outstanding notes;
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where outstanding notes have been tendered pursuant to the
procedure for book-entry transfer described above, specify the
name and number of the account at DTC to be credited with the
withdrawn outstanding notes and otherwise comply with the
procedures of DTC; and
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bear the signature of the holder in the same manner as the
original signature on the letter of transmittal, if any, by
which such outstanding notes were tendered, with such signature
guaranteed by an eligible institution, unless such holder is an
eligible institution.
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We will determine all questions as to the validity, form, and
eligibility (including time of receipt) of such notices and our
determination will be final and binding on all parties. Any
tendered outstanding notes validly withdrawn will be deemed not
to have been validly tendered for exchange for purposes of the
exchange offer. Properly withdrawn notes may be re-tendered by
following one of the procedures described under
How to Tender Outstanding Notes for
Exchange above at any time at or prior to the expiration
time.
Acceptance
of Outstanding Notes for Exchange; Delivery of Exchange
Notes
All of the conditions to the exchange offer must be satisfied or
waived at or prior to the expiration of the exchange offer.
Promptly following the expiration time we will accept for
exchange all outstanding notes validly tendered and not validly
withdrawn as of such date. We will promptly issue exchange notes
for all validly tendered outstanding notes. For purposes of the
exchange offer, we will be deemed to have accepted validly
tendered outstanding notes for exchange when, as, and if we have
given oral or written notice to the exchange agent, with written
confirmation of any oral notice to be given promptly thereafter.
See Conditions to the Exchange Offer for
a discussion of the conditions that must be satisfied before we
accept any outstanding notes for exchange.
For each outstanding note accepted for exchange, the holder will
receive an exchange note of the same series registered under the
Securities Act having a principal amount equal to, and in the
denomination of, that of the surrendered outstanding note.
Accordingly, registered holders of exchange notes that are
outstanding on the relevant record date for the first interest
payment date following the consummation of the exchange offer
will receive interest accruing from the most recent date through
which interest has been paid on the outstanding notes, or if no
interest has been paid, from the original issue date of the
outstanding notes. Outstanding notes that we accept for exchange
will cease to accrue interest from and after the date of
consummation of the exchange offer.
If we do not accept any tendered outstanding notes, or if a
holder submits outstanding notes for a greater principal amount
than the holder desires to exchange, we will return such
unaccepted or non-exchanged outstanding notes without cost to
the tendering holder. In the case of outstanding notes tendered
by book-entry transfer into the exchange agents account at
DTC, such non-exchanged outstanding notes will be credited to an
account maintained with DTC. We will return the outstanding
notes or have them credited to DTC promptly after the
withdrawal, rejection of tender or termination of the exchange
offer, as applicable. The untendered portion of any outstanding
note tendered in part must be in denominations of $2,000 or
integral multiples of $1,000 in excess thereof.
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Conditions
to the Exchange Offer
The exchange offer is not conditioned upon the tender of any
minimum principal amount of outstanding notes. Notwithstanding
any other provision of the exchange offer, or any extension of
the exchange offer, we will not be required to accept for
exchange, or to issue exchange notes in exchange for, any
outstanding notes and may terminate or amend the exchange offer,
by oral (promptly confirmed in writing) or written notice to the
exchange agent or by a timely press release, if at any time
before the expiration of the exchange offer, any of the
following conditions exist:
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any action or proceeding is instituted or threatened in any
court or by or before any governmental agency challenging the
exchange offer or that we believe might be expected to prohibit
or materially impair our ability to proceed with the exchange
offer;
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any stop order is threatened or in effect with respect to either
(1) the registration statement of which this prospectus
forms a part or (2) the qualification of the indenture
governing the notes under the Trust Indenture Act of 1939,
as amended;
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any law, rule or regulation is enacted, adopted, proposed, or
interpreted that we believe might be expected to prohibit or
impair our ability to proceed with the exchange offer or to
materially impair the ability of holders generally to receive
freely tradeable exchange notes in the exchange offer. See
Consequences of Failure to Exchange
Outstanding Notes;
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any change or a development involving a prospective change in
our business, properties, assets, liabilities, financial
condition, operations, or results of operations taken as a
whole, that is or may be adverse to us;
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any declaration of war, armed hostilities, or other similar
international calamity directly or indirectly involving the
United States, or the worsening of any such condition that
existed at the time that we commence the exchange offer; or
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we become aware of facts that, in our reasonable judgment, have
or may have adverse significance with respect to the value of
the outstanding notes or the exchange notes to be issued in the
exchange offer.
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Accounting
Treatment
For accounting purposes, we will not recognize gain or loss upon
the issuance of the exchange notes for outstanding notes. We are
capitalizing costs incurred in connection with the issuance of
the exchange notes and amortizing those costs over the life of
the debt.
Fees and
Expenses
We will not make any payment to brokers, dealers, or others
soliciting acceptance of the exchange offer except for
reimbursement of mailing expenses. We will pay the cash expenses
to be incurred in connection with the exchange offer, including:
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SEC registration fees;
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fees and expenses of the exchange agent and trustee;
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our accounting and legal fees;
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printing fees; and
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related fees and expenses.
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Transfer
Taxes
Holders who tender their outstanding notes for exchange will not
be obligated to pay any transfer taxes in connection with the
exchange. If, however, exchange notes issued in the exchange
offer are to be delivered to, or are to be issued in the name
of, any person other than the holder of the outstanding notes
tendered, or if a
37
transfer tax is imposed for any reason other than the exchange
of outstanding notes in connection with the exchange offer, then
the holder must pay these transfer taxes, whether imposed on the
registered holder or on any other person. If satisfactory
evidence of payment of or exemption from these taxes is not
submitted with the letter of transmittal, the amount of these
transfer taxes will be billed directly to the tendering holder.
The
Exchange Agent
We have appointed The Bank of New York Mellon
Trust Company, N.A. as our exchange agent for the exchange
offer. All executed letters of transmittal should be directed to
the exchange agent at the address set forth below. Questions and
requests for assistance with respect to the procedures for the
exchange offer, requests for additional copies of this
prospectus or of the letter of transmittal and requests for
notices of guaranteed delivery should also be directed to the
exchange agent at the address below:
Deliver
to:
By Mail,
by Courier, or by Hand:
Bank of New
York Mellon Corporation
Corporate Trust Operations
Reorganization Unit
101 Barclay Street 7 East
New York, New York 10286
Attention:
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By Facsimile Transmission:
(212) 298-1915
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Confirm Facsimile Transmission
(212) 815-5098
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Delivery of the letter of transmittal to an address other
than as set forth above or transmission of such letter of
transmittal via facsimile other than as set forth above will not
constitute a valid delivery.
Consequences
of Failure to Exchange Outstanding Notes
Outstanding notes that are not tendered or are tendered but not
accepted will, following the consummation of the exchange offer,
continue to be subject to the provisions in the indenture and
the legend contained on the outstanding notes regarding the
transfer restrictions of the outstanding notes. In general,
outstanding notes, unless registered under the Securities Act,
may not be offered or sold except pursuant to an exemption from,
or in a transaction not subject to, the Securities Act and
applicable state securities laws. We do not currently anticipate
that we will take any action to register under the Securities
Act or under any state securities laws the outstanding notes
that are not tendered in the exchange offer or that are tendered
in the exchange offer but are not accepted for exchange.
Holders of the exchange notes of any series and any outstanding
notes of such series that remain outstanding after consummation
of the exchange offer will vote together as a single series for
purposes of determining whether holders of the requisite
percentage of the notes have taken certain actions or exercised
certain rights under the indenture.
Consequences
of Exchanging Outstanding Notes
We have not requested, and do not intend to request, an
interpretation by the staff of the SEC as to whether the
exchange notes issued in the exchange offer may be offered for
sale, resold, or otherwise transferred by any holder without
compliance with the registration and prospectus delivery
provisions of the Securities Act. However, based on
interpretations of the staff of the SEC, as set forth in a
series of no-action letters issued to third parties, we believe
that the exchange notes may be offered for resale, resold, or
38
otherwise transferred by holders of those exchange notes without
compliance with the registration and prospectus delivery
provisions of the Securities Act, provided that:
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the holder is not an affiliate of ours within the
meaning of Rule 405 promulgated under the Securities Act;
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the exchange notes issued in the exchange offer are acquired in
the ordinary course of the holders business;
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neither the holder, nor, to the actual knowledge of such holder,
any other person receiving exchange notes from such holder, has
any arrangement or understanding with any person to participate
in the distribution of the exchange notes issued in the exchange
offer;
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if the holder is not a broker-dealer, the holder is not engaged
in, and does not intend to engage in, a distribution of the
exchange notes; and
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if such a holder is a broker-dealer, such broker-dealer will
receive the exchange notes for its own account in exchange for
outstanding notes and that:
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such outstanding notes were acquired by such broker-dealer as a
result of market-making or other trading activities; and
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it will deliver a prospectus meeting the requirements of the
Securities Act in connection with the resale of exchange notes
issued in the exchange offer, and will comply with the
applicable provisions of the Securities Act with respect to
resale of any exchange notes. (In no-action letters issued to
third parties, the SEC has taken the position that
broker-dealers may fulfill their prospectus delivery
requirements with respect to exchange notes (other than a resale
of an unsold allotment from the original sale of outstanding
notes) by delivery of the prospectus relating to the exchange
offer). See Plan of Distribution for a discussion of
the exchange and resale obligations of broker-dealers in
connection with the exchange offer.
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Each holder participating in the exchange offer will be required
to furnish us with a written representation in the letter of
transmittal that they meet each of these conditions and agree to
these terms.
However, because the SEC has not considered the exchange offer
for our outstanding notes in the context of a no-action letter,
we cannot guarantee that the staff of the SEC would make similar
determinations with respect to this exchange offer. If our
belief is not accurate and you transfer an exchange note without
delivering a prospectus meeting the requirements of the federal
securities laws or without an exemption from these laws, you may
incur liability under the federal securities laws. We do not and
will not assume, or indemnify you against, this liability.
Any holder that is an affiliate of ours or that tenders
outstanding notes in the exchange offer for the purpose of
participating in a distribution:
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may not rely on the applicable interpretation of the SEC
staffs position contained in Exxon Capital Holdings Corp.,
SEC No-Action Letter (April 13, 1988), Morgan,
Stanley & Co., Inc., SEC No-Action Letter
(June 5, 1991) and Shearman & Sterling, SEC
No-Action Letter (July 2, 1993); and
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must comply with the registration and prospectus delivery
requirements of the Securities Act in connection with a
secondary resale transaction.
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The exchange notes issued in the exchange offer may not be
offered or sold in any state unless they have been registered or
qualified for sale in such state or an exemption from
registration or qualification is available and complied with by
the holders selling the exchange notes. We currently do not
intend to register or qualify the sale of the exchange notes in
any state where we would not otherwise be required to qualify.
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Filing of
Registration Statements
Under the registration rights agreement we agreed, among other
things, that if:
(1) we are not permitted to consummate the exchange offer
because the exchange offer is not permitted by applicable law or
SEC policy; or
(2) any holder of outstanding notes notifies us prior to
the 20th day following consummation of the exchange offer
that:
(a) it is prohibited by law or SEC policy from
participating in the exchange offer; or
(b) it may not resell the exchange notes acquired by it in
the exchange offer to the public without delivering a
prospectus, and the prospectus contained in the exchange offer
registration statement is not appropriate or available for such
resales; or
(c) it is a broker-dealer and owns notes acquired directly
from us or an affiliate of ours,
then we will file with the SEC a shelf registration statement to
cover resales of the notes by the holders of the notes who
satisfy certain conditions relating to the provision of
information in connection with the shelf registration statement.
If obligated to file the shelf registration statement, we will
use our commercially reasonable efforts to file the shelf
registration statement with the SEC on or prior to 60 days
after such filing obligation arises (or, if later, the date by
which we are obligated to file an exchange offer registration
statement) and use our commercially reasonable efforts to cause
the shelf registration statement to be declared effective by the
SEC or to become automatically effective in accordance with the
rules and regulations of the SEC on or prior to 180 days
after such obligation arises (or, if later, the date by which we
are obligated to use commercially reasonably efforts to have the
exchange offer registration statement declared effective).
If the shelf registration statement is declared effective or
becomes automatically effective but thereafter ceases to be
effective or usable in connection with resales of outstanding
notes during the periods specified in the registration rights
agreement (except with respect to permitted suspension periods
as provided therein), then we will pay Additional Interest to
each holder of affected outstanding notes on the terms provided
in the registration rights agreement.
Holders of notes will be required to deliver certain information
to be used in connection with the shelf registration statement
and to provide comments on the shelf registration statement
within the time periods set forth in the registration rights
agreement in order to have their notes included in the shelf
registration statement and benefit from the provisions regarding
Additional Interest set forth above. By acquiring outstanding
notes, a holder will be deemed to have agreed to indemnify us
against certain losses arising out of information furnished by
such holder in writing for inclusion in any shelf registration
statement. Holders of notes will also be required to suspend
their use of the prospectus included in the shelf registration
statement under certain circumstances upon receipt of written
notice to that effect from us.
Although we intend, if required, to file the shelf registration
statement, we cannot assure you that the shelf registration
statement will be filed or, if filed, that it will become or
remain effective.
The foregoing description is a summary of certain provisions of
the registration rights agreement. It does not restate the
registration rights agreement in its entirety. We urge you to
read the registration rights agreement, which is an exhibit to
the registration statement of which this prospectus forms a part
and can also be obtained from us. See Where You Can Find
More Information.
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DESCRIPTION
OF NOTES
You can find the definitions of certain terms used in this
description under the subheading Certain
Definitions. In this description, the term
Company, us, our or
we refers only to Williams Partners L.P. and not to
any of our subsidiaries.
We will issue the exchange notes under an indenture dated as of
February 9, 2010 between the Company and The Bank of New
York Mellon Trust Company, N.A., as trustee. The terms of
the notes include those stated in the indenture and those made
part of the indenture by reference to the Trust Indenture
Act of 1939, as amended (the Trust Indenture
Act).
The following description is a summary of the material
provisions of the indenture and the notes. It does not restate
the indenture in its entirety. We urge you to read the indenture
in its entirety, because it, and not this description, defines
your rights as holders of the notes. A copy of the indenture is
available as set forth above under Where You Can Find More
Information. Certain defined terms used in this
Description of Notes but not defined below under
Certain Definitions have the meanings
assigned to them in the indenture.
The registered holder of a note will be treated as the owner of
it for all purposes. Only registered holders will have rights
under the indenture.
Brief
Description of the Notes
The notes:
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are our general unsecured obligations;
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are equal in right of payment with all of our existing and
future senior unsecured indebtedness; and
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are effectively subordinated to any of our existing and future
senior secured indebtedness and structurally subordinated to all
existing and future indebtedness of our Subsidiaries.
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On March 31, 2010:
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we had outstanding indebtedness of approximately
$4.3 billion; and
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our Subsidiaries had outstanding indebtedness of approximately
$2.0 billion.
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The outstanding notes were issued in the following series:
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$750,000,000 aggregate principal amount of 3.800% Senior
Notes due 2015 (the outstanding 2015 notes);
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$1,500,000,000 aggregate principal amount of 5.250% Senior
Notes due 2020 (the outstanding 2020 notes); and
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$1,250,000,000 aggregate principal amount of 6.300% Senior
Notes due 2040 (the outstanding 2040 notes).
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We will issue exchange notes under the indenture in the
following series:
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in exchange for outstanding 2015 notes, up to $750,000,000
aggregate principal amount of 3.800% Senior Notes due 2015
(the exchange 2015 notes, and together with the
outstanding 2015 notes, the 2015 notes);
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in exchange for outstanding 2020 notes, up to $1,500,000,000
aggregate principal amount of 5.250% Senior Notes due 2020
(the exchange 2020 notes, and together with the
outstanding 2020 notes, the 2020 notes); and
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in exchange for outstanding 2040 notes, up to $1,250,000,000
aggregate principal amount of 6.300% Senior Notes due 2040
(the exchange 2040 notes, and together with the
outstanding 2040 notes, the 2040 notes).
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The indenture permits us to incur additional indebtedness,
including additional senior unsecured indebtedness. The
indenture does not restrict the ability of our subsidiaries to
incur additional indebtedness. See Risks Related to the
Notes Our indebtedness could impair our financial
condition and our ability to fulfill our debt obligations,
including our obligations under the notes.
We own a noncontrolling interest in Aux Sable Liquid Products
Inc., Aux Sable Liquid Products LP, Baton Rouge Fractionators
LLC, Baton Rouge Pipeline LLC, Cardinal Pipeline Company LLC,
Discovery Producer Services LLC, Gulfstream Natural Gas System,
L.L.C., Laurel Mountain Midstream Ohio, LLC, Laurel Mountain
Midstream Operating LLC, Laurel Mountain Midstream, LLC, Pine
Needle LNG Company, LLC, Pacific Connector Gas Pipeline, LLC,
and Pacific Connector Gas Pipeline, LP. We use the equity method
of accounting for these investments and they are not classified
as Subsidiaries of ours under the indenture so long as we
continue to own a noncontrolling interest in each of them. As a
result, the entities listed above are not subject to the
restrictive covenants in the indenture so long as they are not
Subsidiaries of ours.
Principal,
Maturity and Interest
We will issue up to $750,000,000 aggregate principal amount of
2015 notes, up to $1,500,000,000 aggregate principal amount of
2020 notes, and up to $1,250,000,000 aggregate principal amount
of 2040 notes in this exchange offer. We will issue exchange
notes in minimum denominations of $2,000 and integral multiples
of $1,000 in excess thereof.
The 2015 notes will mature on February 15, 2015, the 2020
notes will mature on March 15, 2020 and the 2040 notes will
mature on April 15, 2040.
Interest on the 2015 notes will accrue at the rate of 3.800% per
annum, and will be payable semi-annually in arrears on February
15 and August 15, commencing on August 15, 2010. We
will make each interest payment on the 2015 notes to the holders
of record at the close of business on the immediately preceding
February 1 or August 1 (whether or not a Business Day). Interest
on the 2020 notes will accrue at the rate of 5.250% per annum,
and will be payable semi-annually in arrears on March 15 and
September 15, commencing on September 15, 2010. We
will make each interest payment on the 2020 notes to the holders
of record at the close of business on the immediately preceding
March 1 or September 1 (whether or not a Business Day). Interest
on the 2040 notes will accrue at the rate of 6.300% per annum,
and will be payable semi-annually in arrears on April 15 and
October 15, commencing on October 15, 2010. We will
make each interest payment on the 2040 notes to the holders of
record at the close of business on the immediately preceding
April 1 or October 1 (whether or not a Business Day).
Interest on the notes will accrue from the date of original
issuance of the outstanding notes or, if interest has already
been paid or duly provided for, from the date it was most
recently paid or duly provided for. Interest will be computed on
the basis of a
360-day year
comprised of twelve
30-day
months.
We may, without the consent of the holders of notes of any
series, issue additional notes having the same ranking and the
same interest rate, maturity and other terms as the notes of
such series, except that interest would accrue from the date of
issuance of such additional notes and such additional notes may
not be fungible for trading purposes with, and may initially
bear a different identifying numbers than, the notes of the
applicable series offered hereby. Any additional notes having
such similar terms, together with the notes of the applicable
series, will constitute a single series of debt securities under
the indenture.
Methods
of Receiving Payments on the Notes
We will pay all principal, interest and premium, if any, on the
notes in the manner described under
Same-Day
Settlement and Payment below.
Paying
Agent and Registrar for the Notes
The trustee will initially act as paying agent and registrar. We
may change the paying agent or registrar without prior notice to
the holders of the notes, and we or any of our Subsidiaries may
act as paying agent or registrar.
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Transfer
and Exchange
A holder may transfer or exchange notes in accordance with the
indenture. The registrar and the trustee may require a holder to
furnish appropriate endorsements and transfer documents in
connection with a transfer of notes. No service charges will be
imposed by us, the trustee or the registrar for any registration
of transfer or exchange of notes, but holders may be required to
pay all taxes due on transfer or exchange. We are not required
to transfer or exchange any note selected for redemption. Also,
we are not required to transfer or exchange any note for a
period of 15 days before mailing notice of any redemption
of notes.
Optional
Redemption
We may, at our option, redeem the notes of any series, in whole
or in part, at any time or from time to time at a redemption
price equal to the greater of:
(1) 100% of the principal amount of the notes to be
redeemed, plus accrued interest to the redemption date, and
(2) as determined by the Quotation Agent, the sum of the
present values of the remaining scheduled payments of principal
of and interest on the notes to be redeemed (not including any
portion of payments of interest accrued as of the redemption
date) discounted to the redemption date on a semiannual basis
(assuming a
360-day year
consisting of twelve
30-day
months) at the Adjusted Treasury Rate, plus 25 basis points
in the case of the 2015 notes, 25 basis points in the case
of the 2020 notes and 30 basis points in the case of the
2040 notes, in each case plus accrued interest to the redemption
date.
The indenture would have allowed us to redeem the notes, at our
option, in whole but not in part, at any time prior to
April 15, 2010, if in our judgment, the Dropdown would not
be consummated on or prior to April 15, 2010. These
provisions have ceased to apply to the outstanding notes, and
will not apply to the exchange notes, because the Dropdown has
been consummated.
Selection
and Notice
If less than all of the notes of any series are to be redeemed
at any time, the trustee will select such notes for redemption
from the outstanding notes of such series not previously called
for redemption on a pro rata basis or by lot (whichever is
consistent with the trustees customary practice).
No notes of $2,000 or less can be redeemed in part. Except as
provided in the second paragraph under the caption
Optional Redemption, notices of optional
redemption will be mailed by first class mail at least 30 but
not more than 60 days before the redemption date to each
holder of notes to be redeemed at its registered address.
Notices of redemption may not be conditional.
If any note is to be redeemed in part only, the notice of
redemption that relates to that note will state the portion of
the principal amount of that note that is to be redeemed. A new
note of the same series and in principal amount equal to the
unredeemed portion of the original note will be issued in the
name of the holder of notes upon cancellation of the original
note. Notes called for redemption become due on the date fixed
for redemption. On and after the redemption date, interest will
cease to accrue on notes or portions of them called for
redemption.
Mandatory
Redemption
We are not required to make mandatory redemption or sinking fund
payments with respect to the notes of any series or to
repurchase the notes of any series at the option of the holders.
The indenture contains provisions establishing a proceeds
account with the trustee and providing for a special mandatory
redemption of the notes using funds in the proceeds account if
the closing of the Dropdown did not occur on or prior to
April 15, 2010. These provisions have ceased to apply to
the outstanding notes, and will not apply to the exchange notes,
because the Dropdown has been consummated.
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Certain
Covenants
Except as set forth in this Description of Notes,
neither we nor any of our Subsidiaries are restricted by the
indenture from incurring additional indebtedness or other
obligations, from making distributions or paying dividends on
our or our Subsidiaries equity interests or from
purchasing our or our Subsidiaries equity interests. The
indenture does not require the maintenance of any financial
ratios or specified levels of net worth or liquidity. In
addition, the indenture does not contain any provisions that
would require us to repurchase or redeem any of the notes in
situations that may adversely affect the creditworthiness of the
notes.
Liens
We will not, and will not permit any Subsidiary of ours to,
issue, assume or guarantee any Indebtedness secured by a Lien,
other than Permitted Liens, upon any of our or any of our
Subsidiaries property, now owned or hereafter acquired,
unless the notes are equally and ratably secured with such
Indebtedness until such time as such Indebtedness is no longer
secured by a Lien.
Notwithstanding the preceding paragraph, we may, and may permit
any Subsidiary of ours to, issue, assume or guarantee any
Indebtedness secured by a Lien, other than a Permitted Lien,
without securing the notes; provided that the aggregate
principal amount of all Indebtedness of ours and any Subsidiary
of ours then outstanding secured by any such Liens (other than
Permitted Liens) does not exceed 15% of Consolidated Net
Tangible Assets.
Merger,
Consolidation or Sale of Assets
We may not directly or indirectly consolidate with or merge with
or into, or sell, assign, transfer, lease, convey or otherwise
dispose of all or substantially all of our assets and properties
and the assets and properties of our Subsidiaries (taken as a
whole) in one or more related transactions to another Person,
unless:
(1) either: (a) we are the survivor; or (b) the
Person formed by or surviving any such consolidation or merger
(if other than us) or to which such sale, assignment, transfer,
lease, conveyance or other disposition has been made is a Person
formed, organized or existing under the laws of the United
States, any state of the United States or the District of
Columbia;
(2) the Person formed by or surviving any such
consolidation or merger (if other than us) or the Person to
which such sale, assignment, transfer, lease, conveyance or
other disposition has been made expressly assumes by
supplemental indenture, in form reasonably satisfactory to the
trustee, executed by the successor person and delivered to the
trustee, the due and punctual payment of the principal of and
any premium and interest on the notes of each series and the
performance of all of our obligations under the indenture, the
notes of each series, and, if applicable, the registration
rights agreement;
(3) we or the Person formed by or surviving any such merger
will deliver to the trustee an officers certificate and an
opinion of counsel, each stating that such consolidation,
merger, sale, assignment, transfer, lease, conveyance or other
disposition and such supplemental indenture (if any) comply with
the indenture and that all conditions precedent in the indenture
relating to such transaction have been complied with; and
(4) immediately after giving effect to such transaction, no
Event of Default or event which, after notice or lapse of time,
or both, would become an Event of Default, shall have occurred
and be continuing.
Upon any consolidation by us with or our merger into any other
Person or Persons where we are not the survivor or any sale,
assignment, transfer, lease, conveyance or other disposition of
all or substantially all of our properties and assets and the
properties and assets of our Subsidiaries (taken as a whole) to
any Person or Persons in accordance herewith, the successor
Person formed by such consolidation or into which we are merged
or to which such sale, assignment, transfer, lease, conveyance
or other disposition is made shall succeed to, and be
substituted for, and may exercise every right and power of, us
under the indenture with the same effect as if such successor
Person had been named as the Company therein; and thereafter,
except in the
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case of a lease, the predecessor Person shall be released from
all obligations and covenants under the indenture and the notes.
Although there is a limited body of case law interpreting the
phrase substantially all, there is no precise
established definition of the phrase under applicable law.
Accordingly, in certain circumstances there may be a degree of
uncertainty as to whether a particular transaction would involve
all or substantially all of the properties or assets
of a Person.
Reports
We will:
(1) file with the trustee, within 30 days after we
have filed the same with the Commission, unless such reports are
available on the Commissions EDGAR filing system (or any
successor thereto), copies of the annual reports and of the
information, documents, and other reports (or copies of such
portions of any of the foregoing as the Commission may from time
to time by rules and regulations prescribe) which we may be
required to file with the Commission pursuant to Section 13
or Section 15(d) of the Exchange Act; or, if we are not
required to file information, documents or reports pursuant to
either of said Sections, then we shall file with the trustee and
the Commission, in accordance with rules and regulations
prescribed from time to time by the Commission, such of the
supplementary and periodic information, documents, and reports
which may be required pursuant to Section 13 of the
Exchange Act in respect of a security listed and registered on a
national securities exchange as may be prescribed from time to
time in such rules and regulations;
(2) file with the trustee and the Commission, in accordance
with rules and regulations prescribed from time to time by the
Commission, such additional information, documents and reports
with respect to compliance by us with the conditions and
covenants of the indenture as may be required from time to time
by such rules and regulations; and
(3) transmit to the holders of the notes within
30 days after the filing thereof with the trustee, in the
manner and to the extent provided in Section 313(c) of the
Trust Indenture Act, such summaries of any information,
documents and reports required to be filed by us pursuant to
clauses (1) and (2) of this paragraph as may be
required by rules and regulations prescribed from time to time
by the Commission.
In addition, so long as the notes of any series remain
outstanding, we will make available to all holders of such notes
and to securities analysts and prospective investors in such
notes, upon request, the information required to be delivered
pursuant to Rule 144A(d)(4) under the Securities Act unless
such information is available on the Commissions EDGAR
filing system (or any successor thereto).
Events of
Default and Remedies
Each of the following is an Event of Default
with respect to notes of any series:
(1) default for 30 days in the payment when due of any
interest on the notes of such series;
(2) default in the payment of the principal of or any
premium on the notes of such series when the principal or
premium becomes due and payable;
(3) failure by us duly to observe or perform any other of
the covenants or agreements (other than those described in
clause (1) or (2) above) in the indenture, which
failure continues for a period of 60 days, or, in the case
of the covenant set forth under Certain
Covenants Reports above, which failure
continues for a period of 90 days, after the date on which
written notice of such failure, requiring the same to be
remedied and stating that such notice is a Notice of
Default has been given to us by the trustee, upon
direction of holders of at least 25% in principal amount of then
outstanding notes of such series; provided, however, that
if such failure is not capable of cure within such
60-day or
90-day
period, as the case may be, such
60-day or
90-day
period, as the case may be, shall be automatically extended by
an additional 60 days so long as (i) such failure is
subject to cure, and (ii) we are using commercially
reasonable efforts to cure such failure; and provided,
further, that a failure to comply with any such other
45
agreement in the indenture that results from a change in GAAP
shall not be deemed to be an Event of Default; or
(4) certain events of bankruptcy, insolvency or
reorganization described in the indenture with respect to us.
In the case of an Event of Default arising from certain events
of bankruptcy, insolvency or reorganization with respect to us,
the principal of all outstanding notes will automatically become
due and payable immediately without further action or notice. If
any other Event of Default occurs and is continuing with respect
to the notes of any series, the holders of at least 25%, in the
case of clause (1) or (2) of this section, or of at
least a majority, in the case of clause (3) of this
section, in aggregate principal amount of the then outstanding
notes of such series, may declare all the notes of such series,
to be due and payable immediately.
Holders of the notes may not enforce the indenture or the notes
except as provided in the indenture. Subject to certain
limitations, holders of a majority in principal amount of the
then outstanding notes of any series, may direct the trustee in
its exercise of any trust or power with respect to the notes of
such series. The trustee may withhold notice of any continuing
default or Event of Default with respect to the notes of a
series from holders of the notes of such series if it determines
that withholding notice is in their interest, except a default
or Event of Default relating to the payment of principal of, or
interest or premium, if any, on, the notes of such series.
Holders of not less than a majority in principal amount of the
notes of any series, then outstanding by notice to the trustee
may on behalf of the holders of all of the notes of such series,
waive any past or existing default or Event of Default under the
indenture with respect to such series and its consequences,
except a continuing default (a) in the payment of principal
of, or interest or premium, if any, on the notes of such series
or (b) in respect of a covenant or other provision of the
indenture, which under the indenture cannot be modified or
amended without the consent of the holder of each outstanding
note of such series.
We are required to deliver to the trustee annually a statement
regarding compliance with the indenture.
Modification
and Waiver
The indenture provides that supplements to the indenture and any
supplemental indentures may be made by us and the trustee for
the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of the indenture or
of modifying in any manner the rights of the holders of notes of
any series under the indenture or under the notes of such
series, with the consent of the holders of not less than a
majority in principal amount of the then outstanding notes of
each series affected by such supplemental indenture (including
consents obtained in connection with a purchase of, or tender
offer or exchange offer for, notes of a series); provided,
however, that no such supplemental indenture may, without
the consent of the holder of each outstanding note affected
thereby:
(1) change the stated maturity of the principal of, or any
premium or installment of interest on, any note, or reduce the
principal amount thereof, the rate of interest thereon or any
premium payable upon the redemption thereof or otherwise, or
change the redemption provisions, or change the place of payment
for any note or the currency in which the principal of, or any
premium or interest on, any note is payable or impair or affect
the right to institute suit for enforcement of any such payment
on or after the stated maturity thereof (or in the case of
redemption, on or after the redemption date);
(2) reduce the percentage in principal amount of
outstanding notes of any series, the consent of the holders of
which is required for any such supplemental indenture or the
consent of whose holders is required for any waiver (of
compliance with certain provisions of the indenture or certain
defaults and their consequences) provided for in the indenture
or reduce the requirements contained in the indenture for quorum
or voting; or
(3) modify any of the provisions of the sections of such
indenture relating to supplemental indentures with the consent
of the holders or waivers of past defaults, except to increase
any percentage
46
set forth in such sections or to provide that certain other
provisions of such indenture cannot be modified or waived
without the consent of the holder of each outstanding note
affected thereby.
A supplemental indenture that changes or eliminates any covenant
or other provision of the indenture that has been included
expressly and solely for the benefit of one or more particular
series of notes, or that modifies the rights of holders of notes
of such series with respect to such covenant or other provision,
are deemed not to affect the rights under the indenture of the
holders of notes of any other series.
The indenture provides that we and the trustee may, at any time
and from time to time, without the consent of any holders of the
notes of any series, enter into one or more supplemental
indentures, in form satisfactory to the trustee, for any of the
following purposes:
(1) to evidence the succession of another person to us, and
the assumption by any such successor of our covenants in the
indenture, the notes and the registration rights agreement;
(2) to add to our covenants for the benefit of the holders
of all or any series of notes (as shall be specified in such
supplemental indenture or indentures) or to surrender any right
or power in the indenture conferred on us;
(3) to evidence and provide for acceptance of appointment
of a successor trustee under the indenture with respect to the
notes of one or more series and to add to or change any of the
provisions of the indenture as shall be necessary to provide for
or facilitate the administration of the trusts under the
indenture by more than one trustee;
(4) to cure any ambiguity, to correct or supplement any
provision in the indenture that may be defective or inconsistent
with any other provision of the indenture, or to make any other
provisions with respect to matters or questions arising under
such indenture; provided that no such action pursuant to
this clause (4) shall adversely affect the interests of the
holders of the notes of any series then outstanding in any
material respect;
(5) to add any additional Events of Default with respect to
all or any series of notes (as shall be specified in such
supplement indenture);
(6) to supplement any of the provisions of the indenture to
such extent as shall be necessary for the defeasance and
discharge of any series of notes pursuant to
Discharge, Legal Defeasance and Covenant
Defeasance; provided that any such action shall not
adversely affect the interests of any holder of an outstanding
note of such series or any other note in any material respect;
(7) to add guarantees in respect of the notes of one or
more series and to provide for the terms and conditions of
release thereof;
(8) to convey, transfer, assign, mortgage or pledge to the
trustee as security for the notes of one or more series any
property or assets and to provide for the terms and conditions
of any release thereof;
(9) to provide for definitive notes in addition to or in
place of global notes;
(10) to qualify the indenture under the
Trust Indenture Act of 1939, as amended;
(11) to provide for the issuance of additional notes in
accordance with the limitations set forth in the indenture;
(12) with respect to the notes of a series, to conform the
text of the indenture or the notes of such series to any
provision of this Description of Notes to the extent
that such provision in this Description of Notes, in
our good faith judgment, was intended to be a verbatim
recitation of a provision of the indenture or such notes; or
(13) to make any other change that does not adversely
affect the rights of holders of outstanding notes in any
material respect.
47
Discharge,
Legal Defeasance and Covenant Defeasance
The indenture provides that we may satisfy and discharge our
obligations under the notes of any series and the indenture with
respect to such series if:
(1) either:
(a) all notes of such series previously authenticated and
delivered have been delivered to the trustee for cancellation,
except mutilated, lost, stolen or destroyed notes of such series
that have been replaced or paid and notes of such series for
whose payment money has been deposited in trust and thereafter
repaid to us or discharged from such trust; or
(b) all notes of such series not delivered to the trustee
for cancellation have become due and payable, mature within one
year, or are to be called for redemption within one year under
arrangements satisfactory to the trustee for giving the notice
of redemption and we irrevocably deposit or cause to be
deposited in trust with the trustee, as trust funds solely for
the benefit of the holders, for such purpose, money,
governmental obligations or a combination thereof sufficient (in
the opinion of a nationally recognized independent registered
public accounting firm expressed in a written certification
thereof delivered to the trustee) to pay and discharge the
entire indebtedness on such then outstanding notes to maturity
or earlier redemption, as the case may be; and
(2) we pay or cause to be paid all other sums payable by us
under such indenture with respect to outstanding notes of such
series; and
(3) we deliver to the trustee an officers certificate
and an opinion of counsel, in each case stating that all
conditions precedent provided for in the indenture relating to
the satisfaction and discharge of the indenture as to such
series have been complied with.
Notwithstanding such satisfaction and discharge with respect to
any series of notes, our obligations to compensate and indemnify
the trustee and our and the trustees obligations to hold
funds in trust and to apply such funds pursuant to the terms of
the indenture with respect to the notes of such series, with
respect to issuing temporary notes of such series, with respect
to the registration, transfer and exchange of notes of such
series, with respect to the replacement of mutilated, destroyed,
lost or stolen notes of such series and with respect to the
maintenance of an office or agency for payment with respect to
the notes of such series, shall in each case survive such
satisfaction and discharge.
The indenture provides that (i) we will be deemed to have
paid and will be discharged from any and all obligations in
respect of the notes of a series, and the provisions of the
indenture will, except as noted below, no longer be in effect
with respect to the notes of such series
(defeasance) and (ii) we may omit to comply
with the covenants under Liens and
Merger, Consolidation or Sale of Assets,
and such omission shall be deemed not to be an event of default
under clause (3) of the first paragraph of
Events of Default and Remedies with
respect to the notes of such series (covenant
defeasance) and provided that the following conditions
shall have been satisfied:
(1) we have irrevocably deposited or caused to be deposited
in trust with the trustee as trust funds solely for the benefit
of the holders of such notes, money or government obligations or
a combination thereof sufficient (in the opinion of a nationally
recognized independent registered public accounting firm
expressed in a written certification thereof delivered to the
trustee) without consideration of any reinvestment to pay and
discharge the principal of and accrued interest on such then
outstanding notes to maturity or earlier redemption, as the case
may be;
(2) such defeasance or covenant defeasance will not result
in a breach or violation of, or constitute a default under, the
indenture or any other material agreement or instrument to which
we are a party or by which we are bound;
(3) no Event of Default or event which with notice or lapse
of time would become an Event of Default with respect to such
notes shall have occurred and be continuing on the date of such
deposit
48
(other than an Event of Default resulting from non-compliance
with any covenant from which the Company is released upon
effectiveness of such defeasance or covenant defeasance as
applicable);
(4) we shall have delivered to the trustee an opinion of
counsel as described in the indenture to the effect that: the
holders of the notes of such series will not recognize income,
gain or loss for federal income tax purposes as a result of our
exercise of the option under this provision of the indenture and
will be subject to federal income tax on the same amount and in
the same manner and at the same times as would have been the
case if such deposit and defeasance or covenant defeasance had
not occurred;
(5) we have delivered to the trustee an officers
certificate and an opinion of counsel, in each case stating that
all conditions precedent provided for in the indenture relating
to the defeasance or covenant defeasance have been complied
with; and
(6) if the notes of such series are to be redeemed prior to
their maturity, notice of such redemption shall have been duly
given or provision therefor satisfactory to the trustee shall
have been made.
Notwithstanding a defeasance or covenant defeasance with respect
to the notes of a series, our obligations with respect to the
following will survive until otherwise terminated or discharged
under the terms of the indenture or until no notes of such
series are outstanding:
(1) the rights of holders to receive payments in respect of
the principal of, interest on or premium, if any, on such notes
when such payments are due from the trust referred in
clause (1) in the preceding paragraph;
(2) the issuance of temporary notes of such series, the
registration, transfer and exchange of notes of such series, the
replacement of mutilated, destroyed, lost or stolen notes of
such series and the maintenance of an office or agency for
payment and holding payments in trust with respect to the notes
of such series;
(3) the rights, powers, trusts, duties and immunities of
the trustee, and our obligations in connection
therewith; and
(4) the defeasance provisions of the indenture.
No
Personal Liability
Neither our General Partner nor any affiliate, director,
officer, partner, employee, incorporator, manager or owner of
Capital Stock of our General Partner, as such, has any liability
for any of our obligations under the notes, the indenture, or
for any claim based on, in respect of, or by reason of, such
obligations or their creation. Each holder of notes by accepting
a note waives and releases all such liability. The waiver and
release are part of the consideration for issuance of the notes.
The waiver may not be effective to waive liabilities under the
federal securities laws.
Notwithstanding the foregoing, nothing in the preceding
paragraph shall be construed to modify or supersede any
obligation of our General Partner to restore any negative
balance in its capital account (maintained by us pursuant to our
Limited Partnership Agreement) upon liquidation of its interest
in us.
Concerning
the Trustee
If the trustee becomes a creditor of ours, the indenture limits
its right to obtain payment of claims in certain cases or to
realize on certain property received in respect of any such
claim as security or otherwise. The trustee will be permitted to
engage in other transactions; however, if the trustee acquires
any conflicting interest (as defined in the Trust Indenture
Act) after a default has occurred and is continuing, it must
eliminate such conflict within 90 days, apply to the
Commission for permission to continue or resign.
The holders of a majority in principal amount of the then
outstanding notes of any series, will have the right to direct
the time, method and place of conducting any proceeding for
exercising any remedy available to the trustee with respect to
the notes of such series, subject to certain exceptions. The
indenture provides that in case an Event of Default occurs and
is continuing, the trustee will be required, in the exercise of
its power, to
49
use the degree of care of a prudent person in the conduct of
such persons own affairs. Subject to such provisions, the
trustee will be under no obligation to exercise any of its
rights or powers under the indenture at the request of any
holder of notes, unless such holder has offered to the trustee
security or indemnity satisfactory to it against any loss,
liability or expense.
Governing
Law
The indenture and the notes of each series are governed by, and
construed in accordance with, the laws of the State of New York.
Additional
Information
Anyone who receives this prospectus may obtain a copy of the
indenture without charge by writing to Williams Partners L.P.,
One Williams Center, Tulsa, Oklahoma
74172-0172;
Attention: Chief Financial Officer.
Book-Entry,
Delivery and Form
The exchange notes of each series will be represented by one or
more permanent global notes in registered form without interest
coupons (collectively, the Global Notes).
The Global Notes will be deposited upon issuance with the
trustee as custodian for The Depository Trust Company
(DTC), in New York, New York, and registered in the
name of DTCs nominee, Cede & Co., in each case
for credit to an account of a direct or indirect participant in
DTC as described below. Beneficial interests in the Global Notes
may be held through the Euroclear System (Euroclear)
and Clearstream Banking, S.A. (Clearstream) (as
indirect participants in DTC).
Except as set forth below, the Global Notes may be transferred,
in whole but not in part, only to DTC, to a nominee of DTC or to
a successor of DTC or its nominee. Beneficial interests in the
Global Notes may not be exchanged for notes in registered,
certificated form (Certificated Notes) except in the
limited circumstances described below. See
Exchange of Certificated Notes for Global
Notes. Except in the limited circumstances described
below, owners of beneficial interests in the Global Notes will
not be entitled to receive physical delivery of notes in
certificated form.
Transfers of beneficial interests in the Global Notes will be
subject to the applicable rules and procedures of DTC and its
direct or indirect participants (including, if applicable, those
of Euroclear and Clearstream), which may change from time to
time.
Depository
Procedures
The following description of the operations and procedures of
DTC is provided solely as a matter of convenience. These
operations and procedures are solely within the control of DTC
and are subject to changes by it. We take no responsibility for
these operations and procedures and urge investors to contact
DTC or its participants directly to discuss these matters.
DTC has advised us that DTC is a limited-purpose trust company
created to hold securities for its participating organizations
(collectively, the Participants) and to facilitate
the clearance and settlement of transactions in those securities
between Participants through electronic book-entry changes in
accounts of its Participants. The Participants include
securities brokers and dealers (including the initial
purchasers), banks, trust companies, clearing corporations and
certain other organizations. Access to DTCs system is also
available to other entities such as banks, brokers, dealers and
trust companies that clear through or maintain a custodial
relationship with a Participant, either directly or indirectly
(collectively, the Indirect Participants). Persons
who are not Participants may beneficially own securities held by
or on behalf of DTC only through the Participants or the
Indirect Participants. The ownership interests in, and transfers
of ownership interests in, each security held by or on behalf of
DTC are recorded on the records of the Participants and Indirect
Participants.
50
DTC has also advised us that, pursuant to procedures established
by it:
(1) upon deposit of the Global Notes, DTC will credit the
accounts of the Participants designated by the initial
purchasers with portions of the principal amount of the Global
Notes; and
(2) ownership of these interests in the Global Notes will
be shown on, and the transfer of ownership of these interests
will be effected only through, records maintained by DTC (with
respect to the Participants) or by the Participants and the
Indirect Participants (with respect to other owners of
beneficial interest in the Global Notes).
Investors in the Global Notes who are Participants may hold
their interests therein directly through DTC. Investors in the
Global Notes who are not Participants may hold their interests
therein indirectly through organizations (including Euroclear
and Clearstream) which are Participants. Euroclear and
Clearstream may hold interests in the Global Notes on behalf of
their participants through customers securities accounts
in their respective names on the books of their respective
depositories, which are Euroclear Bank S.A./N.V., as operator of
Euroclear, and Citibank, N.A., as operator of Clearstream. All
interests in a Global Note, including those held through
Euroclear or Clearstream, may be subject to the procedures and
requirements of DTC. Those interests held through Euroclear or
Clearstream may also be subject to the procedures and
requirements of such systems. The laws of some states require
that certain Persons take physical delivery in definitive form
of securities that they own. Consequently, the ability to
transfer beneficial interests in a Global Note to such Persons
will be limited to that extent. Because DTC can act only on
behalf of the Participants, which in turn act on behalf of the
Indirect Participants, the ability of a Person having beneficial
interests in a Global Note to pledge such interests to Persons
that do not participate in the DTC system, or otherwise take
actions in respect of such interests, may be affected by the
lack of a physical certificate evidencing such interests.
Except as described below, owners of an interest in the
Global Notes will not have notes registered in their names, will
not receive physical delivery of Certificated Notes and will not
be considered the registered owners or Holders
thereof under the indenture for any purpose.
Payments in respect of the principal of, and interest and
premium, if any, on a Global Note registered in the name of DTC
or its nominee will be payable to DTC in its capacity as the
registered holder under the indenture. Under the terms of the
indenture, the Company and the trustee will treat the Persons in
whose names the notes, including the Global Notes, are
registered as the owners of the notes for the purpose of
receiving payments and for all other purposes. Consequently,
neither the Company, the trustee nor any agent of ours or of the
trustee has or will have any responsibility or liability for:
(1) any aspect of DTCs records or any
Participants or Indirect Participants records
relating to, or payments made on account of, beneficial
ownership interests in the Global Notes or for maintaining,
supervising or reviewing any of DTCs records or any
Participants or Indirect Participants records
relating to the beneficial ownership interests in the Global
Notes; or
(2) any other matter relating to the actions and practices
of DTC or any of its Participants or Indirect Participants.
DTC has advised us that its current practice, at the due date of
any payment in respect of securities such as the notes, is to
credit the accounts of the relevant Participants with the
payment on the payment date unless DTC has reason to believe
that it will not receive payment on such payment date. Each
relevant Participant is credited with an amount proportionate to
its beneficial ownership of an interest in the principal amount
of the notes as shown on the records of DTC. Payments by the
Participants and the Indirect Participants to the beneficial
owners of notes will be governed by standing instructions and
customary practices and will be the responsibility of the
Participants or the Indirect Participants and will not be the
responsibility of DTC, the trustee or us. Neither we nor the
trustee will be liable for any delay by DTC or any of its
Participants in identifying the beneficial owners of the notes,
and the Company and the trustee may conclusively rely on and
will be protected in relying on instructions from DTC or its
nominee for all purposes.
51
Transfers between Participants in DTC will be effected in
accordance with DTCs procedures, and will be settled in
same-day
funds, and transfers between participants in Euroclear and
Clearstream will be effected in accordance with their respective
rules and operating procedures.
Cross-market transfers between the Participants in DTC, on the
one hand, and Euroclear or Clearstream participants, on the
other hand, will be effected through DTC in accordance with
DTCs rules on behalf of Euroclear or Clearstream, as the
case may be, by its depositary; however, such cross-market
transactions will require delivery of instructions to Euroclear
or Clearstream, as the case may be, by the counterparty in such
system in accordance with the rules and procedures and within
the established deadlines (Brussels time) of such system.
Euroclear or Clearstream, as the case may be, will, if the
transaction meets its settlement requirements, deliver
instructions to its respective depositary to take action to
effect final settlement on its behalf by delivering or receiving
interests in the relevant Global Note in DTC, and making or
receiving payment in accordance with normal procedures for
same-day
funds settlement applicable to DTC. Euroclear participants and
Clearstream participants may not deliver instructions directly
to the depositories for Euroclear or Clearstream.
DTC has advised us that it will take any action permitted to be
taken by a holder of notes only at the direction of one or more
Participants to whose account DTC has credited the interests in
the Global Notes and only in respect of such portion of the
aggregate principal amount of the notes as to which such
Participant or Participants has or have given such direction.
However, if there is an Event of Default under the notes of any
series, DTC reserves the right to exchange the Global Notes of
such series for Certificated Notes of such series, and to
distribute such notes to its Participants.
Although DTC, Euroclear and Clearstream have agreed to the
foregoing procedures to facilitate transfers of interests in the
Global Notes among participants in DTC, Euroclear and
Clearstream, they are under no obligation to perform or to
continue to perform such procedures, and may discontinue such
procedures at any time. Neither the Company nor the trustee nor
any of their respective agents will have any responsibility for
the performance by DTC, Euroclear or Clearstream or their
respective Participants or Indirect Participants of their
respective obligations under the rules and procedures governing
their operations.
Exchange
of Global Notes for Certificated Notes
A Global Note of any series is exchangeable for Certificated
Notes of such series in minimum denominations of $2,000 and in
integral multiples of $1,000 in excess thereof if:
(1) DTC notifies us that it is unwilling or unable to
continue as depositary for such Global Notes or that it has
ceased to be a clearing agency registered under the Exchange Act
and, in either case, we fail to appoint a successor depositary
within 120 days after the date of such notice from DTC;
(2) we, at our option and subject to the procedures of DTC,
notify the trustee in writing that we elect to cause the
issuance of the Certificated Notes; or
(3) an Event of Default has occurred and is continuing with
respect to the notes of such series.
In addition, beneficial interests in a Global Note may be
exchanged for Certificated Notes upon prior written notice given
to the trustee by or on behalf of DTC in accordance with the
indenture. In all cases, Certificated Notes delivered in
exchange for any Global Note or beneficial interests in Global
Notes will be registered in the names, and issued in any
approved denominations, requested by or on behalf of the
depositary (in accordance with its customary procedures).
Exchange
of Certificated Notes for Global Notes
Certificated Notes may not be exchanged for beneficial interests
in any Global Note.
Same-Day
Settlement and Payment
We will make payments in respect of the notes represented by the
Global Notes (including principal, interest and premium, if any)
by wire transfer of immediately available funds to the accounts
specified by the
52
Global Note Holder. We will make all payments of principal,
interest and premium, if any, with respect to Certificated Notes
(i) to holders having an aggregate principal amount of
$2,000,000 or less, by check mailed to such holders
registered address or (ii) to holders having an aggregate
principal amount of more than $2,000,000, by check mailed to
such holders registered address or, upon application by a
holder to the registrar not later than the relevant record date
or in the case of payments of principal or premium, if any, not
later than 15 days prior to the principal payment date, by
wire transfer in immediately available funds to that
holders account within the United States (subject to
surrender of the Certificated Note in the case of payments of
principal or premium), which application shall remain in effect
until the holder notifies the registrar to the contrary in
writing. The notes represented by the Global Notes are expected
to be eligible to trade in DTCs
Same-Day
Funds Settlement System, and any permitted secondary market
trading activity in such notes will, therefore, be required by
DTC to be settled in immediately available funds. The Company
expects that secondary trading in any Certificated Notes will
also be settled in immediately available funds.
Because of time zone differences, the securities account of a
Euroclear or Clearstream participant purchasing an interest in a
Global Note from a Participant in DTC will be credited, and any
such crediting will be reported to the relevant Euroclear or
Clearstream participant, during the securities settlement
processing day (which must be a business day for Euroclear and
Clearstream) immediately following the settlement date of DTC.
DTC has advised us that cash received in Euroclear or
Clearstream as a result of sales of interests in a Global Note
by or through a Euroclear or Clearstream participant to a
Participant in DTC will be received with value on the settlement
date of DTC but will be available in the relevant Euroclear or
Clearstream cash account only as of the business day for
Euroclear or Clearstream following DTCs settlement date.
Certain
Definitions
Set forth below are certain defined terms used in the indenture.
Reference is made to the indenture for a full disclosure of all
such terms, as well as any other capitalized terms used herein
for which no definition is provided.
Adjusted Treasury Rate means, with respect to
any redemption date, the rate per annum equal to the semi-annual
equivalent yield to maturity of the Comparable Treasury Issue,
assuming a price for the Comparable Treasury Issue (expressed as
a percentage of its principal amount) equal to the Comparable
Treasury Price for that redemption date.
Board of Directors means:
(1) with respect to the Company, the board of directors of
the General Partner or any authorized committee thereof; and
(2) with respect to any corporation, the board of directors
of the corporation or any authorized committee thereof;
(3) with respect to a limited liability company, the
managing member or managing members or board of directors, as
applicable, of such limited liability company or any authorized
committee thereof;
(4) with respect to any other partnership, the board of
directors of the general partner of the partnership or any
authorized committee thereof; and
(5) with respect to any other Person, the board or
committee of such Person serving a similar function.
Business Day means each day that is not a
Saturday, Sunday or other day on which banking institutions in
New York, New York or another place of payment are authorized or
required by law, regulation or executive order to close.
Capital Stock means:
(1) in the case of a corporation, corporate stock;
(2) in the case of an association or business entity, any
and all shares, interests, participations, rights or other
equivalents (however designated) of corporate stock;
53
(3) in the case of a partnership or limited liability
company, partnership or membership interests (whether general or
limited); and
(4) any other interest or participation that confers on a
Person the right to receive a share of the profits and losses
of, or distributions of assets of, the issuing Person.
Commission means the U.S. Securities and
Exchange Commission, as from time to time constituted, created
under the Exchange Act or any successor agency.
Comparable Treasury Issue means the United
States Treasury security selected by the Quotation Agent as
having an actual or interpolated maturity comparable to the
remaining term of a series of notes that would be utilized, at
the time of selection and in accordance with customary financial
practice, in pricing new issues of corporate debt securities of
comparable maturity to the remaining term of the notes of such
series.
Comparable Treasury Price means, with respect
to any redemption date:
(1) the average of the Reference Treasury Dealer Quotations
for that redemption date, after excluding the highest and lowest
of the Reference Treasury Dealer Quotations, or
(2) if the Quotation Agent obtains fewer than three
Reference Treasury Dealer Quotations, the average of all
Reference Treasury Dealer Quotations so received.
Consolidated Net Tangible Assets means at any
date of determination, the total amount of assets of us and our
Subsidiaries after deducting therefrom:
(1) all current liabilities (excluding (A) any current
liabilities that by their terms are extendable or renewable at
the option of the obligor thereon to a time more than
12 months after the time as of which the amount thereof is
being computed, and (B) current maturities of long-term
debt); and
(2) the value (net of any applicable reserves) of all
goodwill, trade names, trademarks, patents, and other like
intangible assets,
all as set forth, or on a pro forma basis would be set forth, on
our consolidated balance sheet for our most recently completed
fiscal quarter, prepared in accordance with GAAP.
Dropdown means the contribution by Williams
(through certain of its subsidiaries) to us of 100% of its
ownership interests in each of Marsh Resources, LLC,
Transcontinental Gas Pipe Line Company, LLC, WGP Development,
LLC, WGPC Holdings LLC, Williams Field Services Group, LLC,
Williams Pacific Connector Gas Operator, LLC, Williams Pipeline
GP LLC, Williams Pipeline Services LLC, Pacific Connector Gas
Pipeline, LLC, Pacific Connector Gas Pipeline, LP and a 24.5%
ownership interest in Gulfstream Natural Gas System, L.L.C. in
exchange for the aggregate consideration specified in that
certain Contribution Agreement, dated as of January 15,
2010, by and among us, the General Partner, our operating
company, certain subsidiaries of Williams (and solely with
respect to Section 9.11 thereof, Williams).
GAAP means generally accepted accounting
principles in the United States, which are in effect from time
to time.
General Partner means Williams Partners GP
LLC, a Delaware limited liability company (including any
permitted successors and assigns under the Limited Partnership
Agreement).
Government Securities means (i) direct
obligations of, or obligations guaranteed by, the United States
of America (including any agency or instrumentality thereof) for
the payment of which obligations or guarantees the full faith
and credit of the United States of America is pledged and which
are not callable or redeemable at the issuers option,
(ii) repurchase agreements with respect to debt obligations
referred to in clause (i) above and (iii) money market
accounts that invest solely in the debt obligations referred to
in clause (i) and/or repurchase agreements referred to in
clause (ii) above.
holder means a Person in whose name a note is
registered.
Indebtedness means, with respect to any
specified Person, any obligation created or assumed by such
Person, whether or not contingent, for the repayment of money
borrowed from others or any guarantee thereof.
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Joint Venture means any Person that is not a
direct or indirect Subsidiary of ours in which we or any of our
Subsidiaries owns any Capital Stock.
Lien means any mortgage, pledge, lien,
security interest or other similar encumbrance.
Limited Partnership Agreement means our
Amended and Restated Agreement of Limited Partnership, dated as
of August 23, 2005, among the General Partner, Williams
Energy Services, LLC, Williams Energy, L.L.C., Williams
Discovery Pipeline LLC and Williams Partners Holdings LLC, as
amended, supplemented or restated from time to time.
Non-Recourse Indebtedness means any
Indebtedness incurred by any Joint Venture or Non-Recourse
Subsidiary which does not provide for recourse against us or any
Subsidiary of ours (other than a Non-Recourse Subsidiary) or any
property or asset of ours or any Subsidiary of ours (other than
the Capital Stock or the properties or assets of a Joint Venture
or Non-Recourse Subsidiary).
Non-Recourse Subsidiary means any Subsidiary
of ours (i) whose principal purpose is to incur Non-
Recourse Indebtedness
and/or
construct, lease, own or operate the assets financed thereby, or
to become a direct or indirect partner, member or other equity
participant or owner in a partnership, limited partnership,
limited liability partnership, corporation (including a business
trust), limited liability company, unlimited liability company,
joint stock company, trust, unincorporated association or joint
venture created for such purpose (collectively, a Business
Entity), (ii) who is not an obligor or otherwise
bound with respect to any Indebtedness other than Non-Recourse
Indebtedness, (iii) substantially all the assets of which
Subsidiary or Business Entity are limited to (x) those
assets being financed (or to be financed), or the operation of
which is being financed (or to be financed), in whole or in part
by Non-Recourse Indebtedness or (y) Capital Stock in, or
Indebtedness or other obligations of, one or more other
Non-Recourse Subsidiaries or Business Entities and (iv) any
Subsidiary of a Non-Recourse Subsidiary; provided that
such Subsidiary shall be considered to be a Non-Recourse
Subsidiary only to the extent that and for so long as each of
the above requirements are met.
Permitted Liens means:
(1) any Lien existing on any property at the time of the
acquisition thereof and not created in contemplation of such
acquisition by us or any of our Subsidiaries, whether or not
assumed by us or any of our Subsidiaries;
(2) any Lien existing on any property of a Subsidiary of
ours at the time it becomes a Subsidiary of ours and not created
in contemplation thereof and any Lien existing on any property
of any Person at the time such Person is merged or liquidated
into or consolidated with us or any Subsidiary of ours and not
created in contemplation thereof;
(3) purchase money and analogous Liens incurred in
connection with the acquisition, development, construction,
improvement, repair or replacement of property (including such
Liens securing Indebtedness incurred within 12 months of
the date on which such property was acquired, developed,
constructed, improved, repaired or replaced); provided
that all such Liens attach only to the property acquired,
developed, constructed, improved, repaired or replaced and the
principal amount of the Indebtedness secured by such Lien shall
not exceed the gross cost of the property;
(4) any Liens created or assumed to secure Indebtedness of
ours or of any Subsidiary of ours maturing within 12 months
of the date of creation thereof and not renewable or extendible
by the terms thereof at the option of the obligor beyond such
12 months;
(5) Liens on accounts receivable and related proceeds
thereof arising in connection with a receivables financing and
any Lien held by the purchaser of receivables derived from
property or assets sold by us or any Subsidiary of ours and
securing such receivables resulting from the exercise of any
rights arising out of defaults on such receivables;
(6) leases constituting Liens now or hereafter existing and
any renewals or extensions thereof;
(7) any Lien securing industrial development, pollution
control or similar revenue bonds;
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(8) Liens existing on the date of the indenture;
(9) Liens in favor of us or any Subsidiary of ours;
(10) Liens securing Indebtedness incurred to refund,
extend, refinance or otherwise replace Indebtedness
(Refinanced Indebtedness) secured by a Lien
permitted to be incurred under the indenture; provided
that the principal amount of such Refinanced Indebtedness
does not exceed the principal amount of Indebtedness refinanced
(plus the amount of penalties, premiums, fees, accrued interest
and reasonable expenses incurred therewith) at the time of
refinancing;
(11) Liens on any assets or properties, or pledges of the
Capital Stock, of (a) any Joint Venture owned by us or any
Subsidiary of ours or (b) any Non-Recourse Subsidiary, in
each case only to the extent securing Non-Recourse Indebtedness
of such Joint Venture or Non-Recourse Subsidiary;
(12) Liens on the products and proceeds (including
insurance, condemnation, and eminent domain proceeds) of and
accessions to, and contract or other rights (including rights
under insurance policies and product warranties) derivative of
or relating to, property permitted by the indenture to be
subject to Liens but subject to the same restrictions and
limitations set forth in the indenture as to Liens on such
property (including the requirement that such Liens on products,
proceeds, accessions, and rights secure only obligations that
such property is permitted to secure);
(13) any Liens securing Indebtedness neither assumed nor
guaranteed by us or any Subsidiary of ours nor on which we or
they customarily pay interest, existing upon real estate or
rights in or relating to real estate (including
rights-of-way
and easements) acquired by us or such Subsidiary, which mortgage
Liens do not materially impair the use of such property for the
purposes for which it is held by us or such Subsidiary;
(14) any Lien existing or hereafter created on any office
equipment, data processing equipment (including computer and
computer peripheral equipment) or transportation equipment
(including motor vehicles, aircraft, and marine vessels);
(15) undetermined Liens and charges incidental to
construction or maintenance;
(16) any Lien created or assumed by us or any Subsidiary of
ours on oil, gas, coal or other mineral or timber property owned
by us or a Subsidiary of ours;
(17) any Lien created by us or any Subsidiary of ours on
any contract (or any rights thereunder or proceeds therefrom)
providing for advances by us or such Subsidiary to finance gas
exploration and development, which Lien is created to secure
Indebtedness incurred to finance such advances; and
(18) any Lien granted in connection with a cash
collateralization or similar arrangement to secure obligations
of ours or any Subsidiary of ours to issuing banks in connection
with letters of credits issued at the request of us or any
Subsidiary of ours.
Person means any individual, corporation,
partnership, joint venture, association, joint-stock company,
trust, unincorporated organization, limited liability company or
government or any agency or political subdivision thereof.
Quotation Agent means the Reference Treasury
Dealer appointed as such agent by us.
Reference Treasury Dealer Quotations means,
with respect to any Reference Treasury Dealer and any redemption
date, the average, as determined by the Quotation Agent, of the
bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount)
quoted in writing to the Quotation Agent by that Reference
Treasury Dealer at 5:00 p.m., New York City time, on the
third Business Day preceding that redemption date.
Reference Treasury Dealers means
(i) Barclays Capital Inc. and Citigroup Global Markets Inc.
and their successors, unless any of such entities ceases to be a
primary U.S. Government securities dealer in New York City
(a Primary Treasury Dealer), in which case we shall
substitute another Primary Treasury Dealer; and (ii) any
two other Primary Treasury Dealers selected by us.
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Subsidiary means, with respect to any
specified Person:
(1) any corporation, association or other business entity
(other than a partnership or limited liability company) of which
more than 50% of the total voting power of Voting Stock is at
the time owned or controlled, directly or indirectly, by that
Person or one or more of the other Subsidiaries of that Person
(or a combination thereof); and
(2) any partnership (whether general or limited) or limited
liability company (a) the sole general partner or member of
which is such Person or a Subsidiary of such Person or
(b) if there is more than a single general partner or
member, either (x) the only managing general partners or
managing members of which are such Person or one or more
Subsidiaries of such Person (or any combination thereof) or
(y) such Person owns or controls, directly or indirectly, a
majority of the outstanding general partner interests, member
interests or other Voting Stock of such partnership or limited
liability company, respectively.
Voting Stock of any Person as of any date
means the Capital Stock of such Person that is at the time
entitled (without regard to the occurrence of any contingency)
to vote in the election of the Board of Directors of such Person.
Williams means The Williams Companies, Inc.,
a Delaware corporation.
57
DESCRIPTION
OF OTHER INDEBTEDNESS
Existing
Williams Partners Notes
As of March 31, 2010, we had $150 million of
7.5% senior unsecured notes outstanding that mature on
June 15, 2011 and $600 million of 7.25% senior
unsecured notes outstanding that mature on February 1, 2017
(together, the Existing Notes).
The terms of the Existing Notes are governed by indentures that
contain covenants that, among other things, limit (1) our
ability and the ability of our subsidiaries to incur liens to
support indebtedness and (2) mergers, consolidations and
transfers of all or substantially all of our properties or
assets. The indentures also contain customary events of default,
upon which the trustee or the holders of the Existing Notes may
declare all outstanding Existing Notes to be due and payable
immediately.
We may redeem the Existing Notes at our option in whole or in
part at any time or from time to time prior to the respective
maturity dates, at a redemption price per note equal to the sum
of (1) the then outstanding principal amount thereof, plus
(2) accrued and unpaid interest, if any, to the redemption
date (subject to the right of holders of record on the relevant
record date to receive interest due on an interest payment date
that is on or prior to the redemption date), plus (3) a
specified make-whole premium (as defined in the
applicable indenture). We are not required to make mandatory
redemption or sinking fund payments with respect to the Existing
Notes or to repurchase the Existing Notes at the option of the
holders.
Credit
Facility
In connection with the Dropdown, we entered into the Credit
Facility with Transco and Northwest Pipeline, as co-borrowers,
Citibank, N.A., as the administrative agent, and certain other
named lenders. Under certain conditions, the Credit Facility may
be increased by up to an additional $250 million. The full
amount of the Credit Facility is available to us, to the extent
not utilized by Transco or Northwest Pipeline. Each of Transco
and Northwest Pipeline may borrow up to $400 million under
the Credit Facility to the extent not otherwise utilized by a
co-borrower. We borrowed $250 million under the Credit
Facility to repay the term loan under our then existing credit
facility. As of March 31, 2010, loans outstanding under the
Credit Facility were reduced to $108 million using
available cash.
Interest on borrowings under the Credit Facility is payable at
rates per annum equal to, at the option of the borrower:
(1) a fluctuating base rate equal to Citibank, N.A.s
adjusted base rate plus the applicable margin, or (2) a
periodic fixed rate equal to LIBOR plus the applicable margin.
The adjusted base rate will be the highest of (i) the
federal funds rate plus 0.5 percent, (ii) Citibank
N.A.s publicly announced base rate, and
(iii) one-month LIBOR plus 1.0 percent. We pay a
commitment fee (currently 0.5 percent) on the unused
portion of the facility. The applicable margin and the
commitment fee are determined by reference to a pricing schedule
based on the borrowers senior unsecured debt ratings.
The Credit Facility contains various covenants that limit, among
other things, a borrowers and its respective
subsidiaries ability to incur indebtedness, grant certain
liens supporting indebtedness, merge or consolidate, sell all or
substantially all of its assets, enter into certain affiliate
transactions, make certain distributions during an event of
default and allow any material change to the nature of its
business.
In addition, we are required to maintain a ratio of debt to
EBITDA (each as defined in the Credit Facility) of no greater
than 5.00 to 1.00 for us and our consolidated subsidiaries. For
each of Transco and Northwest Pipeline and their respective
consolidated subsidiaries, the ratio of debt to capitalization
(defined as net worth plus debt) is not permitted to be greater
than 55%. Each of the above ratios will be tested, beginning
June 30, 2010, at the end of each fiscal quarter, and the
debt to EBITDA ratio will be measured on a rolling four-quarter
basis (with the first full year measured on an annualized basis).
The Credit Facility also includes customary events of default.
If an event of default with respect to a borrower occurs under
the Credit Facility, the lenders will be able to terminate the
commitments for all borrowers and accelerate the maturity of the
loans of the defaulting borrower under the Credit Facility and
exercise other rights and remedies.
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Contributed
Entity Debt
Following the consummation of the Dropdown, we own all of the
ownership interests of Transco and all the ownership interests
of Northwest Pipeline not indirectly owned by the public
unitholders of WMZ. As of March 31, 2010, Transco had
outstanding a total of $1,282,500,000 aggregate principal face
amount of senior unsecured debt issues with various interest
rates from 6.05% to 8.875% and maturities ranging from 2011 to
2026 (the Transco Notes). As of March 31, 2010,
Northwest Pipeline had outstanding a total of $695,000,000
aggregate principal face amount of senior unsecured debt issues
with various interest rates from 5.95% to 7.125% and maturities
ranging from 2016 to 2025 (the Northwest Pipeline
Notes).
The indentures governing the Transco Notes and the Northwest
Pipeline Notes contain covenants that, among other things, limit
Transco and Northwest Pipelines ability to (1) incur
liens securing indebtedness, (2) engage in certain sale and
lease-back transactions and (3) consolidate, merge,
transfer or lease assets. The indentures also contain customary
events of default including non-payment of principal or
interest, failure to comply with covenants, and certain
bankruptcy or insolvency events. Northwest Pipelines
7.125% Debentures due 2025 ($85 million aggregate
principal amount outstanding as of March 31, 2010) are
not subject to redemption prior to maturity. The remaining
Northwest Pipeline Notes, and all of the Transco Notes, may be
redeemed, in whole or in part, at any time and from time to
time, as provided in the indentures governing the notes.
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MATERIAL
U.S. FEDERAL INCOME TAX CONSIDERATIONS
The following is a summary of the material U.S. federal
income tax consequences of an exchange of outstanding notes for
exchange notes in the exchange offer and the purchase,
beneficial ownership, and disposition of the exchange notes. It
is based on provisions of the U.S. Internal Revenue Code of
1986, as amended (the Code), existing and proposed
Treasury regulations promulgated thereunder (the Treasury
Regulations), and administrative and judicial
interpretations thereof, all as of the date hereof and all of
which are subject to change, possibly on a retroactive basis. No
ruling from the Internal Revenue Service (the IRS)
has been or will be sought with respect to any aspect of the
transactions described herein. Accordingly, no assurance can be
given that the IRS will agree with the views expressed in this
summary, or that a court will not sustain any challenge by the
IRS in the event of litigation. The following relates only to
notes that are held as capital assets (i.e., generally, property
held for investment). This summary does not address all of the
U.S. federal income tax consequences that may be relevant
to particular holders in light of their personal circumstances,
or to certain types of holders that may be subject to special
tax treatment (such as banks and other financial institutions,
employee stock ownership plans, partnerships, or other
pass-through entities for U.S. federal income tax purposes,
certain former citizens or residents of the United States,
controlled foreign corporations, corporations that accumulate
earnings to avoid U.S. federal income tax, insurance
companies, tax-exempt organizations, dealers in securities and
foreign currencies, brokers, persons who hold the notes as a
hedge or other integrated transaction or who hedge the interest
rate on the notes, U.S. holders (as defined
below) whose functional currency is not U.S. dollars, or
persons subject to the alternative minimum tax). In addition,
this summary does not include any description of the tax laws of
any state, local, or
non-U.S. jurisdiction
that may be applicable to a particular holder and does not
consider any aspects of U.S. federal tax law other than
income taxation.
For purposes of this discussion, a
non-U.S. holder
is an individual, corporation, estate, or trust that is a
beneficial owner of the notes and that is not, for
U.S. federal income tax purposes:
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an individual who is a citizen or resident of the United States
for U.S. federal income tax purposes;
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a corporation (or other business entity treated as a corporation
for U.S. federal income tax purposes) created or organized
in or under the laws of the United States or any state thereof
or the District of Columbia;
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an estate the income of which is subject to U.S. federal
income taxation regardless of its source; or
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a trust if a court within the United States can exercise primary
supervision over its administration, and one or more United
States persons have the authority to control all of the
substantial decisions of that trust (or the trust was in
existence on August 20, 1996, and validly elected to
continue to be treated as a U.S. trust).
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A U.S. holder is an individual, corporation, estate, or
trust that is a beneficial owner of the notes and is not a
non-U.S. holder.
The U.S. federal income tax treatment of a partner in a
partnership (or other entity classified as a partnership for
U.S. federal income tax purposes) that holds the notes
generally will depend on such partners particular
circumstances and on the activities of the partnership. Partners
in such partnerships should consult their own tax advisors.
HOLDERS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS WITH RESPECT
TO THE PARTICULAR U.S. FEDERAL INCOME TAX CONSEQUENCES TO
THEM OF THE EXCHANGE OFFER AND THE PURCHASE, OWNERSHIP, AND
DISPOSITION OF THE NOTES AND THE TAX CONSEQUENCES UNDER
STATE, LOCAL,
NON-U.S. AND
OTHER U.S. FEDERAL TAX LAWS AND THE POSSIBLE EFFECTS OF
CHANGES IN THE FEDERAL INCOME TAX LAWS.
Notes
Subject to Contingencies
As described under Description of Notes
Deposit of Proceeds; Special Mandatory Redemption, we were
required or had the right to redeem the notes at a price equal
to 101% of their principal amount plus
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accrued and unpaid interest if the closing of the Dropdown did
not occur on or before a certain date. Moreover, as described
under Description of Notes Registration
Rights; Additional Interest, we were required to pay
additional interest if we failed to satisfy certain registration
requirements. It is possible that our obligation or option to
redeem at a premium or to pay such additional interest could
have implicated the provisions of Treasury Regulations relating
to contingent payment debt instruments. If the notes
were characterized as contingent payment debt instruments, a
U.S. Holder might, among other things, be required to
accrue interest income in different amounts and at different
times than the stated interest on the notes and to treat any
gain recognized on the sale or other disposition of a note as
ordinary income rather than as capital gain. We have taken the
position that that the notes should not be treated as contingent
payment debt instruments either because the likelihood of such
redemption of the notes at a premium and the likelihood of
payment of additional interest as a result of failing to satisfy
certain registration requirements were remote or that the
possibility of such payments should be ignored under the rules
applicable to debt instruments with alternative payment
schedules. Our determination that these contingencies are remote
is binding on a U.S. Holder unless the U.S. Holder
discloses its contrary position in the manner required by
applicable Treasury Regulations. Our determination, however, is
not binding on the IRS, and the IRS could challenge this
determination.
The remainder of this disclosure assumes that our determination
that the notes are not subject to the rules applicable to
contingent payment debt instruments is correct. The Treasury
Regulations applicable to contingent payment debt instruments
have not been the subject of authoritative interpretation,
however, and the scope of the Treasury Regulations is not
certain. A U.S. Holder is urged to consult its own tax
advisor regarding the possible application of the special rules
related to contingent payment debt instruments.
U.S.
Federal Income Tax Consequences of the Exchange Offer to U.S.
Holders and
Non-U.S.
Holders
The exchange of outstanding notes for exchange notes pursuant to
the exchange offer will not be a taxable transaction for
U.S. federal income tax purposes. U.S. holders and
non-U.S. holders
will not recognize any taxable gain or loss as a result of such
exchange and will have the same adjusted issue price, tax basis,
and holding period in the exchange notes as they had in the
outstanding notes immediately before the exchange.
U.S.
Federal Income Tax Consequences to U.S. Holders
Treatment
of Stated Interest
Stated interest on the notes will generally be taxable to a
U.S. holder as ordinary income at the time it is paid or
accrues in accordance with the U.S. holders method of
accounting for U.S. federal income tax purposes.
Market
Discount
A note that is acquired for an amount that is less than its
principal amount by more than a de minimis amount (generally
0.25% of the principal amount multiplied by the number of
remaining whole years to maturity), will be treated as having
market discount equal to such difference. Unless the
U.S. holder elects to include such market discount in
income as it accrues, a U.S. holder will be required to
treat any principal payment on, and any gain on the sale,
exchange, retirement or other disposition (including a gift) of,
a note as ordinary income to the extent of any accrued market
discount that has not previously been included in income. In
general, market discount on the notes will accrue ratably over
the remaining term of the notes or, at the election of the
U.S. holder, under a constant yield method. In addition, a
U.S. holder could be required to defer the deduction of all
or a portion of the interest paid on any indebtedness incurred
or continued to purchase or carry a note unless the
U.S. holder elects to include market discount in income
currently. Such an election applies to all debt instruments held
by a taxpayer and may not be revoked without the consent of the
IRS.
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Amortization
of Premium
A U.S. holder, whose tax basis immediately after its
acquisition of a note is greater than the sum of all remaining
payments other than qualified stated interest payable on the
note, will be considered to have purchased the note at a
premium. Qualified stated interest is stated
interest that is unconditionally payable at least annually at a
single fixed rate. A U.S. holder may elect to amortize any
such bond premium to offset a portion of the stated interest
that would otherwise be includable in income. using a constant
yield method, over the remaining term of the note (or, if it
results in a smaller amount of amortizable premium, until an
earlier call date). Such an election generally applies to all
taxable debt instruments held by the holder on or after the
first day of the first taxable year to which the election
applies, and may be revoked only with the consent of the IRS.
Holders that acquire a note with bond premium should consult
their tax advisors regarding the manner in which such premium is
calculated and the election to amortize bond premium over the
life of the instrument.
Sale,
Exchange, or Other Disposition of the Notes
In general, upon the sale, exchange, redemption, retirement at
maturity, or other taxable disposition of a note, a
U.S. holder will recognize taxable gain or loss equal to
the difference between (1) the amount of the cash and the
fair market value of any property received (less any portion
allocable to any accrued and unpaid interest, which will be
taxable as interest) and (2) the U.S. holders
adjusted tax basis in the note. Gain or loss realized on the
sale, retirement, or other taxable disposition of a note will
generally be capital gain or loss. The deductibility of capital
losses is subject to limitations.
Backup
Withholding and Information Reporting
In general, a U.S. holder of the notes will be subject to
backup withholding with respect to interest on the notes, and
the proceeds of a sale of the notes, at the applicable tax rate
(currently 28%), unless such holder (a) is an entity that
is exempt from withholding (including corporations, tax-exempt
organizations and certain qualified nominees) and, when
required, demonstrates this fact, or (b) provides the payor
with its taxpayer identification number (TIN),
certifies that the TIN provided to the payor is correct and that
the holder has not been notified by the IRS that such holder is
subject to backup withholding due to underreporting of interest
or dividends, and otherwise complies with applicable
requirements of the backup withholding rules. In addition, such
payments to U.S. holders that are not exempt entities will
generally be subject to information reporting requirements. A
U.S. holder who does not provide the payor with its correct
TIN may be subject to penalties imposed by the IRS. The amount
of any backup withholding from a payment to a U.S. holder
will be allowed as a credit against such holders
U.S. federal income tax liability and may entitle such
holder to a refund, provided that the required information is
timely furnished to the IRS.
U.S.
Federal Income Tax Consequences to
Non-U.S.
Holders
Treatment
of Stated Interest
Subject to the discussion of backup withholding below, under the
portfolio interest exemption, a
non-U.S. holder
will generally not be subject to U.S. federal income tax
(or any withholding tax) on payments of interest on the notes,
provided that:
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the
non-U.S. holder
does not actually or constructively own 10% or more of the
capital or profits interest in us;
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the
non-U.S. holder
is not, and is not treated as, a bank receiving interest on an
extension of credit pursuant to a loan agreement entered into in
the ordinary course of its trade or business;
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the
non-U.S. holder
is not a controlled foreign corporation that is
related (directly or indirectly) to us; and
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certain certification requirements are met. Under current law,
the certification requirement will be satisfied in any of the
following circumstances:
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If a
non-U.S. holder
provides to us or our paying agent a statement on IRS
Form W-8BEN
(or suitable successor form), together with all appropriate
attachments, signed under penalties of perjury, identifying the
non-U.S. holder
by name and address and stating, among other things, that the
non-U.S. holder
is not a United States person.
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If a note is held through a securities clearing organization,
bank, or another financial institution that holds
customers securities in the ordinary course of its trade
or business, (i) the
non-U.S. holder
provides such a form to such organization or institution, and
(ii) such organization or institution, under penalty of
perjury, certifies to us that it has received such statement
from the beneficial owner or another intermediary and furnishes
us or our paying agent with a copy thereof.
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If a financial institution or other intermediary that holds the
note on behalf of the
non-U.S. holder
has entered into a withholding agreement with the IRS and
submits an IRS
Form W-8IMY
(or suitable successor form) and certain other required
documentation to us or our paying agent.
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If the requirements of the portfolio interest exemption
described above are not satisfied, a 30% withholding tax will
apply to the gross amount of interest on the notes that is paid
to a
non-U.S. holder,
unless either: (a) an applicable income tax treaty reduces
or eliminates such tax, and the
non-U.S. holder
claims the benefit of that treaty by providing a properly
completed and duly executed IRS
Form W-8BEN
(or suitable successor or substitute form) establishing
qualification for benefits under the treaty, or (b) the
interest is effectively connected with the
non-U.S. holders
conduct of a trade or business in the United States and the
non-U.S. holder
provides an appropriate statement to that effect on a properly
completed and duly executed IRS
Form W-8ECI
(or suitable successor form).
If a
non-U.S. holder
is engaged in a trade or business in the United States and
interest on a note is effectively connected with the conduct of
that trade or business, the
non-U.S. holder
will be required to pay U.S. federal income tax on that
interest on a net income basis (and the 30% withholding tax
described above will not apply provided the duly executed IRS
Form W-8ECI
is provided to us or our paying agent) generally in the same
manner as a U.S. person. If a
non-U.S. holder
is eligible for the benefits of an income tax treaty between the
United States and its country of residence, and the
non-U.S. holder
claims the benefit of the treaty by properly submitting an IRS
Form W-8BEN,
any interest income that is effectively connected with a
U.S. trade or business will be subject to U.S. federal
income tax in the manner specified by the treaty and generally
will only be subject to tax on a net basis if such income is
attributable to a permanent establishment (or a fixed base in
the case of an individual) maintained by the
non-U.S. holder
in the United States. In addition, a
non-U.S. holder
that is treated as a foreign corporation for U.S. federal
income tax purposes may be subject to a branch profits tax equal
to 30% (or lower applicable treaty rate) of its earnings and
profits for the taxable year, subject to adjustments, that are
effectively connected with its conduct of a trade or business in
the United States.
Sale,
Exchange, or Other Disposition of the Notes
Subject to the discussion of backup withholding below, a
non-U.S. holder
generally will not be subject to U.S. federal income tax
(or any withholding thereof) on any gain (other than any gain
attributable to accrued interest, which will be taxed in the
manner described above under the heading U.S. Federal
Income Tax Consequences to
Non-U.S. Holders
Treatment of Stated Interest) realized by such holder upon
a sale, exchange, redemption, retirement at maturity, or other
taxable disposition of a note, unless:
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the
non-U.S. holder
is an individual present in the U.S. for 183 days or
more during the taxable year of disposition and who has a
tax home in the United States and certain other
conditions are met; or
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the gain is effectively connected with the conduct of a
U.S. trade or business of the
non-U.S. holder
(and, if an applicable income tax treaty so provides, the gain
is attributable to a U.S. permanent establishment of the
non-U.S. holder
or a fixed base in the case of an individual).
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If the first exception applies, the
non-U.S. holder
generally will be subject to U.S. federal income tax at a
rate of 30% on the amount by which its
U.S.-source
capital gains exceed its
U.S.-source
capital losses. If the second exception applies, the
non-U.S. holder
will generally be subject to U.S. federal income tax on the
net gain derived from the sale, exchange, redemption, retirement
at maturity, or other taxable disposition of the notes in the
same manner as a U.S. person. In addition, corporate
non-U.S. holders
may be subject to a 30% branch profits tax on any such
effectively connected gain. If a
non-U.S. holder
is eligible for the benefits of an income tax treaty between the
United States and its country of residence, the
U.S. federal income tax treatment of any such gain may be
modified in the manner specified by the treaty.
Information
Reporting and Backup Withholding
When required, we or our paying agent will report to the IRS and
to each
non-U.S. holder
the amount of any principal and interest paid on the notes in
each calendar year, and the amount of U.S. federal income
tax withheld, if any, with respect to these payments.
Non-U.S. holders
who have provided certification as to their
non-U.S. status
or who have otherwise established an exemption will generally
not be subject to backup withholding tax on payments of
principal or interest if neither we nor our agent have actual
knowledge or reason to know that such certification is
unreliable or that the conditions of the exemption are in fact
not satisfied.
Payments of the proceeds from the sale of a note to or through a
foreign office of a broker generally will not be subject to
information reporting or backup withholding. However, additional
information reporting, but generally not backup withholding, may
apply to those payments if the broker is one of the following:
(a) a United States person, (b) a controlled
foreign corporation for U.S. federal income tax
purposes, (c) a foreign person 50 percent or more of
whose gross income from all sources for the three-year period
ending with the close of its taxable year preceding the payment
was effectively connected with a U.S. trade or business, or
(d) a foreign partnership with specified connections to the
United States.
Payment of the proceeds from a sale of a note to or through the
United States office of a broker will be subject to information
reporting and backup withholding unless the
non-U.S. holder
certifies as to its
non-U.S. status
or otherwise establishes an exemption from information reporting
and backup withholding.
The amount of any backup withholding from a payment to a
non-U.S. holder
will be allowed as a credit against such holders
U.S. federal income tax liability, if any, and may entitle
such holder to a refund, provided that the required information
is timely furnished to the IRS.
New
Legislation Relating to Foreign Accounts
Newly enacted legislation may impose withholding taxes on
certain types of payments made to foreign financial
institutions and certain other
non-U.S.
entities after December 31, 2012. The legislation imposes a
30% withholding tax on interest payments on, or gross proceeds
from the sale or other disposition of, certain obligations paid
to a foreign financial institution unless the foreign financial
institution enters into an agreement with the U.S. Treasury to
among other things, undertake to identify accounts held by
certain U.S. persons or
U.S.-owned
foreign entities, annually report certain information about such
accounts, and withhold 30% on payments to account holders whose
actions prevent it from complying with these reporting and other
requirements. In addition, the legislation imposes a 30%
withholding tax on the same types of payments to a foreign
non-financial entity unless the entity certifies that it does
not have any substantial U.S. owners or furnishes identifying
information regarding each substantial U.S. owner. These
withholding obligations do not apply to interest payments on, or
gross sale proceeds from sale or disposition of, obligations
outstanding prior to March 18, 2012. Prospective investors
should consult their tax advisors regarding this legislation.
64
PLAN OF
DISTRIBUTION
Each broker-dealer that receives exchange notes for its own
account in the exchange offer must acknowledge that it acquired
the outstanding notes for its own account as a result of
market-making or other trading activities and must agree that it
will deliver a prospectus meeting the requirements of the
Securities Act in connection with any resale of the exchange
notes. A participating broker-dealer may use this prospectus, as
it may be amended or supplemented from time to time, in
connection with resales of exchange notes received in exchange
for outstanding notes where such outstanding notes were acquired
as a result of market-making activities or other trading
activities. The registration rights agreement we executed in
connection with the offering of the outstanding notes provides
that we will generally not be required to amend or supplement
this prospectus for a period exceeding 180 days after the
expiration time of the exchange offer and participating
broker-dealers shall not be authorized by us to deliver this
prospectus in connection with resales after that period of time
has expired.
We will not receive any proceeds from any sale of exchange notes
by any participating broker-dealer. Exchange notes received by
participating broker-dealers for their own account pursuant to
the exchange offer may be sold from time to time in one or more
transactions in the
over-the-counter
market, in negotiated transactions, through the writing of
options on the exchange notes, or a combination of such methods
of resale, at market prices prevailing at the time of resale, at
prices related to such prevailing market prices, or negotiated
prices. Any resale may be made directly to purchasers or to or
through brokers or dealers who may receive compensation in the
form of commissions or concessions from any such participating
broker-dealer
and/or the
purchasers of the exchange notes. Any participating
broker-dealer that resells exchange notes that were received by
it for its own account in the exchange offer and any broker or
dealer that participates in a distribution of the exchange notes
may be deemed to be an underwriter within the
meaning of the Securities Act and any profit on any such resale
of exchange notes and any commissions or concessions received by
those persons may be deemed to be underwriting compensation
under the Securities Act. The letter of transmittal states that
by acknowledging that it will deliver and by delivering a
prospectus, a participating broker-dealer will not be deemed to
admit that it is an underwriter within the meaning
of the Securities Act.
We have agreed to pay all expenses incident to the exchange
offer other than commissions or concessions of any brokers or
dealers and will indemnify the holders of the outstanding notes
(including any broker-dealers) against certain liabilities,
including liabilities under the Securities Act.
65
LEGAL
MATTERS
Certain matters with respect to the validity of the exchange
notes will be passed upon for us by Gibson, Dunn &
Crutcher LLP.
EXPERTS
The consolidated financial statements of Williams Partners L.P.
for the year ended December 31, 2009, appearing in our
Current Report on
Form 8-K
filed on May 12, 2010, have been audited by
Ernst & Young LLP, independent registered public
accounting firm, as set forth in their report thereon included
therein and incorporated herein by reference, and are
incorporated herein by reference in reliance upon such report
given on the authority of such firm as experts in accounting and
auditing.
The effectiveness of Williams Partners L.P.s internal
control over financial reporting as of December 31, 2009,
included our Annual Report on
Form 10-K
for the year ended December 31, 2009, has been audited by
Ernst & Young LLP, independent registered public
accounting firm, as set forth in their report thereon included
therein and incorporated herein by reference, and is
incorporated herein by reference in reliance upon such report
given on the authority of such firm as experts in accounting and
auditing.
66
$3,500,000,000
Williams Partners
L.P.
Exchange Offer for All Outstanding
$750,000,000 aggregate amount of 3.800% Senior Notes due
2015
(CUSIP Nos. 96950FAA2 and U96956AA2)
for new 3.800% Senior Notes due 2015
that have been registered under the Securities Act of 1933
and
$1,500,000,000 aggregate amount of 5.250% Senior Notes
due 2020
(CUSIP Nos. 96950FAC8 and U96956AB0)
for new 5.250% Senior Notes due 2020
that have been registered under the Securities Act of 1933
and
$1,250,000,000 aggregate amount of 6.300% Senior Notes
due 2040
(CUSIP Nos. 96950FAE4 and U96956AC8)
for new 6.300% Senior Notes due 2040
that have been registered under the Securities Act of 1933
PROSPECTUS
,
2010
PART II
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Item 20.
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Indemnification
of Directors and Officers
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Williams Partners L.P. has no employees, officers or directors,
but is managed and operated by the employees, officers and
directors of Williams Partners L.P.s general partner,
Williams Partners GP LLC, and its affiliates.
Williams Partners L.P. will generally indemnify officers,
directors and affiliates of its general partner to the fullest
extent permitted by the law against all losses, claims, damages
or similar events.
Section 17-108
of the Delaware Revised Uniform Limited Partnership Act provides
that, subject to such standards and restrictions, if any, as are
set forth in its partnership agreement, a Delaware limited
partnership may, and shall have the power to, indemnify and hold
harmless any partner or other person from and against any and
all claims and demands whatsoever.
Section 18-108
of the Delaware Limited Liability Company Act provides that,
subject to such standards and restrictions, if any, as are set
forth in its limited liability company agreement, a Delaware
limited liability company may, and shall have the power to,
indemnify and hold harmless any member or manager or other
person from and against any and all claims and demands
whatsoever.
The amended and restated limited liability company agreement of
Williams Partners GP LLC contains the following provisions
relating to indemnification of, among others, its officers and
directors:
Section 10.01 Indemnification. To
the fullest extent permitted by law but subject to the
limitations expressly provided in this Agreement, all
Indemnitees shall be indemnified and held harmless by the
Company from and against any and all losses, claims, damages,
liabilities, joint or several, expenses (including legal fees
and expenses), judgments, fines, penalties, interest,
settlements or other amounts arising from any and all claims,
demands, actions, suits or proceedings, whether civil, criminal,
administrative or investigative, in which any Indemnitee may be
involved, or is threatened to be involved, as a party or
otherwise, by reason of its status as an Indemnitee; provided,
that the Indemnitee shall not be indemnified and held harmless
if there has been a final and non-appealable judgment entered by
a court of competent jurisdiction determining that, in respect
of the matter for which the Indemnitee is seeking
indemnification pursuant to this Section 10.01, the
Indemnitee acted in bad faith or engaged in fraud or willful
misconduct or, in the case of a criminal matter, acted with
knowledge that the Indemnitees conduct was unlawful. Any
indemnification pursuant to this Section 10.01 shall be
made only out of the assets of the Company, it being agreed that
the Members shall not be liable for such indemnification and
shall have no obligation to contribute or loan any monies or
property to the Company to enable it to effectuate such
indemnification.
(b) To the fullest extent permitted by law, expenses
(including legal fees and expenses) incurred by an Indemnitee
who is indemnified pursuant to Section 10.01(a) in
defending any claim, demand, action, suit or proceeding shall,
from time to time, be advanced by the Company prior to a
determination that the Indemnitee is not entitled to be
indemnified upon receipt by the Company of any undertaking by or
on behalf of the Indemnitee to repay such amount if it shall be
determined that the Indemnitee is not entitled to be indemnified
as authorized in this Section 10.01.
(c) The indemnification provided by this Section 10.01
shall be in addition to any other rights to which an Indemnitee
may be entitled under any agreement, as a matter of law or
otherwise, both as to actions in the Indemnitees capacity
as an Indemnitee and as to actions in any other capacity, and
shall continue as to an Indemnitee who has ceased to serve in
such capacity and shall inure to the benefit of the heirs,
successors, assigns and administrators of the Indemnitee.
(d) The Company may purchase and maintain insurance on
behalf of the Company, its Affiliates and such other Persons as
the Company shall determine, against any liability that may be
asserted against, or expense that may be incurred by, such
Person in connection with the Companys activities or such
Persons activities on behalf of the Company, regardless of
whether the Company would have the power to indemnify such
Person against such liability under the provisions of this
Agreement.
II-1
(e) For purposes of this Section 10.01, (i) the
Company shall be deemed to have requested an Indemnitee to serve
as fiduciary of an employee benefit plan whenever the
performance by it of its duties to the Company also imposes
duties on, or otherwise involves services by, it to the plan or
participants or beneficiaries of the plan; (ii) excise
taxes assessed on an Indemnitee with respect to an employee
benefit plan pursuant to applicable law shall constitute
fines within the meaning of Section 10.01(a);
and (iii) action taken or omitted by the Indemnitee with
respect to any employee benefit plan in the performance of its
duties for a purpose reasonably believed by it to be in the best
interest of the participants and beneficiaries of the plan shall
be deemed to be for a purpose that is in the best interests of
the Company.
(f) An Indemnitee shall not be denied indemnification in
whole or in part under this Section 10.01 because the
Indemnitee had an interest in the transaction with respect to
which the indemnification applies if the transaction was
otherwise permitted by the terms of this Agreement.
(g) The provisions of this Section 10.01 are for the
benefit of the Indemnitees, their heirs, successors, assigns and
administrators and shall not be deemed to create any rights for
the benefit of any other Persons.
(h) No amendment, modification or repeal of this
Section 10.01 or any provision hereof shall in any manner
terminate, reduce or impair the right of any past, present or
future Indemnitee to be indemnified by the Company, nor the
obligations of the Company to indemnify any such Indemnitee
under and in accordance with the provisions of this
Section 10.01 as in effect immediately prior to such
amendment, modification or repeal with respect to claims arising
from or relating to matters occurring, in whole or in part,
prior to such amendment, modification or repeal, regardless of
when such claims may arise or be asserted.
Section 10.02 Liability
of Indemnitees.
(a) Notwithstanding anything to the contrary set forth in
this Agreement, no Indemnitee shall be liable for monetary
damages to the Company or any other Persons who have acquired
membership interests in the Company, for losses sustained or
liabilities incurred as a result of any act or omission of an
Indemnitee unless there has been a final and non-appealable
judgment entered by a court of competent jurisdiction
determining that, in respect of the matter in question, the
Indemnitee acted in bad faith or engaged in fraud or willful
misconduct or, in the case of a criminal matter, acted with
knowledge that the Indemnitees conduct was criminal.
(b) To the extent that, at law or in equity, an Indemnitee
has duties (including fiduciary duties) and liabilities relating
thereto to the Company, such Indemnitee acting in connection
with the Companys business or affairs shall not be liable
to the Company or to any Member for its good faith reliance on
the provisions of this Agreement. The provisions of this
Agreement, to the extent that they restrict or otherwise modify
the duties and liabilities of an Indemnitee otherwise existing
at law or in equity, are agreed by the Members to replace such
other duties and liabilities of such Indemnitee.
(c) Any amendment, modification or repeal of this
Section 10.02 or any provision hereof shall be prospective
only and shall not in any way affect the limitations on the
liability of the Indemnitees under this Section 10.02 as in
effect immediately prior to such amendment, modification or
repeal with respect to claims arising from or relating to
matters occurring, in whole or in part, prior to such amendment,
modification or repeal, regardless of when such claims may arise
or be asserted.
The Williams Companies, Inc. has purchased insurance designed to
protect Williams Partners L.P. and the directors and officers of
Williams Partners GP LLC against losses arising from certain
claims, including claims under the Securities Act of 1933, as
amended.
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Item 21.
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Exhibits
and Financial Statement Schedules
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See the Exhibit Index attached to this registration
statement and incorporated herein by reference.
II-2
The undersigned registrant hereby undertakes:
To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) to include any prospectus required by
Section 10(a)(3) of the Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events
arising after the effective date of the registration statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change
in the information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in
volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered)
and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of
prospectus filed with the SEC pursuant to Rule 424(b) if,
in the aggregate, the changes in volume and price represent no
more than a 20% change in the maximum aggregate offering price
set forth in the Calculation of Registration Fee
table in the effective registration statement;
(iii) to include any material information with respect to
the plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement.
That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall
be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide
offering thereof.
To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
That, for the purpose of determining liability under the
Securities Act of 1933 to any purchaser, each prospectus filed
pursuant to Rule 424(b) as part of a registration statement
relating to an offering, other than registration statements
relying on Rule 430B or other than prospectuses filed in
reliance on Rule 430A, shall be deemed to be part of and
included in the registration statement as of the date it is
first used after effectiveness.
Provided, however, that no statement made in a
registration statement or prospectus that is part of the
registration statement or made in a document incorporated or
deemed incorporated by reference into the registration statement
or prospectus that is part of the registration statement will,
as to a purchaser with a time of contract of sale prior to such
first use, supersede or modify any statement that was made in
the registration statement or prospectus that was part of the
registration statement or made in any such document immediately
prior to such date of first use.
That, for the purpose of determining liability of the registrant
under the Securities Act of 1933 to any purchaser in the initial
distribution of the securities: The undersigned registrant
undertakes that in a primary offering of securities of the
undersigned registrant pursuant to this registration statement,
regardless of the underwriting method used to sell the
securities to the purchaser, if the securities are offered or
sold to such purchaser by means of any of the following
communications, the undersigned registrant will be a seller to
the purchaser and will be considered to offer or sell such
securities to such purchaser:
(i) Any preliminary prospectus or prospectus of the
undersigned registrant relating to the offering required to be
filed pursuant to Rule 424;
(ii) Any free writing prospectus relating to the offering
prepared by or on behalf of the undersigned registrant or used
or referred to by the undersigned registrant;
II-3
(iii) The portion of any other free writing prospectus
relating to the offering containing material information about
the undersigned registrant or its securities provided by or on
behalf of the undersigned registrant; and
(iv) Any other communication that is an offer in the
offering made by the undersigned registrant to the purchaser.
That, for the purposes of determining any liability under the
Securities Act of 1933, each filing of its annual report
pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plans annual report pursuant to
Section 15(d) of the Exchange Act) that is incorporated by
reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors,
officers and controlling persons of the registrant pursuant to
the foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Securities Act of 1933 and is, therefore,
unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer
or controlling person of the registrant in the successful
defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the
opinion of counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the
question of whether such indemnification by it or them is
against public policy as expressed in the Securities Act of 1933
and will be governed by the final adjudication of such issue.
The undersigned registrant hereby undertakes to respond to
requests for information that is incorporated by reference into
the prospectus pursuant to Items 4, 10(b), 11, or 13 of
this Form, within one business day of receipt of such request,
and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained
in documents filed subsequent to the effective date of the
registration statement through the date of responding to the
request.
The undersigned registrant hereby undertakes to supply by means
of a post-effective amendment all information concerning a
transaction, and the company being acquired involved therein,
that was not the subject of and included in the registration
statement when it became effective.
II-4
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Tulsa, State of Oklahoma, on
May 12, 2010.
WILLIAMS PARTNERS L.P.
(Registrant)
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By:
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Williams Partners GP LLC,
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its general partner
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By:
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/s/ La Fleur
C. Browne
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La Fleur C. Browne
Secretary
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated:
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Signature
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Title
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Date
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*
Steven
J. Malcolm
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President, Chief Executive Officer and Chairman of the Board
(Principal Executive Officer)
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May 12, 2010
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*
Donald
R. Chappel
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Chief Financial Officer and Director (Principal Financial
Officer)
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May 12, 2010
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*
Ted
T. Timmermans
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Chief Accounting Officer and Controller (Principal Accounting
Officer)
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May 12, 2010
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*
Alan
S. Armstrong
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Director
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May 12, 2010
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*
Bill
Z. Parker
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Director
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May 12, 2010
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*
Alice
M. Peterson
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Director
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May 12, 2010
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*
H.
Michael Krimbill
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Director
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May 12, 2010
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*
Phillip
D. Wright
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Director
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May 12, 2010
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*By:
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/s/ La Fleur
C. Browne
La Fleur
C. Browne
Attorney-in-Fact
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II-5
EXHIBIT INDEX
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Exhibit No.
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Description
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(4
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.1)
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Certificate of Limited Partnership of Williams Partners L.P.
(incorporated by reference to Exhibit 3.1 to Williams
Partners L.P.s registration statement on Form S-1 (File
No. 333-124517) filed with the SEC on May 2, 2005)
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(4
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.2)
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Amended and Restated Agreement of Limited Partnership of
Williams Partners L.P., as amended by Amendments Nos. 1, 2, 3,
4, 5 and 6 (incorporated by reference to Exhibit 3.3 to
Williams Partners L.P.s annual report on Form 10-K
(File No. 001-32599) filed with the SEC on February 25, 2010)
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(4
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.3)
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Indenture, dated as of February 9, 2010, between Williams
Partners L.P. and The Bank of New York Mellon Trust
Company, N.A. (incorporated by reference to Exhibit 4.1 to
Williams Partners L.P.s current report on Form 8-K
(File No. 001-32599) filed with the SEC on February 10, 2010)
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(4
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.4)
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Registration Rights Agreement, dated as of February 9, 2010,
among Williams Partners L.P. and Barclays Capital Inc. and
Citigroup Global Markets Inc., each acting on behalf of
themselves and the initial purchasers listed on Schedule I
thereto (incorporated by reference to Exhibit 10.1 to Williams
Partners L.P.s current report on Form 8-K (File No.
001-32599) filed with the SEC on February 10, 2010)
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5
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.1
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Opinion of Gibson, Dunn & Crutcher LLP
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(12
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.1)
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Statement Regarding Computation of Ratio of Earnings to Fixed
Charges. (incorporated by reference to Exhibit 12 to Williams
Partners L.P.s quarterly report on Form 10-Q (File No.
001-32599) filed with the SEC on May 5, 2010 and Exhibit 12 to
Williams Partners L.P.s current report on Form 8-K (File
No. 001-32599) filed with the SEC on May 12, 2010)
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23
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.1
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Consent of Ernst & Young LLP
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23
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.2
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Consent of Gibson, Dunn & Crutcher LLP (included in Exhibit
5.1)
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24
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.1
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Power of Attorney
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25
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.1
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Statement of Eligibility of Trustee, The Bank of New York Mellon
Trust Company, N.A., on Form T-1
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99
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.1
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Form of Letter of Transmittal
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99
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.2
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Substitute Form W-9 and Guidelines for Certification of Taxpayer
Identification Number of Substitute Form W-9
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99
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.3
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Form of Notice of Guaranteed Delivery
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99
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.4
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Form of Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees
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99
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.5
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Form of Letter to Clients for use by Brokers, Dealers,
Commercial Banks, Trust Companies and Other Nominees
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