##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 Form 10-K
 (Mark One)
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
 For the fiscal year ended December 31, 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 1-33825
 El Paso Pipeline Partners, L.P.
  Delaware
    
    26-0789784(State or Other Jurisdiction of
    
    (I.R.S. EmployerIncorporation or Organization)
    
    Identification No.)El Paso Building1001 Louisiana StreetHouston, Texas
    
    77002(Address of Principal Executive Offices)
    
    (Zip Code)
 Telephone Number: (713) 420-2600
Internet Website: www.eppipelinepartners.com
 Securities registered pursuant to Section 12(b) of the Act:
 Name of Each ExchangeTitle of Each Class
    
    on which RegisteredCommon Units Representing Limited Partnership Interests
    
    New York Stock Exchange
 Securities registered pursuant to Section 12(g) of the Act: None
 o þ
 o þ
 þ o
 þ
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
    
    Smaller reporting company o(Do not check if a smaller reporting company)
 o þ
   Documents Incorporated by Reference: None.




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##### 



EL PASO PIPELINE PARTNERS, L.P.
TABLE OF CONTENTS
 Caption
    
    PagePART IItem 1. Business
    
    
    1Item 1A. Risk Factors
    
    
    7Item 1B. Unresolved Staff Comments
    
    
    25Item 2. Properties
    
    
    25Item 3. Legal Proceedings
    
    
    25Item 4. Submission of Matters to a Vote of Security Holders
    
    
    25PART IIItem 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities
    
    
    26Item 6. Selected Financial Data
    
    
    28Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    29Item 7A. Quantitative and Qualitative Disclosures About Market Risk
    
    
    41Item 8. Financial Statements and Supplementary Data
    
    
    42Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
    
    
    63Item 9A. Controls and Procedures
    
    
    63Item 9B. Other Information
    
    
    63PART IIIItem 10. Directors, Executive Officers and Corporate Governance
    
    
    64Item 11. Executive Compensation
    
    
    69Item 12. Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
    
    
    72Item 13. Certain Relationships and Related Transactions, and Director Independence
    
    
    74Item 14. Principal Accountant Fees and Services
    
    
    81PART IVItem 15. Exhibits and Financial Statement Schedules
    
    
    82Signatures
    
    
    124EX-12EX-21EX-23.AEX-23.BEX-31.AEX-31.BEX-32.AEX-32.BEX-99
   /d
    
    = per day
    
    LNG
    
    = liquefied natural gasBBtu
    
    = billion British thermal units
    
    MDth
    
    = thousand dekathermBcf
    
    = billion cubic feet
    
    MMcf
    
    = million cubic feetDth
    
    = dekatherm
    
    MMcf/d
    
    = million cubic feet per day




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##### Table of Contents



ITEM 1. BUSINESS
 Overview and Strategy
    
    
    Providing outstanding customer service;
    
    Focusing on increasing utilization, efficiency and cost control in our operations;
    
    Pursuing economically attractive organic and greenfield expansion opportunities;
    
    Pursuing strategic asset acquisitions from third parties and El Paso to grow our
business; and
    
    Maintaining the integrity and ensuring the safety of our pipeline systems and other
assets.
 1




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##### Table of Contents



Our Assets
  As of December 31, 2008Transmission
    
    Ownership
    
    Miles of
    
    Design
    
    Storage
    
    Average Throughput(1)System
    
    Interest
    
    Pipeline
    
    Capacity
    
    Capacity
    
    2008
    
    2007
    
    2006(Percent)
    
    
    
    
    
    (MMcf/d)
    
    (Bcf)
    
    
    
    
    
    (BBtu/d)WIC
    
    
    100
    
    
    
    800
    
    
    
    3,105
    
    
    
    
    
    
    
    2,543
    
    
    
    2,071
    
    
    
    1,914CIG (2)
    
    
    40
    
    
    
    4,100
    
    
    
    3,920
    
    
    
    29
    
    
    
    2,225
    
    
    
    2,339
    
    
    
    2,008SNG (2)(3)
    
    
    25
    
    
    
    7,600
    
    
    
    3,700
    
    
    
    60
    
    
    
    2,339
    
    
    
    2,345
    
    
    
    2,167
 
 (1)
    
    The WIC throughput includes 181 BBtu/d, 239 BBtu/d and 204 BBtu/d transported
by WIC on behalf of CIG for the years ended December 31, 2008, 2007, and 2006.(2)
    
    Volumes reflected are 100 percent of the volumes transported on the CIG system
and the SNG system, respectively.(3)
    
    SNGs storage capacity includes the storage capacity associated with their 50
percent ownership interest in Bear Creek Storage Company, a joint venture with Tennessee Gas
Pipeline Company (TGP), our affiliate. WIC.
 CIG
(40 percent interest).
 SNG (25 percent interest).
  Markets and Competition
 WIC.
 2




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CIG.
  SNG.
    3




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WICCustomer Information
    
    Contract InformationApproximately 50 firm and interruptible customers.
    
    Approximately 70 firm transportation contracts. Weighted average remaining contract term of approximately eight years.Major Customers:Williams Gas Marketing, Inc.(84 BBtu/d)
    
    Expires in 2010.(822 BBtu/d)
    
    Expire in 2013-2021.Anadarko Petroleum Corporation(8 BBtu/d)
    
    Expires in 2009.(28 BBtu/d)
    
    Expires in 2010.(100 BBtu/d)
    
    Expires in 2011.(1,014 BBtu/d)
    
    Expire in 2013-2023.
 CIGCustomer Information
    
    Contract InformationApproximately 120 firm and interruptible customers.
    
    Approximately 170 firm transportation contracts. Weighted average remaining contract term of approximately eight years.Major Customers:Public Service Company of Colorado(5 BBtu/d)
    
    Expires in 2009.(1,764 BBtu/d)
    
    Expire in 2012-2029.Williams Gas Marketing, Inc.(37 BBtu/d)
    
    Expires in 2009.(113 BBtu/d)
    
    Expires in 2010.(175 BBtu/d)
    
    Expires in 2011.(175 BBtu/d)
    
    Expires in 2013.Anadarko Petroleum Corporation(11 BBtu/d)
    
    Expires in 2009.(80 BBtu/d)
    
    Expires in 2010.(24 BBtu/d)
    
    Expires in 2011.(164 BBtu/d)
    
    Expire in 2012-2015.
 4




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##### Table of Contents



SNGCustomer Information
    
    Contract InformationApproximately 270 firm and interruptible customers.
    
    Approximately 190 firm transportation contracts. Weighted average  remaining contract term of approximately five years.Major Customers:Atlanta Gas Light Company(1)(30 BBtu/d)
    
    Expires in 2009.(152 BBtu/d)
    
    Expires in 2010.(282 BBtu/d)
    
    Expires in 2011.(545 BBtu/d)
    
    Expire in 2012-2015.Southern Company Services(28 BBtu/d)
    
    Expires in 2010.(390 BBtu/d)
    
    Expire in 2017-2018.Alabama Gas Corporation(39 BBtu/d)
    
    Expires in 2010.(323 BBtu/d)
    
    Expires in 2011.(31 BBtu/d)
    
    Expires in 2013.SCANA Corporation(8 BBtu/d)
    
    Expires in 2009.(161 BBtu/d)
    
    Expires in 2010.(146 BBtu/d)
    
    Expire in 2017-2019.
 
 (1)
    
    Atlanta Gas Light Company is currently releasing a significant portion of its firm
capacity to a subsidiary of SCANA Corporation under terms allowed by SNGs tariff.  5




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Regulatory
Environment
  
    
    rates and charges for natural gas transportation and storage;
    
    certification and construction of new facilities;
    
    extension or abandonment of services and facilities;
    
    maintenance of accounts and records;
    
    relationships between pipelines and certain affiliates;
    
    terms and conditions of service;
    
    depreciation and amortization policies;
    
    acquisition and disposition of facilities; and
    
    initiation and discontinuation of services.
 Our Relationship with El Paso Corporation
   Environmental
  Employees
  Available Information
  6




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ITEM 1A. RISK FACTORS
 CAUTIONARY STATEMENT REGARDING FORWARD LOOKING STATEMENTS
     Risks Inherent in Our Business
 Our success depends on factors beyond our control.
  
    
    service area competition;
    
    price competition;
    
    expiration or turn back of significant contracts;
    
    changes in regulation and actions of regulatory bodies;
    
    weather conditions that impact natural gas throughput and storage levels;
    
    weather fluctuations or warming and cooling trends that may impact demand in the
markets in which we do business, including trends potentially attributable to climate
change;
    
    drilling activity and decreased availability of conventional gas supply sources and the
availability and timing of other natural gas sources such as LNG;
    
    continued development of additional sources of gas supply that can be accessed;
    
    decreased natural gas demand due to various factors, including economic recession (as
further discussed below) and increases in
prices;
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
    
    legislative, regulatory or judicial actions, such as mandatory greenhouse gas (GHG)
regulations and/or legislation that could result in (i) changes in the demand for natural
gas and oil, (ii) changes in the availability of or demand for alternative energy sources
such as hydroelectric and nuclear, power wind and solar energy or (iii)
changes in the demand for lower carbon intensive energy sources;
    
    availability and cost to fund ongoing maintenance and growth projects, especially in
periods of prolonged economic decline;
    
    opposition to energy infrastructure development, especially in environmentally
sensitive areas;
    
    adverse general economic conditions including prolonged recessionary periods that might
negatively impact natural gas demand and the capital markets; and
    
    unfavorable movements in natural gas prices in supply and demand areas.
 We may not have sufficient cash from operations following the establishment of cash reserves and
payment of fees and expenses, including cost reimbursements to our general partner, to enable us to
make cash distributions to holders of our common units and subordinated units at our current
quarterly distribution.
  
    
    the rates we charge and the volumes under contract for our transportation and storage
services;
    
    the quantities of natural gas available for transport and the demand for natural gas;
    
    the price of natural gas;
    
    legislative or regulatory action affecting demand for and supply of natural gas, and
the rates we are allowed to charge in relation to our operating costs;
    
    the level of our operating and maintenance and general and administrative costs; and
    
    the creditworthiness of our shippers.
  
    
    the level of capital expenditures we make;
    
    our debt service requirements, retirement of debt and other liabilities;
    
    fluctuations in working capital needs;
    
    our ability to borrow funds and access capital markets;
    
    the amount of cash distributed to us by the entities in which we own a minority
interest;
    
    restrictions on distributions contained in debt agreements; and
    
    the amount of cash reserves established by our general partner, which may include
reserves for tariff rates that are subject to refund.
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We own minority interests in two of our three primary assets, with the remaining
interest in each of those assets owned by El Paso or its other subsidiaries. As a result, we will
be unable to control the amount of cash we will receive from those operations and we could be
required to contribute significant cash to fund our share of their operations, including capital
expenditures. If we fail to make these contributions, we will be subject to specified penalties.
  
    
    decisions with respect to incurrence of expenses and distributions to us;
    
    establishing reserves for working capital, maintenance capital expenditures,
environmental matters and legal and rate proceedings;
    
    incurring additional indebtedness and principal and interest payments; and
    
    requiring us to make additional capital contributions to CIG and SNG to fund working
capital, maintenance capital and expansion capital expenditures which could be material. In
the event we elect not to make a required capital contribution or are unable to do so, our
partnership interest could be diluted or it could affect the receipt of distributions until
we have forgone distributions equal to our portion of the capital call plus a specified
premium.
 Our natural gas transportation and storage systems are subject to regulation by agencies, including
the FERC, which could have an adverse impact on our ability to establish transportation and storage
rates that would allow recovery of the full cost of operating these pipeline systems and storage
facilities, including a reasonable return, and our ability to make distributions.
  
    
    rates, operating terms and conditions of service, with SNG expected to file a new rate
case in 2009 and CIG required to file a new rate case to be effective no later than October
2011;
    
    the types of services we may offer to our customers;
    
    the contracts for service entered into with our customers;
    
    construction and abandonment of new facilities;
    
    the integrity and safety of our pipeline systems and related operations;
    
    acquisition, extension or abandonment of services or facilities;
    
    accounts and records; and
    
    relationships with affiliated companies involved in certain aspects of the natural gas
business.
  9




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The application of certain FERC policy statements could affect the rate of return on our equity we
are allowed to recover through rates and the amount of any allowance (if any) our systems can
include for income taxes in establishing their rates for service, which would in turn impact our
revenues and/or equity earnings.
    Certain of our systems transportation services are subject to long-term, fixed-price negotiated
rate contracts that are not subject to adjustment, even if our cost to perform such services
exceeds the revenues received from such contracts, and, as a result, our costs could exceed our
revenues received under such contracts.
  10




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Increased competition from alternative natural gas transportation and storage options and
alternative fuel sources could have a significant financial impact on us.
   Competition in more actively priced markets from pipelines that may be able to provide our shippers
with capacity at a lower price could cause us to reduce our rates or otherwise reduce our revenues.
    Any significant decrease in supplies of natural gas in our areas of operation could adversely
affect our business and operating results and reduce our cash available for distribution to
unitholders.
  11




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A substantial
portion of the  revenues of our pipeline businesses are generated
from transportation contracts that must be renegotiated
periodically.
  
    
    competition by other pipelines, including the change in rates or upstream supply of
existing pipeline competitors, as well as the proposed construction by other companies of
additional pipeline capacity or LNG terminals in markets served by our interstate
pipelines;
    
    changes in state regulation of local distribution companies, which may cause them to
negotiate short-term contracts or turn back their capacity when their contracts expire;
    
    reduced demand and market conditions in the areas we serve;
    
    the availability of alternative energy sources or natural gas supply points; and
    
    legislative and regulatory actions.
  Fluctuations in energy commodity prices could adversely affect our business.
     12




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
    
    regional, domestic and international supply and demand;
    
    availability and adequacy of transportation facilities;
    
    energy legislation and regulation;
    
    federal and state taxes, if any, on the transportation and storage of natural
gas;
    
    abundance of supplies of alternative energy sources; and
    
    political unrest among countries producing oil and LNG.
 Adverse general domestic economic conditions could negatively affect our operating results,
financial condition, liquidity or our ability to make cash distributions.
  We are exposed to the credit risk of our customers and our credit risk management may not be
adequate to protect against such risk.
  We are exposed to the credit and performance risk of our key contractors and suppliers.
  13




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Neither CIG nor SNG is prohibited from incurring indebtedness, which may affect our ability to make
distributions.
  Restrictions in our credit facility and note purchase agreement could limit our ability to make
distributions to our unitholders. The conditions of the U.S. and international capital markets may
adversely affect our ability to draw on our current credit facility.
     
    
    adversely affect our ability to obtain additional financing for future operations
or capital needs;
    
    limit our ability to pursue acquisitions and other business opportunities; or
    
    make our results of operations more susceptible to adverse economic or operating
conditions.
  Increases in interest rates and general volatility in the financial markets and economy could
adversely impact our unit price, our ability to make distributions and our ability to issue
additional equity to make acquisitions, incur debt or for other purposes.
  14




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The credit and risk profile of our general partner and its owner, El Paso, could adversely affect
our credit ratings and risk profile, which could increase our borrowing costs or hinder our ability
to raise capital.
   If our systems do not successfully complete expansion projects or make and integrate acquisitions
that are accretive, our future growth may be limited.
  
    
    unable to identify attractive expansion projects or acquisition candidates or we are
outbid by competitors;
    
    El Paso elects not to sell or contribute additional interests in its pipeline systems
that it owns to us or to offer attractive expansion projects or acquisition candidates to
us;
    
    unable to obtain necessary rights of way or government approvals;
    
    unable to realize anticipated costs savings and successful integration of the
businesses we build or acquire;
    
    unable to raise financing for expansion projects or acquisitions on economically
acceptable terms, especially in periods of prolonged economic decline;
    
    mistaken assumptions about volumes, revenues and costs, including synergies and
potential growth;
    
    unable to secure adequate transportation, storage or throughput commitments to support
the expansion or acquisition of new facilities;
    
    the assumption of unknown liabilities when making acquisitions for which we are not
indemnified or for which our indemnity is inadequate;
    
    the diversion of managements and employees attention to other business concerns;
    
    unforeseen difficulties operating in new product areas or new geographic areas
including opposition to energy infrastructure development, especially in environmentally
sensitive areas;
    
    there is a lack of available of skilled labor, equipment, and materials to complete
expansion projects;
    
    potential changes in federal, state and local statutes and regulations, including
environmental requirements, that prevent a project from proceeding or increase the
anticipated cost of the project;
 15




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
    
    our ability to construct expansion projects within anticipated costs, including the
risk that we may incur cost overruns resulting from inflation or increased costs of
equipment, materials, labor, a lack of contractor productivity or other factors beyond our
control, that may be material; and
    
    the lack of future growth in natural gas supply or demand.
  The amount of cash we have available for distribution depends primarily on our cash flow and not
solely on profitability, which may prevent us from making cash distributions during periods when we
record net income.
  We do not own all of the land on which our pipelines and facilities are located, which could
disrupt our operations.
  Our operations are subject to operational hazards and uninsured risks.
  16




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Environmental compliance and remediation costs and the costs of environmental liabilities could
exceed our estimates.
     17




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Risks Inherent in Our Structure and Relationship with El Paso
 El Paso controls our general partner, which has sole responsibility for conducting our business and
managing our operations. Our general partner and its affiliates, including El Paso, have conflicts
of interest with us and limited fiduciary duties, and they may favor their own interests to the
detriment of our unitholders.
  Affiliates of our general partner, including El Paso and its other subsidiaries, are not limited in
their ability to compete with us and are not obligated to offer us the opportunity to pursue
additional assets or businesses, which could limit our commercial activities or our ability to
acquire additional assets or businesses.
  Holders of our common units have limited voting rights and are not entitled to elect our general
partner or its directors, which could reduce the price at which the common units will trade.
  18




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Cost reimbursements to our general partner and its affiliates for services provided, which will be
determined by our general partner, will be substantial and will reduce our cash available for
distribution.
  Our partnership agreement limits our general partners fiduciary duties to holders of our common
units and subordinated units and restricts the remedies available to holders of our common units
and subordinated units for actions taken by our general partner that might otherwise constitute
breaches of fiduciary duty.
  Limited unitholders cannot remove our general partner without its consent.
 2 3
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Our general partner may elect to cause us to issue Class B common units to it in connection with a
resetting of the target distribution levels related to our general partners incentive distribution
rights without the approval of the conflicts committee of our general partner or holders of our
common units and subordinated units. This may result in lower distributions to holders of our
common units in certain situations.
   The control of our general partner may be transferred to a third party without unitholder consent.
  If we are deemed an investment company under the Investment Company Act of 1940, it would
adversely affect the price of our common units and could have a material adverse effect on our
business.
  20




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We may issue additional units without approval which would dilute existing ownership interests.
  
    
    each unitholders proportionate ownership interest in us will decrease;
    
    the amount of cash available for distribution 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 ratio of taxable income to distributions may increase;
    
    new classes of securities could be issued that provide preferences to the new class in
relation to existing unitholders, including preferences on distributions of available cash,
distributions upon our liquidation and voting rights;
    
    the relative voting strength of each previously outstanding unit may be diminished; and
    
    the market price of the common units may decline.
 Our general partner has a limited call right that may require unitholders to sell common units at
an undesirable time or price.
  Our partnership agreement restricts the voting rights of unitholders owning 20 percent or more of
our common units.
  21




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Unitholder liability may not be limited if a court finds that unitholder action constitutes control
of our business.
  
    
    we were conducting business in a state but had not complied with that particular
states partnership statute; or
    
    unitholders right to act with other unitholders to remove or replace the general
partner, to approve some amendments to our partnership agreement or to take other actions
under our partnership agreement constitute control of our business.
 The market price of our common units could be adversely affected by sales of substantial amounts of
our common units in the public or private markets, including sales by affiliates of our general
partner.
  Tax Risks to Common Unitholders
 Our tax treatment depends on our status as a partnership for federal income tax purposes, as well
as our not being subject to a material amount of additional entity-level taxation by states. If the
Internal Revenue Service were to treat us as a corporation or if we become subject to a material
amount of additional entity-level taxation for state tax purposes, then it would substantially
reduce the amount of cash available for distribution to our unitholders.
    22




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The tax treatment of publicly traded partnerships or an investment in our common units could be
subject to potential legislative, judicial or administrative changes and differing interpretations,
possibly on a retroactive basis.
  We prorate our items of income, gain, loss and deduction between transferors and transferees of our
units each month based upon the ownership of our units on the first day of each month, instead of
on the basis of the date a particular unit is transferred. The IRS may challenge this treatment,
which could change the allocation of items of income, gain, loss and deduction among our
unitholders.
  An Internal Revenue Service contest of the federal income tax positions we take may adversely
affect the market for our common units, and the cost of any Internal Revenue Service contest will
reduce our cash available for distribution to our unitholders.
  Unitholders will be required to pay taxes on their share of our income even if they do not receive
any cash distributions from us.
  23




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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.
  We will treat each purchaser of units as having the same tax benefits without regard to the actual
common units purchased. The IRS may challenge this treatment, which could adversely affect the
value of the common units.
  We may adopt certain valuation methodologies that may result in a shift of income, gain, loss and
deduction between the general partner and the unitholders. The IRS may challenge this treatment,
which could adversely affect the value of the common units.
   The sale or exchange of 50 percent or more of our capital and profits interests during any 12-month
period will result in the termination of our partnership for federal income tax purposes.
  24




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Unitholders will likely be subject to state and local taxes and return filing requirements in
states where they do not live as a result of their investment in our common units.
  
 ITEM 1B. UNRESOLVED STAFF COMMENTS
  
 ITEM 2. PROPERTIES
   
 ITEM 3. LEGAL PROCEEDINGS
  Gas Measurement Cases. re:
Natural Gas Royalties Qui Tam Litigation,
 Will Price, et
al. v. Gas Pipelines and Their Predecessors, et al.,
  
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  25




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PART II
 
 ITEM 5.
    
    MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF
EQUITY SECURITIES
   High
    
    Low
    
    Distributions2008Fourth Quarter
    
    $
    21.80
    
    
    $
    11.95
    
    
    $
    0.30000Third Quarter
    
    $
    21.95
    
    
    $
    11.72
    
    
    $
    0.29500Second Quarter
    
    $
    24.35
    
    
    $
    20.57
    
    
    $
    0.28750First Quarter
    
    $
    25.00
    
    
    $
    18.53
    
    
    $
    0.128132007Fourth Quarter (1)
    
    $
    25.65
    
    
    $
    20.24
    
    
    
    
 
 (1)
    
    For the period from November 21, 2007, the date of our initial public offering, through
December 31, 2007. Cash Distribution Policy. first second third
 Incentive Distribution Rights.
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Marginal PercentageTotal Quarterly
    
    Interest in DistributionDistribution per Unit
    
    
    
    
    
    GeneralTarget Amount
    
    Unitholders
    
    PartnerMinimum Quarterly Distribution
    
    $
    0.28750
    
    
    
    98
    %
    
    
    2
    %First Target Distribution
    
    above $0.28750 up to $0.33063
    
    
    98
    %
    
    
    2
    %Second Target Distribution
    
    above $0.33063 up to $0.35938
    
    
    85
    %
    
    
    15
    %Third Target Distribution
    
    above $0.35938 up to $0.43125
    
    
    75
    %
    
    
    25
    %Thereafter
    
    above$0.43125
    
    
    50
    %
    
    
    50
    %
 Subordination Period.
  27




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##### Table of Contents



ITEM 6. SELECTED FINANCIAL DATA
  As of or for the Year Ended December 31,2008
    
    2007
    
    2006
    
    2005
    
    2004(In millions, except per unit amounts)Operating Results Data:Operating revenues
    
    $
    141.1
    
    
    $
    110.4
    
    
    $
    97.7
    
    
    $
    81.0
    
    
    $
    73.5Operating income
    
    
    77.1
    
    
    
    63.1
    
    
    
    67.1
    
    
    
    37.7
    
    
    
    43.1Earnings from unconsolidated affiliates(1)
    
    
    58.8
    
    
    
    4.7
    
    
    
    
    
    
    
    
    
    
    
    Net income
    
    
    114.5
    
    
    
    65.6
    
    
    
    65.2
    
    
    
    37.6
    
    
    
    41.1Net income per limited partner unit-basic and dilutedCommon units(2)
    
    $
    1.22
    
    
    $
    0.13
    
    
    $
    
    
    
    $
    
    
    
    $
    Subordinated units(2)
    
    
    1.22
    
    
    
    0.09
    
    
    
    
    
    
    
    
    
    
    
    Distributions declared per common unit(3)
    
    $
    1.01
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Financial Position Data:Property, plant and equipment, net
    
    $
    646.3
    
    
    $
    612.2
    
    
    $
    436.1
    
    
    $
    384.2
    
    
    $
    319.6Investment in unconsolidated affiliates(1)
    
    
    715.9
    
    
    
    258.5
    
    
    
    
    
    
    
    
    
    
    
    Total assets
    
    
    1,434.6
    
    
    
    902.5
    
    
    
    464.5
    
    
    
    407.3
    
    
    
    339.1Long-term financing obligations, including capital
lease obligation
    
    
    777.3
    
    
    
    462.9
    
    
    
    8.3
    
    
    
    8.8
    
    
    
    27.6Total partners capital
    
    
    634.4
    
    
    
    391.3
    
    
    
    327.0
    
    
    
    272.2
    
    
    
    214.8
 
 (1)
    
    El Paso contributed to us 10 percent general partner interests in each of CIG and SNG on
November 21, 2007. On September 30, 2008, we acquired an additional 30 percent general partner interest in CIG
and an additional 15 percent general partner interest in SNG from El Paso, as further described in Item 8,
Financial Statements and Supplementary Data, Note 2.(2)
    
    Earnings per unit in 2007 are based on income allocable to us subsequent to
completion of our initial public offering.(3)
    
    Other than distributions to El Paso made in conjunction with our initial public
offering, we did not declare or pay any cash distributions in 2007. 28




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##### Table of Contents



ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 Overview
     
    
    General description of our business assets and operations and growth projects;
    
    Comparative discussion of our historical results of operations; and
    
    Liquidity and capital resource related matters, including our available liquidity,
sources and uses of cash, our historical cash flow activities, contractual obligations and
commitments, and critical accounting policies, among other items.
 Our Business.
  
    
    CIG.CIG is an interstate natural gas pipeline system with approximately 4,100 miles of
pipeline with a design capacity of approximately 3.9 Bcf/d and an average daily throughput
in 2008 of 2,225 BBtu/d. It has associated storage facilities with 29 Bcf of underground
working natural gas storage capacity.
    
    SNG.SNG is an interstate natural gas pipeline system with approximately 7,600 miles of
pipeline with a design capacity of approximately 3.7 Bcf/d and an average daily throughput
in 2008 of 2,339 BBtu/d. It has associated storage facilities with a total of approximately
60 Bcf of underground working natural gas storage capacity, which includes the storage
capacity associated with a 50 percent ownership interest in Bear Creek Storage Company, a
joint venture with TGP, our affiliate.
  29




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##### Table of Contents



% ofPhysical
    
    WeightedTariff Revenue Composition%(1)
    
    Design
    
    AverageFirm Contracts
    
    
    
    
    
    Capacity
    
    RemainingOur
    
    Capacity
    
    Variable
    
    
    
    
    
    Subscribed
    
    ContractOwnership
    
    Reservation
    
    Usage
    
    Interruptible
    
    Under Firm
    
    Life (inInterest
    
    Charges(2)
    
    Charges
    
    Contracts
    
    Contracts(3)
    
    Years)(4)WIC
    
    
    100
    %
    
    
    96.6
    %
    
    
    2.9
    %
    
    
    0.5
    %
    
    
    100
    %
    
    
    8CIG
    
    
    40
    %
    
    
    90.4
    %
    
    
    7.2
    %
    
    
    2.4
    %
    
    
    100
    %
    
    
    8SNG
    
    
    25
    %
    
    
    88.7
    %
    
    
    7.7
    %
    
    
    3.6
    %
    
    
    100
    %
    
    
    5
 
 (1)
    
    Excludes liquids transportation revenue, amounts associated with retained fuel
and, in the case of CIG, liquids revenue associated with CIGs processing plants. The revenues
described in this table constituted approximately 100%, 89% and 89% of WICs, CIGs and SNGs
total revenues, respectively, earned during the year ended December 31, 2008.(2)
    
    Approximately 10% and 9% of total capacity reservation revenues for CIG and
SNG, respectively, are the result of storage service charges.(3)
    
    Contract levels on WIC and CIG include forward haul capacity and back haul
capacity.(4)
    
    The weighted average remaining contract life is determined by weighting the
remaining life of each contract by the amount of capacity that is covered by the contract as
of December 31, 2008.  Growth Projects.
 WIC.
 
    
    Piceance Lateral. The Piceance lateral expansion consists of the addition of 17,678
horsepower of compression to the Piceance lateral at the WIC Greasewood Compressor station
in Rio Blanco County, Colorado and at a new midpoint station in Moffat County, Colorado, to
increase the transportation capacity of that lateral line by 219 MMcf/d for increased
supplies of Piceance Basin production. We estimate the total cost of the project will be
approximately $62 million. We received FERC approval for this project in December 2008.
Phase I of this project, consisting of a compressor unit uprate, was completed in December
2008, adding approximately 48 MMcf/d of additional capacity. We expect to place Phase II of
this project in service in October 2009.
    
    WIC Expansion. We estimate the total cost of this project, which requires FERC
approval, will be approximately $71 million. Due to increased shipper commitments, WIC
recently expanded the scope of this project to add a second compressor unit on the Kanda
Lateral, which increased its capital cost from $55 million to $71 million. This portion of
the project will add a 12,400 horsepower compressor station on the Kanda Lateral which will
increase the Kanda Lateral capacity to 595 MDth/d and the anticipated in-service date is
November 2010. WIC also plans to install three miles of pipeline and reconfigure one
compressor at its Wamsutter station which will provide 155 MDth/d natural gas deliveries
from the WIC Mainline into a
 30




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##### Table of Contents



CIG.
 
    
    Totem Gas Storage. The Totem Gas Storage expansion project consists of the development
of the Totem Gas Storage field, a natural gas storage field that services and interconnects
with the High Plains pipeline. The Totem Gas Storage field will have 10.7 Bcf of natural
gas storage capacity, 7 Bcf of which will be working gas capacity and 3.7 Bcf of which will
be base gas capacity. The Totem Gas Storage expansion project has a 200 MMcf/d maximum
withdrawal rate and 100 MMcf/d maximum injection rate. All of the storage capacity of this
new storage field is fully contracted with Public Service Company of Colorado pursuant to a
firm contract through 2040. CIG will operate this storage facility when it is placed in service
(estimated to be July 2009), and it will be owned by WYCO.
The estimated total cost of this project is $154 million,
of which $77 million will be paid by CIG.
    
    Raton 2010.The Raton 2010 expansion project will consist of approximately 118 miles of
pipeline from the Raton Basin Wet Canyon Lateral to the south end of the Valley Line. This
project will provide additional capacity of approximately 130 MMcf/d from the Raton Basin
in southern Colorado to the Cheyenne Hub in northern Colorado. The estimated total cost of
the project is $146 million. The estimated in-service date is June 2010. The tentative
FERC filing date for this project is March 2009.
 SNG.
 
    
    Cypress Phase III.The Cypress Phase III expansion project will add 20,700 horsepower
of additional compression and approximately 160 MMcf/d of additional capacity at an
estimated cost of $86 million. A FERC certificate has been issued for the project.
Construction of Cypress Phase III is at the option of BG LNG Services. If BG LNG Services
elects to have us build Cypress Phase III, then construction is expected to commence in
2010 with an in-service date in the first half of 2011. If constructed, Cypress Phase III
would be fully subscribed by BG LNG Services with a contract through December 2030.
    
    South System III.The South System III expansion project will expand SNGs pipeline
system in Mississippi, Alabama and Georgia by adding approximately 81 miles of pipeline
looping and replacement on SNGs south system and 17,310 horsepower of compression to serve
an existing power generation facility in the Atlanta, Georgia area that is being converted
from coal fired to cleaner burning natural gas owned by the Southern Company. This
expansion project will be completed in three phases, with each phase expected to add an
additional 122 MMcf/d of capacity. During the second quarter of 2008, SNG changed the scope
of this project at the request of a customer which increased the total estimated cost to
$352 million. SNG has entered into a precedent agreement with Southern Company Services as
agent for its affiliated operating companies, Georgia Power Company, Alabama Power Company,
Mississippi Power Company, Southern Power Company and Gulf Power Company to provide an
incremental firm transportation service to such operating companies, commencing in phases
beginning January 1, 2011, for a term of 15 years. The precedent agreement obligates SNG to
proceed with the South System III expansion project, upon the occurrence of certain
conditions precedent, including FERC approval of the project on SNGs system and the
proposed Southeast Supply Header project described below. SNG filed a request with the FERC
in December 2008 for certificate authorization to construct and operate these expansion
facilities. The project has estimated in-service dates of January 2011 for Phase I, June
2011 for Phase II and June 2012 for Phase III.
 31




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##### Table of Contents




    
    Southeast Supply Header.SNG owns an undivided interest in the northern portion of the
Southeast Supply Header project jointly owned by Spectra Energy Corp (Spectra) and
CenterPoint Energy, which added a 115-mile supply line to the western portion of the SNG
system. This project is expected to provide access through pipeline interconnects to
several supply basins, including the Barnett Shale, Bossier Sands, Arkoma and Fayetteville
Shale basins. The estimated cost to SNG for this project is $241 million. This project is
expected to be completed in two phases, with the first phase having provided SNG with
approximately 140 MMcf/d of additional supply capacity, and the second phase expected to
provide SNG with an additional 350 MMcf/d of supply capacity.
Phase I of the project was placed in service in September 2008. In
December 2008, we filed an application with the FERC for certificate
authorization to construct Phase II, which is anticipated to be placed in service in
June 2011.
  32




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##### Table of Contents



Results of Operations
  Operating Results
 2008
    
    
    2007
    
    
    2006(in millions, except volumes)Operating revenues
    
    $
    141.1
    
    
    $
    110.4
    
    
    $
    97.7Operating expenses
    
    
    (64.0
    )
    
    
    (47.3
    )
    
    
    (30.6
    )Operating income
    
    
    77.1
    
    
    
    63.1
    
    
    
    67.1Earnings from unconsolidated affiliates
    
    
    58.8
    
    
    
    4.7
    
    
    
    Other income, net
    
    
    1.5
    
    
    
    7.4
    
    
    
    3.6EBIT
    
    
    137.4
    
    
    
    75.2
    
    
    
    70.7Interest and debt expense, net
    
    
    (22.9
    )
    
    
    (9.6
    )
    
    
    (5.5
    )Net income
    
    $
    114.5
    
    
    $
    65.6
    
    
    $
    65.2WIC throughput volumes (BBtu/d)(1)
    
    
    2,543
    
    
    
    2,071
    
    
    
    1,914
 
 (1)
    
    Throughput volumes presented are for WIC only and include 181 BBtu/d, 239
BBtu/d and 204 BBtu/d transported by WIC on behalf of CIG for the years ended
December 31, 2008, 2007 and 2006. EBIT Analysis
 2008 to 2007
    
    
    2007 to 2006EBIT
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    EBITRevenue
    
    
    Expense
    
    
    Other
    
    
    Impact
    
    
    Revenue
    
    
    Expense
    
    
    Other
    
    
    ImpactFavorable/(Unfavorable)(In millions)Transportation revenues
    
    $
    3.4
    
    
    $
    
    
    
    $
    
    
    
    $
    3.4
    
    
    $
    6.1
    
    
    $
    
    
    
    $
    
    
    
    $
    6.1Expansions
    
    
    26.7
    
    
    
    (11.1
    )
    
    
    (3.3
    )
    
    
    12.3
    
    
    
    6.8
    
    
    
    (2.1
    )
    
    
    2.5
    
    
    
    7.2Operational gas and
revaluations
    
    
    
    
    
    
    6.8
    
    
    
    
    
    
    
    6.8
    
    
    
    
    
    
    
    (12.5
    )
    
    
    
    
    
    
    (12.5
    )Operating and general
and administrative
expenses
    
    
    
    
    
    
    (9.3
    )
    
    
    
    
    
    
    (9.3
    )
    
    
    
    
    
    
    (0.5
    )
    
    
    
    
    
    
    (0.5
    )Transportation expenses
    
    
    
    
    
    
    (3.2
    )
    
    
    
    
    
    
    (3.2
    )
    
    
    
    
    
    
    (1.8
    )
    
    
    
    
    
    
    (1.8
    )Earnings from
unconsolidated
affiliates
    
    
    
    
    
    
    
    
    
    
    54.1
    
    
    
    54.1
    
    
    
    
    
    
    
    
    
    
    
    4.7
    
    
    
    4.7Other(1)
    
    
    0.6
    
    
    
    0.1
    
    
    
    (2.6
    )
    
    
    (1.9
    )
    
    
    (0.2
    )
    
    
    0.2
    
    
    
    1.3
    
    
    
    1.3Total impact on EBIT
    
    $
    30.7
    
    
    $
    (16.7
    )
    
    $
    48.2
    
    
    $
    62.2
    
    
    $
    12.7
    
    
    $
    (16.7
    )
    
    $
    8.5
    
    
    $
    4.5
 
 (1)
    
    Consists of individually insignificant items. 33




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##### Table of Contents



Transportation Revenues.
 Expansions.
  Estimated AnnualProject
    
    In-Service Date
    
    Capacity
(MMcf/d)
    
    EBIT
(In Millions)Kanda Lateral and related compression
    
    January 2008
    
    
    410
    
    
    $
    11Medicine Bow
    
    October 2008
    
    
    330
    
    
    
    10
 Operational Gas and Revaluations.
 Operating and General and Administrative Expenses.
 Transportation Expenses.
 Earnings from Unconsolidated Affiliates.
 Interest and Debt Expense
   34




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##### Table of Contents



Distributable Cash Flow
     Year EndedDecember 31, 2008(In millions)Net income
    
    $
    114.5Add: Interest and debt expense, net
    
    
    22.9EBIT
    
    
    137.4Add:Depreciation and amortization
    
    
    26.1Distributions declared by CIG and SNG
    
    
    67.9Less:Equity earnings from CIG and SNG
    
    
    (58.8
    )Adjusted EBITDA
    
    
    172.6Less:Cash interest expense, net
    
    
    (22.9
    )Maintenance capital expenditures
    
    
    (1.3
    )Other, net (1)
    
    
    (2.2
    )Distributable Cash Flow
    
    $
    146.2
 
 (1)
    
    Includes certain non-cash items such as AFUDC equity and other items. 35




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##### Table of Contents



Liquidity and Capital Resources
 Overview.
     Overview of Cash Flows.
 2008
    
    2007
    
    2006(In millions)Net cash provided by operating activities
    
    $
    96.0
    
    
    $
    77.1
    
    
    $
    53.7Net cash used in investing activities
    
    
    (312.0
    )
    
    
    (160.3
    )
    
    
    (73.5
    )Net cash provided by financing activities
    
    
    222.3
    
    
    
    87.8
    
    
    
    19.5
 Operating Activities.
 36




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##### Table of Contents



Working Capital.
  Investing Activities.
 Capital Expenditures.
 Expected2008
    
    
    2009(In millions)Maintenance
    
    $
    1.3
    
    
    $
    2Expansion
    
    
    82.7
    
    
    
    64Total
    
    $
    84.0
    
    
    $
    66
  Financing Activities.
  37




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##### Table of Contents



Unconsolidated Affiliates
 Capital Requirements.
 Anticipated2008
    
    
    2009(In millions)CIGMaintenance
    
    $
    26
    
    
    $
    37Expansion
    
    
    108
    
    
    
    103Total
    
    $
    134
    
    
    $
    140SNGMaintenance
    
    $
    63
    
    
    $
    74Expansion/Other
    
    
    71
    
    
    
    100Hurricanes
    
    
    4
    
    
    
    (4
    )Total
    
    $
    138
    
    
    $
    170
 38




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##### Table of Contents



Commitments and Contingencies
  Off-Balance Sheet Arrangements
  Contractual Obligations
  Due in
    
    
    Due in
    
    
    Due inLess Than
    
    
    1-3
    
    
    3-5Contractual Obligations
    
    1 Year
    
    
    Years
    
    
    Years
    
    
    Thereafter
    
    
    Total(in millions)Long-term
debtPrincipal
    
    $
    
    
    
    $
    37.0
    
    
    $
    732.9
    
    
    $
    
    
    
    $
    769.9Interest
    
    
    18.7
    
    
    
    37.8
    
    
    
    23.9
    
    
    
    
    
    
    
    80.4Capital lease
    
    
    1.3
    
    
    
    2.5
    
    
    
    2.2
    
    
    
    8.9
    
    
    
    14.9Capital commitments
    
    
    4.8
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4.8Transportation commitments
    
    
    8.8
    
    
    
    18.8
    
    
    
    19.3
    
    
    
    54.8
    
    
    
    101.7Total
    
    $
    33.6
    
    
    $
    96.1
    
    
    $
    778.3
    
    
    $
    63.7
    
    
    $
    971.7
 
 
    
    Long-Term Debt (Principal and Interest).Long-term debt obligations represent stated
maturities of amounts borrowed under our revolving credit facility and senior unsecured notes
issued in conjunction with the acquisition of additional interests in CIG and SNG. Interest
payments are shown through the stated maturity date of the related debt based on (i) the
contractual interest rates for fixed rate debt, (ii) current market interest rates and the
contractual credit spread for our variable rate debt. For a further discussion of our debt
obligations see Item 8, Financial Statements and Supplementary Data, Note 4.
    
    Capital Lease.Effective December 1, 1999, we leased a compressor station under a capital
lease from an affiliate of CIG, WYCO. The compressor station lease expires November 2029. For
a further discussion of our capital lease obligations see Item 8, Financial Statements and
Supplementary Data, Note 4.
    
    Capital Commitments.At December 31, 2008, our capital commitments consisted primarily of our
Piceance lateral expansion project. We have other planned capital projects that are
discretionary in nature, with no substantial contractual capital commitments made in advance
of the actual expenditures.
    
    Transportation Commitments.At December 31, 2008, our transportation commitments consisted of
our agreements for capacity on a third party pipeline system. 39




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##### Table of Contents



Critical Accounting Policies and Estimates
  Cost-Based Regulation. Accounting for the Effects of Certain
Types of Regulation.
 New Accounting Pronouncements Issued But Not Yet Adopted
 New Accounting
Pronouncements Issued But Not Yet Adopted.
 40




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##### Table of Contents



ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  December 31, 2008
    
    December 31, 2007Expected Fiscal Year of Maturity of Carrying Amounts
    
    
    
    
    
    Fair
    
    Carrying
    
    Fair2009
    
    2010
    
    2011
    
    2012
    
    2013
    
    Thereafter
    
    Total
    
    Value
    
    Amounts
    
    Value(In millions)Long-term debt and
other obligations,
including current
portion  fixed
rate
    
    $
    0.5
    
    
    $
    0.5
    
    
    $
    37.5
    
    
    $
    15.5
    
    
    $
    88.5
    
    
    $
    5.4
    
    
    
    
    
    
    $
    147.9
    
    
    $
    136.4
    
    
    $
    8.4
    
    
    $
    8.4Average interest
rate
    
    
    11.9
    %
    
    
    11.9
    %
    
    
    7.8
    %
    
    
    8.1
    %
    
    
    8.0
    %
    
    
    11.9
    %Long-term debt and
other obligations,
including current
portion  variable
rate
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    629.9
    
    
    $
    
    
    
    $
    
    
    
    
    
    
    
    $
    629.9
    
    
    $
    488.2
    
    
    $
    455.0
    
    
    $
    455.0Average interest
rate
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3.9
    %
 41




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##### Table of Contents



ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
 Index
  PageManagements Annual Report on Internal Control over Financial Reporting
    
    
    43Reports of Independent Registered Public Accounting Firm
    
    
    44Consolidated Statements of Income
    
    
    46Consolidated Balance Sheets
    
    
    47Consolidated Statements of Cash Flows
    
    
    48Consolidated Statements of Partners Capital
    
    
    49Notes to Consolidated Financial Statements
    
    
    501. Basis of Presentation and Significant Accounting Policies
    
    
    502. Contribution of Assets and Acquisition
    
    
    543. Earnings Per Unit and Cash Distributions
    
    
    554. Long-Term Financing Obligations
    
    
    575. Fair Value of Financial Instruments
    
    
    596. Commitments and Contingencies
    
    
    597. Transactions with Major Customers
    
    
    608. Investments in Unconsolidated Affiliates and Transactions with Affiliates
    
    
    609. Supplemental Selected Quarterly Financial Information (Unaudited)
    
    
    62
 42




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##### Table of Contents



MANAGEMENTS ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
  
    
    Pertain to the maintenance of records that, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of our assets;
    
    Provide reasonable assurance that transactions are recorded as necessary to permit
preparation of the financial statements in accordance with generally accepted accounting
principles, and that our receipts and expenditures are being made only in accordance with
authorizations of our management and directors; and
    
    Provide reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use or disposition of our assets that could have a material effect on the
financial statements.
 Internal Control  Integrated Framework
 43




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##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
      
 44




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##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON INTERNAL
CONTROL OVER FINANCIAL REPORTING
 
        
 45




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##### Table of Contents



El PASO PIPELINE PARTNERS, L.P.
 
 CONSOLIDATED STATEMENTS OF INCOME
(In millions, except per unit amounts)
 Year Ended December 31,2008
    
    
    2007
    
    
    2006Operating revenues
    
    $
    141.1
    
    
    $
    110.4
    
    
    $
    97.7Operating expensesOperation and maintenance
    
    
    33.6
    
    
    
    27.8
    
    
    
    14.3Depreciation and amortization
    
    
    26.1
    
    
    
    15.7
    
    
    
    14.2Taxes, other than income taxes
    
    
    4.3
    
    
    
    3.8
    
    
    
    2.164.0
    
    
    
    47.3
    
    
    
    30.6Operating income
    
    
    77.1
    
    
    
    63.1
    
    
    
    67.1Earnings from unconsolidated affiliates
    
    
    58.8
    
    
    
    4.7
    
    
    
    Other income, net
    
    
    1.5
    
    
    
    7.4
    
    
    
    3.6Interest and debt expense, net
    
    
    (22.9
    )
    
    
    (9.6
    )
    
    
    (5.5
    )Net income
    
    $
    114.5
    
    
    $
    65.6
    
    
    $
    65.2Net income per limited partner unit  Basic and Diluted:Common units
    
    $
    1.22
    
    
    $
    0.13Subordinated units
    
    $
    1.22
    
    
    $
    0.09
  46




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##### Table of Contents



El PASO PIPELINE PARTNERS, L.P.
 
 CONSOLIDATED BALANCE SHEETS
(In millions, except units)
 December 31,2008
    
    
    2007ASSETSCurrent assetsCash and cash equivalents
    
    $
    10.9
    
    
    $
    4.6Accounts receivableCustomer, net of allowance of $0.5 in 2008 and $0.7 in 2007
    
    
    13.7
    
    
    
    11.6Affiliates
    
    
    21.5
    
    
    
    0.8Other
    
    
    1.8
    
    
    
    Regulatory assets
    
    
    10.1
    
    
    
    Other
    
    
    4.1
    
    
    
    4.6Total current assets
    
    
    62.1
    
    
    
    21.6Property, plant and equipment, at cost
    
    
    867.6
    
    
    
    805.6Less accumulated depreciation and amortization
    
    
    221.3
    
    
    
    193.4Total property, plant and equipment, net
    
    
    646.3
    
    
    
    612.2Other assetsInvestment in unconsolidated affiliates
    
    
    715.9
    
    
    
    258.5Regulatory assets
    
    
    8.3
    
    
    
    9.0Other
    
    
    2.0
    
    
    
    1.2726.2
    
    
    
    268.7Total assets
    
    $
    1,434.6
    
    
    $
    902.5LIABILITIES AND PARTNERS CAPITALCurrent liabilitiesAccounts payable and accrued liabilitiesTrade
    
    $
    6.6
    
    
    $
    2.2Affiliates
    
    
    2.1
    
    
    
    3.8Other
    
    
    4.5
    
    
    
    32.1Accrued interest
    
    
    3.6
    
    
    
    0.7Taxes payable
    
    
    1.8
    
    
    
    2.4Contractual deposits
    
    
    1.7
    
    
    
    0.7Regulatory liabilities
    
    
    
    
    
    
    4.9Other
    
    
    1.1
    
    
    
    1.2Total current liabilities
    
    
    21.4
    
    
    
    48.0Other liabilitiesLong-term financing obligations, including capital lease obligation
    
    
    777.3
    
    
    
    462.9Other liabilities
    
    
    1.5
    
    
    
    0.3778.8
    
    
    
    463.2Commitments and contingencies (Note 6)Partners capitalCommon units (issued 84,970,498 units in 2008 and 57,187,786 in 2007)
    
    
    1,064.8
    
    
    
    831.8Subordinated units (issued 27,727,411 units in 2008 and 2007)
    
    
    289.4
    
    
    
    284.1General partner units (issued 2,299,526 units in 2008 and 1,732,963 in 2007)
    
    
    (719.8
    )
    
    
    (724.6
    )Total partners capital
    
    
    634.4
    
    
    
    391.3Total liabilities and partners capital
    
    $
    1,434.6
    
    
    $
    902.5
  47




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##### Table of Contents



El PASO PIPELINE PARTNERS, L.P.
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 (In millions)
 Year Ended December 31,2008
    
    
    2007
    
    
    2006(In millions)Cash flows from operating activitiesNet income
    
    $
    114.5
    
    
    $
    65.6
    
    
    $
    65.2Adjustments to reconcile net income to net cash from operating activitiesDepreciation and amortization
    
    
    26.1
    
    
    
    15.7
    
    
    
    14.2Earnings from unconsolidated affiliates, adjusted for cash distributions
    
    
    (29.0
    )
    
    
    (4.7
    )
    
    
    Other non-cash income items
    
    
    (1.7
    )
    
    
    (4.8
    )
    
    
    Asset and liability changesAccounts receivable
    
    
    (4.4
    )
    
    
    0.4
    
    
    
    (0.4
    )Accounts payable
    
    
    0.6
    
    
    
    
    
    
    
    (4.1
    )Regulatory assets
    
    
    (9.6
    )
    
    
    1.5
    
    
    
    (4.2
    )Regulatory liabilities
    
    
    (5.0
    )
    
    
    1.3
    
    
    
    (11.4
    )Other, net
    
    
    4.5
    
    
    
    2.1
    
    
    
    (5.6
    )Net cash provided by operating activities
    
    
    96.0
    
    
    
    77.1
    
    
    
    53.7Cash flows from investing activitiesCapital expenditures
    
    
    (84.0
    )
    
    
    (160.3
    )
    
    
    (73.5
    )Cash paid to acquire additional equity interests
    
    
    (254.3
    )
    
    
    
    
    
    
    Returns of
capital on investment in unconsolidated affiliates
    
    
    15.4
    
    
    
    
    
    
    
    Net change in notes receivable from affiliates
    
    
    9.8
    
    
    
    
    
    
    
    Other
    
    
    1.1
    
    
    
    
    
    
    
    Net cash used in investing activities
    
    
    (312.0
    )
    
    
    (160.3
    )
    
    
    (73.5
    )Cash flows from financing activitiesNet proceeds from issuance of long-term debt
    
    
    174.0
    
    
    
    
    
    
    
    Net proceeds from borrowings under credit facility
    
    
    129.9
    
    
    
    453.9
    
    
    
    Net proceeds from issuance of common units
    
    
    15.0
    
    
    
    537.2
    
    
    
    Payments to retire long-term debt, including capital lease obligations
    
    
    (0.5
    )
    
    
    (0.5
    )
    
    
    (0.5
    )Distributions
    
    
    (96.1
    )
    
    
    (792.3
    )
    
    
    (10.3
    )Net change in notes payable to affiliate
    
    
    
    
    
    
    (110.5
    )
    
    
    30.3Net cash provided by financing activities
    
    
    222.3
    
    
    
    87.8
    
    
    
    19.5Net change in cash and cash equivalents
    
    
    6.3
    
    
    
    4.6
    
    
    
    (0.3
    )Cash and cash equivalentsBeginning of period
    
    
    4.6
    
    
    
    
    
    
    
    0.3End of period
    
    $
    10.9
    
    
    $
    4.6
    
    
    $
    Supplemental cash flow informationInterest paid, net of capitalized amounts
    
    $
    19.3
    
    
    $
    8.9
    
    
    $
    5.5
  48




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El PASO PIPELINE PARTNERS, L.P.
 
 CONSOLIDATED STATEMENTS OF PARTNERS CAPITAL
 (In millions, except units)
 Partners CapitalPartners
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    TotalCapital
    
    
    Limited Partners
    
    
    General
    
    
    Partners(pre-IPO)
    
    
    Common
    
    
    Subordinated
    
    
    Partner
    
    
    CapitalBalance at January 1, 2006
    
    
    272.2
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net income
    
    
    65.2
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Distributions
    
    
    (10.4
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Balance at December 31, 2006
    
    
    327.0
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net income
    
    
    56.8
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Balance at November 20, 2007
    
    
    383.8
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Contribution of interests in CIG and SNG
    
    
    253.7
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Conversion to El Paso Pipeline Partners, L.P.
    
    
    (580.6
    )
    
    
    288.1
    
    
    
    280.9
    
    
    
    11.6
    
    
    
    580.6Issuance of common units, net of issuance costs
    
    
    
    
    
    
    537.2
    
    
    
    
    
    
    
    
    
    
    
    537.2Distributions
    
    
    (56.9
    )
    
    
    
    
    
    
    
    
    
    
    (736.4
    )
    
    
    (736.4
    )Net income
    
    
    
    
    
    
    6.5
    
    
    
    3.2
    
    
    
    0.2
    
    
    
    9.9Balance at December 31, 2007
    
    
    
    
    
    
    831.8
    
    
    
    284.1
    
    
    
    (724.6
    )
    
    
    391.3Contribution of additional interests in CIG
and SNG
    
    
    
    
    
    
    205.2
    
    
    
    
    
    
    
    4.5
    
    
    
    209.7Issuance of common units
    
    
    
    
    
    
    15.0
    
    
    
    
    
    
    
    
    
    
    
    15.0Distributions
    
    
    
    
    
    
    (66.1
    )
    
    
    (28.0
    )
    
    
    (2.0
    )
    
    
    (96.1
    )Net income
    
    
    
    
    
    
    78.9
    
    
    
    33.3
    
    
    
    2.3
    
    
    
    114.5Balance at December 31, 2008
    
    $
    
    
    
    $
    1,064.8
    
    
    $
    289.4
    
    
    $
    (719.8
    )
    
    $
    634.4
 Unit ReconciliationTotalLimited Partner Units
    
    
    General
    
    
    PartnersCommon
    
    
    Subordinated
    
    
    Partner
    
    
    CapitalBalance at December 31, 2006
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Formation of
El Paso Pipeline Partners, L.P.
    
    
    28,437,786
    
    
    
    27,727,411
    
    
    
    1,732,963
    
    
    
    57,898,160Issuance of units to public
    
    
    28,750,000
    
    
    
    
    
    
    
    
    
    
    
    28,750,000Balance at December 31, 2007
    
    
    57,187,786
    
    
    
    27,727,411
    
    
    
    1,732,963
    
    
    
    86,648,160Unit based compensation to non-employee
directors
    
    
    21,101
    
    
    
    
    
    
    
    
    
    
    
    21,101Issuance of units to public
    
    
    873,000
    
    
    
    
    
    
    
    
    
    
    
    873,000Acquisition of additional interests in CIG
and SNG
    
    
    26,888,611
    
    
    
    
    
    
    
    566,563
    
    
    
    27,455,174Balance at December 31, 2008
    
    
    84,970,498
    
    
    
    27,727,411
    
    
    
    2,299,526
    
    
    
    114,997,435
  49




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##### Table of Contents



El PASO PIPELINE PARTNERS, L.P.
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 
 1. Basis of Presentation and Significant Accounting Policies
 Initial Public Offering
  Acquisition
  Basis of Presentation and Principles of Consolidation
   Use of Estimates
  50




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##### Table of Contents



Regulated Operations
 Accounting for the Effects of
Certain Types of Regulation
 Cash and Cash Equivalents
  Allowance for Doubtful Accounts
  Materials and Supplies
  Natural Gas Imbalances
   Property, Plant and Equipment
   51




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##### Table of Contents



Asset and Investment Impairments
  Revenue Recognition
  Environmental Costs and Other Contingencies
 Environmental Costs.
 52




---



##### Table of Contents



Other Contingencies.
 Income Taxes
  
 Accounting for Asset Retirement Obligations
 Accounting
for Asset Retirement Obligations Accounting for Conditional Asset Retirement Obligations
   Partners Capital
  Participating Securities and the Two-Class Method under FASB Statement No. 128
 53




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##### Table of Contents



New Accounting Pronouncements Issued But Not Yet Adopted
  Fair Value Measurements. Fair Value
Measurements
 Earnings per Unit. Application of the Two-Class Method under FASB Statement No. 128 to Master Limited
Partnerships
 Business Combinations Business
Combinations
 Noncontrolling Interests. Noncontrolling
Interests in Consolidated Financial Statements,
 2. Contribution of Assets and Acquisition
 Initial
Contribution of Assets (IPO).
 Acquisition of Additional Interests in CIG and SNG.
   54




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##### Table of Contents



Year Ended December 31,2008
    
    2007(In millions, except per unit amounts)(Unaudited)Revenues
    
    $
    141.1
    
    
    $
    110.4Net income
    
    
    156.7
    
    
    
    129.1Net income per limited partner unit  Basic and DilutedCommon units
    
    
    1.36
    
    
    
    1.15Subordinated units
    
    
    1.36
    
    
    
    1.04
 
 3. Earnings Per Unit and Cash Distributions
 Earnings per unit. Participating Securities and the
Two-Class Method under FASB Statement No. 128.
  55




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##### Table of Contents



Year Ended December 31,2008
    
    
    2007(1)((In millions, except units and per unit amounts)Allocation of Net Income:Net income allocation
    
    $
    114.5
    
    
    $
    9.9Less: general partners interest in net income
    
    
    2.3
    
    
    
    0.2Limited partners interest in net income
    
    $
    112.2
    
    
    $
    9.7Calculation of Limited Partners Interest in Net Income:Net income allocable to common units
    
    $
    78.4
    
    
    $
    7.3Net income allocable to subordinated units
    
    
    33.8
    
    
    
    2.4Limited partners interest in net income
    
    $
    112.2
    
    
    $
    9.7Net income per limited partner unit  Basic and Diluted:Common units
    
    $
    1.22
    
    
    $
    0.13Subordinated units
    
    $
    1.22
    
    
    $
    0.09Weighted average limited partner units outstanding  Basic:Common units
    
    
    64,241,973
    
    
    
    57,187,786Subordinated units
    
    
    27,727,411
    
    
    
    27,727,411Weighted average limited partner units outstanding Diluted:Common units
    
    
    64,243,162
    
    
    
    57,187,786Subordinated units
    
    
    27,727,411
    
    
    
    27,727,411
 
 (1)
    
    Amounts for 2007 are calculated from the date of the initial public
offering to December 31, 2007. See Note 2 for 2007 pro forma earnings per unit. Subordinated units.
 Incentive distribution rights.
 56




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##### Table of Contents



Cash
Distributions to Unitholders
 Quarter Ended
    

Total QuarterlyDistribution PerUnit
    
    Date ofDistributionDecember 31, 2007(1)
    
    $
    0.12813
    
    
    February 2008March 31, 2008
    
    
    0.28750
    
    
    May 2008June 30, 2008
    
    
    0.29500
    
    
    August 2008September 30, 2008
    
    
    0.30000
    
    
    November 2008December 31, 2008
    
    
    0.32000
    
    
    February 2009
 
 (1)
    
    The December 31, 2007 distribution of $0.12813 per unit was prorated for the period
beginning with the closing of our initial public offering through December 31, 2007.  
 4. Long-Term Financing Obligations
  As of December 31,2008
    
    
    2007(in millions)Revolving credit facility, variable due 2012
    
    $
    584.9
    
    
    $
    455.0Note payable to El Paso, variable due 2012, LIBOR plus 3.5%
    
    
    10.0
    
    
    
    Notes, variable due 2012, LIBOR plus 3.5%
    
    
    35.0
    
    
    
    Notes, 7.76%, due 2011
    
    
    37.0
    
    
    
    Notes, 7.93%, due 2012
    
    
    15.0
    
    
    
    Notes, 8.00%, due 2013
    
    
    88.0
    
    
    
    Capital lease obligation, net of current maturities
    
    
    7.4
    
    
    
    7.9Total long-term financing obligations, including capital lease obligation
    
    $
    777.3
    
    
    $
    462.9
 Credit Facility.
   57




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##### Table of Contents




    
    prohibiting the borrowers from creating or incurring indebtedness (except for
certain specified permitted indebtedness) if such incurrence would cause a breach of the
leverage ratio described below;
    
    prohibiting WIC from creating or incurring indebtedness in excess of $50 million
(other than indebtedness under the Credit Facility);
    
    limiting our ability and that of the borrowers and our other restricted
subsidiaries from creating or incurring certain liens on our respective properties
(subject to enumerated exceptions);
    
    limiting our ability to make distributions and equity repurchases (which shall be
permitted if no insolvency default or event of default exists); and
    
    prohibiting consolidations, mergers and asset transfers by us, the borrowers and
our other restricted subsidiaries (subject to enumerated exceptions).
   Other Debt Obligations
 Capital Lease.
 Year Ending December 31,
    
    (In millions)2009
    
    $
    1.32010
    
    
    1.32011
    
    
    1.22012
    
    
    1.12013
    
    
    1.1Thereafter
    
    
    8.9Total minimum lease payments
    
    
    14.9Less: amount representing interest
    
    
    (7.0
    )Present value of net minimum lease payments
    
    $
    7.9
 58




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##### Table of Contents



5. Fair Value of Financial Instruments
 As of December 31,2008
    
    2007Carrying
    
    Fair
    
    Carrying
    
    FairAmount
    
    Value
    
    Amount
    
    Value(In millions)Long-term financing obligations, including current maturities
    
    $
    777.8
    
    
    $
    624.6
    
    
    $
    463.4
    
    
    $
    463.4
  
 6. Commitments and Contingencies
 Legal Proceedings
 WIC Line 124A Rupture
  Regulatory Matters
 Fuel Recovery Mechanism
 Greenhouse Gas (GHG) Emissions
 59




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##### Table of Contents



Other Commitments
 Capital Commitments
 Transportation Commitments
 Other Commercial Commitments
 
 7. Transactions with Major Customers
  2008
    
    2007
    
    2006(In millions)Williams Gas Marketing, Inc.
    
    $
    41.9
    
    
    $
    29.6
    
    
    $
    23.9Anadarko Petroleum Corporation and Subsidiaries
    
    
    29.6
    
    
    
    18.7
    
    
    
    14.9
 
 8. Investments in Unconsolidated Affiliates and Transactions with Affiliates
 Investments in Unconsolidated Affiliates
  Net Investment and Earnings
 Earnings fromInvestment
    
    
    Unconsolidated AffiliatesDecember 31,
    
    
    December 31,
    
    
    Year Ended December 31,2008
    
    
    2007
    
    
    2008
    
    
    2007(1)(In millions)
    
    
    (In millions)CIG
    
    $
    322.1
    
    
    $
    104.3
    
    
    $
    29.0
    
    
    $
    2.1SNG
    
    
    393.8
    
    
    
    154.2
    
    
    
    29.8
    
    
    
    2.6Total
    
    $
    715.9
    
    
    $
    258.5
    
    
    $
    58.8
    
    
    $
    4.7Summarized Financial InformationCIG
    
    SNGYear Ended December 31,
    
    Year Ended December 31,Results of operations
    
    2008
    
    2007(1)
    
    2008
    
    2007(1)(In millions)
    
    
    (In millions)Operating results data:Operating revenues
    
    $
    59.0
    
    
    $
    4.2
    
    
    $
    73.3
    
    
    $
    5.9Operating expenses
    
    
    28.4
    
    
    
    2.3
    
    
    
    38.1
    
    
    
    2.6Income from continuing operations and net income
    
    $
    29.0
    
    
    $
    2.1
    
    
    $
    29.8
    
    
    $
    2.6
 
 (1)
    
    Amounts for 2007 are calculated from the date of the initial public offering
to December 31, 2007. See Note 2 for 2007 pro forma earnings per unit. 60




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##### Table of Contents



CIG
    
    
    SNGDecember 31,
    
    
    December 31,
    
    
    December 31,
    
    
    December 31,2008
    
    
    2007
    
    
    2008
    
    
    2007Financial position data
    
    (In millions)
    
    
    (In millions)Current assets
    
    $
    61.8
    
    
    $
    18.9
    
    
    $
    26.3
    
    
    $
    11.8Non-current assets
    
    
    555.5
    
    
    
    158.0
    
    
    
    630.9
    
    
    
    268.5Current liabilities
    
    
    45.5
    
    
    
    10.9
    
    
    
    23.0
    
    
    
    12.7Long-term debt
    
    
    190.0
    
    
    
    57.5
    
    
    
    227.4
    
    
    
    109.8Other non-current liabilities
    
    
    68.6
    
    
    
    4.2
    
    
    
    13.0
    
    
    
    3.6Net assets
    
    $
    313.2
    
    
    $
    104.3
    
    
    $
    393.8
    
    
    $
    154.2
 Transactions with Affiliates
 Distributions/Contributions.
 Note Receivable and Payable with
Affiliates
 Affiliate Revenues and Expenses.
    Year Ended December 31,2008
    
    2007(in millions)Revenues from affiliates
    
    $
    11.1
    
    
    $
    9.1WYCO lease payments
    
    
    1.4
    
    
    
    1.5Operation and maintenance expense from affiliates
    
    
    15.2
    
    
    
    12.2Affiliated interest (income) expense, net
    
    
    (0.1
    )
    
    
    7.5
 Cash Management Program.
 61




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##### Table of Contents



Notes Receivable and Payable with Affiliates.
 Other Affiliate Balances.
 
 9. Supplemental Selected Quarterly Financial Information (Unaudited)
  Quarters Ended
    
    Year toMarch 31
    
    June 30
    
    September 30
    
    December 31
    
    Date2008Operating revenues
    
    $
    33.7
    
    
    $
    34.6
    
    
    $
    34.7
    
    
    $
    38.1
    
    
    $
    141.1Operating income
    
    
    18.2
    
    
    
    20.0
    
    
    
    17.5
    
    
    
    21.4
    
    
    
    77.1Earnings from unconsolidated affiliates (1)
    
    
    15.1
    
    
    
    7.1
    
    
    
    7.0
    
    
    
    29.6
    
    
    
    58.8Net income
    
    
    27.6
    
    
    
    23.0
    
    
    
    20.8
    
    
    
    43.1
    
    
    
    114.5Net income per limited partner unit-Basic and DilutedCommon
    
    
    0.32
    
    
    
    0.29
    
    
    
    0.29
    
    
    
    0.37
    
    
    
    1.22Subordinated
    
    
    0.32
    
    
    
    0.22
    
    
    
    0.14
    
    
    
    0.37
    
    
    
    1.222007Operating revenues
    
    $
    26.4
    
    
    $
    26.9
    
    
    $
    27.6
    
    
    $
    29.5
    
    
    $
    110.4Operating income
    
    
    10.9
    
    
    
    19.4
    
    
    
    17.7
    
    
    
    15.1
    
    
    
    63.1Earnings from unconsolidated affiliates (2)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4.7
    
    
    
    4.7Net income
    
    
    10.1
    
    
    
    19.1
    
    
    
    17.4
    
    
    
    19.0
    
    
    
    65.6Net income per limited partner unit-Basic and
Diluted(3)Common
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.13
    
    
    
    0.13Subordinated
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.09
    
    
    
    0.09
 
 (1)
    
    We acquired an additional 30 percent interest in CIG and an additional 15
percent interest in SNG from El Paso on September 30, 2008.(2)
    
    El Paso contributed 10 percent ownership interests in CIG and SNG to us in
November 2007.(3)
    
    Earnings per unit are based on income allocable to us subsequent to completion
of our initial public offering through December 31, 2007. 62




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##### Table of Contents



ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
  
 ITEM 9A. CONTROLS AND PROCEDURES
 Evaluation of Disclosure Controls and Procedures
  Changes in Internal Control over Financial Reporting
  
 ITEM 9B. OTHER INFORMATION
  63




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##### Table of Contents



PART III
 
 ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
 Partnership Management
      64




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##### Table of Contents



Directors and Executive Officers of Our General Partner
  Name
    
    Age
    
    Position with El Paso Pipeline GP Company, L.L.C.Ronald L. Kuehn, Jr.
    
    
    73
    
    
    Chairman of the BoardJames C. Yardley
    
    
    57
    
    
    Director, President and Chief Executive OfficerRobert W. Baker
    
    
    52
    
    
    Executive Vice President and General CounselJohn R. Sult
    
    
    49
    
    
    Senior Vice President, Chief Financial Officer and ControllerJames J. Cleary
    
    
    54
    
    
    Senior Vice PresidentDaniel B. Martin
    
    
    52
    
    
    Senior Vice PresidentNorman G. Holmes
    
    
    52
    
    
    Senior Vice PresidentDouglas L. Foshee
    
    
    49
    
    
    DirectorD. Mark Leland
    
    
    47
    
    
    DirectorArthur C. Reichstetter
    
    
    62
    
    
    DirectorWilliam A. Smith
    
    
    64
    
    
    Director
 Ronald L. Kuehn, Jr.
 James C. Yardley.
 Robert W. Baker.
 John R. Sult.
 65




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##### Table of Contents



James J. Cleary.
 Daniel B. Martin.
 Norman G. Holmes.
 Douglas L. Foshee
 D. Mark Leland.
 Arthur C. Reichstetter.
 66




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##### Table of Contents



William A. Smith
  Audit Committee
  Corporate Governance Guidelines and Code of Ethics
 www.eppipelinepartners.com
 www.eppipelinepartners.com.
 67




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##### Table of Contents



Executive Sessions of the Board and Communications by Interested Parties
   Web Access
 www.eppipelinepartners.com
 Reimbursement of Expenses of Our General Partner
  Section 16(a) Beneficial Ownership Reporting Compliance
  NYSE Annual CEO Certification
  68




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##### Table of Contents



Additional Certifications
  
 ITEM 11. EXECUTIVE COMPENSATION
  Compensation Discussion and Analysis
  
    
    El Paso makes available to El Paso Pipeline GP Company, L.L.C. the services of the El
Paso employees who serve as the executive officers of El Paso Pipeline GP Company, L.L.C.;
and
    
    El Paso Pipeline GP Company, L.L.C. is obligated to reimburse El Paso for any allocated
portion of the costs that El Paso incurs in providing compensation and benefits to such El
Paso employees.
   LTIP
 Long-Term Incentive Plan
   69




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##### Table of Contents



Compensation of Directors
  Cash Retainer
 Initial Equity Grant
 Annual Equity Grant
 70




---



##### Table of Contents



Director Compensation Table
  Director Compensation
for the Year Ended December 31, 2008 (1)
 Fees Earned or
    
    
    
    
    
    All OtherName
    
    Paid in Cash(2)
    
    Stock Awards(3) (4)
    
    Compensation(5)
    
    TotalRonald L. Kuehn, Jr.
    
    $
    50,000
    
    
    $
    34,331
    
    
    $
    2,092
    
    
    $
    86,423Arthur C. Reichstetter
    
    
    58,000
    
    
    
    34,331
    
    
    
    2,092
    
    
    
    94,423William A. Smith
    
    
    37,500
    
    
    
    31,025
    
    
    
    1,294
    
    
    
    69,819W. Matt Ralls (6)
    
    
    50,000
    
    
    
    33,870
    
    
    
    2,132
    
    
    
    86,002
 
 (1)
    
    Employee directors do not receive any additional compensation for serving on
the board of directors of our general partner; therefore no amounts are shown for
Messrs. Foshee, Leland and Yardley. Amounts paid as reimbursable business expenses to each
director for attending board functions are not reflected in this table. Our general partner
does not consider the directors reimbursable business expenses for attending board functions
and other business expenses required to perform board duties to have a personal benefit and
thus be considered a perquisite.(2)
    
    This column reflects the value of a directors annual retainer, as well as the
additional retainer for the chairman of the audit committee. Mr. Smith was appointed to the
board of our general partner in May 2008, and therefore received a pro-rated retainer for
services rendered in 2008.(3)
    
    The amount in this column represents the dollar amount recognized for financial
reporting purposes for the fiscal year ended December 31, 2008, in accordance with FAS 123(R),
of restricted common units granted in 2008.(4)
    
    The grant date fair value of the initial restricted unit grant made to Messrs.
Kuehn and Reichstetter on January 9, 2008 was $50,011. The grant date fair value of the
initial restricted unit grant made to Mr. Ralls on January 29, 2008 was $50,014. The grant
date fair value of the initial restricted unit grant made to Mr. Smith on May 16, 2008 was
$50,014. In addition, the grant date fair value of the annual restricted stock grants made to
Messrs. Kuehn, Reichstetter, Smith and Ralls on December 1, 2008 was $50,007.(5)
    
    The amount in this column represents cash distributions received on unvested
restricted common units.(6)
    
    Mr. W. Matt Ralls resigned from the board of directors of our general partner
effective January 1, 2009. At the time of his resignation, his unvested restricted common
units were forfeited. 71




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##### 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.
   Percentage of
    
    
    
    
    
    Percentage of
    
    Percentage ofCommon
    
    Common
    
    Subordinated
    
    Subordinated
    
    Total CommonUnits
    
    Units
    
    Units
    
    Units
    
    and SubordinatedBeneficially
    
    Beneficially
    
    Beneficially
    
    Beneficially
    
    Units BeneficiallyName of Beneficial Owner(1)
    
    Owned
    
    Owned
    
    Owned
    
    Owned
    
    OwnedEl Paso Corporation(2)
    
    
    55,326,397
    
    
    
    65.1
    %
    
    
    27,727,411
    
    
    
    100
    %
    
    
    73.7
    %Ronald L. Kuehn, Jr.
    
    
    65,239
    
    
    
    *
    
    
    
    
    
    
    
    
    %
    
    
    *James C. Yardley
    
    
    10,000
    
    
    
    *
    
    
    
    
    
    
    
    
    %
    
    
    *Robert W. Baker
    
    
    5,000
    
    
    
    *
    
    
    
    
    
    
    
    
    %
    
    
    *John R. Sult
    
    
    10,000
    
    
    
    *
    
    
    
    
    
    
    
    
    %
    
    
    *James J. Cleary
    
    
    2,000
    
    
    
    *
    
    
    
    
    
    
    
    
    %
    
    
    *Daniel B. Martin
    
    
    
    
    
    
    *
    
    
    
    
    
    
    
    
    %
    
    
    *Norman G. Holmes
    
    
    7,000
    
    
    
    *
    
    
    
    
    
    
    
    
    %
    
    
    *Douglas L. Foshee
    
    
    25,000
    
    
    
    *
    
    
    
    
    
    
    
    
    %
    
    
    *D. Mark Leland
    
    
    13,200
    
    
    
    *
    
    
    
    
    
    
    
    
    %
    
    
    *Arthur C. Reichstetter
    
    
    105,239
    
    
    
    *
    
    
    
    
    
    
    
    
    %
    
    
    *William A. Smith
    
    
    5,344
    
    
    
    *
    
    
    
    
    
    
    
    
    %
    
    
    *All directors and executive
officers as a group (eleven
persons)
    
    
    248,022
    
    
    
    *
    
    
    
    
    
    
    
    
    %
    
    
    *
 
 *
    
    Less than 1%.(1)
    
    Unless otherwise indicated, the address for all beneficial owners in this table
is El Paso Building, 1001 Louisiana Street, Houston, Texas 77002.(2)
    
    El Paso Corporation is the ultimate parent company of El Paso Pipeline Holding
Company, L.L.C., the sole owner of the member interests of our general partner and
El Paso Pipeline LP Holdings, L.L.C., the owner of 55,326,397 common units and 27,727,411
subordinated units. El Paso Corporation may, therefore, be deemed to beneficially own the
units held by El Paso Pipeline LP Holdings, L.L.C. 72




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##### Table of Contents



Shares of
    
    Shares
    
    
    
    
    
    Percentage ofCommon
    
    Underlying
    
    Total Shares
    
    Total SharesStock
    
    Options
    
    of Common
    
    of CommonOwned
    
    Exercisable
    
    Stock
    
    StockDirectly or
    
    Within
    
    Beneficially
    
    BeneficiallyName of Beneficial Owner
    
    Indirectly(1)
    
    60 Days(2)
    
    Owned
    
    Owned(3)Ronald L. Kuehn, Jr.
    
    
    295,336
    (4)
    
    
    11,000
    
    
    
    306,336
    
    
    
    *James C. Yardley
    
    
    205,448
    
    
    
    404,245
    
    
    
    609,693
    
    
    
    *Robert W. Baker
    
    
    278,950
    
    
    
    580,632
    
    
    
    859,582
    
    
    
    *John R. Sult
    
    
    64,945
    
    
    
    94,607
    
    
    
    159,552
    
    
    
    *James J. Cleary
    
    
    49,860
    
    
    
    269,508
    
    
    
    319,368
    
    
    
    *Daniel B. Martin
    
    
    132,437
    
    
    
    263,701
    
    
    
    396,138
    
    
    
    *Norman G. Holmes
    
    
    54,728
    
    
    
    172,271
    
    
    
    226,999
    
    
    
    *Douglas L. Foshee
    
    
    896,195
    
    
    
    2,403,502
    
    
    
    3,299,697
    
    
    
    *D. Mark Leland
    
    
    248,732
    
    
    
    460,791
    
    
    
    709,523
    
    
    
    *Arthur C. Reichstetter
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    *William A. Smith
    
    
    
    (5)
    
    
    
    
    
    
    
    
    
    
    *All directors and
executive officers as a
group (eleven persons)
    
    
    2,226,631
    
    
    
    4,660,257
    
    
    
    6,886,888
    
    
    
    *
 
 *
    
    Less than 1%.(1)
    
    This column includes shares of common stock of El Paso Corporation held in the
El Paso Corporation Benefits Protection Trust as a result of deferral elections made in
accordance with El Pasos benefit plans. These individuals share voting power with the trustee
under that plan and receive dividend equivalents on such shares, but do not have the power to
dispose of, or direct the disposition of, such shares until such shares are distributed.(2)
    
    The shares indicated represent stock options granted under El Pasos current or
previous stock option plans, which are currently exercisable or which will become exercisable
within 60 days of February 23, 2009. Shares subject to options cannot be voted.(3)
    
    Based on 698,613,542 shares outstanding as of February 23, 2009.(4)
    
    Excludes 28,720 shares owned by Mr. Kuehns wife or children. Mr. Kuehn
disclaims any beneficial ownership in these 28,720 shares.(5)
    
    Excludes 8,563 shares owned by Mr. Smiths wife. Mr. Smith disclaims any
beneficial ownership in these 8,563 shares. EQUITY COMPENSATION PLAN INFORMATION TABLE
  (a)
    
    (b)
    
    (c)Number of SecuritiesRemaining Available forNumber of Securities
    
    
    
    
    
    Future Issuance underto be Issued upon
    
    Weighted-Average
    
    Equity CompensationExercise of
    
    Exercise Price of
    
    Plans (ExcludingOutstanding Options,
    
    Outstanding Options,
    
    Securities Reflected inPlan Category
    
    Warrants and Rights
    
    Warrants and Rights
    
    Column (a))Equity compensation plans
approved by unitholders
    
    
    
    
    
    $
    
    
    
    
    Equity compensation plans
not approved by
unitholders(1)
    
    
    
    
    
    $
    
    
    
    
    1,233,474Total
    
    
    
    
    
    $
    
    
    
    
    1,233,474
 
 (1)
    
    Please read Executive Compensation  Long-Term Incentive Plan for a
description of the material features of the plan, including the awards that may be granted
under the plan. 73




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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
  Distributions and Payments to Our General Partner and Its Affiliates
  Operational Stage
 Distributions of available cash to our general
partner and its affiliates
    
    We will generally make
cash distributions 98
percent to unitholders,
including our general
partner and its
affiliates as holders of
an aggregate of
55,326,397 common units,
all of the subordinated
units and the remaining
two percent 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 percent of the
distributions above the
highest target level.Payments 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. In addition we
will reimburse El Paso
and its affiliates for
the payment of certain
operating expenses and
for the provision of
various general and
administrative services
for our benefit.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.
 Omnibus Agreement
  
    
    reimbursement of certain operating and general and administrative expenses;
    
    indemnification for certain environmental contingencies, tax contingencies and
right-of-way defects;
    
    reimbursement for certain expenditures; and
    
    the guaranty by El Paso of certain expenses under intercompany agreements related to
the Elba Island LNG terminal expansion.
 74




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##### Table of Contents



Reimbursement of Operating and General and Administrative Expense
    Competition
  Indemnification
     75




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##### Table of Contents



Contracts with Affiliates
 Contribution and Exchange Agreement
    Note Receivable
  Note Payable
    CIG and SNG General Partnership Agreements
 General.
 provided
  Governance.
  76




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##### Table of Contents




    
    dissolution of the partnership;
    
    causing or permitting the partnership to take certain bankruptcy actions;
    
    mortgaging or pledging the partnerships assets;
    
    the commencement or the resolution before the FERC (or any U.S. Court of Appeals of an
appeal of a FERC order) of certain actions under the Natural Gas Act;
    
    any amendment of the partnership agreement;
    
    the admission of any person as a partner (other than a permitted transferee of a
partner);
    
    any proposal to dispose of assets of such partnership with a value exceeding $225
million in the case of CIG and $450 million in the case of SNG;
    
    the disposition of all or substantially all of the assets of the partnership, and any
disposition of interests in the partnership that would result in a termination under
Section 708 of the Code;
    
    any merger, consolidation or conversion of the partnership;
    
    entering into new lines of business, including but not limited to, those that do not
generate qualifying income under Section 7704 of the Internal Revenue Code; and
    
    any amendment to the master services agreement to which the partnership is a party,
other than any amendment that the management committee determines would not materially
adversely affect such partnership.
 Quarterly Cash Distributions. plus
 Capital Calls to the Partners. plus
 Guarantee of WIC Purchases of Natural Gas and Natural Gas Liquids from BP Energy Company
  Guarantee of WYCO Purchases of Natural Gas from Anadarko Energy Services
  77




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##### Table of Contents



Bear Creek Partnership Agreement
  SNG Guarantee of Elba Island Expansion
  SNG Guarantee of Elba Express Expansion
  El Paso Guarantee of SNG Lease
  Cash Management Programs
   78




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##### Table of Contents



CIG Operating Agreements
    Transportation Agreements
   79




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##### Table of Contents



Interconnection and Operational Balancing Agreements and Other Inter-Affiliate Agreements
        Other Agreements
   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.
 80




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##### Table of Contents



Table of Contents
  Director Independence
  
 ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
 Audit Fees
  All Other Fees
    81




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##### Table of Contents



PART IV
 
 ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
   El Paso Pipeline Partners, L.P.
    
    PageReports of Independent Registered Public Accounting Firm
    
    44Consolidated Statements of Income
    
    46Consolidated Balance Sheets
    
    47Consolidated Statements of Cash Flows
    
    48Consolidated Statements of Partners Capital
    
    49Notes to Consolidated Financial Statements
    
    502. Financial
Statement Schedules.All
schedules are omitted because they are not applicable, or the
required information is disclosed in the financial statements or
accompanying notes.3. and (b). Exhibits
  (c) Financial Statements of 50-Percent-Or-Less-Owned InvesteesColorado Interstate Gas CompanyReport of Independent Registered Public Accounting Firm
    
    83Consolidated Statements of Income
    
    84Consolidated Balance Sheets
    
    85Consolidated Statements of Cash Flows
    
    86Consolidated Statements of Partners Capital
    
    87Notes to Consolidated Financial Statements
    
    88Southern Natural Gas CompanyReports of
Independent Registered Public Accounting Firms
    
    103Consolidated Statements of Income
    
    105Consolidated Balance Sheets
    
    106Consolidated Statements of Cash Flows
    
    107Consolidated Statements of Partners Capital
    
    108Notes to Consolidated Financial Statements
    
    109
 Undertaking
  82




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##### Table of Contents



Report of Independent Registered Public Accounting Firm
     Employers Accounting for Defined Benefit
Pension and Other Postretirement Plans  An Amendment of FASB Statements No. 87, 88, 106, and 132
(R)
  
 83




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COLORADO INTERSTATE GAS COMPANY
CONSOLIDATED STATEMENTS OF INCOME
(In millions)
 Year Ended December 31,2008
    
    
    2007
    
    
    2006Operating revenues
    
    $
    323
    
    
    $
    317
    
    
    $
    305Operating expensesOperation and maintenance
    
    
    120
    
    
    
    126
    
    
    
    120Depreciation and amortization
    
    
    33
    
    
    
    31
    
    
    
    30Taxes, other than income taxes
    
    
    17
    
    
    
    15
    
    
    
    12170
    
    
    
    172
    
    
    
    162Operating income
    
    
    153
    
    
    
    145
    
    
    
    143Other income, net
    
    
    11
    
    
    
    5
    
    
    
    2Interest and debt expense
    
    
    (38
    )
    
    
    (49
    )
    
    
    (47
    )Affiliated interest income, net
    
    
    23
    
    
    
    50
    
    
    
    41Income before income taxes
    
    
    149
    
    
    
    151
    
    
    
    139Income taxes
    
    
    
    
    
    
    44
    
    
    
    52Income from continuing operations
    
    
    149
    
    
    
    107
    
    
    
    87Discontinued operations, net of income taxes
    
    
    
    
    
    
    42
    
    
    
    48Net income
    
    $
    149
    
    
    $
    149
    
    
    $
    135
  84




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##### Table of Contents



COLORADO INTERSTATE GAS COMPANY
CONSOLIDATED BALANCE SHEETS
(In millions)
 December 31,2008
    
    
    2007ASSETSCurrent assetsCash and cash equivalents
    
    $
    
    
    
    $
    Accounts and notes receivableCustomer
    
    
    8
    
    
    
    Affiliates
    
    
    119
    
    
    
    181Other
    
    
    1
    
    
    
    1Materials and supplies
    
    
    7
    
    
    
    5Regulatory assets
    
    
    18
    
    
    
    Other
    
    
    2
    
    
    
    1Total current assets
    
    
    155
    
    
    
    188Property, plant and equipment, at cost
    
    
    1,675
    
    
    
    1,413Less accumulated depreciation and amortization
    
    
    413
    
    
    
    392Total property, plant and equipment, net
    
    
    1,262
    
    
    
    1,021Other assetsNotes receivable from affiliates
    
    
    76
    
    
    
    503Other
    
    
    50
    
    
    
    57126
    
    
    
    560Total assets
    
    $
    1,543
    
    
    $
    1,769LIABILITIES AND PARTNERS CAPITALCurrent liabilitiesAccounts payableTrade
    
    $
    11
    
    
    $
    14Affiliates
    
    
    10
    
    
    
    8Other
    
    
    30
    
    
    
    15Taxes payable
    
    
    10
    
    
    
    10Regulatory liabilities
    
    
    29
    
    
    
    12Accrued interest
    
    
    7
    
    
    
    5Contractual deposits
    
    
    8
    
    
    
    7Other
    
    
    9
    
    
    
    8Total current liabilities
    
    
    114
    
    
    
    79Long-term debt and other financing obligations, less current maturities
    
    
    580
    
    
    
    575Other liabilities
    
    
    66
    
    
    
    72Commitments and contingencies (Note 7)Partners capital
    
    
    783
    
    
    
    1,043Total liabilities and partners capital
    
    $
    1,543
    
    
    $
    1,769
  85




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COLORADO INTERSTATE GAS COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
 Year Ended December 31,2008
    
    
    2007
    
    
    2006Cash flows from operating activitiesNet income
    
    $
    149
    
    
    $
    149
    
    
    $
    135Less income from discontinued operations, net of income taxes
    
    
    
    
    
    
    42
    
    
    
    48Income from continuing operations
    
    
    149
    
    
    
    107
    
    
    
    87Adjustments to reconcile net income to net cash from operating activitiesDepreciation and amortization
    
    
    33
    
    
    
    31
    
    
    
    30Deferred income taxes
    
    
    
    
    
    
    8
    
    
    
    4Other non-cash income items
    
    
    3
    
    
    
    8
    
    
    
    28Asset and liability changesAccounts receivable
    
    
    (3
    )
    
    
    3
    
    
    
    41Accounts payable
    
    
    1
    
    
    
    6
    
    
    
    (9
    )Taxes payable
    
    
    
    
    
    
    (56
    )
    
    
    14Current assets
    
    
    (2
    )
    
    
    6
    
    
    
    8Current liabilities
    
    
    (9
    )
    
    
    
    
    
    
    (8
    )Non-current assets
    
    
    (14
    )
    
    
    (4
    )
    
    
    (16
    )Non-current liabilities
    
    
    2
    
    
    
    (195
    )
    
    
    1Cash provided by (used in) continuing activities
    
    
    160
    
    
    
    (86
    )
    
    
    180Cash provided by discontinued activities
    
    
    
    
    
    
    54
    
    
    
    51Net cash provided by (used in) operating activities
    
    
    160
    
    
    
    (32
    )
    
    
    231Cash flows from investing activitiesAdditions to property, plant and equipment
    
    
    (134
    )
    
    
    (108
    )
    
    
    (56
    )Net change in notes receivable from affiliates
    
    
    183
    
    
    
    271
    
    
    
    (89
    )Cash paid for acquisitions of affiliates
    
    
    
    
    
    
    
    
    
    
    (37
    )Other
    
    
    3
    
    
    
    
    
    
    
    2Cash provided by (used in) continuing activities
    
    
    52
    
    
    
    163
    
    
    
    (180
    )Cash used in discontinued activities
    
    
    
    
    
    
    (83
    )
    
    
    (51
    )Net cash provided by (used in) investing activities
    
    
    52
    
    
    
    80
    
    
    
    (231
    )Cash flows from financing activitiesPayments to retire long-term debt
    
    
    (103
    )
    
    
    (128
    )
    
    
    Distributions to partners
    
    
    (109
    )
    
    
    
    
    
    
    Contribution from parent
    
    
    
    
    
    
    7
    
    
    
    Distribution from discontinued operations
    
    
    
    
    
    
    44
    
    
    
    Cash used in continuing activities
    
    
    (212
    )
    
    
    (77
    )
    
    
    Cash provided by discontinued activities
    
    
    
    
    
    
    29
    
    
    
    Net cash used in financing activities
    
    
    (212
    )
    
    
    (48
    )
    
    
    Net change in cash and cash equivalents
    
    
    
    
    
    
    
    
    
    
    Cash and cash equivalentsBeginning of period
    
    
    
    
    
    
    
    
    
    
    End of period
    
    $
    
    
    
    $
    
    
    
    $
    
  86




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COLORADO INTERSTATE GAS COMPANY
CONSOLIDATED STATEMENTS OF PARTNERS CAPITAL/STOCKHOLDERS EQUITY
(In millions, except share amounts)
 AccumulatedAdditional
    
    
    
    
    
    
    Other
    
    
    Total
    
    
    TotalCommon stock
    
    
    Paid-in
    
    
    Retained
    
    
    Comprehensive
    
    
    Stockholders
    
    
    PartnersShares
    
    
    Amount
    
    
    Capital
    
    
    Earnings
    
    
    Income (Loss)
    
    
    Equity
    
    
    CapitalJanuary 1, 2006
    
    
    1,000
    
    
    $
    
    
    
    $
    47
    
    
    $
    962
    
    
    $
    
    
    
    $
    1,009
    
    
    $
    Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    135
    
    
    
    
    
    
    
    135Adoption of SFAS
No. 158, net of
income taxes of $3
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5
    
    
    
    5
    
    
    
    December 31, 2006
    
    
    1,000
    
    
    
    
    
    
    
    47
    
    
    
    1,097
    
    
    
    5
    
    
    
    1,149
    
    
    
    Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    111
    
    
    
    
    
    
    
    111Reclassification
to regulatory
liability (Note 8)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5
    )
    
    
    (5
    )
    
    
    October 31, 2007
    
    
    1,000
    
    
    
    
    
    
    
    47
    
    
    
    1,208
    
    
    
    
    
    
    
    1,255
    
    
    
    Conversion to general
partnership
(November 1, 2007)
    
    
    (1,000
    )
    
    
    
    
    
    
    (47
    )
    
    
    (1,208
    )
    
    
    
    
    
    
    (1,255
    )
    
    
    1,255Contributions
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    82Distributions
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (332
    )Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    38December 31, 2007
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,043Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    149Distributions
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (409
    )December 31, 2008
    
    
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    783
  87




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##### Table of Contents



1. Summary of Significant Accounting Policies
 Basis of Presentation and Principles of Consolidation
    Use of Estimates
  Regulated Operations
 Accounting for the
Effects of Certain Types of Regulation
 Cash and Cash Equivalents
  88




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Allowance for Doubtful Accounts
  Materials and Supplies
  Natural Gas Imbalances
   Property, Plant and Equipment
      89




---



##### Table of Contents



Asset and Investment Impairments
   Revenue Recognition
  Environmental Costs and Other Contingencies
 Environmental Costs.
  Other Contingencies
 90




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##### Table of Contents



Income Taxes
  Accounting for Asset Retirement Obligations
 Accounting
for Asset Retirement Obligations , Accounting for Conditional Asset Retirement Obligations.
   Postretirement Benefits
  Employers Accounting for Defined Benefit Pension and Other
Postretirement Plans  an Amendment of FASB Statements No. 87, 88, 106, and 132(R)
 91




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##### Table of Contents



.
  New Accounting Pronouncements Issued But Not Yet Adopted
  Fair Value Measurements. Fair Value
Measurements
 Business Combinations. Business
Combinations
 Noncontrolling Interests Noncontrolling
Interests in Consolidated Financial Statements
 2. Acquisitions and Divestitures
 Acquisitions.
 92




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##### Table of Contents



Divestitures
 2007
    
    
    2006(In millions)Revenues
    
    $
    97
    
    
    $
    98Operating expenses
    
    
    (41
    )
    
    
    (30
    )Other income, net
    
    
    5
    
    
    
    3Interest and debt expense
    
    
    1
    
    
    
    1Affiliated interest income, net
    
    
    1
    
    
    
    2Income before income taxes
    
    
    63
    
    
    
    74Income taxes
    
    
    21
    
    
    
    26Income from discontinued operations, net of income taxes
    
    $
    42
    
    
    $
    48
 3. Income Taxes
  Components of Income Taxes.
 2007
    
    
    2006(In millions)CurrentFederal
    
    $
    33
    
    
    $
    43State
    
    
    3
    
    
    
    536
    
    
    
    48DeferredFederal
    
    
    7
    
    
    
    4State
    
    
    1
    
    
    
    8
    
    
    
    4Total income taxes
    
    $
    44
    
    
    $
    52
 Effective Tax Rate Reconciliation.
 2007
    
    
    2006(In millions, except for rates)Income taxes at the statutory federal rate of 35%
    
    $
    53
    
    
    $
    49Increase (decrease)Pretax income not subject to income taxes after conversion to partnership
    
    
    (12
    )
    
    
    State income taxes, net of federal income tax benefit
    
    
    3
    
    
    
    3Income taxes
    
    $
    44
    
    
    $
    52Effective tax rate
    
    
    29
    %
    
    
    37
    %
 93




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##### Table of Contents



4. Financial Instruments
   2008
    
    2007Carrying
    
    Fair
    
    Carrying
    
    FairAmount
    
    Value
    
    Amount
    
    Value(In millions)Long-term financing obligations, including current maturities
    
    $
    583
    
    
    $
    502
    
    
    $
    575
    
    
    $
    598
 5. Regulatory Assets and Liabilities
  2008
    
    
    2007(In millions)Current regulatory assetsDeferred fuel loss and unaccounted for gas
    
    $
    17
    
    
    $
    Other
    
    
    1
    
    
    
    Total current regulatory assets
    
    
    18
    
    
    
    Non-current regulatory assetsTaxes on capitalized funds used during construction
    
    
    11
    
    
    
    12Unamortized loss on reacquired debt
    
    
    7
    
    
    
    3Postretirement benefits
    
    
    2
    
    
    
    3Under-collected income taxes
    
    
    1
    
    
    
    1Total non-current regulatory assets
    
    
    21
    
    
    
    19Total regulatory assets
    
    $
    39
    
    
    $
    19Current regulatory liabilitiesOver-collected
fuel variance
    
    $
    29
    
    
    $
    12Non-current regulatory liabilitiesProperty and plant depreciation
    
    
    19
    
    
    
    20Postretirement benefits
    
    
    6
    
    
    
    13Excess recovery of income taxes
    
    
    
    
    
    
    1Total non-current regulatory liabilities
    
    
    25
    
    
    
    34Total regulatory liabilities
    
    $
    54
    
    
    $
    46
 94




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##### Table of Contents



6. Long-Term Financing Obligations
  2008
    
    
    2007(In millions)5.95% Senior Notes due March 2015
    
    $
    35
    
    
    $
    756.80% Senior Notes due November 2015
    
    
    340
    
    
    
    4006.85% Senior Debentures due June 2037
    
    
    100
    
    
    
    100Total long-term debt
    
    
    475
    
    
    
    575Other financing obligations
    
    
    108
    
    
    
    Total long-term debt and other financing obligations
    
    
    583
    
    
    
    575Less: Current maturities
    
    
    3
    
    
    
    Total long-term debt and other financing obligations, less current maturities
    
    $
    580
    
    
    $
    575
 Debt.
  Other Financing Obligations.
  7. Commitments and Contingencies
 Legal Proceedings
 Gas Measurement Cases. re: Natural Gas Royalties Qui
Tam Litigation,
 95




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##### Table of Contents



Will Price, et
al. v. Gas Pipelines and Their Predecessors, et al.,
  Environmental Matters
    Balance at January 1, 2008
    
    $
    15Additions/adjustments for remediation activities
    
    
    1Payments for remediation activities
    
    
    (3
    )Balance at December 31, 2008
    
    $
    13
   96




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##### Table of Contents



Regulatory Matters
 Fuel Recovery Mechanisms.
 Greenhouse Gas (GHG) Emissions
 Purchase Obligations, Commitments and Other Matters
 Transportation Commitments and Purchase Obligations
 Operating Leases.
 Year EndingDecember 31,
    
    (In millions)2009
    
    $
    22010
    
    
    1Total
    
    $
    3
  Other Commercial Commitments.
 Guarantees.
 97




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##### Table of Contents



8. Retirement Benefits
 Pension and Retirement Benefits.
 Postretirement Benefits.
 .
  Accumulated Postretirement Benefit Obligation, Plan Assets and Funded Status
 December 31,
    
    
    September 30,2008
    
    
    2007(In millions)Change in accumulated postretirement benefit obligation:Accumulated postretirement benefit obligation  beginning of period
    
    $
    7
    
    
    $
    11Interest cost
    
    
    1
    
    
    
    1Actuarial
(gain) loss
    
    
    1
    
    
    
    (4
    )Benefits paid(1)
    
    
    (2
    )
    
    
    (1
    )Accumulated postretirement benefit obligation  end of period
    
    $
    7
    
    
    $
    7Change in plan assets:Fair value of plan assets  beginning of period
    
    $
    18
    
    
    $
    17Actual return on plan assets
    
    
    (4
    )
    
    
    2Benefits paid
    
    
    (2
    )
    
    
    (1
    )Fair value of plan assets  end of period
    
    $
    12
    
    
    $
    18Reconciliation
of funded status:Fair value of plan assets
    
    $
    12
    
    
    $
    18Less: accumulated postretirement benefit obligation
    
    
    7
    
    
    
    7Fourth quarter contributions
    
    
    
    
    
    
    Net asset at December 31
    
    $
    5
    
    
    $
    11
 
 (1)
    
    Amounts shown are net of a subsidy related to the Medicare
Prescription Drug,
Improvement, and Modernization Act of 2003. 98




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##### Table of Contents



Plan Assets.
 Actual
    
    ActualAsset Category
    
    Target
    
    2008
    
    2007(Percent)Equity securities
    
    
    65
    
    
    
    61
    
    
    
    63Debt securities
    
    
    35
    
    
    
    32
    
    
    
    33Cash and cash equivalents
    
    
    
    
    
    
    7
    
    
    
    4Total
    
    
    100
    
    
    
    100
    
    
    
    100
 Expected Payment of Future Benefits.
 Year EndingDecember 31,2009
    
    $
    12010
    
    
    12011
    
    
    12012
    
    
    12013
    
    
    12014 - 2018
    
    
    3
 Actuarial Assumptions and Sensitivity Analysis
 2008
    
    2007
    
    2006(Percent)Assumptions
related to benefit obligations at December 31, 2008 and
September 30, 2007 and 2006 measurement dates:Discount rate
    
    
    5.82
    
    
    
    6.05
    
    
    
    5.50Assumptions related to benefit costs at December 31:Discount rate
    
    
    6.05
    
    
    
    5.50
    
    
    
    5.25Expected return on plan assets(1)
    
    
    8.00
    
    
    
    8.00
    
    
    
    8.00
 
 (1)
    
    The expected return on plan assets is a pre-tax rate of return based on our
targeted portfolio of investments. Our postretirement benefit plans investment earnings are
subject to unrelated business income taxes at a rate of 35%. The expected return on plan
assets for our postretirement benefit plan is calculated using the after-tax rate of
return  99




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##### Table of Contents



Components of Net Benefit Cost (Income).
 2008
    
    
    2007
    
    
    2006(In millions)Interest cost
    
    $
    1
    
    
    $
    1
    
    
    $
    Expected return on plan assets
    
    
    (1
    )
    
    
    (1
    )
    
    
    (1
    )Other
    
    
    (1
    )
    
    
    (1
    )
    
    
    3Net postretirement benefit cost (income)
    
    $
    (1
    )
    
    $
    (1
    )
    
    $
    2
 9. Transactions with Major Customer
  2008
    
    2007
    
    2006(In millions)PSCo
    
    $
    90
    
    
    $
    91
    
    
    $
    95
 10. Supplemental Cash Flow Information
  2008
    
    2007
    
    2006(In millions)Interest paid, net of capitalized interest
    
    $
    37
    
    
    $
    52
    
    
    $
    48Income tax payments
    
    
    
    
    
    
    277
    (1)
    
    
    34
 
 (1)
    
    Includes amounts related to the settlement of current and deferred tax balances due to the
conversion to a partnership in November 2007 (see Notes 3 and 11). 11. Investment in Unconsolidated Affiliate and Transactions with Affiliates
 Investment in Unconsolidated Affiliate
  Transactions with Affiliates
 MLP Acquisition.
 Contributions/Distributions. Cash Management Program
 100




---



##### Table of Contents



Cash Management Program.
 Income Taxes.
 Accounts Receivable Sales Program. Accounting for Transfers and Servicing of Financial
Assets and Extinguishments of Liabilities,
 Other Affiliate Balances.
 Affiliate Revenues and Expenses.
   2008
    
    2007
    
    2006(In millions)Revenues from affiliates
    
    $
    17
    
    
    $
    20
    
    
    $
    22Operation and maintenance expenses from affiliates
    
    
    86
    
    
    
    60
    
    
    
    53Reimbursements of operating expenses charged to affiliates
    
    
    26
    
    
    
    22
    
    
    
    18
 101




---



##### Table of Contents



12. Supplemental Selected Quarterly Financial Information (Unaudited)
  Quarters EndedMarch 31
    
    June 30
    
    September 30
    
    December 31
    
    Total(In millions)2008Operating revenues
    
    $
    90
    
    
    $
    73
    
    
    $
    71
    
    
    $
    89
    
    
    $
    323Operating income
    
    
    50
    
    
    
    26
    
    
    
    26
    
    
    
    51
    
    
    
    153Net income
    
    
    50
    
    
    
    26
    
    
    
    25
    
    
    
    48
    
    
    
    1492007Operating revenues
    
    $
    84
    
    
    $
    75
    
    
    $
    67
    
    
    $
    91
    
    
    $
    317Operating income
    
    
    40
    
    
    
    32
    
    
    
    28
    
    
    
    45
    
    
    
    145Income from continuing operations
    
    
    25
    
    
    
    21
    
    
    
    20
    
    
    
    41
    
    
    
    107Discontinued operations, net of income taxes
    
    
    8
    
    
    
    14
    
    
    
    12
    
    
    
    8
    
    
    
    42Net income
    
    
    33
    
    
    
    35
    
    
    
    32
    
    
    
    49
    
    
    
    149
 102




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##### Table of Contents



Report of Independent Registered Public Accounting Firm
     Accounting for Uncertainty in Income Taxes an interpretation of FASB Statement No. 109, Employers Accounting for Defined Benefit Pension and Other Postretirement Plans  An Amendment of
FASB Statements No. 87, 88, 106, and 132 (R)
  
 103




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##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
     
 104




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##### Table of Contents



SOUTHERN NATURAL GAS COMPANY
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(In millions)
 Year Ended December 31,2008
    
    
    2007
    
    
    2006Operating revenues
    
    $
    540
    
    
    $
    482
    
    
    $
    462Operating expensesOperation and maintenance
    
    
    189
    
    
    
    160
    
    
    
    169Depreciation and amortization
    
    
    53
    
    
    
    53
    
    
    
    49Taxes, other than income taxes
    
    
    27
    
    
    
    27
    
    
    
    26269
    
    
    
    240
    
    
    
    244Operating income
    
    
    271
    
    
    
    242
    
    
    
    218Earnings from unconsolidated affiliates
    
    
    13
    
    
    
    88
    
    
    
    78Other income, net
    
    
    10
    
    
    
    13
    
    
    
    8Interest and debt expense
    
    
    (72
    )
    
    
    (91
    )
    
    
    (95
    )Affiliated interest income
    
    
    13
    
    
    
    19
    
    
    
    18Income before income taxes
    
    
    235
    
    
    
    271
    
    
    
    227Income taxes
    
    
    
    
    
    
    69
    
    
    
    65Income from continuing operations
    
    
    235
    
    
    
    202
    
    
    
    162Discontinued operations, net of income taxes
    
    
    
    
    
    
    19
    
    
    
    22Net income
    
    
    235
    
    
    
    221
    
    
    
    184Other comprehensive income
    
    
    
    
    
    
    1
    
    
    
    1Comprehensive income
    
    $
    235
    
    
    $
    222
    
    
    $
    185
  105




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##### Table of Contents



SOUTHERN NATURAL GAS COMPANY
CONSOLIDATED BALANCE SHEETS
(In millions)
 December 31,2008
    
    
    2007ASSETSCurrent assetsCash and cash equivalents
    
    $
    
    
    
    $
    Accounts and notes receivableCustomer
    
    
    3
    
    
    
    5Affiliates
    
    
    71
    
    
    
    89Other
    
    
    2
    
    
    
    1Materials and supplies
    
    
    14
    
    
    
    12Other
    
    
    15
    
    
    
    11Total current assets
    
    
    105
    
    
    
    118Property, plant and equipment, at cost
    
    
    3,636
    
    
    
    3,448Less accumulated depreciation and amortization
    
    
    1,373
    
    
    
    1,298Total property, plant and equipment, net
    
    
    2,263
    
    
    
    2,150Other assetsInvestments in unconsolidated affiliates
    
    
    81
    
    
    
    84Note receivable from affiliate
    
    
    95
    
    
    
    378Other
    
    
    85
    
    
    
    73261
    
    
    
    535Total assets
    
    $
    2,629
    
    
    $
    2,803LIABILITIES AND PARTNERS CAPITALCurrent liabilitiesAccounts payableTrade
    
    $
    28
    
    
    $
    29Affiliates
    
    
    10
    
    
    
    3Other
    
    
    18
    
    
    
    16Current maturities of long-term debt
    
    
    
    
    
    
    34Taxes payable
    
    
    8
    
    
    
    11Accrued interest
    
    
    18
    
    
    
    24Other
    
    
    10
    
    
    
    10Total current liabilities
    
    
    92
    
    
    
    127Long-term debt, less current maturities
    
    
    910
    
    
    
    1,098Other liabilities
    
    
    50
    
    
    
    36Commitments and contingencies (Note 7)Partners capital
    
    
    1,577
    
    
    
    1,542Total liabilities and partners capital
    
    $
    2,629
    
    
    $
    2,803
  106




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SOUTHERN NATURAL GAS COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
 Year Ended December 31,2008
    
    
    2007
    
    
    2006Cash flows from operating activitiesNet income
    
    $
    235
    
    
    $
    221
    
    
    $
    184Less income from discontinued operations, net of income taxes
    
    
    
    
    
    
    19
    
    
    
    22Income from continuing operations
    
    
    235
    
    
    
    202
    
    
    
    162Adjustments to reconcile net income to net cash from operating activitiesDepreciation and amortization
    
    
    53
    
    
    
    53
    
    
    
    49Deferred income taxes
    
    
    
    
    
    
    23
    
    
    
    34Earnings from unconsolidated affiliates, adjusted for cash distributions
    
    
    3
    
    
    
    42
    
    
    
    2Other non-cash income items
    
    
    (5
    )
    
    
    (6
    )
    
    
    (2
    )Asset and liability changesAccounts receivable
    
    
    13
    
    
    
    (7
    )
    
    
    21Accounts payable
    
    
    7
    
    
    
    (13
    )
    
    
    (6
    )Taxes payable
    
    
    
    
    
    
    (21
    )
    
    
    (20
    )Other current assets
    
    
    (5
    )
    
    
    5
    
    
    
    (3
    )Other current liabilities
    
    
    (9
    )
    
    
    (4
    )
    
    
    (6
    )Non current assets
    
    
    (11
    )
    
    
    (5
    )
    
    
    (10
    )Non current liabilities
    
    
    4
    
    
    
    (320
    )
    
    
    2Cash provided by (used in) continuing activities
    
    
    285
    
    
    
    (51
    )
    
    
    223Cash provided by discontinued activities
    
    
    
    
    
    
    25
    
    
    
    35Net cash provided by (used in) operating activities
    
    
    285
    
    
    
    (26
    )
    
    
    258Cash flows from investing activitiesAdditions to property, plant and equipment
    
    
    (138
    )
    
    
    (243
    )
    
    
    (273
    )Net change in notes receivable from affiliate
    
    
    289
    
    
    
    (152
    )
    
    
    57Proceeds from the sale of assets
    
    
    
    
    
    
    
    
    
    
    3Cash provided by (used in) continuing activities
    
    
    151
    
    
    
    (395
    )
    
    
    (213
    )Cash used in discontinued activities
    
    
    
    
    
    
    (25
    )
    
    
    (45
    )Net cash provided by (used in) investing activities
    
    
    151
    
    
    
    (420
    )
    
    
    (258
    )Cash flows from financing activitiesPayments to retire long-term debt
    
    
    (236
    )
    
    
    (584
    )
    
    
    Distributions to partners
    
    
    (200
    )
    
    
    
    
    
    
    Net proceeds from issuance of long-term debt
    
    
    
    
    
    
    494
    
    
    
    Contribution from parent
    
    
    
    
    
    
    536
    
    
    
    Contribution to discontinued operations
    
    
    
    
    
    
    
    
    
    
    (10
    )Cash provided by (used in) continuing activities
    
    
    (436
    )
    
    
    446
    
    
    
    (10
    )Cash provided by discontinued activities
    
    
    
    
    
    
    
    
    
    
    10Net cash provided by (used in) financing activities
    
    
    (436
    )
    
    
    446
    
    
    
    Net change in cash and cash equivalents
    
    
    
    
    
    
    
    
    
    
    Cash and cash equivalentsBeginning of period
    
    
    
    
    
    
    
    
    
    
    End of period
    
    $
    
    
    
    $
    
    
    
    $
    
  107




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SOUTHERN NATURAL GAS COMPANY
CONSOLIDATED STATEMENTS OF PARTNERS CAPITAL/STOCKHOLDERS EQUITY
(In millions, except share amounts)
 AccumulatedAdditional
    
    
    
    
    
    
    Other
    
    
    Total
    
    
    TotalCommon stock
    
    
    Paid-in
    
    
    Retained
    
    
    Comprehensive
    
    
    Stockholders
    
    
    PartnersShares
    
    
    Amount
    
    
    Capital
    
    
    Earnings
    
    
    Income (Loss)
    
    
    Equity
    
    
    CapitalJanuary 1, 2006
    
    
    1,000
    
    
    $
    
    
    
    $
    340
    
    
    $
    1,120
    
    
    $
    (6
    )
    
    $
    1,454
    
    
    $
    Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    184
    
    
    
    
    
    
    
    184Other
comprehensive
income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    1
    
    
    
    Adoption of SFAS
No. 158, net of
income taxes of
$2
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5
    
    
    
    5
    
    
    
    December 31, 2006
    
    
    1,000
    
    
    
    
    
    
    
    340
    
    
    
    1,304
    
    
    
    
    
    
    
    1,644
    
    
    
    Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    187
    
    
    
    
    
    
    
    187Other
comprehensive
income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    1
    
    
    
    Adoption of FIN
No. 48, net of
income taxes of
$(3)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5
    )
    
    
    
    
    
    
    (5
    )
    
    
    Reclassification
to regulatory
liability (Note
8)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5
    )
    
    
    (5
    )
    
    
    October 31, 2007
    
    
    1,000
    
    
    
    
    
    
    
    340
    
    
    
    1,486
    
    
    
    (4
    )
    
    
    1,822
    
    
    
    Conversion to
general partnership
(November 1, 2007)
    
    
    (1,000
    )
    
    
    
    
    
    
    (340
    )
    
    
    (1,486
    )
    
    
    4
    
    
    
    (1,822
    )
    
    
    1,822Contributions
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    536Distributions
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (850
    )Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    34December 31, 2007
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,542Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    235Distributions
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (200
    )December 31, 2008
    
    
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    1,577
  108




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##### Table of Contents



1. Summary of Significant Accounting Policies
 Basis of Presentation and Principles of Consolidation
    Use of Estimates
  Regulated Operations
 Accounting for the
Effects of Certain Types of Regulation.
 Cash and Cash Equivalents
  109




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Allowance for Doubtful Accounts
  Materials and Supplies
  Natural Gas Imbalances
   Property, Plant and Equipment
     110




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\

Asset and Investment Impairments
   Revenue Recognition
  Environmental Costs and Other Contingencies
 Environmental Costs.
 111




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##### Table of Contents



Other Contingencies.
 Income Taxes
  Accounting for Uncertainty in Income Taxes, an interpretation of FASB No. 109
 Accounting for Asset Retirement Obligations
 Accounting
for Asset Retirement Obligations Accounting for Conditional Asset Retirement
Obligations
  112




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##### Table of Contents



Postretirement Benefits
  Employers Accounting for Defined Benefit Pension and Other
Postretirement Plans  an Amendment of FASB Statements No. 87, 88, 106, and 132(R) .
  New Accounting Pronouncements Issued But Not Yet Adopted
  Fair Value Measurements Fair Value
Measurements
 Business Combinations Business
Combinations
 Noncontrolling Interests. Noncontrolling
Interests in Consolidated Financial Statements,
 113




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##### Table of Contents



2. Divestitures
  2007
    
    
    2006(In millions)Revenues
    
    $
    61
    
    
    $
    66Costs and expenses
    
    
    (35
    )
    
    
    (32
    )Other income, net
    
    
    4
    
    
    
    1Interest and debt expense
    
    
    1
    
    
    
    1Income before income taxes
    
    
    31
    
    
    
    36Income taxes
    
    
    12
    
    
    
    14Income from discontinued operations, net of income taxes
    
    $
    19
    
    
    $
    22
 3. Income Taxes
  Components of Income Taxes.
 2007
    
    
    2006(In millions)CurrentFederal
    
    $
    40
    
    
    $
    30State
    
    
    6
    
    
    
    146
    
    
    
    31DeferredFederal
    
    
    19
    
    
    
    29State
    
    
    4
    
    
    
    523
    
    
    
    34Total income taxes
    
    $
    69
    
    
    $
    65
 Effective Tax Rate Reconciliation.
 2007
    
    
    2006(In millions, except for rates)Income taxes at the statutory federal rate of 35%
    
    $
    95
    
    
    $
    79Increase (decrease)Pretax income not subject to income tax after conversion to partnership
    
    
    (11
    )
    
    
    State income taxes, net of federal income tax benefit
    
    
    6
    
    
    
    4Earnings from unconsolidated affiliates where we anticipate receiving dividends
    
    
    (21
    )
    
    
    (17
    )Other
    
    
    
    
    
    
    (1
    )Income taxes
    
    $
    69
    
    
    $
    65Effective tax rate
    
    
    25
    %
    
    
    29
    %
 114




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4. Financial Instruments
   2008
    
    2007Carrying
    
    Fair
    
    Carrying
    
    FairAmount
    
    Value
    
    Amount
    
    Value(In millions)Long-term debt, including current maturities
    
    $
    910
    
    
    $
    726
    
    
    $
    1,132
    
    
    $
    1,187
 5. Regulatory Assets and Liabilities
  2008
    
    
    2007(In millions)Current regulatory assets
    
    $
    1
    
    
    $
    Non-current regulatory assetsTaxes on capitalized funds used during construction
    
    
    34
    
    
    
    31Unamortized loss on reacquired debt
    
    
    36
    
    
    
    24Other
    
    
    4
    
    
    
    3Total non-current regulatory assets
    
    
    74
    
    
    
    58Total regulatory assets
    
    $
    75
    
    
    $
    58Non-current regulatory liabilitiesCost of removal of offshore assets
    
    $
    4
    
    
    $
    7Postretirement benefits
    
    
    
    
    
    
    23Total non-current regulatory liabilities
    
    $
    4
    
    
    $
    30
 6. Debt and Credit Facilities
 Debt.
 2008
    
    
    2007(In millions)6.125% Notes due September 2008
    
    $
    
    
    
    $
    345.90% Notes due April 2017
    
    
    500
    
    
    
    5007.35% Notes due February 2031
    
    
    153
    
    
    
    3008.0% Notes due March 2032
    
    
    258
    
    
    
    300911
    
    
    
    1,134Less: Current maturities
    
    
    
    
    
    
    34Unamortized discount
    
    
    1
    
    
    
    2Total long-term debt, less current maturities
    
    $
    910
    
    
    $
    1,098
   115




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##### Table of Contents



7. Commitments and Contingencies
 Legal Proceedings
 Gas Measurement Cases. re: Natural Gas Royalties Qui Tam
Litigation,
  Environmental Matters
   Regulatory Matters
 Notice of Proposed Rulemaking
 116




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##### Table of Contents



Greenhouse Gas (GHG) Emissions.
 Rate Case.
 Other Matters
 Calpine Bankruptcy
 Commitments, Purchase Obligations and Other Matters
 Commercial Commitments.
 Operating Leases and Other Commercial Commitments
 Year EndingDecember 31,
    
    (In millions)2009
    
    $
    22010
    
    
    32011
    
    
    32012
    
    
    32013
    
    
    3Thereafter
    
    
    11Total
    
    $
    25
   Guarantees
 117




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##### Table of Contents



8. Retirement Benefits
 Pension and Retirement Benefits.
 Postretirement Benefits.
   Accumulated Postretirement Benefit Obligation, Plan Assets and Funded Status.
 118




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##### Table of Contents



December 31,
    
    
    September 30,2008
    
    
    2007(In millions)Change in accumulated postretirement benefit obligation:Accumulated postretirement benefit obligation  beginning of period
    
    $
    62
    
    
    $
    73Interest cost
    
    
    4
    
    
    
    4Participant contributions
    
    
    1
    
    
    
    1Actuarial (gain) loss
    
    
    1
    
    
    
    (9
    )Benefits paid (1)
    
    
    (7
    )
    
    
    (7
    )Accumulated postretirement benefit obligation  end of period
    
    $
    61
    
    
    $
    62Change in plan assets:Fair value of plan assets  beginning of period
    
    $
    66
    
    
    $
    59Actual return on plan assets
    
    
    (17
    )
    
    
    9Employer contributions
    
    
    4
    
    
    
    4Participant contributions
    
    
    1
    
    
    
    1Benefits paid
    
    
    (8
    )
    
    
    (7
    )Fair value of plan assets  end of period
    
    $
    46
    
    
    $
    66Reconciliation of funded status:Fair value of plan assets
    
    $
    46
    
    
    $
    66Less: Accumulated postretirement benefit obligation
    
    
    61
    
    
    
    62Fourth quarter contributions
    
    
    
    
    
    
    Net asset (liability) at December 31
    
    $
    (15
    )
    
    $
    4
 
 (1)
    
    Amounts shown are net a subsidy related to the Medicare
Prescription Drug, Improvement,
and Modernization Act of 2003. Plan Assets.
 Actual
    
    ActualAsset Category
    
    Target
    
    2008
    
    2007(Percent)Equity securities
    
    
    65
    
    
    
    65
    
    
    
    63Debt securities
    
    
    35
    
    
    
    34
    
    
    
    33Cash and cash equivalents
    
    
    
    
    
    
    1
    
    
    
    4Total
    
    
    100
    
    
    
    100
    
    
    
    100
 119




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##### Table of Contents



Expected Payment of Future Benefits.
 Year EndingDecember 31,2009
    
    $
    62010
    
    
    62011
    
    
    52012
    
    
    52013
    
    
    52014-2018
    
    
    24
 Actuarial Assumptions and Sensitivity Analysis.
 2008
    
    2007
    
    2006(Percent)Assumptions related to benefit obligations at December 31, 2008 and
September 30, 2007 and 2006 measurement dates:Discount rate
    
    
    6.00
    
    
    
    6.05
    
    
    
    5.50Assumptions related to benefit costs at December 31:Discount rate
    
    
    6.05
    
    
    
    5.50
    
    
    
    5.25Expected return on plan assets(1)
    
    
    8.00
    
    
    
    8.00
    
    
    
    8.00
 
 (1)
    
    The expected return on plan assets is a pre-tax rate of return based on our targeted
portfolio of investments. Our postretirement benefit plans investment earnings are subject to
unrelated business income tax at a rate of 35%. The expected return on plan assets for our
postretirement benefit plans is calculated using the after-tax rate of return.  2008
    
    2007(In millions)One percentage point increase:Accumulated postretirement benefit obligation
    
    $
    5
    
    
    $
    5One percentage point decrease:Accumulated postretirement benefit obligation
    
    $
    (5
    )
    
    $
    (4
    )
 Components of Net Benefit Cost.
 2008
    
    
    2007
    
    
    2006(In millions)Interest cost
    
    $
    4
    
    
    $
    4
    
    
    $
    4Expected return on plan assets
    
    
    (3
    )
    
    
    (3
    )
    
    
    (3
    )Amortization of net actuarial gain
    
    
    (1
    )
    
    
    
    
    
    
    Net postretirement benefit cost
    
    $
    
    
    
    $
    1
    
    
    $
    1
 120




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##### Table of Contents



9. Transactions with Major Customers
  2008
    
    2007
    
    2006(In millions)SCANA Corporation(1)
    
    $
    79
    
    
    $
    77
    
    
    $
    71Southern Company Services
    
    
    55
    
    
    
    54
    
    
    
    53
 
 (1)
    
    A significant portion of revenues received from a subsidiary of SCANA Corporation
resulted from firm capacity released by Atlanta Gas Light Company under terms allowed by our
tariff. 10. Supplemental Cash Flow Information
  2008
    
    2007
    
    2006(In millions)Interest paid, net of capitalized interest
    
    $
    75
    
    
    $
    97
    
    
    $
    95Income tax payments
    
    
    
    
    
    
    374
    (1)
    
    
    53
 
 (1)
    
    Includes amounts related to the settlement of current and deferred tax balances due
to the conversion to a partnership in November 2007 (see Notes 3 and 11). 11. Investments in Unconsolidated Affiliates and Transactions with Affiliates
 Investments in Unconsolidated Affiliates
 Citrus.
 Bear Creek Storage Company (Bear Creek).
  2008
    
    2007
    
    2006(In millions)Operating results data:(1)Operating revenues
    
    $
    20
    
    
    $
    267
    
    
    $
    262Operating expenses
    
    
    8
    
    
    
    115
    
    
    
    113Income from continuing operations and net income
    
    
    13
    
    
    
    92
    (2)
    
    
    78
 121




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##### Table of Contents



2008
    
    2007(In millions)Financial position data:Current assets
    
    $
    27
    
    
    $
    28Non-current assets
    
    
    55
    
    
    
    58Other current liabilities
    
    
    1
    
    
    
    2Equity in net assets
    
    
    81
    
    
    
    84
 
 (1)
    
    Includes Citrus results for the entire year ended December 31, 2007. Our share of
Citrus net income prior to the distribution of this investment in November 2007 was $75
million, adjusted for the excess purchase price amortization.(2)
    
    The difference between our proportionate share of our equity investments net income
and our earnings from unconsolidated affiliates in 2007 is due primarily to the excess
purchase price amortization related to Citrus and differences between the estimated and actual
equity earnings on our investments. Transactions with Affiliates
 MLP Acquisition.
 Contributions/Distributions.
  Cash Management Program.
 Income Taxes.
 Accounts Receivable Sales Program. Accounting for Transfers and Servicing of Financial
Assets and Extinguishments of Liabilities
 122




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##### Table of Contents



Affiliate Revenues and Expenses.
   2008
    
    2007
    
    2006(In millions)Revenues from affiliates
    
    $
    6
    
    
    $
    7
    
    
    $
    9Operation and maintenance expenses from affiliates
    
    
    107
    
    
    
    69
    
    
    
    65
 12. Supplemental Selected Quarterly Financial Information (Unaudited)
  Quarters EndedMarch 31
    
    June 30
    
    September 30
    
    December 31
    
    Total(In millions)2008Operating revenues
    
    $
    163
    
    
    $
    125
    
    
    $
    123
    
    
    $
    129
    
    
    $
    540Operating income
    
    
    101
    
    
    
    61
    
    
    
    54
    
    
    
    55
    
    
    
    271Net income
    
    
    95
    
    
    
    53
    
    
    
    44
    
    
    
    43
    
    
    
    2352007Operating revenues
    
    $
    120
    
    
    $
    114
    
    
    $
    121
    
    
    $
    127
    
    
    $
    482Operating income
    
    
    67
    
    
    
    55
    
    
    
    56
    
    
    
    64
    
    
    
    242Income from continuing operations
    
    
    57
    
    
    
    47
    
    
    
    46
    
    
    
    52
    
    
    
    202Discontinued operations, net of income taxes
    
    
    6
    
    
    
    3
    
    
    
    6
    
    
    
    4
    
    
    
    19Net income
    
    
    63
    
    
    
    50
    
    
    
    52
    
    
    
    56
    
    
    
    221
 123




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##### Table of Contents



SIGNATURES
  EL PASO PIPELINE PARTNERS, L.P.By:
    
    El Paso Pipeline GP Company, L.L.C.,
its General PartnerBy:
    
    /s/ James C. Yardley

James C. YardleyPresident and Chief Executive Officer
  Signature
    
    Title
    
    Date/s/ James C. Yardley

James C. Yardley
    
    President, Chief Executive Officer and Director
(Principal Executive Officer)
    
    March 2, 2009/s/ John R. Sult

John R. Sult
    
    Senior Vice President, Chief Financial Officer and
Controller
(Principal Accounting and Financial Officer)
    
    March 2, 2009/s/ Ronald L. Kuehn, Jr.

Ronald L. Kuehn, Jr.
    
    Chairman of the Board
    
    March 2, 2009/s/ Douglas L. Foshee

Douglas L. Foshee
    
    Director
    
    March 2, 2009/s/ D. Mark Leland

D. Mark Leland
    
    Director
    
    March 2, 2009/s/ Arthur C. Reichstetter

Arthur C. Reichstetter
    
    Director
    
    March 2, 2009/s/ William A. Smith

William A. Smith
    
    Director
    
    March 2, 2009
 124




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##### Table of Contents



EL PASO PIPELINE PARTNERS, L.P.
 
 EXHIBIT INDEX
 December 31, 2008
  EXHIBIT LIST
 ExhibitNumber
    
    Description2
    
    
    Contribution and Exchange Agreement, dated September 17, 2008, by and among El Paso Pipeline
Partners, L.P., El Paso Pipeline GP Company, L.L.C., El Paso Pipeline LP Holdings, L.L.C., El Paso
Pipeline Partners Operating Company, L.L.C., El Paso Corporation, El Paso Noric Investments III,
L.L.C., Colorado Interstate Gas Company, El Paso SNG Holding Company, L.L.C., Southern Natural Gas
Company, EPPP SNG GP Holdings, L.L.C. and EPPP CIG GP Holdings, L.L.C. (incorporated by reference
to Exhibit 2.1 to our current Report on Form 8-K filed with the SEC on September 23, 2008).3.A
    
    
    Certificate of Limited Partnership of El Paso Pipeline Partners, L.P
(incorporated by reference to Exhibit 3.1 to our Registration Statement on
Form S-1).3.B
    
    
    First Amended and Restated Agreement of Limited Partnership of El Paso
Pipeline Partners, L.P., dated November 21, 2007 (incorporated by
reference to Exhibit 3.1 to our Current Report on Form 8-K filed with the
SEC on November 28, 2007); Amendment No. 1 to First Amended and Restated
Agreement of Limited Partnership of El Paso Pipeline Partners, L.P., dated
July 28, 2008 (incorporated by reference to Exhibit 4.A to our Current
Report on Form 8-K, filed with the SEC on July 28, 2008).3.C
    
    
    Certificate of Formation of El Paso Pipeline GP Company, L.L.C.
(incorporated by reference to Exhibit 3.3 to our Registration Statement on
Form S-1).3.D
    
    
    Amended and Restated Limited Liability Company Agreement of El Paso
Pipeline GP Company, L.L.C., dated November 21, 2007 (incorporated by
reference to Exhibit 3.2 to our Current Report on Form 8-K filed with the
SEC on November 28, 2007).4.A
    
    
    Registration Rights Agreement, dated September 30, 2008, by and among
El Paso Pipeline Partners, L.P., El Paso Pipeline GP Company, L.L.C. and
Tortoise Energy Infrastructure Corporation (incorporated by reference to
Exhibit 10.4 to our Current Report on Form 8-K filed with the SEC on
October 6, 2008).10.A
    
    
    Credit Agreement, dated as of November 21, 2007, among El Paso Pipeline
Partners, L.P., El Paso Pipeline Partners Operating Company, L.L.C. and
Wyoming Interstate Company, Ltd. and the lenders and agents identified
therein (incorporated by reference to Exhibit 10.1 to our Current Report
on Form 8-K filed with the SEC on November 28, 2007).10.B
    
    
    Omnibus Agreement, dated November 21, 2007, among El Paso Pipeline
Partners, L.P., El Paso Pipeline GP Company, L.L.C., Colorado Interstate
Gas Company, Southern Natural Gas Company and El Paso Corporation
(incorporated by reference to Exhibit 10.3 to our Current Report on
Form 8-K filed with the SEC on November 28, 2007).10.C
    
    
    General Partnership Agreement of Colorado Interstate Gas Company, dated
November 1, 2007 (incorporated by reference to Exhibit 3.C to the Colorado
Interstate Gas Company Form 8-K filed with the SEC on November 7, 2007);
First Amendment to the General Partnership Agreement of Colorado
Interstate Gas Company, dated September 30, 2008 (incorporated by
reference to Exhibit 3.A to the Colorado Interstate Gas Company Form 8-K
filed with the SEC on October 6, 2008).10.D
    
    
    General Partnership Agreement of Southern Natural Gas Company, dated
November 1, 2007 (incorporated by reference to Exhibit 3.C to the Southern
Natural Gas Company Form 8-K filed with the SEC on November 7, 2007);
First Amendment to the General Partnership Agreement of Southern Natural
Gas Company, dated September 30, 2008 (incorporated by reference to
Exhibit 3.A to the Southern Natural Gas Company Form 8-K filed with the
SEC on October 6, 2008).+10.E
    
    
    Long-Term Incentive Plan of El Paso Pipeline GP Company, L.L.C.
(incorporated by reference to Exhibit 10.4 to our Current Report on
Form 8-K filed with the SEC on November 28, 2007).
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##### Table of Contents



ExhibitNumber
    
    Description10.F
    
    
    Contribution, Conveyance and Assumption Agreement, dated November 21,
2007, among El Paso Pipeline Partners, L.P., El Paso Pipeline GP Company,
L.L.C., El Paso Pipeline LP Holdings, L.L.C., WIC Holdings Company,
L.L.C., El Paso Wyoming Gas Supply Company, L.L.C., EPPP SNG GP Holdings,
L.L.C., EPPP CIG GP Holdings, L.L.C., El Paso Pipeline Holding Company,
L.L.C., El Paso Pipeline Partners Operating Company, L.L.C. and El Paso
Corporation (incorporated by reference to Exhibit 10.2 to our Current
Report on Form 8-K filed with the SEC on November 28, 2007).10.G
    
    
    Form of Indemnification Agreement (incorporated by reference to Exhibit
10.20 to our Registration Statement on Form S-1).10.H
    
    
    Form of Master Services Agreement by and between Colorado Interstate Gas
Company and El Paso Corporation, Tennessee Gas Pipeline Company, El Paso
Natural Gas Company and CIG Pipeline Services Company L.L.C. (incorporated
by reference to Exhibit 10.21 to our Registration Statement on Form S-1).10.I
    
    
    Form of Master Services Agreement by and between Southern Natural Gas
Company and El Paso Corporation, Tennessee Gas Pipeline Company and SNG
Pipeline Services Company, L.L.C. (incorporated by reference to Exhibit
10.22 to our Registration Statement on Form S-1).10.J
    
    
    Contribution, Conveyance and Assumption Agreement, dated September 30,
2008, by and among El Paso Pipeline Partners, L.P., El Paso Pipeline GP
Company, L.L.C., El Paso Pipeline LP Holdings, L.L.C., El Paso Noric
Investments III, L.L.C., El Paso CNG Company, L.L.C., El Paso Pipeline
Corporation, El Paso SNG Holding Company, L.L.C., EPPP SNG GP Holdings,
L.L.C., EPPP CIG GP Holdings, L.L.C., El Paso Pipeline Holding Company,
L.L.C., El Paso Pipeline Partners Operating Company, L.L.C., Colorado
Interstate Gas Company, Southern Natural Gas Company and El Paso
Corporation (incorporated by reference to Exhibit 10.1 to our Current
Report on Form 8-K filed with the SEC on October 6, 2008).10.K
    
    
    Securities Purchase Agreement dated September 30, 2008, by and among El
Paso Pipeline Partners, L.P., El Paso Pipeline GP Company, L.L.C. and
NGPMR MLP Opportunity Fund Company, LLC (incorporated by reference to
Exhibit 10.2 to our Current Report on Form 8-K filed with the SEC on
October 6, 2008).10.L
    
    
    Securities Purchase Agreement, dated September 30, 2008, by and among El
Paso Pipeline Partners, L.P., El Paso Pipeline GP Company, L.L.C. and
Tortoise Energy Infrastructure Corporation (incorporated by reference to
Exhibit 10.3 to our Current Report on Form 8-K filed with the SEC on
October 6, 2008).10.M
    
    
    Note Purchase Agreement, dated September 30, 2008, by and among El Paso
Pipeline Partners, L.P., as guarantor, El Paso Pipeline Partners Operating
Company, L.L.C., as issuer, and the insurance companies and financial
institutions named therein as parties thereto (incorporated by reference
to Exhibit 10.5 to our Current Report on Form 8-K filed with the SEC on
October 6, 2008).*12
    
    
    Ratio of Earnings to Fixed Charges*21
    
    
    List of subsidiaries of El Paso Pipeline Partners, L.P.*23.A
    
    
    Consent of Independent Registered Public Accounting Firm Ernst & Young LLP.*23.B
    
    
    Consent of
Independent Registered Public Accounting Firm PricewaterhouseCoopers
LLP.*31.A
    
    
    Certification of Chief Executive Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
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##### Table of Contents



ExhibitNumber
    
    Description*31.B
    
    
    Certification of Chief Financial Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.*32.A
    
    
    Certification of Chief Executive Officer pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.*32.B
    
    
    Certification of Chief Financial Officer pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.*99
    
    
    El Paso Pipeline GP Company, L.L.C. consolidated balance sheet at December
31, 2008 and notes thereto.
 127