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 ~~September~~March 3031, ~~2009~~2010


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.

(Exact name of registrant as specified in its charter)

Delaware		26-0834035
Delaware (State or other jurisdiction of incorporation or organization)		26-0834035 (I.R.S. Employer Identification No.)
(State or other jurisdiction of		(I.R.S. Employer
One Williams Center, Tulsa, Oklahoma (Address of principal executive offices)		74172-0172 (Zip Code)
incorporation or organization)		Identification No.)
One Williams Center, Tulsa, Oklahoma		74172-0172
(Address of principal executive offices)		(Zip Code)

(918) 573-2000
(Registrant’s telephone number, including area code)

NO CHANGE
(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed ~~all~~ reports required to be filed by by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or ~~for~~ for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o Accelerated filer oþ Non-accelerated filer þo(Do not check if a smaller reporting company) Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

The registrant had 22,607,430 common units and 10,957,900 subordinated units outstanding as of ~~October~~May 263, ~~2009~~2010.

WILLIAMS PIPELINE PARTNERS L.P.

FORM 10-Q

TABLE OF CONTENTS

	Page
Part I. Financial Information
Item 1. Financial Statements
Consolidated Statements of Income — Three and Nine Months Ended September 30, 2009 and 2008		4
Consolidated Statements of Income — Three Months Ended March 31, 2010 and 2009		5
Consolidated Balance Sheets — September 30, 2009 and December 31, 2008		5
Consolidated Balance Sheets — March 31, 2010 and December 31, 2009		6
Consolidated Statements of Cash Flows — Nine Months Ended September 30, 2009 and 2008		6
Consolidated Statements of Cash Flows — Three Months Ended March 31, 2010 and 2009		7
Consolidated Statement of Partners’ Capital from January 1, 2009 to September 30, 2009		7
Consolidated Statement of Partners’ Capital from January 1, 2010 to March 31, 2010		8
Notes to Consolidated Financial Statements		89
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		1213
Item 3. Quantitative and Qualitative Disclosures About Market Risk		2021
Item 4T. Controls and Procedures		20
Item 4. Controls and Procedures		21
Part II. Other Information
Item 1. Legal Proceedings		2122
Item 1A. Risk Factors		2122
Item 6. Exhibits		2322
EX-31.1
EX-31.2
EX-32
EX-99.1

FORWARD-LOOKING STATEMENTS

Certain matters contained in this report include “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements relate to anticipated financial performance, management’s plans and objectives for future operations, business prospects, outcome of regulatory proceedings, market conditions and other matters. We make these forward-looking statements in reliance on the safe harbor protections provided under the Private Securities Litigation Reform Act of 1995.

All statements, other than statements of historical facts, included in this report that address activities, events or developments that we expect, believe or anticipate will exist or may occur in the future, are forward-looking statements. Forward-looking statements can be identified by various forms of words such as “anticipates,” “believes,” “seeks,” “could,” “may,” “should,” “continues,” “estimates,” “expects,” “forecasts,” “intends,” “might,” “goals,” “objectives,” “targets,” “planned,” “potential,” “projects,” “scheduled,” “will” or other similar expressions. These forward-looking statements are based on management’s beliefs and assumptions and on information currently available to management and include, among others, statements regarding:

• Amounts and nature of future capital expenditures; • Expansion and growth of our business and operations; • Financial condition and liquidity; • 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.

~~Forward-looking~~• ~~statements~~Expansion ~~are based on numerous assumptions, uncertainties~~ and ~~risks~~growth ~~that could cause future events or results to be materially different from those stated or implied in this report. Limited partner interests are inherently different from the capital stock~~ of a corporation, although many of the business risks to which we are subject are similar to those that would be faced by a corporation engaged in a similar business. The reader should carefully consider the risk factors discussed below in addition to the other information in this report. If any of the following risks were actually to occur, our business, ~~results of operations~~ and ~~financial condition~~ ~~could be materially adversely affected. In that case, we might not be able to pay distributions on our common units, the~~ operations;

•

Financial condition and liquidity;

~~trading~~• ~~price~~Business of our common units could decline and unitholders could lose all or part of their investment. Many of the factors that could adversely affect our business, results of operations and financial condition are beyond our ability to control or predict. Specific factors that could cause actual results to differ from results contemplated by the forward-looking statements include, among others, the following: strategy;

• ~~Whether~~Cash weflow ~~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 the current economic slowdown and the disruption of 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~~operations; • Northwest’s costs and funding obligations for defined benefit pension plans and other postretirement benefit plans; • 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”).

•

The levels of cash distributions to unitholders;

•

Rate case filings; and

•

Natural gas prices and demand.

Forward-looking statements are based on numerous assumptions, uncertainties and risks that could cause future events or results to be materially different from those stated or implied in this report. Limited partner units are inherently different from the capital stock of a corporation, although many of the business risks to which we are subject are similar to those that would be faced by a corporation engaged in a similar business. You should carefully consider the risk factors discussed below in addition to the other information in this report. If any of the following risks were actually to occur, our business, results of operations and financial condition could be materially adversely affected. In that case, we might not be able to pay distributions on our common units, the trading price of our common units could decline and unitholders could lose all or part of their investment. Many of the factors that will determine these results are beyond our ability to control or predict. Specific factors that could cause actual results to differ from results contemplated by the forward-looking statements, include, among others, the following:

•

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”).

Given the uncertainties and risk factors that could cause our actual results to differ materially from those contained in any forward-looking statement, we caution investors not to unduly rely on our forward-looking statements. We disclaim any obligations to and do not intend to update the above list or to announce publicly the result of any revisions to any of the forward-looking statements to reflect future events or developments.

In addition to causing our actual results to differ, the factors listed above and referred to below may cause our intentions to change from those statements of intention set forth in this report. Such changes in our intentions may also cause our results to differ. We may change our intentions, at any time and without notice, based upon changes in such factors, our assumptions, or otherwise.

Because forward-looking statements involve risks and uncertainties, we caution that there are important factors, in addition to those listed above, that may cause actual results to differ materially from those contained in the forward-looking statements. For a detailed discussion of those factors, see Part I, Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, ~~2008, and Part II, Item 1A~~2009. ~~Risk Factors of this Quarterly Report on Form 10-Q.~~

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

WILLIAMS PIPELINE PARTNERS L.P.

CONSOLIDATED STATEMENTS OF INCOME

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2009			2008			2009			2008
	(Thousands of dollars, except per-unit amounts)
	(Unaudited)
General and administrative expense	$	899		$	596		$	2,289		$	1,715
Earnings from Northwest Pipeline GP through January 23, 2008 (Predecessor)		—			—			—			4,002
Equity earnings from investment in Northwest Pipeline GP after January 23, 2008		13,391			14,433			40,016			36,276
Interest expense — affiliate		(13	)		(13	)		(38	)		(34	)
Interest income		1			39			6			56
Net income	$	12,480		$	13,863		$	37,695		$	38,585
Allocation of net income used for earnings per unit calculation:
Net income	$	12,480		$	13,863		$	37,695		$	38,585
Net income applicable to the period through January 23, 2008		—			—			—			4,002
Net income applicable to the period after January 23, 2008		12,480			13,863			37,695			34,583
Net loss allocated to general partner		(121	)		(216	)		(346	)		(653	)
Net income allocated to limited partners	$	12,601		$	14,079		$	38,041		$	35,236
Basic and diluted net income per limited partner unit:
Common units	$	0.38		$	0.42		$	1.14		$	1.05
Subordinated units	$	0.38		$	0.42		$	1.14		$	1.05
Weighted average number of units outstanding:
Common units		22,607,430			22,605,668			22,607,430			22,605,489
Subordinated units		10,957,900			10,957,900			10,957,900			10,957,900

(Unaudited)


	Three Months Ended
	March 31,
	2010			2009
	(Thousands of dollars, except
	per-unit amounts)
General and administrative expense	$	1,330		$	653
Equity earnings from investment in Northwest Pipeline GP		13,259			14,318
Interest expense — affiliate		(3	)		(12	)
Interest income		1			2

Net income	$	11,927		$	13,655


Allocation of net income used for earnings per unit calculation:
Net income	$	11,927		$	13,655
Allocation of net income (loss) to general partner		18			(89	)

Allocation of net income to limited partners	$	11,909		$	13,744


Basic and diluted net income per limited partner unit:
Common units	$	0.35		$	0.41
Subordinated units	$	0.35		$	0.41

Weighted average number of units outstanding:
Common units		22,607,430			22,607,430
Subordinated units		10,957,900			10,957,900

See accompanying notes to consolidated financial statements.

WILLIAMS PIPELINE PARTNERS L.P.

CONSOLIDATED BALANCE SHEETS

	September 30,		December 31,
	2009		2008
	(Unaudited)
	(Thousands of dollars)
ASSETS
Current assets:
Cash and cash equivalents	$	7,911	$	7,760
Prepaid expense		323		184
Total current assets		8,234		7,944
Investment in Northwest Pipeline GP		420,030		414,069
Total assets	$	428,264	$	422,013
LIABILITIES AND PARTNERS’ CAPITAL
Current liabilities:
Accounts payable:
Trade	$	492	$	671
Affiliate		473		424
Total current liabilities		965		1,095
Contingent liabilities and commitments
Partners’ capital		427,299		420,918
Total liabilities and partners’ capital	$	428,264	$	422,013

(Unaudited)


	March 31,		December 31,
	2010		2009
	(Thousands of dollars)
ASSETS
Current assets:
Cash and cash equivalents	$	21,841	$	8,114
Accounts receivable — affiliate		247		—
Prepaid expense		574		193

Total current assets		22,662		8,307
Investment in Northwest Pipeline GP		428,515		441,608

Total assets	$	451,177	$	449,915


LIABILITIES AND PARTNERS’ CAPITAL

Current liabilities:
Accounts payable:
Trade	$	842	$	419
Affiliate		290		124

Total current liabilities		1,132		543
Contingent liabilities and commitments
Partners’ capital		450,045		449,372

Total liabilities and partners’ capital	$	451,177	$	449,915

See accompanying notes to consolidated financial statements.

WILLIAMS PIPELINE PARTNERS L.P.

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Nine Months Ended
	September 30,
	2009			2008
	(Thousands of dollars)
	(Unaudited)
OPERATING ACTIVITIES:
Net income	$	37,695		$	38,585
Adjustments to reconcile to cash provided by operations:
Equity earnings from investment in Northwest Pipeline GP		(40,016	)		(40,278	)
Distributions related to equity earnings from investment in Northwest Pipeline GP		35,000			30,605
Cash provided (used) by changes in assets and liabilities:
Accounts receivable		—			(95	)
Other current assets		(139	)		(243	)
Accounts payable		(130	)		1,054
Other		13			101
Net cash provided by operating activities		32,423			29,729
INVESTING ACTIVITIES:
Purchase of 15.9% general partnership interest in Northwest Pipeline GP		—			(300,900	)
Net cash used by investing activities		—			(300,900	)
FINANCING ACTIVITIES:
Distributions to unitholders and general partner		(33,394	)		(24,107	)
Proceeds from sale of common units		—			336,520
Offering costs		—			(3,797	)
Redemption of common units held by general partner		—			(31,020	)
Contribution pursuant to the omnibus agreement		1,122			867
Net cash (used) provided by financing activities		(32,272	)		278,463
Increase in cash and cash equivalents		151			7,292
Cash and cash equivalents at beginning of period		7,760			—
Cash and cash equivalents at end of period	$	7,911		$	7,292
SCHEDULE OF NONCASH FINANCING ACTIVITIES:
Contribution of 19.1% in Northwest Pipeline GP	$	—		$	(115,020	)
Issuance of units to Williams Pipeline GP LLC		—			115,020

(Unaudited)


	Three Months Ended
	March 31,
	2010			2009
	(Thousands of dollars)
OPERATING ACTIVITIES:
Net Income	$	11,927		$	13,655
Adjustments 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			11,200
Cash used by changes in assets and liabilities:
Other current assets		(381	)		(135	)
Accounts payable		589			(713	)
Other		—			12

Net cash provided by operating activities		25,224			9,701


INVESTING ACTIVITIES:
Other		—			—

Net cash provided (used) by investing activities		—			—


FINANCING ACTIVITIES:
Distributions paid		(11,497	)		(10,960	)
Contribution pursuant to the omnibus agreement		—			370

Net 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			7,760

Cash and cash equivalents at end of period	$	21,841		$	6,871

See accompanying notes to consolidated financial statements.

WILLIAMS PIPELINE PARTNERS L.P.

CONSOLIDATED STATEMENT OF PARTNERS’ CAPITAL

										Accumulated
										Other			Total
	Limited Partner						General			Comprehensive			Partners’
	Common			Subordinated			Partner			Loss			Capital
	(Thousands of dollars)
	(Unaudited)
Balance — January 1, 2009	$	287,269		$	138,835		$	8,677		$	(13,863	)	$	420,918
Net income		25,622			12,419			(346	)		—			37,695
Other comprehensive income:
Net unrealized gain on cash flow hedge		—			—			—			(16	)		(16	)
Pension benefits:
Amortization of net actuarial loss		—			—			—			941			941
Amortization of prior service cost		—			—			—			21			21
Total other comprehensive income														946
Cash distributions		(22,042	)		(10,684	)		(668	)		—			(33,394	)
Contributions pursuant to the omnibus agreement		—			—			1,122			—			1,122
Other		12			—			—			—			12
Balance — September 30, 2009	$	290,861		$	140,570		$	8,785		$	(12,917	)	$	427,299

(Unaudited)


										Accumulated
										Other			Total
	Limited Partner						General			Comprehensive			Partners’
	Common			Subordinated			Partner			Income			Capital
	(Thousands of dollars)
Balance — January 1, 2010	$	296,932		$	143,513		$	8,969		$	(42	)	$	449,372
Net income		8,021			3,888			18			—			11,927
Other 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			—			248

Balance — March 31, 2010	$	297,379		$	143,730		$	8,983		$	(47	)	$	450,045

See accompanying notes to consolidated financial statements.

WILLIAMS PIPELINE PARTNERS L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1. Organization and Basis of Presentation

Unless the context clearly indicates otherwise, references in this report to “we,” “our,” “us” or like terms refer to Williams Pipeline Partners L.P. (“Partnership”), its subsidiaries and the operations of Northwest Pipeline GP (“Northwest”), in which we own a 35 percent interest. When we refer to Northwest by name, we are referring exclusively to Northwest Pipeline GP and its consolidated affiliate, Northwest Pipeline Services LLC.

We are a Delaware limited partnership formed on August 31, 2007 to own and operate natural gas transportation and storage assets, including a ~~minority~~non-controlling ownership interest in Northwest. On January 24, 2008, we completed our initial public offering (“IPO”) of common units. The 35 percent of Northwest owned by us was owned by The Williams Companies, Inc. (“Williams”) prior to the IPO of our common units. Asin ~~of September~~January ~~30, 2009, Williams, through its subsidiary, Williams Pipeline GP LLC, owns a 2 percent general partner interest and a 45~~2008.~~7 percent limited partner interest in us.~~

~~Because~~ On ~~the~~February 17, 2010, Williams completed a strategic restructuring in which it contributed certain of its midstream and pipeline assets, including its 45.7 percent limited partner interest in us, its 100 percent ownership interest in our general partner, and its 65 percent interest in Northwest ~~interests~~to ~~were~~Williams ~~acquired~~Partners ~~from~~L.P. (“Williams Partners”), an affiliate of Williams and of us, in exchange for cash and units in Williams Partners (the ~~transaction was~~“Dropdown”). ~~between~~As ~~entities~~part ~~under~~of ~~common~~the ~~control~~Dropdown, Williams ~~and~~Partners has ~~been~~stated ~~accounted~~its intention to commence an exchange offer for atany ~~historical~~and ~~cost. Accordingly,~~all of our outstanding ~~consolidated~~common ~~financial~~units ~~statements~~not ~~and~~held ~~notes~~by ~~reflect~~Williams ~~the~~Partners ~~combined~~or ~~historical~~its ~~results~~affiliates ofat a future date, or to propose a merger to our ~~investment~~holders also inat ~~Northwest~~the ~~for~~previously ~~all~~stated ~~periods~~exchange ~~presented~~ratio.

~~Our~~ As ~~proportionate share~~ of ~~operating results is reflected as equity earnings from investment in Northwest in our financial statements beginning January~~March 2431, ~~2008~~2010, ~~the~~Williams ~~effective~~Partners, ~~date~~through ofits ~~the IPO. The financial information that precedes January 24~~subsidiary, ~~2008~~Williams isPipeline ~~referred~~GP ~~to as “Predecessor.” The~~LLC, ~~historical~~owns ~~financial~~a ~~information~~2 percent ~~for~~general ~~the~~partner ~~Predecessor~~interest ~~reflects~~and ~~the ownership of~~ a 3545.7 percent ~~investment~~ inlimited ~~Northwest~~partner ~~using~~interest ~~the~~in ~~equity method of accounting~~us.

~~The~~ As ~~accompanying~~discussed ~~interim financial statements do not include all the notes~~ in our ~~annual financial~~2009 ~~statements~~Annual ~~and,~~Report ~~therefore,~~on ~~should be read in conjunction with the audited consolidated financial statements and notes thereto included in our~~ Form 10-K, ~~filed~~on ~~February~~January 2720, ~~2009~~2010, ~~for~~we ~~the year~~concluded ~~ended December 31, 2008. The accompanying consolidated financial statements include all normal recurring adjustments~~ that~~, in the opinion of management, are necessary to present fairly~~ our financial ~~position~~statements ~~at September 30, 2009, results of operations~~ for the ~~three~~year ~~and nine months~~ ended ~~September~~December 3031, ~~2009 and~~ 2008, ~~and~~should ~~cash~~be ~~flows~~restated ~~for~~due to the ~~nine~~manner in ~~months~~which ~~ended~~Northwest ~~September 30,~~had ~~2009~~presented and ~~2008.~~ ~~All~~recognized ~~intercompany~~pension ~~transactions~~and ~~have~~postretirement ~~been~~obligations ~~eliminated.~~in ~~We have evaluated our disclosure of~~certain ~~subsequent~~benefit ~~events~~plans ~~through~~for ~~the~~which ~~time~~Williams ofis ~~filing this Form 10-Q with~~ the ~~SEC~~plan ~~on October 29, 2009~~sponsor.

The accompanying interim consolidated financial statements do not include all the notes in our annual financial statements and, therefore, should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K, filed February 23, 2010, for the year ended December 31, 2009. The accompanying consolidated financial statements include all normal recurring adjustments that, in the opinion of management, are necessary to present fairly our financial position at March 31, 2010, results of operations for the three months ended March 31, 2010 and 2009, and cash flows for the three months ended March 31, 2010 and 2009. All intercompany transactions have been eliminated.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates.

WILLIAMS PIPELINE PARTNERS L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Note 2. Allocation of Net Income and Distributions

The allocation of ~~post-IPO~~ net income between our general partner and limited partners, as reflected in the Consolidated ~~Statement~~Statements of Partners’ Capital, for the three ~~and nine~~ months ended ~~September~~ March 3031, ~~2009~~2010 and 2009 ~~2008~~ is as follows:

	Three Months Ended						~~Nine Months Ended~~
	September 30,						September 30,
	March 31,
	2009			2008			2009			2008
	2010			2009
	(Thousands of dollars, except per-unit amounts)
	(Thousands of dollars)
Allocation to general partner:
Net income	$	1211,~~480~~927		$	13,~~863~~655		$	~~37,695~~		$	~~34,583~~
Charges direct to general partner:
Reimbursable general administrative costs		~~378~~248			~~503~~370			~~1,122~~			~~1,372~~
Income subject to 2% allocation of general partner interest		12,~~858~~175			14,~~366~~025			~~38,817~~			~~35,955~~
General partner’s share of net income		2.0	%		2.0	%		~~2.0~~	%		~~2.0~~	%
General partner’s allocated share of net income before items directly allocable to general partner interest		~~257~~244			~~287~~281			~~776~~			~~719~~
Incentive distributions paid to general partner		—22			—			—			—
Direct charges to general partner		(~~378~~248	)		(~~503~~370	)		~~(1,122~~	)		~~(1,372~~	)
Net loss allocated to general partner	$	(121	)	$	(216	)	$	(346	)	$	(653	)
Net income (loss) allocated to general partner	$	18		$	(89	)
Net income	$	1211,~~480~~927		$	13,~~863~~655		$	~~37,695~~		$	~~34,583~~
Net loss allocated to general partner		(121	)		(216	)		(346	)		(653	)
Net income (loss) allocated to general partner		18			(89	)
Net income allocated to limited partners	$	1211,~~601~~909		$	1413,~~079~~744		$	~~38,041~~		$	~~35,236~~

Certain of our historical periods’ earnings per unit have been revised as a result of adopting Emerging Issues Task Force Issue No. 07-4 (Accounting Standards Codification Topic 260) in 2009. The retrospective application of this new guidance resulted in an increase in earnings per unit of $0.01 for the third quarter of 2008. Adoption of this new standard only impacts the allocation of earnings for purposes of calculating our earnings per limited partner and has no impact on our results of operations, allocation of earnings to capital accounts, or distributions of available cash to unitholders and our general partner. The application will also result in an increase in earnings per unit of $0.01 for the fourth quarter of 2008.

Common and subordinated unitholders have always shared equally, on a per-unit basis, in the net income allocated to limited partners.

We have paid or have authorized payment of the following post-IPO cash distributions during 2008, 2009 and ~~2009~~2010 (in thousands, except per-unit amounts):

							General Partner
									Incentive
	Per Unit		Common		Subordinated				Distribution			Total Cash
Payment Date	Distribution		Units		Units		2%		Rights			Distribution
5/15/2008	$	0.2242	$	5,068	$	2,457	$	154	$	—		$	7,679
8/14/2008		0.3100		7,008		3,397		212		—			10,617
11/14/2008		0.3150		7,121		3,452		216		—			10,789
2/13/2009		0.3200		7,234		3,507		219		—			10,960
5/15/2009		0.3250		7,347		3,561		223		—			11,131
8/14/2009		0.3300		7,461		3,616		226		—			11,303
11/13/2009(a)		0.3350		7,574		3,671		230		22	(b)		11,497
11/13/2009		0.3350		7,574		3,671		230		22			11,497
2/12/2010		0.3350		7,574		3,671		230		22			11,497
5/14/2010(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 October 27, 2009 to be paid on November 13, 2009 to unitholders of record at the close of business on November 6, 2009.
(b)		The declared distribution amount of $0.335 per unit falls within the Partnership’s second target distribution level, which triggers the payment of incentive distributions.


(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.

910

WILLIAMS PIPELINE PARTNERS L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Note 3. Credit ~~Agreement~~Facilities

We At ~~have~~the closing of the IPO on January 24, 2008, we entered into a $20.0 million working capital credit agreement with Williams as the lender. The ~~proceeds~~ offacility ~~the~~was ~~borrowing are~~ available exclusively to fund working capital, ~~including~~borrowings. ~~the~~The ~~payment of~~initial ~~distributions~~maturity todate ~~the limited partners~~ of the ~~Partnership.~~facility ~~Borrowings~~was ~~under the agreement mature on~~ January 23, ~~2010~~2009. We exercised ~~are~~our ~~permitted~~automatic right to extend the ~~term~~facility ~~of the agreement~~ for ~~another~~an additional 365-day ~~period~~ ~~upon~~term ~~notice~~in ~~to Williams~~January 2009. WeThe ~~pay~~new amaturity ~~commitment~~date ~~fee~~was ~~to Williams on the unused portion of the credit agreement of 0.25~~January ~~percent~~23, ~~annually~~2010. WeThis ~~are~~facility ~~required~~expired toat ~~reduce~~maturity ~~all~~since ~~borrowings~~we ~~under our~~did ~~working~~not ~~capital~~exercise ~~credit~~our ~~agreement~~automatic toright ~~zero for a period of at least 15 consecutive days once each twelve-month period prior~~ to ~~the~~extend ~~maturity date of~~ the facility. Atin ~~September~~January ~~30,~~2010. ~~2009,~~No weborrowings ~~had~~were nomade ~~outstanding borrowings~~ under the ~~working capital credit agreement~~facility.

Note 4. Related Party Transactions

During the ~~nine~~three months ended ~~September~~March 3031, ~~2009~~2010, we received distributions oftotaling $3526.03 million from Northwest. ~~and~~Of ~~distributed~~this amount, $1513.97 million represents a distribution from Northwest due to the settlement of its outstanding advances to Williams as of January 31, 2010. On February 12, 2010 we made a distribution to Williams of $5.5 million, as declared by the board of directors of ~~our~~ our general partner on January 25, 2010.

Our general partner gives us a ~~quarterly~~ credit for general and administrative expenses under the terms of an omnibus agreement. The annual amounts of those credits are as follows: $1.~~5 million in 2009, $1.~~0 million in 2010 and $0.5 million in 2011. ~~These~~At ~~amounts~~March 31, ~~are reflected as capital contributions from our general partner. Accordingly~~2010, ~~our net income does not reflect the benefit of the credit received~~$0.2 million ~~The cost subject to this credit~~ is ~~allocated~~reflected ~~entirely~~as ~~to our general partner. As~~ a ~~result,~~capital ~~the~~contribution ~~net income allocated to limited partners on a per-unit basis~~in ~~reflects~~our ~~the~~financial ~~benefit of this credit~~statements. ~~For the nine months ended September 30, 2009, the total~~ ~~general and administrative credit received was $1.1 million.~~

Note 5. Comprehensive Income

Comprehensive income is as follows:

	Three Months Ended						~~Nine Months Ended~~
	September 30,						September 30,
	March 31,
	2009			2008			2009			2008
	2010			2009*
	(Thousands of dollars)
				(Restated)
Net income	$	12,480		$	13,863		$	37,695		$	38,585
	(Thousands of dollars)
Reclassification of cash flow hedge gain into earnings		(5	)		(6	)		(16	)		(15	)
Net income	$	11,927		$	13,655
Pension benefits:
Reclassification of cash flow hedge gain into earnings		(5	)		(6	)
Amortization of net actuarial loss		315			124			941			332
Total comprehensive income	$	11,922		$	13,649
Amortization of prior service cost		7			7			21			19
Total comprehensive income	$	12,797		$	13,988		$	38,641		$	38,921

* Prior year amount has been restated to reflect accounting for pension and postretirement benefit obligations on a multi-employer accounting model (See Note 61). ~~Equity~~The ~~Investments~~ 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.

~~Northwest is accounted for using the equity method of accounting. As such, our interest in~~11 ~~Northwest’s net operating results is reflected as equity earnings in our Consolidated Statements of Income. The summarized results of operations for 100 percent of Northwest are presented below:~~

Northwest

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2009		2008		2009		2008
	(Thousands of dollars)
Revenues	$	106,615	$	108,542	$	325,919	$	322,397
Operating expenses		57,470		55,500		176,609		173,513
Other income, net		1,146		507		1,786		1,246
Interest charges		12,031		12,313		36,766		35,051
Net income	$	38,260	$	41,236	$	114,330	$	115,079

WILLIAMS PIPELINE PARTNERS L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Note 6. Equity Investments

Northwest is accounted for using the equity method of accounting. As such, our interest in Northwest’s net operating results is reflected as equity earnings in our Consolidated Statements of Income. The summarized results of operations for 100 percent of Northwest are presented below:

Northwest


	Three Months Ended
	March 31,
	2010			2009
	(Thousands of dollars)
Revenues	$	106,110		$	111,548
Operating expenses		55,819			58,396
Other (expense) income, net		(338	)		191
Interest charges		12,070			12,435

Net income	$	37,883		$	40,908

Note 7. Disclosures About the Fair Value of Financial Instruments

The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate that value:

Cash, ~~and~~ cash equivalents — The carrying amounts of these items ~~approximate~~approximates their fair value.

1112


Item 2.		*Management’s Discussion and Analysis of Financial Condition and Results of Operations*

Overview

We are a growth-oriented Delaware limited partnership formed by Williams to own and operate natural gas transportation and storage assets. Effective January 24, 2008, we own a 35 percent general partnership interest in Northwest, a subsidiary of Williams that owns an approximate 3,900-mile, bi-directional, interstate natural gas pipeline system that extends from the San Juan Basin in New Mexico through the Rocky Mountains and to the Northwestern United States. Northwest also has working natural gas storage capacity of approximately 1213.80 billion cubic feet (“Bcf”). ~~The~~ The remaining 65 percent general partnership interest in Northwest is owned by a subsidiary of Williams.

Our general partnership interest in Northwest is our primary asset. As a result, we are dependent on Northwest for substantially all of our cash available for distribution, and the management’s discussion and analysis of financial condition and results of operations contained herein is primarily focused on Northwest.

~~Unless~~ On ~~indicated~~February 17, ~~otherwise~~2010, ~~the~~Williams ~~following~~completed ~~discussion~~a ~~and~~strategic ~~analysis~~restructuring ofin ~~results~~which it contributed certain of ~~operations~~its midstream and ~~financial~~ ~~condition~~pipeline ~~and~~assets, ~~liquidity~~including ~~should~~its be45.7 percent ~~read~~limited partner interest in ~~conjunction~~us, ~~with~~its ~~the~~100 percent ~~consolidated~~ownership ~~financial statements~~interest ~~and~~in ~~notes~~our ~~included~~general ~~within Part II~~partner, ~~Item~~and its 65 8.percent ~~Financial~~interest ~~Statements~~in Northwest ~~and~~to ~~Supplementary~~Williams ~~Data of~~Partners, ~~our~~an ~~2008~~affiliate ~~Annual~~of ~~Report~~Williams onand ~~Form~~of ~~10-K~~us, ~~the~~in ~~consolidated~~exchange ~~financial~~for ~~statements~~cash and ~~notes contained~~units in ~~Part I,~~Williams ~~Item 1~~Partners (the “Dropdown”). ~~Financial~~As ~~Statements~~part of the Dropdown, ~~Northwest~~Williams ~~Pipeline~~Partners GPhas ~~Quarterly~~stated ~~Report~~its intention onto ~~Form~~commence ~~10-Q~~ an exchange offer for ~~the~~any ~~quarterly~~and ~~period~~all ~~ending~~of ~~September 30,~~our ~~2009~~outstanding common units not held by Williams Partners or its affiliates at a future date, ~~and~~or ~~our~~to ~~consolidated~~propose ~~financial~~a ~~statements~~merger ~~and~~to our holders ~~notes~~also ~~contained~~at ~~within~~the ~~this~~previously ~~document~~stated exchange ratio.

Unless indicated otherwise, the following discussion and analysis of results of operations and financial condition and liquidity should be read in conjunction with the consolidated financial statements and notes included within Part II, Item 8. Financial Statements and Supplementary Data of our 2009 Annual Report on Form 10-K, the consolidated financial statements and notes contained in Part I, Item 1. Financial Statements of the Northwest Pipeline GP Quarterly Report on Form 10-Q for the quarterly period ending March 31, 2010, and with our consolidated financial statements and notes contained within this document.

Outlook

Northwest’s strategy to create value focuses on maximizing the contracted capacity on its pipeline by providing high quality, low cost natural gas transportation and storage services to its markets. ~~Northwest~~Changes in commodity prices and volumes transported have little impact on revenues because the majority of its revenues are recovered through firm capacity reservation charges. Northwest grows its business primarily through expansion projects that are designed to increase its access to natural gas supplies and to serve the demand growth in its markets.

Northwest’s Capital Projects

The pipeline projects listed below are significant future pipeline projects for which Northwest has significant customer commitments.

	•		Colorado Hub Connection Project. On June 1, 2009, Northwest commenced construction of a new 27-mile, 24-inch diameter lateral to connect the Meeker/White River Hub near Meeker, Colorado to Northwest’s mainline south of Rangely, Colorado. This project is referred to as the Colorado Hub Connection (“CHC Project”). It is estimated that the construction of the CHC Project will cost up to $60 million with service targeted to commence in November 2009. Northwest will combine the lateral capacity with existing mainline capacity to provide approximately 363 thousand dekatherms (“MDth”) per day of firm transportation from various receipt points to delivery points on the mainline as far south as Ignacio, Colorado. Approximately 243 MDth per day of this capacity was originally held by Pan-Alberta Gas under a contract that would have terminated on October 31, 2012 and approximately 98 MDth per day was sold on a short-term basis.
			In addition to providing greater opportunity for contract extensions for the short-term firm and Pan-Alberta capacity, the CHC Project provides direct access to additional natural gas supplies at the Meeker/White River Hub for Northwest’s on-system and off-system markets. Northwest has entered into transportation agreements for approximately 363 MDth per day of capacity with terms ranging between eight and fifteen years at maximum rates for all of the short-term firm and Pan-Alberta capacity resulting in the successful re-contracting of the capacity out to 2018 and beyond. In April 2009, the Federal Energy Regulatory Commission (“FERC”) issued a certificate approving the CHC Project, including the presumption of rolling in the costs of the project in any future rate case filed with the FERC.
	•		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

	•		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.

1213

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 ~~working~~deliverability ~~natural~~expansion ~~gas~~was ~~storage~~placed in service on November 1, 2008 at a cost of approximately $16.0 million. Northwest’s estimated capital cost for the capacity expansion ~~being~~component ~~developed~~of ~~over~~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 a16 ~~six~~miles of 30-~~year~~inch ~~period~~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 ~~2007~~the ~~through~~Greasewood ~~2012~~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.

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 May 2009, Northwest filed an application with the FERC for the proposed Sundance Trail Expansion to construct approximately 16 miles of 30-inch loop between Northwest’s existing Green River and Muddy Creek compressor stations in Wyoming as well as an upgrade to Northwest’s existing Vernal compressor station, with service targeted to commence in November 2010. The total project is estimated to cost up to $65 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 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 is seeking approval from the FERC to roll-in the Sundance Trail Expansion costs in any future rate cases. FERC approval is expected by the end of 2009.

Northwest’s Results of Operations

In the following discussion of the results of Northwest, all amounts represent 100 percent of the operations of Northwest, in which we hold a 35 percent general partnership interest following the completion of our IPO on January 24, 2008. As such, we recognized equity earnings from investments of $13.43 million and $4014.03 million for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2009,~~ ~~respectively,~~2010 ~~compared with the $14.4 million~~ and ~~$36~~2009.~~3 million for the three and nine months~~ ~~ended September 30, 2008, respectively.~~

Analysis of Financial Results

This analysis discusses financial results of Northwest’s operations for the three ~~and nine~~-month periods ended ~~September~~ March 3031, ~~2009~~2010 and ~~2008~~2009. ~~Changes~~Variances due to changes in natural gas prices and transportation volumes have little impact on revenues, because, under Northwest’s rate design methodology, the majority of overall cost of service is recovered through firm capacity reservation charges in Northwest’s transportation rates.

Three Months Ended ~~September~~March 3031, ~~2009~~2010 Compared to Three Months Ended ~~September~~March 3031, ~~2008~~2009

Northwest’s operating revenues decreased $15.94 million, or 25 percent. This decrease is primarily attributed to i) lower firm transportation commodity revenues of $1.3 million due primarily to warmer weather in our market area and lower off-system deliveries on the ~~termination~~southern end of the system, ii) lower Parachute Lateral lease ~~agreement~~revenues of $2.6 million resulting from the termination of the Parachute Lateral lease on August 1, 2009, iii) lower revenues of $0.5 million ~~The~~resulting ~~decrease~~from inthe termination of the ~~Parachute~~Everett Delta Lateral lease on November 9, 2009, and iv) lower other revenues isof ~~substantially~~$1.0 million resulting from the absence of sublease income attributed to the restructuring of the Salt Lake City headquarters building lease. These decreases were partially offset by aan ~~decrease~~increase in firm transportation under long-term contracts. The revenue decreases from the Parachute and Everett Delta laterals as well as the reduction in building sublease revenues is substantially offset by decreases in lease ~~expense~~expenses as described below.

Northwest’s transportation service accounted for 9596 percent and 9695 percent of its operating revenues for the three~~-month~~ ~~periods~~months ended ~~September~~March 3031, ~~2009~~2010 and ~~2008~~2009, respectively. ~~Additionally,~~ Natural gas storage service accounted for 4 percent ~~and 3 percent~~ of operating revenues for each of the three-month periods ended ~~September~~ March 3031, ~~2009~~2010 and ~~2008, respectively~~2009.

Operating expenses ~~increased~~decreased $2.06 million, or 4 percent., ~~This increase is~~ due primarily to i) the termination ~~higher~~of ~~pension~~the ~~expense~~Parachute ofand ~~$1.0 million,~~Everett ~~ii)~~Delta ~~higher~~leases, ~~allocated~~resulting ~~overhead~~in ~~from~~lower ~~Williams~~lease expense of $1.3.0 million and ii) ~~attributed~~the ~~primarily~~restructuring toof ~~higher~~the ~~pension~~Salt ~~expense,~~Lake ~~and~~City ~~iii)~~headquarters ~~higher~~building ~~contractual~~lease ~~and~~resulting ~~outside~~in ~~services~~lower ofbuilding lease expense of $01.93 million ~~attributed primarily to pipeline maintenance~~. These ~~increases~~decreases were partially offset by higher property taxes of $1.73 million ~~lower~~primarily ~~expense~~attributed ~~from~~to ~~the~~a ~~termination~~$1.5 million ofreduction ~~the~~in ~~Parachute~~2009 ~~Lateral~~for ~~lease~~lower ~~agreement~~than anticipated mill levies.

~~Nine Months Ended September 30, 2009 Compared to Nine Months Ended September 30, 2008~~14

Northwest’s operating revenues increased $3.5 million, or 1 percent. This increase is attributed to higher transportation revenues of $1.8 million resulting primarily from an increase in firm transportation under long-term contracts and higher storage revenues of $3.0 million resulting primarily from the release of capacity at Clay Basin and incremental reservation charges associated with the Jackson Prairie deliverability expansion that was placed in service on November 1, 2008, partially offset by $1.8 million

lower revenues due to the termination of the Parachute Lateral lease agreement on August 1, 2009. The decrease in the Parachute Lateral lease revenues is substantially offset by a decrease in lease expense as described below.

Northwest’s transportation service accounted for 95 percent and 96 percent of its operating revenues for the nine-month periods ended September 30, 2009 and 2008, respectively. Additionally, gas storage service accounted for 4 percent and 3 percent of operating revenues for the nine-month periods ended September 30, 2009 and 2008, respectively.

Operating expenses increased $3.1 million, or 2 percent. This increase is due primarily to i) higher pension expense of $3.0 million, ii) higher allocated overhead from Williams of $1.7 million attributed primarily to higher pension expense, iii) higher contractual and outside services of $0.6 million and higher labor of $0.7 million attributed primarily to pipeline maintenance, and iv) higher employee group insurance expense of $0.8 million. These increases were partially offset by lower taxes, other than income taxes, of $2.3 million primarily attributed to lower than anticipated tax settlements and $1.7 million lower expense from the termination of the Parachute Lateral lease agreement.

Interest charges increased $1.7 million, or 5 percent, due primarily to the May 2008 refinancing of the $250.0 million revolver debt with the issuance of $250.0 million of 6.05 percent senior unsecured notes.

Operating Statistics

The following table summarizes volumes and capacity for the periods indicated:

	Three Months Ended				Nine Months Ended
	Quarter Ended
	September 30,				September 30,
	March 31,
	2009		2008		2009		2008
	2010		2009
	(In Trillion British Thermal Units)
Total Throughput(1)		166		179		563		570
Total Throughput (1)		179		224
Average Daily Transportation Volumes		12.80		2.05		~~2.1~~		~~2.1~~
Average Daily Reserved Capacity Under Base Firm Contracts, excluding peak capacity		2.68		2.56		~~2.6~~		~~2.5~~
Average Daily Reserved Capacity Under Short-Term Firm Contracts(2)		0.5		0.6		0.5		0.7
Average Daily Reserved Capacity Under Short-Term Firm Contracts (2)		0.3		0.6

(1)		Parachute Lateral volumes of 623 trillion British ~~thermal~~Thermal ~~units~~Units (“TBtu”) ~~and~~in ~~49 TBtu for the three and nine months ended September 30,~~ 2009, ~~respectively, and 26 TBtu and 75 TBtu for the three and nine months ended September 30, 2008, respectively,~~ are excluded from total throughput as these volumes flowed under separate contracts that dodid 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

Northwest’s ability to finance its operations (including the funding of capital expenditures and acquisitions), to meet its debt obligations and to refinance indebtedness depends on its ability to generate future cash flows and to borrow funds. Northwest’s ability to generate cash is subject to a number of factors, some of which are beyond its control, including the impact of regulators’ decisions on the rates it is able to establish for its transportation and storage services.

On or before the end of the calendar month following each quarter, available cash is distributed to Northwest’s partners as required by its general partnership agreement. Available cash is generally defined for Northwest as the sum of all cash and cash equivalents on hand at the end of the quarter, plus cash on hand from working capital borrowings made subsequent to the end of that quarter (as determined by Northwest’s management committee), less cash reserves established by Northwest’s management committee as necessary or appropriate for the conduct of Northwest’s business and to comply with any applicable law or agreements. In ~~2009~~January 2010, for the three-month ~~periods~~ period ended December 31, ~~2008, March, 31,~~ 2009, ~~and June 30, 2009,~~ Northwest ~~declared~~distributed ~~and paid equity distributions of~~ $3236.0 million, ~~$33.0 million~~of ~~and~~available ~~$35.0 million,~~cash ~~respectively,~~ to its ~~partners. In~~ ~~October 2009, for the three-month period ended September 30, 2009, Northwest declared equity distributions of $35.0 million to its~~ partners~~, to be paid on October 30, 2009~~.

14 In connection with the Dropdown, Northwest’s participation in the Williams’ cash management program was terminated. As a result of the Dropdown, Northwest became a participant in Williams Partners’ cash management program. In February 2010, Northwest’s management committee authorized a cash distribution of $39.3 million, which included the amount of its outstanding advances with Williams as of January 31, 2010. As a result of the February distributions, no additional distributions have been declared or paid. Accordingly, the balance owed by Williams to Northwest pursuant to the cash management program at December 31, 2009 is reflected as a reduction of Northwest’s Owners’ Equity as the advances were not available to it as working capital.

Northwest funds its capital spending requirements with cash from operating activities, third-party debt and contributions from Northwest’s partners, and when necessary, with borrowings under the Credit Facility (described in Method of Financing, Credit Agreement).

Northwest funds its capital spending requirements with cash from operating activities, third-party debt and contributions from its partners with the exception of the CHC Project, which is funded by capital contributions from Williams. Through September 30, 2009, Northwest has received $35.7 million in capital contributions from Williams to fund the CHC Project.

Sources (Uses) of Cash

	Nine Months Ended
	Three Months Ended
	September 30,
	March 31,
	2009			2008
	2010			2009
	(Thousands of dollars)
Net cash provided (used) by:
Operating activities	$	~~194~~66,~~567~~546		$	~~190~~73,~~331~~627
Financing activities		(6665,~~365~~893	)		(9433,~~714~~644	)
Investing activities		(~~128~~1,~~169~~005	)		(9539,~~863~~662	)
Increase (decrease) in cash and cash equivalents	$	33		$	(246	)
(Decrease) increase in cash and cash equivalents	$	(352	)	$	321

Operating Activities

Northwest’s net cash provided by operating activities for the ~~nine~~three months ended ~~September~~March 3031, ~~2009~~2010 ~~increased~~decreased $47.21 million from the same period in ~~2008~~2009. This ~~increase~~decrease is primarily attributed to changes in working capital and anlower ~~increase in Northwest’s~~ cash operating results, partially offset by an increase in changes in ~~Northwest’s other~~ noncurrent assets and liabilities.

Financing Activities

~~Cash~~ Northwest’s cash used in financing activities for the ~~nine~~three months ended ~~September~~March 3031, ~~2009~~2010 increased ~~decreased~~ $2832.3 2 million from the same period in ~~2008~~2009 due to ~~lower~~higher distributions paid to Northwest’s partners ~~due~~and ~~to the absence of proceeds from the sale of partnership interests in 2008, a $34.1 million capital contribution for the CHC Project from Northwest’s parent in 2009,~~ lower cash overdrafts, ~~and~~partially ~~the absence~~offset ofby ~~the~~borrowings ~~costs~~from ~~associated with~~ the ~~refinancing~~Credit Facility of(described ~~the~~in ~~$250.0 million~~Method ~~revolver debt with the issuance~~ of ~~$250.0 million~~Financing, ofCredit ~~6.05 percent~~Agreement) ~~senior~~and ~~unsecured~~contributions ~~notes~~from ~~in 2008~~Williams.

Investing Activities

~~Cash~~ Northwest’s cash used in investing activities for the ~~nine~~three months ended ~~September~~March 3031, ~~2009~~2010 decreased ~~increased~~ $3238.3 7 million from the same period in ~~2008~~2009 due to ~~increased~~repayments ~~capital~~from ~~expenditures~~affiliates, partially offset by ~~lower advances~~higher tocapital ~~affiliates~~expenditures.

Method of Financing

Working Capital

Working capital is the amount by which current assets exceed current liabilities. Northwest’s working capital requirements will be primarily driven by changes in accounts receivable and accounts payable. These changes are primarily impacted by such factors as credit and the timing of collections from customers and the level of spending for maintenance and expansion activity.

Changes in the terms of Northwest’s transportation and storage arrangements have a direct impact on Northwest’s generation and use of cash from operations due to their impact on net income, along with the resulting changes in working capital. A material adverse change in operations or available financing may impact Northwest’s ability to fund its requirements for liquidity and capital resources.

In ~~2009~~January 2010, for the three-month ~~periods~~period ended December 31, ~~2008, March 31,~~ 2009, ~~and June 30, 2009,~~ Northwest made distributions of available cash of $3236.0 million, ~~$33.0 million, and $35.0 million, respectively,~~ to its partners, representing cash in excess of working capital requirements and reserves established by Northwest’s management committee as necessary for the conduct of its business. In February 2010, Northwest made a distribution of $39.3 million to its partners, which included the amount of its outstanding advances with Williams as of January 31, 2010.

Short-Term Liquidity

Northwest funds its working capital and capital requirements with cash flows from operating activities, and, if required, borrowings under the ~~Williams~~ Credit Facility (described below) and return of advances previously made to Williams Partners.

15 Northwest invests cash through participation in Williams Partners’ cash management program. At March 31, 2010, the advances due to Northwest by Williams Partners totaled approximately $32.3 million. At March 31, 2010,

~~Northwest invests cash through participation in Williams’ cash management program. At September 30, 2009~~ the advances due to Northwest by Williams totaled approximately $9225.1 million. ~~The~~ ~~advances~~These advances are represented by one or more demand ~~notes~~obligations. The interest rate on these demand notes is was based upon the overnight investment rate paid on Williams Partners’ and Williams’ excess cash, which was approximately 0.1301 percent and 0.03 percent, respectively, at ~~September~~March 3031, ~~2009~~2010.

Credit Agreement

~~Williams~~ As ~~has~~part anof ~~unsecured~~the restructuring, Northwest was removed as a borrower under the $1.5 billion credit facility it shared as co-borrowers with Williams and Transcontinental Gas Pipe Line Company, LLC (“Transco”). On February 17, 2010, Northwest entered into a new $1.75 billion three-year senior unsecured revolving credit facility (“Credit Facility”) ~~that~~with Williams Partners and Transco, ~~terminates~~as inco-borrowers, ~~May~~and Citibank, N.A., as administrative agent, and certain other lenders named therein. The full amount of the Credit Facility is available to Williams Partners, and may, under certain conditions, be increased by up to an additional $250 ~~2012~~million. Northwest has access to borrow up to $400 million under the Credit Facility to the extent not otherwise utilized by Williams Partners and Transco. Interest is calculated based on a choice of two methods: (1) a fluctuating base rate equal to ~~the~~Citibank, ~~lender~~N.A.’s adjusted base rate plus an applicable margin, or a (2) a periodic fixed rate equal to the London Interbank Offered Rate (“LIBOR”) plus an applicable margin. ~~Williams~~The adjusted base rate will be the highest of (i) the federal funds rate plus 0.5 percent, (ii) Citibank, N.A.’s publicly announced base rate, and (iii) one month LIBOR plus 1.0 percent. Williams Partners is required to pay a commitment fee (currently 0.~~125~~5 percent ~~per annum~~) based on the unused ~~portion~~ portion of the Credit Facility. The applicable margin isand the commitment fee are based on the ~~specific~~ borrower’s senior unsecured long-term debt ratings. ~~As of September 30, 2009, there were no letters of credit issued by the~~ ~~participating institutions and no revolving credit loans outstanding.~~

~~Lehman~~ The Credit ~~Commercial~~Facility ~~Paper~~contains ~~Inc.,~~various ~~which~~covenants isthat ~~committed~~limit, toamong ~~fund up to $70 million of the Credit~~other ~~Facility~~things, ~~filed~~a ~~for~~borrower’s ~~bankruptcy~~and ~~in October of 2008. Williams expects that~~ its respective subsidiaries’ ability to ~~borrow under~~incur ~~this~~indebtedness, ~~facility~~grant iscertain ~~reduced~~liens bysupporting indebtedness, ~~this~~merge ~~committed~~or ~~amount. Consequently~~consolidate, ~~Northwest~~sell ~~expects~~all ~~its ability~~or tosubstantially ~~borrow~~all ~~under~~of its ~~the~~assets, ~~Credit~~enter ~~Facility~~into iscertain ~~reduced~~affiliate bytransactions, ~~approximately~~make ~~$18.7 million. The~~certain ~~committed~~distributions ~~amounts~~during ofan ~~other~~event ~~participating~~of ~~banks~~default ~~remain~~and inallow ~~effect~~any ~~and~~material change ~~are~~in ~~not~~the ~~impacted~~nature byof ~~this reduction~~its business.

Under the Credit Facility, Williams Partners is required to maintain a ratio of debt to EBITDA (each as defined in the Credit Facility) of no greater than 5.00 to 1.00 for itself and its consolidated subsidiaries. The debt to EBITDA ratio is measured on a rolling four-quarter basis. For Northwest, the ratio of debt to capitalization (defined as net worth plus debt) is not permitted to be greater than 55 percent. Each of the above ratios will be tested, beginning June 30, 2010, at the end of each fiscal quarter (with the first full year measured on an annualized basis).

The Credit Facility includes customary events of default. If an event of default with respect to a borrower occurs under the Credit Facility, the lenders will be able to terminate the commitments for all borrowers and accelerate the maturity of the loans of the defaulting borrower under the Credit Facility and exercise other rights and remedies.

As of March 31, 2010, there were no letters of credit issued by the participating institutions under the Credit Facility, and revolving credit loans of $108.0 million, $8.0 million of which were associated with Northwest, were outstanding.

Capital Requirements

The transmission and storage business can be capital intensive, requiring significant investment to maintain and upgrade existing facilities and construct new facilities.

Northwest categorizes its capital expenditures as either maintenance capital expenditures or expansion capital expenditures. Maintenance capital expenditures are those expenditures required to maintain the existing operating capacity and service capability of Northwest’s assets, including replacement of system components and equipment that are worn, obsolete, completing their useful life, or necessary to remain in compliance with environmental laws and regulations. Expansion capital expenditures improve the service capability of the existing assets, extend useful lives, increase transmission or storage capacities from existing levels, reduce costs or enhance revenues.

Northwest anticipates ~~2009~~2010 capital expenditures will be between $~~125~~120 million and $~~160~~140 million of which includes $7560 million to $9080 million for maintenance capital and $~~100~~95 million to $~~135~~115 million is considered nondiscretionary due to legal, regulatory and/or contractual requirements. Northwest’s ~~gross expenditures for~~ property, plant and equipment additions were $~~110~~6.57 million ($505.29 million for maintenance and $600.38 million for expansion) and $575.75 million ($433.79 million for maintenance and $141.06 million for expansion) for the ~~nine~~three months ended ~~September~~March 3031, ~~2009~~2010 and ~~2008~~ 2009, respectively. ~~The $52.8 million increase is primarily attributed to expenditures related to~~ ~~the CHC Project.~~

Credit Ratings

During the ~~third~~first quarter of ~~2009~~2010, the credit ratings on Northwest’s senior unsecured long-term debt remained unchanged with investment grade ratings from all three agencies, as shown below:

Moody’s Investors Service		Baa2
Standard and Poor’s		BBB-–
Fitch Ratings		BBB

At ~~September~~March 3031, ~~2009~~2010, ~~the evaluation of~~ Northwest’s credit rating outlook is “stable” from ~~all~~Moody’s Investors ~~three~~Service ~~agencies~~and Fitch Ratings. On January 12, 2010, Standard and Poor’s revised Northwest’s ratings outlook to “positive” from “stable.”

With respect to Moody’s, a rating of “Baa” or above indicates an investment grade rating. A rating below “Baa” is considered to have speculative elements. A “Ba” rating indicates an obligation that is judged to have speculative elements and is subject to substantial credit risk. The “1”, “2” and “3” modifiers show the relative standing within a major category. A “1” indicates that an obligation ranks in the higher end of the broad rating category, “2” indicates a mid-range ranking, and “3” indicates a ranking at the lower end of the category.

With respect to Standard and Poor’s, a rating of “BBB” or above indicates an investment grade rating. A rating below “BBB” indicates that the security has significant speculative characteristics. A “BB” rating indicates that Standard and Poor’s believes the issuer has the capacity to meet its financial commitment on the obligation, but adverse business conditions could lead to insufficient ability to meet financial commitments. Standard and Poor’s may modify its ratings with a “+” or a “-” sign to show the obligor’s relative standing within a major rating category.

With respect to Fitch, a rating of “BBB” or above indicates an investment grade rating. A rating below “BBB” is considered speculative grade. A “BB” rating from Fitch indicates that there is a possibility of credit risk developing, particularly as the result of adverse economic change over time; however, business or financial alternatives may be available to allow financial commitments to be met. Fitch may add a “+” or a “-” sign to show the obligor’s relative standing within a major rating category.

Credit rating agencies perform independent analyses when assigning credit ratings. No assurance can be given that the credit rating agencies will continue to assign Northwest investment grade ratings even if they meet or exceed their current criteria for investment grade ratios.

Other

Off-Balance Sheet Arrangements

Neither we nor Northwest have any guarantees of off-balance sheet debt to third parties and maintain no debt obligations that contain provisions requiring accelerated payment of the related obligations in the event of specified levels of declines in Williams’, orWilliams Partners’ or Northwest’s credit ratings.

Impact of Inflation

Northwest has generally experienced increased costs in recent years due to the effect of inflation on the cost of labor, benefits, materials and supplies, and property, plant and equipment. A portion of the increased labor and materials and supplies costs can directly affect ~~income~~ income through increased operating and maintenance costs. The cumulative impact of inflation over a number of years has resulted in increased costs for current replacement of productive facilities. ~~The~~ The majority of the costs related to Northwest’s property, plant and equipment and materials and supplies is subject to rate-making treatment, and under current FERC practices, recovery is limited to historical costs. While amounts in excess of historical cost are not recoverable under current FERC practices, Northwest believes it may be allowed to recover and earn a return based on the increased actual costs incurred when existing facilities are replaced. However, cost-based regulation along with competition and other market factors ~~may~~ limit Northwest’s ability to price services or products to ensure recovery of inflation’s effect on costs.

~~Environmental Matters~~18

Northwest is subject to the National Environmental Policy Act and other federal and state legislation regulating the environmental aspects of its business. Except as discussed below, Northwest’s management believes that it is in substantial compliance with existing environmental requirements. Environmental expenditures are expensed or capitalized depending on their future economic benefit and potential for rate recovery. Northwest believes that, with respect to any expenditures required to meet applicable standards and regulations, the FERC would grant the requisite rate relief so that substantially all of such expenditures would be permitted to be recovered through rates. Northwest believes that compliance with applicable environmental requirements is not likely to have a material effect upon its financial position, liquidity or results of operations.

Beginning in the mid-1980s, Northwest evaluated many of its facilities for the presence of toxic and hazardous substances to determine to what extent, if any, remediation might be necessary. Northwest identified polychlorinated biphenyl (“PCB”) contamination in air compressor systems, soils and related properties at certain compressor station sites. Similarly, Northwest identified hydrocarbon impacts at these facilities due to the former use of earthen pits and mercury contamination at certain natural gas metering sites. The PCBs were remediated pursuant to a Consent Decree with the U.S. Environmental Protection Agency (“EPA”) in the late 1980s, and Northwest conducted a voluntary clean-up of the hydrocarbon and mercury impacts in the early 1990s. In 2005, the Washington Department of Ecology required Northwest to re-evaluate its previous mercury clean-ups in Washington. Currently, Northwest is conducting assessment and remediation activities needed to bring the sites up to Washington’s current environmental standards. At September 30, 2009, Northwest had accrued liabilities totaling approximately $8.3 million for these costs which are expected to be incurred through 2014. Northwest is conducting environmental assessments and implementing a variety of remedial measures that may result in increases or decreases in the total estimated costs. Northwest considers these costs associated with compliance with environmental laws and regulations to be prudent costs incurred in the ordinary course of business and, therefore, recoverable through its rates.

InEnvironmental ~~March 2008, the EPA promulgated a new, lower National Ambient Air Quality Standard~~Matters (“NAAQS”) for ground-level ozone. Within two years, the EPA was expected to designate new eight-hour ozone non-attainment areas. Designation of new eight-hour ozone non-attainment areas will result in additional federal and state regulatory actions that would likely impact Northwest’s operations and increase the cost of additions to property, plant and equipment. In September 2009, the EPA announced it would reconsider the 2008 NAAQS for ground-level ozone to ensure that the standards are clearly grounded in science, and are protective of both public health and the environment. As a result, the EPA has delayed designation of new eight-hour ozone non-attainment areas under the 2008 standards until the reconsideration is complete. Additionally, the EPA is expected to promulgate additional hazardous air pollutant regulations in 2010 that will likely impact Northwest’s operations. Northwest is unable at this time to estimate with any certainty the cost of additions that may be required to meet new regulations. Northwest’s management considers costs associated with compliance with the environmental laws and regulations described above to be prudent costs incurred in the ordinary course of business and, therefore, recoverable through its rates.

Beginning in the mid-1980s, Northwest evaluated many of its facilities for the presence of toxic and hazardous substances to determine to what extent, if any, remediation might be necessary. Northwest identified polychlorinated biphenyl (“PCB”) contamination in air compressor systems, soils and related properties at certain compressor station sites. Similarly, Northwest identified hydrocarbon impacts at these facilities due to the former use of earthen pits and mercury contamination at certain natural gas metering sites. The PCBs were remediated pursuant to a Consent Decree with the U.S. Environmental Protection Agency (“EPA”) in the late 1980s, and Northwest conducted a voluntary clean-up of the hydrocarbon and mercury impacts in the early 1990s. In 2005, the Washington Department of Ecology required Northwest to re-evaluate its previous mercury clean-ups in Washington. Currently, Northwest is conducting assessment and remediation activities needed to bring the sites up to Washington’s current environmental standards. At March 31, 2010, Northwest had accrued liabilities totaling approximately $7.8 million for these costs which are expected to be incurred through 2015. Northwest is conducting environmental assessments and implementing a variety of remedial measures that may result in increases or decreases in the total estimated costs. Northwest considers these costs associated with compliance with environmental laws and regulations to be prudent costs incurred in the ordinary course of business and, therefore, recoverable through its rates.

In March 2008, the EPA issued new air quality standards for ground-level ozone, but in September 2009, the EPA announced that it would reconsider those standards. In January 2010, the EPA proposed standards more stringent than the March 2008 standards. The EPA expects that these proposed standards will be final in August 2010 and that new eight-hour ozone non-attainment areas will be designated in July 2011. The new standards and non-attainment areas will likely impact the operations of our interstate gas pipeline and cause us to incur additional capital expenditures. At this time, we are unable to estimate the cost of the additions that may be required to meet these regulations. Northwest expects that costs associated with these compliance efforts will be recoverable through its rates.

Safety Matters

Pipeline Integrity Regulations. Northwest has developed an Integrity Management Plan that it believes meets the United States Department of Transportation Pipeline and Hazardous Materials Safety Administration final rule that was issued pursuant to the requirements of the Pipeline Safety Improvement Act of 2002. In meeting the integrity regulations, Northwest has identified ~~high~~ high consequence areas and completed its baseline assessment plan. Northwest is on schedule to ~~complete~~ complete the required assessments within specified timeframes. Currently, Northwest estimates that the cost to perform required assessments and associated remediation will be primarily capital in nature and range between $~~110~~65 million and $~~135~~85 million over the remaining assessment period of ~~2009~~2010 through 2012. Northwest’s management considers the costs associated with compliance with the rule to be prudent costs incurred in the ordinary course of business and, therefore, recoverable through its rates.

Legal Matters

Northwest is party to ~~various~~ legal, ~~actions~~administrative, and regulatory proceedings arising in the normal course of business. ~~Northwest’s management believes that the disposition of outstanding legal actions will not have a material adverse impact on its future liquidity or financial condition.~~

Summary

Litigation, arbitration, regulatory matters, environmental matters, and safety matters are subject to inherent uncertainties. Were an unfavorable ruling to occur, there exists the possibility of a material adverse impact on the results of operations in the period in which the ruling occurs. Northwest’s management, including internal counsel, ~~currently believes that the~~ ultimate resolution of the foregoing matters, taken as a whole and after consideration of amounts accrued, insurance coverage, recovery from customers or other indemnification arrangements, will not have a material adverse effect on Northwest’s future liquidity or financial position.

currently believes that the ultimate resolution of the foregoing matters, taken as a whole and after consideration of amounts accrued, insurance coverage, recovery from customers or other indemnification arrangements, will not have a material adverse effect on Northwest’s future liquidity or financial position.

Conclusion

Although no assurances can be given, Northwest currently believes that the aggregate of cash flows from operating activities, supplemented, when necessary, by advances or capital contributions from its partners and/or borrowings under the Credit Facility, will provide Northwest with sufficient liquidity to meet its capital requirements. Northwest anticipates that it will be able to access public and private debt markets on terms commensurate with its credit ratings to finance its capital requirements, when needed.

Capital Resources and Liquidity of Williams Pipeline Partners L.P.

Our principal sources of liquidity include cash distributed to us by Northwest ~~and our working capital credit agreement with Williams as the lender~~. We expect to fund our operating expenses, debt service and cash distributions primarily with distributions from Northwest. As of ~~September 30~~March 31, ~~2009~~2010, we had cash and cash equivalents of $721.98 million.

We Prior to the completion of the restructuring on February 17, 2010, we were able to invest cash through participation in Williams’ cash management program. Subsequent to the restructuring, we may invest cash through participation in the Williams’ Partners cash management program. Any ~~advances~~ advances will be represented by one or more demand ~~notes~~obligations. The interest rate on ~~the~~ demand notes ~~will be~~ is based upon the overnight investment rate paid on Williams Partners’ excess cash, which was approximately 0.1301 percent at ~~September~~ March 3031, ~~2009~~2010.

We have filed a shelf registration statement for the issuance of up to $1.5 billion aggregate principal amount of debt and limited partnership unit securities. The registration statement was declared effective on August 3, 2009.

Northwest Distributions

~~During~~ In ~~the nine months ended September~~January 302010, ~~2009,~~ we received cash distributions of $3512.06 million from Northwest. In ~~October 2009~~February 2010, Northwest ~~declared~~made ana ~~equity~~cash distribution of $3539.03 million, ~~of which~~to ~~our~~its ~~share~~partners ~~will~~to besettle ~~approximately~~the ~~$12.3 million,~~outstanding advances to beWilliams ~~paid~~as onof ~~October~~January 3031, ~~2009~~2010, of which our share was $13.7 million.

Capital Contributions

Please see Part I, Item 1. Financial Statements — Notes to Consolidated Financial Statements: Note 4. Related Party Transactions.

Credit ~~Agreement~~Facility

Please see Part I, Item 1. Financial Statements — Notes to Consolidated Financial ~~Statements~~States: Note 3. Credit ~~Agreement~~Facilities.

Cash Distributions to Unitholders

~~During~~ We ~~the~~have ~~nine~~paid ~~months~~quarterly ~~ended~~distributions ~~September~~to unitholders and our general partner after every quarter since our IPO on January 3024, ~~2009,~~2008. weOur ~~have~~last ~~paid~~ quarterly ~~distributions~~distribution of $3311.4 5 million was paid on February 12, 2010, to unitholders ~~and~~of ~~our~~record ~~general~~at ~~partner.~~the close of business on February 5, 2010. On ~~October~~April 2722, ~~2009~~2010, the board of directors of our general partner declared a cash distribution of $11.5 million to be paid on ~~November~~May 1314, ~~2009~~2010, to unitholders onof record at the close of business on ~~November 6~~May 7, ~~2009~~2010.

~~Conclusion~~20

We expect to fund expansion capital expenditures or new investments through commercial borrowings, issuance(s) of debt or equity securities or a combination of the above. The capital markets have continued to recover from their recent turmoil, and we believe our access to capital funding or credit is available at market rates.


Item 3.		*Quantitative and Qualitative Disclosures About Market Risk*

For quantitative and qualitative disclosures about market risk, see ~~Part II,~~ Item 7A. Quantitative and Qualitative Disclosures About Market Risk of our Annual Report on Form 10-K for the year ended December 31, ~~2008~~2009. Our exposures to market risk have not changed materially since December 31, ~~2008~~ 2009.

Item 4T 4. Controls and Procedures

Our management, including our general partner’s Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15(d)-15(e) of the Securities Exchange Act) (“Disclosure Controls”) or our internal controls over financial reporting (“Internal Controls”) will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within Williams Pipeline Partners L.P. have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be ~~circumvented~~ circumvented by the individual acts of some persons, by collusion of two or more people, or by ~~management~~ management override of the control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected. We monitor our Disclosure Controls and Internal Controls and make modifications as necessary; our intent in this regard is that the Disclosure Controls and ~~the~~ Internal Controls will be modified as systems change and conditions warrant.

Evaluation of Disclosure Controls and Procedures

An evaluation of the effectiveness of the design and operation of our Disclosure Controls was performed as of the end of the period covered by this report. This evaluation was performed under the supervision and with the participation of our management, including ~~the~~our general partner’s Chief Executive Officer and Chief Financial Officer. Based upon that evaluation, our ~~general~~management ~~partner’s Chief Executive Officer and Chief Financial Officer~~ concluded that these Disclosure Controls are effective at a reasonable assurance level.

~~Third-Quarter~~ In the first quarter of 2010 and related to our financial statements for the period ended December 31, 2009, ~~Changes~~we identified a material weakness related to the manner in ~~Internal~~which ~~Controls~~we presented and recognized certain pension and postretirement related activity associated with our investment in Northwest Pipeline GP (“Northwest”).

~~There~~ A ~~have~~material ~~been~~weakness nois ~~changes~~a ~~during~~deficiency, ~~the~~or ~~third~~combination ~~quarter~~ of ~~2009~~deficiencies, ~~that~~in ~~have~~internal ~~materially~~control ~~affected~~over financial reporting, orsuch that there is a reasonable possibility that a material misstatement of ~~are~~the ~~reasonably~~annual ~~likely~~or tointerim ~~materially~~financial ~~affect,~~statements ~~our~~will ~~Internal~~not ~~Controls~~be prevented or detected on a timely basis.

20 Northwest had previously recorded Williams-allocated amounts related to these benefit plans on a single-employer basis rather than a multi-employer accounting model. As the plan assets are not legally segregated and Northwest was not contractually required to assume these obligations upon withdrawal, Northwest concluded that the appropriate accounting model for these historical financial statements is a multi-employer model. Northwest corrected their method of accounting for the Williams-allocated amounts related to certain pension and postretirement plans to the multi-employer model and this change was reflected in our financial statements for the period ended December 31, 2009. Northwest also enhanced their controls that ensure proper selection and application of generally accepted accounting principles. We consider this material weakness to be remediated as of March 31, 2010.

First Quarter 2010 Changes in Internal Controls

Other than described above, there have been no changes during the first quarter of 2010 that have materially affected, or are reasonably likely to materially affect, our Internal Controls.

PART II. OTHER INFORMATION


Item 1.		*Legal Proceedings*

In We ~~1998,~~are the United States Department of Justice (“DOJ”) informed Williams that Jack Grynberg, an individual, had filed claims under the False Claims Act on behalf of himself and the federal government in the United States District Court for the District of Colorado against Williams, certain of its wholly-owned subsidiaries (including Northwest) and approximately 300 other energy companies. Grynberg alleged violations of the False Claims Act in connection with the measurement, royalty valuation and purchase of hydrocarbons. The claims sought an unspecified amount of royalties allegedly not ~~paid~~currently ~~to the federal government, treble damages,~~ a ~~civil~~party ~~penalty,~~to ~~attorneys’ fees and costs. In 1999, the DOJ announced that it would not intervene in~~ any oflegal ~~the Grynberg cases~~proceedings. ~~Also in 1999, the Panel on Multi-District Litigation transferred all of these cases,~~ including those filed against Northwest and Williams, to the federal court in Wyoming for pre-trial purposes. The District Court dismissed all claims against Williams and its wholly-owned subsidiaries, including Northwest. On March 17, 2009, the Tenth Circuit Court of Appeals affirmed the District Court’s dismissal. On October 5, 2009, the United States Supreme Court denied Grynberg’s petition for a writ of certiorari requesting review of the Tenth Circuit Court of Appeal’s ruling. This matter is concluded.


Item 1A.		*Risk Factors*

Part I, Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, ~~2008~~2009, includes certain risk factors that could materially affect our business, financial condition or future results. Those Risk Factors have not materially changed ~~except as set forth~~. ~~below:~~

Northwest is subject to risks associated with climate change.

There is a growing belief that emissions of greenhouse gases may be linked to climate change. Climate change and the costs that may be associated with its impacts and the regulation of greenhouse gases have the potential to affect Northwest’s business in many ways, including negatively impacting the costs Northwest incurs in providing its products and services, the demand for and consumption of its products and services (due to change in both costs and weather patterns), and the economic health of the regions in which Northwest operates, all of which can create financial risks.

Northwest’s operations are subject to governmental laws and regulations relating to the protection of the environment, including those relating to climate change, which may expose it to significant costs and liabilities and could exceed its current expectations.

Northwest’s natural gas transportation and storage operations are subject to extensive federal, state and local environmental laws and regulations governing environmental protection, the discharge of materials into the environment and the security of chemical and industrial facilities. For a description of these laws and regulations, please see Part I, Item 1. Business — Regulatory Matters — Environmental Regulation in our Annual Report on Form 10-K for the year ended December 31, 2008.

These laws and regulations may impose numerous obligations that are applicable to Northwest’s operations including the acquisition of permits to conduct regulated activities, the incurrence of capital expenditures to limit or prevent releases of materials from its pipeline and facilities, and the imposition of substantial costs and penalties for spills, releases and emissions of various regulated substances into the environment resulting from those operations. Various governmental authorities, including the U.S. Environmental Protection Agency and analogous state agencies, and the United States Department of Homeland Security have the power to enforce compliance with these laws and regulations and the permits issued under them, oftentimes requiring difficult and costly actions. Failure to comply with these laws, regulations and permits may result in the assessment of administrative, civil and criminal penalties, the imposition of remedial obligations, and the issuance of injunctions limiting or preventing some or all of Northwest’s operations.

There is inherent risk of incurring significant environmental costs and liabilities in the operation of natural gas transportation and storage facilities due to the handling of petroleum hydrocarbons and wastes, the occurrence of air emissions and water discharges related to the operations, and historical industry operations and waste disposal practices. Joint and several, strict liability may be incurred without regard to fault under certain environmental laws and regulations, including the Federal Comprehensive Environmental Response, Compensation, and Liability Act, the Federal Resource Conservation and Recovery Act and analogous state laws, in connection with spills or releases of natural gas and wastes on, under, or from Northwest’s properties and facilities. Private parties, including the owners of properties through which Northwest’s pipeline passes and facilities where its wastes are taken for

reclamation or disposal, may have the right to pursue legal actions to enforce compliance as well as to seek damages for non-compliance with environmental laws and regulations or for personal injury or property damage. Northwest’s insurance may not cover all environmental risks and costs or may not provide sufficient coverage if an environmental claim is made against it.

Northwest’s business may be adversely affected by increased costs due to stricter pollution control requirements or liabilities resulting from non-compliance with required operating or other regulatory permits. Also, Northwest might not be able to obtain or maintain from time to time all required environmental regulatory approvals for its operations. If there is a delay in obtaining any required environmental regulatory approvals, or if Northwest fails to obtain and comply with them, the operation of its facilities could be prevented or become subject to additional costs, resulting in potentially material adverse consequences to its business, financial condition, results of operations and cash flows and our ability to make distributions to you.

Northwest makes assumptions and develops expectations about possible expenditures related to environmental conditions based on current laws and regulations and current interpretations of those laws and regulations. If the interpretation of laws or regulations, or the laws and regulations themselves, change, Northwest’s assumptions may change, and any new capital costs incurred to comply with such changes may not be recoverable under Northwest’s regulatory rate structure or its customer contracts. In addition, new environmental laws and regulations might adversely affect Northwest’s activities, including storage and transportation, as well as waste management and air emissions. For instance, federal and state agencies could impose additional safety requirements, any of which could have a material adverse effect on Northwest’s business, financial condition, results of operations and cash flows and our ability to make distributions to you.

Northwest may be subject to legislative and regulatory responses to climate change with which compliance may be costly.

Recent scientific studies have suggested that emissions of certain gases, commonly referred to as “greenhouse gases,” may be contributing to warming of the earth’s atmosphere, and various governmental bodies have considered legislative and regulatory responses in this area. Legislative and regulatory responses related to climate change create financial risk. The United States Congress and certain states have for some time been considering various forms of legislation related to greenhouse gas emissions. There have also been international efforts seeking legally binding reductions in emissions of greenhouse gases. In addition, increased public awareness and concern may result in more state, federal and international proposals to reduce or mitigate the emission of greenhouse gases.

Several bills have been introduced in the United States Congress that would compel carbon dioxide emission reductions. On June 26, 2009, the U.S. House of Representatives passed the “American Clean Energy and Security Act” which is intended to decrease annual greenhouse gas emissions through a variety of measures, including a “cap and trade” system which limits the amount of greenhouse gases that may be emitted and incentives to reduce the nation’s dependence on traditional energy sources. The U.S. Senate is currently considering similar legislation, and numerous states have also announced or adopted programs to stabilize and reduce greenhouse gases. While it is not clear whether any federal climate change law will be passed this year, any of these actions could result in increased costs to (i) operate and maintain Northwest’s facilities, (ii) install new emission controls on Northwest’s facilities, and (iii) administer and manage any greenhouse gas emissions program. If Northwest is unable to recover or pass through a significant level of costs related to complying with climate change regulatory requirements imposed on them, it could have a material adverse effect on Northwest’s results of operations and our ability to make distributions to you. To the extent financial markets view climate change and emissions of greenhouse gases as a financial risk, this could negatively impact Northwest’s cost of and access to capital.

Northwest’s assets and operations can be affected by weather and other natural phenomena.

Northwest’s assets and operations can be adversely affected by hurricanes, floods, earthquakes, tornadoes and other natural phenomena and weather conditions, including extreme temperatures, making it more difficult for Northwest to realize the historic rates of return associated with these assets and operations and adversely affecting our ability to make distributions to you. Insurance may be inadequate, and in some instances, Northwest may be unable to obtain insurance on commercially reasonable terms, if at all. A significant disruption in operations or a significant liability for which Northwest was not fully insured could have a material adverse effect on its business, results of operations and financial condition and our ability to make distributions to you.

Northwest’s customers’ energy needs vary with weather conditions. To the extent weather conditions are affected by climate change or demand is impacted by regulations associated with climate change, customers’ energy use could increase or decrease depending on the duration and magnitude of the changes, leading either to increased investment or decreased revenues.


Item 6.		*Exhibits*

The following instruments are included as exhibits to this report.

Exhibit
Number		Description
3.1		Certificate of Limited Partnership of Williams Pipeline Partners L.P. (filed on September 12, 2007 as Exhibit 3.1 to ~~Williams~~our ~~Pipeline Partners L.P.’s~~ Registration Statement on Form S-1 ~~(File No. 333-146015~~) 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 ~~Williams~~our ~~Pipeline Partners L.P.’s~~ Form 8-K ~~(File No. 001-33917~~) 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 ~~Williams~~our ~~Pipeline Partners L.P.’s~~ Registration Statement on Form S-1 ~~(File No. 333-146015~~) 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 ~~Williams~~our ~~Pipeline Partners L.P.~~ Form 8-K ~~(File No. 001-33917~~) and incorporated herein by reference).
31.1*		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.
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.
31.2*		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.
31.1*		Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer.
32*		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.
31.2*		Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer.
99.1*		Williams Pipeline GP LLC Financial Statements.
32**		Section 1350 Certifications of Chief Executive Officer and Chief Financial Officer.

* Filed herewith ** Furnished herewith

2322

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


		Williams Pipeline Partners L.P.
		(Registrant)

		By:		Williams Pipeline GP LLC, its general partner

		By:		/s/ Ted T. Timmermans
				Ted T. Timmermans
				Chief Accounting Officer

~~October~~May 295, ~~2009~~2010

2423

EXHIBIT INDEX

Exhibit
Number		Description
3.1		Certificate of Limited Partnership of Williams Pipeline Partners L.P. (filed on September 12, 2007 as Exhibit 3.1 to ~~Williams~~our ~~Pipeline Partners L.P.’s~~ Registration Statement on Form S-1 ~~(File No. 333-146015~~) 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 ~~Williams~~our ~~Pipeline Partners L.P.’s~~ Form 8-K ~~(File No. 001-33917~~) 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 ~~Williams~~our ~~Pipeline Partners L.P.’s~~ Registration Statement on Form S-1 ~~(File No. 333-146015~~) 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 ~~Williams~~our ~~Pipeline Partners L.P.~~ Form 8-K ~~(File No. 001-33917~~) and incorporated herein by reference).
31.1*		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.
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.
31.2*		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.
31.1*		Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer.
32*		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.
31.2*		Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer.
99.1*		Williams Pipeline GP LLC Financial Statements.
32**		Section 1350 Certifications of Chief Executive Officer and Chief Financial Officer.

* Filed herewith ** Furnished herewith

2524

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Filing Compare · WILLIAMS PIPELINE PARTNERS L.P.