RegistrationNo. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORMForm S-4
REGISTRATION STATEMENT
UNDER
UNDER
NORTHWEST PIPELINE LLC
(Exact Namename of Registrantregistrant as Specifiedspecified in Its Charter)
| 4922 | ||||
| Delaware | 26-1157701 | |||
(Primary Standard Industrial Classification Code Number) | (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) |
295 Chipeta Way
Salt Lake City, Utah 84108
(801) 583-8800
(Address, Including Zip Code,including zip code, and Telephone Number, Including Area Code,telephone number, including area code, of Registrant’s Principal Executive Offices)
T. Lane Wilson
Senior Vice President and General Counsel
The Williams Companies, Inc.
One Williams Center
Tulsa, Oklahoma 74172
(918)573-2000
(Name, Address, Including Zip Code,address, including zip code, and Telephone Number, Including Area Code,telephone number, including area code, of Agent For Service)
With a copy to:
Robyn E. Zolman
Gibson, Dunn & Crutcher LLP
1801 California Street Suite 4200
Denver, Colorado 80202
(303)298-5700
Approximate date of commencement of proposed sale of the securities to the public:As soon as practicable after this registration statement becomes effective.
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.o
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.o
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. ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, aonon-accelerated
| Proposed | Proposed Maximum | Amount Of | ||||||||||
| Title of Each Class of | Amount | Maximum Offering | Aggregate | Registration | ||||||||
| Securities To Be Registered | To Be Registered | Price Per Unit(1) | Offering Price(1) | Fee | ||||||||
| 5.95% Senior Notes due 2017 | $185,000,000 | 100% | $185,000,000 | $5,680 | ||||||||
| ☐ | Accelerated filer | ☐ | ||||
| Non-accelerated filer | ☒ | Smaller reporting company | ☐ | |||
| Emerging growth company | ☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐
If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:
Exchange Act Rule13e-4(i) (Cross-Border Issue Tender Offer) ☐
Exchange Act Rule14d-1(d) (Cross-Border Third-Party Tender Offer) ☐
CALCULATION OF REGISTRATION FEE
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Title of each class of securities to be registered | Amount to be registered | Proposed maximum offering price per unit(1) | Proposed maximum aggregate offering price(1) | Amount of registration fee | ||||
4.000% Senior Notes due 2027 | $250,000,000 | 100% | $250,000,000 | $31,125 | ||||
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| (1) | Exclusive of accrued interest, if any, and estimated solely for the purpose of calculating the registration fee in accordance with Rule 457(f) under the Securities Act of 1933, as amended. |
The Registrantregistrant hereby amends this Registration Statementregistration statement on such date or dates as may be necessary to delay its effective date until the Registrantregistrant shall file a further amendment which specifically states that this Registration Statementregistration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until this Registration Statementregistration 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. We may not complete the exchange offer and issue these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.
PROSPECTUS
$185,000,000
Northwest Pipeline Corporation
Offer to Exchange Offer for All Outstanding
that have been registered under the Securities Act of 1933
for any and all outstanding
4.000% Senior Notes due 2027
(CUSIP Nos. 66775V AA3 and U6664R AA9)
This exchange offer will expire at 5:00 p.m., New York City time,
on , 2007,2018, unless extended.
We are offering to exchange Northwest Pipeline LLC’s 4.000% Senior Notes due 2027, which have been registered under the Securities Act of 1933, as amended (the “Securities Act”), and which we refer to in this prospectus as the “exchange notes,” for any and all of Northwest Pipeline LLC’s 4.000% Senior Notes due 2027 issued on April 3, 2017, which we refer to in this prospectus as the “outstanding notes.” The term “notes” refers to both the outstanding notes and the exchange notes. We refer to the offer to exchange the exchange notes for the outstanding notes as the “exchange offer” in this prospectus.
The Exchange Notes:
Material Terms of the Exchange Offer:
See “Risk Factors”“Risk Factors” beginning on page 8 for a discussion of certain risks that you should consider in connection with an investment in the notes.10.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or the accuracy of this prospectus. Any representation to the contrary is a criminal offense.
Prospectus dated , 2007
2018
We have not authorized anyone to provide you with any information or to make representations other than those contained or incorporated by reference in this prospectus. We take no responsibility for and can provide no assurance as to the reliability of any other information that others may give you. We are not making an offer to sell or soliciting an offer to buy any securities other than the securities described in this prospectus. We are not making an offer to sell or soliciting an offer to buy any of these securities in any state or jurisdiction where the offer is not permitted or in any circumstances in which such offer or solicitation is unlawful.
You should not assume that the information contained or incorporated by reference in this prospectus is accurate as of any date other than the date on the front of those documents. Our business, financial condition, results of operations and prospects may have changed since those dates.We have not authorized anyone to give any information or make any representation about us that is different from or in addition to that contained in this prospectus. Therefore, if anyone does give you information of this sort, you should not rely on it as authorized by us. If you are in a jurisdiction where offers to sell, or solicitations of offers to purchase, the securities offered by this document are unlawful, or if you are a person to whom it is unlawful to direct these types of activities, then the offer presented in this document does not extend to you. You should assume that the information contained in this prospectus is accurate only as of the date on the front of this prospectus, regardless of the date of delivery of this prospectus or the sale of the securities made hereunder.
We are subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and file annual, quarterly and specialcurrent reports and other information with the Securities and Exchange Commission (the “SEC”(“SEC”). You may read and copy any document that we file with the SEC at the SEC’s public reference room located at 100 F Street, N.E. Washington, D.C. 20549. Please call the SEC at1-800-SEC-0330 for further information on the operation of the public reference room. Our SEC filings are also available to the public from commercial document retrieval services andover the Internet at the web site maintained by the SECSEC’s website athttp://www.sec.gov.www.sec.gov. Unless specifically listed under “Incorporation by Reference” below, the information contained on the SEC web sitewebsite is not intended to be incorporated by reference in this prospectus and you should not consider that information a part of this prospectus.
This prospectus incorporates important business and financial information about us that is not included in or delivered with this prospectus. We will provide without charge to each person to whom a copy of this prospectus has been delivered, who makes a written or oral request, a copy of this information and any and all of the documents referred to herein, including the registration rights agreement and the indenture for the notes, which are summarized in this prospectus, by writing or calling us at the following address or telephone number.
Northwest Pipeline Corporation
Attention: Associate General Counsel
295 Chipeta Way
Salt Lake City, Utah 84108
(801)583-8800
In order to ensure timely delivery, you must make such request the information no later than five business days before the expiration of the exchange offer.
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We incorporate“incorporate by reference intoreference” in this prospectus the following documents that we have previously filed with the SEC. This means that we are disclosing important information to you without actually including the specific information in this prospectus by referring you to other documents filed separately with the SEC. The information incorporated by reference is an important part of this prospectus. Information that we later provide to the SEC, and which is deemed “filed” with the SEC, will automatically update information previously filed with the SEC, which means that we can disclose importantand may replace information to you by referring you to those filings:in this prospectus and information previously filed with the SEC:
We also incorporate by reference each of the documents that we file with the SEC (excluding those filings made under ItemsItem 2.02 or 7.01 of FormForm 8-K and corresponding information furnished under Item 9.01 ofForm 8-K or included as an exhibit)exhibit, or other information furnished to the SEC) under SectionsSection 13(a), 13(c), 14, or 15(d) of the Exchange Act on or after the date of the initial registration statement and prior to effectiveness of the registration statement and on or after the date of this prospectus and prior to the completion of the exchange offer. Any statements made in such documents will automatically update and supersede the information contained in this prospectus, and any statements made in this prospectus update and supersede the information contained in past SEC filings incorporated by reference into this prospectus.
Except for any historical information contained or incorporated by reference herein, the matters discussed in this prospectus All statements, other than statements of historical facts, included in this prospectus that address activities, events or developments that we expect, believe, or anticipate will exist or may occur in the future are forward-looking statements. Forward-looking statements can be identified by various forms of words or phrases such as “anticipates,” “believes,” “seeks,” “could,” “may,” “should,” “continues,” “estimates,” “expects,” “assumes,” “forecasts,” “intends,” iiTheincludesand the documents incorporated by reference herein contain certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.statements. These forward-looking statements relate to anticipated financial performance, management’s plans and objectives for future operations, business prospects, outcome of regulatory proceedings, market conditions, and other matters. Words“may,” “might,” “objective,“goals,” “objectives,” “targets,” “planned,” “potential,” “projects,” “scheduled,” and “should” and“will,” “guidance,” “outlook,” “in service date,” or other similar expressions identify those statements that are forward-looking.expressions. These forward-looking statements are based on management’s beliefs and assumptions and on information currently available to management and include, among others, statements regarding:• amounts and nature of future capital expenditures;• expansion and growth of our business and operations;• business strategy;• cash flow from operations;• rate case filings; and• power and gas prices and demand.
Forward-looking statements are based on numerous assumptions, uncertainties, and risks that could cause future events or results to be materially different from those stated or implied in this prospectus. Many of the factors that will determine these results are beyond our ability to control or project.predict. Specific factors that could cause actual results to differ from results contemplated by the forward-looking statements include, among others, the following:
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In addition to causing our actual results to differ, the factors listed above and referred to below may cause our intentions to change from those statements of intention set forth in this prospectus. Such changes in our intentions may also cause our results to differ. We may change our intentions, at any time and without notice, based upon changes in such factors, our assumptions, or otherwise.
Because forward-looking statements involve risks and uncertainties, we caution that there are important factors, in addition to those listed above, that may cause actual results to differ materially from those contained in the forward-looking statements. These factors include the risks set forth under the caption “Risk Factors.”
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Northwest Pipeline LLC We Our system We own aone-third interest in the Jackson Prairie underground storage facility located near Chehalis, Washington. We have a contract with a third party under which we contract for natural gas storage services in an underground storage reservoir in the Clay Basin Field located in Daggett County, Utah. We also own and operate a Liquefied Natural Gas (“LNG”) storage facility near Plymouth, Washington. We have approximately 14.2 MMdth of working natural gas storage capacity through these three storage facilities, which is substantially utilized for third-party natural gas. These natural gas storage facilities enable us to balance daily receipts and deliveries and provide storage services to our customers. We transport and store natural gas for a broad mix of customers, Our rates are subject to the rate-making policies of the FERC. We provide a significant portion of our transportation and storage services pursuant to long-term firm contracts that obligate our customers to pay us monthly capacity reservation fees, which are fees that are owed for reserving an agreed upon amount of pipeline or storage capacity regardless of the amount of pipeline or storage capacity actually utilized by a customer. When a customer utilizes the capacity it has reserved under a firm transportation contract, we also collect a volumetric fee based on the quantity of natural gas transported. These volumetric fees are typically a small percentage of theThe followingThis summary contains basichighlights some of the information about us andcontained or incorporated by reference in this exchange offer, but doesprospectus. This summary may not contain all of the information that may be important to you. For a more complete understanding of this exchange offer, we encourage you toYou should read thisthe entire prospectus and the documents incorporated by reference herein. You should carefully consider the information set forth under “Risk Factors.” In addition, certain statements are forward-looking statements, which involve risks and uncertainties. See “Special Note Regarding Forward-Looking Statements.”in this prospectus before making an investment decision. References in this prospectus to “we,” “us,” “our,” and the “Company”“Northwest” refer to Northwest Pipeline Corporation,LLC, unless otherwise stated or the context indicates otherwise.otherwise requires.NORTHWEST PIPELINE CORPORATIONare an interstate natural gas transportation company that ownsown and operatesoperate a natural gas pipeline system extendingthat extends from the San Juan basinBasin in northwestern New Mexico and southwestern Colorado through the states of Colorado, Utah, Wyoming, Idaho, Oregon and Washington to a point on the Canadian border near Sumas, Washington. We provide natural gas transportation services for markets in California,Washington, Oregon, Idaho, Wyoming, Nevada, Utah, Colorado, New Mexico, Colorado, Utah, Nevada, Wyoming, Idaho, Oregon,California and WashingtonArizona, either directly or indirectly through interconnections with other pipelines. Our principal business is the interstate transportation of natural gas, which is regulated by the Federal Energy Regulatory Commission (“FERC”).At December 31, 2006, ourhad long-term firm transportation agreements with peaking capacity of approximately 3.4 MMDth (million dekatherms) of gas per day and was comprised ofincludes approximately 3,900 miles of mainline and lateral transmission pipelinespipeline and 41 transmission compressor stations. Our compression facilities have a combined sea level-rated capacity of approximately 473,000472,000 horsepower.In 2006, At December 31, 2016, we served a total of 141had long-term firm transportation contracts and storage redelivery agreements, with aggregate capacity reservations of approximately 3.8 million dekatherms (“MMdth”) of natural gas per day. Our transportationincludeincluding local natural gas distribution companies, municipalities, interstatemunicipal utilities, direct industrial users, electric power generators, and intrastate pipelines,natural gas marketers and direct industrial users. In 2006, our two largest customers were Puget Sound Energy, Inc. and Northwest Natural Gas Co., which accounted for approximately 19.9 percent and 10.9 percent, respectively, of our total operating revenues. No other customer accounted for more than 10 percent of our total operating revenues in 2006.producers. Our firm transportation and storage agreementscontracts are generally long-term agreementscontracts with various expiration dates and account for the major portion of our business. Additionally, we offer interruptible and short-term termfirm transportation services.The credit ratings on During 2017, our senior unsecured long-term debt as of March 31, 2007 are shown below.Moody’s Investors ServiceBalStandard and Poor’sBB+Fitch RatingsBBB−As of March 31, 2007, the Moody’s Investors Service, Standardthree largest customers were Puget Sound Energy, Inc., Northwest Natural Gas Company, and Poor’s,Cascade Natural Gas Corporation, which accounted for approximately 25.3 percent, 11.0 percent, and Fitch Ratings evaluations10.3 percent, respectively, of our credit rating outlook were stable.total operating revenues for the nine months ended September 30, 2017. No other customer accounted for more than 10 percent of our total operating revenues during that period.
total fees received under a firm contract. We also derive a small portion of our revenues from short-term firm and interruptible contracts under which customers pay fees for transportation, storage and other related services. The high percentage of our revenue derived from capacity reservation fees helps mitigate the risk of revenue fluctuations caused by changing supply and demand conditions.
Our operations are subject to the Natural Gas Pipeline Safety Act of 1968, as amended, the Pipeline Safety Improvement Act of 2002, the Pipeline Safety, Regulatory Certainty, and Jobs Creation Act of 2011 (the “Pipeline Safety Act”), and the Protecting Our Infrastructure of Pipelines and Enhancing Safety Act of 2016 (the “PIPES Act”), which regulate safety requirements in the design, construction, operation, and maintenance of interstate natural gas transmission facilities. The U.S. Department of Transportation’s Pipeline and Hazardous Materials Safety Administration (“PHMSA”) administers federal pipeline safety laws.
Federal pipeline safety laws authorize PHMSA to establish minimum safety standards for pipeline facilities and persons engaged in the transportation of gas or hazardous liquids by pipeline. These safety standards apply to the design, construction, testing, operation, and maintenance of gas and hazardous liquids pipeline facilities affecting interstate or foreign commerce. PHMSA has also established reporting requirements for operators of gas and hazardous liquid pipeline facilities, as well as provisions for establishing the qualification of pipeline personnel and requirements for managing the integrity of gas transmission and distribution lines and certain hazardous liquid pipelines. To ensure compliance with these provisions, PHMSA performs pipeline safety inspections and has the authority to initiate enforcement actions.
On January 3, 2012, the Pipeline Safety Act was enacted. The Pipeline Safety Act requires PHMSA to complete a number of reports in preparation for potential rulemakings. The issues addressed in these rulemaking provisions include, but are not limited to, the use of automatic or remotely-controlledshut-off valves on new or replaced transmission line facilities, modifying the requirements for pipeline leak detection systems, and expanding the scope of the pipeline integrity management requirements. On June 22, 2016, the PIPES Act was enacted, further strengthening PHMSA’s safety authority.
We have developed an Integrity Management Plan in compliance with the PHMSA final rule that was issued pursuant to the requirements of the Pipeline Safety Improvement Act of 2002. The rule requires gas pipeline operators to develop an integrity management program for transmission pipelines that could affect high consequence areas in the event of pipeline failure. The Integrity Management Plan includes a baseline assessment plan along with periodic reassessments to be completed within required timeframes. In meeting the integrity regulations, we identified high consequence areas as defined by the rule. Ongoing periodic reassessments and initial assessments of any new high consequence areas will be completed within the timeframes required by the rule. Management considers the costs associated with compliance with the rule to be prudent costs incurred in the ordinary course of business and, therefore, recoverable through our rates.
We are indirectly owned by Williams Partners L.P. (“WPZ”), a wholly-owned subsidiary of Williams Gas Pipeline Company, LLC (“WGP”). WGPpublicly traded Delaware limited partnership, which is a wholly-owned subsidiary ofconsolidated by The Williams Companies, Inc. (“Williams”). At December 31, 2017, Williams owned an approximate 74 percent limited partner interest in WPZ and all of the general partner interest. Williams is a natural gas company that has been active in constructing gas pipelines since 1916 and in operating interstate natural gas pipelines since 1983. We
Prior to October 1, 2007, we were a corporation incorporated in Delaware, in 1965.known as Northwest Pipeline Corporation, and effective October 1, 2007, we converted to a general partnership organized under the laws of Delaware, known as Northwest Pipeline GP. We converted to a limited liability company organized under the laws of Delaware effective July 1, 2013. Our principal executive offices are located at 295 Chipeta Way, Salt Lake City, Utah 84108 and our telephone number is (801)(801) 583-8800.
Recent Developments
Our rates charged to our customers are subject to the rate-making policies of the FERC. These policies permit an interstate pipeline to include in its cost-of-service an income tax allowance that includes a deferred income tax component. Recently enacted tax reform legislation signed into law on December 22, 2017 (the “Tax Reform Act”), among other things, reduces the corporate federal income tax rates. As a result of the decreased federal income tax rates and our collection of the rates charged to our customers, which are partially based on historical corporate federal income tax rates, we entered into an Amendment Agreement (the “Amendment”) amongexpect to reduce our rates charged to customers in the Company, Williams, Williams Partners L.P. (“MLP”), Transcontinental Gas Pipe Line Corporation (“TGPL,” and together with the Company, Williams, and MLP, the “Borrowers”), the Banks (as defined below) and Citibank, N.A., as administrative agent, amending the Credit Agreement, datedfuture. As such, we may be required to recognize a regulatory liability as of May 1, 2006 (the “Credit Agreement”), among the Borrowers, the banks, financial institutions and other institutional lenders that are parties thereto (the “Banks”) and Citibank, N.A., as administrative agent. Among other things, the Amendment modifies the pricing grid that determines what pricing applies to loans made under the Credit Agreement and extends the maturity date of enactment of the Credit AgreementTax Reform Act. Currently, we are still in the process of estimating the amount of the regulatory liability, which could be material to Mayour financial statements. The actual adjustment and timing of any return of collected taxes to our customers will be subject to future discussions and negotiations with our customers in our next rate case.
In addition to the regulatory liability discussed above, as part of our 2017 rate case settlement, which became effective January 1, 2012.
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The following is aExchange Offer
The summary ofbelow describes the principal terms of the exchange offer. ACertain of the terms and conditions described below are subject to important limitations and exceptions. The sections of this prospectus entitled “The Exchange Offer” and “Description of Notes” contain a more detailed description is contained inof the section “The Exchange Offer.” The term “outstanding notes” refers to our outstanding 5.95% Senior Notes due 2017, which were issued on April 5, 2007. The term “exchange notes” refers to our 5.95% Senior Notes due 2017 offered by this prospectus, which have been registered under the Securities Actterms and conditions of 1933, as amended, or the Securities Act. The term “notes” refers to the outstanding notes and the exchange notes offered in the exchange offer collectively. The term “indenture” refers to the indenture that governs both the outstanding notes and the exchange notes.
The Exchange Offer |
| In order to exchange your outstanding notes for exchange notes, you must properly tender them |
Expiration Time | The exchange offer will expire at 5:00 p.m., New York City time, on , |
Conditions to the Exchange Offer | The exchange offer is subject to customary conditions |
How to Tender Outstanding Notes | for Exchange | You may tender your outstanding notes through book-entry transfer in accordance with The Depository Trust Company’s Automated Tender Offer Program, known as ATOP. If you wish to accept the exchange offer, you must: |
complete, sign and date the accompanying letter of transmittal, or a facsimile of the letter of transmittal, in accordance with the instructions contained in the letter of transmittal, and mail or otherwise deliver prior to the expiration time the letter of transmittal, together with your outstanding notes, to the
exchange agent at the address set forth under “The Exchange Offer — The Exchange | ||
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Guaranteed Delivery Procedures | If you wish to tender your outstanding notes and time will not permit your required documents to reach the exchange agent by the expiration time, or the procedures for book-entry transfer cannot be completed by the expiration time, you may tender your outstanding notes according to the guaranteed delivery procedures described in “The Exchange Offer — Guaranteed Delivery Procedures.” |
Special Procedures for Beneficial Owners | If you beneficially own outstanding notes registered in the name of a broker, dealer, commercial bank, trust company or other nominee and you wish to tender your outstanding notes in the exchange offer, you should contact the registered holder promptly and instruct it to tender on your behalf. See “The Exchange Offer — How to Tender Outstanding Notes for Exchange.” |
Withdrawal of Tenders | You may withdraw your tender of outstanding notes at any time |
Acceptance of Outstanding Notes and Delivery of Exchange Notes | Upon consummation of the exchange offer, we will accept any and all outstanding notes that are properly tendered in the exchange offer and not withdrawn |
Registration Rights Agreement | We are making the exchange offer pursuant to the registration rights agreement that we entered into on April |
Resales of Exchange Notes | We believe that the exchange notes issued in the exchange offer may be offered for resale, resold or otherwise transferred by you without compliance with the registration and prospectus delivery requirements of the Securities Act, provided that: |
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| If you do not meet these requirements, your resale of the exchange notes must comply with the registration and prospectus delivery requirements of the Securities Act. |
| Our belief is based on interpretations by the staff of the SEC, as set forth inno-action letters issued to third parties. The staff of the SEC has not considered this exchange offer in the context of ano-action letter, and we cannot assure you that the staff of the SEC would make a similar determination with respect to this exchange offer. |
| If our belief is not accurate and you transfer an exchange note without delivering a prospectus meeting the requirements of the federal securities laws or without an exemption from these laws, you may incur liability under the federal securities laws. We do not and will not assume, or indemnify you against, this liability. |
| See “The Exchange Offer — Consequences of Exchanging Outstanding Notes.” |
Consequences of Failure to Exchange Your Outstanding Notes | If you do not exchange your outstanding notes for exchange notes in the exchange offer, your outstanding notes will continue to be subject to the restrictions on transfer provided in the legend on the outstanding notes and in the |
trading market for your untendered outstanding notes could be adversely affected. |
Exchange Agent | The exchange agent for the exchange offer is The Bank of New |
Certain Federal Income Tax | Considerations | The exchange of your outstanding notes for exchange notes will not be a taxable exchange for United States federal income tax purposes.You should consult your own tax advisor as to the tax consequences to you of the exchange offer, as well as to the tax consequences of the ownership and disposition of the exchange |
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Summary of the Terms of the Exchange Notes
The terms of the exchange notes are substantially the same asidentical to the outstanding notes, except that the provisions relating tofor transfer restrictions, registration rights and Additional Interest applicable to the outstanding notes will not apply to the exchange notes. The following is a summary of the principal terms of the exchange notes. A more detailed description is contained in the section “Description of Notes” in this prospectus.
Issuer | Northwest Pipeline |
Securities Offered | $ |
Maturity Date | April |
Interest | Interest on the exchange notes will accrue at an annual rate of 4.000%. Interest will be paid semi-annually in arrears on April |
| Holders whose outstanding notes are exchanged for exchange notes will not receive a payment in respect of interest accrued but unpaid on such outstanding notes from the most recent interest payment date up to but excluding the settlement date of the exchange offer. Instead, interest on the exchange notes received in exchange for such outstanding notes will (i) accrue from the last date on which interest was paid on such outstanding notes and (ii) accrue at the same rate as and be payable on the same dates as interest was payable on such outstanding notes. However, if any interest payment occurs prior to the settlement date of the exchange offer on any outstanding notes already tendered for exchange in the exchange offer, the holder of such outstanding notes will be entitled to receive such interest payment. |
Mandatory Redemption | We will not be required to make mandatory redemption or sinking fund payments with respect to the exchange notes. |
Limited Recourse Obligations | Payments of principal, premium, if any, and interest in respect of the exchange notes will be solely our obligations. Noteholders will have no recourse against Williams or WPZ, or against any of Williams’ or WPZ’s respective officers, directors, employees, shareholders, members, managers or affiliates for any failure by us to perform or comply with our obligations under the exchange notes or the indenture governing the notes. |
Optional Redemption | At any time prior to January 1, 2027, we may redeem some or all of the exchange notes at the make-whole price described in “Description of Notes — Optional Redemption,” plus accrued and unpaid interest, if any, to the applicable redemption date. |
| At any time on or after January 1, 2027, we may redeem some or all of the notes at a redemption price equal to 100% of the principal amount of the notes to be redeemed plus accrued and unpaid interest to the applicable redemption date. |
Ranking | The exchange notes will be our senior unsecured obligations and will rank |
Certain Covenants | The indenture governing the notes |
Denomination | The | |
Use of Proceeds | We will not receive any cash proceeds from the issuance of the exchange notes offered by this prospectus. |
Risk Factors |
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Risks Inherent to Our Industry and Business
Our natural gas transportation and storage activities involve numerous risks and hazards that might result in accidents and unforeseen interruptions.
Our operations are subject to all the risks and hazards typically associated with the transportation and storage of natural gas including, but not limited to:
Any of these risks could result in loss of human life, personal injuries, significant damage to property, environmental pollution, impairment of our operations, loss of services to our customers, reputational damage, and substantial losses to us. The location of certain segments of our pipeline in or near populated areas, including residential areas, commercial business centers, and industrial sites, could increase the level of damages resulting from these risks. An event such as those described above could cause considerable harm and have been derived froma material adverse effect on our audited financial statementscondition and results of operations, particularly if the event is not fully covered by insurance.
Certain of our services are subject to long-term, fixed-price contracts that are not included, or incorporated by reference, in this prospectus. The selected financial data (excludingsubject to adjustment, even if our cost to perform such services exceeds the operating data) asrevenues received from such contracts.
We provide some services pursuant to long-term, fixed-price contracts. It is possible that costs to perform services under such contracts will exceed the revenues we collect for our services. Although most of March 31, 2007 and for the three-month periods ended March 31, 2007 and 2006 have been derived from our unaudited condensed financial statementsservices are priced at cost-based rates that are incorporatedsubject to adjustment in rate cases, under the FERC policy, a regulated service provider and a customer may mutually agree to sign a contract for service at a “negotiated rate” that may be above or below the FERC regulated cost-based rate for that service. These “negotiated rate” contracts are not generally subject to adjustment for increased costs that could be produced by reference in this prospectus. The selected consolidated financial data shouldinflation or other factors relating to the specific facilities being used to perform the services.
We may not be read in conjunctionable to extend or replace expiring natural gas transportation and storage contracts at favorable rates, on a long-term basis or at all.
Our primary exposure to market risk occurs at the time the terms of existing transportation and storage contracts expire or are subject to termination. Upon expiration or termination of our existing contracts, we may not be able to extend such contracts with such financial statements, the notes thereto, and the related management’s narrative analysisexisting customers or obtain replacement contracts at favorable rates, on
a long-term basis or at all. Failure to extend or replace a significant portion of the results of operations. Our unaudited condensed financial statementsour existing contracts may have been prepareda material adverse effect on the same basis as our audited financial statements and, in the opinion of management, include all adjustments, consisting only of normal recurring adjustments, considered necessary for a fair presentation of ourbusiness, financial condition, results of operations, and cash flowsflows. Our ability to extend or replace existing customer contracts on favorable terms is subject to a number of factors, some of which are beyond our control, including:
| Three Months Ended | ||||||||||||||||||||||||||||
| March 31, | Year Ended December 31, | |||||||||||||||||||||||||||
| 2007 | 2006 | 2006 | 2005 | 2004 | 2003 | 2002 | ||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||||
| (Dollars in thousands, except operating data) | ||||||||||||||||||||||||||||
Income Statement Data: | ||||||||||||||||||||||||||||
| Operating Revenues | $ | 103,043 | $ | 79,638 | $ | 324,250 | $ | 321,457 | $ | 338,532 | $ | 323,353 | $ | 297,619 | ||||||||||||||
| Operating Expenses: | ||||||||||||||||||||||||||||
| General and administrative | 14,435 | 12,176 | 56,463 | 49,749 | 51,062 | 45,693 | 49,338 | |||||||||||||||||||||
| Operation and maintenance | 15,390 | 15,678 | 65,763 | 53,330 | 42,878 | 31,842 | 32,279 | |||||||||||||||||||||
| Depreciation | 19,413 | 17,411 | 75,192 | 66,333 | 65,615 | 66,735 | 58,988 | |||||||||||||||||||||
| Regulatory credits | (770 | ) | (1,062 | ) | (4,469 | ) | (4,446 | ) | (7,180 | ) | (6,357 | ) | 28 | |||||||||||||||
| Taxes, other than income taxes | 4,184 | 4,497 | 15,018 | 15,115 | 17,492 | 19,220 | 12,352 | |||||||||||||||||||||
| Impairment charges | — | — | — | — | 8,872 | (1) | 25,643 | (2) | — | |||||||||||||||||||
| Total Operating Expenses | 52,652 | 48,700 | 207,967 | 180,081 | 178,739 | 182,776 | 152,985 | |||||||||||||||||||||
| Operating Income | 50,391 | 30,938 | 116,283 | 141,376 | 159,793 | 140,577 | 144,634 | |||||||||||||||||||||
| Other Income (net) | 1,554 | 4,582 | 16,597 | 10,597 | 5,278 | 14,178 | 10,374 | |||||||||||||||||||||
| Interest Charges: | ||||||||||||||||||||||||||||
| Interest on long-term debt | 12,336 | 9,443 | 43,649 | 38,164 | 38,721 | 37,144 | 25,577 | |||||||||||||||||||||
| Other interest | 988 | 1,060 | 3,824 | 3,389 | 3,368 | 3,388 | 2,688 | |||||||||||||||||||||
| Allowance for borrowed funds used during construction | (559 | ) | (529 | ) | (4,557 | ) | (1,529 | ) | (452 | ) | (3,589 | ) | (2,638 | ) | ||||||||||||||
| Total Interest Charges | 12,765 | 9,974 | 42,916 | 40,024 | 41,637 | 36,943 | 25,627 | |||||||||||||||||||||
| Income Before Income Taxes | 39,180 | 25,546 | 89,964 | 111,949 | 123,434 | 117,812 | 129,381 | |||||||||||||||||||||
| Provision for Income Taxes | 15,200 | 9,644 | 32,821 | 40,194 | 46,779 | 44,518 | 48,750 | |||||||||||||||||||||
| Net Income | $ | 23,980 | $ | 15,902 | $ | 57,143 | $ | 71,755 | $ | 76,655 | $ | 73,294 | $ | 80,631 | ||||||||||||||
| Cash Dividends on Common Stock | $ | — | $ | — | $ | — | $ | 50,000 | $ | 60,000 | $ | — | $ | — | ||||||||||||||
Cash Flow and Other Financial Data: | ||||||||||||||||||||||||||||
| Net Cash Provided by Operating Activities | $ | 70,815 | $ | 57,224 | $ | 189,258 | $ | 108,135 | $ | 181,848 | $ | 218,808 | $ | 136,487 | ||||||||||||||
| Capital Expenditures | (48,092 | ) | (40,313 | ) | (473,566 | ) | (137,232 | ) | (102,213 | ) | (294,524 | ) | (181,843 | ) | ||||||||||||||
| Ratio of Earnings to Fixed Charges(3) | 3.91 | 3.39 | 2.87 | 3.64 | 3.86 | 3.81 | 5.31 | |||||||||||||||||||||
Operating Data: | ||||||||||||||||||||||||||||
| Transportation volumes (trillion British Thermal Units) | 200 | 180 | 676 | 673 | 650 | 682 | 729 | |||||||||||||||||||||
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| As of March 31, | As of December 31, | |||||||||||||||||||||||
| 2007 | 2006 | 2005 | 2004 | 2003 | 2002 | |||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||||||
Balance Sheet Data: | ||||||||||||||||||||||||
| Net property, plant and equipment | $ | 1,805,379 | $ | 1,776,023 | $ | 1,328,895 | $ | 1,340,036 | $ | 1,312,949 | $ | 1,104,565 | ||||||||||||
| Total assets | 1,999,780 | 1,977,353 | 1,616,104 | 1,589,936 | 1,530,704 | 1,232,673 | ||||||||||||||||||
| Long-term debt, less current maturities | 434,227 | 434,208 | 512,580 | 520,062 | 527,542 | 360,023 | ||||||||||||||||||
| Total common stockholder’s equity | 837,325 | 813,037 | 708,757 | 687,002 | 669,959 | 593,839 | ||||||||||||||||||
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Competitive pressures could lead to be subject to the provisions in the indenture and the legend contained on the outstanding notes regarding the transfer restrictions of the outstanding notes. In general, outstanding notes, unless registered under the Securities Act, may not be offered or sold except pursuant to an exemption from, or in a transaction not subject to, the Securities Act and applicable state securities laws. We do not currently anticipate that we will take any action to register under the Securities Act or under any state securities laws the outstanding notes that are not tendered in the exchange offer or that are tendered in the exchange offer but are not accepted for exchange. If a substantial amount of the outstanding notes is exchanged for alike-amount of the exchange notes issued in the exchange offer, the liquidity of your outstanding notes could be adversely affected. See “The Exchange Offer — Consequences of Failure to Exchange Outstanding Notes” for a discussion of additional consequences of failing to exchange your outstanding notes.
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The principal elements of the reasons described below will adversely affect our business.
We compete primarily with other interstate pipelines and storage facilities in the transportation and storage of natural gas. Some of our competitors may have greater financial resources and access to greater supplies of natural gas than we do. Some of these competitors may expand or construct transportation and storage systems that would create additional competition for natural gas supplies or the services we provide to our customers. Moreover, WPZ and its other affiliates, including Williams, may not be limited in their ability to compete with us. In a number of key markets, interstate pipelines are now facing competitive pressure from other major pipeline systems, enabling local distribution companies and end users to choose a transmission provider based on considerations other than location. Other entities could construct new pipelines or expand existing pipelines that could potentially serve the same markets as our pipeline system. Any such new pipelines could offer transportation services that are more desirable to shippers because of locations, facilities, or other factors. These new pipelines could charge rates or provide service to locations that would result in greater net profit for shippers and producers and thereby force us to lower the rates charged for service on our pipeline in order to extend our existing transportation service agreements or to attract new customers. We are aware of proposals by competitors to expand pipeline capacity in certain markets that we also serve which,that, if the proposed projects succeed,proceed, could increase the competitive pressure upon us. There can be no assurance that we willFurther, natural gas also competes with other forms of energy available to our customers, including electricity, coal, fuel oils, and other alternative energy sources. We may not be able to successfully compete successfully against current and future competitors and any failure to do so could have a material adverse effect on our business, andfinancial condition, results of operations, and oncash flows.
Any significant decrease in supplies of natural gas in the supply basins we access or in demand for those supplies in the markets we serve could adversely affect our business and operating results.
Our ability to make payments of interestmaintain and principalexpand our business depends on the notes.
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Demand for our transportation services depends on the ability and willingness of shippers with customary industry practice,access to our facilities to satisfy demand in the markets we maintain insurance against some, but notserve by deliveries through our system. Any decrease in this demand could adversely affect our business. Demand for natural gas is also affected by weather, future industrial and economic conditions, fuel conservation measures, alternative fuel requirements, governmental regulation, and technological advances in fuel economy and energy generation devices, all of these risks and losses, and only at levelswhich are matters beyond our control.
A failure to obtain sufficient natural gas supplies or a reduction in demand for our services in the markets we believe to be appropriate. The location of certain segments of our pipeline in or near populated areas, including residential areas, commercial business centers, and industrial sites, could increase the level of damages resulting from these risks. In spite of our precautions, an event such as those described above could cause considerable harm to people or property andserve could have a material adverse effect on our business, financial condition, and results of operations, particularly if the event is not fully covered by insurance. Accidents or other operating risks could further result in loss of service available to our customers. Such circumstances, including those arising from maintenance and repair activities, could result in service interruptions on segments of our pipeline infrastructure. Potential customer impacts arising from service interruptions on segments of our pipeline infrastructure could include limitations on the pipeline’s ability to satisfy customer requirements, obligations to provide reservations charge credits to customers in times of constrained capacity, and solicitation of existing customers by others for potential new pipeline projects that would compete directly with existing services. Such circumstances could adversely impact our ability to meet contractual obligations and retain customers, with a resulting negative impact on our results of operations, and cash flows.
Significant prolonged changes in natural gas prices could affect supply and demand and cause a reduction in or termination of our long-term transportation and storage contracts or throughput on our ability to make payments of interest and principal onsystem.
Higher natural gas prices over the notes.
Our costs of testing, maintaining or repairing our facilities may exceed our expectations, and the FERC may not allow, or competition in our markets may prevent our recovery of such costs in the rates we charge for our services.
We have experienced and could experience in the future unexpected leaks or ruptures on our gas pipeline system. Either as a preventative measure or in response to a leak or another issue, we could be required by regulatory authorities to test or undertake modifications to our systems. If the cost of testing, maintaining, or repairing our facilities exceed expectations and the FERC does not allow us to recover, or competition in our markets prevents us from recovering such costs in the rates that we charge for our services, such costs could have a material adverse impact on our business.business, financial condition, results of operations, and cash flows.
CostsThe operation of our businesses might be adversely affected by regulatory proceedings, changes in government regulations or in their interpretation or implementation, or the introduction of new laws or regulations applicable to our businesses or our customers.
Public and regulatory scrutiny of the energy industry has resulted in the proposal and/or implementation of increased regulations. Such scrutiny has also resulted in various inquiries, investigations, and court proceedings, including litigation of energy industry matters. Both the shippers on our pipeline and regulators have rights to challenge the rates we charge under certain circumstances. Any successful challenge could materially affect our results of operations.
Certain inquiries, investigations, and court proceedings are ongoing. Adverse effects may continue as a result of the uncertainty of these ongoing inquiries, investigations, and court proceedings, or additional inquiries and proceedings by federal or state regulatory agencies or private plaintiffs. In addition, we cannot predict the outcome of any of these inquiries or whether these inquiries will lead to additional legal proceedings against us, civil or criminal fines and/or penalties, or other regulatory action, including legislation, which might be materially adverse to the operation of our business and our revenues and net income or increase our operating costs in other ways. Current legal proceedings or other matters including environmental matters, suits, regulatory appeals and similar matters might result in adverse decisions against us, which among other outcomes, could result in the imposition of substantial penalties and fines and could damage our reputation. The result of such adverse decisions, either individually or in the aggregate, could be material and may not be covered fully or at all by insurance.
In addition, existing regulations, including those pertaining to financial assurances to be provided by our businesses in respect of potential asset decommissioning and abandonment activities, might be revised, reinterpreted or otherwise enforced in a manner that differs from prior regulatory action. New laws and regulations might also be adopted or become applicable to us, our customers or our business activities. If new laws or regulations are imposed relating to oil and gas extraction, or if additional or revised levels of reporting, regulation, or permitting moratoria are required or imposed, including those related to hydraulic fracturing, the volumes of natural gas that we transport could decline, our compliance costs could increase, and our results of operations could be adversely affected.
Our operations are subject to environmental laws and regulations, including laws and regulations relating to climate change and greenhouse gas emissions, which may expose us to significant costs, liabilities and complying with existing and future environmental regulationsexpenditures that could exceed our current expectations.
Our operations are subject to extensive environmental regulation pursuant to a variety of federal, state, and municipal laws and regulations. Suchlocal laws and regulations impose, amonggoverning environmental protection, endangered and threatened species, the discharge of materials into the environment, and the security of chemical and industrial facilities. Substantial costs, liabilities, delays, and other things, restrictions, liabilities,significant issues related to environmental laws and regulations are inherent in the gathering, transportation, and storage of natural gas as well as waste disposal practices and construction activities. New or amended environmental laws and regulations can also result in significant increases in capital costs we incur to comply with such laws and regulations.
Failure to comply with laws, regulations and permits may result in the assessment of administrative, civil and/or criminal penalties, the imposition of remedial obligations, the imposition of stricter conditions on or revocation of permits, the issuance of injunctions limiting or preventing some or all of our operations, and delays or denials in connection withgranting permits.
Joint and several, strict liability may be incurred without regard to fault under certain environmental laws and regulations for the generation, handling, use, storage, transportation, treatment,remediation of contaminated areas and disposal of hazardous substances and wastes, in connection with spills or releases of materials associated with natural gas, oil, and emissionswastes on, under, or from our properties and facilities. Private parties, including the owners of various substances intoproperties through which our pipeline system passes and facilities where our wastes are
taken for reclamation or disposal, may have the environment, and in connection with the operation, maintenance, abandonment, and reclamation of our facilities.
We are generally responsible for all liabilities associated with the environmental condition of our facilities and assets, whether acquired or developed, regardless of when the liabilities arose and whether they are known or unknown. In connection with certain acquisitions and divestitures, we could acquire, or be required to provide indemnification against, environmental liabilities that could expose us to material losses, which may not be covered by insurance. In addition, the steps we could be required to take to bring certain facilities into compliance could be prohibitively expensive, and we might be required to shut down, divest, or alter the operation of those facilities, which might cause us to incur losses. Although we do not expect that
In addition, climate change and the costs that may be associated with its impacts and with the regulation of emissions of greenhouse gases (“GHG”) have the potential to affect our business. Regulatory actions by the U.S. Environmental Protection Agency or the passage of new climate change laws or regulations could result in increased costs to (i) operate and maintain our facilities, (ii) install new emissions controls on our facilities, or (iii) administer and manage any GHG emissions program. If we are unable to recover or pass through a significant level of our costs related to complying with
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We make assumptions and develop expectations about possible expenditures related to environmental conditions baseddepend on current laws and regulations and current interpretationscertain key customers for a significant portion of those laws and regulations. If the interpretationour revenues. The loss of laws or regulations,any of these key customers or the lawsloss of any contracted volumes could result in a decline in our business.
We rely on a limited number of customers for a significant portion of our revenues. Although some of these customers are subject to long-term contracts, we may be unable to negotiate extensions or replacements of these contracts on favorable terms, or at all. For the nine months ended September 30, 2017, our largest customer, Puget Sound Energy, Inc., accounted for approximately 25.3 percent of our operating revenues. The loss of all, or even a portion of, the revenues from contracted volumes supplied by our key customers, as a result of competition, creditworthiness, inability to negotiate extensions or replacements of contracts, or otherwise, could have a material adverse effect on our business, financial condition, results of operations, and regulations themselves, change,cash flows.
We are exposed to the credit risk of our assumptions may change. Our regulatory rate structurecustomers and counterparties and our contracts with customers might not necessarily allow us to recover capital costs we incur to comply with the new environmental regulations. Also, we mightcredit risk management will not be able to obtain completely eliminate such risk.
We are subject to the risk of loss resulting from nonpayment and/or maintain from timenonperformance by our customers and counterparties in the ordinary course of our business. Generally, our customers are rated investment grade, are otherwise considered creditworthy, or are required to time allmakepre-payments or provide security to satisfy credit concerns. However, our credit procedures and policies cannot completely eliminate customer credit risk. Our customers and counterparties include industrial customers, local distribution companies, natural gas producers, and marketers whose creditworthiness may be suddenly and disparately impacted by, among other factors, commodity price volatility, deteriorating energy market conditions, and public and regulatory opposition to energy producing activities. In a low commodity price environment, certain of our customers could be negatively impacted causing them significant economic stress including, in some cases, to file for bankruptcy protection or to renegotiate contracts. To the extent one or more of our key customers commences bankruptcy proceedings, our contracts with the customers may be subject to rejection under applicable provisions of the United States Bankruptcy Code, or may be renegotiated. Further, during any such bankruptcy proceeding, prior to assumption, rejection or renegotiation of such contracts, the bankruptcy court may temporarily authorize the payment of value for our services less than contractually required, environmental regulatory approvals for certain development projects.which could have a material adverse effect on our business,
results of operations, cash flows, and financial condition. If there is a delay in obtaining any required environmental regulatory approvals or if we fail to obtainadequately assess the creditworthiness of existing or future customers and comply withcounterparties, or otherwise do not take sufficient mitigating actions, including obtaining sufficient collateral, deterioration in their creditworthiness and any resulting increase in nonpayment and/or nonperformance by them could cause us to write down or write off accounts receivable. Such write-downs or write-offs could negatively affect our operating results for the period in which they occur, and, if significant, could have a material adverse effect on our business, financial condition, results of operations, and cash flows.
If third-party pipelines and other facilities interconnected to our pipeline and facilities become unavailable to transport natural gas, our revenues could be adversely affected.
We depend upon third-party pipelines and other facilities that provide delivery options to and from our pipeline and storage facilities for the benefit of our customers. Because we do not own these third-party pipelines or facilities, their continuing operation is not within our control. If these pipelines or other facilities were to become temporarily or permanently unavailable for any reason, or if throughput were reduced because of testing, line repair, damage to pipelines or facilities, reduced operating pressures, lack of capacity, increased credit requirements or rates charged by such pipelines or facilities, or other causes, we and our customers would have reduced capacity to transport, store, or deliver natural gas to end use markets, thereby reducing our revenues. Any temporary or permanent interruption at any key pipeline interconnection causing a material reduction in volumes transported on our pipeline or stored at our facilities could be prevented or becomehave a material adverse effect on our business, financial condition, results of operations, and cash flows.
We do not own all of the land on which our pipeline and facilities are located, which could disrupt our operations.
We do not own all of the land on which our pipeline and facilities have been constructed. As such, we are subject to additionalthe possibility of increased costs resultingto retain necessary land use. In those instances in potentiallywhich we do not own the land on which our facilities are located, we obtain the rights to construct and operate our pipeline on land owned by third parties and governmental agencies for a specific period of time. Our loss of any of these rights, through our inability to renewright-of-way contracts or otherwise, could have a material adverse consequenceseffect on our business, financial condition, results of operations, and cash flows.
We do not insure against all potential risks and losses and could be seriously harmed by unexpected liabilities or by the inability of our insurers to satisfy our claims.
In accordance with customary industry practice, we maintain insurance against some, but not all, risks and losses, and only at levels we believe to be appropriate.
Williams currently maintains excess liability insurance with limits of $820 million per occurrence and in the annual aggregate with a $2 million per occurrence deductible. This insurance covers Williams, its subsidiaries, and certain of its affiliates, including us, for legal and contractual liabilities arising out of bodily injury or property damage, including resulting loss of use to third parties. This excess liability insurance includes coverage for sudden and accidental pollution liability for full limits, with the first $135 million of insurance also providing gradual pollution liability coverage for natural gas and natural gas liquids operations.
Although we maintain property insurance on certain physical assets that we own, lease, or are responsible to insure, the policy may not cover the full replacement cost of all damaged assets or the entire amount of business interruption loss we may experience. In addition, certain perils may be excluded from coverage orsub-limited. We may not be able to maintain or obtain insurance of the type and amount we desire at reasonable rates. We may elect to self- insure a portion of our risks. We do not insure our onshore underground pipelines for physical damage, except at certain locations such as river crossings and compressor stations. All of our insurance is subject to deductibles.
In addition to the insurance coverage described above, Williams is a member of Oil Insurance Limited (“OIL”), an energy industry mutual insurance company, which provides coverage for damage to our property. As an insured member of OIL, Williams shares in the losses among other OIL members even if our property is not damaged. As a result, we may share in any losses incurred by Williams.
The occurrence of any risks not fully covered by insurance could have a material adverse effect on our business, financial condition, results of operations, and oncash flows, and our ability to repay our debt.
We may not be able to grow or effectively manage our growth.
As part of our growth strategy, we consider acquisition opportunities and engage in significant capital projects. We have a project lifecycle process and an investment evaluation process. These are processes we use to identify, evaluate, and execute on acquisition opportunities and capital projects. We may not always have sufficient and accurate information to identify and value potential opportunities and risks or our investment evaluation process may be incomplete or flawed. Regarding potential acquisitions, suitable acquisition candidates may not be available on terms and conditions we find acceptable or, where multiple parties are trying to acquire an acquisition candidate, we may not be chosen as the acquirer. If we are able to acquire a targeted business, we may not be able to successfully integrate the acquired businesses and realize anticipated benefits in a timely manner. Our growth may also be dependent upon the construction of new natural gas gathering, transportation, compression, processing, or treating pipelines and facilities, NGL transportation, or fractionation or storage facilities, as well as the expansion of existing facilities. We also face all the risks associated with construction, including political opposition by landowners, environmental activists and others resulting in the delay and/or denial of required governmental permits. Other construction risks include the inability to obtainrights-of-way, skilled labor, equipment, materials, permits, and other required inputs in a timely manner such that projects are completed on time and the risk that construction cost overruns could cause total project costs to exceed budgeted costs. Additional risks associated with growing our business include, among others, that:
If realized, any of these risks could have an adverse impact on our financial condition, results of operations, including the notes.possible impairment of our assets, or cash flows.
Failure of our service providers or disruptions to outsourcing relationships might negatively impact our ability to conduct our business.
We rely on Williams and other third parties for certain services necessary for us to be able to conduct our business. We have a limited ability to control these operations and the associated costs. Certain of Williams’ accounting and information technology functions that we rely on are currently provided by third party vendors, and sometimes from service centers outside of the United States. Services provided pursuant to these agreements could be disrupted. Similarly, the expiration of such agreements or the transition of services between providers could lead to loss of institutional knowledge or service disruptions. Our reliance on Williams and others as
service providers and on Williams’ outsourcing relationships, and our limited ability to control certain costs, could have a material adverse effect on our business, financial condition, results of operations, and cash flows.
Williams has experienced significant change in the composition of its Board of Directors and senior management which could negatively affect our business and results of operations.
Williams indirectly owns and controls us and has the ability to control the appointment of all of our officers and management committee members. Williams’ Board of Directors is composed of eleven directors, seven of whom were appointed in the second half of 2016. Williams also executed a restructuring process, shifting from five operating areas to three, and during 2017, Williams announced the appointment of several officers including Micheal Dunn as Executive Vice President and Chief Operating Officer and John Chandler as Senior Vice President and Chief Financial Officer.
As our management committee member, and all of our officers, are also officers at Williams, the changes in the composition of the Williams Board of Directors and management impose an additional demand for the attention, time and energy of our management in connection with orientation and education of new members about Williams, including with regard to its business strategies and objectives, assets and operations, and policies and practices, which could distract our management from execution of our strategy and objectives. Additionally, such changes invite new analysis of our business as the new members of the Williams Board of Directors contribute to the formulation of business strategies and objectives, which could implicate changes, including to our strategy and objectives. It is possible that changes to the composition of the Williams Board of Directors and management could negatively impact our business, financial condition, and results of operations.
Risks Related to Strategy and Financing
Our debt agreements impose restrictions onA downgrade of our credit ratings, which are determined outside of our control by independent third parties, could impact our liquidity, access to capital and our costs of doing business.
Downgrades of our credit ratings increase our cost of borrowing and could require us that may adversely affectto provide collateral to our counterparties, negatively impacting our available liquidity. In addition, our ability to operateaccess capital markets could be limited by a downgrade of our business.credit ratings.
Credit rating agencies perform independent analysis when assigning credit ratings. The analysis includes a number of criteria such as business composition, market and operational risks, as well as various financial tests. Credit rating agencies continue to review the criteria for industry sectors and various debt ratings and may make changes to those criteria from time to time. Credit ratings are subject to revision or withdrawal at any time by the ratings agencies.
Our ability to obtain credit in the future could be affected by Williams’ and WPZ’s credit ratings.
Substantially all of Williams’ and WPZ’s operations are conducted through their respective subsidiaries. Each of Williams’ and WPZ’s cash flows are substantially derived from loans, dividends and distributions paid to them by their subsidiaries. Their cash flows are typically utilized to service debt and pay dividends or distributions on their equity, with the balance, if any, reinvested in their respective subsidiaries as loans or contributions to capital. Due to our relationship with each of Williams and WPZ, our ability to obtain credit will be affected by Williams’ and WPZ’s credit ratings. If Williams or WPZ were to experience a deterioration in its respective credit standing or financial condition, our access to capital and our ratings could be adversely affected. Any downgrading of a Williams or WPZ credit rating could result in a downgrading of our credit rating. A downgrading of a Williams or WPZ credit rating could limit our ability to obtain financing in the future upon favorable terms, if at all.
Restrictions in our debt agreements and the amount of our indebtedness may affect our future financial and operating flexibility.
Our total outstanding long-term debt (including current portion) as of September 30, 2017, was $581.6 million.
The agreements governing our indebtedness contain covenants that restrict our ability to incur certain liens to support indebtedness and our ability to merge or consolidate or sell all or substantially all of our assets. In addition, certain of our debt agreements contain various covenants that restrict or limit, among other things, our ability to create liens securing indebtedness, sell assets,make certain distributions during the continuation of an event of default and incur additional debt. In addition,our ability to enter into certain affiliate transactions and certain restrictive agreements and to change the nature of our business. Certain of our debt agreements also contain, and those we enter into in the future may contain, financial covenants and other limitations with which we will need to comply. Williams’ and WPZ’s debt agreements contain similar covenants with respect to such entities and their respective subsidiaries, including us.
Our debt service obligations and the covenants described above could have important consequences. For example, they could, among other things:
Our ability to comply with theseour debt covenants, may be affected by many events beyondto repay, extend, or refinance our control,existing debt obligations and to obtain future credit will depend primarily on our operating performance. Our ability to refinance existing debt obligations or obtain future credit will also depend upon the current conditions in the credit markets and the availability of credit generally. If we cannot assure you that our future operating results will be sufficientare unable to comply with thethese covenants, or, in the event of a default under any ofmeet our debt agreements,service obligations, or obtain future credit on favorable terms, or at all, we could be forced to remedy that default.
Our failure to comply with the covenants in the documents governing our debt agreements and other related transaction documentsindebtedness could result in events of default. Upon the occurrence ofdefault, which could render such an event of default, the lenders could elect to declare all amounts outstanding under a particular facility to be immediatelyindebtedness due and payable and terminate all commitments, if any, to extend further credit.
Difficult conditions in the global financial markets and the economy in general could negatively affect our business and results of operations.
Our business may be negatively impacted by adverse economic conditions or future disruptions in the global financial markets. Included among these potential negative impacts are more vulnerableindustrial or economic contraction leading to reduced energy demand and lower prices for our products and services and increased difficulty in collecting amounts owed to us by our customers. We have availability under the impact of market disruptions or a downgrade of our$3.5 billion revolving credit rating that might further increase our cost of borrowing or further impair
facility among us, WPZ, and Transcontinental Gas Pipe Line Company, LLC (“Transco”), together with Citibank, N.A., as administrative agent, as amended (the “Credit Facility”), but our ability to accessborrow under the capital markets. Such disruptionsCredit Facility could include:
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Because we are an indirect wholly-owned subsidiary of Williams. Our board of directors, which is elected by WGP, which in turn is controlled by Williams,WPZ, WPZ exercises substantial control over our business and operations and makes determinations with respect to, among other things, the following:
| payment | ||
WPZ could decide to increase dividendsdistributions or advances to our parent entities.member consistent with existing debt covenants. This could adversely affect our liquidity and our ability to make payments of interest and principal on the notes. Moreover, various Williams credit facilities include covenants prohibiting restrictions on the ability of Williams entities, including us, to make advances to Williams and its other subsidiaries, which could make the terms on which we may be able to secure additional future financing less favorable.
Risks Related to Regulations thatThat Affect Our Industry
Our transmissionnatural gas transportation and storage operations are subject to government regulations and rate proceedings thatregulation by the FERC, which could have an adverse impact on the profitability of these operations.
In addition to regulation by other federal, state, and regulations in accordance withlocal regulatory authorities, under the Natural Gas Act of 1938, as amended (the “NGA”), our interstate pipeline transportation and storage services and related assets are subject to regulation by the Natural Gas Policy ActFERC. Federal regulation extends to such matters as:
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Regulatory or administrative actions in these areas, including successful complaints or protests against our rates, can affect our business in many ways, including by decreasing existing tariff rates andor setting future tariff rates to levels such that revenues are inadequate to recover increases in operating costs or to sustain an adequate return on capital investments, decreasing volumes in our pipelines, increasing our costs and otherwise altering the profitability of our business.
The FERC’s Standardsamount of Conduct govern the relationship between natural gas transmission providers and their “marketing affiliates” as definedincome taxes that we will be allowed to recover will be determined by the standards. The standardsoutcome of conduct are intended to prevent natural gas transmission providers from preferentially benefiting their marketing affiliates by requiring the employees of a transmission provider to function independently from employees of marketing affiliatesfuture rate cases and by restricting the information that transmission providers may provide to marketing affiliates. The inefficiencies createdany potential action taken by the restrictions on the sharingFERC in response to its recent Notice of employees and information may increase our costs, and the restrictions on the sharing of information may have an adverse impact on our senior management’s ability to effectively obtain important information about our business. Violators of the rules are subject to potentially substantial civil penalty assessments.
In May 2005, the FERC issued a statement of general policy permitting a pipeline owned by a partnership or similar pass-through entity to include in itscost-of-service computations an income tax allowance provided that an entity or individual that owns an interest in the partnership or pass-through entity has an actual or potential income tax liability on June 30, 2006income from the pipeline’s public utility assets. Pursuant to request changesthat policy, the extent to the rates we charge. The new rates became effective January 1, 2007. On January 31, 2007, we filed a stipulation and settlement agreement that resolved all outstanding issues in our pending rate case and included a two-year moratorium on any further rate increaseswhich owners of pipelines have such actual or decreases. The settlement was approvedpotential income tax liability will be reviewed by the FERC on March 30, 2007. There isacase-by-case basis in rate cases where the amounts of the allowances will be established. In December 2016, the FERC issued a risk thatNotice of Inquiry (“NOI”) in response to the ratesholding of the U.S. Court of Appeals for the District of Columbia Circuit inUnited Airlines, Inc., et al. v. Federal Energy Regulatory Commission that the FERC approved as partfailed to demonstrate that there is no double recovery of the submitted settlement will ultimately prove to be inadequate to recover increases in operating costs, which could impact our ability to make payments of interest and principal on the notes, while sustaining an adequate return on capital investments. There is also the risk that higher rates will cause our customers to looktaxes for alternative ways to transport their natural gas.
We expect that certain aspects of the Tax Reform Act, including regulatory liabilities relating to reduced corporate federal income tax rates, could adversely impact our businessfinancial condition and our revenues and net income or increasefuture financial results.
The rates we charge to our operating costs in other ways. Current legal proceedings or other matters against us including environmental matters, disputes over gas measurement, royalty payments, suits, regulatory appeals, and similar matters might result in adverse decisions against us. The resultcustomers are subject to the rate-making policies of such adverse decisions, either individually or in the aggregate, could be material and may not be covered fully or at all by insurance.
13
Risks Related to Employees, Outsourcing ofNon-Core Support Activities, and Technology
Institutional knowledge residing with current Williams employees nearing retirement eligibility or with former Williams employees might not be adequately preserved.
We expect that a significant percentage of Williams’ employees will become eligible for retirement over the next several years. In our business,addition, as part of an internal restructuring, Williams announced the reduction of five operating areas into three and the closing of its Oklahoma City office and the consolidation of employee positions to Tulsa or other locations. As employees with significant institutional knowledge resides with employees who have many years of service. As these employees reach retirement age, wechoose not to relocate with Williams or their services are otherwise no longer available, Williams may not be able to replace them with employees of comparable knowledge and experience. In addition, weWilliams may not be able to retain or recruit other qualified individuals, and ourWilliams’ efforts at knowledge transfer could be inadequate. If knowledge transfer, recruiting and retention efforts are inadequate, access to significant amounts of internal historical knowledge and expertise could become unavailable to us.
FailureOur allocation from Williams for costs for its defined benefit pension plans and other postretirement benefit plans are affected by factors beyond our and Williams’ control.
As we have no employees, employees of outsourcing relationships might negatively impact our ability to conduct our business.
or its affiliates’ employees providing services to us, present similar risksas well as a portion of business operations locatedthe costs of other postretirement benefit plans covering certain eligible participants providing services to us. The timing and amount of our allocations under the defined benefit pension plans depend upon a number of factors that Williams controls, including changes to pension plan benefits, as well as factors outside of the United States, including risks of interruption of business, war, expropriation, nationalization, renegotiation, trade sanctions, or nullification of existing contractsWilliams’ control, such as asset returns, interest rates and changes in law or tax policy, that are greater than in the United States.
14
Our assets and operations, as well as our customers’ assets and operations, can be affected by weather and other natural phenomena.
Our assets and operations and our customers’ assets and operations can be adversely affected by hurricanes, floods, earthquakes, landslides, tornadoes, and other natural phenomena and weather conditions, including extreme or unseasonable temperatures, making it more difficult for us to realize the historic rates of return associated with theseour assets and operations.
Acts of terrorism could have a material adverse effect on our financial condition, results of operations, and cash flows.
Given the volatile nature of the commodities we transport and store, our assets and the assets of our customers and others in our industry may be targets of terrorist activities thatactivities. A terrorist attack could create significant price volatility, disrupt our business, limit our access to capital markets, or cause significant harm to our operations, such as full or partial disruption to our ability to transport natural gas. Acts of terrorism, as well as events occurring in response to or in connection with acts of terrorism, could cause environmental repercussions that could result in a significant decrease in revenues or significant reconstruction or remediation costs, which could have a material adverse effect on our financial condition, results of operations, and cash flowsflows.
Our business could be negatively impacted by security threats, including cybersecurity threats, and related disruptions.
We rely on our information technology infrastructure to process, transmit, and store electronic information, including information we use to safely operate our assets. While we believe that we maintain appropriate information security policies and protocols, we face cybersecurity and other security threats to our information technology infrastructure, which could include threats to our operational industrial control systems and safety systems that operate our pipelines, plants, and assets. We could face unlawful attempts to gain access to our information technology infrastructure, including coordinated attacks from hackers, whether state-sponsored groups, “hacktivists,” or private individuals. The age, operating systems or condition of our current information technology infrastructure and software assets and our ability to make paymentsmaintain and upgrade such assets could affect our ability to resist cybersecurity threats. We could also face attempts to gain access to information related to our assets through attempts to obtain unauthorized access by targeting acts of interestdeception against individuals with legitimate access to physical locations or information.
Breaches in our information technology infrastructure or physical facilities, or other disruptions including those arising from theft, vandalism, fraud, or unethical conduct, could result in damage to our assets, unnecessary waste, safety incidents, damage to the environment, reputational damage, potential liability or the loss of contracts, and principalhave a material adverse effect on our operations, financial condition, results of operations, and cash flows.
Risks Related to the Exchange Offer and the Notes
We cannot assure you that an active trading market for the exchange notes will exist if you desire to sell the exchange notes.
There is no existing public market for the outstanding notes or the exchange notes. The liquidity of any trading market in the exchange notes, and the market prices quoted for the exchange notes, may be adversely affected by changes in the overall market for these types of securities, and by changes in our financial performance or prospects or in the prospects for companies in our industry generally. As a result, we cannot assure you that you will be able to sell the exchange notes or that, if you can sell your exchange notes, you will be able to sell them at an acceptable price.
You may have difficulty selling any outstanding notes that you do not exchange.
If you do not exchange your outstanding notes for exchange notes in the exchange offer, you will continue to hold outstanding notes subject to restrictions on their transfer. Those transfer restrictions are described in the indenture governing the outstanding notes and in the legend contained on the outstanding notes, and arose because we originally issued the outstanding notes under an exemption from the registration requirements of the Securities Act.
In general, you may offer or sell your outstanding notes only if they are registered under the Securities Act and applicable state securities laws, or if they are offered and sold under an exemption from those requirements. We do not currently intend to register the outstanding notes under the Securities Act or any state securities laws. If a substantial amount of the outstanding notes is exchanged for a like amount of the exchange notes issued in the exchange offer, the liquidity of your outstanding notes could be adversely affected. See “The Exchange Offer — Consequences of Failure to Exchange Outstanding Notes” for a discussion of additional consequences of failing to exchange your outstanding notes.
We may not be able to service our debt.
Our ability to pay or to refinance our indebtedness, including the notes, will depend upon our future operating performance, which will be affected by general economic, financial, competitive, legislative, regulatory, business, and other factors beyond our control.
We anticipate that our operating cash flow, together with funds we anticipate being available to us to borrow under our Credit Facility and through other sources, including advances from WPZ and further issuances, if needed, in the capital markets, will be sufficient to meet anticipated future operating expenses, to fund capital expenditures, and to service our debt as it becomes due. However, we cannot assure you that our business will generate sufficient cash flow from operations, or that we will be able to borrow additional funds in amounts sufficient to enable us to pay our indebtedness, including the notes, or to fund our other liquidity needs. We, WPZ, and Transco, another WPZ subsidiary, are parties to the Credit Facility. Our ability to borrow under the Credit Facility depends not only on our financial performance, but also on the ability of those other parties to comply with their obligations under the Credit Facility. The amount of funds available to us under the Credit Facility could be diminished at any time at which other borrowers under the Credit Facility are borrowing under it or if the commitments under it are reduced.
We will not receive any cash proceeds from the issuance of the exchange notes.net proceedsexchange offer is intended to us fromsatisfy our obligations under the registration rights agreement executed in connection with the sale of the outstanding notes was approximately $182.2 million after deducting estimated discounts, commissions, and expenses. We used the net proceeds from the sale of the outstanding notes to repay intercompany indebtedness incurred to fund the redemption on April 4, 2007 of all outstanding $175,000,000 in aggregate principal amount of our 81/8% Senior Notes due 2010.
15notes.
SELECTED HISTORICAL FINANCIAL AND OPERATING DATA
| Nine Months Ended September 30, | Year Ended December 31, | |||||||||||||||||||||||||||
| 2016 | 2017 | 2012 | 2013 | 2014 | 2015 | 2016 | ||||||||||||||||||||||
| (Dollars in thousands, except operating data) | ||||||||||||||||||||||||||||
Income Statement Data: | ||||||||||||||||||||||||||||
Operating Revenues: | $ | 352,914 | $ | 351,783 | $ | 437,835 | $ | 469,661 | $ | 470,050 | $ | 472,994 | $ | 474,029 | ||||||||||||||
Operating Costs and Expenses: | ||||||||||||||||||||||||||||
General and administrative | 39,202 | 40,028 | 68,997 | 62,473 | 62,085 | 57,105 | 52,343 | |||||||||||||||||||||
Operation and maintenance | 58,701 | 55,817 | 77,580 | 75,342 | 74,191 | 73,128 | 79.514 | |||||||||||||||||||||
Depreciation | 76,150 | 76,345 | 93,419 | 96,109 | 99,138 | 100,554 | 101,672 | |||||||||||||||||||||
Regulatory (debits) credits | (2,593 | ) | (3,672 | ) | (494 | ) | 921 | 1,487 | 2,550 | 3,510 | ||||||||||||||||||
Taxes, other than income taxes | 13,356 | 13,043 | 16,751 | 16,882 | 16,987 | 17,151 | 17,835 | |||||||||||||||||||||
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Total Operating Expenses | 190,002 | 188,905 | 256,253 | 251,727 | 253,888 | 250,488 | 254,874 | |||||||||||||||||||||
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Operating Income | 162,912 | 162,878 | 181,582 | 217,934 | 216,162 | 222,506 | 219,155 | |||||||||||||||||||||
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Other Income and Other Expenses: | ||||||||||||||||||||||||||||
Interest expense | 30,805 | 24,950 | 46,357 | 46,177 | 46,095 | 46,024 | 39,164 | |||||||||||||||||||||
Allowance for borrowed funds used during construction | (1,079 | ) | (1,099 | ) | (2,291 | ) | (1,405 | ) | (573 | ) | (1,619 | ) | (1,371 | ) | ||||||||||||||
Miscellaneous other expenses, net | 845 | 184 | 793 | 175 | 87 | 595 | 907 | |||||||||||||||||||||
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Total other expenses | 30,571 | 24,035 | 44,859 | 44,947 | 45,609 | 43,810 | 38,700 | |||||||||||||||||||||
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Net Income | $ | 132,341 | $ | 138,843 | $ | 136,723 | $ | 172,987 | $ | 170,553 | $ | 178,696 | $ | 180,455 | ||||||||||||||
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Cash Distributions to parent | $ | 131,000 | $ | 148,000 | $ | 137,500 | $ | 91,000 | $ | 234,000 | $ | 168,000 | $ | 174,000 | ||||||||||||||
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Cash Flow and Other Financial Data: | ||||||||||||||||||||||||||||
Net cash provided by operating activities | $ | 224,908 | $ | 237,013 | $ | 232,406 | $ | 240,115 | $ | 312,884 | $ | 290,693 | $ | 284,269 | ||||||||||||||
Capital expenditures | $ | 51,115 | $ | 58,020 | $ | 136,168 | $ | 83,317 | $ | 79,413 | $ | 86,289 | $ | 80,383 | ||||||||||||||
Ratio of earnings to fixed charges(1) | 5.23x | 6.50x | 3.89x | 4.67x | 4.63x | 4.81x | 5.54x | |||||||||||||||||||||
Operating Data: | ||||||||||||||||||||||||||||
Transportation volumes (trillion British Thermal Units) | 535.5 | 540.8 | 658.2 | 716.9 | 687.0 | 762.7 | 727.1 | |||||||||||||||||||||
| As of | ||||
| March 31, 2007 | ||||
| (Dollars in thousands) | ||||
| Cash and cash equivalents | $ | 32,442 | ||
| Long-term debt due within one year | 252,867 | |||
| Long-term debt, less amounts due within one year, net of discount: | ||||
| 7.000% Senior Notes due 2016 | 174,491 | |||
| 7.125% Debentures due 2025 | 84,788 | |||
| 9.000% Debentures payable 2004 through 2007 | (52 | ) | ||
| 8.125% Senior Notes due 2010 | 175,000 | |||
| Total long-term debt | 687,094 | |||
| Common stockholder’s equity: | ||||
| Common stock | 1 | |||
| Additional paid-in capital | 327,844 | |||
| Retained earnings | 527,033 | |||
| Accumulated other comprehensive loss | (17,553 | ) | ||
| Total common stockholder’s equity | 837,325 | |||
| Total capitalization(1) | $ | 1,524,419 | ||
| As of September 30, | As of December 31, | |||||||||||||||||||||||
| 2017 | 2012 | 2013 | 2014 | 2015 | 2016 | |||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||||||
Balance Sheet Data: | ||||||||||||||||||||||||
Net property, plant and equipment | $ | 1,891,916 | $ | 2,003,545 | $ | 1,984,839 | $ | 1,981,087 | $ | 1,983,573 | $ | 1,894,661 | ||||||||||||
Total assets | 2,121,781 | 2,167,612 | 2,270,094 | 2,236,096 | 2,232,014 | 2,041,156 | ||||||||||||||||||
Long-term debt, including current maturities | 581,604 | 694,027 | 694,224 | 692,488 | 693,420 | 519,160 | ||||||||||||||||||
Total owner’s equity | 1,367,857 | 1,328,238 | 1,423,463 | 1,359,954 | 1,370,588 | 1,377,015 | ||||||||||||||||||
| (1) |
16
Purpose of the Exchange Offer
This exchange offer is being made pursuant to the registration rights agreement we entered into with the initial purchasers of the outstanding notes on April 5, 2007.3, 2017. The summary of the registration rights agreement contained herein does not purport to be complete and is qualified in its entirety by reference to the registration rights agreement. A copy of the registration rights agreement is filed as an exhibit to the registration statement of which this prospectus forms a part.
Terms of the Exchange Offer; Expiration Time
This prospectus and the accompanying letter of transmittal together constitute the exchange offer. Subject to the terms and conditions in this prospectus and the letter of transmittal, we will accept for exchange outstanding notes that are validly tendered at or before the expiration time and are not validly withdrawn as permitted below. The expiration time for the exchange offer is 5:00 p.m., New York City time, on , 2007,2018, or such later date and time to which we, in our sole discretion, extend the exchange offer.
We expressly reserve the right, in our sole discretion:
We will give oral or written notice of any extension, delay, non-acceptance, termination or amendment as promptly as practicable by a public announcement, and in the case of an extension, no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled expiration time.
During an extension, all outstanding notes previously tendered will remain subject to the exchange offer and may be accepted for exchange by us, upon expiration of the exchange offer, unless validly withdrawn.
Each broker-dealer that receives exchange notes for its own account in exchange for outstanding notes, where such outstanding notes were acquired by such broker-dealer as a result of market-making activities or other trading activities, must acknowledge in the letter of transmittal that it will deliver a prospectus in connection with any resale of such exchange notes. See “Plan of Distribution.”
How to Tender Outstanding Notes for Exchange
Only a record holder of outstanding notes may tender in the exchange offer. When the holder of outstanding notes tenders and we accept outstanding notes for exchange, a binding agreement between us and the tendering holder is created, subject to the terms and conditions in this prospectus and the accompanying letter of transmittal. Except as set forth below, a holder of outstanding notes who desires to tender outstanding notes for exchange must, at or prior to the expiration time:
| transmit a properly completed and duly executed letter of transmittal, the outstanding notes being tendered and all other documents required by such letter of transmittal, | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
if outstanding notes are tendered pursuant to the book-entry procedures set forth below, an agent’s message must be transmitted by The Depository Trust Company (“DTC”) to the exchange agent at the
if time will not permit the required documentation to reach the exchange agent before the expiration time, or the procedures for book-entry transfer cannot be completed by the expiration time, the holder may effect a tender by complying with the guaranteed delivery procedures described below. The term “agent’s message” means a message that: is transmitted by DTC; is received by the exchange agent and forms a part of a book-entry transfer; states that DTC has received an express acknowledgement that the tendering holder has received and agrees to be bound by, and makes each of the representations and warranties contained in, the letter of transmittal; and states that we may enforce the letter of transmittal against such holder. The method of delivery of the outstanding notes, the letter of transmittal or agent’s message and all other required documents to the exchange agent is at the election and sole risk of the holder. If such delivery is by mail, we recommend registered mail, properly insured, with return receipt requested. In all cases, you should allow sufficient time to assure timely delivery. No letters of transmittal or outstanding notes should be sent directly to us. Signatures on a letter of transmittal must be guaranteed unless the outstanding notes surrendered for exchange are tendered: by a holder of outstanding notes who has not completed the box entitled “Special Issuance Instructions” or “Special Delivery Instructions” on the letter of transmittal; or for the account of an eligible institution. The term “eligible institution” means an institution that is a member in good standing of a Medallion Signature Guarantee Program recognized by the exchange agent, for example, the Securities Transfer Agents Medallion Program, the Stock Exchanges Medallion Program or the New York Stock Exchange Medallion Signature Program. An eligible institution includes firms that are members of a registered national securities exchange, members of the National Association of Securities Dealers, Inc., commercial banks or trust companies having an office in the United States or certain other eligible guarantors. If signatures on a letter of transmittal or notice of withdrawal are required to be guaranteed, the guarantor must be an eligible institution. If outstanding notes are registered in the name of a person other than the person who signed the letter of transmittal, the outstanding notes tendered for exchange must be endorsed by, or accompanied by a written instrument or instruments of transfer or exchange, in satisfactory form as determined by us in our sole discretion, duly executed by the registered holder with the registered holder’s signature guaranteed by an eligible institution. We will determine in our sole discretion all questions as to the validity, form and eligibility (including time of receipt) reject any and all tenders of any outstanding note not validly tendered; refuse to accept any outstanding note if, in our judgment or the judgment of our counsel, acceptance of the outstanding note may be deemed unlawful; waive any defects or irregularities or conditions of the exchange offer; and determine the eligibility of any holder who seeks to tender outstanding notes in the exchange offer. Our determinations
exchange agent nor any other person will be under any duty to give notification of any defect or irregularity with respect to any tender of outstanding notes for exchange, nor will any of us incur any liability for failure to give such notification. If you beneficially own outstanding notes registered in the name of a broker, dealer, commercial bank, trust company or other nominee and you wish to tender your outstanding notes in the exchange offer, you should contact the registered holder promptly and instruct it to tender on your behalf. WE MAKE NO RECOMMENDATION TO THE HOLDERS OF THE OUTSTANDING NOTES AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING ALL OR ANY PORTION OF THEIR OUTSTANDING NOTES IN THE EXCHANGE OFFER. IN ADDITION, WE HAVE NOT AUTHORIZED ANYONE TO MAKE ANY SUCH RECOMMENDATION. HOLDERS OF THE OUTSTANDING NOTES MUST MAKE THEIR OWN DECISION AS TO WHETHER TO TENDER PURSUANT TO THE EXCHANGE OFFER AND, IF SO, THE AGGREGATE AMOUNT OF OUTSTANDING NOTES TO TENDER, AFTER READING THIS PROSPECTUS AND THE LETTER OF TRANSMITTAL AND CONSULTING WITH THEIR ADVISERS, IF ANY, BASED ON THEIR FINANCIAL POSITIONS AND REQUIREMENTS. Book-Entry Transfers Any financial institution that is a participant in DTC’s system must make book-entry delivery of outstanding notes by causing DTC to transfer the outstanding notes into the exchange agent’s account at DTC in accordance with DTC’s Automated Tender Offer Program, known as ATOP. Such 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 such acceptance, execute a book-entry transfer of the tendered outstanding notes into the exchange agent’s account at DTC and then send to the exchange agent confirmation of such book-entry transfer. The confirmation of such book-entry transfer will include an agent’s message. The letter of transmittal or facsimile thereof 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 set forth below under “— The Exchange Agent” at or prior to the expiration time of the exchange offer, or the holder must comply with the guaranteed delivery procedures described below. Guaranteed Delivery Procedures If a holder of outstanding notes desires to tender such outstanding notes and the holder’s outstanding notes are not immediately available, or time will not permit such holder’s outstanding notes or other required documents to reach the exchange agent
at or prior to the expiration time, the exchange agent receives from an eligible institution a validly completed and executed notice of guaranteed delivery, substantially in the form accompanying this prospectus, by facsimile transmission, mail or hand delivery, setting forth the name and address of the holder of the outstanding notes being tendered and the amount of the outstanding notes being tendered. The notice of guaranteed delivery will state that the tender is being made and guarantee that within three New York Stock Exchange trading days after the date of execution of the notice of guaranteed delivery, the certificates for all physically tendered outstanding notes, in proper form for transfer, or a book-entry confirmation, as the case may be, together with a validly completed and executed letter of transmittal with any required signature guarantees or an agent’s message and any other documents required by the letter of transmittal, will be transmitted to the exchange agent; and the exchange agent receives the certificates for all physically tendered outstanding notes, in proper form for transfer, or a book-entry confirmation, as the case may be, together with a validly completed and executed letter of transmittal with any required signature guarantees or an agent’s message and any other documents required by the letter of transmittal, within three New York Stock Exchange trading days after the date of execution of the notice of guaranteed delivery. The notice of guaranteed delivery must be received Withdrawal Rights You may withdraw tenders of your outstanding notes at any time For a withdrawal to be effective, a written notice of withdrawal, by facsimile or by mail, must be received by the exchange agent, at the address set forth below under “— The Exchange Agent,” specify the name of the person having tendered the outstanding notes to be withdrawn; identify the outstanding notes to be withdrawn, including the principal amount of such outstanding notes; where outstanding notes have been tendered pursuant to the procedure for book-entry transfer described above, specify the name and number of the account at DTC to be credited with the withdrawn outstanding notes and otherwise comply with the procedures of DTC; and bear the signature of the holder in the same manner as the original signature on the letter of transmittal, if any, by which such outstanding notes were tendered, with such signature guaranteed by an eligible institution, unless such holder is an eligible institution. We will determine all questions as to the validity, form and eligibility (including time of receipt) of such notices and our determination will be final and binding on all parties. Any tendered outstanding notes validly withdrawn will be deemed not to have been validly tendered for exchange for purposes of the exchange offer. Properly withdrawn notes may bere-tendered by following one of the procedures described under “— How to Tender Outstanding Notes for Exchange” above at any time at or prior to the expiration time. Acceptance of Outstanding Notes for Exchange; Delivery of Exchange Notes All of the conditions to the exchange offer must be satisfied or waived at or prior to the expiration of the exchange offer. Promptly following the expiration For each outstanding note accepted for exchange, the holder will receive an exchange note registered under the Securities Act having a principal amount equal to, and in the denomination of, that of the surrendered outstanding note. Holders whose outstanding notes are exchanged for exchange notes will not receive a payment in respect of interest accrued but unpaid on such outstanding notes from the most recent interest payment date up to but excluding the settlement date of the exchange offer. Instead, interest on the exchange notes received in exchange for such outstanding notes will (i) accrue from the last date on which interest was paid on such outstanding notes and (ii) accrue at the same rate as and be payable on the same dates as interest was payable on such outstanding notes. Accordingly, registered holders of exchange notes that are outstanding on the relevant record date for the first interest payment date following the consummation of the exchange offer will receive interest accruing from the most recent date through which interest has been paid on the outstanding If we do not accept any tendered outstanding notes, or if a holder submits outstanding notes for a greater principal amount than the holder desires to exchange, we will return such unaccepted ornon-exchanged outstanding notes without cost to the tendering holder. In the case of outstanding notes tendered by book-entry transfer into the exchange agent’s account at DTC, suchnon-exchanged outstanding notes will be credited to an account maintained with DTC. We will return the outstanding notes or have them credited to DTC promptly after the withdrawal, rejection of tender or termination of the exchange offer, as applicable.
Conditions to the Exchange Offer The exchange offer is not conditioned upon the tender of any minimum aggregate principal amount of outstanding notes. You may tender outstanding notes for exchange in whole or in part in any integral multiple of $1,000, subject to a minimum exchange of $2,000. Notwithstanding any other provision of the exchange offer, or any extension of the exchange offer, we will not be required to accept for exchange, or to issue exchange notes in exchange for, any outstanding notes and may terminate or amend the exchange offer, by oral (promptly confirmed in writing) or written notice to the exchange agent or by a timely press release, if at any time before the expiration of the exchange offer, any of the following conditions exist: any action or proceeding is instituted or threatened in any court or by or before any governmental agency challenging the exchange offer or that could reasonably be expected to prohibit or materially impair our ability to proceed with the exchange offer; any stop order is threatened or in effect with respect to either (1) the registration statement of which this prospectus forms a part or (2) the qualification of the indenture governing the notes under the Trust Indenture Act of 1939, as amended; any law, rule or regulation is enacted, adopted, proposed or interpreted that could reasonably be expected to prohibit or impair our ability to proceed with the exchange offer or to materially impair the ability of holders generally to receive freely tradable exchange notes in the exchange offer. See “— Consequences of Failure to Exchange Outstanding Notes”; any change or a development involving a prospective change in our business, properties, assets, liabilities, financial condition, operations or results of operations taken as a whole, that is or may be adverse to us; any declaration of war, armed hostilities or other similar international calamity directly or indirectly involving the United States, or the worsening of any such condition that existed at the time that we commence the exchange offer; or we become aware of facts that, in our reasonable judgment, have or may have adverse significance with respect to the value of the outstanding notes or the exchange notes to be issued in the exchange offer. Accounting Treatment For accounting purposes, we will not recognize a gain or loss upon the issuance of the exchange notes for outstanding notes. Fees and Expenses We will not make any payment to brokers, dealers, or others soliciting acceptance of the exchange offer except for reimbursement of mailing expenses. We will pay the cash expenses to be incurred in connection with the exchange offer, including: SEC registration fees; fees and expenses of the exchange agent and trustee; our accounting and legal fees; printing fees; and related fees and expenses. Transfer Taxes Holders who tender their outstanding notes for exchange will not be obligated to pay any transfer taxes in connection with the exchange. If, however, exchange notes issued in the exchange offer are to be delivered to, or are to be issued in the name of, any person other than the holder of the outstanding notes tendered, or if a
transfer tax is imposed for any reason other than the exchange of outstanding notes in connection with the exchange offer, then the holder must pay these transfer taxes, whether imposed on the registered holder or on any other person. If satisfactory evidence of payment of or exemption from these taxes is not submitted with the letter of transmittal, the amount of these transfer taxes will be billed directly to the tendering holder. The Exchange Agent We have appointed The Bank of New The Bank of New York Mellon Trust Company, N.A, as Exchange Agent c/o The Bank of New York Mellon Corporation Corporate Trust Operations- Reorganization Unit 111 Sanders Creek Parkway East Syracuse, NY 13057 Attn: Pamela Adamo Tel:315-414-3317 Fax:732-667-9408 Email: CT_REORG_UNIT_INQUIRIES@BNYMELLON.COM Delivery of the letter of transmittal to an address other than as set forth above or transmission of such letter of transmittal via facsimile other than as set forth above will not constitute a valid delivery. Consequences of Failure to Exchange Outstanding Notes Outstanding notes that are not tendered or are tendered but not accepted will, following the consummation of the exchange offer, continue to be subject to the provisions in the indenture governing the notes and the legend contained on the outstanding notes regarding the transfer restrictions of the outstanding notes. In general, outstanding notes, unless registered under the Securities Act, may not be offered or sold except pursuant to an exemption from, or in a transaction not subject to, the Securities Act and applicable state securities laws. We do not currently anticipate that we will take any action to register under the Securities Act or under any state securities laws the outstanding notes that are not tendered in the exchange offer or that are tendered in the exchange offer but are not accepted for exchange. Holders of the exchange notes and any outstanding notes that remain outstanding after consummation of the exchange offer will vote together as a single series for purposes of determining whether holders of the requisite percentage of the Consequences of Exchanging Outstanding Notes We have not requested, and do not intend to request, an interpretation by the staff of the SEC as to whether the exchange notes issued in the exchange offer may be offered for sale, resold or otherwise transferred by any holder without compliance with the registration and prospectus delivery provisions of the Securities Act. However, based on interpretations of the staff of the SEC, as set forth in a series ofno-action letters issued to third parties, we believe that the exchange notes may be offered for resale, resold or otherwise transferred by holders of those exchange notes without compliance with the registration and prospectus delivery provisions of the Securities Act, provided that:
the holder is not an “affiliate” of ours within the meaning of Rule 405 promulgated under the Securities Act; the exchange notes issued in the exchange offer are acquired in the ordinary course of the holder’s business; neither the holder, nor, to the actual knowledge of such holder, any other person receiving exchange notes from such holder, has any arrangement or understanding with any person to participate in the distribution of the exchange notes issued in the exchange offer; if the holder is not a broker-dealer, the holder is not engaged in, and does not intend to engage in, a distribution of the exchange notes; and if such a holder is a broker-dealer, such broker-dealer will receive the exchange notes for its own account in exchange for outstanding notes and that: such outstanding notes were acquired by such broker-dealer as a result of market-making or other trading activities; and it will deliver a prospectus meeting the requirements of the Securities Act in connection with the resale of exchange notes issued in the exchange offer, and will comply with the applicable provisions of the Securities Act with respect to resale of any exchange notes. (Inno-action letters issued to third parties, the SEC has taken the position that broker-dealers may fulfill their prospectus delivery requirements with respect to exchange notes (other than a resale of an unsold allotment from the original sale of outstanding notes) by delivery of the prospectus relating to the exchange offer). See “Plan of Distribution” for a discussion of the exchange and resale obligations of broker-dealers in connection with the exchange offer. Each holder participating in the exchange offer will be required to furnish us with a written representation in the letter of transmittal that they meet each of these conditions and agree to these terms. However, because the SEC has not considered the exchange offer for our outstanding notes in the context of ano-action letter, we cannot guarantee that the staff of the SEC would make similar determinations with respect to this exchange offer. If our belief is not accurate and you transfer an exchange note without delivering a prospectus meeting the requirements of the federal securities laws or without an exemption from these laws, you may incur liability under the federal securities laws. We do not and will not assume, or indemnify you against, this liability. Any holder that is an affiliate of ours or that tenders outstanding notes in the exchange offer for the purpose of participating in a distribution: may not rely on the applicable interpretation of the SEC staff’s position contained in Exxon Capital Holdings Corp., SECNo-Action Letter (April 13, 1988), Morgan, Stanley & Co., Inc., SECNo-Action Letter (June 5, 1991) and Shearman & Sterling, SECNo-Action Letter (July 2, 1993); and must comply with the registration and prospectus delivery requirements of the Securities Act in connection with a secondary resale transaction and be identified as an underwriter in the prospectus. The exchange notes issued in the exchange offer may not be offered or sold in any state unless they have been registered or qualified for sale in such state or an exemption from registration or qualification is available and complied with by the holders selling the exchange notes. We currently do not intend to register or qualify the sale of the exchange notes in any state where we would not otherwise be required to qualify. Filing of Shelf Registration Statements Under the registration rights agreement we agreed that, among other things,
as expeditiously as possible. If the shelf registration statement is declared effective but thereafter ceases to be effective or usable in connection with resales of outstanding notes during the periods specified in the registration rights agreement (except with respect to permitted suspension periods as provided therein), then we will pay Additional Interest to each holder of affected outstanding notes on the terms provided in the registration rights agreement. Holders of notes will be required to deliver certain information to be used in connection with the shelf registration statement and to provide comments on the shelf registration statement within the time periods set forth in the registration rights agreement in order to have their notes included in the shelf registration statement and benefit from the provisions regarding Additional Interest set forth above. By acquiring outstanding notes, a holder will be deemed to have agreed to indemnify us against certain losses arising out of information furnished by such holder in writing for inclusion in any shelf registration statement. Holders of notes will also be required to suspend their use of the prospectus included in the shelf registration statement under certain circumstances upon receipt of written notice to that effect from us. Although we intend, if required, to file the shelf registration statement, we cannot assure you that the shelf registration statement will be filed or, if filed, that it will become or remain effective. The foregoing description is a summary of certain provisions of the registration rights agreement. It does not restate the registration rights agreement in its entirety. We urge you to read the registration rights agreement, which is an exhibit to the registration statement of which this prospectus forms a part and can also be obtained from us. See “Where You Can Find More Information.”
DESCRIPTION OF NOTES In this description, the We will issue the exchange notes under The following description is a summary of the material provisions of the indenture. It does not restate the indenture in its entirety. We urge you to read the indenture, because it, and not this description, defines your rights as holders of the notes. Copies of the indenture and the registration rights agreement are available as set forth above under “Where You Can Find More Information.” Certain defined terms used in this The registered holder of a note will be treated as the owner of it for all purposes. Only registered holders will have rights under the indenture. Brief Description of the Notes The notes: are our general unsecured obligations; will mature on April 1, 2027; are equal in right of payment with all of our existing and future senior unsecured indebtedness; and are effectively subordinated to any of our existing and future senior secured indebtedness and all indebtedness of our subsidiaries, if any. As of The indenture
Principal, Maturity, and Interest We will issue up to indenture, including, without limitation, waivers, amendments, redemptions, and offers to purchase. We will issue exchange notes in denominations of $2,000 and integral multiples of $1,000 in excess thereof. The notes will mature on April 1, 2027. Interest on the notes will accrue at the rate of Interest on the notes will accrue from the date of original issuance or, if interest has already been paid or duly provided for, from the date it was most recently paid or duly provided for. Interest will be computed on the basis of a360-day year If any interest or other payment date of the notes falls on a day that is not a Business Day, the required payment of principal, premium, if any, or interest will be due on the next succeeding Business Day as if made on the date that payment was due, and no interest will accrue on that payment for the period from and after that interest or other payment date, as the case may be, to the date of that payment on the next succeeding Business Day. We may, without the consent of the holders of notes, issue additional notes having the same ranking and the same interest rate, maturity and other terms as the notes, except the issue date, the public offering price and, if applicable, the initial interest payment date and the initial interest accrual date, and such additional notes may not be fungible for trading purposes with, and may initially bear different identifying numbers than, the notes. Any additional notes having such similar terms, together with the notes offered hereby, will constitute a single series of debt securities under the indenture; provided, however, that any such additional notes that are not fungible for U.S. federal income tax purposes with the notes offered hereby will be issued under a different identifying number. Methods of Receiving Payments on the Notes We will pay all principal, interest, and premium, if any, on the notes in the manner described under“— Same-Day Settlement and Payment” below. Paying Agent and Registrar for the Notes The trustee will initially act as paying agent and registrar. We may change the paying agent or registrar without prior notice to the holders of the notes, and we may act as paying agent or registrar. Transfer and Exchange A holder may transfer or exchange notes in accordance with the indenture. The registrar and the trustee may require a holder to furnish appropriate endorsements and transfer documents in connection with a transfer of notes. No service charges will be imposed by the Company, the trustee or the registrar for any registration of transfer, exchange, or Optional Redemption At any time prior to the Par Call Date (as defined below), we may at our option, redeem the notes, in whole or in part, at (1) 100% of the principal amount of the notes to be redeemed, plus accrued and unpaid interest, if any, to the redemption date, and (2) as determined by the Quotation Agent, the sum of the present values of the remaining scheduled payments of principal of, and interest that would be due on, the notes to be redeemed if the notes matured on the Par Call Date (not including any portion of payments of interest accrued as of the redemption date) discounted to the redemption date on a semiannual basis (assuming a360-day year consisting of twelve30-day months) at the Adjusted Treasury Rate, plus 25 basis points, plus accrued and unpaid interest, if any, to the applicable redemption date. At any time on or after the Par Call Date, we may redeem the notes, in whole or in part, at a redemption price, as calculated by us, equal to 100% of the principal amount of the notes to be redeemed plus accrued and unpaid interest to the applicable redemption date. Selection and Notice If less than all of the notes are to be redeemed at any time, the trustee will select notes for redemption from the outstanding notes not previously called for redemption
No notes of $2,000 or less can be redeemed in given in accordance with DTC’s procedures therefor. If any note is to be redeemed in part only, the notice of redemption that relates to that note will state the portion of the principal amount of that note that is to be redeemed. A new note in principal amount equal to the unredeemed portion of the original note will be issued in the name of the holder of notes upon cancellation of the original note. Notes called for redemption become due on the date fixed for redemption. On and after the redemption date, interest will cease to accrue on notes or portions of them called for redemption. Mandatory Redemption We are not required to make mandatory redemption or sinking fund payments with respect to the notes or to repurchase the notes at the option of the holders. Certain Covenants Except as set forth in this description of notes, neither we nor any Subsidiary of ours will be restricted by the indenture from incurring any type of indebtedness or other obligation, from paying dividends or making distributions on its equity interests, or from purchasing its equity interests. The indenture does not require the maintenance of any financial ratios or specified levels of net worth or liquidity. In addition, the indenture does not contain any provisions that would require us to repurchase or redeem any of the notes in situations that may adversely affect the creditworthiness of the notes. Liens We will not, and will not permit any Subsidiary of ours to, or hereafter acquired, unless the notes are equally and ratably secured with such Indebtedness until such time as such Indebtedness is no longer secured by a Lien. Notwithstanding the preceding paragraph, we may, and may permit any Subsidiary of ours to,
Merger, Consolidation, or Sale of Assets We may not directly or indirectly consolidate with or merge with or into, or sell, assign, transfer, lease, convey, or otherwise dispose of all or substantially all of our assets and properties and the assets and properties of any of our Subsidiaries (taken as a whole) in one or more related transactions to another Person unless: (1) either: (a) the Company is the survivor; or (b) the Person formed by or surviving any such consolidation or merger (if other than the Company) or to which such sale, assignment, transfer, lease, conveyance, or other disposition has been made is a Person formed, organized or existing under the laws of the United States, any state of the United States, or the District of Columbia; (2) the Person formed by or surviving any such consolidation or merger (if other than the Company) or the Person to which such sale, assignment, transfer, lease, conveyance, or other disposition has been made assumes by supplemental indenture all the obligations of the Company under the notes and the indenture and delivers to the trustee an opinion of counsel stating that such consolidation, merger, or disposition and such supplemental indenture (if any) comply with the indenture; and (3) immediately after such transaction no Event of Default or event Upon any consolidation by us with or merger of us into any other Person or Persons where the Company is not the survivor or any sale, assignment, transfer, lease, conveyance, or other disposition of all or substantially all of our properties and assets to any Person or Persons, the successor Person formed by such consolidation or into which we are merged or to which such sale, assignment, transfer, lease, conveyance, or other disposition is made shall succeed to, and be substituted for, and may exercise every right and power of the Company under the indenture with the same effect as if such successor Person had been named as the Company therein; and thereafter, except in the case of a lease, the predecessor Person shall be released from all obligations and covenants under the indenture and the notes. Although there is a limited body of case law interpreting the phrase “substantially all,” there is no precise established definition of the phrase under applicable law. Accordingly, in certain circumstances there may be a degree of uncertainty as to whether a particular transaction would involve “all or substantially all” of the properties or assets of a Person. Reports So long as any notes are outstanding, we will file with the trustee, within 30 days after we Commission, such of the supplementary and periodic information, documents, and reports
Section 13 of the Exchange Act in respect of a security listed and registered on a national securities exchange as may be prescribed from time to time in such rules and regulations. In addition, so long as the notes remain outstanding, we will make available to all holders of such notes and to securities analysts and prospective investors in such notes, upon request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act unless such information is available on the Commission’s EDGAR filing system (or any successor thereto). Events of Default and Remedies Each of the following is an Event of Default: (1) default for 30 days in the payment when due of interest on the notes; (2) default in payment when due of the principal of, or premium, if any, on the notes; (3) failure by us duly to observe or perform any other of the covenants or agreements (other than those described in clause (1) or (2) above) in the indenture, which failure continues for a period of 60 days, or, in the case of the covenant set forth under “— Certain Covenants — Reports” above, which failure continues for a period of 90 days, after (4) certain events of bankruptcy, insolvency, or reorganization described in the indenture with respect to the Company. In the case of an Event of Default arising from certain events of bankruptcy, insolvency, or reorganization with respect to the Company, the principal of all outstanding notes will automatically become due and payable immediately without further action or notice. If any other Event of Default occurs and is continuing, the holders of at least 25%, in the case of clauses (1) or (2) of this section, or of at least a majority, in the case of clause (3) of this section, in principal amount of the then outstanding notes may declare all the notes to be due and payable immediately. Holders of the notes may not enforce the indenture or the notes except as provided in the indenture. Subject to certain limitations, holders of a majority in principal amount of the then outstanding notes may direct the trustee in its exercise of any trust or power. The trustee may withhold notice of any continuing default or Event of Default from holders of the notes if it determines that withholding notice is in their interest, except a default or Event of Default relating to the payment of principal of, or interest or premium, if any, on, the notes. Holders of a majority in principal amount of the notes then outstanding by notice to the trustee may on behalf of the holders of all of the notes waive any existing default or Event of Default and its consequences under the indenture except a continuing default or Event of Default in the payment of principal of, or interest or premium, if any, on the notes. We are required to deliver to the trustee annually a statement regarding compliance with the indenture. Modification and Waiver The indenture provides that amendments and supplements to the indenture may be made by the Company and the trustee for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of the indenture or of modifying in any manner the rights of the holders of notes under the indenture, with the consent of the holders of a majority in principal amount of the outstanding notes, voting as a single class; provided that no such amendment or supplement may, without the consent of the holder of each note, among other things: (1) change the stated maturity of the principal of, or interest or premium, if any, on the notes, reduce the principal amount thereof, or reduce the rate or extend the time of payment of interest thereon, or reduce any premium payable on redemption thereof or otherwise, change the redemption provisions or adversely affect the right of repayment at the option of the holder, change the place of payment or currency in which the principal of, or any premium, or interest, with respect to any note is payable, or impair or affect the right of any holder to institute suit for the payment after such payment is due;
(2) reduce the percentage of outstanding notes whose holders’ consent is required for any such amendment, supplement, or waiver or reduce the quorum required for voting; or (3) modify any of the provisions of the indenture relating to amendments, supplements, or waivers The indenture provides that the Company and the trustee may, without the consent of the holders of the notes, amend or supplement the indenture for one of the following purposes: (1) to evidence the succession of another Assets”; (2) to add to the covenants of the Company or to surrender any right or power conferred on the trustee upon such default or may limit the rights of holders of a majority in aggregate principal amount of the notes to waive such default; (3) to evidence and provide for a successor trustee with respect to the notes; (4) to cure any ambiguity or defect, to correct or supplement any provision in the indenture that may be inconsistent with any other provision of the indenture, to conform the text of the indenture or the notes to any provision of this (5) to add to, delete from, or revise the conditions, limitations, and restrictions on the authorized amount, terms, or purposes of issue, authentication, and delivery of the notes; (6) to add any additional Events of Default; (7) to amend or supplement any of the provisions of the indenture as may be necessary to permit or facilitate the defeasance and discharge of the notes; provided that such action does not adversely affect the interests of any holder in any material respect; (8) to pledge to the trustee as security for the notes any property or assets; (9) to secure the notes pursuant to the requirements of the covenant described above under the subheading Liens”; (10) to provide for certificated notes in addition to, or in place of, global notes; or (11) to qualify the indenture under the Trust Indenture Discharge, Defeasance, and Covenant Defeasance The indenture provides that we may satisfy and discharge our obligations under the notes and the indenture if: (a) all notes previously authenticated and delivered, with certain exceptions, have been accepted by the trustee for cancellation; or (b) (i) the notes have become due and payable, or mature within one year, or all of them are to be called for redemption within one year under arrangements satisfactory to the trustee for giving the notice of redemption and we irrevocably deposit in trust with the trustee, as trust funds solely for the benefit of the holders of the notes, for that purpose, money or governmental obligations or a combination thereof that through the payment of interest and principal in accordance with their terms is sufficient (in the opinion of a nationally recognized independent registered public accounting firm expressed in a written certification thereof delivered to the
the entire indebtedness on the notes to maturity or redemption, as the case may be, and pays all other sums payable by it under the indenture; and (ii) the Company delivers to the trustee an officers’ certificate and an opinion of counsel, in each case stating that all conditions precedent provided for in the indenture relating to the satisfaction and discharge of the notes have been complied with. Notwithstanding such satisfaction and discharge, our obligations to compensate and indemnify the trustee on the notes and the obligations by us and the trustee to hold funds in trust and to apply such funds pursuant to the terms of the indenture, with respect to issuing temporary notes, with respect to the registration, transfer, and exchange of the notes, with respect to the replacement of mutilated, destroyed, lost, or stolen notes and with respect to the maintenance of an office or agency for payment, shall in each case survive such satisfaction and discharge. The indenture provides that (i) we will be deemed to have paid and will be discharged from any and all obligations in respect of the notes, and the provisions of the indenture will, except as noted in the preceding paragraph and below, no longer be in effect (“legal defeasance”) and (ii) we may omit to comply with the covenants under (1) we have irrevocably deposited in trust with the trustee as trust funds solely for the benefit of the holders of the notes, for payment of the principal of and interest, and premium, if any, on the notes, money, or government obligations or a combination thereof that through the payment of interest and principal in accordance with their terms is sufficient (in the opinion of a nationally recognized independent registered public accounting firm expressed in a written certification thereof delivered to the (2) such deposit will not result in a breach or violation of, or constitute a default under, the indenture or any other material agreement or instrument to which we are a party or by which we are bound; (3) no default shall have occurred and be continuing on the date of such deposit; (4) in the case of legal defeasance, we have delivered to the trustee an opinion of counsel as described in the indenture confirming that (a) we have received from, or there has been published by, the U.S. Internal Revenue Service a ruling or (b) since the issue date, there has been a change in the applicable U.S. federal income tax law, in either case to the effect that, and based thereon such opinion of counsel will confirm that, the holders of the notes will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such legal defeasance and will be subject to U.S. federal income tax on the same amount and in the same manner and at the same times as would have been the case if such legal defeasance had not occurred; (5) in the case of covenant defeasance, we have delivered to the trustee an opinion of counsel as described in the indenture to the effect that the holders of the notes will not recognize income, gain, or loss for (6) we have delivered to the trustee an officers’ certificate and an opinion of counsel, in each case stating that all conditions precedent provided for in the indenture relating to the defeasance contemplated have been complied with; and (7) if the notes are to be redeemed prior to their maturity, notice of such redemption shall have been duly given or provision therefor shall have been made in another manner satisfactory to the trustee. Notwithstanding a legal defeasance, our obligations with respect to the following will survive until otherwise terminated or discharged under the terms of the indenture: (1) the rights of holders of outstanding notes to receive payments in respect of the principal of, and interest, and premium, if any, payable in respect of, such notes when such payments are due from the trust referred in clause (1) in the preceding paragraph; (2) the issuance of temporary notes, the registration, transfer and exchange of notes, the replacement of mutilated, destroyed, lost, or stolen notes and the maintenance of an office or agency for payment and holding payments in trust;
(3) the rights, powers, trusts, duties, and immunities of the trustee, and our obligations in connection therewith; and (4) the legal defeasance provisions of the indenture. No Personal Liability No director, officer, employee, incorporator, or Concerning the Trustee If the trustee becomes a creditor of ours, the indenture limits its right to obtain payment of claims in certain cases, or to realize on certain property received in respect of any such claim as security or otherwise. The trustee will be permitted to engage in other transactions; however, if The holders of a majority in principal amount of the then outstanding notes will have the right to direct the time, method, and place of conducting any proceeding for exercising any remedy available to the trustee, subject to certain exceptions. The indenture provides that in case an Event of Default occurs and is continuing, the trustee will be required, in the exercise of its power, to use the degree of care of a prudent person in the conduct of Governing Law The registration rights agreement, the indenture, and the notes will be governed by, and construed in accordance with, the laws of the State of New York. Additional Information Anyone who receives this prospectus may obtain a copy of the indenture or the registration rights agreement without charge by writing to The Williams Companies, Inc., One Williams Center, Tulsa, Oklahoma 74172, Attention: Treasurer. Book-Entry, Delivery, and Form The exchange notes will be represented by one or more permanent global notes in registered form without interest coupons (collectively, the “Global Notes”). The Global Notes will be deposited upon issuance with the trustee as custodian for The Depository Trust Company (“DTC”), in New York, New York, and registered in the name of DTC’s nominee, Cede & Co., in each case for credit to an account of a direct or indirect participant in DTC as described below. Beneficial Except as set forth below, the Global Notes may be transferred, in whole but not in part, only to DTC, to another nominee of DTC or to a successor of DTC or its nominee. Beneficial interests in the Global Notes may not be exchanged for notes in registered, certificated form (“Certificated Notes”) except in the limited circumstances described below. See “— Exchange of Global Notes for Certificated Notes.” Depository Procedures The following description of the operations and procedures of DTC, Euroclear, and Clearstream are provided solely as a matter of convenience. These operations and procedures are solely within the control of
the respective settlement systems and are subject to changes by them. We take no responsibility for these operations and procedures and urge investors to contact the system or their participants directly to discuss these matters. DTC has advised us that DTC is a limited-purpose trust company created to hold securities for its participating organizations (collectively, the “Participants”) and to facilitate the clearance and settlement of transactions in those securities between Participants through electronic book-entry changes in accounts of its Participants. The Participants include securities brokers and dealers (including the initial purchasers), banks, trust companies, clearing corporations, and certain other organizations. Access to DTC’s system is also available to other entities such as banks, brokers, dealers, and trust companies that clear through or maintain a custodial relationship with a Participant, either directly or indirectly (collectively, the “Indirect Participants”). Persons who are not Participants may beneficially own securities held by or on behalf of DTC only through the Participants or the Indirect Participants. The ownership interests in, and transfers of ownership interests in, each security held by or on behalf of DTC are recorded on the records of the Participants and Indirect Participants. DTC has also advised us that, pursuant to procedures established by it: (1) upon deposit of the Global Notes, DTC will credit the accounts of Participants (2) we, at our option, and subject to the procedures of DTC, notify the trustee in writing that we elect to cause the issuance of Certificated Notes; or (3) ownership of these interests in the Global Notes will be shown on, and the transfer of ownership of these interests will be effected only through, records maintained by DTC (with respect to the Participants) or by the Participants and the Indirect Participants (with respect to other owners of beneficial interests in the Global Notes). Investors in the Global Notes who are Participants in DTC’s system may hold their interests therein directly through DTC. Investors in the Global Notes who are not Participants may hold their interests therein indirectly through organizations (including Euroclear and Clearstream) that are Participants in such system. Euroclear and Clearstream may hold interests in the Global Notes on behalf of their participants through customers’ securities accounts in their respective names on the books of their respective depositories, which are Euroclear Bank S.A./ The laws of some states require that certain Persons take physical delivery in definitive form of securities that they own. Consequently, the ability to transfer beneficial interests in a Global Note to such Persons will be limited to that extent. Because DTC can act only on behalf of Participants, which in turn act on behalf of Indirect Participants, the ability of a Person having beneficial interests in a Global Note to pledge such interests to Persons that do not participate in the DTC system, or otherwise take actions in respect of such interests, may be affected by the lack of a physical certificate evidencing such interests. Except as described below, owners of an interest in the Global Notes will not have notes registered in their names, will not receive physical delivery of Certificated Notes and will not be considered the registered owners or “Holders” thereof under the indenture for any purpose. Payments in respect of the principal of, and interest, and premium, if any, on a Global Note registered in the name of DTC or its nominee will be payable to DTC in its capacity as the registered Holder under the indenture. Under the terms of the indenture, the Company and the trustee will treat the Persons in whose names the notes, including the Global Notes, are registered as the owners of the notes for the purpose of
receiving payments and for all other purposes. Consequently, neither we, the trustee nor any agent of ours or of the trustee has or will have any responsibility or liability for: (1) any aspect of DTC’s records or any Participant’s or Indirect Participant’s records relating to or payments made on account of beneficial ownership interests in the Global Notes or for maintaining, supervising or reviewing any of DTC’s records or any Participant’s or Indirect Participant’s records relating to the beneficial ownership interests in the Global Notes; or (2) any other matter relating to the actions and practices of DTC or any of its Participants or Indirect Participants. DTC has advised us that its current practice, at the due date of any payment in respect of securities such as the notes, is to credit the accounts of the relevant Participants with the payment on the payment date unless DTC has reason to believe it will not receive payment on such payment date. Each relevant Participant is credited with an amount proportionate to its beneficial ownership of an interest in the principal amount of the notes as shown on the records of DTC. Payments by the Participants and the Indirect Participants to the beneficial owners of notes will be governed by standing instructions and customary practices and will be the responsibility of the Participants or the Indirect Participants and will not be the responsibility of DTC, the trustee or us. Neither we nor the trustee will be liable for any delay by DTC or any of its Participants in identifying the beneficial owners of the notes, and the Company and the trustee may conclusively rely on and will be protected in relying on instructions from DTC or its nominee for all purposes. Subject to the transfer restrictions set forth under “Notice to Investors,” transfers between Participants in DTC will be effected in accordance with DTC’s procedures, and will be settled insame-day funds, and transfers between participants in Euroclear and Clearstream will be effected in accordance with their respective rules and operating procedures. Subject to compliance with the transfer restrictions applicable to the notes described herein, cross-market transfers between the Participants in DTC, on the one hand, and Euroclear or Clearstream participants, on the other hand, will be effected through DTC in accordance with DTC’s rules on behalf of Euroclear or Clearstream, as the case may be, by its depositary; however, such cross-market transactions will require delivery of instructions to Euroclear or Clearstream, as the case may be, by the counterparty in such system in accordance with the rules and procedures and within the established deadlines (Brussels time) of such system. Euroclear or Clearstream, as the case may be, will, if the transaction meets its settlement requirements, deliver instructions to its respective depositary to take action to effect final settlement on its behalf by delivering or receiving interests in the relevant Global Note in DTC, and making or receiving payment in accordance with normal procedures forsame-day funds settlement applicable to DTC. Euroclear participants and Clearstream participants may not deliver instructions directly to the depositories for Euroclear or Clearstream. DTC has advised us that it will take any action permitted to be taken by a Holder of notes only at the direction of one or more Participants to whose account DTC has credited the interests in the Global Notes and only in respect of such portion of the aggregate principal amount of the notes as to which such Participant or Participants has or have given such direction. However, if there is an Event of Default under the notes, DTC reserves the right to exchange the Global Notes for Certificated Notes, and to distribute such notes to its Participants. Although DTC, Euroclear, and Clearstream have agreed to the foregoing procedures to facilitate transfers of interests in the Global Notes among participants in DTC, Euroclear, and Clearstream, they are under no obligation to perform or to continue to perform such procedures, and may discontinue such procedures at any time. None of the Company, the trustee, or any of their respective agents will have any responsibility for the performance by DTC, Euroclear, or Clearstream or their respective participants or indirect participants of their respective obligations under the rules and procedures governing their operations.
Exchange of Global Notes for Certificated Notes A Global Note is exchangeable for Certificated Notes in minimum denominations of $2,000 and in integral multiples of $1,000 in excess thereof, if: (1) DTC (a) notifies us that it is unwilling or unable to continue as depositary for the Global Note or (b) has ceased to be a clearing agency registered under the Exchange Act and in either event we fail to appoint a successor depositary within 90 days; or (2) there has occurred and is continuing an Event of Default and DTC notifies the trustee of its decision to exchange the Global Note for Certificated Notes. In all cases, Certificated Notes delivered in exchange for any Global Note or beneficial interests in Global Notes will be registered in the names, and issued in any approved denominations, requested by or on behalf of the depositary (in accordance with its customary procedures). Exchange of Certificated Notes for Global Notes Certificated Notes may not be exchanged for beneficial interests in any Global Note. Same-Day Settlement and Payment We will make payments in respect of the notes represented by the Global Notes (including principal of, and interest, and premium, if any) by wire transfer of immediately available funds to the accounts specified by the Global Note Holder. We will make all payments of principal, interest, and premium, if any, with respect to Certificated Notes by wire transfer of immediately available funds to the accounts specified by the Holders of the Certificated Notes or, if no such account is specified, by mailing a check to each such Holder’s registered address. The notes represented by the Global Notes are eligible to trade in Because of time zone differences, the securities account of a Euroclear or Clearstream participant purchasing an interest in a Global Note from a Participant in DTC will be credited, and any such crediting will be reported to the relevant Euroclear or Clearstream participant, during the securities settlement processing day (which must be a business day for Euroclear and Clearstream) immediately following the settlement date of DTC. DTC has advised us that cash received in Euroclear or Clearstream as a result of sales of interests in a Global Note by or through a Euroclear or Clearstream participant to a Participant in DTC will be received with value on the settlement date of DTC but will be available in the relevant Euroclear or Clearstream cash account only as of the business day for Euroclear or Clearstream following DTC’s settlement date. Certain Definitions Set forth below are certain defined terms used in the indenture. Reference is made to the indenture for a full disclosure of all such terms, as well as any other capitalized terms used herein for which no definition is provided. “Adjusted Treasury
“Board of Directors” means: (1) with respect to the Company, the (2) with respect to (3) with respect to a limited liability company (other than the Company), the managing member or managing members of such limited liability company or any authorized committee thereof; (4) with respect to a partnership, any authorized committee thereof or the board of directors of the general partner of the (5) with respect to any other Person, the board or committee of such Person serving a similar function. “Business “Capital Stock” means: (1) in the case of a corporation, corporate stock; (2) in the case of an association or business entity, any and all shares, interests, participations, rights, or other equivalents (however designated) of corporate stock; (3) in the case of a partnership or limited liability company, partnership, or membership interests (whether general or limited); and (4) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person. “ “Comparable Treasury Remaining Life. “Comparable Treasury (1) the average of the Reference Treasury Dealer Quotations for that redemption date, after excluding the highest and lowest of the Reference Treasury Dealer Quotations, or (2) if the Quotation Agent obtains fewer than three Reference Treasury Dealer Quotations, the average of all Reference Treasury Dealer Quotations so received. “Consolidated Net Tangible (1) all current liabilities (excluding (A) any current liabilities that by their terms are extendable or renewable at the option of the obligor thereon to a time more than 12 months after the time as of which the amount thereof is being computed, and (B) current maturities of long-term debt); and (2) the value (net of any applicable reserves) of all goodwill, trade names, trademarks, patents, and other like intangible assets, all as set forth, or on a pro forma basis would be set forth, on the Company’s balance sheet (on a consolidated basis, if applicable) for our most recently completed fiscal quarter, prepared in accordance with GAAP.
“Credit “ “ “ “Joint “ “Non-Recourse Indebtedness”means any Indebtedness incurred by any Joint Venture orNon-Recourse Subsidiary that does not provide for recourse against us or any Subsidiary of ours (other than aNon-Recourse Subsidiary) or any property or asset of ours or any Subsidiary of ours (other than the Capital Stock or the properties or assets of a Joint Venture orNon-Recourse Subsidiary). “Non-Recourse Subsidiary”means any Subsidiary of ours (i) whose principal purpose is to incurNon- Recourse Indebtedness and/or construct, lease, own or operate the assets financed thereby, or to become a direct or indirect partner, member or other equity participant or owner in a partnership, limited partnership, limited liability partnership, corporation (including a business trust), limited liability company, unlimited liability company, joint stock company, trust, unincorporated association or joint venture created for such purpose (collectively, a “Business Entity”), (ii) who is not an obligor or otherwise bound with respect to any Indebtedness other thanNon-Recourse Indebtedness, (iii) substantially all the assets of which Subsidiary or Business Entity are limited to (x) those assets being financed (or to be financed), or the operation of which is being financed (or to be financed), in whole or in part byNon-Recourse Indebtedness or (y) Capital Stock in, or Indebtedness or other obligations of, one or more otherNon-Recourse Subsidiaries or Business Entities and (iv) any Subsidiary of aNon-Recourse Subsidiary; provided that such Subsidiary shall be considered to be aNon-Recourse Subsidiary only to the extent that and for so long as each of the above requirements are met. “Par Call Date” means January 1, 2027 (three months prior to the maturity date). “Permitted (1) any Lien existing on any property at the time of the acquisition thereof and not created in contemplation of such acquisition by us or any Subsidiary of ours, whether or not assumed by us or any Subsidiary of ours; (2) any Lien existing on any property of one of our Subsidiaries at the time it becomes a Subsidiary and not created in contemplation thereof and any Lien existing on any property of any Person at the time such Person is merged or liquidated into or consolidated with us or any Subsidiary of ours and not created in contemplation thereof; (3) purchase money and analogous Liens incurred in connection with the acquisition, development, construction, improvement, repair, or replacement of property (including such Liens securing Indebtedness incurred within 12 months of the date on which such property was acquired, developed, constructed, improved, repaired, or replaced); provided that all such Liens attach only to the property acquired, developed, constructed, improved, repaired, or replaced and the principal amount of the Indebtedness secured by such Lien shall not exceed the gross cost of the property; (4) any Liens created or assumed to secure Indebtedness of ours or of any Subsidiary of ours maturing within 12 months of the date of creation thereof and not renewable or extendible by the terms thereof at the option of the obligor beyond such 12 months; (5) Liens on accounts receivable and related proceeds thereof arising in connection with a receivables financing and any Lien held by the purchaser of receivables derived from property or assets sold by us or any Subsidiary of ours and securing such receivables resulting from the exercise of any rights arising out of defaults on such receivables; (6) leases constituting Liens now or hereafter existing and any renewals or extensions thereof; (7) any Lien securing industrial development, pollution control, or similar revenue bonds; (8) Liens existing on the date of the indenture; (9) Liens in favor of us or any Subsidiary of ours; (10) Liens securing Indebtedness incurred to refund, extend, refinance, or otherwise replace Indebtedness (“Refinanced Indebtedness”) secured by a Lien permitted to be incurred under the indenture;provided that the principal amount of such Refinanced Indebtedness does not exceed the principal amount of Indebtedness refinanced (plus the amount of penalties, premiums, fees, accrued interest, and reasonable expenses incurred therewith) at the time of refinancing;
(11) Liens on Non-Recourse Subsidiary; (12) Liens on the products and proceeds (including insurance, condemnation, and eminent domain proceeds) of and accessions to, and contract or other rights (including rights under insurance policies and product warranties) derivative of or relating to, property permitted by the indenture to be subject to Liens but subject to the same restrictions and limitations set forth in the indenture as to Liens on such property (including the requirement that such Liens on products, proceeds, accessions, and rights secure only obligations that such property is permitted to secure); (13) any Liens securing Indebtedness neither assumed nor guaranteed by us or any Subsidiary of ours nor on which we or they customarily pay interest, existing upon real estate or rights in or relating to real estate (includingrights-of-way and easements) acquired by us or such Subsidiary, which mortgage Liens do not materially impair the use of such property for the purposes for which it is held by us or such Subsidiary; (14) any Lien existing or hereafter created on any office equipment, data processing equipment (including computer and computer peripheral equipment), or transportation equipment (including motor vehicles, aircraft, and marine vessels); (15) undetermined Liens and charges incidental to construction or maintenance; (16) any Lien created or assumed by us or any Subsidiary of ours on oil, gas, coal, or other mineral or timber property owned by us or a Subsidiary of ours; (17) any Lien created by us or any Subsidiary of ours on any contract (or any rights thereunder or proceeds therefrom) providing for advances by us or such Subsidiary to finance gas exploration and development, which Lien is created to secure indebtedness incurred to finance such advances; and (18) any Lien granted in connection with a cash collateralization or similar arrangement to secure obligations of ours or any Subsidiary of ours to issuing banks in connection with letters of credits issued at the request of us or any Subsidiary of ours. “ “Quotation “Reference Treasury “Reference Treasury Dealer
“ (1) any corporation, association, or other business entity (other than a partnership or limited liability company) of which more than 50% of the total voting power of Voting Stock is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person (or a combination thereof); and (2) any partnership (whether general or limited) or limited liability company (a) the sole general partner or member of which is such Person or a Subsidiary of such Person, or (b) if there is more than a single general partner or member, either (x) the only managing general partners or managing members of which are such Person or one or more Subsidiaries of such Person (or any combination thereof) or (y) such Person owns or controls, directly or indirectly, a majority of the outstanding general partner interests, member interests, or other Voting Stock of such partnership or limited liability company, respectively. “Voting
The following is a summary of the For purposes of this discussion, a“non-U.S. holder” is an individual, corporation, estate, or trust that is a beneficial owner of the notes and that is not, for U.S. federal income tax purposes: an individual who is a citizen or resident of the United States for U.S. federal income tax purposes; a corporation (or other business entity treated as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the United States or any state thereof or the District of Columbia; an estate the income of which is subject to U.S. federal income taxation regardless of its source; or a trust if a court within the United States can exercise primary supervision over its administration, and one or more United States persons have the authority to control all of the substantial decisions of that trust (or the trust was in existence on August 20, 1996, and validly elected to continue to be treated as a U.S. trust). A The U.S. federal income tax treatment of a partner in a partnership (or other entity classified as a partnership for U.S. federal income tax purposes) that holds the notes generally will depend on such partner’s particular circumstances and on the activities of the partnership. Partners in such partnerships should consult their own tax advisors. U.S. Federal Income Tax Consequences of the Exchange Offer to U.S. Holders andNon-U.S. Holders The exchange of outstanding notes for exchange notes pursuant to the exchange offer will not be a taxable transaction for U.S. federal income tax purposes. U.S. holders andnon-U.S. holders will not recognize
U.S. Federal Income Tax Consequences to U.S. Holders Treatment of Stated Interest Stated interest on the notes will generally be taxable to a U.S. Additional Interest Our obligation to pay you additional interest in the event that we failed to comply with specified obligations under the registration rights agreement may have implicated the provisions of Treasury Sale, Exchange, or Other Disposition of the Notes In general, upon the sale, exchange (other than exchanges for exchange notes pursuant to the exchange offer), redemption, retirement at maturity, or other taxable disposition of a note, a U.S. holder will recognize taxable gain or loss equal to the difference between (1) the amount of the cash and the fair market value of any property received (less any portion allocable to any accrued and unpaid interest, which will be taxable as interest to the extent not previously included in income) and (2) the U.S. holder’s adjusted tax basis in the note. Gain or loss realized on the sale, retirement, or other taxable disposition of a note will generally be capital gain or loss and will be long-term capital gain or loss if the notes are held for more than one year at the time of the disposition. The deductibility of capital losses is subject to limitations. Market Discount A note that is acquired for an amount that is less than its principal amount by more than a de minimis amount (generally 0.25% of the principal amount multiplied by the number of remaining whole years to maturity), will be treated as having “market discount” equal to such difference. Unless the U.S. holder elects to include such market discount in income as it accrues, a U.S. holder will be required to treat any principal payment on, and any gain on the sale, exchange, retirement or other disposition (including a gift) of, a note as ordinary income to the extent of any accrued market discount that has not previously been included in income. In general, market discount on the notes will accrue ratably over the remaining term of the notes or, at the election of the U.S. holder, under a constant yield method. In addition, a U.S. holder could be required to defer the deduction of all or a portion of the interest paid on any indebtedness incurred or continued to purchase or carry a note unless the U.S. holder elects to include market discount in income currently. Such an election applies to all debt instruments held by a taxpayer and may not be revoked without the consent of the IRS. Amortization of Premium A U.S. holder, whose tax basis immediately after its acquisition of a note is greater than the sum of all remaining payments other than qualified stated interest payable on the note, will be considered to have purchased the note at a premium. “Qualified stated interest” is stated interest that is unconditionally payable at least annually at a single fixed rate. A U.S. holder may elect to amortize any such bond premium
Medicare Tax and Reporting Obligations its income and gains in respect of its investment in the notes. Backup Withholding and Information Reporting In general, a U.S. holder of the notes will be subject to backup withholding with respect to interest on the notes, and the proceeds of a sale of the notes, at the applicable tax rate (currently 28%), unless such holder (a) is an entity that is exempt from withholding (including corporations,tax-exempt organizations and certain qualified nominees) and, when required, demonstrates this fact, or (b) provides the payor with its taxpayer identification number (“TIN”), certifies that the TIN provided to the payor is correct and that the holder has not been notified by the IRS that such holder is subject to backup withholding due to underreporting of interest or dividends, and otherwise complies with applicable requirements of the backup withholding rules. In addition, such payments to U.S. holders that are not exempt entities will generally be subject to information reporting requirements. A U.S. holder who does not provide the payor with its correct TIN may be subject to penalties imposed by the IRS. The amount of any backup withholding from a payment to a U.S. holder will be allowed as a credit against such holder’s U.S. federal income tax liability and may entitle such holder to a refund, provided that the required information is timely furnished to the IRS. U.S. Federal Income Tax Consequences toNon-U.S. Holders Treatment of Stated Interest Subject to the discussion of backup withholding below, under the “portfolio interest exemption,” anon-U.S. holder will generally not be subject to U.S. federal income tax (or any withholding tax) on payments of interest on the notes,providedthat: thenon-U.S. holder does not actually or constructively own 10% or more of the total capital or profits interest of WPZ; thenon-U.S. holder is not, and is not treated as, a bank receiving interest on an extension of credit pursuant to a loan agreement entered into in the ordinary course of its trade or business; thenon-U.S. holder is not a “controlled foreign corporation” that is related (directly or indirectly) to us; and certain certification requirements are met. Under current law, the certification requirement will be satisfied in any of the following circumstances: If anon-U.S. holder provides to us or our paying agent a statement on IRS FormW-8BEN orW-8BEN-E (or suitable successor form), together with all appropriate attachments, signed under penalties of perjury, identifying thenon-U.S. holder by name and address and stating, among other things, that thenon-U.S. holder is not a United States person.
If a note is held through a securities clearing organization, bank, or another financial institution that holds customers’ securities in the ordinary course of its trade or business, (i) thenon-U.S. holder provides such a form to such organization or institution, and (ii) such organization or institution, under penalty of perjury, certifies to us that it has received such statement from the beneficial owner or another intermediary and furnishes us or our paying agent with a copy thereof. If a financial institution or other intermediary that holds the note on behalf of thenon-U.S. holder has entered into a withholding agreement with the IRS and submits an IRS FormW-8IMY (or suitable successor form) and certain other required documentation to us or our paying agent. If the requirements of the portfolio interest exemption described above are not satisfied, a 30% withholding tax will apply to the gross amount of interest on the notes that is paid to anon-U.S. holder, unless either: (a) an applicable income tax treaty reduces or eliminates such tax, and thenon-U.S. holder claims the benefit of that treaty by providing a properly completed and duly executed IRS Form If anon-U.S. holder is engaged in a trade or business in the United States. Sale, Exchange, or Subject to the discussion of backup withholding below, anon-U.S. holder generally will not be subject to U.S. federal income tax (or any withholding thereof) on any gain realized by such holder upon a sale, exchange, redemption, retirement at maturity, or other taxable disposition of a note, unless: thenon-U.S. holder is an individual present in the United States for 183 days or more during the taxable year of disposition and who has a “tax home” in the United States and certain other conditions are met; or the gain is effectively connected with the conduct of a U.S. trade or business of thenon-U.S. holder (and, if an applicable income tax treaty so provides, the gain is attributable to a U.S. permanent establishment of thenon-U.S. holder or a fixed base in the case of an individual). If the first exception applies, thenon-U.S. holder generally will be subject to U.S. federal income tax at a rate of 30% on the amount by which itsU.S.-source capital gains exceed itsU.S.-source capital losses. If the second exception applies, thenon-U.S. holder will generally be subject to U.S. federal income tax on the net gain derived from the sale, exchange, redemption, retirement at maturity, or other taxable disposition of the notes in the same manner as a U.S. person. In addition, corporatenon-U.S. holders may be subject to a 30% branch profits tax on any such effectively connected gain. If anon-U.S. holder is eligible for the benefits of an income tax treaty between the United States and its country of residence, the U.S. federal income tax treatment of any such gain may be modified in the manner specified by the treaty. Non-U.S. holders will not be subject to U.S. federal income tax (or any withholding thereof) upon an exchange of notes for exchange notes pursuant to the exchange offer. Information Reporting and Backup Withholding When required, we or our paying agent will report to the IRS and to eachnon-U.S. holder the amount of any interest paid on the notes in each calendar year, and the amount of U.S. federal income tax withheld, if any, with respect to these payments. Non-U.S. holders who have provided certification as to theirnon-U.S. status or who have otherwise established an exemption will generally not be subject to backup withholding tax on payments of principal or interest if neither we nor our agent have actual knowledge or reason to know that such certification is unreliable or that the conditions of the exemption are in fact not satisfied.
Payments of the proceeds from the sale of a note to or through a foreign office of a broker generally will not be subject to information reporting or backup withholding. However, additional information reporting, but generally not backup withholding, may apply to those payments if the broker is one of the following: (a) a United States person, (b) a “controlled foreign corporation” for U.S. federal income tax purposes, (c) a foreign person 50 percent or more of whose gross income from all sources for the three-year period ending with the close of its taxable year preceding the payment was effectively connected with a U.S. trade or business, or (d) a foreign partnership with specified connections to the United States. Payment of the proceeds from a sale of a note to or through the United States office of a broker will be subject to information reporting and backup withholding unless thenon-U.S. holder certifies as to itsnon-U.S. status or otherwise establishes an exemption from information reporting and backup withholding. The amount of any backup withholding from a payment to anon-U.S. holder will be allowed as a credit against such holder’s U.S. federal income tax liability, if any, and may entitle such holder to a refund, provided that the required information is timely furnished to the IRS.
Under the Foreign Account Tax Compliance Act (“FATCA”), withholding taxes may apply to certain types of payments made to “foreign financial institutions” (as specially defined in the Code) and certain othernon-United States entities. Specifically, a 30% withholding tax may be imposed on interest on, and gross proceeds from the sale or other disposition of, notes paid to a foreign financial institution or to anon-financial foreign entity, unless (1) the foreign financial institution undertakes certain diligence and reporting obligations, (2) thenon-financial foreign entity either certifies it does not have any substantial United States owners or furnishes identifying information regarding each substantial United States owner, or (3) the foreign financial institution ornon-financial foreign entity otherwise qualifies for an exemption from these rules. If the payee is a foreign financial institution and is subject to the diligence and reporting requirements in clause (1) above, then, pursuant to an agreement between it and the U.S. Treasury or an intergovernmental agreement between, generally, the jurisdiction in which it is resident and the United States, it must, among other things, identify accounts held by certain United States persons or United States owned foreign entities, annually report certain information about such accounts, and withhold 30% on payments tonon-compliant foreign financial institutions and certain other account holders. The withholding provisions described above will generally not apply to payments of gross proceeds from a sale or other disposition of notes until on or after January 1, 2019. Holders should consult their tax advisors regarding FATCA and the regulations thereunder. The U.S. federal income tax discussion set forth above is included for general information only and may not be applicable depending upon a holder’s particular situation. Holders are urged to consult their own tax advisors with respect to the tax consequences to them of the acquisition, ownership and disposition of the notes, including the tax consequences under state, local, estate, foreign and other tax laws and tax treaties and the possible effects of changes in U.S. or other tax laws. Each broker-dealer that receives exchange notes for its own account We will not receive any proceeds from any sale of exchange notes by We have agreed to pay all expenses incident to the exchange offer, other than the expenses of counsel for the holders of the outstanding notes, commissions or concessions of any brokers or dealers and any transfer taxes relating to the sale or disposition of the outstanding notes or the exchange notes, and we will indemnify the holders of the outstanding notes (including any broker-dealers) against certain liabilities, including liabilities under the Securities Act. Certain matters with respect to the validity of the exchange notes will be passed upon for us by Gibson, Dunn & Crutcher LLP. The financial statements of Northwest Pipeline
No dealer, salesperson or other person is authorized to give any information or to represent anything not contained in this prospectus. This prospectus does not offer to sell or ask for offers to buy any securities other than those to which this prospectus relates and it does not constitute an offer to sell or ask for offers to buy any of the securities in any jurisdiction where it is unlawful, where the person making the offer is not qualified to do so, or to any person who cannot legally be offered the securities. The information contained in this prospectus is current only as of its date. PROSPECTUS $ 250,000,000 NORTHWEST PIPELINE LLC Offer to Exchange 2027 that have been registered under the Securities Act of 1933 for any and all outstanding 4.000% Senior Notes due 2027 (CUSIP Nos. 66775V AA3 and U6664R AA9) , PART II
Section Our Operating Agreement provides that the We currently maintain an insurance policy that, within the limits and subject to the terms and conditions thereof, covers certain expenses and liabilities that may be incurred by members of the management committee and officers in connection with proceedings that may be brought against them as a result of an act or omission committed or suffered while acting as a member of the management committee or officer of Northwest Pipeline LLC. In addition,
(a)
II-1 Item 22. Undertakings The undersigned registrant hereby undertakes: 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 the 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.
To supply by means of 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. 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; (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 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 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. That, for the purpose of determining any liability under the Securities Act, 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. That, for the purpose of determining liability under the Securities Act II-2 That, for the purpose of determining liability of the registrant under the Securities Act (i) (ii) (iii)
(iv) That, for Insofar as indemnification for liabilities arising under the Securities Act II-3 Pursuant to the requirements of the Securities Act, January 19, 2018.
POWER OF ATTORNEY Each Pursuant to the requirements of Securities Act of 1933, as amended, this registration statement has been signed by the following persons on January 19, 2018 in the capacities indicated below.
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