<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 21, 1998
----------------
The Williams Companies, Inc.
-------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 1-4174 73-0569878
- --------------- --------------- -------------------
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation)
One Williams Center, Tulsa, Oklahoma 74172
- ---------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 918/573-2000
------------
Not Applicable
----------------------------------------------------------------
(Former name or former address, if changed since last report)
<PAGE> 2
Item 5. Other Events.
The Williams Companies, Inc. (the "Company") has reported unaudited
net income of $32.1 million, or 7 cents per share on a diluted basis, for the
third quarter that ended September 30, 1998.
In addition, the Company reports that in 1988 certain royalty owners
in a producing field in Cameron Parish, Louisiana, brought suit against a
subsidiary of the Company and other working interest owners seeking additional
royalties or lease cancellation. An amended Petition later added a second
subsidiary of the Company, the Company, and additional working interest owners.
All other defendants have been dismissed or have settled with Plaintiffs. In
their recently amended damages claim, the Plaintiffs asserted royalty
underpayments plus interest of approximately $12 million. The claimed damages
are attributable to all working interests for a period of approximately 15
years. One of the two subsidiaries of the Company party to the litigation
owned a one-half interest in the field and served as operator for approximately
eight years. The other subsidiary purchased produced gas from the field.
Plaintiffs also request punitive damages equal to double the alleged actual
damages and attorneys' fees. The Company believes all royalties due from its
subsidiaries were properly paid, that the field was properly operated, and that
it is not responsible for any amounts due from any other working interests or
for the period after its subsidiary had sold its interest and terminated its
status as operator of the field.
Settlement discussions have broken off, and the case is now
proceeding to trial in state court of Cameron Parish.
2
<PAGE> 3
Item 7. Financial Statements and Exhibits.
The Company files the following exhibit as part of this report:
Exhibit 99.1 Copy of the Company's press release, dated October
21, 1998, publicly announcing the quarterly earnings
reported herein.
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
THE WILLIAMS COMPANIES, INC.
Date: October 21, 1998 /s/ WILLIAM G. VON GLAHN
-------------------------------------
Name: William G. von Glahn
Title: Senior Vice President
and General Counsel
3
<PAGE> 4
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------- -----------
<S> <C>
Exhibit 99.1 Copy of the Company's press release, dated October 21, 1998,
publicly announcing the quarterly earnings reported herein.
</TABLE>
<PAGE> 1
EXHIBIT 99.1
NEWS RELEASE [WILLIAMS LOGO]
NYSE:WMB
================================================================================
Date: October 21, 1998
Contact: Jim Gipson Rick Rodekohr Richard George
Media Investor relations Investor relations
(918) 573-2111 (918) 573-2087 (918) 573-3679
[email protected] [email protected] [email protected]
ENERGY MARKET CONDITIONS AND UNFAVORABLE CHARGES REDUCE WILLIAMS' RESULTS
TULSA - With results reduced by energy market conditions and by pre-tax
charges and write-downs of approximately $70 million, or 10 cents per share,
Williams reported unaudited net income of $32.1 million, or 7 cents per share on
a diluted basis, for the third quarter that ended Sept. 30.
This compares to unaudited restated net income of $13.7 million, or 3 cents
per share, for the same period of 1997, a quarter in which results were reduced
by 17 cents per share for the cost of debt restructuring.
"It is never enjoyable to report a quarter that falls short of
expectations," said Keith E. Bailey, chairman, president and chief executive
officer. "But, we do so with a realization that we also achieved significant
progress in a number of areas that will help position us to reach our longer
term earnings performance goals."
Examples of that progress include:
o Favorable decisions by federal regulators this summer to provide more
competitive rates of return on equity for the gas pipeline industry, and an
intent to examine other short- and long-term transportation issues in the
relatively near future. The gas pipelines continue to exceed market growth
objectives, and are on track to produce improved financial results for the
year.
o In energy services, a major California electric power marketing arrangement
launched this summer already has proven very successful. While disrupted by
hurricanes during the quarter, Williams completed the first phase of Mobile
Bay, a suite of regulated and unregulated natural gas projects that
provide a strategic platform for growth in the eastern Gulf of Mexico. In
Texas and Louisiana, recently completed natural gas wells are expected to
begin providing 25-35 million cubic feet per day of net incremental
production in November.
o With the continuing rapid completion of segments of its new national fiber
optic communications network, Williams will attempt to complete the
32,000-mile system by the end of 2000, up to a year sooner than originally
planned.
1
<PAGE> 2
"While these and other examples of progress give us great confidence in
our future, the reality is that we continue to achieve disappointing financial
results in several key areas of our businesses," Bailey said.
He noted that gas liquids margins continue at historic lows. Refined
product margins and prices have weakened as they have tracked this year's
decline in crude oil prices. Low gasoline prices are translating into lower
ethanol prices. And, continuing integration issues in the communications
solutions business negatively impacted third quarter performance.
"We are concentrating our resources where we believe we can add the
greatest short-term value without compromising long-term potential," Bailey
said. "We will continue to examine all of our activities to ensure they
reinforce the high growth potential that we believe exists for each of our
principal businesses. Additionally, we will evaluate our capital spending on
what we view as the highest priority investments."
For the first nine months of 1998, Williams reported net income of $160.9
million, or 37 cents per share, compared with net income of $310.8 million, or
72 cents per share, for the same period a year ago.
Following is a third quarter 1998 summary of Williams' major business
groups:
GAS PIPELINE, the nation's largest transporter of natural gas through
systems that span the United States, reported third quarter operating profit of
$141.7 million, identical to the operating profit reported during the same
period of 1997.
The quarter benefited from expansions on the Transco system, new services
offered on the Transco and Texas Gas systems and lower operating and
maintenance expenses within the pipeline group. Quarter-to-quarter operating
profit is flat because the third quarter of last year included favorable
adjustments to certain accruals.
For the first nine months of 1998, Williams' gas pipeline business
reported operating profit of $489.7 million, compared with operating profit of
$453.9 million during the same period of 1997.
Other systems that comprise this group are Central, Northwest and Kern
River.
ENERGY SERVICES, which provides a full spectrum of traditional and
advanced energy products and services, reported third quarter operating profit
of $116.6 million, compared with operating profit of $137.3 million in the
third quarter of 1997.
The benefit of substantially higher electric power marketing and trading,
lower operating losses from retail propane operations and increased petroleum
pipeline transportation activities was more than offset by lower refining and
per-unit natural gas liquids margins. Also, results from natural gas trading
and ethanol activities were lower than during the same period a year ago. And,
this quarter includes credit loss accruals of $26.4 million for certain energy
capital and retail energy activities, partially offset by the favorable
settlement of a long-term transportation contract.
For the first nine months of 1998, Energy Services reported operating
profit of $315.7 million, which
2
<PAGE> 3
includes $45.9 million in MAPCO merger-related costs, compared with operating
profit of $413.2 million during the same period last year.
Units comprising Energy Services are: Energy Marketing & Trading,
Exploration & Production, Midstream Gas & Liquids and Petroleum Services.
COMMUNICATIONS, which includes a leading-edge broadband network,
single-source communications systems integration and multiple technology
applications for businesses, reported a third quarter operating loss of $25.6
million, compared with an operating loss of $5.2 million in the same quarter of
1997.
Financial performance declined because of lower operating profit from
communications solutions, including charges for asset write-downs, and the
costs of building a network service delivery platform are being incurred in
advance of the network being commercially available to customers.
Not included in communications' operating loss, but included in this third
quarter investing income (loss) is a $23 million write-down related to a network
applications venture.
For the first nine months of 1998, Communications reported an operating
loss of $56.2 million compared with an operating loss of $3.9 million during the
same period of 1997.
ABOUT WILLIAMS (NYSE:WMB)
Williams, through its subsidiaries, provides a full range of traditional and
leading-edge communications and energy services and is the nation's
largest-volume transporter of natural gas. Williams information is available at
www.twc.com.
###
Portions of this document may constitute "forward-looking statements" as
defined by federal law. Although the company believes any such statements are
based on reasonable assumptions, there is no assurance that actual outcomes
will not be materially different. Any such statements are made in reliance on
the "safe harbor" protections provided under the Private Securities Reform Act
of 1995. Additional information about issues that could lead to material
changes in performance is contained in the company's annual reports filed with
the Securities and Exchange commission.
3
<PAGE> 4
FINANCIAL HIGHLIGHTS [WILLIAMS LOGO]
(UNAUDITED)
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30, September 30,
- ------------------------------------------------------------------------------------------------------
(Millions, except per-share amounts) 1998 1997* 1998 1997*
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenues $ 1,901.0 $ 2,099.0 $ 5,641.4 $ 5,898.5
Income before extraordinary loss $ 32.1 $ 87.4 $ 165.7 $ 384.5
Extraordinary loss $ -- $ (73.7) $ (4.8) $ (73.7)
Net income $ 32.1 $ 13.7 $ 160.9 $ 310.8
Basic earnings per common share:
Income before extraordinary loss $ .07 $ .21 $ .38 $ .92
Extraordinary loss $ -- $ (.18) $ (.01) $ (.18)
Net income $ .07 $ .03 $ .37 $ .74
Average shares (thousands) 428,594 411,821 424,076 411,677
Diluted earnings per common share:
Income before extraordinary loss $ .07 $ .20 $ .38 $ .89
Extraordinary loss $ -- $ (.17) $ (.01) $ (.17)
Net income $ .07 $ .03 $ .37 $ .72
Average shares (thousands) 442,080 429,155 440,874 428,980
Shares outstanding at September 30 (thousands) 427,666 409,660
- ------------------------------------------------------------------------------------------------------
</TABLE>
*Amounts have been restated to reflect the acquisition of MAPCO Inc. which has
been accounted for as a pooling of interests. (See Note 1 of Notes to
Consolidated Statement of Income for additional information.)
THIRD QUARTER 1998
<PAGE> 5
[WILLIAMS LOGO]
CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
----------------------------------------------------------------------------------------------------------
(Millions, except per-share amounts) 1998 1997* 1998 1997*
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
REVENUES Gas Pipelines (Note 2) $ 400.6 $ 398.3 $ 1,243.9 $ 1,237.4
Energy Services (Note 2) 1,240.7 1,517.0 3,741.5 4,386.3
Communications 418.5 413.7 1,219.6 989.4
Other 14.5 8.9 40.0 28.0
Intercompany eliminations (173.3) (238.9) (603.6) (742.6)
---------------------------------------------------------------------------------------------------------
Total revenues 1,901.0 2,099.0 5,641.4 5,898.5
---------------------------------------------------------------------------------------------------------
PROFIT-CENTER Costs and operating expenses 1,377.2 1,609.5 4,059.4 4,454.3
COSTS AND Selling, general and administrative
EXPENSES expenses 275.0 220.3 754.4 593.1
Other (income) expense--net (Notes 1 and 2) 13.3 (6.6) 68.3 (16.3)
---------------------------------------------------------------------------------------------------------
Total profit-center costs and expenses 1,665.5 1,823.2 4,882.1 5,031.1
---------------------------------------------------------------------------------------------------------
OPERATING Gas Pipelines (Note 2) 141.7 141.7 489.7 453.9
PROFIT Energy Services (Note 2) 116.6 137.3 315.7 413.2
Communications (Note 2) (25.6) (5.2) (56.2) (3.9)
Other 2.8 2.0 10.1 4.2
---------------------------------------------------------------------------------------------------------
Total operating profit 235.5 275.8 759.3 867.4
General corporate expenses (Note 1) (17.2) (17.9) (76.1) (57.0)
Interest accrued (131.5) (118.5) (376.0) (344.7)
Interest capitalized 12.6 8.1 28.6 15.5
Investing income (loss)(Note 3) (33.7) 4.1 (30.7) 13.5
Gain on sale of interest in subsidiary (Note 4) - - - 44.5
Gain on sale of assets (Note 5) - - - 66.0
Minority interest in (income) loss of
consolidated subsidiaries .1 (5.2) (5.5) (12.6)
Other expense--net (10.0) (1.9) (22.4) (4.7)
---------------------------------------------------------------------------------------------------------
Income before income taxes 55.8 144.5 277.2 587.9
Provision for income taxes 23.7 57.1 111.5 203.4
---------------------------------------------------------------------------------------------------------
Income before extraordinary loss 32.1 87.4 165.7 384.5
Extraordinary loss (Note 6) - (73.7) (4.8) (73.7)
---------------------------------------------------------------------------------------------------------
Net income 32.1 13.7 160.9 310.8
Preferred stock dividends 1.9 2.4 5.7 7.6
---------------------------------------------------------------------------------------------------------
Income applicable to common stock $ 30.2 $ 11.3 $ 155.2 $ 303.2
---------------------------------------------------------------------------------------------------------
EARNINGS Basic earnings per common share:
PER SHARE Income before extraordinary loss $ .07 $ .21 $ .38 $ .92
Extraordinary loss (Note 6) - $ (.18) $ (.01) $ (.18)
---------------------------------------------------------------------------------------------------------
Net income $ .07 $ .03 $ .37 $ .74
---------------------------------------------------------------------------------------------------------
Diluted earnings per common share:
Income before extraordinary loss $ .07 $ .20 $ .38 $ .89
Extraordinary loss (Note 6) - (.17) (.01) (.17)
---------------------------------------------------------------------------------------------------------
Net income $ .07 $ .03 $ .37 $ .72
---------------------------------------------------------------------------------------------------------
</TABLE>
* Amounts have been restated to reflect the acquisition of
MAPCO Inc. which has been accounted for as a pooling of
interests, and certain revenue amounts have been reclassified
to conform to current year classifications. (See Note 1 of
Notes to Consolidated Statements of Income for additional
information.)
See accompanying notes.
THIRD QUARTER 1998
<PAGE> 6
[WILLIAMS LOGO]
NOTES TO CONSOLIDATED STATEMENT OF INCOME
(unaudited)
1. BASIS OF PRESENTATION
- --------------------------------------------------------------------------------
MAPCO ACQUISITION
On March 28, 1998, Williams completed the acquisition of MAPCO Inc.
Williams acquired MAPCO by exchanging 1.665 shares of Williams common stock for
each outstanding share of MAPCO common stock. In addition, outstanding MAPCO
stock options were converted into Williams common stock. A total of 98.8
million shares of Williams common stock valued at $3.1 billion, based on the
closing market price of Williams common stock on March 27, 1998, were issued in
the transaction. MAPCO is engaged in the NGL pipeline, petroleum refining and
marketing and propane marketing businesses, and is included as part of the
Energy Services' business unit.
The merger constitutes a tax-free reorganization and has been accounted
for as a pooling of interests. Accordingly, all prior period consolidated
financial information and statistics have been restated to include the combined
results of operations, financial position and cash flows of MAPCO Inc. and
Williams.
In connection with the merger, Williams has recognized approximately $74
million in merger-related costs comprised primarily of outside professional
fees and early retirement and severance costs. Approximately $46 million of
these merger-related costs are included in other (income) expense-net, as a
component of Energy Services' operating profit (see Note 2), and approximately
$28 million is included in general corporate expenses.
OTHER
Effective April 1, 1998, certain marketing activities of natural gas
liquids (previously reported in Midstream Gas & Liquids) and petroleum refining
products (previously reported in Petroleum Services) were transferred to Energy
Marketing & Trading and combined with its commodity risk trading operations. As
a result, revenues and operating profit amounts for the three months and nine
months ended September 30, 1997, have been restated to reflect this
classification. These marketing activities are reported through first quarter
1998 on a "gross" basis in the Consolidated Statement of Income as revenues and
profit-center costs within Energy Marketing & Trading. Concurrent with
completing the combination of such activities with the commodity risk trading
operations of Energy Marketing & Trading, the related contract rights and
obligations of certain of these operations were recorded in the balance sheet
on a market-value basis consistent with Energy Marketing & Trading's accounting
policy, and the related income statement presentation relating to these
operations was changed effective April 1, 1998, to reflect these revenues net
of the related costs to purchase such items.
On April 30, 1997, Williams and Northern Telecom (Nortel) combined their
customer-premise equipment sales and service operations into a limited
liability company, Williams Communications Solutions, LLC (LLC) (see Note 4).
Communications' revenues and operating profit amounts include the operating
results of the LLC beginning May 1, 1997.
Operating profit of operating companies may vary by quarter. Based on
current rate structures and/or historical maintenance schedules,
Transcontinental Gas Pipe Line and Texas Gas Transmission experience lower
operating profits in the second and third quarters as compared with the first
and fourth quarters.
2. REVENUES AND OPERATING PROFIT
- --------------------------------------------------------------------------------
Revenues and operating profit of Gas Pipelines and Energy Services for the
three and nine months ended September 30, 1998 and 1997, are as follows:
<TABLE>
<CAPTION>
Three months ended September 30,
(millions) Revenues Operating Profit
- ----------------------------------------------------------------------------------------------
1998 1997 1998 1997
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Gas Pipelines:
Central $ 42.3 $ 49.4 $ 12.3 $ 19.1
Kern River Gas
Transmission 40.3 43.1 27.3 30.6
Northwest Pipeline 73.9 71.2 35.7 35.3
Texas Gas Transmission 50.0 53.2 7.9 3.7
Transcontinental Gas
Pipe Line 194.1 181.4 58.5 53.0
- ----------------------------------------------------------------------------------------------
$ 400.6 $ 398.3 $ 141.7 $ 141.7
- ----------------------------------------------------------------------------------------------
Energy Services:
Energy Marketing
& Trading $ 298.3 $ 524.4* $ 14.6 $ (2.5)*
Exploration & Production 28.7 32.1 4.9 5.4
Midstream Gas & Liquids 208.5 260.3* 56.2 72.1*
Petroleum Services 705.2 700.2* 44.8 62.3*
Merger-related costs -- -- (3.9) --
- ----------------------------------------------------------------------------------------------
$ 1,240.7 $ 1,517.0* $ 116.6 $ 137.3*
==============================================================================================
</TABLE>
<TABLE>
<CAPTION>
Nine months ended September 30,
(millions) Revenues Operating Profit
- ----------------------------------------------------------------------------------------------
1998 1997 1998 1997
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Gas Pipelines:
Central $ 128.2 $ 137.2 $ 41.7 $ 51.4
Kern River Gas
Transmission 121.8 125.1 83.8 90.6
Northwest Pipeline 215.4 204.5 105.1 94.5
Texas Gas Transmission 193.8 210.4 61.2 55.5
Transcontinental Gas
Pipe Line 584.7 560.2 197.9 161.9
- ----------------------------------------------------------------------------------------------
$ 1,243.9 $ 1,237.4 $ 489.7 $ 453.9
- ----------------------------------------------------------------------------------------------
Energy Services:
Energy Marketing
& Trading $ 953.5 $ 1,511.6* $ 35.3 $ 9.7*
Exploration & Production 106.8 94.5 25.2 20.1
Midstream Gas & Liquids 650.4 782.9* 177.3 226.4*
Petroleum Services 2,030.8 1,997.3* 123.8 157.0*
Merger-related costs -- -- (45.9) --
- ----------------------------------------------------------------------------------------------
$ 3,741.5 $ 4,386.3* $ 315.7 $ 413.2*
==============================================================================================
</TABLE>
* Amounts have been restated as described in Note 1.
THIRD QUARTER 1998
<PAGE> 7
[WILLIAMS LOGO]
NOTES TO CONSOLIDATED STATEMENTS OF INCOME (continued)
(Unaudited)
2. REVENUES AND OPERATING PROFIT (continued)
- --------------------------------------------------------------------------------
Included in the third quarter 1998 operating profit for Energy Marketing &
Trading are credit loss accruals of $26.4 million for certain energy capital
and retail energy activities. Other (income) expense - net and operating profit
for the same period includes write-downs of the carrying value of software for
certain financial systems totaling $8.9 million ($5.6 million related to
Communications) for consolidation of multiple financial systems.
Included in other (income) expenses - net and operating profit for
Petroleum Services for the nine months ended September 30, 1998, is a loss
provision for a recent order from the Federal Energy Regulatory Commission
(FERC). On July 15, 1998, Williams Pipe Line Company received an Order from the
FERC which affirmed an administrative law judge's 1996 initial decision
regarding rate-making proceedings for the period September 15, 1990 through May
1, 1992. The FERC has ruled that the company did not meet its burden of
establishing that its transportation rates in its 12 noncompetitive markets
were just and reasonable for the period and has ordered refunds. The company
continues to believe it should prevail upon appeal regarding collected rates
for that period. However, due to this FERC decision, the company accrued $15.5
million, including interest, in the second quarter of 1998, for potential
refunds to customers for the issues described above.
3. INVESTING INCOME (LOSS)
- --------------------------------------------------------------------------------
Third-quarter 1998 investing loss includes a $25.7 million write-down of
the carrying value of certain investments. The largest of these is a $23.2
million write-down related to a Communications network applications venture
that was re-evaluated in the third quarter.
4. SALE OF INTEREST IN SUBSIDIARY
- --------------------------------------------------------------------------------
On April 30, 1997, Williams and Nortel combined their customer-premise
equipment sales and service operations into a limited liability company,
Williams Communications Solutions, LLC (LLC). In addition, Williams paid $68
million to Nortel. Williams has accounted for its 70 percent interest in the
operations that Nortel contributed to the LLC as a purchase business combination
and beginning May 1, 1997, has included the results of operations of the
acquired company in Williams' Consolidated Statement of Income.
Williams recorded the 30 percent reduction in its operations contributed to
the LLC as a sale to the minority shareholders of the LLC. Williams recognized a
gain of $44.5 million based on the fair value of its operations contributed to
the LLC. Income taxes were not provided on the gain because the transaction did
not affect the difference between the financial and tax bases of identifiable
assets and liabilities.
5. SALES OF ASSETS
- --------------------------------------------------------------------------------
In January 1997, Williams sold its interest in the natural gas liquids and
condensate reserves in the West Panhandle field of Texas for $66 million in
cash. The sale resulted in a $66 million pre-tax gain on the transaction,
because the related reserves had no book value.
6. EXTRAORDINARY LOSS
- --------------------------------------------------------------------------------
The extraordinary loss in 1998 resulted from the early extinguishment of
debt. Williams paid $54.4 million to redeem higher interest rate debt for a
$4.8 million net loss (net of a $2.6 million benefit of income taxes).
During third-quarter 1997, Williams initiated a restructuring of its debt
portfolio. At September 30, 1997, Williams had paid approximately $1.2 billion
to redeem higher interest rate debt for a $73.7 million net loss (net of a $46.9
million benefit for income taxes).
Third Quarter 1998
<PAGE> 8
[WILLIAMS LOGO]
OPERATING STATISTICS
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30, September 30,
- ---------------------------------------------------------------------------------------------------------------------------------
1998 1997 1998 1997
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Gas Pipelines:
Central
Throughput (TBtu) 70.0 61.8 239.4 233.4
Average daily transportation volumes (TBtu) .8 .7 .9 .9
Average daily firm reserved capacity (TBtu) 2.1 2.0 2.1 2.1
Kern River Gas Transmission
Throughput (TBtu) 72.5 72.7 221.1 212.0
Average daily transportation volumes (TBtu) .8 .8 .8 .8
Average daily firm reserved capacity (TBtu) .7 .8 .7 .7
Northwest Pipeline
Throughput (TBtu) 163.1 147.6 546.2 521.5
Average daily transportation volumes (TBtu) 1.8 1.5 2.0 1.9
Average daily firm reserved capacity (TBtu) 2.7 2.4 2.6 2.4
Texas Gas Transmission
Throughput (TBtu) 159.1 160.2 550.1 562.8
Average daily transportation volumes (TBtu) 1.7 1.7 2.0 2.1
Average daily firm reserved capacity (TBtu) 1.7 1.7 2.0 2.0
Transcontinental Gas Pipe Line
Throughput (TBtu) 375.5 372.7* 1,186.3 1,196.6*
Average daily transportation volumes (TBtu) 4.1 4.1* 4.3 4.4*
Average daily firm reserved capacity (TBtu) 6.8 5.7 6.4 5.5
Communications:
Communications Solutions (millions)
Backlog at September 30 $ 245.8 $228.5
Orders $344.0 $351.0 $1,059.0 $818.1
Network Services
Total planned route miles 32,000 **
Multi-media network miles 11,000 **
Route miles under construction:
Project miles 11,080 **
Right-of-way acquired 10,725 **
Dark fiber 7,628 **
Lit 6,070 **
</TABLE>
*Restated
**Information not applicable in 1997
Third Quarter 1998
<PAGE> 9
[WILLIAMS LOGO]
OPERATING STATISTICS (continued)
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30, September 30,
- --------------------------------------------------------------------------------------------------------------------------
1998 1997 1998 1997
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Energy Services:
Energy Marketing & Trading
Physical Trading
Natural gas (TBtuD) 3.2 3.1 3.4 2.9
Power (GWh/hour) 8.5 2.1 5.4 1.1
Propane Marketing
Retail (million gallons) 39.3 45.0 183.0 187.4
Exploration & Production
Natural gas production (TBtu) 9.0 9.6* 29.1 27.5*
Midstream Gas & Liquids
Field Services
Gathering volumes (TBtu) 509.3 559.7 1,571.6 1,618.2
Processing volumes (TBtu) 131.1 131.9 399.4 383.4
Natural gas liquids sales (million gallons) 149.9 161.4 435.4 424.9
Natural Gas Liquids Pipeline
Barrel miles - total system (billions) 33.8 36.0* 102.4 107.1*
Mid-America Pipeline deliveries (million barrels) 66.8 69.4 203.5 205.8
Seminole Pipeline deliveries (million barrels) 24.6 27.7 71.7 79.2
Rocky Mountain Extension deliveries (million barrels) 7.5 9.1 22.1 26.6
Petroleum Services
Petroleum Products Pipeline
Shipments (million barrels) 57.1 59.7 167.1 173.2
Barrel miles (billions) 16.0 16.0 44.7 44.8
Ethanol sales (million gallons) 45.0 38.3 129.5 101.8
Refining (crude runs)
Memphis (MBPD) 119.1 116.1 120.5 108.5
North Pole (MBPD) 128.5 132.2 130.7 131.1
Retail stations
Average monthly gallons per store (thousands) 178.3 141.9 165.5 148.3
Average number of stores 254 251 253 241
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
*Restated
Note: Amounts reflect the acquisition of MAPCO Inc.
THIRD QUARTER 1998
