OREANDA-NEWS.    Expected 2Q 2014 Cash Distributions From Williams Partners and Access Midstream Partners Totals USD 509 Million, Up 29% vs. 2Q 2013
Adjusted Segment Profit + DD&A Is USD 742 Million, Up 15% vs. 2Q 2013
Adjusted Income Is USD 158 Million or USD 0.23 per Share, Up 22% vs. 2Q 2013
2Q 2014 Net Income Is USD 103 Million or USD 0.15 per Share
Updating Financial Guidance Primarily to Reflect Acquisition of Additional Interests in Access Midstream Partners
Affirming Planned Dividend Guidance: 3Q 2014 Up 32% to USD 0.56, or USD 2.24 on an Annualized Basis; USD 2.46 in 2015, With Follow-On Annual Dividend Growth of Approximately 15% through 2017
Williams Partners and Access Midstream Partners Evaluating Merger as Proposed by Williams

Williams (NYSE: WMB) today announced second-quarter 2014 cash distributions from Williams Partners and Access Midstream Partners of USD 509 million, a USD 114 million, or 29 percent, increase from total cash distributions received for second-quarter 2013. The quarterly cash distributions discussed in this release are declared and received in the following quarter, as these distributions relate to the prior quarter's cash flow.

Year-to-date 2014, Williams reported cash distributions from Williams Partners and Access Midstream Partners of USD 964 million, a USD 188 million, or 24 percent increase from the same period last year.

For second-quarter 2014, Williams reported USD 742 million in adjusted segment profit + DD&A, compared with USD 644 million in adjusted segment profit + DD&A in second-quarter 2013. The USD 98 million increase in second-quarter adjusted segment profit + DD&A for the quarter was driven by a USD 100 million increase in adjusted segment profit + DD&A for Williams Partners. The Williams Partners increase included USD 46 million, or 7 percent, growth in fee-based revenues compared with second-quarter 2013, as well as USD 52 million in higher Geismar results, partially offset by lower NGL margins. The Geismar plant remained off-line for the quarter; however, assumed business interruption insurance proceeds for the second quarter totaled USD 138 million and were included in the calculation of adjusted segment profit + DD&A.

Year-to-date adjusted segment profit + DD&A was USD 1.538 billion, compared with USD 1.343 billion year-to-date 2013. The USD 195 million increase in year-to-date adjusted segment profit + DD&A was driven by a USD 187 million increase in adjusted segment profit + DD&A for Williams Partners. The Williams Partners increase includes USD 109 million, or 8 percent, growth in fee-based revenues compared with the year-to-date 2013 period, as well as USD 113 million in higher Geismar results, which include the favorable impacts of the assumed business interruption insurance proceeds.

Adjusted income from continuing operations for second-quarter 2014 was USD 158 million, or USD 0.23 per share, compared with USD 129 million, or USD 0.19 per share for second-quarter 2013. Year-to-date through June 30, adjusted income from continuing operations was USD 348 million, or USD 0.50 per share, compared with USD 281 million, or USD 0.41 per share, for the first six months of 2013.

The increases in adjusted income for the quarter were driven by the growth in Williams Partners fee-based revenues, as well as higher adjusted Geismar results (including the benefit of assumed business interruption insurance recoveries), partially offset by lower NGL margins and higher net interest expense and income tax expense. The increases in adjusted income for the year-to-date period were driven by similar factors that drove the quarterly comparison.

Adjusted income from continuing operations and adjusted segment profit + DD&A are non-GAAP measures and reflect the removal of items considered unrepresentative of ongoing operations and may include assumed business interruption insurance related to the Geismar plant. Reconciliations to the most relevant GAAP measures are attached to this news release.

Williams reported unaudited second-quarter 2014 net income attributable to Williams of USD 103 million, or USD 0.15 per share on a diluted basis, compared with net income of USD 142 million, or USD 0.21 per share on a diluted basis, for second-quarter 2013.

The decline in net income during second-quarter 2014 was driven by lower NGL and olefin margins, as well as USD 36 million higher net interest expense associated with recent debt issuances, partially offset by increased fee-based revenues and lower income tax expense.

For the first half of 2014, Williams reported net income of USD 243 million, or USD 0.35 per share on a diluted basis, compared with net income of USD 303 million, or USD 0.44 per share, for the same time period in 2013.

The decline in net income for the first half of 2014 was primarily due to USD 95 million of first-quarter 2014 charges related to the proposed Bluegrass Pipeline project, as well as USD 48 million higher net interest expense. Lower NGL and olefin margins were partially offset by higher fee-based revenues and insurance recoveries related to the Geismar incident.

CEO Comment

Alan Armstrong, Williams' president and chief executive officer, made the following comments:

"We're pleased to report that Williams benefited from a 29-percent increase in second-quarter cash distributions from our two MLP investments compared with second-quarter 2013 due to the continued rapid growth in cash flows of Williams Partners and Access Midstream Partners.

"Our recent acquisition of significant additional interests in Access Midstream Partners, which has extensive natural gas gathering systems in attractive growth basins, is expected to further enhance our presence in key regions and deliver immediate and future dividend growth for Williams' shareholders. We expect the acquisition will also reinforce Williams' stable, fee-based business model and support our industry-leading dividend growth strategy.

"Our proposal to merge Williams Partners and Access Midstream Partners would create the fastest-growing, large midstream MLP that will generate competitively advantaged investment opportunities for decades to come as we connect the best shale basins to the best markets."