- Partnership's Growth, Solid Performance Drive 20% Increase in
Distributable Cash Flow per Unit in 2007 TULSA, Okla., Feb. 21
/PRNewswire-FirstCall/ -- Williams Partners L.P. (NYSE:WPZ) today
announced unaudited 2007 net income of $164.6 million, or $1.97 per
common unit, compared with 2006 net income of $214.6 million and
$1.62 per common unit. Net income per common unit for 2007 was
higher due primarily to the growth of the partnership through its
2006 acquisition of Four Corners and higher equity earnings from
Discovery, partially offset by higher interest expense and
additional units outstanding. However, net income for 2007, which
includes pre-partnership income allocated to the general partner in
association with the partnership's acquisitions, was lower than the
recast 2006 net income due primarily to interest expense associated
with the Four Corners and Wamsutter acquisitions. For
fourth-quarter 2007, Williams Partners reported net income of $44.9
million, or 56 cents per common unit, compared with $46.3 million
and 45 cents per common unit for fourth-quarter 2006.
Fourth-quarter 2007 net income per common unit was higher than
fourth-quarter 2006 also due to the growth of the partnership. The
growth was partially offset by lower volumes in Four Corners
following the Nov. 28 fire and subsequent shut-down of the Ignacio
natural gas processing plant, a $10.4 million non-cash impairment
charge on the Carbonate Trend gathering pipeline and higher
interest expense. In 2007, the key measure of distributable cash
flow per weighted-average limited partner unit was $2.59, compared
with $2.15 for 2006 -- an increase of 20 percent. Total
distributable cash flow in 2007 for limited-partner unitholders was
$103.7 million, compared with $42.5 million for 2006. The increase
in distributable cash flow during 2007 is due to the growth of the
partnership through its 2006 acquisition of Four Corners, its 2007
acquisition of an additional 20 percent interest in Discovery, and
the partnership's steady business performance. For fourth-quarter
2007, distributable cash flow per weighted-average limited partner
unit was 63 cents, compared with 62 cents for fourth-quarter 2006.
Total distributable cash flow for limited-partner unitholders
totaled $26.6 million in fourth-quarter 2007, compared with $15.8
million for fourth-quarter 2006. The slight increase in
distributable cash flow during the fourth quarter is also due to
the growth of the partnership and its business performance. These
benefits were partially offset by lower volumes at Four Corners,
due to the Ignacio fire. The partnership's issuance of 13.4 million
common units in the fourth-quarter 2007 to fund a portion of the
Wamsutter acquisition also reduced the per-unit distributable cash
flow amounts in the fourth-quarter 2007 and full-year. Because the
units were issued and the acquisition closed in December 2007, the
partnership has not yet received a cash distribution from its
equity investment in Wamsutter. As such, fourth-quarter
distributable cash flow did not include any benefit from the
investment. The Wamsutter investment will make its first scheduled
cash distribution to the partnership in the first quarter of 2008.
Business Segment Performance Business segment performance includes
results for the partnership's three business segments: Gathering
and Processing -- West, which includes Four Corners and the
Wamsutter investment; Gathering and Processing -- Gulf, which
includes the Discovery investment; and NGL Services, which includes
the Conway fractionation and storage complex. The segment profit
numbers have been recast to include Wamsutter through all periods
presented following the partnership's fourth-quarter acquisition of
an ownership interest in the assets. Consolidated Segment Profit 4Q
Full Year Amounts in thousands 2007 2006 2007 2006 Gathering and
Processing - West $62,486 $53,349 $223,903 $221,499 Gathering and
Processing - Gulf 2,447 2,310 17,431 17,845 NGL Services 4,689
3,623 14,305 9,834 Consolidated Segment Profit $69,622 $59,282
$255,639 $249,178 Recurring Consolidated Segment Profit* Amounts in
thousands Gathering and Processing - West $63,486 $53,349 $227,292
$213,980 Gathering and Processing - Gulf 12,847 2,310 27,831 17,845
NGL Services 4,689 3,623 15,742 9,834 Recurring Consolidated
Segment Profit* $81,022 $59,282 $270,865 $241,659 * A schedule
reconciling segment profit to recurring segment profit is attached
to this press release. Williams Partners' consolidated recurring
segment profit for 2007 was $270.9 million, compared with $241.7
million for 2006. Recurring segment profit for Gathering &
Processing -- West was $227.3 million in 2007, compared with $214
million in 2006. The increase in recurring segment profit was
primarily the result of higher NGL margins at Four Corners and
higher equity earnings from Wamsutter, also due to higher NGL
margins. These benefits were partially offset by lower volumes in
Four Corners due to the Ignacio fire and higher operating and
maintenance expenses. Recurring segment profit for the Gathering
& Processing -- Gulf segment was $27.8 million in 2007,
compared with $17.9 million in 2006. Increased equity earnings from
the partnership's Discovery interest were the primary driver of the
improvement. Discovery's equity earnings increased due to higher
gross processing margins and higher gathered volumes for the year.
NGL Services reported recurring segment profit of $15.8 million for
2007, compared with $9.8 million for 2006. The increase in segment
profit was due primarily to higher storage and product upgrade fee
revenues and lower operating and maintenance expense.
Reconciliations of the partnership's distributable cash flow for
limited-partner unitholders to net income, as well as recurring
segment profit to segment profit, accompany this press release.
Chief Operating Officer Perspective "The partnership had a solid
performance in 2007," said Alan Armstrong, chief operating officer
of the general partner of Williams Partners. "The core assets
performed well and our two acquisitions -- the additional interest
in Discovery and Wamsutter -- provide a foundation for future
growth. "In particular, the fourth-quarter acquisition of an
interest in the Wamsutter system should be a key driver in the
partnership's future growth. Wamsutter includes large-scale assets
in a high-growth natural gas basin. This investment will increase
the diversity of our cash flows and reduce our dependence on
commodity margins. "We also continued to increase our cash
distributions in 2007 and our coverage ratio remains strong,"
Armstrong said. Increase in Cash Distribution to Unitholders
Subsequent to the close of the fourth quarter, the board of
directors of the general partner of Williams Partners increased the
quarterly cash distribution payable to unitholders to 57.5 cents
from 55 cents. This was the eighth consecutive quarter the
partnership increased its cash distribution. For 2007, Williams
Partners' total cash distribution to unitholders was $2.15 per
unit, compared with $1.725 per unit in 2006 -- an increase of 25
percent. Distributable Cash Flow and Recurring Segment Profit
Definitions Distributable cash flow per weighted average
limited-partner unit is a key measure of the partnership's
financial performance and available cash flows to unitholders.
Williams Partners defines distributable cash flow per limited
partner unit as distributable cash flow, as defined in the
following paragraph, attributable to partnership operations plus
the cash distributed by Wamsutter and Discovery. The total
distributable cash flow attributable to partnership operations is
then allocated among the general partner and the limited partners
in accordance with the cash-distribution provisions of our
partnership agreement. The resulting distributable cash flow
attributable to partnership operations and to its limited partners
is then divided by the weighted average limited partner units
outstanding to arrive at distributable cash flow per limited
partner unit. Williams Partners defines distributable cash flow as
net income plus depreciation, amortization and accretion, and the
amortization of a natural gas purchase contract, less its equity
earnings in Wamsutter and Discovery, as well as adjustments for
certain non-cash, non-recurring items, plus reimbursements from
Williams under an omnibus agreement and less maintenance capital
expenditures. Williams Partners defines recurring segment profit as
segment profit excluding items of income or loss that it
characterizes as unrepresentative of its ongoing operations.
Schedules presenting Williams Partners' consolidated statements of
income, segment profit and operating information are available on
Williams Partners' web site at http://www.williamslp.com/ and as an
attachment to this document. Today's Analyst Call Williams
Partners' management will discuss the partnership's year-end
financial results during an analyst presentation to be webcast live
beginning at noon Eastern today. Participants are encouraged to
access the presentation and corresponding slides via
http://www.williamslp.com/. A limited number of phone lines also
will be available at (877) 856-1969. International callers should
dial (719) 325-4746. Callers should dial in at least 10 minutes
prior to the start of the discussion. A replay of the year-end
webcast will be available for two weeks at
http://www.williamslp.com/. Form 10-K The partnership plans to file
its Form 10-K with the Securities and Exchange Commission during
the week of Feb. 25. The document will be available on both the SEC
and Williams Partners web sites. About Williams Partners L.P.
(NYSE:WPZ) Williams Partners L.P. is a publicly traded master
limited partnership that owns natural gas gathering,
transportation, processing and treating assets serving regions
where producers require large scale and highly reliable services,
including the Gulf of Mexico, the San Juan Basin in New Mexico and
Colorado, and the Washakie Basin in Wyoming. The partnership also
serves the natural gas liquids (NGL) market through its NGL
fractionating and storage assets. The general partner is Williams
Partners GP LLC. More information about the partnership is
available at http://www.williamslp.com. Go to
http://www.b2i.us/irpass.asp?BzID=1296&to=ea&s=0 to join
our e-mail list. Contact: Jeff Pounds Williams (media relations)
(918) 573-3332 Sharna Reingold Williams (investor relations) (918)
573-2078 Williams Partners' reports, filings and other public
announcements might contain or incorporate by reference
forward-looking statements -- statements that do not directly or
exclusively relate to historical facts. You typically can identify
forward-looking statements by the use of forward-looking words,
such as "anticipate," believe," "could," "continue," "estimate,"
"expect," "forecast," "may," "plan," "potential," "project,"
"schedule," "will" and other similar words. These statements are
based on our intentions, beliefs and assumptions about future
events and are subject to risks, uncertainties and other factors.
Actual results could differ materially from those contemplated by
the forward-looking statements. In addition to any assumptions,
risks, uncertainties and other factors referred to specifically in
connection with such statements, other factors could cause our
actual results to differ materially from the results expressed or
implied in any forward-looking statements. Those risks,
uncertainties and factors include, among others: Williams Partners
may not have sufficient cash from operations to enable it to pay
the minimum quarterly distribution following establishment of cash
reserves and payment of fees and expenses, including payments to
its general partner; because of the natural decline in production
from existing wells and competitive factors, the success of
Williams Partners' gathering and transportation businesses depends
on its ability to connect new sources of natural gas supply, which
is dependent on factors beyond its control; any decrease in
supplies of natural gas could adversely affect Williams Partners'
business and operating results; Williams Partners' processing,
fractionation and storage business could be affected by any
decrease in the price of natural gas liquids or a change in the
price of natural gas liquids relative to the price of natural gas;
lower natural gas and oil prices could adversely affect Williams
Partners' fractionation and storage businesses; Williams Partners
depends on certain key customers and producers for a significant
portion of its revenues and supply of natural gas and natural gas
liquids and the loss of any of these key customers or producers
could result in a decline in its revenues and cash available to pay
distributions; if third-party pipelines and other facilities
interconnected to Williams Partners' pipelines and facilities
become unavailable to transport natural gas and natural gas liquids
or to treat natural gas, Williams Partners' revenues and cash
available to pay distributions could be adversely affected;
Discovery Producer Services LLC and Wamsutter LLC may reduce their
cash distributions to Williams Partners in some situations;
Williams Partners' future financial and operating flexibility may
be adversely affected by restrictions in its indentures and by its
leverage; Williams Partners' partnership agreement limits its
general partner's fiduciary duties to Williams Partner's
unitholders and restricts the remedies available to unitholders for
actions taken by the general partner that might otherwise
constitute breaches of fiduciary duty; even if unitholders are
dissatisfied, they currently have little ability to remove Williams
Partners' general partner without its consent; The Williams
Companies, Inc.'s public indentures and Williams Partners' credit
facility contain financial and operating restrictions that may
limit Williams Partners' access to credit; in addition, Williams
Partners' ability to obtain credit in the future will be affected
by The Williams Companies Inc.'s credit ratings; Williams Partners'
general partner and its affiliates have conflicts of interest and
limited fiduciary duties and they may favor their own interests to
the detriment of Williams Partners' unitholders; unitholders will
be required to pay taxes on their share of Williams Partners'
income even if they do not receive any cash distributions from
Williams Partners; and Williams Partners' operations are subject to
operational hazards and unforeseen interruptions for which it may
or may not be adequately insured. In light of these risks,
uncertainties and assumptions, the events described in the
forward-looking statements might not occur or might occur to a
different extent or at a different time than we have described. We
undertake no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise. Investors are urged to closely consider
the disclosures and risk factors in Williams Partners' reports on
Forms 10-K and 10-Q filed with the Securities and Exchange
Commission available from Williams Partners' offices or from
Williams Partners' website at http://www.williamslp.com.
Reconciliation of Non-GAAP Measures (UNAUDITED) This press release
includes certain financial measures, Recurring Segment Profit,
Distributable Cash Flow and Distributable Cash Flow per Limited
Partner Unit that are non-GAAP financial measures as defined under
the rules of the Securities and Exchange Commission. For Williams
Partners L.P., Recurring Segment Profit excludes items of income or
loss that we characterize as unrepresentative of our ongoing
operations. Management believes Recurring Segment Profit provides
investors meaningful insight into Williams Partners L.P.'s results
from ongoing operations. For Williams Partners L.P. we define
Distributable Cash Flow as net income (loss) plus the non-cash
affiliate interest expense associated with the advances from
affiliate that were forgiven by Williams, depreciation,
amortization and accretion, and the amortization of a natural gas
purchase contract, less our earnings from equity investments, as
well as adjustments for certain non-cash, non-recurring items, plus
reimbursements from Williams under an omnibus agreement and less
maintenance capital expenditures. For our equity investments,
Wamsutter and Discovery, we define Distributable Cash Flow as net
income (loss) plus depreciation, amortization and accretion and
less maintenance capital expenditures. We also adjust for certain
non-cash, non-recurring items. Our equity share of Wamsutter's
Distributable Cash Flow is based on the distribution provision of
the Wamsutter LLC Agreement. Our equity share of Discovery's
Distributable Cash Flow is 60%. For Williams Partners L.P. we
define Distributable Cash Flow per Limited Partner Unit as
Distributable Cash Flow, as defined in the preceding paragraph,
attributable to partnership operations plus the actual cash
distributed by Wamsutter and Discovery. The total Distributable
Cash Flow attributable to partnership operations is then allocated
between the general partner and the limited partners in accordance
with the cash distribution provisions of our partnership agreement.
The resulting Distributable Cash Flow attributable to partnership
operations and to its limited partners is then divided by the
weighted average limited partner units outstanding to arrive at
Distributable Cash Flow per Limited Partner Unit. This press
release is accompanied by a reconciliation of these non-GAAP
financial measures to their nearest GAAP financial measures.
Management uses these financial measures because they are accepted
financial indicators used by investors to compare company
performance. In addition, management believes that these measures
provide investors an enhanced perspective of the operating
performance of the Partnership's assets and the cash that the
business is generating. Neither Recurring Segment Profit nor
Distributable Cash Flow are intended to represent cash flows for
the period, nor are they presented as an alternative to net income
(loss) or cash flow from operations. Distributable Cash Flow per
Limited Partner is not presented as an alternative to net income
per unit. They should not be considered in isolation or as
substitutes for a measure of performance prepared in accordance
with United States generally accepted accounting principles.
(Thousands, except per-unit amounts) 2006* 1st Qtr 2nd Qtr 3rd Qtr
4th Qtr Y-T-D Williams Partners L.P. Reconciliation of Non-GAAP
"Recurring Segment Profit" to GAAP "Segment Profit" Gathering and
Processing - West $45,994 $55,505 $66,651 $53,349 $221,499
Gathering and Processing - Gulf 5,860 3,659 6,016 2,310 17,845 NGL
Services 2,050 1,984 2,177 3,623 9,834 Segment Profit 53,904 61,148
74,844 59,282 249,178 Non-recurring Items: Gathering and Processing
- West 2001-2002 EFM fees adjustment, revenue effect - - - - -
2001-2002 EFM fees adjustment, depreciation effect - - - - -
Condensate revenue adjustment - (1,900) - - (1,900) 2005-2006
retroactive charges for customer contract - - - - - Adjust
right-of-way prepaid expense - - - - - Adjust 2006 incentive
compensation accrual - - - - - Adjust asset retirement obligation -
- - - - Adjust other accounts payable items (3,300) (700) 2,000 -
(2,000) NGL Services Product imbalance valuation adjustment - - - -
- Other items: Gathering and Processing - West Gain on sale of
LaMaquina treating facility (3,619) - - - (3,619) Ignacio fire
property insurance deductible - - - - - Gathering and Processing -
Gulf Impairment of Carbonate Trend gathering pipeline - - - - -
Recurring Segment Profit $46,985 $58,548 $76,844 $59,282 $241,659
(Thousands, except per-unit amounts) 2007* 1st Qtr 2nd Qtr 3rd Qtr
4th Qtr Y-T-D Williams Partners L.P. Reconciliation of Non-GAAP
"Recurring Segment Profit" to GAAP "Segment Profit" Gathering and
Processing - West $42,604 $59,181 $59,632 $62,486 $223,903
Gathering and Processing - Gulf 3,638 3,670 7,676 2,447 17,431 NGL
Services 53 5,606 3,957 4,689 14,305 Segment Profit 46,295 68,457
71,265 69,622 255,639 Non-recurring Items: Gathering and Processing
- West 2001-2002 EFM fees adjustment, revenue effect - - 3,464 -
3,464 2001-2002 EFM fees adjustment, depreciation effect - -
(1,356) - (1,356) Condensate revenue adjustment - - - - - 2005-2006
retroactive charges for customer contract (848) - - - (848) Adjust
right-of-way prepaid expense 1,243 - - - 1,243 Adjust 2006
incentive compensation accrual (899) - - - (899) Adjust asset
retirement obligation 785 - - - 785 Adjust other accounts payable
items - - - - - NGL Services Product imbalance valuation adjustment
1,437 - - - 1,437 Other items: Gathering and Processing - West Gain
on sale of LaMaquina treating facility - - - - - Ignacio fire
property insurance deductible - - - 1,000 1,000 Gathering and
Processing - Gulf Impairment of Carbonate Trend gathering pipeline
- - - 10,400 10,400 Recurring Segment Profit $48,013 $68,457
$73,373 $81,022 $270,865 * Because Four Corners, Wamsutter and the
additional 20% interest in Discovery were affiliates of Williams at
the time of these acquisitions, the transactions were between
entities under common control, and have been accounted for at
historical cost. Accordingly, these tables have been recast to
reflect the historical results of Four Corners, Wamsutter and
Equity Earnings in Discovery throughout the periods presented.
(Thousands, except per-unit amounts) 2006* 1st Qtr 2nd Qtr 3rd Qtr
4th Qtr Y-T-D Williams Partners L.P. Reconciliation of Non-GAAP
"Distributable Cash Flow Excluding Equity Investments" to GAAP "Net
income" Net income $48,855 $53,036 $66,384 $46,300 $214,575
Depreciation, amortization and accretion 10,714 10,852 10,944
11,182 43,692 Amortization of natural gas purchase contract 1,354
1,322 1,322 1,322 5,320 Non-cash amortization of debt issuance
costs included in interest expense - - - - - Equity earnings
(15,012) (21,789) (27,035) (15,904) (79,740) Reimbursements from
Williams under omnibus agreement 1,248 1,183 1,813 996 5,240
Non-cash adjustment of 2001-2002 EFM revenue - - - - - Impairment
of Carbonate Trend gathering pipeline - - - - - Maintenance capital
expenditures (a)(b) (5,838) (5,371) (5,305) (4,555) (21,069)
Distributable Cash Flow Excluding Equity Investments $41,321
$39,233 $48,123 $39,341 $168,018 Less: Pre-partnership Four Corners
net income allocated to general partner (33,415) (30,624) (31,445)
(20,967) (116,451) Less: Pre-partnership Four Corners depreciation,
amortization and accretion expense (9,814) (9,666) (7,517) (6,096)
(33,093) Plus: Pre-partnership Four Corners maintenance capital
expenditures(b) 4,673 4,116 3,368 2,711 14,868 Plus: Discovery's
cash distributions to Williams Partners L.P. 4,400 3,600 4,000
4,400 16,400 Distributable cash flow attributable to partnership
operations 7,165 6,659 16,529 19,389 49,742 Distributable Cash Flow
attributable to partnership operations allocable to general partner
410 201 3,066 3,612 7,289 Distributable Cash Flow attributable to
limited partnership operations allocable to limited partners $6,755
$6,458 $13,463 $15,777 $42,453 Weighted average number of units
outstanding: 14,006,146 14,923,619 21,597,072 25,266,210 18,986,368
Distributable Cash Flow attributable to partnership operations per
limited partner unit: $0.48 $0.43 $0.62 $0.62 $2.15 Wamsutter
Reconciliation of Non-GAAP "Distributable Cash Flow" to GAAP "Net
income" Net income $9,341 $18,268 $20,952 $13,129 $61,690
Depreciation, amortization and accretion 3,774 3,920 4,215 4,280
16,189 Maintenance capital expenditures (6,450) (5,372) (5,794)
(2,992) (20,608) Distributable Cash Flow - 100% $6,665 $16,816
$19,373 $14,417 $57,271 Discovery Producer Services Reconciliation
of Non-GAAP "Distributable Cash Flow" to GAAP "Net income" Net
income $9,452 $5,868 $10,138 $4,625 $30,083 Depreciation,
amortization and accretion 6,379 6,374 6,380 6,429 25,562
Maintenance capital expenditures (516) (506) (262) 22 (1,262)
Distributable Cash Flow - 100% $15,315 $11,736 $16,256 $11,076
$54,383 Distributable Cash Flow - our 60% interest $9,189 $7,042
$9,754 $6,646 $32,631 (Thousands, except per-unit amounts) 2007*
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Y-T-D Williams Partners L.P.
Reconciliation of Non-GAAP "Distributable Cash Flow Excluding
Equity Investments" to GAAP "Net income" Net income $25,137 $46,742
$47,901 $44,851 $164,631 Depreciation, amortization and accretion
13,178 11,234 10,345 11,735 46,492 Amortization of natural gas
purchase contract 1,188 1,189 1,189 1,188 4,754 Non-cash
amortization of debt issuance costs included in interest expense
404 403 404 394 1,605 Equity earnings (15,259) (24,433) (26,374)
(38,988) (105,054) Reimbursements from Williams under omnibus
agreement 842 825 1,059 2,636 5,362 Non-cash adjustment of
2001-2002 EFM revenue - - 3,464 - 3,464 Impairment of Carbonate
Trend gathering pipeline - - - 10,400 10,400 Maintenance capital
expenditures (a)(b) (7,621) (8,665) (3,524) (7,790) (27,600)
Distributable Cash Flow Excluding Equity Investments $17,869
$27,295 $34,464 $24,426 $104,054 Less: Pre-partnership Four Corners
net income allocated to general partner - - - - - Less:
Pre-partnership Four Corners depreciation, amortization and
accretion expense - - - - - Plus: Pre-partnership Four Corners
maintenance capital expenditures(b) - - - - - Plus: Discovery's
cash distributions to Williams Partners L.P. 3,600 10,869 3,600
8,400 26,469 Distributable cash flow attributable to partnership
operations 21,469 38,164 38,064 32,826 130,523 Distributable Cash
Flow attributable to partnership operations allocable to general
partner 1,487 9,607 9,557 6,201 26,852 Distributable Cash Flow
attributable to limited partnership operations allocable to limited
partners $19,982 $28,557 $28,507 $26,625 $103,671 Weighted average
number of units outstanding: 39,358,798 39,358,798 39,359,555
42,422,444 40,131,195 Distributable Cash Flow attributable to
partnership operations per limited partner unit: $0.51 $0.73 $0.72
$0.63 $2.59 Wamsutter Reconciliation of Non-GAAP "Distributable
Cash Flow" to GAAP "Net income" Net income $11,328 $20,558 $18,472
$27,027 $77,385 Depreciation, amortization and accretion 4,258
4,440 4,586 5,140 18,424 Maintenance capital expenditures (4,535)
(5,763) (5,284) (5,108) (20,690) Distributable Cash Flow - 100%
$11,051 $19,235 $17,774 $27,059 $75,119 Discovery Producer Services
Reconciliation of Non-GAAP "Distributable Cash Flow" to GAAP "Net
income" Net income $6,551 $6,460 $13,168 $21,892 $48,071
Depreciation, amortization and accretion 6,483 6,508 6,243 6,718
25,952 Maintenance capital expenditures (429) (595) (1,560) 1,207
(1,377) Distributable Cash Flow - 100% $12,605 $12,373 $17,851
$29,817 $72,646 Distributable Cash Flow - our 60% interest $7,563
$7,424 $10,711 $17,890 $43,588 * Because Four Corners, Wamsutter
and the additional 20% interest in Discovery were affiliates of
Williams at the time of these acquisitions, the transactions were
between entities under common control, and have been accounted for
at historical cost. Accordingly, these tables have been recast to
reflect the historical results of Four Corners, Wamsutter and
Equity Earnings in Discovery throughout the periods presented.
Consolidated Statements of Income (UNAUDITED) (Thousands, except
per-unit amounts) 2006* 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Y-T-D
Revenues: Product sales: Affiliate $58,396 $63,370 $68,542 $64,767
$255,075 Third-party 2,792 7,766 4,553 1,808 16,919 Gathering and
processing: Affiliate 9,933 10,756 10,162 11,377 42,228 Third-party
51,376 49,405 52,679 52,972 206,432 Storage 5,105 5,924 6,581 7,627
25,237 Fractionation 3,953 2,989 2,708 2,048 11,698 Other 1,180 976
1,357 2,308 5,821 Total revenues 132,735 141,186 146,582 142,907
563,410 Cost and expenses: Product cost and shrink replacement:
Affiliate 21,380 18,057 19,159 19,605 78,201 Third-party 22,620
26,662 25,542 22,483 97,307 Operating and maintenance expense:
Affiliate 15,686 13,401 10,681 13,859 53,627 Third-party 21,100
28,167 26,888 25,432 101,587 Depreciation, amortization and
accretion 10,714 10,852 10,944 11,182 43,692 General and
administrative expense: Affiliate 7,281 9,227 7,730 10,057 34,295
Third-party 1,305 950 1,038 1,852 5,145 Taxes other than income
2,283 1,757 2,352 2,569 8,961 Other (3,643) 328 90 752 (2,473)
Total costs and expenses 98,726 109,401 104,424 107,791 420,342
Operating income 34,009 31,785 42,158 35,116 143,068 Equity
earnings - Wamsutter 9,341 18,268 20,952 13,129 61,690 Equity
earnings - Discovery 5,671 3,521 6,083 2,775 18,050 Interest
expense: Affiliate (15) (15) (15) (44) (89) Third-party (221) (633)
(3,256) (5,634) (9,744) Interest income 70 110 462 958 1,600 Net
income $48,855 $53,036 $66,384 $46,300 $214,575 Allocation of net
income* Net income $48,855 $53,036 $66,384 $46,300 $214,575
Allocation of net income to general partner 43,957 49,241 54,171
35,011 182,380 Allocation of net income to limited partners 4,898
3,795 12,213 11,289 32,195 Net income, per common and subordinated
unit $0.35 $0.25 $0.57 $0.45 $1.62 Weighted average number of units
outstanding 14,006,146 14,923,619 21,597,072 25,266,210 18,986,368
Consolidated Statements of Income (UNAUDITED) (Thousands, except
per-unit amounts) 2007* 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Y-T-D
Revenues: Product sales: Affiliate $56,552 $62,119 $75,519 $73,780
$267,970 Third-party 6,313 5,070 4,297 7,282 22,962 Gathering and
processing: Affiliate 9,491 8,743 9,178 8,407 35,819 Third-party
51,103 51,422 51,721 48,529 202,775 Storage 6,410 6,818 7,404 7,384
28,016 Fractionation 1,917 2,616 2,723 2,366 9,622 Other 2,029
2,481 (1,266) 2,409 5,653 Total revenues 133,815 139,269 149,576
150,157 572,817 Cost and expenses: Product cost and shrink
replacement: Affiliate 21,725 18,520 18,806 14,424 73,475
Third-party 20,470 26,157 30,043 31,553 108,223 Operating and
maintenance expense: Affiliate 14,328 10,484 15,275 21,546 61,633
Third-party 28,185 23,759 25,259 23,507 100,710 Depreciation,
amortization and accretion 13,178 11,234 10,345 11,735 46,492
General and administrative expense: Affiliate 9,406 9,644 10,816
12,172 42,038 Third-party 664 1,189 925 812 3,590 Taxes other than
income 2,114 2,626 2,474 2,410 9,624 Other 460 198 134 11,303
12,095 Total costs and expenses 110,530 103,811 114,077 129,462
457,880 Operating income 23,285 35,458 35,499 20,695 114,937 Equity
earnings - Wamsutter 11,328 20,558 18,472 25,854 76,212 Equity
earnings - Discovery 3,931 3,875 7,902 13,134 28,842 Interest
expense: Affiliate (15) (15) (16) (15) (61) Third-party (14,375)
(14,395) (14,268) (15,249) (58,287) Interest income 983 1,261 312
432 2,988 Net income $25,137 $46,742 $47,901 $44,851 $164,631
Allocation of net income* Net income $25,137 $46,742 $47,901
$44,851 $164,631 Allocation of net income to general partner 12,912
27,725 23,409 21,144 85,190 Allocation of net income to limited
partners 12,225 19,017 24,492 23,707 79,441 Net income, per common
and subordinated unit $0.31 $0.48 $0.62 $0.56 $1.97 Weighted
average number of units outstanding 39,358,798 39,358,798
39,359,555 42,422,444 40,131,195 * Because Four Corners, Wamsutter
and the additional 20% interest in Discovery were affiliates of
Williams at the time of these acquisitions, the transactions were
between entities under common control, and have been accounted for
at historical cost. Accordingly, these tables have been recast to
reflect the historical results of Four Corners, Wamsutter and
Equity Earnings in Discovery throughout the periods presented. Net
income applicable to periods before the acquisitions of these
businesses is fully allocated to our general partner, which results
in no impact to net income per limited partner unit. Segment Profit
& Operating Statistics (UNAUDITED) (Thousands) 2006* 1st Qtr
2nd Qtr 3rd Qtr 4th Qtr Y-T-D Gathering and Processing - West
Segment revenues $115,672 $127,794 $132,603 $126,244 $502,313
Product cost and shrink replacement 38,277 41,800 41,821 38,099
159,997 Operating and maintenance expense 29,095 34,525 29,950
31,193 124,763 Depreciation, amortization and accretion 9,814 9,952
10,035 10,254 40,055 Direct general and administrative expenses
3,400 2,361 2,838 3,321 11,920 Other, net (1,567) 1,919 2,260 3,157
5,769 Segment operating income 36,653 37,237 45,699 40,220 159,809
Equity earnings 9,341 18,268 20,952 13,129 61,690 Segment profit
$45,994 $55,505 $66,651 $53,349 $221,499 Gathering and Processing -
Gulf Segment revenues $733 $676 $632 $615 $2,656 Operating and
maintenance expense 242 231 399 788 1,660 Depreciation and
accretion 300 300 300 300 1,200 Direct general and administrative
expenses 2 7 - (8) 1 Other, net - - - - - Segment operating income
(loss) 189 138 (67) (465) (205) Equity earnings 5,671 3,521 6,083
2,775 18,050 Segment profit $5,860 $3,659 $6,016 $2,310 $17,845 NGL
Services Segment revenues $16,330 $12,716 $13,347 $16,048 $58,441
Product cost 5,723 2,919 2,880 3,989 15,511 Operating and
maintenance expense 7,449 6,812 7,220 7,310 28,791 Depreciation and
accretion 600 600 609 628 2,437 Direct general and administrative
expenses 301 235 279 334 1,149 Other, net 207 166 182 164 719
Segment profit $2,050 $1,984 $2,177 $3,623 $9,834 * Because Four
Corners, Wamsutter and the additional 20% interest in Discovery
were affiliates of Williams at the time of these acquisitions, the
transactions were between entities under common control, and have
been accounted for at historical cost. Accordingly, these tables
have been recast to reflect the historical results of Four Corners,
Wamsutter and Equity Earnings in Discovery throughout the periods
presented. Operating Information: Williams Partners: Conway storage
revenues $5,105 $5,924 $6,581 $7,627 $17,610 Conway fractionation
volumes (bpd) - our 50% 46,042 39,669 38,517 31,374 41,382
Carbonate Trend gathered volumes (MMBtu/d) 33,407 29,327 27,650
26,995 30,107 Williams Four Corners: Gathered volumes (MMBtu/d)
1,511,867 1,473,371 1,501,978 1,512,304 1,495,771 Processed volumes
(MMBtu/d) 868,200 861,876 878,965 893,022 869,731 Liquid sales
gallons (000s) 41,413 43,874 47,009 49,714 132,296 Net liquids
margin (cents/gallon) $0.37 $0.49 $0.56 $0.45 $0.48 Wamsutter -
100%: Gathered volumes (MMBtu/d) 468,243 475,703 498,124 517,775
490,119 Processed volumes (MMBtu/d) 264,744 270,752 282,024 293,116
277,749 Liquid sales gallons (000s) 35,891 38,259 33,983 32,635
140,768 Net liquids margin (cents/gallon) $0.14 $0.34 $0.41 $0.29
$0.29 Discovery Producer Services - 100% Gathered volumes (MMBtu/d)
581,788 342,037 435,885 514,486 451,449 Gross processing margin
($/MMBtu) $0.16 $0.25 $0.28 $0.25 $0.22 Segment Profit &
Operating Statistics (UNAUDITED) (Thousands) 2007* 1st Qtr 2nd Qtr
3rd Qtr 4th Qtr Y-T-D Gathering and Processing - West Segment
revenues $120,428 $125,047 $134,035 $134,277 $513,787 Product cost
and shrink replacement 39,675 42,313 45,791 42,655 170,434
Operating and maintenance expense 33,097 29,487 34,267 38,931
135,782 Depreciation, amortization and accretion 12,175 10,203
8,564 10,581 41,523 Direct general and administrative expenses
1,821 1,797 1,839 2,333 7,790 Other, net 2,384 2,624 2,414 3,145
10,567 Segment operating income 31,276 38,623 41,160 36,632 147,691
Equity earnings 11,328 20,558 18,472 25,854 76,212 Segment profit
$42,604 $59,181 $59,632 $62,486 $223,903 Gathering and Processing -
Gulf Segment revenues $561 $459 $521 $578 $2,119 Operating and
maintenance expense 550 361 443 521 1,875 Depreciation and
accretion 304 303 304 338 1,249 Direct general and administrative
expenses - - - - - Other, net - - - 10,406 10,406 Segment operating
income (loss) (293) (205) (226) (10,687) (11,411) Equity earnings
3,931 3,875 7,902 13,134 28,842 Segment profit $3,638 $3,670 $7,676
$2,447 $17,431 NGL Services Segment revenues $12,826 $13,763
$15,020 $15,302 $56,911 Product cost 2,520 2,364 3,058 3,322 11,264
Operating and maintenance expense 8,866 4,395 5,824 5,601 24,686
Depreciation and accretion 699 728 1,477 816 3,720 Direct general
and administrative expenses 498 470 510 712 2,190 Other, net 190
200 194 162 746 Segment profit $53 $5,606 $3,957 $4,689 $14,305 *
Because Four Corners, Wamsutter and the additional 20% interest in
Discovery were affiliates of Williams at the time of these
acquisitions, the transactions were between entities under common
control, and have been accounted for at historical cost.
Accordingly, these tables have been recast to reflect the
historical results of Four Corners, Wamsutter and Equity Earnings
in Discovery throughout the periods presented. Operating
Information: Williams Partners: Conway storage revenues $6,410
$6,818 $7,404 $7,384 $28,016 Conway fractionation volumes (bpd) -
our 50% 31,316 36,220 35,574 34,682 34,460 Carbonate Trend gathered
volumes (MMBtu/d) 25,187 19,127 22,080 24,226 22,651 Williams Four
Corners: Gathered volumes (MMBtu/d) 1,452,694 1,461,514 1,468,598
1,386,512 1,499,937 Processed volumes (MMBtu/d) 866,116 872,091
889,576 786,271 875,601 Liquid sales gallons (000s) 45,603 39,031
46,098 35,957 166,689 Net liquids margin (cents/gallon) $0.41 $0.53
$0.63 $0.91 $0.61 Wamsutter - 100%: Gathered volumes (MMBtu/d)
509,857 521,586 512,808 519,428 515,938 Processed volumes (MMBtu/d)
302,029 312,414 308,659 319,515 310,697 Liquid sales gallons (000s)
28,053 26,789 25,114 33,191 113,147 Net liquids margin
(cents/gallon) $0.27 $0.40 $0.48 $0.72 $0.48 Discovery Producer
Services - 100% Gathered volumes (MMBtu/d) 547,504 616,172 579,588
583,106 581,685 Gross processing margin ($/MMBtu) $0.23 $0.24 $0.32
$0.53 $0.33 DATASOURCE: Williams Partners L.P. CONTACT: Jeff
Pounds, media relations, +1-918-573-3332, or Sharna Reingold,
investor relations, +1-918-573-2078, both of Williams Web site:
http://www.williamslp.com/
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