Profile of Major
Williams Businesses

Regulated Businesses

Accomplishments

Key Issues

Strategies

Natural Gas Pipelines

• Acquisition of Transco Energy and the remaining 50 percent interest in Kern River created a coast-to-coast network of interstate natural gas pipelines.
• These assets provide significant operating profit and cash flow, as well as income stability, which contribute to our goal of sustaining shareholder returns.

• The rate of return is tempered because the economics of these businesses are regulated by the Federal Energy Regulatory Commission.

• Retain competitive advantage of being the least-cost provider in all of our markets by operating efficiently and applying best practices systemwide.
• Aggressively pursue expansion opportunities, leveraging our efficiency and scale advantages to capture incremental demand in every reachable market, including west-to-east gas transportation opportunities.

Unregulated Businesses

Natural Gas Gathering and Processing

• Entered the offshore gas gathering business.
• Purchased New Mexico gathering and processing assets.
• Built and expanded facilities in the Midwest and Rocky Mountains.

• Some production shut-ins could continue in 1996 if wellhead gas prices and gas liquids margins remain low in the western United States.

• Pursue deregulation of offshore Gulf Coast gathering systems to compete effectively.
• Win incremental business in every reachable producing basin.
• Further develop electric power generation projects that create demand for producers' gas.

Energy Services

• Integrated Transco's marketing functions into Williams' trading activities.
• Negotiated extensions to Transco contracts to provide premium gas serv ices to local distribution companies.
• Formed a partnership to create a "super network" of online trading and other services.

• Intensely competitive business arena. Physical trading margins continue to erode. Form alliances with local distribution companies to open opportunities in retail natural gas and electric markets.
• Leverage Williams' balance sheet strength and grow the customer base to serve financial markets more fully.

Liquids Pipeline/
Ethanol Production

• Williams Pipe Line achieved record throughput.
• Williams Energy Ventures acquired a large ethanol producing plant in Illinois and built a smaller one in Nebraska.

• Williams Pipe Line must find ways to continue to grow business in a mature market area.
• If 1995's record high corn prices persist, low ethanol margins could restrain Williams Energy Ventures' earnings.

• Aggressively develop new business beyond Williams Pipe Line's traditional service area, create additional value-added services, establish alliances with shipper customers.
• Expand and operate Williams Energy Ventures' ethanol plants at peak efficiency. Diminish commod ity risk by adding a broader mix of complementary businesses.

Telecommunications/
Technology

• Retained two key growth vehicles - WilTel and WilTech - from the sale of our long-distance telecommunications business.
• Through acquisitions and further commitment of capital, provided a broader framework of assets to fuel growth.

• WilTel must invest in employees and infrastructure to lead the application of sophisticated data technologies in an intensely competitive arena.
• WilTech must increase network capacity and connectivity to serve demand fully.

• WilTel is expanding its presence in the estimated $17 billion data market, which is growing much faster than its core voice-products business.
• WilTech is developing products, service offerings and new applications to fully utilize expanding fiber-optic and satellite transmission networks.
• Work toward goal of building two $1 billion companies by the year 2000.