Williams Partners L.P. Reports Fourth-Quarter and Full-Year Financial Results

TULSA, Okla., Feb. 22 /PRNewswire-FirstCall/ -- Williams Partners L.P. today announced unaudited 2006 net income of $146.9 million, or $1.62 per common unit, compared with a 2005 net income of $118.4 million and 44 cents per common unit. For fourth-quarter 2006, Williams Partners reported net income of $32.2 million, or 45 cents per common unit, compared with 2005 fourth quarter net income of $32.2 million and 46 cents per common unit.

Quarter-over-quarter and year-over-year comparisons throughout this release are based on restated results following the Dec. 13, 2006, close of the partnership's acquisition of the remaining 74.9 percent interest in Williams Four Corners LLC from Williams .

Distributable cash flow for Williams Partners and its 40 percent interest in Discovery totaled $184.4 million for 2006, compared to $166.4 million for 2005. For the fourth quarter of 2006, the partnership totaled $42.3 million in distributable cash flow, compared with $43.2 million for fourth-quarter 2005.

Adjusted EBITDA for Williams Partners and its Discovery interest was $213.4 million for 2006, compared to $181.6 million for 2005. For fourth- quarter 2006, this measure was $51.8 million, compared to $48.3 million for fourth-quarter 2005.

The improved results in 2006 are due primarily to the strong performance in the Gathering and Processing - West segment, which includes the Four Corners asset. Also driving the positive results were higher equity earnings from our investment in Discovery, which is part of the Gathering and Processing - Gulf segment, and higher storage revenues at Conway within the NGL Services segment.

Four Corners' strong performance in 2006 was driven by record natural gas liquids (NGL) margins on higher natural gas sales volumes, along with higher fee-based gathering and processing revenues. Its performance was partially offset by higher operating and maintenance expenses.

The fourth-quarter 2006 results were also driven by Four Corners' performance, along with higher storage revenues at Conway. These benefits were partially offset by lower equity earnings at Discovery and higher interest expense associated with the Four Corners transaction financing. Discovery's equity earnings in fourth-quarter 2006 fell from its fourth- quarter 2005 level, which included additional processing of stranded volumes from the 2005 hurricane season.

Distributable cash flow and adjusted EBITDA are key measures of the partnership's financial performance. Definitions for distributable cash flow and adjusted EBITDA are included in the body of this press release.

Total enterprise value grew to $2.3 billion by the end of 2006, compared to approximately $300 million at the time of the partnership's initial public offering. During 2006, Williams Partners continued to deliver stable and consistent cash flows by increasing cash distributions, which have grown 34 percent over the initial distribution level.

Chief Operating Officer Perspective

"The partnership's full-year results were driven by the strong performance of our core assets, in terms of both record-level NGL margins and increasing fee-based revenues," said Alan Armstrong, chief operating officer of the general partner of Williams Partners.

"For 2007 we anticipate solid growth of our base assets. This year we expect an unprecedented number of well connects for our operations in the Four Corners area. In addition, our Discovery partnership began laying 35 miles of pipeline in the deepwater Gulf of Mexico to extend our existing system out to the Tahiti prospect in 4,400 feet of water."

Increase in Cash Distribution to Unitholders

Subsequent to the close of the fourth quarter, the board of directors of the general partner of Williams Partners increased the quarterly cash distribution payable to unitholders to 47 cents from 45 cents. This was the fourth consecutive quarter the partnership increased its cash distribution, reflecting the continued strong performance of its asset base.

Distributable Cash Flow and Adjusted EBITDA Definitions

Williams Partners defines distributable cash flow as net income plus the non-cash affiliate interest expense associated with the advances from affiliate that were forgiven by Williams, depreciation, amortization and accretion, and the amortization of a natural gas purchase contract, less its equity earnings in Discovery, as well as adjustments for certain non-cash, non-recurring items, plus reimbursements from Williams under an omnibus agreement and less maintenance capital expenditures. For Discovery, distributable cash flow is defined as net income plus depreciation and accretion and less maintenance capital expenditures. The partnership's equity share of Discovery's distributable cash flow is 40 percent.

Williams Partners defines adjusted EBITDA excluding investment in Discovery as the sum of net income plus interest (income) expense and depreciation, amortization and accretion, and the amortization of a natural gas purchase contract, less equity earnings in Discovery, as well as adjustments for certain non-cash, non-recurring items. For Discovery, adjusted EBITDA is defined as net income plus interest (income) expense, depreciation and accretion, as well as adjustments for certain non-cash, non- recurring items. The partnership's equity share of Discovery's adjusted EBITDA is 40 percent.

Schedules presenting Williams Partners' consolidated statements of income, segment profit and operating information, as well as schedules reconciling adjusted EBITDA and distributable cash flow to measures included in Generally Accepted Accounting Principles are available on Williams Partners' Web site at http://www.williamslp.com/ and as an attachment to this document.

Today's Analyst Call

Williams Partners' management will discuss the partnership's year-end financial results during an analyst presentation to be webcast live beginning at noon Eastern today.

Participants are encouraged to access the presentation and corresponding slides via http://www.williamslp.com/. A limited number of phone lines also will be available at (800) 361-0912. International callers should dial (913) 981-5559. Callers should dial in at least 10 minutes prior to the start of the discussion. Replay of the year-end webcast will be available for two weeks at http://www.williamslp.com/.

Form 10-K

The partnership plans to file its Form 10-K with the Securities and Exchange Commission during the week of Feb. 26. The document will be available on both the SEC and Williams Partners web sites.

About Williams Partners L.P.

Williams Partners L.P. primarily gathers, transports and processes natural gas and fractionates and stores natural gas liquids. The general partner is Williams Partners GP LLC. More information is at www.williamslp.com

Williams Partners' reports, filings and other public announcements might contain or incorporate by reference forward-looking statements - statements that do not directly or exclusively relate to historical facts. You typically can identify forward-looking statements by the use of forward-looking words, such as "anticipate," believe," "could," "continue," "estimate," "expect," "forecast," "may," "plan," "potential," "project," "schedule," "will" and other similar words. These statements are based on our intentions, beliefs and assumptions about future events and are subject to risks, uncertainties and other factors. Actual results could differ materially from those contemplated by the forward-looking statements. In addition to any assumptions, risks, uncertainties and other factors referred to specifically in connection with such statements, other factors could cause our actual results to differ materially from the results expressed or implied in any forward-looking statements. Those risks, uncertainties and factors include, among others: Williams Partners may not have sufficient cash from operations to enable it to pay the minimum quarterly distribution following establishment of cash reserves and payment of fees and expenses, including payments to its general partner; because of the natural decline in production from existing wells and competitive factors, the success of Williams Partners' gathering and transportation businesses depends on its ability to connect new sources of natural gas supply, which is dependent on factors beyond its control; Williams Partners' processing, fractionation and storage business could be affected by any decrease in the price of natural gas liquids or a change in the price of natural gas liquids relative to the price of natural gas; lower natural gas and oil prices could adversely affect Williams Partners' fractionation and storage businesses; Williams Partners depends on certain key customers and producers for a significant portion of its revenues and supply of natural gas and natural gas liquids and the loss of any of these key customers or producers could result in a decline in its revenues and cash available to pay distributions; if third-party pipelines and other facilities interconnected to Williams Partners' pipelines and facilities become unavailable to transport natural gas and natural gas liquids or to treat natural gas, Williams Partners' revenues and cash available to pay distributions could be adversely affected; Williams Partners' future financial and operating flexibility may be adversely affected by restrictions in its indentures and by its leverage; Williams Partners' partnership agreement limits its general partner's fiduciary duties to Williams Partner's unitholders for actions taken by the general partner that might otherwise constitute breaches of fiduciary duty; even if unitholders are dissatisfied, they currently have little ability to remove Williams Partners' general partner without its consent; The Williams Companies, Inc.'s credit agreement and The Williams Companies, Inc.'s public indentures contain financial and operating restrictions that may limit Williams Partners' access to credit; in addition, Williams Partners' ability to obtain credit in the future will be affected by The Williams Company Inc's credit ratings; Williams Partners' general partner and its affiliates have conflicts of interest and limited fiduciary duties, which may permit them to favor their own interest to the detriment of Williams Partners' unitholders; unitholders may be required to pay taxes on their share of Williams Partners' income even if they do not receive any cash distributions from Williams Partners; and Williams Partners' operations are subject to operational hazards and unforeseen interruptions for which it may or may not be adequately insured. In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than we have described. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Investors are urged to closely consider the disclosures and risk factors in Williams Partners' reports on Forms 10-K and 10-Q filed with the Securities and Exchange Commission available from Williams Partners' offices or from Williams Partners' website at www.williamslp.com.

Reconciliation of Non-GAAP Measures (UNAUDITED)

This press release includes certain financial measures, Adjusted EBITDA Excluding Investment in Discovery, in our case, and Adjusted EBITDA in Discovery's case, Distributable Cash Flow and Distributable Cash Flow per Limited Partner Unit that are non-GAAP financial measures as defined under the rules of the Securities and Exchange Commission. For Williams Partners L.P., we define Adjusted EBITDA Excluding Investment in Discovery as the sum of net income (loss) plus interest (income) expense and depreciation, amortization and accretion, and the amortization of a natural gas purchase contract, less our equity earnings in Discovery and we also adjust for certain non-cash, non- recurring items. For Discovery, we define Adjusted EBITDA as net income plus interest (income) expense, depreciation, amortization and accretion and we also adjust for certain non-cash, non-recurring items. Our equity share of Discovery's Adjusted EBITDA is 40%.

For Williams Partners L.P. we define Distributable Cash Flow as net income (loss) plus the non-cash affiliate interest expense associated with the advances from affiliate that were forgiven by Williams, depreciation, amortization and accretion, and the amortization of a natural gas purchase contract, less our equity earnings in Discovery, as well as adjustments for certain non-cash, non-recurring items, plus reimbursements from Williams under an omnibus agreement and less maintenance capital expenditures. For Discovery we define Distributable Cash Flow as net income (loss) plus depreciation, amortization and accretion and less maintenance capital expenditures. Our equity share of Discovery's Distributable Cash Flow is 40%.

For Williams Partners L.P. we define Distributable Cash Flow per Limited Partner Unit as Distributable Cash Flow, as defined in the preceding paragraph, attributable to partnership operations plus the actual cash distributed by Discovery. The total Distributable Cash Flow attributable to partnership operations is then allocated between the general partner and the limited partners in accordance with the cash distribution provisions of our partnership agreement. The resulting Distributable Cash Flow attributable to partnership operations and to its limited partners is then divided by the weighted average limited partner units outstanding to arrive at Distributable Cash Flow per Limited Partner Unit.

This press release is accompanied by a reconciliation of these non-GAAP financial measures to their nearest GAAP financial measures. Management uses these financial measures because they are widely accepted financial indicators used by investors to compare company performance. In addition, management believes that these measures provide investors an enhanced perspective of the operating performance of the Partnership's assets and the cash that the business is generating. Neither Adjusted EBITDA nor Distributable Cash Flow are intended to represent cash flows for the period, nor are they presented as an alternative to net income (loss) or cash flow from operations. Distributable Cash Flow per Limited Partner is not presented as an alternative to net income per unit. They should not be considered in isolation or as substitutes for a measure of performance prepared in accordance with United States generally accepted accounting principles.

2005* (Thousands, except 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Y-T-D per-unit amounts) Williams Partners L.P. Reconciliation of Non-GAAP "Adjusted EBITDA Excluding Equity Investments" to GAAP "Net income" Net Income $26,206 $28,664 $31,252 $32,230 $118,352 Interest expense 3,004 2,982 2,014 238 8,238 Interest income - - (76) (89) (165) Depreciation, amortization and accretion 10,631 10,601 10,569 10,778 42,579 Amortization of gas purchase contract - - 581 1,452 2,033 Cumulative effect of change in accounting principle - - - 1,322 1,322 Equity earnings - Discovery (2,212) (691) (66) (5,362) (8,331) Adjusted EBITDA Excluding Equity Investments $37,629 $41,556 $44,274 $40,569 $164,028 Discovery Producer Services Reconciliation of Non-GAAP "Adjusted EBITDA" to GAAP "Net income" Net Income $5,531 $1,727 $166 $13,228 $20,652 Interest (income) (284) (389) (498) (514) (1,685) Depreciation and accretion 6,113 6,126 6,127 6,428 24,794 Cumulative effect of change in accounting principle - - - 176 176 Adjusted EBITDA - 100% $11,360 $7,464 $5,795 $19,318 $43,937 Adjusted EBITDA - our 40% interest $4,544 $2,986 $2,318 $7,727 $17,575 2006* (Thousands, except 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Y-T-D per-unit amounts) Williams Partners L.P. Reconciliation of Non-GAAP "Adjusted EBITDA Excluding Equity Investments" to GAAP "Net income" Net Income $37,624 $33,594 $43,404 $32,246 $146,868 Interest expense 236 648 3,271 5,678 9,833 Interest income (70) (110) (462) (958) (1,600) Depreciation, amortization and accretion 10,714 10,852 10,944 11,182 43,692 Amortization of gas purchase contract 1,354 1,322 1,322 1,322 5,320 Cumulative effect of change in accounting principle - - - - - Equity earnings - Discovery (3,781) (2,347) (4,055) (1,850) (12,033) Adjusted EBITDA Excluding Equity Investments $46,077 $43,959 $54,424 $47,620 $192,080 Discovery Producer Services Reconciliation of Non-GAAP "Adjusted EBITDA" to GAAP "Net income" Net Income $9,452 $5,868 $10,138 $4,625 $30,083 Interest (income) (626) (601) (608) (569) (2,404) Depreciation and accretion 6,379 6,374 6,380 6,429 25,562 Cumulative effect of change in accounting principle - - - - - Adjusted EBITDA - 100% $15,205 $11,641 $15,910 $10,485 $53,241 Adjusted EBITDA - our 40% interest $6,082 $4,656 $6,364 $4,194 $21,296

* Because Four Corners was an affiliate of Williams at the time of the acquisition, the transaction was between entities under common control, and has been accounted for at historical cost. Accordingly, these tables have been restated to reflect the historical results of Four Corners throughout the periods presented.

2005* (Thousands, except 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Y-T-D per-unit amounts) Williams Partners L.P. Reconciliation of Non-GAAP "Distributable Cash Flow Excluding Equity Investments" to GAAP "Net income" Net income $26,206 $28,664 $31,252 $32,230 $118,352 Interest expense - Affiliate (a) 2,805 2,812 1,822 22 7,461 Depreciation, amortization and accretion 10,631 10,601 10,569 10,778 42,579 Amortization of natural gas purchase contract - - 581 1,452 2,033 Equity earnings - Discovery (2,212) (691) (66) (5,362) (8,331) Cumulative effect of change in accounting principle - - - 1,322 1,322 Reimbursements from Williams under omnibus agreement (b) - - - 1,610 1,610 Maintenance capital expenditures (c) (2,752) (2,070) (4,370) (6,647) (15,839) Distributable Cash Flow Excluding Equity Investments $34,678 $39,316 $39,788 35,405 $149,187 Less: Pre-partnership Four Corners net income allocated to general partner Less: Pre-partnership Four Corners depreciation, amortization and accretion expense Plus: Pre-partnership Four Corners maintenance capital expenditures Plus: Discovery's cash distributions to Williams Partners L.P. Distributable cash flow attributable to partnership operations Distributable Cash Flow attributable to partnership operations allocable to general partner Distributable Cash Flow attributable to limited partnership operations allocable to limited partners Weighted average number of units outstanding: Distributable Cash Flow attributable to partnership operations per limited partner unit: (a) Distributable cash flow includes the affiliate interest expense associated with the advances from affiliate that were forgiven by Williams in connection with our initial public offering. This interest expense did not result in a cash outlay for the Williams Partners Predecessor entity. (b) 4th quarter amount includes both a $1.6 million contribution to Discovery and the related receipt from Williams under the omnibus agreement for a net-zero impact to distributable cash flow. (c) Maintenance capital expenditures includes certain well connection capital. Discovery Producer Services Reconciliation of Non-GAAP "Distributable Cash Flow" to GAAP "Net income" Net income $5,531 $1,727 $166 $13,228 $20,652 Depreciation and accretion 6,113 6,126 6,127 6,428 24,794 Cumulative effect of change in accounting principle - - - - - Maintenance capital expenditures (1,866) (156) (137) (375) (2,534) Distributable Cash Flow - 100% $9,778 $7,697 $6,156 $19,457 $43,088 Distributable Cash Flow - our 40% interest $3,911 $3,079 $2,462 $7,783 $17,235 2006* (Thousands, except 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Y-T-D per-unit amounts) Williams Partners L.P. Reconciliation of Non-GAAP "Distributable Cash Flow Excluding Equity Investments" to GAAP "Net income" Net income $37,624 $33,594 $43,404 $32,246 $146,868 Interest expense - Affiliate (a) - - - - - Depreciation, amortization and accretion 10,714 10,852 10,944 11,182 43,692 Amortization of natural gas purchase contract 1,354 1,322 1,322 1,322 5,320 Equity earnings - Discovery (3,781) (2,347) (4,055) (1,850) (12,033) Cumulative effect of change in accounting principle - - - - - Reimbursements from Williams under omnibus agreement (b) 1,248 1,183 1,813 996 5,240 Maintenance capital expenditures (c) (6,391) (6,636) (7,357) (6,017) (26,401) Distributable Cash Flow Excluding Equity Investments $40,768 $37,968 $46,071 $37,879 $162,686 Less: Pre-partnership Four Corners net income allocated to general partner (33,415) $(30,624) $(31,445) $(20,967) $(116,451) Less: Pre-partnership Four Corners depreciation, amortization and accretion expense (9,814) (9,666) (7,517) (6,096) (33,093) Plus: Pre-partnership Four Corners maintenance capital expenditures 5,226 4,872 4,200 3,314 17,612 Plus: Discovery's cash distributions to Williams Partners L.P. 4,400 $3,600 $4,000 $4,400 $16,400 Distributable cash flow attributable to partnership operations 7,165 6,150 15,309 18,530 47,154 Distributable Cash Flow attributable to partnership operations allocable to general partner 410 125 2,456 3,183 6,174 Distributable Cash Flow attributable to limited partnership operations allocable to limited partners $6,755 $6,025 $12,853 $15,347 $40,980 Weighted average number of units outstanding: 14,006,146 14,923,619 21,597,072 25,266,210 18,986,368 Distributable Cash Flow attributable to partnership operations per limited partner unit: $0.48 $0.40 $0.60 $0.61 $2.09 (a) Distributable cash flow includes the affiliate interest expense associated with the advances from affiliate that were forgiven by Williams in connection with our initial public offering. This interest expense did not result in a cash outlay for the Williams Partners Predecessor entity. (b) 4th quarter amount includes both a $1.6 million contribution to Discovery and the related receipt from Williams under the omnibus agreement for a net-zero impact to distributable cash flow. (c) Maintenance capital expenditures includes certain well connection capital. Discovery Producer Services Reconciliation of Non-GAAP "Distributable Cash Flow" to GAAP "Net income" Net income $9,452 $5,868 $10,138 $4,625 $30,083 Depreciation and accretion 6,379 6,374 6,380 6,429 25,562 Cumulative effect of change in accounting principle - - - - - Maintenance capital expenditures (516) (506) (262) 22 (1,262) Distributable Cash Flow - 100% $15,315 $11,736 $16,256 $11,076 $54,383 Distributable Cash Flow - our 40% interest $6,126 $4,694 $6,502 $4,431 $21,753

* Because Four Corners was an affiliate of Williams at the time of the acquisition, the transaction was between entities under common control, and has been accounted for at historical cost. Accordingly, these tables have been restated to reflect the historical results of our Four Corners throughout the periods presented.

Consolidated Statements of Income (UNAUDITED) 2005* (Thousands) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Y-T-D Revenues: Product sales: Affiliate $53,564 $52,617 $61,914 $67,925 $236,020 Third-party 1,273 1,345 1,855 4,255 8,728 Gathering and processing: Affiliate 8,728 9,177 8,559 10,291 36,755 Third-party 48,038 49,314 51,121 49,568 198,041 Storage 4,388 4,638 5,409 5,855 20,290 Fractionation 2,430 2,307 2,386 3,647 10,770 Other 851 858 1,096 1,563 4,368 Total revenues 119,272 120,256 132,340 143,104 514,972 Cost and expenses: Product cost and shrink replacement: Affiliate 13,009 9,349 11,884 24,538 58,780 Third-party 26,160 30,396 32,609 29,582 118,747 Operating and maintenance expense: Affiliate 11,737 8,907 10,576 14,974 46,194 Third-party 19,637 20,620 22,125 21,183 83,565 Depreciation, amortization and accretion 10,631 10,601 10,569 10,778 42,579 General and administrative expense: Affiliate 7,841 7,165 7,277 11,482 33,765 Third-party 645 242 1,061 902 2,850 Taxes other than income 2,377 1,894 2,170 2,005 8,446 Other 237 127 945 (679) 630 Total costs and expenses 92,274 89,301 99,216 114,765 395,556 Operating income 26,998 30,955 33,124 28,339 119,416 Equity earnings - Discovery 2,212 691 66 5,362 8,331 Interest expense: Affiliate (2,805) (2,812) (1,822) (22) (7,461) Third-party (199) (170) (192) (216) (777) Interest income - - 76 89 165 Net income before cumulative effect of change in accounting principle 26,206 28,664 31,252 33,552 119,674 Cumulative effect of change in accounting principle - - - (1,322) (1,322) Net income $26,206 $28,664 $31,252 $32,230 $118,352 2006* (Thousands) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Y-T-D Revenues: Product sales: Affiliate $58,396 $63,370 $68,542 $64,767 $255,075 Third-party 2,792 7,766 4,553 1,808 16,919 Gathering and processing: Affiliate 9,933 10,756 10,162 11,377 42,228 Third-party 51,376 49,405 52,679 52,972 206,432 Storage 5,105 5,924 6,581 7,627 25,237 Fractionation 3,953 2,989 2,708 2,048 11,698 Other 1,180 976 1,357 2,308 5,821 Total revenues 132,735 141,186 146,582 142,907 563,410 Cost and expenses: Product cost and shrink replacement: Affiliate 21,380 18,057 19,159 19,605 78,201 Third-party 22,620 26,662 25,542 22,483 97,307 Operating and maintenance expense: Affiliate 15,686 13,401 10,681 13,859 53,627 Third-party 21,100 28,167 26,888 25,432 101,587 Depreciation, amortization and accretion 10,714 10,852 10,944 11,182 43,692 General and administrative expense: Affiliate 7,281 9,227 7,730 10,057 34,295 Third-party 1,305 950 1,038 1,852 5,145 Taxes other than income 2,283 1,757 2,352 2,569 8,961 Other (3,643) 328 90 752 (2,473) Total costs and expenses 98,726 109,401 104,424 107,791 420,342 Operating income 34,009 31,785 42,158 35,116 143,068 Equity earnings - Discovery 3,781 2,347 4,055 1,850 12,033 Interest expense: Affiliate (15) (15) (15) (44) (89) Third-party (221) (633) (3,256) (5,634) (9,744) Interest income 70 110 462 958 1,600 Net income before cumulative effect of change in accounting principle 37,624 33,594 43,404 32,246 146,868 Cumulative effect of change in accounting principle - - - - - Net income $37,624 $33,594 $43,404 $32,246 $146,868

* Because Four Corners was an affiliate of Williams at the time of the acquisition, the transaction was between entities under common control, and has been accounted for at historical cost. Accordingly, these tables have been restated to reflect the historical results of Four Corners throughout the periods presented.

Segment Profit & Operating Statistics (UNAUDITED) 2005* (Thousands) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Y-T-D Gathering and Processing - West Segment revenues $107,903 $108,080 $120,164 $127,056 $463,203 Product cost 36,434 36,418 42,235 50,619 165,706 Operating and maintenance expense 25,646 26,735 24,429 27,838 104,648 Depreciation, amortization and accretion 9,726 9,708 9,673 9,853 38,960 Direct general and administrative expenses 3,240 2,522 3,117 3,351 12,230 Other, net 2,422 1,875 2,921 1,164 8,382 Segment profit $30,435 $30,822 $37,789 $34,231 $133,277 Gathering and Processing - Gulf Segment revenues $880 $765 $650 $1,220 $3,515 Operating and maintenance expense 107 269 101 237 714 Depreciation and accretion 300 300 300 300 1,200 Direct general and administrative expenses - - - 2 2 Segment operating income (loss) 473 196 249 681 1,599 Equity earnings 2,212 691 66 5,362 8,331 Segment profit $2,685 $887 $315 $6,043 $9,930 NGL Services Segment revenues $10,489 $11,411 $11,526 $14,828 $48,254 Operating and maintenance expense 5,621 2,523 8,171 8,082 24,397 Product cost 2,735 3,327 2,258 3,501 11,821 Depreciation and accretion 605 593 596 625 2,419 Direct general and administrative expenses 203 271 308 286 1,068 Other, net 192 146 194 162 694 Segment profit $1,133 $4,551 $(1) $2,172 $7,855 2006* (Thousands) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Y-T-D Gathering and Processing - West Segment revenues $115,672 $127,794 $132,603 $126,244 $502,313 Product cost 38,277 41,800 41,821 38,099 159,997 Operating and maintenance expense 29,095 34,525 29,950 31,193 124,763 Depreciation, amortization and accretion 9,814 9,952 10,035 10,254 40,055 Direct general and administrative expenses 3,400 2,361 2,838 3,321 11,920 Other, net (1,567) 1,919 2,260 3,157 5,769 Segment profit $36,653 $37,237 $45,699 $40,220 $159,809 Gathering and Processing - Gulf Segment revenues $733 $676 $632 $615 $2,656 Operating and maintenance expense 242 231 399 788 1,660 Depreciation and accretion 300 300 300 300 1,200 Direct general and administrative expenses 2 7 - (8) 1 Segment operating income (loss) 189 138 (67) (465) (205) Equity earnings 3,781 2,347 4,055 1,850 12,033 Segment profit $3,970 $2,485 $3,988 $1,385 $11,828 NGL Services Segment revenues $16,330 $12,716 $13,347 $16,048 $58,441 Operating and maintenance expense 7,449 6,812 7,220 7,310 28,791 Product cost 5,723 2,919 2,880 3,989 15,511 Depreciation and accretion 600 600 609 628 2,437 Direct general and administrative expenses 301 235 279 334 1,149 Other, net 207 166 182 164 719 Segment profit $2,050 $1,984 $2,177 $3,623 $9,834

* Because Four Corners was an affiliate of Williams at the time of the acquisition, the transaction was between entities under common control, and has been accounted for at historical cost. Accordingly, these tables have been restated to reflect the historical results of Four Corners throughout the periods presented.

2005* (Thousands) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Y-T-D Operating Information: Williams Partners: Conway storage revenues $4,388 $4,638 $5,409 $5,855 $20,290 Conway fractionation volumes (bpd) - our 50% 41,296 37,503 34,511 46,550 39,965 Carbonate Trend gathered volumes (MMBtu/d) 41,567 35,933 29,834 35,218 35,605 Williams Four Corners - 100%: Gathered volumes (MMBtu/d) 1,512,489 1,526,251 1,538,105 1,509,109 1,521,507 Processed volumes (MMBtu/d) 857,867 854,321 872,261 870,076 863,693 Liquid sales gallons (000s) 45,740 38,472 42,185 39,082 165,479 Net liquids margin (cents/gallon) $0.32 $0.33 $0.42 $0.40 $0.37 Discovery Producer Services - 100% Gathered volumes (MMBtu/d) 335,727 334,466 249,722 460,160 345,098 Gross processing margin ($/MMBtu) $0.21 $0.17 $0.19 $0.18 $0.19 2006* (Thousands) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Y-T-D Operating Information: Williams Partners: Conway storage revenues $5,105 $5,924 $6,581 $7,627 $25,237 Conway fractionation volumes (bpd) - our 50% 46,042 39,669 38,517 31,374 38,859 Carbonate Trend gathered volumes (MMBtu/d) 33,407 29,327 27,650 26,995 29,323 Williams Four Corners - 100%: Gathered volumes (MMBtu/d) 1,511,867 1,473,371 1,501,978 1,512,304 1,499,937 Processed volumes (MMBtu/d) 868,200 861,876 878,965 893,022 875,600 Liquid sales gallons (000s) 41,413 43,874 47,009 49,714 182,010 Net liquids margin (cents/gallon) $0.37 $0.49 $0.56 $0.45 $0.47 Discovery Producer Services - 100% Gathered volumes (MMBtu/d) 581,788 342,037 435,885 514,486 467,338 Gross processing margin ($/MMBtu) $0.16 $0.25 $0.28 $0.25 $0.23