110019--2/29/2008--NORTHWEST_PIPELINE

related topics

{operation, natural, condition}

{gas, price, oil}

{cost, regulation, environmental}

{regulation, change, law}

{capital, credit, financial}

{tax, income, asset}

{system, service, information}

{debt, indebtedness, cash}

{acquisition, growth, future}

{regulation, government, change}

{financial, litigation, operation}

{customer, product, revenue}

Risks Inherent to our Industry and Business Our natural gas transportation and storage activities involve numerous risks that might result in accidents and other operating risks and hazards Our current pipeline infrastructure is aging, which may adversely affect our business. Increased competition from alternative natural gas transportation and storage options and alternative fuel sources could have a significant financial impact on us. We may not be able to maintain or replace expiring natural gas transportation and storage contracts at favorable rates or on a long-term basis. Any significant decrease in supplies of natural gas in our areas of operation could adversely affect our business and operating results. Significant prolonged changes in natural gas prices could affect supply and demand and cause a reduction in or termination of the long-term transportation and storage contracts or throughput on our system. Costs of environmental liabilities and complying with existing and future environmental regulations could exceed our current expectations. The failure of liquid natural gas (LNG) import terminals to be successfully developed in the United States could increase natural gas prices and reduce the demand for our services. We depend on certain key customers for a significant portion of our revenues. The loss of any of these key customers or the loss of any contracted volumes could result in a decline in our business. 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 do not own all of the land on which our pipeline and facilities are located, which could disrupt our operations. We do not insure against all potential losses and could be seriously harmed by unexpected liabilities. Risks Related to Strategy and Financing Our debt agreements impose restrictions on us that may adversely affect our ability to operate our business. A downgrade of our current credit rating could impact our costs of doing business in certain ways and maintaining our current credit rating is within the control of independent third parties. Williams can exercise substantial control over our distribution policy and our business and operations and may do so in a manner that is adverse to our interests. The financial condition and liquidity of Williams affects our access to capital, our credit standing and our financial condition. Risks Related to Regulations that Affect our Industry Compliance with the Pipeline Safety Improvement Act of 2002 may adversely impact our cost of conducting business. Our natural gas transportation and storage operations are subject to regulation by FERC, which could have an adverse impact on our ability to establish transportation and storage rates that would allow us to recover the full cost of operating our pipeline, including a reasonable return. We could be subject to penalties and fines if we fail to comply with FERC regulations. The outcome of certain FERC proceedings regarding income tax allowances in rate calculations is uncertain and could affect our ability to include an income tax allowance in our cost-of-service based rates. The outcome of certain FERC proceedings involving FERC policy statements is uncertain and could affect the level of return on equity that Northwest may be able to achieve in any future rate proceeding. The outcome of future rate cases to set the rates we can charge customers on our pipeline might result in rates that lower our return on the capital that we have invested in our pipeline. Risks Related to Accounting Standards Potential changes in accounting standards might cause us to revise our financial results and disclosures in the future, which might change the way analysts measure our business or financial performance. Risks Related to Employees, Outsourcing of Non-Core Support Activities, and Technology. Institutional knowledge residing with current employees nearing retirement eligibility might not be adequately preserved. Failure of or disruptions to our outsourcing relationships might negatively impact our ability to conduct our business. Risks Related to Weather, Other Natural Phenomena and Business Disruption Our assets and operations can be affected by weather and other natural phenomena. Acts of terrorism could have a material adverse effect on our financial condition, results of operations and cash flows.

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110019--2/29/2008--NORTHWEST_PIPELINE_GP