##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 Form 10-Q
 (Mark One)
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended March 31, 2010
 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 001-33917
 Williams Pipeline Partners L.P.
  Delaware(State or other jurisdiction of 
incorporation or organization)
    
    26-0834035(I.R.S. Employer
Identification No.)One Williams Center, Tulsa, Oklahoma(Address of principal executive offices)
    
    74172-0172(Zip Code)
 (918) 573-2000  (Registrants telephone number, including area code)
 NO CHANGE  (Former name, former address and former fiscal year, if changed since last report)
 þ o
 o o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o(Do not check if a smaller reporting company)
    
    Smaller reporting company o
 o þ




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##### 



WILLIAMS PIPELINE PARTNERS L.P.
 FORM 10-Q
 TABLE OF CONTENTS
 PagePart I. Financial InformationItem 1. Financial StatementsConsolidated Statements of Income  Three Months Ended March 31, 2010 and 2009
    
    
    5Consolidated Balance Sheets  March 31, 2010 and December 31, 2009
    
    
    6Consolidated Statements of Cash Flows  Three Months Ended March 31, 2010 and 2009
    
    
    7Consolidated Statement of Partners Capital from January 1, 2010 to March 31, 2010
    
    
    8Notes to Consolidated Financial Statements
    
    
    9Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    13Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    21Item 4. Controls and Procedures
    
    
    21Part II. Other InformationItem 1. Legal Proceedings
    
    
    22Item 1A. Risk Factors
    
    
    22Item 6. Exhibits
    
    
    22EX-31.1EX-31.2EX-32
  FORWARD-LOOKING STATEMENTS
   
    
    Amounts and nature of future capital expenditures;
 
    
    Expansion and growth of our business and operations;
 
    
    Financial condition and liquidity;
 2




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##### Table of Contents




    
    Business strategy;
 
    
    Cash flow from operations or results of operations;
 
    
    The levels of cash distributions to unitholders;
 
    
    Rate case filings; and
 
    
    Natural gas prices and demand.
  
    
    Whether we have sufficient cash from operations to enable us to maintain current levels
of cash distributions or to pay the minimum quarterly distribution following establishment
of cash reserves and payment of fees and expenses, including payments to our general
partner;
 
    
    Availability of supplies (including the uncertainties inherent in assessing and
estimating future natural gas reserves), market demand, volatility of prices, and the
availability and cost of capital;
 
    
    Inflation, interest rates, and general economic conditions (including future
disruptions and volatility in the global credit markets and the impact of these events on
Northwests customers and suppliers);
 
    
    The strength and financial resources of our and Northwests competitors;
 
    
    Development of alternative energy sources;
 
    
    The impact of operational and development hazards;
 
    
    Costs of, changes in, or the results of laws, government regulations (including
proposed climate change legislation), environmental liabilities, litigation and rate
proceedings;
 
    
    Northwests allocated costs for defined benefit pension plans and other postretirement
benefit plans sponsored by its affiliates;
 
    
    Changes in maintenance and construction costs;
 
    
    Changes in the current geopolitical situation;
 
    
    Northwests exposure to the credit risk of its customers;
 
    
    Risks related to strategy and financing, including restrictions stemming from
Northwests debt agreements, future changes in Northwests credit ratings, and the
availability and cost of credit;
 
    
    Risks associated with future weather conditions;
 
    
    Acts of terrorism; and
 
    
    Additional risks described in our filings with the Securities and Exchange Commission
(SEC).
 3




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4




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PART I. FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 WILLIAMS PIPELINE PARTNERS L.P.
 
 CONSOLIDATED STATEMENTS OF INCOME
 (Unaudited)
 Three Months EndedMarch 31,2010
    
    
    2009(Thousands of dollars, exceptper-unit amounts)General and administrative expense
    
    $
    1,330
    
    
    $
    653Equity earnings from investment in Northwest Pipeline GP
    
    
    13,259
    
    
    
    14,318Interest expense  affiliate
    
    
    (3
    )
    
    
    (12
    )Interest income
    
    
    1
    
    
    
    2Net income
    
    $
    11,927
    
    
    $
    13,655Allocation of net income used for earnings per unit calculation:Net income
    
    $
    11,927
    
    
    $
    13,655Allocation of net income (loss) to general partner
    
    
    18
    
    
    
    (89
    )Allocation of net income to limited partners
    
    $
    11,909
    
    
    $
    13,744Basic and diluted net income per limited partner unit:Common units
    
    $
    0.35
    
    
    $
    0.41Subordinated units
    
    $
    0.35
    
    
    $
    0.41Weighted average number of units outstanding:Common units
    
    
    22,607,430
    
    
    
    22,607,430Subordinated units
    
    
    10,957,900
    
    
    
    10,957,900
  5




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WILLIAMS PIPELINE PARTNERS L.P.
 
 CONSOLIDATED BALANCE SHEETS
 (Unaudited)
 March 31,
    
    
    December 31,2010
    
    
    2009(Thousands of dollars)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    21,841
    
    
    $
    8,114Accounts receivable  affiliate
    
    
    247
    
    
    
    Prepaid expense
    
    
    574
    
    
    
    193Total current assets
    
    
    22,662
    
    
    
    8,307Investment in Northwest Pipeline GP
    
    
    428,515
    
    
    
    441,608Total assets
    
    $
    451,177
    
    
    $
    449,915LIABILITIES AND PARTNERS CAPITALCurrent liabilities:Accounts payable:Trade
    
    $
    842
    
    
    $
    419Affiliate
    
    
    290
    
    
    
    124Total current liabilities
    
    
    1,132
    
    
    
    543Contingent liabilities and commitmentsPartners capital
    
    
    450,045
    
    
    
    449,372Total liabilities and partners capital
    
    $
    451,177
    
    
    $
    449,915
  6




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##### Table of Contents



WILLIAMS PIPELINE PARTNERS L.P.
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 (Unaudited)
 Three Months EndedMarch 31,2010
    
    
    2009(Thousands of dollars)OPERATING ACTIVITIES:Net Income
    
    $
    11,927
    
    
    $
    13,655Adjustments to reconcile to cash provided by operations:Equity earnings from investment in Northwest Pipeline GP
    
    
    (13,259
    )
    
    
    (14,318
    )Distributions related to equity earnings from
investment in Northwest Pipeline GP
    
    
    26,348
    
    
    
    11,200Cash used by changes in assets and liabilities:Other current assets
    
    
    (381
    )
    
    
    (135
    )Accounts payable
    
    
    589
    
    
    
    (713
    )Other
    
    
    
    
    
    
    12Net cash provided by operating activities
    
    
    25,224
    
    
    
    9,701INVESTING ACTIVITIES:Other
    
    
    
    
    
    
    Net cash provided (used) by investing activities
    
    
    
    
    
    
    FINANCING ACTIVITIES:Distributions paid
    
    
    (11,497
    )
    
    
    (10,960
    )Contribution pursuant to the omnibus agreement
    
    
    
    
    
    
    370Net cash used by financing activities
    
    
    (11,497
    )
    
    
    (10,590
    )Increase (decrease) in cash and cash equivalents
    
    
    13,727
    
    
    
    (889
    )Cash and cash equivalents at beginning of period
    
    
    8,114
    
    
    
    7,760Cash and cash equivalents at end of period
    
    $
    21,841
    
    
    $
    6,871
  7




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WILLIAMS PIPELINE PARTNERS L.P.
 
 CONSOLIDATED STATEMENT OF PARTNERS CAPITAL
 (Unaudited)
 AccumulatedOther
    
    
    TotalLimited Partner
    
    
    General
    
    
    Comprehensive
    
    
    PartnersCommon
    
    
    Subordinated
    
    
    Partner
    
    
    Income
    
    
    Capital(Thousands of dollars)Balance  January 1, 2010
    
    $
    296,932
    
    
    $
    143,513
    
    
    $
    8,969
    
    
    $
    (42
    )
    
    $
    449,372Net income
    
    
    8,021
    
    
    
    3,888
    
    
    
    18
    
    
    
    
    
    
    
    11,927Other comprehensive income:Net unrealized gain on
cash flow hedge
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5
    )
    
    
    (5
    )Total other comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5
    )Cash distributions
    
    
    (7,574
    )
    
    
    (3,671
    )
    
    
    (252
    )
    
    
    
    
    
    
    (11,497
    )Contributions pursuant to the
omnibus agreement
    
    
    
    
    
    
    
    
    
    
    248
    
    
    
    
    
    
    
    248Balance  March 31, 2010
    
    $
    297,379
    
    
    $
    143,730
    
    
    $
    8,983
    
    
    $
    (47
    )
    
    $
    450,045
  8




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WILLIAMS PIPELINE PARTNERS L.P.
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (Unaudited)
 Note 1. Organization and Basis of Presentation
        9




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WILLIAMS PIPELINE PARTNERS L.P.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 Note 2. Allocation of Net Income and Distributions
  Three Months EndedMarch 31,2010
    
    
    2009(Thousands of dollars)Allocation to general partner:Net income
    
    $
    11,927
    
    
    $
    13,655Charges direct to general partner:Reimbursable general administrative costs
    
    
    248
    
    
    
    370Income subject to 2% allocation of general partner interest
    
    
    12,175
    
    
    
    14,025General partners share of net income
    
    
    2.0
    %
    
    
    2.0
    %General partners allocated share of net income before
items directly allocable to general partner interest
    
    
    244
    
    
    
    281Incentive distributions paid to general partner
    
    
    22
    
    
    
    Direct charges to general partner
    
    
    (248
    )
    
    
    (370
    )Net income (loss) allocated to general partner
    
    $
    18
    
    
    $
    (89
    )Net income
    
    $
    11,927
    
    
    $
    13,655Net income (loss) allocated to general partner
    
    
    18
    
    
    
    (89
    )Net income allocated to limited partners
    
    $
    11,909
    
    
    $
    13,744
   General PartnerIncentivePer Unit
    
    Common
    
    Subordinated
    
    
    
    
    
    Distribution
    
    Total CashPayment Date
    
    Distribution
    
    Units
    
    Units
    
    2%
    
    Rights
    
    Distribution5/15/2008
    
    $
    0.2242
    
    
    $
    5,068
    
    
    $
    2,457
    
    
    $
    154
    
    
    $
    
    
    
    $
    7,6798/14/2008
    
    
    0.3100
    
    
    
    7,008
    
    
    
    3,397
    
    
    
    212
    
    
    
    
    
    
    
    10,61711/14/2008
    
    
    0.3150
    
    
    
    7,121
    
    
    
    3,452
    
    
    
    216
    
    
    
    
    
    
    
    10,7892/13/2009
    
    
    0.3200
    
    
    
    7,234
    
    
    
    3,507
    
    
    
    219
    
    
    
    
    
    
    
    10,9605/15/2009
    
    
    0.3250
    
    
    
    7,347
    
    
    
    3,561
    
    
    
    223
    
    
    
    
    
    
    
    11,1318/14/2009
    
    
    0.3300
    
    
    
    7,461
    
    
    
    3,616
    
    
    
    226
    
    
    
    
    
    
    
    11,30311/13/2009
    
    
    0.3350
    
    
    
    7,574
    
    
    
    3,671
    
    
    
    230
    
    
    
    22
    
    
    
    11,4972/12/2010
    
    
    0.3350
    
    
    
    7,574
    
    
    
    3,671
    
    
    
    230
    
    
    
    22
    
    
    
    11,4975/14/2010(a)
    
    
    0.3350
    
    
    
    7,574
    
    
    
    3,671
    
    
    
    230
    
    
    
    22
    
    
    
    11,497
 
 (a)
    
    The board of directors of our general partner declared this cash distribution on April 22,
2010 to be paid on May 14, 2010 to unitholders of record at the close of business on May 7,
2010. 10




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WILLIAMS PIPELINE PARTNERS L.P.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 Note 3. Credit Facilities
  Note 4. Related Party Transactions
   Note 5. Comprehensive Income
  Three Months EndedMarch 31,2010
    
    
    2009*(Restated)(Thousands of dollars)Net income
    
    $
    11,927
    
    
    $
    13,655Reclassification of cash flow hedge gain into earnings
    
    
    (5
    )
    
    
    (6
    )Total comprehensive income
    
    $
    11,922
    
    
    $
    13,649
 
 *
    
    Prior year amount has been restated to reflect accounting for pension and postretirement
benefit obligations on a multi-employer accounting model (See Note 1). The effect of the
restatement decreased Northwests Total Comprehensive Income by $1.0 million for the three
months ended March 31, 2009. The effect of the restatement decreased our Total Comprehensive
Income by $0.3 million for the three months ended March 31, 2009. 11




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WILLIAMS PIPELINE PARTNERS L.P.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 Note 6. Equity Investments
  Northwest
 Three Months EndedMarch 31,2010
    
    
    2009(Thousands of dollars)Revenues
    
    $
    106,110
    
    
    $
    111,548Operating expenses
    
    
    55,819
    
    
    
    58,396Other (expense) income, net
    
    
    (338
    )
    
    
    191Interest charges
    
    
    12,070
    
    
    
    12,435Net income
    
    $
    37,883
    
    
    $
    40,908
 Note 7. Disclosures About the Fair Value of Financial Instruments
  Cash, cash equivalents
 12




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Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
 Overview
     Outlook
  Northwests Capital Projects
  
    
    Jackson Prairie Underground Expansion.The Jackson Prairie Storage Project, connected to
Northwests transmission system near Chehalis, Washington, is operated by Puget Sound Energy
and is jointly owned by Puget Sound Energy, Avista Corporation and Northwest. A phased
capacity expansion is currently underway and a deliverability expansion was placed in service
on November 1, 2008.As a one-third owner of Jackson Prairie, in early 2006, Northwest held an open season
for a new firm storage service based on its 100 million cubic feet per day share of the
planned 2008 deliverability expansion and approximately 1.2 Bcf of its share of the working
natural gas storage capacity expansion being developed over approximately a six-year period
from 2007 through 2012.
 13




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As a result of the open season, four shippers have executed long-term service agreements for
the full amount of incremental storage service offered at contract terms averaging 33 years.
The firm service relating to storage capacity rights will be phased-in as the expanded working
natural gas capacity is developed. Northwests
one-third share of the deliverability expansion was placed in service on November 1, 2008 at a
cost of approximately $16.0 million. Northwests estimated capital cost for the capacity
expansion component of the new storage service is $6.1 million, primarily for base natural gas.
    
    Sundance Trail Expansion.In November 2009, Northwest received approval from the Federal
Energy Regulatory Commission (FERC) to construct approximately 16 miles of 30-inch loop
between its existing Green River and Muddy Creek compressor stations in Wyoming as well as an
upgrade to its existing Vernal compressor station, with service targeted to commence in
November 2010. The total project is estimated to cost
approximately $60 million, including the cost
of replacing the existing compression at Vernal, which will enhance the efficiency of
Northwests system. Northwest executed a precedent agreement to provide 150 thousand
dekatherms (MDth) per day of firm transportation service from the Greasewood and Meeker
Hubs in Colorado for delivery to the Opal Hub in Wyoming. Northwest has proposed to collect
its maximum system rates, and has received approval from the FERC to roll-in the Sundance
Trail Expansion costs in any future rate cases.
 Northwests Results of Operations
  Analysis of Financial Results
  Three Months Ended March 31, 2010 Compared to Three Months Ended March 31, 2009
    14




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Operating Statistics
  Quarter EndedMarch 31,2010
    
    2009(In Trillion British Thermal Units)Total Throughput (1)
    
    
    179
    
    
    
    224Average Daily Transportation Volumes
    
    
    2.0
    
    
    
    2.5Average Daily Reserved Capacity Under Base Firm Contracts,
excluding peak capacity
    
    
    2.8
    
    
    
    2.6Average Daily Reserved Capacity Under Short-Term Firm Contracts (2)
    
    
    0.3
    
    
    
    0.6
 
 (1)
    
    Parachute Lateral volumes of 23 trillion British Thermal Units (TBtu) in 2009 are excluded
from total throughput as these volumes flowed under separate contracts that did not result in
mainline throughput.(2)
    
    Includes additional capacity created from time to time through the installation of new
receipt or delivery points or the segmentation of existing mainline capacity. Such capacity is
generally marketed on a short-term firm basis. When the capacity is sold on a long-term
basis, it is included above, under Base Firm Contracts. Capital Resources and Liquidity of Northwest
     15




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Sources (Uses) of Cash
 Three Months EndedMarch 31,2010
    
    
    2009(Thousands of dollars)Net cash provided (used) by:Operating activities
    
    $
    66,546
    
    
    $
    73,627Financing activities
    
    
    (65,893
    )
    
    
    (33,644
    )Investing activities
    
    
    (1,005
    )
    
    
    (39,662
    )(Decrease) increase in cash and cash equivalents
    
    $
    (352
    )
    
    $
    321
 Operating Activities
  Financing Activities
  Investing Activities
  Method of Financing
 Working Capital
    Short-Term Liquidity
   16




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Credit Agreement
      Capital Requirements
    17




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##### Table of Contents



Credit Ratings
  Moodys Investors Service
    
    Baa2Standard and Poors
    
    BBBFitch Ratings
    
    BBB
      Other
 Off-Balance Sheet Arrangements
  Impact of Inflation
  18




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Environmental Matters
    Safety Matters
 Pipeline Integrity Regulations.
 Legal Matters
  Summary
  19




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##### Table of Contents



Conclusion
  Capital Resources and Liquidity of Williams Pipeline Partners L.P.
   Northwest Distributions
  Capital Contributions
  Credit Facility
  Cash Distributions to Unitholders
  20




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Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
  
 Item 4.
    
    Controls and Procedures
  Evaluation of Disclosure Controls and Procedures
     First Quarter 2010 Changes in Internal Controls
  21




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PART II. OTHER INFORMATION
 
 Item 1.
    
    Legal Proceedings
  
 Item 1A.
    
    Risk Factors
  
 Item 6.
    
    Exhibits
  ExhibitNumber
    
    Description3.1
    
    Certificate of Limited Partnership of Williams Pipeline Partners L.P. (filed on
September 12, 2007 as Exhibit 3.1 to our Registration Statement on Form S-1) and
incorporated herein by reference.3.2
    
    First Amended and Restated Agreement of Limited Partnership of Williams Pipeline
Partners L.P., dated January 24, 2008 (filed on January 30, 2008 as Exhibit 3.1 to
our Form 8-K) and incorporated herein by reference.3.3
    
    Certificate of Formation of Williams Pipeline GP LLC (filed on September 12, 2007
as Exhibit 3.3 to our Registration Statement on Form S-1) and incorporated herein
by reference.3.4
    
    First Amended and Restated Limited Liability Company Agreement of Williams
Pipeline GP LLC, dated January 24, 2008 (filed on January 30, 2008 as Exhibit 3.2
to our Form 8-K) and incorporated herein by reference.10.1
    
    Credit Agreement, dated as of February 17, 2010, by and among Williams Partners
L.P., Transcontinental Gas Pipe Line Company, LLC, Northwest Pipeline GP, the
lenders party thereto and Citibank, N.A., as Administrative Agent (filed as
Exhibit 10.5 to Williams Partners L.P.s Current Report on Form 8-K, filed on
February 22, 2010 (File No. 001-32599) and incorporated by reference as item 10.1
to Northwest Pipeline GPs Form 8-K filed February 22, 2010 (File No. 001-007414))
and incorporated herein by reference.31.1*
    
    Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer.31.2*
    
    Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer.32**
    
    Section 1350 Certifications of Chief Executive Officer and Chief Financial Officer.
 
 *
    
    Filed herewith**
    
    Furnished herewith 22




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SIGNATURES
  Williams Pipeline Partners L.P.(Registrant)By:
    
    Williams Pipeline GP LLC,
its general partnerBy:
    
    /s/ Ted T. TimmermansTed T. TimmermansChief Accounting Officer
  23




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EXHIBIT INDEX
 ExhibitNumber
    
    Description3.1
    
    Certificate of Limited Partnership of Williams Pipeline Partners L.P. (filed on
September 12, 2007 as Exhibit 3.1 to our Registration Statement on Form S-1) and
incorporated herein by reference.3.2
    
    First Amended and Restated Agreement of Limited Partnership of Williams Pipeline
Partners L.P., dated January 24, 2008 (filed on January 30, 2008 as Exhibit 3.1 to
our Form 8-K) and incorporated herein by reference.3.3
    
    Certificate of Formation of Williams Pipeline GP LLC (filed on September 12, 2007
as Exhibit 3.3 to our Registration Statement on Form S-1) and incorporated herein
by reference.3.4
    
    First Amended and Restated Limited Liability Company Agreement of Williams
Pipeline GP LLC, dated January 24, 2008 (filed on January 30, 2008 as Exhibit 3.2
to our Form 8-K) and incorporated herein by reference.10.1
    
    Credit Agreement, dated as of February 17, 2010, by and among Williams Partners
L.P., Transcontinental Gas Pipe Line Company, LLC, Northwest Pipeline GP, the
lenders party thereto and Citibank, N.A., as Administrative Agent (filed as
Exhibit 10.5 to Williams Partners L.P.s Current Report on Form 8-K, filed on
February 22, 2010 (File No. 001-32599) and incorporated by reference as item 10.1
to Northwest Pipeline GPs Form 8-K filed February 22, 2010 (File No. 001-007414))
and incorporated herein by reference.31.1*
    
    Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer.31.2*
    
    Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer.32**
    
    Section 1350 Certifications of Chief Executive Officer and Chief Financial Officer.
 
 *
    
    Filed herewith**
    
    Furnished herewith 24