Williams Partners L.P. Reports First-Quarter 2008 Financial Results

- Wamsutter, Discovery Acquisitions Drive 45% Increase in Distributable Cash Flow per Unit During 1Q





TULSA, Okla., May 1  /PRNewswire-FirstCall/ -- Williams Partners L.P. (NYSE:WPZ) today announced unaudited first-quarter 2008 net income of $43.6 million, compared with first-quarter 2007 net income of $25.1 million.

Williams Partners' net income per limited-partner unit for first-quarter 2008 was 66 cents, compared with 31 cents per limited-partner unit for first-quarter 2007.  Increased equity earnings from the partnership's Wamsutter and Discovery investments and higher natural gas liquid margins at Four Corners were the key drivers of the improved earnings per unit in first-quarter 2008.

Also, because the partnership's 2007 acquisitions of an additional 20 percent of Discovery and a membership interest in Wamsutter closed later in the year, their first-quarter 2007 net income was allocated to the general partner as pre-partnership income.  As a result, a higher portion of the partnership's total net income was allocated to the limited partners in first-quarter 2008, compared with first-quarter 2007.

Lower gathering and processing volumes and higher operating and maintenance expenses at Four Corners, and higher interest expense due to the Wamsutter acquisition partially offset these benefits.

First-quarter 2007 results throughout this release have been recast to reflect the Wamsutter and Discovery acquisitions.

In first-quarter 2008, the key measure of distributable cash flow per weighted-average limited partner unit was 74 cents, compared with 51 cents for first-quarter 2007 -- an increase of 45 percent.  Total distributable cash flow in first-quarter 2008 for limited-partner unitholders was $38.8 million, compared with $20 million for first-quarter 2007.

The significant increase in distributable cash flow during first-quarter 2008 is due to the partnership receiving its first cash distribution associated with the Wamsutter investment, as well as a record-high distribution associated with its Discovery investment.

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.

  Consolidated Segment Profit                                1Q
  Amounts in thousands                              2008              2007

  Gathering and Processing - West                 $50,405           $42,604
  Gathering and Processing - Gulf                  13,511             3,638
  NGL Services                                      5,541                53

  Consolidated Segment Profit                     $69,457           $46,295

  Recurring Consolidated Segment Profit*
  Amounts in thousands

  Gathering and Processing - West                 $47,340           $42,885
  Gathering and Processing - Gulf                  13,511             3,638
  NGL Services                                      5,541             1,490

  Recurring Consolidated Segment Profit*          $66,392           $48,013

  * A schedule reconciling segment profit to recurring segment profit is
    attached to this press release.





Williams Partners' consolidated recurring segment profit for first-quarter 2008 was $66.4 million, compared with $48 million for first-quarter 2007.

Recurring segment profit for Gathering and Processing -- West was $47.3 million in first-quarter 2008, compared with $42.9 million in first-quarter 2007.  Higher NGL margins at Four Corners and the Wamsutter investment were the primary drivers of the quarterly improvement.

Lower gathering and processing volumes at Four Corners, due to severe winter weather and the shutdown of the Ignacio gas processing plant following the Nov. 28, 2007, fire, partially offset these benefits.  The Ignacio plant returned to service on Jan. 18.  Also, both Wamsutter and Four Corners experienced higher net product imbalance losses during the first quarter of 2008. Gains and losses from product imbalances are an unpredictable component of operating costs.

Recurring segment profit for the Gathering and Processing -- Gulf segment was $13.5 million in first-quarter 2008, compared with $3.6 million in first-quarter 2007.  Higher equity earnings from the partnership's Discovery interest were the primary source of the improvement.  Discovery's results increased due to higher gross processing margins and higher gathered volumes in the first quarter.

NGL Services reported recurring segment profit of $5.5 million for first-quarter 2008, compared with $1.5 million for first-quarter 2007.  Higher fractionation and storage revenues and lower operating costs drove the increase in segment profit.

Reconciliations of the partnership's distributable cash flow for limited-partner unitholders to net income, as well as recurring segment profit to segment profit, are available on Williams Partners' web site at http://www.williamslp.com/ and as an attachment to this document.

Chief Operating Officer Perspective

"The partnership performed extremely well during the first quarter, highlighted by a 45-percent increase in our distributable cash flow per unit," said Alan Armstrong, chief operating officer of the general partner of Williams Partners.  "We're now seeing the benefit of our 2007 acquisitions -- Wamsutter and the additional interest in Discovery, both of which contributed significant cash flow to the partnership in the first quarter.

"Operationally, our Conway and Discovery businesses performed extremely well, and both Four Corners and Wamsutter posted terrific financial performances despite long periods of severe winter weather that halted our customers' production in those areas.  We are glad to see that production flows have returned to normal after the very difficult winter," Armstrong said.

Increase in Cash Distribution to Unitholders

Subsequent to the close of the first quarter, the board of directors of the general partner of Williams Partners increased the quarterly cash distribution payable to unitholders to 60 cents from 57.5 cents.  This was the ninth consecutive quarter the partnership increased its cash distribution.

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 first-quarter 2008 financial results during an analyst presentation to be webcast live beginning at 11 a.m. Eastern today.

Participants are encouraged to access Williams Partners' webcast at http://www.williamslp.com/.  Slides will be available for viewing, downloading and printing.

A limited number of phone lines also will be available for the partnership's webcast at [phone].  International callers should dial [phone]. Replays of the first-quarter webcast, in both streaming and downloadable podcast formats, will be available for two weeks at http://www.williamslp.com/ following the event.

Form 10-Q

The partnership has filed its Form 10-Q with the Securities and Exchange Commission.  The document is 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)
             [phone]

             Sharna Reingold
             Williams (investor relations)
             [phone]




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 distribution following establishment of cash reserves and payment of fees and expenses, including payments to our 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; lower natural gas and oil prices could adversely affect Williams Partners' fractionation and storage businesses; Williams Partners' processing, fractionation and storage businesses could be affected by any decrease in natural gas liquids (NGL) prices or a change in NGL prices relative to the price of natural gas; Williams Partners depends on certain key customers and producers for a significant portion of its revenues and supply of natural gas and NGLs 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 NGLs or to treat natural gas, Williams Partners' revenues and cash available to pay distributions could be adversely affected; Williams Partners does not own all of the interests in Wamsutter LLC (Wamsutter), the Conway fractionator or Discovery Producer Services LLC (Discovery), which could adversely affect Williams Partners' ability to operate and control these assets in a manner beneficial to it; Williams Partners' results of storage and fractionation operations are dependent upon the demand for propane and other NGLs and a substantial decrease in this demand could adversely affect Williams Partners' business and operation results; Discovery and Wamsutter may reduce their cash distributions to Williams Partners in some situations; Discovery's interstate tariff rates and terms and conditions are subject to review and possible adjustment by federal regulators and are subject to changes in policy by federal regulators, which could have a material adverse effect on Williams Partner's business and operating results; Williams Partners' operations are subject to operational hazards and unforeseen interruptions for which it may not be adequately insured; Williams Partners does not operate all of its assets and its reliance on others to operate its assets and to provide other services could adversely affect Williams Partners' business and operating results. Williams Partners' partnership agreement limits its general partner's fiduciary duties to unitholders and restricts the remedies available to unitholders for actions taken by its general partner that might otherwise constitute breaches of fiduciary duty; The Williams Companies, Inc.'s (Williams) public indentures and Williams Partners' credit facility contain financial and operating restrictions that may limit its access to credit; in addition, Williams Partners' ability to obtain credit in the future will be affected by Williams' credit ratings; Williams Partners' future financial and operating flexibility may be adversely affected by restrictions in Williams Partners' debt agreements and by its leverage; Williams Partners has a holding company structure in which its subsidiaries conduct its operations and own its operating assets, which may affect Williams Partners' ability to make payments on its debt obligations and distributions on its common units; common units held by Williams eligible for future sale may have adverse effects on the price of Williams Partners' common units; Williams controls Williams Partners' general partner, which has sole responsibility for conducting Williams Partners' business and managing its operations; Williams Partners' general partner and its affiliates have conflicts of interests with Williams Partners and limited fiduciary duties, and they may favor their own interests to the detriment of Williams Partners' unitholders; even if unitholders are dissatisfied, they currently have little ability to remove Williams Partners' general partner without its consent. 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 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 provisions 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.

                                                       2007*          2008
  (Thousands, except per-unit amounts)                1st Qtr       1st Qtr

  Williams Partners L.P.
  Reconciliation of Non-GAAP "Recurring Segment
   Profit" to GAAP "Segment Profit"

  Gathering and Processing - West                     $42,604       $50,405
  Gathering and Processing - Gulf                       3,638        13,511
  NGL Services                                             53         5,541

  Segment Profit                                       46,295        69,457
    Non-recurring Items:
      Gathering and Processing - West
        Wamsutter customer contract adjustment
         included in equity earnings                        -        (3,065)
        2005-2006 retroactive charges for customer
         contract                                        (848)            -
        Adjust right-of-way prepaid expense             1,243             -
        Adjust 2006 incentive compensation accrual       (899)            -
        Adjust asset retirement obligation                785             -
      NGL Services
        Product imbalance valuation adjustment          1,437             -
  Recurring Segment Profit                            $48,013       $66,392

  * Because 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 Wamsutter and Equity
    Earnings in Discovery throughout the periods presented.



                                                      2007*          2008
  (Thousands, except per-unit amounts)               1st Qtr       1st Qtr

  Williams Partners L.P.
  Reconciliation of Non-GAAP  "Distributable Cash
   Flow per Limited Partner Unit "GAAP "Net income"

  Net income                                         $25,137      $43,629
  Depreciation, amortization and accretion            13,178        1,226
  Amortization of natural gas purchase contract        1,188            -
  Non-cash amortization of debt issuance costs
   included in interest expense                          404          489
  Equity earnings                                    (15,259)     (34,815)
  Reimbursements from Williams under omnibus
   agreement                                             842          771
  Maintenance capital expenditures(a)                 (7,621)      (8,534)

  Distributable Cash Flow Excluding Equity
   Investments                                       $17,869      $12,766

  Plus: Wamsutter cash distributions
   to Williams Partners L.P.                               -       22,704
  Plus: Discovery's cash
   distributions to Williams Partners L.P.             3,600       16,800

  Distributable cash flow attributable to
   partnership operations                             21,469       52,270

  Distributable Cash Flow attributable to
   partnership operations allocable to general
   partner                                             1,487       13,431
  Distributable Cash Flow attributable to limited
   partnership operations allocable to limited
   partners                                          $19,982      $38,839

  Weighted average number of units
   outstanding:                                   39,358,798   52,774,728

  Distributable Cash Flow
   attributable to partnership operations per
   limited partner unit:                               $0.51        $0.74

  (a) Maintenance capital expenditures includes certain well connection
      capital.



  Wamsutter
  Reconciliation of Non-GAAP "Distributable
   Cash Flow" to GAAP "Net income"

  Net income                                         $11,328        $21,194
  Depreciation, amortization and accretion             4,258          5,228
  Maintenance capital expenditures                    (4,535)        (3,245)

  Distributable Cash Flow - 100%                     $11,051        $23,177

  Discovery Producer Services
  Reconciliation of Non-GAAP "Distributable
   Cash Flow" to GAAP "Net income"

  Net income                                          $6,551        $22,701
  Depreciation, amortization and accretion             6,483          6,983
  Maintenance capital expenditures                      (429)          (187)

  Distributable Cash Flow - 100%                     $12,605        $29,497

  Distributable Cash Flow - our 60% interest          $7,563        $17,698

  * Because 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 Wamsutter and Equity
    Earnings in Discovery throughout the periods presented.



  Consolidated Statements of Income
  (UNAUDITED)

                                                  2007*              2008
  (Thousands, except per-unit amounts)           1st Qtr           1st Qtr

  Revenues:
    Product sales:
      Affiliate                                   $56,552           $78,122
      Third-party                                   6,313             4,221
    Gathering and processing:
      Affiliate                                     9,491             8,790
      Third-party                                  51,103            46,210
    Storage                                         6,410             7,333
    Fractionation                                   1,917             3,292
    Other                                           2,029             2,394

  Total revenues                                  133,815           150,362

  Cost and expenses:
    Product cost and shrink replacement:
      Affiliate                                    21,725            22,033
      Third-party                                  20,470            30,065
    Operating and maintenance expense:
      Affiliate                                    14,328            23,133
      Third-party                                  28,185            23,951
    Depreciation, amortization and accretion       13,178            11,226
    General and administrative expense:
      Affiliate                                     9,406             9,876
      Third-party                                     664               928
    Taxes other than income                         2,114             2,505
    Other                                             460               333

  Total costs and expenses                        110,530           124,050

  Operating income                                 23,285            26,312

  Equity earnings - Wamsutter                      11,328            21,194
  Equity earnings - Discovery                       3,931            13,621
  Interest expense:
    Affiliate                                         (15)              (25)
    Third-party                                   (14,375)          (17,711)
  Interest income                                     983               238

  Net income                                      $25,137           $43,629

  Allocation of net income*
    Net income                                    $25,137           $43,629
    Allocation of net income to general partner    12,912             8,911
    Allocation of net income to limited partners   12,225            34,718

    Net income, per common and subordinated unit    $0.31             $0.66
    Weighted average number of units
     outstanding                               39,358,798        52,774,728

  * Because 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 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)

                                                  2007*              2008
  (Thousands)                                   1st Qtr            1st Qtr

  Gathering and Processing - West
  Segment revenues                             $120,428           $132,333
  Product cost and shrink replacement            39,675             47,446
  Operating and maintenance expense              33,097             40,893
  Depreciation, amortization and accretion       12,175             10,299
  Direct general and administrative expenses      1,821              1,930
  Other, net                                      2,384              2,554

  Segment operating income                       31,276             29,211
  Equity earnings                                11,328             21,194

  Segment profit                                $42,604            $50,405

  Gathering and Processing - Gulf
  Segment revenues                                 $561               $567
  Operating and maintenance expense                 550                524
  Depreciation and accretion                        304                153
  Direct general and administrative expenses          -                  -
  Other, net                                          -                  -

  Segment operating loss                           (293)              (110)
  Equity earnings                                 3,931             13,621

  Segment profit                                 $3,638            $13,511

  NGL Services
  Segment revenues                              $12,826            $17,462
  Product cost                                    2,520              4,652
  Operating and maintenance expense               8,866              5,667
  Depreciation and accretion                        699                774
  Direct general and administrative expenses        498                544
  Other, net                                        190                284

  Segment profit                                    $53             $5,541

  * Because 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 Wamsutter and Equity
    Earnings in Discovery throughout the periods presented.



  Williams Partners:
    Conway storage revenues                      $6,410             $7,333
    Conway fractionation volumes (bpd) - our 50% 31,316             33,103
    Carbonate Trend gathering volumes (BBtu/d)       25                 24
  Williams Four Corners:
    Gathering volumes (BBtu/d)                    1,453              1,316
    Fee-based processing  volumes (BBtu/d)          866                796
      NGL equity sales (million gallons)             46                 36
      NGL margin ($/gallon)                       $0.41              $0.74
      NGL production (million gallons)              140                112
  Wamsutter - 100%:
    Gathering  volumes (BBtu/d)                     510                434
    Fee-based processing  volumes (BBtu/d)          302                252
      NGL equity sales (million gallons)             28                 41
      NGL margin ($/gallon)                       $0.27              $0.58
      NGL production (million gallons)              101                106
  Discovery Producer Services - 100%
    Plant inlet volumes (BBtu/d)                    548                627
    Gross processing margin ($/MMBtu)             $0.23              $0.45
      NGL equity sales (million gallons)             18                 37
      NGL production (million gallons)               56                 70


DATASOURCE: Williams Partners L.P.



CONTACT:  Media relations, Jeff Pounds, [phone], or investor

relations, Sharna Reingold, [phone], both of Williams Partners L.P.



Web site:  http://www.williams.com/ 

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