Organization, Basis of Presentation, and Description of Business

6 Months Ended

Jun. 30, 2011

Organization, Basis of Presentation, and Description of Business [Abstract]

Organization, Basis of Presentation, and Description of Business

Note 1. Organization, Basis of Presentation, and Description of Business

Organization

     Unless the context clearly indicates otherwise, references in this report to “we,” “our,” “us,” or similar language refer to Williams Partners L.P. and its subsidiaries.

     We are a publicly traded Delaware limited partnership. Williams Partners GP LLC, a Delaware limited liability company wholly owned by The Williams Companies, Inc. (Williams), serves as our general partner. As of June 30, 2011, Williams owns an approximate 73 percent limited partner interest, a 2 percent general partner interest and incentive distribution rights (IDRs) in us. All of our activities are conducted through Williams Partners Operating LLC (OLLC), an operating limited liability company (wholly owned by us).

     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 consolidated financial statements and notes thereto for the year ended December 31, 2010 in our Annual report on Form 10-K. The accompanying unaudited consolidated financial statements include all normal recurring adjustments and others that, in the opinion of management, are necessary to present fairly our financial position at June 30, 2011, results of operations for the three and six months ended June 30, 2011 and 2010, changes in equity for the six months ended June 30, 2011, and cash flows for the six months ended June 30, 2011 and 2010.

     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.

Basis of Presentation

     During second-quarter 2011, we closed the acquisition of a 24.5 percent interest in Gulfstream Natural Gas System, L.L.C. (Gulfstream) from a subsidiary of Williams in exchange for aggregate consideration of $297 million of cash, 632,584 of our limited partner units, and an increase in the capital account of our general partner to allow it to maintain its 2 percent general partner interest. As the acquired equity interest was purchased from a subsidiary of Williams, the transaction was accounted for as a combination of entities under common control whereby the investment acquired is combined with ours at its historical amount as of the date of transfer. The excess of the cash purchase price over the historical carrying amount is recognized as a reduction of general partner equity. This investment is reported in our Gas Pipeline segment.

     During fourth-quarter 2010, we closed the acquisition of a business represented by certain gathering and processing assets in Colorado’s Piceance Basin from a subsidiary of Williams (the Piceance Acquisition). As the acquired assets were purchased from a subsidiary of Williams, the transaction was accounted for as a combination of entities under common control whereby the assets and liabilities acquired are combined with ours at their historical amounts. The acquired assets are reported in our Midstream Gas & Liquids (Midstream) segment, which includes a recast of the statement of income for the prior period. The effect of recasting our financial statements to account for this transaction increased net income by $15 million for the three months and $24 million for the six months ended June 30, 2010. This acquisition does not impact historical earnings per unit as pre-acquisition earnings were allocated to our general partner.

Accounting Standards Issued But Not Yet Adopted

     In May 2011, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2011-4, “Fair Value Measurement (Topic 820) Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS” (ASU 2011-4). ASU 2011-4 primarily eliminates the differences in fair value measurement principles between the FASB and International Accounting Standards Board. It clarifies existing guidance, changes certain fair value measurements and requires expanded disclosure primarily related to Level 3 measurements and transfers between Level 1 and Level 2 of the fair value hierarchy. ASU 2011-4 is effective on a prospective basis for interim and annual periods beginning after December 15, 2011. We are assessing the application of this Update to our Consolidated Financial Statements.

     In June 2011, the FASB issued Accounting Standards Update No. 2011-5, “Comprehensive Income (Topic 220) Presentation of Comprehensive Income” (ASU 2011-5). ASU 2011-5 requires presentation of net income and other comprehensive income either in a single continuous statement or in two separate, but consecutive, statements. The Update requires separate presentation in both net income and other comprehensive income of reclassification adjustments for items that are reclassified from other comprehensive income to net income. The new guidance does not change the items reported in other comprehensive income, nor affect how earnings per share is calculated and presented. We currently report net income in the Consolidated Statement of Income and report other comprehensive income in the Consolidated Statement of Changes in Equity. The standard is effective beginning the first quarter of 2012, with a retrospective application to prior periods. We plan to apply the new presentation beginning in 2012.

Description of Business

     Our operations are located in the United States and are organized into the following reporting segments: Gas Pipeline and Midstream.

     Gas Pipeline is comprised primarily of the following interstate natural gas pipeline assets:

• Transcontinental Gas Pipe Line Company, LLC (Transco), an interstate natural gas pipeline extending from the Gulf of Mexico region to the northeastern United States;

• Northwest Pipeline GP (Northwest Pipeline), an interstate natural gas pipeline extending from the San Juan basin in northwestern New Mexico and southwestern Colorado to Oregon and Washington;

• A 49 percent equity interest in Gulfstream, an interstate natural gas pipeline extending from the Mobile Bay area in Alabama to markets in Florida.

     Midstream is comprised primarily of the following natural gas gathering, processing and treating facilities, oil gathering and transportation facilities and natural gas liquid (NGL) transportation, fractionation and storage facilities and investments:

• Two gathering systems and the Echo Springs and Opal processing plants serving the Wamsutter and southwest areas of Wyoming;

• A gathering system, the Ignacio, Kutz and Lybrook processing plants and the Milagro and Esperanza natural gas treating plants, all serving the San Juan basin in New Mexico and Colorado;

• A gathering system, natural gas liquids pipeline and the Willow Creek and Parachute processing plants in Colorado;

• An equity interest in Laurel Mountain Midstream, LLC, serving the Marcellus shale region of western Pennsylvania;

• Gathering pipelines and compressor stations in Pennsylvania’s Marcellus Shale;

• Onshore and offshore natural gas and oil gathering pipelines in the Gulf Coast region;

• The Mobile Bay and Markham processing plants in the Gulf Coast region;

• The Canyon Station and Devils Tower offshore production platforms in the Gulf of Mexico;

• NGL storage facilities in the Conway, Kansas area;

• Interests in two NGL fractionation facilities: one near Conway, Kansas and the other in Baton Rouge, Louisiana;

• An equity interest in Discovery Producer Services LLC, whose assets include a processing plant and a fractionation plant in Louisiana, and an offshore natural gas gathering and transportation system in the Gulf of Mexico;

• An equity interest in Aux Sable Liquid Products LP, whose assets include an NGL processing plant and a fractionator in Illinois, a condensate recovery plant in North Dakota and a pipeline extending from the condensate recovery plant to an affiliate-owned pipeline;

• An equity interest in Overland Pass Pipeline Company LLC, whose assets include a natural gas liquids pipeline stretching from Wyoming through Colorado and into Kansas.