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THE WILLIAMS COMPANIES REPORTS SECOND-QUARTER 1992 NET INCOME

 THE WILLIAMS COMPANIES REPORTS SECOND-QUARTER 1992 NET INCOME
 TULSA, Okla., July 27 /PRNewswire/ -- The Williams Co. Inc. (NYSE: WMB) today reported unaudited net income of $16.1 million, or 27 cents per share, in the second quarter that ended June 30, compared with $14 million, or 26 cents per share, in the same quarter last year.
 Second-quarter revenues were $546 million, compared with $448 million for the same quarter a year ago.
 WilTel's lower than expected operating results, which included one-time, pre-tax charges of $11.1 million, negatively impacted this year's second quarter net income. However, this was more than offset by improved results at Williams Western Group and an extraordinary gain from early redemption of debt.
 "Unanticipated developments have delayed-not diminished-our expectations for WilTel's future," said Joseph H. Williams, chairman and chief executive officer. "Also, these short-term events should not divert undue attention from the exciting growth of our pipeline businesses and the significant gains we are making in building The Williams Cos."
 Net income for the first six months of 1992 was $55.6 million, or $1.12 per share, compared with net income of $56.8 million, or $1.22 per share, for the first half of last year.
 Revenues for the first six months of 1992 were $1.1 billion, essentially unchanged from the same period in 1991.
 Williams noted several recent developments:
 The Kern River Gas Transmission Co. pipeline, a 904-mile system that ships natural gas from southwestern Wyoming to markets in southern California, began operating at full capacity during the second quarter. Shipments on Kern River, which is 50-percent owned by the company, averaged 692 million cubic feet per day (Mmcfd) during July and monthly nominations have exceeded the system's 700 Mmcfd design capacity.
 More than 60 percent of the natural gas carried by Kern River is being provided by Northwest Pipeline Corporation's mainline and by Williams Field Services Company's gathering and processing facilities, two businesses that also are growing rapidly.
 Northwest Pipeline began construction today of a 433 Mmcfd expansion of its present 2 billion cubic feet per day mainline capacity. This $373 million project is fully supported by long-term contracts with customers. Portions of the expansion are to be in service by the coming heating season and it is to be finished in the second quarter of next year.
 Increasing demand is driving the expansion of Williams Field Services' gathering and processing facilities that serve producers and two vital Rocky Mountain natural gas hubs, one at Opal, Wyo., and the other at Blanco, N.M. Capacities of these facilities are being increased from 425 Mmcfd and 440 Mmcfd, respectively, to 575 Mmcfd each this year. The market is expected to support even greater expansions.
 Williams Natural Gas Co. has completed what likely will be only the first phase of a major investment in a gathering system to support Amoco Production Company's major infill drilling program in the Kansas-Hugoton Field. Williams Natural has connected 300 new wells and will connect another 75 by year end.
 In June, Williams Pipe Line Co. signed a letter of intent with a major customer that will result in a significant increase in throughput later this year. Also, an inventory policy implemented in July is improving system supply reliability.
 Williams also said that because of congressional and other opposition, the Federal Energy Regulatory Commission is rehearing, and could possibly alter, its recently issued Order 636.
 "Most opposition has focused on 'transition costs' associated with implementing the order and, more specifically, the amount of these costs-if any-that should be borne by pipeline company shareholders," Williams said. "We continue to believe pipelines should be able to recover all transition costs."
 He said "if Order 636 is modified to require pipelines to absorb a portion of such costs, we do not expect that action to significantly affect our company."
 WilTel reported a second-quarter operating loss of $4.4 million, compared with an operating profit of $18.4 million in the second quarter of 1991.
 This turnabout was due to the costs of integrating and fully deploying a national switched services network, provisions for uncollected receivables from a major switched services customer, and lower margins in the customer premises equipment business.
 Second quarter revenues were $180 million, compared with $154 million in the same quarter last year.
 WilTel's continued penetration of the commercial marketplace is reflected in the 16 percent growth in circuits at the end of the second quarter of 1992, compared with the same period a year ago.
 WilTel reported an operating profit of $4.2 million for the first six months vs. $33.6 million for the same period in 1991. Revenues for the first six months of this year were $360 million, compared with $283 million for the same period in 1991.
 Williams said, "WilTel's disappointing financial results the first half of 1992 have upstaged the significant strides this company is making to deploy a broader, high-quality mix of products and services."
 Noting reserves established this year, he said the company believes that WilTel has recognized all of the exposure anticipated from the switched services customer, which is currently paying on a cash basis.
 "Although lower prices have largely offset the benefits of growing demand for circuits," he said, "customers are continuing to demonstrate a healthy appetite for WilTel's offerings."
 The company is poised to implement several equipment and service contracts, the largest with the U.S. Postal Service, GE Aerospace, Philadelphia Electric Company and Nassau County, New York.
 Williams said, "We expect WilTel to be profitable during the balance of 1992, and to gain momentum as the year closes."
 Williams Western Group reported a second-quarter operating profit of $35.3 million,compared with $23.7 million in the same quarter a year ago.
 Although expenses were higher because of increased activity, operating profit improved due to substantially higher gathering, processing and gas liquids volumes.
 Gathering volumes increased 69 percent and processing volumes increased 94 percent, while mainline volumes were essentially unchanged from volumes in the second quarter of 1991.
 Most of the volume growth is occurring at the expanding gathering and processing systems in the San Juan Basin and in southwestern Wyoming, which supplies a substantial portion of the natural gas for the Kern River pipeline.
 For the first six months, operating profit was $70 million vs. $59.2 million for the same period in 1991.
 Williams Natural Gas Co. reported a second-quarter operating loss of $5.1 million, compared with an operating loss of $3.1 million during the same quarter of 1991.
 The increased operating loss was due primarily to lower processing revenue and gas sales volumes, partially offset by higher transportation revenues.
 Combined sales and transportation volumes were essentially unchanged, compared with volumes in the same quarter of 1991.
 For the first six months, operating profit was $26.3 million, compared with $42.3 million for the same period a year ago.
 Williams Energy Co. reported a second-quarter operating profit of $100,000, compared with $3.5 million during the same quarter in 1991.
 While gas sales volumes significantly increased, operating profit declined primarily because of lower per-unit gas sales margins, and because the second quarter of 1991 included a rate refund from an interstate natural gas pipeline.
 Combined transportation and gas-sales volumes in the second quarter were 10 percent higher than during the same period last year.
 Operating profit was $1.6 million for the first six months, compared with $8.6 million for the same period of 1991.
 Williams Pipe Line Co. reported an operating profit of $10 million in the second quarter vs. $8.6 million in the same quarter of 1991.
 Operating profit increased in part because of a rate increase that became effective May 2 and lower legal and professional fees, partially offset by shorter average hauls. A substantial portion of the improvement was from non-tariff business activities.
 For the first six months of the year, operating profit was $17.6 million, compared with $13.8 million during the same period a year ago.
 In summary, Williams said, "Our company is growing as rapidly as at any time in its modern history-from the major expansion of our natural gas assets to the challenging diversification of WilTel into a full- range provider of business telecommunications products and services. We are very confident about our company's future prospects.
 -0- 7/27/92
 /CONTACT: Jim Gipson of The Williams Cos. 918-588-2111/ CO: The Williams Cos. ST: Oklahoma IN: OIL SU: ERN


RM -- SF005 -- 3548 07/27/92 13:12 EDT
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Date:Jul 27, 1992
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