##### Table of Contents



UNITED
    STATES SECURITIES AND EXCHANGE COMMISSIONWashington, DC 20549Form 10-K
  (Mark One)þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1933For the fiscal year ended
    December 31, 2006oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          to   Commission file number 1-32599
  Williams Partners
    L.P.
 (Exact name of Registrant as
    Specified in Its Charter)
  Delaware

20-2485124(State or Other Jurisdiction
    of

(IRS EmployerIncorporation or
    Organization)

Identification No.)One Williams Center, Tulsa,
    Oklahoma

74172-0172(Address of Principal Executive
    Offices)

(Zip
    Code)   918-573-2000 (Registrants Telephone
    Number, Including Area Code)
  Securities registered pursuant to Section 12(b) of the
    Act:
   Title of Each Class

Name of Each Exchange on Which RegisteredCommon Units

New York Stock Exchange   Securities registered pursuant to Section 12(g) of the
    Act:
    None (Title of Class)
  o þ
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. þ
  Rule 12b-2
 o þ o
  Rule 12b-2 o þ
      DOCUMENTS INCORPORATED BY REFERENCE
    None




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##### 



WILLIAMS
    PARTNERS L.P.FORM 10-K
    TABLE OF CONTENTS
  
  PagePART IItems 1 and
    2.


Business and
    Properties


1Website Access to
    Reports and Other Information


1General


1Recent
    Events


2Financial
    Information About Segments


3Narrative
    Description of Businesses


3Gathering and
    Processing  West Segment


3Gathering and
    Processing  Gulf Segment


6NGL Services
    Segment


11Safety and
    Maintenance


14FERC
    Regulation


16Environmental
    Regulation


18Title to Properties
    and
    Rights-of-Way


21Employees


22Financial
    Information about Geographic Areas


22Item 1A.


Risk
    Factors


22Forward-Looking
    Statements/Risk Factors and Cautionary Statement


22Item 1B.


Unresolved Staff
    Comments


42Item 3.


Legal
    Proceedings


42Item 4.


Submission of
    Matters to a Vote of Security Holders


42PART IIItem 5.


Market for
    Registrants Common Equity, Related Stockholder Matters and
    Issuer Purchases of Equity Securities


42Item 6.


Selected Financial
    and Operational Data


46Item 7.


Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations


48Item 7A.


Quantitative and
    Qualitative Disclosures About Market Risk


71Item 8.


Financial
    Statements and Supplementary Data


72Item 9.


Changes in and
    Disagreements with Accountants on Accounting and Financial
    Disclosure


102Item 9A.


Controls and
    Procedures


103Item 9B.


Other
    Information


103PART IIIItem 10.


Directors and
    Executive Officers of the Registrant


103Item 11.


Executive
    Compensation


110Item 12.


Security Ownership
    of Certain Beneficial Owners and Management


114Item 13.


Certain
    Relationships and Related Transactions, and Director
    Independence


117Item 14.


Principal
    Accountant Fees and Services


125PART IVItem 15.


Exhibits and
    Financial Statement Schedules


125Amended and Restated Agreement of Limited PartnershipCompensation of Ratio of Earnings to Fixed ChargesList of SubsidiariesConsent of Ernst & Young LLPPower of Attorney together with Certified ResolutionRule 13a-14(a)/15d-14(a) Certification of CEORule 13a-14(a)/15d-14(a) Certification of CFOSection 1350 Certification of CEO and CFOPre-approval Policy with Respect to Audit and Non-Audit ServicesWiliams Partners GP LLC Financial Statements




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DEFINITIONS
    Barrel:
  Bcf/d:
  bpd:
  British Thermal Units (Btu):
  BBtu/d:
  ¢/MMBtu:
  MMBtu:
  MMBtu/d:
  MMcf:
  MMcf/d:
  NGLs:
  Recompletions:
  Throughput:
  Workover:




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WILLIAMS
    PARTNERS L.P.FORM 10-K
 PART I Items 1
    and 2.  Business and Properties   WEBSITE
    ACCESS TO REPORTS AND OTHER INFORMATION  Form 10-K, Form 10-Q, Form 8-K time-to-time, 1-800-SEC-0330. http://www.sec.gov.
  http://www.williamslp.com Form 10-K, Form 10-Q, Form 8-K
  918-573-2000.
 GENERAL      
    Gathering and Processing  West.  Our
    Gathering and Processing  West segment includes
    Williams Four Corners LLC, or Four Corners, which owns a
    3,500 mile-natural gas gathering system, including three
    natural gas processing plants and two natural gas treating
    plants, located in the San Juan Basin in Colorado and New
    Mexico. These assets generate revenues by providing natural gas
    gathering, transporting, processing and treating services to
    customers under a range of contractual arrangements.
    Gathering and Processing  Gulf.  Our
    Gathering and Processing  Gulf segment includes our
    equity investment in Discovery and the Carbonate Trend gathering
    pipeline. We own a 40% interest in 1




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Discovery, which is operated by Williams. Discovery owns an
    integrated natural gas gathering and transportation pipeline
    system extending from offshore in the Gulf of Mexico to a
    natural gas processing facility and a natural gas liquids
    fractionator in Louisiana. Our Carbonate Trend gathering
    pipeline is an unregulated sour gas gathering pipeline
    consisting of approximately 34 miles of pipeline off the
    coast of Alabama. These assets generate revenues by providing
    natural gas gathering, transporting and processing services and
    integrated natural gas fractionating services to customers under
    a range of contractual arrangements.  
    NGL Services.  Our NGL Services segment
    includes three integrated natural gas liquids storage facilities
    and a 50% undivided interest in a natural gas liquids
    fractionator near Conway, Kansas. These assets generate revenues
    by providing stand-alone natural gas liquids fractionation and
    storage services using various fee-based contractual
    arrangements where we receive a fee or fees based on actual or
    contracted volumetric measures.       RECENT
    EVENTS  Acquisition of Four Corners.
  Issuance of Common Units.
  Issuance of Common Units and Class B units in a Private
    Placement. one-for-one
  Issuance of Senior Unsecured Notes.
  Williams New Credit Facility.
 2




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FINANCIAL
    INFORMATION ABOUT SEGMENTS   NARRATIVE
    DESCRIPTION OF BUSINESS   Gathering
    and Processing  West    
    A 3,500-mile
    natural gas gathering system in the San Juan Basin in New
    Mexico and Colorado with a capacity of two Bcf/d;
    the Ignacio natural gas processing plant in Colorado and the
    Kutz and Lybrook natural gas processing plants in New Mexico,
    which have a combined processing capacity of
    760 MMcf/d; and
    the Milagro and Esperanza natural gas treating plants in New
    Mexico, which have a combined carbon dioxide treating capacity
    of 750 MMcf/d.      Four
    Corners Natural Gas Gathering System
    
    3,500 miles of
    2-inch to
    30-inch
    diameter natural gas gathering pipelines with capacity of two
    Bcf/d and approximately 6,400 receipt points; and
    Over 400,000 horsepower of compression comprised of distributed
    gathering compression, major gathering station compression and
    plant compression. A substantial portion of this compression is
    operated by a third-party.   3




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Four
    Corners Processing and Treating Plants
  Natural
    Gas Processing Plants
    Mid-America
    Treating
    Plants
      Four
    Corners Customers and Contracts
  Customers.
  percent-of-liquids
 4




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Contracts.
  
    Keep-whole.  Under keep-whole contracts, we
    (1) process natural gas produced by customers,
    (2) retain some or all of the extracted NGLs as
    compensation for our services, (3) replace the Btu content
    of the retained NGLs that were separated during processing with
    natural gas purchases, also known as shrink replacement gas, and
    (4) deliver an equivalent Btu content of natural gas to
    customers at the plant outlet. We, in turn, sell the retained
    NGLs to a subsidiary of Williams, which serves as a purchaser
    for those NGLs at market prices. For the year ended
    December 31, 2006, 38% of our Gathering and
    Processing  West segments processing volumes
    were under keep-whole contracts.
    Percent-of-liquids.  Under
    percent-of-liquids processing contracts, we (1) process
    natural gas produced by customers, (2) deliver to customers
    an
    agreed-upon
    percentage of the extracted NGLs, (3) retain a portion of
    the extracted NGLs as compensation for our services and
    (4) deliver natural gas to customers at the plant outlet.
    Under this type of contract, we are not required to replace the
    Btu content of the retained NGLs that were extracted during
    processing. We sell the retained NGLs to a subsidiary of
    Williams, which serves as a purchaser for those NGLs at market
    prices. For the year ended December 31, 2006, 12% of the
    segments processing volumes were under percent-of-liquids
    contracts.
    Fee-based.  Under fee-based contracts, we
    receive revenue based on the volume of natural gas processed and
    the per-unit
    fee charged, and retain none of the extracted NGLs. For the year
    ended December 31, 2006, 14% of the segments
    processing volumes were under fee-based contracts.
    Fee-based and keep-whole.  These contracts have
    both a
    per-unit fee
    component and a keep-whole component. The relative proportions
    of the fee component and the keep-whole component vary from
    contract to contract, with the keep-whole component never
    consisting of more than 50% of the total extracted NGLs. For the
    year ended December 31, 2006, 36% of the segments
    processing volumes were under these fee-based and keep-whole
    contracts.  Competition
    Gas
    Supply
  and/or
 5




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Gathering
    and Processing  Gulf    Discovery 
    General
    
    a 283-mile
    natural gas gathering and transportation pipeline system,
    located primarily off the coast of Louisiana in the Gulf of
    Mexico, with a mainline capacity, certified by the
    U.S. Federal Energy Regulatory Commission (the
    FERC), of approximately 600 MMcf/d with six
    delivery points connected to major interstate and intrastate
    pipeline systems;
    a cryogenic natural gas processing plant in Larose, Louisiana;
    a fractionator in Paradis, Louisiana; and
    a 22-mile
    mixed NGL pipeline connecting the gas processing plant to the
    fractionator.  35-mile
    Discovery
    Natural Gas Pipeline System
  Transportation and Gathering Natural Gas
    Pipeline. 105-mile, 30-inch four-mile, 20-inch
  20-inch
 6




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Shallow Water/Onshore Gathering.
  
    90 miles of offshore laterals with pipeline diameters
    ranging from 12 inches to 20 inches with connections
    to the mainline. These shallow water laterals are located in
    water depths ranging from approximately 50 to 360 feet. The
    FERC regulates 60 miles of Discoverys 90 miles
    of shallow water laterals;
    a fixed-leg shelf production handling facility installed at
    Grand Isle 115. The platform facility allows for the injection
    of gas and condensate into the pipeline and is equipped with a
    production handling facility; and
    a five-mile
    onshore gathering lateral with
    20-inch
    diameter pipe that extends from a production area north of the
    Larose gas processing plant directly to the plant. The FERC does
    not regulate this lateral.    Deepwater Gathering.
  Larose
    Gas Processing Plant
        Paradis
    Fractionation Facility
   7




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Discovery
    Management
    Discovery
    Customers and Contracts
  Customers.
    Contracts.
   8




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
    Fee-based.  Under fee-based contracts,
    Discovery receives revenue based on the volume of natural gas
    processed and the
    per-unit fee
    charged.
    Percent-of-liquids.  Under
    percent-of-liquids
    gas processing contracts, Discovery (1) processes natural
    gas for customers, (2) delivers to customers an agreed upon
    percentage of the NGLs extracted in processing and
    (3) retains a portion of the extracted NGLs. Discovery
    generates revenue from the sale of these retained NGLs to a
    subsidiary of Williams at market prices. Some of
    Discoverys contracts have a bypass option,
    which is explained below under  Operation and
    Contract Optimization.  Operation
    and Contract Optimization
        Competition
    Gas
    Supply
   9




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35-mile
  Third-Party
    Pipeline Supply
    Carbonate
    Trend Pipeline  General
  12-inch
        Carbonate
    Trend Customers and Contracts
  Customers.
 10




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Contracts. per-unit
  Competition
    Gas
    Supply
   NGL
    Services    
    three integrated NGL storage facilities; and
    a 50% interest in an NGL fractionator.    Conway
    Storage Assets
     11




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Conway West.
  Conway East.
  Mitchell.
  Competition
      NGL
    Sources and Transportation Options
      Operating
    Supply Management
   12




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The
    Conway Fractionation Facility
      per-unit per-unit
    Competition
     13




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Mixed
    NGL Sources
    NGL
    Transportation Options
    Customers
    and Contracts
  Customers.
  Contracts.
  case-by-case
     Safety
    and Maintenance   14




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30-inch 18-inch
    and/or
    right-to-know
 15




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FERC
    Regulation  Discovery
  105-mile
    
    required pipelines to implement imbalance management services;
    restricted the ability of pipelines to impose penalties for
    imbalances, overruns and non-compliance with operational flow
    orders; and
    implemented a number of new pipeline reporting requirements.     16




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##### Table of Contents



$0.08/MMBtu.
    
    the overall cost of service, including operating costs and
    overhead;
    the allocation of overhead and other administrative and general
    expenses to the rate;
    the appropriate capital structure to be utilized in calculating
    rates;
    the appropriate rate of return on equity;
    the cost of debt;
    the rate base, including the proper starting rate base;
    the throughput underlying the rate; and
    the proper allowance for federal and state income taxes.  BP West Coast Products, LLC v.
    FERC Lakehead Lakehead cost-of-service BP West Coast case-by-case
 17




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BP West Coast
      Other
       Environmental
    Regulation  General
     18




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Air
    Emissions
    Hazardous
    Substances and Waste
     19




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Water
    Hazardous
    Materials Transportation Requirements
    Kansas
    Department of Health and Environment Obligations
   20




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on-site
     Title to
    Properties and
    Rights-of-Way  Our real property falls into two
    categories: rights-of-way, right-of-way right-of-way, right-of-way right-of-way
  rights-of-way
 21




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Employees   FINANCIAL
    INFORMATION ABOUT GEOGRAPHIC AREAS   Item 1A.  Risk
    Factors FORWARD-LOOKING
    STATEMENTS/RISK FACTORS AND CAUTIONARY STATEMENT      
    amounts and nature of future capital expenditures;
    expansion and growth of our business and operations;
    business strategy;
    cash flow from operations;
    seasonality of certain business segments; and
    natural gas liquids and gas prices and demand.    
    We may not have sufficient cash from operations to enable us to
    pay the minimum distribution following establishment of cash
    reserves and payment of fees and expenses, including payments to
    our general partner. 22




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
    Because of the natural decline in production from existing wells
    and competitive factors, the success of our gathering and
    transportation businesses depends on our ability to connect new
    sources of natural gas supply, which is dependent on factors
    beyond our control. Any decrease in supplies of natural gas
    could adversely affect our business and operating results.
    Our processing, fractionation and storage businesses could be
    affected by any decrease in the price of natural gas liquids or
    a change in the price of natural gas liquids relative to the
    price of natural gas.
    Lower natural gas and oil prices could adversely affect our
    fractionation and storage businesses.
    We depend on certain key customers and producers for a
    significant portion of our revenues and supply of natural gas
    and natural gas liquids. The loss of any of these key customers
    or producers could result in a decline in our revenues and cash
    available to pay distributions.
    If third-party pipelines and other facilities interconnected to
    our pipelines and facilities become unavailable to transport
    natural gas and natural gas liquids or to treat natural gas, our
    revenues and cash available to pay distributions could be
    adversely affected.
    Our future financial and operating flexibility may be adversely
    affected by restrictions in our indentures and by our leverage.
    Our partnership agreement limits our general partners
    fiduciary duties to unitholders and restricts the remedies
    available to unitholders for actions taken by our general
    partner that might otherwise constitute breaches of fiduciary
    duty.
    Williams revolving credit facility and Williams
    public indentures contain financial and operating restrictions
    that may limit our access to credit. In addition, our ability to
    obtain credit in the future will be affected by Williams
    credit ratings.
    Our general partner and its affiliates have conflicts of
    interest and limited fiduciary duties, which may permit them to
    favor their own interests to the detriment of our unitholders.
    Even if unitholders are dissatisfied, they currently have little
    ability to remove our general partner without its consent.
    Unitholders may be required to pay taxes on their share of our
    income even if they do not receive any cash distributions from
    us.
    Our operations are subject to operational hazards and unforeseen
    interruptions for which we may or may not be adequately insured.     23




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Risks
    Inherent in Our Business
  We may
    not have sufficient cash from operations to enable us to pay the
    minimum quarterly distribution following establishment of cash
    reserves and payment of fees and expenses, including payments to
    our general partner.
    
    the prices we obtain for our services;
    the prices of, level of production of, and demand for, natural
    gas and NGLs;
    the volumes of natural gas we gather, transport, process and
    treat and the volumes of NGLs we fractionate and store;
    the level of our operating costs, including payments to our
    general partner; and
    prevailing economic conditions.    
    the level of capital expenditures we make;
    the restrictions contained in our and Williams debt
    agreements and our debt service requirements;
    the cost of acquisitions, if any;
    fluctuations in our working capital needs;
    our ability to borrow for working capital or other purposes;
    the amount, if any, of cash reserves established by our general
    partner;
    the amount of cash that Discovery distributes to us; and
    reimbursement payments to us by, and credits from, Williams
    under the omnibus agreement.    Because
    of the natural decline in production from existing wells and
    competitive factors, the success of our gathering and
    transportation businesses depends on our ability to connect new
    sources of natural gas supply, which is dependent on factors
    beyond our control. Any decrease in supplies of natural gas
    could adversely affect our business and operating
    results.
   24




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35-mile
    Lower
    natural gas and oil prices could adversely affect our
    fractionation and storage businesses.
      
    worldwide economic conditions;
    weather conditions and seasonal trends;
    the levels of domestic production and consumer demand;
    the availability of imported natural gas and NGLs;
    the availability of transportation systems with adequate
    capacity;
    the price and availability of alternative fuels;
    the effect of energy conservation measures;
    the nature and extent of governmental regulation and
    taxation; and
    the anticipated future prices of natural gas, NGLs and other
    commodities. 25




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Our
    processing, fractionation and storage businesses could be
    affected by any decrease in NGL prices or a change in NGL prices
    relative to the price of natural gas.
  percent-of-liquids
    We
    depend on certain key customers and producers for a significant
    portion of our revenues and supply of natural gas and NGLs. The
    loss of any of these key customers or producers could result in
    a decline in our revenues and cash available to pay
    distributions.
      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 pay distributions could be adversely
    affected.
   26




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Williams
    revolving credit facility and Williams public indentures
    contain financial and operating restrictions that may limit our
    access to credit. In addition, our ability to obtain credit in
    the future will be affected by Williams credit
    ratings.
       27




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Our
    future financial and operating flexibility may be adversely
    affected by restrictions in our indentures and by our
    leverage.
      
    make it more difficult for us to satisfy our obligations with
    respect to our senior unsecured notes and our other
    indebtedness, which could in turn result in an event of default
    on such other indebtedness or our outstanding notes;
    impair our ability to obtain additional financing in the future
    for working capital, capital expenditures, acquisitions, general
    corporate purposes or other purposes;
    adversely affect our ability to pay cash distributions to
    unitholders;
    diminish our ability to withstand a downturn in our business or
    the economy generally;
    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;
    limit our flexibility in planning for, or reacting to, changes
    in our business and the industry in which we operate; and
    place us at a competitive disadvantage compared to our
    competitors that have proportionately less debt.      Discovery
    is not prohibited from incurring indebtedness, which may affect
    our ability to make distributions to unitholders.
    We do
    not own all of the interests in the Conway fractionator or
    Discovery, which could adversely affect our ability to operate
    and control these assets in a manner beneficial to
    us.
   28




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Discovery
    may reduce its cash distributions to us in some
    situations.
  majority-in-interest
    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.
    
    the Carbonate Trend pipeline, which is operated by Chevron;
    our Conway fractionator and storage facilities, which we
    operate; and
    most of our Four Corners field compression, excluding major
    turbine compressor stations, which is operated by Hanover.      month-to-month
  Our
    industry is highly competitive, and increased competitive
    pressure could adversely affect our business and operating
    results.
     29




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Our
    results of storage and fractionation operations are dependent
    upon the demand for propane and other NGLs. A substantial
    decrease in this demand could adversely affect our business and
    operating results.
     30




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We may
    not be able to grow or effectively manage our
    growth.
    
    identify businesses engaged in managing, operating or owning
    pipeline, processing, fractionation and storage assets, or other
    midstream assets for acquisitions, joint ventures and
    construction projects;
    control costs associated with acquisitions, joint ventures or
    construction projects;
    consummate acquisitions or joint ventures and complete
    construction projects, including Discoverys Tahiti lateral
    expansion project;
    integrate any acquired or constructed business or assets
    successfully with our existing operations and into our operating
    and financial systems and controls;
    hire, train and retain qualified personnel to manage and operate
    our growing business; and
    obtain required financing for our existing and new operations.      Discoverys
    interstate tariff rates are subject to review and possible
    adjustment by federal regulators, which could have a material
    adverse effect on our business and operating results. Moreover,
    because Discovery is a non-corporate entity, it may be
    disadvantaged in calculating its cost of service for
    rate-making
    purposes.
     31




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BP West Coast Products, LLC v. FERC case-by-case
    Our
    operations are subject to operational hazards and unforeseen
    interruptions for which we may not be adequately
    insured.
    
    hurricanes, tornadoes, floods, fires, extreme weather conditions
    and other natural disasters and acts of terrorism;
    damages to pipelines and pipeline blockages;
    leakage of natural gas (including sour gas), NGLs, brine or
    industrial chemicals;
    collapse of NGL storage caverns;
    operator error;
    pollution;
    fires, explosions and blowouts;
    risks related to truck and rail loading and unloading; and
    risks related to operating in a marine environment.     32




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The
    only pipeline that provides NGL transportation capacity in the
    San Juan Basin has filed at the FERC to increase certain of
    its tariff rates. If the requested increase is granted, our
    operating costs would increase, which could have an adverse
    effect on our business and operating results.
    Pipeline
    integrity programs and repairs may impose significant costs and
    liabilities on us.
    
    perform ongoing assessments of pipeline integrity;
    identify and characterize applicable threats to pipeline
    segments that could impact a high consequence area;
    improve data collection, integration and analysis;
    repair and remediate the pipeline as necessary; and
    implement preventive and mitigating actions.       33




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We do
    not own all of the land on which our pipelines and facilities
    are located, which could disrupt our operations.
  right-of-way rights-of-way. rights-of-way
  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.
    
    the Federal Clean Air Act and analogous state laws, which impose
    obligations related to air emissions;
    the Federal Water Pollution Control Act of 1972, as renamed and
    amended as the Clean Water Act, or CWA, and analogous state
    laws, which regulate discharge of wastewaters from our
    facilities to state and federal waters;
    the federal Comprehensive Environmental Response, Compensation,
    and Liability Act, also known as CERCLA or the Superfund law,
    and analogous state laws that 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
    the federal Resource Conservation and Recovery Act, also known
    as RCRA, and analogous state laws that impose requirements for
    the handling and discharge of solid and hazardous waste from our
    facilities.       34




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The
    natural gas gathering operations in the San Juan Basin may
    be subjected to regulation by the state of New Mexico, which
    could negatively affect our revenues and cash
    flows.
    Risks
    Inherent in an Investment in Us
  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 our outstanding notes and
    distributions on our common units.
    Common
    units held by Williams eligible for future sale may have adverse
    effects on the price of our common units.
   35




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##### Table of Contents



If we
    fail to obtain the approval of the unitholders for the
    conversion of the Class B units to common units, the
    minimum quarterly distribution payable in respect of the
    Class B units will increase, which will reduce the amount
    of cash available for distribution on our common
    units.
    Potential
    changes in accounting standards might cause us to revise our
    financial results and disclosures in the future.
    Terrorist
    attacks have resulted in increased costs, and attacks directed
    at our facilities or those of our suppliers and customers could
    disrupt our operations.
      We are
    exposed to the credit risk of our customers and our credit risk
    management may not be adequate to protect against such
    risk.
  and/or and/or
 36




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##### Table of Contents



Our
    general partner and its affiliates have conflicts of interest
    and limited fiduciary duties, which may permit them to favor
    their own interests to the detriment of our
    unitholders.
    
    neither our partnership agreement nor any other agreement
    requires Williams or its affiliates to pursue a business
    strategy that favors us;
    our general partner is allowed to take into account the
    interests of parties other than us, such as Williams, in
    resolving conflicts of interest, which has the effect of
    limiting its fiduciary duty to our unitholders;
    Williams and its affiliates may engage in competition with us;
    our general partner has limited its liability and reduced its
    fiduciary duties, and has also restricted the remedies available
    to our unitholders for actions that, without the limitations,
    might constitute breaches of fiduciary duty;
    our general partner determines the amount and timing of our cash
    reserves, asset purchases and sales, capital expenditures,
    borrowings and issuances of additional partnership securities,
    each of which can affect the amount of cash that is distributed
    to our unitholders;
    our general partner determines the amount and timing of any
    capital expenditures, as well as whether a capital expenditure
    is a maintenance capital expenditure, which reduces operating
    surplus, or an expansion capital expenditure, which does not,
    which determination can affect the amount of cash that is
    distributed to our unitholders and the ability of the
    subordinated units to convert to common units;
    in some instances, our general partner may cause us to borrow
    funds in order to permit the payment of cash distributions, even
    if the purpose or effect of the borrowing is to make a
    distribution on the subordinated units, to make incentive
    distributions or to accelerate the expiration of the
    subordination period;
    our general partner determines which costs incurred by it and
    its affiliates are reimbursable by us;
    our partnership agreement does not restrict our general partner
    from causing us to pay it or its affiliates for any services
    rendered to us or entering into additional contractual
    arrangements with any of these entities on our behalf;
    our general partner intends to limit its liability regarding our
    contractual and other obligations;
    our general partner may exercise its limited right to call and
    purchase common units if it and its affiliates own more than 80%
    of the common units;
    our general partner controls the enforcement of obligations owed
    to us by it and its affiliates; and
    our general partner decides whether to retain separate counsel,
    accountants or others to perform services for us. 37




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##### Table of Contents



Our
    partnership agreement limits our general partners
    fiduciary duties to unitholders and restricts the remedies
    available to unitholders for actions taken by our general
    partner that might otherwise constitute breaches of fiduciary
    duty.
    
    permits our general partner to make a number of decisions in its
    individual capacity, as opposed to in its capacity as our
    general partner. This entitles our general partner to consider
    only the interests and factors that it desires, and it has no
    duty or obligation to give any consideration to any interest of,
    or factors affecting, us, our affiliates or any limited partner.
    Examples include the exercise of its limited call right, its
    voting rights with respect to the units it owns, its
    registration rights and its determination whether or not to
    consent to any merger or consolidation of the partnership;
    provides that our general partner will not have any liability to
    us or our unitholders for decisions made in its capacity as a
    general partner so long as it acted in good faith, meaning it
    believed the decision was in the best interests of our
    partnership;
    provides that resolutions of conflicts of interest not approved
    by the conflicts committee of the board of directors of our
    general partner and not involving a vote of unitholders must be
    on terms no less favorable to us than those generally being
    provided to or available from unrelated third parties or be
    fair and reasonable to us, as determined by our
    general partner in good faith, and that, in determining whether
    a transaction or resolution is fair and reasonable,
    our general partner may consider the totality of the
    relationships between the parties involved, including other
    transactions that may be particularly advantageous or beneficial
    to us; and
    provides that our general partner, its affiliates and their
    officers and directors will not be liable for monetary damages
    to us or our limited partners for any acts or omissions unless
    there has been a final and non-appealable judgment entered by a
    court of competent jurisdiction determining that our general
    partner or those other persons acted in bad faith or engaged in
    fraud or willful misconduct.    Even
    if unitholders are dissatisfied, they have little ability to
    remove our general partner without its consent.
    2 3
   38




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##### Table of Contents



The
    control of our general partner may be transferred to a third
    party without unitholder consent.
    Increases
    in interest rates may cause the market price of our common units
    to decline.
    We may
    issue additional common units without unitholder approval, which
    would dilute unitholder ownership interests.
    
    our unitholders proportionate ownership interest in us
    will decrease;
    the amount of cash available to pay distributions on each unit
    may decrease;
    because a lower percentage of total outstanding units will be
    subordinated units, the risk that a shortfall in the payment of
    the minimum quarterly distribution will be borne by our common
    unitholders will increase;
    the relative voting strength of each previously outstanding unit
    may be diminished; and
    the market price of the common units may decline.  Williams
    and its affiliates may compete directly with us and have no
    obligation to present business opportunities to
    us.
    Our
    general partner has a limited call right that may require
    unitholders to sell their common units at an undesirable time or
    price.
   39




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##### Table of Contents



Our
    partnership agreement restricts the voting rights of unitholders
    owning 20% or more of our common units.
    Cost
    reimbursements due our general partner and its affiliates will
    reduce cash available to pay distributions to
    unitholders.
    Unitholders
    may not have limited liability if a court finds that unitholder
    action constitutes control of our business. Unitholders may also
    have liability to repay distributions.
  Section 17-607
  Tax
    Risks
  Our
    tax treatment depends on our status as a partnership for federal
    income tax purposes, as well as our not being subject to
    entity-level taxation by states. If the IRS were to treat us as
    a corporation or if we were to become subject to entity-level
    taxation for state tax purposes, then our cash available to pay
    distributions to unitholders would be substantially
    reduced.
     40




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##### Table of Contents



A
    successful IRS contest of the federal income tax positions we
    take may adversely impact the market for our common units, and
    the costs of any contest will be borne by our unitholders and
    our general partner.
    Unitholders
    may be required to pay taxes on their share of our income even
    if unitholders do not receive any cash distributions from
    us.
    The
    tax gain or loss on the disposition of our common units could be
    different than expected.
    Tax-exempt
    entities and foreign persons face unique tax issues from owning
    common units that may result in adverse tax consequences to
    them.
  non-U.S. persons non-U.S. persons non-U.S. persons
 41




---



##### Table of Contents



We
    will treat each purchaser of units as having the same tax
    benefits without regard to the units purchased. The IRS may
    challenge this treatment, which could adversely affect the value
    of the common units.
    Unitholders
    will likely be subject to state and local taxes and return
    filing requirements as a result of investing in our common
    units.
    The
    sale or exchange of 50% or more of our capital and profits
    interests will result in the termination of our partnership for
    federal income tax purposes.
  12-month
  Item 1B.
    Unresolved
    Staff Comments    Item 3.
    Legal
    Proceedings    Item 4.
    Submission
    of Matters to a Vote of Security Holders   PART II  Item 5.
    Market
    for Registrants Common Equity, Related Stockholder Matters
    and Issuer Purchases of Equity Securities.  Market
    Information, Holders and Distributions
   42




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##### Table of Contents



Cash DistributionHigh

Low

per Unit(a)2006Fourth Quarter

$
40.80


$
35.04


$
0.4700Third Quarter


36.00



29.25



0.4500Second Quarter


35.55



30.30



0.4250First Quarter


33.92



31.00



0.38002005Fourth Quarter

$
34.26


$
29.75



0.3500Third Quarter(b)


32.75



24.89



0.1484
(c)     (a)
    
    Represents cash distributions attributable to the quarter and
    declared and paid or to be paid within 45 days after
    quarter end. We paid cash distributions to our general partner
    with respect to its 2% general partner interest that totaled
    $0.1 million for the period from August 23, 2005
    through December 31, 2005. We declared cash distributions
    to our general partner with respect to its 2% general partner
    interest and incentive distribution rights that totaled
    $1.8 million for the 2006 period. No Class B units
    were outstanding until December 2006 and therefore did not
    participate in cash distributions prior to the cash distribution
    for the fourth quarter of 2006.(b)
    
    For the period from August 18, 2005 through
    September 30, 2005.(c)
    
    The distribution for the third quarter of 2005 represents a
    pro-rated distribution of $0.35 per common and subordinated
    unit for the period from August 23, 2005, the date of the
    closing of our initial public offering of common units through
    September 30, 2005.  Distributions
    of Available Cash
    
    less the amount of cash reserves established by our general
    partner to:  
    provide for the proper conduct of our business (including
    reserves for future capital expenditures and for our anticipated
    credit needs);
    comply with applicable law, any of our debt instruments or other
    agreements; or
    provide funds for distribution to our unitholders and to our
    general partner for any one or more of the next four quarters;  
    plus all cash on hand on the date of determination of available
    cash for the quarter resulting from working capital borrowings
    made after the end of the quarter for which the determination is
    being made. Working capital borrowings are generally borrowings
    that will be made under our working capital facility with
    Williams and in all cases are used solely for working capital
    purposes or to pay distributions to partners.   43




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##### Table of Contents




    distributions of available cash from operating surplus on each
    of the outstanding common units and subordinated units equaled
    or exceeded the minimum quarterly distribution for each of the
    three consecutive, non-overlapping four-quarter periods
    immediately preceding that date;
    the adjusted operating surplus (as defined in our
    partnership agreement) generated during each of the three
    consecutive, non-overlapping four-quarter periods immediately
    preceding that date equaled or exceeded the sum of the minimum
    quarterly distributions on all of the outstanding common units
    and subordinated units during those periods on a fully diluted
    basis and the related distribution on the general partner
    interest during those periods; and
    there are no arrearages in payment of the minimum quarterly
    distribution on the common units.    
    distributions of available cash from operating surplus on each
    of the outstanding common units and subordinated units equaled
    or exceeded $2.10 (150% of the annualized minimum quarterly
    distribution) for the immediately preceding four-quarter period;
    the adjusted operating surplus generated during such
    four-quarter period equaled or exceeded $2.10 (150% of the
    annualized minimum quarterly distribution) on all of the
    outstanding common units and subordinated units during such
    four-quarter period on a fully diluted basis and the related
    distribution on the general partner interest during such
    four-quarter period; and
    there are no arrearages in payment of the minimum quarterly
    distribution on the common units.      
    the subordination period will end and each subordinated unit
    will immediately convert into one common unit;
    any existing arrearages in payment of the minimum quarterly
    distribution on the common units will be extinguished; and
    our general partner will have the right to convert its general
    partner interest and, if any, its incentive distribution rights
    into common units or to receive cash in exchange for those
    interests.    
    first, 98% to the common unitholders, pro rata, and 2% to
    our general partner, until we distribute for each outstanding
    common unit an amount equal to the minimum quarterly
    distribution for that quarter; 44




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##### Table of Contents




    second, 98% to the common unitholders, pro rata, and 2%
    to our general partner, until we distribute for each outstanding
    common unit an amount equal to any arrearages in payment of the
    minimum quarterly distribution on the common units for any prior
    quarters during the subordination period;
    third, if any Class B units remain outstanding, 98%
    to the Class B unitholders, pro rata, and 2% to our general
    partner, until we distribute for each outstanding Class B
    unit an amount equal to the minimum quarterly distribution for
    that quarter;
    fourth, if any Class B units remain outstanding, 98%
    to the Class B unitholders, pro rata, and 2% to our general
    partner, until we distribute for each outstanding Class B
    unit an amount equal to any arrearages in payment of the minimum
    quarterly distribution on the Class B units for any prior
    quarters;
    fifth, if any subordinated units remain outstanding, 98%
    to the subordinated unitholders, pro rata, and 2% to our general
    partner, until we distribute for each subordinated unit an
    amount equal to the minimum quarterly distribution for that
    quarter; and
    thereafter, cash in excess of the minimum quarterly
    distributions is distributed to the unitholders and the general
    partner based on the incentive percentages below.  one-for-one
    Marginal PercentageTotal Quarterly Distribution

Interest in DistributionsTarget Amount

Unitholders


General PartnerMinimum Quarterly Distribution

$0.35


98
%


2
%First Target Distribution

up to $0.4025


98
%


2
%Second Target Distribution

above $0.4025 up to $0.4375


85
%


15
%Third Target distribution

above $0.4375 up to $0.5250


75
%


25
%Thereafter

Above $0.5250


50
%


50
%  45




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##### Table of Contents



Item 6.
    Selected
    Financial and Operational Data        Year Ended December 31,2006


2005


2004


2003


2002(Dollars in thousands, except per unit amounts)Statement of Income
    Data:Revenues

$
563,410


$
514,972


$
469,199


$
382,428


$
349,817Costs and expenses


420,342



395,556



364,602



286,637



253,417Operating income


143,068



119,416



104,597



95,791



96,400Equity earnings 
    Discovery


12,033



8,331



4,495



3,447



2,026Impairment of investment in
    Discovery










(13,484
)(a)






Interest expense


(9,833
)


(8,238
)


(12,476
)


(4,176
)


(3,414
)Interest income


1,600



165











Income before cumulative effect of
    change in accounting principle

$
146,868


$
119,674


$
83,132


$
95,062


$
95,012Net income(b)

$
146,868


$
118,352


$
83,132


$
93,633


$
95,012Income before cumulative effect of
    change in accounting principle per limited partner unit:Common unit

$
1.62


$
0.49
(d)


N/A



N/A



N/AB unit

$
0.45



N/A



N/A



N/A



N/ASubordinated unit

$
1.62


$
0.49
(d)


N/A



N/A



N/ANet income per limited partner
    unit:Common unit

$
1.62


$
0.44
(d)


N/A



N/A



N/AB unit

$
0.45



N/A



N/A



N/A



N/ASubordinated unit

$
1.62


$
0.44
(d)


N/A



N/A



N/ABalance Sheet Data (at period
    end):Total assets

$
933,148


$
875,275


$
863,584


$
896,739
(c)

$
825,007Property, plant and equipment, net


647,578



658,965



669,503



705,600



755,131Investment in Discovery


147,493



150,260



147,281
(a)


156,269
(c)


49,323Advances from affiliate










186,024



187,193
(c)


90,996Partners capital


135,402
(e)


827,245



637,198



674,533



694,691 46




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##### Table of Contents



Year Ended December 31,2006


2005


2004


2003


2002(Dollars in thousands, except per unit amounts)Cash Flow Data:Cash distributions declared per
    unit

$
1.605


$
0.1484



N/A



N/A



N/ACash distributions paid per unit

$
1.605


$
0.1484



N/A



N/A



N/AOperating
    Information:Williams Partners L.P.:Four Corners gathered volumes
    (MMBtu/d)


1,499,937



1,521,507



1,559,940



1,577,181



1,594,745Four Corners processed volumes
    (MMBtu/d)


875,600



863,693



900,194



900,356



917,613Four Corners liquid sales
    gallons(000s)


182,010



165,479



197,851



187,788



203,688Four Corners net liquids margin
    (¢/gallon)


47
¢


37
¢


29
¢


17
¢


15
¢Conway storage revenues

$
25,237


$
20,290


$
15,318


$
11,649


$
10,854Conway fractionation volumes
    (bpd)  our 50%


38,859



39,965



39,062



34,989



38,234Carbonate Trend gathered volumes
    (MMBtu/d)


29,323



35,605



49,981



67,638



57,060Discovery Producer
    Services  100%:Gathered volumes (MMBtu/d)


467,338



345,098



348,142



378,745



425,388Gross processing margin
    (¢/MMbtu)


23
¢


19
¢


17
¢


17
¢


12
¢     (a)
    
    The $13.5 million impairment of our equity investment in
    Discovery in 2004 reduced the investment balance. See
    Note 6 of the Notes to Consolidated Financial Statements.(b)
    
    Our operations are treated as a partnership with each member
    being separately taxed on its ratable share of our taxable
    income. Therefore, we have excluded income tax expense from this
    financial information.(c)
    
    In December 2003, we made a $101.6 million capital
    contribution to Discovery, which Discovery subsequently used to
    repay maturing debt. We funded this contribution with an advance
    from Williams. Prior to the closing of our initial public
    offering, Williams forgave the entire advances from affiliates
    balance.(d)
    
    The period of August 23, 2005 through December 31,
    2005.(e)
    
    Because Four Corners was an affiliate of Williams at the time of
    its acquisition by us, the acquisition is accounted for as a
    combination of entities under common control, whereby the assets
    and liabilities of Four Corners are combined with Williams
    Partners L.P. at their historical amounts for all periods
    presented. This accounting causes a reduction of the capital
    balance for the general partner for the difference between the
    historical cost of the Four Corners assets and liabilities and
    the aggregate consideration paid to the general partner. 47




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##### Table of Contents



Item 7.
    MANAGEMENTS
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS  Please
    read the following discussion of our financial condition and
    results of operations in conjunction with the consolidated
    financial statements and related notes included in Item 8
    of this annual report.
  Overview
    
    Gathering and Processing  West.  Our
    West segment includes Williams Four Corners LLC (Four
    Corners). The Four Corners system gathers and processes or
    treats approximately 37% of the natural gas produced in the
    San Juan Basin and connects with the five pipeline systems
    that transport natural gas to end markets from the basin.
    Gathering and Processing  Gulf.  Our
    Gulf segment includes (1) our 40% ownership interest in
    Discovery and (2) the Carbonate Trend gathering pipeline
    off the coast of Alabama. Discovery owns an integrated natural
    gas gathering and transportation pipeline system extending from
    offshore in the Gulf of Mexico to a natural gas processing
    facility and an NGL fractionator in Louisiana. These assets
    generate revenues by providing natural gas gathering,
    transporting and processing services and integrated NGL
    fractionating services to customers under a range of contractual
    arrangements. Although Discovery includes fractionation
    operations, which would normally fall within the NGL Services
    segment, it is primarily engaged in gathering and processing and
    is managed as such.
    NGL Services.  Our NGL Services segment
    includes three integrated NGL storage facilities and a 50%
    undivided interest in a fractionator near Conway, Kansas. These
    assets generate revenues by providing stand-alone NGL
    fractionation and storage services using various fee-based
    contractual arrangements where we receive a fee or fees based on
    actual or contracted volumetric measures.  Executive
    Summary
    Recent
    Events
  Acquisition of Four Corners.
 48




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##### Table of Contents



Issuance of Common Units.
  Issuance of Common Units and Class B units in a Private
    Placement. one-for-one
  Issuance of Senior Unsecured Notes.
    New Credit Facility with Williams.
  How We
    Evaluate Our Operations
    
    Four Corners gathering and processing volumes;
    Four Corners net liquids margin;
    Discoverys and Carbonate Trends pipeline throughput
    volumes;
    Discoverys gross processing margins;
    Conways fractionation volumes;
    Conways storage revenues; and
    operating and maintenance expenses.  Four
    Corners
  Gathering and Processing Volumes.
 49




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##### Table of Contents



Net Liquids Margin.
  Discovery
    and Carbonate Trend
  Pipeline Throughput Volumes.
  Gross Processing Margins.
  
    the rates stipulated under fee-based contracts multiplied by the
    actual MMBtu volumes;
    sales of NGL volumes received under certain processing contracts
    for Discoverys account and keep-whole contracts; and
    sales of natural gas volumes that are in excess of operational
    needs.      Conway
  Fractionation Volumes.
 50




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##### Table of Contents



Storage Revenues.
  Operating
    and Maintenance Expenses
      per-unit
  Critical
    Accounting Policies and Estimates
    Accounting
    for Asset Retirement Obligations
  and/or
 51




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##### Table of Contents



Environmental
    Remediation Liabilities
   52




---



##### Table of Contents



Results
    of Operations
  Consolidated
    Overview
    % Change





% Changefrom





from2006


2005(1)


2005


2004(1)


2004(Dollars in thousands)Revenues

$
563,410



+9
%

$
514,972



+10
%

$
469,199Costs and expenses:Product cost and shrink replacement


175,508



+1
%


177,527



(16
)%


152,963Operating and maintenance expense


155,214



(20
)%


129,759



(11
)%


116,446Depreciation, amortization and
    accretion


43,692



(3
)%


42,579



+4
%


44,361General and administrative expense


39,440



(8
)%


36,615



(14
)%


32,179Taxes other than income


8,961



(6
)%


8,446



(13
)%


7,506Other (income) expense, net


(2,473
)


NM



630



+94
%


11,147Total costs and expenses


420,342



(6
)%


395,556



(8
)%


364,602Operating income


143,068



+20
%


119,416



+14
%


104,597Equity earnings 
    Discovery


12,033



+44
%


8,331



+85
%


4,495Impairment of investment in
    Discovery














+100
%


(13,484
)Interest expense


(9,833
)


(19
)%


(8,238
)


+34
%


(12,476
)Interest income


1,600



NM



165



NM



Income before cumulative effect of
    change in accounting principle


146,868



+23
%


119,674



+44
%


83,132Cumulative effect of change in
    accounting principle






+100
%


(1,322
)


NM



Net income

$
146,868



+24
%

$
118,352



+42
%

$
83,132     (1)
    
    + = Favorable Change;− = Unfavorable Change; NM = A
    percentage calculation is not meaningful due to change in signs,
    a zero-value denominator or a percentage change greater than 200.  2006 vs.
    2005
     53




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##### Table of Contents



2005 vs.
    2004
                     54




---



##### Table of Contents



Results
    of operations  Gathering and Processing 
    West
    2006


2005


2004(In thousands)Segment revenues

$
502,313


$
463,203


$
428,223Costs and expenses:Product cost and shrink replacement


159,997



165,706



146,328Operating and maintenance expense


124,763



104,648



97,070Depreciation, amortization and
    accretion


40,055



38,960



40,675General and administrative
    expense  direct


11,920



12,230



8,500Taxes other than income


8,245



7,746



6,790Other (income) expense, net


(2,476
)


636



11,238Total costs and expenses,
    including interest income


342,504



329,926



310,601Segment profit

$
159,809


$
133,277


$
117,622   2006 vs.
    2005
    
    $14.9 million related to a 12% increase in NGL volumes that
    we received under certain processing contracts. This increase
    was related primarily to equipment outages in 2005 and reduced
    ethane processing in the fourth quarter of 2005 caused by
    sharply higher natural gas prices following the hurricanes of
    2005;
    $13.5 million related to a 10% increase in average NGL
    sales prices realized on sales of NGLs which we received under
    certain processing contracts. This increase resulted from
    general increases in market prices for these commodities between
    the two periods;
    $4.1 million of higher condensate sales, which includes
    $1.9 million resulting from the recognition of two
    additional months of condensate revenue in 2006. Prior to 2006,
    condensate revenue had been recognized two months in arrears. As
    a result of more timely sales information now made available
    from third parties, we have recorded these on a current basis
    and thus have fully recognized this activity through
    December 31, 2006. Our management concluded that the effect
    of recording the additional two months was not material to our
    results for 2006, prior periods or our trend of
    earnings; and
    $1.1 million of higher LNG sales related to an increase in
    volumes sold.     55




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##### Table of Contents




    a $9.0 million decrease from third party producers who
    elected to have us purchase their NGLs which was offset by the
    corresponding decrease in product sales discussed above; and
    a $6.0 million decrease from 8% lower average natural gas
    prices.      
    a $13.4 million increase in materials and supplies, outside
    services and other operating expenses related primarily to
    increased compression and maintenance costs;
    a $4.7 million increase in labor and benefits caused by
    higher Williams annual incentive program costs and the addition
    of new personnel; and
    a $2.0 million increase in non-shrink natural gas purchases
    due primarily to higher volumetric gathering fuel requirements
    and higher system losses.    per-unit
  2005 vs.
    2004
    
    a $21.5 million increase in the sale of liquids on behalf
    of third parties. These NGL sales were made on behalf of
    producers who have us purchase their NGLs for a fee in
    accordance with their contracts. This increase was offset by
    higher associated product costs of $21.5 million discussed
    below;
    $21.1 million related to 21% higher average NGL sales
    prices realized for the volumes we received under our processing
    contracts;
    $3.0 million higher LNG sales; and
    $2.9 million higher condensate sales.       56




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##### Table of Contents




    $5.1 million higher materials and supplies and outside
    services expense related to increased repair and maintenance
    activity;
    $2.7 million of higher natural gas cost related to fuel and
    system gains and losses; and
    $1.8 million of higher compressor costs from
    inflation-indexed escalation clauses in operating and
    maintenance agreements and additional rental units.        
    $7.6 million impairment charge for the LaMaquina treating
    facility in 2004. The LaMaquina treating facility shut down in
    2002 and was sold in the first quarter of 2006;
    $1.2 million loss on asset dispositions; and
    $1.0 million for materials and supplies inventory
    adjustments.    Outlook
    2007
    
    In 2007, we anticipate that sustained drilling activity,
    expansion opportunities and production enhancement activities by
    existing customers should be sufficient to more than offset the
    historical decline and increase gathered and processed volumes.
    We have realized above average margins at our gas processing
    plants in recent years due primarily to increasing prices for
    NGLs. We expect
    per-unit
    margins in 2007 will remain higher in relation to five- year
    historical averages but below the record levels realized in
    2006. Additionally, we anticipate that our contract mix and
    commodity management activities at Four Corners will continue to
    allow us to realize greater margins relative to industry
    benchmark averages.
    We anticipate that operating costs, excluding compression, will
    remain stable as compared to 2006. Compression cost increases
    are dependent upon the extent and amount of additional
    compression needed to meet the needs of our Four Corners
    customers and the cost at which compression can be purchased,
    leased and operated.
    We are conducting negotiations with the Jicarilla Apache Nation
    in Northern New Mexico for the renewal of certain rights of way
    on reservation lands. The current right of way agreement, which
    covers certain gathering system assets in Rio Arriba County, New
    Mexico, expired on December 31, 2006. We continue to
    operate our assets on these reservation lands pursuant to a
    three-month agreement while we 57




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##### Table of Contents



conduct further discussions that could result in renewal of our
    rights of way, sale of the gathering assets on reservation lands
    or other options that might be in the mutual interest of both
    parties.  Results
    of operations  Gathering and Processing 
    Gulf
    2006


2005


2004(In thousands)Segment revenues

$
2,656


$
3,515


$
4,833Costs and expenses:Operating and maintenance expense


1,660



714



572Depreciation


1,200



1,200



1,200General and administrative
    expense  direct


1



2



Total costs and expenses


2,861



1,916



1,772Segment operating income (loss)


(205
)


1,599



3,061Equity earnings 
    Discovery


12,033



8,331



4,495Impairment of investment in
    Discovery










(13,484
)Segment profit (loss)

$
11,828


$
9,930


$
(5,928
)   Carbonate
    Trend
  2006 vs.
    2005
    2005 vs.
    2004
   58




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##### Table of Contents



Discovery
    2006


2005


2004(In thousands)Revenues

$
197,313


$
122,745


$
99,876Costs and expenses, including
    interest:Product cost and shrink replacement


119,552



64,467



45,355Operating and maintenance expense


23,049



10,165



17,854General and administrative expense


2,150



2,053



1,424Depreciation and accretion


25,562



24,794



22,795Interest income


(2,404
)


(1,685
)


(550
)Other (income)expense, net


(679
)


2,123



1,328Total costs and expenses


167,230



101,917



88,206Net income before cumulative
    effect of change in accounting principle

$
30,083


$
20,828


$
11,670Williams Partners 40%
    interest

$
12,033


$
8,331


$
4,668Capitalized interest amortization










(173
)Equity earnings per our
    Consolidated Statement of Income

$
12,033


$
8,331


$
4,495   2006 vs.
    2005
    
    Product sales increased $59.9 million for NGL sales related
    to third-party processing customers elections to have
    Discovery purchase their NGLs under an option in their
    contracts. These sales were offset by higher associated product
    costs of $59.9 million discussed below.
    Product sales also increased $18.1 million due to a 54%
    increase in NGL volumes that Discovery received under certain
    processing contracts and $5.3 million due to 10% higher
    average NGL sales prices related to these volumes. NGL sales
    volumes in 2006 were higher due partly to the lack of
    hurricane-related disruptions in 2006. In addition,
    exceptionally strong commodity margins compelled our customers
    to process their natural gas rather than by-pass, which led to
    higher product sales revenues on our
    percent-of-liquids
    and keep-whole processing contracts.
    Transportation revenues increased $3.1 million, including
    $2.4 million in additional fee-based revenues related to
    the TGP and TETCO open season agreements discussed above.
    Fee-based processing and fractionation revenues increased
    $2.7 million due primarily to $5.1 million in
    additional fee-based revenues related to processing the TGP and
    TETCO open seasons volumes discussed above, partially offset by
    lower by-pass revenues. 59




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##### Table of Contents




    Product sales decreased $10.0 million due to the absence of
    excess fuel and shrink replacement gas sales.
    Gathering revenues decreased $3.8 million due primarily to
    lower gathered volumes and rates and a $1.4 million
    deficiency payment received in the first quarter of 2005.              2005 vs.
    2004
  per-unit
  
    Product sales increased $31.6 million for the NGL sales
    related to third-party processing customers election to
    have Discovery purchase their NGLs under an option in their
    contracts. These sales were offset by higher associated product
    costs of $31.6 million discussed below.
    Processing and fractionation revenues increased
    $6.8 million due primarily to $3.9 million in
    additional volumes related to the TGP and TETCO open seasons
    discussed previously, $2.9 million related to an increase
    in the fractionation rate for increased natural gas fuel cost
    pass through, and other increases related to new volumes from
    the Front Runner prospect that came on line in the first quarter
    of 2005.
    Gathering revenues increased $2.1 million due primarily to
    a $1.4 million deficiency payment received in 2005 related
    to a volume shortfall under a transportation contract,
    $0.4 million related to an increase in volumes and
    $0.3 million related to a 25% higher average gathering rate
    associated with new volumes from the Front Runner prospect. 60




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##### Table of Contents




    Product sales decreased approximately $16.0 million as a
    result of 36% lower NGL sales volumes following Hurricanes
    Katrina and Rita, partially offset by a $5.0 million
    increase associated with a 17% higher average sales prices.
    Product sales also decreased $4.9 million as a result of
    lower sales of excess fuel and shrink replacement gas in 2005.
    During the first half of 2004 increased natural gas prices made
    it more economical for Discoverys customers to bypass the
    processing plant rather than process the gas, leaving Discovery
    with higher levels of excess fuel and replacement gas in 2004
    than 2005.
    Transportation revenues decreased $0.6 million due
    primarily to lower condensate transportation volumes. Higher
    average natural gas transportation volumes were partially offset
    by a lower average natural gas transmission rate.
    Other revenues declined $1.1 million due largely to lower
    platform rental fees.    
    $31.6 million increased purchase costs for the two
    processing customers who elected to have Discovery purchase
    their NGLs; and
    $3.4 million resulting from higher average
    per-unit
    natural gas prices.    
    $11.0 million lower costs related to reduced processing
    activity in 2005 following Hurricanes Katrina and Rita; and
    $4.9 million lower costs associated with sales of excess
    fuel and shrink natural gas.             61




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Outlook
    for 2007
  Carbonate
    Trend
  and/or
  Discovery
    
    The Tahiti pipeline lateral expansion project is currently on
    schedule. We expect construction will be completed in the second
    quarter of 2007 and anticipate initial throughput will begin in
    the first half of 2008. We expect this agreement will have a
    significant favorable impact on Discoverys revenues.
    Discovery signed a one-year processing contract with TETCO
    effective October 2006 for a minimum volume of 100 BBtu/d and a
    maximum of 300 BBtu/d. Current flowing volume under this
    contract is 160 BBtu/d.
    With the current oil and natural gas price environment, drilling
    activity across the shelf and the deepwater of the Gulf of
    Mexico has been robust. However, the limited availability of
    specialized rigs necessary to drill in the deepwater areas, such
    as those in and around Discoverys gathering areas, limits
    the ability of producers to bring identified reserves to market
    quickly. This will prolong the timeframe over which these
    reserves will be developed. We expect Discovery to be successful
    in competing for a portion of these new volumes.
    On March 31, 2006, Discovery connected a new well in ATP
    Oil & Gas Corporations Gomez prospect; currently
    the rate is approximately 40 BBtu/d. We expect the rate to
    increase from this level in the third quarter of 2007.
    In October 2006 we signed an agreement with Walter Oil and Gas
    Corp. which is producing approximately 25 BBtu/d.
    In December 2006 we signed an agreement with Energy
    Partners LTD, which will result in approximately 10 BBtu/d
    of throughput beginning in the first quarter of 2007.
    Insurance premiums have increased dramatically from
    approximately $2.3 million in 2005 to the current level of
    $4.9 million in 2006. We have no reason to expect premiums
    to materially change from this amount in the near term. 62




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Results
    of operations  NGL Services
    2006


2005


2004(In thousands)Segment revenues

$
58,441


$
48,254


$
36,143Costs and expenses:Operating and maintenance expense


28,791



24,397



18,804Product cost


15,511



11,821



6,635Depreciation and accretion


2,437



2,419



2,486General and administrative
    expense  direct


1,149



1,068



535Other, net


719



694



625Total costs and expenses


48,607



40,399



29,085Segment profit

$
9,834


$
7,855


$
7,058   2006 vs.
    2005
    
    Storage revenues increased $4.9 million due primarily to
    higher average storage volumes from additional short-term
    storage leases caused by the reduced demand for propane during
    the mild 2006 winter and storage customers who held their NGLs
    in storage due to an inclining forward market.
    Product sales were $2.6 million higher due primarily to the
    sale of surplus volumes created through our product optimization
    activities. This increase was more than offset by the related
    increase in product cost discussed below.
    Other revenues increased $1.7 million due primarily to
    $1.3 million of fees charged for low sulfur natural
    gasoline upgrades that began in 2006.    per-unit
    2005 vs.
    2004
    
    Product sales were $5.0 million higher due primarily to the
    sale of surplus propane volumes created through our product
    optimization activities. This increase was partially offset by
    the related increase in product cost discussed below.
    Storage revenues increased $5.0 million due primarily to
    higher average
    per-unit
    storage rates for 2005 and higher storage volumes from
    additional short-term storage leases caused by the reduced
    demand for propane due to unusually warm temperatures in the
    early winter months of 2005 and an overall increase in butane
    and storage volumes. 63




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##### Table of Contents




    Fractionation revenues increased $1.7 million due primarily
    to a 17% increase in the average fractionation rate related to
    the pass through to customers of increased fuel and power costs
    and higher volumes in 2005.          Outlook
    for 2007
  
    In 2006 we experienced record physical storage volumes largely
    related to increased demand for short-term storage leases. This
    increase in short-term leases was caused primarily by reduced
    demand for propane during the mild
    2005-2006
    winter and storage customers who held their NGLs in storage due
    to an inclining forward market. In 2007, we expect demand for
    our storage services to remain strong in relation to historic
    averages but we do not expect to realize the same level of
    short-term storage leases as experienced in 2006.
    We continue to execute a large number of storage cavern
    workovers and wellhead modifications to comply with KDHE
    regulatory requirements. We expect outside service costs to
    continue at current levels throughout 2007 and 2008 to ensure
    that we meet the regulatory compliance requirement to complete
    cavern wellhead modifications before the end of 2008. Our
    forecast for 2007 is to workover approximately 59 caverns (both
    complete and partial) compared to 51 cavern workovers (38
    complete and 13 partial) in 2006.  Financial
    Condition and Liquidity
    
    Cash and cash equivalents on hand;
    Cash generated from operations, including cash distributions
    from Discovery;
    Insurance or other recoveries related to the Carbonate Trend
    overburden restoration, which should be received, approximately,
    as costs are incurred;
    Capital contributions from Williams pursuant to an omnibus
    agreement; and
    Credit facilities, as needed.      
    Maintenance capital expenditures for our Four Corners and Conway
    assets;
    Expansion capital expenditures for our Four Corners assets; 64




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##### Table of Contents




    Carbonate Trend overburden restoration;
    Interest on our long-term debt; and
    Quarterly distributions to our unitholders.  Discovery
  2006-2007
  Date of Distribution

Total Distribution to Members


Our 40% Share1/31/06

$
11,000


$
4,4004/28/06

$
9,000


$
3,6007/31/06

$
10,000


$
4,00010/30/06

$
11,000


$
4,4001/30/07

$
9,000


$
3,600       Capital
    Contributions from Williams
    
    Indemnification of environmental and related expenditures, less
    any related insurance recoveries, for a period of three years
    (for certain of those expenditures) up to a cap of
    $14 million. Amounts expected to be incurred in 2007
    related to these indemnifications are as follows:  
    approximately $2.9 million for capital expenditures related
    to KDHE-related cavern compliance at our Conway storage
    facilities;
    and approximately $1.2 million for our 40% share of
    Discoverys costs for marshland restoration and repair or
    replacement of Paradis emission-control flare.    
    An annual credit for general and administrative expenses of
    $2.4 million in 2007, $1.6 million in 2008 and
    $0.8 million in 2009.
    Up to $3.4 million to fund our 40% share of the expected
    total cost of Discoverys Tahiti pipeline lateral expansion
    project in excess of the $24.4 million we contributed
    during September 2005. As of December 31, 2006 we have
    received $1.6 million from Williams for this
    indemnification. 65




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##### Table of Contents



Credit
    Facilities
    12-month
  Capital
    Requirements
    
    Maintenance capital expenditures, which are capital expenditures
    made to replace partially or fully depreciated assets in order
    to maintain the existing operating capacity of our assets and to
    extend their useful lives; and
    Expansion capital expenditures such as those to acquire
    additional assets to grow our business, to expand and upgrade
    plant or pipeline capacity and to construct new plants,
    pipelines and storage facilities.           66




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##### Table of Contents



Carbonate
    Trend Overburden Restoration
  and/or
  Debt
    Service  Long-Term Debt
      90-day
  Cash
    Distributions to Unitholders
    Results
    of Operations  Cash Flows
  Williams
    Partners L.P.
  2006


2005


2004(In thousands)Net cash provided by operating
    activities

$
173,817


$
157,932


$
137,090Net cash used by investing
    activities


(628,580
)


(55,666
)


(15,454
)Net cash provided (used) by
    financing activities


505,465



(95,427
)


(121,636
)  67




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##### Table of Contents




    $625.3 million of net proceeds from debt and equity
    issuances related to our acquisition of Four Corners less the
    related amounts distributed to Williams in excess of Four
    Corners contributed basis;
    distributions to unitholders and our general partner of
    $30.0 million; and
    contributions from our general partner to maintain their 2%
    ownership following the issuances of equity and per the omnibus
    agreement that totaled $25.5 million.    Discovery 
    100%
  2006


2005


2004(In thousands)Net cash provided by operating
    activities

$
62,606


$
30,814


$
35,623Net cash used by investing
    activities


(16,312
)


(65,997
)


(39,115
)Net cash provided (used) by
    financing activities


(30,089
)


1,339



      68




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##### Table of Contents



Contractual
    Obligations
    2007


2008-2009


2010-2011


2012+


TotalLong-term debt:Principal

$



$



$
150,000


$
600,000


$
750,000Interest


36,625



109,500



109,500



239,250



494,875Capital leases


















Operating leases


2,426



4,025



2,440



1,000



9,891Purchase obligations


20,212
(a)


240



240



120
(b)


20,812Other long term liabilities


















Total

$
59,263


$
113,765


$
262,180


$
840,370


$
1,275,578     (a)
    
    Includes the open purchase orders as of
    12/31/06 to
    be paid in 2007.(b)
    
    Year 2012 represents one year of payments associated with an
    operating agreement whose term is tied to the life of the
    underlying gas reserves.    2007


2008-2009


2010-2011


2012+


TotalNotes payable/long-term debt

$



$



$



$



$
Capital leases


















Operating leases


855



1,715



1,715



3,252



7,537Purchase obligations(a)


33,279















33,279Other long-term liabilities


















Total

$
34,134


$
1,715


$
1,715


$
3,252


$
40,816     (a)
    
    A majority of the amounts are Tahiti-related expenditures that
    will be funded from the amounts that were escrowed for this
    project in September 2005 and capital contributions from members
    including us. Please read Financial Condition and
    Liquidity.  Effects
    of Inflation
  and/or
 69




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##### Table of Contents



Regulatory
    Matters
    Environmental
         70




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##### Table of Contents



Form 10-K,
    Item 7A.
    Qualitative
    and Quantitative Disclosures About Market Risk    Commodity
    Price Risk
  per-unit
  Interest
    Rate Risk
      Fair ValueDecember 31,2011


2006Long-term debt:Fixed rate

$
150


$
156Interest rate


7.5
%Fixed rate

$
600


$
612Interest rate


7.25
%  71




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##### Table of Contents



Item 8.
    Financial
    Statements and Supplementary Data  MANAGEMENTS
    REPORT ON INTERNAL CONTROL OVER
    FINANCIAL REPORTING
  Rules 13a-15(f) 15d-15(f)
    Internal
    Control  Integrated Framework.
  Form 10-K.
 72




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##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON
    INTERNAL CONTROL OVER FINANCIAL REPORTING
                  
    73




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##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
            , Accounting for
    Conditional Asset Retirement Obligations.
    
    74




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##### Table of Contents



WILLIAMS
    PARTNERS L.P.



CONSOLIDATED
    BALANCE SHEETS  December 31,2006


2005*(In thousands)ASSETSCurrent assets:Cash and cash equivalents

$
57,541


$
6,839Accounts receivable:Trade


18,320



17,695Affiliate


12,420



Other


3,991



3,472Gas purchase contract 
    affiliate


4,754



5,320Prepaid expenses


3,765



2,742Other current assets


2,534



Total current assets


103,325



36,068Investment in Discovery Producer
    Services


147,493



150,260Property, plant and equipment, net


647,578



658,965Gas purchase contract 
    noncurrent  affiliate






4,754Other noncurrent assets


34,752



25,228Total assets

$
933,148


$
875,275LIABILITIES AND PARTNERS
    CAPITALCurrent liabilities:Accounts payable:Trade

$
19,827


$
25,572Affiliate






4,729Product imbalance


651



1,765Deferred revenue


3,382



3,552Accrued liabilities


16,173



6,160Total current liabilities


40,033



41,778Long-term debt


750,000



Environmental remediation
    liabilities


3,964



4,371Other noncurrent liabilities


3,749



1,881Commitments and contingent
    liabilities (Note 14)Partners capital:Common unitholders (25,553,306 and
    7,006,146 outstanding at December 31, 2006 and 2005)


733,878



108,526Class B unitholders
    (6,805,492 outstanding at December 31, 2006)


241,923



Subordinated unitholders
    (7,000,000 outstanding at December 31, 2006 and 2005)


108,862



108,491General partner


(949,261
)


610,228Total partners capital


135,402



827,245Total liabilities and
    partners capital

$
933,148


$
875,275     *
    
    Restated as discussed in Note 1.   75




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##### Table of Contents



WILLIAMS
    PARTNERS L.P.



CONSOLIDATED
    STATEMENTS OF INCOME  Year Ended December 31,2006


2005*


2004*(In thousands)Revenues:Gathering and processing:Affiliate

$
42,228


$
36,755


$
30,990Third-party


206,432



198,041



194,832Product sales:Affiliate


255,075



236,020



199,716Third-party


16,919



8,728



13,605Storage


25,237



20,290



15,318Fractionation


11,698



10,770



9,070Other


5,821



4,368



5,668Total revenues


563,410



514,972



469,199Costs and expenses:Product cost and shrink replacement:Affiliate


78,201



58,780



58,193Third-party


97,307



118,747



94,770Operating and maintenance expense:Affiliate


53,627



46,194



39,968Third-party


101,587



83,565



76,478Depreciation, amortization and
    accretion


43,692



42,579



44,361General and administrative expense:Affiliate


34,295



33,765



29,948Third-party


5,145



2,850



2,231Taxes other than income


8,961



8,446



7,506Other (income) expense 
    net


(2,473
)


630



11,147Total costs and expenses


420,342



395,556



364,602Operating income


143,068



119,416



104,597Equity earnings 
    Discovery Producer Services


12,033



8,331



4,495Impairment of investment in
    Discovery Producer Services










(13,484
)Interest expense:Affiliate


(89
)


(7,461
)


(11,980
)Third-party


(9,744
)


(777
)


(496
)Interest income


1,600



165



Income before cumulative effect of
    change in accounting principle


146,868



119,674



83,132Cumulative effect of change in
    accounting principle






(1,322
)


Net income

$
146,868


$
118,352


$
83,132Allocation of net income for
    calculation of earnings per unit:Net income

$
146,868


$
118,352Net income applicable to
    pre-partnership operations allocated to general partner


(116,450
)


(113,418
)Net income applicable to
    partnership operations


30,418



4,934Allocation of net loss to general
    partner


(2,897
)


(1,273
)Allocation of net income to limited
    partner


33,315



6,207Basic and diluted earnings per
    limited partner unit:Income before cumulative effect of
    change in accounting principle:Common units

$
1.62


$
0.49Class B units

$
0.45



N/ASubordinated units

$
1.62


$
0.49Cumulative effect of change in
    accounting principle:Common units





$
(0.05
)Class B units






N/ASubordinated units





$
(0.05
)Net income:Common units

$
1.62


$
0.44Class B units

$
0.45



N/ASubordinated units

$
1.62


$
0.44Weighted average number of units
    outstanding:Common units


11,632,110



7,001,366Class B units


354,258



N/ASubordinated units


7,000,000



7,000,000     *
    
    Restated as discussed in Note 1.   76




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##### Table of Contents



WILLIAMS
    PARTNERS L.P.



CONSOLIDATED
    STATEMENT OF PARTNERS CAPITAL*  Pre-IPOOwnersEquity/


TotalLimited Partners


General


PartnersCommon


Class B


Subordinated


Partner


Capital(Dollars in thousands)Balance 
    December 31, 2004

$



$



$



$
637,198


$
637,198Accounts receivable not contributed














(2,640
)


(2,640
)Contribution of net assets of
    predecessor companies (2,000,000 common units; 7,000,000
    subordinated units)


10,471







106,427



49,174



166,072Net income  2005


3,104







3,103



112,145



118,352Cash distributions


(1,039
)






(1,039
)


(42
)


(2,120
)Issuance of units to public
    (5,000,000 common units)


100,247















100,247Offering costs


(4,291
)














(4,291
)Issuance of common units (6,146
    common units)


34















34Distributions to The Williams
    Companies, Inc.  net














(187,217
)


(187,217
)Contributions pursuant to the
    omnibus agreement














1,610



1,610Balance 
    December 31, 2005


108,526







108,491



610,228



827,245Net income  2006


21,181



655



11,606



113,426



146,868Cash distributions


(17,887
)






(11,235
)


(872
)


(29,994
)Issuance of units to public
    (18,545,030 common units)


625,995















625,995Issuance of Class B units
    through Private placement (6,805,492 Class B units)






241,268











241,268Offering costs


(4,168
)














(4,168
)Distributions to The Williams
    Companies, Inc.  net














(114,497
)


(114,497
)Distributions to general partner
    for purchase of Four Corners














(1,583,000
)


(1,583,000
)Contributions pursuant to the
    omnibus agreement














6,840



6,840Contributions from general partner














18,614



18,614Other


231















231Balance 
    December 31, 2006

$
733,878


$
241,923


$
108,862


$
(949,261
)

$
135,402     *
    
    Restated as discussed in Note 1.   77




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##### Table of Contents



WILLIAMS
    PARTNERS L.P.



CONSOLIDATED
    STATEMENTS OF CASH FLOWS  Year Ended December 31,2006


2005*


2004*(In thousands)OPERATING ACTIVITIES:Net income

$
146,868


$
118,352


$
83,132Adjustments to reconcile to cash
    provided by operations:Cumulative effect of change in
    accounting principle






1,322



Depreciation, amortization and
    accretion


43,692



42,579



44,361Provision for loss on property,
    plant and equipment






917



7,636(Gain)/loss on sale of property,
    plant and equipment


(3,055
)






1,258Impairment of investment in
    Discovery Producer Services










13,484Amortization of gas purchase
    contract  affiliate


5,320



2,033



Distributions in excess of
    /(undistributed) equity Earnings of Discovery Producer Services


4,367



(7,051
)


(4,495
)Cash provided (used) by changes in
    assets and liabilities:Accounts receivable


(13,564
)


(4,419
)


1,559Prepaid expenses


(1,023
)


(463
)


(362
)Other current assets


(920
)






Accounts payable


(10,600
)


8,801



12,146Product imbalance


(1,114
)


8,243



(7,295
)Accrued liabilities


6,395



(4,008
)


(5,464
)Deferred revenue


(170
)


247



775Other, including changes in
    noncurrent assets and liabilities


(2,379
)


(8,621
)


(9,645
)Net cash provided by operating
    activities


173,817



157,932



137,090INVESTING ACTIVITIES:Purchase of Four Corners


(607,545
)






Capital expenditures


(32,270
)


(31,266
)


(15,603
)Change in accrued
    liabilities-capital expenditures


5,078







Contribution to Discovery Producer
    Services


(1,600
)


(24,400
)


Proceeds from sales of property,
    plant and equipment


7,757







149Net cash used by investing
    activities


(628,580
)


(55,666
)


(15,454
)FINANCING ACTIVITIES:Proceeds from sales of common units


867,263



100,247



Proceeds from debt issuances


750,000







Excess purchase price over the
    contributed basis of Four Corners


(975,455
)






Payment of debt issuance costs


(13,138
)






Payment of equity offering costs


(4,168
)


(4,291
)


Distributions to The Williams
    Companies, Inc.


(114,497
)


(187,217
)


(120,467
)Changes in advances from
    affiliates  net






(3,656
)


(1,169
)Distributions to unitholders and
    general partner


(29,994
)


(2,120
)


General partner contributions


18,614







Contributions per omnibus agreement


6,840



1,610



Net cash provided (used) by
    financing activities


505,465



(95,427
)


(121,636
)Increase in cash and cash
    equivalents


50,702



6,839



Cash and cash equivalents at
    beginning of year


6,839







Cash and cash equivalents at end
    of year

$
57,541


$
6,839


$
     *
    
    Restated as discussed in Note 1.   78




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##### Table of Contents



WILLIAMS
    PARTNERS L. P.



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS  Note 1.
    Organization      Initial
    Public Offering and Related Transactions
    
    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.    Acquisition
    of Four Corners
   79




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##### Table of Contents



WILLIAMS
    PARTNERS L. P.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        Note 2.
    Description
    of Business    Gathering and Processing-West. 3,500-mile
  Gathering and Processing-Gulf . 283-mile 22-mile
 80




---



##### Table of Contents



WILLIAMS
    PARTNERS L. P.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      NGL Services.
    Note 3.
    Summary
    of Significant Accounting Policies  Basis of Presentation.
  Use of Estimates.
    
    loss contingencies;
    environmental remediation obligations; and
    asset retirement obligations.    Proportional Accounting for the Conway
    Fractionator. co-owners)
 81




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##### Table of Contents



WILLIAMS
    PARTNERS L. P.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Cash and Cash Equivalents.
  Accounts Receivable.
  Gas purchase contract.
  Investments. other-than-temporary
  Property, Plant and Equipment.
    Prepaid expenses and leasing
    activities. right-of-way right-of-way
  Product Imbalances.
 82




---



##### Table of Contents



WILLIAMS
    PARTNERS L. P.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Revenue Recognition.
  Impairment of Long-Lived Assets and
    Investments.
  other-than-temporary
  and/or
  Environmental.
  Capitalized Interest.
  Income Taxes.
 83




---



##### Table of Contents



WILLIAMS
    PARTNERS L. P.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Earnings Per Unit. 03-6,
  Recent Accounting Standards.
        00-19-2,
 84




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##### Table of Contents



WILLIAMS
    PARTNERS L. P.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Note 4.
    Allocation
    of Net Income and Distributions    2006


2005Allocation of net income to
    general partner:Net income

$
146,868


$
118,352Net income applicable to
    pre-partnership operations allocated to general partner


(116,450
)


(113,418
)Charges allocated directly to
    general partner:Reimbursable general and
    administrative costs


3,200



1,400Core drilling indemnified costs


784



Total charges allocated directly
    to general partner


3,984



1,400Income subject to 2% allocation of
    general partner interest


34,402



6,334General partners share of
    net income


2.0
%


2.0
%General partners allocated
    share of net income before items directly allocable to general
    partner interest


688



127Incentive distributions paid to
    general partner*


272



Charges allocated directly to
    general partner


(3,984
)


(1,400
)Pre-partnership net income
    allocated to general partner interest


116,450



113,418Net income allocated to general
    partner

$
113,426


$
112,145Net income

$
146,868


$
118,352Net income allocated to general
    partner


113,426



112,145Net income allocated to limited
    partners

$
33,442


$
6,207     *
    
    Under the two class method of computing earnings per
    share, prescribed by SFAS No. 128, Earnings Per
    Share, earnings are to be allocated to participating
    securities as if all of the earnings for the period had been
    distributed. As a result, the general partner receives an
    additional allocation of income in quarterly periods where an
    assumed incentive distribution, calculated as if all earnings
    for the period had been distributed, exceeds the actual
    incentive distribution. The assumed incentive distribution for
    the twelve months ended December 31, 2006 is
    $0.4 million. This results in an allocation of income for
    the calculation of earnings per limited partner unit as follows:  2006


2005Net income allocated to general
    partner

$
113,553


$
112,145Net income allocated to limited
    partners

$
33,315


$
6,207Net income

$
146,868


$
118,352   per-unit
 85




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##### Table of Contents



WILLIAMS
    PARTNERS L. P.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
       Per Unit


Common


Subordinated


Class B


General


Total CashPayment Date

Distribution


Units


Units


Units


Partner


Distribution11/14/2005(a)

$
0.1484


$
1,039


$
1,039






$
42


$
2,1202/14/2006

$
0.3500


$
2,452


$
2,450






$
100


$
5,0025/15/2006

$
0.3800


$
2,662


$
2,660






$
109


$
5,4318/14/2006(b)

$
0.4250


$
6,204


$
2,975






$
263


$
9,44211/14/2006(c
    )

$
0.4500


$
6,569


$
3,150






$
401


$
10,1202/14/2007(d)

$
0.4700


$
12,010


$
3,290


$
3,198


$
993


$
19,491     (a)
    
    This distribution represents the $0.35 per unit minimum
    quarterly distribution pro-rated for the
    39-day
    period following the IPO closing date (August 23, 2005
    through September 30, 2005).(b)
    
    Includes $0.1 million incentive distribution rights payment
    to the general partner.(c)
    
    Includes $0.2 million incentive distribution rights payment
    to the general partner.(d)
    
    On February 14, 2007, we paid a cash distribution of
    $0.47 per unit on our outstanding common, subordinated and
    Class B units to unitholders of record on February 7, 2007.
    This amount includes $0.6 million incentive distribution
    rights payment to the general partner.  Note 5.
    Related
    Party Transactions     86




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##### Table of Contents



WILLIAMS
    PARTNERS L. P.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
                87




---



##### Table of Contents



WILLIAMS
    PARTNERS L. P.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     2006


2005


2004(In thousands)General and administrative
    expenses, including amounts subsequently charged to co-owners:Allocated

$
18,512


$
29,400


$
24,293Directly charged


10,574



4,607



5,655Operating and maintenance
    expenses, including amounts subsequently charged to co-owners:Fuel purchases, including
    amortization of gas contract


38,197



38,996



28,851Salaries and benefits


26,860



21,812



21,657NGL purchases


14,884



15,657



1,271   per-unit
        Note 6.
    Investment
    in Discovery Producer Services     88




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##### Table of Contents



WILLIAMS
    PARTNERS L. P.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
           December 31,2006


2005Current assets

$
73,841


$
70,525Non-current restricted cash


28,773



44,559Property, plant and equipment


355,304



344,743Current liabilities


(40,559
)


(45,070
)Non-current liabilities


(3,728
)


(1,121
)Members capital

$
413,631


$
413,636   Years Ended December 31,2006


2005


2004Revenues:Affiliate

$
160,825


$
76,864


$
68,766Third-party


36,488



45,881



31,110Costs and expenses:Affiliate


74,316



24,895



4,945Third-party


97,394



77,702



83,811Interest income


(2,404
)


(1,685
)


(550
)Foreign exchange (gain) loss


(2,076
)


1,005



Income before cumulative effect of
    change in accounting principle

$
30,083


$
20,828


$
11,670Net income

$
30,083


$
20,652


$
11,670  89




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##### Table of Contents



WILLIAMS
    PARTNERS L. P.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Note 7.
    Other
    Costs and Expenses  Net    Years Ended December 31,2006


2005


2004Impairment of LaMaquina carbon
    dioxide treating facility

$



$



$
7,636Gain on sale of LaMaquina carbon
    dioxide treating facility


(3,619
)






Other


1,146



630



3,511Total

$
(2,473
)

$
630


$
11,147   LaMaquina Carbon Dioxide Treating
    Facility.
  Other.
  Note 8.
    Property,
    Plant and Equipment    EstimatedDecember 31,


Depreciable2006


2005


Lives(In thousands)Land and right of way

$
41,721


$
44,363Gathering pipelines and related
    equipment


821,478



801,385



20-30 yearsProcessing plants and related
    equipment


147,241



164,257



30 yearsFractionation plant and related
    equipment


16,697



16,646



30 yearsStorage plant and related equipment


69,017



65,892



30 yearsBuildings and other equipment


90,082



90,070



3-45 yearsConstruction work in progress


19,447



20,323Total property, plant and equipment


1,205,683



1,202,936Accumulated depreciation


558,105



543,971Net property, plant and equipment

$
647,578


$
658,965    90




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##### Table of Contents



WILLIAMS
    PARTNERS L. P.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        2006


2005(In thousands)Balance, January 1

$
1,880


$
1,090Liabilities incurred during the
    period






91Liabilities settled during the
    period


(510
)


(204
)Accretion expense


86



1Estimate revisions


2,943



(460
)FIN No. 47 revisions






1,362Loss on settlements


77



Balance, December 31

$
4,476


$
1,880   Note 9.
    Accrued
    Liabilities    December 31,2006


2005(In thousands)Environmental
    remediation  current portion

$
2,636


$
1,752Customer deposit for construction


5,078



Accrued interest


2,796



Taxes other than income


2,347



2,431Other


3,316



1,977$
16,173


$
6,160   Note 10.
    Major
    Customers, Concentrations of Credit Risk and Financial
    Instruments  Major
    customers
   91




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##### Table of Contents



WILLIAMS
    PARTNERS L. P.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    2006

2005

2004ConocoPhillips


12
%


14
%


14
%Burlington Resources


9



10



11     Concentrations
    of Credit Risk
      December 31,2006


2005(In thousands)Gathering and
    Processing  West:Natural gas gathering and
    processing

$
16,709


$
15,855Other


561



1,368Gathering and
    Processing  Gulf:Natural gas gathering


468



525Other


1,343



NGL Services:Fractionation services


320



532Amounts due from fractionator
    partners


1,833



1,834Storage


825



793Other


36



260Accrued interest


216



$
22,311


$
21,167     Financial
    Instruments
    Cash and cash equivalents.
 92




---



##### Table of Contents



WILLIAMS
    PARTNERS L. P.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Long-term debt.
  2006

2005Carrying

Fair

Carrying

FairAmount

Value

Amount

Value(In thousands)Cash and cash equivalents

$
57,541


$
57,541


$
6,839


$
6,839Long-term debt (see Note 11)

$
750,000


$
768,844







   Note 11.
    Long-Term
    Debt, Credit Facilities and Leasing Activities  Long-Term
    Debt
      90-day
     93




---



##### Table of Contents



WILLIAMS
    PARTNERS L. P.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
          Credit
    Facilities
      
    ratio of debt to net worth no greater than 65%;
    ratio of debt to net worth no greater than 55% for Northwest
    Pipeline Corporation, a wholly owned subsidiary of Williams, and
    Transco; and 94




---



##### Table of Contents



WILLIAMS
    PARTNERS L. P.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   
    ratio of EBITDA to interest, on a rolling four quarter basis, no
    less than (i) 2.5 for any period through December 31,
    2007 and (ii) 3.0 for the remaining term of the agreement.  12-month
  Leasing
    Activities
  month-to-month month-to-month
  (In thousands)2007


2,4262008


2,1882009


1,8372010


1,4102011 and thereafter


2,030$
9,891     Note 12.
    Partners
    Capital    Description
    of Class B Units
    one-for-one
 95




---



##### Table of Contents



WILLIAMS
    PARTNERS L. P.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Subordinated
    Units
    Limited
    Partners Rights
    
    Right to receive distributions of available cash within
    45 days after the end of each quarter.
    No limited partner shall have any management power over our
    business and affairs; the general partner shall conduct, direct
    and manage our activities.
    The general partner may be removed if such removal is approved
    by the unitholders holding at least
    662/3%
    of the outstanding units voting as a single class, including
    units held by our general partner and its affiliates.
    Right to receive information reasonably required for tax
    reporting purposes within 90 days after the close of the
    calendar year.  Incentive
    Distribution Rights
    GeneralQuarterly Distribution Target Amount (per unit)

Unitholders


PartnerMinimum quarterly distribution of
    $0.35


98
%


2
%Up to $0.4025


98



2Above $0.4025 up to $0.4375


85



15Above $0.4375 up to $0.5250


75



25Above $0.5250


50



50    96




---



##### Table of Contents



WILLIAMS
    PARTNERS L. P.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Note 13.
    Long-Term
    Incentive Plan      Note 14.
    Commitments
    and Contingencies  Environmental Matters-Four Corners.
        Environmental Matters-Conway. and/or
   97




---



##### Table of Contents



WILLIAMS
    PARTNERS L. P.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Will Price.
  Grynberg.
  Vendor Dispute.
  Other.
  Summary.
 98




---



##### Table of Contents



WILLIAMS
    PARTNERS L. P.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Note 15.
    Segment
    Disclosures    Gathering &


Gathering &Processing -


Processing -


NGLWest


Gulf


Services


Total(In thousands)2006Segment revenues:Product sales

$
255,907


$



$
16,087


$
271,994Gathering and processing


246,004



2,656







248,660Storage










25,237



25,237Fractionation










11,698



11,698Other


402







5,419



5,821Total revenues


502,313



2,656



58,441



563,410Product cost and shrink replacement


159,997







15,511



175,508Operating and maintenance expense


124,763



1,660



28,791



155,214Depreciation, amortization and
    accretion


40,055



1,200



2,437



43,692Direct general and administrative
    expenses


11,920



1



1,149



13,070Other, net


5,769







719



6,488Segment operating income (loss)


159,809



(205
)


9,834



169,438Equity earnings






12,033







12,033Segment profit

$
159,809


$
11,828


$
9,834


$
181,471Reconciliation to the Consolidated
    Statement of Income:Segment operating income













$
169,438General and administrative expenses:Allocated  affiliate














(23,721
)Third-party direct














(2,649
)Combined operating income













$
143,068Other financial information:Segment assets

$
653,949


$
207,390


$
76,502


$
937,841Other assets and eliminations














(4,693
)Total assets













$
933,148Equity method investments

$



$
147,493


$



$
147,493Additions to long-lived assets


25,889







6,381



32,270 99




---



##### Table of Contents



WILLIAMS
    PARTNERS L. P.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Gathering &


Gathering &Processing -


Processing -


NGLWest


Gulf


Services


Total(In thousands)2005Segment revenues:Product sales

$
231,285


$



$
13,463


$
244,748Gathering and processing


231,733



3,063







234,796Storage










20,290



20,290Fractionation










10,770



10,770Other


185



452



3,731



4,368Total revenues


463,203



3,515



48,254



514,972Product cost and shrink replacement


165,706







11,821



177,527Operating and maintenance expense


104,648



714



24,397



129,759Depreciation, amortization and
    accretion


38,960



1,200



2,419



42,579Direct general and administrative
    expenses


12,230



2



1,068



13,300Other, net


8,382







694



9,076Segment operating income


133,277



1,599



7,855



142,731Equity earnings






8,331







8,331Segment profit

$
133,277


$
9,930


$
7,855


$
151,062Reconciliation to the Consolidated
    Statement of Income:Segment operating income













$
142,731General and administrative expenses:Allocated  affiliate














(22,256
)Third-party direct














(1,059
)Combined operating income













$
119,416Other financial information:Segment assets

$
635,094


$
171,009


$
63,819


$
869,922Other assets and eliminations














5,353Total assets













$
875,275Equity method investments

$



$
150,260


$



$
150,260Additions to long-lived assets


27,578







3,688



31,266 100




---



##### Table of Contents



WILLIAMS
    PARTNERS L. P.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Gathering &


Gathering &Processing -


Processing -


NGLWest


Gulf


Services


Total(In thousands)2004Segment revenues:Product sales

$
204,868


$



$
8,453


$
213,321Gathering and processing


221,939



3,883







225,822Storage










15,318



15,318Fractionation










9,070



9,070Other


1,416



950



3,302



5,668Total revenues


428,223



4,833



36,143



469,199Product cost and shrink replacement


146,328







6,635



152,963Operating and maintenance expense


97,070



572



18,804



116,446Depreciation, amortization and
    accretion


40,675



1,200



2,486



44,361Direct general and administrative
    expenses


8,500







535



9,035Other, net


18,028







625



18,653Segment operating income


117,622



3,061



7,058



127,741Equity earnings






4,495







4,495Impairment of investment






(13,484
)






(13,484
)Segment profit (loss)

$
117,622


$
(5,928
)

$
7,058


$
118,752Reconciliation to the Consolidated
    Statement of Income:Segment operating income













$
127,741Allocated general and
    administrative expenses














(23,144
)Combined operating income













$
104,597Other financial information:Total assets

$
645,294


$
166,985


$
51,305


$
863,584Equity method investments






147,281







147,281Additions to long-lived assets


14,069







1,622



15,691  101




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##### Table of Contents



WILLIAMS
    PARTNERS L. P.
  QUARTERLY
    FINANCIAL DATA
 (Unaudited)
  per-unit
  First


Second


Third


FourthQuarter


Quarter


Quarter


Quarter2006Revenues


132,735



141,186



146,582



142,907Costs and operating expenses


98,726



109,401



104,424



107,791Net income


37,624



33,594



43,404



32,246Basic and diluted net income per
    limited partner unit:Income before cumulative effect of
    change in accounting principle:Common units

$
0.35


$
0.25


$
0.57


$
0.45Class B units

$



$



$



$
0.45Subordinated units

$
0.35


$
0.25


$
0.57


$
0.45Net income:Common units

$
0.35


$
0.25


$
0.57


$
0.45Class B units

$



$



$



$
0.45Subordinated units

$
0.35


$
0.25


$
0.57


$
0.45   First


Second


Third


FourthQuarter


Quarter


Quarter


Quarter2005Revenues

$
119,272


$
120,256


$
132,340


$
143,104Costs and operating expenses


92,274



89,301



99,216



114,765Income before cumulative effect of
    change in accounting principle


26,206



28,664



31,252



33,552Net income


26,206



28,664



31,252



32,230Basic and diluted net income
    (loss) per limited partner unit:Income (loss) before cumulative
    effect of change in accounting principle:Common units


NA



NA


$
(0.02
)

$
0.51Subordinated units


NA



NA


$
(0.02
)

$
0.51Cumulative effect of change in
    accounting principle:Common units


NA



NA


$



$
(0.05
)Subordinated units


NA



NA


$



$
(0.05
)Net income (loss):Common units


NA



NA


$
(0.02
)

$
0.46Subordinated units


NA



NA


$
(0.02
)

$
0.46    Item 9.
    Changes
    In and Disagreements With Accountants on Accounting and
    Financial Disclosure   102




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##### Table of Contents



Item 9A.
    Controls
    and Procedures  Evaluation
    of Disclosure Controls and Procedures
  Rules 13a-15(e)
    Changes
    in Internal Controls Over Financial Reporting
    Managements
    Report on Internal Control over Financial Reporting
   Item 9B.  Other
    Information



There have been no events that occurred in the fourth quarter of
    2006 that would need to be reported on
    Form 8-K
    that have not been previously reported. PART III  Item 10.
    Directors
    , Executive Officers and Corporate Governance     103




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##### Table of Contents



Name

Age

Position with Williams Partners GP LLCSteven J. Malcolm


58


Chairman of the Board and Chief
    Executive OfficerDonald R. Chappel


55


Chief Financial Officer and
    DirectorAlan S. Armstrong


44


Chief Operating Officer and
    DirectorJames J. Bender


50


General CounselThomas C. Knudson


60


Director and Member of Audit and
    Conflicts CommitteesBill Z. Parker


59


Director and Member of Audit and
    Conflicts CommitteesAlice M. Peterson


54


Director and Member of Audit and
    Conflicts CommitteesPhillip D. Wright


51


Director     Steven J. Malcolm
  Donald R. Chappel
 104




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##### Table of Contents



Alan S. Armstrong
  James J. Bender
  Thomas C. Knudson
  Bill Z. Parker
  Alice M. Peterson tm start-up
  Phillip D. Wright
 105




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##### Table of Contents



Governance
    Director
    Independence
    http://www.williamslp.com
  
    the director, or an immediate family member of the director, has
    received during any twelve-month period within the last three
    years more than $100,000 per year in direct compensation
    from our general partner, us, and any parent or subsidiary in a
    consolidated group with such entities (collectively, the
    Partnership Group), other than board and committee
    fees and pension or other forms of deferred compensation for
    prior service (provided such compensation is not contingent in
    any way on continued service). Neither compensation received by
    a director for former service as an interim chairman or chief
    executive officer or other executive officer nor compensation
    received by an immediate family member for service as an
    employee of the Partnership Group will be considered in
    determining independence under this standard.
    the director is a current employee, or has an immediate family
    member who is a current executive officer, of another company
    that has made payments to, or received payments from, the
    Partnership Group for property or services in an amount which,
    in any of the last three fiscal years, exceeds the greater of
    $1.0 million, or 2% of the other companys
    consolidated gross annual revenues. Contributions to tax exempt
    organizations are not considered payments for
    purposes of this standard.
    the director is, or has been within the last three years, an
    employee of the Partnership Group, or an immediate family member
    is, or has been within the last three years, an executive
    officer, of the Partnership Group. Employment as an interim
    chairman or chief executive officer or other executive officer
    will not disqualify a director from being considered independent
    following that employment.
    (i) the director or an immediate family member is a current
    partner of a present or former internal or external auditor for
    the Partnership Group, (ii) the director is a current
    employee of such a firm, (iii) the director has an
    immediate family member who is a current employee of such a firm
    and participates in such firms audit, assurance or tax
    compliance (but not tax planning) practice or (iv) the
    director or an 106




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##### Table of Contents



immediately family member was within the last three years (but
    is no longer) a partner or employee of such a firm and
    personally worked on an audit for the Partnership Group within
    that time.  
    if the director or an immediate family member is, or has been
    within the last three years, employed as an executive officer of
    another company where any of the Partnership Groups
    present executive officers at the same time serves or served on
    that companys compensation committee.
    if the board of directors determines that a discretionary
    contribution made by any member of the Partnership Group to a
    non-profit organization with which a director, or a
    directors spouse, has a relationship, impacts the
    directors independence.  and/or
      Meeting
    Attendance and Preparation
    Executive
    Sessions of Non-Management Directors
    Communications
    with Directors
  http://www.williamslp.com.
 107




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##### Table of Contents



E-mail: brian.shore@williams.com
  Board
    Committees
    Board
    Committee Membership
  Audit

ConflictsCommittee

CommitteeThomas C. Knudson

ü

üBill Z. Parker

ü

Alice M. Peterson



ü     ü
    
    = committee member
    
    = chairperson  Audit
    Committee
    Conflicts
    Committee
   108




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##### Table of Contents



Code of
    Business Conduct and Ethics
  http://www.williamslp.com
  Internet
    Access to Governance Documents
  http://www.williamslp.com
  Section 16(a)
    Beneficial Ownership Reporting Compliance
    Transfer
    Agent and Registrar
    02940-3069  (781) 575-2879 (877) 498-8861  (800) 952-9245
    
  CEO/CFO
    Certifications
    REPORT OF
    THE AUDIT COMMITTEE
   109




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##### Table of Contents




    reviewed and discussed the audited financial statements in this
    annual report on
    Form 10-K
    with management, including a discussion of the quality, not just
    the acceptability, of the accounting principles, the
    reasonableness of significant judgments and the clarity of
    disclosures in the financial statements;
    reviewed with Ernst & Young LLP, the independent
    auditors, who are responsible for expressing an opinion on the
    conformity of those audited financial statements with generally
    accepted accounting principles, their judgments as to the
    quality and acceptability of Williams Partners L.P.s
    accounting principles and such other matters as are required to
    be discussed with the audit committee under generally accepted
    auditing standards;
    received the written disclosures and the letter required by
    standard No. 1 of the independence standards board
    (independence discussions with audit committees) provided to the
    audit committee by Ernst & Young LLP;
    discussed with Ernst & Young LLP its independence from
    management and Williams Partners L.P. and considered the
    compatibility of the provision of nonaudit services by the
    independent auditors with the auditors independence;
    discussed with Ernst & Young LLP the matters required
    to be discussed by statement on auditing standards No. 61
    (communications with audit committees);
    discussed with Williams Partners L.P.s internal auditors
    and Ernst  & Young LLP the overall scope and plans
    for their respective audits. The audit committee meets with the
    internal auditors and Ernst & Young LLP, with and
    without management present, to discuss the results of their
    examinations, their evaluations of Williams Partners L.P.s
    internal controls and the overall quality of Williams Partners
    L.P.s financial reporting;
    based on the foregoing reviews and discussions, recommended to
    the board of directors that the audited financial statements be
    included in the annual report on
    Form 10-K
    for the year ended December 31, 2006, for filing with the
    SEC; and
    approved the selection and appointment of Ernst & Young
    LLP to serve as Williams Partners L.P.s independent
    auditors.    
    Alice M. Peterson  chairman
    Bill Z. Parker
    Thomas C. Knudson      Item 11.
    Executive
    Compensation  Compensation
    Discussion and Analysis
   110




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##### Table of Contents



http://www.sec.gov http://www.williams.com
  Executive
    Compensation
    http://www.sec.gov http:/www.williams.com
  Compensation
    Committee Interlocks and Insider Participation
    Board
    Report on Compensation
  Form 10-K.
  
  Compensation
    of Directors
   111




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##### Table of Contents



Director
    Compensation Fiscal Year 2006
  Fees Earned or Paid



All OtherName

in Cash

Unit Awards(1)

Compensation

TotalThomas C. Knudson

$
60,000


$
63,394.66
(2)

$
0


$
123,394.66Bill Z. Parker

$
60,000


$
82,738.39
(3)

$
0


$
142,738.39Alice M. Peterson

$
60,000


$
82,738.39
(4)

$
0


$
142,738.39     (1)
    
    Awards were granted under the Williams Partners GP LLC Long-Term
    Incentive Plan. Awards are in the form of restricted units and
    are shown using a dollar value equal to the 2006 compensation
    expense computed in accordance with FAS 123(R). Cash
    distributions are paid on these restricted units at the same
    time and same rate as dividends paid to our unitholders.(2)
    
    The grant date fair value for the 2006 restricted units for
    Mr. Knudson is $25,013. At fiscal year end,
    Mr. Knudson had an aggregate of 710 restricted units
    outstanding.(3)
    
    The grant date fair value for the 2006 restricted units for
    Mr. Parker is $25,013. At fiscal year end, Mr. Parker
    had an aggregate of 710 restricted units outstanding.(4)
    
    The grant date fair value for the 2006 restricted units for
    Ms. Peterson is $25,013. At fiscal year end,
    Ms. Peterson had an aggregate of 710 restricted units
    outstanding.  Long-Term
    Incentive Plan
     112




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##### Table of Contents



Restricted
    Units and Phantom Units
      Unit
    Options and Unit Appreciation Rights
     113




---



##### Table of Contents



Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters    
    each person known by us to be a beneficial owner of more than 5%
    of the units;
    each of the directors of our general partner;
    each of the named executive officers of our general
    partner; and
    all directors and executive officers of our general partner as a
    group.      74172-0172.
  114




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##### Table of Contents



Percentage











Percentage


PercentageCommon


of Common


Subordinated


Percentage of


Class B


of Class B


of TotalName of

Units


Units


Units


Subordinated


Units


Units


UnitsBeneficial

Beneficially


Beneficially


Beneficially


Beneficially


Beneficially


Beneficially


BeneficiallyOwner

Owned


Owned


Owned


Owned


Owned


Owned


OwnedThe Williams Companies, Inc.(a)


1,250,000



4.9
%


7,000,000



100.0
%










21
%Williams Energy Services, LLC(a)


821,761



3.2



4,601,861



65.7











13.8Williams Energy, L.L.C.


447,308



1.8



2,504,925



35.8











7.5Williams Discovery Pipeline LLC


215,980



.8



1,209,486



17.3











3.6Williams Partners Holdings LLC


428,239



1.7



2,398,139



34.2











7.2MAPCO Inc.(a)


447,308



1.8



2,504,925



35.8











7.5Prudential Financial, Inc.(b)


2,776,949



10.87



















7.06Jennison Utility Fund(c)


714,680



2.8











2,062,269



30.3
%


7.1Goldman Sachs & Co.(d)


357,340



1.4











1,031,134



15.2



3.5GPS Income Fund (Cayman) LTD(e)


164,376



.6











474,321



7.0



1.6Tortoise Capital Advisors L.L.C.(f)


1,487,094



1.0











721,796



10.6



5.6Perry Partners L.P.(g)


178,670



.7











515,566



6



8The Cushing MLP Opportunity
    Fund I, LP(h)


178,670



.7











515,566



7.6



1.8Alan S. Armstrong


10,000




*


















*James J. Bender


2,000




*


















*Donald R. Chappel


10,000




*


















*Steven J. Malcolm(i)


25,100




*


















*Bill Z. Parker


8,036




*


















*Alice M. Peterson


3,036




*


















*Thomas C. Knudson


2,204




*


















*Phillip D. Wright


2,000




*


















*All directors and executive
    officers as a group (eight persons)


62,376




*


















*     *
    
    Less than 1%.(a)
    
    As noted in the Schedule 13D/A filed with the SEC on
    December 19, 2006, The Williams Companies, Inc. is the
    ultimate parent company of Williams Energy Services, LLC,
    Williams Energy, L.L.C., Williams Discovery Pipeline LLC and
    Williams Partners Holdings LLC and may, therefore, be deemed to
    beneficially own the units held by Williams Energy Services,
    LLC, Williams Energy, L.L.C., Williams Discovery Pipeline LLC
    and Williams Partners Holdings LLC. The Williams Companies,
    Inc.s common stock is listed on the New York Stock
    Exchange under the symbol WMB. The Williams
    Companies, Inc. files information with or furnishes information
    to, the Securities and Exchange Commission pursuant to the
    information requirements of the Securities Exchange Act of 1934
    (the Act). Williams Energy Services, LLC is the
    record owner of 158,473 common units and 887,450 subordinated
    units and, as the sole stockholder of MAPCO Inc. and the sole
    member of Williams Discovery Pipeline LLC, may, pursuant to
    Rule 13d-3,
    be deemed to beneficially own the units beneficially owned by
    MAPCO Inc. and Williams Discovery Pipeline LLC. MAPCO Inc., as
    the sole member of Williams Energy, L.L.C., may, pursuant to
    Rule 13d-3,
    be deemed to beneficially own the units held by Williams Energy,
    L.L.C.(b)
    
    Based solely on the Schedule 13G filed with the SEC on
    February 9, 2007, Prudential Financial, Inc.
    (Prudential), a Parent Holding Company as defined in
    the Securities Exchange Act of 1934, may be deemed to be the
    beneficial owner of securities beneficially owned by the
    Registered Investment Advisors listed in such Schedule 13G,
    of which Prudential is the direct or indirect parent, and may
    have direct or 115




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##### Table of Contents



indirect voting power over 2,776,949 common units which are held
    for Prudentials benefit or for the benefit of its clients
    by its separate accounts, externally managed accounts,
    registered investment companies subsidiaries
    and/or
    affiliates. The Schedule 13G notes that Prudential reported
    the combined holdings of these entities for the purpose of
    administrative convenience. The address of Prudential is 751
    Broad Street, Newark, New Jersey
    07102-3777.(c)
    
    The address of Jennison Utility Fund is 466 Lexington Avenue,
    New York, New York 10017.(d)
    
    The address of Goldman Sachs & Co. is 85 Broad Street,
    29th Floor, New York, New York 10004.(e)
    
    Also includes 64,321 common units and 185,604 Class B units
    held by GPS Income Fund LP and 20,011 common units and
    57,743 Class B units held by GPS High Yield Equities Fund.
    The address of GPS Income Fund (Cayman) LTD is 1000 Wilshire
    Blvd., Suite 900, Santa Monica, California, 90401.(f)
    
    According to the Schedule 13G filed with the SEC on
    February 13, 2007, Tortoise Capital Advisors, L.L.C.
    (TCA) acts as an investment advisor to certain
    closed-end investment companies registered under the Investment
    Company Act of 1940. TCA, by virtue of investment advisory
    agreements with these investment companies, has all investment
    and voting power over the units owned of record by these
    companies. In addition, TCA acts as an investment advisor to
    certain managed accounts. Under contractual agreements with
    individual account holders, TCA, with respect to the units held
    in the managed accounts, shares investment and voting power with
    certain account holders, and has no voting power but shares
    investment power with certain other account holders.
    Accordingly, TCA may be deemed to beneficially own 1,487,094
    common units and 721,796 Class B units. The address of TCA
    is 10801 Mastin Boulevard, Suite 222 Overland Park, Kansas
    66210.(g)
    
    Also includes 5,717 common units and 16,498 Class B units
    held by Perry Commitment Fund L.P. The address of Perry
    Partners L.P. is 767 5th Ave, 19th Floor, New York,
    New York 10153.(h)
    
    Also includes 35,734 common units and 103,113 Class B units
    held by Swank MLP Convergence Fund, LP. The address of The
    Cushing MLP Opportunity Fund I, LP is 3300 Oak Lawn Avenue,
    Suite 650 Dallas, Texas 75219.(i)
    
    Represents units beneficially owned by Mr. Malcolm that are
    held by the Steven J. Malcolm Revocable Trust.    Shares of CommonStock Owned


Shares UnderlyingDirectly or


Options ExercisableName of Beneficial Owner

Indirectly(a)


Within 60 Days(b)


Total


Percent of ClassAlan S. Armstrong


123,999



21,378



145,377



*James J. Bender


139,732



21,378



161,110



*Donald R. Chappel


229,077



32,306



261,383



*Steven J. Malcolm


794,117



158,333



952,450



*Bill Z. Parker














Alice M. Peterson














Thomas C. Knudson














Phillip D. Wright


217,385



21,378



238,763



*All directors and executive
    officers as a group (eight persons)


1,504,310



254,773



1,759,083



*     *
    
    Less than 1%.(a)
    
    Includes shares held under the terms of incentive and investment
    plans as follows: Mr. Armstrong, 14 shares in The
    Williams Companies Investment Plus Plan, 88,368 restricted stock
    units and 35,617 beneficially owned shares; Mr. Bender,
    6,000 shares owned by children, 88,368 restricted stock
    units and 116




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##### Table of Contents



45,364 beneficially owned shares; Mr. Chappel, 129,434
    restricted stock units and 99,643 beneficially owned shares;
    Mr. Malcolm, 45,297 shares in The Williams Companies
    Investment Plus Plan, 393,092 restricted stock units and 355,728
    beneficially owned shares; and Mr. Wright,
    14,964 shares in The Williams Investment Plus Plan, 88,368
    restricted stock units and 114,053 beneficially owned shares.
    Restricted stock units do not provide the holder with voting or
    investment power.  (b)
    
    The shares indicated represent stock options granted under
    Williams current or previous stock option plans, which are
    currently exercisable or which will become exercisable within
    60 days of February 20, 2007. Shares subject to
    options cannot be voted.  Securities
    Authorized for Issuance Under Equity Compensation
    Plans(1)
    Number of SecuritiesRemaining AvailableNumber of Securities


Weighted-Average


for Future Issuanceto be Issued Upon


Exercise Price of


Under EquityExercise of Outstanding


Outstanding


Compensation PlanOptions, Warrants


Options, Warrants


(Excluding Securitiesand Rights


and Rights


Reflected in Column(a))Plan category

(a)


(b)


(c)Equity compensation plans approved
    by security holders










Equity compensation plans not
    approved by security holders


2,130







691,724Total


2,130
(1)






691,724     (1)
    
    Represents unvested restricted units granted pursuant to the
    Williams Partners GP LLC Long-Term Incentive Plan as of
    December 31, 2006. The restricted units vested on
    February 18, 2007. No value is shown in column (b) of
    the table because the restricted units do not have an exercise
    price. To date, the only grants under the plan have been grants
    of restricted units.  Item 13.
    Certain
    Relationships and Related Transactions, and Director
    Independence  Transactions
    with Related Persons
  and/or
    Distributions
    and Payments to Our General Partner and Its Affiliates
   117




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##### Table of Contents



Operational
    StageDistributions of available cash to
    our general partner and its affiliates

We will generally make cash
    distributions 98% to unitholders, including our general partner
    and its affiliates as holders of an aggregate of 1,250,000
    common units and all of the subordinated units, and the
    remaining 2% to our general partner.In addition, if distributions
    exceed the minimum quarterly distribution and other higher
    target levels, our general partner will be entitled to
    increasing percentages of the distributions, up to 50% of the
    distributions above the highest target level. We refer to the
    rights to the increasing distributions as incentive
    distribution rights. For further information about
    distributions, please read Market for Registrants
    Common Equity, Related Stockholder Matters and Issuer Purchases
    of Equity Securities.Reimbursement of expenses to our
    general partner and its affiliates

Our general partner does not
    receive a management fee or other compensation for the
    management of our partnership. Our general partner and its
    affiliates are reimbursed, however, for all direct and indirect
    expenses incurred on our behalf. Our general partner determines
    the amount of these expenses.Withdrawal or removal of our
    general partner

If our general partner withdraws
    or is removed, its general partner interest and its incentive
    distribution rights will either be sold to the new general
    partner for cash or converted into common units, in each case
    for an amount equal to the fair market value of those interests.Liquidation
    StageLiquidation

Upon our liquidation, the
    partners, including our general partner, will be entitled to
    receive liquidating distributions according to their particular
    capital account balances.   Reimbursement
    of Expenses of Our General Partner
     118




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##### Table of Contents



http://www.sec.gov http://www.williams.com
    Omnibus
    Agreement
    
    reimbursement of certain general and administrative expenses;
    indemnification for certain environmental liabilities, tax
    liabilities and
    right-of-way
    defects;
    reimbursement for certain expenditures; and
    a license for the use of certain software and intellectual
    property.  General
    and Administrative Expenses
    Indemnification
    for Environmental and Related Liabilities
    
    remediation costs associated with the KDHE Consent Orders and
    certain fugitive NGLs associated with our Conway storage
    facilities;
    the costs associated with the installation of wellhead control
    equipment and well meters at our Conway storage facility;
    KDHE-related cavern compliance at our Conway storage
    facility; and
    the costs relating to the restoration of the overburden along
    our Carbonate Trend pipeline in connection with erosion caused
    by Hurricane Ivan in September 2004.   119




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##### Table of Contents




    certain defects in the easement rights or fee ownership
    interests in and to the lands on which any assets contributed to
    us in connection with our initial public offering are located
    and failure to obtain certain consents and permits necessary to
    conduct our business that arise within three years after the
    closing of our initial public offering; and
    certain income tax liabilities attributable to the operation of
    the assets contributed to us in connection with our initial
    public offering prior to the time they were contributed.    Reimbursement
    for Certain Expenditures Attributable to Discovery
    Intellectual
    Property License
    Amendments
    Competition
    Credit
    Facilities
  Working
    Capital Facility
   120




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##### Table of Contents



12-month
  Williams
    Credit Agreement
    Discovery
    Limited Liability Company Agreement
      Discovery
    Operating and Maintenance Agreements
     121




---



##### Table of Contents



Four
    Corners Purchase and Sale Agreements
      Natural
    Gas and NGL Purchasing Contracts
      Gathering,
    Processing and Treating Contracts
  year-to-year
 122




---



##### Table of Contents



year-to-year
    Natural
    Gas Purchases
        Balancing
    Services Agreement
    Summary
    of Other Transactions with Williams
    
    we distributed $15.0 million to affiliates of Williams as
    quarterly distributions on their common units, subordinated
    units, 2% general partner interest and incentive distribution
    rights;
    we purchased $14.9 million of NGLs to replenish deficit
    product positions from a subsidiary of Williams based on market
    pricing; and 123




---



##### Table of Contents




    we previously sold electricity and capacity to Williams Power
    Company at the Ignacio plant. The revenue from these sales
    during 2006 were $0.4 million.  Review,
    Approval or Ratification of Transactions with Related
    Persons
    
    approved by the conflicts committee;
    approved by the vote of a majority of the outstanding common
    units, excluding any common units owned by our general partner
    or any of its affiliates;
    on terms no less favorable to us than those generally being
    provided to or available from unrelated third parties; or
    fair and reasonable to us, taking into account the totality of
    the relationships between the parties involved, including other
    transactions that may be particularly favorable or advantageous
    to us.      Director
    Independence
   124




---



##### Table of Contents



Item 14.
    Principal
    Accountant Fees and Services    2006


2005(Thousands)Audit Fees

$
1,459


$
1,624Audit-Related Fees






Tax Fees


25



All Other Fees






$
1,484


$
1,624   Form 10-Q,
   PART IV  Item 15.
    Exhibits
    and Financial Statement Schedules  1 and 2. Williams Partners L.P. financials
  PageCovered by reports of independent
    auditors:Consolidated
    balance sheets at December 31, 2006 and 2005


75Consolidated
    statements of income for each of the three years ended
    December 31, 2006


76Consolidated
    statement of partners capital for each of the three years
    ended December 31, 2006


77Consolidated
    statements of cash flows for each of the three years ended
    December 31, 2006


78Notes to
    consolidated financial statements


79Not covered by reports of
    independent auditors:Quarterly financial data
    (unaudited)


102  125




---



##### Table of Contents



3 and(b). The exhibits listed below are furnished or
    filed as part of this annual report:
    ExhibitNumber



Description*§Exhibit 2
.1



Purchase and Sale agreement, dated
    April 6, 2006, by and among Williams Energy Services, LLC,
    Williams Field Services Group, LLC, Williams Field Services
    Company, LLC, Williams Partners GP LLC, Williams Partners L.P.
    and Williams Partners Operating LLC (attached as
    Exhibit 2.1 to Williams Partners L.P.s current report
    on
    Form 8-K
    (File
    No. 001-32599)
    filed with the SEC on April 7, 2006.*§Exhibit 2
.2



Purchase and Sale Agreement, dated
    November 16, 2006, by and among Williams Energy Services,
    LLC, Williams Field Services Group, LLC, Williams Field Services
    Company, LLC, Williams Partners GP LLC, Williams Partners L.P.
    and Williams Partners Operating LLC (attached as
    Exhibit 2.1 to Williams Partners L.P.s current report
    on
    Form 8-K
    (File
    001-32599)
    filed with the SEC on November 21, 2006).*Exhibit 3
.1



Certificate of Limited Partnership
    of Williams Partners L.P. (attached as 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).*Exhibit 3
.2



Certificate of Formation of
    Williams Partners GP LLC (attached as Exhibit 3.3 to
    Williams Partners L.P.s registration statement on
    Form S-1
    (File
    No. 333-124517)
    filed with the SEC on May 2, 2005).+Exhibit 3
.3



Amended and Restated Agreement of
    Limited Partnership of Williams Partners L.P. (including form of
    common unit certificate), as amended by Amendments Nos. 1,
    2 and 3.*Exhibit 3
.4



Amended and Restated Limited
    Liability Company Agreement of Williams Partners GP LLC
    (attached as Exhibit 3.2 to Williams Partners L.P.s
    current report on
    Form 8-K
    (File
    No. 001-32599)
    filed with the SEC on August 26, 2005).*Exhibit 4
.1



Indenture, dated June 20,
    2006, by and among Williams Partners L.P., Williams Partners
    Finance Corporation and JPMorgan Chase Bank, N.A. (attached as
    Exhibit 4.1 to Williams Partners L.P.s current report
    on
    Form 8-K
    (File
    No. 001-32599)
    filed with the SEC on June 20, 2006).*Exhibit 4
.2



Form of
    71/2% Senior
    Note due 2011 (included as Exhibit 1 to
    Rule 144A/Regulation S Appendix of Exhibit 4.1
    attached to Williams Partners L.P.s current report on
    Form 8-K
    (File
    No. 001-32599)
    filed with the SEC on June 20, 2006).*Exhibit 4
.3



Registration Rights Agreement,
    dated June 20, 2006, by and between Williams Partners L.P.,
    Williams Partners Finance Corporation, Citigroup Global Markets
    Inc. and Lehman Brothers Inc. (attached as Exhibit 4.3 to
    Williams Partners L.P.s current report on
    Form 8-K
    (File
    No. 001-32599)
    filed with the SEC on June 20, 2006).*Exhibit 4
.4



Certificate of Incorporation of
    Williams Partners Finance Corporation (attached as
    Exhibit 4.5 to Williams Partners L.P.s registration
    statement on
    Form S-3
    (File
    No. 333-137562)
    filed with the SEC on September 22, 2006).*Exhibit 4
.5



Bylaws of Williams Partners
    Finance Corporation (attached as Exhibit 4.6 to Williams
    Partners L.P.s registration statement on
    Form S-3
    (File
    No. 333-137562)
    filed with the SEC on September 22, 2006).*Exhibit 4
.6



Indenture, dated December 13,
    2006, by and among Williams Partners L.P., Williams Partners
    Finance Corporation and The Bank of New York (attached as
    Exhibit 4.1 to Williams Partners L.P.s current report
    on
    Form 8-K
    (File
    No. 001-32599)
    filed with the SEC on December 19, 2006).*Exhibit 4
.7



Form of
    71/4% Senior
    Note due 2017 (included as Exhibit 1 to
    Rule 144A/Regulation S Appendix of Exhibit 4.1
    attached to Williams Partners L.P. current report on
    Form 8-K
    (File
    No. 001-32599)
    filed with the SEC on December 19, 2006). 126




---



##### Table of Contents



ExhibitNumber



Description*Exhibit 4
.8



Registration Rights Agreement,
    dated December 13, 2006, by and between Williams Partners
    L.P., Williams Partners Finance Corporation, Citigroup Global
    Markets Inc., Lehman Brothers Inc. and Merrill Lynch, Pierce,
    Fenner & Smith Incorporated (attached as
    Exhibit 4.3 to Williams Partners L.P.s current report
    on
    Form 8-K
    (File
    No. 001-32599)
    filed with the SEC on December 19, 2006).*Exhibit 4
.9



Registration Rights Agreement,
    dated December 13, 2006, by and between Williams Partners
    L.P. and the purchasers named therein (attached as
    Exhibit 4.4 to Williams Partners L.P.s current report
    on
    Form 8-K
    (File
    No. 001-32599)
    filed with the SEC on December 19, 2006).*Exhibit 4
.10



Common Unit and Class B Unit
    Purchase Agreement, dated December 1, 2006, by and among
    Williams Partners L.P. and the purchasers names therein
    (attached as Exhibit 1.1 to Williams Partners L.P.s
    current report on
    Form 8-K
    (File
    No. 001-32599)
    filed with the SEC on December 4, 2006)*Exhibit 10
.1



Omnibus Agreement among Williams
    Partners L.P., Williams Energy Services, LLC, Williams Energy,
    L.L.C., Williams Partners Holdings LLC, Williams Discovery
    Pipeline LLC, Williams Partners GP LLC, Williams Partners
    Operating LLC and (for purposes of Articles V and VI
    thereof only) The Williams Companies, Inc. (attached as
    Exhibit 10.1 to Williams Partners L.P.s current
    report on
    Form 8-K
    (File
    No. 001-32599)
    filed with the SEC on August 26, 2005).*#Exhibit 10
.2



Williams Partners GP LLC Long-Term
    Incentive Plan (attached as Exhibit 10.2 to Williams
    Partners L.P.s current report on
    Form 8-K
    (File
    No. 001-32599)
    filed with the SEC on August 26, 2005).*#Exhibit 10
.3



Amendment to the Williams Partners
    GP LLC Long-Term Incentive Plan, dated November 28, 2006
    (attached as Exhibit 10.1 to Williams Partners L.P.s
    current report on
    Form 8-K
    (File
    No. 001-32599)
    filed with the SEC on December 4, 2006).*Exhibit 10
.4



Contribution, Conveyance and
    Assumption Agreement, dated August 23, 2005, by and among
    Williams Partners L.P., Williams Energy, L.L.C., Williams
    Partners GP LLC, Williams Partners Operating LLC, Williams
    Energy Services, LLC, Williams Discovery Pipeline LLC, Williams
    Partners Holdings LLC and Williams Natural Gas Liquids, Inc.
    (attached as Exhibit 10.3 to Williams Partners L.P.s
    current report on
    Form 8-K
    (File
    No. 001-32599)
    filed with the SEC on August 26, 2005).*Exhibit 10
.5



Amended and Restated Credit
    Agreement dated as of May 20, 2005 among The Williams
    Companies, Inc., Williams Partners L.P., Northwest Pipeline
    Corporation, Transcontinental Gas Pipe Line Corporation, and the
    Banks, Citibank, N.A. and Bank of America, N.A., and Citicorp
    USA, INC. as administrative agent (attached as Exhibit 1.1
    to The Williams Companies, Inc.s current report on
    Form 8-K
    (File
    No. 001-04174)
    filed with the SEC on May 26, 2005).*Exhibit 10
.6



Third Amended and Restated Limited
    Liability Company Agreement for Discovery Producer Services LLC
    (attached as Exhibit 10.7 to Amendment No. 1 to
    Williams Partners L.P.s registration statement on
    Form S-1
    (File
    No. 333-124517)
    filed with the SEC on June 24, 2005).*Exhibit 10
.7



Amendment No. 1 to Third
    Amended and Restated Limited Liability Company Agreement for
    Discovery Producer Services LLC (attached as Exhibit 10.6
    to Williams Partners L.P.s quarterly report on
    Form 10-Q
    (File
    No. 001-32599)
    filed with the SEC on August 8, 2006).*#Exhibit 10
.8



Director Compensation Policy dated
    November 29, 2005 (attached as Exhibit 10.1 to
    Williams Partners L.P.s current report on
    Form 8-K
    (File
    No. 001-32599)
    filed with the SEC on December 1, 2005).*#Exhibit 10
.9



Form of Grant Agreement for
    Restricted Units (attached as Exhibit 10.2 to Williams
    Partners L.P.s current report on
    Form 8-K
    (File
    No. 001-32599)
    filed with the SEC on December 1, 2005). 127




---



##### Table of Contents



ExhibitNumber



Description*Exhibit 10
.10



Credit agreement dated as of
    May 1, 2006 among Williams Partners L.P., The Williams
    Companies, Inc., Northwest Pipeline Corporation,
    Transcontinental Gas Pipeline Corporation, and Citibank, N.A.,
    as administrative agent (attached as Exhibit 10.1 to The
    Williams Companies, Incs current report on
    Form 8-K
    (File
    No. 001-04174)
    filed with the SEC on May 1, 2006).*Exhibit 10
.12



Contribution, Conveyance and
    Assumption Agreement, dated June 20, 2006, by and among
    Williams Energy Services, LLC, Williams Field Services Company,
    LLC, Williams Field Services Group, LLC, Williams Partners GP
    LLC, Williams Partners L.P. and Williams Partners Operating LLC
    (attached as Exhibit 10.1 to Williams Partners L.P.s
    current report on
    Form 8-K
    (File
    No. 001-32599)
    filed with the SEC on June 20, 2006).*Exhibit 10
.13



Contribution, Conveyance and
    Assumption Agreement, dated June 20, 2006, by and among
    Williams Field Services Company, LLC and Williams Four Corners
    LLC (attached as Exhibit 10.4 to Williams Partners
    L.P.s current report on
    Form 8-K
    (File
    No. 001-32599)
    filed with the SEC on June 20, 2006).*Exhibit 10
.14



Amended and Restated Working
    Capital Loan Agreement, dated August 7, 2006, between The
    Williams Companies, Inc. and Williams Partners L.P. (attached as
    Exhibit 10.7 to Williams Partners L.P.s quarterly
    report on
    Form 10-Q
    (File
    No. 001-32599)
    filed with the SEC on August 8, 2006).*Exhibit 10
.15



Contribution, Conveyance and
    Assumption Agreement, dated December 13, 2006, by and among
    Williams Energy Services, LLC, Williams Field Services Company,
    LLC, Williams Field Services Group, LLC, Williams Partners GP
    LLC, Williams Partners L.P. and Williams Partners Operating LLC
    (attached as Exhibit 10.1 to Williams Partners L.P.s
    current report on
    Form 8-K
    (File
    No. 001-32599)
    filed with the SEC on December 19, 2006).+Exhibit 12




Computation of Ratio of Earnings
    to Fixed Charges+Exhibit 21




List of subsidiaries of Williams
    Partners L.P.+Exhibit 23




Consent of Independent Registered
    Public Accounting Firm, Ernst & Young LLP.+Exhibit 24




Power of attorney together with
    certified resolution.+Exhibit 31
.1



Rule 13a-14(a)/15d-14(a)
    Certification of Chief Executive Officer.+Exhibit 31
.2



Rule 13a-14(a)/15d-14(a)
    Certification of Chief Financial Officer.+Exhibit 32




Section 1350 Certifications
    of Chief Executive Officer and Chief Financial Officer.+Exhibit 99
.1



Pre-approval policy with respect
    to audit and non-audit services of the audit committee of the
    board of directors of Williams Partners GP LLC.+Exhibit 99
.2



Williams Partners GP LLC Financial
    Statements.     *
    
    Each such exhibit has heretofore been filed with the SEC as part
    of the filing indicated and is incorporated herein by reference.+
    
    Filed herewith.  §
    
    Pursuant to item 601(b) (2) of
    Regulation S-K,
    the registrant agrees to furnish supplementally a copy of any
    omitted exhibit or schedule to the SEC upon request.#
    
    Management contract or compensatory plan or arrangement. 128




---



##### Table of Contents



SIGNATURES
       By:
    Williams Partners GP LLC,   By:
    /s/  William
    H. Gault  Attorney-in-fact
      Signature

Title

Date/s/  Steven
    J. Malcolm*Steven
    J. Malcolm

President, Chief Executive Officer
    and Chairman of the Board
    (Principal Executive Officer)

February 28, 2007/s/  Donald
    R. Chappel*Donald
    R. Chappel

Chief Financial Officer and
    Director (Principal Financial Officer)

February 28, 2007/s/  Ted
    T.
    Timmermans*Ted
    T. Timmermans

Chief Accounting Officer and
    Controller (Principal Accounting Officer)

February 28, 2007/s/  Alan
    S.
    Armstrong*Alan
    S. Armstrong

Chief Operating Officer and
    Director

February 28, 2007/s/  Bill
    Z. Parker*Bill
    Z. Parker

Director

February 28, 2007/s/  Alice
    M.
    Peterson*Alice
    M. Peterson

Director

February 28, 2007/s/  Thomas
    C. Knudson*Thomas
    C. Knudson

Director

February 28, 2007/s/  Phillip
    D. Wright*Phillip
    D. Wright

Director

February 28, 2007*By: /s/  William
    H. GaultWilliam
    H. Gault Attorney-in-fact



February 28, 2007  129




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##### Table of Contents



INDEX TO
    EXHIBITS
  ExhibitNumber



Description*§Exhibit 2
.1



Purchase and Sale agreement, dated
    April 6, 2006, by and among Williams Energy Services, LLC,
    Williams Field Services Group, LLC, Williams Field Services
    Company, LLC, Williams Partners GP LLC, Williams Partners L.P.
    and Williams Partners Operating LLC (attached as
    Exhibit 2.1 to Williams Partners L.P.s current report
    on
    Form 8-K
    (File
    No. 001-32599)
    filed with the SEC on April 7, 2006.*§Exhibit 2
.2



Purchase and Sale Agreement, dated
    November 16, 2006, by and among Williams Energy Services,
    LLC, Williams Field Services Group, LLC, Williams Field Services
    Company, LLC, Williams Partners GP LLC, Williams Partners L.P.
    and Williams Partners Operating LLC (attached as
    Exhibit 2.1 to Williams Partners L.P.s current report
    on
    Form 8-K
    (File
    001-32599)
    filed with the SEC on November 21, 2006).*Exhibit 3
.1



Certificate of Limited Partnership
    of Williams Partners L.P. (attached as 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).*Exhibit 3
.2



Certificate of Formation of
    Williams Partners GP LLC (attached as Exhibit 3.3 to
    Williams Partners L.P.s registration statement on
    Form S-1
    (File
    No. 333-124517)
    filed with the SEC on May 2, 2005).+Exhibit 3
.3



Amended and Restated Agreement of
    Limited Partnership of Williams Partners L.P. (including form of
    common unit certificate), as amended by Amendments Nos. 1,
    2 and 3.*Exhibit 3
.4



Amended and Restated Limited
    Liability Company Agreement of Williams Partners GP LLC
    (attached as Exhibit 3.2 to Williams Partners L.P.s
    current report on
    Form 8-K
    (File
    No. 001-32599)
    filed with the SEC on August 26, 2005).*Exhibit 4
.1



Indenture, dated June 20,
    2006, by and among Williams Partners L.P., Williams Partners
    Finance Corporation and JPMorgan Chase Bank, N.A. (attached as
    Exhibit 4.1 to Williams Partners L.P.s current report
    on
    Form 8-K
    (File
    No. 001-32599)
    filed with the SEC on June 20, 2006).*Exhibit 4
.2



Form of
    71/2% Senior
    Note due 2011 (included as Exhibit 1 to
    Rule 144A/Regulation S Appendix of Exhibit 4.1
    attached to Williams Partners L.P.s current report on
    Form 8-K
    (File
    No. 001-32599)
    filed with the SEC on June 20, 2006).*Exhibit 4
.3



Registration Rights Agreement,
    dated June 20, 2006, by and between Williams Partners L.P.,
    Williams Partners Finance Corporation, Citigroup Global Markets
    Inc. and Lehman Brothers Inc. (attached as Exhibit 4.3 to
    Williams Partners L.P.s current report on
    Form 8-K
    (File
    No. 001-32599)
    filed with the SEC on June 20, 2006).*Exhibit 4
.4



Certificate of Incorporation of
    Williams Partners Finance Corporation (attached as
    Exhibit 4.5 to Williams Partners L.P.s registration
    statement on
    Form S-3
    (File
    No. 333-137562)
    filed with the SEC on September 22, 2006).*Exhibit 4
.5



Bylaws of Williams Partners
    Finance Corporation (attached as Exhibit 4.6 to Williams
    Partners L.P.s registration statement on
    Form S-3
    (File
    No. 333-137562)
    filed with the SEC on September 22, 2006).*Exhibit 4
.6



Indenture, dated December 13,
    2006, by and among Williams Partners L.P., Williams Partners
    Finance Corporation and The Bank of New York (attached as
    Exhibit 4.1 to Williams Partners L.P.s current report
    on
    Form 8-K
    (File
    No. 001-32599)
    filed with the SEC on December 19, 2006).*Exhibit 4
.7



Form of
    71/4% Senior
    Note due 2017 (included as Exhibit 1 to
    Rule 144A/Regulation S Appendix of Exhibit 4.1
    attached to Williams Partners L.P. current report on
    Form 8-K
    (File
    No. 001-32599)
    filed with the SEC on December 19, 2006).*Exhibit 4
.8



Registration Rights Agreement,
    dated December 13, 2006, by and between Williams Partners
    L.P., Williams Partners Finance Corporation, Citigroup Global
    Markets Inc., Lehman Brothers Inc. and Merrill Lynch, Pierce,
    Fenner & Smith Incorporated (attached as
    Exhibit 4.3 to Williams Partners L.P.s current report
    on
    Form 8-K
    (File
    No. 001-32599)
    filed with the SEC on December 19, 2006). 130




---



##### Table of Contents



ExhibitNumber



Description*Exhibit 4
.9



Registration Rights Agreement,
    dated December 13, 2006, by and between Williams Partners
    L.P. and the purchasers named therein (attached as
    Exhibit 4.4 to Williams Partners L.P.s current report
    on
    Form 8-K
    (File
    No. 001-32599)
    filed with the SEC on December 19, 2006).*Exhibit 4
.10



Common Unit and Class B Unit
    Purchase Agreement, dated December 1, 2006, by and among
    Williams Partners L.P. and the purchasers names therein
    (attached as Exhibit 1.1 to Williams Partners L.P.s
    current report on
    Form 8-K
    (File
    No. 001-32599)
    filed with the SEC on December 4, 2006)*Exhibit 10
.1



Omnibus Agreement among Williams
    Partners L.P., Williams Energy Services, LLC, Williams Energy,
    L.L.C., Williams Partners Holdings LLC, Williams Discovery
    Pipeline LLC, Williams Partners GP LLC, Williams Partners
    Operating LLC and (for purposes of Articles V and VI
    thereof only) The Williams Companies, Inc. (attached as
    Exhibit 10.1 to Williams Partners L.P.s current
    report on
    Form 8-K
    (File
    No. 001-32599)
    filed with the SEC on August 26, 2005).*#Exhibit 10
.2



Williams Partners GP LLC Long-Term
    Incentive Plan (attached as Exhibit 10.2 to Williams
    Partners L.P.s current report on
    Form 8-K
    (File
    No. 001-32599)
    filed with the SEC on August 26, 2005).*#Exhibit 10
.3



Amendment to the Williams Partners
    GP LLC Long-Term Incentive Plan, dated November 28, 2006
    (attached as Exhibit 10.1 to Williams Partners L.P.s
    current report on
    Form 8-K
    (File
    No. 001-32599)
    filed with the SEC on December 4, 2006).*Exhibit 10
.4



Contribution, Conveyance and
    Assumption Agreement, dated August 23, 2005, by and among
    Williams Partners L.P., Williams Energy, L.L.C., Williams
    Partners GP LLC, Williams Partners Operating LLC, Williams
    Energy Services, LLC, Williams Discovery Pipeline LLC, Williams
    Partners Holdings LLC and Williams Natural Gas Liquids, Inc.
    (attached as Exhibit 10.3 to Williams Partners L.P.s
    current report on
    Form 8-K
    (File
    No. 001-32599)
    filed with the SEC on August 26, 2005).*Exhibit 10
.5



Amended and Restated Credit
    Agreement dated as of May 20, 2005 among The Williams
    Companies, Inc., Williams Partners L.P., Northwest Pipeline
    Corporation, Transcontinental Gas Pipe Line Corporation, and the
    Banks, Citibank, N.A. and Bank of America, N.A., and Citicorp
    USA, INC. as administrative agent (attached as Exhibit 1.1
    to The Williams Companies, Inc.s current report on
    Form 8-K
    (File
    No. 001-04174)
    filed with the SEC on May 26, 2005).*Exhibit 10
.6



Third Amended and Restated Limited
    Liability Company Agreement for Discovery Producer Services LLC
    (attached as Exhibit 10.7 to Amendment No. 1 to
    Williams Partners L.P.s registration statement on
    Form S-1
    (File
    No. 333-124517)
    filed with the SEC on June 24, 2005).*Exhibit 10
.7



Amendment No. 1 to Third
    Amended and Restated Limited Liability Company Agreement for
    Discovery Producer Services LLC (attached as Exhibit 10.6
    to Williams Partners L.P.s quarterly report on
    Form 10-Q
    (File
    No. 001-32599)
    filed with the SEC on August 8, 2006).*#Exhibit 10
.8



Director Compensation Policy dated
    November 29, 2005 (attached as Exhibit 10.1 to
    Williams Partners L.P.s current report on
    Form 8-K
    (File
    No. 001-32599)
    filed with the SEC on December 1, 2005).*#Exhibit 10
.9



Form of Grant Agreement for
    Restricted Units (attached as Exhibit 10.2 to Williams
    Partners L.P.s current report on
    Form 8-K
    (File
    No. 001-32599)
    filed with the SEC on December 1, 2005).*Exhibit 10
.10



Credit agreement dated as of
    May 1, 2006 among Williams Partners L.P., The Williams
    Companies, Inc., Northwest Pipeline Corporation,
    Transcontinental Gas Pipeline Corporation, and Citibank, N.A.,
    as administrative agent (attached as Exhibit 10.1 to The
    Williams Companies, Incs current report on
    Form 8-K
    (File
    No. 001-04174)
    filed with the SEC on May 1, 2006). 131




---



##### Table of Contents



ExhibitNumber



Description*Exhibit 10
.12



Contribution, Conveyance and
    Assumption Agreement, dated June 20, 2006, by and among
    Williams Energy Services, LLC, Williams Field Services Company,
    LLC, Williams Field Services Group, LLC, Williams Partners GP
    LLC, Williams Partners L.P. and Williams Partners Operating LLC
    (attached as Exhibit 10.1 to Williams Partners L.P.s
    current report on
    Form 8-K
    (File
    No. 001-32599)
    filed with the SEC on June 20, 2006).*Exhibit 10
.13



Contribution, Conveyance and
    Assumption Agreement, dated June 20, 2006, by and among
    Williams Field Services Company, LLC and Williams Four Corners
    LLC (attached as Exhibit 10.4 to Williams Partners
    L.P.s current report on
    Form 8-K
    (File
    No. 001-32599)
    filed with the SEC on June 20, 2006).*Exhibit 10
.14



Amended and Restated Working
    Capital Loan Agreement, dated August 7, 2006, between The
    Williams Companies, Inc. and Williams Partners L.P. (attached as
    Exhibit 10.7 to Williams Partners L.P.s quarterly
    report on
    Form 10-Q
    (File
    No. 001-32599)
    filed with the SEC on August 8, 2006).*Exhibit 10
.15



Contribution, Conveyance and
    Assumption Agreement, dated December 13, 2006, by and among
    Williams Energy Services, LLC, Williams Field Services Company,
    LLC, Williams Field Services Group, LLC, Williams Partners GP
    LLC, Williams Partners L.P. and Williams Partners Operating LLC
    (attached as Exhibit 10.1 to Williams Partners L.P.s
    current report on
    Form 8-K
    (File
    No. 001-32599)
    filed with the SEC on December 19, 2006).+Exhibit 12




Computation of Ratio of Earnings
    to Fixed Charges+Exhibit 21




List of subsidiaries of Williams
    Partners L.P.+Exhibit 23




Consent of Independent Registered
    Public Accounting Firm, Ernst & Young LLP.+Exhibit 24




Power of attorney together with
    certified resolution.+Exhibit 31
.1



Rule 13a-14(a)/15d-14(a)
    Certification of Chief Executive Officer.+Exhibit 31
.2



Rule 13a-14(a)/15d-14(a)
    Certification of Chief Financial Officer.+Exhibit 32




Section 1350 Certifications
    of Chief Executive Officer and Chief Financial Officer.+Exhibit 99
.1



Pre-approval policy with respect
    to audit and non-audit services of the audit committee of the
    board of directors of Williams Partners GP LLC.+Exhibit 99
.2



Williams Partners GP LLC Financial
    Statements.     *
    
    Each such exhibit has heretofore been filed with the SEC as part
    of the filing indicated and is incorporated herein by reference.+
    
    Filed herewith.§
    
    Pursuant to item 601(b) (2) of
    Regulation S-K,
    the registrant agrees to furnish supplementally a copy of any
    omitted exhibit or schedule to the SEC upon request.#
    
    Management contract or compensatory plan or arrangement. 132