##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 For the quarterly period ended June 30, 2008
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission file number 1-32599
 WILLIAMS PARTNERS L.P.
  DELAWARE
(State or other Jurisdiction of Incorporation or Organization)
    
    20-2485124
(I.R.S. Employer Identification No.)
 ONE WILLIAMS CENTER 
TULSA, OKLAHOMA
(Address of principal executive offices)
    
    74172-0172
(Zip Code)
 
 
  þ o
  Large accelerated filer þAccelerated filer oNon-accelerated filer o(Do not check if a smaller reporting company)Smaller reporting company o o þ




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##### 



WILLIAMS PARTNERS L.P.
INDEX
 PagePart I. Financial InformationItem 1. Financial StatementsConsolidated Statements of Income  Three and Six Months Ended June 30, 2008 and 2007
    
    
    4Consolidated Balance Sheets  June 30, 2008 and December 31, 2007
    
    
    5Consolidated Statements of Cash Flows  Six Months Ended June 30, 2008 and 2007
    
    
    6Consolidated Statement of Partners Capital from January 1, 2008 to June 30, 2008
    
    
    7Notes to Consolidated Financial Statements
    
    
    8Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    21Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    40Item 4. Controls and Procedures
    
    
    41Part II. Other InformationItem 1. Legal Proceedings
    
    
    42Item 1A. Risk Factors
    
    
    42Item 6. Exhibits
    
    
    44Rule 13a-14(a) Certification of Chief Executive OfficerRule 13a-14(a) Certification of Chief Financial OfficerSection 1350 CertificationsFinancial Statements
  FORWARD-LOOKING STATEMENTS
   
    
    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.
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
    
    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.
    
    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.
    
    Lower natural gas and oil prices could adversely affect our fractionation and storage
businesses.
    
    Our processing, fractionation and storage businesses could be affected by any decrease in
natural gas liquids (NGL) prices or a change in NGL prices relative to the price of natural
gas.
    
    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.
    
    We do not own all of the interests in Wamsutter LLC, the Conway fractionator or Discovery
Producer Services LLC (Discovery), which could adversely affect our ability to operate and
control these assets in a manner beneficial to us.
    
    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 operation results.
    
    Discovery and Wamsutter may reduce their cash distributions to us in some situations.
    
    Discoverys interstate tariff rates and terms and conditions are subject to review and
possible adjustment by federal regulators, and are subject to changes in policy by federal
regulators which could have a material adverse effect on our business and operating results.
    
    Our operations are subject to operational hazards and unforeseen interruptions for which
we may not be adequately insured.
    
    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.
    
    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.
    
    The Williams Companies Inc.s (Williams) public indentures and our credit facility
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 future financial and operating flexibility may be adversely affected by restrictions
in our debt agreements and by our leverage.
    
    We may not be able to grow or effectively manage our growth.
    
    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 debt
obligations 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.
    
    Williams controls our general partner, which has sole responsibility for conducting our
business and managing our operations. Our general partner and its affiliates have conflicts
of interests with us and limited fiduciary duties, and they may 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.
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3




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PART I  FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 
 WILLIAMS PARTNERS L.P.
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per-unit amounts)
(Unaudited)
 Three Months Ended
    
    
    Six Months EndedJune 30,
    
    

June
30,2008
    
    
    2007*
    
    
    2008
    
    
    2007*Revenues:Product sales:Affiliate
    
    $
    94,134
    
    
    $
    62,119
    
    
    $
    172,256
    
    
    $
    118,671Third-party
    
    
    9,741
    
    
    
    5,070
    
    
    
    13,962
    
    
    
    11,383Gathering and processing:Affiliate
    
    
    9,847
    
    
    
    8,743
    
    
    
    18,637
    
    
    
    18,234Third-party
    
    
    49,548
    
    
    
    51,422
    
    
    
    95,758
    
    
    
    102,525Storage
    
    
    7,102
    
    
    
    6,818
    
    
    
    14,435
    
    
    
    13,228Fractionation
    
    
    4,804
    
    
    
    2,616
    
    
    
    8,096
    
    
    
    4,533Other
    
    
    3,069
    
    
    
    2,481
    
    
    
    5,463
    
    
    
    4,510Total revenues
    
    
    178,245
    
    
    
    139,269
    
    
    
    328,607
    
    
    
    273,084Costs and expenses:Product cost and shrink replacement:Affiliate
    
    
    27,686
    
    
    
    18,520
    
    
    
    49,719
    
    
    
    40,245Third-party
    
    
    38,323
    
    
    
    26,157
    
    
    
    68,388
    
    
    
    46,627Operating and maintenance expense (excluding depreciation):Affiliate
    
    
    16,548
    
    
    
    10,484
    
    
    
    39,681
    
    
    
    24,812Third-party
    
    
    29,984
    
    
    
    23,759
    
    
    
    53,935
    
    
    
    51,944Depreciation, amortization and accretion
    
    
    11,002
    
    
    
    11,234
    
    
    
    22,228
    
    
    
    24,412General and administrative expense:Affiliate
    
    
    12,385
    
    
    
    9,644
    
    
    
    22,261
    
    
    
    19,050Third-party
    
    
    749
    
    
    
    1,189
    
    
    
    1,677
    
    
    
    1,853Taxes other than income
    
    
    2,167
    
    
    
    2,626
    
    
    
    4,672
    
    
    
    4,740Other (income) expense  net
    
    
    (2,811
    )
    
    
    198
    
    
    
    (2,478
    )
    
    
    658Total costs and expenses
    
    
    136,033
    
    
    
    103,811
    
    
    
    260,083
    
    
    
    214,341Operating income
    
    
    42,212
    
    
    
    35,458
    
    
    
    68,524
    
    
    
    58,743Equity earnings-Wamsutter
    
    
    37,480
    
    
    
    20,558
    
    
    
    58,674
    
    
    
    31,886Equity earnings-Discovery Producer Services
    
    
    8,570
    
    
    
    3,875
    
    
    
    22,191
    
    
    
    7,806Interest expense:Affiliate
    
    
    (15
    )
    
    
    (15
    )
    
    
    (40
    )
    
    
    (30
    )Third-party
    
    
    (16,668
    )
    
    
    (14,359
    )
    
    
    (34,316
    )
    
    
    (28,714
    )Interest income
    
    
    243
    
    
    
    1,225
    
    
    
    418
    
    
    
    2,188Net income
    
    $
    71,822
    
    
    $
    46,742
    
    
    $
    115,451
    
    
    $
    71,879Allocation of net income:Net income
    
    $
    71,822
    
    
    $
    46,742
    
    
    $
    115,451
    
    
    $
    71,879Allocation of net income to general partner
    
    
    23,008
    
    
    
    22,417
    
    
    
    31,919
    
    
    
    35,329Allocation of net income to limited partners
    
    $
    48,814
    
    
    $
    24,325
    
    
    $
    83,532
    
    
    $
    36,550Basic and diluted net income per limited partner unit:Common units
    
    $
    0.92
    
    
    $
    0.48
    
    
    $
    1.58
    
    
    $
    0.79Weighted average number of units outstanding:Common units
(b)
    
    
    52,774,728
    
    
    
    39,358,798
    (a)
    
    
    52,774,728
    
    
    
    39,358,798
    (a)
 
 *
    
    Recast as discussed in Note 1.(a)
    
    Includes Class B units converted to Common on May 21, 2007.(b)
    
    Includes Subordinated units converted to Common on February 19, 2008.  4




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WILLIAMS PARTNERS L.P.
CONSOLIDATED BALANCE SHEETS
 June 30,
    
    
    December 31,2008
    
    
    2007(Unaudited)(In thousands)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    57,715
    
    
    $
    36,197Accounts receivable:Trade
    
    
    22,042
    
    
    
    12,860Affiliate
    
    
    39,146
    
    
    
    20,402Other
    
    
    7,477
    
    
    
    2,543Product imbalance
    
    
    32,858
    
    
    
    20,660Prepaid expense
    
    
    4,668
    
    
    
    4,056Derivative assets  affiliate
    
    
    
    
    
    
    231Reimbursable projects
    
    
    416
    
    
    
    8,989Assets held for sale
    
    
    11,296
    
    
    
    11,519Other current assets
    
    
    3,544
    
    
    
    3,574Total current assets
    
    
    179,162
    
    
    
    121,031Investment in Wamsutter
    
    
    294,837
    
    
    
    284,650Investment in Discovery Producer Services
    
    
    204,753
    
    
    
    214,526Property, plant and equipment, net
    
    
    638,964
    
    
    
    630,770Other noncurrent assets
    
    
    29,570
    
    
    
    32,500Total assets
    
    $
    1,347,286
    
    
    $
    1,283,477LIABILITIES AND PARTNERS CAPITALCurrent liabilities:Accounts payable:Trade
    
    $
    34,906
    
    
    $
    35,947Affiliate
    
    
    34,425
    
    
    
    17,676Product imbalance
    
    
    20,142
    
    
    
    21,473Deferred revenue
    
    
    11,125
    
    
    
    4,569Derivative liabilities  affiliate
    
    
    11,978
    
    
    
    2,718Accrued interest
    
    
    19,101
    
    
    
    19,500Other accrued liabilities
    
    
    6,982
    
    
    
    8,243Total current liabilities
    
    
    138,659
    
    
    
    110,126Long-term debt
    
    
    1,000,000
    
    
    
    1,000,000Other noncurrent liabilities
    
    
    11,818
    
    
    
    11,864Commitments and contingent liabilities (Note 9)Partners capital
    
    
    196,809
    
    
    
    161,487Total liabilities and partners capital
    
    $
    1,347,286
    
    
    $
    1,283,477
  5




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WILLIAMS PARTNERS L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 Six Months EndedJune 30,2008
    
    
    2007*(In thousands)OPERATING ACTIVITIES:Net income
    
    $
    115,451
    
    
    $
    71,879Adjustments to reconcile to cash provided by operations:Depreciation, amortization and accretion
    
    
    22,228
    
    
    
    24,412Amortization of gas purchase contract  affiliate
    
    
    
    
    
    
    2,377Gain on involuntary conversion
    
    
    (3,266
    )
    
    
    Equity earnings of Wamsutter
    
    
    (58,674
    )
    
    
    (31,886
    )Equity earnings of Discovery Producer Services
    
    
    (22,191
    )
    
    
    (7,806
    )Distributions related to equity earnings of
Wamsutter
    
    
    49,307
    
    
    
    Distributions related to equity earnings of
Discovery Producer Services
    
    
    22,191
    
    
    
    5,204Cash provided (used) by changes in assets and liabilities:Accounts receivable
    
    
    (32,860
    )
    
    
    (13,907
    )Prepaid expense
    
    
    (612
    )
    
    
    (24
    )Other current assets
    
    
    5,679
    
    
    
    19Accounts payable
    
    
    15,708
    
    
    
    19,761Product imbalance
    
    
    (13,529
    )
    
    
    (5,414
    )Deferred revenue
    
    
    6,428
    
    
    
    6,770Accrued liabilities
    
    
    (1,272
    )
    
    
    23,437Derivative assets and liabilities
    
    
    377
    
    
    
    Other, including changes in non-current liabilities
    
    
    1,925
    
    
    
    619Net cash provided by operating activities
    
    
    106,890
    
    
    
    95,441INVESTING ACTIVITIES:Purchase of equity investment
    
    
    
    
    
    
    (69,061
    )Capital expenditures
    
    
    (29,031
    )
    
    
    (21,703
    )Cumulative distributions in excess of equity earnings of
Discovery Producer Services
    
    
    10,209
    
    
    
    9,265Insurance proceeds
    
    
    6,190
    
    
    
    Change in accrued liabilities-capital expenditures
    
    
    9
    
    
    
    (2,810
    )Contributions to Wamsutter
    
    
    (820
    )
    
    
    Contributions to Discovery Producer Services
    
    
    (437
    )
    
    
    Net cash used by investing activities
    
    
    (13,880
    )
    
    
    (84,309
    )FINANCING ACTIVITIES:Distributions to unitholders
    
    
    (73,204
    )
    
    
    (40,557
    )Proceeds from sale of common units
    
    
    28,992
    
    
    
    Redemption of common units from general partner
    
    
    (28,992
    )
    
    
    Excess purchase price over contributed basis of equity
investment
    
    
    
    
    
    
    (8,939
    )Contributions per omnibus agreement
    
    
    1,636
    
    
    
    1,667Other
    
    
    76
    
    
    
    Net cash used by financing activities
    
    
    (71,492
    )
    
    
    (47,829
    )Increase (decrease) in cash and cash equivalents
    
    
    21,518
    
    
    
    (36,697
    )Cash and cash equivalents at beginning of period
    
    
    36,197
    
    
    
    57,541Cash and cash equivalents at end of period
    
    $
    57,715
    
    
    $
    20,844
 
 *
    
    Recast as discussed in Note 1.  6




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WILLIAMS PARTNERS L.P.
CONSOLIDATED STATEMENT OF PARTNERS CAPITAL
(Unaudited)
 Limited Partners
    
    
    
    
    
    Accumulated Other
    
    
    TotalGeneral
    
    
    Comprehensive
    
    
    PartnersCommon
    
    
    Subordinated
    
    
    Partner
    
    
    Loss
    
    
    Capital(In thousands)Balance  January 1, 2008
    
    $
    1,473,814
    
    
    $
    109,542
    
    
    $
    (1,419,382
    )
    
    $
    (2,487
    )
    
    $
    161,487Net income
    
    
    102,636
    
    
    
    1,556
    
    
    
    11,259
    
    
    
    
    
    
    
    115,451Other comprehensive income (loss):Net unrealized losses on cash flow hedges
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (10,373
    )
    
    
    (10,373
    )Reclassification into earnings of derivative
instrument losses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,259
    
    
    
    1,259Total other comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (9,114
    )Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    106,337Cash distributions
    
    
    (57,986
    )
    
    
    (4,025
    )
    
    
    (11,193
    )
    
    
    
    
    
    
    (73,204
    )Conversion of subordinated units into common
    
    
    107,073
    
    
    
    (107,073
    )
    
    
    
    
    
    
    
    
    
    
    Contributions pursuant to the omnibus
agreement
    
    
    
    
    
    
    
    
    
    
    1,636
    
    
    
    
    
    
    
    1,636Issuance of units to public
    
    
    28,992
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    28,992Repurchase of units from Williams
    
    
    (28,992
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (28,992
    )Other
    
    
    (462
    )
    
    
    
    
    
    
    1,015
    
    
    
    
    
    
    
    553Balance  June 30, 2008
    
    $
    1,625,075
    
    
    $
    
    
    
    $
    (1,416,665
    )
    
    $
    (11,601
    )
    
    $
    196,809
  7




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WILLIAMS PARTNERS L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
 Note 1. Organization and Basis of Presentation
       8




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Note 2. Recent Accounting Standards
 
 Earnings per Share,
 9




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Note 3. Allocation of Net Income and Distributions
  Three months ended
    
    
    Six months endedJune 30,
    
    
    June 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Allocation to general partner:Net income
    
    $
    71,822
    
    
    $
    46,742
    
    
    $
    115,451
    
    
    $
    71,879Net income applicable to pre-partnership operations allocated
to general partner
    
    
    
    
    
    
    (21,849
    )
    
    
    
    
    
    
    (34,488
    )Beneficial conversion of Class B units*
    
    
    
    
    
    
    (5,308
    )
    
    
    
    
    
    
    (5,308
    )Reimbursable general and administrative costs charged
directly
to general partner
    
    
    398
    
    
    
    598
    
    
    
    796
    
    
    
    1,190Income subject to 2% allocation of general
partner interest
    
    
    72,220
    
    
    
    20,183
    
    
    
    116,247
    
    
    
    33,273General partners share of net income
    
    
    2.0
    %
    
    
    2.0
    %
    
    
    2.0
    %
    
    
    2.0
    %General partners allocated share of net income before
items directly allocable to general partner interest
    
    
    1,444
    
    
    
    403
    
    
    
    2,325
    
    
    
    665Incentive distributions paid to general
partner**
    
    
    5,499
    
    
    
    965
    
    
    
    9,730
    
    
    
    1,568Direct charges to general partner
    
    
    (398
    )
    
    
    (598
    )
    
    
    (796
    )
    
    
    (1,190
    )Pre-partnership net income allocated to general partner
    
    
    
    
    
    
    21,849
    
    
    
    
    
    
    
    34,488Net income allocated to general partner
    
    $
    6,545
    
    
    $
    22,619
    
    
    $
    11,259
    
    
    $
    35,531Net income
    
    $
    71,822
    
    
    $
    46,742
    
    
    $
    115,451
    
    
    $
    71,879Net income allocated to general partner
    
    
    6,545
    
    
    
    22,619
    
    
    
    11,259
    
    
    
    35,531Net income allocated to limited partners
    
    $
    65,277
    
    
    $
    24,123
    
    
    $
    104,192
    
    
    $
    36,348
 
 *
    
    During the second quarter of 2007, our outstanding
Class B units were converted into common units on a one-for-one basis.
Accordingly, under EITF 98-05, Accounting for Convertible Securities
with Beneficial Conversion Features or Contingently Adjustable
Conversion Ratios we made a $5.3 million non-cash allocation of
income to the Class B units representing the Class B unit beneficial conversion feature.
The $5.3 million beneficial conversion feature was computed as the product of the 6,805,492 Class B units and the difference between the fair value of a privately
placed common unit on the date of issuance ($36.59) and the issue
price of a Class B unit ($35.81). The conversion affects net income available to limited
partners and should be excluded for calculation of earnings
per limited partner unit; however, it does not affect net income, cash
 flows nor does it affect total partners equity.**
    
    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 three months
ended June 30, 2008 is $22.0 million and the assumed incentive distribution for the six
months ended June 30, 2008 is $30.4 million. There were no
assumed incentive distributions for the
three and six months ended June 30, 2007.   10




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General PartnerIncentivePer Unit
    
    Common
    
    Subordinated
    
    Class B
    
    
    
    
    
    Distribution
    
    Total CashPayment Date
    
    Distribution
    
    Units
    
    Units
    
    Units
    
    2%
    
    Rights
    
    Distribution2/14/2007
    
    $
    0.4700
    
    
    $
    12,010
    
    
    $
    3,290
    
    
    $
    3,198
    
    
    $
    390
    
    
    $
    603
    
    
    $
    19,4915/15/2007
    
    $
    0.5000
    
    
    $
    12,777
    
    
    $
    3,500
    
    
    $
    3,403
    
    
    $
    421
    
    
    $
    965
    
    
    $
    21,0668/14/2007
    
    $
    0.5250
    
    
    $
    16,989
    
    
    $
    3,675
    
    
    
    
    
    
    $
    447
    
    
    $
    1,267
    
    
    $
    22,37811/14/2007
    
    $
    0.5500
    
    
    $
    17,799
    
    
    $
    3,850
    
    
    
    
    
    
    $
    487
    
    
    $
    2,211
    
    
    $
    24,3472/14/2008
    
    $
    0.5750
    
    
    $
    26,321
    
    
    $
    4,025
    
    
    
    
    
    
    $
    706
    
    
    $
    4,231
    
    
    $
    35,2835/15/2008
    
    $
    0.6000
    
    
    $
    31,665
    
    
    
    
    
    
    
    
    
    
    $
    758
    
    
    $
    5,498
    
    
    $
    37,9218/14/2008 (a)
    
    $
    0.6250
    
    
    $
    32,984
    
    
    
    
    
    
    
    
    
    
    $
    811
    
    
    $
    6,765
    
    
    $
    40,560
 
 (a)
    
    The board of directors of our general partner declared this cash distribution on July
28, 2008 to be paid on August 14, 2008 to unitholders of record at the close of business on
August 7, 2008. Note 4. Assets Held for Sale
  11




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Note 5. Equity Investments
 Wamsutter
   June 30,
    
    
    December 31,2008
    
    
    2007(Unaudited)Current assets
    
    $
    30,104
    
    
    $
    27,114Property, plant and equipment, net
    
    
    275,820
    
    
    
    275,163Non-current assets
    
    
    157
    
    
    
    191Current liabilities
    
    
    (10,823
    )
    
    
    (13,016
    )Non-current liabilities
    
    
    (3,015
    )
    
    
    (2,740
    )Members capital
    
    $
    292,243
    
    
    $
    286,712
 Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2008
    
    
    2007
    
    
    2008
    
    
    2007(Unaudited)Revenues:Affiliate
    
    $
    49,754
    
    
    $
    21,410
    
    
    $
    99,804
    
    
    $
    43,689Third-party
    
    
    20,468
    
    
    
    19,124
    
    
    
    38,043
    
    
    
    37,018Costs and expenses:Affiliate
    
    
    17,277
    
    
    
    7,595
    
    
    
    50,491
    
    
    
    23,769Third-party
    
    
    15,465
    
    
    
    12,381
    
    
    
    28,682
    
    
    
    25,052Net income
    
    $
    37,480
    
    
    $
    20,558
    
    
    $
    58,674
    
    
    $
    31,886
 12




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##### Table of Contents



Discovery Producer Services LLC
  June 30,
    
    
    December 31,2008
    
    
    2007(Unaudited)Current assets
    
    $
    75,832
    
    
    $
    78,035Non-current restricted cash and cash equivalents
    
    
    3,658
    
    
    
    6,222Property, plant and equipment, net
    
    
    357,963
    
    
    
    368,228Current liabilities
    
    
    (32,988
    )
    
    
    (33,820
    )Non-current liabilities
    
    
    (12,704
    )
    
    
    (12,216
    )Members capital
    
    $
    391,761
    
    
    $
    406,449
 Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2008
    
    
    2007
    
    
    2008
    
    
    2007(Unaudited)Revenues:Affiliate
    
    $
    71,911
    
    
    $
    48,635
    
    
    $
    149,917
    
    
    $
    93,168Third-party
    
    
    10,972
    
    
    
    14,869
    
    
    
    20,122
    
    
    
    22,817Costs and expenses:Affiliate
    
    
    32,222
    
    
    
    24,017
    
    
    
    70,468
    
    
    
    47,172Third-party
    
    
    36,559
    
    
    
    32,414
    
    
    
    63,179
    
    
    
    56,534Interest income
    
    
    (186
    )
    
    
    (422
    )
    
    
    (450
    )
    
    
    (1,083
    )Loss on sale of operating assets
    
    
    2
    
    
    
    1,071
    
    
    
    2
    
    
    
    603Foreign exchange loss (gain)
    
    
    4
    
    
    
    (36
    )
    
    
    (143
    )
    
    
    (252
    )Net income
    
    $
    14,282
    
    
    $
    6,460
    
    
    $
    36,983
    
    
    $
    13,011
 13




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##### Table of Contents



Note 6. Long-Term Debt and Credit Facilities
 Long-Term Debt
  Interest
    
    
    June 30,
    
    
    December 31,Rate
    
    
    2008
    
    
    2007(In millions)Credit agreement term loan, adjustable rate, due 2012
    
    
    (a
    )
    
    $
    250
    
    
    $
    250Senior unsecured notes, fixed rate, due 2017
    
    
    7.25
    %
    
    
    600
    
    
    
    600Senior unsecured notes, fixed rate, due 2011
    
    
    7.50
    %
    
    
    150
    
    
    
    150Total Long-term debt
    
    
    
    
    
    $
    1,000
    
    
    $
    1,000
 
 (a)
    
    3.225% at June 30, 2008. Credit Facilities
   Note 7. Partners Capital
   Note 8. Fair Value Measurements
 Adoption of SFAS No.157
  14




---



##### Table of Contents




    
    Level 1  Quoted prices in active markets for identical assets or liabilities that we
have the ability to access. Active markets are those in which transactions for the asset
or liability occur in sufficient frequency and volume to provide pricing information on an
ongoing basis.
    
    Level 2  Inputs are other than quoted prices in active markets included in Level 1,
that are either directly or indirectly observable. These inputs are either directly
observable in the marketplace or indirectly observable through corroboration with market
data for substantially the full contractual term of the asset or liability being measured.
    
    Level 3  Includes inputs that are not observable for which there is little, if any,
market activity for the asset or liability being measured. These inputs reflect
managements best estimate of the assumptions market participants would use in determining
fair value. Our Level 3 consists of instruments valued with valuation methods that utilize
unobservable pricing inputs that are significant to the overall fair value.
     15




---



##### Table of Contents



Level 3 Fair Value Measurements Using Significant Unobservable Inputs
Three Months Ended June 30, 2008
(In thousands)
 Net DerivativeAsset (Liability)Balance as of April 1, 2008
    
    $
    (33
    )Realized and unrealized gains (losses):Included in net income
    
    
    (357
    )Included in other comprehensive income
    
    
    (12,832
    )Purchases, issuances, and settlements
    
    
    1,244Transfers in/(out) of Level 3
    
    
    Balance as of June 30, 2008
    
    $
    (11,978
    )Unrealized gains (losses) included in net
income relating to instruments still held at
June 30, 2008
    
    $
    (377
    )
 Level 3 Fair Value Measurements Using Significant Unobservable Inputs
Six Months Ended June 30, 2008
(In thousands)
 Net DerivativeAsset (Liability)Balance as of January 1, 2008
    
    $
    (2,487
    )Realized and unrealized gains (losses):Included in net income
    
    
    (357
    )Included in other comprehensive income
    
    
    (10,373
    )Purchases, issuances, and settlements
    
    
    1,239Transfers in/(out) of Level 3
    
    
    Balance as of June 30, 2008
    
    $
    (11,978
    )Unrealized gains (losses) included in net
income relating to instruments still held at
June 30, 2008
    
    $
    (377
    )
  Note 9. Commitments and Contingencies
 Environmental Matters-Four Corners.
 16




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##### Table of Contents



Environmental Matters-Conway.
  17




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##### Table of Contents



Will Price.
 Grynberg.
 GE Litigation.
 Other.
 Summary.
 18




---



##### Table of Contents



Note 10. Segment Disclosures
  Gathering &Gathering &
    
    
    Processing -
    
    
    NGLProcessing - West
    
    
    Gulf
    
    
    Services
    
    
    Total(In thousands)Three Months Ended June 30, 2008:Segment revenues
    
    $
    158,563
    
    
    $
    546
    
    
    $
    19,136
    
    
    $
    178,245Product cost and shrink replacement
    
    
    61,144
    
    
    
    
    
    
    
    4,865
    
    
    
    66,009Operating and maintenance expense
    
    
    36,677
    
    
    
    519
    
    
    
    9,336
    
    
    
    46,532Depreciation, amortization and accretion
    
    
    10,136
    
    
    
    151
    
    
    
    715
    
    
    
    11,002Direct general and administrative expense
    
    
    2,058
    
    
    
    
    
    
    
    700
    
    
    
    2,758Other, net
    
    
    (750
    )
    
    
    
    
    
    
    106
    
    
    
    (644
    )Segment operating income (loss)
    
    
    49,298
    
    
    
    (124
    )
    
    
    3,414
    
    
    
    52,588Equity earnings
    
    
    37,480
    
    
    
    8,570
    
    
    
    
    
    
    
    46,050Segment profit
    
    $
    86,778
    
    
    $
    8,446
    
    
    $
    3,414
    
    
    $
    98,638Reconciliation to the Consolidated Statements of Income:Segment operating income
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    52,588General and administrative expenses:Allocated-affiliate
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (9,846
    )Third party-direct
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (530
    )Combined operating income
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    42,212Three Months Ended June 30, 2007*:Segment revenues
    
    $
    125,047
    
    
    $
    459
    
    
    $
    13,763
    
    
    $
    139,269Product cost and shrink replacement
    
    
    42,313
    
    
    
    
    
    
    
    2,364
    
    
    
    44,677Operating and maintenance expense
    
    
    29,487
    
    
    
    361
    
    
    
    4,395
    
    
    
    34,243Depreciation, amortization and accretion
    
    
    10,203
    
    
    
    303
    
    
    
    728
    
    
    
    11,234Direct general and administrative expense
    
    
    1,797
    
    
    
    
    
    
    
    470
    
    
    
    2,267Other, net
    
    
    2,624
    
    
    
    
    
    
    
    200
    
    
    
    2,824Segment operating income (loss)
    
    
    38,623
    
    
    
    (205
    )
    
    
    5,606
    
    
    
    44,024Equity earnings
    
    
    20,558
    
    
    
    3,875
    
    
    
    
    
    
    
    24,433Segment profit
    
    $
    59,181
    
    
    $
    3,670
    
    
    $
    5,606
    
    
    $
    68,457Reconciliation to the Consolidated Statements of Income:Segment operating income
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    44,024General and administrative expenses:Allocated-affiliate
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (7,430
    )Third party-direct
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,136
    )Combined operating income
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    35,458
 
 *
    
    Recast as discussed in Note 1. 19




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##### Table of Contents



Gathering &Gathering &
    
    
    Processing -
    
    
    NGLProcessing - West
    
    
    Gulf
    
    
    Services
    
    
    Total(In thousands)Six Months Ended June 30, 2008:Segment revenues
    
    $
    290,896
    
    
    $
    1,113
    
    
    $
    36,598
    
    
    $
    328,607Product cost and shrink replacement
    
    
    108,590
    
    
    
    
    
    
    
    9,517
    
    
    
    118,107Operating and maintenance expense
    
    
    77,570
    
    
    
    1,043
    
    
    
    15,003
    
    
    
    93,616Depreciation, amortization and accretion
    
    
    20,435
    
    
    
    304
    
    
    
    1,489
    
    
    
    22,228Direct general and administrative expense
    
    
    3,988
    
    
    
    
    
    
    
    1,244
    
    
    
    5,232Other, net
    
    
    1,804
    
    
    
    
    
    
    
    390
    
    
    
    2,194Segment operating income (loss)
    
    
    78,509
    
    
    
    (234
    )
    
    
    8,955
    
    
    
    87,230Equity earnings
    
    
    58,674
    
    
    
    22,191
    
    
    
    
    
    
    
    80,865Segment profit
    
    $
    137,183
    
    
    $
    21,957
    
    
    $
    8,955
    
    
    $
    168,095Reconciliation to the Consolidated Statements of Income:Segment operating income
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    87,230General and administrative expenses:Allocated-affiliate
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (17,508
    )Third party-direct
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,198
    )Combined operating income
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    68,524Six Months Ended June 30, 2007*:Segment revenues
    
    $
    245,475
    
    
    $
    1,020
    
    
    $
    26,589
    
    
    $
    273,084Product cost and shrink replacement
    
    
    81,988
    
    
    
    
    
    
    
    4,884
    
    
    
    86,872Operating and maintenance expense
    
    
    62,584
    
    
    
    911
    
    
    
    13,261
    
    
    
    76,756Depreciation, amortization and accretion
    
    
    22,378
    
    
    
    607
    
    
    
    1,427
    
    
    
    24,412Direct general and administrative expense
    
    
    3,618
    
    
    
    
    
    
    
    968
    
    
    
    4,586Other, net
    
    
    5,008
    
    
    
    
    
    
    
    390
    
    
    
    5,398Segment operating income (loss)
    
    
    69,899
    
    
    
    (498
    )
    
    
    5,659
    
    
    
    75,060Equity earnings
    
    
    31,886
    
    
    
    7,806
    
    
    
    
    
    
    
    39,692Segment profit
    
    $
    101,785
    
    
    $
    7,308
    
    
    $
    5,659
    
    
    $
    114,752Reconciliation to the Consolidated Statements of Income:Segment operating income
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    75,060General and administrative expenses:Allocated-affiliate
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (14,654
    )Third party-direct
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,663
    )Combined operating income
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    58,743
 
 *
    
    Recast as discussed in Note 1. 20




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##### Table of Contents



Item 2. 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 included in Item 1 of Part I of this
quarterly report.
 Overview
  
    
    Gathering and Processing  West.Our West segment includes Four Corners and ownership
interests in Wamsutter, consisting of (i) 100% of the Class A limited liability company
membership interests and (ii) 50% of the initial Class C limited liability company
membership interests (together, the Wamsutter Ownership Interests). We account for the
Wamsutter Ownership Interests as an equity investment.
    
    Gathering and Processing  Gulf.Our Gulf segment includes (1) our 60% ownership
interest in Discovery and (2) the Carbonate Trend gathering pipeline off the coast of
Alabama. We account for our ownership interest in Discovery as an equity investment.
    
    NGL Services.Our NGL Services segment includes three integrated NGL storage facilities
and a 50% undivided interest in a fractionator near Conway, Kansas.
 Executive Summary
  21




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##### Table of Contents



Results of Operations
 Consolidated Overview
  Three months ended
    
    
    
    
    
    
    Six months endedJune 30,
    
    
    
    
    
    June 30,2008
    
    
    2007
    
    
    % Change from
    
    
    2008
    
    
    2007
    
    
    % Change from(Thousands)
    
    
    2007(1)
    
    
    (Thousands)
    
    
    2007(1)Revenues
    
    $
    178,245
    
    
    $
    139,269
    
    
    
    +28
    %
    
    $
    328,607
    
    
    $
    273,084
    
    
    
    +20
    %Costs and expenses:Product cost and shrink replacement
    
    
    66,009
    
    
    
    44,677
    
    
    
    -48
    %
    
    
    118,107
    
    
    
    86,872
    
    
    
    -36
    %Operating and maintenance
expense
    
    
    46,532
    
    
    
    34,243
    
    
    
    -36
    %
    
    
    93,616
    
    
    
    76,756
    
    
    
    -22
    %Depreciation, amortization and accretion
    
    
    11,002
    
    
    
    11,234
    
    
    
    +2
    %
    
    
    22,228
    
    
    
    24,412
    
    
    
    +9
    %General and administrative
expense
    
    
    13,134
    
    
    
    10,833
    
    
    
    -21
    %
    
    
    23,938
    
    
    
    20,903
    
    
    
    -15
    %Taxes other than income
    
    
    2,167
    
    
    
    2,626
    
    
    
    +17
    %
    
    
    4,672
    
    
    
    4,740
    
    
    
    +1
    %Other (income) expense  net
    
    
    (2,811
    )
    
    
    198
    
    
    NM
    
    
    (2,478
    )
    
    
    658
    
    
    NMTotal costs and expenses
    
    
    136,033
    
    
    
    103,811
    
    
    
    -31
    %
    
    
    260,083
    
    
    
    214,341
    
    
    
    -21
    %Operating income
    
    
    42,212
    
    
    
    35,458
    
    
    
    +19
    %
    
    
    68,524
    
    
    
    58,743
    
    
    
    +17
    %Equity earnings  Wamsutter
    
    
    37,480
    
    
    
    20,558
    
    
    
    +82
    %
    
    
    58,674
    
    
    
    31,886
    
    
    
    +84
    %Equity earnings  Discovery
    
    
    8,570
    
    
    
    3,875
    
    
    
    +121
    %
    
    
    22,191
    
    
    
    7,806
    
    
    
    +184
    %Interest expense
    
    
    (16,683
    )
    
    
    (14,374
    )
    
    
    -16
    %
    
    
    (34,356
    )
    
    
    (28,744
    )
    
    
    -20
    %Interest income
    
    
    243
    
    
    
    1,225
    
    
    
    -80
    %
    
    
    418
    
    
    
    2,188
    
    
    
    -81
    %Net income
    
    $
    71,822
    
    
    $
    46,742
    
    
    
    +54
    %
    
    $
    115,451
    
    
    $
    71,879
    
    
    
    +61
    %
 
 (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. Three months ended June 30, 2008 vs. three months ended June 30, 2007
    22




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Six months ended June 30, 2008 vs. six months ended June 30, 2007
    23




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##### Table of Contents



24




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##### Table of Contents



Results of operations  Gathering and Processing  West
  Three months ended
    
    
    Six months endedJune 30,
    
    
    June 30,2008
    
    
    2007
    
    
    2008
    
    
    2007(Thousands)Revenues
    
    $
    158,563
    
    
    $
    125,047
    
    
    $
    290,896
    
    
    $
    245,475Costs and expenses, including interest:Product cost and shrink replacement
    
    
    61,144
    
    
    
    42,313
    
    
    
    108,590
    
    
    
    81,988Operating and maintenance expense
    
    
    36,677
    
    
    
    29,487
    
    
    
    77,570
    
    
    
    62,584Depreciation and amortization
    
    
    10,136
    
    
    
    10,203
    
    
    
    20,435
    
    
    
    22,378General and administrative expense  direct
    
    
    2,058
    
    
    
    1,797
    
    
    
    3,988
    
    
    
    3,618Taxes other than income
    
    
    2,061
    
    
    
    2,426
    
    
    
    4,281
    
    
    
    4,350Other (income) expense   net
    
    
    (2,811
    )
    
    
    198
    
    
    
    (2,477
    )
    
    
    658Total costs and expenses, including interest
    
    
    109,265
    
    
    
    86,424
    
    
    
    212,387
    
    
    
    175,576Segment operating income
    
    
    49,298
    
    
    
    38,623
    
    
    
    78,509
    
    
    
    69,899Equity earnings  Wamsutter
    
    
    37,480
    
    
    
    20,558
    
    
    
    58,674
    
    
    
    31,886Segment profit
    
    $
    86,778
    
    
    $
    59,181
    
    
    $
    137,183
    
    
    $
    101,785
 Four Corners
 Three months ended June 30, 2008 vs. three months ended June 30, 2007
   
    
    $16.5 million related to a 41% increase in average NGL sales prices realized on the
sales of NGLs which we received under keep-whole and percent of liquids processing
contracts. This increase resulted from general increases in market prices for these
commodities between the two periods;
    
    $9.7 million higher sales of NGLs on behalf of third party producers for whom we
purchase their NGLs for a fee under their contracts. Under these arrangements, we purchase
the NGLs from the third party producers and sell them to an affiliate. This increase is
offset by higher associated product costs of $9.7 million discussed below;
    
    $3.8 million related to an 11% increase in NGL volumes due to the absence in 2008 of
plant maintenance outages that occurred in 2007; and
    
    $3.9 million higher condensate and LNG sales due primarily to higher prices.
  
    
    $9.7 million increase from third party producers who elected to have us purchase their
NGLs, which was offset by the corresponding increase in product sales discussed above;
    
    $5.7 million increase from 33% higher average natural gas prices;
    
    $2.0 million increase from 13% higher volumetric shrink requirements associated with the
increased NGL volumes received under Four Corners keep-whole processing contracts
discussed above; and
 25




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##### Table of Contents




    
    $1.4 million increase in condensate and LNG product cost resulting primarily from
increased prices.
  
    
    $3.4 million higher system losses. During the second quarter of 2008 our volumetric
loss, as a percentage of total volume received, was higher than in 2007;
    
    $1.6 million higher gathering fuel expense related to lower customer fuel
reimbursements as a result of lower throughput volumes; and
    
    $1.3 million higher plant materials and supplies expense.
   Six months ended June 30, 2008 vs. six months ended June 30, 2007
   
    
    $34.2 million related to a 51% increase in NGL sales prices realized on sales of NGLs
which we received under keep-whole and percent-of-liquids processing contracts. This
increase resulted from general increases in market prices for these commodities between the
two periods;
    
    $17.1 million higher sales of NGLs on behalf of third party producers for whom we
purchase their NGLs for a fee under their contracts. Under these arrangements, we purchase
the NGLs from the third party producers and sell them to an affiliate. This increase is
offset by higher associated product costs of $17.1 million discussed below; and
    
    $5.3 million higher condensate sales due primarily to higher prices.
    
    
    $17.1 million increase from third party producers who elected to have us purchase their
NGLs, which was offset by the corresponding increase in product sales discussed above;
 26




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##### Table of Contents




    
    $9.1 million increase from 28% higher average natural gas prices for shrink replacement;
and
    
    $1.1 million increase in condensate cost of sales.
  
    
    $8.4 million higher system losses. During 2008 our volumetric loss, as a percentage of
total volume received, was significantly higher than in 2007. While our system losses are
generally an unpredictable component of our operating costs, they can be higher during
periods of prolonged, severe weather, such as those we experienced during early 2008.
Additionally, operating inefficiencies caused by the fire at Ignacio plant unfavorably
impacted our system losses;
    
    $2.7 million higher gathering fuel expense related to lower customer fuel
reimbursements as a result of lower volumes;
    
    $1.7 million increased expense related to revaluation of product imbalances; and
    
    $1.2 million higher plant materials and supplies expense.
    Outlook
 
    
    We anticipated that growth capital investments we completed in 2007 to support
ConocoPhillips and other producer customers drilling activity, expansion opportunities
and production enhancement activities would be sufficient to offset the historical decline
and slightly increase 2008 average gathering and processing volumes above 2007 levels.
However, first-quarter 2008 volumes were significantly impacted by severe weather
conditions that inhibited both our and our customers ability to access facilities and
maintain production. We currently expect average gathering and processing volumes for the
remainder of 2008 will be slightly higher as compared with the same period in 2007 and full
year 2008 gathering and processing volumes will be slightly lower than 2007.
    
    We have realized above average net liquids margins at our gas processing plants in
recent years due primarily to increasing prices for NGLs. Based on 2008 prices for NGLs and
natural gas through June 30, combined with the hedging program described below, per-unit
margins in 2008 could meet or exceed record levels realized in 2007. The prices of NGLs and
natural gas can quickly fluctuate in response to a variety of factors that are outside of
our control and, in particular, NGL pricing is typically impacted negatively by
recessionary economic conditions. The fluctuations and impacts due to economic conditions
could change the realized margins currently expected for the remainder of 2008.
    
    We currently have financial swap contracts to hedge 5.4 million gallons of our monthly
forecasted NGL sales and fixed price natural gas purchase contracts to hedge the price of
our natural gas shrink replacement associated with these NGL sales for July through
December 2008. The 5.4 million gallons per month represents approximately 40% of our 2007
NGL sales for these same months. On average, the per-gallon margin for the remaining
forecasted sales is $0.51 per gallon. The primary purpose of these hedges is to
 27




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##### Table of Contents



mitigate risk associated with ethane sales derived from keep-whole processing arrangements.
Of the 5.4 million gallons, 4.2 million are ethane gallons. The average hedged margin on
these forecasted keep-whole NGL sales exceeds the average margin realized on keep-whole NGL
sales for 2007.
 
    
    We are currently experiencing restrictions in the volume of NGLs we can deliver to
third-party pipelines as a result of pipeline transportation allocations. These
restrictions are caused by a lack of pipeline transportation capacity and impact Four
Corners ability to recover and sell NGLs, primarily ethane, which might otherwise have
been available from its Ignacio processing plant. These restrictions will likely continue
until the Overland Pass Pipeline becomes operational, which we expect will occur in the
late third or early fourth quarter of this year.
    
    We anticipate that operating costs, excluding compression, gathering fuel and system
gains and losses, will remain stable as compared to 2007. Compression cost increases are
dependent upon the extent and amount of additional compression needed to meet the needs of
our customers and the cost at which compression can be purchased, leased and operated.
System gains and losses are an unpredictable component of our operating costs. Gathering
fuel costs are expected to be higher in 2008 due to lower customer fuel reimbursements in
2008 as the result of lower overall volumes in 2008.
    
    Our right of way agreement with the Jicarilla Apache Nation (JAN) which covered certain
gathering system assets in Rio Arriba County of northern New Mexico, expired on December
31, 2006. We currently operate our gathering assets on the JAN lands pursuant to a special
business license granted by the JAN which expires August 31, 2008, and are negotiating with
the JAN to sell them these gathering assets. Although the special business license required
the execution of a purchase and sale agreement for these gathering assets on or before May
31, 2008, we continue to operate the gathering assets under the terms of the special
business license and it is our expectation that we will continue to operate these assets
past the completion date of negotiations with the JAN. It is anticipated that if this sale
is completed, it will be completed during the fourth quarter of 2008 or first quarter of
2009. Current expectations are that the final terms of the sale will allow us to maintain
partial revenues associated with gathering and processing services for gas produced from
the JAN lands and continued operations of the gathering assets on the JAN lands through at
least 2009. We believe the expected proceeds from the sale of these assets will
substantially exceed their carrying value. Based on current estimated gathering volumes and
a range of annual average commodity prices over the past five years, we estimate that gas
produced on or isolated by the JAN lands represents approximately $20 to $30 million of
Four Corners annual gathering and processing revenue less related product costs.
 Wamsutter
  28




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##### Table of Contents



Three months ended
    
    
    Six months endedJune 30,
    
    
    June 30,2008
    
    
    2007
    
    
    2008
    
    
    2007(Thousands)Revenues
    
    $
    70,219
    
    
    $
    40,535
    
    
    $
    137,847
    
    
    $
    80,707Costs and expenses, including interest:Product cost and shrink replacement
    
    
    26,426
    
    
    
    10,584
    
    
    
    52,456
    
    
    
    24,882Operating and maintenance expense
    
    
    (2,586
    )
    
    
    2,595
    
    
    
    9,050
    
    
    
    9,642Depreciation and accretion
    
    
    5,214
    
    
    
    4,440
    
    
    
    10,441
    
    
    
    8,698General and administrative expense
    
    
    3,621
    
    
    
    2,411
    
    
    
    6,839
    
    
    
    5,231Taxes other than income
    
    
    419
    
    
    
    400
    
    
    
    903
    
    
    
    822Other income, net
    
    
    (355
    )
    
    
    (453
    )
    
    
    (516
    )
    
    
    (454
    )Total costs and expenses
    
    
    32,739
    
    
    
    19,977
    
    
    
    79,173
    
    
    
    48,821Net income
    
    $
    37,480
    
    
    $
    20,558
    
    
    $
    58,674
    
    
    $
    31,886Williams Partners interest  equity
earnings per our Consolidated
Statements of Income
    
    $
    37,480
    
    
    $
    20,558
    
    
    $
    58,674
    
    
    $
    31,886
 Three months ended June 30, 2008 vs. three months ended June 30, 2007
   
    
    $21.3 million related to a 76% increase in average NGL sales prices realized on sales
of NGLs which Wamsutter received under keep-whole processing contracts. This increase
resulted from general increases in market prices for these commodities between the two
periods.
    
    $7.4 million related to a 36% increase in NGL volumes that Wamsutter received under
keep-whole processing contracts. This increase was due primarily to higher plant
utilization in 2008, a lower percentage of total gas delivered from Wamsutters fee-based
customers and overall additional keep-whole gas processed at Colorado Interstate Gas
Companys (CIG) Rawlins natural gas processing plant.
   
    
    $12.4 million increase from 91% higher average natural gas prices. Gas prices in 2007
were impacted by very low local shrink replacement natural gas costs compared with other
natural gas markets. Natural gas prices have returned to more comparable levels in 2008 and
we do not expect a near-term return to 2007 levels.
    
    $3.8 million increase from 39% higher volumetric shrink requirements due to higher
volumes processed under Wamsutters keep-whole processing contracts.
     
    
    $12.3 million higher product sales margins resulting primarily from sharply increased
per-unit margins on higher NGL sales volumes; and
 29




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##### Table of Contents




    
    $5.2 million decrease in operating and maintenance expense due to higher system gains
and lower gathering fuel costs.
 These increases to net income were slightly offset by $1.2 million higher general and
administrative expenses.
 Six months ended June 30, 2008 vs. six months ended June 30, 2007
  
    
    $37.4 million related to a 64% increase in average NGL sales prices realized on sales
of NGLs which Wamsutter received under keep-whole processing contracts. This increase
resulted from general increases in market prices for these commodities between the two
periods.
    
    $16.8 million related to a 41% increase in NGL volumes that Wamsutter received under
keep-whole processing contracts. This increase was primarily due to a lower percentage of
total gas delivered from Wamsutters fee-based customers in the first quarter of 2008 due
to inclement weather and additional keep-whole gas processed at Colorado Interstate Gas
Companys (CIG) Rawlins natural gas processing plant in the second quarter of 2008 compared
to the second quarter of 2007.
    
    $3.1 million related to favorable adjustments to the margin sharing provisions of one
of Wamsutters significant contracts.
  
    
    $19.3 million increase from 59% higher average natural gas prices. Gas prices in 2007
were impacted by very low local shrink replacement natural gas costs compared with other
natural gas markets. Natural gas prices have returned to more comparable levels in 2008 and
we do not expect a near-term return to 2007 levels.
    
    $9.7 million increase from 42% higher volumetric shrink requirements due to higher
volumes processed under Wamsutters keep-whole processing contracts.
    Outlook
 
    
    Wamsutter anticipated that sustained drilling activity, expansion opportunities and
production enhancement activities by producers would be sufficient to offset production
declines and to increase 2008 average gathering volumes above 2007 levels. However,
first-quarter 2008 volumes were significantly impacted by severe weather conditions that
inhibited both Wamsutters and their customers abilities to access facilities and maintain
production, resulting in lower than expected volumes. Wamsutter currently expects average
gathering and processing volumes for the remainder of 2008 will be slightly higher as
compared with the same period in 2007, and full year 2008 gathering and processing volumes
will be approximately the same as in 2007.
    
    Total gas available for processing has increased in recent years; however, due to
limited plant capacity, not all of this increased volume could be processed, resulting in
gas being bypassed around the Echo Springs plant. Under normal operating conditions, this
results in lower NGL volumes being received under keep- whole processing agreements relative to the volume of NGLs being received by customers under
fee
 30




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##### Table of Contents



processing agreements. In 2008, Wamsutter anticipates that an agreement for processing gas at
Colorado Interstate Gas Companys (CIG) Rawlins natural gas processing plant will increase
the processing capacity available to Wamsutter up to 80 million cubic feet per day (MMcf/d)
or approximately 20%. The processing agreement with CIG is expected to add approximately
$4.0 million in operating costs, which will be more than offset by the incremental value of
the propane, butane and natural gasoline volumes sold by Wamsutter as a result of the
agreement.
    
    In 2007, Wamsutter realized very high net liquids margins at its Echo Springs plant.
The 2007 net liquids margins were significantly impacted by very low local shrink
replacement natural gas costs as compared with other natural gas markets. Local natural
gas prices have returned to more comparable levels in 2008. However, based on continued
high 2008 prices for NGLs through June 30, per-unit margins in 2008 could meet or exceed
record levels realized in 2007. The prices of NGLs and natural gas can quickly fluctuate in
response to a variety of factors that are outside of our control and, in particular, NGL
pricing is typically impacted negatively by recessionary economic conditions. The
fluctuations and impacts due to economic conditions could change the realized margins
currently expected for the remainder of 2008.
    
    Wamsutter is currently experiencing restrictions in the volume of NGLs it can deliver
to third-party pipelines as a result of higher pressures and pipeline transportation
allocations. These restrictions are caused by a lack of pipeline transportation capacity
and impact Wamsutters ability to recover and sell NGLs, primarily ethane, which might
otherwise have been available from its Echo Springs processing plant. These restrictions
will likely continue until the Echo Springs plant is able to deliver NGLs to Overland Pass
Pipeline, which we expect will occur in the late third or early fourth quarter of this
year. During the month of July, we estimate that the higher pressures and pipeline
allocations resulted in a loss of approximately 2.0 million ethane
gallons which Wamsutter might have otherwise extracted and sold. Wamsutter has executed
agreements for an alternative delivery option, starting in July, for
a portion of the NGL volumes lost
due to the capacity constraints. However, NGLs utilizing this alternative delivery will
likely realize lower pricing than NGLs being delivered into the traditional third-party
markets. Transition to the Overland Pass Pipeline is expected to
lower transportation costs by approximately 8.5 cents per gallon based on
July 2008 rates to Mont Belvieu, Texas.
    
    Operating costs, excluding system gains and losses and processing fees at CIGs Rawlins
plant, are expected to approximate those in 2007. System gains and losses are an
unpredictable component of Wamsutters operating costs.
 Results of Operations  Gathering and Processing  Gulf
  Three months ended
    
    
    Six months endedJune 30,
    
    
    June 30,2008
    
    
    2007
    
    
    2008
    
    
    2007(Thousands)Segment revenues
    
    $
    546
    
    
    $
    459
    
    
    $
    1,113
    
    
    $
    1,020Costs and expenses:Operating and maintenance expense
    
    
    519
    
    
    
    361
    
    
    
    1,043
    
    
    
    911Depreciation
    
    
    151
    
    
    
    303
    
    
    
    304
    
    
    
    607Total costs and expenses
    
    
    670
    
    
    
    664
    
    
    
    1,347
    
    
    
    1,518Segment operating loss
    
    
    (124
    )
    
    
    (205
    )
    
    
    (234
    )
    
    
    (498
    )Equity earnings  Discovery
    
    
    8,570
    
    
    
    3,875
    
    
    
    22,191
    
    
    
    7,806Segment profit
    
    $
    8,446
    
    
    $
    3,670
    
    
    $
    21,957
    
    
    $
    7,308
 Carbonate Trend
  31




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##### Table of Contents



Outlook
  Discovery Producer Services  100 %
 Three months ended
    
    
    Six months endedJune 30,
    
    
    June 30,2008
    
    
    2007
    
    
    2008
    
    
    2007(Thousands)Revenues
    
    $
    82,883
    
    
    $
    63,504
    
    
    $
    170,039
    
    
    $
    115,985Costs and expenses, including interest:Product cost and shrink replacement
    
    
    51,359
    
    
    
    39,889
    
    
    
    103,599
    
    
    
    73,407Operating and maintenance expense
    
    
    8,411
    
    
    
    9,099
    
    
    
    15,419
    
    
    
    15,514Depreciation and accretion
    
    
    6,802
    
    
    
    6,508
    
    
    
    13,785
    
    
    
    12,991General and administrative expense
    
    
    1,750
    
    
    
    579
    
    
    
    3,500
    
    
    
    1,123Interest income
    
    
    (186
    )
    
    
    (422
    )
    
    
    (450
    )
    
    
    (1,083
    )Other (income) expense, net
    
    
    465
    
    
    
    1,391
    
    
    
    (2,797
    )
    
    
    1,022Total costs and expenses, including interest
    
    
    68,601
    
    
    
    57,044
    
    
    
    133,056
    
    
    
    102,974Net income
    
    $
    14,282
    
    
    $
    6,460
    
    
    $
    36,983
    
    
    $
    13,011Williams Partners 60% interest  Equity
earnings per our Consolidated Statements of
Income
    
    $
    8,570
    
    
    $
    3,875
    
    
    $
    22,191
    
    
    $
    7,806
 Three months ended June 30, 2008 vs. three months ended June 30, 2007
  
    
    $14.8 million related to a 60% increase in average NGL sales prices realized on sales
of NGLs which Discovery received under certain processing contracts. This increase resulted
from general increases in market prices for these commodities between the two periods.
    
    $5.6 million higher sales of NGLs on behalf of third party producers for whom Discovery
purchases their NGLs for a fee under their contracts. This increase is offset by higher
associated product costs of $5.5 million discussed below.
  
    
    $5.5 million higher product purchase cost for the processing customers who elected to
have Discovery purchase their NGLs.
    
    $4.7 million increase from higher average natural gas prices.
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##### Table of Contents



Six months ended June 30, 2008 vs. Six months ended June 30, 2007
  
    
    $26.6 million related to a 41% increase in average NGL sales prices realized on sales
of NGLs which Discovery received under certain processing contracts. This increase resulted
from general increases in market prices for these commodities between the two periods.
    
    $18.7 million from 41% higher NGL volumes due primarily to an increase in volumes
processed under keep-whole and percent-of-liquids processing arrangements and 7% higher
plant inlet volumes.
    
    $9.2 million higher sales of NGLs on behalf of third party producers for whom Discovery
purchases their NGLs for a fee under their contracts. This increase is offset by higher
associated product costs of $9.2 million discussed below.
   
    
    $12.9 million from higher volumetric natural gas shrink requirements from increased
keep-whole and percent-of-liquids processing activity;
    
    $9.2 million higher product purchase cost for the processing customers who elected to
have Discovery purchase their NGLs;
    
    $6.0 million increase from higher average natural gas prices; and
    
    $4.2 million increase in payments to producers for the rights to process their gas.
     Outlook
  
    
    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.
    
    Discoverys Tahiti pipeline lateral was installed on the sea bed in February 2007.
Chevron is currently working on the installation of their production facilities indicating
their ongoing progress toward first
production. During June 2008, Discovery connected its pipeline to Chevrons production
facility. Chevron announced that it expects first production by the third quarter of 2009.
Discoverys revenues from the Tahiti project are dependent on receiving throughput from
Chevron. Therefore, delays Chevron experiences in bringing their production online impact the
initial timing of revenues for Discovery.
 33




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##### Table of Contents




    
    Gross processing margins have been at record high levels due to commodity prices for
NGLs and natural gas, Discoverys mix of processing contract types and its operation and
optimization activities. We expect that 2008 gross processing margins will remain favorable
to historical averages. However, the prices of NGLs and natural gas can quickly fluctuate
in response to a variety of factors that are impossible to control and, in particular, NGL
pricing is typically impacted negatively by recessionary economic conditions.
    
    Discoverys Larose gas processing plant has been operating at near capacity. We expect
that additional processing volumes from the Tennessee Gas Pipeline (TGP) system in 2008
along with new month-to-month agreements with several shippers on Texas Eastern
Transmission Company (TETCO) will replace most of the processing volumes previously coming
from the TETCO system; therefore, the Larose plant will continue to remain at near capacity
throughout 2008. In addition, Discovery has compression projects that are expected to be
completed by the end of 2008, which will increase the inlet capacity of the TGP connection.
    
    In February 2008, Discovery executed agreements with LLOG Exploration Company to
provide production handling, transportation, processing and fractionation services for its
production from the MC 705 and 707 areas.
    
    We expect Discoverys 2008 results will be favorably impacted by approximately $3.0
million per year due to its recently approved FERC rate filing pertaining to the regulated
portion of its business.
    
    Discovery has recently received an additional dedication in four blocks of new natural gas reserves with ATP Oil
and Gas Corporation (ATP) around its Gomez facility.
    
    Discovery recently contracted with ATP for three blocks in the Mirage, Morgas and
Telemark areas. The capital requirements to connect these
blocks to Discoverys facilities will be funded entirely by ATP.
    
    Discovery is currently renegotiating the management fee it is charged by Williams for
providing senior management guidance, legal, marketing, financial analysis, information
technology, accounting and other management services to Discovery. Discovery expects an
increase of approximately $1.0 million per quarter and the
increase has been accrued as
part of Discoverys June year-to-date results.
 Results of Operations  NGL Services
  Three months ended
    
    
    Six months endedJune 30,
    
    
    June 30,2008
    
    
    2007
    
    
    2008
    
    
    2007(Thousands)Segment revenues
    
    $
    19,136
    
    
    $
    13,763
    
    
    $
    36,598
    
    
    $
    26,589Costs and expenses:Product cost
    
    
    4,865
    
    
    
    2,364
    
    
    
    9,517
    
    
    
    4,884Operating and maintenance expense
    
    
    9,336
    
    
    
    4,395
    
    
    
    15,003
    
    
    
    13,261Depreciation and accretion
    
    
    715
    
    
    
    728
    
    
    
    1,489
    
    
    
    1,427General and administrative expense  direct
    
    
    700
    
    
    
    470
    
    
    
    1,244
    
    
    
    968Other expense, net
    
    
    106
    
    
    
    200
    
    
    
    390
    
    
    
    390Total costs and expenses
    
    
    15,722
    
    
    
    8,157
    
    
    
    27,643
    
    
    
    20,930Segment profit
    
    $
    3,414
    
    
    $
    5,606
    
    
    $
    8,955
    
    
    $
    5,659
 Three months ended June 30, 2008 vs. three months ended June 30, 2007
  34




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##### Table of Contents




    
    Product sales increased $2.7 million due to higher sales volumes combined with a 57%
increase in average propane rates. This product sales increase was substantially offset by
the related increase in product cost discussed below.
    
    Fractionation revenues increased $2.2 million due primarily to 74% higher average
fractionation rate and a slight increase in fractionation volumes. The higher average rate
is due primarily to the expiration of a fractionation contract with a cap on the per-unit
fee, which limited our ability to pass through increases in fractionation fuel expense to
this customer.
    Six months ended June 30, 2008 vs. six months ended June 30, 2007
  
    
    Product sales increased $4.6 million due to higher sales volumes and a 35% increase in
average propane prices. This increase was offset by the related increase in product cost
discussed below.
    
    Fractionation revenues increased $3.6 million due primarily to a 68% higher average
fractionation rate and slight increase in fractionation volumes. The higher average rate
is due primarily to the expiration of a fractionation contract with a cap on the per-unit
fee, which limited our ability to pass through increases in fractionation fuel expense to
this customer.
    
    Storage revenues increased $1.2 million due primarily to higher average storage revenues
from additional storage leases.
   
    
    $1.5 million higher storage product losses on compared to 2007; and
    
    $1.5 million higher fractionation fuel costs related to increased natural gas prices and
slightly higher fractionation volumes.
   Outlook
 
    
    We expect 2008 storage revenues will be consistent with 2007 due to continued strong
demand for NGL storage and specialty storage services.
    
    We continue to perform 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 2008 to ensure that we meet the regulatory compliance requirements.
 35




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##### Table of Contents



Financial Condition and Liquidity
  
    
    cash and cash equivalents on hand;
    
    cash generated from operations, including cash distributions from Wamsutter and
Discovery;
    
    insurance recoveries related to the fire at the Ignacio gas processing plant;
    
    proceeds from the sale of gathering assets to the Jicarilla Apache Nation;
    
    capital contributions from Williams pursuant to the omnibus agreement; and
    
    credit facilities, as needed.
  
    
    maintenance and expansion capital expenditures for our Four Corners and Conway assets;
    
    contributions we must make to Wamsutter LLC to fund certain of its capital
expenditures;
    
    completion of the Four Corners repair expenditures related to the fire at Ignacio gas
processing plant, which generally should be reimbursed by insurance approximately as they
are incurred;
    
    interest on our long-term debt; and
    
    quarterly distributions to our unitholders and general
partner.
 Wamsutter Distributions
  Total Distribution toDate of Distribution
    
    Members
    
    Our Share3/28/08
    
    $25,000
    
    $21,4386/30/08
    
    $30,500
    
    $24,325
  36




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##### Table of Contents



Discovery
  Total Distribution toDate of Distribution
    
    Members
    
    Our 60% Share1/30/08
    
    $28,000
    
    $16,8004/30/08
    
    26,000
    
    15,6007/30/08
    
    22,000
    
    13,200
 Insurance Recoveries
  Sale of Gathering Assets to the Jicarilla Apache Nation
  Capital Contributions from Williams
  
    
    Indemnification of environmental and related expenditures, less any related insurance
recoveries, for a period of three years ending August 2008 (for certain of those
expenditures) up to a cap of $14.0 million. As of June 30, 2008, we have received $6.2
million from Williams for indemnified items since inception of the agreement in August
2005. Thus, approximately $7.8 million remains available for reimbursement of our costs not
subject to the three-year limitation.
    
    Additionally, under the omnibus agreement, we will receive (1) an annual credit for
general and administrative expenses of $1.6 million in 2008 and $0.8 million in 2009 and
(2) up to $3.4 million to fund our initial 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 June 30, 2008 we have received $1.6 million from
Williams for the Tahiti-related indemnification since inception.
  Credit Facilities
  37




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##### Table of Contents



Capital Expenditures
  
    
    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.
  Maintenance
    
    Expansion
    
    TotalThrough
    
    
    
    
    
    Through
    
    
    
    
    
    ThroughCompany
    
    Total Year Estimate
    
    June 30, 2008
    
    Total Year Estimate
    
    June 30, 2008
    
    Total Year Estimate
    
    June 30, 2008Four Corners
    
    $
    20.9
    
    
    $
    9.8
    
    
    $
    14.8
    
    
    $
    2.6
    
    
    $
    35.7
    
    
    $
    12.4Conway
    
    
    4.3
    
    
    
    1.2
    
    
    
    9.5
    
    
    
    3.4
    
    
    
    13.8
    
    
    
    4.6Wamsutter  (our share)
    
    
    20.0
    
    
    
    9.5
    
    
    
    8.3
    
    
    
    .9
    
    
    
    28.3
    
    
    
    10.4Discovery  (our share)
    
    
    4.1
    
    
    
    0.3
    
    
    
    9.0
    
    
    
    1.3
    
    
    
    13.1
    
    
    
    1.6
     38




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##### Table of Contents



Cash Distributions to Unitholders
  Results of Operations  Cash Flows
 Six months endedJune 30,Williams Partners L.P.
    
    2008
    
    2007(Thousands)Net cash provided by operating activities
    
    $
    106,890
    
    
    $
    95,441Net cash used by investing activities
    
    
    (13,880
    )
    
    
    (84,309
    )Net cash used by financing activities
    
    
    (71,492
    )
    
    
    (47,829
    )
  
    
    $27.3 million decrease in cash provided by working capital excluding accrued interest.
Cash provided by working capital decreased due primarily to changes in accounts receivable,
product imbalance and accounts payable; and
    
    $27.8 million higher cash interest payments for the interest on our $600.0 million
senior unsecured notes issued in December 2006 to finance a portion of our acquisition of
Four Corners and on our $250.0 million term loan issued in December 2007 to finance a
portion of our acquisition of Wamsutter.
   Six months endedJune 30,Wamsutter 100 percent
    
    2008
    
    2007(Thousands)Net cash provided by operating activities
    
    $
    64,935
    
    
    $
    37,136Net cash used by investing activities
    
    
    (11,792
    )
    
    
    (19,806
    )Net cash used by financing activities
    
    
    (53,143
    )
    
    
    (17,330
    )
 39




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##### Table of Contents



Six months endedJune 30,Discovery 100 %
    
    2008
    
    2007(Thousands)Net cash provided by operating activities
    
    $
    55,377
    
    
    $
    26,139Net cash used by investing activities
    
    
    (4,505
    )
    
    
    (5,137
    )Net cash used by financing activities
    
    
    (51,672
    )
    
    
    (32,252
    )
   Fair Value Measurements
   
 Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
  40




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##### Table of Contents



Commodity Price Risk
     Interest Rate Risk
  
 Item 4.  Controls and Procedures
 Evaluation of Disclosure Controls and Procedures
   41




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##### Table of Contents



Changes in Internal Control Over Financial Reporting
  
 PART II  OTHER INFORMATION
 
 Item 1.
    
    Legal Proceedings
 
  Item 1A.
    
    Risk Factors
  Our future financial and operating flexibility may be adversely affected by restrictions in our
debt agreements 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.
   42




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##### Table of Contents



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;
    
    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.
   43




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##### Table of Contents



Item 6.
    
    Exhibits
  ExhibitNumber
    
    DescriptionExhibit 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
    
    Williams Partners GP LLC Financial Statements.
 44




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##### Table of Contents



SIGNATURES
  WILLIAMS PARTNERS L.P.
(Registrant)By:
    Williams Partners GP LLC, its general partner /s/ Ted T. TimmermansTed. T. TimmermansController (Duly Authorized Officer and Principal Accounting Officer)  45




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##### Table of Contents



EXHIBIT INDEX
 ExhibitNumber
    
    DescriptionExhibit 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
    
    Williams Partners GP LLC Financial Statements.
 46