Williams, Williams Partners Complete Asset Contribution Transactions Designed to Drive Value, Growth

Williams and Williams Partners L.P. announced that they have completed the asset contribution transactions that are part of the strategic restructuring they announced in January.

The closing of the asset contribution transactions follows Williams Partners' completion of a $3.5 billion private debt offering on February 9 and Williams' completion of a $3 billion cash tender offer and consent solicitation for debt.

Contributed Assets:

The asset contribution transforms Williams Partners into one of the leading energy master limited partnerships. It now owns a substantial portfolio of best-in-class interstate gas pipeline and midstream assets that includes a large number of attractive development projects and business opportunities.

The partnership's premier interstate natural gas pipeline assets include 100 percent of Transcontinental Gas Pipe Line Company, 65 percent of Northwest Pipeline and 24.5 percent of Gulfstream Pipeline. The partnership also now owns 48 percent of Williams Pipeline Partners L.P. (NYSE: WMZ), including the general-partner interest. Williams Pipeline Partners owns the remaining 35 percent of Northwest Pipeline.

Williams Partners now owns interests in three major interstate natural gas pipelines that combined deliver 12 percent of the natural gas consumed in the United States.

In addition to the Four Corners and Wamsutter gas gathering and processing systems, Williams Partners now owns seven additional processing trains totaling 2.3 billion cubic feet per day (Bcfd) of capacity in the Rockies. It also owns four processing trains on the Gulf Coast that are integrated with five major deepwater oil and gas pipeline systems and two production handling platforms.

The new midstream assets also include various equity investments in domestic processing and fractionation assets, including a 51-percent ownership of Laurel Mountain Midstream, a joint venture in the Marcellus Shale.

Williams Partners' gathering and processing assets now have a combined daily inlet capacity of approximately 9.5 Bcfd and a natural gas liquid production capacity of 360,000 barrels per day.

Cash and Unit Issuance to Williams:

In exchange for the contributed assets, Williams Partners has issued 203 million units to Williams, paid approximately $3.4 billion cash to Williams, and maintained Williams' 2 percent general-partner interest.

Williams now owns approximately 84 percent of Williams Partners, including the general-partner interest.

Changes to Unsecured Credit Facilities:

Both Williams and Williams Partners have made changes to their unsecured credit facilities to reflect their new structures following the asset contribution transactions.

Williams Partners has obtained a new unsecured, three-year, $1.75 billion revolving credit facility. The new facility was oversubscribed, which allowed the partnership to increase the facility from the offered $1.5 billion to $1.75 billion. Williams Partners plans to use the new facility primarily for working capital, capital expenditures, acquisitions, general corporate purposes and issuing letters of credit.

Simultaneously Williams Partners will terminate its existing $450 million credit facility. The $250 million term loan will be repaid with borrowings under the new facility.

Because of Williams Partners' new larger credit facility, Williams has reduced its existing $1.5 billion unsecured revolving credit facility, which matures in May 2012, to $900 million.

Minor Changes to General Partner Management Structure, Board:

There are no changes to the underlying operating management structure at Williams as result of the asset contributions. Williams' senior management will also continue to lead Williams Partners, given the partnership's importance to Williams.

Effective with the closing of the asset contributions, there are some minor changes to the management and board of directors of the general partner of Williams Partners to align with the new structure.

Phil Wright is now senior vice president and president of Gas Pipeline for the GP of Williams Partners and replaces Rod Sailor as one of Williams' internal directors of the GP of Williams Partners. Sailor will continue to serve as vice president and treasurer of Williams and treasurer of the GP of Williams Partners.

Alan Armstrong is now senior vice president and president of Midstream for the GP of Williams Partners. He will also continue to serve as an internal director of the GP of Williams Partners.

Williams Pipeline Partners Exchange Offer:

Williams Partners previously announced that it intends to launch an exchange offer for the publicly held units of Williams Pipeline Partners following the closing of the asset contribution transactions. The timing of the offer will be based on the timing of regulatory filings and on market conditions.

Williams Partners will offer a fixed exchange ratio of 0.7584 of its common units for each Williams Pipeline Partners common unit. The ratio is based on Friday, Jan. 15 closing prices on the New York Stock Exchange of $23.35 for Williams Pipeline Partners and $30.79 for Williams Partners.

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