Williams Reports Third-Quarter 2009 Financial Results

Share Name	Share Symbol	Market	Type
Williams Companies Inc	TG:WMB	Tradegate	Ordinary Share

	Price Change	% Change	Share Price	Bid Price	Offer Price	High Price	Low Price	Open Price	Shares Traded	Last Trade
	-0.17	-0.33%	51.75	51.63	51.87	51.86	51.76	51.86	35	22:50:19

Williams Companies (TG:WMB)
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- Net Income is $143 Million, $0.24 Per Share for 3Q - Recurring Adjusted Income is $147 Million, $0.25 Per Share for 3Q: Up 27% Versus 2Q - Recurring Adjusted EPS Guidance Increased 18% for '09 - Higher Expected NGL Margins, Gas Prices, Lower Costs Drive Guidance Increase TULSA, Okla., Oct. 29 /PRNewswire-FirstCall/ -- Williams (NYSE:WMB) announced unaudited net income attributable to Williams, for third-quarter 2009 of $143 million, or $0.24 per share on a diluted basis, compared with net income of $366 million, or $0.62 per share on a diluted basis for third-quarter 2008. Quarterly Summary Financial Information Per share amounts are reported on a diluted basis. 3Q 2009 3Q 2008 All amounts are attributable ------------------- ------------------- to The Williams Companies, Inc. millions per share millions per share -------- --------- -------- --------- Income from continuing operations $141 $0.24 $360 $0.61 Income from discontinued operations 2 - 6 0.01 ---- ----- ---- ----- Net income $143 $0.24 $366 $0.62 ==== ===== ==== ===== -------------------------------------------------------------------------- Recurring income from continuing operations* $140 $0.24 $361 $0.61 After-tax mark-to-market adjustments 7 0.01 (38) ($0.06) ---- ----- ---- ----- Recurring income from continuing operations - after mark-to-market adjustments* $147 $0.25 $323 $0.55 ==== ===== ==== ===== Year-to-Date Summary Financial Information Per share amounts are reported on a diluted basis. YTD 2009 YTD 2008 All amounts are attributable ------------------- ------------------- to The Williams Companies, Inc. millions per share millions per share -------- --------- -------- --------- Income from continuing operations $266 $0.45 $1,183 $1.99 Income (loss) from discontinued operations (153) (0.26) 120 0.20 ---- ----- ---- ----- Net income $113 $0.19 $1,303 $2.19 ==== ===== ==== ===== -------------------------------------------------------------------------- Recurring income from continuing operations* $366 $0.62 $1,089 $1.83 After-tax mark-to-market adjustments 26 0.05 (30) ($0.05) ---- ----- ---- ----- Recurring income from continuing operations - after mark-to-market adjustments* $392 $0.67 $1,059 $1.78 ==== ===== ==== ===== * A schedule reconciling income from continuing operations to recurring income from continuing operations and mark-to-market adjustments (non-GAAP measures) is available at http://www.williams.com/ and as an attachment to this press release. Lower energy commodity prices in third-quarter 2009, compared to the relatively high prices in third-quarter 2008, impacted results in Exploration & Production and Midstream, as both businesses' results were lower than third-quarter 2008. However, the company's overall results are improved compared with second-quarter 2009. Gas Pipeline's results, as expected, were relatively steady despite the much lower commodity prices. Other factors that served to mitigate the effect of lower commodity prices include higher natural gas production; Exploration & Production's hedge positions, which cover a significant portion of its production; and fee-based revenues from certain of Midstream's gathering and processing services. Year-to-date through Sept. 30, Williams reported net income attributable to Williams of $113 million, or $0.19 per share on a diluted basis, compared with net income of $1,303 million, or $2.19 per share, for the first three quarters of 2008. The year-to-date loss from discontinued operations is primarily due to the charges associated with the company's operations in Venezuela that were recorded in first-quarter 2009. As a result of the Venezuelan government's expropriation of the El Furrial and PIGAP II compression facilities in May, Williams is now reporting the results of those operations in discontinued operations. In addition to the losses associated with the Venezuelan operations, the previously noted lower energy commodity prices compared with the relatively high prices in 2008 also negatively affected the year-to-date 2009 results. The 2008 results through three quarters also benefited from $148 million in pre-tax gains on the sale of certain international interests. Recurring Results Adjusted for Effect of Mark-to-Market Accounting Recurring income from continuing operations, after adjustments to remove the effect of mark-to-market accounting for certain hedges and other derivatives in Gas Marketing Services, was $147 million, or $0.25 per share for third-quarter 2009. On the same adjusted basis, recurring income from continuing operations was $323 million, or $0.55 per share, for third-quarter 2008. For the first three quarters of 2009, recurring income from continuing operations after mark-to-market adjustments was $392 million, or $0.67 per share; compared with $1,059 million, or $1.78 per share, for the same period in 2008. The lower recurring adjusted results for both the third-quarter and year-to-date periods were also due to the large disparity between the relatively low 2009 commodity prices compared with the 2008 prices, particularly in the first half of the year. As previously noted, the relatively steady results in Gas Pipeline, as well as higher natural gas production, Exploration & Production's hedge positions and fee-based revenues in Midstream, partially offset some of the negative effect of lower commodity prices. While the 2009 recurring adjusted results are lower compared with 2008, the third-quarter 2009 results are up 27 percent compared with second-quarter 2009 results, which represent a more comparable commodity price environment. A reconciliation of the company's income from continuing operations to recurring income from continuing operations and mark-to-market adjustments is available at http://www.williams.com/ and as an attachment to this news release. 2009 Guidance Increased, 2010-11 Guidance Unchanged Williams is updating its outlook for full-year 2009 commodity price assumptions and its earnings and capital expenditures, which it previously provided on Sept. 10. The following chart shows the updated guidance for 2009, as well as guidance for 2010 and 2011, which are both unchanged from the Sept. 10 guidance. Williams' 2009-2011 Outlook 2009 2010 2011 ------------------------------------------------------------------------ As of Oct. 29, 2009 Natural Gas ($/MMBtu) NYMEX $3.95 - $4.35 $4.50 - $7.00 $5.00 - $8.00 Rockies $3.00 - $3.40 $3.90 - $6.10 $4.35 - $6.95 San Juan/Mid-Continent Avg. $3.15 - $3.55 $4.05 - $6.35 $4.55 - $7.30 Crude Oil - WTI ($/barrel) $55 - $60 $60 - $90 $65 - $95 Crude-to-Natural Gas Ratio 13.8x - 13.9x 12.9x - 13.3x 11.9x - 13.0x Average NGL Margins ($/gallon) $0.35 - $0.37 $0.35 - $0.67 $0.38 - $0.64 Capital Expenditures Incurred* $2,450 - $2,675 $1,900 - $2,675 $2,300 - $3,800 Recurring Adj. Segment Profit* $1,750 - $1,900 $1,575 - $2,775 $1,850 - $3,450 Recurring Adj. Earnings Per Share* $0.95 - $1.00 $0.80 - $1.90 $1.10 - $2.65 * Capital Expenditures Incurred and Recurring Adjusted Segment Profit are in millions of dollars. Capital Expenditures Incurred includes increase in property, plant and equipment plus purchase of investments. Recurring Segment Profit and Earnings Per Share are adjusted to remove the effect of mark-to-market accounting and EPS is diluted. The company is increasing 2009 recurring adjusted segment profit guidance from a range of $1,525 million to $1,800 to a range of $1,750 million to $1,900 million. Guidance for recurring adjusted earnings per share is also increasing from a range of $0.75 to $0.90 to a range of $0.95 to $1.00. The updated guidance for 2009 reflects higher expected NGL margins in Midstream as well as higher expected average net realized prices for natural gas and lower costs in Exploration & Production. The company has slightly reduced its expected capital expenditures for 2009, reflecting the company's continuing efforts to reduce operating and capital project costs. CEO Perspective "Williams has delivered steadily improving results throughout a difficult 2009 and we are now poised to deliver significant earnings growth and value creation," said Steve Malcolm, chairman, president and chief executive officer. "Forward market commodity prices are now above the midpoints of our 2010-11 assumptions, which have us approaching our record-level of earnings from 2008 over the next two years. And this is in a much more sustainable and lower commodity price environment," Malcolm said. "We're planning on investing in significant growth opportunities over the next two years. The Piceance Basin, where we have continued to build scale, holds a vast inventory of low risk, high return projects across all of our businesses. "As expected, Rockies gas prices are increasing and the basis differential is improving, which only enhances the strong returns on our projects," Malcolm said. Business Segment Performance 3Q YTD Consolidated Segment Profit ------------- ---------------- Amounts in millions 2009 2008 2009 2008 Exploration & Production $106 $361 $303 $1,287 Midstream Gas & Liquids 222 229 371 737 Gas Pipeline 157 173 498 532 ---- ---- ------ ------ $485 $763 $1,172 $2,556 Gas Marketing Services ($6) $16 ($14) ($9) Other (1) (2) 3 (2) ---- ---- ------ ------ Consolidated Segment Profit $478 $777 $1,161 $2,545 ==== ==== ====== ====== Recurring Consolidated Segment Profit After Mark-to-Market 3Q YTD Adjustments* ------------- ---------------- Amounts in millions 2009 2008 2009 2008 Exploration & Production $102 $379 $339 $1,162 Midstream Gas & Liquids 217 223 435 729 Gas Pipeline 157 163 498 513 ---- ---- ------ ------ $476 $765 $1,272 $2,404 Gas Marketing after MTM Adjustments $6 ($45) $27 ($58) Other (1) (2) 3 (2) ---- ---- ------ ------ Recurring Consolidated Segment Profit After Mark-to-Market Adjustments $481 $718 $1,302 $2,344 ==== ==== ====== ====== * A schedule reconciling income from continuing operations to recurring income from continuing operations and mark-to-market adjustments (non-GAAP measures) is available at http://www.williams.com/ and as an attachment to this press release. Exploration & Production Exploration & Production includes natural gas production and development in the U.S. Rocky Mountains, San Juan Basin, Barnett Shale, and oil and gas development in South America. The company also made its initial investment in the Marcellus Shale earlier in 2009. The business reported segment profit of $106 million for third-quarter 2009, compared with segment profit of $361 million in third-quarter 2008. The significant decline in segment profit during the third quarter was due to much lower net realized average prices for natural gas, partially offset by higher production volumes and lower costs and expenses, including operating taxes. These higher production volumes, coupled with higher capital costs in prior years, resulted in higher depletion, depreciation and amortization expense during the third quarter. Although natural gas production grew from third-quarter 2008 to third-quarter 2009, production is expected to decline somewhat throughout the remainder of 2009 because of the company's reduced drilling activity. Average daily natural gas production on U.S. interests has fallen 6 percent from first-quarter to third-quarter 2009. Average Daily Production 3Q Amounts in million cubic feet --------------- equivalent of natural gas (MMcfe) 2009 2008 Growth rate ----- ---- ----------- Piceance Basin 697 657 6% Powder River Basin 224 225 0% Other Basins 227 214 6% U.S. Interests only 1,148 1,096 5% U.S. & International Interests 1,202 1,146 5% During third-quarter 2009, Williams' net realized average price for U.S. production was $4.18 per thousand cubic feet of natural gas equivalent (Mcfe), which was 40 percent lower than the $6.97 per Mcfe realized in third-quarter 2008. For the nine months of 2009, the exploration and production business reported a segment profit of $303 million, compared with $1,287 million for the first nine months of 2008. The primary driver of the lower segment profit in the first nine months of 2009 was a 43 percent decline in the net realized average price for natural gas. Also, the 2008 period benefited from $148 million in pre-tax gains on the sale of certain international interests. Lower operational costs and expenses partially offset these negative impacts in the year-to-date period. Midstream Gas & Liquids Midstream provides natural gas gathering and processing, deepwater production handling and oil transportation, natural gas liquid (NGL) fractionation and storage services and olefins production. The business reported a segment profit of $222 million for third-quarter 2009, compared with segment profit of $229 million for third-quarter 2008. The slight decline in segment profit for the quarter is primarily because of lower NGL and olefin prices, partially offset by decreased production costs reflecting lower natural gas prices. Higher NGL equity volumes and higher fee-based revenues also helped mitigate the lower NGL prices. The increase in fee-based revenue for the quarter was attributable to connecting new supplies in the deepwater Gulf of Mexico through the Blind Faith extension in late 2008, as well as the first partial quarter of processing natural gas production at Willow Creek. The higher NGL equity volumes in the quarter were primarily due to the absence of a number of unfavorable factors in third-quarter 2008, including impacts from hurricanes in the Gulf of Mexico. Year-to-date through Sept. 30, Midstream's segment profit was $371 million, compared with $737 million for the same period in 2008. The significant decline, compared with the same period in 2008, is due primarily to lower NGL and olefin prices, especially in the first half of the year. These lower prices were partially offset by decreased production costs reflecting lower natural gas prices. In addition, the year-to-date results were unfavorably impacted by a $75 million loss related to the impairment of Midstream's investment in the Accroven assets in Venezuela. Gas Pipeline Gas Pipeline, which primarily delivers natural gas to markets along the Eastern Seaboard, in Florida and in the Pacific Northwest, reported third-quarter 2009 segment profit of $157 million, compared with $173 million for third-quarter 2008. Higher operating and maintenance, depreciation and pension expenses and the absence of a $10 million gain in 2008 were the drivers of the decrease in third-quarter segment profit. These were partially offset by lower project development costs. Year-to-date through Sept. 30, Gas Pipeline reported segment profit of $498 million, compared with $532 million for the same period in 2008. The lower segment profit was due primarily to higher operating costs, partially offset by higher other service revenues and by lower project development costs. The 2008 results also included the benefit of a $9 million gain on sale of excess natural gas inventory in the second quarter and the $10 million gain in the third quarter noted above. Gas Marketing Services Gas Marketing Services is responsible for supporting Williams' natural gas businesses by providing marketing and risk management services. These services primarily include marketing and hedging the gas produced by Exploration & Production, and procuring fuel and shrink gas and hedging NGLs for Midstream. In addition, Gas Marketing manages various natural gas related contracts, such as transportation, storage, and related hedges. It also provides marketing services to third-parties, such as producers and processing companies. The segment also manages certain legacy natural gas contracts and positions that previously were reported in the former power business, which have been reduced to a minimal level and will conclude by the end of 2010. Gas Marketing Recurring Segment Profit Adjusted for Mark-to-Market 3Q YTD Effect* ------------- -------------- Amounts in millions 2009 2008 2009 2008 Segment profit (loss) ($6) $16 ($14) ($9) Nonrecurring adjustments - - - - --- ---- ---- ---- Recurring segment profit (loss) ($6) $16 ($14) ($9) Mark-to-market adjustments 12 (61) 41 (49) --- ---- ---- ---- Recurring segment profit (loss) after MTM adjustments $6 ($45) $27 ($58) === ==== ==== ==== * A schedule reconciling income from continuing operations to recurring income from continuing operations and mark-to-market adjustments (non-GAAP measures) is available at http://www.williams.com/ and as an attachment to this press release. The improvement in Gas Marketing's third-quarter recurring segment loss after mark-to-market adjustments primarily resulted from a $31 million increase in realized gains associated with storage contracts executed to hedge natural gas storage activity and by the absence of a $24 million unfavorable adjustment to the carrying value of our natural gas storage inventory in 2008. The improvement in Gas Marketing's year-to-date recurring adjusted results was primarily the result of a $33 million increase in realized revenues associated with storage contracts, a $25 million decrease in inventory valuation adjustments related to natural gas owned in storage and a $19 million decrease in realized losses associated with certain legacy and proprietary trading positions. Although not significant for the third-quarter 2009 results, the company expects in the future to have some level of mark-to-market volatility in Gas Marketing Services, primarily from natural gas storage hedging. Williams' Liquidity, Financial Strength Remain Strong As of Oct. 23, 2009, Williams had approximately $1.7 billion of cash and cash equivalents, which included approximately $635 million held by certain domestic and international subsidiaries or margin deposits held on behalf of counterparties. The company also had approximately $1.9 billion of available credit capacity under the company's credit facilities. Williams' total liquidity as of Oct. 23 was approximately $3.6 billion. Williams has no significant debt maturities until 2011 and the company's $1.43 billion primary credit facility does not expire until May 2012. Williams is rated investment grade by three of the major rating agencies. Today's Analyst Call Management will discuss the third-quarter 2009 results and outlook for 2009 during a live webcast beginning at 9:30 a.m. EDT today. Participants are encouraged to access the webcast and corresponding slides for viewing, downloading and printing at http://www.williams.com/. A limited number of phone lines will be available at (877) 719-9791. International callers should dial (719) 325-4800. Replays of the third-quarter webcast, in both streaming and downloadable podcast formats, will be available for two weeks at http://www.williams.com/ following the event. Form 10-Q The company plans to file its Form 10-Q with the Securities and Exchange Commission today. The document will be available on both the SEC and Williams websites. About Williams (NYSE:WMB) Williams, through its subsidiaries, finds, produces, gathers, processes and transports natural gas. Williams' operations are concentrated in the Pacific Northwest, Rocky Mountains, Gulf Coast, and Eastern Seaboard. More information is available at http://www.williams.com. Go to http://www.b2i.us/irpass.asp?BzID=630&to=ea&s=0 to join our e-mail list. Contact: Jeff Pounds Williams (media relations) (918) 573-3332 Travis Campbell Williams (investor relations) (918) 573-2944 Richard George Williams (investor relations) (918) 573-3679 Sharna Reingold Williams (investor relations) (918) 573-2078 Our reports, filings, and other public announcements may contain or incorporate by reference statements that do not directly or exclusively relate to historical facts. Such statements are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. You typically can identify forward-looking statements by the use of forward-looking words, such as "anticipates," believes," "could," "may," "should," "continues," "estimates," "expects," "forecasts," "intends," "might," "objectives," "planned," "potential," "projects," "scheduled," "will," or other similar expressions. These statements are based on our present intentions and our assumptions about future events and are subject to risks, uncertainties, and other factors. In addition to any assumptions, risks, uncertainties or other factors referred to specifically in connection with such statements, other factors not specifically referenced could cause our actual results to differ materially from the results expressed or implied in any forward-looking statements. Those factors include, among others: -- availability of supplies (including the uncertainties inherent in assessing, estimating, acquiring and developing future natural gas reserves), market demand, volatility of prices, and the availability and cost of capital; -- inflation, interest rates, fluctuation in foreign exchange, and general economic conditions (including the current economic slowdown and the disruption of global credit markets and the impact of these events on our customers and suppliers); -- the strength and financial resources of our competitors; -- development of alternative energy sources; -- the impact of operational and development hazards; -- costs of, changes in, or the results of laws, government regulations (including proposed climate change legislation), environmental liabilities, litigation, and rate proceedings; -- our costs and funding obligations for defined benefit pension plans and other postretirement benefit plans; -- changes in maintenance and construction costs; -- changes in the current geopolitical situation; -- our exposure to the credit risk of our customers; -- risks related to strategy and financing, including restrictions stemming from our debt agreements, future changes in our credit ratings and the availability and cost of credit; -- risks associated with future weather conditions; -- acts of terrorism, and additional risks described in our filings with the Securities and Exchange Commission. Given the uncertainties and risk factors that could cause our actual results to differ materially from those contained in any forward-looking statement, we caution investors not to unduly rely on our forward-looking statements. In addition to causing our actual results to differ, the factors listed above may cause our intentions to change. Such changes in our intentions may also cause our results to differ. We disclaim any obligation to and do not intend to publicly update or revise any forward-looking statements or changes to our intentions, whether as a result of new information, future events or otherwise. Reconciliation of Income from Continuing Operations Attributable to The Williams Companies, Inc. to Recurring Earnings (UNAUDITED) (Dollars in millions, 2008 except per-share ------------------------------------------ amounts) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year -------------------------------------------------------------------- Income from continuing operations attributable to The Williams Companies, Inc. available to common stockholders $411 $412 $360 $123 $1,306 ======= ======= ======= ======= ======= Income from continuing operations - diluted earnings per common share $0.69 $0.69 $0.61 $0.21 $2.21 ======= ======= ======= ======= ======= Nonrecurring items: Exploration & Production (E&P) ------------------------------ Gain on sale of Peru interests $(118) $(30) $- $- $(148) Reserve for receivables from bankrupt counterparty - 5 4 - 9 Impairments of property in the Arkoma basin - - 14 129 143 Accrual for Wyoming severance taxes - - - 34 34 Penalties from early release of drilling rigs - - - - - ------- ------- ------- ------- ------- Total Exploration & Production nonrecurring items (118) (25) 18 163 38 Gas Pipeline ------------- Gain on sale of excess inventory gas - TGPL - (9) - - (9) Gain on sale of certain south Texas assets - TGPL - - (10) - (10) ------- ------- ------- ------- ------- Total Gas Pipeline nonrecurring items - (9) (10) - (19) Midstream Gas & Liquids (MGL) ------------------------------ Impairment of Carbonate Trend pipeline - - - 6 6 Involuntary conversion gain related to Ignacio gas processing plant - (3) (6) (3) (12) Reserve for receivables from bankrupt counterparty - 1 - - 1 Final earnout payment from 2005 Gulf Liquids asset sale - - (8) - (8) Charges from Hurricanes Gustav & Ike - - 8 5 13 Involuntary conversion gain from hurricane damage at Cameron - - - (5) (5) Gulf Liquids litigation partial settlement - - - (32) (32) Loss from Venezuela investment - - - - - ------- ------- ------- ------- ------- Total Midstream Gas & Liquids nonrecurring items - (2) (6) (29) (37) ------- ------- ------- ------- ------- Nonrecurring items included in segment profit (loss) (118) (36) 2 134 (18) Nonrecurring items below segment profit (loss) ------------------------ Interest related to Gulf Liquids litigation partial settlement - MGL - - - (11) (11) Interest related to Wyoming severance taxes - E&P - - - 4 4 Loss associated with Venezuela investment - E&P - - - - - Reversal of litigation contingency - Corporate - - - - - Impairment of cost-based investment - Corporate - - - - - ------- ------- ------- ------- ------- - - - (7) (7) Total nonrecurring items (118) (36) 2 127 (25) Tax effect for above items (45) (14) 1 49 (9) ------- ------- ------- ------- ------- Recurring income from continuing operations available to common stockholders $338 $390 $361 $201 $1,290 ======= ======= ======= ======= ======= Recurring diluted earnings per common share $0.57 $0.66 $0.61 $0.34 $2.18 ======= ======= ======= ======= ======= Weighted-average shares - diluted (thousands) 598,627 596,187 589,138 587,057 592,719 (Dollars in millions, 2009 except per-share --------------------------------- amounts) 1st Qtr 2nd Qtr 3rd Qtr Year ----------------------------------------------------------- Income from continuing operations attributable to The Williams Companies, Inc. available to common stockholders $2 $123 $141 $266 ======= ======= ======= ======= Income from continuing operations - diluted earnings per common share $- $0.21 $0.24 $0.45 ======= ======= ======= ======= Nonrecurring items: Exploration & Production (E&P) ------------------------------- Gain on sale of Peru interests $- $- $- $- Reserve for receivables from bankrupt counterparty - - - - Impairments of property in the Arkoma basin 5 - - 5 Accrual for Wyoming severance taxes - 3 (4) (1) Penalties from early release of drilling rigs 34 (2) - 32 ------- ------- ------- ------- Total Exploration & Production nonrecurring items 39 1 (4) 36 Gas Pipeline ------------- Gain on sale of excess inventory gas - TGPL - - - - Gain on sale of certain south Texas assets - TGPL - - - - ------- ------- ------- ------- Total Gas Pipeline nonrecurring items - - - - Midstream Gas & Liquids (MGL) ------------------------------ Impairment of Carbonate Trend pipeline - - - - Involuntary conversion gain related to Ignacio gas processing plant 1 - (5) (4) Reserve for receivables from bankrupt counterparty - - - - Final earnout payment from 2005 Gulf Liquids asset sale - - - - Charges from Hurricanes Gustav & Ike - - - - Involuntary conversion gain from hurricane damage at Cameron - - - - Gulf Liquids litigation partial settlement - - - - Loss from Venezuela investment 68 - - 68 ------- ------- ------- ------- Total Midstream Gas & Liquids nonrecurring items 69 - (5) 64 ------- ------- ------- ------- Nonrecurring items included in segment profit (loss) 108 1 (9) 100 Nonrecurring items below segment profit (loss) ------------------------ Interest related to Gulf Liquids litigation partial settlement - MGL - - - - Interest related to Wyoming severance taxes - E&P - - - - Loss associated with Venezuela investment - E&P 11 - - 11 Reversal of litigation contingency - Corporate - (5) - (5) Impairment of cost-based investment - Corporate - - 7 7 ------- ------- ------- ------- 11 (5) 7 13 Total nonrecurring items 119 (4) (2) 113 Tax effect for above items 15 (1) (1) 13 ------- ------- ------- ------- Recurring income from continuing operations available to common stockholders $106 $120 $140 $366 ======= ======= ======= ======= Recurring diluted earnings per common share $0.18 $0.20 $0.24 $0.62 ======= ======= ======= ======= Weighted-average shares - diluted (thousands) 582,361 588,780 590,059 588,693 Note: The sum of earnings per share for the quarters may not equal the total earnings per share for the year due to changes in the weighted-average number of common shares outstanding. Adjustment to remove MTM effect Dollars in millions except for per share amounts 3rd Quarter YTD -------------- -------------- 2009 2008* 2009 2008* ----- ----- ----- ----- Recurring income from cont. ops available to common shareholders $140 $361 $366 $1,089 Recurring diluted earnings per common share $0.24 $0.61 $0.62 $1.83 Mark-to-Market (MTM) adjustments for Gas Marketing 12 (61) 41 (49) Tax effect of total MTM adjustments (5) 23 (15) 19 ----- ----- ----- ------ After tax MTM adjustments 7 (38) 26 (30) Recurring income from cont. ops available to common shareholders after MTM adjust. $147 $323 $392 $1,059 Recurring diluted earnings per share after MTM adj. $0.25 $0.55 $0.67 $1.78 weighted average shares - diluted (thousands) 590,059 589,138 588,693 594,630 Note: all amounts attributable to Williams Adjustments have been made to reverse estimated forward unrealized MTM gains/losses and add estimated realized gains/losses from MTM previously recognized, i.e. assumes MTM accounting had never been applied to designated hedges and other derivatives. Some annual figures may differ from sum of quarterly figures due to rounding. * Amounts have been recast to reflect certain Venezuela operations as discontinued operations. DATASOURCE: Williams CONTACT: media relations, Jeff Pounds, +1-918-573-3332, or investor relations, Travis Campbell, +1-918-573-2944, or Richard George, +1-918-573-3679, or Sharna Reingold, +1-918-573-2078, all of Williams Web Site: http://www.williams.com/

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WMB Williams Companies Inc