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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): February 17, 2010
WILLIAMS PARTNERS L.P.
(Exact name of registrant as specified in its charter)
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Delaware
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1-32599
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20-2485124 |
(State or Other Jurisdiction of
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(Commission File Number)
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(I.R.S. Employer |
Incorporation)
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Identification No.) |
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One Williams Center, Tulsa, Oklahoma
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74172-0172 |
(Address of Principal Executive Offices)
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(Zip Code) |
Registrants Telephone Number, Including Area Code: 918/573-2000
Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing
obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c)) |
TABLE OF CONTENTS
Item 1.01. Entry Into a Material Definitive Agreement.
Consummation of Dropdown
On February 17, 2010, Williams Partners L.P. (the Partnership) consummated the dropdown
transaction (the Dropdown) contemplated by the previously announced Contribution Agreement among
the Partnership and certain subsidiaries of The Williams Companies, Inc. (Williams), specifically
Williams Gas Pipeline Company, LLC (WGP), Williams Energy Services, LLC (WES), WGP Gulfstream
Pipeline Company, L.L.C. (WGPGPC), Williams Partners GP LLC (the General Partner, and together
with WGP, WES, and WGPGPC, the Contributing Parties), and Williams Partners Operating LLC, the
operating subsidiary of the Partnership (the Operating Company, and together with the
Partnership, the Partnership Parties). Williams is also a party to the Contribution Agreement
for the limited purpose described in the Contribution Agreement. Additional information about the
Contribution Agreement is set forth in Item 2.01 below.
In connection with the closing of Dropdown, the Partnership or its subsidiaries executed the
following ancillary agreements, which are attached as exhibits hereto. These agreements are (i) a
Conveyance, Contribution and Assumption Agreement among the Contributing Parties and the
Partnership Parties (the Conveyance Agreement), (ii) an Omnibus Agreement between Williams and
the Partnership, (iii) a Limited Call Right Forbearance Agreement between the Partnership and the
General Partner (the Forbearance Agreement), (iv) an Administrative Services Agreement between
Transco Pipeline Services LLC, a Delaware limited liability company (the Contractor), and
Transcontinental Gas Pipe Line Company, LLC, a Delaware limited liability company (Transco), and
(v) an Amendment to the Partnerships Amended and Restated Agreement of Limited Partnership, as
amended (the Partnership Agreement Amendment).
The Conveyance Agreement effected the contribution of the ownership interests in the
Contributed Entities (as defined in Item 2.01 below) from the Contributing Parties to the
Partnership and further transferred the ownership interests in the Contributed Entities from the
Partnership to the Operating Company. The Conveyance Agreement is filed as Exhibit 10.1 hereto and
is incorporated herein by reference.
Pursuant to the Omnibus Agreement, Williams has agreed to indemnify the Partnership from and
against or reimburse the Partnership for (i) amounts incurred by the Partnership or its
subsidiaries for repair or abandonment costs for damages to certain facilities caused by Hurricane
Ike, up to a maximum of $10,000,000, (ii) maintenance capital expenditure amounts incurred by the
Partnership or its subsidiaries in respect of certain U.S. Department of Transportation projects,
up to a maximum aggregate amount of $50,000,000, and (iii) an amount based on the amortization over
time of deferred revenue amounts that relate to cash payments received prior to the closing of the
transactions contemplated by the Contribution Agreement for services to be rendered by the
Partnership in the future at the Devils Tower floating production platform located in Mississippi
Canyon Block 773. In addition, the Partnership has agreed to pay to Williams the proceeds of
certain sales of natural gas recovered from the Hester storage field pursuant to the FERC order
dated March 7, 2008, approving a settlement agreement in Docket No. RP06-569. The Omnibus
Agreement is filed as Exhibit 10.2 hereto and is incorporated herein by reference.
Pursuant to the Forbearance Agreement, the General Partner has agreed to forbear exercising a
right in certain circumstances that is granted to it under the Partnerships Amended and Restated
Agreement of Limited Partnership (the Partnership Agreement). Under the Partnership Agreement,
if the General Partner and its affiliates hold more than 80% of the Partnerships common limited
partner units, the General Partner has the right to purchase all of the remaining common limited
partner units. In the Forbearance Agreement, the General Partner agreed not to exercise this right
unless it and its affiliates hold more than 85% of the Partnerships common limited partner units.
The Forbearance Agreement will terminate when the ownership by the General Partner and its
affiliates of the Partnerships common limited partner units decreases below 75% (assuming the full
conversion of Class C Units (as defined in Item 2.01 below) that are held by the General Partner
and its affiliates). The Forbearance Agreement is filed as Exhibit 4.1 hereto and is incorporated
herein by reference.
Pursuant to the Administrative Services Agreement, the Contractor agreed to provide personnel,
facilities, goods, and equipment not otherwise provided by Transco that are necessary to operate
Transcos businesses. In return, Transco agreed to reimburse the Contractor for all direct and
indirect expenses the Contractor incurs or payments it makes (including salary, bonus, incentive
compensation, and benefits) in connection with these services. The Administrative Services
Agreement is filed as Exhibit 10.3 hereto and is incorporated herein by reference.
Pursuant to the Partnership Agreement Amendment, the Partnership Agreement has been amended to
(a) authorize the issuance of the Class C Units of the Partnership that will comprise part of the
consideration for the transactions contemplated by the
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Contribution Agreement and to make certain other changes in connection with the authorization
of the issuance of the Class C Units of the Partnership, (ii) provide for the proration of
distributions, with respect to the first fiscal quarter in which the Class C Units and the
Additional Partner Units (as defined in Item 2.01 below) are outstanding, on the Class C Units and
the Additional Partner Units to reflect the fact that the Class C Units and the Additional Partner
Units will not be outstanding during the full quarterly period, and (iii) provide that certain
amounts received by the Partnership under the Omnibus Agreement are to be treated as a capital
contribution to the Partnership by Williams in the amount of such payment. The Partnership
Agreement Amendment is filed as Exhibit 3.1 hereto and is incorporated herein by reference.
In addition, the Amended and Restated Limited Liability Company Agreement of Wamsutter LLC
(Wamsutter and such agreement, the Wamsutter LLC Agreement) was amended to reflect that the
Operating Company is now the sole member of Wamsutter. The Wamsutter LLC Agreement is filed as
Exhibit 10.4 hereto and is incorporated herein by reference.
Entry into New Credit Facility
On February 17, 2010, the Partnership, Transco and Northwest Pipeline GP (Northwest), as
co-borrowers, entered into a new $1.75 billion three-year senior unsecured revolving credit
facility (the New Credit Facility) with Citibank N.A. as administrative agent. The full amount of the
New Credit Facility is available to the Partnership and may be increased by up to an additional $250
million. Each of Transco and Northwest may borrow up to $400 million under the New Credit Facility
to the extent not otherwise utilized by the Partnership. At closing, the Partnership borrowed $250
million under the New Credit Facility to repay the term loan outstanding under its existing senior
unsecured credit agreement, as described in more detail in Item 1.02 below.
Interest on borrowings under the New Credit Facility is payable at rates per annum equal to,
at the option of the borrower: (1) a fluctuating base rate equal to Citibank, N.A.s adjusted base
rate plus the applicable margin, or (2) a periodic fixed rate equal to LIBOR plus the 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. The
Partnership is required to pay a commitment fee based on the unused portion of the New Credit
Facility. The applicable margin and the commitment fee are determined for each borrower
by reference to a pricing schedule based on such borrowers senior unsecured debt ratings.
The New Credit Facility contains various covenants that limit, among other things,
each borrowers 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 their business.
Under the New Credit Facility, the Partnership 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. For each of Transco and Northwest and their respective consolidated
subsidiaries, the ratio of debt to capitalization (defined as net worth plus debt) is not permitted
to be greater than 55%. Each of the above ratios will be tested beginning June 30, 2010 at the end of each fiscal quarter,
and the debt to EBITDA ratio is measured on a rolling four-quarter basis.
The New Credit Facility includes customary events of default, including events of default
relating to non-payment of principal, interest or fees, inaccuracy of representations and
warranties in any material respect when made or when deemed made, violation of covenants, cross
payment-defaults, cross acceleration, bankruptcy and insolvency events, certain unsatisfied
judgments and a change of control. 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.
The New Credit Facility is filed as Exhibit 10.5 hereto and is incorporated herein by
reference.
The foregoing descriptions of the ancillary agreements, the Wamsutter LLC Agreement and the
New Credit Facility are not complete and are subject to and qualified in their entirety by
reference to the full text of such agreements. The ancillary agreements, the Wamsutter LLC
Agreement and the New Credit Facility are filed as exhibits to this Current Report on Form 8-K to
provide investors with information regarding their terms. They are not intended to provide any
other factual information about the Partnership or the other parties to the agreements or any of
their respective subsidiaries or affiliates.
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Item 1.02. Termination of a Material Definitive Agreement
On February 17, 2010, the Partnership terminated, and repaid all amounts owed under, its $450
million senior unsecured credit agreement with Citibank, N.A. as administrative agent, comprised
initially of a $200 million revolving credit facility available for borrowings and letters of
credit and a $250 million term loan. Upon the termination of this credit agreement, the Partnership
entered into the New Credit Facility, detailed in Item 1.01 above.
Item 2.01. Completion of Acquisition or Disposition of Assets
As described in Item 1.01 above, on February 17, 2010 the Partnership and the other parties to
the Contribution Agreement consummated the Dropdown contemplated by the Contribution Agreement.
Pursuant to the Contribution Agreement, the Contributing Parties contributed to the Partnership the
ownership interests in the entities that make up Williams Gas Pipeline and Midstream Gas and
Liquids business segments (including its limited and general partner interests in Williams Pipeline
Partners L.P., a publicly traded Delaware master limited partnership (WMZ), but excluding its
Canadian, Venezuelan and olefins operations, and a 25.5% interest in Gulfstream Natural Gas System,
L.L.C.), to the extent not already owned by the Partnership and its subsidiaries (the Contributed
Entities). This contribution was in exchange for aggregate consideration of:
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$3.5 billion in cash, less certain expenses incurred by the Partnership in
connection with (i) the transactions contemplated by the Contribution
Agreement, (ii) the Private Placement (as defined below), including any
initial purchasers discount or original issue discount, (iii) the
establishment of the New Credit Facility, (iv) the exchange offer for the
outstanding publicly traded common units of WMZ, and (v) one-half of any and
all applicable filing fees under the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended (the Net Cash Consideration); |
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203 million of the Partnerships Class C limited partner units (the Class
C Units), which are identical to the Partnerships common limited partner
units except that (i) for the first fiscal quarter in which the Class C Units
are outstanding they will receive a quarterly distribution that is prorated
to reflect the fact that the Class C Units were not outstanding during the
full quarterly period, and (ii) they will automatically convert into the
Partnerships common limited partner units following the record date for the
distribution with respect to the first fiscal quarter in which the Class C
Units are outstanding; and |
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an increase in the capital account of the General Partner to allow it to
maintain its 2% general partner interest and the issuance of general partner
units to the General Partner equal to 2/98th of the number of Class C Units
that will be issued (the Additional Partner Units), resulting in Williams
holding an approximate 82% limited partner interest and a 2% general partner
interest in the Partnership. |
The Net Cash Consideration was paid from the net proceeds of a private placement of the
Partnerships senior unsecured notes, conducted pursuant to Rule 144A (the Private Placement)
under the Securities Act of 1933, as amended (the Securities Act).
The issuance of the Class C Units was made in reliance upon an exemption from the registration
requirements of the Securities Act, under Section 4(2) of the Securities Act.
A more detailed description of the material terms of the Contribution Agreement was included
in the Partnerships Current Report on Form 8-K filed on January 19, 2010.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet
Arrangement of a Registrant
The description of the New Credit Facility in Item 1.01 is incorporated herein by reference.
Item 3.02. Unregistered Sales of Equity Securities
The description of the issuance of Class C Units in Items 1.01 and 2.01 is incorporated herein
by reference.
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Item 3.03. Material Modification to Rights of Security Holders
The description of the Forbearance Agreement in Item 1.01 is incorporated herein by reference.
Item 5.03. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year
The description of the Partnership Agreement Amendment in Item 1.01 above is incorporated
herein by reference.
Item 7.01. Regulation FD Disclosure
On February 17, 2010, Williams and the Partnership issued a joint press release announcing,
among other things, the consummation of the Dropdown. A copy of the press release is furnished and
attached as Exhibit 99.1 hereto and is incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits
(a) Financial Statements of Business Acquired
The financial statements required by this Item will be filed by an amendment to this Current
Report within the time period required by Form 8-K.
(b) Pro Forma Financial Information
The financial statements required by this Item will be filed by an amendment to this Current
Report within the time period required by Form 8-K.
(d) Exhibits.
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Exhibit No. |
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Description |
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3.1
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Amendment No. 6 to Amended and Restated Agreement of Limited
Partnership of Williams Partners L.P., dated as of February
17, 2010 by Williams Partners GP LLC. |
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4.1
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Limited Call Right Forbearance Agreement, dated as of February
17, 2010, by and between Williams Partners L.P. and Williams
Partners GP LLC. |
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10.1
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Conveyance, Contribution and Assumption Agreement, dated as of
February 17, 2010, by and among Williams Energy Services, LLC,
Williams Gas Pipeline Company, LLC, WGP Gulfstream Pipeline
Company, L.L.C., Williams Partners GP LLC, Williams Partners
L.P., and Williams Partners Operating LLC. |
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10.2
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Omnibus Agreement, dated as of February 17, 2010, by and
between The Williams Companies, Inc. and Williams Partners
L.P. |
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10.3
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Administrative Services Agreement, dated as of February 17,
2010, by and between Transco Pipeline Services LLC and
Transcontinental Gas Pipe Line Company, LLC. |
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10.4
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Amendment No. 1 to Amended and Restated Limited Liability
Company Agreement of Wamsutter LLC Agreement, dated as of
February 17, 2010, by and between Williams Field Services
Company, LLC and Williams Partners Operating LLC. |
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10.5
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Credit Agreement, dated as of February 17, 2010, by and among
Williams Partners L.P., Northwest Pipeline GP,
Transcontinental Gas Pipe Line Company, LLC, and Citibank
N.A., as Administrative Agent. |
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99.1
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Press Release, dated February 17, 2010. |
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SIGNATURE
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 hereunto duly authorized.
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WILLIAMS PARTNERS L.P.
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By: |
Williams Partners GP LLC,
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its General Partner |
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By: |
/s/ La Fleur C. Browne
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La Fleur C. Browne |
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Corporate Secretary |
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DATED: February 22, 2010
EXHIBIT INDEX
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Exhibit No. |
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Description |
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3.1
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Amendment No. 6 to Amended and Restated Agreement of Limited
Partnership of Williams Partners L.P., dated as of February
17, 2010 by Williams Partners GP LLC. |
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4.1
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Limited Call Right Forbearance Agreement, dated as of February
17, 2010, by and between Williams Partners L.P. and Williams
Partners GP LLC. |
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10.1
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Conveyance, Contribution and Assumption Agreement, dated as of
February 17, 2010, by and among Williams Energy Services, LLC,
Williams Gas Pipeline Company, LLC, WGP Gulfstream Pipeline
Company, L.L.C., Williams Partners GP LLC, Williams Partners
L.P., and Williams Partners Operating LLC. |
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10.2
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Omnibus Agreement, dated as of February 17, 2010, by and
between The Williams Companies, Inc. and Williams Partners
L.P. |
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10.3
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Administrative Services Agreement, dated as of February 17,
2010, by and between Transco Pipeline Services LLC and
Transcontinental Gas Pipe Line Company, LLC. |
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10.4
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Amendment No. 1 to Amended and Restated Limited Liability
Company Agreement of Wamsutter LLC Agreement, dated as of
February 17, 2010, by and between Williams Field Services
Company, LLC and Williams Partners Operating LLC. |
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10.5
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Credit Agreement, dated as of February 17, 2010, by and among
Williams Partners L.P., Northwest Pipeline GP,
Transcontinental Gas Pipe Line Company, LLC, and Citibank
N.A., as Administrative Agent. |
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99.1
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Press Release, dated February 17, 2010. |