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<div> <div><div><div> <div style="margin-top: 12pt; font-size: 10pt;" align="left"><b>Note 12. Contingent Liabilities</b></div>  <div style="margin-top: 6pt; font-size: 10pt;" align="left"><b><i>Issues Resulting from California Energy Crisis</i></b></div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     Our former power business was engaged in power marketing in various geographic areas, including California. Prices charged for power by us and other traders and generators in California and other western states in 2000 and 2001 were challenged in various proceedings, including those before the U.S. Federal Energy Regulatory Commission (FERC). These challenges included refund proceedings, summer 2002 90-day contracts, investigations of alleged market manipulation including withholding, gas indices and other gaming of the market, new long-term power sales to the State of California that were subsequently challenged and civil litigation relating to certain of these issues. We have entered into settlements with the State of California (State Settlement), major California utilities (Utilities Settlement), and others that substantially resolved each of these issues with these parties.</div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     As a result of a June 2008 U.S. Supreme Court decision, certain contracts that we entered into during 2000 and 2001 may be subject to partial refunds depending on the results of further proceedings at the FERC. These contracts, under which we sold electricity, totaled approximately $89 million in revenue. While we are not a party to the cases involved in the U.S. Supreme Court decision, the buyer of electricity from us is a party to the cases and claims that we must refund to the buyer any loss it suffers due to the FERC’s reconsideration of the contract terms at issue in the decision. The FERC has directed the parties to provide additional information on certain issues remanded by the U.S. Supreme Court, but delayed the submission of this information to permit the parties to explore possible settlements of the contractual disputes. The parties to the remanded procee ding have engaged the FERC’s Dispute Resolution Service to assist with settlement discussions. <div style="margin-top: 6pt; font-size: 10pt;" align="left">     Certain other issues also remain open at the FERC and for other nonsettling parties.</div> <div style="margin-top: 6pt; font-size: 10pt; margin-left: 1%;" align="left"><i>Refund proceedings</i></div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     Although we entered into the State Settlement and Utilities Settlement, which resolved a significant portion of the refund issues among the settling parties, we continue to have potential refund exposure to nonsettling parties, such as the counterparty to the contracts described above and various California end users that did not participate in the Utilities Settlement. As a part of the Utilities Settlement, we funded escrow accounts that will be used towards satisfying any ultimate refund determinations in favor of the nonsettling parties including interest on refund amounts that we might owe to settling and nonsettling parties. We are also owed interest from counterparties in the California market during the refund period for which we have recorded a receivable totaling $24 million at March 31, 2010. Collection of the interest and the payment of interest on refund amounts fr om the escrow accounts are subject to the conclusion of this proceeding. Therefore, we continue to participate in the FERC refund case and related proceedings.</div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     Challenges to virtually every aspect of the refund proceedings, including the refund period, continue to be made. Despite two FERC decisions that will affect the refund calculation, significant aspects of the refund calculation process remain unsettled, and the final refund calculation has not been made. Because of our settlements, we do not expect that the final resolution of refund obligations will have a material impact on us.</div> <div style="margin-top: 12pt; font-size: 10pt;" align="left"><b><i>Reporting of Natural Gas-Related Information to Trade Publications</i></b></div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     Civil suits based on allegations of manipulating published gas price indices have been brought against us and others, in each case seeking an unspecified amount of damages. We are currently a defendant in class action litigation and other litigation originally filed in state court in Colorado, Kansas, Missouri, Tennessee and Wisconsin brought on behalf of direct and indirect purchasers of gas in those states.</div> <div style="margin-top: 6pt;"> <table style="font-size: 10pt;" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr style="font-size: 10pt; background: none transparent scroll repeat 0% 0%; color: #000000;" valign="top"> <td style="background: none transparent scroll repeat 0% 0%;" width="2%">  </td> <td align="left" width="3%"><b>•</b></td> <td width="1%">  </td> <td>The federal court in Nevada currently presides over cases that were transferred to it from state courts in Colorado, Kansas, Missouri, and Wisconsin. In 2008, the federal court in Nevada granted summary judgment in the Colorado case in favor of us and most of the other defendants, and on January 8, 2009, the court denied the plaintiffs’ request for reconsideration of the Colorado dismissal. We expect that the Colorado plaintiffs will appeal, but the appeal cannot occur until the case against the remaining defendant is concluded.</td> </tr> <tr> <td style="font-size: 6pt;">  </td> </tr> <tr style="font-size: 10pt; background: none transparent scroll repeat 0% 0%; color: #000000;" valign="top"> <td style="background: none transparent scroll repeat 0% 0%;" width="2%">  </td> <td align="left" width="3%"><b>•</b></td> <td width="1%">  </td> <td>On April 23, 2010, the Tennessee Supreme Court reversed the state appellate court and dismissed the plaintiffs’ claims against us on federal preemption grounds. The plaintiffs might appeal this ruling to the United States Supreme Court.</td> </tr> <tr> <td style="font-size: 6pt;">  </td> </tr> <tr style="font-size: 10pt; background: none transparent scroll repeat 0% 0%; color: #000000;" valign="top"> <td style="background: none transparent scroll repeat 0% 0%;" width="2%">  </td> <td align="left" width="3%"><b>•</b></td> <td width="1%">  </td> <td>On December 8, 2009, the Missouri appellate court upheld the trial court’s dismissal of a case for lack of standing. The plaintiff has appealed to the Missouri Supreme Court.</td> </tr> </table> </div> <div style="margin-top: 12pt; font-size: 10pt;" align="left"><b><i>Environmental Matters</i></b></div> <div style="margin-top: 6pt; font-size: 10pt; margin-left: 1%;" align="left"><i>Continuing operations</i></div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     Since 1989, our Transco subsidiary has had studies underway to test certain of its facilities for the presence of toxic and hazardous substances to determine to what extent, if any, remediation may be necessary. Transco has responded to data requests from the U.S. Environmental Protection Agency (EPA) and state agencies regarding such potential contamination of certain of its sites. Transco has identified polychlorinated biphenyl (PCB) contamination in compressor systems, soils and related properties at certain compressor station sites. Transco has also been involved in negotiations with the EPA and state agencies to develop screening, sampling and cleanup programs. In addition, Transco commenced negotiations with certain environmental authorities and other parties concerning investigative and remedial actions relative to potential mercury contamination at certain gas metering sites. The costs of any such remediation will depend upon the scope of the remediation. At March 31, 2010, we had accrued liabilities of $5 million related to PCB contamination, potential mercury contamination, and other toxic and hazardous substances. Transco has been identified as a potentially responsible party at various Superfund and state waste disposal sites. Based on present volumetric estimates and other factors, we have estimated our aggregate exposure for remediation of these sites to be less than $500,000, which is included in the environmental accrual discussed above. We expect that these costs will be recoverable through Transco’s rates. <div style="margin-top: 6pt; font-size: 10pt;" align="left">     Beginning in the mid-1980s, our Northwest Pipeline GP (Northwest Pipeline) subsidiary evaluated many of its facilities for the presence of toxic and hazardous substances to determine to what extent, if any, remediation might be necessary. Consistent with other natural gas transmission companies, Northwest Pipeline identified PCB contamination in air compressor systems, soils and related properties at certain compressor station sites. Similarly, Northwest Pipeline identified hydrocarbon impacts at these facilities due to the former use of earthen pits and mercury contamination at certain gas metering sites. The PCBs were remediated pursuant to a Consent Decree with the EPA in the late 1980s and Northwest Pipeline conducted a voluntary clean-up of the hydrocarbon and mercury impacts in the early 1990s. In 2005, the Washington Department of Ecology required Northwest Pipeline to reevaluate its pre vious mercury clean-ups in Washington. Consequently, Northwest Pipeline is conducting additional assessments and remediation activities at certain sites to comply with Washington’s current environmental standards. At March 31, 2010, we have accrued liabilities of $8 million for these costs. We expect that these costs will be recoverable through Northwest Pipeline’s rates.</div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     In March 2008, the EPA issued new air quality standards for ground level ozone. In September 2009, the EPA announced that it would reconsider those standards. In January 2010, the EPA proposed more stringent standards, which are expected to be final in August 2010. The EPA expects that new eight-hour ozone nonattainment areas will be designated in July 2011. The new standards and nonattainment areas will likely impact the operations of our interstate gas pipelines and cause us to incur additional capital expenditures to comply. At this time we are unable to estimate the cost of these additions that may be required to meet these regulations. We expect that costs associated with these compliance efforts will be recoverable through rates.</div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     We also accrue environmental remediation costs for natural gas underground storage facilities, primarily related to soil and groundwater contamination. At March 31, 2010, we have accrued liabilities totaling $6 million for these costs.</div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     In April 2007, the New Mexico Environment Department’s (NMED) Air Quality Bureau issued a notice of violation (NOV) to Williams Four Corners LLC (Four Corners) that alleged various emission and reporting violations in connection with our Lybrook gas processing plant’s flare and leak detection and repair program. In December 2007, the NMED proposed a penalty of approximately $3 million. In July 2008, the NMED issued an NOV to Four Corners that alleged air emissions permit exceedances for three glycol dehydrators at one of our compressor facilities and proposed a penalty of approximately $103,000. We are discussing the proposed penalties with the NMED.</div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     In March 2008, the EPA proposed a penalty of $370,000 for alleged violations relating to leak detection and repair program delays at our Ignacio gas plant in Colorado and for alleged permit violations at a compressor station. We met with the EPA and are exchanging information in order to resolve the issues.</div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     In September 2007, the EPA requested, and our Transco subsidiary later provided, information regarding natural gas compressor stations in the states of Mississippi and Alabama as part of the EPA’s investigation of our compliance with the Clean Air Act. On March 28, 2008, the EPA issued NOVs alleging violations of Clean Air Act requirements at these compressor stations. We met with the EPA in May 2008 and submitted our response denying the allegations in June 2008. In July 2009, the EPA requested additional information pertaining to these compressor stations and in August 2009, we submitted the requested information.</div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     In January 2010, the Colorado Department of Public Health and Environment (CDPHE) proposed a penalty against Williams Production RMT Company for alleged permit violations at four compressor stations in Colorado. A settlement was reached with the CDPHE in March 2010 wherein we paid a penalty of $96,750. <div style="margin-top: 6pt; font-size: 10pt; margin-left: 1%;" align="left"><i>Former operations, including operations classified as discontinued</i></div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     We have potential obligations in connection with assets and businesses we no longer operate. These potential obligations include the indemnification of the purchasers of certain of these assets and businesses for environmental and other liabilities existing at the time the sale was consummated. Our responsibilities include those described below.</div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     <u>Agrico</u></div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     In connection with the 1987 sale of the assets of Agrico Chemical Company, we agreed to indemnify the purchaser for environmental cleanup costs resulting from certain conditions at specified locations to the extent such costs exceed a specified amount. At March 31, 2010, we have accrued liabilities of $8 million for such excess costs.</div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     <u>Other</u></div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     At March 31, 2010, we have accrued environmental liabilities of $15 million related primarily to our:</div> <div style="margin-top: 6pt;"> <table style="font-size: 10pt;" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr style="font-size: 10pt; background: none transparent scroll repeat 0% 0%; color: #000000;" valign="top"> <td style="background: none transparent scroll repeat 0% 0%;" width="2%">  </td> <td align="left" width="3%"><b>•</b></td> <td width="1%">  </td> <td>Potential indemnification obligations to purchasers of our former retail petroleum and refining operations;</td> </tr> <tr> <td style="font-size: 6pt;">  </td> </tr> <tr style="font-size: 10pt; background: none transparent scroll repeat 0% 0%; color: #000000;" valign="top"> <td style="background: none transparent scroll repeat 0% 0%;" width="2%">  </td> <td align="left" width="3%"><b>•</b></td> <td width="1%">  </td> <td>Former propane marketing operations, bio-energy facilities, petroleum products and natural gas pipelines;</td> </tr> <tr> <td style="font-size: 6pt;">  </td> </tr> <tr style="font-size: 10pt; background: none transparent scroll repeat 0% 0%; color: #000000;" valign="top"> <td style="background: none transparent scroll repeat 0% 0%;" width="2%">  </td> <td align="left" width="3%"><b>•</b></td> <td width="1%">  </td> <td>Discontinued petroleum refining facilities;</td> </tr> <tr> <td style="font-size: 6pt;">  </td> </tr> <tr style="font-size: 10pt; background: none transparent scroll repeat 0% 0%; color: #000000;" valign="top"> <td style="background: none transparent scroll repeat 0% 0%;" width="2%">  </td> <td align="left" width="3%"><b>•</b></td> <td width="1%">  </td> <td>Former exploration and production and mining operations.</td> </tr> </table> </div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     Certain of our subsidiaries have been identified as potentially responsible parties at various Superfund and state waste disposal sites. In addition, these subsidiaries have incurred, or are alleged to have incurred, various other hazardous materials removal or remediation obligations under environmental laws.</div> <div style="margin-top: 6pt; font-size: 10pt; margin-left: 1%;" align="left"><i>Summary of environmental matters</i></div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     Actual costs incurred for these matters could be substantially greater than amounts accrued depending on the actual number of contaminated sites identified, the actual amount and extent of contamination discovered, the final cleanup standards mandated by the EPA and other governmental authorities and other factors, but the amount cannot be reasonably estimated at this time.</div> <div style="margin-top: 12pt; font-size: 10pt;" align="left"><b><i>Other Legal Matters</i></b></div> <div style="margin-top: 6pt; font-size: 10pt; margin-left: 1%;" align="left"><i>Will Price (formerly Quinque)</i></div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     In 2001, fourteen of our entities were named as defendants in a nationwide class action lawsuit in Kansas state court that had been pending against other defendants, generally pipeline and gathering companies, since 2000. The plaintiffs alleged that the defendants have engaged in mismeasurement techniques that distort the heating content of natural gas, resulting in an alleged underpayment of royalties to the class of producer plaintiffs and sought an unspecified amount of damages. The fourth amended petition, which was filed in 2003, deleted all of our defendant entities except two Midstream subsidiaries. All remaining defendants opposed class certification and on September 18, 2009, the court denied plaintiffs’ most recent motion to certify the class. On October 2, 2009, the plaintiffs filed a motion for reconsideration of the denial. We are awaiting a decision fro m the court. The amount of any possible liability cannot be reasonably estimated at this time.</div> <div style="margin-top: 6pt; font-size: 10pt;" align="left"> <div style="margin-top: 6pt; font-size: 10pt; margin-left: 1%;" align="left"><i>Gulf Liquids litigation</i></div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     Gulf Liquids contracted with Gulsby Engineering Inc. (Gulsby) and Gulsby-Bay (a joint venture between Gulsby and Bay Ltd.) for the construction of certain gas processing plants in Louisiana. National American Insurance Company (NAICO) and American Home Assurance Company provided payment and performance bonds for the projects. In 2001, the contractors and sureties filed multiple cases in Louisiana and Texas against Gulf Liquids and us.</div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     In 2006, at the conclusion of the consolidated trial of the asserted contract and tort claims, the jury returned its actual and punitive damages verdict against us and Gulf Liquids. Based on our interpretation of the jury verdicts, we recorded a charge based on our estimated exposure for actual damages of approximately $68 million plus potential interest of approximately $20 million. In addition, we concluded that it was reasonably possible that any ultimate judgment might have included additional amounts of approximately $199 million in excess of our accrual, which primarily represented our estimate of potential punitive damage exposure under Texas law.</div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     From May through October 2007, the court entered seven post-trial orders in the case (interlocutory orders) which, among other things, overruled the verdict award of tort and punitive damages as well as any damages against us. The court also denied the plaintiffs’ claims for attorneys’ fees. On January 28, 2008, the court issued its judgment awarding damages against Gulf Liquids of approximately $11 million in favor of Gulsby and approximately $4 million in favor of Gulsby-Bay. Gulf Liquids, Gulsby, Gulsby-Bay, Bay Ltd., and NAICO appealed the judgment. In February 2009, we settled with certain of these parties and reduced our liability as of December 31, 2008, by $43 million, including $11 million of interest. If the judgment is upheld on appeal, our remaining liability will be substantially less than the amount of our accrual for these matters.</div> <div style="margin-top: 6pt; font-size: 10pt; margin-left: 1%;" align="left"><i>Royalty litigation</i></div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     In September 2006, royalty interest owners in Garfield County, Colorado, filed a class action suit in Colorado state court alleging that we improperly calculated oil and gas royalty payments, failed to account for the proceeds that we received from the sale of gas and extracted products, improperly charged certain expenses, and failed to refund amounts withheld in excess of ad valorem tax obligations. We reached a final partial settlement agreement for an amount that was previously accrued. We received a favorable ruling on our motion for summary judgment on one remaining claim, and we anticipate trial in 2010 on the other remaining issue related to royalty payment calculation and obligations under specific lease provisions. While we are not able to estimate the amount of any additional exposure at this time, it is reasonably possible that plaintiff’s claims could reach a mat erial amount.</div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     Other producers have been in litigation or discussions with a federal regulatory agency and a state agency in New Mexico regarding certain deductions used in the calculation of royalties. Although we are not a party to these matters, we have monitored them to evaluate whether their resolution might have the potential for unfavorable impact on our results of operations. One of these matters involving federal litigation was decided on October 5, 2009. The resolution of this specific matter is not material to us. However, other related issues in these matters that could be material to us remain outstanding.</div> <div style="margin-top: 12pt; font-size: 10pt;" align="left"><b><i>Other Divestiture Indemnifications</i></b></div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     Pursuant to various purchase and sale agreements relating to divested businesses and assets, we have indemnified certain purchasers against liabilities that they may incur with respect to the businesses and assets acquired from us. The indemnities provided to the purchasers are customary in sale transactions and are contingent upon the purchasers incurring liabilities that are not otherwise recoverable from third parties. The indemnities generally relate to breach of warranties, tax, historic litigation, personal injury, environmental matters, right of way and other representations that we have provided.</div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     At March 31, 2010, we do not expect any of the indemnities provided pursuant to the sales agreements to have a material impact on our future financial position. However, if a claim for indemnity is brought against us in the future, it may have a material adverse effect on our results of operations in the period in which the claim is made.</div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     In addition to the foregoing, various other proceedings are pending against us which are incidental to our operations.</div> <div style="margin-top: 6pt; font-size: 10pt;" align="left"> <div style="margin-top: 6pt; font-size: 10pt;" align="left"><b><i>Summary</i></b></div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     Litigation, arbitration, regulatory matters, and environmental matters are subject to inherent uncertainties. Were an unfavorable ruling to occur, there exists the possibility of a material adverse impact on the results of operations in the period in which the ruling occurs. Management, including internal counsel, currently believes that the ultimate resolution of the foregoing matters, taken as a whole and after consideration of amounts accrued, insurance coverage, recovery from customers or other indemnification arrangements, will not have a material adverse effect upon our future liquidity or financial position.</div> </div> </div> </div> </div> </div> </div></div></div> </div>

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10000000

<div> <div><div><div> <div style="margin-top: 12pt; font-size: 10pt;" align="left"><b>Note 9. Debt and Banking Arrangements</b></div>  <div style="margin-top: 6pt; font-size: 10pt;" align="left"><b><i>Revolving Credit and Letter of Credit Facilities (Credit Facilities)</i></b></div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     At March 31, 2010, letters of credit issued and loans outstanding under our credit facilities are:</div> <div align="center"> <table style="font-size: 10pt;" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr valign="bottom"> <td width="64%">  </td> <td width="5%">  </td> <td width="7%">  </td> <td width="5%">  </td> <td width="1%">  </td> <td width="5%">  </td> <td width="1%">  </td> <td width="5%">  </td> <td width="1%">  </td> <td width="5%">  </td> <td width="1%">  </td> </tr> <tr style="font-size: 8pt;" valign="bottom"> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td align="center" colspan="6"> <div style="width: 100%; border-bottom: #000000 1px solid;"><b>March 31, 2010</b></div> </td> <td>  </td> </tr> <tr style="font-size: 8pt;" valign="bottom"> <td>  </td> <td>  </td> <td align="center"><b>Credit Facilities</b></td> <td>  </td> <td align="center" colspan="2"><b>Letters of Credit</b></td> <td>  </td> <td>  </td> <td align="center" colspan="2"><b>Loans</b></td> <td>  </td> </tr> <tr style="font-size: 8pt;" valign="bottom"> <td>  </td> <td>  </td> <td style="border-bottom: #000000 1px solid;" align="center" nowrap="nowrap"><b>Expiration</b></td> <td>  </td> <td style="border-bottom: #000000 1px solid;" align="center" colspan="2" nowrap="nowrap"><b>Issued</b></td> <td>  </td> <td>  </td> <td style="border-bottom: #000000 1px solid;" align="center" colspan="2" nowrap="nowrap"><b>Outstanding</b></td> <td>  </td> </tr> <tr style="font-size: 8pt;" valign="bottom"> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td align="center" colspan="6"><b>(Millions)</b></td> <td>  </td> </tr>  <tr style="background: #cceeff;" valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;">$700 million unsecured credit facilities</div> </td> <td>  </td> <td valign="top" align="center">October 2010</td> <td>  </td> <td valign="top" align="left">$</td> <td valign="top" align="right">186</td> <td valign="top">  </td> <td>  </td> <td valign="top" align="left">$</td> <td valign="top" align="right">—</td> <td valign="top">  </td> </tr> <tr valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;">$900 million unsecured credit facility</div> </td> <td>  </td> <td valign="top" align="center">May 2012</td> <td>  </td> <td valign="top" align="left">  </td> <td valign="top" align="right">—</td> <td valign="top">  </td> <td>  </td> <td valign="top" align="left">  </td> <td valign="top" align="right">—</td> <td valign="top">  </td> </tr> <tr style="background: #cceeff;" valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;">$1.75 billion Williams Partners L.P. unsecured credit facility</div> </td> <td>  </td> <td valign="top" align="center" nowrap="nowrap">February 2013</td> <td>  </td> <td valign="top" align="left">  </td> <td valign="top" align="right">—</td> <td valign="top">  </td> <td>  </td> <td valign="top" align="left">  </td> <td valign="top" align="right">108</td> <td valign="top">  </td> </tr> <tr style="font-size: 1px;"> <td> <div style="margin-left: 15px; text-indent: -15px;">  </div> </td> <td>  </td> <td valign="top" align="center">  </td> <td>  </td> <td style="border-top: #000000 1px solid;" valign="top" align="right" colspan="2" nowrap="nowrap">  </td> <td valign="top">  </td> <td>  </td> <td style="border-top: #000000 1px solid;" valign="top" align="right" colspan="2" nowrap="nowrap">  </td> <td valign="top">  </td> </tr> <tr valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;">  </div> </td> <td>  </td> <td valign="top" align="center">  </td> <td>  </td> <td valign="top" align="left">$</td> <td valign="top" align="right">186</td> <td valign="top">  </td> <td>  </td> <td valign="top" align="left">$</td> <td valign="top" align="right">108</td> <td valign="top">  </td> </tr> <tr style="font-size: 1px;"> <td> <div style="margin-left: 15px; text-indent: -15px;">  </div> </td> <td>  </td> <td valign="top" align="center">  </td> <td>  </td> <td style="border-top: #000000 3px double;" valign="top" align="right" colspan="2" nowrap="nowrap">  </td> <td valign="top">  </td> <td>  </td> <td style="border-top: #000000 3px double;" valign="top" align="right" colspan="2" nowrap="nowrap">  </td> <td valign="top">  </td> </tr> </table> </div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     As part of our strategic restructuring (see Note 2), WPZ entered into a new $1.75 billion three-year senior unsecured revolving credit facility with Transco and Northwest Pipeline as co-borrowers. This credit facility replaced an unsecured $450 million credit facility, comprised of a $200 million revolving credit facility and a $250 million term loan which was terminated as part of the restructuring. At the closing, WPZ utilized $250 million of the credit facility to repay the outstanding term loan. As of March 31, 2010, loans outstanding under the credit facility were reduced to $108 million using available cash. The credit facility expires February 15, 2013, and may, under certain conditions, be increased by up to an additional $250 million. The full amount of the credit facility is available to WPZ to the extent not othe rwise utilized by Transco and Northwest Pipeline. Transco and Northwest Pipeline each have access to borrow up to $400 million under the credit facility to the extent not otherwise utilized by WPZ. Each time funds are borrowed, the borrower may choose from two methods of calculating interest: a fluctuating base rate equal to Citibank N.A.’s adjusted base rate plus an applicable margin, or a periodic fixed rate equal to LIBOR plus an applicable margin. WPZ is required to pay a commitment fee (currently 0.5 percent) based on the unused portion of the credit facility. The applicable margin and the commitment fee are based on the specific borrower’s senior unsecured long-term debt ratings. The credit facility contains various covenants that limit, among other things, a borrower’s and its respective subsidiaries’ ability to incur indebtedness, grant certain liens supporting indebtedness, merge or consolidate, sell all or substantially all of its assets, en ter into certain affiliate transactions, make certain distributions during an event of default, and allow any material change in the nature of its business. Significant financial covenants under the credit facility include:</div> <div style="margin-top: 6pt;"> <table style="font-size: 10pt;" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr style="font-size: 10pt; background: none transparent scroll repeat 0% 0%; color: #000000;" valign="top"> <td style="background: none transparent scroll repeat 0% 0%;" width="2%">  </td> <td align="left" width="3%"><b>•</b></td> <td width="1%">  </td> <td>WPZ ratio of debt to EBITDA (each as defined in the credit facility) must be no greater than 5 to 1.</td> </tr> <tr> <td style="font-size: 6pt;">  </td> </tr> <tr style="font-size: 10pt; background: none transparent scroll repeat 0% 0%; color: #000000;" valign="top"> <td style="background: none transparent scroll repeat 0% 0%;" width="2%">  </td> <td align="left" width="3%"><b>•</b></td> <td width="1%">  </td> <td>The ratio of debt to capitalization (defined as net worth plus debt) must be no greater than 55 percent for Transco and Northwest Pipeline.</td> </tr> </table> </div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">Each of the above ratios will be tested, beginning June 30, 2010, at the end of each fiscal quarter, and the debt to EBITDA ratio will be measured on a rolling four-quarter basis (with the first full year measured on an annualized basis).</div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     The credit facility includes customary events of default. If an event of default with respect to a borrower occurs under the credit facility, the lenders will be able to terminate the commitments for all borrowers and accelerate the maturity of the loans of the defaulting borrower under the credit facility and exercise other rights and remedies.</div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     As WPZ will be funding projects for its midstream and gas pipeline businesses, we reduced our $1.5 billion unsecured credit facility that expires May 2012 to $900 million and removed Transco and Northwest Pipeline as borrowers. <div style="margin-top: 6pt; font-size: 10pt;" align="left">     In first-quarter 2010, there were no changes to our $700 million unsecured credit facilities, which mature in October 2010 or to our unsecured credit facility used to facilitate our natural gas production hedging, which expires in December 2013.</div> <div style="margin-top: 12pt; font-size: 10pt;" align="left"><b><i>Issuances and Retirements</i></b></div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     In connection with the restructuring, WPZ issued $3.5 billion face value of senior unsecured notes as follows:</div> <div align="center"> <table style="font-size: 10pt;" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr valign="bottom"> <td width="88%">  </td> <td width="5%">  </td> <td width="1%">  </td> <td width="5%">  </td> <td width="1%">  </td> </tr> <tr style="font-size: 8pt;" valign="bottom"> <td>  </td> <td>  </td> <td style="border-bottom: #000000 1px solid;" align="center" colspan="2" nowrap="nowrap"><b>(Millions)</b></td> <td>  </td> </tr>  <tr style="background: #cceeff;" valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;">3.80% Senior Notes due 2015</div> </td> <td>  </td> <td align="left">$</td> <td align="right">750</td> <td>  </td> </tr> <tr valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;">5.25% Senior Notes due 2020</div> </td> <td>  </td> <td>  </td> <td align="right">1,500</td> <td>  </td> </tr> <tr style="background: #cceeff;" valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;">6.30% Senior Notes due 2040</div> </td> <td>  </td> <td>  </td> <td align="right">1,250</td> <td>  </td> </tr> <tr style="font-size: 1px;"> <td> <div style="margin-left: 15px; text-indent: -15px;">  </div> </td> <td>  </td> <td style="border-top: #000000 1px solid;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> </tr> <tr valign="bottom"> <td> <div style="margin-left: 30px; text-indent: -15px;">Total</div> </td> <td>  </td> <td align="left">$</td> <td align="right">3,500</td> <td>  </td> </tr> <tr style="font-size: 1px;"> <td> <div style="margin-left: 15px; text-indent: -15px;">  </div> </td> <td>  </td> <td style="border-top: #000000 3px double;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> </tr> </table> </div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     Prior to the issuance of this debt, WPZ entered into forward starting interest rate swaps to hedge against variability in interest rates on a portion of the anticipated debt issuance. Upon the issuance of the debt, these instruments were terminated, which resulted in a payment of $7 million. This amount has been recorded in <i>accumulated other comprehensive income (loss)</i> and will be amortized over the term of the related debt.</div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     As part of the issuance of the $3.5 billion unsecured notes, WPZ entered into registration rights agreements with the initial purchasers of the notes. WPZ is obligated to file a registration statement for an offer to exchange the notes for a new issue of substantially identical notes registered under the Securities Act of 1933, as amended, within 180 days from closing and to use its commercially reasonable efforts to cause the registration statement to be declared effective within 270 days after closing and to consummate the exchange offer within 30 business days after such effective date. WPZ is required to provide a shelf registration statement to cover resales of the notes under certain circumstances. If WPZ fails to fulfill these obligations, additional interest will accrue on the affected securities. The rate of additional interest will be 0.25 percent per annum on the principal amount of the affected securities for the first 90-day period immediately following the occurrence of default, increasing by an additional 0.25 percent per annum with respect to each subsequent 90-day period thereafter, up to a maximum amount for all such defaults of 0.5 percent annually. Following the cure of any registration defaults, the accrual of additional interest will cease.</div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     With the debt proceeds discussed above, we retired $3 billion of debt and paid $574 million in related premiums. The $3 billion of aggregate principal corporate debt retired includes:</div> <div align="center"> <table style="font-size: 10pt;" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr valign="bottom"> <td width="88%">  </td> <td width="5%">  </td> <td width="1%">  </td> <td width="5%">  </td> <td width="1%">  </td> </tr> <tr style="font-size: 8pt;" valign="bottom"> <td>  </td> <td>  </td> <td style="border-bottom: #000000 1px solid;" align="center" colspan="2" nowrap="nowrap"><b>(Millions)</b></td> <td>  </td> </tr>  <tr style="background: #cceeff;" valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;">7.125% Notes due 2011</div> </td> <td>  </td> <td align="left">$</td> <td align="right">429</td> <td>  </td> </tr> <tr valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;">8.125% Notes due 2012</div> </td> <td>  </td> <td>  </td> <td align="right">602</td> <td>  </td> </tr> <tr style="background: #cceeff;" valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;">7.625% Notes due 2019</div> </td> <td>  </td> <td>  </td> <td align="right">668</td> <td>  </td> </tr> <tr valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;">8.75% Senior Notes due 2020</div> </td> <td>  </td> <td>  </td> <td align="right">586</td> <td>  </td> </tr> <tr style="background: #cceeff;" valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;">7.875% Notes due 2021</div> </td> <td>  </td> <td>  </td> <td align="right">179</td> <td>  </td> </tr> <tr valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;">7.70% Debentures due 2027</div> </td> <td>  </td> <td>  </td> <td align="right">98</td> <td>  </td> </tr> <tr style="background: #cceeff;" valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;">7.50% Debentures due 2031</div> </td> <td>  </td> <td>  </td> <td align="right">163</td> <td>  </td> </tr> <tr valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;">7.75% Notes due 2031</div> </td> <td>  </td> <td>  </td> <td align="right">111</td> <td>  </td> </tr> <tr style="background: #cceeff;" valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;">8.75% Notes due 2032</div> </td> <td>  </td> <td>  </td> <td align="right">164</td> <td>  </td> </tr> <tr style="font-size: 1px;"> <td> <div style="margin-left: 15px; text-indent: -15px;">  </div> </td> <td>  </td> <td style="border-top: #000000 1px solid;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> </tr> <tr valign="bottom"> <td> <div style="margin-left: 30px; text-indent: -15px;">Total</div> </td> <td>  </td> <td align="left">$</td> <td align="right">3,000</td> <td>  </td> </tr> <tr style="font-size: 1px;"> <td> <div style="margin-left: 15px; text-indent: -15px;">  </div> </td> <td>  </td> <td style="border-top: #000000 3px double;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> </tr> </table> </div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     As a result of the changes in debt noted above, the weighted-average interest rate for unsecured fixed rate notes decreased from 7.7 percent at December 31, 2009 to 6.6 percent at March 31, 2010.</div> </div> </div></div></div> </div>

3656000000

3708000000

367000000

361000000

-64000000

-0.30

-0.33

-0.29

-0.33

<div> <div><div><div> <div style="margin-top: 12pt; font-size: 10pt;" align="left"><b>Note 6. Earnings (Loss) Per Common Share from Continuing Operations</b></div>  <div align="center"> <table style="font-size: 10pt;" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr valign="bottom"> <td width="76%">  </td> <td width="5%">  </td> <td width="1%">  </td> <td width="5%">  </td> <td width="1%">  </td> <td width="5%">  </td> <td width="1%">  </td> <td width="5%">  </td> <td width="1%">  </td> </tr> <tr style="font-size: 8pt;" valign="bottom"> <td>  </td> <td>  </td> <td style="border-bottom: #000000 1px solid;" align="center" colspan="6" nowrap="nowrap"><b>Three months ended March 31,</b></td> <td>  </td> </tr> <tr style="font-size: 8pt;" valign="bottom"> <td>  </td> <td>  </td> <td style="border-bottom: #000000 1px solid;" align="center" colspan="2" nowrap="nowrap"><b>2010</b></td> <td>  </td> <td>  </td> <td style="border-bottom: #000000 1px solid;" align="center" colspan="2" nowrap="nowrap"><b>2009</b></td> <td>  </td> </tr> <tr style="font-size: 8pt;" valign="bottom"> <td>  </td> <td>  </td> <td align="center" colspan="6"><b>(Dollars in millions, except per-share</b></td> <td>  </td> </tr> <tr style="font-size: 8pt;" valign="bottom"> <td>  </td> <td>  </td> <td align="center" colspan="6"><b>amounts; shares in thousands)</b></td> <td>  </td> </tr>  <tr style="background: #cceeff;" valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;">Income (loss) from continuing operations attributable to The Williams Companies, Inc. available to common stockholders for basic and diluted earnings (loss) per common share</div> </td> <td>  </td> <td align="left">$</td> <td align="right">(195</td> <td>)</td> <td>  </td> <td align="left">$</td> <td align="right">2</td> <td>  </td> </tr> <tr style="font-size: 1px;"> <td> <div style="margin-left: 15px; text-indent: -15px;">  </div> </td> <td>  </td> <td style="border-top: #000000 3px double;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 3px double;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> </tr> <tr valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;">Basic weighted-average shares</div> </td> <td>  </td> <td>  </td> <td align="right">583,929</td> <td>  </td> <td>  </td> <td>  </td> <td align="right">579,495</td> <td>  </td> </tr> <tr style="background: #cceeff;" valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;">Effect of dilutive securities:</div> </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> </tr> <tr valign="bottom"> <td> <div style="margin-left: 30px; text-indent: -15px;">Nonvested restricted stock units</div> </td> <td>  </td> <td>  </td> <td align="right">—</td> <td>  </td> <td>  </td> <td>  </td> <td align="right">1,405</td> <td>  </td> </tr> <tr style="background: #cceeff;" valign="bottom"> <td> <div style="margin-left: 30px; text-indent: -15px;">Stock options</div> </td> <td>  </td> <td>  </td> <td align="right">—</td> <td>  </td> <td>  </td> <td>  </td> <td align="right">1,461</td> <td>  </td> </tr> <tr valign="bottom"> <td> <div style="margin-left: 30px; text-indent: -15px;">Convertible debentures</div> </td> <td>  </td> <td>  </td> <td align="right">—</td> <td>  </td> <td>  </td> <td>  </td> <td align="right">—</td> <td>  </td> </tr> <tr style="font-size: 1px;"> <td> <div style="margin-left: 15px; text-indent: -15px;">  </div> </td> <td>  </td> <td style="border-top: #000000 1px solid;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 1px solid;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> </tr> <tr style="background: #cceeff;" valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;">Diluted weighted-average shares</div> </td> <td>  </td> <td>  </td> <td align="right">583,929</td> <td>  </td> <td>  </td> <td>  </td> <td align="right">582,361</td> <td>  </td> </tr> <tr style="font-size: 1px;"> <td> <div style="margin-left: 15px; text-indent: -15px;">  </div> </td> <td>  </td> <td style="border-top: #000000 3px double;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 3px double;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> </tr> <tr valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;">Earnings (loss) per common share from continuing operations:</div> </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> </tr> <tr style="background: #cceeff;" valign="bottom"> <td> <div style="margin-left: 30px; text-indent: -15px;">Basic</div> </td> <td>  </td> <td align="left">$</td> <td align="right">(.33</td> <td>)</td> <td>  </td> <td align="left">$</td> <td align="right">—</td> <td>  </td> </tr> <tr valign="bottom"> <td> <div style="margin-left: 30px; text-indent: -15px;">Diluted</div> </td> <td>  </td> <td align="left">$</td> <td align="right">(.33</td> <td>)</td> <td>  </td> <td align="left">$</td> <td align="right">—</td> <td>  </td> </tr> </table> </div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     For the three months ended March 31, 2010, 3.3 million weighted-average nonvested restricted stock units and 3.2 million weighted-average stock options have been excluded from the computation of diluted earnings per common share as their inclusion would be antidilutive due to our loss from continuing operations attributable to The Williams Companies, Inc.</div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     Additionally, for the three months ended March 31, 2010 and 2009, respectively, 2.3 million and 4.8 million weighted-average shares related to the assumed conversion of our convertible debentures, as well as the related interest, net of tax, have been excluded from the computation of diluted earnings per common share. Inclusion of these shares would have an antidilutive effect on the diluted earnings per common share. We estimate that if <i>income (loss) from continuing operations attributable to The Williams Companies, Inc. available to common stockholders</i> was $54 million of income for the three months ended March 31, 2010 and 2009, then these shares would become dilutive.</div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     The table below includes information related to stock options that were outstanding at March 31 of each respective year but have been excluded from the computation of weighted-average stock options due to the option exercise price exceeding the first quarter weighted-average market price of our common shares.</div> <div align="center"> <table style="font-size: 10pt;" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr valign="bottom"> <td width="76%">  </td> <td width="5%">  </td> <td width="1%">  </td> <td width="5%">  </td> <td width="1%">  </td> <td width="5%">  </td> <td width="1%">  </td> <td width="5%">  </td> <td width="1%">  </td> </tr> <tr style="font-size: 8pt;" valign="bottom"> <td>  </td> <td>  </td> <td style="border-bottom: #000000 1px solid;" align="center" colspan="6" nowrap="nowrap"><b>March 31,</b></td> <td>  </td> </tr> <tr style="font-size: 8pt;" valign="bottom"> <td>  </td> <td>  </td> <td style="border-bottom: #000000 1px solid;" align="center" colspan="2" nowrap="nowrap"><b>2010</b></td> <td>  </td> <td>  </td> <td style="border-bottom: #000000 1px solid;" align="center" colspan="2" nowrap="nowrap"><b>2009</b></td> <td>  </td> </tr>  <tr style="background: #cceeff;" valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;">Options excluded (millions)</div> </td> <td>  </td> <td>  </td> <td align="right">2.4</td> <td>  </td> <td>  </td> <td>  </td> <td align="right">6.7</td> <td>  </td> </tr> <tr valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;">Weighted-average exercise price of options excluded</div> </td> <td>  </td> <td align="left">$</td> <td align="right">32.40</td> <td>  </td> <td>  </td> <td align="left">$</td> <td align="right">25.62</td> <td>  </td> </tr> <tr style="background: #cceeff;" valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;">Exercise price ranges of options excluded</div> </td> <td>  </td> <td align="left">$</td> <td align="right">22.25 - $40.51</td> <td>  </td> <td>  </td> <td align="left">$</td> <td align="right">15.71 - $42.29</td> <td>  </td> </tr> <tr valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;">First quarter weighted-average market price</div> </td> <td>  </td> <td align="left">$</td> <td align="right">22.18</td> <td>  </td> <td>  </td> <td align="left">$</td> <td align="right">13.05</td> </tr> </table> </div> </div></div></div> </div>

<div> <div><div><div> <div> <div style="margin-top: 12pt; font-size: 10pt;" align="left"><b>Note 10. Fair Value Measurements</b></div>  <div style="margin-top: 6pt; font-size: 10pt;" align="left">     Fair value is the amount received to sell an asset or the amount paid to transfer a liability in an orderly transaction between market participants (an exit price) at the measurement date. Fair value is a market-based measurement considered from the perspective of a market participant. We use market data or assumptions that we believe market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation. These inputs can be readily observable, market corroborated, or unobservable. We apply both market and income approaches for recurring fair value measurements using the best available information while utilizing valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. <div style="margin-top: 6pt; font-size: 10pt;" align="left">     The fair value hierarchy prioritizes the inputs used to measure fair value, giving the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). We classify fair value balances based on the observability of those inputs. The three levels of the fair value hierarchy are as follows:</div> <div style="margin-top: 6pt;"> <table style="font-size: 10pt;" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr style="font-size: 10pt; background: none transparent scroll repeat 0% 0%; color: #000000;" valign="top"> <td style="background: none transparent scroll repeat 0% 0%;" width="2%">  </td> <td align="left" width="3%"><b>•</b></td> <td width="1%">  </td> <td>Level 1 – Quoted prices for identical assets or liabilities in active markets that we have the ability to access. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Our Level 1 primarily consists of financial instruments that are exchange traded.</td> </tr> <tr> <td style="font-size: 6pt;">  </td> </tr> <tr style="font-size: 10pt; background: none transparent scroll repeat 0% 0%; color: #000000;" valign="top"> <td style="background: none transparent scroll repeat 0% 0%;" width="2%">  </td> <td align="left" width="3%"><b>•</b></td> <td width="1%">  </td> <td>Level 2 – Inputs are other than quoted prices in active markets included in Level 1, that are either directly or indirectly observable. These inputs are either directly observable in the marketplace or indirectly observable through corroboration with market data for substantially the full contractual term of the asset or liability being measured. Our Level 2 primarily consists of over-the-counter (OTC) instruments such as forwards, swaps, and options.</td> </tr> <tr> <td style="font-size: 6pt;">  </td> </tr> <tr style="font-size: 10pt; background: none transparent scroll repeat 0% 0%; color: #000000;" valign="top"> <td style="background: none transparent scroll repeat 0% 0%;" width="2%">  </td> <td align="left" width="3%"><b>•</b></td> <td width="1%">  </td> <td>Level 3 – Inputs that are not observable for which there is little, if any, market activity for the asset or liability being measured. These inputs reflect management’s best estimate of the assumptions market participants would use in determining fair value. Our Level 3 consists of instruments that are valued utilizing unobservable pricing inputs that are significant to the overall fair value.</td> </tr> </table> </div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     In valuing certain contracts, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. For disclosure purposes, assets and liabilities are classified in their entirety in the fair value hierarchy level based on the lowest level of input that is significant to the overall fair value measurement. Our assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the placement within the fair value hierarchy levels.</div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     The following table presents, by level within the fair value hierarchy, our assets and liabilities that are measured at fair value on a recurring basis.</div> <div align="center"> <table style="font-size: 10pt;" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr valign="bottom"> <td width="20%">  </td> <td width="3%">  </td> <td width="1%">  </td> <td width="5%">  </td> <td width="1%">  </td> <td width="3%">  </td> <td width="1%">  </td> <td width="5%">  </td> <td width="1%">  </td> <td width="3%">  </td> <td width="1%">  </td> <td width="5%">  </td> <td width="1%">  </td> <td width="3%">  </td> <td width="1%">  </td> <td width="5%">  </td> <td width="1%">  </td> <td width="3%">  </td> <td width="1%">  </td> <td width="5%">  </td> <td width="1%">  </td> <td width="3%">  </td> <td width="1%">  </td> <td width="5%">  </td> <td width="1%">  </td> <td width="3%">  </td> <td width="1%">  </td> <td width="5%">  </td> <td width="1%">  </td> <td width="3%">  </td> <td width="1%">  </td> <td width="5%">  </td> <td width="1%">  </td> </tr> <tr style="font-size: 8pt;" valign="bottom"> <td>  </td> <td>  </td> <td style="border-bottom: #000000 1px solid;" align="center" colspan="14" nowrap="nowrap"><b>March 31, 2010</b></td> <td>  </td> <td>  </td> <td style="border-bottom: #000000 1px solid;" align="center" colspan="14" nowrap="nowrap"><b>December 31, 2009</b></td> <td>  </td> </tr> <tr style="font-size: 8pt;" valign="bottom"> <td>  </td> <td>  </td> <td style="border-bottom: #000000 1px solid;" align="center" colspan="2" nowrap="nowrap"><b>Level 1</b></td> <td>  </td> <td>  </td> <td style="border-bottom: #000000 1px solid;" align="center" colspan="2" nowrap="nowrap"><b>Level 2</b></td> <td>  </td> <td>  </td> <td style="border-bottom: #000000 1px solid;" align="center" colspan="2" nowrap="nowrap"><b>Level 3</b></td> <td>  </td> <td>  </td> <td style="border-bottom: #000000 1px solid;" align="center" colspan="2" nowrap="nowrap"><b>Total</b></td> <td>  </td> <td>  </td> <td style="border-bottom: #000000 1px solid;" align="center" colspan="2" nowrap="nowrap"><b>Level 1</b></td> <td>  </td> <td>  </td> <td style="border-bottom: #000000 1px solid;" align="center" colspan="2" nowrap="nowrap"><b>Level 2</b></td> <td>  </td> <td>  </td> <td style="border-bottom: #000000 1px solid;" align="center" colspan="2" nowrap="nowrap"><b>Level 3</b></td> <td>  </td> <td>  </td> <td style="border-bottom: #000000 1px solid;" align="center" colspan="2" nowrap="nowrap"><b>Total</b></td> <td>  </td> </tr> <tr style="font-size: 8pt;" valign="bottom"> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td align="center" colspan="6"><b>(Millions)</b></td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td align="center" colspan="6"><b>(Millions)</b></td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> </tr>  <tr style="background: #cceeff;" valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;">Assets:</div> </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> </tr> <tr valign="bottom"> <td> <div style="margin-left: 30px; text-indent: -15px;">Energy derivatives</div> </td> <td>  </td> <td align="left">$</td> <td align="right">229</td> <td>  </td> <td>  </td> <td align="left">$</td> <td align="right">844</td> <td>  </td> <td>  </td> <td align="left">$</td> <td align="right">6</td> <td>  </td> <td>  </td> <td align="left">$</td> <td align="right">1,079</td> <td>  </td> <td>  </td> <td align="left">$</td> <td align="right">178</td> <td>  </td> <td>  </td> <td align="left">$</td> <td align="right">911</td> <td>  </td> <td>  </td> <td align="left">$</td> <td align="right">5</td> <td>  </td> <td>  </td> <td align="left">$</td> <td align="right">1,094</td> <td>  </td> </tr> <tr style="background: #cceeff;" valign="bottom"> <td> <div style="margin-left: 30px; text-indent: -15px;">ARO Trust Investments (see Note 11)</div> </td> <td>  </td> <td>  </td> <td align="right">25</td> <td>  </td> <td>  </td> <td>  </td> <td align="right">—</td> <td>  </td> <td>  </td> <td>  </td> <td align="right">—</td> <td>  </td> <td>  </td> <td>  </td> <td align="right">25</td> <td>  </td> <td>  </td> <td>  </td> <td align="right">22</td> <td>  </td> <td>  </td> <td>  </td> <td align="right">—</td> <td>  </td> <td>  </td> <td>  </td> <td align="right">—</td> <td>  </td> <td>  </td> <td>  </td> <td align="right">22</td> <td>  </td> </tr> <tr style="font-size: 1px;"> <td> <div style="margin-left: 15px; text-indent: -15px;">  </div> </td> <td>  </td> <td style="border-top: #000000 1px solid;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 1px solid;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 1px solid;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 1px solid;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 1px solid;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 1px solid;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 1px solid;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 1px solid;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> </tr> <tr valign="bottom"> <td> <div style="margin-left: 45px; text-indent: -15px;">Total assets</div> </td> <td>  </td> <td align="left">$</td> <td align="right">254</td> <td>  </td> <td>  </td> <td align="left">$</td> <td align="right">844</td> <td>  </td> <td>  </td> <td align="left">$</td> <td align="right">6</td> <td>  </td> <td>  </td> <td align="left">$</td> <td align="right">1,104</td> <td>  </td> <td>  </td> <td align="left">$</td> <td align="right">200</td> <td>  </td> <td>  </td> <td align="left">$</td> <td align="right">911</td> <td>  </td> <td>  </td> <td align="left">$</td> <td align="right">5</td> <td>  </td> <td>  </td> <td align="left">$</td> <td align="right">1,116</td> <td>  </td> </tr> <tr style="font-size: 1px;"> <td> <div style="margin-left: 15px; text-indent: -15px;">  </div> </td> <td>  </td> <td style="border-top: #000000 3px double;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 3px double;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 3px double;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 3px double;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 3px double;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 3px double;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 3px double;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 3px double;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> </tr> <tr valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;">  </div> </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> </tr> <tr style="background: #cceeff;" valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;">Liabilities:</div> </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> </tr> <tr valign="bottom"> <td> <div style="margin-left: 30px; text-indent: -15px;">Energy derivatives</div> </td> <td>  </td> <td align="left">$</td> <td align="right">225</td> <td>  </td> <td>  </td> <td align="left">$</td> <td align="right">498</td> <td>  </td> <td>  </td> <td align="left">$</td> <td align="right">1</td> <td>  </td> <td>  </td> <td align="left">$</td> <td align="right">724</td> <td>  </td> <td>  </td> <td align="left">$</td> <td align="right">177</td> <td>  </td> <td>  </td> <td align="left">$</td> <td align="right">826</td> <td>  </td> <td>  </td> <td align="left">$</td> <td align="right">3</td> <td>  </td> <td>  </td> <td align="left">$</td> <td align="right">1,006</td> <td>  </td> </tr> <tr style="font-size: 1px;"> <td> <div style="margin-left: 15px; text-indent: -15px;">  </div> </td> <td>  </td> <td style="border-top: #000000 1px solid;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 1px solid;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 1px solid;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 1px solid;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 1px solid;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 1px solid;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 1px solid;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 1px solid;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> </tr> <tr style="background: #cceeff;" valign="bottom"> <td> <div style="margin-left: 45px; text-indent: -15px;">Total liabilities</div> </td> <td>  </td> <td align="left">$</td> <td align="right">225</td> <td>  </td> <td>  </td> <td align="left">$</td> <td align="right">498</td> <td>  </td> <td>  </td> <td align="left">$</td> <td align="right">1</td> <td>  </td> <td>  </td> <td align="left">$</td> <td align="right">724</td> <td>  </td> <td>  </td> <td align="left">$</td> <td align="right">177</td> <td>  </td> <td>  </td> <td align="left">$</td> <td align="right">826</td> <td>  </td> <td>  </td> <td align="left">$</td> <td align="right">3</td> <td>  </td> <td>  </td> <td align="left">$</td> <td align="right">1,006</td> <td>  </td> </tr> <tr style="font-size: 1px;"> <td> <div style="margin-left: 15px; text-indent: -15px;">  </div> </td> <td>  </td> <td style="border-top: #000000 3px double;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 3px double;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 3px double;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 3px double;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 3px double;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 3px double;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 3px double;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 3px double;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> </tr> </table> </div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     Energy derivatives include commodity based exchange-traded contracts and OTC contracts. Exchange-traded contracts include futures, swaps, and options. OTC contracts include forwards, swaps and options.</div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     Many contracts have bid and ask prices that can be observed in the market. Our policy is to use a mid-market pricing (the mid-point price between bid and ask prices) convention to value individual positions and then adjust on a portfolio level to a point within the bid and ask range that represents our best estimate of fair value. For offsetting positions by location, the mid-market price is used to measure both the long and short positions.</div> </div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     The determination of fair value for our assets and liabilities also incorporates the time value of money and various credit risk factors which can include the credit standing of the counterparties involved, master netting arrangements, the impact of credit enhancements (such as cash collateral posted and letters of credit) and our nonperformance risk on our liabilities. The determination of the fair value of our liabilities does not consider noncash collateral credit enhancements. <div style="margin-top: 6pt; font-size: 10pt;" align="left">     Exchange-traded contracts include New York Mercantile Exchange and Intercontinental Exchange contracts and are valued based on quoted prices in these active markets and are classified within Level 1.</div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     Forward, swap, and option contracts included in Level 2 are valued using an income approach including present value techniques and option pricing models. Option contracts, which hedge future sales of production from our Exploration & Production segment, are structured as costless collars and are financially settled. They are valued using an industry standard Black-Scholes option pricing model. Significant inputs into our Level 2 valuations include commodity prices, implied volatility by location, and interest rates, as well as considering executed transactions or broker quotes corroborated by other market data. These broker quotes are based on observable market prices at which transactions could currently be executed. In certain instances where these inputs are not observable for all periods, relationships of observable market data and historical observations are used as a means to esti mate fair value. Where observable inputs are available for substantially the full term of the asset or liability, the instrument is categorized in Level 2.</div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     Our derivatives portfolio is largely comprised of exchange-traded products or like products and the tenure of our derivatives portfolio is relatively short with more than 99 percent of the value of our derivatives portfolio expiring in the next 36 months. Due to the nature of the products and tenure, we are consistently able to obtain market pricing. All pricing is reviewed on a daily basis and is formally validated with broker quotes and documented on a monthly basis.</div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     Certain instruments trade in less active markets with lower availability of pricing information. These instruments are valued with a present value technique using inputs that may not be readily observable or corroborated by other market data. These instruments are classified within Level 3 when these inputs have a significant impact on the measurement of fair value. The instruments included in Level 3 at March 31, 2010, consist of natural gas liquids (NGL) swaps and forward contracts for our midstream businesses, including those in our Williams Partners segment, as well as natural gas index transactions that are used to manage the physical requirements of our Exploration & Production segment.</div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     Reclassifications of fair value between Level 1, Level 2, and Level 3 of the fair value hierarchy, if applicable, are made at the end of each quarter. No significant transfers in or out of Level 1 and Level 2 occurred during the period ended March 31, 2010. During the third quarter of 2009, certain Exploration & Production options which hedge future sales of production were transferred from Level 3 to Level 2. These options were originally included in Level 3 because a significant input to the model, implied volatility by location, was considered unobservable. Due to increased transparency, this input was considered observable, and we transferred these options to Level 2.</div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     The following tables present a reconciliation of changes in the fair value of our net energy derivatives and other assets classified as Level 3 in the fair value hierarchy.</div> <div style="margin-top: 18pt; font-size: 10pt;" align="center"><b>Level 3 Fair Value Measurements Using Significant Unobservable Inputs</b></div> <div align="center"> <table style="font-size: 10pt;" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr valign="bottom"> <td width="52%">  </td> <td width="5%">  </td> <td width="1%">  </td> <td width="5%">  </td> <td width="1%">  </td> <td width="5%">  </td> <td width="1%">  </td> <td width="5%">  </td> <td width="1%">  </td> <td width="5%">  </td> <td width="1%">  </td> <td width="5%">  </td> <td width="1%">  </td> <td width="5%">  </td> <td width="1%">  </td> <td width="5%">  </td> <td width="1%">  </td> </tr> <tr style="font-size: 8pt;" valign="bottom"> <td>  </td> <td>  </td> <td style="border-bottom: #000000 1px solid;" align="center" colspan="14" nowrap="nowrap"><b>Three months ended March 31,</b></td> <td>  </td> </tr> <tr style="font-size: 8pt;" valign="bottom"> <td>  </td> <td>  </td> <td style="border-bottom: #000000 1px solid;" align="center" colspan="6" nowrap="nowrap"><b>2010</b></td> <td>  </td> <td>  </td> <td style="border-bottom: #000000 1px solid;" align="center" colspan="6" nowrap="nowrap"><b>2009</b></td> <td>  </td> </tr> <tr style="font-size: 8pt;" valign="bottom"> <td>  </td> <td>  </td> <td align="center" colspan="2"><b>Net Energy</b></td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td align="center" colspan="2"><b>Net Energy</b></td> <td>  </td> <td>  </td> <td align="center" colspan="2">  </td> <td>  </td> </tr> <tr style="font-size: 8pt;" valign="bottom"> <td>  </td> <td>  </td> <td style="border-bottom: #000000 1px solid;" align="center" colspan="2" nowrap="nowrap"><b>Derivatives</b></td> <td>  </td> <td>  </td> <td style="border-bottom: #000000 1px solid;" align="center" colspan="2" nowrap="nowrap"><b>Other Assets</b></td> <td>  </td> <td>  </td> <td style="border-bottom: #000000 1px solid;" align="center" colspan="2" nowrap="nowrap"><b>Derivatives</b></td> <td>  </td> <td>  </td> <td style="border-bottom: #000000 1px solid;" align="center" colspan="2" nowrap="nowrap"><b>Other Assets</b></td> <td>  </td> </tr> <tr style="font-size: 8pt;" valign="bottom"> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td align="center" colspan="6"><b>(Millions)</b></td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> </tr>  <tr style="background: #cceeff;" valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;">Beginning balance</div> </td> <td>  </td> <td align="left">$</td> <td align="right">2</td> <td>  </td> <td>  </td> <td align="left">$</td> <td align="right">—</td> <td>  </td> <td>  </td> <td align="left">$</td> <td align="right">507</td> <td>  </td> <td>  </td> <td align="left">$</td> <td align="right">7</td> <td>  </td> </tr> <tr valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;">Realized and unrealized gains (losses):</div> </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> </tr> <tr style="background: #cceeff;" valign="bottom"> <td> <div style="margin-left: 30px; text-indent: -15px;">Included in <i>income (loss) from continuing operations</i></div> </td> <td>  </td> <td>  </td> <td align="right">—</td> <td>  </td> <td>  </td> <td>  </td> <td align="right">—</td> <td>  </td> <td>  </td> <td>  </td> <td align="right">137</td> <td>  </td> <td>  </td> <td>  </td> <td align="right">—</td> <td>  </td> </tr> <tr valign="bottom"> <td> <div style="margin-left: 30px; text-indent: -15px;">Included in other comprehensive income (loss)</div> </td> <td>  </td> <td>  </td> <td align="right">4</td> <td>  </td> <td>  </td> <td>  </td> <td align="right">—</td> <td>  </td> <td>  </td> <td>  </td> <td align="right">133</td> <td>  </td> <td>  </td> <td>  </td> <td align="right">—</td> <td>  </td> </tr> <tr style="background: #cceeff;" valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;">Purchases, issuances, and settlements</div> </td> <td>  </td> <td align="left">  </td> <td align="right">(1</td> <td>)</td> <td>  </td> <td>  </td> <td align="right">—</td> <td>  </td> <td>  </td> <td align="left">  </td> <td align="right">(138</td> <td>)</td> <td>  </td> <td>  </td> <td align="right">—</td> <td>  </td> </tr> <tr valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;">Transfers into Level 3</div> </td> <td>  </td> <td>  </td> <td align="right">—</td> <td>  </td> <td>  </td> <td>  </td> <td align="right">—</td> <td>  </td> <td>  </td> <td>  </td> <td align="right">—</td> <td>  </td> <td>  </td> <td>  </td> <td align="right">—</td> <td>  </td> </tr> <tr style="background: #cceeff;" valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;">Transfers out of Level 3</div> </td> <td>  </td> <td>  </td> <td align="right">—</td> <td>  </td> <td>  </td> <td>  </td> <td align="right">—</td> <td>  </td> <td>  </td> <td>  </td> <td align="right">—</td> <td>  </td> <td>  </td> <td>  </td> <td align="right">—</td> <td>  </td> </tr> <tr style="font-size: 1px;"> <td> <div style="margin-left: 15px; text-indent: -15px;">  </div> </td> <td>  </td> <td style="border-top: #000000 1px solid;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 1px solid;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 1px solid;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 1px solid;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> </tr> <tr valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;">Ending balance</div> </td> <td>  </td> <td align="left">$</td> <td align="right">5</td> <td>  </td> <td>  </td> <td align="left">$</td> <td align="right">—</td> <td>  </td> <td>  </td> <td align="left">$</td> <td align="right">639</td> <td>  </td> <td>  </td> <td align="left">$</td> <td align="right">7</td> <td>  </td> </tr> <tr style="font-size: 1px;"> <td> <div style="margin-left: 15px; text-indent: -15px;">  </div> </td> <td>  </td> <td style="border-top: #000000 3px double;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 3px double;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 3px double;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 3px double;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> </tr> <tr style="background: #cceeff;" valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;">Unrealized gains (losses) included in <i>income (loss) from continuing operations</i> relating to instruments still held at March 31</div> </td> <td>  </td> <td align="left">$</td> <td align="right">—</td> <td>  </td> <td>  </td> <td align="left">$</td> <td align="right">—</td> <td>  </td> <td>  </td> <td align="left">$</td> <td align="right">—</td> <td>  </td> <td>  </td> <td align="left">$</td> <td align="right">—</td> <td>  </td> </tr> <tr style="font-size: 1px;"> <td> <div style="margin-left: 15px; text-indent: -15px;">  </div> </td> <td>  </td> <td style="border-top: #000000 3px double;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 3px double;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 3px double;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 3px double;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> </tr> </table> </div> </div> </div> <div style="margin-top: 6pt; font-size: 10pt;" align="left"> <div style="margin-top: 12pt; font-size: 10pt;" align="left">     Realized and unrealized gains (losses) included in <i>income (loss) from continuing operations</i> for the above periods are reported in <i>revenues</i> in our Consolidated Statement of Operations.</div> </div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     The following table presents impairments associated with certain assets that have been measured at fair value on a nonrecurring basis within Level 3 of the fair value hierarchy. Certain of these items have been reported within discontinued operations.</div> <div align="center"> <table style="font-size: 10pt;" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr valign="bottom"> <td width="76%">  </td> <td width="5%">  </td> <td width="1%">  </td> <td width="5%">  </td> <td width="1%">  </td> <td width="5%">  </td> <td width="1%">  </td> <td width="5%">  </td> <td width="1%">  </td> </tr> <tr style="font-size: 8pt;" valign="bottom"> <td>  </td> <td>  </td> <td align="center" colspan="6"><b>Total losses for</b></td> <td>  </td> </tr> <tr style="font-size: 8pt;" valign="bottom"> <td>  </td> <td>  </td> <td align="center" colspan="6"><b>three months ended</b></td> <td>  </td> </tr> <tr style="font-size: 8pt;" valign="bottom"> <td>  </td> <td>  </td> <td style="border-bottom: #000000 1px solid;" align="center" colspan="6" nowrap="nowrap"><b>March 31,</b></td> <td>  </td> </tr> <tr style="font-size: 8pt;" valign="bottom"> <td>  </td> <td>  </td> <td style="border-bottom: #000000 1px solid;" align="center" colspan="2" nowrap="nowrap"><b>2010</b></td> <td>  </td> <td>  </td> <td style="border-bottom: #000000 1px solid;" align="center" colspan="2" nowrap="nowrap"><b>2009</b></td> <td>  </td> </tr> <tr style="font-size: 8pt;" valign="bottom"> <td>  </td> <td>  </td> <td align="center" colspan="6"><b>(Millions)</b></td> <td>  </td> </tr>  <tr style="background: #cceeff;" valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;">Impairments:</div> </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> </tr> <tr valign="bottom"> <td> <div style="margin-left: 30px; text-indent: -15px;">Venezuelan property – Other</div> </td> <td>  </td> <td align="left">$</td> <td align="right">—</td> <td>  </td> <td>  </td> <td align="left">$</td> <td align="right">211</td> <td>(a)</td> </tr> <tr style="background: #cceeff;" valign="bottom"> <td> <div style="margin-left: 30px; text-indent: -15px;">Investment in Accroven – Other</div> </td> <td>  </td> <td>  </td> <td align="right">—</td> <td>  </td> <td>  </td> <td align="left">  </td> <td align="right">75</td> <td>(b)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left: 30px; text-indent: -15px;">Cost-based investment – Exploration & Production</div> </td> <td>  </td> <td>  </td> <td align="right">—</td> <td>  </td> <td>  </td> <td align="left">  </td> <td align="right">11</td> <td>(c)</td> </tr> <tr style="font-size: 1px;"> <td> <div style="margin-left: 15px; text-indent: -15px;">  </div> </td> <td>  </td> <td style="border-top: #000000 1px solid;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 1px solid;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> </tr> <tr style="background: #cceeff;" valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;">  </div> </td> <td>  </td> <td align="left">$</td> <td align="right">—</td> <td>  </td> <td>  </td> <td align="left">$</td> <td align="right">297</td> <td>  </td> </tr> <tr style="font-size: 1px;"> <td> <div style="margin-left: 15px; text-indent: -15px;">  </div> </td> <td>  </td> <td style="border-top: #000000 3px double;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 3px double;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> </tr> </table> </div> <div align="left"> <div style="border-top: #000000 1px solid; margin-top: 16pt; font-size: 3pt; width: 18%;"></div> </div> <table style="font-size: 10pt;" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td width="3%"></td> <td width="1%"></td> <td width="96"></td> </tr> <tr valign="top"> <td align="left">(a)</td> <td>  </td> <td>Fair value measured at March 31, 2009, was $106 million. This value was based on our estimates of probability-weighted discounted cash flows that considered (1) the continued operation of the assets considering different scenarios of outcome, (2) the purchase of the assets by Petróleos de Venezuela S.A., (3) the results of arbitration with varying degrees of award and collection, and (4) an after-tax discount rate of 20 percent.</td> </tr> <tr style="font-size: 3pt;"> <td>  </td> </tr> <tr valign="top"> <td align="left">(b)</td> <td>  </td> <td>Fair value measured at March 31, 2009, was zero. This value was determined based on a probability-weighted discounted cash flow analysis that considered the deteriorating circumstances in Venezuela.</td> </tr> <tr style="font-size: 3pt;"> <td>  </td> </tr> <tr valign="top"> <td align="left">(c)</td> <td>  </td> <td>Fair value measured at March 31, 2009, was zero. This value was based on an other-than-temporary decline in the value of our investment considering the deteriorating financial condition of a Venezuelan corporation in which Exploration & Production has a 4 percent interest.</td> </tr> </table> </div></div></div> </div>

1011000000

2000000

-195000000

19000000

-148000000

-0.33

-243000000

2000000

-174000000

2000000

-0.30

-0.29

<div> <div><div><div> <div style="margin-top: 12pt; font-size: 10pt;" align="left"><b>Note 5. Provision (Benefit) for Income Taxes</b></div>  <div style="margin-top: 6pt; font-size: 10pt;" align="left">     The <i>provision (benefit) for income taxes</i> from continuing operations includes:</div> <div align="center"> <table style="font-size: 10pt;" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr valign="bottom"> <td width="76%">  </td> <td width="5%">  </td> <td width="1%">  </td> <td width="5%">  </td> <td width="1%">  </td> <td width="5%">  </td> <td width="1%">  </td> <td width="5%">  </td> <td width="1%">  </td> </tr> <tr style="font-size: 8pt;" valign="bottom"> <td>  </td> <td>  </td> <td style="border-bottom: #000000 1px solid;" align="center" colspan="6" nowrap="nowrap"><b>Three months ended March 31,</b></td> <td>  </td> </tr> <tr style="font-size: 8pt;" valign="bottom"> <td>  </td> <td>  </td> <td style="border-bottom: #000000 1px solid;" align="center" colspan="2" nowrap="nowrap"><b>2010</b></td> <td>  </td> <td>  </td> <td style="border-bottom: #000000 1px solid;" align="center" colspan="2" nowrap="nowrap"><b>2009</b></td> <td>  </td> </tr> <tr style="font-size: 8pt;" valign="bottom"> <td>  </td> <td>  </td> <td align="center" colspan="6"><b>(Millions)</b></td> <td>  </td> </tr>  <tr style="background: #cceeff;" valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;">Current:</div> </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> </tr> <tr valign="bottom"> <td> <div style="margin-left: 30px; text-indent: -15px;">Federal</div> </td> <td>  </td> <td align="left">$</td> <td align="right">(115</td> <td>)</td> <td>  </td> <td align="left">$</td> <td align="right">12</td> <td>  </td> </tr> <tr style="background: #cceeff;" valign="bottom"> <td> <div style="margin-left: 30px; text-indent: -15px;">State</div> </td> <td>  </td> <td align="left">  </td> <td align="right">(14</td> <td>)</td> <td>  </td> <td>  </td> <td align="right">2</td> <td>  </td> </tr> <tr valign="bottom"> <td> <div style="margin-left: 30px; text-indent: -15px;">Foreign</div> </td> <td>  </td> <td>  </td> <td align="right">5</td> <td>  </td> <td>  </td> <td>  </td> <td align="right">4</td> <td>  </td> </tr> <tr style="font-size: 1px;"> <td> <div style="margin-left: 15px; text-indent: -15px;">  </div> </td> <td>  </td> <td style="border-top: #000000 1px solid;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 1px solid;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> </tr> <tr style="background: #cceeff;" valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;">  </div> </td> <td>  </td> <td align="left">  </td> <td align="right">(124</td> <td>)</td> <td>  </td> <td>  </td> <td align="right">18</td> <td>  </td> </tr> <tr valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;">Deferred:</div> </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> </tr> <tr style="background: #cceeff;" valign="bottom"> <td> <div style="margin-left: 30px; text-indent: -15px;">Federal</div> </td> <td>  </td> <td>  </td> <td align="right">24</td> <td>  </td> <td>  </td> <td>  </td> <td align="right">34</td> <td>  </td> </tr> <tr valign="bottom"> <td> <div style="margin-left: 30px; text-indent: -15px;">State</div> </td> <td>  </td> <td>  </td> <td align="right">3</td> <td>  </td> <td>  </td> <td>  </td> <td align="right">4</td> <td>  </td> </tr> <tr style="background: #cceeff;" valign="bottom"> <td> <div style="margin-left: 30px; text-indent: -15px;">Foreign</div> </td> <td>  </td> <td>  </td> <td align="right">2</td> <td>  </td> <td>  </td> <td>  </td> <td align="right">—</td> <td>  </td> </tr> <tr style="font-size: 1px;"> <td> <div style="margin-left: 15px; text-indent: -15px;">  </div> </td> <td>  </td> <td style="border-top: #000000 1px solid;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 1px solid;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> </tr> <tr valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;">  </div> </td> <td>  </td> <td>  </td> <td align="right">29</td> <td>  </td> <td>  </td> <td>  </td> <td align="right">38</td> <td>  </td> </tr> <tr style="font-size: 1px;"> <td> <div style="margin-left: 15px; text-indent: -15px;">  </div> </td> <td>  </td> <td style="border-top: #000000 1px solid;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 1px solid;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> </tr> <tr style="background: #cceeff;" valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;">Total provision (benefit)</div> </td> <td>  </td> <td align="left">$</td> <td align="right">(95</td> <td>)</td> <td>  </td> <td align="left">$</td> <td align="right">56</td> <td>  </td> </tr> <tr style="font-size: 1px;"> <td> <div style="margin-left: 15px; text-indent: -15px;">  </div> </td> <td>  </td> <td style="border-top: #000000 3px double;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 3px double;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> </tr> </table> </div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     The effective income tax rate on the total benefit for the three months ended March 31, 2010, is greater than the federal statutory rate primarily due to the effect of state income taxes and the impact of nontaxable noncontrolling interests partially offset by the reduction of tax benefits on the Medicare Part D federal subsidy due to enacted healthcare legislation.</div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     The effective income tax rate on the total provision for the three months ended March 31, 2009, is greater than the federal statutory rate primarily due to the effect of state income taxes and the limitation of tax benefits associated with impairments of certain Venezuelan investments (see Note 4), partially offset by the impact of nontaxable noncontrolling interests.</div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     During the next 12 months, we do not expect ultimate resolution of any uncertain tax position associated with a domestic or international matter will result in a significant increase or decrease of our unrecognized tax benefit. However, certain matters we have contested to the Internal Revenue Service Appeals Division could be resolved and result in a reduction to our unrecognized tax benefit.</div> </div></div></div> </div>

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<div> <div><div><div> <div style="margin-top: 12pt; font-size: 10pt;" align="left"><b>Note 8. Inventories</b></div>  <div align="center"> <table style="font-size: 10pt;" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr valign="bottom"> <td width="76%">  </td> <td width="5%">  </td> <td width="1%">  </td> <td width="5%">  </td> <td width="1%">  </td> <td width="5%">  </td> <td width="1%">  </td> <td width="5%">  </td> <td width="1%">  </td> </tr> <tr style="font-size: 8pt;" valign="bottom"> <td>  </td> <td>  </td> <td align="center" colspan="2"><b>March 31,</b></td> <td>  </td> <td>  </td> <td align="center" colspan="2"><b>December 31,</b></td> <td>  </td> </tr> <tr style="font-size: 8pt;" valign="bottom"> <td>  </td> <td>  </td> <td style="border-bottom: #000000 1px solid;" align="center" colspan="2" nowrap="nowrap"><b>2010</b></td> <td>  </td> <td>  </td> <td style="border-bottom: #000000 1px solid;" align="center" colspan="2" nowrap="nowrap"><b>2009</b></td> <td>  </td> </tr> <tr style="font-size: 8pt;" valign="bottom"> <td>  </td> <td>  </td> <td align="center" colspan="6"><b>(Millions)</b></td> <td>  </td> </tr>  <tr style="background: #cceeff;" valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;">Natural gas liquids and olefins</div> </td> <td>  </td> <td align="left">$</td> <td align="right">64</td> <td>  </td> <td>  </td> <td align="left">$</td> <td align="right">70</td> <td>  </td> </tr> <tr valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;">Natural gas in underground storage</div> </td> <td>  </td> <td>  </td> <td align="right">46</td> <td>  </td> <td>  </td> <td>  </td> <td align="right">47</td> <td>  </td> </tr> <tr style="background: #cceeff;" valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;">Materials, supplies, and other</div> </td> <td>  </td> <td>  </td> <td align="right">111</td> <td>  </td> <td>  </td> <td>  </td> <td align="right">105</td> <td>  </td> </tr> <tr style="font-size: 1px;"> <td> <div style="margin-left: 15px; text-indent: -15px;">  </div> </td> <td>  </td> <td style="border-top: #000000 1px solid;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 1px solid;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> </tr> <tr valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;">  </div> </td> <td>  </td> <td align="left">$</td> <td align="right">221</td> <td>  </td> <td>  </td> <td align="left">$</td> <td align="right">222</td> <td>  </td> </tr> <tr style="font-size: 1px;"> <td> <div style="margin-left: 15px; text-indent: -15px;">  </div> </td> <td>  </td> <td style="border-top: #000000 3px double;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 3px double;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> </tr> </table> </div>  <div style="margin-top: 12pt; font-size: 10pt;" align="left">  </div> </div></div></div> </div>

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<div> <div><div><div> <div style="margin-top: 12pt; font-size: 10pt;" align="left"><b>Note 2. Basis of Presentation</b></div>  <div style="margin-top: 6pt; font-size: 10pt;" align="left"><b><i>Strategic Restructuring</i></b></div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     Our strategic restructuring completed during the first quarter of 2010 resulted in contributing businesses that were in our previously reported Gas Pipeline and Midstream Gas & Liquids (Midstream) segments into our consolidated master limited partnership, WPZ. The contributed Gas Pipeline businesses included 100 percent of Transcontinental Gas Pipe Line Company, LLC (Transco), 65 percent of Northwest Pipeline GP (Northwest Pipeline), and 24.5 percent of Gulfstream Natural Gas System, L.L.C. (Gulfstream). We also contributed our general and limited partner interests in Williams Pipeline Partners L.P. (WMZ), which owns the remaining 35 percent of Northwest Pipeline. The contributed Midstream businesses include significant, large-scale operations in the Rocky Mountain and Gulf Coast regions, as well as a business in Pennsylvania’s Marcellus Sha le region, and various equity investments in domestic processing and fractionation assets. Our remaining 25.5 percent ownership interest in Gulfstream and our Canadian, Venezuelan, and olefins operations were excluded from the transaction. Additionally, our Exploration & Production segment was not included in this transaction.</div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     As a result of the restructuring, we have changed our segment reporting structure to align with the new parent-level focus employed by our chief operating decision-maker considering the resource allocation and governance associated with managing WPZ as a distinctly separate entity. Beginning this quarter, our reportable segments are Williams Partners, Exploration & Production, and Other.</div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     William Partners consists of our consolidated master limited partnership WPZ, including the gas pipeline and midstream businesses that were contributed as part of our previously described strategic restructuring. WPZ also includes other significant midstream operations and investments in the Four Corners and Gulf Coast regions, as well as an NGL fractionator and storage facilities near Conway, Kansas.</div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     Exploration & Production includes natural gas development, production and gas management activities primarily in the Rocky Mountain and Mid-Continent regions of the United States, development activities in the Eastern portion of the United States and oil and natural gas interests in South America. The gas management activities include procuring fuel and shrink gas for our midstream businesses and providing marketing to third parties, such as producers. Additionally, gas management activities include the managing of various natural gas related contracts such as transportation, storage, related hedges and proprietary trading positions not utilized for our own production.</div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     Other includes our Canadian midstream and domestic olefins operations, a 25.5 percent interest in Gulfstream, as well as corporate operations.</div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     Prior periods have been recast to reflect this revised segment presentation.</div> <div style="margin-top: 6pt; font-size: 10pt;" align="left"> <div style="margin-top: 6pt; font-size: 10pt;" align="left"><b><i>Master Limited Partnerships</i></b></div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     Upon completing our strategic restructuring, we now own approximately 84 percent of the interests in WPZ, including the interests of the general partner, which is wholly owned by us, and incentive distribution rights. Prior to the restructuring, we owned approximately 23.6 percent of WPZ and consolidated it due to our control of the general partner. The change in WPZ ownership between us and the noncontrolling interests has been accounted for as an equity transaction, resulting in a $800 million decrease to <i>capital in excess of par value</i> and a corresponding increase to <i>noncontrolling interests in consolidated subsidiaries</i>.</div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     WPZ is expected to be self-funding and maintains separate lines of bank credit and cash management accounts. Cash distributions from WPZ to us, including any associated with our incentive distribution rights, are expected to occur through the normal partnership distributions from WPZ to all partners.</div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     As of March 31, 2010, WPZ owns approximately 47.7 percent of the interests in WMZ, including the interests of the general partner, which is wholly owned by WPZ, and incentive distribution rights. WPZ consolidates WMZ due to its control through the general partner.</div> <div style="margin-top: 12pt; font-size: 10pt;" align="left"><b><i>Discontinued Operations</i></b></div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     The accompanying consolidated financial statements and notes reflect the results of operations and financial position of certain of our Venezuela operations and other former businesses as discontinued operations. (See Note 3.)</div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     Unless indicated otherwise, the information in the Notes to Consolidated Financial Statements relates to our continuing operations.</div> </div> </div></div></div> </div>

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<div> <div><div><div> <div style="margin-top: 12pt; font-size: 10pt;" align="left"><b>Note 7. Employee Benefit Plans</b></div>  <div style="margin-top: 6pt; font-size: 10pt;" align="left">     <i>Net periodic benefit expense</i> is as follows:</div> <div align="center"> <table style="font-size: 10pt;" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr valign="bottom"> <td width="52%">  </td> <td width="5%">  </td> <td width="1%">  </td> <td width="5%">  </td> <td width="1%">  </td> <td width="5%">  </td> <td width="1%">  </td> <td width="5%">  </td> <td width="1%">  </td> <td width="5%">  </td> <td width="1%">  </td> <td width="5%">  </td> <td width="1%">  </td> <td width="5%">  </td> <td width="1%">  </td> <td width="5%">  </td> <td width="1%">  </td> </tr> <tr style="font-size: 8pt;" valign="bottom"> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td align="center" colspan="6"><b>Other Postretirement</b></td> <td>  </td> </tr> <tr style="font-size: 8pt;" valign="bottom"> <td>  </td> <td>  </td> <td style="border-bottom: #000000 1px solid;" align="center" colspan="6" nowrap="nowrap"><b>Pension Benefits</b></td> <td>  </td> <td>  </td> <td style="border-bottom: #000000 1px solid;" align="center" colspan="6" nowrap="nowrap"><b>Benefits</b></td> <td>  </td> </tr> <tr style="font-size: 8pt;" valign="bottom"> <td>  </td> <td>  </td> <td align="center" colspan="6"><b>Three months</b></td> <td>  </td> <td>  </td> <td align="center" colspan="6"><b>Three months</b></td> <td>  </td> </tr> <tr style="font-size: 8pt;" valign="bottom"> <td>  </td> <td>  </td> <td style="border-bottom: #000000 1px solid;" align="center" colspan="6" nowrap="nowrap"><b>ended March 31,</b></td> <td>  </td> <td>  </td> <td style="border-bottom: #000000 1px solid;" align="center" colspan="6" nowrap="nowrap"><b>ended March 31,</b></td> <td>  </td> </tr> <tr style="font-size: 8pt;" valign="bottom"> <td>  </td> <td>  </td> <td style="border-bottom: #000000 1px solid;" align="center" colspan="2" nowrap="nowrap"><b>2010</b></td> <td>  </td> <td>  </td> <td style="border-bottom: #000000 1px solid;" align="center" colspan="2" nowrap="nowrap"><b>2009</b></td> <td>  </td> <td>  </td> <td style="border-bottom: #000000 1px solid;" align="center" colspan="2" nowrap="nowrap"><b>2010</b></td> <td>  </td> <td>  </td> <td style="border-bottom: #000000 1px solid;" align="center" colspan="2" nowrap="nowrap"><b>2009</b></td> <td>  </td> </tr> <tr style="font-size: 8pt;" valign="bottom"> <td>  </td> <td>  </td> <td align="center" colspan="14"><b>(Millions)</b></td> <td>  </td> </tr>  <tr style="background: #cceeff;" valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;">Components of net periodic benefit expense:</div> </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> </tr> <tr valign="bottom"> <td> <div style="margin-left: 30px; text-indent: -15px;">Service cost</div> </td> <td>  </td> <td align="left">$</td> <td align="right">8</td> <td>  </td> <td>  </td> <td align="left">$</td> <td align="right">7</td> <td>  </td> <td>  </td> <td align="left">$</td> <td align="right">1</td> <td>  </td> <td>  </td> <td align="left">$</td> <td align="right">—</td> <td>  </td> </tr> <tr style="background: #cceeff;" valign="bottom"> <td> <div style="margin-left: 30px; text-indent: -15px;">Interest cost</div> </td> <td>  </td> <td>  </td> <td align="right">16</td> <td>  </td> <td>  </td> <td>  </td> <td align="right">15</td> <td>  </td> <td>  </td> <td>  </td> <td align="right">4</td> <td>  </td> <td>  </td> <td>  </td> <td align="right">4</td> <td>  </td> </tr> <tr valign="bottom"> <td> <div style="margin-left: 30px; text-indent: -15px;">Expected return on plan assets</div> </td> <td>  </td> <td align="left">  </td> <td align="right">(18</td> <td>)</td> <td>  </td> <td align="left">  </td> <td align="right">(14</td> <td>)</td> <td>  </td> <td align="left">  </td> <td align="right">(3</td> <td>)</td> <td>  </td> <td align="left">  </td> <td align="right">(2</td> <td>)</td> </tr> <tr style="background: #cceeff;" valign="bottom"> <td> <div style="margin-left: 30px; text-indent: -15px;">Amortization of prior service credit</div> </td> <td>  </td> <td>  </td> <td align="right">—</td> <td>  </td> <td>  </td> <td>  </td> <td align="right">—</td> <td>  </td> <td>  </td> <td align="left">  </td> <td align="right">(3</td> <td>)</td> <td>  </td> <td align="left">  </td> <td align="right">(2</td> <td>)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left: 30px; text-indent: -15px;">Amortization of net actuarial loss</div> </td> <td>  </td> <td>  </td> <td align="right">9</td> <td>  </td> <td>  </td> <td>  </td> <td align="right">11</td> <td>  </td> <td>  </td> <td>  </td> <td align="right">—</td> <td>  </td> <td>  </td> <td>  </td> <td align="right">1</td> <td>  </td> </tr> <tr style="background: #cceeff;" valign="bottom"> <td> <div style="margin-left: 30px; text-indent: -15px;">Amortization of regulatory asset</div> </td> <td>  </td> <td>  </td> <td align="right">—</td> <td>  </td> <td>  </td> <td>  </td> <td align="right">—</td> <td>  </td> <td>  </td> <td>  </td> <td align="right">—</td> <td>  </td> <td>  </td> <td>  </td> <td align="right">1</td> <td>  </td> </tr> <tr style="font-size: 1px;"> <td> <div style="margin-left: 15px; text-indent: -15px;">  </div> </td> <td>  </td> <td style="border-top: #000000 1px solid;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 1px solid;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 1px solid;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 1px solid;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> </tr> <tr valign="bottom"> <td> <div style="margin-left: 30px; text-indent: -15px;">Net periodic benefit expense (income)</div> </td> <td>  </td> <td align="left">$</td> <td align="right">15</td> <td>  </td> <td>  </td> <td align="left">$</td> <td align="right">19</td> <td>  </td> <td>  </td> <td align="left">$</td> <td align="right">(1</td> <td>)</td> <td>  </td> <td align="left">$</td> <td align="right">2</td> <td>  </td> </tr> <tr style="font-size: 1px;"> <td> <div style="margin-left: 15px; text-indent: -15px;">  </div> </td> <td>  </td> <td style="border-top: #000000 3px double;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 3px double;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 3px double;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 3px double;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> </tr> </table> </div> <p style="font-size: 10pt;" align="center">     </p> <p style="font-size: 10pt;" align="left">     During the three months ended March 31, 2010, we contributed $15 million to our pension plans and $4 million to our other postretirement benefit plans. We presently anticipate making additional contributions of approximately $46 million to our pension plans and approximately $12 million to our other postretirement benefit plans in the remainder of 2010.</p> </div></div></div> </div>

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<div> <div><div><div> <div style="margin-top: 12pt; font-size: 10pt;" align="left"><b>Note 3. Discontinued Operations</b></div>  <div style="margin-top: 6pt; font-size: 10pt;" align="left"><b><i>Summarized Results of Discontinued Operations</i></b></div> <div align="center"> <table style="font-size: 10pt;" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr valign="bottom"> <td width="76%">  </td> <td width="5%">  </td> <td width="1%">  </td> <td width="5%">  </td> <td width="1%">  </td> <td width="5%">  </td> <td width="1%">  </td> <td width="5%">  </td> <td width="1%">  </td> </tr> <tr style="font-size: 8pt;" valign="bottom"> <td>  </td> <td>  </td> <td style="border-bottom: #000000 1px solid;" align="center" colspan="6" nowrap="nowrap"><b>Three months ended March 31,</b></td> <td>  </td> </tr> <tr style="font-size: 8pt;" valign="bottom"> <td>  </td> <td>  </td> <td style="border-bottom: #000000 1px solid;" align="center" colspan="2" nowrap="nowrap"><b>2010</b></td> <td>  </td> <td>  </td> <td style="border-bottom: #000000 1px solid;" align="center" colspan="2" nowrap="nowrap"><b>2009</b></td> <td>  </td> </tr> <tr style="font-size: 8pt;" valign="bottom"> <td>  </td> <td>  </td> <td align="center" colspan="6"><b>(Millions)</b></td> <td>  </td> </tr>  <tr style="background: #cceeff;" valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;">Income (loss) from discontinued operations before impairments and income taxes</div> </td> <td>  </td> <td align="left">$</td> <td align="right">5</td> <td>  </td> <td>  </td> <td align="left">$</td> <td align="right">(102</td> <td>)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;">Impairments</div> </td> <td>  </td> <td>  </td> <td align="right">—</td> <td>  </td> <td>  </td> <td align="left">  </td> <td align="right">(211</td> <td>)</td> </tr> <tr style="background: #cceeff;" valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;">(Provision) benefit for income taxes</div> </td> <td>  </td> <td align="left">  </td> <td align="right">(3</td> <td>)</td> <td>  </td> <td>  </td> <td align="right">70</td> <td>  </td> </tr> <tr style="font-size: 1px;"> <td> <div style="margin-left: 15px; text-indent: -15px;">  </div> </td> <td>  </td> <td style="border-top: #000000 1px solid;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 1px solid;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> </tr> <tr valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;">Income (loss) from discontinued operations</div> </td> <td>  </td> <td align="left">$</td> <td align="right">2</td> <td>  </td> <td>  </td> <td align="left">$</td> <td align="right">(243</td> <td>)</td> </tr> <tr style="font-size: 1px;"> <td> <div style="margin-left: 15px; text-indent: -15px;">  </div> </td> <td>  </td> <td style="border-top: #000000 3px double;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 3px double;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> </tr> <tr valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;">  </div> </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> </tr> <tr style="background: #cceeff;" valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;">Income (loss) from discontinued operations:</div> </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> </tr> <tr valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;">Attributable to noncontrolling interests</div> </td> <td>  </td> <td align="left">$</td> <td align="right">—</td> <td>  </td> <td>  </td> <td align="left">$</td> <td align="right">(69</td> <td>)</td> </tr> <tr style="background: #cceeff;" valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;">Attributable to The Williams Companies, Inc.</div> </td> <td>  </td> <td align="left">$</td> <td align="right">2</td> <td>  </td> <td>  </td> <td align="left">$</td> <td align="right">(174</td> <td>)</td> </tr> </table> </div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     <i>Income (loss) from discontinued operations before impairments and income taxes</i> for the three months ended March 31, 2009, primarily includes losses related to our discontinued Venezuela operations, including $48 million of bad debt expense and a $30 million net charge related to the write-off of certain deferred charges and credits.</div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     <i>Impairments</i> for the three months ended March 31, 2009, reflects a $211 million impairment of our Venezuela property, plant, and equipment.</div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     <i>(Provision) benefit for income taxes</i> for the three months ended March 31, 2009, includes a $76 million benefit from the reversal of deferred tax balances related to our discontinued Venezuela operations.</div> </div></div></div> </div>

<div> <div><div><div> <div style="margin-top: 12pt; font-size: 10pt;" align="left"><b>Note 13. Segment Disclosures</b></div>  <div style="margin-top: 6pt; font-size: 10pt;" align="left">     In February 2010, we completed our strategic restructuring that resulted in a revision to our segment reporting structure. Beginning with first-quarter 2010 reporting, our reportable segments are Williams Partners, Exploration & Production, and Other. (See Note 2.)</div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     Our segment presentation of Williams Partners is reflective of the parent-level focus by our chief operating decision-maker, considering the resource allocation and governance provisions associated with this master limited partnership structure. Following our restructuring, this entity maintains a capital and cash management structure that is separate from ours. Williams Partners is expected to be self-funding and maintains its own lines of bank credit and cash management accounts. These factors, coupled with a different cost of capital from our other businesses, serve to differentiate the management of this entity as a whole.</div> <div style="margin-top: 12pt; font-size: 10pt;" align="left"><b><i>Performance Measurement</i></b></div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     We currently evaluate segment operating performance based upon <i>segment profit (loss)</i> from operations, which includes <i>segment revenues</i> from external and internal customers, <i>segment costs and expenses</i>, <i>equity earnings (losses)</i> and <i>income (loss) from investments</i>. Intersegment sales are generally accounted for at current market prices as if the sales were to unaffiliated third parties.</div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     The primary types of costs and operating expenses by segment can be generally summarized as follows:</div> <div style="margin-top: 6pt;"> <table style="font-size: 10pt;" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr style="font-size: 10pt; background: none transparent scroll repeat 0% 0%; color: #000000;" valign="top"> <td style="background: none transparent scroll repeat 0% 0%;" width="2%">  </td> <td align="left" width="3%"><b>•</b></td> <td width="1%">  </td> <td>Williams Partners – commodity purchases (primarily for NGL and crude marketing, shrink and fuel), depreciation and operation and maintenance expenses;</td> </tr> <tr> <td style="font-size: 6pt;">  </td> </tr> <tr style="font-size: 10pt; background: none transparent scroll repeat 0% 0%; color: #000000;" valign="top"> <td style="background: none transparent scroll repeat 0% 0%;" width="2%">  </td> <td align="left" width="3%"><b>•</b></td> <td width="1%">  </td> <td>Exploration & Production – commodity purchases (primarily in support of commodity marketing and risk management activities), depletion, depreciation and amortization, lease and facility operating expenses and operating taxes;</td> </tr> <tr> <td style="font-size: 6pt;">  </td> </tr> <tr style="font-size: 10pt; background: none transparent scroll repeat 0% 0%; color: #000000;" valign="top"> <td style="background: none transparent scroll repeat 0% 0%;" width="2%">  </td> <td align="left" width="3%"><b>•</b></td> <td width="1%">  </td> <td>Other – commodity purchases (primarily for shrink, feedstock and NGL and olefin marketing activities), depreciation and operation and maintenance expenses.</td> </tr> </table> </div> <p style="font-size: 10pt;" align="left">     The following table reflects the reconciliation of <i>segment revenues</i> and <i>segment profit (loss)</i> to <i>revenues</i> and <i>operating income</i> as reported in the Consolidated Statement of Operations.</p> <table style="font-size: 10pt;" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr valign="bottom"> <td width="40%">  </td> <td width="5%">  </td> <td width="1%">  </td> <td width="5%">  </td> <td width="1%">  </td> <td width="5%">  </td> <td width="1%">  </td> <td width="5%">  </td> <td width="1%">  </td> <td width="5%">  </td> <td width="1%">  </td> <td width="5%">  </td> <td width="1%">  </td> <td width="5%">  </td> <td width="1%">  </td> <td width="5%">  </td> <td width="1%">  </td> <td width="5%">  </td> <td width="1%">  </td> <td width="5%">  </td> <td width="1%">  </td> </tr> <tr style="font-size: 8pt;" valign="bottom"> <td>  </td> <td>  </td> <td align="center" colspan="2"></td> <td>  </td> <td>  </td> <td align="center" colspan="2"><b>Exploration</b></td> <td>  </td> <td>  </td> <td align="center" colspan="2">  </td> <td>  </td> <td>  </td> <td align="center" colspan="2">  </td> <td>  </td> <td>  </td> <td align="center" colspan="2">  </td> <td>  </td> </tr> <tr style="font-size: 8pt;" valign="bottom"> <td>  </td> <td>  </td> <td align="center" colspan="2"><b>Williams</b></td> <td>  </td> <td>  </td> <td align="center" colspan="2"><b>&</b></td> <td>  </td> <td>  </td> <td align="center" colspan="2">  </td> <td>  </td> <td>  </td> <td align="center" colspan="2">  </td> <td>  </td> <td>  </td> <td align="center" colspan="2">  </td> <td>  </td> </tr> <tr style="font-size: 8pt;" valign="bottom"> <td>  </td> <td>  </td> <td style="border-bottom: #000000 1px solid;" align="center" colspan="2" nowrap="nowrap"><b>Partners</b></td> <td>  </td> <td>  </td> <td style="border-bottom: #000000 1px solid;" align="center" colspan="2" nowrap="nowrap"><b>Production</b></td> <td>  </td> <td>  </td> <td style="border-bottom: #000000 1px solid;" align="center" colspan="2" nowrap="nowrap"><b>Other</b></td> <td>  </td> <td>  </td> <td style="border-bottom: #000000 1px solid;" align="center" colspan="2" nowrap="nowrap"><b>Eliminations</b></td> <td>  </td> <td>  </td> <td style="border-bottom: #000000 1px solid;" align="center" colspan="2" nowrap="nowrap"><b>Total</b></td> <td>  </td> </tr> <tr style="font-size: 8pt;" valign="bottom"> <td>  </td> <td>  </td> <td align="center" colspan="19"><b>(Millions)</b></td> </tr> <tr style="background: #cceeff;" valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;"><b><i>Three months ended March 31, 2010</i></b></div> </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> </tr> <tr valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;">Segment revenues:</div> </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> </tr> <tr style="background: #cceeff;" valign="bottom"> <td> <div style="margin-left: 30px; text-indent: -15px;">External</div> </td> <td>  </td> <td align="left">$</td> <td align="right">1,391</td> <td>  </td> <td>  </td> <td align="left">$</td> <td align="right">936</td> <td>  </td> <td>  </td> <td align="left">$</td> <td align="right">269</td> <td>  </td> <td>  </td> <td align="left">$</td> <td align="right">—</td> <td>  </td> <td>  </td> <td align="left">$</td> <td align="right">2,596</td> <td>  </td> </tr> <tr valign="bottom"> <td> <div style="margin-left: 30px; text-indent: -15px;">Internal</div> </td> <td>  </td> <td>  </td> <td align="right">67</td> <td>  </td> <td>  </td> <td>  </td> <td align="right">232</td> <td>  </td> <td>  </td> <td>  </td> <td align="right">9</td> <td>  </td> <td>  </td> <td align="left">  </td> <td align="right">(308</td> <td>)</td> <td>  </td> <td>  </td> <td align="right">—</td> <td>  </td> </tr> <tr style="font-size: 1px;"> <td> <div style="margin-left: 15px; text-indent: -15px;">  </div> </td> <td>  </td> <td style="border-top: #000000 1px solid;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 1px solid;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 1px solid;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 1px solid;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 1px solid;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> </tr> <tr style="background: #cceeff;" valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;">Total revenues</div> </td> <td>  </td> <td align="left">$</td> <td align="right">1,458</td> <td>  </td> <td>  </td> <td align="left">$</td> <td align="right">1,168</td> <td>  </td> <td>  </td> <td align="left">$</td> <td align="right">278</td> <td>  </td> <td>  </td> <td align="left">$</td> <td align="right">(308</td> <td>)</td> <td>  </td> <td align="left">$</td> <td align="right">2,596</td> <td>  </td> </tr> <tr style="font-size: 1px;"> <td> <div style="margin-left: 15px; text-indent: -15px;">  </div> </td> <td>  </td> <td style="border-top: #000000 3px double;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 3px double;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 3px double;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 3px double;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 3px double;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> </tr> <tr valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;">Segment profit</div> </td> <td>  </td> <td align="left">$</td> <td align="right">414</td> <td>  </td> <td>  </td> <td align="left">$</td> <td align="right">162</td> <td>  </td> <td>  </td> <td align="left">$</td> <td align="right">27</td> <td>  </td> <td>  </td> <td align="left">$</td> <td align="right">—</td> <td>  </td> <td>  </td> <td align="left">$</td> <td align="right">603</td> <td>  </td> </tr> <tr style="background: #cceeff;" valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;">Less equity earnings</div> </td> <td>  </td> <td>  </td> <td align="right">26</td> <td>  </td> <td>  </td> <td>  </td> <td align="right">5</td> <td>  </td> <td>  </td> <td>  </td> <td align="right">9</td> <td>  </td> <td>  </td> <td>  </td> <td align="right">—</td> <td>  </td> <td>  </td> <td>  </td> <td align="right">40</td> <td>  </td> </tr> <tr style="font-size: 1px;"> <td> <div style="margin-left: 15px; text-indent: -15px;">  </div> </td> <td>  </td> <td style="border-top: #000000 1px solid;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 1px solid;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 1px solid;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 1px solid;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 1px solid;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> </tr> <tr valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;">Segment operating income</div> </td> <td>  </td> <td align="left">$</td> <td align="right">388</td> <td>  </td> <td>  </td> <td align="left">$</td> <td align="right">157</td> <td>  </td> <td>  </td> <td align="left">$</td> <td align="right">18</td> <td>  </td> <td>  </td> <td align="left">$</td> <td align="right">—</td> <td>  </td> <td>  </td> <td>  </td> <td align="right">563</td> <td>  </td> </tr> <tr style="font-size: 1px;"> <td> <div style="margin-left: 15px; text-indent: -15px;">  </div> </td> <td>  </td> <td style="border-top: #000000 3px double;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 3px double;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 3px double;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 3px double;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> </tr> <tr style="background: #cceeff;" valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;">General corporate expenses</div> </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td align="left">  </td> <td align="right">(85</td> <td>)</td> </tr> <tr style="font-size: 1px;"> <td> <div style="margin-left: 15px; text-indent: -15px;">  </div> </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 1px solid;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> </tr> <tr valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;">Total operating income</div> </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td align="left">$</td> <td align="right">478</td> <td>  </td> </tr> <tr style="font-size: 1px;"> <td> <div style="margin-left: 15px; text-indent: -15px;">  </div> </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 3px double;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> </tr> <tr valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;">  </div> </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> </tr> <tr style="background: #cceeff;" valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;"><b><i>Three months ended March 31, 2009</i></b>*</div> </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> </tr> <tr valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;">Segment revenues:</div> </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> </tr> <tr style="background: #cceeff;" valign="bottom"> <td> <div style="margin-left: 30px; text-indent: -15px;">External</div> </td> <td>  </td> <td align="left">$</td> <td align="right">924</td> <td>  </td> <td>  </td> <td align="left">$</td> <td align="right">846</td> <td>  </td> <td>  </td> <td align="left">$</td> <td align="right">152</td> <td>  </td> <td>  </td> <td align="left">$</td> <td align="right">—</td> <td>  </td> <td>  </td> <td align="left">$</td> <td align="right">1,922</td> <td>  </td> </tr> <tr valign="bottom"> <td> <div style="margin-left: 30px; text-indent: -15px;">Internal</div> </td> <td>  </td> <td>  </td> <td align="right">33</td> <td>  </td> <td>  </td> <td>  </td> <td align="right">130</td> <td>  </td> <td>  </td> <td>  </td> <td align="right">6</td> <td>  </td> <td>  </td> <td align="left">  </td> <td align="right">(169</td> <td>)</td> <td>  </td> <td>  </td> <td align="right">—</td> <td>  </td> </tr> <tr style="font-size: 1px;"> <td> <div style="margin-left: 15px; text-indent: -15px;">  </div> </td> <td>  </td> <td style="border-top: #000000 1px solid;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 1px solid;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 1px solid;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 1px solid;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 1px solid;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> </tr> <tr style="background: #cceeff;" valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;">Total revenues</div> </td> <td>  </td> <td align="left">$</td> <td align="right">957</td> <td>  </td> <td>  </td> <td align="left">$</td> <td align="right">976</td> <td>  </td> <td>  </td> <td align="left">$</td> <td align="right">158</td> <td>  </td> <td>  </td> <td align="left">$</td> <td align="right">(169</td> <td>)</td> <td>  </td> <td align="left">$</td> <td align="right">1,922</td> <td>  </td> </tr> <tr style="font-size: 1px;"> <td> <div style="margin-left: 15px; text-indent: -15px;">  </div> </td> <td>  </td> <td style="border-top: #000000 3px double;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 3px double;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 3px double;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 3px double;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 3px double;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> </tr> <tr valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;">Segment profit (loss)</div> </td> <td>  </td> <td align="left">$</td> <td align="right">252</td> <td>  </td> <td>  </td> <td align="left">$</td> <td align="right">76</td> <td>  </td> <td>  </td> <td align="left">$</td> <td align="right">(60</td> <td>)</td> <td>  </td> <td align="left">$</td> <td align="right">—</td> <td>  </td> <td>  </td> <td align="left">$</td> <td align="right">268</td> <td>  </td> </tr> <tr style="background: #cceeff;" valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;">Less:</div> </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> </tr> <tr valign="bottom"> <td> <div style="margin-left: 30px; text-indent: -15px;">Equity earnings</div> </td> <td>  </td> <td>  </td> <td align="right">5</td> <td>  </td> <td>  </td> <td>  </td> <td align="right">4</td> <td>  </td> <td>  </td> <td>  </td> <td align="right">14</td> <td>  </td> <td>  </td> <td>  </td> <td align="right">—</td> <td>  </td> <td>  </td> <td>  </td> <td align="right">23</td> <td>  </td> </tr> <tr style="background: #cceeff;" valign="bottom"> <td> <div style="margin-left: 30px; text-indent: -15px;">Loss from investments</div> </td> <td>  </td> <td>  </td> <td align="right">—</td> <td>  </td> <td>  </td> <td>  </td> <td align="right">—</td> <td>  </td> <td>  </td> <td align="left">  </td> <td align="right">(75</td> <td>)</td> <td>  </td> <td>  </td> <td align="right">—</td> <td>  </td> <td>  </td> <td align="left">  </td> <td align="right">(75</td> <td>)</td> </tr> <tr style="font-size: 1px;"> <td> <div style="margin-left: 15px; text-indent: -15px;">  </div> </td> <td>  </td> <td style="border-top: #000000 1px solid;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 1px solid;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 1px solid;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 1px solid;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 1px solid;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> </tr> <tr valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;">Segment operating income</div> </td> <td>  </td> <td align="left">$</td> <td align="right">247</td> <td>  </td> <td>  </td> <td align="left">$</td> <td align="right">72</td> <td>  </td> <td>  </td> <td align="left">$</td> <td align="right">1</td> <td>  </td> <td>  </td> <td align="left">$</td> <td align="right">—</td> <td>  </td> <td>  </td> <td>  </td> <td align="right">320</td> <td>  </td> </tr> <tr style="font-size: 1px;"> <td> <div style="margin-left: 15px; text-indent: -15px;">  </div> </td> <td>  </td> <td style="border-top: #000000 3px double;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 3px double;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 3px double;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 3px double;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> </tr> <tr style="background: #cceeff;" valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;">General corporate expenses</div> </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td align="left">  </td> <td align="right">(40</td> <td>)</td> </tr> <tr style="font-size: 1px;"> <td> <div style="margin-left: 15px; text-indent: -15px;">  </div> </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 1px solid;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> </tr> <tr valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;">Total operating income</div> </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td align="left">$</td> <td align="right">280</td> <td>  </td> </tr> <tr style="font-size: 1px;"> <td> <div style="margin-left: 15px; text-indent: -15px;">  </div> </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 3px double;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> </tr> </table> <p> </p> <p style="font-size: 10pt;" align="left">     Total segment revenues for Exploration & Production include $556 million and $411 million of gas management revenues for the three months ended March 31, 2010 and 2009, respectively. Gas management revenues include sales of natural gas in conjunction with marketing services provided to third parties and intercompany sales of fuel and shrink gas to the midstream businesses in Williams Partners. These revenues are substantially offset by similar amounts of gas management costs.      The following table reflects total assets by reporting segment.</p>  <table style="font-size: 10pt;" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr valign="bottom"> <td width="76%">  </td> <td width="5%">  </td> <td width="1%">  </td> <td width="5%">  </td> <td width="1%">  </td> <td width="5%">  </td> <td width="1%">  </td> <td width="5%">  </td> <td width="1%">  </td> </tr> <tr style="font-size: 8pt;" valign="bottom"> <td>  </td> <td>  </td> <td style="border-bottom: #000000 1px solid;" align="center" colspan="6" nowrap="nowrap"><b>Total Assets</b></td> <td>  </td> </tr> <tr style="font-size: 8pt;" valign="bottom"> <td>  </td> <td>  </td> <td style="border-bottom: #000000 1px solid;" align="center" colspan="2" nowrap="nowrap"><b>March 31, 2010</b></td> <td>  </td> <td>  </td> <td style="border-bottom: #000000 1px solid;" align="center" colspan="2" nowrap="nowrap"><b>December 31, 2009*</b></td> <td>  </td> </tr> <tr style="font-size: 8pt;" valign="bottom"> <td>  </td> <td>  </td> <td align="center" colspan="6"><b>(Millions)</b></td> <td>  </td> </tr>  <tr style="background: #cceeff;" valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;">Williams Partners</div> </td> <td>  </td> <td align="left">$</td> <td align="right">12,132</td> <td>  </td> <td>  </td> <td align="left">$</td> <td align="right">11,981</td> <td>  </td> </tr> <tr valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;">Exploration & Production</div> </td> <td>  </td> <td align="left">  </td> <td align="right">10,593</td> <td>  </td> <td>  </td> <td align="left">  </td> <td align="right">10,575</td> <td>  </td> </tr> <tr style="background: #cceeff;" valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;">Other</div> </td> <td>  </td> <td>  </td> <td align="right">3,948</td> <td>  </td> <td>  </td> <td>  </td> <td align="right">4,193</td> <td>  </td> </tr> <tr valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;">Eliminations</div> </td> <td>  </td> <td align="left">  </td> <td align="right">(1,544</td> <td>)</td> <td>  </td> <td align="left">  </td> <td align="right">(1,469</td> <td>)</td> </tr> <tr style="font-size: 1px;"> <td> <div style="margin-left: 15px; text-indent: -15px;">  </div> </td> <td>  </td> <td style="border-top: #000000 1px solid;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 1px solid;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> </tr> <tr style="background: #cceeff;" valign="bottom"> <td> <div style="margin-left: 30px; text-indent: -15px;">Total</div> </td> <td>  </td> <td align="left">$</td> <td align="right">25,129</td> <td>  </td> <td>  </td> <td align="left">$</td> <td align="right">25,280</td> <td>  </td> </tr> <tr style="font-size: 1px;"> <td> <div style="margin-left: 15px; text-indent: -15px;">  </div> </td> <td>  </td> <td style="border-top: #000000 3px double;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 3px double;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> </tr> </table>  <table style="font-size: 10pt;" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td width="3%"></td> <td width="1%"></td> <td width="96"></td> </tr> <tr valign="top"> <td align="left">*</td> <td>  </td> <td>Recast as discussed in Note 2.</td> </tr> </table> </div></div></div> </div>

125000000

111000000

8447000000

7573000000

9054000000

614000000

8440000000

8856000000

530000000

8326000000

9019000000

572000000

8447000000

8962000000

1389000000

7573000000

1000000

35000000

1041000000

<div> <div><div><div> <div style="margin-top: 12pt; font-size: 10pt;" align="left"><b>Note 4. Asset Sales, Impairments and Other Accruals</b></div>  <div style="margin-top: 6pt; font-size: 10pt;" align="left">     <i>Other (income) expense</i> – <i>net</i> within <i>segment costs and expenses</i> in 2009 includes Exploration & Production’s $34 million of penalties from the early release of drilling rigs.</div> <div style="margin-top: 6pt; font-size: 10pt;" align="left"> <div style="margin-top: 6pt; font-size: 10pt;" align="left"><b><i>Additional Items</i></b></div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     We completed a strategic restructuring transaction in the first quarter of 2010 that involved significant debt issuances, retirements and amendments (see Note 9). We incurred significant costs related to these transactions, as follows:</div> <div style="margin-top: 6pt;"> <table style="font-size: 10pt;" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr style="font-size: 10pt; background: none transparent scroll repeat 0% 0%; color: #000000;" valign="top"> <td style="background: none transparent scroll repeat 0% 0%;" width="2%">  </td> <td align="left" width="3%"><b>•</b></td> <td width="1%">  </td> <td>$606 million of early debt retirement costs consisting primarily of cash premiums of $574 million;</td> </tr> <tr> <td style="font-size: 6pt;">  </td> </tr> <tr style="font-size: 10pt; background: none transparent scroll repeat 0% 0%; color: #000000;" valign="top"> <td style="background: none transparent scroll repeat 0% 0%;" width="2%">  </td> <td align="left" width="3%"><b>•</b></td> <td width="1%">  </td> <td>$39 million of other transaction costs reflected in <i>general corporate expenses,</i> of which $4 million is attributable to noncontrolling interests;</td> </tr> <tr> <td style="font-size: 6pt;">  </td> </tr> <tr style="font-size: 10pt; background: none transparent scroll repeat 0% 0%; color: #000000;" valign="top"> <td style="background: none transparent scroll repeat 0% 0%;" width="2%">  </td> <td align="left" width="3%"><b>•</b></td> <td width="1%">  </td> <td>$4 million of accelerated amortization of debt costs related to the amendments of credit facilities, reflected in <i>other expense – net</i> below <i>operating income</i>.</td> </tr> </table> </div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     In first-quarter 2009, we recorded a $75 million impairment charge related to an other-than-temporary loss in value associated with our Venezuelan investment in Accroven SRL (Accroven), which is reflected in loss from investments within <i>investing income (loss)</i> at Other. (See Note 10.)</div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     In addition, Exploration & Production recorded an $11 million impairment related to a cost-based investment in first-quarter 2009, which is included within <i>investing income (loss)</i>. (See Note 10.)</div> </div> </div></div></div> </div>

582361000

583929000

579495000

583929000

-612000000 -428000000 1867000000 1644000000 0 0 0 0 800000000 -800000000 -128000000 -18000000 1444000000 1922000000 650000000 703000000 578000000 420000000 0 -606000000 <div> <div><div><div> <div style="margin-top: 12pt; font-size: 10pt;" align="left"><b>Note 11. Financial Instruments, Derivatives, Guarantees and Concentration of Credit Risk</b></div>  <div style="margin-top: 6pt; font-size: 10pt;" align="left"><b><i>Financial Instruments</i></b></div> <div style="margin-top: 6pt; font-size: 10pt; margin-left: 1%;" align="left"><i>Fair-value methods</i></div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     We use the following methods and assumptions in estimating our fair-value disclosures for financial instruments:</div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     <u>Cash and cash equivalents and restricted cash</u>: The carrying amounts reported in the Consolidated Balance Sheet approximate fair value due to the short-term maturity of these instruments. Current and noncurrent restricted cash is included in <i>other current assets and deferred charges</i> and <i>other assets and deferred charges</i>, respectively, in the Consolidated Balance Sheet.</div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     <u>ARO Trust Investments:</u> Our Transco subsidiary deposits a portion of its collected rates, pursuant to its 2008 rate case settlement, into an external trust specifically designated to fund future asset retirement obligations (ARO Trust). The ARO Trust invests in a portfolio of mutual funds that are reported at fair value in <i>other assets and deferred charges</i> in the Consolidated Balance Sheet and are classified as available-for-sale. However, both realized and unrealized gains and losses are ultimately recorded as regulatory assets or liabilities.</div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     <u>Long-term debt</u>: The fair value of our publicly traded long-term debt is determined using indicative period-end traded bond market prices. Private debt is valued based on market rates and the prices of similar securities with similar terms and credit ratings. At March 31, 2010 and December 31, 2009, approximately 58 percent and 97 percent, respectively, of our long-term debt was publicly traded. (See Note 9.)</div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     <u>Guarantees</u>: The <i>guarantees</i> represented in the following table consist primarily of guarantees we have provided in the event of nonpayment by our previously owned communications subsidiary, Williams Communications Group (WilTel), on certain lease performance obligations. To estimate the fair value of the guarantees, the estimated default rate is determined by obtaining the average cumulative issuer-weighted corporate default rate for each guarantee based on the credit rating of WilTel’s current owner and the term of the underlying obligation. The default rates are published by Moody’s Investors Service. Guarantees, if recognized, are included in <i>accrued liabilities</i> in the Consolidated Balance Sheet. <div style="margin-top: 6pt; font-size: 10pt;" align="left">     <u>Other</u>: Includes current and noncurrent notes receivable, margin deposits, customer margin deposits payable, and cost-based investments.</div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     <u>Energy derivatives</u>: Energy derivatives include futures, forwards, swaps, and options. These are carried at fair value in the Consolidated Balance Sheet. See Note 10 for discussion of valuation of our energy derivatives.</div> <div style="margin-top: 12pt; font-size: 10pt;" align="left">   <i>Carrying amounts and fair values of our financial instruments</i></div> <div align="center"> <table style="font-size: 10pt;" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr valign="bottom"> <td width="52%">  </td> <td width="5%">  </td> <td width="3%">  </td> <td width="1%">  </td> <td width="3%">  </td> <td width="5%">  </td> <td width="3%">  </td> <td width="1%">  </td> <td width="3%">  </td> <td width="5%">  </td> <td width="3%">  </td> <td width="1%">  </td> <td width="3%">  </td> <td width="5%">  </td> <td width="3%">  </td> <td width="1%">  </td> <td width="3%">  </td> </tr> <tr style="font-size: 8pt;" valign="bottom"> <td>  </td> <td>  </td> <td style="border-bottom: #000000 1px solid;" align="center" colspan="7" nowrap="nowrap"><b>March 31, 2010</b></td> <td>  </td> <td style="border-bottom: #000000 1px solid;" align="center" colspan="7" nowrap="nowrap"><b>December 31, 2009</b></td> </tr> <tr style="font-size: 8pt;" valign="bottom"> <td>  </td> <td>  </td> <td style="border-bottom: #000000 0px solid;" align="center" colspan="3" nowrap="nowrap"><b>Carrying</b></td> <td>  </td> <td align="center" colspan="3">  </td> <td>  </td> <td align="center" colspan="3"><b>Carrying</b></td> <td>  </td> <td align="center" colspan="3">  </td> </tr> <tr style="font-size: 8pt;" valign="bottom"> <td style="border-bottom: #000000 1px solid;" align="left" nowrap="nowrap"><b>Asset (Liability)</b></td> <td>  </td> <td style="border-bottom: #000000 1px solid;" align="center" colspan="3" nowrap="nowrap"><b>Amount</b></td> <td>  </td> <td style="border-bottom: #000000 1px solid;" align="center" colspan="3" nowrap="nowrap"><b>Fair Value</b></td> <td>  </td> <td style="border-bottom: #000000 1px solid;" align="center" colspan="3" nowrap="nowrap"><b>Amount</b></td> <td>  </td> <td style="border-bottom: #000000 1px solid;" align="center" colspan="3" nowrap="nowrap"><b>Fair Value</b></td> </tr> <tr style="font-size: 8pt;" valign="bottom"> <td>  </td> <td>  </td> <td align="center" colspan="15"><b>(Millions)</b></td> </tr>  <tr style="background: #cceeff;" valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;">Cash and cash equivalents</div> </td> <td>  </td> <td align="right">$</td> <td align="right">1,644</td> <td>  </td> <td>  </td> <td align="right">$</td> <td align="right">1,644</td> <td>  </td> <td>  </td> <td align="right">$</td> <td align="right">1,867</td> <td>  </td> <td>  </td> <td align="right">$</td> <td align="right">1,867</td> <td>  </td> </tr> <tr valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;">Restricted cash (current and noncurrent)</div> </td> <td>  </td> <td>  </td> <td align="right">28</td> <td>  </td> <td>  </td> <td>  </td> <td align="right">28</td> <td>  </td> <td>  </td> <td>  </td> <td align="right">28</td> <td>  </td> <td>  </td> <td>  </td> <td align="right">28</td> <td>  </td> </tr> <tr style="background: #cceeff;" valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;">ARO Trust Investments</div> </td> <td>  </td> <td>  </td> <td align="right">25</td> <td>  </td> <td>  </td> <td>  </td> <td align="right">25</td> <td>  </td> <td>  </td> <td>  </td> <td align="right">22</td> <td>  </td> <td>  </td> <td>  </td> <td align="right">22</td> <td>  </td> </tr> <tr valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;">Long-term debt, including current portion (a)</div> </td> <td>  </td> <td align="right">  </td> <td align="right">(8,622</td> <td>)</td> <td>  </td> <td align="right">  </td> <td align="right">(9,319</td> <td>)</td> <td>  </td> <td align="right">  </td> <td align="right">(8,273</td> <td>)</td> <td>  </td> <td align="right">  </td> <td align="right">(9,142</td> <td>)</td> </tr> <tr style="background: #cceeff;" valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;">Guarantees</div> </td> <td>  </td> <td align="right">  </td> <td align="right">(36</td> <td>)</td> <td>  </td> <td align="right">  </td> <td align="right">(34</td> <td>)</td> <td>  </td> <td align="right">  </td> <td align="right">(36</td> <td>)</td> <td>  </td> <td align="right">  </td> <td align="right">(33</td> <td>)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;">Other</div> </td> <td>  </td> <td align="right">  </td> <td align="right">(33</td> <td>)</td> <td>  </td> <td align="right">  </td> <td align="right">(36</td> <td><div style="width: 20px;">)(b)</div></td> <td>  </td> <td align="right">  </td> <td align="right">(23</td> <td>)</td> <td>  </td> <td align="right">  </td> <td align="right">(25</td> <td><div style="width: 20px;">)(b)</div></td> </tr> <tr style="background: #cceeff;" valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;">Net energy derivatives:</div> </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> </tr> <tr valign="bottom"> <td> <div style="margin-left: 30px; text-indent: -15px;">Energy commodity cash flow hedges</div> </td> <td>  </td> <td>  </td> <td align="right">396</td> <td>  </td> <td>  </td> <td>  </td> <td align="right">396</td> <td>  </td> <td>  </td> <td>  </td> <td align="right">178</td> <td>  </td> <td>  </td> <td>  </td> <td align="right">178</td> <td>  </td> </tr> <tr style="background: #cceeff;" valign="bottom"> <td> <div style="margin-left: 30px; text-indent: -15px;">Other energy derivatives</div> </td> <td>  </td> <td align="right">  </td> <td align="right">(41</td> <td>)</td> <td>  </td> <td align="right">  </td> <td align="right">(41</td> <td>)</td> <td>  </td> <td align="right">  </td> <td align="right">(90</td> <td>)</td> <td>  </td> <td align="right">  </td> <td align="right">(90</td> <td>)</td> </tr> </table> </div> <div align="left"> <div style="border-top: #000000 1px solid; margin-top: 16pt; font-size: 3pt; width: 18%;"></div> </div> <table style="font-size: 10pt;" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td width="3%"></td> <td width="1%"></td> <td width="96"></td> </tr> <tr valign="top"> <td align="left">(a)</td> <td>  </td> <td>Excludes capital leases.</td> </tr> <tr style="font-size: 3pt;"> <td>  </td> </tr> <tr valign="top"> <td align="left">(b)</td> <td>  </td> <td>Excludes certain cost-based investments in companies that are not publicly traded and therefore it is not practicable to estimate fair value. The carrying value of these investments was $2 million at March 31, 2010 and December 31, 2009.</td> </tr> </table> <div style="margin-top: 12pt; font-size: 10pt;" align="left"><b><i>Energy Commodity Derivatives</i></b></div> <div style="margin-top: 6pt; font-size: 10pt; margin-left: 1%;" align="left"><i>Risk management activities</i></div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     We are exposed to market risk from changes in energy commodity prices within our operations. We manage this risk on an enterprise basis and may utilize derivatives to manage our exposure to the variability in expected future cash flows from forecasted purchases and sales of natural gas and NGLs attributable to commodity price risk. Certain of these derivatives utilized for risk management purposes have been designated as cash flow hedges, while other derivatives have not been designated as cash flow hedges or do not qualify for hedge accounting despite hedging our future cash flows on an economic basis.</div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     We produce, buy, and sell natural gas at different locations throughout the United States. We also enter into forward contracts to buy and sell natural gas to maximize the economic value of transportation agreements and storage capacity agreements. To reduce exposure to a decrease in revenues or margins from fluctuations in natural gas market prices, we enter into natural gas futures contracts, swap agreements, and financial option contracts to mitigate the price risk on forecasted sales of natural gas. We have also entered into basis swap agreements to reduce the locational price risk associated with our producing basins. These cash flow hedges are expected to be highly effective in offsetting cash flows attributable to the hedged risk during the term of the hedge. However, ineffectiveness may be recognized primarily as a result of locational differences between the hedging derivative and the hedged item. Our financial option contracts are either purchased options or a combination of options that comprise a net purchased option or a zero-cost collar. Our designation of the hedging relationship and method of assessing effectiveness for these option contracts are generally such that the hedging relationship is considered perfectly effective and no ineffectiveness is recognized in earnings. Hedges for storage contracts have not been designated as cash flow hedges, despite economically hedging the expected cash flows generated by those agreements.</div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     We produce and sell NGLs and olefins at different locations throughout North America. We also buy natural gas to satisfy the required fuel and shrink needed to generate NGLs and olefins. To reduce exposure to a decrease in revenues from fluctuations in NGL market prices or increases in costs and operating expenses from fluctuations in natural gas and NGL market prices, we may enter into NGL or natural gas swap agreements, financial forward contracts, and financial option contracts to mitigate the price risk on forecasted sales of NGLs and purchases of natural gas and NGLs. These cash flow hedges are expected to be highly effective in offsetting cash flows attributable to the hedged risk during the term of the hedge. However, ineffectiveness may be recognized primarily as a result of locational differences between the hedging derivative and the hedged item. <div style="margin-top: 6pt; font-size: 10pt; margin-left: 1%;" align="left"><i>Other activities</i></div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     We also enter into commodity derivatives for other than risk management purposes, including managing certain remaining legacy natural gas contracts and positions from our former power business and providing services to third parties. These legacy natural gas contracts include substantially offsetting positions and have an insignificant net impact on earnings.</div> <div style="margin-top: 6pt; font-size: 10pt; margin-left: 1%;" align="left"><i>Volumes</i></div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     Our energy commodity derivatives are comprised of both contracts to purchase the commodity (long positions) and contracts to sell the commodity (short positions). Derivative transactions are categorized into four types:</div> <div style="margin-top: 6pt;"> <table style="font-size: 10pt;" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr style="font-size: 10pt; background: none transparent scroll repeat 0% 0%; color: #000000;" valign="top"> <td style="background: none transparent scroll repeat 0% 0%;" width="2%">  </td> <td align="left" width="3%"><b>•</b></td> <td width="1%">  </td> <td>Fixed price: Includes physical and financial derivative transactions that settle at a fixed location price;</td> </tr> <tr> <td style="font-size: 6pt;">  </td> </tr> <tr style="font-size: 10pt; background: none transparent scroll repeat 0% 0%; color: #000000;" valign="top"> <td style="background: none transparent scroll repeat 0% 0%;" width="2%">  </td> <td align="left" width="3%"><b>•</b></td> <td width="1%">  </td> <td>Basis: Includes financial derivative transactions priced off the difference in value between a commodity at two specific delivery points;</td> </tr> <tr> <td style="font-size: 6pt;">  </td> </tr> <tr style="font-size: 10pt; background: none transparent scroll repeat 0% 0%; color: #000000;" valign="top"> <td style="background: none transparent scroll repeat 0% 0%;" width="2%">  </td> <td align="left" width="3%"><b>•</b></td> <td width="1%">  </td> <td>Index: Includes physical derivative transactions at an unknown future price;</td> </tr> <tr> <td style="font-size: 6pt;">  </td> </tr> <tr style="font-size: 10pt; background: none transparent scroll repeat 0% 0%; color: #000000;" valign="top"> <td style="background: none transparent scroll repeat 0% 0%;" width="2%">  </td> <td align="left" width="3%"><b>•</b></td> <td width="1%">  </td> <td>Options: Includes all fixed price options or combination of options (collars) that set a floor and/or ceiling for the transaction price of a commodity.</td> </tr> </table> </div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     The following table depicts the notional quantities of the net long (short) positions in our commodity derivatives portfolio as of March 31, 2010. Natural gas is presented in millions of British Thermal Units (MMBtu), and NGLs is presented in gallons. The volumes for options represent at location zero-cost collars and present one side of the short position.</div> <div align="center"> <table style="font-size: 10pt;" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr valign="bottom"> <td width="24%">  </td> <td width="2%">  </td> <td width="13%">  </td> <td width="2%">  </td> <td width="6%">  </td> <td width="2%">  </td> <td width="5%">  </td> <td width="1%">  </td> <td width="6%">  </td> <td width="2%">  </td> <td width="5%">  </td> <td width="1%">  </td> <td width="5%">  </td> <td width="2%">  </td> <td width="4%">  </td> <td width="1%">  </td> <td width="5%">  </td> <td width="2%">  </td> <td width="5%">  </td> <td width="1%">  </td> <td width="6%">  </td> </tr> <tr style="font-size: 8pt;" valign="bottom"> <td style="border-bottom: #000000 1px solid;" align="center" colspan="3" nowrap="nowrap"><b>Derivative Notional Volumes</b></td> <td>  </td> <td style="border-bottom: #000000 1px solid;" align="center" nowrap="nowrap"><b>Measurement</b></td> <td>  </td> <td style="border-bottom: #000000 1px solid;" align="center" colspan="3" nowrap="nowrap"><b>Fixed Price</b></td> <td>  </td> <td style="border-bottom: #000000 1px solid;" align="center" colspan="3" nowrap="nowrap"><b>Basis</b></td> <td>  </td> <td style="border-bottom: #000000 1px solid;" align="center" colspan="3" nowrap="nowrap"><b>Index</b></td> <td>  </td> <td style="border-bottom: #000000 1px solid;" align="center" colspan="3" nowrap="nowrap"><b>Options</b></td> </tr>  <tr style="background: #cceeff;" valign="bottom"> <td align="left" colspan="3"><b>Designated as Hedging Instruments</b></td> <td>  </td> <td valign="top" align="center">  </td> <td>  </td> <td valign="top" align="right">  </td> <td valign="top" align="right">  </td> <td valign="top">  </td> <td>  </td> <td valign="top" align="right">  </td> <td valign="top" align="right">  </td> <td valign="top">  </td> <td>  </td> <td valign="top" align="right">  </td> <td valign="top" align="right">  </td> <td valign="top">  </td> <td>  </td> <td valign="top" align="right">  </td> <td valign="top" align="right">  </td> <td valign="top">  </td> </tr> <tr valign="bottom"> <td> <div style="margin-left: 30px; text-indent: -15px;">Exploration & Production</div> </td> <td>  </td> <td valign="top" align="left">Risk Management</td> <td>  </td> <td valign="top" align="center">MMBtu</td> <td>  </td> <td valign="top" align="right" nowrap="nowrap">  </td> <td valign="top" align="right">(49,325,000</td> <td valign="top">)</td> <td>  </td> <td valign="top" align="right" nowrap="nowrap">  </td> <td valign="top" align="right">(48,050,000</td> <td valign="top">)</td> <td>  </td> <td valign="top" align="right">  </td> <td valign="top" align="right">  </td> <td valign="top">  </td> <td>  </td> <td valign="top" align="right" nowrap="nowrap">  </td> <td valign="top" align="right">(240,625,000</td> <td valign="top">)</td> </tr> <tr style="background: #cceeff;" valign="bottom"> <td> <div style="margin-left: 30px; text-indent: -15px;">Williams Partners</div> </td> <td>  </td> <td valign="top" align="left" nowrap="nowrap">Risk Management</td> <td>  </td> <td valign="top" align="center">MMBtu</td> <td>  </td> <td valign="top" align="right">  </td> <td valign="top" align="right">8,502,500</td> <td valign="top">  </td> <td>  </td> <td valign="top" align="right">  </td> <td valign="top" align="right">4,450,000</td> <td valign="top">  </td> <td>  </td> <td valign="top" align="right">  </td> <td valign="top" align="right">  </td> <td valign="top">  </td> <td>  </td> <td valign="top" align="right">  </td> <td valign="top" align="right">  </td> <td valign="top">  </td> </tr> <tr valign="bottom"> <td> <div style="margin-left: 30px; text-indent: -15px;">Williams Partners</div> </td> <td>  </td> <td valign="top" align="left">Risk Management</td> <td>  </td> <td valign="top" align="center">Gallons</td> <td>  </td> <td valign="top" align="right" nowrap="nowrap">  </td> <td valign="top" align="right">(119,784,000</td> <td valign="top">)</td> <td>  </td> <td valign="top" align="right">  </td> <td valign="top" align="right">  </td> <td valign="top">  </td> <td>  </td> <td valign="top" align="right">  </td> <td valign="top" align="right">  </td> <td valign="top">  </td> <td>  </td> <td valign="top" align="right">  </td> <td valign="top" align="right">  </td> <td valign="top">  </td> </tr> <tr style="font-size: 10pt;"> <td>  </td> </tr> <tr style="background: #cceeff;" valign="bottom"> <td align="left" colspan="3"><b>Not Designated as Hedging Instruments</b></td> <td>  </td> <td valign="top" align="center">  </td> <td>  </td> <td valign="top" align="right">  </td> <td valign="top" align="right">  </td> <td valign="top">  </td> <td>  </td> <td valign="top" align="right">  </td> <td valign="top" align="right">  </td> <td valign="top">  </td> <td>  </td> <td valign="top" align="right">  </td> <td valign="top" align="right">  </td> <td valign="top">  </td> <td>  </td> <td valign="top" align="right">  </td> <td valign="top" align="right">  </td> <td valign="top">  </td> </tr> <tr valign="bottom"> <td> <div style="margin-left: 30px; text-indent: -15px;">Exploration & Production</div> </td> <td>  </td> <td valign="top" align="left">Risk Management</td> <td>  </td> <td valign="top" align="center">MMBtu</td> <td>  </td> <td valign="top" align="right" nowrap="nowrap">  </td> <td valign="top" align="right">(4,059,999</td> <td valign="top">)</td> <td>  </td> <td valign="top" align="right" nowrap="nowrap">  </td> <td valign="top" align="right">(897,500</td> <td valign="top">)</td> <td>  </td> <td valign="top" align="right" nowrap="nowrap">  </td> <td valign="top" align="right">(3,263,073</td> <td valign="top">)</td> <td>  </td> <td valign="top" align="right">  </td> <td valign="top" align="right">  </td> <td valign="top">  </td> </tr> <tr style="background: #cceeff;" valign="bottom"> <td> <div style="margin-left: 30px; text-indent: -15px;">Williams Partners</div> </td> <td>  </td> <td valign="top" align="left">Risk Management</td> <td>  </td> <td valign="top" align="center">Gallons</td> <td>  </td> <td valign="top" align="right" nowrap="nowrap">  </td> <td valign="top" align="right">(2,100,000</td> <td valign="top">)</td> <td>  </td> <td valign="top" align="right">  </td> <td valign="top" align="right">  </td> <td valign="top">  </td> <td>  </td> <td valign="top" align="right">  </td> <td valign="top" align="right">  </td> <td valign="top">  </td> <td>  </td> <td valign="top" align="right">  </td> <td valign="top" align="right">  </td> <td valign="top">  </td> </tr> <tr valign="bottom"> <td> <div style="margin-left: 30px; text-indent: -15px;">Other</div> </td> <td>  </td> <td valign="top" align="left">Risk Management</td> <td>  </td> <td valign="top" align="center">Gallons</td> <td>  </td> <td valign="top" align="right" nowrap="nowrap">  </td> <td valign="top" align="right">(1,050,000</td> <td valign="top">)</td> <td>  </td> <td valign="top" align="right">  </td> <td valign="top" align="right">  </td> <td valign="top">  </td> <td>  </td> <td valign="top" align="right">  </td> <td valign="top" align="right">  </td> <td valign="top">  </td> <td>  </td> <td valign="top" align="right">  </td> <td valign="top" align="right">  </td> <td valign="top">  </td> </tr> <tr style="background: #cceeff;" valign="bottom"> <td> <div style="margin-left: 30px; text-indent: -15px;">Exploration & Production</div> </td> <td>  </td> <td valign="top" align="left">Other</td> <td>  </td> <td valign="top" align="center">MMBtu</td> <td>  </td> <td valign="top" align="right">  </td> <td valign="top" align="right">4,387,500</td> <td valign="top">  </td> <td>  </td> <td valign="top" align="right">  </td> <td valign="top" align="right">665,000</td> <td valign="top">  </td> <td>  </td> <td valign="top" align="right">  </td> <td valign="top" align="right">  </td> <td valign="top">  </td> <td>  </td> <td valign="top" align="right" nowrap="nowrap">  </td> <td valign="top" align="right">(1,500,000</td> <td valign="top">)</td> </tr> </table> </div> <div style="margin-top: 6pt; font-size: 10pt; margin-left: 1%;" align="left"><i>Fair values and gains (losses)</i></div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     The following table presents the fair value of energy commodity derivatives. Our derivatives are presented as separate line items in our Consolidated Balance Sheet as current and noncurrent derivative assets and liabilities. Derivatives are classified as current or noncurrent based on the contractual timing of expected future net cash flows of individual contracts. The expected future net cash flows for derivatives classified as current are expected to occur within the next 12 months. The fair value amounts are presented on a gross basis and do not reflect the netting of asset and liability positions permitted under the terms of our master netting arrangements. Further, the amounts below do not include cash held on deposit in margin accounts that we have received or remitted to collateralize certain derivative positions. <div align="center"> <table style="font-size: 10pt;" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr valign="bottom"> <td width="52%">  </td> <td width="5%">  </td> <td width="1%">  </td> <td width="5%">  </td> <td width="1%">  </td> <td width="5%">  </td> <td width="1%">  </td> <td width="5%">  </td> <td width="1%">  </td> <td width="5%">  </td> <td width="1%">  </td> <td width="5%">  </td> <td width="1%">  </td> <td width="5%">  </td> <td width="1%">  </td> <td width="5%">  </td> <td width="1%">  </td> </tr> <tr style="font-size: 8pt;" valign="bottom"> <td>  </td> <td>  </td> <td style="border-bottom: #000000 1px solid;" align="center" colspan="6" nowrap="nowrap"><b>March 31, 2010</b></td> <td>  </td> <td>  </td> <td style="border-bottom: #000000 1px solid;" align="center" colspan="6" nowrap="nowrap"><b>December 31, 2009</b></td> <td>  </td> </tr> <tr style="font-size: 8pt;" valign="bottom"> <td>  </td> <td>  </td> <td style="border-bottom: #000000 1px solid;" align="center" colspan="2" nowrap="nowrap"><b>Assets</b></td> <td>  </td> <td>  </td> <td style="border-bottom: #000000 1px solid;" align="center" colspan="2" nowrap="nowrap"><b>Liabilities</b></td> <td>  </td> <td>  </td> <td style="border-bottom: #000000 1px solid;" align="center" colspan="2" nowrap="nowrap"><b>Assets</b></td> <td>  </td> <td>  </td> <td style="border-bottom: #000000 1px solid;" align="center" colspan="2" nowrap="nowrap"><b>Liabilities</b></td> <td>  </td> </tr> <tr style="font-size: 8pt;" valign="bottom"> <td>  </td> <td>  </td> <td align="center" colspan="14"><b>(Millions)</b></td> <td>  </td> </tr>  <tr style="background: #cceeff;" valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;">Designated as hedging instruments</div> </td> <td>  </td> <td align="left">$</td> <td align="right">482</td> <td>  </td> <td>  </td> <td align="left">$</td> <td align="right">86</td> <td>  </td> <td>  </td> <td align="left">$</td> <td align="right">352</td> <td>  </td> <td>  </td> <td align="left">$</td> <td align="right">174</td> <td>  </td> </tr> <tr valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;">Not designated as hedging instruments:</div> </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> </tr> <tr style="background: #cceeff;" valign="bottom"> <td> <div style="margin-left: 30px; text-indent: -15px;">Legacy natural gas contracts from former power business</div> </td> <td>  </td> <td>  </td> <td align="right">395</td> <td>  </td> <td>  </td> <td>  </td> <td align="right">412</td> <td>  </td> <td>  </td> <td>  </td> <td align="right">505</td> <td>  </td> <td>  </td> <td>  </td> <td align="right">526</td> <td>  </td> </tr> <tr valign="bottom"> <td> <div style="margin-left: 30px; text-indent: -15px;">All other</div> </td> <td>  </td> <td>  </td> <td align="right">202</td> <td>  </td> <td>  </td> <td>  </td> <td align="right">226</td> <td>  </td> <td>  </td> <td>  </td> <td align="right">237</td> <td>  </td> <td>  </td> <td>  </td> <td align="right">306</td> <td>  </td> </tr> <tr style="font-size: 1px;"> <td> <div style="margin-left: 15px; text-indent: -15px;">  </div> </td> <td>  </td> <td style="border-top: #000000 1px solid;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 1px solid;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 1px solid;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 1px solid;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> </tr> <tr style="background: #cceeff;" valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;">Total derivatives not designated as hedging instruments</div> </td> <td>  </td> <td>  </td> <td align="right">597</td> <td>  </td> <td>  </td> <td>  </td> <td align="right">638</td> <td>  </td> <td>  </td> <td>  </td> <td align="right">742</td> <td>  </td> <td>  </td> <td>  </td> <td align="right">832</td> <td>  </td> </tr> <tr style="font-size: 1px;"> <td> <div style="margin-left: 15px; text-indent: -15px;">  </div> </td> <td>  </td> <td style="border-top: #000000 1px solid;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 1px solid;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 1px solid;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 1px solid;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> </tr> <tr valign="bottom"> <td> <div style="margin-left: 30px; text-indent: -15px;">Total derivatives</div> </td> <td>  </td> <td align="left">$</td> <td align="right">1,079</td> <td>  </td> <td>  </td> <td align="left">$</td> <td align="right">724</td> <td>  </td> <td>  </td> <td align="left">$</td> <td align="right">1,094</td> <td>  </td> <td>  </td> <td align="left">$</td> <td align="right">1,006</td> <td>  </td> </tr> <tr style="font-size: 1px;"> <td> <div style="margin-left: 15px; text-indent: -15px;">  </div> </td> <td>  </td> <td style="border-top: #000000 3px double;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 3px double;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 3px double;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 3px double;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> </tr> </table> </div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     The following table presents pre-tax gains and losses for our energy commodity derivatives designated as cash flow hedges, as recognized in <i>accumulated other comprehensive income (loss)</i> (AOCI) or revenues.</div> <div align="center"> <table style="font-size: 10pt;" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr valign="bottom"> <td width="36%">  </td> <td width="5%">  </td> <td width="3%">  </td> <td width="1%">  </td> <td width="3%">  </td> <td width="5%">  </td> <td width="3%">  </td> <td width="1%">  </td> <td width="3%">  </td> <td width="3%">  </td> <td width="3%">  </td> <td width="1%">  </td> <td width="3%">  </td> </tr> <tr style="font-size: 8pt;" valign="bottom"> <td>  </td> <td>  </td> <td align="center" colspan="7"> <div style="width: 100%; border-bottom: #000000 1px solid;"><b>Three months ended March 31,</b></div> </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> </tr> <tr style="font-size: 8pt;" valign="bottom"> <td>  </td> <td>  </td> <td style="border-bottom: #000000 1px solid;" align="center" colspan="3" nowrap="nowrap"><b>2010</b></td> <td>  </td> <td style="border-bottom: #000000 1px solid;" align="center" colspan="3" nowrap="nowrap"><b>2009</b></td> <td>  </td> <td style="border-bottom: #000000 1px solid;" align="center" colspan="3" nowrap="nowrap"><b>Classification</b></td> </tr> <tr style="font-size: 8pt;" valign="bottom"> <td>  </td> <td>  </td> <td align="center" colspan="7"><b>(Millions)</b></td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> </tr>  <tr style="background: #cceeff;" valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;">Net gain recognized in other comprehensive income (effective portion)</div> </td> <td>  </td> <td align="right">$</td> <td align="right">278</td> <td>  </td> <td>  </td> <td align="right">$</td> <td align="right">325</td> <td>  </td> <td>  </td> <td align="center" colspan="3">AOCI</td> </tr> <tr valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;">Net gain reclassified from <i>accumulated other comprehensive income (loss)</i> into income (effective portion)</div> </td> <td>  </td> <td align="right">$</td> <td align="right">25</td> <td>  </td> <td>  </td> <td align="right">$</td> <td align="right">129</td> <td>  </td> <td>  </td> <td align="center" colspan="3">Revenues</td> </tr> <tr style="background: #cceeff;" valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;">Gain recognized in income (ineffective portion)</div> </td> <td>  </td> <td align="right">$</td> <td align="right">5</td> <td>  </td> <td>  </td> <td align="right">$</td> <td align="right">1</td> <td>  </td> <td>  </td> <td align="center" colspan="3">Revenues</td> </tr> </table> </div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     There were no gains or losses recognized in income as a result of excluding amounts from the assessment of hedge effectiveness.</div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     The following table presents pre-tax gains and losses for our energy commodity derivatives not designated as hedging instruments.</div> <div align="center"> <table style="font-size: 10pt;" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr valign="bottom"> <td width="76%">  </td> <td width="5%">  </td> <td width="1%">  </td> <td width="5%">  </td> <td width="1%">  </td> <td width="5%">  </td> <td width="1%">  </td> <td width="5%">  </td> <td width="1%">  </td> </tr> <tr style="font-size: 8pt;" valign="bottom"> <td>  </td> <td>  </td> <td style="border-bottom: #000000 1px solid;" align="center" colspan="6" nowrap="nowrap"><b>Three months ended March 31,</b></td> <td>  </td> </tr> <tr style="font-size: 8pt;" valign="bottom"> <td>  </td> <td>  </td> <td style="border-bottom: #000000 1px solid;" align="center" colspan="2" nowrap="nowrap"><b>2010</b></td> <td>  </td> <td>  </td> <td style="border-bottom: #000000 1px solid;" align="center" colspan="2" nowrap="nowrap"><b>2009</b></td> <td>  </td> </tr> <tr style="font-size: 8pt;" valign="bottom"> <td>  </td> <td>  </td> <td align="center" colspan="6"><b>(Millions)</b></td> <td>  </td> </tr>  <tr style="background: #cceeff;" valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;">Revenues</div> </td> <td>  </td> <td align="left">$</td> <td align="right">26</td> <td>  </td> <td>  </td> <td align="left">$</td> <td align="right">15</td> <td>  </td> </tr> <tr valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;">Costs and operating expenses</div> </td> <td>  </td> <td>  </td> <td align="right">—</td> <td>  </td> <td>  </td> <td>  </td> <td align="right">4</td> <td>  </td> </tr> <tr style="font-size: 1px;"> <td> <div style="margin-left: 15px; text-indent: -15px;">  </div> </td> <td>  </td> <td style="border-top: #000000 1px solid;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 1px solid;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> </tr> <tr style="background: #cceeff;" valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;">Net gain</div> </td> <td>  </td> <td align="left">$</td> <td align="right">26</td> <td>  </td> <td>  </td> <td align="left">$</td> <td align="right">11</td> <td>  </td> </tr> <tr style="font-size: 1px;"> <td> <div style="margin-left: 15px; text-indent: -15px;">  </div> </td> <td>  </td> <td style="border-top: #000000 3px double;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 3px double;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> </tr> </table> </div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     The cash flow impact of our derivative activities is presented in the Consolidated Statement of Cash Flows as <i>changes in current and noncurrent derivative assets and liabilities</i>.</div> <div style="margin-top: 6pt; font-size: 10pt; margin-left: 1%;" align="left"><i>Credit-risk-related features</i></div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     Certain of our derivative contracts contain credit-risk-related provisions that would require us, in certain circumstances, to post additional collateral in support of our net derivative liability positions. These credit-risk-related provisions require us to post collateral in the form of cash or letters of credit when our net liability positions exceed an established credit threshold. The credit thresholds are typically based on our senior unsecured debt ratings from Standard and Poor’s and/or Moody’s Investors Service. Under these contracts, a credit ratings decline would lower our credit thresholds, thus requiring us to post additional collateral. We also have contracts that contain adequate assurance provisions giving the counterparty the right to request collateral in an amount that corresponds to the outstanding net liability. Additionally, Exploration & Produc tion has an unsecured credit agreement with certain banks related to hedging activities. We are not required to provide collateral support for net derivative liability positions under the credit agreement as long as the value of Exploration & Production’s domestic natural gas reserves, as determined under the provisions of the agreement, exceeds by a specified amount certain of its obligations including any outstanding debt and the aggregate out-of-the-money position on hedges entered into under the credit agreement.</div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     As of March 31, 2010, we have collateral totaling $87 million, all of which is in the form of letters of credit, posted to derivative counterparties to support the aggregate fair value of our net derivative liability position (reflecting master netting arrangements in place with certain counterparties) of $145 million, which includes a reduction of $2 million to our liability balance for our own nonperformance risk. At December 31, 2009, we had collateral totaling $96 million posted to derivative counterparties, all of which was in the form of letters of credit, to support the aggregate fair value of our net derivative liability position (reflecting master netting arrangements in place with certain counterparties) of $167 million, which included a reduction of $3 million to our liability balance for our own nonperformance risk. The additional collateral that we would have been required to post, assuming our credit thresholds were eliminated and a call for adequate assurance under the credit risk provisions in our derivative contracts was triggered, was $60 million and $74 million at March 31, 2010 and December 31, 2009, respectively. <div style="margin-top: 6pt; font-size: 10pt; margin-left: 1%;" align="left"><i>Cash flow hedges</i></div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     Changes in the fair value of our cash flow hedges, to the extent effective, are deferred in other comprehensive income and reclassified into earnings in the same period or periods in which the hedged forecasted purchases or sales affect earnings, or when it is probable that the hedged forecasted transaction will not occur by the end of the originally specified time period. As of March 31, 2010, we have hedged portions of future cash flows associated with anticipated energy commodity purchases and sales for up to three years. Based on recorded values at March 31, 2010, $184 million of net gains (net of income tax provision of $112 million) will be reclassified into earnings within the next year. These recorded values are based on market prices of the commodities as of March 31, 2010. Due to the volatile nature of commodity prices and changes in the cr editworthiness of counterparties, actual gains or losses realized within the next year will likely differ from these values. These gains or losses are expected to substantially offset net losses or gains that will be realized in earnings from previous unfavorable or favorable market movements associated with underlying hedged transactions.</div> <div style="margin-top: 12pt; font-size: 10pt;" align="left"><b><i>Guarantees</i></b></div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     In addition to the guarantees and payment obligations discussed in Note 12, we have issued guarantees and other similar arrangements as discussed below.</div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     We are required by our revolving credit agreements to indemnify lenders for any taxes required to be withheld from payments due to the lenders and for any tax payments made by the lenders. The maximum potential amount of future payments under these indemnifications is based on the related borrowings and such future payments cannot currently be determined. These indemnifications generally continue indefinitely unless limited by the underlying tax regulations and have no carrying value. We have never been called upon to perform under these indemnifications and have no current expectation of a future claim.</div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     We have provided guarantees in the event of nonpayment by our previously owned communications subsidiary, WilTel, on certain lease performance obligations that extend through 2042. The maximum potential exposure is approximately $40 million at March 31, 2010. Our exposure declines systematically throughout the remaining term of WilTel’s obligations. The carrying value of these guarantees included in <i>accrued liabilities</i> on the Consolidated Balance Sheet is $36 million at March 31, 2010.</div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     At March 31, 2010, we do not expect these guarantees to have a material impact on our future liquidity or financial position. However, if we are required to perform on these guarantees in the future, it may have a material adverse effect on our results of operations.</div> <div style="margin-top: 12pt; font-size: 10pt;" align="left"><b><i>Concentration of Credit Risk</i></b></div> <div style="margin-top: 6pt; font-size: 10pt; margin-left: 1%;" align="left"><i>Derivative assets and liabilities</i></div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     We have a risk of loss from counterparties not performing pursuant to the terms of their contractual obligations. Counterparty performance can be influenced by changes in the economy and regulatory issues, among other factors. Risk of loss is impacted by several factors, including credit considerations and the regulatory environment in which a counterparty transacts. We attempt to minimize credit-risk exposure to derivative counterparties and brokers through formal credit policies, consideration of credit ratings from public ratings agencies, monitoring procedures, master netting agreements and collateral support under certain circumstances. Collateral support could include letters of credit, payment under margin agreements, and guarantees of payment by credit worthy parties.</div> <div style="margin-top: 6pt; font-size: 10pt;" align="left"> <div style="margin-top: 6pt; font-size: 10pt;" align="left">The gross credit exposure from our derivative contracts as of March 31, 2010, is summarized as follows.</div> <div align="center"> <table style="font-size: 10pt;" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr valign="bottom"> <td width="76%">  </td> <td width="5%">  </td> <td width="1%">  </td> <td width="5%">  </td> <td width="1%">  </td> <td width="5%">  </td> <td width="1%">  </td> <td width="5%">  </td> <td width="1%">  </td> </tr> <tr style="font-size: 8pt;" valign="bottom"> <td>  </td> <td>  </td> <td align="center" colspan="2"><b>Investment</b></td> <td>  </td> <td>  </td> <td align="center" colspan="2">  </td> <td>  </td> </tr> <tr style="font-size: 8pt;" valign="bottom"> <td style="border-bottom: #000000 1px solid;" align="left" nowrap="nowrap"><b>Counterparty Type</b></td> <td>  </td> <td style="border-bottom: #000000 1px solid;" align="center" colspan="2" nowrap="nowrap"><b>Grade(a)</b></td> <td>  </td> <td>  </td> <td style="border-bottom: #000000 1px solid;" align="center" colspan="2" nowrap="nowrap"><b>Total</b></td> <td>  </td> </tr> <tr style="font-size: 8pt;" valign="bottom"> <td>  </td> <td>  </td> <td align="center" colspan="6"><b>(Millions)</b></td> <td>  </td> </tr>  <tr style="background: #cceeff;" valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;">Gas and electric utilities</div> </td> <td>  </td> <td align="left">$</td> <td align="right">24</td> <td>  </td> <td>  </td> <td align="left">$</td> <td align="right">26</td> <td>  </td> </tr> <tr valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;">Energy marketers and traders</div> </td> <td>  </td> <td>  </td> <td align="right">—</td> <td>  </td> <td>  </td> <td>  </td> <td align="right">259</td> <td>  </td> </tr> <tr style="background: #cceeff;" valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;">Financial institutions</div> </td> <td>  </td> <td>  </td> <td align="right">794</td> <td>  </td> <td>  </td> <td>  </td> <td align="right">794</td> <td>  </td> </tr> <tr style="font-size: 1px;"> <td> <div style="margin-left: 15px; text-indent: -15px;">  </div> </td> <td>  </td> <td style="border-top: #000000 1px solid;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 1px solid;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> </tr> <tr valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;">  </div> </td> <td>  </td> <td align="left">$</td> <td align="right">818</td> <td>  </td> <td>  </td> <td>  </td> <td align="right">1,079</td> <td>  </td> </tr> <tr style="font-size: 1px;"> <td> <div style="margin-left: 15px; text-indent: -15px;">  </div> </td> <td>  </td> <td style="border-top: #000000 3px double;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> </tr> <tr style="background: #cceeff;" valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;">Credit reserves</div> </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td align="right">—</td> <td>  </td> </tr> <tr style="font-size: 1px;"> <td> <div style="margin-left: 15px; text-indent: -15px;">  </div> </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 1px solid;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> </tr> <tr valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;">Gross credit exposure from derivatives</div> </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td align="left">$</td> <td align="right">1,079</td> <td>  </td> </tr> <tr style="font-size: 1px;"> <td> <div style="margin-left: 15px; text-indent: -15px;">  </div> </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 3px double;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> </tr> </table> </div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     We assess our credit exposure on a net basis to reflect master netting agreements in place with certain counterparties. We offset our credit exposure to each counterparty with amounts we owe the counterparty under derivative contracts. The net credit exposure from our derivatives as of March 31, 2010, excluding collateral support discussed below, is summarized as follows.</div> <div align="center"> <table style="font-size: 10pt;" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr valign="bottom"> <td width="76%">  </td> <td width="5%">  </td> <td width="1%">  </td> <td width="5%">  </td> <td width="1%">  </td> <td width="5%">  </td> <td width="1%">  </td> <td width="5%">  </td> <td width="1%">  </td> </tr> <tr style="font-size: 8pt;" valign="bottom"> <td>  </td> <td>  </td> <td align="center" colspan="2"><b>Investment</b></td> <td>  </td> <td>  </td> <td align="center" colspan="2">  </td> <td>  </td> </tr> <tr style="font-size: 8pt;" valign="bottom"> <td style="border-bottom: #000000 1px solid;" align="left" nowrap="nowrap"><b>Counterparty Type</b></td> <td>  </td> <td style="border-bottom: #000000 1px solid;" align="center" colspan="2" nowrap="nowrap"><b>Grade(a)</b></td> <td>  </td> <td>  </td> <td style="border-bottom: #000000 1px solid;" align="center" colspan="2" nowrap="nowrap"><b>Total</b></td> <td>  </td> </tr> <tr style="font-size: 8pt;" valign="bottom"> <td>  </td> <td>  </td> <td align="center" colspan="6"><b>(Millions)</b></td> <td>  </td> </tr>  <tr style="background: #cceeff;" valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;">Gas and electric utilities</div> </td> <td>  </td> <td align="left">$</td> <td align="right">14</td> <td>  </td> <td>  </td> <td align="left">$</td> <td align="right">16</td> <td>  </td> </tr> <tr valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;">Energy marketers and traders</div> </td> <td>  </td> <td>  </td> <td align="right">—</td> <td>  </td> <td>  </td> <td>  </td> <td align="right">7</td> <td>  </td> </tr> <tr style="background: #cceeff;" valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;">Financial institutions</div> </td> <td>  </td> <td>  </td> <td align="right">477</td> <td>  </td> <td>  </td> <td>  </td> <td align="right">477</td> <td>  </td> </tr> <tr style="font-size: 1px;"> <td> <div style="margin-left: 15px; text-indent: -15px;">  </div> </td> <td>  </td> <td style="border-top: #000000 1px solid;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 1px solid;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> </tr> <tr valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;">  </div> </td> <td>  </td> <td align="left">$</td> <td align="right">491</td> <td>  </td> <td>  </td> <td>  </td> <td align="right">500</td> <td>  </td> </tr> <tr style="font-size: 1px;"> <td> <div style="margin-left: 15px; text-indent: -15px;">  </div> </td> <td>  </td> <td style="border-top: #000000 3px double;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> </tr> <tr style="background: #cceeff;" valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;">Credit reserves</div> </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td align="right">—</td> <td>  </td> </tr> <tr style="font-size: 1px;"> <td> <div style="margin-left: 15px; text-indent: -15px;">  </div> </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 1px solid;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> </tr> <tr valign="bottom"> <td> <div style="margin-left: 15px; text-indent: -15px;">Net credit exposure from derivatives</div> </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td align="left">$</td> <td align="right">500</td> <td>  </td> </tr> <tr style="font-size: 1px;"> <td> <div style="margin-left: 15px; text-indent: -15px;">  </div> </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td>  </td> <td style="border-top: #000000 3px double;" align="right" colspan="2" nowrap="nowrap">  </td> <td>  </td> </tr> </table> </div> <div align="left"> <div style="border-top: #000000 1px solid; margin-top: 16pt; font-size: 3pt; width: 18%;"></div> </div> <table style="font-size: 10pt;" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td width="3%"></td> <td width="1%"></td> <td width="96"></td> </tr> <tr valign="top"> <td align="left">(a)</td> <td>  </td> <td>We determine investment grade primarily using publicly available credit ratings. We include counterparties with a minimum Standard & Poor’s rating of BBB- or Moody’s Investors Service rating of Baa3 in investment grade.</td> </tr> </table> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     Our eight largest net counterparty positions represent approximately 95 percent of our net credit exposure from derivatives and are all with investment grade counterparties. Included within this group are six counterparty positions, representing 79 percent of our net credit exposure from derivatives, associated with Exploration & Production’s hedging facility. Under certain conditions, the terms of this credit agreement may require the participating financial institutions to deliver collateral support to a designated collateral agent (which is another participating financial institution in the agreement). The level of collateral support required is dependent on whether the net position of the counterparty financial institution exceeds specified thresholds. The thresholds may be subject to prescribed reductions based on changes in the credit rating of the coun terparty financial institution.</div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     At March 31, 2010, the designated collateral agent holds $113 million of collateral support on our behalf under Exploration & Production’s hedging facility. In addition, we hold collateral support, including letters of credit, of $39 million related to our other derivative positions.</div> </div> </div> </div> </div> </div> </div></div></div> </div> 40000000 -40000000 85000000 -85000000 <div> <div><div><div> <div style="margin-top: 12pt; font-size: 10pt;" align="left"><b>Note 1. General</b></div>  <div style="margin-top: 6pt; font-size: 10pt;" align="left">     Our accompanying interim consolidated financial statements do not include all the notes in our annual financial statements and, therefore, should be read in conjunction with the consolidated financial statements and notes thereto in our Annual Report on Form 10-K. The accompanying unaudited financial statements include all normal recurring adjustments that, in the opinion of our management, are necessary to present fairly our financial position at March 31, 2010, and results of operations, changes in equity, and cash flows for the three months ended March 31, 2010 and 2009.</div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates.</div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     On February 17, 2010, we completed a strategic restructuring that involved contributing certain of our wholly and partially owned subsidiaries to Williams Partners L.P. (WPZ), our consolidated master limited partnership, and restructuring our debt (see Note 9). As discussed further in Note 2, we have revised our segment presentation as a result of this strategic restructuring. The restructure disclosures in this filing should be read in conjunction with our 2009 Form 10-K.</div> <div style="margin-top: 12pt; font-size: 10pt;" align="left"><b><i>Goodwill</i></b></div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     We perform interim assessments of goodwill if impairment triggering events or circumstances are present. One such triggering event is a significant decline in forward natural gas prices. While nearer-term forward natural gas prices as of March 31, 2010, have declined compared to those used in our prior year-end analysis, we do not consider the impact across all future production periods to be significant enough to be indicative of a triggering event. It is reasonably possible that we may be required to conduct an interim goodwill impairment evaluation during 2010, which could result in a material impairment of goodwill.</div> </div></div></div> </div> 75000000 -243000000 -484000000 -410000000 -169000000 -308000000 20000000 17000000 -61000000 39000000 -2000000 11000000 444000000 376000000 428000000 304000000 33000000 0 1441000000 1443000000 7000000 0 7000000 5000000 0 5000000 0 -574000000 -38000000 29000000 5000000 0 5000000 12000000 0 12000000 1602000000 2033000000