Yesterday, the Federal Energy Regulatory Commission ("FERC") issued a revised policy statement that reversed its 2005 income tax policy that permitted master limited partnership (MLP) interstate oil and natural gas pipelines to recover an income tax allowance in cost of service rates. Williams Partners' (NYSE:WPZ) primary regulated interstate pipelines are Transcontinental Gas Pipe Line Company ("Transco"), Northwest Pipeline, and a 50 percent interest in Gulfstream Natural Gas System. Williams Companies, Inc. (NYSE:WMB) ("Williams") owns approximately 74 percent of Williams Partners, and is an income tax paying entity. In 2017, about a third of Williams Partners' gross margin was derived from these regulated pipelines.

The FERC's revised policy will only impact cost of service rate calculations on a prospective basis. Transco will make its initial filing for its next rate case later this year. However, negotiated rates will make up approximately 50 percent of Transco's revenue by year-end and would not be impacted by this ruling. Northwest Pipeline settled its rate case with shippers in 2017, with new rates becoming effective in 2018. Finally, Gulfstream Natural Gas System's rates with its customers, which are all negotiated rates, would not be impacted by this ruling.

Alan Armstrong, Williams' president and chief executive officer, made the following statement: "Given the relatively small percentage of our revenues that are affected by this ruling, we don't expect this ruling to impact our previous guidance for WMB and WPZ cash dividends and distributions and related growth rates. Additionally, as we've often discussed, we are well-positioned to execute on corporate structure changes, which would restore the income tax allowance to the pipeline's cost of service rates."

About Williams & Williams Partners

Williams (NYSE:WMB) is a premier provider of large-scale infrastructure connecting U.S. natural gas and natural gas products to growing demand for cleaner fuel and feedstocks. Headquartered in Tulsa, Okla., Williams owns approximately 74 percent of Williams Partners L.P. (NYSE:WPZ). Williams Partners is an industry-leading, large-cap master limited partnership with operations across the natural gas value chain including gathering, processing and interstate transportation of natural gas and natural gas liquids. With major positions in top U.S. supply basins, Williams Partners owns and operates more than 33,000 miles of pipelines system wide - including the nation's largest volume and fastest growing pipeline - providing natural gas for clean-power generation, heating and industrial use. Williams Partners' operations touch approximately 30 percent of U.S. natural gas.

Portions of this document may constitute "forward-looking statements" as defined by federal law. Although the company believes any such statements are based on reasonable assumptions, there is no assurance that actual outcomes will not be materially different. Any such statements are made in reliance on the "safe harbor" protections provided under the Private Securities Reform Act of 1995. Additional information about issues that could lead to material changes in performance is contained in the company's annual and quarterly reports filed with the Securities and Exchange Commission.

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