Williams : Partners L.P. : (Newly Merged Partnership) Reports 2014 Financial Results for Pre-Merger Williams Partners and Pre-Merger Access Midstream Partners, Updates Guidance

Williams Partners L.P. (NYSE: WPZ) today announced unaudited 2014 financial results for pre-merger Williams Partners L.P. and pre-merger Access Midstream Partners, L.P. The two master limited partnerships (MLP) merged on Feb. 2, 2015, creating a new MLP that adopted the name “Williams Partners” and the NYSE ticker symbol “WPZ.”

Throughout this news release, “Williams Partners” refers to the merged MLP on a go-forward basis while “pre-merger Williams Partners” and “pre-merger Access Midstream Partners” refers to the two MLPs and their separate financial results prior to the merger. The pre-merger Access Midstream Partners’ results do not reflect Williams’ basis of accounting.

Pre-Merger Williams Partners

For full-year 2014, pre-merger Williams Partners reported adjusted segment profit + DD&A of $2.586 billion, compared with $2.589 billion for 2013. The results include a $199 million increase in fee-based revenues, offset by $56 million lower results at the Geismar olefins plant (including actual and assumed business interruption insurance proceeds of $123 million and $311 million for 2013 and 2014, respectively). Additionally, 2014 adjusted segment profit + DD&A was reduced by $181 million as a result of commodity price declines including $130 million lower NGL margins, and $51 million primarily related to unfavorable inventory adjustments.

DCF for 2014 was $1.719 billion, compared with $1.771 billion for 2013. The primary drivers of DCF were the same as those that drove adjusted segment profit + DD&A. Additionally maintenance capital expenditures were also $97 million higher in the 2014 period, which includes $65 million of unusual Geismar-related expenditures.

Fourth quarter 2014 adjusted segment profit + DD&A was $521 million, compared with $691 million for fourth quarter 2013. The decrease for the quarter was primarily due to $137 million lower Geismar results (including actual and assumed business interruption insurance proceeds of $108 million for fourth quarter 2013). The partnership estimates that adjusted segment profit + DD&A would have been approximately $160 million higher had the expanded Geismar plant been in operation during fourth quarter 2014. Additionally, a $55 million increase in fee-based revenues was more than offset by $88 million of commodity price declines including $47 million primarily related to unfavorable inventory adjustments and $41 million lower NGL margins.

DCF for fourth quarter 2014 was $266 million, compared with $509 million for fourth quarter 2013. Again, the primary drivers for DCF were the same as those that drove adjusted segment profit + DD&A, however maintenance capital expenditures were $67 million higher for the 2014 period, including unusual Geismar-related expenditures.

Pre-Merger Access Midstream Partners

For full-year 2014, pre-merger Access Midstream’s adjusted EBITDA was $1.161 billion, an increase of $302 million, or 35.2 percent, compared with $859 million for 2013. DCF for 2014 was $725 million, up 14.2 percent over 2013 DCF of $635 million. After excluding the impact of one-time Williams transaction related costs, adjusted 2014 DCF totaled $853 million, an increase of $218 million, or 34.3 percent, from 2013 DCF.

For fourth quarter 2014, pre-merger Access Midstream’s adjusted EBITDA totaled $317 million, an increase of $76 million, or 31.5 percent, from fourth quarter 2013 adjusted EBITDA of $241 million. DCF for fourth quarter 2014 totaled $225 million, an increase of $45 million, or 25 percent, from fourth quarter 2013 DCF of $180 million. After excluding the impact of one-time Williams transaction related costs, adjusted DCF for fourth quarter 2014 totaled $230 million, an increase of $50 million, or 27.8 percent, from fourth quarter 2013 DCF.

Access Midstream experienced record volume performance throughout 2014, including generating a daily gross throughput record of more than 6.5 billion cubic feet in December 2014.

CEO Commentary

Alan Armstrong, chief executive officer of the general partner of Williams Partners (the newly merged MLP), made the following comments:

“In the fourth quarter, our fee-based revenues continued to grow and we began commissioning major new assets including Gulfstar One, Keathley Canyon Connector and our Geismar plant. These large-scale assets are ramping up in the first quarter of 2015 and are expected to deliver strong contributions for the balance of the year and beyond. However, the sharp decline in commodity prices, the delay in the startup of Geismar and higher costs associated with the commissioning of these large-scale assets, reduced our overall results.

“The merger of Williams Partners and Access Midstream created a leading large-cap MLP focused on natural gas infrastructure, and further positions us to take advantage of long-term natural gas demand growth for power generation, manufacturing and exports. We expect the new Williams Partners to generate approximately $4.5 billion of adjusted EBITDA in 2015 from a gross margin that is about 88 percent fee-based, the majority of which consists of contracts with demand payments, cost-of-service rates or minimum volume commitments.

“Over the next three years, we’re deploying 99 percent of Williams Partners’ planned $9.3 billion of growth capital toward fully-contracted, fee-based projects. As a result, we’re confident in our ability to deliver one of the highest rates of distribution growth amongst our large-cap peers, despite lower commodity prices.”

Guidance for Williams Partners (newly merged MLP)

Earnings and cash flow guidance for Williams Partners (the newly merged MLP), reflects the following key assumptions:

Updated guidance for the new Williams Partners’ 2015 common unit cash distributions is $3.40 per unit with an annual growth rate of 7 percent to 11 percent through 2017 with growing coverage.

Current guidance assumes approximately $600 million of Williams Partners’ equity financing for 2015. We anticipate meeting these equity needs through Williams Partners’ at-the-market program. Additional financing needs are expected to be met primarily through the use of commercial paper, revolver borrowing and the issuance of new debt. Williams Partners expects to maintain investment-grade credit ratings.

Current guidance is provided in the following table:

Year-End 2014 Materials to Be Posted Shortly; Conference Call Scheduled for Tomorrow

Year-end 2014 financial materials for pre-merger Williams Partners and pre-merger Access Midstream Partners will be posted shortly at www.williams.com. The materials include the data book and analyst package for pre-merger Williams Partners, as well as financial highlights and operating statistics for pre-merger Access Midstream Partners.

Williams Partners and Williams plan to jointly host a conference call and live webcast on Thursday, Feb. 19, at 9:30 a.m. EST. A limited number of phone lines will be available at (800) 768-6570. International callers should dial (785) 830-1942. A link to the webcast, as well as replays of the webcast in both streaming and downloadable podcast formats, will be available for two weeks following the event at www.williams.com.

Form 10-K

Williams Partners’ 2014 Form 10-K, which will contain the pre-merger results of Access Midstream Partners, is expected to be filed with the Securities and Exchange Commission next week. Once filed, the document will be available on both the SEC and Williams’ websites.

Williams Partners also anticipates filing a Form 8-K next week including supplemental financial statements for the post-merger partnership, which will present the results for pre-merger Williams Partners and pre-merger Access Midstream Partners at Williams’ basis in both partnerships, combined for the periods under common control since the July 1 acquisition of Access Midstream Partners by Williams. Periods prior to that date will primarily reflect only pre-merger Williams Partners at Williams’ accounting basis.

Definitions and Non-GAAP Measures

This news includes certain financial measures – adjusted EBITDA, adjusted segment profit and adjusted segment profit + DD&A, distributable cash flow and cash distribution coverage ratio – that are non-GAAP financial measures as defined under the rules of the Securities and Exchange Commission. For the following definitions, depreciation and amortization (DD&A) includes amortization of basis differences related to equity-method investments.

Adjusted EBITDA is defined as net income (loss) before income tax expense, net interest expense, depreciation and amortization expense (including amortization of basis differences related to equity-method investments) and equity earnings from investments, adjusted for certain other items management believes affect the comparability of operating results. We also add our proportional ownership share of net income (loss) before income tax expense, net interest expense, depreciation and amortization expense of equity investments.

Adjusted segment profit excludes items of income or loss that we characterize as unrepresentative of our ongoing operations and may include assumed business interruption insurance related to the Geismar plant. Adjusted segment profit + DD&A is adjusted to add back depreciation and amortization expense. Management believes these measures provide investors meaningful insight into results from ongoing operations.

For the newly merged MLP, Williams Partners L.P., we define distributable cash flow as adjusted EBITDA less maintenance capital expenditures, cash paid for interest expense, distributions to noncontrolling interests and cash income taxes.

For the newly merged MLP, Williams Partners L.P., we also calculate the ratio of distributable cash flow to the total cash distributed (cash distribution coverage ratio). This measure reflects the amount of distributable cash flow relative to our cash distribution. We have also provided this ratio calculated using the most directly comparable GAAP measure, net income.

This news 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 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, adjusted segment profit, adjusted segment profit + DD&A, nor distributable cash flow are intended to represent cash flows for the period, nor are they presented as an alternative to net income or cash flow from operations. 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.

About Williams Partners (newly merged partnership)

Williams Partners (NYSE: WPZ) is an industry-leading, large-cap natural gas infrastructure master limited partnership with a strong growth outlook and substantial positions across key U.S. supply basins and also in Canada. Williams Partners has operations across the natural gas value chain from gathering, processing and interstate transportation of natural gas and natural gas liquids to petchem production of ethylene, propylene and other olefins. Williams Partners owns and operates more than 33,000 miles of pipelines system wide – including the nation’s largest volume and fastest growing pipeline – moving approximately 20 percent of U.S. natural gas for clean-power generation, home heating and industrial use. Tulsa, Okla.-based Williams (NYSE: WMB), a premier provider of large-scale North American natural gas infrastructure, owns 60 percent of Williams Partners, including the general-partner interest. www.williams.com

Forward-Looking Statements

The reports, filings, and other public announcements of The Williams Companies, Inc. (Williams) and Williams Partners L.P. (WPZ) may contain or incorporate by reference statements that do not directly or exclusively relate to historical facts. Such statements are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. We make these forward-looking statements in reliance on the safe harbor protections provided under the Private Securities Litigation Reform Act of 1995. You typically can identify forward-looking statements by various forms of words such as “anticipates,” “believes,” “seeks,” “could,” “may,” “should,” “continues,” “estimates,” “expects,” “forecasts,” “intends,” “might,” “goals,” “objectives,” “targets,” “planned,” “potential,” “projects,” “scheduled,” “will,” “assumes,” “guidance,” “outlook,” “in service date” or other similar expressions. These forward-looking statements are based on management's beliefs and assumptions and on information currently available to management and include, among others, statements regarding:

• Expected levels of cash distributions by WPZ with respect to general partner interests, incentive distribution rights, and limited partner interests;
• The levels of dividends to Williams stockholders;
• Future credit ratings of Williams and WPZ;
• Amounts and nature of future capital expenditures;
• Expansion and growth of our business and operations;
• Financial condition and liquidity;
• Business strategy;
• Cash flow from operations or results of operations;
• Seasonality of certain business components;
• Natural gas, natural gas liquids, and olefins prices, supply, and demand; and
• Demand for our services.

Forward-looking statements are based on numerous assumptions, uncertainties and risks that could cause future events or results to be materially different from those stated or implied in this presentation. Many of the factors that will determine these results are beyond our ability to control or predict. Specific factors that could cause actual results to differ from results contemplated by the forward-looking statements include, among others, the following:

• Whether WPZ will produce sufficient cash flows to provide the level of cash distributions we expect;
• Whether Williams is able to pay current and expected levels of dividends;
• Availability of supplies, market demand, and volatility of prices;
• Inflation, interest rates, and fluctuation in foreign exchange rates and general economic conditions (including future disruptions and volatility in the global credit markets and the impact of these events on customers and suppliers);
• The strength and financial resources of our competitors and the effects of competition;
• Whether we are able to successfully identify, evaluate and execute investment opportunities;
• Our ability to acquire new businesses and assets and successfully integrate those operations and assets into our existing businesses as well as successfully expand our facilities;
• Development of alternative energy sources;
• The impact of operational and developmental hazards and unforeseen interruptions;
• The ability to recover expected insurance proceeds related to the Geismar plant;
• Costs of, changes in, or the results of laws, government regulations (including safety and environmental regulations), environmental liabilities, litigation, and rate proceedings;
• Williams’ costs and funding obligations for defined benefit pension plans and other postretirement benefit plans;
• WPZ’s allocated costs for defined benefit pension plans and other postretirement benefit plans sponsored by its affiliates;
• Changes in maintenance and construction costs;
• Changes in the current geopolitical situation;
• Our exposure to the credit risk of our customers and counterparties;
• Risks related to financing, including restrictions stemming from debt agreements, future changes in credit ratings as determined by nationally-recognized credit rating agencies and the availability and cost of capital;
• The amount of cash distributions from and capital requirements of our investments and joint ventures in which we participate;
• Risks associated with weather and natural phenomena, including climate conditions;
• Acts of terrorism, including cybersecurity threats and related disruptions; and
• Additional risks described in our filings with the Securities and Exchange Commission (SEC).

Given the uncertainties and risk factors that could cause our actual results to differ materially from those contained in any forward-looking statement, we caution investors not to unduly rely on our forward-looking statements. We disclaim any obligations to and do not intend to update the above list or announce publicly the result of any revisions to any of the forward-looking statements to reflect future events or developments.

In addition to causing our actual results to differ, the factors listed above may cause our intentions to change from those statements of intention set forth in this presentation. Such changes in our intentions may also cause our results to differ. We may change our intentions, at any time and without notice, based upon changes in such factors, our assumptions, or otherwise.

Investors are urged to closely consider the disclosures and risk factors in Williams’ and WPZ’s annual reports on Form 10-K filed with the SEC on Feb. 26, 2014, and each of our quarterly reports on Form 10-Q available from our offices or from our website at www.williams.com.

Notes: ¹ A more detailed schedule reconciling this non-GAAP measure is provided in this presentation. ² Includes proportionate share of maintenance capex of equity investments. ³ Includes proportionate share of interest expense of equity investments.