Travis Campbell - Head, IR Steven Malcolm - Chairman, President and CEO Ralph Hill - President, E&P Alan Armstrong - President, Midstream Gathering & Processing Phillip Wright - President, Gas Pipeline Don Chappel - Senior Vice President, CFO

Steven Maresca - Morgan Stanley Carl Kirst - BMO Capital Holly Stewart - Howard Weil Faisel Khan - Citi Craig Shere - Tuohy Brothers Investment Research Andrew Gundlach - ASB Holdings

Thank you. Good morning everybody. Welcome to our first quarter call and as always thanks for your interest in the company. Steve Malcolm will be doing the presentation then we will review the few slides that we have. Be aware though, that all of our business unit heads are here and available for questions that will take right after Steve's comments. Also as usual, we've put together our data book which includes the normal information we provide each quarter. So, this morning, on the website williams.com, you should be able to find the slides, the data book, the press releases and the 10-Q, which was filed this morning as well. At the beginning of the slide deck is the forward-looking statements on slide number two and the disclaimer on oil and gas reserves on slide number three. Those are important and integral to our remarks this morning, so please review those. Also included are various non-GAAP numbers which have been reconciled back to Generally Accepted Accounting Principles. Those schedules are available and follow the presentation. As I suspect the call today should be rather brief because as you know we will be hosting the Analyst day in New York next Tuesday. At that time, all of our senior management will be there to go into a much more robust look at each of our businesses. So with that, I'll turn it over to Steve.

Thank you, Travis. Welcome to our first quarter call. Thank you for your interest in our company, and as Travis mentioned our discussion today should be very crisp as we are looking forward to our analyst and investor day next week in New York, and at that we will be talking more about strategies and tactics and the various growth opportunities at that meeting. So, this would be pretty quick, so looking at the first slide, slide four. A few of our first quarter results and accomplishments of course, first quarter recurring adjusted earnings per share is $0.36, which is up 64% over the first quarter of '09 results as well recurring segment profit of $589 million; it's 43% higher than our ' 09, first quarter. We increased our quarterly dividend by 14%. Of course, we completed our transformational transaction, which created a much larger WPZ. We've grown our position to Marcellus by adding another 11,000 acres in Columbia County, Pennsylvania, which brings our total acreage position in the Marcellus to above 45,000 acreage at a weighted average cost of about $2800 per acre. Began startup operations at Perdido Norte in the Western deepwater Gulf of Mexico, and I believe on Monday of this week we brought Transco's Mobile South expansion project into service adding deliverability to Southern markets. Turning to slide five, we are offering guidance for 2012 for the first time, but this shows that we are all about returning to significant value creation. Let me go through the prior guidance here. In 2010, our prior guidance mid-point was $1.35 you see here were to $1.28, and that's driven by obviously changes in our commodity price assumptions. Crude oil from $75 to $80, but Henry Hub nat gas from $575 to $450, and so that creates the change that we're reflecting here. As well, in 2011, $1.83 versus $1.87, driven by an increase in crude oil prices from $80 to $86, but nat gas going from $650 to $550. And then we're showing for the first time again, mid-point guidance for 2012 of $2.38, that all represents about a 36% CAGR with respect to our earnings per share. Slide six, please, shows the higher segment profit growth and shows the relative contributions by WPZ and our E&P business. And overall, you see a 78% increase in total recurring adjusted segment profit over this period of time. Slide seven, we've talked about our many growth opportunities, and as you see here, we're expecting to invest over $5 billion in growth in the 2010, 2012 timeframe. This slide is one that the investors are appreciative of, in that we do break out our capital by business unit and by category -- capital for maintenance of facilities, capital for maintenance of volumes and growth projects. So, obviously, a lot of wonderful, exciting growth opportunities during this three year timeframe. Slide eight just gives you -- reminds you of our premier E&P portfolio, anchored by our position in the Piceance. And we are a proven optimizer of resource plays; year-after-year, a leader in terms of costs. We believe that the Piceance is competitive with the best of the Shale plays. And I think we have a unique portfolio that allows us to ramp-up or ramp-down, depending on the price signals that the market is offering. Slide nine; if you look at all three of our business units, probably there are more growth opportunities in the midstream space. And again, we'll talk more about these in New York next week, but looking at this map, we have the growth opportunities in our traditional basins. Out West, we have Wamsutter TXP4 or Echo Springs TXP4, adding about 350 million a day of processing capacity, which will come on in late 2010. We have the Paradox Basin, where we continue to build toward a large scale midstream solution for producers in this promising basin. And then we're looking forward to a full year benefit of the Willow Creek facility, which is a course of 450 cubic foot per day processing facility. In the Gulf, Perdido Norte went into operation in late first quarter 2010, and so we'll be getting the benefit of that project. Probably the most exciting opportunities are in the Marcellus, and there we -- of course, done the Laurel Mountain Midstream, LLC. We've done the Springville project, but we just have a lot more opportunities, as producers seek to focus their resources on their E&P activities and in many cases, they are looking to outsource some of their midstream requirements. Slide 10 just gives you the universe of gas pipeline projects, and there are a lot of base hits here, obviously, and the outlook is excellent for steady, stable cash flows backed by customers with high quality credit. So, this is a business where you won't see us taking big risks, but all of these projects are backed by our customers. Before I conclude, let me cover a couple of questions that we have received from investors over the last couple of weeks. One relates to the Gulf of Mexico situation. Are we faced with any potential exposure to the efforts to clean up the oil slick? Is our production impacted in any way? And the simple answer is no. Our assets have not been affected by loss of production, have not been affected by the spill, have not been affected by any of the cleanup activities, and we have no reason to believe that they will. The BP platform was the drilling platform that was not connected to any infrastructure. We don't anticipate any problems related to the spill. We did limit work on Canyon Station just as a precaution, but again, we don't see any impact to our operations in the Gulf. As well, there have been questions about the WMC Exchange Offer, any updates there on timing? And I would just say, again, that representatives of Williams and WPZ have commenced discussions with representatives of the Conflicts Committee, of the Board of Directors of the WMZ general partner regarding the exchange offer at the ratio that was discussed earlier. And the parties are considering structural alternatives for completion of the exchange in a single transaction, including without limitation, a potential merger transaction. So, we're still moving ahead. We would expect a second quarter kind of close. It could slip into third quarter, but I think it will still be done on the basis that we've essentially described to you in the past. Concluding then on slide 11, we do believe that Williams is a winning value creator, and I think the key points for you to have in mind -- we've never seen as many growth opportunities that we are seeing today. Those will clearly generate value for the Company. And I think the fact that we have gone forward with the structural transformation that we closed earlier in the first quarter will ensure that we're able to capture these many growth opportunities. The integrated business model is working well for us. The Piceance Basin, where our production is over 600 million a day, is a world class resource, as good as any of the Shale plays. We are committed to going forward in a very disciplined manner, and a strong growth outlook, and we expect 2012 recurring adjusted earnings per share to exceed our record 2008 results. So with that, we look forward to seeing you next week and I'll be happy to take any questions that you have this morning.

(Operator Instructions). First is Steven Maresca of Morgan Stanley. Steven Maresca - Morgan Stanley: First question, you talked about production levels that you think will ramp-up throughout the rest of the year, and the first quarter was about 1.1 in the U.S. Bcf a day. Are you -- can you talk about all where you are right now, and then in the second quarter have you started that ramp-up and are you above that level?

This is Ralph Hill. Yes, we have started it up. Let me just go through our volumes just for a minute to take advantage of that question. We did drop last year from 28 rigs in the Piceance down to about as low as seven. We're currently at about eight in the Valley and two in the Highlands, and we'll add a few rigs in both those areas during the course of the year. We also deferred about 70 completions in the Valley, and those things are all starting to be completed now. We've got a few more -- a couple more rigs running, so we do expect and we have seen our volumes are starting to turn back to where we'll be essentially for the year, will be flat with 2009 volumes. So, we do see that come out, and so we're right on plan, right where we thought we'd be, and the volumes are starting to turn back around a little bit. Steven Maresca - Morgan Stanley: Okay. As a follow-up to that, you guys obviously added some acreage in the Marcellus. What is your ultimate goal in the area over the next year or two?

Well, we like the area, as Steve mentioned. We now are about 45,000 acres. We'd like that position to continue to grow. I think a meaningful position would be about double that at some point. Again, we'll be disciplined, but we see good opportunities. We've been able to grow our -- double the position we started out with, which was the 22,000 acres with Rex. And we would like to continue to grow our position and we'll continue to work towards that in a disciplined manner. Steven Maresca - Morgan Stanley: Okay and final quick question. I see that you guys in the NGL to Crude Relationship and your forecast kind of tails off a little bit. Is there a reason you're thinking that we'll see a weakening of that relationship?

Really that's just driven by continued strength in crude oil to natural gas, and so we're not predicting that bigger change really in the gas to NGL ratio; so basically, our margins are held fairly flat on a pure gas to NGL relationship. We did have very strong ethane demand going into the first quarter, and that was subsided a little bit as there were some ethylene crackers being out towards the end of the first quarter. So that's tapered demand. We've certainly seen ethane fall off a little bit in terms of how strong ratio was earlier in the first quarter. Steven Maresca - Morgan Stanley: Okay. Thanks a lot and look forward to seeing you next week.

Our next question today comes from Carl Kirst, BMO Capital. Carl Kirst - BMO Capital: Actually, if I could, Ralph, just piggyback off the Marcellus. The 11,000 acres that were acquired, are you basically building out separate from your Rex position but near the Rex acreage, or you going off in a different area? Can you give us some color as to where you're looking? 2800?

We're doing both. We have added what's called bolt-ons, and those clear fields, Westmoreland, and Center Counties, which is where Rex is. We've also picked up some acreage in Columbia County now and got some acreage in Bradford and Susquehanna. So we're kind of -- we're staying in the Northeastern part, from the middle to the Northeastern part at this point, but adding to our position around the Rex Basin, and we're seeing other areas we like and trying to get sizable blocks that we can drill in efficient manners. Carl Kirst - BMO Capital: And then this is sort of a combination question for both Ralph and Alan. Just as far as we look at the Shale map and we look at the opportunity, just noting that the Eagle Ford is not on that list and then maybe we will talk more about it next week, maybe but is that something that we should be keeping as perhaps optionality of where you guys might go? What is right now what you're seeing in the Marcellus and the deal flow that you're a part of right now is basically too compelling to look elsewhere. Ralph Hill Well, from the E&P perspective we do like the Eagle Ford. We've looked at in a number of opportunities there and continued to do that. So, w will obviously if we can put something there that makes good economic sense. We'd like to be there. Alan Armstrong On the midstream side, we've got a real opportunity there right now with our Markham that we just completed the expansion on, and we have frac capacity, transport capacity out of that plant as well. So, pretty rare situation there what we've got available capacity that we basically would just be pushing out some very lean offshore volumes that are coming into Markham today, and that so we would have space available for the Eagle Ford and we're working with other pipeline including Transco to see what other capabilities are there to get that gas transported and accessed through the Eagle Ford. So, the McMullen lateral that Transco has is very well positioned right along there, and so we think we got some great opportunities and some competitive advantage there in that base. Carl Kirst - BMO Capital: Great and maybe last question if I could really fulfill on the pipeline side. As we look at the range of the EBIT guidance if you will, can you help me better get a sense of what's going to push pipelines to the higher or to the lower end of the range. Is it specific regional bases? Is it interruptible volumes? Is it just simply price of gas on retained fuel?

Carl, this is Phill. You kind of put out there on the table the range of some things that are possible, but I would take off the table the variability on like basis differentials and interruptible because on the down side, about the only spot we have that's vulnerable to that is in the production area on Transco under the IT Feed rate. And we've got a pretty healthy decline baked into our forecast on the interruptible in that end, but it's only a modest piece of the total cost of service on Transco. Just for round numbers, in the ballpark of $60 million, $66 million. So it's not a huge part of the cost to service on Transco. On the upside, it will be a successful completion of growth projects, and so we'll have expansions that will bump that up along the way. And then we're always seeking opportunities to achieve better outcomes on our costs. But we'll just have to take a look at that. We have to come back in for rate cases in 2013 on both Northwest and Transco. We have come back provisions on both of those. Carl Kirst - BMO Capital: Thanks for the color, guys.

Our next question today comes from Ted Durbin, Goldman Sachs. Ted Durbin - Goldman Sachs: I just had a question -- first question is on the dividend and just thinking about cash. The shareholders get a pretty big dividend hike in percentage terms, maybe not in dollar terms, but maybe just walk through how you're thinking about your payout ratio and generally returning cash to shareholders? Don Chappel This is Don Chappel. Good morning. Well, as you know, we did not increase the dividend in 2009 as a result of the global financial crisis and recession. Following the WPZ transformation, and the very stable business and the growth that we enjoy from WPZ and the growing distribution, we felt that an increase in the dividend was appropriate, and we thought at a level that was exceeding the level of increase that we passed on, back in the 2007, 2008 period. So that's how we're thinking about it. I think it will be a function of those reliable cash flows coming up from WPZ as well as alternative uses of cash. But I do believe Steve and the Board also agree that dividend is an important part of the total picture for our investors. So, I'm not sure if that helps. We don't have a formula, but we are committed to the dividend and increasing the dividend over time. Ted Durbin - Goldman Sachs: Now it's helpful. And then if I could just come back to the E&P side, you raised the mid-point of the CapEx guidance. Can you just give us a little more detail on what's behind that and just the moving pieces there? Steve Malcolm Yes, essentially it was just some of the lease acquisitions that we've done and exploration opportunities we're doing. And we're going to break that out next week to show that the base development side -- base development drilling is about the same as we were. It's just we've in guidance now; we're putting in some additional CapEx that we anticipate we will spend on new opportunities. Ted Durbin - Goldman Sachs: That's helpful.

Holly Stewart at Howard Weil has the next question. Holly Stewart - Howard Weil: Just real quickly a macro question really, for Alan. Alan, we've seen a lot of producers, most recently, Chesapeake yesterday, talking about shifting quite a bit of their capital from gas toward liquids. What is your thought on this change, and just really as far as kind of the potential impact towards the liquids market? Alan Armstrong Right. Well, certainly, NGL margins are very beneficial to producers today and adding a lot of value. But I would certainly say in the case where they're going into new exploration areas like Chesapeake announced that that's a long ways away from actually producing NGLs into the market. And a lot of things will change over time by the time those NGLs get into the market. So, there's a lot of infrastructure. The Marcellus is a great example of that, where a lot of rich gas, but we're a long ways away from having the infrastructure available to get those NGLs into the market. And so I think over time, I think if we continue to see high margins, we should continue to see NGL supplies increase. And on the heavier's end, I don't see that being a big problem because as long as crude to gas ratios remain where they are, that will still be a favored product in terms of and gasoline into those markets. On the ethane side, we certainly would have to see some expansion in market. We're seeing that today through conversion of heavy and cracking capacity, but eventually, there's a limit to that. Our hope, obviously, would be that we see an opportunity to long-term to expand demand in the U.S. on the petchem side, if those NGLs continue to be such favored relative to naphtha and other products that are cracked globally. So, certainly though, I would say the fundamentals are that we've got strong margins. We should expect supply to be chasing that margin, and I think that's what we'll see for some period of time.

Up next we'll hear from Faisel Khan, Citi. Faisel Khan - Citi: If I'm looking at the -- Ralph, if I'm looking at the volumes in the Piceance sequentially from fourth quarter to first quarter, the drop-off seem a little bit steeper and I think you said you deferred 70 well completions. But can you talk a little bit about the steeper drop-off sequentially from fourth quarter to first quarter?

Yes. We did defer completions, but the fourth quarter versus the first quarter has a -- the fourth quarter had about $50 million of positive accounting adjustments in there, which really should have been spread out through the year, just normal adjustments that come through and they kind of were all lumped in the fourth quarter. So, that volume should have been spread out flatter during the second, third, and fourth quarters. So if you smooth that out as it should have been, then we actually had a sequential decline of only about 2%. And that will be -- you'll see that catch up during the year. So the sequential decline looked like it was more about 11% or 8% to 11%, depending on which basin you're looking at. In reality, that was about a 2% decline. Faisel Khan - Citi: Okay, got you. And then I guess, if we're looking at your exploration project for this year versus the last two years, I mean, how would you compare this year's budget to the last couple of years? Would you consider it kind of more robust, the same? Or are you guys hunting a little bit more than you were in the past?

It's more robust. And it's -- and we also, in the past, we've just added as we've added deals, we put that into guidance. And this year, we're putting it into guidance before we're actually adding deals, just to let you know the flavor of what we think and anticipate we could spend. Faisel Khan - Citi: Okay, and then on a total kind of corporate sense, if you're looking at your strategic opportunities and you guys have a strong liquidity position, I know you said that you were going to be disciplined about how you allocate your capital, but is there a preference of where these dollars go, whether it's midstream or upstream? How are you guys looking at those sorts of opportunities right now?

Faisel, this is Don. We see WPZ to be self-funding; while Williams could make incremental investment in WPZ, it's more likely that the excess capital that we have would be pointed toward E&P or some other corporate use versus plowing it back into midstream or gas pipelines in light of the very advantaged sources of capital that the MLP space, WPZ enjoys. Faisel Khan - Citi: Okay, got you. I guess on that point, looking -- if you were to -- I was going through your data book, and I didn't see sort of a breakdown of what Williams C-Corp as a standalone entity had in terms of net debt after at the end of the quarter or cash on hand. I think I saw some of the data, but isn't WMB as a C-Corp have a much higher level of liquidity and a much better balance sheet than it did in the past?

Williams has about $2.3 billion of debt at the corporate level, in addition to the debt that's consolidated at WPZ, and it's -- and the pipeline debt that's part of WPZ. In terms of total liquidity, it's largely -- cash is about the same as what you've seen before. It is in the data book; I'll find a page here. It's reported the ending cash of $1.64 billion. Beginning of the year, it was $1.86 billion, so still very substantial cash balance. Again, about $500 million of that's offshore. International hasn't been taxed in the U.S. That's earmarked for our Canadian expansions, which we didn't talk about today but we'll talk about next week. And we have some exciting opportunities up in Canada. So we take that out of the equation, and then the balance is available for our opportunities here in the U.S., and largely focused on corporate and E&P opportunities. Faisel Khan - Citi: So, C-Corp debt is $2.3 billion and $1.6 billion of cash? Don Chappel Including the international cash. Faisel Khan - Citi: Thank you very much. Appreciate it.

And we'll now go to Jonathan Lefebvre, Wells Fargo. Jonathan Lefebvre - Wells Fargo: Most of my questions have been asked. Just on the Rex, or the Appalachia, Marcellus transaction, I was just wondering if that was in the [AMI] with Rex sort of that was outside of it? You may have already stated that, but just wanted a clarification.

Part of it was bolt-ons to the Rex area, but a big part of it was outside of it. So we've now got about -- initially, I think Rex was 22,000 net acres to us and we'll -- that's probably 24,000 or so. So then the other 21,000 or 20,000 plus acres is really 100% Williams outside of that [AMI]. Jonathan Lefebvre - Wells Fargo: Can you give us a sense for what type of royalty rates were on those leases and terms?

They're exactly where you see most of the industry right now. The royalty rates are -- I think we're getting in the 80% net range in those kinds of things. Jonathan Lefebvre - Wells Fargo: And then just finally, in terms of pursuing other opportunities in the Marcellus, are you guys still -- would you consider any JV type of structures, or would you prefer not to at this point?

We're actually looking at it in kind of a three pronged way. We're doing some leasing, as you can tell. We're doing some JV discussions and looking at JVs. And then there's also the acquisition side of the world. So we're looking really on all three facets. Jonathan Lefebvre - Wells Fargo: Okay, thanks. I appreciate it.

And our next question today comes from Craig Shere, Tuohy Brothers Investment Research. Craig Shere - Tuohy Brothers Investment Research: I'm sure you're going to talk about this in more detail next week, but can you speak a little more in detail to the decision process and how to handle excess cash and free cash flow at Williams Corporate? Is it just when we have higher prices? I think you all had guided that you would kind of go pedal to the metal and push our production growth organically from, say, 2011 guidance into the 12% range to more like 20% plus, which you have the ability to do at Will. But then at lower prices for the commodity deck, you're just looking to be an acquirer? Is that basically how we should be thinking about things?

This is Don. Certainly, we have a vast resource of low cost opportunities with attractive returns. However, cash and credit are limiting factors as well as our desire not to flood the market with gas and drive prices even lower. But clearly, as prices go higher, our operating cash flows go up and we have more cash to reinvest in that business without stressing credit or raising capital. On the other hand, as prices go down, we have the ability to pull back on our drilling so as not to suck too much cash in a low price environment and negatively affect our ratings. So the ratings agencies, I will tell you are very focused, not just on Williams, but all companies in the E&P space as well as more broadly in terms of outspending your operating cash flows in the E&P side of the business. So not to say that it can't be done, but certainly the credit agencies are very focused on that, and so we tend to flex our production up in the period of high prices and down in the period of low prices, so that our Capex tends to match our operating cash flows. Now I would say that given that we have a very substantial and excess cash balance at corporate in excess of our needs, we have an ability to spend some of that excess cash, and we focus that on diversifying our portfolio rather than just drilling more wells. Craig Shere - Tuohy Brothers Investment Research: I guess that's what I was alluding to that in a less favorable commodity environment, are you focused a little more on growing the business versus weighing that against avenues of kind o distributing cash to shareholders in one form or another? Don Chappel Again, I would say, and I've said this before that our credit metrics are not where we'd like to see them today in light of the low gas price environment. And certainly a stock buyback, if that's the code, would be off the table in terms of our rating. So it really gets down to the extent that we reinvest in good assets in the business, that tends to be a credit positive. But if we take the cash off the balance sheet and buy back stock, that's a bad credit answer. Craig Shere - Tuohy Brothers Investment Research: Understood; thank you.

Up next is Andrew Gundlach of ASB Holdings. Andrew Gundlach - ASB Holdings: Steve, this is probably a question for next week, but hopefully, you'll allow me to ask it right here. Since your MLP restructuring, there has not been an energy conference or MLP conference I've gone to where someone hasn't said, haven't you looked at Williams? And aren't you going to do the same thing? And of course, you can guess the companies I'm talking about. It's a groundbreaking transaction. It's been bondholder-friendly and WPZ-friendly; but WMB's stock really hasn't moved all that much. I guess you could say the same thing about Questar. I'm curious how you see all of this restructuring ultimately paying off for the WMB shareholder?

Well, thank you, Andrew. We look forward to seeing you next week. Williams stock, WMB stock, has performed pretty well since we made the announcement, relative to some of the other so called integrated players. As you said, it was a groundbreaking transaction. We really like it in that. It's created a large-scale MLP that will have access to low cost capital, and that's going to let us capture the many growth opportunities that we see before us. I think Andrew that, again, as we continue to execute on the plan, as we continue to grow PZ, as we grow the distributions, I think that people will see how attractive the cash flow movement is to Williams. And I really think that there are some investors who are sitting on the sidelines saying, okay, let's see how Williams and how PZ execute on this plan. So, I'm still very excited and optimistic about the new structure. And I think, over time, that it will translate into very good things for Williams and its shareholders.

And, everyone, at this time, there are no further questions. I'll turn the conference back over to our speakers for any additional or closing remarks.

Well, again, thank you for your participation and attention today. We look forward to an exciting Investor Day next week and we'll see you then.

Ladies and gentlemen, that does conclude today's conference. We would like to thank you all for your participation.