AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 11, 2002
REGISTRATION NO. 333-
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- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------
FORM S-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
---------------------
TRANSCONTINENTAL GAS PIPE LINE CORPORATION
(Exact name of registrant as specified in its charter)
<Table>
DELAWARE 4922 74-1079400
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of Incorporation or organization) Classification Code Number) Identification No.)
</Table>
2800 POST OAK BOULEVARD
HOUSTON, TEXAS 77056
(713) 215-2000
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
---------------------
RICHARD CARSON, ESQ.
SENIOR ATTORNEY
THE WILLIAMS COMPANIES, INC.
ONE WILLIAMS CENTER
TULSA, OKLAHOMA 74172
(918) 573-2000
(Name, address, including zip code, and telephone number, including area code of
agent for service)
---------------------
COPY TO:
WILLIAM MARK YOUNG
ANDREWS & KURTH L.L.P.
600 TRAVIS, SUITE 4200
HOUSTON, TEXAS 77002
(713) 220-4200
---------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: As soon as
practicable following the effectiveness of this registration statement.
---------------------
If the securities being registered on this form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration number of the earlier registration
statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
<Table>
<Caption>
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PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED PER SHARE OFFERING PRICE REGISTRATION FEE(1)
- ---------------------------------------------------------------------------------------------------------------------------
8 7/8% Notes Due 2012.................. $325,000,000 100% $325,000,000 $29,900
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
</Table>
(1) Determined in accordance with Rule 457(f) promulgated under the Securities
Act of 1933, as amended.
---------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL THESE
SECURITIES AND IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY
STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
THE INFORMATION IN THIS PROSPECTUS WILL BE AMENDED OR COMPLETED;
DATED DECEMBER 11, 2002
PROSPECTUS
EXCHANGE OFFER FOR:
ALL 8 7/8% SERIES A SENIOR NOTES DUE JULY 15, 2012
FOR 8 7/8% SERIES B SENIOR NOTES DUE JULY 15, 2012
OF
TRANSCONTINENTAL GAS PIPE LINE CORPORATION
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON , 2003, UNLESS EXTENDED.
Terms of the exchange offer:
- We are offering a total of $325 million of our 8 7/8% Series B Senior
Notes due July 15, 2012 for an equal amount of our outstanding 8 7/8%
Series A Senior Notes due July 15, 2012.
- We will exchange new notes for all outstanding old notes that are validly
tendered and not withdrawn prior to the expiration of the exchange offer.
- You may withdraw tenders of old notes at any time prior to the expiration
of the exchange offer.
- The exchange of old notes for new notes will not be a taxable transaction
for U.S. federal income tax purposes; but you should see the discussion
under the caption "Material United States Federal Income Tax
Considerations" on page 29 for more information.
- We will not receive any cash proceeds from the exchange offer.
- The terms of the new notes are substantially identical to those of the
outstanding old notes, except that the transfer restrictions and
registration rights relating to the old notes do not apply to the new
notes.
- The exchange offer is the initial offering of the new notes.
- There is no established trading market for the new notes or the old
notes.
- We do not intend to apply for listing of the new notes on any national
securities exchange or for quotation through The Nasdaq National Market.
---------------------
SEE "RISK FACTORS" BEGINNING ON PAGE 7 FOR A DISCUSSION OF RISKS YOU SHOULD
CONSIDER.
---------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
---------------------
The date of this prospectus is , 2002
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED, OR INCORPORATED BY
REFERENCE, IN THIS PROSPECTUS. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH
DIFFERENT INFORMATION. WE ARE NOT MAKING AN OFFER OF THE NEW NOTES IN ANY
JURISDICTION WHERE THE OFFER IS NOT PERMITTED. YOU SHOULD NOT ASSUME THAT THE
INFORMATION CONTAINED IN THIS PROSPECTUS IS ACCURATE AS OF ANY DATE OTHER THAN
THE DATE ON THE FRONT COVER OF THIS PROSPECTUS OR THAT ANY INFORMATION WE HAVE
INCORPORATED BY REFERENCE IS ACCURATE AS OF ANY DATE OTHER THAN THE DATE OF THE
DOCUMENT INCORPORATED BY REFERENCE.
---------------------
TABLE OF CONTENTS
<Table>
Where You Can Find Information.............................. i
Forward Looking Statements.................................. ii
Prospectus Summary.......................................... 1
Risk Factors................................................ 7
Use of Proceeds............................................. 9
Capitalization.............................................. 9
Ratios of Earnings to Fixed Charges......................... 9
Selected Financial and Operating Data....................... 10
The Exchange Offer.......................................... 11
Description of Notes........................................ 20
Exchange Offer; Registration Rights......................... 27
Material United States Federal Income Tax Considerations.... 29
Certain ERISA Considerations................................ 32
Plan of Distribution........................................ 34
Legal Matters............................................... 34
Experts..................................................... 34
</Table>
---------------------
WHERE YOU CAN FIND INFORMATION
We file annual, quarterly and special reports and other information with
the SEC. You may read and copy any material on file with the SEC at the SEC's
Public Reference Room at 450 Fifth Street, N.W., Judiciary Plaza, Washington,
D.C. 20549. Our filings are available to the public over the Internet at the
SEC's web site at http://www.sec.gov. Please call the SEC at 1-800-SEC-0330 for
further information on the Public Reference Room.
We are incorporating by reference information which we file with the SEC,
which means that we can disclose important information to you by referring you
to those documents. The information incorporated by reference or deemed
incorporated by reference is an important part of this prospectus, and
information that we file later with the SEC will be deemed to automatically
update and supersede this incorporated information. We incorporate by reference
the documents listed below and any future filings made with the SEC under
Sections 13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of 1934 prior
to the completion of this offering. We also incorporate by reference any future
filings made with the SEC under the Exchange Act subsequent to the date of the
initial registration statement and prior to the effectiveness of the
registration statement.
- our Annual Report on Form 10-K for the year ended December 31, 2001, and
- our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2002,
June 30, 2002, and September 30, 2002, and
- our Current Report on Form 8-K filed with the SEC on December 11, 2002.
i
You can get a free copy of any of the documents incorporated by reference
by making an oral or written request directed to:
Transcontinental Gas Pipe Line Corporation
2800 Post Oak Boulevard
P.O. Box 1396
Houston, Texas 77251
Attention: General Counsel
Telephone (713) 215-2000
FORWARD LOOKING STATEMENTS
Matters discussed in this prospectus or incorporated by reference herein,
excluding historical information, include forward-looking
statements -- statements that discuss our expected future results based on
current and pending business operations. We make these forwarding-looking
statements in reliance on the safe harbor protections provided under the Private
Securities Litigation Reform Act of 1995.
Forward-looking statements can be identified by words such as
"anticipates," "believes," "expects," "planned," "scheduled" or similar
expressions. Although we believe these forward-looking statements are based on
reasonable assumptions, statements made regarding future results are subject to
numerous assumptions, uncertainties and risks that may cause future results to
be materially different from the results stated or implied in this document.
The following are important factors that could cause actual results to
differ materially from any results projected, forecasted, estimated or budgeted:
- changes in general economic conditions in the United States and changes
in the industries in which we conduct business;
- changes in federal or state laws and regulations to which we are subject,
including tax, environmental and employment laws and regulations;
- the cost and effects of legal and administrative claims and proceedings
against us or our subsidiaries;
- conditions of the capital markets we utilize to access capital to finance
operations;
- the ability to raise capital in a cost-effective way;
- the effect of changes in accounting policies;
- the ability to manage rapid growth;
- the ability to control costs;
- the ability to successfully implement key systems, such as service
delivery systems;
- the impact of future federal and state regulations of business
activities, including allowed rates of return, the pace of deregulation
in retail natural gas and electricity markets, and the resolution of
other regulatory matters discussed herein;
- our ability to develop expanded markets and product offerings as well as
our ability to maintain existing markets;
- our ability and the ability of our subsidiaries to obtain governmental
and regulatory approval of various expansion projects;
- future utilization of pipeline capacity, which can depend on energy
prices, competition from other pipelines and alternative fuels, the
general level of natural gas and petroleum product demand, decisions by
customers not to renew expiring natural gas transportation contracts, and
weather conditions; and
- global and domestic economic repercussions from terrorist activities and
the government's response thereto.
ii
PROSPECTUS SUMMARY
The following summary highlights selected information from the prospectus
and may not contain all of the information that is important to you. This
prospectus includes specific terms of the new notes, as well as information
regarding our business and detailed financial data. We encourage you to read
this entire prospectus carefully, including the discussion of risks and
uncertainties affecting our business included under the caption "Risk Factors,"
and the documents to which we refer you. In this prospectus, references to "we,"
"us" and "our" refer to Transcontinental Gas Pipe Line Corporation, unless the
context indicates that "we," "us" and "our" refers to Transcontinental Gas Pipe
Line Corporation, together with its consolidated subsidiaries.
TRANSCONTINENTAL GAS PIPE LINE CORPORATION
We are an interstate natural gas transmission company that owns a natural
gas pipeline system extending from Texas, Louisiana, Mississippi and the Gulf of
Mexico through the states of Alabama, Georgia, South Carolina, North Carolina,
Virginia, Maryland, Pennsylvania and New Jersey to the New York City
metropolitan area. We also hold minority interests in Cardinal Pipeline Company,
LLC, which owns an intrastate natural gas pipeline located in North Carolina,
and Pine Needle LNG Company, LLC, which owns an interstate LNG storage facility
in North Carolina. Our principal business is the transportation of natural gas.
We are a wholly-owned subsidiary of Williams Gas Pipeline Company, LLC.
Williams Gas Pipeline Company, LLC is a wholly-owned subsidiary of The Williams
Companies, Inc. We were incorporated in Delaware in 1948 and our principal
executive offices are located at the Williams Tower, 2800 Post Oak Boulevard,
Houston, Texas 77056 (telephone: (713) 215-2000).
RECENT DEVELOPMENTS
On November 15, 2002, our parent, Williams Gas Pipeline Company, LLC,
repaid an intercompany loan with us in the amount of $200 million. On the same
date, we paid a cash dividend in the amount of $200 million to Williams Gas
Pipeline Company, LLC.
On November 22, 2002, Moody's Investor Service reduced our credit rating on
our senior unsecured debt from Ba2 to B3.
THE EXCHANGE OFFER
Old Notes..................... 8 7/8% Series A Senior Notes due July 15, 2012,
which were issued on July 3, 2002.
New Notes..................... 8 7/8% Series B Senior Notes due July 15, 2012.
The terms of the new notes are substantially
identical to those terms of the outstanding old
notes, except that the transfer restrictions
and registration rights relating to the old
notes do not apply to the new notes.
Exchange Offer................ We are offering to exchange up to $325 million
principal amount of our 8 7/8% Series B Senior
Notes due July 15, 2012 which have been
registered under the Securities Act for an
equal amount of our outstanding 8 7/8% Series A
Senior Notes due July 15, 2012, to satisfy our
obligations under the registration rights
agreement that we entered into when the old
notes were sold in transactions exempt from
registration under the Securities Act.
1
Expiration Date; Tenders...... The exchange offer will expire at 5:00 p.m.,
New York City time, on , 2003, unless
extended. By tendering your old notes, you
represent to us that:
- you are not our "affiliate" as defined in
Rule 405 under the Securities Act;
- any new notes you receive in the exchange
offer are being acquired by you in the
ordinary course of your business;
- at the time of commencement of the exchange
offer, neither you nor, to your knowledge,
anyone receiving new notes from you, has any
arrangement or understanding with any person
to participate in the distribution of the new
notes, as defined in the Securities Act, in
violation of the Securities Act;
- if you are not a participating broker-dealer,
you are not engaged in, and do not intend to
engage in, the distribution of the new notes,
as defined in the Securities Act; and
- if you are a broker-dealer, you will receive
the new notes for your own account in
exchange for old notes that were acquired by
you as a result of your market-making or
other trading activities and that you will
deliver a prospectus in connection with any
resale of the new notes you receive. For
further information regarding resales of the
new notes by participating broker-dealers,
see the discussion below under the caption
"Plan of Distribution."
Withdrawal; Non-Acceptance.... You may withdraw any old notes tendered in the
exchange offer at any time prior to 5:00 p.m.,
New York City time, on , 2003. If we
decide for any reason not to accept any old
notes tendered for exchange, the old notes will
be returned to the registered holder at our
expense promptly after the expiration or
termination of the exchange offer. In the case
of old notes tendered by book-entry transfer
into the exchange agent's account at The
Depository Trust Company, any withdrawn or
unaccepted old notes will be credited to the
tendering holder's account at The Depository
Trust Company. For further information
regarding the withdrawal of tendered old notes,
see "The Exchange Offer -- Terms of the
Exchange Offer; Period for Tendering Old Notes"
and "-- Withdrawal Rights."
Conditions to the Exchange
Offer......................... The exchange offer is subject to customary
conditions, which we may waive. See the
discussion below under the caption "The
Exchange Offer -- Conditions to the Exchange
Offer" for more information regarding the
conditions to the exchange offer.
Procedures for Tendering Old
Notes......................... Unless you comply with the procedures described
below under the caption "The Exchange
Offer -- Guaranteed Delivery Procedures," you
must do one of the following on or prior to the
expiration of the exchange offer to participate
in the exchange offer:
- tender your old notes by sending the
certificates for your old notes, in proper
form for transfer, a properly completed and
duly executed letter of transmittal, with any
required signature
2
guarantees, and all other documents required
by the letter of transmittal, to Wells Fargo
Bank, N.A., as exchange agent, at one of the
addresses listed below under the caption "The
Exchange Offer -- Exchange Agent"; or
- tender your old notes by using the book-entry
transfer procedures described below and
transmitting a properly completed and duly
executed letter of transmittal, with any
required signature guarantees, or an agent's
message instead of the letter of transmittal,
to the exchange agent. In order for a
book-entry transfer to constitute a valid
tender of your old notes in the exchange
offer, Wells Fargo Bank, N.A., as exchange
agent, must receive a confirmation of
book-entry transfer of your old notes into
the exchange agent's account at The
Depository Trust Company prior to the
expiration of the exchange offer. For more
information regarding the use of book-entry
transfer procedures, including a description
of the required agent's message, see the
discussion below under the caption "The
Exchange Offer -- Procedures for Tendering
Old Notes" and "-- Book Entry Transfer."
Guaranteed Delivery
Procedures.................... If you are a registered holder of the old notes
and wish to tender your old notes in the
exchange offer, but
- the old notes are not immediately available,
- time will not permit your old notes or other
required documents to reach the exchange
agent before the expiration of the exchange
offer, or
- the procedure for book-entry transfer cannot
be completed prior to the expiration of the
exchange offer,
then you may tender old notes by following the
procedures described below under the caption
"The Exchange Offer -- Guaranteed Delivery
Procedures."
Special Procedures for
Beneficial Owners............. If you are a beneficial owner whose old notes
are registered in the name of a broker, dealer,
commercial bank, trust company or other nominee
and you wish to tender your old notes in the
exchange offer, you should promptly contact the
person in whose name the old notes are
registered and instruct that person to tender
on your behalf.
If you wish to tender in the exchange offer on
your own behalf, prior to completing and
executing the letter of transmittal and
delivering your old notes, you must either make
appropriate arrangements to register ownership
of the old notes in your name or obtain a
properly completed bond power from the person
in whose name the old notes are registered.
United States Federal Income
Tax Considerations............ The exchange of old notes for new notes in the
exchange offer will not be a taxable
transaction for United States federal income
tax purposes. See the discussion below under
the caption "Material United States Federal
Income Tax Considerations" for
3
more information regarding the tax consequences
to you of the exchange offer.
Use of Proceeds............... We will not receive any cash proceeds from the
exchange offer.
Exchange Agent................ Wells Fargo Bank, N.A. is the exchange agent
for the exchange offer. You can find the
addresses and telephone number of the exchange
agent below under the caption "The Exchange
Offer -- Exchange Agent."
Resales....................... Based on interpretations by the staff of the
SEC, as set forth in no-action letters issued
to third parties, we believe that the new notes
you receive in the exchange offer may be
offered for resale, resold or otherwise
transferred without compliance with the
registration and prospectus delivery provisions
of the Securities Act so long as:
- you are not our "affiliate," as defined in
Rule 405 under the Securities Act;
- you are acquiring the new notes in the
exchange offer in the ordinary course of your
business; and
- you do not have an arrangement or
understanding with any person to participate
in the distribution, as defined in the
Securities Act of the new notes, you will
receive in the exchange offer.
You must represent that you meet the above
three requirements if you wish to exchange old
notes for new notes in the exchange offer.
If you are our "affiliate" or are engaged in or
intend to engage in or have any arrangement or
understanding with any person to participate in
the distribution of the new notes:
- you cannot rely on the applicable
interpretations of the staff of the SEC;
- you will not be permitted or entitled to
tender the old notes in the exchange offer;
and
- you must comply with the registration and
prospectus delivery requirements of the
Securities Act in connection with any resale
transaction.
A broker-dealer that receives new notes for its
own account in the exchange offer for old notes
that were acquired as a result of market-making
or other trading activities must acknowledge
that it will comply with the registration and
prospectus delivery requirements of the
Securities Act in connection with any offer to
resell, resale or other transfer of the new
notes issued in the exchange offer, including
the delivery of a prospectus that contains
information with respect to any selling holder
required by the Securities Act in connection
with any resale of the new notes. Furthermore,
any broker-dealer that acquired any of its old
notes directly from us:
4
- cannot rely on the applicable interpretations
of the staff of the SEC; and
- will not be permitted or entitled to tender
the old notes in the exchange offer;
- must comply with the registration and
prospectus delivery requirements of the
Securities Act in connection with any resale
transaction.
Please read "The Exchange Offer -- Consequences
of Exchanging or Failing to Exchange Old
Notes."
CONSEQUENCES OF NOT EXCHANGING OLD NOTES
If you do not exchange your old notes in the exchange offer, your old notes
will continue to be subject to the restrictions on transfer described in the
legend on the certificate for your old notes. In general, you may offer or sell
your old notes only:
- if they are registered under the Securities Act and applicable state
securities laws;
- if they are offered or sold under an exemption from registration under
the Securities Act and applicable state securities laws; or
- if they are offered or sold in a transaction not subject to the
Securities Act and applicable state securities laws.
We do not currently intend to register the old notes under the Securities
Act. Under some circumstances, however, holders of the old notes, including
holders who are not permitted to participate in the exchange offer or who may
not freely resell new notes received in the exchange offer, may require us to
file, and cause to become effective, a shelf registration statement covering
resales of old notes by these holders. For more information regarding the
consequences of not tendering your old notes and our obligation to file a shelf
registration statement, see "The Exchange Offer -- Consequences of Exchanging or
Failing to Exchange Old Notes" and "Exchange Offer; Registration Rights."
SUMMARY DESCRIPTION OF THE NEW NOTES
The terms of the new notes and those of the outstanding old notes are
substantially identical, except that the transfer restrictions and registration
rights relating to the old notes do not apply to the new notes. In addition, if
- we do not file a registration statement on or prior to September 16,
2002,
- this registration statement is not declared effective on or prior to
October 31, 2002 or the exchange offer is not completed within 60 days
after the registration statement is declared effective,
- the exchange offer is not consummated by December 30, 2002,
- we are obligated to file a shelf registration statement and we fail to do
so prior to the 75th day after the obligation arises or the shelf
registration statement is not declared effective prior to the 60th day
after the date of filing, or
- if the shelf registration statement ceases to be effective or usable,
we agree to pay liquidated damages in an amount equal to 0.25% per annum of the
principal amount of old notes for the first 90-day period immediately following
a default, increasing to 0.50% per annum thereafter.
We did not file this registration statement on or prior to September 16,
2002, nor was it declared effective on or prior to October 31, 2002. Therefore,
liquidated damages have been accruing since
5
September 17, 2002. The liquidated damages will cease to accrue as of the date
of this prospectus. However, since the exchange offer will not be consummated by
December 30, 2002, liquidated damages will begin to accrue from December 31,
2002 until such time as the exchange offer is consummated.
Issuer........................ Transcontinental Gas Pipe Line Corporation
Securities Offered............ $325 million aggregate principal amount of
8 7/8% Series B Senior Notes due 2012. The
notes will mature on July 15, 2012.
Interest...................... Interest on the new notes will accrue at the
rate of 8 7/8% per annum and will be payable
semiannually on January 15 and July 15 of each
year, commencing on January 15, 2003.
Ranking....................... The new notes will be our unsecured and
unsubordinated obligations and will rank
equally with our other existing and future
unsecured and unsubordinated indebtedness.
Sinking Fund.................. None.
Optional Redemption........... We may redeem some or all of the notes at any
time at the "make-whole" price, plus accrued
and unpaid interest, if any, to the redemption
date. See the discussion below under the
caption "Description of Notes -- Terms and
Conditions of the Notes -- Optional Redemption"
for more information.
Covenants..................... The terms of the new notes will restrict our
ability to:
- incur liens on our property;
- enter into any sale and lease-back
transactions; and
- consolidate or merge or sell assets.
These limitations are subject to a number of
important qualifications and exceptions which
are described in "Description of Notes -- Terms
and Conditions of the Notes -- Covenants."
Events of Default............. If there is an event of default on the notes,
the principle amount of the notes plus accrued
interest, if any, may be declared immediately
due and payable in specified circumstances. See
"Description of Notes -- Terms and Conditions
of the Notes -- Events of Default."
RISK FACTORS
You should carefully consider all of the information contained in this
prospectus before deciding to tender your old notes in the exchange offer. In
particular, you should carefully review the specific factors described below
under the caption "Risk Factors," which contain important information about us
and the risks that may affect our business.
6
RISK FACTORS
You should consider carefully the following factors, as well as the other
information set forth or incorporated by reference in the prospectus (including
the risks and other disclosure that are presented in our Annual Report on Form
10-K for the year ended December 31, 2001), before tendering your old notes in
the exchange offer. When we use the term "notes" in this prospectus, the term
includes the old notes and the new notes.
HOLDERS WHO FAIL TO EXCHANGE THEIR OLD NOTES WILL CONTINUE TO BE SUBJECT TO
RESTRICTIONS ON TRANSFER.
If you do not exchange your old notes for new notes in the exchange offer,
you will continue to be subject to the restrictions on transfer of your old
notes described in the legend on the certificates for your old notes. The
restrictions on transfer of your old notes arise because we issued the old notes
under exemptions from, or in transactions not subject to, the registration
requirements of the Securities Act and applicable state securities laws. In
general, you may only offer or sell the old notes if they are registered under
the Securities Act and applicable state securities laws, or are offered and sold
under an exemption from these requirements. We do not plan to register any sale
of the old notes under the Securities Act unless required to do so under the
Registration Rights Agreement. For further information regarding the
consequences of tendering your old notes in the exchange offer, see the
discussions below under the captions "The Exchange Offer -- Consequences of
Exchanging or Failing to Exchange Old Notes" and "Material United States Federal
Income Tax Considerations."
We believe that new notes issued in exchange for old notes pursuant to the
exchange offer may be offered for resale, resold or otherwise transferred by you
without registering the new notes under the Securities Act or delivering a
prospectus so long as you (1) are not one of our "affiliates," which is defined
in Rule 405 of the Securities Act; (2) acquire the new notes in the ordinary
course of your business and, (3) unless you are a broker dealer, you do not have
any arrangement or understanding with any person to participate in the
distribution of the new notes. Our belief is based on interpretations by the
SEC's staff in no-action letters issued to third parties. Please note that the
SEC has not considered our exchange offer in the context of a no-action letter,
and the SEC's staff may not make a similar determination with respect to our
exchange offer.
Unless you are a broker-dealer, you must acknowledge that you are not
engaged in, and do not intend to engage in, a distribution of the new notes and
that you have no arrangement or understanding to participate in a distribution
of the new notes. If you are one of our affiliates, or you are engaged in,
intend to engage in or have any arrangement or understanding with respect to,
the distribution of new notes acquired in the exchange offer, you (1) should not
rely on our interpretations of the position of the SEC's staff, (2) will not be
permitted or entitled to tender the old notes in the exchange offer and (3) must
comply with the registration and prospectus delivery requirement of the
Securities Act in connection with any resale transaction.
If you are a broker-dealer and receive new notes for your own account
pursuant to the exchange offer, you must acknowledge that you will deliver a
prospectus in connection with any resale of the new notes. The letter of
transmittal states that by so acknowledging and by delivering a prospectus, you
will not be deemed to admit that you are an "underwriter" within the meaning of
the Securities Act. If you are a broker-dealer, you may use this prospectus, as
it may be amended or supplemented from time to time, in connection with the
resale of new notes received in exchange for old notes acquired by you as a
result of market-making or other trading activities. For a period of 180 days
after the expiration or termination of the exchange offer, we will make this
prospectus available to any broker-dealer for use in connection with any resale.
See "Plan of Distribution."
In addition, you may offer or sell the new notes in certain jurisdictions
only if they have been registered or qualified for sale there, or an exemption
from registration or qualification is available and is complied with. Subject to
the limitations specified in the registration rights agreements relating to the
old notes, we will register or qualify the new notes for offer or sale under the
securities laws of any jurisdictions that you reasonably request in writing.
Unless you request that the sale of the new notes be
7
registered or qualified in a jurisdiction, we currently do not intend to
register or qualify the sale of the new notes in any jurisdiction.
YOU MAY FIND IT DIFFICULT TO SELL YOUR NOTES.
There is no established trading market for the new notes or the old notes.
We do not intend to apply for listing of the new notes on any national
securities exchange or for quotation through The Nasdaq National Market. The
liquidity of any market for the new notes will depend upon the number of holders
of the new notes, our performance, the market for similar securities, the
interest of securities dealers in making a market in the new notes and other
factors relating to us. A liquid trading market may not develop for the new
notes. In addition, to the extent old notes are tendered and accepted in the
exchange offer, the trading market, if any, for the old notes would be adversely
affected.
YOU MUST COMPLY WITH THE EXCHANGE OFFER PROCEDURES IN ORDER TO RECEIVE NEW,
FREELY TRADABLE NOTES.
Subject to the conditions set forth under "The Exchange Offer -- Conditions
to the Exchange Offer," delivery of new notes in exchange for old notes tendered
and accepted for exchange pursuant to the exchange offer will be made only after
timely receipt by the exchange agent of the following:
- certificates for old notes or a book-entry confirmation of a book-entry
transfer of old notes into the exchange agent's account at The Depository
Trust Company, New York, New York as depository, including an agent's
message (as defined) if the tendering holder does not deliver a letter of
transmittal;
- a completed signed letter of transmittal (or facsimile thereof), with any
required signature guarantees, or, in the case of a book-entry transfer,
an agent's message in lieu of the letter of transmittal; and
- any other documents required by the letter of transmittal.
Therefore, holders of old notes who would like to tender old notes in
exchange for new notes should be sure to allow enough time for the old notes to
be delivered on time. We are not required to notify you of defects or
irregularities in tenders of old notes for exchange. Old notes that are not
tendered or that are tendered but we do not accept for exchange will, following
consummation of the exchange offer, continue to be subject to the existing
transfer restrictions under the Securities Act and, upon consummation of the
exchange offer, certain registration and other rights under the registration
rights agreement will terminate. See "The Exchange Offer -- Procedures for
Tendering Old Notes" and "The Exchange Offer -- Consequences of Exchanging or
Failing to Exchange Old Notes."
SOME HOLDERS WHO EXCHANGE THEIR NOTES MAY BE DEEMED TO BE UNDERWRITERS.
If you exchange your old notes in the exchange offer for the purpose of
participating in a distribution of the new notes, you may be deemed to have
received restricted securities and, if so, will be required to comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with any resale transaction.
8
USE OF PROCEEDS
We will not receive any proceeds from the exchange offer. In consideration
for issuing the new notes as contemplated in this prospectus, we will receive in
exchange outstanding old notes in like principal amount. We will cancel all old
notes surrendered in exchange for new notes in the exchange offer.
CAPITALIZATION
The following table sets forth our capitalization as of September 30, 2002.
<Table>
<Caption>
AS OF
SEPTEMBER 30,
2002
--------------
(IN THOUSANDS)
Cash........................................................ $ 808
==========
Long-term debt due within one year.......................... $ --
Long-term debt, less amounts due within one year............ 1,122,941
----------
Total debt........................................ 1,122,941
----------
Common stockholder's equity:
Common stock and paid-in capital.......................... 1,652,430
Retained earnings......................................... 1,001,006
Accumulated other comprehensive loss...................... (1,661)
----------
Total common stockholder's equity................. 2,651,775
----------
Total capitalization.............................. $3,774,716
==========
</Table>
On November 15, 2002, our parent, Williams Gas Pipeline Company, LLC,
repaid an intercompany loan to us in the amount of $200 million. On the same
date, we paid a cash dividend in the amount of $200 million to Williams Gas
Pipeline Company, LLC.
RATIOS OF EARNINGS TO FIXED CHARGES
The following table sets forth our ratios of earnings to fixed charges for
the periods shown:
<Table>
<Caption>
NINE MONTHS
YEAR ENDED DECEMBER 31, ENDED
-------------------------------- SEPTEMBER 30,
1997 1998 1999 2000 2001 2002
---- ---- ---- ---- ---- -------------
Earnings/Fixed Charges................. 3.34 3.18 4.31 4.62 3.26 3.99
</Table>
For purposes of computing the ratio of earnings to fixed charges, earnings
are divided by fixed charges. "Earnings" represent the aggregate of (a) our
pre-tax income, adjusted for distributed income of equity investees, and (b)
fixed charges, net of interest capitalized. "Fixed charges" represent interest
(whether expensed or capitalized), the amortization of total debt premium,
discount and expense and that portion of rentals considered to be representative
of the interest factor.
9
SELECTED FINANCIAL AND OPERATING DATA
The following table presents selected income data, cash flow data, and
balance sheet data for Transcontinental Gas Pipe Line for each of the periods
indicated. The selected financial data as of December 31, 2001 and 2000 and for
each of the years ended December 31, 2001, 2000 and 1999 has been derived from
our audited consolidated financial statements which are incorporated by
reference in this prospectus. The selected financial data as of December 31,
1999, 1998 and 1997 and for the years ended December 31, 1998 and 1997 has been
derived from our audited consolidated financial statements not included, or
incorporated by reference, herein. The selected financial data as of September
30, 2002 and for each of the nine months ended September 30, 2002 and 2001 has
been derived from our unaudited consolidated financial statements which are
incorporated by reference in this prospectus. The selected financial data as of
September 30, 2001 has been derived from our unaudited consolidated financial
statements not included, or incorporated by reference, in this prospectus. The
selected consolidated financial data should be read in conjunction with such
financial statements, the notes thereto and the related management's narrative
analysis of the results of operations.
<Table>
<Caption>
NINE MONTHS ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
--------------------------------------------------------------- -----------------------
1997 1998 1999 2000 2001 2001 2002
---------- ---------- ---------- ----------- ---------- ---------- ----------
(IN THOUSANDS, EXCEPT OPERATING DATA) (UNAUDITED)
INCOME DATA:
Operating revenues............ $1,443,299 $1,325,136 $1,543,456 $ 2,016,236 $1,481,008 $1,184,437 $ 926,028
Operating expenses:
Cost of natural gas sales
and transportation........ (705,597) (567,587) (741,284) (1,186,946) (690,110) (587,599) (278,867)
Operation and maintenance... (185,175) (172,769) (172,912) (175,479) (184,985) (137,639) (130,176)
Administrative and
general................... (124,145) (120,632) (130,027) (126,147) (126,144) (92,959) (111,066)
Depreciation and
amortization.............. (157,883) (151,387) (161,480) (165,877) (174,220) (130,062) (140,221)
Taxes other than income
taxes..................... (36,745) (34,392) (34,927) (37,904) (39,263) (30,112) (30,533)
Other....................... (1,787) (4,632) (5,601) (11,964) (30,709) (10,936) (2,595)
---------- ---------- ---------- ----------- ---------- ---------- ----------
Operating income.............. 231,967 273,737 297,225 311,919 235,577 195,130 232,570
Other income and deductions:
Interest expense............ (71,639) (91,655) (70,558) (76,871) (88,744) (50,375) (69,203)
Interest income............. 9,263 27,382 25,775 40,059 17,542 14,768 10,946
AFUDC (equity and
borrowed)................. 7,771 9,792 5,542 17,522 28,963 19,990 21,752
Equity in earnings of
unconsolidated
affiliates................ 504 239 3,214 8,117 8,447 6,369 5,882
Impairment of investment in
unconsolidated
affiliate................. -- -- -- -- -- -- (12,275)
Other....................... (2,744) (4,520) (1,091) 6,861 13,041 9,346 22,055
---------- ---------- ---------- ----------- ---------- ---------- ----------
Income before income taxes and
extraordinary item.......... 175,122 214,975 260,107 307,607 214,826 195,228 211,727
Provision for income taxes.... (66,594) (79,281) (98,920) (115,806) (82,250) (74,413) (80,803)
---------- ---------- ---------- ----------- ---------- ---------- ----------
Income before extraordinary
item........................ 108,528 135,694 161,187 191,801 132,576 120,815 130,924
Extraordinary item-net gain on
reacquired debt............. 2,860 -- -- -- -- -- --
---------- ---------- ---------- ----------- ---------- ---------- ----------
Net income.................... $ 111,388 $ 135,694 $ 161,187 $ 191,801 $ 132,576 $ 120,815 $ 130,924
========== ========== ========== =========== ========== ========== ==========
CASH FLOW DATA:
Net cash provided by operating
activities.................. $ 315,794 $ 297,046 $ 303,761 $ 290,552 $ 160,632 $ 102,896 $ 371,191
Capital expenditures.......... 242,800 303,700 185,400 339,100 381,700 319,400 404,100
OPERATING DATA:
Transportation volumes
(trillion British Thermal
Units)...................... 1,621.1 1,593.9 1,664.6 1,759.1 1,613.0 1,200.1 1,311.3
BALANCE SHEET DATA (AT END OF
PERIOD):
Net property, plant and
equipment................... $3,499,953 $3,643,382 $3,661,040 $ 3,809,632 $4,034,566 $4,001,301 $4,295,531
Total assets.................. 4,267,663 4,531,957 4,664,403 4,819,028 4,972,985 4,845,759 5,203,332
Long-term debt, including
current maturities.......... 837,832 975,768 975,330 974,850 1,081,050 1,081,172 1,122,941
Common stockholder's equity... 1,926,347 2,062,041 2,223,228 2,393,413 2,521,940 2,513,179 2,651,775
</Table>
10
THE EXCHANGE OFFER
TERMS OF THE EXCHANGE OFFER; PERIOD FOR TENDERING OLD NOTES
On July 3, 2002, we issued an aggregate principal amount of $325 million of
our 8 7/8% Senior Notes due July 15, 2012 in a private placement to Salomon
Smith Barney Inc. and other institutions as initial purchasers. Salomon Smith
Barney and the other institutions then resold the notes in an unregistered
offering pursuant to Rule 144A and Regulation S under the Securities Act. The
old notes were issued and the new notes will be issued, under an indenture
relating to the notes, dated July 3, 2002. The trustee under the indenture was
originally Citibank, N.A. Citibank, N.A. has been replaced as trustee by Wells
Fargo Bank, N.A. We sold the old notes to Salomon Smith Barney Inc. and other
institutions, as initial purchasers, under a purchase agreement, dated June 28,
2002, by and between Salomon Smith Barney Inc., the other institutions parties
thereto and us. When we sold the old notes to Salomon Smith Barney Inc. and the
other institutions we also signed a registration rights agreement in which we
agreed to exchange all the issued and outstanding old notes for a like principal
amount of our new notes. The terms of the new notes are substantially identical
to those of the outstanding old notes, except that the transfer restrictions and
registration rights relating to the old notes do not apply to the new notes.
Subject to the terms and conditions set forth in this prospectus and in the
letter of transmittal, we are offering to exchange up to $325 million in
aggregate principal amount of our 8 7/8% Series B Senior Notes due July 15, 2012
for an equal amount of our outstanding 8 7/8% Series A Senior Notes due July 15,
2012.
This prospectus and the enclosed letter of transmittal constitute an offer
to exchange new notes for all of the issued and outstanding old notes. This
exchange offer is being extended to all holders of the old notes. As of the date
of this prospectus, $325 million aggregate principal amount of 8 7/8% Series A
Senior Notes due July 15, 2012 are outstanding. This prospectus and the enclosed
letter of transmittal are first being sent on or about , 2002, to
all holders of old notes known to us. Subject to the conditions listed below, we
will accept for exchange all old notes which are properly tendered on or prior
to the expiration of the exchange offer and not withdrawn as permitted below.
The exchange offer will expire at 5:00 p.m., New York City time, on ,
2003. However, if we, in our sole discretion, extend the period of time during
which the exchange offer is open, the exchange offer will expire at the latest
time and date to which we extend the exchange offer. Our obligation to accept
old notes for exchange in the exchange offer is subject to the conditions listed
below under the caption "-- Conditions to the Exchange Offer."
We expressly reserve the right, at any time and from time to time, to
extend the period of time during which the exchange offer is open, and thereby
delay acceptance for exchange of any old notes. If we elect to extend the period
of time during which the exchange offer is open, we will give you oral or
written notice of the extension and delay, as described below. During any
extension of the exchange offer, all old notes previously tendered and not
withdrawn will remain subject to the exchange offer and may be accepted for
exchange by us. We will return to the registered holder, at our expense, any old
notes not accepted for exchange as promptly as practicable after the expiration
or termination of the exchange offer. In the case of an extension, we will issue
a press release or other public announcement no later than 9:00 a.m., New York
City time, on the next business day after the previously scheduled expiration of
the exchange offer.
We expressly reserve the right to amend or terminate the exchange offer,
and not to accept for exchange any old notes not previously accepted for
exchange if any of the events described below under the caption "-- Conditions
to the Exchange Offer" should occur. We will give you oral or written notice of
any amendment, termination or non-acceptance as promptly as practicable.
Following completion of the exchange offer, we may, in our sole discretion,
commence one or more additional exchange offers to those old note holders who
did not exchange their old notes for new notes. The terms of these additional
exchange offers may differ from those applicable to this exchange offer. We may
use this prospectus, as amended or supplemented from time to time, in connection
with any additional exchange offers. These additional exchange offers may take
place from time to time until all
11
outstanding old notes have been exchanged for new notes, subject to the terms
and conditions contained in the prospectus and letter of transmittal we will
distribute in connection with the additional exchange offers.
PROCEDURES FOR TENDERING OLD NOTES
Old notes tendered in the exchange offer must be in denominations of $1,000
principal amount and any integral multiple thereof.
When you tender your old notes, and we accept the old notes, this will
constitute a binding agreement between you and us subject to the terms and
conditions set forth in this prospectus and the enclosed letter of transmittal.
Unless you comply with the procedures described below under the caption
"-- Guaranteed Delivery Procedures," you must do one of the following on or
prior to the expiration of the exchange offer to participate in the exchange
offer:
- tender your old notes by sending the certificates for your old notes, in
proper form for transfer, a properly completed and duly executed letter
of transmittal, with any required signature guarantees, and all other
documents required by the letter of transmittal, to Wells Fargo Bank,
N.A., as exchange agent, at one of the addresses listed below under the
caption "-- Exchange Agent"; or
- tender your old notes by using the book-entry procedures described below
under the caption "-- Book-Entry Transfer" and transmitting a properly
completed and duly executed letter of transmittal, with any required
signature guarantees, or an agent's message instead of the letter of
transmittal, to Wells Fargo Bank, N.A., as exchange agent, at one of the
addresses listed below under the caption "-- Exchange Agent."
In order for a book-entry transfer to constitute a valid tender of your old
notes in the exchange offer, the exchange agent must receive a confirmation of
book-entry transfer of your old notes into the exchange agent's account at The
Depository Trust Company prior to the expiration of the exchange offer. The term
"agent's message" means a message, transmitted by The Depository Trust Company
and received by the exchange agent and forming a part of the book-entry
confirmation, which states that The Depository Trust Company has received an
express acknowledgment from you that you have received and have agreed to be
bound by the letter of transmittal. If you use this procedure, we may enforce
the letter of transmittal against you.
THE METHOD OF DELIVERY OF CERTIFICATES FOR OLD NOTES, LETTERS OF
TRANSMITTAL, AGENT'S MESSAGES AND ALL OTHER REQUIRED DOCUMENTS IS AT YOUR
ELECTION. IF YOU DELIVER YOUR OLD NOTES BY MAIL, WE RECOMMEND REGISTERED MAIL,
PROPERLY INSURED, WITH RETURN RECEIPT REQUESTED. IN ALL CASES, YOU SHOULD ALLOW
SUFFICIENT TIME TO ASSURE TIMELY DELIVERY. DO NOT SEND CERTIFICATES FOR OLD
NOTES, LETTERS OF TRANSMITTAL OR AGENT'S MESSAGES TO US.
Signatures on a letter of transmittal or a notice of withdrawal, as the
case may be, must be guaranteed unless you are either a registered old note
holder and have not completed the box entitled "Special Issuance Instructions"
or "Special Delivery Instructions" on the letter of transmittal or you are
exchanging old notes for the account of an eligible guarantor institution. An
eligible guarantor institution means:
- Banks (as defined in Section 3(a) of the Federal Deposit Insurance Act);
- Brokers, dealers, municipal securities dealers, municipal securities
brokers, government securities dealers and government securities brokers
(as defined in the Exchange Act);
- Credit unions (as defined in Section 19B(1)(A) of the Federal Reserve
Act);
- National securities exchanges, registered securities associations and
clearing agencies (as these terms are defined in the Exchange Act); and
- Savings associations (as defined in Section 3(b) of the Federal Deposit
Insurance Act).
12
If signatures on a letter of transmittal or a notice of withdrawal are
required to be guaranteed, the guarantor must be an eligible guarantor
institution. If you plan to sign the letter of transmittal but you are not the
registered holder of the old notes -- which term, for this purpose, includes any
participant in The Depository Trust Company's system whose name appears on a
security position listing as the owner of the old notes -- you must have the old
notes signed by the registered holder of the old notes and that signature must
be guaranteed by an eligible guarantor institution. You may also send a separate
instrument of transfer or exchange signed by the registered holder and
guaranteed by an eligible guarantor institution, but that instrument must be in
a form satisfactory to us in our sole discretion. In addition, if a person or
persons other than the registered holder or holders of old notes signs the
letter of transmittal, certificates for the old notes must be endorsed or
accompanied by appropriate bond powers, in either case signed exactly as the
name or names of the registered holder or holders that appear on the
certificates for old notes.
All questions as to the validity, form, eligibility -- including time of
receipt -- and acceptance of old notes tendered for exchange will be determined
by us in our sole discretion. Our determination will be final and binding. We
reserve the absolute right to reject any and all tenders of old notes improperly
tendered or to not accept any old notes, the acceptance of which might be
unlawful as determined by us or our counsel. We also reserve the absolute right
to waive any defects or irregularities or conditions of the exchange offer as to
any old notes either before or after the expiration of the exchange
offer -- including the right to waive the ineligibility of any holder who seeks
to tender old notes in the exchange offer. Our interpretation of the terms and
conditions of the exchange offer as to any particular old notes either before or
after the expiration of the exchange offer -- including the terms and conditions
of the letter of transmittal and the accompanying instructions -- will be final
and binding. Unless waived, any defects or irregularities in connection with
tenders of old notes for exchange must be cured within a reasonable period of
time, as determined by us. Neither we, Wells Fargo Bank, N.A., as exchange
agent, nor any other person has any duty to give notification of any defect or
irregularity with respect to any tender of old notes for exchange, nor will we
have any liability for failure to give this notification.
If you are a trustee, executor, administrator, guardian, attorney-in-fact,
officer of a corporation, or act in a similar fiduciary or representative
capacity, and wish to sign the letter of transmittal or any certificates for old
notes or bond powers, you must indicate your status when signing. If you are
acting in any of these capacities, you must submit proper evidence satisfactory
to us of your authority to so act unless we waive this requirement.
By tendering your old notes, you represent to us:
- that you are not our "affiliate" as defined in Rule 405 under the
Securities Act;
- that any new notes you receive in the exchange offer are being acquired
by you in the ordinary course of your business;
- that at the time of the commencement of the exchange offer, you do not
have any arrangement or understanding with any person to participate in
the distribution of the new notes, as defined in the Securities Act, in
violation of the Securities Act;
- if you are not a participating broker-dealer, that you are not engaged
in, and do not intend to engage in, the distribution of the new notes, as
defined in the Securities Act; and
- if you are a participating broker-dealer, that you will receive the new
notes for your own account in exchange for old notes that were acquired
by you as a result of your market-making or other trading activities and
that you will deliver a prospectus in connection with any resale of the
new notes you receive. As used in this prospectus, a "participating
broker-dealer" is a broker-dealer that receives new notes for its own
account in exchange for old notes that it acquired as a result of
market-making or other trading activities. The SEC has taken the position
that participating broker-dealers may fulfill their prospectus delivery
requirements with respect to resales of the new notes -- other than a
resale of an unsold allotment from the original sale of the old
notes -- by
13
delivering this prospectus to prospective purchasers. For further
information regarding participating broker-dealers and the prospectus
delivery requirement, see "Plan of Distribution."
ACCEPTANCE OF OLD NOTES FOR EXCHANGE; DELIVERY OF NEW NOTES
Upon satisfaction or waiver of all of the conditions to the exchange offer,
we will accept, promptly after the expiration of the exchange offer, all old
notes properly tendered and will issue the new notes promptly after the
acceptance of the old notes. For purposes of the exchange offer, we will be
deemed to have accepted properly tendered old notes for exchange when, as and if
we have given oral or written notice of acceptance to Wells Fargo Bank, N.A., as
exchange agent, with written confirmation of any oral notice to be given
promptly after any oral notice.
For each outstanding note accepted for exchange in the exchange offer, the
holder of the old note will receive a new note having a principal amount at
maturity equal to that of the surrendered old note. Interest on the new note
will accrue:
- from the later of the last date to which interest was paid on the old
note surrendered in the exchange for the new note or if the old note is
surrendered for exchange on a date in a period which includes the record
date for an interest payment date to occur on or after the date of the
exchange and as to which interest will be paid, the date to which
interest will be paid on such interest payment date; or
- if no interest has been paid on the old note, from and including July 3,
2002.
Payments of interest, if any, on old notes that were exchanged for new
notes will be made on each January 15 and July 15 during which the new notes are
outstanding to the person who, at the close of business on the record date next
preceding the interest payment date, is the registered holder of the old notes
if the record date occurs prior to the exchange, or is the registered holder of
the new notes if the record date occurs on or after the date of the exchange,
even if the old notes are cancelled after the record date and on or before the
interest payment date.
In addition, if
- we do not file a registration statement on or prior to September 16,
2002,
- this registration statement is not declared effective on or prior to
October 31, 2002 or the exchange offer is not completed within 60 days
after the registration statement is declared effective,
- the exchange offer is not consummated by December 30, 2002,
- we are obligated to file a shelf registration statement and we fail to do
so prior to the 75th day after the obligation arises or the shelf
registration statement is not declared effective prior to the 60th day
after the date of filing, or
- if the shelf registration statement ceases to be effective or usable,
(each a "Registration Default") then we agree to pay each holder of transfer
restricted securities affected thereby liquidated damages in an amount equal to
0.25% per annum of the principal amount of transfer restricted securities held
by such holder for the first 90-day period immediately following the occurrence
of a Registration Default, increasing to 0.50% per annum thereafter, from and
including the date on which any such registration default shall occur. We shall
not be required to pay liquidated damages for more than one Registration Default
at any given time. Following the cure of all Registration Defaults, the accrual
of liquidated damages will cease.
We did not file this registration statement on or prior to September 16,
2002, nor was it declared effective on or prior to October 31, 2002. Therefore,
liquidated damages have been accruing since September 17, 2002. The liquidated
damages will cease to accrue as of the date of this prospectus. However, since
the exchange offer will not be consummated by December 30, 2002, liquidated
damages will begin to accrue from December 31, 2002 until such time as the
exchange offer is consummated.
14
In all cases, the issuance of new notes in exchange for old notes will be
made only after Wells Fargo Bank, N.A., as exchange agent, timely receives
either certificates for all physically tendered old notes, in proper form for
transfer, or a book-entry confirmation of transfer of the old notes into the
exchange agent's account at The Depository Trust Company, as the case may be, a
properly completed and duly executed letter of transmittal, with any required
signature guarantees, and all other required documents or, in the case of a
book-entry confirmation, a properly completed and duly executed letter of
transmittal, with any required signature guarantees, or an agent's message
instead of the letter of transmittal. If for any reason we do not accept any
tendered old notes or if old notes are submitted for a greater principal amount
than the holder desires to exchange, we will return the unaccepted or
non-exchanged old notes without expense to the registered holder. In the case of
old notes tendered by book-entry transfer into the exchange agent's account at
The Depository Trust Company by using the book-entry procedures described below,
the unaccepted or non-exchanged old notes will be credited to an account
maintained with The Depository Trust Company. Any old notes to be returned to
the holder will be returned as promptly as practicable after the expiration or
termination of the exchange offer.
BOOK-ENTRY TRANSFER
BOOK-ENTRY, DELIVERY AND FORM
The exchange agent will make a request to establish an account for the old
notes at DTC for purposes of the exchange offer within two business days after
the date of this prospectus. Any financial institution that is a participant in
DTC's systems must make book-entry delivery of old notes by causing DTC to
transfer those old notes into the exchange agent's account at DTC in accordance
with DTC's procedure for transfer. The participant should transmit its
acceptance to DTC at or prior to the expiration time or comply with the
guaranteed delivery procedures described below. DTC will verify this acceptance,
execute a book-entry transfer of the tendered old notes into the exchange
agent's account at DTC and then send to the exchange agent confirmation of this
book-entry transfer. The confirmation of this book-entry transfer will include
an agent's message confirming that DTC has received an express acknowledgment
from this participant that this participant has received and agrees to be bound
by the letter of transmittal and that we may enforce the letter of transmittal
against this participant.
Delivery of new notes issued in the exchange offer may be effected through
book-entry transfer at DTC. However, the letter of transmittal or facsimile of
it or an agent's message, with any required signature guarantees and any other
required documents, must:
- be transmitted to and received by the exchange agent at the address
listed under "-- Exchange Agent" at or prior to the expiration time; or
- comply with the guaranteed delivery procedures described below.
Delivery of documents to DTC in accordance with DTC's procedures does not
constitute delivery to the exchange agent.
GUARANTEED DELIVERY PROCEDURES
If you are a registered holder of the old notes and wish to tender your old
notes, but
- the certificates for the old notes are not immediately available,
- time will not permit your certificates for the old notes or other
required documents to reach Wells Fargo Bank, N.A., as exchange agent,
before the expiration of the exchange offer, or
- the procedure for book-entry transfer cannot be completed before the
expiration of the exchange offer,
15
then you may effect a tender of your old notes if:
- the tender is made through an eligible guarantor institution;
- prior to the expiration of the exchange offer, the exchange agent
receives from an eligible guarantor institution a properly completed and
duly executed notice of guaranteed delivery, substantially in the form we
have provided, setting forth your name and address, and the amount of old
notes you are tendering and stating that the tender is being made by
notice of guaranteed delivery. These documents may be sent by overnight
courier, registered or certified mail or facsimile transmission. If you
elect to use this procedure, you must also guarantee that within three
New York Stock Exchange, Inc. trading days after the date of execution of
the notice of guaranteed delivery, the certificates for all physically
tendered old notes, in proper form for transfer, or a book-entry
confirmation of transfer of the old notes into the exchange agent's
account at The Depository Trust Company, as the case may be, a properly
completed and duly executed letter of transmittal, with any required
signature guarantees, and all other required documents or, in the case of
a book-entry confirmation, a properly completed and duly executed letter
of transmittal, with any required signature guarantees, or an agent's
message instead of the letter of transmittal, will be deposited by the
eligible guarantor institution with the exchange agent; and
- the exchange agent receives the certificates for all physically tendered
old notes, in proper form for transfer, or a book-entry confirmation of
transfer of the old notes into the exchange agent's account at The
Depository Trust Company, as the case may be, a properly completed and
duly executed letter of transmittal, with any required signature
guarantees, and all other required documents or, in the case of a
book-entry confirmation, a properly completed and duly executed letter of
transmittal, with any required signature guarantees, or an agent's
message instead of the letter of transmittal, in each case, within three
New York Stock Exchange, Inc. trading days after the date of execution of
the notice of guaranteed delivery.
WITHDRAWAL RIGHTS
You may withdraw tenders of old notes at any time prior to the expiration of
the exchange offer.
For a withdrawal to be effective, a written notice of withdrawal must be
received by Wells Fargo Bank, N.A., as exchange agent, prior to the expiration
of the exchange offer at one of the addresses listed below under the caption
"-- Exchange Agent." Any notice of withdrawal must:
- specify the name of the person who tendered the old notes to be
withdrawn;
- identify the old notes to be withdrawn, including the principal amount of
the old notes;
- contain a statement that the holder is withdrawing its election to have
the old notes exchanged;
- be signed by the holder in the same manner as the original signature on
the letter of transmittal by which the old notes were tendered, including
any required signature guarantees, or be accompanied by documents of
transfer to have the trustee with respect to the old notes register the
transfer of the old notes in the name of the person withdrawing the
tender; and
- specify the name in which the old notes are registered, if different from
that of the depositor.
If certificates for old notes have been delivered or otherwise identified
to the exchange agent, then, prior to the release of the certificates, the
withdrawing holder must also submit the serial numbers of the particular
certificates to be withdrawn and a signed notice of withdrawal with signatures
guaranteed by an eligible guarantor institution unless the holder is an eligible
guarantor institution. If old notes have been tendered using the procedure for
book-entry transfer described above, any notice of withdrawal must specify the
name and number of the account at The Depository Trust Company to be credited
with the withdrawn old notes and otherwise comply with the procedures of the
book-entry transfer facility. All questions as to the validity, form and
eligibility -- including time of receipt -- of these notices will be determined
by us. Our determination will be final and binding.
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Any old notes so withdrawn will be deemed not to have been validly tendered
for exchange for purposes of the exchange offer. Any old notes which have been
tendered for exchange but which are not exchanged for any reason will be
returned to the registered holder without cost to that holder as soon as
practicable after withdrawal, non-acceptance of tender or termination of the
exchange offer. In the case of old notes tendered by book-entry transfer into
the exchange agent's account at The Depository Trust Company by using the
book-entry transfer procedures described above, any withdrawn or unaccepted old
notes will be credited to the tendering holder's account at The Depository Trust
Company. Properly withdrawn old notes may be retendered at any time on or prior
to the expiration of the exchange offer by following one of the procedures
described above under "-- Procedures for Tendering Old Notes."
CONDITIONS TO THE EXCHANGE OFFER
Notwithstanding any other provision of the exchange offer, we will not be
required to accept any old notes for exchange or to issue any new notes in
exchange for old notes, and we may terminate or amend the exchange offer if, at
any time before the acceptance of the old notes for exchange or the exchange of
new notes for old notes, any of the following events occurs:
- the exchange offer is determined to violate any applicable law or any
applicable interpretation of the staff of the SEC;
- an action or proceeding is pending or threatened in any court or by any
governmental agency that might materially impair our ability to proceed
with the exchange offer;
- any material adverse development occurs in any existing legal action or
proceeding involving us;
- we do not receive any governmental approval we deem necessary for the
completion of the exchange offer; or
- any of the conditions precedent to our obligations under the registration
rights agreement are not fulfilled.
These conditions are for our benefit only and we may assert them regardless
of the circumstances giving rise to any condition. We may also waive any
condition in whole or in part at any time in our sole discretion. Our failure at
any time to exercise any of the foregoing rights will not constitute a waiver of
that right and each right is an ongoing right that we may assert at any time.
In addition, we will not accept any old notes for exchange or issue any new
notes in exchange for old notes, if at the time a stop order is threatened or in
effect which relates to:
- the registration statement of which this prospectus forms a part; or
- the qualification under the Trust Indenture Act of 1939 of the indenture
under which the old notes were issued and the new notes will be issued.
EXCHANGE AGENT
We have appointed Wells Fargo Bank, N.A. as the exchange agent for the
exchange offer. All completed letters of transmittal and agent's messages should
be directed to the exchange agent at one of the addresses listed below.
Questions and requests for assistance, requests for additional copies of this
17
prospectus or the letter of transmittal, agent's messages and requests for
notices of guaranteed delivery should be directed to the exchange agent at one
of the following addresses:
<Table>
BY HAND DELIVERY: BY OVERNIGHT COURIER:
Wells Fargo Bank Minnesota, N.A. Wells Fargo Bank Minnesota, N.A.
Corporate Trust Operations Corporate Trust Operations
MAC N9303-121 MAC N9303-121
Sixth and Marquette Sixth and Marquette
Minneapolis, MN 55479 Minneapolis, MN 55479
BY REGISTERED OR CERTIFIED MAIL: BY FACSIMILE TRANSMISSION
Wells Fargo Bank Minnesota, N.A. (FOR ELIGIBLE INSTITUTIONS ONLY):
Corporate Trust Operations Wells Fargo Bank Minnesota, N.A.
MAC N9303-121 (612) 667-4927
P.O. Box 1517 Confirm: (800) 344-5128
Minneapolis, MN 55480-1517 For Information
(800) 344-5128
</Table>
DELIVERY OF A LETTER OF TRANSMITTAL OR AGENT'S MESSAGE TO AN ADDRESS OTHER
THAN THE ADDRESS LISTED ABOVE OR TRANSMISSION OF INSTRUCTIONS BY FACSIMILE OTHER
THAN AS SET FORTH ABOVE IS NOT VALID DELIVERY OF THE LETTER OF TRANSMITTAL OR
AGENT'S MESSAGE.
FEES AND EXPENSES
The principal solicitation is being made by mail by Wells Fargo Bank, N.A.,
as exchange agent. We will pay the exchange agent customary fees for its
services, reimburse the exchange agent for its reasonable out-of-pocket expenses
incurred in connection with the provision of these services and pay other
registration expenses, including fees and expenses of the trustee under the
indenture relating to the notes, filing fees, blue sky fees and printing and
distribution expenses. We will not make any payment to brokers, dealers or
others soliciting acceptances of the exchange offer.
Additional solicitation may be made by telephone, facsimile or in person by
our and our affiliates' officers and regular employees and by persons so engaged
by the exchange agent.
TRANSFER TAXES
You will not be obligated to pay any transfer taxes in connection with the
tender of old notes in the exchange offer unless you instruct us to register new
notes in the name of, or request that old notes not tendered or not accepted in
the exchange offer be returned to, a person other than the registered tendering
holder. In those cases, you will be responsible for the payment of any
applicable transfer tax.
CONSEQUENCES OF EXCHANGING OR FAILING TO EXCHANGE OLD NOTES
If you do not exchange your old notes for new notes in the exchange offer,
your old notes will continue to be subject to the provisions of the indenture
relating to the notes regarding transfer and exchange of the old notes and the
restrictions on transfer of the old notes described in the legend on your
certificates. These transfer restrictions are required because the old notes
were issued under an exemption from, or in transactions not subject to, the
registration requirements of the Securities Act and applicable state securities
laws. In general, the old notes may not be offered or sold, unless registered
under the Securities Act, except under an exemption from, or in a transaction
not subject to, the Securities Act and applicable state securities laws. We do
not plan to register the old notes under the Securities Act unless required to
do so under the Registration Rights Agreement. Based on interpretations by the
staff of the SEC, as set forth in no-action letters issued to third parties, we
believe that the new notes you receive in the exchange offer may be offered for
resale, resold or otherwise transferred without compliance with the
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registration and prospectus delivery provisions of the Securities Act. However,
you will not be able to freely transfer the new notes if:
- you are our "affiliate," as defined in Rule 405 under the Securities Act;
- you are not acquiring the new notes in the exchange offer in the ordinary
course of your business;
- you have an arrangement or understanding with any person to participate
in the distribution of the new notes, as defined in the Securities Act,
you will receive in the exchange offer; or
- you are a participating broker-dealer.
We do not intend to request the SEC to consider, and the SEC has not
considered, the exchange offer in the context of a similar no-action letter. As
a result, we cannot guarantee that the staff of the SEC would make a similar
determination with respect to the exchange offer as in the circumstances
described in the no-action letters discussed above. Each holder, other than a
broker-dealer, must acknowledge that it is not engaged in, and does not intend
to engage in, a distribution of new notes and has no arrangement or
understanding to participate in a distribution of new notes. If you are our
affiliate, are engaged in or intend to engage in a distribution of the new notes
or have any arrangement or understanding with respect to the distribution of the
new notes you will receive in the exchange offer, you
- may not rely on the applicable interpretations of the staff of the SEC
and
- must comply with the registration and prospectus delivery requirements of
the Securities Act in connection with any resale transaction involving
the new notes.
If you are a participating broker-dealer, you must acknowledge that you
will deliver a prospectus in connection with any resale of the new notes. In
addition, to comply with state securities laws, you may not offer or sell the
new notes in any state unless they have been registered or qualified for sale in
that state or an exemption from registration or qualification is available and
is complied with. The offer and sale of the new notes to "qualified
institutional buyers" -- as defined in Rule 144A of the Securities Act -- is
generally exempt from registration or qualification under state securities laws.
We do not plan to register or qualify the sale of the new notes in any state
where an exemption from registration or qualification is required and not
available.
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DESCRIPTION OF NOTES
The old notes were issued and the new notes will be issued under an
indenture dated as of July 3, 2002. The trustee under the indenture was
originally Citibank, N.A. Citibank, N.A. has been replaced as trustee by Wells
Fargo Bank, N.A. This summary is qualified in its entirety by reference to the
indenture, a copy of which is available from us upon request.
The old notes were and the new notes will be our unsecured and
unsubordinated obligations ranking equally with our other outstanding unsecured
and unsubordinated indebtedness. At September 30, 2002, we had outstanding
approximately $1.1 billion of unsecured and unsubordinated indebtedness. The
indenture contains no restrictions on the amount of additional secured or
unsecured indebtedness that we may issue.
TERMS AND CONDITIONS OF THE NOTES
The notes will mature on July 15, 2012. The notes will bear interest from
the date of original issuance of the old notes or, if interest has already been
paid, from the date it was most recently paid, at the rate of 8.875% per year.
Interest will be payable semi-annually on January 15 and July 15 of each year,
beginning January 15, 2003, to the person in whose names the notes are
registered at the close of business on the preceding January 1 and July 1,
respectively, subject to certain exceptions. Interest on the notes will be
computed on the basis of a 360-day year comprised of twelve 30-day months.
We may, without the consent of the holders of the notes, issue additional
notes having the same ranking and the same interest rate, maturity and other
terms as the old notes or the new notes. Any additional notes will, together
with the previously outstanding notes, constitute a single series of the notes
under the indenture. No additional notes may be issued if an event of default
has occurred with respect to the notes.
The old notes are, and the new notes will initially be, issued only in
registered, book-entry form, in denominations of $1,000 and any integral
multiples of $1,000 as described under "The Exchange Offer -- Book-Entry
Transfer." We will issue global notes in denominations that together equal the
total principal amount of the outstanding notes.
OPTIONAL REDEMPTION
The old notes are, and the new notes will be redeemable, in whole at any
time, or in part, from time to time, at our option, at a redemption price equal
to the greater of:
- 100% of the principal amount of the notes then outstanding to be
redeemed, or
- the sum of the present values of the remaining scheduled payments of
principal and interest thereon from the redemption date to the maturity
date computed by discounting such payments to the redemption date on a
semi-annual basis (assuming a 360-day year consisting of twelve 30-day
months) at a rate equal to the sum of 50 basis points plus the Adjusted
Treasury Rate on the third business day prior to the redemption date, as
calculated by an Independent Investment Banker.
"Adjusted Treasury Rate" means:
- the yield, under the heading which represents the average for the
immediately preceding week, appearing in the most recently published
statistical release designated "H.15(519)" or any successor publication
which is published weekly by the Board of Governors of the Federal
Reserve System and which contains yields on actively traded U.S. Treasury
securities adjusted to constant maturity under the caption "Treasury
Constant Maturities," for the maturity corresponding to the Comparable
Treasury Issue (if no maturity is within three months before or after the
remaining term of the notes, yields for the two published maturities most
closely corresponding to the Comparable Treasury Issue will be determined
and the Adjusted Treasury Rate will be interpolated or extrapolated from
such yields on a straight line basis, rounding to the nearest month); or
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- if such release (or any successor release) is not published during the
week preceding the calculation date or does not contain such yields, the
rate per annum equal to the semiannual equivalent yield to maturity of
the Comparable Treasury Issue, calculated using a price for the
Comparable Treasury Issue (expressed as a percentage of its principal
amount) equal to the Comparable Treasury Price for such redemption date.
"Comparable Treasury Issue" means the U.S. Treasury security selected by an
Independent Investment Banker as having a maturity comparable to the remaining
term of the notes that would be utilized, at the time of selection and in
accordance with customary financial practice, in pricing new issues of corporate
debt securities of comparable maturity to the remaining term of the notes or,
if, in the reasonable judgment of the Independent Investment Banker, there is no
such security, then the Comparable Treasury Issue will mean the U.S. Treasury
security or securities selected by an Independent Investment Banker as having an
actual or interpolated maturity or maturities comparable to the remaining term
of the notes.
"Comparable Treasury Price" means (1) the average of five Reference
Treasury Dealer Quotations for the applicable redemption date, after excluding
the highest and lowest Reference Treasury Dealer Quotations, or (2) if the
Independent Investment Banker obtains fewer than five such Reference Treasury
Dealer Quotations, the average of all such quotations.
"Independent Investment Banker" means Salomon Smith Barney Inc. or any
successor firm, or if any such firm is unwilling or unable to serve as such, an
independent investment and banking institution of national standing appointed by
us.
"Reference Treasury Dealer Quotations" means the average, as determined by
the Independent Investment Banker, of the bid and asked prices for the
Comparable Treasury Issue (expressed in each case as a percentage of its
principal amount) quoted in writing to the Independent Investment Banker and the
Trustee at 5:00 p.m., New York City time, on the third business day preceding
such redemption date.
We will mail notice of redemption at least 30 days but not more than 60
days before the applicable redemption date to each holder of the notes to be
redeemed. If we elect to partially redeem the notes, the Trustee will select in
a fair and appropriate manner the notes to be redeemed.
Upon the payment of the redemption price, plus accrued and unpaid interest,
if any, and liquidated damages, if any, to the date of redemption, interest will
cease to accrue on and after the applicable redemption date on the notes or
portions thereof called for redemption.
COVENANTS
Liens. The indenture refers to any of our instruments securing
indebtedness, such as a mortgage, pledge, lien, security interest or encumbrance
on any of our property, as a "mortgage." The indenture further provides that,
subject to certain exceptions, we will not, nor will we permit any subsidiary
to, issue, assume or guarantee any indebtedness secured by a mortgage unless we
provide equal and proportionate security for the notes. Among these exceptions
are:
- purchase money mortgages;
- preexisting mortgages on any property acquired or constructed by us or a
subsidiary;
- mortgages created within one year after completion of such acquisition or
construction or within one year of commencement of full operation of such
property;
- mortgages created on any contract for the sale of products or services
related to the operation or use of any property acquired or constructed
within one year after the later of completion of such acquisition or
construction or commencement of full operation of such property;
- mortgages on property of a subsidiary existing at the time it became our
subsidiary; and
21
- mortgages, other than as specifically excepted, in an aggregate amount
which, at the time of, and after giving effect to, the incurrence does
not exceed five percent of our Consolidated Net Tangible Assets, as
defined in the indenture.
Limitation on Sale and Lease-Back Transactions. We will not, and we will
not permit any of our subsidiaries to, enter into any arrangement with any
person providing for the leasing by us or any of our subsidiaries of any
Principal Property, acquired or placed into service more than 180 days prior to
such arrangement (except for leases of three years or less), whereby such
property has been or is to be sold or transferred by us or any of our
subsidiaries to such person (any such transaction being referred to as a "Sale
and Lease-Back Transaction"), unless:
- we or any of our subsidiaries would, at the time of entering into a Sale
and Lease-Back Transaction, be entitled to incur indebtedness secured by
a mortgage on the property to be leased in an amount at least equal to
the Attributable Debt in respect of such transaction without equally and
ratably securing the Securities pursuant to the covenant described above
under "-- Liens"; or
- we shall covenant that we will apply an amount equal to the net proceeds
from the sale of the Principal Property so leased to the retirement
(other than any mandatory retirement) of our Funded Indebtedness within
90 days of the effective date of any such Sale and Lease-Back
Transaction, provided that the amount to be applied to the retirement of
our Funded Indebtedness shall be reduced by (a) the principal amount of
any notes delivered by us to the Trustee within 90 days after such Sale
and Lease-Back Transaction for retirement and cancellation, and (b) the
principal amount of Funded Indebtedness, other than notes, voluntarily
retired by us within 90 days following such Sale and Lease-Back
Transaction,
provided, further, this covenant shall not apply to, and there shall be excluded
from Attributable Debt in any computation under this covenant, Attributable Debt
with respect to any Sale and Lease-Back Transaction if:
- such Sale and Lease-Back Transaction is entered into in connection with
transactions which are part of an industrial development or pollution
control financing or,
- the only parties involved in such Sale and Lease-Back Transaction are us
and/or any of our subsidiaries.
Notwithstanding the foregoing, we and our subsidiaries may enter into,
create, assume and suffer to exist Sale and Lease-Back Transactions, not
otherwise permitted, if at the time of, and after giving effect to, such Sale
and Lease-Back Transaction, our total consolidated Attributable Debt does not
exceed five percent of our Consolidated Net Tangible Assets.
"Attributable Debt" means, with respect to any Sale and Lease-Back
Transaction as of any particular time, the present value discounted at the rate
of interest implicit in the terms of the lease of the obligations of the lessee
under such lease for net rental payments during the remaining term of the lease
(including any period for which such lease has been extended or may, at our
option, be extended).
"Consolidated Net Tangible Assets" means the total assets appearing on a
consolidated balance sheet of us and our consolidated subsidiaries, less:
(1) intangible assets, unamortized debt discount and expense and stock
expense and other deferred debits;
(2) all current and accrued liabilities (other than consolidated Funded
Indebtedness and capitalized rentals or leases); deferred credits
(other than deferred investment tax credits), deferred gains and
deferred income and billings recorded as revenues deferred pending the
outcome of a rate proceeding (less applicable income taxes) to the
extent refunds thereof shall not have been finally determined; and
(3) all reserves (other than for deferred federal income taxes arising from
timing differences) not already deducted from assets.
22
"Funded Indebtedness" means any indebtedness which matures more than one
year after the date as of which Funded Indebtedness is being determined less any
such Indebtedness as will be retired through or by means of any deposit or
payment required to be made within one year from such date under any prepayment
provision, sinking fund, purchase fund or otherwise.
"Principal Property" means any natural gas pipeline, gathering property or
natural gas processing plant located in the United States, except any such
property that in the opinion of our board of directors is not of material
importance to the total business conducted by us and our consolidated
subsidiaries. "Principal Property" shall not include (i) the production or
proceeds from production of gas processing plants or natural gas or petroleum
products in any pipeline or storage field and (ii) any property acquired or
constructed by us or any of our subsidiaries after December 31, 1996.
Consolidation, Merger, Conveyance of Assets. The indenture provides, in
general, that we will not consolidate with or merge into any other entity or
convey, transfer or lease our properties and assets substantially as an entirety
to any person, unless:
- the corporation, limited liability company, limited partnership, joint
stock company or trust formed by such consolidation or into which we are
merged or the person which acquires such assets expressly assumes our
obligations under the indenture and the notes; and
- immediately after giving effect to such transaction, no event of default,
and no event which, after notice or lapse of time or both, would become
an event of default, shall have happened and be continuing.
Event Risk. Except for the limitations on liens and consolidations,
mergers and conveyance of assets described above, neither the indenture nor the
notes contain any covenants or other provisions designed to afford holders of
the notes protection in the event of a highly leveraged transaction or change of
control involving us or any restrictions on the amount of additional
indebtedness that we may issue.
MODIFICATION OF THE INDENTURE
Without the consent of any holder, we and the trustee may amend or
supplement the indenture or the notes to:
- cure any ambiguity, omission, defect or inconsistency;
- comply with the indenture in the case of the merger, consolidation or
sale or other disposition of all or substantially all of our assets;
- provide for uncertificated notes in addition to or in place of
certificated notes;
- add any additional events of default;
- provide for the acceptance of a successor trustee;
- secure the notes pursuant to the requirements under the indenture;
- comply with any requirements in order to effect or maintain the
qualification of the indenture under the Trust Indenture Act of 1939;
- comply with any requirements of the SEC in connection with qualifying the
indenture under the Trust Indenture Act of 1939;
- add to our covenants for the benefit of the holders of notes or surrender
any power conferred upon us; or
- make any change that does not adversely affect the rights of any holder
of notes in any material respect.
23
We and the trustee may take the following actions with the consent of the
holders of at least a majority in principal amount of the notes then
outstanding:
- add any provisions to the indenture;
- change in any manner the indenture;
- eliminate any of the provisions of the indenture; and
- modify in any way the rights of the holders of the notes.
These changes must conform to the Trust Indenture Act of 1939. In addition,
without the consent of each holder affected, we may not:
- reduce the percentage of principal amount of notes whose holders must
consent to an amendment, supplement or waiver;
- reduce the rate of or change the time for payment of interest, including
default interest, on any note;
- reduce the principal of or change the fixed maturity of any note or alter
the premium or other provisions with respect to redemption;
- make any note payable in money or in a place other than that stated in
the note;
- impair the right to institute suit for the enforcement of any payment of
principal of, or premium, if any, or interest on any note;
- make any change in the percentage of principal amount of notes necessary
to waive compliance with certain provisions of the indenture; or
- waive a continuing default or event of default in the payment of
principal of, or premium, if any, or interest on the notes.
EVENTS OF DEFAULT
In general, the indenture defines an event of default with respect to the
notes as being:
- default in payment of any principal of the notes, either at maturity,
upon any redemption, by declaration or otherwise;
- default for 30 days in payment of any interest on the notes unless
otherwise provided;
- default for 90 days after written notice in the observance or performance
of any covenant or warranty in the notes or the indenture other than:
- default in or breach of a covenant which is dealt with otherwise
below; or
- if certain conditions are met, if the events of default described in
this clause are the result of changes in generally accepted accounting
principles; or
- certain events of our bankruptcy, insolvency or reorganization.
In general, the indenture provides that if an event of default described in
the first three clauses above occurs, the Trustee or the holders of the notes
may then declare the entire principal of all the notes and the interest accrued
on such principal to be due and payable immediately. Such a declaration by the
holders requires the approval of at least 25 percent in principal amount of the
notes then outstanding.
Upon certain conditions, the holders of a majority in aggregate principal
amount of the notes then outstanding may annul such declarations and waive the
past defaults. However, the majority holders may not annul or waive a continuing
default in payment of principal of, premium, if any, or interest on the notes.
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The indenture provides that the holders of the notes will indemnify the
trustee before the trustee exercises any of its rights or powers under the
indenture. This indemnification is subject to the trustee's duty to act with the
required standard of care during a default. The holders of a majority in
aggregate principal amount of the outstanding notes may direct the time, method
and place of:
- conducting any proceeding for any remedy available to the trustee, or
- exercising any trust or power conferred on the trustee.
This right of the holders of the notes is, however, subject to the
provisions in the indenture providing for the indemnification of the trustee and
other specified limitations.
In general, the indenture provides that holders of the notes may only
institute an action against us under the indenture if the following four
conditions are fulfilled:
- the holder previously has given to the trustee written notice of default
and the default continues;
- the holders of at least 25 percent in principal amount of the notes then
outstanding have both (1) requested the trustee to institute such action
and (2) offered the trustee reasonable indemnity;
- the trustee has not instituted such action within 60 days of receipt of
such request; and
- the trustee has not received direction inconsistent with such written
request by the holders of a majority in principal amount of the notes
then outstanding.
The above four conditions do not apply to actions by holders of the notes
against us for payment of principal or interest on or after the due date
provided. The indenture contains a covenant that we will file annually with the
trustee a certificate of no default or a certificate specifying any default that
exists.
DISCHARGE, DEFEASANCE AND COVENANT DEFEASANCE
We can discharge or defease our obligations under the indenture as set
forth below.
Under terms satisfactory to the trustee, we may discharge certain
obligations to holders of the notes which have not already been delivered to the
trustee for cancellation. These notes must also:
- have become due and payable; or
- be due and payable by their terms within one year.
We may discharge the notes by irrevocably depositing an amount certified to
be sufficient to pay at maturity or upon redemption the principal of and
interest on and any liquidated damages with respect to the notes. We may make
the deposit in cash or U.S. Government Obligations, as defined in the indenture.
We may also, upon satisfaction of the conditions listed below, discharge
certain obligations to holders of the notes at any time ("Defeasance"). Under
terms satisfactory to the trustee, we may be released from the obligations
imposed by the sections containing the covenants described above limiting liens
and consolidations, mergers and conveyances of assets. Also under terms
satisfactory to the trustee, we may omit to comply with these sections without
creating an event of default ("Covenant Defeasance"). Defeasance or Covenant
Defeasance may be effected only if, among other things:
- we irrevocably deposit with the trustee cash or U.S. Government
Obligations as trust funds in an amount certified to be sufficient to pay
at maturity or upon redemption the principal of and interest on all
outstanding notes; and
- we deliver to the trustee an opinion of counsel to the effect that the
holders of the notes will not recognize income, gain or loss for United
States federal income tax purposes as a result of such Defeasance or
Covenant Defeasance. The opinion must further state that these holders
will be subject to United States federal income tax on the same amounts,
in the same manner and at the same times as would have been the case if
Defeasance or Covenant Defeasance had not occurred. In the case of a
Defeasance, this opinion must be based on a ruling of the Internal
Revenue
25
Service or a change in United States federal income tax law occurring
after the date of the indenture, since this result would not occur under
current tax law.
CONCERNING THE TRUSTEE
The trustee is one of a number of banks with which we and our subsidiaries
maintain ordinary banking relationships and with which we and our subsidiaries
maintain credit facilities.
GOVERNING LAW
The indenture and the notes are governed by, and construed in accordance
with, the laws of the State of New York.
26
EXCHANGE OFFER; REGISTRATION RIGHTS
We entered into a registration rights agreement with Salomon Smith Barney
Inc. and other institutions, as the initial purchasers of the old notes, for
your benefit. In the registration rights agreement, we agreed to:
- file with the SEC within 75 days after the initial issuance of the old
notes a registration statement relating to an offer to exchange the old
notes for registered new notes with principal amount and terms identical
in all material respects to the principal amount and terms of the old
notes, except that the registered notes would not contain terms with
respect to transfer restrictions under the Securities Act or the payment
of liquidated damages;
- use our reasonable best efforts to cause the exchange offer registration
statement to be declared effective under the Securities Act within 120
days after the initial issuance of the old notes;
- commence the exchange offer promptly after the exchange offer
registration statement has been declared effective;
- use our reasonable best efforts to keep the exchange offer registration
statement effective until the closing of the exchange offer; and
- use our reasonable best efforts to cause the exchange to be completed
within 60 days after the SEC declares the exchange offer registration
statement effective.
Promptly after the exchange offer registration statement has been declared
effective, we will offer the new notes in exchange for surrender of the old
notes. We will keep the exchange offer open for at least 20 business days, or
longer if required by applicable law, after the effective date of the
registration statement. Interest will accrue on each new note from the last
interest payment date on which we paid interest on the old note tendered in the
exchange offer, or if we have not paid interest on the tendered old note, from
the date of original issuance of the old note.
Based on existing interpretations of the Securities Act by the staff of the
SEC set forth in several no-action letters to third parties, we believe that you
may offer for resale, resell and otherwise transfer the new notes without
further compliance with the registration and prospectus delivery requirements of
the Securities Act. However, if you are an affiliate of ours, if you intend to
participate in the exchange offer for the purpose of distributing the new notes
or if you are a broker-dealer who purchased the old notes for the purpose of
reselling the notes under Rule 144A or any other available exemption under the
Securities Act, you:
- will not be able to rely on the interpretation of the staff of the SEC
set forth in these letters;
- will not be entitled to tender your old notes in the exchange offer; and
- must comply with the registration and prospectus delivery requirements of
the Securities Act in connection with any resale or transfer of the old
notes unless the resale or transfer is made under an exemption from those
requirements.
If you wish to exchange your old notes for new notes in the exchange offer,
you will be required to represent that:
- you are not an affiliate of ours;
- at the time of the exchange offer, you have no arrangement or
understanding with any person to participate in the distribution, within
the meaning of the Securities Act, of the new notes; and
- you are acquiring the new notes in the ordinary course of your business.
In addition, any broker-dealer who acquired the old notes for its own
account as a result of market-making or other trading activities must deliver a
prospectus meeting the requirements of the Securities Act in connection with any
resale of the new notes. The SEC has taken the position that broker-dealers may
use the prospectus contained in the registration statement to fulfill this
prospectus delivery requirement.
27
Under the registration rights agreement, we must allow broker-dealers and any
other persons subject to prospectus delivery requirements to use the prospectus
contained in the registration statement in connection with the resale of the new
notes.
If (1) we determine that applicable law or the applicable interpretations
of the staff of the SEC do not permit us to effect the exchange offer, (2) for
any other reason the exchange offer has not been consummated within 180 days
after the initial issuance of the old notes or (3) in the written opinion of
counsel for holders of the old notes, a shelf registration statement must be
filed and a prospectus must be delivered by a holder of the old notes in
connection with its reoffering or resale of the old notes, then in addition to,
or instead of, effecting the registration of the new notes under the exchange
offer registration statement, we will:
- file a shelf registration statement covering resales of the old notes
within 75 days after the determination described in clause (1), the last
date described in clause (2) or our receipt of the opinion described in
clause (3), as applicable;
- use our reasonable best efforts to cause the shelf registration statement
to be declared effective under the Securities Act within 60 days after
filing the registration statement; and
- use our reasonable best efforts to keep the shelf registration statement
continuously effective until the earlier of (1) the expiration of the
period referred to in Rule 144(k) under the Securities Act, or similar
successor rule, with respect to the notes or (2) such time as all of the
old notes have been sold under the shelf registration statement or
otherwise cease to be registrable notes within the meaning of the
registration rights agreement.
If we file a shelf registration statement, we will notify you when the
shelf registration statement has become effective and take other actions which
are required to permit unrestricted resales of the old notes. If you sell old
notes under the shelf registration statement, you will be:
- required to deliver information to be used in connection with the shelf
registration statement;
- required to be named as a selling security holder in the related
prospectus;
- required to deliver a prospectus to purchasers;
- subject to certain of the civil liability provisions under the Securities
Act in connection with the sales; and
- bound by some of the provisions of the registration rights agreement,
including those regarding indemnification rights and obligations.
By accepting an old note, you will be deemed to have agreed to be bound by
the provisions of the registration rights agreement. Under the registration
rights agreement, upon receipt of notice from us of the occurrence of any event
which makes any statement of a material fact in the prospectus which is part of
the exchange registration statement or shelf registration statement untrue or
which requires the making of any changes in the prospectus in order to make the
statements in the prospectus not misleading, you must suspend the disposition of
the old notes until we have amended or supplemented the prospectus to correct
the misstatement or omission and have furnished copies of the amended or
supplemented prospectus to you.
For purposes of the registration rights agreement, "transfer restricted
securities" means each note until the earliest on the date of which (i) the note
is exchanged in the exchange offer and entitled to be resold to the public by
the holder of the note without complying with the prospectus delivery
requirements of the Securities Act, (ii) the note has been disposed of in
accordance with the shelf registration statement, (iii) the note is disposed of
by a broker-dealer pursuant to the "Plan of Distribution" contemplated by the
exchange offer registration statement (including delivery of the prospectus
contained therein) or (iv) the note is distributed to the public pursuant to
Rule 144 or under the Securities Act.
28
If:
- we do not file with the SEC an exchange offer registration statement
which we are required to file under the registration rights agreement on
or prior to September 16, 2002;
- the SEC does not declare an exchange offer registration statement
effective on or prior to October 30, 2002;
- we do not file with the SEC a shelf registration statement which we are
required to file under the registration rights agreement on or prior to
the date specified in the registration rights agreement and described
above;
- we do not consummate the exchange offer by December 30, 2002; or
- we have filed, and the SEC has declared effective, the shelf registration
statement and at any time prior to the expiration of the period referred
to in Rule 144(k) under the Securities Act, or similar successor rule,
with respect to the old notes, other than after all the old notes have
been disposed of under the shelf registration statement or cease to be
registrable notes under the registration rights agreement, the shelf
registration statement ceases to be effective, or fails to be usable for
its intended purpose without being succeeded within two business days by
a post-effective amendment which cures the failure and that is itself
immediately declared effective;
(each, a "Registration Default") then we agree to pay each holder of transfer
restricted securities affected thereby liquidated damages in an amount equal to
0.25% per annum of the principal amount of transfer restricted securities held
by such holder for the first 90 day period immediately following the occurrence
of a Registration Default, increasing to 0.50% per annum thereafter, from and
including the date on which any such Registration Default occurs. We shall not
be required to pay liquidated damages for more than one Registration Default at
any given time. Following the cure of all Registration Defaults, the accrual of
liquidated damages will cease.
We did not file this registration statement on or prior to September 16,
2002, nor was it declared effective on or prior to October 31, 2002. Therefore,
liquidated damages have been accruing since September 17, 2002. The liquidated
damages will cease to accrue as of the date of this prospectus. However, since
the exchange offer will not be consummated by December 30, 2002, liquidated
damages will begin to accrue from December 31, 2002 until such time as the
exchange offer is consummated.
We have agreed to (1) pay all expenses incident to the exchange offer and
(2) indemnify the initial purchasers and holders of the notes against some
liabilities, including liabilities under the Securities Act.
We have not completely summarized the provisions of the registration rights
agreement in this prospectus and our summary is subject to, and is qualified in
its entirety by reference to, the actual registration rights agreement. For a
complete description of the terms of the registration rights agreement, you
should read the registration rights agreement, which is filed as an exhibit to
the registration statement of which this prospectus is a part. In addition, you
should not construe our description of the interpretations of, and positions
taken by, the staff of the SEC as legal advice. You should consult your own
legal advisor about this matter.
MATERIAL UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
The following is a discussion of the material U.S. federal income and
estate tax consequences applicable to the exchange of old notes for new notes in
the exchange offer and the ownership and disposition of the notes by an initial
beneficial owner of the notes that is a "non-U.S. holder," as defined below.
This discussion is based upon current provisions of the Internal Revenue Code of
1986, as amended, its legislative history, final, temporary and proposed
regulations, published rulings, and court decisions, all of which are subject to
change, possibly on a retroactive basis. For purposes of this discussion, you
are a "U.S. holder" if you are a beneficial owner of notes who is a "United
States person"
29
for United States federal income tax purposes or a "non-U.S. holder" if you are
a beneficial owner of notes and are not a U.S. holder. A "United States person"
is:
- a citizen or resident of the United States,
- a corporation, partnership, or other entity created or organized in the
United States or under the law of the United States or of any state
thereof including the District of Columbia,
- an estate whose income is subject to United States federal income
taxation regardless of its source, or
- a trust if a U.S. court is able to exercise primary supervision over the
administration of the trust and one or more United States persons have
the authority to control all substantial decisions of the trust.
This discussion only applies to you if you are a beneficial owner of the
notes who holds the notes as capital assets. The tax treatment of holders of the
notes may vary depending upon their particular situations. Particular persons
including, for example, insurance companies, tax exempt organizations, financial
institutions, partnerships or other entities classified as partnerships for U.S.
federal income tax purposes, and broker-dealers, may be subject to special rules
not discussed below. If a partnership holds notes, the tax treatment of a
partner generally will depend on the status of the partner and the activities of
the partnership. Prospective investors are urged to consult their own tax
advisors regarding the particular U.S. federal tax consequences of holding and
disposing of notes, as well as any tax consequences that may arise under the
laws of any relevant foreign, state, local, or other taxing jurisdiction or
under any applicable tax treaty.
TAX CONSEQUENCES OF THE EXCHANGE OFFER
The exchange of old notes for new notes pursuant to the exchange offer will
not be a taxable event for U.S. federal income tax purposes. U.S. holders and
non-U.S. holders will not recognize any taxable gain or loss as a result of the
exchange and will have the same tax basis and holding period in the new notes as
they had in the old notes immediately before the exchange.
TAX CONSEQUENCES TO NON-U.S. HOLDERS
Payment of Interest
Generally, interest we pay to you will not be subject to U.S. federal
income tax, provided that this interest income is not effectively connected with
your conduct of a United States trade or business, and will not be subject to
United States federal withholding tax provided that:
- you do not actually or constructively own 10% or more our of the combined
voting power of all classes of our stock,
- you are not, for U.S. federal income tax purposes, a controlled foreign
corporation related to us within the meaning of the Internal Revenue
Code,
- you are not a bank receiving interest on a loan entered into in the
ordinary course of its business within the meaning of the Internal
Revenue Code, and
- either (A) you provide a Form W-8BEN (or a suitable substitute form),
signed under penalties of perjury that includes your name and address and
certify as to your non-U.S. holder status in compliance with applicable
law and regulations or (B) hold your notes through a securities clearing
organization, bank or other financial institution that holds customers'
securities in the ordinary course of its trade or business and that
provides a statement signed under penalties of perjury in which it
certifies to us or our agent that a Form W-8BEN (or suitable substitute),
has been received by it from you or a qualifying intermediary and
furnishes us or our agent with a copy thereof.
30
If these conditions are not satisfied, then interest paid on the notes will
be subject to U.S. federal withholding tax at a rate of 30% unless that rate is
reduced or eliminated pursuant to an applicable tax treaty and you provide a
properly completed and executed IRS Form W-8BEN.
Sale, Exchange or Redemption of the Notes
You generally will not be subject to U.S. federal income and withholding
tax on any gain realized on the sale, exchange, redemption or other disposition
of a note unless:
- the gain is effectively connected with your conduct of a United States
trade or business, or, under an applicable tax treaty, is attributable to
a permanent establishment you maintain in the United States, or
- if you are an individual, you are present in the United States for a
period or periods aggregating 183 days or more during the taxable year of
the disposition and certain other requirements are met.
Effectively Connected Income
If the interest, gain or other income you recognize on a note is
effectively connected with your conduct of a trade or business within the United
States, you will be exempt from the withholding tax previously discussed if an
appropriate statement is furnished, but generally will be subject to U.S.
federal income tax on the interest, gain or other income at regular federal
income tax rates. In addition to regular U.S. federal income tax, if you are a
corporation, you may be subject to a branch profits tax equal to 30% of your
effectively connected earnings and profits, as adjusted for certain items,
unless you qualify for a lower rate under an applicable tax treaty.
U.S. Federal Estate Tax Considerations
A note beneficially owned by an individual who is not a citizen or resident
of the United States at the time of death will generally not be includable in
the decedent's gross estate for U.S. federal estate tax purposes, provided that
the beneficial owner did not at the time of death actually or constructively own
10% or more of the combined voting power of all classes of our stock entitled to
vote, and provided that, at the time of the holder's death, payments with
respect to that note would not have been effectively connected with the holder's
conduct of a trade or business within the United States.
Information Reporting and Backup Withholding Tax
United States information reporting requirements and backup withholding tax
generally will not apply to payments of interest and principal on a note if you
provide the certification described in "Payment of Interest" or otherwise
establish an exemption, provided that we do not have actual knowledge or reason
to know that you are a United States person.
Information reporting requirements and backup withholding tax generally
will not apply to any payment of the proceeds of the sale of a note effected
outside the United States by a foreign office of a "broker." However, if the
broker:
- is a United States person,
- derives 50% or more of its gross income from all sources for certain
periods from the conduct of a United States trade or business,
- is a controlled foreign corporation for United States tax purposes or
- is a foreign partnership in which one or more United States persons, in
the aggregate, own more than 50% of the income or capital interests in
the partnership or a foreign partnership that is engaged in a trade or
business in the United States,
31
payment of the proceeds will be subject to information reporting requirements
unless the broker has documentary evidence in its records that you are a
non-U.S. holder and certain other conditions are met, or you otherwise establish
an exemption.
Payment of the proceeds of any sale of a note to or through the United
States office of a broker, whether foreign or United States, is subject to
information reporting and backup withholding requirements, unless you provide
the certification described in "Payment of Interest" or otherwise establish an
exemption and the broker does not have actual knowledge or reason to know that
you are a United States person or that the exemption conditions are not
satisfied.
Backup withholding is not an additional tax. Any amounts withheld from a
payment to you under the backup withholding rules will be allowed as a credit
against your U.S. federal income tax liability and may entitle you to a refund,
provided that the required information is provided to the IRS.
THIS DISCUSSION IS INCLUDED FOR GENERAL INFORMATION ONLY AND MAY NOT BE
APPLICABLE DEPENDING UPON YOUR PARTICULAR SITUATION. YOU SHOULD CONSULT YOUR TAX
ADVISOR WITH RESPECT TO THE TAX CONSEQUENCES TO YOU OF THE OWNERSHIP AND
DISPOSITION OF THE NOTES, INCLUDING THE TAX CONSEQUENCES UNDER STATE, LOCAL,
FOREIGN AND OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN FEDERAL OR
OTHER TAX LAWS.
CERTAIN ERISA CONSIDERATIONS
The following is a summary of certain considerations associated with the
purchase of the notes by employee benefit plans that are subject to Title I of
the U.S. Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
plans, individual retirement accounts and other arrangements that are subject to
Section 4975 of the Code or provisions under any federal, state, local, non-U.S.
or other laws or regulations that are similar to such provisions of the Code or
ERISA (collectively, "Similar Laws"), and entities whose underlying assets are
considered to include "plan assets" of such plans, accounts and arrangements
(each, a "Plan").
GENERAL FIDUCIARY MATTERS
ERISA and the Code impose certain duties on persons who are fiduciaries of
a Plan subject to Title I of ERISA or Section 4975 of the Code and prohibit
certain transactions involving the assets of a Plan and its fiduciaries or other
interested parties. Under ERISA and the Code, any person who exercises any
discretionary authority or control over the administration of such a Plan or the
management or disposition of the assets of such a Plan, or who renders
investment advice for a fee or other compensation to such a Plan, is generally
considered to be a fiduciary of the Plan.
In considering an investment in the notes of a portion of the assets of any
Plan, a fiduciary should determine whether the investment is in accordance with
the documents and instruments governing the Plan and the applicable provisions
of ERISA, the Code or any similar law relating to a fiduciary's duties to the
Plan including, without limitation, the prudence, diversification, delegation of
control and prohibited transaction provisions of ERISA, the Code and any other
applicable Similar Laws
Any insurance company proposing to invest assets of its general account in
the notes should consider the extent that such investment would be subject to
the requirements of ERISA in light of the U.S. Supreme Court's decision in John
Hancock Mutual Life Insurance Co. v. Harris Trust and Savings Bank and under any
subsequent legislation or other guidance that has or may become available
relating to that decision, including the enactment of Section 401(c) of ERISA by
the Small Business Job Protection Act of 1996 and any related regulations.
PROHIBITED TRANSACTION ISSUES
Section 406 of ERISA and Section 4975 of the Code prohibit Plans subject to
Title I of ERISA or Section 4975 of the Code from engaging in specified
transactions involving plan assets with persons or entities who are "parties in
interest," within the meaning of ERISA, or "disqualified persons," within the
32
meaning of Section 4975 of the Code, unless an exemption is available. A party
in interest or disqualified person who engaged in a non-exempt prohibited
transaction may be subject to excise taxes and other penalties and liabilities
under ERISA and the Code. In addition, the fiduciary of the Plan that engaged in
such a non-exempt prohibited transaction may be subject to penalties and
liabilities under ERISA and the Code. The acquisition and/or holding of notes by
a Plan with respect to which we, our affiliates or the Initial Purchaser is
considered a party in interest or a disqualified person may constitute or result
in a direct or indirect prohibited transaction under ERISA and/or the Code,
unless the investment is acquired and is held in accordance with an applicable
statutory, class or individual prohibited transaction exemption. In this regard,
the U.S. Department of Labor has issued prohibited transaction class exemptions,
or "PTCEs," that may apply to the acquisition and holding of the notes. These
class exemptions include PTCE 84-14 respecting transactions determined by
independent qualified professional asset managers, PTCE 90-1 respecting
insurance company pooled separate accounts, PTCE 91-38 respecting bank
collective investment trusts, PTCE 95-60 respecting life insurance company
general accounts and PTCE 96-23 respecting transactions determined by in-house
asset managers. However, there can be no assurance that all of the conditions of
any such exemptions will be satisfied, or, if satisfied, that the scope of the
relief will cover all acts which might be construed as prohibited transactions.
Because of the foregoing, the notes should not be purchased or held by any
person investing "plan assets" of any Plan, unless such purchase and holding
will not constitute a non-exempt prohibited transaction under ERISA and the Code
or similar violation of any applicable Similar Laws whether pursuant to an
applicable exemption or otherwise.
The foregoing discussion is general in nature and is not intended to be all
inclusive. Due to the complexity of these rules and the penalties that may be
imposed upon persons involved in non-exempt prohibited transactions, it is
particularly important that fiduciaries, or other persons considering purchasing
the notes on behalf of, or with the assets of, any Plan, consult with their
counsel regarding the potential applicability of ERISA, Section 4975 of the Code
and any similar laws to such investment and whether an exemption would be
applicable to the purchase and holding of the notes.
33
PLAN OF DISTRIBUTION
Each broker-dealer that receives new notes for its own account in the
exchange offer must acknowledge that it will deliver a prospectus in connection
with any resale of the new notes. This prospectus, as it may be amended or
supplemented from time to time, may be used by a broker-dealer in connection
with resales of new notes received in exchange for old notes where the old notes
were acquired as a result of market-making activities or other trading
activities. We have agreed that for 180 days after the closing of the exchange
offer we will make this prospectus, as amended or supplemented, available to any
broker-dealer that requests these documents from the Exchange Agent for use in
connection with resales of the new notes. In addition, until , 2003,
all dealers effecting transactions in the new notes may be required to deliver a
prospectus.
We will not receive any proceeds from any sale of new notes by
broker-dealers. New notes received by broker-dealers for their own account in
the exchange offer may be sold from time to time in one or more transactions in
the over-the-counter market, in negotiated transactions, through the writing of
options on the new notes or a combination of such methods of resale, at market
prices prevailing at the time of resale, at prices related to such prevailing
market prices or negotiated prices. Any resale of the new notes may be made
directly to purchasers or to or through brokers or dealers who may receive
compensation in the form of commissions or concessions from any such
broker-dealer and/or the purchasers of any such new notes. Any broker-dealer
that resells new notes that were received by it for its own account in the
exchange offer and any broker or dealer that participates in a distribution of
the new notes may be deemed to be an "underwriter" within the meaning of the
Securities Act. Any profit on any resale of new notes and any commissions or
concessions received by any persons deemed to be underwriters may be deemed to
be underwriting compensation under the Securities Act. The enclosed letter of
transmittal states that by acknowledging that it will deliver and be delivering
a prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.
For a period of 180 days after the closing of the exchange offer, we will
promptly send additional copies of this prospectus and any amendment or
supplement to this prospectus to any broker-dealer that requests such documents
in the letter of transmittal. We have agreed to pay all expenses incident to the
exchange offer (including the expenses of one counsel for the holders of the old
notes) other than commissions or concessions of any brokers or dealers and will
indemnify the holders of the old notes (including any broker-dealers) against
certain liabilities, including liabilities under the Securities Act.
Following completion of the exchange offer, we may, in our sole discretion,
commence one or more additional exchange offers to holders of old notes who did
not exchange their old notes for new notes in the exchange offer on terms which
may differ from those contained in the prospectus and the enclosed letter of
transmittal. This prospectus, as it may be amended or supplemented from time to
time, may be used by us in connection with any additional exchange offers. These
additional exchange offers may take place from time to time until all
outstanding old notes have been exchanged for new notes, subject to the terms
and conditions in the prospectus and letter of transmittal distributed by us in
connection with these additional exchange offers.
LEGAL MATTERS
The validity of the new notes will be passed upon for us by Andrews & Kurth
L.L.P., Houston, Texas.
EXPERTS
Ernst & Young LLP, independent auditors, have audited the consolidated
financial statements included in Transcontinental Gas Pipe Line Corporation's
Annual Report on Form 10-K for the year ended December 31, 2001, as set forth in
their report, which is incorporated by reference in this Prospectus and
elsewhere in the Registration Statement. Transcontinental Gas Pipe Line
Corporation's financial statements are incorporated by reference in reliance on
Ernst & Young LLP's report, given on their authority as experts in accounting
and auditing.
34
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[LOGO]
TRANSCONTINENTAL GAS
PIPE LINE CORPORATION
, 2002
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PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Transcontinental Gas Pipe Line Corporation is empowered by Section 145 of
the General Corporation Law of Delaware, subject to the procedures and
limitations stated therein, to indemnify any person against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by such person in connection with any threatened, pending or
completed action, suit or proceeding in which such person is made a party by
reason of such person being or having been a director, officer, employee or
agent of Transcontinental Gas Pipe Line Corporation. The statute provides that
indemnification pursuant to its provisions is not exclusive of other rights of
indemnification to which a person may be entitled under any by-law, agreement,
vote of stockholders or disinterested directors, or otherwise. The By-laws of
Transcontinental Gas Pipe Line Corporation provide for indemnification by it of
its directors and officers to the fullest extent permitted by the General
Corporation Law of Delaware. In addition, Transcontinental Gas Pipe Line
Corporation has entered into indemnity agreements with its directors and certain
officers providing for, among other things, the indemnification of and the
advancing of expenses to such individuals to the fullest extent permitted by
law, and, to the extent insurance is maintained, for the continued coverage of
such individuals.
Policies of insurance are maintained by Transcontinental Gas Pipe Line
Corporation under which its directors and officers are insured, within the
limits and subject to the limitations of the policies, against certain expenses
in connection with the defense of actions, suits or proceedings, and certain
liabilities which might be imposed as a result of such actions, suits or
proceedings, to which they are parties by reason of being or having been such
directors or officers.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits
The following instruments and documents are included as Exhibits to this
Registration Statement.
<Table>
<Caption>
EXHIBIT
NUMBER EXHIBIT
- ------- -------
4.1 -- Indenture, dated as of July 3, 2002, between the registrant
and Citibank N.A. (incorporated by reference to Exhibit 4.1
to The Williams Companies, Inc. Form 10-Q for the quarterly
period ended June 30, 2002 Commission File Number 1-4174)
4.2 -- Registration Rights Agreement, dated July 3, 2002, by and
among the registrant and Salomon Smith Barney Inc., and
other parties listed therein, as Initial Purchasers.
5.1 -- Opinion of Andrews & Kurth L.L.P., as to the validity of the
new notes.
10.1 -- Purchase Agreement between registrant and the parties listed
therein, dated June 28, 2002.
12.1 -- Statement re computation of ratios.
23.1 -- Consent of Ernst & Young LLP.
24.1 -- Power of Attorney (included on signature page).
25.1 -- Statement of Eligibility and Qualification under the Trust
Indenture Act of 1939, as amended, on Form T-1, of Wells
Fargo Bank, N.A., as trustee.
99.1 -- Form of Letter of Transmittal.
99.2 -- Form of Notice of Guaranteed Delivery.
</Table>
II-1
ITEM 22. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
(a)(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment theory thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered)and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes
in volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement; and
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed with or furnished
to the SEC by the registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) That, for purposes of determining any liability under the
Securities Act of 1933, each filing of the registrant's annual report
pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934
(and, where applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Securities Exchange Act of 1934)
that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(c) To respond to requests for information that is incorporated by
reference into the prospectus pursuant to Item 4, 10(b), 11, or 13 of this
form, within one business day of receipt of such request, and to send the
incorporated documents by first class mail or other equally prompt means.
This includes information contained in documents filed subsequent to the
effective date of the registration statement through the date of responding
to the request.
(d) To supply by means of a post-effective amendment all information
concerning a transaction, and the company being acquired involved therein,
that was not the subject of and included in the Registration Statement when
it became effective.
(e) To file an application for the purpose of determining the
eligibility of the trustee to act under subsection (a) of section 310 of
the Trust Indenture Act ("Act") in accordance with the rules and
regulations prescribed by the Commission under Section 305(b)2 of the Act.
II-2
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, on this 10 day of
December, 2002.
TRANSCONTINENTAL GAS PIPE LINE
CORPORATION
By: /s/ JAMES C. BOURNE
------------------------------------
James C. Bourne
Controller, Assistant Treasurer
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
Richard Carson and Richard Rodekhor (with full power to each of them to act
alone) his true and lawful attorney-in-fact and agent, with full power of
substitution, for him and on his behalf and in his name, place and stead, in any
and all capacities, to sign, execute and file this registration statement under
the Securities Act of 1933, as amended, and any or all amendments (including,
without limitation, post-effective amendments), with all exhibits and any and
all documents required to be filed with respect thereto, with the Securities and
Exchange Commission or any regulatory authority, granting unto such
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises in order to effectuate the same, as fully to all intents
and purposes as he himself might or could do, if personally present, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or any of
them, or their substitute or substitutes, may lawfully do or cause to be done.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated on December 10, 2002.
<Table>
<Caption>
SIGNATURE TITLE
--------- -----
/s/ STEVEN J. MALCOLM Chairman of the Board
------------------------------------------------
Steven J. Malcolm
/s/ J. DOUGLAS WHISENANT Director, President
------------------------------------------------ and Chief Executive Officer
J. Douglas Whisenant (Principal Executive Officer)
/s/ RICHARD RODEKHOR Vice President
------------------------------------------------ (Principal Financial Officer)
Richard Rodekhor Treasurer
/s/ JAMES C. BOURNE Controller
------------------------------------------------ (Principal Accounting Officer)
James C. Bourne Assistant Treasurer
</Table>
II-3
EXHIBIT INDEX
<Table>
<Caption>
EXHIBIT
NUMBER EXHIBIT
- ------- -------
4.1 -- Indenture, dated as of July 3, 2002, between the registrant
and Citibank N.A. (incorporated by reference to Exhibit 4.1
to The Williams Companies, Inc. Form 10-Q for the quarterly
period ended June 30, 2002 Commission File Number 1-4174)
4.2 -- Registration Rights Agreement, dated July 3, 2002, by and
among the registrant and Salomon Smith Barney Inc., and
other parties listed therein, as Initial Purchasers.
5.1 -- Opinion of Andrews & Kurth L.L.P., as to the validity of the
new notes.
10.1 -- Purchase Agreement between registrant and the parties listed
therein, dated June 28, 2002.
12.1 -- Statement re computation of ratios.
23.1 -- Consent of Ernst & Young LLP.
24.1 -- Power of Attorney (included on signature page).
25.1 -- Statement of Eligibility and Qualification under the Trust
Indenture Act of 1939, as amended, on Form T-1, of Wells
Fargo Bank, N.A., as trustee.
99.1 -- Form of Letter of Transmittal.
99.2 -- Form of Notice of Guaranteed Delivery.
</Table>