The Williams Companies reported first-quarter 1998 results werereduced primarily by costs related to its MAPCO acquisition,unfavorable conditions in some energy market sectors and continuedinvestment in the company’s communications business.

Williams, which completed the acquisition of MAPCO March 28,reported unaudited net income of $68.1 million, or 16 cents pershare on a diluted basis, for the first quarter. The results werereduced by MAPCO merger-related costs of $59 million, or about 8cents per share. Additionally, results for the period were reducedabout 2 cents per share for certain MAPCO one-time charges, MAPCOcorporate expenses that are not expected to recur and by costsassociated with an early debt elimination.

Absent one-time charges, Williams’ results for the first quarterof 1998 would have been about 26 cents per share on a dilutedbasis. Unaudited restated net income for the first quarter of 1997was $178.6 million, or 42 cents a share on a diluted basis.

“Closing the MAPCO acquisition took longer than we had hoped,preventing us from directly managing the business and reducingexpenses early enough to have an impact on this year’s firstquarter,” said Keith E. Bailey, CEO. “The good news is that costefficiencies and the business potential for the combinedorganization are both better than we had originally believed. While1998 remains a building year for our communications business, weare very pleased with the progress being achieved.”

Williams’ acquisition of MAPCO is accounted for as a pooling ofinterests. Financial results reflect the combined results ofWilliams and MAPCO. Prior results have been restated as if thecompanies had been combined during previous reporting periods.

Gas Pipelines reported first quarter operating profit of $195million, compared with operating profit of $181 million during thesame period a year ago. The increase was due mainly to the impactof three Transco expansions placed into service during 1997, newservices at Transco and Northwest Pipeline, and lower expenses.

Energy Services reported first-quarter operating profit of $92.8million, compared with operating profit of $160.7 million for thesame period a year ago. The decline was due mainly to MAPCOmerger-related costs of $36 million, reduced trading profit, lowerper-unit gas liquids margins and increased operating andadministrative expenses. Reduced trading profit resulted fromunfavorable market movement against both the gas and petroleumproducts portfolios, attributable in part to a warmer than normalwinter, lower gas market volatility and significant short-termmarket volatility for crude oil. Per-unit gas liquids margins wereconstrained by the effects of a combination of low crude oil pricesand relatively high gas prices.

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