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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D. C. 20549
 FORM 10-K
 þ
    
    Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the fiscal year ended December 31, 2007
 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 1-7414
 NORTHWEST PIPELINE GP
  DELAWARE
    
    26-1157701(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)295 Chipeta Way, Salt Lake City, Utah
    
    84108(Address of principal executive offices)
    
    (Zip Code)
 
 
   o þ
 o þ
 þ o
 þ
  Large accelerated filer
o
    
    Accelerated filer
o
    
    Non-accelerated filer  
þ
(Do not check if a smaller reporting company)
    
    Smaller reporting company o
 o þ




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##### 



TABLE OF CONTENTS
 Heading
    
    PagePART IItem 1. BUSINESS
    
    
    1Item 1A. RISK FACTORS
    
    
    13Item 1B. UNRESOLVED STAFF COMMENTS
    
    
    24Item 2. PROPERTIES
    
    
    24Item 3. LEGAL PROCEEDINGS
    
    
    24Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
    
    
    24PART IIItem 5. MARKET FOR REGISTRANTS COMMON EQUITY AND RELATED STOCK-HOLDER MATTERS
    
    
    25Item 6. SELECTED FINANCIAL DATA
    
    
    25Item 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
    
    
    26Item 7A. QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK
    
    
    41Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
    
    
    42Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
    
    
    71Item 9A. CONTROLS AND PROCEDURES
    
    
    71Item 9B. OTHER INFORMATION
    
    
    71PART IIIItem 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
    
    
    72Item 11. EXECUTIVE COMPENSATION
    
    
    73Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
    
    
    74Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
    
    
    75Item 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
    
    
    77PART IVItem 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
    
    
    78Computation of Ratio of Earnings to Fixed ChargesLetter Re: Change in Accounting PrinciplesConsent of Independent Registered Public Accounting FirmPower of Attorney with Certified ResolutionSection 302 Certification of Principal Executive OfficerSection 302 Certification of Principal Financial OfficerSection 906 Certification of Principal Executive Officer and Principal Financial Officer




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NORTHWEST PIPELINE GP
 FORM 10-K
 
 PART I
 
 Item 1. BUSINESS
  GENERAL
  RECENT EVENTS
    PIPELINE SYSTEM, CUSTOMERS AND COMPETITION
 Transportation and Storage
  -1 -




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
    
    Jackson Prairie:We own a one-third interest in the Jackson Prairie underground storage
facility located near Chehalis, Washington, with the remaining interests owned by two of our
distribution customers. As of December 31, 2007, our share of the firm seasonal storage
service in this facility was approximately 7.3 Bcf of working natural gas storage capacity
and up to 283 MMcf per day of peak day deliveries. Additionally, our share of the
best-efforts delivery capacity was 50 MMcf per day. As described below, we are participating
in an ongoing expansion of Jackson Prairie.
    
    Plymouth LNG:We also own and operate an LNG storage facility located near Plymouth,
Washington, which provides standby service for our customers during extreme peaks in demand.
The facility has a total LNG storage capacity equivalent to 2.3 Bcf of working natural gas,
liquefaction capability of 12 MMcf per day and regasification capability of 300 MMcf per
day. Certain of our major customers own the working natural gas stored at the LNG plant.
    
    Clay Basin Field:We have a contract with a third party under which natural gas storage
services are provided to us in an underground storage reservoir in the Clay Basin Field
located in Daggett County, Utah. We are authorized to utilize the Clay Basin Field at a
seasonal storage level of 3.0 Bcf of working natural gas, with a firm delivery capability of
25 MMcf of natural gas per day.
 
 *
    
    The term Mcf means thousand cubic feet, MMcf means million cubic feet and Bcf means billion
cubic feet. All volumes of natural gas are stated at a pressure base of 14.73 pounds per square
inch absolute at 60 degrees Fahrenheit. The term MMBtu means one million British Thermal Units
and TBtu means one trillion British Thermal Units. The term Dth means one dekatherm, which is
equal to one MMBtu. The term MDth means thousand dekatherms. The term MMDth means million
dekatherms. -2 -




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Competition
       CAPITAL PROJECTS
 Jackson Prairie Underground Expansion
  -3 -




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Colorado Hub Connection Project
     Parachute Lateral Project
  -4 -




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Sundance Trail Expansion
  Seasonality
  2007
    
    Jan-Mar
    
    Apr-Jun
    
    Jul-Sep
    
    Oct-Dec
    
    TotalRevenues ($ in 000)
    
    $
    103,043
    
    
    $
    102,655
    
    
    $
    106,364
    
    
    $
    109,789
    
    
    $
    421,851Revenue %
    
    
    24.5
    %
    
    
    24.3
    %
    
    
    25.2
    %
    
    
    26.0
    %
    
    
    100
    %Operating Expenses ($ in 000)
    
    $
    53,726
    
    
    $
    38,199
    
    
    $
    56,384
    
    
    $
    62,813
    
    
    $
    211,122Throughput (TBtu) (1)
    
    
    200
    
    
    
    160
    
    
    
    177
    
    
    
    220
    
    
    
    757Throughput %
    
    
    26.4
    %
    
    
    21.1
    %
    
    
    23.4
    %
    
    
    29.1
    %
    
    
    100
    %
 
 (1)
    
    Parachute Lateral volumes are excluded from throughput as these volumes flow under
separate contracts that do not generally result in mainline throughput. -5 -




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OPERATING STATISTICS
  Year Ended December 31,2007
    
    2006
    
    2005(In trillion British Thermal Units)Total Throughput (1)
    
    
    757
    
    
    
    676
    
    
    
    673Average Daily Transportation Volumes
    
    
    2.1
    
    
    
    1.9
    
    
    
    1.8Average Daily Reserved Capacity Under Base Firm
Contracts, excluding peak capacity
    
    
    2.5
    
    
    
    2.5
    
    
    
    2.5Average Daily Reserved Capacity Under Short-Term
Firm Contracts (2)
    
    
    .8
    
    
    
    .9
    
    
    
    .8
 
 (1)
    
    Parachute Lateral volumes of 55 TBtu in 2007 are excluded from total throughput as these
volumes flow under separate contracts that do 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. REGULATORY MATTERS
 FERC Regulation
  
    
    transportation and storage of natural gas;
    
    rates and charges;
    
    terms of service including creditworthiness requirements;
    
    construction of new facilities;
    
    extension or abandonment of service and facilities;
    
    accounts and records;
    
    depreciation and amortization policies;
    
    relationships with marketing affiliates; and
    
    initiation and discontinuation of services.
    -6 -




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FERC Policy Statement on Income Tax Allowances
    -7 -




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FERC Policy Statement on Proxy Groups and Return on Equity
    Energy Policy Act of 2005
  Safety and Maintenance
  -8 -




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Environmental Regulation
   
    
    requiring the acquisition of permits to conduct regulated activities;
    
    restricting the manner in which we can release materials into the environment;
    
    imposing investigatory and remedial obligations to mitigate pollution from
former or current operations;
    
    assessing administrative, civil and criminal penalties for failure to comply
with applicable legal requirements; and
    
    in certain instances, enjoining some or all of the operations of facilities
deemed in non-compliance with permits issued pursuant to applicable laws and
regulations.
    -9 -




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-11 -




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INSURANCE
  OWNERSHIP OF PROPERTY
  EMPLOYEES
  TRANSACTIONS WITH AFFILIATES
  -12 -




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FORWARD LOOKING STATEMENTS/RISK FACTORS AND CAUTIONARY STATEMENT FOR
PURPOSES OF THE SAFE HARBORPROVISIONS OF
THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
 
 Item 1A. RISK FACTORS
   
    
    amounts and nature of future capital expenditures;
    
    expansion and growth of our business and operations;
    
    business strategy;
    
    cash flow from operations or results of operations; and
    
    power and natural gas prices and demand.
  
    
    availability of supplies ( including the uncertainties inherent in assessing and
estimating future natural gas reserves), market demand, volatility of prices, and
increased costs of capital;
    
    inflation, interest rates, and general economic conditions;
    
    the strength and financial resources of our 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;
    
    changes in the current geopolitical situation;
    
    risks related to strategy and financing, including restrictions stemming from our
debt agreements; and
    
    risk associated with future weather conditions and acts of terrorism.
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RISK FACTORS
  Risks Inherent to our Industry and Business
 Our natural gas transportation and storage activities involve numerous risks that might result in
accidents and other operating risks and hazards .
  
    
    uncontrolled releases of natural gas;
    
    fires and explosions;
    
    natural disasters;
    
    mechanical problems; and
    
    damage inadvertently caused by third party activity, such as operation of
construction equipment.
  -14 -




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Our current pipeline infrastructure is aging, which may adversely affect our business.
  Increased competition from alternative natural gas transportation and storage options and
alternative fuel sources could have a significant financial impact on us.
   We may not be able to maintain or replace expiring natural gas transportation and storage contracts
at favorable rates or on a long-term basis.
   
    
    the level of existing and new competition to deliver natural gas to our markets;
    
    the growth in demand for natural gas in our markets;
    
    whether the market will continue to support long-term firm contracts;
    
    whether our business strategy continues to be successful;
    
    the level of competition for natural gas supplies in the production basins serving
us; and
 -15 -




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
    
    the effects of state regulation on customer contracting practices.
  Any significant decrease in supplies of natural gas in our areas of operation could adversely
affect our business and operating results.
    Significant prolonged changes in natural gas prices could affect supply and demand and cause a
reduction in or termination of the long-term transportation and storage contracts or throughput on
our system.
  Costs of environmental liabilities and complying with existing and future environmental regulations
could exceed our current expectations.
   -16 -




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The failure of liquid natural gas (LNG) import terminals to be successfully developed in the United
States could increase natural gas prices and reduce the demand for our services.
  We depend on certain key customers for a significant portion of our revenues. The loss of any of
these key customers or the loss of any contracted volumes could result in a decline in our
business.
  If third-party pipelines and other facilities interconnected to our pipeline and facilities become
unavailable to transport natural gas, our revenues could be adversely affected.
  -17 -




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We do not own all of the land on which our pipeline and facilities are located, which could disrupt
our operations.
  We do not insure against all potential losses and could be seriously harmed by unexpected
liabilities.
   Risks Related to Strategy and Financing
 Our debt agreements impose restrictions on us that may adversely affect our ability to operate our
business.
  -18 -




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A downgrade of our current credit rating could impact our costs of doing business in certain ways
and maintaining our current credit rating is within the control of independent third parties.
  
    
    economic downturns;
    
    deteriorating capital market conditions generally;
    
    declining market prices for natural gas, natural gas liquids and other commodities;
    
    terrorist attacks or threatened attacks on our facilities or those of other energy
companies;
    
    the overall health of the energy industry, including the bankruptcy or insolvency of
other companies.
  Williams can exercise substantial control over our distribution policy and our business and
operations and may do so in a manner that is adverse to our interests.
  
    
    decisions on financings and our capital raising activities;
    
    mergers or other business combinations;
    
    acquisition or disposition of assets.
  -19 -




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The financial condition and liquidity of Williams affects our access to capital, our credit
standing and our financial condition.
   Risks Related to Regulations that Affect our Industry
 Compliance with the Pipeline Safety Improvement Act of 2002 may adversely impact our cost of
conducting business.
  
    
    perform ongoing assessments of pipeline integrity;
    
    identify and characterize applicable threats to pipeline segments that could impact
a high consequence area;
    
    improve data collection, integration and analysis;
    
    repair and remediate our pipeline as necessary; and
    
    implement preventative and mitigating actions.
  Our natural gas transportation and storage operations are subject to regulation by FERC, which
could have an adverse impact on our ability to establish transportation and storage rates that
would allow us to recover the full cost of operating our pipeline, including a reasonable return.
  
    
    rates, operating terms and conditions of service;
    
    the types of services we may offer to our customers;
    
    certification and construction of new facilities;
 -20 -




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
    
    acquisition, extension, disposition or abandonment of facilities;
    
    accounts and records;
    
    relationships with affiliated companies involved in certain aspects of the natural
gas business;
    
    initiation and discontinuation of services; and
    
    market manipulation in connection with interstate sales, purchases or transportation
of natural gas.
   We could be subject to penalties and fines if we fail to comply with FERC regulations.
  The outcome of certain FERC proceedings regarding income tax allowances in rate calculations is
uncertain and could affect our ability to include an income tax allowance in our cost-of-service
based rates.
   -21 -




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The outcome of certain FERC proceedings involving FERC policy statements is uncertain and could
affect the level of return on equity that Northwest may be able to achieve in any future rate
proceeding.
    The outcome of future rate cases to set the rates we can charge customers on our pipeline might
result in rates that lower our return on the capital that we have invested in our pipeline.
  Risks Related to Accounting Standards
 Potential changes in accounting standards might cause us to revise our financial results and
disclosures in the future, which might change the way analysts measure our business or financial
performance.
  -22 -




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Risks Related to Employees, Outsourcing of Non-Core Support Activities, and Technology.
 Institutional knowledge residing with current employees nearing retirement eligibility might not be
adequately preserved.
  Failure of or disruptions to our outsourcing relationships might negatively impact our ability to
conduct our business.
   Risks Related to Weather, Other Natural Phenomena and Business Disruption
 Our assets and operations can be affected by weather and other natural phenomena.
  Acts of terrorism could have a material adverse effect on our financial condition, results of
operations and cash flows.
  -23 -




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Item 1B. UNRESOLVED STAFF COMMENTS
  
 Item 2. PROPERTIES
  
 Item 3. LEGAL PROCEEDINGS
  
 Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  -24 -




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PART II
 
 Item 5. MARKET FOR REGISTRANTS COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
   
 Item 6. SELECTED FINANCIAL DATA
  Year Ended December 31,2007
    
    2006
    
    2005
    
    2004
    
    2003(Restated) (B)
    
    (Restated) (B)
    
    (Restated) (B)
    
    (Restated) (B)(Thousands of Dollars)Income Statement Data:Operating revenues
    
    $
    421,851
    
    
    $
    324,250
    
    
    $
    321,457
    
    
    $
    338,532
    
    
    $
    323,353Net income
    
    
    439,726
    (A)
    
    
    54,462
    
    
    
    68,974
    
    
    
    73,974
    
    
    
    70,612Balance Sheet Data (at period
end):Total assets
    
    
    2,056,471
    
    
    
    2,049,324
    
    
    
    1,692,371
    
    
    
    1,670,499
    
    
    
    1,615,563Long-term debt, including
current maturities
    
    
    693,736
    
    
    
    687,075
    
    
    
    520,080
    
    
    
    527,562
    
    
    
    535,042Total owners equity
    
    
    1,185,616
    
    
    
    857,945
    
    
    
    756,346
    
    
    
    737,372
    
    
    
    723,010
 Note:
    
    Earnings and distributions/dividends per partnership unit/common share are not presented because
we are a wholly-owned subsidiary of Williams at December 31, 2007 and for all periods presented.
 
 (A)
    
    Through September 30, 2007, we used the liability method of accounting for income taxes
which required, among other things, provisions for all temporary differences between the
financial basis and the tax basis in our assets and liabilities and adjustments to the
existing deferred tax balances for changes in tax rates. Following our conversion to a
general partnership on October 1, 2007, we are no longer subject to income tax. On October
1, 2007, we reversed to income deferred income tax liabilities of approximately $311.8
million and $10.2 million of deferred income tax assets to other comprehensive income.(B)
    
    Our 1983 acquisition by Williams was accounted for using the purchase method of
accounting. Accordingly, Williams performed an allocation of the purchase price to our
assets and liabilities, based on their estimated fair values at the time of the
acquisition. The purchase price allocation was not pushed down to us, as FERC policy does
not permit us to recover these amounts through our rates and we have not been required to
reflect Williams purchase price allocations in our financial statements. Beginning
December 31, 2007, we have elected to include Williams purchase price allocations in our
financial statements. Accordingly, our 2003, 2004, 2005 and 2006 selected financial data
has been restated to include the effects of Williams excess purchase price - 25 -




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allocation. A reconciliation between our original basis in our assets and liabilities and
the selected financial data above follows: Year Ended December 31,2006
    
    
    2005
    
    
    2004
    
    
    2003Income Statement:Net income, as previously reported
    
    $
    57,143
    
    
    $
    71,755
    
    
    $
    76,655
    
    
    $
    73,294Depreciation of purchase price
allocation to property, plant and
equipment, net of income taxes
    
    
    (2,681
    )
    
    
    (2,781
    )
    
    
    (2,681
    )
    
    
    (2,682
    )Net income, as restated
    
    $
    54,462
    
    
    $
    68,974
    
    
    $
    73,974
    
    
    $
    70,612Balance Sheet:Equity, as previously reported
    
    $
    813,037
    
    
    $
    708,757
    
    
    $
    687,002
    
    
    $
    669,959Allocation of purchase price to
property, plant and equipment,
net of taxes
    
    
    44,908
    
    
    
    47,589
    
    
    
    50,370
    
    
    
    53,051Equity, as restated
    
    $
    857,945
    
    
    $
    756,346
    
    
    $
    737,372
    
    
    $
    723,010
 
 Item 7.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 GENERAL
  HOW WE EVALUATE OUR OPERATIONS
  
    
    the level of capacity reserved under our long-term firm transportation and storage
contracts;
    
    the level of revenues provided by our short-term firm and interruptible transportation
and storage services;
    
    our operating expenses; and
    
    our cash available for distribution.
 Long-Term Firm Service
  - 26 -




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Short-Term Firm and Interruptible Servic
  Operating Expenses
  Cash Available for Distribution
  FACTORS THAT IMPACT OUR BUSINESS
   Supply and Demand Dynamics
  - 27 -




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Customers
  Competition
  Regulation
   - 28 -




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OPERATIONS
  Transportation Services
   Storage Services
  RECENT EVENTS
   - 29 -




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OUTLOOK
  - 30 -




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Colorado Hub Connection Project
   Jackson Prairie Underground Expansion
     Sundance Trail Expansion
  - 31 -




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CRITICAL ACCOUNTING POLICIES, ESTIMATES, JUDGMENTS AND SENSITIVITIES
  Regulatory Accounting
  Accounting for the Effects of Certain Types of Regulation,
 Contingencies
  Environmental Liabilities
  Impairment of Long-Lived Assets
  - 32 -




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Pension and Postretirement Obligations
  Revenue Recognition
  RESULTS OF OPERATIONS
 ANALYSIS OF FINANCIAL RESULTS
  Years Ended December 31, 2006 and 2007
    - 33 -




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Years Ended December 31, 2005 and 2006
    - 34 -




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CAPITAL RESOURCES AND LIQUIDITY
    SOURCES (USES) OF CASH
 Years Ended December 31,2007
    
    
    2006
    
    
    2005(Thousands of Dollars)Net cash provided (used) by:Operating activities
    
    $
    205,357
    
    
    $
    159,807
    
    
    $
    97,636Financing activities
    
    
    (142,523
    )
    
    
    266,919
    
    
    
    (57,072
    )Investing activities
    
    
    (63,826
    )
    
    
    (484,946
    )
    
    
    (34,248
    )Increase (decrease) in cash and cash
equivalents
    
    $
    (992
    )
    
    $
    (58,220
    )
    
    $
    6,316
 Operating Activities
  - 35 -




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Financing Activities
  
    
    We issued $185 million aggregate principal amount of 5.95 percent senior unsecured notes
due 2017.
    
    We borrowed $250 million under the Williams revolving credit agreement.
    
    We retired $175 million of 8.125 percent senior unsecured notes due 2010.
    
    We retired $250 million of 6.625 percent senior unsecured notes due 2007.
    
    We paid distributions of $109.8 million to Williams.
  
    
    We issued $175 million aggregate principal amount of 7 percent senior unsecured notes
due 2016.
 
    
    We received a capital contribution of $65 million from Williams.
  
    
    We paid dividends of $50 million to Williams.
 Investing Activities
  
    
    Capital expenditures totaled $157.2 million primarily related to normal maintenance and
compliance.
    
    We received $79.8 million of proceeds from the sale of the Parachute Lateral to an
affiliate.
    
    We received $10.9 million repayment of advances made to Williams.
  
    
    Capital expenditures totaled $473.6 million primarily related to the capacity
replacement project.
  
    
    Capital expenditures totaled $137.2 million primarily related to normal maintenance and
compliance.
    
    We received an $87.9 million contract termination payment, representing reimbursement of
the net book value of the related assets.
 - 36 -




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METHOD OF FINANCING
 Working Capital
     Short-Term Liquidity
   Credit Agreement
   - 37 -




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Long-Term Financing
  CAPITAL REQUIREMENTS
    CREDIT RATINGS
  Moodys Investors Service
    
    Ba1 to Baa2Standard and Poors
    
    BB- to BBB-Fitch Ratings
    
    BBB- to BBB
    - 38 -




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OTHER
 Contractual Obligations
  2008
    
    
    2009-2010
    
    
    2011-2012
    
    
    Thereafter
    
    
    TotalLong-term debt,
including current
portion:Principal
    
    $
    
    
    
    $
    
    
    
    $
    250.0
    
    
    $
    445.0
    
    
    $
    695.0Interest
    
    
    42.1
    
    
    
    83.9
    
    
    
    76.4
    
    
    
    171.2
    
    
    
    373.6Operating leases
    
    
    6.4
    
    
    
    6.3
    
    
    
    
    
    
    
    
    
    
    
    12.7Purchase Obligations:Natural gas
purchase, storage,
transportation and
construction
    
    
    28.7
    
    
    
    5.2
    
    
    
    4.1
    
    
    
    
    
    
    
    38.0Other
    
    
    0.1
    
    
    
    0.5
    
    
    
    0.2
    
    
    
    
    
    
    
    0.8Other long-term
liabilities, including
current portion (1)(2)
(3)
    
    
    1.5
    
    
    
    3.3
    
    
    
    3.0
    
    
    
    
    
    
    
    7.8Total
    
    $
    78.8
    
    
    $
    99.2
    
    
    $
    333.7
    
    
    $
    616.2
    
    
    $
    1,127.9
 
 (1)
    
    Does not include estimated contributions to the pension and other postretirement benefit
plans. We made contributions to the pension and other postretirement benefit plans of $3.2
million in 2007, $5.7 million in 2006 and $6.1 million in 2005. (See Note 5 of the Notes to
Financial Statements). The decrease in the estimated contributions from 2006 and 2005 levels
can be attributed to previous contributions to the other postretirement benefit plan. There
were no minimum funding requirements to the tax-qualified pension plans in 2007, 2006 or 2005.
We anticipate that future contributions to the pension plan will not vary significantly from
recent historical contributions, assuming actual results do not differ significantly from
estimates with respect to discount rates, returns on plan assets, retirement rates, mortality
and other significant assumptions, and assuming no further changes in current and prospective
legislation and regulations. Based upon these anticipated levels of future contributions, we
do not expect to trigger any minimum funding requirements in the future; however, we may elect
to make contributions to increase the funded status of the plans.(2)
    
    Does not include estimated settlement of asset retirement obligations. (See Note 9 of the
Notes to Consolidated Financial Statements).(3)
    
    Does not include non-current regulatory liabilities comprised of negative salvage and other
postretirement benefits. (See Note 10 of the Notes to Consolidated Financial Statements.) Off-Balance Sheet Arrangements
  - 39 -




---



##### Table of Contents



Impact of Inflation
  Environmental Matters
  Safety Matters
 Pipeline Integrity Regulations
 Legal Matters
  Regulatory Proceedings
  CONCLUSION
  - 40 -




---



##### Table of Contents



Item 7A. QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK
 Interest Rate Risk
  December 31, 2007Renewable borrowings under the Williams revolving credit agreement (1)
    
    $
    250,000Fixed rates on long-term debt:5.95% senior unsecured notes due 2017
    
    
    185,0007.00% senior unsecured notes due 2016
    
    
    175,0007.125% senior unsecured notes due 2025
    
    
    85,000445,000Unamortized debt discount
    
    
    1,264Total long-term debt
    
    $
    693,736
 
 (1)
    
    Interest rate was 5.68 percent at December 31, 2007. Interest is calculated based on a choice
of two methods: a fluctuating rate equal to the lenders base rate plus an applicable margin
or a periodic fixed rate equal to the London Interbank Offered Rate plus an applicable margin.
Williams is required to pay a commitment fee (currently 0.125 percent per annum) based on the
unused portion of the agreement. The applicable margin and commitment fee are based on our
senior unsecured long-term debt ratings.  Credit Risk
  Market Risk
  - 41 -




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##### Table of Contents



Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
 INDEX TO FINANCIAL STATEMENTS
 PageManagements report on internal control over financial reporting
    
    
    43Report of independent registered public accounting firm
    
    
    44Consolidated statements of income for the years ended
December 31, 2007, 2006 (restated) and 2005 (restated)
    
    
    45Consolidated balance sheets at December 31, 2007 and 2006 (restated)
    
    
    46Consolidated statements of owners equity for the years ended
December 31, 2007, 2006 (restated) and 2005 (restated)
    
    
    48Consolidated statements of comprehensive income for the years ended
December 31, 2007, 2006 (restated) and 2005 (restated)
    
    
    49Consolidated statements of cash flows for the years ended
December 31, 2007, 2006 (restated) and 2005 (restated)
    
    
    50Notes to consolidated financial statements
    
    
    51
 - 42 -




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##### Table of Contents



MANAGEMENTS REPORT ON INTERNAL CONTROL OVER
FINANCIAL REPORTING
   Internal Control  Integrated Framework.
  - 43 -




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##### Table of Contents



- 44 -




---



##### Table of Contents



NORTHWEST PIPELINE GP
 
 CONSOLIDATED STATEMENTS OF INCOME
  Years Ended December 31,2007
    
    
    2006
    
    
    2005(Restated)
    
    
    (Restated)OPERATING REVENUES
    
    $
    421,851
    
    
    $
    324,250
    
    
    $
    321,457OPERATING EXPENSES:General and administrative
    
    
    65,772
    
    
    
    56,463
    
    
    
    49,749Operation and maintenance
    
    
    66,847
    
    
    
    65,763
    
    
    
    53,330Depreciation
    
    
    84,731
    
    
    
    79,488
    
    
    
    70,629Regulatory credits
    
    
    (3,663
    )
    
    
    (4,469
    )
    
    
    (4,446
    )Taxes, other than income taxes
    
    
    13,997
    
    
    
    15,018
    
    
    
    15,115Regulatory liability reversal
    
    
    (16,562
    )
    
    
    
    
    
    
    Total operating expenses
    
    
    211,122
    
    
    
    212,263
    
    
    
    184,377Operating income
    
    
    210,729
    
    
    
    111,987
    
    
    
    137,080OTHER INCOME  net:Interest income Affiliated
    
    
    2,983
    
    
    
    3,920
    
    
    
    3,801Other
    
    
    2,681
    
    
    
    3,423
    
    
    
    2,820Allowance for equity funds used during construction
    
    
    2,091
    
    
    
    8,947
    
    
    
    2,872Miscellaneous other income (expense), net
    
    
    (517
    )
    
    
    307
    
    
    
    1,104Contract termination income
    
    
    18,199
    
    
    
    
    
    
    
    Total other income   net
    
    
    25,437
    
    
    
    16,597
    
    
    
    10,597INTEREST CHARGES:Interest on long-term debt
    
    
    46,828
    
    
    
    43,649
    
    
    
    38,164Other interest
    
    
    5,585
    
    
    
    3,824
    
    
    
    3,389Allowance for borrowed funds used
during construction
    
    
    (1,306
    )
    
    
    (4,557
    )
    
    
    (1,529
    )Total interest charges
    
    
    51,107
    
    
    
    42,916
    
    
    
    40,024INCOME BEFORE INCOME TAXES
    
    
    185,059
    
    
    
    85,668
    
    
    
    107,653PROVISION (BENEFIT) FOR INCOME TAXES
(Note 6)
    
    
    (254,667
    )
    
    
    31,206
    
    
    
    38,679NET INCOME
    
    $
    439,726
    
    
    $
    54,462
    
    
    $
    68,974CASH DISTRIBUTIONS/DIVIDENDS
    
    $
    109,770
    
    
    $
    
    
    
    $
    50,000
  - 45 -




---



##### Table of Contents



NORTHWEST PIPELINE GP
 
 CONSOLIDATED BALANCE SHEETS
  December 31,2007
    
    
    2006(Restated)ASSETSCURRENT ASSETS:Cash and cash equivalents
    
    $
    497
    
    
    $
    1,489Advances to affiliates
    
    
    39,072
    
    
    
    49,980Accounts receivable Trade, less reserves of $7 for 2007 and $53 for 2006
    
    
    40,689
    
    
    
    32,230Affiliated companies
    
    
    3,514
    
    
    
    591Materials and supplies, less reserves of $181 for 2007 and $472
for 2006
    
    
    10,344
    
    
    
    10,013Exchange gas due from others
    
    
    10,155
    
    
    
    10,556Exchange gas offset (Note 1)
    
    
    6,593
    
    
    
    4,538Deferred income taxes
    
    
    
    
    
    
    4,066Prepayments and other
    
    
    6,928
    
    
    
    7,945Total current assets
    
    
    117,792
    
    
    
    121,408PROPERTY, PLANT AND EQUIPMENT, at cost
    
    
    2,706,691
    
    
    
    2,654,717Less  Accumulated depreciation
    
    
    864,999
    
    
    
    806,723Total property, plant and equipment
    
    
    1,841,692
    
    
    
    1,847,994OTHER ASSETS:Deferred charges
    
    
    44,915
    
    
    
    32,093Regulatory assets
    
    
    52,072
    
    
    
    47,829Total other assets
    
    
    96,987
    
    
    
    79,922Total assets
    
    $
    2,056,471
    
    
    $
    2,049,324
  - 46 -




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##### Table of Contents



NORTHWEST PIPELINE GP
 CONSOLIDATED BALANCE SHEETS
  December 31,2007
    
    
    2006(Restated)LIABILITIES AND OWNERS EQUITYCURRENT LIABILITIES:Accounts payable Trade
    
    $
    32,055
    
    
    $
    55,403Affiliated companies
    
    
    13,056
    
    
    
    13,701Accrued liabilities Income taxes due to affiliate
    
    
    
    
    
    
    3,090Taxes, other than income taxes
    
    
    7,935
    
    
    
    6,779Interest
    
    
    4,517
    
    
    
    7,038Employee costs
    
    
    12,106
    
    
    
    10,759Exchange gas due to others
    
    
    16,748
    
    
    
    15,094Deferred contract termination income
    
    
    
    
    
    
    6,045Other
    
    
    5,713
    
    
    
    5,268Current maturities of long-term debt (Note 4)
    
    
    
    
    
    
    252,867Total current liabilities
    
    
    92,130
    
    
    
    376,044LONG-TERM DEBT, LESS CURRENT MATURITIES
    
    
    693,736
    
    
    
    434,208DEFERRED INCOME TAXES (Note 6)
    
    
    
    
    
    
    282,532DEFERRED CREDITS AND OTHER NONCURRENT LIABILITIES
    
    
    84,989
    
    
    
    98,595CONTINGENT LIABILITIES AND COMMITMENTSOWNERS EQUITY:Common stock, par value $1 per share; authorized
and outstanding, 1,000 shares in 2006
    
    
    
    
    
    
    1Additional paid-in capital
    
    
    
    
    
    
    977,021Partners capital
    
    
    977,022
    
    
    
    Retained earnings (deficit)
    
    
    228,739
    
    
    
    (101,214
    )Accumulated other comprehensive loss
    
    
    (20,145
    )
    
    
    (17,863
    )Total owners equity
    
    
    1,185,616
    
    
    
    857,945Total liabilities and owners equity
    
    $
    2,056,471
    
    
    $
    2,049,324
 
 - 47 -




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##### Table of Contents



NORTHWEST PIPELINE GP
 
 CONSOLIDATED STATEMENTS OF OWNERS EQUITY
 Years Ended December 31,2007
    
    
    2006
    
    
    2005(Restated)
    
    
    (Restated)Common stock, par value $1 per share,
authorized, 1,000 sharesBalance at beginning of period, outstanding,
1,000 shares
    
    $
    1
    
    
    $
    1
    
    
    $
    1Conversion to GP
    
    
    (1
    )
    
    
    
    
    
    
    Balance at end of period
    
    
    
    
    
    
    1
    
    
    
    1Additional paid-in capital -Balance at beginning of period, as previously stated
    
    
    
    
    
    
    
    
    
    
    262,844Cumulative effect of purchase accounting
    
    
    
    
    
    
    
    
    
    
    649,177Balance at beginning of period, as restated
    
    
    977,021
    
    
    
    912,021
    
    
    
    912,021Capital contribution from parent
    
    
    
    
    
    
    65,000
    
    
    
    Conversion to GP
    
    
    (977,021
    )
    
    
    
    
    
    
    Balance at end of period
    
    
    
    
    
    
    977,021
    
    
    
    912,021Partners capital -Balance at beginning of period
    
    
    
    
    
    
    
    
    
    
    Conversion to GP
    
    
    977,022
    
    
    
    
    
    
    
    Balance at end of period
    
    
    977,022
    
    
    
    
    
    
    
    Retained earnings (deficit) -Balance at beginning of period, as previously stated
    
    
    
    
    
    
    
    
    
    
    424,157Cumulative effect of purchase accounting
    
    
    
    
    
    
    
    
    
    
    (598,807
    )Balance at beginning of period, as restated
    
    
    (101,214
    )
    
    
    (155,676
    )
    
    
    (174,650
    )Net income
    
    
    439,726
    
    
    
    54,462
    
    
    
    68,974Cash distributions
    
    
    (109,770
    )
    
    
    
    
    
    
    Cash dividends
    
    
    
    
    
    
    
    
    
    
    (50,000
    )Other
    
    
    (3
    )
    
    
    
    
    
    
    Balance at end of period
    
    
    228,739
    
    
    
    (101,214
    )
    
    
    (155,676
    )Accumulated other comprehensive loss Balance at beginning of period
    
    
    (17,863
    )
    
    
    
    
    
    
    Cash flow hedges:Gain, net of tax of ($233) for 2006
    
    
    
    
    
    
    386
    
    
    
    Reclassification of gain into earnings, net of tax
of $13 for 2006
    
    
    (62
    )
    
    
    (21
    )
    
    
    Pension benefits:Adjustment to initially apply SFAS No. 158:Prior service cost, net of tax of $186 for 2006
    
    
    
    
    
    
    (308
    )
    
    
    Net actuarial loss, net of tax of $10,797 for
2006
    
    
    
    
    
    
    (17,920
    )
    
    
    Net actuarial gain
    
    
    8,466
    
    
    
    
    
    
    
    Prior service cost
    
    
    77
    
    
    
    
    
    
    
    Elimination of deferred income taxes
    
    
    (10,763
    )
    
    
    
    
    
    
    Balance at end of period
    
    
    (20,145
    )
    
    
    (17,863
    )
    
    
    Total owners equity
    
    $
    1,185,616
    
    
    $
    857,945
    
    
    $
    756,346
  - 48 -




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##### Table of Contents



NORTHWEST PIPELINE GP
 
 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
  Years Ended December 31,2007
    
    
    2006
    
    
    2005(Restated)
    
    
    (Restated)Net Income
    
    $
    439,726
    
    
    $
    54,462
    
    
    $
    68,974Gain on cash flow hedges, net of tax of
($220) for 2006
    
    
    (62
    )
    
    
    365
    
    
    
    Pension Benefits:Amortization of prior service cost
    
    
    77
    
    
    
    
    
    
    
    Amortization of net actuarial gain
    
    
    1,913
    
    
    
    
    
    
    
    Net actuarial gain arising during the period
    
    
    6,553
    
    
    
    
    
    
    
    Elimination of deferred income taxes
    
    
    (10,763
    )
    
    
    
    
    
    
    Total comprehensive income
    
    $
    437,444
    
    
    $
    54,827
    
    
    $
    68,974
  -49-




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##### Table of Contents



NORTHWEST PIPELINE GP
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 Years Ended December 31,2007
    
    
    2006
    
    
    2005(Restated)
    
    
    (Restated)OPERATING ACTIVITIES:Net Income
    
    $
    439,726
    
    
    $
    54,462
    
    
    $
    68,974Adjustments to reconcile to net cash provided by
operating activities -Depreciation
    
    
    84,731
    
    
    
    79,488
    
    
    
    70,629Regulatory credits
    
    
    (3,663
    )
    
    
    (4,469
    )
    
    
    (4,446
    )Provision (benefit) for deferred income taxes
    
    
    (289,229
    )
    
    
    27,916
    
    
    
    (20,086
    )Amortization of deferred charges and credits
    
    
    9,783
    
    
    
    2,484
    
    
    
    4,053Allowance for equity funds used during construction
    
    
    (2,091
    )
    
    
    (8,947
    )
    
    
    (2,872
    )Reserve for doubtful accounts
    
    
    (46
    )
    
    
    (38
    )
    
    
    44Regulatory liability reversal
    
    
    (16,562
    )
    
    
    
    
    
    
    Contract termination income
    
    
    (6,045
    )
    
    
    
    
    
    
    Changes in:Trade accounts receivable
    
    
    (8,413
    )
    
    
    (3,515
    )
    
    
    1,639Affiliated receivables, including income taxes.
    
    
    (2,923
    )
    
    
    4,899
    
    
    
    (5,489
    )Exchange gas due from others
    
    
    (1,654
    )
    
    
    5,549
    
    
    
    (4,632
    )Materials and supplies
    
    
    (331
    )
    
    
    (1,912
    )
    
    
    236Other current assets
    
    
    1,017
    
    
    
    (5,264
    )
    
    
    (800
    )Deferred charges
    
    
    (9,769
    )
    
    
    (1,610
    )
    
    
    (6,992
    )Trade accounts payable
    
    
    4,653
    
    
    
    (2,011
    )
    
    
    (1,568
    )Affiliated payables, including income taxes
    
    
    (5,259
    )
    
    
    13,037
    
    
    
    (15,785
    )Exchange gas due to others
    
    
    1,654
    
    
    
    (5,549
    )
    
    
    4,632Other accrued liabilities
    
    
    2,105
    
    
    
    1,192
    
    
    
    6,440Other deferred credits
    
    
    7,673
    
    
    
    4,095
    
    
    
    3,659Net cash provided by operating activities
    
    
    205,357
    
    
    
    159,807
    
    
    
    97,636FINANCING ACTIVITIES:Proceeds from issuance of long-term debt
    
    
    434,362
    
    
    
    174,447
    
    
    
    Retirement of long-term debt
    
    
    (252,867
    )
    
    
    (7,500
    )
    
    
    (7,500
    )Prepayment of long-term debt
    
    
    (175,000
    )
    
    
    
    
    
    
    Debt issuance costs
    
    
    (2,059
    )
    
    
    (2,375
    )
    
    
    Premium on early retirement of long-term debt
    
    
    (7,111
    )
    
    
    
    
    
    
    Capital contribution from parent
    
    
    
    
    
    
    65,000
    
    
    
    Distributions paid
    
    
    (109,770
    )
    
    
    
    
    
    
    Dividends paid
    
    
    
    
    
    
    
    
    
    
    (50,000
    )Changes in cash overdrafts
    
    
    (30,078
    )
    
    
    37,347
    
    
    
    428Net cash provided by (used in) financing activities
    
    
    (142,523
    )
    
    
    266,919
    
    
    
    (57,072
    )INVESTING ACTIVITIES:Property, plant and equipment -Capital expenditures
    
    
    (157,163
    )
    
    
    (473,566
    )
    
    
    (137,232
    )Proceeds from sales
    
    
    2,257
    
    
    
    
    
    
    
    Asset removal cost
    
    
    
    
    
    
    (9,733
    )
    
    
    (1,568
    )Changes in accounts payable and accrued liabilities
    
    
    402
    
    
    
    (5,015
    )
    
    
    16,635Proceeds from contract termination payments
    
    
    
    
    
    
    3,348
    
    
    
    87,917Proceeds from sale of Parachute facilities
    
    
    79,770
    
    
    
    
    
    
    
    Repayments from affiliates
    
    
    10,908
    
    
    
    20
    
    
    
    Net cash used in investing activities
    
    
    (63,826
    )
    
    
    (484,946
    )
    
    
    (34,248
    )NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS
    
    
    (992
    )
    
    
    (58,220
    )
    
    
    6,316CASH AND CASH EQUIVALENTS AT BEGINNING OF
YEAR
    
    
    1,489
    
    
    
    59,709
    
    
    
    53,393CASH AND CASH EQUIVALENTS AT END OF YEAR
    
    $
    497
    
    
    $
    1,489
    
    
    $
    59,709
  -50-




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##### Table of Contents



NORTHWEST PIPELINE GP
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 Corporate Structure and Control
      Nature of Operations
  Regulatory Accounting
  -51-




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##### Table of Contents



NORTHWEST PIPELINE GP
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  Accounting for the Effects of Certain Types of Regulation,
 Basis of Presentation
   Year Ended December 31,2006
    
    
    2005(Thousands of Dollars)Income StatementNet income, as previously reported
    
    $
    57,143
    
    
    $
    71,755Depreciation of purchase price allocation to property and
equipment, net of income taxes
    
    
    (2,681
    )
    
    
    (2,781
    )Net income,
as restated
    
    $
    54,462
    
    
    $
    68,974Balance SheetEquity, as previously reported
    
    $
    813,037Allocation of purchase price to property and equipment, net
of taxes
    
    
    44,908Equity, as
restated
    
    $
    857,945
  Use of Estimates
   -52-




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##### Table of Contents



NORTHWEST PIPELINE GP
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  Property, Plant and Equipment
       Allowance for Borrowed and Equity Funds Used During Construction
  -53-




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##### Table of Contents



NORTHWEST PIPELINE GP
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  Regulatory Allowance for Equity Funds Used During Construction
  Advances to Affiliates
  Accounts Receivable and Allowance for Doubtful Receivables
  Materials and Supplies Inventory
   Impairment of Long-Lived Assets
   -54-




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##### Table of Contents



NORTHWEST PIPELINE GP
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Income Taxes
   Deferred Charges
  Cash and Cash Equivalents
  Exchange Gas Imbalances
  Revenue Recognition
  Environmental Matters
  -55-




---



##### Table of Contents



NORTHWEST PIPELINE GP
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Interest Payments
  Recent Accounting Standards
    
  -56-




---



##### Table of Contents



NORTHWEST PIPELINE GP
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 FERC Accounting and Reporting Guidance
  Change in Accounting Estimate
  Reclassifications and Adjustments
    2. RATE AND REGULATORY MATTERS
 General Rate Case (Docket No. RP06-416)
  Parachute Lateral Project
  -57-




---



##### Table of Contents



NORTHWEST PIPELINE GP
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
   3. CONTINGENT LIABILITIES AND COMMITMENTS
 Legal Proceedings
  Environmental Matters
   -58-




---



##### Table of Contents



NORTHWEST PIPELINE GP
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  Safety Matters
 Pipeline Integrity Regulations
 Other Matters
  Summary
  Other Commitments
  Termination of the Grays Harbor Transportation Agreement
  -59-




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##### Table of Contents



NORTHWEST PIPELINE GP
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
   Cash Distributions to Partners
  4. DEBT, FINANCING ARRANGEMENTS AND LEASES
 Debt Covenants
  Long-Term Debt
    -60-




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##### Table of Contents



NORTHWEST PIPELINE GP
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    December 31,2007
    
    
    2006(Thousands of Dollars)5.95%, payable 2017
    
    $
    184,407
    
    
    $
    6.625%, payable 2007
    
    
    
    
    
    
    250,0007%, payable 2016
    
    
    174,532
    
    
    
    174,4777.125%, payable 2025
    
    
    84,797
    
    
    
    84,7858.125%, payable 2010
    
    
    
    
    
    
    175,0009%, payable 2004 through 2007
    
    
    
    
    
    
    2,813Revolving credit debt, payable 2012
    
    
    250,000
    
    
    
    Total long-term debt
    
    
    693,736
    
    
    
    687,075Less current maturities
    
    
    
    
    
    
    252,867Total long-term debt, less current maturities
    
    $
    693,736
    
    
    $
    434,208
  (Thousands ofDollars)2008
    
    $
    2009
    
    
    2010
    
    
    2011
    
    
    2012
    
    
    250,000Thereafter
    
    
    445,000Total
    
    $
    695,000
 Line-of-Credit Arrangements
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NORTHWEST PIPELINE GP
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  
    
    Williams ratio of debt to capitalization must be no greater than 65 percent.
    
    Our ratio of debt to capitalization and that of another participating subsidiary of
Williams must be no greater than 55 percent.
 Leases
    (Thousandsof Dollars)2008
    
    $
    6,3762009
    
    
    6,312$
    12,688Less: noncancelable
subleases
    
    
    6,336Total
    
    $
    6,352
   5. EMPLOYEE BENEFIT PLANS
 Pension plans
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##### Table of Contents



NORTHWEST PIPELINE GP
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
   Pension Benefits2007
    
    2006(Thousands of Dollars)Amounts not yet recognized in net periodic
benefit expense:Prior service cost
    
    $
    (417
    )
    
    $
    (494
    )Net actuarial losses
    
    
    (20,251
    )
    
    
    (28,717
    )
   Postretirement benefits other than pensions
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##### Table of Contents



NORTHWEST PIPELINE GP
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  Defined contribution plan
  Stock-Based Compensation
       -64-




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NORTHWEST PIPELINE GP
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 6. INCOME TAXES
  December 31,2007 (1)
    
    
    2006(Restated)(Thousands of Dollars)Property, plant and equipment
    
    $
    
    
    
    $
    296,339Regulatory assets
    
    
    
    
    
    
    15,800Loss on reacquired debt
    
    
    
    
    
    
    3,962Other  net
    
    
    
    
    
    
    5,808Deferred tax liabilities
    
    
    
    
    
    
    321,909Accrued liabilities
    
    
    
    
    
    
    29,225Accrued benefits
    
    
    
    
    
    
    14,218Deferred tax assets
    
    
    
    
    
    
    43,443Net deferred tax liabilities
    
    $
    
    
    
    $
    278,466Reflected as:Deferred income taxes  current asset
    
    $
    
    
    
    $
    4,066Deferred income taxes  noncurrent liability
    
    
    
    
    
    
    282,532$
    
    
    
    $
    278,466
 
 (1)
    
    Following our conversion to a general partnership on October 1, 2007, we are no longer
subject to income tax.  Year Ended December 31,2007
    
    
    2006
    
    
    2005(Restated)
    
    
    (Restated)(Thousands of Dollars)Current:Federal
    
    $
    30,888
    
    
    $
    2,940
    
    
    $
    52,292State
    
    
    3,674
    
    
    
    350
    
    
    
    6,47334,562
    
    
    
    3,290
    
    
    
    58,765Deferred:Federal
    
    
    (258,459
    )
    
    
    24,945
    
    
    
    (17,727
    )State
    
    
    (30,770
    )
    
    
    2,971
    
    
    
    (2,359
    )(289,229
    )
    
    
    27,916
    
    
    
    (20,086
    )Total provision (benefit)
    
    $
    (254,667
    )
    
    $
    31,206
    
    
    $
    38,679
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NORTHWEST PIPELINE GP
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  Year Ended December 31,2007
    
    
    2006
    
    
    2005(Restated)
    
    
    (Restated)(Thousands of Dollars)Provision at statutory Federal income tax
rate of 35 percent (1)
    
    $
    52,831
    
    
    $
    29,984
    
    
    $
    37,679Increase (decrease) in tax provision resulting from -
State income taxes net of Federal tax benefit
    
    
    3,948
    
    
    
    2,159
    
    
    
    2,674Book/tax basis reconciliation adjustment
    
    
    
    
    
    
    (723
    )
    
    
    (1,742
    )Other  net
    
    
    330
    
    
    
    (214
    )
    
    
    68Provision for income taxes prior to conversion from
a corporation to a partnership
    
    $
    57,109
    
    
    $
    31,206
    
    
    $
    38,679Effective tax rate prior to conversion from a
corporation to a partnership
    
    
    37.83
    %
    
    
    36.43
    %
    
    
    35.93
    %Provision for income taxes prior to conversion from a
corporation to a partnership
    
    $
    57,109
    
    
    $
    31,206
    
    
    $
    38,679Conversion from corporation to partnership
    
    
    (311,776
    )
    
    
    
    
    
    
    Total provision (benefit) for income taxes
    
    $
    (254,667
    )
    
    $
    31,206
    
    
    $
    38,679
 
 (1)
    
    Following our conversion to a general partnership on October 1, 2007, we are no longer
subject to income tax. The provision for income taxes shown herein for 2007 reflects the
provision through September 30, 2007. Subsequent to the conversion to a general partnership
on October 1, 2007, all deferred income taxes were eliminated and we no longer provide for
income taxes.    7. FINANCIAL INSTRUMENTS
 Disclosures About the Fair Value of Financial Instruments
  -66-




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NORTHWEST PIPELINE GP
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Cash, cash equivalents and advances to affiliate
 Long-term debt
 8. TRANSACTIONS WITH MAJOR CUSTOMERS AND AFFILIATES
 Concentration of Off-Balance-Sheet and Other Credit Risk
  Year Ended December 31,2007
    
    2006
    
    2005(Thousands of Dollars)Puget Sound Energy, Inc.
    
    $
    85,059
    
    
    $
    64,428
    
    
    $
    56,480Northwest Natural Gas Co.
    
    
    48,648
    
    
    
    35,242
    
    
    
    35,420
  Related Party Transactions
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NORTHWEST PIPELINE GP
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  9. ASSET RETIREMENT OBLIGATIONS
     2007
    
    
    2006Beginning balance
    
    $
    48,020
    
    
    $
    15,372Accretion
    
    
    3,673
    
    
    
    965New obligations
    
    
    1,912
    
    
    
    1,451Obligations transferred
to an affiliate
    
    
    (1,996
    )
    
    
    Changes in estimates
of existing obligations
    
    
    (1,186
    )
    
    
    30,232Ending Balance
    
    $
    50,423
    
    
    $
    48,020
  10. REGULATORY ASSETS AND LIABILITIES
  -68-




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NORTHWEST PIPELINE GP
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 2007
    
    
    2006(Thousands of Dollars)Current regulatory assets  environmental
costs
    
    $
    2,200
    
    
    $
    1,500Non-current regulatory assetsEnvironmental costs
    
    
    4,841
    
    
    
    3,200Grossed-up deferred taxes on
equity funds used during
construction
    
    
    20,122
    
    
    
    21,252Levelized incremental depreciation
    
    
    25,780
    
    
    
    22,118Other post-employment benefits
    
    
    1,329
    
    
    
    1,259Total non-current regulatory assets
    
    
    52,072
    
    
    
    47,829Total regulatory assets
    
    $
    54,272
    
    
    $
    49,329Non-current regulatory liabilitiesAsset retirement obligations, net
    
    
    10
    
    
    
    2,677Pension plans (1)
    
    
    
    
    
    
    16,562Postretirement benefits
    
    
    17,806
    
    
    
    13,354Total regulatory liabilities
    
    $
    17,816
    
    
    $
    32,593
 
 (1)
    
    In the second quarter of 2007, we recorded $16.6 million in income for a change in accounting
estimate related to a pension regulatory liability. See Note 5. 11. ACCUMULATED OTHER COMPREHENSIVE LOSS
  2007
    
    
    2006(Thousands of Dollars)Cash flow hedges
    
    $
    523
    
    
    $
    585Pension benefits
    
    
    (20,668
    )
    
    
    (29,211
    )Accumulated other comprehensive loss before
taxes
    
    
    (20,145
    )
    
    
    (28,626
    )Deferred income taxes
    
    
    
    
    
    
    10,763Total accumulated other comprehensive loss
    
    $
    (20,145
    )
    
    $
    (17,863
    )
 -69-




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NORTHWEST PIPELINE GP
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 12. QUARTERLY INFORMATION (UNAUDITED)
  Quarter of 2007First
    
    Second
    
    Third
    
    Fourth(Restated)
    
    (Restated)
    
    (Restated)(Thousands of Dollars)Operating revenues
    
    $
    103,043
    
    
    $
    102,655
    
    
    $
    106,364
    
    
    $
    109,789Operating income
    
    
    49,317
    
    
    
    64,456
    
    
    
    49,980
    
    
    
    46,976Net income
    
    
    23,357
    
    
    
    37,387
    
    
    
    33,092
    
    
    
    345,890
  Quarter of 2006First
    
    Second
    
    Third
    
    Fourth(Restated)
    
    (Restated)
    
    (Restated)
    
    (Restated)(Thousands of Dollars)Operating revenues
    
    $
    79,638
    
    
    $
    79,915
    
    
    $
    81,088
    
    
    $
    83,609Operating income
    
    
    29,872
    
    
    
    28,881
    
    
    
    26,690
    
    
    
    26,544Net income
    
    
    15,257
    
    
    
    16,781
    
    
    
    10,632
    
    
    
    11,792
  -70-




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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 Controls over Financial Reporting
  Managements Report on Internal Control over Financial Reporting
  
 Item 9B.
  - 71 -




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PART III
 
 Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
 Management Committee Members and Executive Officers
   Name
    
    Age
    
    PositionPhillip D. Wright
    
    
    52
    
    
    Senior Vice President and Management Committee MemberDonald R. Chappel
    
    
    56
    
    
    Management Committee MemberSteven J. Malcolm
    
    
    59
    
    
    Chief Executive OfficerRichard D. Rodekohr
    
    
    49
    
    
    Vice President and TreasurerAllison G. Bridges
    
    
    48
    
    
    Vice PresidentRandall L. Barnard
    
    
    49
    
    
    Vice PresidentLawrence G. Hjalmarson
    
    
    53
    
    
    Vice PresidentRandall R. Conklin
    
    
    51
    
    
    Vice President and General CounselFrank J. Ferazzi
    
    
    51
    
    
    Vice President
 Business Experience
       -72-




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##### Table of Contents



Section 16(a) Beneficial Ownership Reporting Compliance
  Code of Ethics
  Corporate Governance
  
 Item 11. EXECUTIVE COMPENSATION
 Compensation Discussion and Analysis
 http://www.sec.gov http://www.williams.com
 -73-




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##### Table of Contents



Executive Compensation
  2007 Summary Compensation Table
 Change inPensionValue andNonqualifiedNon-Equity
    
    DeferredStock
    
    Option
    
    Incentive Plan
    
    Compensation
    
    All OtherName
    
    Year
    
    Salary
    
    Bonus
    
    Awards
    
    Awards
    
    Compensation
    
    Earnings
    
    Compensation
    
    TotalPhillip D. Wright 
Senior Vice President
    
    
    2007
    
    
    $
    92,681
    
    
    $
    
    
    
    $
    408,204
    
    
    $
    66,898
    
    
    $
    129,929
    
    
    $
    13,203
    
    
    $
    1,902
    
    
    $
    712,817(Principal Executive Officer)
    
    
    2006
    
    
    
    98,253
    
    
    
    
    
    
    
    198,649
    
    
    
    57,690
    
    
    
    138,718
    
    
    
    31,480
    
    
    
    2,045
    
    
    
    526,835Richard D, Rodekohr
    
    
    2007
    
    
    
    44,358
    
    
    
    
    
    
    
    100,495
    
    
    
    22,953
    
    
    
    36,913
    
    
    
    (121
    )
    
    
    2,966
    
    
    
    207,564Vice President and
Treasurer
    
    
    2006
    
    
    
    44,959
    
    
    
    
    
    
    
    49,113
    
    
    
    24,130
    
    
    
    37,572
    
    
    
    11,183
    
    
    
    3,035
    
    
    
    169,992(Principal Financial Officer)Allison G. Bridges
    
    
    2007
    
    
    
    231,565
    
    
    
    
    
    
    
    414,500
    
    
    
    94,472
    
    
    
    193,867
    
    
    
    1,804
    
    
    
    13,680
    
    
    
    949,888Vice President
    
    
    2006
    
    
    
    220,250
    
    
    
    
    
    
    
    214,121
    
    
    
    100,127
    
    
    
    188,896
    
    
    
    54,318
    
    
    
    13,535
    
    
    
    791,247Randall L. Barnard
    
    
    2007
    
    
    
    72,584
    
    
    
    
    
    
    
    142,715
    
    
    
    33,037
    
    
    
    76,975
    
    
    
    3,091
    
    
    
    3,644
    
    
    
    332,046Vice President
    
    
    2006
    
    
    
    50,805
    
    
    
    
    
    
    
    69,122
    
    
    
    32,998
    
    
    
    55,295
    
    
    
    14,136
    
    
    
    2,656
    
    
    
    225,012Lawrence G. Hjalmarson
    
    
    2007
    
    
    
    68,301
    
    
    
    
    
    
    
    16,427
    
    
    
    22,957
    
    
    
    51,332
    
    
    
    1,345
    
    
    
    5,009
    
    
    
    165,371Vice President
    
    
    2006
    
    
    
    159,450
    
    
    
    
    
    
    
    5,753
    
    
    
    46,843
    
    
    
    86,974
    
    
    
    39,549
    
    
    
    13,200
    
    
    
    351,769
 Compensation Committee Interlocks and Insider Participation
  Compensation of Directors
  Compensation Committee Report
  
 
 Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
 Security Ownership of Certain Beneficial Owners and Management
  -74-




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Name of Beneficial Owner
    
    Percent of General Partnership InterestWGPC Holdings LLC, a subsidiary of Williams
    
    65%Williams Pipeline Partners Holdings LLC, a subsidiary
of Williams Pipeline Partners L.P.
    
    35%
 
 Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
      
    
    the liquidation, dissolution or winding up of Northwest or making any bankruptcy
filing;
    
    the issuance, incurrence, assumption or guarantee of any indebtedness or the
pledge of any of Northwests assets;
    
    filing or resolving a Section 4 general rate case proceeding under the Natural
Gas Act or any other proceeding or controversy at FERC or an appeal of a FERC
order, the outcome of which would cause (A) Northwest to have reduced revenue of,
or pay penalties, refunds or interest in excess of, $50 million, or (B) Northwest
to agree to any criminal penalty;
    
    any amendment of the Northwest partnership agreement;
    
    any distributions to Northwests partners, other than the distributions of
available cash to be made at least quarterly as described below;
    
    the admission of any person as a partner (other than a permitted transferee of a
partner) or the issuance of any partnership interests or other equity interests of
Northwest or any withdrawal by any partner from the partnership;
    
    the transfer, redemption, repurchase or other acquisition of interests in
Northwest;
    
    the disposition of substantially all of the assets of Northwest or any portion
of such assets with a value exceeding $20 million;
    
    any merger or consolidation of Northwest with another person or any conversion
or reorganization of Northwest;
 -75-




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##### Table of Contents




    
    entering into any activity or business that may generate income that may not be
qualifying income under Section 7704 of the Internal Revenue Code;
    
    the approval of Northwests budget;
    
    the approval of a transfer by a partner of its interest in Northwest; and
    
    any amendment to the administrative services agreement to which Northwest is a
party.
  plus less
         Williams Cash Management Program
  -76-




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##### Table of Contents



Other Related Party Transactions
     
 Item 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
  2007
    
    
    2006(Thousands of Dollars)Audit Fees
    
    $
    1,124
    
    
    $
    851Audit-Related Fees
    
    
    
    
    
    
    Tax Fees
    
    
    
    
    
    
    All Other Fees
    
    
    
    
    
    
    $
    1,124
    
    
    $
    851
   -77-




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PART IV
 
 Item 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
 (a) 1. Financial Statements
 Index
 PageReferenceto 2007Form 10-KManagements Report on Internal Control over Financial Reporting
    
    
    43Report of Independent Registered Public Accounting Firm
    
    
    44Consolidated Statements of Income for the Years Ended December 31,
2007, 2006 (restated) and 2005 (restated)
    
    
    45Consolidated Balance Sheets at December 31, 2007 and 2006 (restated)
    
    
    46Consolidated Statements of Owners Equity for the Years Ended
December 31, 2007, 2006 (restated) and 2005 (restated)
    
    
    48Consolidated Statements of Comprehensive Income for the Years Ended
December 31, 2007, 2006 (restated) and 2005 (restated)
    
    
    49Consolidated Statements of Cash Flows for the Years Ended December
31, 2007, 2006 (restated) and 2005 (restated)
    
    
    50Notes to Consolidated Financial Statements
    
    
    51
 (a) 2. Financial Statement Schedules
 
 Charged toBeginning
    
    
    Costs and
    
    
    
    
    
    
    EndingDescription
    
    Balance
    
    
    Expenses
    
    
    Deductions
    
    
    BalancesYear ended December 31, 2007:Reserve for doubtful receivables
    
    $
    53
    
    
    $
    (46
    )
    
    $
    0
    
    
    $
    7Reserve for obsolescence of
materials and supplies
    
    
    472
    
    
    
    104
    
    
    
    (395
    )
    
    
    181Year ended December 31, 2006:Reserve for doubtful receivables
    
    
    91
    
    
    
    (38
    )
    
    
    0
    
    
    
    53Reserve for obsolescence of
materials and supplies
    
    
    263
    
    
    
    306
    
    
    
    (97
    )
    
    
    472Year ended December 31, 2005:Reserve for doubtful receivables
    
    
    320
    
    
    
    44
    
    
    
    (273
    )
    
    
    91Reserve for obsolescence of
materials and supplies
    
    
    439
    
    
    
    0
    
    
    
    (176
    )
    
    
    263
 -78-




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(a) 3 and b. Exhibits:
 (2)
    
    Plan of acquisition, reorganization, arrangement, liquidation or succession:
 *
    (a) Merger Agreement, dated as of September 20, 1983, between Williams and Northwest
Energy Company (Energy) (Exhibit 18 to Energy schedule 14D-9 (Amendment No. 3) dated
September 22, 1983).*
    (b) The Plan of Merger, dated as of November 7, 1983, between Energy and a subsidiary
of Williams (Exhibit 2(b) to Northwest report on Form 10-K, No. 1-7414, filed March 22,
1984).*
    (c) Certificate of Conversion of Northwest Pipeline Corporation (Exhibit 2.1 to
Northwest report on Form 8-K, No. 1-7414, filed October 2, 2007).
 (3)
    
    Articles of incorporation and by-laws:
 *
    (a) Statement of Partnership Existence of Northwest Pipeline GP (Exhibit 3.1 to
Northwest report on Form 8-K, No. 1-7414, filed October 2, 2007).*
    (b) Amended and Restated General Partnership Agreement of Northwest Pipeline GP
(Exhibit 3.1 to Northwest report on Form 8-K, No. 1-7414, filed January 30, 2008).
 (4)
    
    Instruments defining the rights of security holders, including indentures:
 *
    (a) Senior Indenture, dated as of August 1, 1992, between Northwest and Continental
Bank, N.A., relating to Pipelines 9% Debentures, due 2022 (Exhibit 4.1 to Registration
Statement on Form S-3, No. 33-49150, filed July 2, 1992).*
    (b) Senior Indenture, dated as of November 30, 1995 between Northwest and Chemical
Bank, relating to Pipelines 7.125% Debentures, due 2025 (Exhibit 4.1 to Registration
Statement on Form S-3, No. 33-62639, filed September 14, 1995).*
    (c) Senior Indenture, dated as of December 8, 1997 between Northwest and The Chase
Manhattan Bank, relating to Pipelines 6.625% Debentures, due 2007 (Exhibit 4.1 to
Registration Statement on Form S-3, No. 333-35101, filed September 8, 1997).*
    (d) Indenture, dated March 4, 2003, between Northwest and JP Morgan Chase Bank, as
Trustee (filed as Exhibit 4.1 to The Williams Companies, Inc. Form 10-Q for the quarter
ended March 31, 2003, Commission File Number 1-4174).*
    (e) Indenture, dated as of June 22, 2006, between Northwest Pipeline Corporation and
JPMorgan Chase Bank, N.A. (Exhibit 4.1 to Northwest report on Form 8-K, No. 1-7414,
filed June 23, 2006).*
    (f) Indenture, dated as of April 5, 2007, between Northwest Pipeline Corporation and
The Bank of New York (Exhibit 4.1 to Northwest report on Form 8-K, No. 1-7414, filed
April 6, 2007).
 (10)
    
    Material contracts:
 (a)
    *(1)
    
    Form of Transfer Agreement, dated July 1, 1991, between Northwest and Gas
Processing (Exhibit 10(c)(8) to Pipeline Report on Form 10-K, No. 1-7414, filed March
26, 1992).*(2)
    
    Form of Operating Agreement, dated July 1, 1991, between Northwest and
Williams Field Services Company (Exhibit 10(c)(9) to Pipeline Report on Form 10-K,
No. 1-7414, filed March 26, 1992).
 -79-




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*(3)
    
    Amended and Restated Credit Agreement dated as of May 20, 2005 among
The Williams Companies, Inc., Williams Partner L.P., Northwest Pipeline
Corporation, Transcontinental Gas Pipe Line Corporation, and the Banks, Citibank,
N.A. and
Bank of America, N.A. (each, an Issuing Bank), and Citicorp USA, INC. as
administrative agent. (filed as Exhibit 1.1 to Form 8-K filed May 26, 2005).*(4)
    
    Credit Agreement, dated as of May 1, 2006, among The Williams
Companies, Inc., Northwest Pipeline Corporation, Transcontinental
Gas Pipe Line Corporation, and Williams Partners L.P., as Borrowers,
and Citibank, N.A., as Administrative Agent (Exhibit 10.1 to The
Williams Companies, Inc. Form 8-K filed May 1, 2006 Commission File
Number 1-4174).*(5)
    
    Registration Rights Agreement, dated as of June 22, 2006, among
Northwest Pipeline Corporation and J.P. Morgan Securities Inc. and
Calyon Securities (USA) Inc., acting on behalf of themselves and the
several initial purchasers listed on Schedule I thereto. (Exhibit
10.1 to Form 8-K filed June 23, 2006).*(6)
    
    Amendment Agreement, dated May 9, 2007, among The Williams
Companies, Inc., Williams Partners L.P., Northwest Pipeline
Corporation, Transcontinental Gas Pipe Line Corporation, certain
banks, financial institutions and other institutional lenders and
Citibank, N.A., as administrative agent (Exhibit 10.1 to The
Williams Companies, Inc. report on Form 8-K filed May 15, 2007,
Commission File Number 1-4174).*(7)
    
    Amendment Agreement dated November 21, 2007, among The Williams
Companies, Inc., Williams Partners L.P., Northwest Pipeline GP,
Transcontinental Gas Pipe Line Corporation, certain banks, financial
institutions and other institutional lenders and Citibank, N.A., as
administrative agent (Exhibit 10.1 to the Williams Companies, Inc.,
Form 8-K, filed November 28, 2007, Commission File Number 1-4174).*(8)
    
    Administrative Services Agreement, dated January 24, 2008, between
Northwest Pipeline GP and Northwest Pipeline Services, LLC (Exhibit
10.1 to Northwest report on Form 8-K, No. 1-7414, filed January 30,
2008).*(9)
    
    Contribution, Conveyance and Assumption Agreement, dated January 24,
2008, among Williams Pipeline Partners L.P., Williams Pipeline
Operating LLC, WPP Merger LLC, Williams Pipeline Partners Holdings
LLC, Northwest Pipeline GP, Williams Pipeline GP LLC, Williams Gas
Pipeline Company, LLC, WGPC Holdings LLC and Williams Pipeline
Services Company (Exhibit 10.2 to Northwest report on Form 8-K, No.
1-7414, filed January 30, 2008).*(10)
    
    Registration Rights Agreement, dated as of April 5, 2007, among
Northwest Pipeline Corporation and Greenwich Capital Markets, Inc.
and Banc of America Securities LLC, acting on behalf of themselves
and the several initial purchasers listed on Schedule I thereto
(Exhibit 10.1 to Northwest report on Form 8-K, No. 1-7414, filed
April 6, 2007).
 (12)
    
    Statement of Ratio of Earnings to Fixed Charges(18)
    
    Letter Re: Change in Accounting Principles(23)
    
    Consent of Independent Registered Public Accounting Firm(24)
    
    Power of Attorney with Certified Resolution(31)
    
    Section 302 Certifications
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##### Table of Contents



(a)
    
    Certification of Principal Executive Officer pursuant to Rules 13a-14(a) and
15d-14(a) promulgated under the Securities Exchange Act of 1934, as amended and Item
601(b)(31) of Regulation S-K, as adopted pursuant to Section 302 of The Sarbanes-Oxley
Act of 2002.(b)
    
    Certification of Principal Financial Officer pursuant to Rules 13a-14(a) and
15d-14(a) promulgated under the Securities Exchange Act of 1934, as amended, and Item
601(b)(31) of Regulation S-K, as adopted pursuant to Section 302 of The Sarbanes-Oxley
Act of 2002.
 (32)
    
    Section 906 Certification
 (a)
    
    Certification of Principal Executive Officer and Principal Financial Officer
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
 
 *
    
    Exhibits so marked have heretofore been filed with the Securities and Exchange Commission as
part of the filing indicated and are incorporated herein by reference. -81-




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##### Table of Contents



SIGNATURES
  NORTHWEST PIPELINE CORPORATION
               (Registrant)By
    
    /s/ R. Rand ClarkR. Rand ClarkController
   Signature
    
    Title/s/ Steven J. Malcolm*
    
    Chief Executive OfficerSteven J. Malcolm/s/ Donald R. Chappel*
    
    Management Committee MemberDonald R. Chappel/s/ Phillip D. Wright*
    
    Senior Vice President and Management Committee MemberPhillip D. Wright/s/ Richard D. Rodekohr*
    
    Vice President and TreasurerRichard D. Rodekohr
    
    (Principal
Financial Officer)/s/ R. Rand Clark
    
    Controller (Principal Accounting Officer)R. Rand Clark/s/ Allison G. Bridges*
    
    Vice PresidentAllison G. Bridges* By /s/ R. Rand ClarkR. Rand ClarkAttorney-in-fact
  -82-




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##### Table of Contents



Exhibit
 12
    
    Computation of Ratio of Earnings to Fixed Charges18
    
    Letter Re: Change in Accounting Principles23
    
    Consent of Independent Registered Public Accounting Firm24
    
    Power of Attorney with Certified Resolution31(a)
    
    Section 302 Certification of Principal Executive Officer31(b)
    
    Section 302 Certification of Principal Financial Officer32
    
    Section 906 Certification of Principal Executive Officer and Principal Financial Officer
 -83-