Williams reported first quarter 2000 earnings of $121.3 million,a 107% increase over the same period last year. The resultsrepresented income before the cumulative effect of a change inaccounting principle and were driven by record segment profit fromthe company’s energy business.

The accounting change was a result of a decision to shift fromthe percentage-of-completion method for revenue recognition to thecompleted-contract method of the Solutions segment. Unaudited netincome including the change was $99.7 million, compared with netincome for the first quarter 1999 of $52.9 million.

“For the first time since the 1998 MAPCO acquisition, marketconditions are combining with our strategy of disciplined costmanagement and aggressive capital expansion to demonstrate theearnings capacity of our Energy Services business unit,” saidChairman Keith Bailey. “When combined with the continued strong andsteady performance of our Gas Pipeline unit, energy’s contributionto 2000 earnings is on track to be substantially higher than lastyear.

“We are particularly proud of results from the electric powerside of the business, where we realized significantly highersegment profit and saw physical trading volumes increase 124%. Wenow have tolling access to some 8,900 megawatts of powergeneration.”

“Our communications business is on track to deliver the nation’slargest and most advanced broadband network at year end, on timeand on budget,” Bailey said.

Williams’ gas pipelines reported first quarter 2000 segmentprofit of $197.3 million, compared with $186.8 million during thesame period a year ago with a 2.5% increase in throughput. The gainwas mainly due to additional revenues from the settlement of aprior rate case and equity earnings from investments in newprojects, partially offset by the cost of consolidating theworkforces of the Central and Texas Gas pipeline systems for futureefficiency.

Energy Services reported first quarter 2000 segment profit of$205.1 million, compared with $125.1 million during the same perioda year ago. While physical natural gas volumes traded were up onlyfractionally from 3.7 Bcf/d to 3.8 Bcf/d in 1Q 2000 over 1Q 1999,electric power trading surged from 11,482 GWh to 25,677 GWh in thelatest quarter.

Natural gas liquids sales volumes increased 59% and averageprocessing margins were approximately 18 cents per gallon, comparedwith less than 2 cents during the same period last year. Alsoincreasing results were higher natural gas production revenues —driven mainly by last year’s acquisition of oil and natural gasproperties in Wyoming, and improved market prices.

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