Oct. 29, 2009 (PR Newswire) -- 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 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 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 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.