Mail Stop 0308
June 1, 2005
James J. Bender
General Counsel
Williams Partners L.P.
One Williams Center
Tulsa, Oklahoma 74172-0172
Re: Williams Partners L.P.
Registration Statement on Form S-1
Filed May 2, 2005
File No. 333-124517
Dear Mr. Bender:
We have reviewed your filing and have the following comments.
Where indicated, we think you should revise your document in
response
to these comments. If you disagree, we will consider your
explanation as to why our comment is inapplicable or a revision is
unnecessary. Please be as detailed as necessary in your
explanation.
In some of our comments, we may ask you to provide us with
supplemental information so we may better understand your
disclosure.
After reviewing this information, we may or may not raise
additional
comments.
Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects. We welcome
any questions you may have about our comments or on any other
aspect
of our review. Feel free to call us at the telephone numbers
listed
at the end of this letter.
General
1. We note a number of blank spaces throughout your registration
statement for information that you are not entitled to omit under
Rule 430A, such as the anticipated price range. Since we may have
additional comments once you provide this information, please
allow
us sufficient time to review your complete disclosure prior to any
distribution of preliminary prospectuses.
2. We note that the net proceeds from any exercise of the
underwriters` over-allotment option will be used to redeem an
equal
number of units from affiliates of your general partner. It
appears
that doing so would render those affiliates selling security
holders
in this offering. Please revise or advise.
Prospectus cover page
3. Please delete the fourth and fifth sentences in the first full
paragraph. Stating your expected distribution rate is not
required
by Item 501 of Regulation S-K and otherwise is not appropriate for
cover page disclosure.
4. Please revise to eliminate the defined term NGL from the cover
page and throughout the forepart of the prospectus.
5. It appears that you will include some picture or graphics on
the
gatefold. Prior to the printing and distribution of the
preliminary
prospectus, please provide us with a copy of all artwork and
graphics, and any accompanying captions you intend to use.
Prospectus Summary, page 1
Williams Partners L.P., page 1
6. Please revise to avoid the use of industry jargon such
"fractionating" in the summary.
Management of Williams Partners L.P., page 5
7. You state that your general partner will not receive any
management fee or other compensation "in connection with its
management of [y]our business." Please make clear whether it will
receive any fees or other compensation in connection with this
offering.
Use of Proceeds, page 31
8. We note that you will use most proceeds to repay advances from
Williams. It appears that these advances constitute debt for
which
disclosure required by Instruction 4 to Item 504 applies. Please
revise or advise.
Dilution, page 33
9. We note that net tangible book value in your "pro forma net
tangible book value per common unit before the offering"
calculation
assumes that the Contributed Assets have been transferred to the
Limited Partnership and your advances from The Williams Companies
have been forgiven. Please expand on footnote (a) to the table to
quantify the amount of the debt forgiveness and to clearly
describe
why you have included the debt forgiveness in the calculation.
Cash Distribution Policy, page 34
10. Given that you are a new registrant and this offering conveys
to
potential investors that your initial quarterly distribution will
be
$0.37 per unit - an amount which appears to represent
substantially
all your available cash - we believe that you should provide a
more
detailed discussion about the policy and provide support for the
stated distribution amount. Please accordingly revise this
section,
the Cash Available for Distribution section, and Appendix D. The
revisions should clearly and fully convey:
* the background and effect of the cash distribution policy,
including the initial distribution rate;
* your estimated cash available to pay distributions over the next
four quarters;
* whether historically you had sufficient available cash to pay
the
stated distribution amount; and
* any assumptions and considerations related to the preceding
disclosure.
Selected Historical and Pro Forma Combined Financial and Operating
Data, page 46
11. We note that you present separate EBITDA measures for Williams
Partners Predecessor and Discovery Producer Services. We further
note that you exclude the Discovery impairment charge, Discovery
equity earnings/losses, and the cumulative effect of change in
accounting principle from your EBITDA measures. Please note that
"earnings" in EBITDA is intended to mean "net income" as presented
in
the statement of operations under GAAP. Measures that are
calculated
differently than those described as EBITDA should not be
characterized as "EBIDTA." Instead, the titles of these measures
should clearly identify the earnings measure being used and all
adjustments. In this regard, as the equity earnings/losses of
Discovery and the impairment of your Discovery investment are
already
included in the financial results of Williams Partners Predecessor
under GAAP, please justify your presentation of separate EBITDA
measures. Please ensure you address how you determined that
separate
EBITDA measures are more meaningful to your investors than a
single
consolidated measure. In your current presentation, the Discovery
impairment charge is excluded from both EBITDA calculations
despite
its inclusion in your Predecessor financial statements. If you
still
believe that separate presentation of the EBITDA measures is
appropriate, please further tell us how you determined it was
appropriate to exclude each of the aforementioned items in your
EBITDA calculations. Please note that Item 10(e)(1)(ii)(B) of
Regulation S-K prohibits adjusting a non-GAAP performance measure
to
eliminate items identified as non-recurring, infrequent or
unusual.
Management`s Discussion and Analysis, page 51
12. Please note that Item 303(a)(3)(ii) of Regulation S-K
requires,
as applicable, a discussion of any known trends or uncertainties
that
may materially affect your business or operations. Please expand
this section to discuss in reasonable detail any known material
trends and uncertainties that will have or are reasonably likely
to
have a material impact on your revenues or income or result in
your
liquidity decreasing or increasing in any material way. For
example,
if relevant, you may discuss the evolving trends in the production
of
natural gas, the natural gas and oil prices, the nature of your
competition, the consumer demands for natural gas liquids in the
geographical markets where you operate, and so on. In doing so,
provide additional information about the quality and variability
of
your earnings and cash flows so that investors can ascertain the
likelihood of the extent past performance is indicative of future
performance. In addition, discuss in reasonable detail:
* economic or industry-wide factors relevant to your company, and
* material opportunities, challenges, and risks in short and long
term and the actions you are taking to address them.
Please refer to SEC Release No. 33-8350.
Results of Operations, page 58
13. We note that the segment footnote of your Williams Partners
Predecessor financial statements includes an allocated general and
administrative expenses line item for each fiscal year presented.
Please tell us why the year-to-year change and nature of these
allocated items are not described in your Management`s Discussion
and
Analysis. For instance, we note that the allocated G&A costs
increased from approximately $1.4 million in fiscal year 2003 to
approximately $2.1 million in fiscal year 2004.
14. Where you identify intermediate causes of changes in your
operating results, also describe the reasons underlying the
intermediate causes. For example, you indicate on page 58 that
your
investment in Discovery had experienced an other than temporary
decline in value resulting in an impairment charge in 2004. Your
instruction to refer to Discovery`s results of operations does not
provide any additional insight into the causes of this impairment
charge. Similarly, you indicate on page 59 that the decrease in
Carbonate Trend revenues from fiscal year 2003 to 2004 is
primarily
due to a decline in gathering volumes. A discussion of the
relevant
factors and trends that led to the decline in gathering
volumes would be beneficial to the reader. See SEC Release No.
33-
8350 and also prior comment 12.
Liquidity and Capital Resources, page 63
15. Please ensure your discussion and analysis of cash flows on
page
64 is not merely a recitation of changes evident from the
financial
statements. For example, you mention that the decrease in net
cash
provided by operating activities of Williams Partners Predecessor
was
partially offset by changes in working capital. Please provide
analysis explaining the underlying reasons for the material
fluctuations in any contributing working capital balances, such as
accounts payable.
Contractual Cash Obligations and Contingencies, page 66
16. Please revise your table of contractual obligations to include
your advances from affiliates and all long-term liabilities
recorded
on your balance sheet at December 31, 2004. You should disclose
the
anticipated payoff and forgiveness of the advances in a footnote
to
the table.
Business, page 69
17. We note your use of various statistics and data throughout
this
section. For each statistic or data, please tell us whether this
source is publicly available. If it was prepared especially for
you,
file a consent for that industry source. Additionally, provide us
with annotated copies of the cited materials as support.
Employees, page 97
18. Your use of the phrase "direct support" is unclear. Please
revise to more clearly articulate the number of persons you
employ.
Management, page 98
Executive Compensation, page 99
19. We note that you have not provided information as to executive
compensation paid by your general partner, including the summary
of
compensation table and the option grants table, apparently because
you and the general partner have only recently been formed. Given
that your business previously was operated by your sponsor The
Williams Companies and senior officers of your general partner are
also that of The Williams Companies, it appears that to provide
meaningful disclosure you should revise to provide the Item 402
compensation information paid by The Williams Companies relevant
to
you.
Certain Relationships and Related Transactions, page 103
20. It appears your should provide Item 404 disclosure here
relative
to The Williams Companies. Please refer to the immediately prior
comment.
Conflicts of Interest and Fiduciary Duties, page 107
Conflicts of Interests, page 107
21. It appears that your general partner may make certain
decisions
without others` approval. Please specify all decisions or types
of
decisions your general partner is entitled to make in its sole
discretion. In addition, if there is any appreciable likelihood
that
you general partner would exercise its power to withhold its
consent
to an assignee requesting admission as a substituted limited
partner,
as described on pages 113-114, please include an appropriate risk
factor discussing the negative impact on liquidity of such a power
of
your general partner.
Underwriting, page 145
Lock-up Agreements, page 146
22. With respect to the lock-up agreements to which you refer,
please
disclose whether Lehman Brothers Inc. may allow, on certain
circumstances, a transaction prohibited by those agreements, and
if
so, discuss all factors it will consider before granting its
consent.
Electronic Distribution, page 147
23. We note your disclosure regarding electronic distribution.
Please identify specifically any members of the underwriting
syndicate that will engage in any electronic offer, sale or
distribution of the units and describe their procedures to us. If
you become aware of any additional members of the underwriting
syndicate that may engage in electronic offers, sales or
distributions after you respond to this comment, promptly
supplement
your response to identify those members and provide us with a
description of their procedures.
In your discussion of your procedures, tell us how your procedures
ensure that the distribution complies with Section 5 of the
Securities Act. In particular, describe:
* the communications used;
* the availability of the preliminary prospectus;
* the manner of conducting the distribution and sale, such as the
use
of indications of interest or conditional offers; and
* the manner and timing of funding of an account and payment of
the
purchase price.
In addition, please tell us whether you or the underwriters have
any
arrangements with a third party to host or access your preliminary
prospectus on the Internet. If so, identify the party and the
website, describe the material terms of your agreement, and
provide
us with a copy of any written agreement. Also provide us with
copies
of all information concerning your company or prospectus that has
appeared on that website. Again, if you subsequently enter into
any
of these arrangements, promptly supplement your response.
Financial Statements
Age of Financial Statements
24. Please update your Williams Partners Predecessor, Discovery
Producer Services LLC, and Williams Partners L.P. pro forma
financial
statements for the most recent interim period in accordance with
the
applicable standards of Regulation S-X.
Unaudited Williams Partners L.P. Pro Forma Financial Statements
Unaudited Pro Forma Statement of Operations, page F-4
25. We note that you intend to make quarterly distributions to
holders of your common and subordinated units in the manner
described
on page 7. Please tell us how you intend to present earnings per
unit figures for the limited partnership in future filings. In
your
response, please tell us how you considered presentation of the
two-
class EPS method, as described in paragraphs 60-61 and
Illustration 6
of SFAS 128, including how you determined that method was or was
not
appropriate. Please apply the method you intend to use going
forward
to the pro forma EPU figure you present on your pro forma
statement
of operations.
Williams Partners Predecessor Combined Financial Statements
Combined Statements of Cash Flows, page F-12
26. We note that your advances from affiliates line item is shown
net. SFAS 95 does not permit the netting of cash repayments and
borrowings unless certain criteria in paragraph 13 of the standard
are met. Please revise your filing accordingly or tell us why you
believe your presentation is appropriate.
Note 10. Commitments and Contingencies, page F-20
27. You disclose that you are a participant in certain
environmental
remediation activities. To the extent it is reasonably possible
you
will incur losses in excess of recorded amounts related to these
matters, please provide the applicable disclosures in accordance
with
SFAS 5, including the amount or range of reasonably possible
losses
in excess of recorded amounts. Alternatively, if no amount of
loss
in excess of recorded amounts is believed to be reasonably
possible,
please state this in your disclosure. Please note that the term
reasonably possible, as described in paragraph .160 of SOP 96-1,
spans a significant range starting from remote and ending with
probable. See also the guidance provided in SAB Topic 5-Y.
Undertakings, page II-2
28. Please provide the applicable undertakings required by Item 20
of
Industry Guide 5, or explain to us why you do not provide them.
See
Section II.B.2.a of Securities Act Release No. 33-6900.
Exhibits
29. Please file all required exhibits, such as the underwriting
agreement and the legality and tax opinions, in a timely manner so
that we may have time to review them before you request
effectiveness
of your registration statement.
*****
As appropriate, please amend your registration statement in
response to these comments. You may wish to provide us with
marked
copies of the amendment to expedite our review. Please furnish a
cover letter with your amendment that keys your responses to our
comments and provides any requested supplemental information.
Detailed cover letters greatly facilitate our review. Please
understand that we may have additional comments after reviewing
your
amendment and responses to our comments.
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filings reviewed by the staff to
be
certain that the filing includes all information required under
the
Securities Act of 1933 and they have provided all information
investors require for an informed investment decision. Since the
company and its management are in possession of all facts relating
to
a company`s disclosure, they are responsible for the accuracy and
adequacy of the disclosures they have made.
Notwithstanding our comments, in the event the company
requests
acceleration of the effective date of the pending registration
statement, it should furnish a letter, at the time of such
request,
acknowledging that:
? should the Commission or the staff, acting pursuant to
delegated
authority, declare the filing effective, it does not foreclose the
Commission from taking any action with respect to the filing;
? the action of the Commission or the staff, acting pursuant to
delegated authority, in declaring the filing effective, does not
relieve the company from its full responsibility for the adequacy
and
accuracy of the disclosure in the filing; and
? the company may not assert staff comments and the declaration
of
effectiveness as a defense in any proceeding initiated by the
Commission or any person under the federal securities laws of the
United States.
In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in connection with our review of
your
filing or in response to our comments on your filing.
We will consider a written request for acceleration of the
effective date of the registration statement as a confirmation of
the
fact that those requesting acceleration are aware of their
respective
responsibilities under the Securities Act of 1933 and the
Securities
Exchange Act of 1934 as they relate to the proposed public
offering
of the securities specified in the above registration statement.
We
will act on the request and, pursuant to delegated authority,
grant
acceleration of the effective date.
We direct your attention to Rules 460 and 461 regarding
requesting acceleration of a registration statement. Please allow
adequate time after the filing of any amendment for further review
before submitting a request for acceleration. Please provide this
request at least two business days in advance of the requested
effective date.
You may contact Andrew Blume, Staff Accountant, at (202) 551-
3254, or William Choi, Accounting Branch Chief, at (202) 551-3716
if
you have questions regarding comments on the financial statements
and
related matters. Please contact Pradip Bhaumik, Attorney-Advisor,
at
(202) 551-3333, David Mittelman, Legal Branch Chief, at (202) 551-
3214, or me at (202) 551-3720 with any other questions.
Sincerely,
H. Christopher Owings
Assistant Director
cc: Robert V. Jewell, Esq.
Andrews Kurth LLP
Fax: (713) 220-4285
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James J. Bender
Williams Partners L.P.
June 1, 2005
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