**Exhibit 99.2****REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**The Board of Directors of Williams Partners GP LLC     We have audited the accompanying consolidated balance sheet ofWilliams Partners GP LLC as of December 31, 2005. Theconsolidated balance sheet is the responsibility of theCompany’s management. Our responsibility is to express anopinion on the consolidated balance sheet based on our audit.     We conducted our audit in accordance with the standards of thePublic Company Accounting Oversight Board (United States). Thosestandards require that we plan and perform the audit to obtainreasonable assurance about whether the balance sheet is free ofmaterial misstatement. We were not engaged to perform an auditof the Company’s internal control over financial reporting.Our audit included consideration of internal control overfinancial reporting as a basis for designing audit proceduresthat are appropriate in the circumstances, but not for thepurpose of expressing an opinion on the effectiveness of theCompany’s internal control over financial reporting.Accordingly, we express no such opinion. An audit also includesexamining, on a test basis, evidence supporting the amounts anddisclosures in the balance sheet, assessing the accountingprinciples used and significant estimates made by management,and evaluating the overall balance sheet presentation. Webelieve that our audit provides a reasonable basis for ouropinion.     In our opinion, the balance sheet referred to above presentsfairly, in all material respects, the financial position ofWilliams Partners GP LLC, in conformity with U.S. generallyaccepted accounting principles.     /s/ Ernst & Young LLPTulsa, OklahomaFebruary 27, 2005
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**WILLIAMS PARTNERS GP LLC****CONSOLIDATED BALANCE SHEET****December 31, 2005****(In thousands)**        **ASSETS**     Current assets:          Cash and cash equivalents $6,839       Accounts receivable:           Trade  1,840        Other  2,104      Product imbalance  760      Gas purchase contract — affiliate  5,320      Prepaid expenses  1,133          Total current assets  17,996     Investment in Discovery Producer Services  150,260     Property, plant and equipment, net  67,931     Gas purchase contract — noncurrent —    affiliate  4,754         Total assets $240,941     **LIABILITIES AND OWNERS’ EQUITY**     Current liabilities:          Accounts payable:           Trade $3,906        Affiliate  6,562       Deferred revenue  3,552       Accrued liabilities  2,373          Total current liabilities  16,393     Environmental remediation liabilities  3,964     Other noncurrent liabilities  762     Minority interest  112,160     Commitments and contingent liabilities (Note 11)        Owners’ equity  107,662         Total liabilities and owners’ equity $240,941     See accompanying notes to the consolidated balance sheet.
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**WILLIAMS PARTNERS GP LLC****NOTES TO CONSOLIDATED BALANCE SHEET****Note 1.****Organization**     We are a Delaware limited liability company formed onFebruary 23, 2005, to become the general partner ofWilliams Partners L.P. (the “Partnership”). We own a2 percent general partner interest in the Partnership.However, due to the substantive control granted to us by thepartnership agreement we consolidate our interest in thePartnership. Unless the context clearly indicates otherwise,references to “we,” “our,” and“us” include the operations of the Partnership. We area wholly owned subsidiary of The Williams Companies, Inc.(“Williams”).     The Partnership is a Delaware limited partnership formed inFebruary 2005, to acquire and own (1) a 40 percentinterest in Discovery; (2) the Carbonate Trend gatheringpipeline off the coast of Alabama; (3) three integratednatural gas liquids (“NGL”) product storage facilitiesnear Conway, Kansas; and (4) a 50 percent undividedownership interest in a fractionator near Conway, Kansas. Priorto the closing of the Partnership’s initial public offering(the “IPO”) in August 2005, the 40 percentinterest in Discovery was held by Williams Energy, L.L.C.(“Energy”) and Williams Discovery Pipeline LLC; theCarbonate Trend gathering pipeline was held in Carbonate TrendPipeline LLC (“CTP”), which was owned by WilliamsMobile Bay Producers Services, L.L.C.; and the NGL productstorage facilities and the interest in the fractionator wereowned by Mid-Continent Fractionation and Storage, LLC(“MCFS”). All of these are wholly owned indirectsubsidiaries of The Williams Companies, Inc. (collectively“Williams”). Additionally, Williams Partners OperatingLLC, an operating limited liability company (wholly owned by thePartnership) through which all the Partnership’s activitiesare conducted, was formed.***Initial Public Offering and Related Transactions***     On August 23, 2005, the Partnership completed an IPO of5,000,000 common units representing limited partner interests inus at a price of $21.50 per unit. The proceeds of$100.2 million, net of the underwriters’ discount anda structuring fee totaling $7.3 million, were used to: •     distribute $58.8 million to Williams, in part to reimburse    Williams for capital expenditures relating to the assets    contributed to us and for a gas purchase contract contributed to    us;  •     provide $24.4 million to make a capital contribution to    Discovery to fund an escrow account required in connection with    the Tahiti pipeline lateral expansion project;  •     provide $12.7 million of additional working    capital; and  •     pay $4.3 million of expenses associated with the IPO and    related formation transactions.     Concurrent with the closing of the IPO, the 40 percentinterest in Discovery and all of the interests in CTP and MCFSwere contributed to the Partnership by Williams’subsidiaries in exchange for an aggregate of 2,000,000 commonunits and 7,000,000 subordinated units. The public, through theunderwriters of the offering, contributed $107.5 million($100.2 million net of the underwriters’ discount anda structuring fee) to the Partnership in exchange for 5,000,000common units, representing a 35 percent limited partnerinterest in the Partnership. Additionally, at the closing of theIPO, the underwriters fully exercised their option to purchase750,000 common units from Williams’ subsidiaries at the IPOprice of $21.50 per unit, less the underwriters’discount and a structuring fee.**Note 2.****Description of Business**     We are principally engaged in the business of gathering,transporting and processing natural gas and fractionating andstoring NGLs. Operations of our businesses are located in theUnited States and are organized into two reporting segments:(1) Gathering and Processing and (2) NGL Services. OurGathering and Processing segment includes our equity investmentin Discovery and the Carbonate Trend gathering pipeline. Our NGLServices segment includes the Conway fractionation and storageoperations.
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**WILLIAMS PARTNERS GP LLC****NOTES TO CONSOLIDATED BALANCESHEET — (Continued)**     *Gathering and Processing.* We own a 40 percentinterest in Discovery, which includes a wholly owned subsidiary,Discovery Gas Transmission LLC. Discovery owns (1) a273-mile natural gasgathering and transportation pipeline system, located primarilyoff the coast of Louisiana in the Gulf of Mexico, (2) a600 million cubic feet per day cryogenic natural gasprocessing plant in Larose, Louisiana, (3) a32,000 barrels per day (“bpd”) natural gasliquids fractionator in Paradis, Louisiana and (4) twoonshore liquids pipelines, including a22-mile mixed NGLpipeline connecting the gas processing plant to the fractionatorand a 10-milecondensate pipeline connecting the gas processing plant to athird party oil gathering facility. Although Discovery includesfractionation operations, which would normally fall within theNGL Services segment, it is primarily engaged in gathering andprocessing and is managed as such. Hence, this equity investmentis considered part of the Gathering and Processing segment.     Our Carbonate Trend gathering pipeline is an unregulated sourgas gathering pipeline consisting of approximately 34 milesof pipeline off the coast of Alabama.     *NGL Services.* Our Conway storage facilities include threeunderground NGL storage facilities in the Conway, Kansas, areawith a storage capacity of approximately 20 millionbarrels. The facilities are connected via a series of pipelines.The storage facilities receive daily shipments of a variety ofproducts, including mixed NGLs and fractionated products. Inaddition to pipeline connections, one facility offers truck andrail service.     Our Conway fractionation facility is located near McPherson,Kansas, and has a capacity of approximately 107,000 bpd. Weown a 50 percent undivided interest in these facilitiesrepresenting capacity of approximately 53,500 bpd.ConocoPhillips and ONEOK, Inc. are the other owners. Williamsoperates the facility pursuant to an operating agreement thatextends until May 2011. The fractionator separates mixed NGLsinto five products: ethane, propane, normal butane, isobutaneand natural gasoline. Portions of these products are thentransported and stored at our Conway storage facilities.**Note 3.****Summary of Significant Accounting Policies**     *Basis of Presentation.* The consolidated balance sheet hasbeen prepared based upon accounting principles generallyaccepted in the United States and include the accounts of theparent and our controlled subsidiaries. Intercompany accountsand transactions have been eliminated.     *Use of Estimates.* The preparation of financial statementsin conformity with accounting principles generally accepted inthe United States requires management to make estimates andassumptions that affect the amounts reported in the consolidatedbalance sheet and accompanying notes. Actual results coulddiffer from those estimates.     Estimates and assumptions which, in the opinion of management,are significant to the underlying amounts included in thebalance sheet and for which it would be reasonably possible thatfuture events or information could change those estimatesinclude: •     impairment assessments of investments and long-lived assets;  •     loss contingencies;  •     environmental remediation obligations; and  •     asset retirement obligations.These estimates are discussed further throughout theaccompanying notes.     *Proportional Accounting for the Conway Fractionator.* Noseparate legal entity exists for the fractionator. We hold a50 percent undivided interest in the fractionator property,plant and equipment, and we are responsible for our proportionalshare of the costs and expenses of the fractionator. As operatorof the facility, we incur the liabilities of the fractionator(except for certain fuel costs purchased directly by one of theco-
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**WILLIAMS PARTNERS GP LLC****NOTES TO CONSOLIDATED BALANCESHEET — (Continued)**owners) and are reimbursed by the co-owners for theirproportional share of the total costs and expenses. Eachco-owner is responsible for the marketing of their proportionalshare of the fractionator’s capacity. Accordingly, wereflect our proportionate share of the fractionator property,plant and equipment in the Consolidated Balance Sheet.Liabilities in the Consolidated Balance Sheet include thoseincurred on behalf of the co-owners with correspondingreceivables from the co-owners. Accounts receivable alsoincludes receivables from our customers for fractionationservices.     *Cash and Cash Equivalents.* Cash and cash equivalentsinclude demand and time deposits, certificates of deposit andother marketable securities with maturities of three months orless when acquired.     *Accounts Receivable.* Accounts receivable are carried on agross basis, with no discounting, less an allowance for doubtfulaccounts. No allowance for doubtful accounts is recognized atthe time the revenue which generates the accounts receivable isrecognized. We estimate the allowance for doubtful accountsbased on existing economic conditions, the financial conditionof our customers, and the amount and age of past due accounts.Receivables are considered past due if full payment is notreceived by the contractual due date. Past due accounts aregenerally written off against the allowance for doubtfulaccounts only after all collection attempts have beenunsuccessful.     *Investments.* The voting rights under Discovery’slimited liability company agreement are such that our40 percent interest combined with the additional interestheld by Williams do not control Discovery. Hence, we account forour investment in Discovery under the equity method. In 2004, werecognized an other-than-temporary impairment of our investmentin Discovery. As a result, Discovery’s underlying equityexceeds the carrying value of our investment atDecember 31, 2005.     *Property, Plant and Equipment.* Property, plant andequipment is recorded at cost. We base the carrying value ofthese assets on capitalized costs, useful lives and salvagevalues. Depreciation of property, plant and equipment isprovided on the straight-line basis over estimated useful lives.Expenditures for maintenance and repairs are expensed asincurred. Expenditures that enhance the functionality or extendthe useful lives of the assets are capitalized. The cost ofproperty, plant and equipment sold or retired and the relatedaccumulated depreciation is removed from the accounts in theperiod of sale or disposition. Gains and losses on the disposalof property, plant and equipment are recorded in theConsolidated Statement of Operations.     We record an asset and a liability equal to the present value ofeach expected future asset retirement obligation(“ARO”). The ARO asset is depreciated in a mannerconsistent with the depreciation of the underlying physicalasset. We measure changes in the liability due to passage oftime by applying an interest method of allocation. This amountis recognized as an increase in the carrying amount of theliability and as a corresponding accretion expense included inoperating income.     *Revenue Recognition.* The nature of our businesses resultin various forms of revenue recognition. Our Gathering andProcessing segment recognizes revenue from gathering serviceswhen the services have been performed. Our NGL Services segmentrecognizes (1) fractionation revenues when services havebeen performed and product has been delivered, (2) storagerevenues under prepaid contracted storage capacity evenly overthe life of the contract as services are provided and(3) product sales revenue when the product has beendelivered.     *Gas purchase contract.* In connection with thePartnership’s IPO, Williams transferred to us a gaspurchase contract for the purchase of a portion of our fuelrequirements at the Conway fractionator at a market price not toexceed a specified level. The gas purchase contract is for thepurchase of 80,000 MMBtu per month and terminates onDecember 31, 2007. The initial value of this contract isbeing amortized to expense over the contract life.
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**WILLIAMS PARTNERS GP LLC****NOTES TO CONSOLIDATED BALANCESHEET — (Continued)**     *Product Imbalances.* In the course of providingfractionation and storage services to our customers, we realizeproduct gains and losses that are reflected as product imbalancereceivables or payables on the Consolidated Balance Sheet. Theseimbalances are valued based on the market price of the productswhen the imbalance is identified and are evaluated for theimpact of a change in market prices at the balance sheet date.Certain of these product gains and losses arise due to theproduct blending process at the fractionator. Others arerealized when storage caverns are emptied. Storage caverns areemptied periodically to determine whether any product gains orlosses have occurred, and as these caverns are emptied, it ispossible that the resulting product gains or losses could have amaterial impact to the results of operations for the periodduring which the cavern drain is performed.     *Impairment of Long-Lived Assets and Investments.* Weevaluate our long-lived assets of identifiable businessactivities for impairment when events or changes incircumstances indicate the carrying value of such assets may notbe recoverable. The impairment evaluation of tangible long-livedassets is measured pursuant to the guidelines of Statement ofFinancial Accounting Standards (“SFAS”) No. 144,“Accounting for the Impairment or Disposal of Long-LivedAssets.” When an indicator of impairment has occurred, wecompare our management’s estimate of undiscounted futurecash flows attributable to the assets to the carrying value ofthe assets to determine whether the carrying value of the assetsis recoverable. We apply a probability weighted approach toconsider the likelihood of different cash flow assumptions andpossible outcomes. If the carrying value is not recoverable, wedetermine the amount of the impairment recognized in thefinancial statements by estimating the fair value of the assetsand recording a loss for the amount that the carrying valueexceeds the estimated fair value.     We evaluate our investments for impairment when events orchanges in circumstances indicate, in our management’sjudgment, that the carrying value of such investments may haveexperienced an other-than-temporary decline in value. Whenevidence of loss in value has occurred, we compare our estimateof fair value of the investment to the carrying value of theinvestment to determine whether an impairment has occurred. Ifthe estimated fair value is less than the carrying value and weconsider the decline in value to be other than temporary, theexcess of the carrying value over the estimated fair value isrecognized in the financial statements as an impairment.     Judgments and assumptions are inherent in our management’sestimate of undiscounted future cash flows used to determinerecoverability of an asset and the estimate of an asset’sfair value used to calculate the amount of impairment torecognize. The use of alternate judgments and/or assumptionscould result in the recognition of different levels ofimpairment charges in the financial statements.     *Income Taxes.* We are not a taxable entity for federal andstate income tax purposes. The tax on our net income is borne byour owner, The Williams Companies, Inc.     *Environmental.* Environmental expenditures that relate tocurrent or future revenues are expensed or capitalized basedupon the nature of the expenditures. Expenditures that relate toan existing contamination caused by past operations that do notcontribute to current or future revenue generation are expensed.Accruals related to environmental matters are generallydetermined based on site-specific plans for remediation, takinginto account our prior remediation experience. Environmentalcontingencies are recorded independently of any potential claimfor recovery.     *Capitalized Interest.* We capitalize interest on majorprojects during construction to the extent we incur interestexpense. Historically, Williams provided the financing forcapital expenditures; hence, the rates used to calculate theinterest were based on Williams’ average interest rate ondebt during the applicable period in time.     *Owners’ Equity.* Because we are part of a controlledgroup that includes other wholly owned subsidiaries of Williams,the ownership interests that the other entities in thiscontrolled group have in the Partnership are classified asOwners’ equity on the Consolidated Balance Sheet.
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**WILLIAMS PARTNERS GP LLC****NOTES TO CONSOLIDATED BALANCESHEET — (Continued)**     *Recent Accounting Standards.* In December 2004, theFinancial Accounting Standards Board (“FASB”) issuedrevised SFAS No. 123, “Share-Based Payment.”The Statement requires that compensation costs for allshare-based awards to employees be recognized in the financialstatements at fair value. The Statement, as issued by the FASB,was to be effective as of the beginning of the first interim orannual reporting period that begins after June 15, 2005.However, in April 2005, the Securities and Exchange Commission(“SEC”) adopted a new rule that delayed the effectivedate for revised SFAS No. 123 to the beginning of thenext fiscal year that begins after June 15, 2005. We intendto adopt the revised Statement as of January 1, 2006.Payroll costs directly charged to us by Williams and general andadministrative costs allocated to us by Williams (seeNote 5) will include such compensation costs beginningJanuary 1, 2006. Our and Williams’ adoption of thisStatement will not have a material impact on our ConsolidatedBalance Sheet.     In November 2004, the FASB issued SFAS No. 151,“Inventory Costs, an amendment of ARB No. 43,Chapter 4,” which will be applied prospectively forinventory costs incurred in fiscal years beginning afterJune 15, 2005. The Statement amends Accounting ResearchBulletin (ARB) No. 43, Chapter 4, “InventoryPricing,” to clarify that abnormal amounts of certain costsshould be recognized as current period charges and that theallocation of overhead costs should be based on the normalcapacity of the production facility. The impact of thisStatement on our Consolidated Balance Sheet will not be material.     In December 2004, the FASB issued SFAS No. 153,“Exchanges of Nonmonetary Assets, an amendment of APBOpinion No. 29,” which is effective for nonmonetaryasset exchanges occurring in fiscal periods beginning afterJune 15, 2005, and will be applied prospectively. TheStatement amends APB Opinion No. 29, “Accounting forNonmonetary Transactions.” The guidance in APB OpinionNo. 29 is based on the principle that exchanges ofnonmonetary assets should be measured based on the fair value ofthe assets exchanged but includes certain exceptions to thatprinciple. SFAS No. 153 amends APB Opinion No. 29to eliminate the exception for nonmonetary exchanges of similarproductive assets and replaces it with a general exception forexchanges of nonmonetary assets that do not have commercialsubstance. A nonmonetary exchange has commercial substance ifthe future cash flows of the entity are expected to changesignificantly as a result of the exchange.     In May 2005, the FASB issued SFAS No. 154,“Accounting Changes and Error Corrections — areplacement of APB Opinion No. 20 and FASB StatementNo. 3,” which is effective prospectively for reportinga change in accounting principle for fiscal years beginningafter December 15, 2005. The Statement changes thereporting of a change in accounting principle to requireretrospective application to prior periods’ financialstatements, except for explicit transition provisions providedfor in any existing accounting pronouncements, including thosein the transition phase when SFAS No. 154 becomeseffective.**Note 4.****Related Party Transactions**     The employees of our operated assets and all of our general andadministrative employees are employees of Williams. Williamsdirectly charges us for the payroll costs associated with theoperations employees and certain general and administrativeemployees. Williams carries the obligations for mostemployee-related benefits in its financial statements, includingthe liabilities related to the employee retirement and medicalplans and paid time off. Certain of these costs are charged backto the other Conway fractionator co-owners.     Williams charges its affiliates, including us and its Midstreamsegment, of which we are a part, for certain corporateadministrative expenses that are directly identifiable orallocable to the affiliates. Direct costs charged from Williamsrepresent the direct costs of services provided by Williams onour behalf. Prior to the IPO, a portion of the charges allocatedto the Midstream segment were then reallocated to us. Theseallocated corporate administrative expenses are based on athree-factor formula, which considered revenues; property, plantand equipment; and payroll. Certain of these costs are chargedback to the other Conway fractionator co-owners. Inmanagement’s estimation, the allocation methodologies usedare reasonable and result in a reasonable allocation to us ofour costs of doing business incurred by Williams.
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**WILLIAMS PARTNERS GP LLC****NOTES TO CONSOLIDATED BALANCESHEET — (Continued)**     We purchase fuel for the Conway fractionator, including fuel onbehalf of the co-owners, from Williams Power Company(“Power”), a wholly owned subsidiary of Williams.These purchases are made at market rates at the time ofpurchase. In connection with the IPO, Williams transferred to usa gas purchase contract for the purchase of a portion of ourfuel requirements at the Conway fractionator at a market pricenot to exceed a specified level. The initial value of thiscontract is being amortized to expense over the contract life.The carrying value of this contract is reflected as Gas purchasecontract — affiliate and Gas purchasecontract — noncurrent — affiliate on theConsolidated Balance Sheet.     We sell surplus propane and other NGLs to Power, which takestitle to the product and resells it, for its own account, to endusers. Correspondingly, we purchase ethane and other NGLs fromPower to replenish deficit product positions. The transactionsconducted between us and Power are transacted at current marketprices for the products.     The per-unit gathering fee associated with two of our CarbonateTrend gathering contracts was negotiated on a bundled basis thatincludes transportation along a segment of a pipeline systemowned by Transcontinental Gas Pipe Line Company(“Transco”), a wholly owned subsidiary of Williams.The fees we realize are dependent upon whether our customerelects to utilize this Transco capacity. When they make thiselection, our gathering fee is determined by subtracting theTransco tariff from the total negotiated fee. The rateassociated with the capacity agreement is based on a FederalEnergy Regulatory Commission tariff that is subject to change.Accordingly, if the Transco rate increases, our net gatheringfees for these two contracts may be reduced. The customers withthese bundled contracts must make an annual election to receivethis capacity. For 2005 and 2006, only one of our customers haselected to utilize this capacity.**Note 5. Investment in Discovery Producer Services**     Our 40 percent investment in Discovery is accounted forusing the equity method of accounting. At December 31,2005, Williams owned an additional 20 percent ownershipinterest in Discovery through Energy. Although we and Williamshold a 60 percent interest in Discovery on a combinedbasis, the voting provisions of Discovery’s limitedliability company agreement give the other member of Discoverysignificant participatory rights such that we and Williams donot control Discovery.     Of the total ownership interest owned by Williams prior to thetransfer of 40 percent to us, a portion was acquired byWilliams in April 2005 resulting in a revised basis used for thecalculation of the 40 percent interest transferred to us inconnection with the Partnership’s IPO. As a result, thecarrying value of our 40 percent interest in Discovery andOwners’ equity decreased $11.0 million during thesecond quarter of 2005.     On August 22, 2005, Discovery made a distribution ofapproximately $43.8 million to Williams and the othermember of Discovery at that date. This distribution wasassociated with Discovery’s operations prior to thePartnership’s IPO; hence, we did not receive any portion ofthis distribution. The distribution resulted in a revised basisused for the calculation of the 40 percent interesttransferred to us in connection with the Partnership’s IPO.As a result, the carrying value of our 40 percent interestin Discovery and Owners’ equity decreased$17.5 million during the third quarter of 2005.     In September 2005, we made a $24.4 million capitalcontribution to Discovery for a substantial portion of our shareof the estimated future capital expenditures for the Tahitipipeline lateral expansion project.     Williams is the operator of Discovery. Discovery reimbursesWilliams for actual payroll and employee benefit costs incurredon its behalf. In addition, Discovery pays Williams a monthlyoperations and management fee to cover the cost of accountingservices, computer systems and management services
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**WILLIAMS PARTNERS GP LLC****NOTES TO CONSOLIDATED BALANCESHEET — (Continued)**provided to it. Discovery also has an agreement with Williamspursuant to which Williams markets the NGLs and excess naturalgas to which Discovery takes title.     Due to the significance of Discovery’s equity earnings toour financial position, the summarized financial position for100 percent of Discovery at December 31, 2005 ispresented below (in thousands).       **December 31,**  **2005**       Current assets $70,525     Non-current restricted cash  44,559     Property, plant and equipment  344,743     Current liabilities  (45,070)    Non-current liabilities  (1,121)        Members’ capital $413,636     **Note 6.****Property, Plant and Equipment**     Property, plant and equipment, at cost, as of December 31,2005 is as follows (in thousands):              **Estimated**    **Depreciable**    **Lives**         Land and right of way $2,373         Fractionation plant and equipment  16,646   30 years     Storage plant and equipment  65,892   30 years     Pipeline plant and equipment  23,684   20-30  years     Construction work in progress  1,886         Other  1,492   5-45 years             Total property, plant and equipment  111,973         Accumulated depreciation  44,042                 Net property, plant and equipment $67,931                 Effective December 31, 2005, we adopted FASB Interpretation(“FIN”) No. 47, “Accounting for ConditionalAsset Retirement Obligations.” This Interpretationclarifies that an entity is required to recognize a liabilityfor the fair value of a conditional ARO when incurred if theliability’s fair value can be reasonably estimated. TheInterpretation clarifies when an entity would have sufficientinformation to reasonably estimate the fair value of an ARO. Asrequired by the new standard, we reassessed the estimatedremaining life of all our assets with a conditional ARO. Werecorded additional liabilities totaling $573,000 equal to thepresent value of expected future asset retirement obligations atDecember 31, 2005. The liabilities are slightly offset by a$16,000 increase in property, plant and equipment, net ofaccumulated depreciation, recorded as if the provisions of theInterpretation had been in effect at the date the obligation wasincurred, and the net $557,000 reduced earnings in 2005. If theInterpretation had been in effect at the beginning of 2005, theimpact to our balance sheet would have been immaterial.     The obligations relate to underground storage caverns and theassociated brine ponds. At the end of the useful life of eachrespective asset, we are legally obligated to properly abandonthe storage caverns, empty the brine ponds and restore thesurface, and remove any related surface equipment.
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**WILLIAMS PARTNERS GP LLC****NOTES TO CONSOLIDATED BALANCESHEET — (Continued)**     A rollforward of our asset retirement obligation for 2005 ispresented below (in thousands).         Balance, January 1 $760     Liabilities incurred during the period  91     Liabilities settled during the period  (204)    Accretion expense  1     Estimate revisions  (460)    FIN No. 47 revisions  574         Balance, December 31 $762     **Note 7.****Accrued Liabilities**     Accrued liabilities as of December 31, 2005 are as follows(in thousands):         Environmental remediation — current portion $1,424     Employee costs — affiliate  387     Taxes other than income  375     Other  187       $2,373     **Note 8.****Long-Term Incentive Plan**     In November 2005, we adopted the Williams Partners GP LLCLong-Term Incentive Plan (the “Plan”) for employees,consultants, and directors who perform services for us. The Planpermits the grant of awards covering an aggregate of 700,000common units. These awards may be in the form of options,restricted units, phantom units or unit appreciation rights. OurBoard of Directors Compensation Committee administers the Plan.     During November and December 2005, our we granted 6,146restricted units pursuant to the Plan to members of our Board ofDirectors who are not officers or employees. These restrictedunits vest six months from grant date.**Note 9.****Major Customers, Concentration of Credit Risk and Financial    Instruments*****Major Customers***     In 2005, four customers, Williams Power Company (an affiliatecompany), SemStream, L.P., Enterprise and BP Products NorthAmerica, Inc. (BP) accounted for approximately25.9 percent, 17.1 percent, 14.1 percent and13.5 percent, respectively, of our total revenues.SemStream, L.P., BP, Enterprise and Williams Power Company arecustomers of the NGL Services segment. Chevron is a customer ofthe Gathering and Processing segment.     Our Carbonate Trend gathering pipeline has only two customers.The loss of either of these customers, unless replaced, wouldhave a significant impact on the Gathering and Processingsegment.***Concentration of Credit Risk***     Our cash equivalents consist of high-quality securities placedwith various major financial institutions with credit ratings ator above AA by Standard & Poor’s or Aa by Moody’sInvestor’s Service.
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**WILLIAMS PARTNERS GP LLC****NOTES TO CONSOLIDATED BALANCESHEET — (Continued)**     The following table summarizes the concentration of accountsreceivable by service and segment as of December 31, 2005(in thousands).          Gathering and Processing:         Natural gas gathering $525     NGL Services:         Fractionation services  532      Amounts due from fractionator partners  1,834      Storage  793      Other  260       $3,944          Our fractionation and storage customers include crude refiners;propane wholesalers and retailers; gas producers; natural gasplant, fractionator and storage operators; and NGL traders andpipeline operators. Our two Carbonate Trend natural gasgathering customers are oil and gas producers. While sales toour customers are unsecured, we routinely evaluate theirfinancial condition and creditworthiness.***Financial Instruments***     The carrying amount of cash and cash equivalents reported in thebalance sheet approximates fair value due to the short-termmaturity of these instruments.     The following table summarizes our financial instruments as ofDecember 31, 2005 (in thousands).           **Carrying** **Fair**  **Amount** **Value**         Cash and cash equivalents $6,839  $6,839 **Note 10.****Credit Facilities**     On May 20, 2005, Williams amended its $1.275 billionrevolving credit facility (“Williams facility”), whichis available for borrowings and letters of credit, to allow usto borrow up to $75 million under the Williams facility.Borrowings under the Williams facility mature on May 3,2007. Our $75 million borrowing limit under the Williamsfacility is available for general partnership purposes,including acquisitions, but only to the extent that sufficientamounts remain unborrowed by Williams and its othersubsidiaries. At December 31, 2005, letters of credittotaling $378 million had been issued on behalf of Williamsby the participating institutions under the Williams facilityand no revolving credit loans were outstanding.     Interest on any borrowings under the Williams facility iscalculated based on our choice of two methods: (i) afluctuating rate equal to the facilitating bank’s base rateplus an applicable margin or (ii) a periodic fixed rateequal to LIBOR plus an applicable margin. We are also requiredto pay or reimburse Williams for a commitment fee based on theunused portion of its $75 million borrowing limit under theWilliams facility, currently 0.325 percent annually. Theapplicable margin, currently 1.75 percent, and thecommitment fee are based on Williams’ senior unsecuredlong-term debt rating. Under the Williams facility, Williams andcertain of its subsidiaries, other than us, are required tocomply with certain financial and other covenants. Significantfinancial covenants under the Williams facility to whichWilliams is subject include the following: •     ratio of debt to net worth no greater than    (i) 70 percent through December 31, 2005, and    (ii) 65 percent for the remaining term of the    agreement;
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**WILLIAMS PARTNERS GP LLC****NOTES TO CONSOLIDATED BALANCESHEET — (Continued)** •     ratio of debt to net worth no greater than 55 percent for    Northwest Pipeline Corporation, a wholly owned subsidiary of    Williams, and Transco; and  •     ratio of EBITDA to interest, on a rolling four quarter basis, no    less than (i) 2.0 for any period after March 31, 2005    through December 31, 2005, and (ii) 2.5 for the    remaining term of the agreement.     In August 2005, we entered into a $20 million revolvingcredit facility (the “credit facility”) with Williamsas the lender. The credit facility is available exclusively tofund working capital requirements. Borrowings under the creditfacility mature on May 3, 2007 and bear interest at thesame rate as for borrowings under the Williams facilitydescribed above. We pay a commitment fee to Williams on theunused portion of the credit facility of 0.30 percentannually. We are required to reduce all borrowings under thecredit facility to zero for a period of at least 15 consecutivedays once each 12-monthperiod prior to the maturity date of the credit facility. Noamounts have been drawn on this facility.***Leasing Activities***     We lease automobiles for use in our NGL Services segment. Weaccount for these leases as operating leases. Future minimumannual rentals under non-cancelable operating leases as ofDecember 31, 2005 are as follows (in thousands):         2006 $30     2007  29     2008  27     2009  10     2010  —       $96     **Note 11.****Commitments and Contingencies**     *Environmental Matters.* We are a participant in certainenvironmental remediation activities associated with soil andgroundwater contamination at our Conway storage facilities.These activities relate to four projects that are in variousremediation stages including assessment studies, cleanups and/orremedial operations and monitoring. We continue to coordinatewith the Kansas Department of Health and Environment(“KDHE”) to develop screening, sampling, cleanup andmonitoring programs. The costs of such activities will dependupon the program scope ultimately agreed to by the KDHE and areexpected to be paid over the next two to nine years.     In 2004, we purchased an insurance policy that covers up to$5 million of remediation costs until an active remediationsystem is in place or April 30, 2008, whichever is earlier,excluding operation and maintenance costs and ongoing monitoringcosts, for these projects to the extent such costs exceed a$4.2 million deductible. The policy also covers costsincurred as a result of third party claims associated with thenexisting but unknown contamination related to the storagefacilities. The aggregate limit under the policy for all claimsis $25 million. In addition, under an omnibus agreementwith Williams entered into at the closing of the IPO, Williamshas agreed to indemnify us for the $4.2 million deductible(less amounts expended prior to the closing of the IPO) ofremediation expenditures not covered by the insurance policy,excluding costs of project management and soil and groundwatermonitoring. There is a $14 million cap on the total amountof indemnity coverage under the omnibus agreement, which will bereduced by actual recoveries under the environmental insurancepolicy. There is also a three-year time limitation from the IPOclosing date, August 23, 2005. The benefit of thisindemnification will be accounted for as a capital contributionto us by Williams as the costs are reimbursed. We estimate thatthe approximate cost of this project management and soil andgroundwater monitoring associated with the four remediationprojects at the Conway storage
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**WILLIAMS PARTNERS GP LLC****NOTES TO CONSOLIDATED BALANCESHEET — (Continued)**facilities and for which we will not be indemnified will beapproximately $200,000 to $400,000 per year following thecompletion of the remediation work.     At December 31, 2005, we had accrued liabilities totaling$5.4 million for these costs. It is reasonably possiblethat we will incur losses in excess of our accrual for thesematters. However, a reasonable estimate of such amounts cannotbe determined at this time because actual costs incurred willdepend on the actual number of contaminated sites identified,the amount and extent of contamination discovered, the finalcleanup standards mandated by KDHE and other governmentalauthorities and other factors.     *Other.* We are not currently a party to any legalproceedings but are a party to various administrative andregulatory proceedings that have arisen in the ordinary courseof our business. Management, including internal counsel,currently believes that the ultimate resolution of the foregoingmatters, taken as a whole, and after consideration of amountsaccrued, insurance coverage or other indemnificationarrangements, will not have a material adverse effect upon ourfuture financial position.**Note 12.****Segment Disclosures**     Our reportable segments are strategic business units that offerdifferent products and services. The Segments are managedseparately because each segment requires different industryknowledge, technology and marketing strategies. The accountingpolicies of the segments are the same as those described inNote 3, Summary of Significant Accounting Policies.Long-lived assets are comprised of property, plant and equipment.               **Gathering &** **NGL**    **Processing** **Services** **Total**         **(In thousands)****2005**                Segment Assets $171,009  $64,579  $235,588     Other assets and eliminations          5,353               Total assets         $240,941               Equity method investments $150,260  $—  $150,260     Additions to long-lived assets  —   3,688   3,688 
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