UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)


þ		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~March~~June 3130, 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 (State or other jurisdiction of incorporation or organization)		26-0834035 (I.R.S. Employer Identification No.)
Delaware		26-0834035
One Williams Center, Tulsa, Oklahoma (Address of principal executive offices)		74172-0172 (Zip Code)
(State or other jurisdiction of		(I.R.S. Employer
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 Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has ~~been~~ 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 þ Non-accelerated filer o Smaller reporting company o (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 ~~May~~July 326, 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 Months Ended March 31, 2010 and 2009		5
Consolidated Statements of Income — Three and Six Months Ended June 30, 2010 and 2009		5
Consolidated Balance Sheets — March 31, 2010 and December 31, 2009		6
Consolidated Balance Sheets — June 30, 2010 and December 31, 2009		6
Consolidated Statements of Cash Flows — Three Months Ended March 31, 2010 and 2009		7
Consolidated Statements of Cash Flows — Six Months Ended June 30, 2010 and 2009		7
Consolidated Statement of Partners’ Capital from January 1, 2010 to March 31, 2010		8
Consolidated Statement of Partners’ Capital from January 1, 2010 to June 30, 2010		8
Notes to Consolidated Financial Statements		9
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		13
Item 3. Quantitative and Qualitative Disclosures About Market Risk		2122
Item 4. Controls and Procedures		2122
Part II. Other Information
Item 1. Legal Proceedings		2223
Item 1A. Risk Factors		2223
Item 6. Exhibits		2223
EX-10.1
EX-31.1
EX-31.2
EX-32

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;

• Expansion and growth of our business and operations;

• Financial condition and liquidity;

• ~~Business~~The ~~strategy~~levels of cash distributions to unitholders; • Rate case filings; and • Natural gas prices and demand.

• Forward-looking ~~Cash~~statements ~~flow~~are based on numerous assumptions, uncertainties and risks that could cause future events or results to be materially different from ~~operations~~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:

• ~~The~~Whether we have sufficient cash from operations to enable us to maintain current levels of cash distributions or to ~~unitholders~~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 ~~Rate~~the ~~case~~uncertainties ~~filings;~~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

• 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, 2009.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

WILLIAMS PIPELINE PARTNERS L.P.

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

	Three Months Ended						Six Months Ended
	March 31,
	June 30,						June 30,
	2010			2009			2010			2009
	(Thousands of dollars, except
	(Thousands of dollars, except per-unit amounts)
	per-unit amounts)
General and administrative expense	$	1,140		$	737		$	2,470		$	1,390
General and administrative expense	$	1,330		$	653
Other expense		1,200			—			1,200			—
Equity earnings from investment in Northwest Pipeline GP		1312,~~259~~032			1412,~~318~~307			25,291			26,625
Interest expense — affiliate		(3—	)		(1213	)		(3	)		(25	)
Interest income		12			23			3			5
Net income	$	119,~~927~~694		$	1311,~~655~~560		$	21,621		$	25,215
Allocation of net income used for earnings per unit calculation:
Net income	$	119,~~927~~694		$	1311,~~655~~560		$	21,621		$	25,215
Allocation of net income (loss) to general partner		18			(89	)
Allocation of net loss to general partner		(28	)		(135	)		(9	)		(225	)
Allocation of net income to limited partners	$	119,~~909~~722		$	1311,~~744~~695		$	21,630		$	25,440
Basic and diluted net income per limited partner unit:
Common units	$	0.3529		$	0.4135		$	0.64		$	0.76
Subordinated units	$	0.3529		$	0.4135		$	0.64		$	0.76
Weighted average number of units outstanding:
Common units		22,607,430			22,607,430			22,607,430			22,607,430
Subordinated units		10,957,900			10,957,900			10,957,900			10,957,900

See accompanying notes to consolidated financial statements.

WILLIAMS PIPELINE PARTNERS L.P.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

	March 31,		December 31,
	June 30,		December 31,
	2010		2009
	(Thousands of dollars)
ASSETS
Current assets:
Cash and cash equivalents	$	219,~~841~~163	$	8,114
Accounts receivable — affiliate		~~247~~249		—
Prepaid expense		~~574~~491		193
Total current assets		229,~~662~~903		8,307
Investment in Northwest Pipeline GP		~~428~~440,~~515~~541		441,608
Total assets	$	~~451~~450,~~177~~444	$	449,915
LIABILITIES AND PARTNERS’ CAPITAL
Current liabilities:
Accounts payable:
Trade	$	~~842~~1,662	$	419
Affiliate		~~290~~297		124
Total current liabilities		1,~~132~~959		543
Contingent liabilities and commitments
Contingent liabilities (Note 2)
Partners’ capital		~~450~~448,~~045~~485		449,372
Total liabilities and partners’ capital	$	~~451~~450,~~177~~444	$	449,915

See accompanying notes to consolidated financial statements.

WILLIAMS PIPELINE PARTNERS L.P.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Three Months Ended
	Six Months Ended
	March 31,
	June 30,
	2010			2009
	(Thousands of dollars)
OPERATING ACTIVITIES:
Net Income	$	11,927		$	13,655
Net income	$	21,621		$	25,215
Adjustments to reconcile to cash provided by operations:
Equity earnings from investment in Northwest Pipeline GP		(1325,~~259~~291	)		(1426,~~318~~625	)
Distributions related to equity earnings from investment in Northwest Pipeline GP		26,~~348~~347			1122,~~200~~750
Cash used by changes in assets and liabilities:
Cash provided (used) by changes in assets and liabilities:
Other current assets		(381	)		(135	)
Accounts receivable		—			(90	)
Accounts payable		589			(713	)
Other current assets		(298	)		43
Accounts payable		1,416			(561	)
Other		—			12
Net cash provided by operating activities		2523,~~224~~795			920,~~701~~744
INVESTING ACTIVITIES:
Other		—			—
Net cash provided (used) by investing activities		—			—
FINANCING ACTIVITIES:
Distributions paid		(1122,~~497~~993	)		(1022,~~960~~091	)
Contribution pursuant to the omnibus agreement		—			370
Contributions pursuant to the omnibus agreement		247			744
Net cash used by financing activities		(1122,~~497~~746	)		(1021,~~590~~347	)
Increase (decrease) in cash and cash equivalents		131,~~727~~049			(~~889~~603	)
Cash and cash equivalents at beginning of period		8,114			7,760
Cash and cash equivalents at end of period	$	219,~~841~~163		$	67,~~871~~157

See accompanying notes to consolidated financial statements.

WILLIAMS PIPELINE PARTNERS L.P.

CONSOLIDATED STATEMENT OF PARTNERS’ CAPITAL

(Unaudited)

										Accumulated
										Other			Total
	Limited Partner						General			Comprehensive			Partners’
	Common			Subordinated			Partner			~~Income~~Loss			Capital
	(Thousands of dollars)
Balance — January 1, 2010	$	296,932		$	143,513		$	8,969		$	(42	)	$	449,372
Net income		814,~~021~~569			37,~~888~~061			18(9	)		—			1121,~~927~~621
Other comprehensive income:
Net unrealized gain on cash flow hedge		—			—			—			(5	)		(5	)
Amortization of cash flow hedge		—			—			—			(11	)		(11	)
Total other comprehensive income														(511	)
Cash distributions		(715,~~574~~147	)		(37,~~671~~342	)		(~~252~~504	)		—			(1122,~~497~~993	)
Contributions pursuant to the omnibus agreement		—			—			~~248~~496			—			~~248~~496
Balance — March 31, 2010	$	297,379		$	143,730		$	8,983		$	(47	)	$	450,045
Balance — June 30, 2010	$	296,354		$	143,232		$	8,952		$	(53	)	$	448,485

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 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 in January 2008.

On 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 to Williams Partners L.P. (“Williams Partners”), an affiliate of Williams and of us, in exchange for cash and units in Williams Partners (the “Dropdown”). As part of the Dropdown, Williams Partners ~~has~~ stated its intention to commence an exchange offer for any and all of our outstanding common units not held by Williams Partners or its affiliates at a future date and at an exchange ratio of 0.7584 units of Williams Partners for each of our units, orand tolater indicated that it might propose a merger to our holders also at the previously stated exchange ratio.

AsOn ~~of March~~May 3124, 2010, after lengthy negotiations between Williams Partners and a committee consisting of the three directors on the Board of Directors of our general partner who meet the independence requirements established in our partnership agreement, ~~through~~a ~~its~~merger ~~subsidiary~~agreement (the “Merger Agreement”) providing for the merger of the Partnership into Williams Partners (the “Merger”) was executed. The Merger and the Merger Agreement are described in detail in the Registration Statement on Form S-4 initially filed by Williams Partners on June 9, 2010 and in our and Williams Partners’ ~~Pipeline~~joint GPproxy ~~LLC~~statement/prospectus dated July 15, 2010 that is being provided to holders of ~~owns~~record aof 2our units at the close of business on July ~~percent~~15, ~~general~~2010, ~~partner~~who ~~interest~~are ~~and~~the aholders ~~45.7~~of our units who will be entitled to vote on the Merger at the special meeting of our unitholders scheduled for August ~~percent~~31, ~~limited~~2010. ~~partner~~If ~~interest~~the inMerger usis approved at that meeting, it is anticipated that the Merger will be consummated shortly thereafter and all of our units not held by Williams or its corporate affiliates will be exchanged for units of Williams Partners at the exchange ratio set forth above.

As ~~discussed~~of ~~in our 2009 Annual Report on Form 10-K, on January~~June 2030, 2010, weWilliams ~~concluded~~Partners, ~~that our~~through ~~financial~~its ~~statements~~subsidiary, ~~for~~Williams ~~the~~Pipeline ~~year~~GP ~~ended December 31~~LLC, ~~2008 should be restated due to the manner~~owns ina ~~which~~2 percent ~~Northwest~~general ~~had~~partner ~~presented~~interest and ~~recognized~~a ~~pension~~45.7 percent ~~and~~limited ~~postretirement~~partner ~~obligations~~interest in ~~certain benefit plans for which Williams is the plan sponsor~~us.

~~The~~As ~~accompanying~~discussed ~~interim consolidated financial statements do not include all the notes~~ in our ~~annual~~ ~~financial~~2009 ~~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~~on January 2320, 2010, we concluded that our financial statements for the year ended December 31, ~~2009.~~2008 ~~The~~should ~~accompanying~~be ~~consolidated financial~~restated ~~statements~~due ~~include~~to ~~all~~the ~~normal~~manner in ~~recurring~~which ~~adjustments~~Northwest ~~that,~~had inpresented ~~the~~and ~~opinion~~recognized ofpension ~~management, are~~and ~~necessary~~postretirement toobligations ~~present~~in ~~fairly~~certain benefit ~~our~~plans ~~financial~~for ~~position~~which atWilliams ~~March 31,~~is ~~2010,~~the ~~results~~plan ofsponsor. ~~operations~~We ~~for the~~concluded ~~three~~that ~~months~~the ~~ended~~impact ~~March 31,~~of ~~2010~~the ~~and~~error ~~2009,~~is not ~~and~~material ~~cash~~to ~~flows~~any ~~for~~of the three ~~months~~quarterly ~~ended~~periods ~~March 31, 2010~~of ~~and~~ 2009. ~~All intercompany transactions have been eliminated.~~

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 June 30, 2010, results of operations for the three and six months ended June 30, 2010 and 2009, and cash flows for the six months ended June 30, 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~~Contingent ~~of Net Income and Distributions~~Liabilities

On May 25, 2010, the Booth Family Trust filed a purported class action complaint in Tulsa County District Court against the Partnership, Williams, Williams Partners, Williams Pipeline GP, LLC and its individual directors. The ~~allocation~~plaintiff ofasserts ~~net~~that ~~income~~the ~~between~~individuals ~~our~~breached ~~general~~their fiduciary ~~partner~~duties in connection with the Partnership’s entry into the Merger Agreement and ~~limited~~that ~~partners~~the entities aided and abetted these alleged breaches of fiduciary duties. All of the parties against whom the lawsuit was filed believe that the lawsuit is without merit, asbut ~~reflected~~to avoid any risk of delaying the Merger, have agreed in principle to settle the lawsuit on the basis that certain additional disclosures would be included in the ~~Consolidated~~joint ~~Statements~~proxy statement/prospectus. On July 9, 2010, all parties to the lawsuit entered into a Memorandum of ~~Partners’~~Understanding ~~Capital~~outlining the terms upon which this lawsuit would be settled subject to court approval. There can be no assurance that additional claims will not be made or additional lawsuits filed, ~~for~~the substance of which may be similar to the ~~three~~allegations ~~months~~described ~~ended~~above ~~March~~or that otherwise might arise from, or in connection with, the Merger Agreement and the transactions it contemplates; however, if the lawsuit is settled on the basis contemplated by the Memorandum of Understanding, all the defendants will receive general release from the putative class. At June 3130, 2010, ~~and~~we have accrued liabilities totaling ~~2009~~approximately is$1.2 million asrelated ~~follows:~~to the settlement terms, including accrued legal fees, specified in the Memorandum of Understanding.

	Three Months Ended
	March 31,
	2010			2009
	(Thousands of dollars)
Allocation to general partner:
Net income	$	11,927		$	13,655
Charges direct to general partner:
Reimbursable general administrative costs		248			370
Income subject to 2% allocation of general partner interest		12,175			14,025
General partner’s share of net income		2.0	%		2.0	%
General partner’s allocated share of net income before items directly allocable to general partner interest		244			281
Incentive distributions paid to general partner		22			—
Direct charges to general partner		(248	)		(370	)
Net income (loss) allocated to general partner	$	18		$	(89	)
Net income	$	11,927		$	13,655
Net income (loss) allocated to general partner		18			(89	)
Net income allocated to limited partners	$	11,909		$	13,744

Note 3. Allocation of Net Income and Distributions

The allocation of net income between our general partner and limited partners, as reflected in the Consolidated Statement of Partners’ Capital, for the three and six months ended June 30, 2010 and 2009 is as follows:


	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2010			2009			2010			2009
	(Thousands of dollars, except per-unit amounts)
Allocation to general partner:
Net income	$	9,694		$	11,560		$	21,621		$	25,215
Charges direct to general partner:
Reimbursable general administrative costs		249			374			496			744

Income subject to 2% allocation of general partner interest		9,943			11,934			22,117			25,959
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		199			239			442			519
Incentive distributions paid to general partner		22			—			45			—
Direct charges to general partner		(249	)		(374	)		(496	)		(744	)

Net loss allocated to general partner	$	(28	)	$	(135	)	$	(9	)	$	(225	)

Net income	$	9,694		$	11,560		$	21,621		$	25,215
Net loss allocated to general partner		(28	)		(135	)		(9	)		(225	)

Net income allocated to limited partners	$	9,722		$	11,695		$	21,630		$	25,440

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 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		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 April 22, 2010 to be paid on May 14, 2010 to unitholders of record at the close of business on May 7, 2010.

WILLIAMS PIPELINE PARTNERS L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

~~Note~~ We 3.have ~~Credit~~paid ~~Facilities~~or have authorized payment of the following post-IPO cash distributions during 2008, 2009 and 2010 (in thousands, except per-unit amounts):

At the closing of the IPO on January 24, 2008, we entered into a $20 million working capital credit agreement with Williams as the lender. The facility was available exclusively to fund working capital borrowings. The initial maturity date of the facility was January 23, 2009. We exercised our automatic right to extend the facility for an additional 365-day term in January 2009. The new maturity date was January 23, 2010. This facility expired at maturity since we did not exercise our automatic right to extend the facility in January 2010. No borrowings were made under the facility.


							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		0.3350		7,574		3,671		230		22		11,497
02/12/2010		0.3350		7,574		3,671		230		22		11,497
05/14/2010		0.3350		7,574		3,671		230		22		11,497
08/13/2010(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 July 27, 2010 to be paid on August 13, 2010 to unitholders of record at the close of business on August 6, 2010.

Note 4. Related Party Transactions

During the ~~three~~six months ended ~~March~~June 3130, 2010, we received distributions totaling $26.3 million from Northwest. Of this amount, $13.7 million represents a distribution from Northwest due to the settlement of its outstanding advances to Williams as of January 31, 2010. OnWe ~~February 12, 2010 we~~ made ~~a distribution~~ distributions to Williams of $511.50 million, as declared by the board of directors of our general partner, onduring the ~~January~~six months ended June 2530, 2010.

Our general partner gives us a credit for general and administrative expenses under the terms of an omnibus agreement. The annual amounts of those credits are as follows: $1.0 million in 2010 and $0.5 million in 2011. At ~~March~~June 3130, 2010, $0.25 million is reflected as a capital contribution in our financial statements.

Note 5. Comprehensive Income

Comprehensive income is as follows:

	Three Months Ended						Six Months Ended
	March 31,
	June 30,						June 30,
	2010			2009*			2010			2009*
				(Restated)
	(Thousands of dollars)
	(Thousands of dollars)
Net income	$	9,694		$	11,560		$	21,621		$	25,215
Net income	$	11,927		$	13,655
Amortization of cash flow hedge		(6	)		(5	)		(11	)		(11	)
Reclassification of cash flow hedge gain into earnings		(5	)		(6	)
Total comprehensive income	$	9,688		$	11,555		$	21,610		$	25,204
Total comprehensive income	$	11,922		$	13,649

* Prior year amount has been restated to reflect accounting for pension and postretirement benefit obligations on a multi-employer accounting model (See Note 1). The effect of the restatement decreased Northwest’s Total Comprehensive Income by $0.8 million and $1.08 million for the three and six months ended ~~March~~June 3130, 2009, respectively. The effect of the restatement decreased our Total Comprehensive Income by $0.3 million and $0.6 million for the three and six months ended ~~March~~June 3130, 2009, respectively.

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					Six Months Ended
	March 31,
	June 30,					June 30,
	2010			2009		2010		2009
	(Thousands of dollars)
Revenues	$	~~106~~102,~~110~~578		$	~~111~~107,~~548~~756	$	208,688	$	219,304
Operating expenses		5557,~~819~~159			5860,~~396~~743		112,978		119,139
Other (expense) income, net		(338	)		191
Other income, net		438			449		100		640
Interest charges		1211,~~070~~441			12,~~435~~300		23,511		24,735
Net income	$	37,883		$	40,908
Income taxes		38			—		38		—
Net income	$	34,378		$	35,162	$	72,261	$	76,070

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 ~~approximates~~approximate their fair value.

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 13.0 billion cubic feet (“Bcf”). 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~~only significant asset. As a result, we ~~are~~ 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.

OnRecent ~~February 17, 2010, Williams completed a strategic restructuring in which it contributed~~Events 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 to Williams Partners, an affiliate of Williams and of us, in exchange for cash and units in Williams Partners (the “Dropdown”). As part of the Dropdown, Williams Partners has stated its intention to commence an exchange offer for any and all of our outstanding common units not held by Williams Partners or its affiliates at a future date, or to propose a merger to our holders also at the previously stated exchange ratio.

~~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 ~~2009~~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 ~~Northwest~~Dropdown, ~~Pipeline~~Williams GPPartners ~~Quarterly~~stated ~~Report~~its intention onto ~~Form~~commence ~~10-Q~~ an exchange offer for ~~the~~any ~~quarterly~~and ~~period~~all ~~ending~~of ~~March 31,~~our ~~2010,~~outstanding common units not held by Williams Partners or its affiliates at a future date and ~~with~~at ~~our~~an ~~consolidated~~exchange ~~financial~~ratio ~~statements~~of 0.7584 units of Williams Partners for each of our units, and later indicated that it might propose a merger to our ~~notes~~holders ~~contained~~also ~~within~~at ~~this~~the ~~document~~previously stated exchange ratio.

On May 24, 2010, after lengthy negotiations between Williams Partners and a committee consisting of the three directors on the Board of Directors of our general partner who meet the independence requirements established in our partnership agreement, a merger agreement (the “Merger Agreement”) providing for the merger of the Partnership into Williams Partners (the “Merger”) was executed. The Merger and the Merger Agreement are described in detail in the Registration Statement on Form S-4 initially filed by Williams Partners on June 9, 2010 and in our and Williams Partners’ joint proxy statement/prospectus dated July 15, 2010 that is being provided to holders of record of our units at the close of business on July 15, 2010, who are the holders of our units who will be entitled to vote on the Merger at the special meeting of our unitholders scheduled for August 31, 2010. If the Merger is approved at that meeting, it is anticipated that the Merger will be consummated shortly thereafter and all of our units not held by Williams or its corporate affiliates will be exchanged for units of Williams Partners at the exchange ratio set forth above.

On May 25, 2010, the Booth Family Trust filed a purported class action complaint in Tulsa County District Court against the Partnership, Williams, Williams Partners, Williams Pipeline GP, LLC and its individual directors. The plaintiff asserts that the individuals breached their fiduciary duties in connection with the Partnership’s entry into the Merger Agreement and that the entities aided and abetted these alleged breaches of fiduciary duties. All of the parties against whom the lawsuit was filed believe that the lawsuit is without merit, but to avoid any risk of delaying the Merger, have agreed in principle to settle the lawsuit on the basis that certain additional disclosures would be included in the joint proxy statement/prospectus. On July 9, 2010, all parties to the lawsuit entered into a Memorandum of Understanding outlining the terms upon which this lawsuit would be settled subject to court approval. There can be no assurance that additional claims will not be made or additional lawsuits filed, the substance of which may be similar to the allegations described above or that otherwise might arise from, or in connection with, the Merger Agreement and the transactions it contemplates; however, if the lawsuit is settled on the basis contemplated by the Memorandum of Understanding, all the defendants will receive general release from the putative class. At June 30, 2010, we have accrued liabilities totaling approximately $1.2 million related to the settlement terms, including accrued legal fees, specified in the Memorandum of Understanding.

General

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 June 30, 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. Changes in commodity prices and volumes transported have little impact on revenues ~~because~~ because the majority of ~~its~~Northwest’s 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.

• 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.

	•		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.

			As a result of the open season, four shippers have executed long-term service agreements for the full amount of incremental storage service offered at contract terms averaging 33 years. The firm service relating to storage capacity rights will be phased-in as the expanded working natural gas capacity is developed. Northwest’s one-third share of the deliverability expansion was placed in service on November 1, 2008 at a cost of approximately $16.0 million. Northwest’s estimated capital cost for the capacity expansion component of the new storage service is $6.1 million, primarily for base natural gas.

	•		Sundance Trail Expansion. In November 2009, Northwest received approval from the Federal Energy Regulatory Commission (“FERC”) to construct approximately 16 miles of 30-inch loop between its existing Green River and Muddy Creek compressor stations in Wyoming as well as an upgrade to its existing Vernal compressor station, with service targeted to commence in November 2010. The total project, currently under construction, 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 transportation service agreement to provide 150 thousand dekatherms per day of firm transportation service from the Greasewood and Meeker Hubs in Colorado for delivery to the Opal Hub in Wyoming. Northwest will collect its maximum system rates under the firm service agreement, and has received approval from the FERC to roll-in the Sundance Trail Expansion costs in any future rate cases.

13Williams Pipeline Partners L.P.’s Results of Operations

~~Table~~ Three ofMonths ~~Contents~~Ended June 30, 2010 Compared to Three Months Ended June 30, 2009

~~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~~Partnership’s ~~one-third~~net ~~share~~income ofdecreased ~~the deliverability expansion was placed in service on November 1, 2008 at a cost of approximately~~ $161.0 9 million. ~~Northwest’s~~or estimated capital cost for the capacity expansion component of the new storage service is $6.1 million, primarily for base natural gas. • Sundance Trail Expansion. In November 2009, Northwest received approval from the Federal Energy Regulatory Commission (“FERC”) to construct approximately 16 miles of 30-inch loop between its existing Green River and Muddy Creek compressor stations in Wyoming as well as an upgrade to its existing Vernal compressor station, with service targeted to commence in November 2010 percent. The ~~total~~decrease ~~project~~ is ~~estimated~~primarily attributed to ~~cost~~the ~~approximately~~ $60 1.2 million, ~~including~~accrual ~~the~~related ~~cost~~to ~~of replacing~~ the ~~existing~~settlement ~~compression~~terms atof ~~Vernal, which will enhance~~ the ~~efficiency~~Memorandum of Understanding ~~Northwest’s~~combined ~~system.~~with ~~Northwest~~higher ~~executed~~general aand ~~precedent~~administrative ~~agreement~~expenses toassociated ~~provide~~with ~~150 thousand dekatherms (“MDth”) per day of firm transportation service from~~ the ~~Greasewood~~ Dropdown and ~~Meeker~~Merger ~~Hubs in Colorado for delivery to the Opal Hub in Wyoming. Northwest has proposed to collect its maximum system rates,~~ and ~~has~~lower ~~received~~equity ~~approval from the FERC to roll-~~in ~~the~~earnings ~~Sundance~~of ~~Trail Expansion costs in any future rate cases~~Northwest.

Six Months Ended June 30, 2010 Compared to Six Months Ended June 30, 2009

The Partnership’s net income decreased $3.6 million or 14 percent. The decrease is due to lower equity in earnings of Northwest, higher general and administrative expenses associated with the Dropdown and Merger and the $1.2 million accrual related to the settlement terms of the Memorandum of Understanding.

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 $13.3 million and $14.3 million for the three months ended March 31, 2010 and 2009.~~

Analysis of Financial Results

This analysis discusses financial results of Northwest’s operations for the three-month periods ended March 31, 2010 and 2009. 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 March 31, 2010 Compared to Three Months Ended March 31, 2009

Northwest’s operating revenues decreased $5.4 million, or 5 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 southern end of the system, ii) lower Parachute Lateral lease 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 resulting from the termination of the Everett Delta Lateral lease on November 9, 2009, and iv) lower other revenues of $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 an 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 expenses as described below.

Northwest’s transportation service accounted for 96 percent and 95 percent of its operating revenues for the three months ended March 31, 2010 and 2009, respectively. Natural gas storage service accounted for 4 percent of operating revenues for each of the three-month periods ended March 31, 2010 and 2009.

Operating expenses decreased $2.6 million, or 4 percent, due primarily to i) the termination of the Parachute and Everett Delta leases, resulting in lower lease expense of $3.0 million and ii) the restructuring of the Salt Lake City headquarters building lease resulting in lower building lease expense of $1.3 million. These decreases were partially offset by higher property taxes of $1.3 million primarily attributed to a $1.5 million reduction in 2009 for lower than anticipated mill levies.

equity earnings from investments of $12.0 million and $25.3 million for the three and six months ended June 30, 2010, respectively, compared with the $12.3 million and $26.6 million for the three and six months ended June 30, 2009, respectively.

Analysis of Financial Results

This analysis discusses financial results of Northwest’s operations for the three and six-month periods ended June 30, 2010 and 2009. 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 June 30, 2010 Compared to Three Months Ended June 30, 2009

Northwest’s operating revenues decreased $5.2 million, or 5 percent. This decrease is primarily attributed to i) lower Parachute Lateral lease revenues of $2.6 million resulting from the termination of the Parachute Lateral lease on August 1, 2009, ii) lower other revenues of $1.0 million resulting from the absence of sublease income attributed to the restructuring of the Salt Lake City headquarters building lease, iii) lower revenues of $0.9 million resulting from the termination of the Everett Delta Lateral lease on November 9, 2009, and iv) lower firm transportation commodity revenues of $0.7 million due primarily to mild weather in Northwest’s market area and lower off-system deliveries on the southern end of the system. 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 expenses as described below.

Northwest’s transportation service accounted for 97 percent and 95 percent of its operating revenues for the three-month periods ended June 30, 2010 and 2009, respectively. Natural gas storage service accounted for 3 percent and 4 percent of operating revenues for the three-month periods ended June 30, 2010 and 2009, respectively.

Operating expenses decreased $3.6 million, or 6 percent, due primarily to i) the termination of the Parachute and Everett Delta leases, resulting in lower lease expense of $3.4 million and ii) the restructuring of the Salt Lake City headquarters building lease resulting in lower building lease expense of $1.2 million. These decreases were partially offset by higher property taxes of $1.0 million primarily attributed to a $1.1 million reduction in 2009 for lower than anticipated mill levies.

Six Months Ended June 30, 2010 Compared to Six Months Ended June 30, 2009

Northwest’s operating revenues decreased $10.6 million, or 5 percent. This decrease is primarily attributed to i) lower Parachute Lateral lease revenues of $5.2 million resulting from the termination of the Parachute Lateral lease on August 1, 2009, ii) lower other revenues of $2.0 million resulting from the absence of sublease income attributed to the restructuring of the Salt Lake City headquarters building lease, iii) lower firm transportation commodity revenues of $2.0 million due primarily to mild weather in Northwest’s market area and lower off-system deliveries on the southern end of the system, and iv) lower revenues of $1.4 million resulting from the termination of the Everett Delta Lateral lease on November 9, 2009. 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 expenses as described below.

Northwest’s transportation service accounted for 97 percent and 95 percent of its operating revenues for the six-month periods ended June 30, 2010 and 2009, respectively. Natural gas storage service accounted for 3 percent and 4 percent of operating revenues for the six-month periods ended June 30, 2010 and 2009, respectively.

Operating expenses decreased $6.2 million, or 5 percent, due primarily to i) the termination of the Parachute and Everett Delta leases, resulting in lower lease expense of $6.4 million and ii) the restructuring of the Salt Lake City headquarters building lease resulting in lower building lease expense of $2.5 million. These decreases were partially offset by higher property taxes of $2.4 million primarily attributed to a $2.6 million reduction in 2009 for lower than anticipated mill levies.

Operating Statistics

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

	Quarter Ended
	Three Months Ended				Six Months Ended
	March 31,
	June 30,				June 30,
	2010		2009		2010		2009
	(In Trillion British Thermal Units)
Total Throughput (1)		179		224
Total Throughput(1)		156		173		336		397
Average Daily Transportation Volumes		21.07		21.59		1.9		2.2
Average Daily Reserved Capacity Under Base Firm Contracts, excluding peak capacity		2.8		2.6		2.8		2.6
Average Daily Reserved Capacity Under Short-Term Firm Contracts (2)		0.3		0.6
Average Daily Reserved Capacity Under Short-Term Firm Contracts(2)		0.2		0.5		0.3		0.6

(1)		Parachute Lateral volumes of 2320 trillion British ~~Thermal~~thermal ~~Units~~units (“TBtu”) inand 43 TBtu for the three and six months ended June 30, 2009, respectively, are excluded from total throughput as these volumes flowed under separate contracts that did not result in mainline throughput.
(2)		Includes additional capacity created from time to time through the installation of new receipt or delivery points or the segmentation of existing mainline capacity. Such capacity is generally marketed on a short-term firm basis. When the capacity is sold on a long-term basis, it is included above, under Base Firm Contracts.

Capital Resources and Liquidity of Northwest

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 January 2010, for the three-month period ended December 31, 2009, Northwest distributed $36.0 million of available cash to its partners. In July 2010, Northwest declared equity distributions of $39.5 million to its partners to be paid on July 30, 2010.

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~~June 30, ~~February distributions~~2010, nocash ~~additional distributions~~advances ~~have~~to ~~been~~Williams ~~declared~~of ~~or paid~~$38.7 million remain ~~Accordingly,~~outstanding ~~the~~and ~~balance~~will ~~owed~~not bybe ~~Williams~~available to Northwest ~~pursuant~~ toas ~~the~~working ~~cash~~capital ~~management~~and ~~program~~are ~~at December 31, 2009 is~~ therefore reflected as a reduction ~~of Northwest’s~~in 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 New Credit Facility (described in Method of Financing, Credit Agreement).

1516

Sources (Uses) of Cash

	Three Months Ended
	Six Months Ended
	March 31,
	June 30,
	2010			2009
	(Thousands of dollars)
Net cash provided (used) by:
Operating activities	$	66115,~~546~~035		$	73125,~~627~~838
Financing activities		(6574,~~893~~641	)		(3353,~~644~~594	)
Investing activities		(140,~~005~~733	)		(3972,~~662~~231	)
(Decrease) increase in cash and cash equivalents	$	(352	)	$	321
Increase (decrease) in cash and cash equivalents	$	(339	)	$	13

Operating Activities

Northwest’s net cash provided by operating activities for the ~~three~~six months ended ~~March~~June 3130, ~~2010~~ 2010 decreased $710.18 million from the same period in 2009. This decrease is primarily attributed to changes in working capital and lower cash operating results, partially offset by an increase in changes in noncurrent assets and liabilities.

Financing Activities

~~Northwest’s~~Cash ~~cash~~ used in financing activities for the ~~three~~six months ended ~~March~~June 3130, 2010 increased $3221.2 0 million from the same period in 2009 due to higher distributions paid to Northwest’s partners and lower ~~cash overdrafts, partially offset by borrowings from the Credit Facility (described in Method of Financing, Credit Agreement) and~~ contributions from Williams.

Investing Activities

~~Northwest’s~~Cash ~~cash~~ used in investing activities for the ~~three~~six months ended ~~March~~June 3130, 2010 decreased $3831.7 5 million from the same period in 2009 due primarily to ~~repayments~~lower ~~from~~capital ~~affiliates,~~expenditures ~~partially~~and advances to ~~offset~~affiliates byas well as higher ~~capital~~proceeds ~~expenditures~~from sales of property, plant and equipment.

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 January 2010, for the three-month period ended December 31, 2009, Northwest made distributions of available cash of $36.0 million 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 New Credit Facility (described below) and return of of advances previously made to Williams Partners.

Northwest invests cash through participation in Williams Partners’ cash management program. At ~~March~~June 3130, 2010, the advances due to Northwest by Williams Partners totaled approximately $3275.37 million. AtThe ~~March~~advances are represented by demand notes. The interest rate on the Williams Partners demand notes was based upon the overnight investment rate paid on Williams Partners’ excess cash, which was approximately 0.01 31percent at June 30, 2010,.

the advances due to Northwest by Williams totaled approximately $25.1 million. These advances are represented by one or more demand obligations. The interest rate on these demand notes was based upon the overnight investment rate paid on Williams Partners’ and Williams’ excess cash, which was approximately 0.01 percent and 0.03 percent, respectively, at March 31, 2010.

Credit Agreement

As part of the restructuring, Northwest was removed as a borrower under the $1.5 billion credit facility it shared as co-~~borrowers~~borrower 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 (“New Credit Facility”) with Williams Partners and Transco, as co-borrowers, and Citibank, N.A., as administrative agent, and certain other lenders ~~named~~ named therein. The full amount of the ~~Credit~~New ~~Facility is available to Williams Partners, and may, under certain conditions, be increased by up to an additional $250 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 Citibank, N.A.’s adjusted base rate plus an applicable margin, or (2) a periodic fixed rate equal to the London Interbank Offered Rate (“LIBOR”) plus an applicable margin. 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 0.5 percent) based on the unused portion of the Credit Facility. The applicable margin and the commitment fee are based on the borrower’s senior unsecured long-term debt ratings.

~~The~~17 Credit Facility contains various covenants that limit, among other things, a borrower’s and its respective subsidiaries’ ability to incur indebtedness, grant certain liens supporting indebtedness, merge or consolidate, sell all or substantially all of its assets, enter into certain affiliate transactions, make certain distributions during an event of default and allow any material change in the nature of its business.

UnderTable 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). Contents

~~The~~Facility ~~Credit~~is ~~Facility~~available ~~includes~~to ~~customary~~Williams ~~events~~Partners, ofand ~~default.~~may, Ifunder certain conditions, be increased by up to an ~~event~~additional of$250 million. ~~default~~Northwest ~~with~~may ~~respect~~borrow up to $400 million under the New Credit Facility to athe ~~borrower~~extent ~~occurs~~not otherwise utilized by Williams Partners and Transco. Interest on borrowings under the New Credit Facility is payable at rates per annum equal to, at the ~~lenders~~option ~~will~~of the beborrower: ~~able~~(1) a fluctuating base rate equal to ~~terminate~~Citibank, ~~the~~N.A.’s adjusted base rate plus an ~~commitments~~applicable ~~for~~margin, ~~all~~or ~~borrowers~~(2) a ~~and~~periodic ~~accelerate~~fixed rate equal to the ~~maturity~~London ofInterbank Offered Rate (“LIBOR”) plus an applicable margin. The adjusted base rate will be the ~~loans~~highest of (i) the ~~defaulting~~federal funds ~~borrower~~rate plus 0.5 percent, (ii) Citibank, N.A.’s publicly announced base rate, and (iii) one ~~under~~month LIBOR plus 1.0 percent. Williams Partners pays a commitment fee (currently 0.5 percent) based on the unused portion of the New Credit Facility. The applicable margin and ~~exercise~~the ~~other~~commitment fee ~~rights~~are ~~and~~based ~~remedies~~on the borrower’s senior unsecured long-term debt ratings.

AsThe ofNew ~~March 31~~Credit Facility contains various covenants that limit, ~~2010~~among other things, ~~there~~a borrower’s ~~were~~and noits ~~letters~~respective ofsubsidiaries’ ~~credit~~ability ~~issued~~to byincur ~~the~~indebtedness, ~~participating~~grant certain liens ~~institutions~~supporting ~~under~~indebtedness, ~~the~~merge ~~Credit~~or ~~Facility~~consolidate, ~~and~~sell ~~revolving~~all ~~credit~~or ~~loans~~substantially all of ~~$108.0 million~~its assets, ~~$8.0 million~~enter into certain affiliate transactions, make certain distributions during an event of ~~which~~default ~~were~~and allow ~~associated~~any ~~with~~material ~~Northwest,~~change ~~were~~in ~~outstanding~~the nature of its business.

Under the New Credit Facility, Williams Partners is required to maintain a ratio of debt to EBITDA (each as defined in the New 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 is tested at the end of each fiscal quarter (with the first full year measured on an annualized basis). At June 30, 2010, Northwest is in compliance with this covenant.

The New Credit Facility includes customary events of default. If an event of default with respect to a borrower occurs under the New 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 New Credit Facility and exercise other rights and remedies.

As of June 30, 2010, there were no letters of credit issued by the participating institutions under the New Credit Facility, and no revolving credit loans 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 2010 capital expenditures will be between $120 million and $140 million of which includes $60 million to $80 million for maintenance capital and $95 million to $115 million considered nondiscretionary due to legal, regulatory and/or contractual requirements. Northwest’s property, plant and equipment additions were $630.72 million ($521.97 million for maintenance and $0.8 .5 million for expansion) and $547.58 million ($318.94 million for maintenance and $129.64 million for expansion) for the ~~three~~six months ended ~~March~~June 3130, 2010 and 2009, respectively.

Credit Ratings

During the ~~first~~second quarter of 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 ~~March~~June 3130, 2010, Northwest’s credit rating outlook is “stable” from Moody’s Investors ~~Service~~ Service and Fitch Ratings. Onand ~~January 12,~~“positive” ~~2010,~~from 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’, Williams 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~~ 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

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 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 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~~19 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.

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 for mercury and other constituents to bring the sites up to Washington’s current environmental standards. At June 30, 2010, Northwest had accrued liabilities totaling approximately $7.4 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.

In March 2008, the EPA promulgated a new, lower National Ambient Air Quality Standard (“NAAQS”) for ground-level ozone. Within two years, the EPA was expected to designate new eight-hour ozone non-attainment areas. However, in September 2009, the EPA announced it would reconsider the 2008 NAAQS for ground-level ozone to ensure that the standards were clearly grounded in science and were protective of both public health and the environment. As a result, the EPA delayed designation of new eight-hour ozone non-attainment areas under the 2008 standards until the reconsideration is complete. In January 2010, the EPA proposed to further reduce the ground-level ozone NAAQS from the March 2008 levels. The EPA currently anticipates finalization of the new ground-level ozone standard in August 2010 and anticipates designation of new eight-hour ozone non-attainment areas under the new August 2010 ozone NAAQS standards in July 2011. Designation of new eight-hour ozone non-attainment areas are expected to result in additional federal and state regulatory actions that will likely impact Northwest’s operations and increase the cost of additions to property, plant and equipment.

Additionally, in August 2010, the EPA is expected to promulgate National Emission Standards for hazardous air pollutants (“NESHAP”) regulations that will impact Northwest’s operations. The emission control additions required to comply with the pending hazardous air pollutant regulations are estimated to include costs in the range of $6 million to $9 million through 2013, the expected compliance date.

Furthermore, the EPA promulgated the Greenhouse Gas (“GHG”) Mandatory Reporting Rule on October 30, 2009, which requires facilities that emit 25,000 metric tons or more CO₂ equivalent per year from stationary fossil-fuel combustion sources to report GHG emissions to the EPA annually beginning March 31, 2011 for calendar year 2010. Subsequently, the EPA proposed additional reporting requirements on April 12, 2010 to address fugitive/vented GHG emissions from petroleum and natural gas facilities. Final promulgation of the additional reporting requirements is expected by late 2010, with an effective date of January 1, 2011. At such time, facilities that emit 25,000 metric tons or more CO₂ equivalent per year from stationary fossil-fuel combustion and fugitive/vented sources combined will be required to report GHG combustion and fugitive/vented emissions to the EPA annually, beginning March 31, 2012 for calendar year 2011. Compliance with this reporting obligation is estimated to cost $3 million to $5 million over the next four to five years.

In February 2010, the EPA promulgated a final rule establishing a new one-hour NO₂ National Ambient Air Quality Standard. The effective date of the new NO₂ standard was April 12, 2010. This new standard is subject to numerous challenges in the federal court. Northwest is unable at this time to estimate the cost of additions that may be required to meet this new regulation.

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 consequence areas and completed its baseline assessment plan. Northwest is on schedule to 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 $6580 million and $8595 million over the remaining assessment period of 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, ~~administrative,~~actions ~~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~~20

~~currently believes that the ultimate resolution of the foregoing matters, taken as a whole and~~ Summary 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.

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.

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 New 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. We expect to fund our operating expenses, debt service and cash distributions primarily with distributions from Northwest. As of ~~March~~June 3130, 2010, we had cash and cash equivalents of $219.82 million.

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 will be represented by one or more demand obligations. The interest rate on demand notes is based upon the overnight investment rate paid on Williams Partners’ excess cash, which was approximately 0.01 percent at ~~March~~June 3130, 2010. No cash has been invested in the Williams or Williams Partners cash management program through June 30, 2010.

Northwest Distributions

In January 2010, we received cash distributions of $12.6 million from Northwest. In February 2010, Northwest made a cash distribution of $39.3 million to its partners to settle the outstanding advances to Williams as of January 31, 2010, of which our share was $13.7 million. In July 2010, Northwest declared a cash distribution of $39.5 million to its partners of which our share will be $13.8 million to be paid on July 30, 2010.

Capital Contributions

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

Credit Facility

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

Cash Distributions to Unitholders

We have paid quarterly distributions to unitholders and our general partner after every quarter since our IPO on January 24, 2008. ~~Our~~A ~~last~~ quarterly cash distribution of $11.5 million was ~~paid~~ paid on February 12, 2010, to unitholders of record at the close of business on February 5, 2010. Our Onlast ~~April~~quarterly cash distribution of $11.5 22million was paid on May 14, 2010 to unitholders on record at the close of business on May 7, 2010. On July 27, 2010 the board of directors of our general partner declared a cash distribution of $11.5 million to be paid on ~~May~~August 1413, 2010, to unitholders of record at the close of business on ~~May 7~~August 6, 2010.

2021

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~~about Market Risk of our Annual Report on Form 10-K for the year ended December 31, 2009. Our exposures to market risk have not changed materially since December 31, 2009.

Item 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 our general partner’s Chief Executive Officer and Chief Financial Officer. Based upon that evaluation, our management concluded that these Disclosure Controls are effective at a reasonable assurance level.

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

AThere ~~material~~have ~~weakness~~been isno achanges ~~deficiency,~~during orthe ~~combination~~second quarter of ~~deficiencies,~~2010 inthat ~~internal~~have ~~control~~materially ~~over financial reporting~~affected, ~~such that there is a reasonable possibility that a material misstatement of~~or ~~the~~are ~~annual~~reasonably orlikely ~~interim~~to ~~financial~~materially ~~statements~~affect, ~~will~~our ~~not~~Internal ~~be prevented or detected on a timely basis~~Controls.

~~Northwest had previously recorded Williams-allocated amounts related to these benefit plans on~~22 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

WeThe ~~are~~information ~~not~~called ~~currently~~for aby ~~party~~this item is provided in Part I, Item 1. Financial Statements — Notes to ~~any~~Consolidated ~~legal~~Financial ~~proceedings~~Statements: Note 2. Contingent Liabilities.

Item 1A. Risk Factors

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

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


*		Filed herewith

**		Furnished herewith

2223

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

~~May~~July 529, 2010

2324

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


*		Filed herewith

**		Furnished herewith

2425

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