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EXHIBIT 99.(b)
News Release
01/03/01
WILLIAMS EXPECTS TO MEET OR EXCEED 2001 WALL STREET ESTIMATES
TULSA -- Williams (NYSE:WMB) said today that expanding earnings capacity in
marketing and trading combined with the growth of its other energy businesses
should enable the company to meet or exceed Wall Street's 2001 estimates of
$1.26 per share for consolidated and $1.73 per share for energy-only results.
Keith E. Bailey, chairman, president and chief executive officer, said the
forecast of consolidated recurring results does not include the impact of the
potential tax-free spin-off of Williams Communications to Williams'
shareholders, which continues to be evaluated. Energy-only earnings reflect
recurring consolidated performance excluding the after-tax results of Williams
Communications.
"What 2000 made clear is that we have successfully transformed our energy
business to take greater advantage of opportunities that exist in unregulated or
lightly regulated parts of the industry," Bailey said. "This now represents the
majority of our income growth potential, even in light of the strong and
continued improving performance of our natural gas pipeline group.
"The shift toward higher growth potential lines of business, of course, brings
with it the chance for greater volatility in our financial results," he said.
"Barring significant shifts in our industry's business environment, we believe
we have the potential to build on the success we enjoyed in 2000.
"Our proprietary trading investments are generating exceptional returns through
record structured deal flow -- highlighting our ability to capture value across
nearly every energy market," Bailey said. "We've built our base business to the
point where we believe it will generate a solid and sustainable level of
earnings from
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which to grow our trading portfolio. It should also be the fastest growing part
of our mix of energy businesses."
Steve Malcolm, president and chief executive officer of Williams Energy
Services, said he believes the marketing and trading company, "can generate a
minimum of $500 million per year in segment profit under most market conditions.
And, if we achieve our growth goals for our power portfolio, we have the
potential to significantly exceed that level of performance."
Bailey said, "As well as marketing and trading is performing, it should not
overshadow the superior performance we are achieving across nearly all of our
energy portfolio, which we also continue to selectively grow in a way that is
consistent with our investment strategy. And, our communications business enters
the year building on accomplishing two major objectives -- completing a new,
next-generation national fiber-optic network on time and growing a significant
book of business to ride on it."
Pending board approval later this month, Bailey said he expects the 2001 capital
budget to be approximately $2.4 billion for energy and $2.2 billion for
communications.
Bailey also provided the following roundup of developments that may impact 2001
and beyond:
Williams Energy Services, which provides a full range of traditional and leading
edge energy products and services that are unregulated or lightly regulated,
reported it:
- Is actively working to double the company's 8,900-megawatt electric power
portfolio in 2001, with a five-year goal to manage approximately 40,000
megawatts. This business already is a top-10 domestic power marketer, the
nation's third largest natural gas liquids marketer and trades nearly every
energy commodity from its trading floor in Tulsa.
- Acquired TransCanada's western Canadian natural gas liquids assets, expanding
into a new key producing basin in western Canada.
- Won major new deep-water, western Gulf of Mexico business to gather oil and
natural gas, which will include the construction of a 300 million cubic foot per
day gas processing plant, to be completed in the fourth quarter.
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- Completed in mid-2000 a $123 million, 20,000-barrel-per-day expansion of the
Memphis refinery.
- Formed Williams Energy Partners L.P. master limited partnership to acquire,
own and operate energy assets, principally for storage, transportation, and
distribution of refined petroleum products and ammonia.
- Formed, with several industry partners, TradeSpark, LP, an electronic energy
trading marketplace.
- Increased petroleum product storage capacity through the acquisition of six
terminals, bringing the totals to 40 independent and 40 on-system terminals.
Williams Gas Pipeline, the nation's second largest which provides transportation
and storage services while delivering from 17 to 20 percent of the country's
daily demand for natural gas, said it:
- Received Federal Energy Regulatory Commission (FERC) authorization to phase
construction of the MarketLink expansion to provide 296,000 dekatherms per day
of additional firm natural gas transportation capacity to markets in the
northeastern United States. Construction should begin in first-quarter 2001.
- Filed an application with the FERC to add 124,500 dekatherms per day firm
transportation service to the Kern River system into southern California.
Proposed in-service date is May 1, 2002.
- Completed the SouthCoast expansion, increasing capacity on the Transco system
by 204,099 dekatherms per day to serve Alabama and Georgia markets.
- Announced plans to purchase, with Duke Energy, the Coastal Gulfstream natural
gas system to expedite entry into growing Florida energy markets.
- Announced plans for several expansion projects, including Cross Bay in New
Jersey, Georgia Strait in the Northwest, Sundance in the Southeast, and Western
Frontier in the Rockies and MidContinent.
- Purchased Cove Point LNG Limited Partnership from Columbia Energy Group. The
facility is the largest LNG import facility in the United States, with a daily
send-out capacity of 1 billion cubic feet.
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- Acquired Duke Energy's 9.8 percent interest in Alliance Pipeline. Williams
already owned a 4.8 percent stake in the pipeline, which will transport Canadian
gas to growth markets in the midwestern and eastern United States.
Williams Communications, which includes a leading-edge broadband network,
single-source communications systems integration and multiple technology
applications for businesses, expects to produce 2001 network-related revenue
that will be approximately $1.3 billion, more than double that of recurring 2000
network revenues. Network EBITDA (earnings before interest, taxes, depreciation
and amortization) is expected to be positive on a run-rate basis by year-end
2001.
The communications division also reported:
- It generated more than $3 billion in new network business in 2000, effectively
doubling its network customer base.
- Williams further strengthened its alliances with SBC Communications, which
began offering long-distance service in Texas on the Williams network, and KDDI
America, the largest Internet service provider in Japan.
- Extended network connectivity to 125 domestic cities, becoming the nation's
largest next-generation network.
- Led the next generation of optical networking by offering OC-192 optical wave
service to customers and accelerating the development of an intelligent optical
Internet Protocol network and a comprehensive suite of IP-based services.
- Extended its international reach, establishing interests in undersea
communications between China and Japan, expanding European and Canadian
capabilities; and establishing major broadband fiber-optic network links to
Australia, Argentina and Chile.
- Expanded its vision for business-to-business broadband media services with
Vyvx Services' MediaXtranet initiatives, delivering the first-run movie "Bounce"
over the Williams network from Los Angeles to a theater in New York City.
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About Williams
Williams, through its subsidiaries, connects businesses to energy and
communications. The company delivers innovative, reliable products and services
through its extensive networks of energy-distributing pipelines and high-speed
fiber-optic cables. Williams information is available at
http://www.williams.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.
CONTACT INFORMATION:
Jim Gipson, Rick Rodekohr, Richard George,
Williams (media Williams (investor Williams (investor
inquiries) inquiries) inquiries)
(918) 573-2111 (918) 573-2087 (918) 573-3679
[email protected] [email protected] [email protected]
