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<div>
<div style="FONT-FAMILY: 'TIMES NEW ROMAN',TIMES,SERIF">
<div style="MARGIN-TOP: 12pt; FONT-SIZE: 10pt" align="left">
<b>Note 14. Recent Accounting Standards</b>
</div>
<div style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align="left">
     In December 2008, the Financial Accounting Standards
Board (FASB) issued FASB Staff Position No. FAS 132 (R)-1,
“Employers’ Disclosures about Postretirement Benefit Plan
Assets” (FSP FAS 132 (R)-1). This FASB Staff Position
(FSP) amends FASB Statement No. 132 (revised 2003),
“Employers’ Disclosures about Pensions and Other
Postretirement Benefits” (SFAS No. 132 (R)), to provide
guidance on an employer’s disclosures about plan assets of
a defined benefit pension or other postretirement plan. FSP
FAS 132 (R)-1 applies to an employer that is subject to the
disclosure requirements of SFAS No. 132(R). An employer is
required to disclose information about how investment
allocation decisions are made, including factors that are
pertinent to an understanding of investment policies and
strategies. An employer should disclose separately for
pension plans and other postretirement benefit plans the
fair value of each major category of plan assets as of each
annual reporting date for which a statement of financial
position is presented. Asset categories should be based on
the nature and risks of assets in an employer’s plan(s). An
employer is required to disclose information that enables
users of financial statements to assess the inputs and
valuation techniques used to develop fair value
measurements of plan assets at the annual reporting date.
For fair value measurements using significant unobservable
inputs (Level 3), an employer should disclose the effect of
the measurements on changes in plan assets for the period.
An employer should provide users of financial statements
with an understanding of significant concentrations of risk
in plan assets. The disclosures about plan assets required
by FSP FAS 132 (R)-1 are to be provided for fiscal years
ending after December 15, 2009. Upon initial application,
the provisions of FSP FAS 132 (R)-1 are not required for
earlier periods that are otherwise presented for
comparative purposes. Earlier application of the provisions
of FSP FAS 132 (R)-1 is permitted. We will assess the
application of this FSP on our disclosures in our
Consolidated Financial Statements.
</div>
</div>
<div style="FONT-FAMILY: 'TIMES NEW ROMAN',TIMES,SERIF">
<div style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align="left">
     In June 2009, the FASB issued SFAS No. 167,
“Amendments to FASB Interpretation No. 46(R)” (SFAS
No. 167). This Statement amends Interpretation 46(R) to
require an entity to perform a qualitative analysis to
determine whether the entity’s variable interest or
interests give it a controlling financial interest in a
variable interest entity (VIE). This analysis identifies
the primary beneficiary of a VIE as the entity that has
both the power to direct the activities that most
significantly impact the VIE’s economic performance and the
obligation to absorb losses or the right to receive
benefits of the VIE. SFAS No. 167 amends Interpretation
46(R) to replace the quantitative-based risks and rewards
approach previously required for determining the primary
beneficiary of a VIE. SFAS No. 167 is effective as of the
beginning of an entity’s first annual reporting period that
begins after November 15, 2009 and for interim periods
within that first annual reporting period. Earlier
application is prohibited. We will assess the application
of this Statement on our Consolidated Financial Statements.
</div>
<div style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align="left">
     In June 2009, the FASB issued SFAS No. 168 “The FASB
Accounting Standards Codification <sup style=
"FONT-SIZE: 85%; VERTICAL-ALIGN: text-top">TM</sup> and the
Hierarchy of Generally Accepted Accounting Principles — a
replacement of FASB Statement No. 162” (SFAS No. 168). This
Statement is effective for financial statements issued for
interim and annual periods ending after September 15, 2009
and establishes the FASB Accounting Standards Codification
as the source of authoritative accounting principles to be
applied in the preparation of financial statements in
conformity with Generally Accepted Accounting Principles.
SEC registrants must also follow the rules and
interpretative releases of the SEC. We will apply SFAS
No. 168 in the third quarter of 2009, and it will not have
an impact on our Consolidated Financial Statements.
</div>
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<div style="FONT-FAMILY: 'TIMES NEW ROMAN',TIMES,SERIF">
<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 proceeding have
engaged the FERC’s Dispute Resolution Service to assist
with settlement discussions.
</div>
<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" 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 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 we anticipate
will satisfy 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 June 30,
2009. Collection of the interest and the payment of
interest on refund amounts from the escrow accounts is
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. Because of our settlements, we do not expect that the
final resolution of refund obligations will have a material
impact on us. 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.
</div>
<div style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align="left">
  
</div>
<div style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align="left">
<b><i>Reporting of Natural Gas-Related Information to Trade
Publications</i></b>
</div>
</div>
<div style="FONT-FAMILY: 'TIMES NEW ROMAN',TIMES,SERIF">
<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:
</div>
<div style="MARGIN-TOP: 6pt">
<table style="FONT-SIZE: 10pt" cellspacing="0" cellpadding=
"0" width="100%" border="0">
<tbody>
<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 nowrap="nowrap" align="left" width="3%">
<b>•</b>
</td>
<td width="1%">
 
</td>
<td>
State court litigation in California brought on
behalf of certain business and governmental
entities that purchased gas for their use. On
March 23, 2009, we reached a settlement for an
insignificant amount that resolved all California
gas index litigation. In May 2009, these cases were
dismissed with prejudice.
</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 nowrap="nowrap" align="left" width="3%">
<b>•</b>
</td>
<td width="1%">
 
</td>
<td>
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.
</td>
</tr>
</tbody>
</table>
</div>
<div style="MARGIN-TOP: 6pt">
<table style="FONT-SIZE: 10pt" cellspacing="0" cellpadding=
"0" width="100%" border="0">
<tbody>
<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="6%">
 
</td>
<td nowrap="nowrap" 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="6%">
 
</td>
<td nowrap="nowrap" align="left" width="3%">
<b>•</b>
</td>
<td width="1%">
 
</td>
<td>
On October 29, 2008, the Tennessee appellate court
reversed the state court’s dismissal of the
plaintiffs’ claims on federal preemption grounds
and sent the case back to the lower court for
further proceedings. We and other defendants
appealed the reversal to the Tennessee Supreme
Court, and we expect the court’s ruling in 2010.
</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="6%">
 
</td>
<td nowrap="nowrap" align="left" width="3%">
<b>•</b>
</td>
<td width="1%">
 
</td>
<td>
On January 13, 2009, the Missouri state court
dismissed a case for lack of standing. The
plaintiff has appealed.
</td>
</tr>
</tbody>
</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" 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 June 30, 2009, we had accrued
liabilities of $4 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>
<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
previous mercury clean-ups in Washington. Consequently,
Northwest Pipeline is conducting additional remediation
activities at certain sites to comply with Washington’s
current environmental standards. At
</div>
<p style="FONT-SIZE: 10pt" align="center">
  
</p>
</div>
<div style="FONT-FAMILY: 'TIMES NEW ROMAN',TIMES,SERIF">
<div style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align="left">
June 30, 2009, we have accrued liabilities of $9 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 a new air quality
standard for ground level ozone. The new standard 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 June 30,
2009, 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. We are currently preparing a response to this
request.
</div>
<div style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align="left">
    <i>Former operations, including operations classified
as discontinued</i>
</div>
<div style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align="left">
     In connection with the sale of certain assets and
businesses, we have retained responsibility, through
indemnification of the purchasers, for environmental and
other liabilities existing at the time the sale was
consummated, as 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 June 30, 2009, 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 June 30, 2009, we have accrued environmental
liabilities of $13 million related primarily to our:
</div>
<div style="MARGIN-TOP: 6pt">
<table style="FONT-SIZE: 10pt" cellspacing="0" cellpadding=
"0" width="100%" border="0">
<tbody>
<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 nowrap="nowrap" 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 nowrap="nowrap" 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 nowrap="nowrap" 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 nowrap="nowrap" align="left" width="3%">
<b>•</b>
</td>
<td width="1%">
 
</td>
<td>
Former exploration and production and mining
operations.
</td>
</tr>
</tbody>
</table>
</div>
<p style="FONT-SIZE: 10pt" align="center">
     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.
</p>
</div>
<div style="FONT-FAMILY: 'TIMES NEW ROMAN',TIMES,SERIF">
<div style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" 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" 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 have opposed class certification and a hearing
on plaintiffs’ second motion to certify the class was held
in April 2005. We are awaiting a decision from 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">
    <i>Grynberg</i>
</div>
<div style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align="left">
     In 1998, the U.S. Department of Justice (DOJ) informed
us that Jack Grynberg, an individual, had filed claims on
behalf of himself and the federal government, in the United
States District Court for the District of Colorado under
the False Claims Act against us and certain of our wholly
owned subsidiaries. The claims sought an unspecified amount
of royalties allegedly not paid to the federal government,
treble damages, a civil penalty, attorneys’ fees, and
costs. In connection with our sales of Kern River Gas
Transmission in 2002 and Texas Gas Transmission Corporation
in 2003, we agreed to indemnify the purchasers for any
liability relating to this claim, including legal fees. The
maximum amount of future payments that we could potentially
be required to pay under these indemnifications depends
upon the ultimate resolution of the claim and cannot
currently be determined. Grynberg had also filed claims
against approximately 300 other energy companies alleging
that the defendants violated the False Claims Act in
connection with the measurement, royalty valuation and
purchase of hydrocarbons. In 1999, the DOJ announced that
it would not intervene in any of the Grynberg cases. Also
in 1999, the Panel on Multi-District Litigation transferred
all of these cases, including those filed against us, to
the federal court in Wyoming for pre-trial purposes. The
District Court dismissed all claims against us and our
wholly owned subsidiaries. On March 17, 2009, the Tenth
Circuit Court of Appeals affirmed the District Court’s
dismissal, and on May 4, 2009, the Tenth Circuit Court of
Appeals denied Grynberg’s request for rehearing. Grynberg
has filed with the United States Supreme Court a petition
for a writ of certiorari requesting review of the Tenth
Circuit Court of Appeal's ruling.
</div>
<div style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align="left">
    <i>Securities class actions</i>
</div>
<div style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align="left">
     Shareholder class action suits were filed against us
in 2002 in the United States District Court for the
Northern District of Oklahoma alleging that we and
co-defendants, WilTel, previously a subsidiary known as
Williams Communications, and certain corporate officers,
acted jointly and separately to inflate the price of WilTel
securities.
</div>
<div style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align="left">
     In 2007, the court granted various defendants’ motions
for summary judgment and entered judgment for us and the
other defendants. On February 18, 2009, the Tenth Circuit
Court of Appeals affirmed the lower court’s decision. The
plaintiffs did not request a writ of certiorari from the
United States Supreme Court to appeal the Tenth Circuit’s
ruling. This matter is concluded.    
</div>
<div style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align="left">
<i>    Gulf Liquids litigation</i>
</div>
</div>
<div style="FONT-FAMILY: 'TIMES NEW ROMAN',TIMES,SERIF">
<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" align="left">
    <i>Wyoming severance taxes</i>
</div>
<div style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align="left">
     In August 2006, the Wyoming Department of Audit
(DOA) assessed our subsidiary, Williams Production RMT
Company, additional severance tax and interest for the
production years 2000 through 2002. In addition, the DOA
notified us of an increase in the taxable value of our
interests for ad valorem tax purposes. We disputed the
DOA’s interpretation of the statutory obligation and
appealed this assessment to the Wyoming State Board of
Equalization (SBOE). The SBOE upheld the assessment and
remanded it to the DOA to address the disallowance of a
credit. We appealed to the Wyoming Supreme Court but the
court ruled against us in December 2008. The negative
assessment for the 2000-2002 time period resulted in
additional severance and ad valorem taxes of $4 million.
During the second quarter of 2009, we made partial payments
totaling $24 million, including interest, for periods
through 2008 and have an additional $21 million accrued at
June 30, 2009 related to this matter representing our
estimated remaining exposure, including interest. On
April 14, 2009, the Wyoming Supreme Court denied our
petition for rehearing and issued its mandate affirming its
prior published decision in this case.
</div>
<div style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" 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. The plaintiffs claim that the class might be
in excess of 500 individuals and seek an accounting and
damages. We have reached a final partial settlement
agreement for an amount that was previously accrued. We
anticipate trial in 2010 on remaining issues related to
royalty payment calculation and obligations under specific
lease provisions. We are not able to estimate the amount of
any additional exposure at this time.
</div>
<div style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align="left">
     Certain other royalty matters are currently being
litigated by other producers with a federal regulatory
agency and with a state agency in New Mexico. Although we
are not a party to these matters, the final outcome of
those cases might lead to a future unfavorable impact on
our results of operations.
</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
</div>
<p style="FONT-SIZE: 10pt" align="center">
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.
</p>
</div>
<div style="FONT-FAMILY: 'TIMES NEW ROMAN',TIMES,SERIF">
<div style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align="left">
     At June 30, 2009, 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: 12pt; 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>
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<div style="FONT-FAMILY: 'TIMES NEW ROMAN',TIMES,SERIF">
<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 June 30, 2009, no loans are outstanding under our
credit facilities. Letters of credit issued under our
credit facilities are:
</div>
<div align="center">
<table style="FONT-SIZE: 10pt" cellspacing="0" cellpadding=
"0" width="100%" border="0">
<tbody>
<tr valign="bottom">
<td width="64%">
 
</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="1%">
 
</td>
</tr>
<tr style="FONT-SIZE: 8pt" valign="bottom">
<td>
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="middle" colspan="2">
<b>Credit Facilities</b>
</td>
<td>
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="middle" colspan="2">
<b>Letters of Credit at</b>
</td>
<td>
 
</td>
<td>
 
</td>
</tr>
<tr style="FONT-SIZE: 8pt" valign="bottom">
<td>
 
</td>
<td>
 
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" nowrap=
"nowrap" align="middle" colspan="2">
<b>Expiration</b>
</td>
<td>
 
</td>
<td>
 
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" nowrap=
"nowrap" align="middle" colspan="2">
<b>June 30, 2009</b>
</td>
<td>
 
</td>
<td>
 
</td>
</tr>
<tr style="FONT-SIZE: 8pt" valign="bottom">
<td>
 
</td>
<td>
 
</td>
<td>
 
</td>
<td>
 
</td>
<td>
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="middle" colspan="2">
<b>(Millions)</b>
</td>
<td>
 
</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 align="middle" colspan="3">
October 2010
</td>
<td>
 
</td>
<td align="left">
$
</td>
<td align="right">
207
</td>
<td>
 
</td>
<td>
 
</td>
</tr>
<tr valign="bottom">
<td>
<div style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">
$1.5 billion unsecured credit facility
</div>
</td>
<td>
 
</td>
<td align="middle" colspan="3">
May 2012
</td>
<td>
 
</td>
<td>
 
</td>
<td align="right">
45
</td>
<td>
 
</td>
<td>
 
</td>
</tr>
<tr style="BACKGROUND: #cceeff" valign="bottom">
<td>
<div style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">
$200 million Williams Partners L.P. unsecured
credit facility
</div>
</td>
<td>
 
</td>
<td align="middle" colspan="3">
<font style="WHITE-SPACE: nowrap">December
2012</font>
</td>
<td>
 
</td>
<td>
 
</td>
<td align="right">
—
</td>
<td>
 
</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" nowrap=
"nowrap" align="right" colspan="2">
 
</td>
<td>
 
</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 align="left">
$
</td>
<td align="right">
252
</td>
<td>
 
</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" nowrap=
"nowrap" align="right" colspan="2">
 
</td>
<td>
 
</td>
<td>
 
</td>
</tr>
</tbody>
</table>
</div>
<div style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align="left">
     Lehman Commercial Paper Inc., which is committed to
fund up to $70 million of our $1.5 billion revolving credit
facility, filed for bankruptcy in October 2008. Lehman
Brothers Commercial Bank, which has not filed for
bankruptcy, is committed to fund up to $12 million of
Williams Partners L.P.’s $200 million revolving credit
facility. We expect that our ability to borrow under these
facilities is reduced by these committed amounts. The
committed amounts of other participating banks under these
agreements remain in effect and are not impacted by the
above.
</div>
<div style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align="left">
     In second-quarter 2009, two of our unsecured revolving
credit facilities totaling $500 million expired and were
not renewed. These facilities were originated primarily in
support of our former power business.
</div>
<div style="MARGIN-TOP: 12pt; FONT-SIZE: 10pt" align="left">
<b><i>Issuances</i></b>
</div>
<div style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align="left">
     On March 5, 2009, we issued $600 million aggregate
principal amount of 8.75 percent senior unsecured notes due
2020 to certain institutional investors in a private debt
placement. An offer to exchange these notes for
substantially identical new notes that are registered under
the Securities Act of 1933, as amended, was commenced in
July 2009 and is expected to be completed in early
August 2009.
</div>
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<div> <DIV style="FONT-FAMILY: 'TIMES NEW ROMAN',TIMES,SERIF">
<DIV style="MARGIN-TOP: 12pt; FONT-SIZE: 10pt" align="left"><B>Note 6. Earnings Per Common Share from Continuing Operations </B></DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align="left"> Basic and diluted earnings per common share are computed as follows: </DIV><EFX_UNIDENTIFIED_TABLE><A name="FIS_UNIDENTIFIED_TABLE_9"></A>
<DIV align="center">
<TABLE style="FONT-SIZE: 10pt" cellSpacing="0" cellPadding="0" width="100%" border="0">
<TBODY>
<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" noWrap align="middle" colSpan="6"><B>Three months ended June 30, </B></TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align="middle" colSpan="6"><B>Six months ended June 30, </B></TD>
<TD> </TD></TR>
<TR style="FONT-SIZE: 8pt" vAlign="bottom">
<TD> </TD>
<TD> </TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align="middle" colSpan="2"><B>2009 </B></TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align="middle" colSpan="2"><B>2008 </B></TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align="middle" colSpan="2"><B>2009 </B></TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align="middle" colSpan="2"><B>2008 </B></TD>
<TD> </TD></TR>
<TR style="FONT-SIZE: 8pt" vAlign="bottom">
<TD> </TD>
<TD> </TD>
<TD noWrap align="middle" colSpan="14"><B>(Dollars in millions, except per share </B></TD>
<TD> </TD></TR>
<TR style="FONT-SIZE: 8pt" vAlign="bottom">
<TD> </TD>
<TD> </TD>
<TD noWrap align="middle" colSpan="14"><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 from continuing operations attributable to The Williams Companies, Inc. available to common stockholders for basic and diluted earnings per common share (1) </DIV></TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">123 </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">412 </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">125 </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">823 </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" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 3px double" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 3px double" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 3px double" noWrap align="right" colSpan="2"> </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">580,726 </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">583,400 </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">580,114 </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">584,459 </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>
<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">1,773 </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">1,242 </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">1,589 </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">1,354 </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">1,884 </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">4,227 </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">1,674 </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">4,273 </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">4,397 </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">7,318 </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">4,622 </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">7,318 </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" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 1px solid" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 1px solid" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 1px solid" noWrap align="right" colSpan="2"> </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">588,780 </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">596,187 </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">587,999 </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">597,404 </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" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 3px double" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 3px double" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 3px double" noWrap align="right" colSpan="2"> </TD>
<TD> </TD></TR>
<TR vAlign="bottom">
<TD>
<DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Earnings per common share from continuing operations: </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">Basic </DIV></TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">.21 </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">.71 </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">.22 </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">1.41 </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">.21 </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">.69 </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">.21 </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">1.38 </TD>
<TD> </TD></TR></TBODY></TABLE></DIV></EFX_UNIDENTIFIED_TABLE>
<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">
<TBODY>
<TR>
<TD width="3%"></TD>
<TD width="1%"></TD>
<TD width="96"></TD></TR>
<TR vAlign="top">
<TD noWrap align="left">(1) </TD>
<TD> </TD>
<TD>The six-month period ended June 30, 2009 and the three- and six-month periods ended June 30, 2008, each include $1 million of interest expense, net of tax, associated with our convertible debentures. This amount has been added back to <I>income from continuing operations attributable to The Williams Companies, Inc. available to common stockholders </I>to calculate diluted earnings per common share. </TD></TR></TBODY></TABLE></DIV>
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<DIV style="FONT-FAMILY: 'TIMES NEW ROMAN',TIMES,SERIF">
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align="left">The table below includes information related to stock options that were outstanding at June 30 of each respective year but have been excluded from the computation of weighted-average stock options due to the option exercise price exceeding the second 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">
<TBODY>
<TR vAlign="bottom">
<TD width="76%"> </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 noWrap align="middle" colSpan="3"><B>June 30,</B> </TD>
<TD> </TD>
<TD noWrap align="middle" colSpan="3"><B>June 30,</B> </TD></TR>
<TR style="FONT-SIZE: 8pt" vAlign="bottom">
<TD> </TD>
<TD> </TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align="middle" colSpan="3"><B>2009</B> </TD>
<TD> </TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align="middle" colSpan="3"><B>2008</B> </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">6.7 </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">.4 </TD>
<TD> </TD></TR>
<TR vAlign="bottom">
<TD>
<DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Weighted-average exercise prices of options excluded </DIV></TD>
<TD> </TD>
<TD align="right">$ </TD>
<TD align="right">25.60 </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">$ </TD>
<TD align="right">41.87 </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="right">$ </TD>
<TD noWrap align="right">15.71-$42.29 </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">$ </TD>
<TD noWrap align="right">37.88-$42.29 </TD>
<TD> </TD></TR>
<TR vAlign="bottom">
<TD>
<DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Second quarter weighted-average market price </DIV></TD>
<TD> </TD>
<TD align="right">$ </TD>
<TD align="right">14.95 </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">$ </TD>
<TD align="right">37.38 </TD>
<TD> </TD></TR></TBODY></TABLE></DIV></DIV>
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1011000000
1011000000
823000000
412000000
125000000
123000000
919000000
471000000
170000000
151000000
1.41
0.71
0.22
0.21
1.38
0.69
0.21
0.21
120000000
29000000
-225000000
18000000
114000000
25000000
-155000000
19000000
0.19
0.04
-0.27
0.03
0.19
0.04
-0.26
0.03
<div>
<div style="FONT-FAMILY: 'TIMES NEW ROMAN',TIMES,SERIF">
<div style="MARGIN-TOP: 12pt; FONT-SIZE: 10pt" align="left">
<b>Note 5. Provision for Income Taxes</b>
</div>
<div style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align="left">
     The <i>provision for income taxes</i> includes:
</div>
<div align="center">
<table style="FONT-SIZE: 10pt" cellspacing="0" cellpadding=
"0" width="100%" border="0">
<tbody>
<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 nowrap="nowrap" align="middle" colspan="6">
<b>Three months ended</b>
</td>
<td>
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="middle" colspan="6">
<b>Six 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" nowrap=
"nowrap" align="middle" colspan="6">
<b>June 30,</b>
</td>
<td>
 
</td>
<td>
 
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" nowrap=
"nowrap" align="middle" colspan="6">
<b>June 30,</b>
</td>
<td>
 
</td>
</tr>
<tr style="FONT-SIZE: 8pt" valign="bottom">
<td>
 
</td>
<td>
 
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" nowrap=
"nowrap" align="middle" colspan="2">
<b>2009</b>
</td>
<td>
 
</td>
<td>
 
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" nowrap=
"nowrap" align="middle" colspan="2">
<b>2008</b>
</td>
<td>
 
</td>
<td>
 
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" nowrap=
"nowrap" align="middle" colspan="2">
<b>2009</b>
</td>
<td>
 
</td>
<td>
 
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" nowrap=
"nowrap" align="middle" colspan="2">
<b>2008</b>
</td>
<td>
 
</td>
</tr>
<tr style="FONT-SIZE: 8pt" valign="bottom">
<td>
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="middle" colspan="6">
<b>(Millions)</b>
</td>
<td>
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="middle" 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>
<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">
44
</td>
<td>
 
</td>
<td>
 
</td>
<td align="left">
$
</td>
<td align="right">
159
</td>
<td>
 
</td>
<td>
 
</td>
<td align="left">
$
</td>
<td align="right">
56
</td>
<td>
 
</td>
<td>
 
</td>
<td align="left">
$
</td>
<td align="right">
267
</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>
 
</td>
<td align="right">
5
</td>
<td>
 
</td>
<td>
 
</td>
<td>
 
</td>
<td align="right">
28
</td>
<td>
 
</td>
<td>
 
</td>
<td>
 
</td>
<td align="right">
7
</td>
<td>
 
</td>
<td>
 
</td>
<td>
 
</td>
<td align="right">
45
</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">
10
</td>
<td>
 
</td>
<td>
 
</td>
<td>
 
</td>
<td align="right">
5
</td>
<td>
 
</td>
<td>
 
</td>
<td>
 
</td>
<td align="right">
14
</td>
<td>
 
</td>
<td>
 
</td>
<td>
 
</td>
<td align="right">
12
</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" nowrap=
"nowrap" align="right" colspan="2">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td style="BORDER-TOP: #000000 1px solid" nowrap=
"nowrap" align="right" colspan="2">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td style="BORDER-TOP: #000000 1px solid" nowrap=
"nowrap" align="right" colspan="2">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td style="BORDER-TOP: #000000 1px solid" nowrap=
"nowrap" align="right" colspan="2">
 
</td>
<td>
 
</td>
</tr>
<tr style="BACKGROUND: #cceeff" valign="bottom">
<td>
<div style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">
</div>
</td>
<td>
 
</td>
<td>
 
</td>
<td align="right">
59
</td>
<td>
 
</td>
<td>
 
</td>
<td>
 
</td>
<td align="right">
192
</td>
<td>
 
</td>
<td>
 
</td>
<td>
 
</td>
<td align="right">
77
</td>
<td>
 
</td>
<td>
 
</td>
<td>
 
</td>
<td align="right">
324
</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>
</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>
<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">
23
</td>
<td>
 
</td>
<td>
 
</td>
<td>
 
</td>
<td align="right">
61
</td>
<td>
 
</td>
<td>
 
</td>
<td>
 
</td>
<td align="right">
57
</td>
<td>
 
</td>
<td>
 
</td>
<td>
 
</td>
<td align="right">
163
</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">
2
</td>
<td>
 
</td>
<td>
 
</td>
<td>
 
</td>
<td align="right">
7
</td>
<td>
 
</td>
<td>
 
</td>
<td>
 
</td>
<td align="right">
18
</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 nowrap="nowrap" align="left">
 
</td>
<td align="right">
(5
</td>
<td nowrap="nowrap">
)
</td>
<td>
 
</td>
<td>
 
</td>
<td align="right">
2
</td>
<td>
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left">
 
</td>
<td align="right">
(5
</td>
<td nowrap="nowrap">
)
</td>
<td>
 
</td>
<td>
 
</td>
<td align="right">
3
</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" nowrap=
"nowrap" align="right" colspan="2">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td style="BORDER-TOP: #000000 1px solid" nowrap=
"nowrap" align="right" colspan="2">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td style="BORDER-TOP: #000000 1px solid" nowrap=
"nowrap" align="right" colspan="2">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td style="BORDER-TOP: #000000 1px solid" nowrap=
"nowrap" align="right" colspan="2">
 
</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">
21
</td>
<td>
 
</td>
<td>
 
</td>
<td>
 
</td>
<td align="right">
65
</td>
<td>
 
</td>
<td>
 
</td>
<td>
 
</td>
<td align="right">
59
</td>
<td>
 
</td>
<td>
 
</td>
<td>
 
</td>
<td align="right">
184
</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" nowrap=
"nowrap" align="right" colspan="2">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td style="BORDER-TOP: #000000 1px solid" nowrap=
"nowrap" align="right" colspan="2">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td style="BORDER-TOP: #000000 1px solid" nowrap=
"nowrap" align="right" colspan="2">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td style="BORDER-TOP: #000000 1px solid" nowrap=
"nowrap" align="right" colspan="2">
 
</td>
<td>
 
</td>
</tr>
<tr style="BACKGROUND: #cceeff" valign="bottom">
<td>
<div style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">
Total provision
</div>
</td>
<td>
 
</td>
<td align="left">
$
</td>
<td align="right">
80
</td>
<td>
 
</td>
<td>
 
</td>
<td align="left">
$
</td>
<td align="right">
257
</td>
<td>
 
</td>
<td>
 
</td>
<td align="left">
$
</td>
<td align="right">
136
</td>
<td>
 
</td>
<td>
 
</td>
<td align="left">
$
</td>
<td align="right">
508
</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" nowrap=
"nowrap" align="right" colspan="2">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td style="BORDER-TOP: #000000 3px double" nowrap=
"nowrap" align="right" colspan="2">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td style="BORDER-TOP: #000000 3px double" nowrap=
"nowrap" align="right" colspan="2">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td style="BORDER-TOP: #000000 3px double" nowrap=
"nowrap" align="right" colspan="2">
 
</td>
<td>
 
</td>
</tr>
</tbody>
</table>
</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 June 30, 2009, and the three and
six months ended June 30, 2008, is approximately equal to
the federal statutory rate due primarily to offsetting
impacts of state income taxes reduced by nontaxable
noncontrolling interests.
</div>
<div style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align="left">
     The effective income tax rate on the total provision
for the six months ended June 30, 2009, is greater than the
federal statutory rate due primarily 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 nontaxable noncontrolling
interests.
</div>
<div style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align="left">
     During the next twelve months, we do not expect
ultimate resolution of any unrecognized tax benefit
associated with a domestic or international matter will
have a material impact on our financial position. 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>
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<div> <DIV style="FONT-FAMILY: 'TIMES NEW ROMAN',TIMES,SERIF">
<DIV style="MARGIN-TOP: 12pt; FONT-SIZE: 10pt" align="left"><B>Note 8. Inventories </B></DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align="left"> <I>Inventories </I>are as follows: </DIV><EFX_UNIDENTIFIED_TABLE><A name="FIS_UNIDENTIFIED_TABLE_12"></A>
<DIV align="center">
<TABLE style="FONT-SIZE: 10pt" cellSpacing="0" cellPadding="0" width="100%" border="0">
<TBODY>
<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 noWrap align="middle" colSpan="2"><B>June 30, </B></TD>
<TD> </TD>
<TD> </TD>
<TD noWrap align="middle" 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" noWrap align="middle" colSpan="2"><B>2009 </B></TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align="middle" colSpan="2"><B>2008 </B></TD>
<TD> </TD></TR>
<TR style="FONT-SIZE: 8pt" vAlign="bottom">
<TD> </TD>
<TD> </TD>
<TD noWrap align="middle" 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 </DIV></TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">49 </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">56 </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">82 </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">97 </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">118 </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">107 </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" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 1px solid" noWrap align="right" colSpan="2"> </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">249 </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">260 </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" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 3px double" noWrap align="right" colSpan="2"> </TD>
<TD> </TD></TR></TBODY></TABLE></DIV></DIV>
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<div>
<div class="Section1">
  
<div style="FONT-FAMILY: 'TIMES NEW ROMAN',TIMES,SERIF">
<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">
     During the second quarter of 2009, we determined
that certain contracts within our Midstream Gas &
Liquids (Midstream) segment involving the purchase and
resale of natural gas liquids (NGLs) and oil with the
same counterparties should have been reported on a net,
rather than gross, basis in the first quarter of 2009.
The error in presentation overstated both <i>revenues</i>
and <i>costs and operating expenses</i> by equal amounts
and had no impact on <i>segment profit</i> , <i>operating
income</i> , <i>net income</i> , <i>net cash provided by
operating activities</i> or any other key internal
measures of operating performance <b>.</b> Amounts for
the second quarter of 2009 have been properly reported
and activity related to the first quarter of 2009,
totaling $206 million, has been corrected in the
year-to-date amounts presented in the Consolidated
Statement of Operations.
</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 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 style="MARGIN-TOP: 12pt; FONT-SIZE: 10pt" align=
"left">
<b><i>Master Limited Partnerships</i></b>
</div>
<div style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align="left">
     We own approximately 23.6 percent of Williams
Partners L.P., including 100 percent of the general
partner, and incentive distribution rights. Considering
the presumption of control of the general partner,
Williams Partners L.P. is consolidated within our
Midstream segment. For 2009 distribution periods, we have
agreed to waive our general partner incentive
distribution rights, which we estimate would total
$29 million based on current distribution levels. We have
also agreed to provide a credit of up to $10 million to
Williams Partners L.P. if general and administrative
expenses exceed specified levels. This will decrease our
total allocation of income from Williams Partners L.P.,
resulting in decreased <i>net income attributable to The
Williams Companies, Inc.</i> and increased <i>net income
attributable to noncontrolling interests.</i>
</div>
<div style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align="left">
  
</div>
<div style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align="left">
<div style="FONT-FAMILY: 'TIMES NEW ROMAN',TIMES,SERIF">
<div style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align=
"left">
    We own approximately 47.7 percent of Williams
Pipeline Partners L.P., including 100 percent of the
general partner, and incentive distribution rights.
Considering the presumption of control of the general
partner, Williams Pipeline Partners L.P. is
consolidated within our Gas Pipeline segment.
</div>
</div>
</div>
<div style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align="left">
  
</div>
<p style="FONT-SIZE: 10pt" align="center">
  
</p>
</div>
<p></p>
<p>
<a id="eolPage10" name="eolPage10"></a>
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<h5 style="PAGE-BREAK-BEFORE: always" align="left">
     
</h5>
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<div>
<div style="FONT-FAMILY: 'TIMES NEW ROMAN',TIMES,SERIF">
<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">
<tbody>
<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" nowrap=
"nowrap" align="middle" colspan="14">
<b>Pension Benefits</b>
</td>
<td>
 
</td>
</tr>
<tr style="FONT-SIZE: 8pt" valign="bottom">
<td>
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="middle" colspan="6">
<b>Three months</b>
</td>
<td>
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="middle" colspan="6">
<b>Six months</b>
</td>
<td>
 
</td>
</tr>
<tr style="FONT-SIZE: 8pt" valign="bottom">
<td>
 
</td>
<td>
 
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" nowrap=
"nowrap" align="middle" colspan="6">
<b>ended June 30,</b>
</td>
<td>
 
</td>
<td>
 
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" nowrap=
"nowrap" align="middle" colspan="6">
<b>ended June 30,</b>
</td>
<td>
 
</td>
</tr>
<tr style="FONT-SIZE: 8pt" valign="bottom">
<td>
 
</td>
<td>
 
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" nowrap=
"nowrap" align="middle" colspan="2">
<b>2009</b>
</td>
<td>
 
</td>
<td>
 
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" nowrap=
"nowrap" align="middle" colspan="2">
<b>2008</b>
</td>
<td>
 
</td>
<td>
 
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" nowrap=
"nowrap" align="middle" colspan="2">
<b>2009</b>
</td>
<td>
 
</td>
<td>
 
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" nowrap=
"nowrap" align="middle" colspan="2">
<b>2008</b>
</td>
<td>
 
</td>
</tr>
<tr style="FONT-SIZE: 8pt" valign="bottom">
<td>
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="middle" 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 pension 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">
9
</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">
16
</td>
<td>
 
</td>
<td>
 
</td>
<td align="left">
$
</td>
<td align="right">
11
</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">
16
</td>
<td>
 
</td>
<td>
 
</td>
<td>
 
</td>
<td align="right">
31
</td>
<td>
 
</td>
<td>
 
</td>
<td>
 
</td>
<td align="right">
30
</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 nowrap="nowrap" align="left">
 
</td>
<td align="right">
(16
</td>
<td nowrap="nowrap">
)
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left">
 
</td>
<td align="right">
(19
</td>
<td nowrap="nowrap">
)
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left">
 
</td>
<td align="right">
(30
</td>
<td nowrap="nowrap">
)
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left">
 
</td>
<td align="right">
(39
</td>
<td nowrap="nowrap">
)
</td>
</tr>
<tr style="BACKGROUND: #cceeff" valign="bottom">
<td>
<div style="MARGIN-LEFT: 30px; TEXT-INDENT: -15px">
Amortization of prior service cost
</div>
</td>
<td>
 
</td>
<td>
 
</td>
<td align="right">
1
</td>
<td>
 
</td>
<td>
 
</td>
<td>
 
</td>
<td align="right">
—
</td>
<td>
 
</td>
<td>
 
</td>
<td>
 
</td>
<td align="right">
1
</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">
Amortization of net actuarial loss
</div>
</td>
<td>
 
</td>
<td>
 
</td>
<td align="right">
10
</td>
<td>
 
</td>
<td>
 
</td>
<td>
 
</td>
<td align="right">
5
</td>
<td>
 
</td>
<td>
 
</td>
<td>
 
</td>
<td align="right">
21
</td>
<td>
 
</td>
<td>
 
</td>
<td>
 
</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 1px solid" nowrap=
"nowrap" align="right" colspan="2">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td style="BORDER-TOP: #000000 1px solid" nowrap=
"nowrap" align="right" colspan="2">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td style="BORDER-TOP: #000000 1px solid" nowrap=
"nowrap" align="right" colspan="2">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td style="BORDER-TOP: #000000 1px solid" nowrap=
"nowrap" align="right" colspan="2">
 
</td>
<td>
 
</td>
</tr>
<tr style="BACKGROUND: #cceeff" valign="bottom">
<td>
<div style="MARGIN-LEFT: 30px; TEXT-INDENT: -15px">
Net periodic pension expense
</div>
</td>
<td>
 
</td>
<td align="left">
$
</td>
<td align="right">
20
</td>
<td>
 
</td>
<td>
 
</td>
<td align="left">
$
</td>
<td align="right">
8
</td>
<td>
 
</td>
<td>
 
</td>
<td align="left">
$
</td>
<td align="right">
39
</td>
<td>
 
</td>
<td>
 
</td>
<td align="left">
$
</td>
<td align="right">
9
</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" nowrap=
"nowrap" align="right" colspan="2">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td style="BORDER-TOP: #000000 3px double" nowrap=
"nowrap" align="right" colspan="2">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td style="BORDER-TOP: #000000 3px double" nowrap=
"nowrap" align="right" colspan="2">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td style="BORDER-TOP: #000000 3px double" nowrap=
"nowrap" align="right" colspan="2">
 
</td>
<td>
 
</td>
</tr>
</tbody>
</table>
</div>
<div align="center">
<table style="FONT-SIZE: 10pt" cellspacing="0" cellpadding=
"0" width="100%" border="0">
<tbody>
<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" nowrap=
"nowrap" align="middle" colspan="14">
<b>Other Postretirement Benefits</b>
</td>
<td>
 
</td>
</tr>
<tr style="FONT-SIZE: 8pt" valign="bottom">
<td>
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="middle" colspan="6">
<b>Three months</b>
</td>
<td>
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="middle" colspan="6">
<b>Six months</b>
</td>
<td>
 
</td>
</tr>
<tr style="FONT-SIZE: 8pt" valign="bottom">
<td>
 
</td>
<td>
 
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" nowrap=
"nowrap" align="middle" colspan="6">
<b>ended June 30,</b>
</td>
<td>
 
</td>
<td>
 
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" nowrap=
"nowrap" align="middle" colspan="6">
<b>ended June 30,</b>
</td>
<td>
 
</td>
</tr>
<tr style="FONT-SIZE: 8pt" valign="bottom">
<td>
 
</td>
<td>
 
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" nowrap=
"nowrap" align="middle" colspan="2">
<b>2009</b>
</td>
<td>
 
</td>
<td>
 
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" nowrap=
"nowrap" align="middle" colspan="2">
<b>2008</b>
</td>
<td>
 
</td>
<td>
 
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" nowrap=
"nowrap" align="middle" colspan="2">
<b>2009</b>
</td>
<td>
 
</td>
<td>
 
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" nowrap=
"nowrap" align="middle" colspan="2">
<b>2008</b>
</td>
<td>
 
</td>
</tr>
<tr style="FONT-SIZE: 8pt" valign="bottom">
<td>
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="middle" 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 other postretirement
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">
1
</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
</td>
<td>
 
</td>
<td>
 
</td>
<td align="left">
$
</td>
<td align="right">
1
</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">
4
</td>
<td>
 
</td>
<td>
 
</td>
<td>
 
</td>
<td align="right">
5
</td>
<td>
 
</td>
<td>
 
</td>
<td>
 
</td>
<td align="right">
8
</td>
<td>
 
</td>
<td>
 
</td>
<td>
 
</td>
<td align="right">
9
</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 nowrap="nowrap" align="left">
 
</td>
<td align="right">
(2
</td>
<td nowrap="nowrap">
)
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left">
 
</td>
<td align="right">
(3
</td>
<td nowrap="nowrap">
)
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left">
 
</td>
<td align="right">
(4
</td>
<td nowrap="nowrap">
)
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left">
 
</td>
<td align="right">
(6
</td>
<td nowrap="nowrap">
)
</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 nowrap="nowrap" align="left">
 
</td>
<td align="right">
(3
</td>
<td nowrap="nowrap">
)
</td>
<td>
 
</td>
<td>
 
</td>
<td align="right">
—
</td>
<td>
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left">
 
</td>
<td align="right">
(5
</td>
<td nowrap="nowrap">
)
</td>
<td>
 
</td>
<td>
 
</td>
<td align="right">
—
</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">
—
</td>
<td>
 
</td>
<td>
 
</td>
<td>
 
</td>
<td align="right">
—
</td>
<td>
 
</td>
<td>
 
</td>
<td>
 
</td>
<td align="right">
1
</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: 30px; TEXT-INDENT: -15px">
Amortization of regulatory asset
</div>
</td>
<td>
 
</td>
<td>
 
</td>
<td align="right">
1
</td>
<td>
 
</td>
<td>
 
</td>
<td>
 
</td>
<td align="right">
1
</td>
<td>
 
</td>
<td>
 
</td>
<td>
 
</td>
<td align="right">
2
</td>
<td>
 
</td>
<td>
 
</td>
<td>
 
</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 1px solid" nowrap=
"nowrap" align="right" colspan="2">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td style="BORDER-TOP: #000000 1px solid" nowrap=
"nowrap" align="right" colspan="2">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td style="BORDER-TOP: #000000 1px solid" nowrap=
"nowrap" align="right" colspan="2">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td style="BORDER-TOP: #000000 1px solid" nowrap=
"nowrap" align="right" colspan="2">
 
</td>
<td>
 
</td>
</tr>
<tr valign="bottom">
<td>
<div style="MARGIN-LEFT: 30px; TEXT-INDENT: -15px">
Net periodic other postretirement benefit expense
</div>
</td>
<td>
 
</td>
<td align="left">
$
</td>
<td align="right">
1
</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">
3
</td>
<td>
 
</td>
<td>
 
</td>
<td align="left">
$
</td>
<td align="right">
6
</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" nowrap=
"nowrap" align="right" colspan="2">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td style="BORDER-TOP: #000000 3px double" nowrap=
"nowrap" align="right" colspan="2">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td style="BORDER-TOP: #000000 3px double" nowrap=
"nowrap" align="right" colspan="2">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td style="BORDER-TOP: #000000 3px double" nowrap=
"nowrap" align="right" colspan="2">
 
</td>
<td>
 
</td>
</tr>
</tbody>
</table>
</div>
<div style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align="left">
     During the six months ended June 30, 2009, we
contributed $61 million to our pension plans and $7 million
to our other postretirement benefit plans. We do not
presently anticipate making any additional contributions to
our pension plans in the remainder of 2009. We presently
anticipate making additional contributions of approximately
$9 million to our other postretirement benefit plans in
2009 for a total of approximately $16 million.
</div>
</div>
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<div> <DIV style="FONT-FAMILY: 'TIMES NEW ROMAN',TIMES,SERIF">
<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"> Our Venezuela operations include majority ownership in entities that owned and operated the El Furrial and PIGAP II gas compression facilities prior to their expropriation by the Venezuelan government in May 2009. We previously operated these assets under long-term agreements for the exclusive benefit of the state-owned oil company, Petróleos de Venezuela S.A. (PDVSA). We and the secured lenders are pursuing rights available to us under our agreements, including contractual and international arbitration. These operations meet the accounting definition of a component of an entity. As a result of the expropriation of the assets and the termination of the associated contracts, we consider these assets to be disposed and thus qualified for reporting as discontinued operations. </DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align="left"> Considering the expropriation of the assets and the significant controlling rights of the secured lenders, we no longer control these entities and no longer meet the criteria to consolidate them. In conjunction with the deconsolidation of these entities in the second quarter of 2009, we have recorded our retained investment in these entities at zero and recognized a pre-tax gain of $9 million. This carrying value was based on our estimates of probability-weighted discounted cash flows that considered (1) alternate arbitration venues, (2) estimated levels of arbitration awards, (3) the subsequent likelihood and timing of collection, (4) the duration of the arbitration process, (5) a discount rate of 20 percent, and (6) the allocation of arbitration proceeds between parties, including the secured lenders. The use of alternate judgments and/or assumptions would have resulted in a different gain on deconsolidation. The carrying value of our retained investment in these entities was significantly impacted by our assumptions and is not representative of our underlying claims against PDVSA or the country of Venezuela. </DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align="left"> The expropriations in the second quarter of 2009 followed an extended period of nonpayment by PDVSA and default notices that we provided in accordance with our agreements. The collection of receivables from PDVSA was historically slower and required more effort than with other customers due to PDVSA’s policies and the political environment in Venezuela. In our year-end 2008 analysis, we expected PDVSA to resume regular payments following a February 15, 2009, referendum vote in Venezuela; however, that did not happen. PDVSA’s continued nonperformance across the industry, their financial distress, and lack of communications with us caused us to revise our assessment in the first quarter of 2009. </DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align="left"> As a result of this and our first-quarter assessment of the low likelihood of PDVSA curing the defaults, we fully reserved $48 million of accounts receivable from PDVSA in the first quarter of 2009. In addition, we ceased revenue recognition of these operations in the first quarter of 2009 as we no longer believed that the collectibility of revenues was reasonably assured. This indicator of impairment required us to review our Venezuela property, plant and equipment for recoverability, which resulted in recording a $211 million impairment charge at March 31, 2009. We estimated this impairment charge using probability-weighted discounted cash flow estimates that considered expected cash flows from (1) the continued operation of the assets considering a complete cure of the default or a partial payment and renegotiation of the contracts, (2) the purchase of the assets by PDVSA, and (3) the results of arbitration with varying degrees of award and collection. Considering the risk associated with operating in Venezuela, we utilized an after-tax discount rate of 20 percent. The use of alternate judgments and/or assumptions would have resulted in the recognition of a different or no impairment charge. Certain deferred charges and credits, which netted to a $30 million charge, were also written off because the related future cash inflows and outflows were no longer expected to occur. </DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align="left"> Construction of these assets was funded through project financing that is collateralized by the stock, assets, and contract rights of the entities that operated the Venezuela assets and is nonrecourse to us. The past due payments from PDVSA triggered technical default of the related project debt under our financing agreements in the fourth quarter of 2008, which resulted in classification of the entire debt balance as current at December 31, 2008. </DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align="left"> </DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align="left">
<DIV style="FONT-FAMILY: 'TIMES NEW ROMAN',TIMES,SERIF">
<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">
<TBODY>
<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 noWrap align="middle" colSpan="6"><B>Three months ended</B> </TD>
<TD> </TD>
<TD> </TD>
<TD noWrap align="middle" colSpan="6"><B>Six 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" noWrap align="middle" colSpan="6"><B>June 30,</B> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align="middle" colSpan="6"><B>June 30,</B> </TD>
<TD> </TD></TR>
<TR style="FONT-SIZE: 8pt" vAlign="bottom">
<TD> </TD>
<TD> </TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align="middle" colSpan="2"><B>2009</B> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align="middle" colSpan="2"><B>2008</B> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align="middle" colSpan="2"><B>2009</B> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align="middle" colSpan="2"><B>2008</B> </TD>
<TD> </TD></TR>
<TR style="FONT-SIZE: 8pt" vAlign="bottom">
<TD> </TD>
<TD> </TD>
<TD noWrap align="middle" colSpan="6"><B>(Millions)</B> </TD>
<TD> </TD>
<TD> </TD>
<TD noWrap align="middle" 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">— </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">49 </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">— </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">89 </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" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 3px double" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 3px double" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 3px double" noWrap align="right" colSpan="2"> </TD>
<TD> </TD></TR>
<TR vAlign="bottom">
<TD>
<DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Income (loss) from discontinued operations before impairments, gain on deconsolidation and income taxes </DIV></TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">18 </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">53 </TD>
<TD> </TD>
<TD> </TD>
<TD noWrap align="left">$ </TD>
<TD align="right">(84 </TD>
<TD noWrap>) </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">204 </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 align="right">— </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">— </TD>
<TD> </TD>
<TD> </TD>
<TD noWrap align="left"> </TD>
<TD align="right">(211 </TD>
<TD noWrap>) </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">— </TD>
<TD> </TD></TR>
<TR vAlign="bottom">
<TD>
<DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Gain on deconsolidation </DIV></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">9 </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">(Provision) benefit for income taxes </DIV></TD>
<TD> </TD>
<TD noWrap align="left"> </TD>
<TD align="right">(9 </TD>
<TD noWrap>) </TD>
<TD> </TD>
<TD noWrap align="left"> </TD>
<TD align="right">(24 </TD>
<TD noWrap>) </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">61 </TD>
<TD> </TD>
<TD> </TD>
<TD noWrap align="left"> </TD>
<TD align="right">(84 </TD>
<TD noWrap>) </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" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 1px solid" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 1px solid" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 1px solid" noWrap align="right" colSpan="2"> </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">18 </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">29 </TD>
<TD> </TD>
<TD> </TD>
<TD noWrap align="left">$ </TD>
<TD align="right">(225 </TD>
<TD noWrap>) </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">120 </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" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 3px double" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 3px double" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 3px double" noWrap align="right" colSpan="2"> </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></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>
<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">Attributable to noncontrolling interests </DIV></TD>
<TD> </TD>
<TD noWrap align="left">$ </TD>
<TD align="right">(1 </TD>
<TD noWrap>) </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">4 </TD>
<TD> </TD>
<TD> </TD>
<TD noWrap align="left">$ </TD>
<TD align="right">(70 </TD>
<TD noWrap>) </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">6 </TD>
<TD> </TD></TR>
<TR style="BACKGROUND: #cceeff" vAlign="bottom">
<TD>
<DIV style="MARGIN-LEFT: 30px; TEXT-INDENT: -15px">Attributable to The Williams Companies, Inc. </DIV></TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">19 </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">25 </TD>
<TD> </TD>
<TD> </TD>
<TD noWrap align="left">$ </TD>
<TD align="right">(155 </TD>
<TD noWrap>) </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">114 </TD>
<TD> </TD></TR></TBODY></TABLE></DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align="left"> <I>Revenues</I> for the three and six months ended June 30, 2009, decreased from 2008, primarily a result of discontinuing revenue recognition associated with our Venezuela operations in the first quarter of 2009. </DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align="left"> <I>Income (loss) from discontinued operations before impairments, gain on deconsolidation and income taxes</I> for the three months ended June 30, 2009, includes $15 million of income related to our former coal operations. </DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align="left"> <I>Income (loss) from discontinued operations before impairments, gain on deconsolidation and income taxes</I> for the six months ended June 30, 2009, primarily includes losses related to our discontinued Venezuela operations, including the previously discussed $48 million of bad debt expense related to fully reserving accounts receivable from PDVSA and a $30 million net charge related to the write-off of certain deferred charges and credits. Offsetting these losses is the previously discussed $15 million of income related to our former coal operations. </DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align="left"> <I>Income (loss) from discontinued operations before impairments, gain on deconsolidation and income taxes</I> for the three months ended June 30, 2008, includes a $10 million charge associated with a settlement primarily related to the sale of NGL pipeline systems in 2002, a charge of $10 million associated with an oil purchase contract related to our former Alaska refinery, a $54 million gain related to the favorable resolution of a matter involving pipeline transportation rates associated with our former Alaska operations, and the results of operations related to our discontinued Venezuela operations. </DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align="left"> <I>Income (loss) from discontinued operations before impairments, gain on deconsolidation and income taxes</I> for the six months ended June 30, 2008, includes both of the $10 million charges previously discussed, $54 million of income related to a reduction of remaining amounts accrued in excess of our obligation associated with the Trans-Alaska Pipeline System Quality Bank, $128 million of gains related to the favorable resolution of matters involving pipeline transportation rates associated with our former Alaska operations, and the results of operations related to our discontinued Venezuela operations. </DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align="left"> <I>Impairments</I> for the six months ended June 30, 2009, includes the previously described $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 six months ended June 30, 2009, includes a $76 million benefit from the reversal of deferred tax balances related to our discontinued Venezuela operations. </DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align="left">
<DIV style="FONT-FAMILY: 'TIMES NEW ROMAN',TIMES,SERIF">
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align="left"><B><I>Summarized Assets and Liabilities of Discontinued Operations </I></B></DIV>
<DIV align="center">
<TABLE style="FONT-SIZE: 10pt" cellSpacing="0" cellPadding="0" width="100%" border="0">
<TBODY>
<TR vAlign="bottom">
<TD width="76%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD></TR>
<TR style="FONT-SIZE: 8pt" vAlign="bottom">
<TD> </TD>
<TD> </TD>
<TD noWrap align="middle" colSpan="2"><B>June 30, </B></TD>
<TD> </TD>
<TD> </TD>
<TD noWrap align="middle" colSpan="2"><B>December 31, </B></TD>
<TD> </TD></TR>
<TR style="FONT-SIZE: 8pt" vAlign="bottom">
<TD> </TD>
<TD> </TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align="middle" colSpan="2"><B>2009 </B></TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align="middle" colSpan="2"><B>2008 </B></TD>
<TD> </TD></TR>
<TR style="FONT-SIZE: 8pt" vAlign="bottom">
<TD> </TD>
<TD> </TD>
<TD noWrap align="middle" colSpan="6"><B>(Millions) </B></TD>
<TD> </TD></TR>
<TR style="BACKGROUND: #cceeff" vAlign="bottom">
<TD>
<DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Cash and cash equivalents . </DIV></TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">— </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">1 </TD>
<TD> </TD></TR>
<TR vAlign="bottom">
<TD>
<DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Accounts receivable — net </DIV></TD>
<TD> </TD>
<TD> </TD>
<TD align="right">1 </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">62 </TD>
<TD> </TD></TR>
<TR style="BACKGROUND: #cceeff" vAlign="bottom">
<TD>
<DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Other current assets </DIV></TD>
<TD> </TD>
<TD> </TD>
<TD align="right">— </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">79 </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" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 1px solid" noWrap align="right" colSpan="2"> </TD>
<TD> </TD></TR>
<TR vAlign="bottom">
<TD>
<DIV style="MARGIN-LEFT: 45px; TEXT-INDENT: -15px">Total current assets </DIV></TD>
<TD> </TD>
<TD> </TD>
<TD align="right">1 </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">142 </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">Property, plant and equipment — net </DIV></TD>
<TD> </TD>
<TD> </TD>
<TD align="right">— </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">324 </TD>
<TD> </TD></TR>
<TR vAlign="bottom">
<TD>
<DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Other noncurrent assets </DIV></TD>
<TD> </TD>
<TD> </TD>
<TD align="right">— </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">63 </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" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 1px solid" noWrap align="right" colSpan="2"> </TD>
<TD> </TD></TR>
<TR style="BACKGROUND: #cceeff" vAlign="bottom">
<TD>
<DIV style="MARGIN-LEFT: 45px; TEXT-INDENT: -15px">Total noncurrent assets </DIV></TD>
<TD> </TD>
<TD> </TD>
<TD align="right">— </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">387 </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" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 1px solid" noWrap align="right" colSpan="2"> </TD>
<TD> </TD></TR>
<TR vAlign="bottom">
<TD>
<DIV style="MARGIN-LEFT: 60px; TEXT-INDENT: -15px">Total assets </DIV></TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">1 </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">529 </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" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 3px double" noWrap align="right" colSpan="2"> </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">Long-term debt due within one year </DIV></TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">— </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">177 </TD>
<TD> </TD></TR>
<TR vAlign="bottom">
<TD>
<DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Other current liabilities </DIV></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" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 1px solid" noWrap align="right" colSpan="2"> </TD>
<TD> </TD></TR>
<TR style="BACKGROUND: #cceeff" vAlign="bottom">
<TD>
<DIV style="MARGIN-LEFT: 30px; TEXT-INDENT: -15px">Total current liabilities </DIV></TD>
<TD> </TD>
<TD> </TD>
<TD align="right">— </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">217 </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" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 1px solid" noWrap align="right" colSpan="2"> </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 vAlign="bottom">
<TD>
<DIV style="MARGIN-LEFT: 30px; TEXT-INDENT: -15px">Total noncurrent liabilities </DIV></TD>
<TD> </TD>
<TD> </TD>
<TD align="right">— </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">82 </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" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 1px solid" noWrap align="right" colSpan="2"> </TD>
<TD> </TD></TR>
<TR style="BACKGROUND: #cceeff" vAlign="bottom">
<TD>
<DIV style="MARGIN-LEFT: 60px; TEXT-INDENT: -15px">Total liabilities </DIV></TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">— </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">299 </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" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 3px double" noWrap align="right" colSpan="2"> </TD>
<TD> </TD></TR></TBODY></TABLE></DIV></EFX_UNIDENTIFIED_TABLE><EFX_UNIDENTIFIED_TABLE></DIV>
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<div> <DIV style="FONT-FAMILY: 'TIMES NEW ROMAN',TIMES,SERIF">
<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"> Our reportable segments are strategic business units that offer different products and services. The segments are managed separately because each segment requires different technology, marketing strategies and industry knowledge. Our master limited partnerships, Williams Partners L.P. and Williams Pipeline Partners L.P., are consolidated within our Midstream and Gas Pipeline segments, respectively. (See Note 2.) Other primarily consists of corporate operations. </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 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"> External revenues of our Exploration & Production segment are presented net of transportation expenses and royalties due third parties on intersegment sales. In some periods, transportation expenses and royalties due third parties on intersegment sales may exceed other external revenues. </DIV>
<P style="FONT-SIZE: 10pt" align="center"> 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 (loss) </I>as reported in the Consolidated Statement of Operations. </P></DIV>
<DIV style="FONT-FAMILY: 'TIMES NEW ROMAN',TIMES,SERIF">
<DIV align="center">
<TABLE style="FONT-SIZE: 9pt" cellSpacing="0" cellPadding="0" width="100%" border="0">
<TBODY>
<TR vAlign="bottom">
<TD width="25%"> </TD>
<TD width="2%"> </TD>
<TD width="1%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
<TD width="4%"> </TD>
<TD width="1%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
<TD width="4%"> </TD>
<TD width="1%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
<TD width="4%"> </TD>
<TD width="1%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
<TD width="4%"> </TD>
<TD width="1%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
<TD width="4%"> </TD>
<TD width="1%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
<TD width="4%"> </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 noWrap align="middle" colSpan="2"><B>Exploration </B></TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD noWrap align="middle" colSpan="2"><B>Gas </B></TD>
<TD> </TD>
<TD> </TD>
<TD noWrap align="middle" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD noWrap align="middle" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD noWrap align="middle" colSpan="2"> </TD>
<TD> </TD></TR>
<TR style="FONT-SIZE: 8pt" vAlign="bottom">
<TD> </TD>
<TD> </TD>
<TD noWrap align="middle" colSpan="2"><B>& </B></TD>
<TD> </TD>
<TD> </TD>
<TD noWrap align="middle" colSpan="2"><B>Gas </B></TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD noWrap align="middle" colSpan="2"><B>Marketing </B></TD>
<TD> </TD>
<TD> </TD>
<TD noWrap align="middle" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD noWrap align="middle" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD noWrap align="middle" colSpan="2"> </TD>
<TD> </TD></TR>
<TR style="FONT-SIZE: 8pt" vAlign="bottom">
<TD> </TD>
<TD> </TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align="middle" colSpan="2"><B>Production </B></TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align="middle" colSpan="2"><B>Pipeline </B></TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align="middle" colSpan="2"><B>Midstream </B></TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align="middle" colSpan="2"><B>Services </B></TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align="middle" colSpan="2"><B>Other </B></TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align="middle" colSpan="2"><B>Eliminations </B></TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align="middle" colSpan="2"><B>Total </B></TD>
<TD> </TD></TR>
<TR style="FONT-SIZE: 8pt" vAlign="bottom">
<TD> </TD>
<TD> </TD>
<TD noWrap align="middle" colSpan="26"><B>(Millions) </B></TD>
<TD> </TD></TR>
<TR style="BACKGROUND: #cceeff" vAlign="bottom">
<TD>
<DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px"><B><I>Three months ended June 30, 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>
<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>
<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">198 </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">413 </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">790 </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">505 </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">— </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">1,909 </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">332 </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">8 </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">15 </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">93 </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">4 </TD>
<TD> </TD>
<TD> </TD>
<TD noWrap align="left"> </TD>
<TD align="right">(452 </TD>
<TD noWrap>) </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" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 1px solid" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 1px solid" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 1px solid" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 1px solid" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 1px solid" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 1px solid" noWrap align="right" colSpan="2"> </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">530 </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">421 </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">805 </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">598 </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">7 </TD>
<TD> </TD>
<TD> </TD>
<TD noWrap align="left">$ </TD>
<TD align="right">(452 </TD>
<TD noWrap>) </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">1,909 </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" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 3px double" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 3px double" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 3px double" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 3px double" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 3px double" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 3px double" noWrap align="right" colSpan="2"> </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">119 </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">137 </TD>
<TD> </TD>
<TD> </TD>
<TD noWrap align="left">$ </TD>
<TD align="right">(6 </TD>
<TD noWrap>) </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">3 </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">— </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">415 </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">4 </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">15 </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">7 </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>
<TD> </TD>
<TD> </TD>
<TD align="right">26 </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" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 1px solid" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 1px solid" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 1px solid" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 1px solid" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 1px solid" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 1px solid" noWrap align="right" colSpan="2"> </TD>
<TD> </TD></TR>
<TR vAlign="bottom">
<TD>
<DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Segment operating income (loss) </DIV></TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">115 </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">147 </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">130 </TD>
<TD> </TD>
<TD> </TD>
<TD noWrap align="left">$ </TD>
<TD align="right">(6 </TD>
<TD noWrap>) </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">3 </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">— </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">389 </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" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 3px double" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 3px double" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 3px double" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 3px double" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 3px double" noWrap align="right" colSpan="2"> </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> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD noWrap align="left"> </TD>
<TD align="right">(38 </TD>
<TD noWrap>) </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> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 1px solid" noWrap align="right" colSpan="2"> </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> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">351 </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> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 3px double" noWrap align="right" colSpan="2"> </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></TR>
<TR style="BACKGROUND: #cceeff" vAlign="bottom">
<TD>
<DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px"><B><I>Three months ended June 30, 2008 </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>
<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>
<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 noWrap align="left">$ </TD>
<TD align="right">(109 </TD>
<TD noWrap>) </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">395 </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">1,717 </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">1,653 </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 align="left">$ </TD>
<TD align="right">3,657 </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">1,057 </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">11 </TD>
<TD> </TD>
<TD> </TD>
<TD noWrap align="left"> </TD>
<TD align="right">(7 </TD>
<TD noWrap>) </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">357 </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">5 </TD>
<TD> </TD>
<TD> </TD>
<TD noWrap align="left"> </TD>
<TD align="right">(1,423 </TD>
<TD noWrap>) </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" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 1px solid" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 1px solid" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 1px solid" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 1px solid" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 1px solid" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 1px solid" noWrap align="right" colSpan="2"> </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">948 </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">406 </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">1,710 </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">2,010 </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">6 </TD>
<TD> </TD>
<TD> </TD>
<TD noWrap align="left">$ </TD>
<TD align="right">(1,423 </TD>
<TD noWrap>) </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">3,657 </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" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 3px double" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 3px double" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 3px double" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 3px double" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 3px double" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 3px double" noWrap align="right" colSpan="2"> </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">496 </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">179 </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">270 </TD>
<TD> </TD>
<TD> </TD>
<TD noWrap align="left">$ </TD>
<TD align="right">(46 </TD>
<TD noWrap>) </TD>
<TD> </TD>
<TD noWrap align="left">$ </TD>
<TD align="right">(1 </TD>
<TD noWrap>) </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">— </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">898 </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">6 </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">15 </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">16 </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>
<TD> </TD>
<TD> </TD>
<TD align="right">37 </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" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 1px solid" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 1px solid" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 1px solid" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 1px solid" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 1px solid" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 1px solid" noWrap align="right" colSpan="2"> </TD>
<TD> </TD></TR>
<TR vAlign="bottom">
<TD>
<DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Segment operating income (loss) </DIV></TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">490 </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">164 </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">254 </TD>
<TD> </TD>
<TD> </TD>
<TD noWrap align="left">$ </TD>
<TD align="right">(46 </TD>
<TD noWrap>) </TD>
<TD> </TD>
<TD noWrap align="left">$ </TD>
<TD align="right">(1 </TD>
<TD noWrap>) </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">— </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">861 </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" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 3px double" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 3px double" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 3px double" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 3px double" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 3px double" noWrap align="right" colSpan="2"> </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> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD noWrap align="left"> </TD>
<TD align="right">(42 </TD>
<TD noWrap>) </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> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 1px solid" noWrap align="right" colSpan="2"> </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> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">819 </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> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 3px double" noWrap align="right" colSpan="2"> </TD>
<TD> </TD></TR></TBODY></TABLE></DIV>
<DIV align="center">
<TABLE style="FONT-SIZE: 9pt" cellSpacing="0" cellPadding="0" width="100%" border="0">
<TBODY>
<TR vAlign="bottom">
<TD width="25%"> </TD>
<TD width="2%"> </TD>
<TD width="1%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
<TD width="4%"> </TD>
<TD width="1%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
<TD width="4%"> </TD>
<TD width="1%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
<TD width="4%"> </TD>
<TD width="1%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
<TD width="4%"> </TD>
<TD width="1%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
<TD width="4%"> </TD>
<TD width="1%"> </TD>
<TD width="5%"> </TD>
<TD width="1%"> </TD>
<TD width="4%"> </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 noWrap align="middle" colSpan="2"><B>Exploration </B></TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD noWrap align="middle" colSpan="2"><B>Gas </B></TD>
<TD> </TD>
<TD> </TD>
<TD noWrap align="middle" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD noWrap align="middle" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD noWrap align="middle" colSpan="2"> </TD>
<TD> </TD></TR>
<TR style="FONT-SIZE: 8pt" vAlign="bottom">
<TD> </TD>
<TD> </TD>
<TD noWrap align="middle" colSpan="2"><B>& </B></TD>
<TD> </TD>
<TD> </TD>
<TD noWrap align="middle" colSpan="2"><B>Gas </B></TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD noWrap align="middle" colSpan="2"><B>Marketing </B></TD>
<TD> </TD>
<TD> </TD>
<TD noWrap align="middle" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD noWrap align="middle" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD noWrap align="middle" colSpan="2"> </TD>
<TD> </TD></TR>
<TR style="FONT-SIZE: 8pt" vAlign="bottom">
<TD> </TD>
<TD> </TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align="middle" colSpan="2"><B>Production </B></TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align="middle" colSpan="2"><B>Pipeline </B></TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align="middle" colSpan="2"><B>Midstream </B></TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align="middle" colSpan="2"><B>Services </B></TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align="middle" colSpan="2"><B>Other </B></TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align="middle" colSpan="2"><B>Eliminations </B></TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align="middle" colSpan="2"><B>Total </B></TD>
<TD> </TD></TR>
<TR style="FONT-SIZE: 8pt" vAlign="bottom">
<TD> </TD>
<TD> </TD>
<TD noWrap align="middle" colSpan="26"><B>(Millions) </B></TD>
<TD> </TD></TR>
<TR style="BACKGROUND: #cceeff" vAlign="bottom">
<TD>
<DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px"><B><I>Six months ended June 30, 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>
<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>
<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">299 </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">806 </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">1,469 </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">1,250 </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">— </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">3,831 </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">784 </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">16 </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">29 </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">215 </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">7 </TD>
<TD> </TD>
<TD> </TD>
<TD noWrap align="left"> </TD>
<TD align="right">(1,051 </TD>
<TD noWrap>) </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" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 1px solid" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 1px solid" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 1px solid" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 1px solid" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 1px solid" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 1px solid" noWrap align="right" colSpan="2"> </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">1,083 </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">822 </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">1,498 </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">1,465 </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">14 </TD>
<TD> </TD>
<TD> </TD>
<TD noWrap align="left">$ </TD>
<TD align="right">(1,051 </TD>
<TD noWrap>) </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">3,831 </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" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 3px double" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 3px double" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 3px double" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 3px double" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 3px double" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 3px double" noWrap align="right" colSpan="2"> </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">197 </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">341 </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">149 </TD>
<TD> </TD>
<TD> </TD>
<TD noWrap align="left">$ </TD>
<TD align="right">(8 </TD>
<TD noWrap>) </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">4 </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">— </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">683 </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>
<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">8 </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">30 </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">— </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">— </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">49 </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 noWrap align="left"> </TD>
<TD align="right">(75 </TD>
<TD noWrap>) </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 noWrap align="left"> </TD>
<TD align="right">(75 </TD>
<TD noWrap>) </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" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 1px solid" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 1px solid" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 1px solid" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 1px solid" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 1px solid" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 1px solid" noWrap align="right" colSpan="2"> </TD>
<TD> </TD></TR>
<TR vAlign="bottom">
<TD>
<DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Segment operating income (loss) </DIV></TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">189 </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">311 </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">213 </TD>
<TD> </TD>
<TD> </TD>
<TD noWrap align="left">$ </TD>
<TD align="right">(8 </TD>
<TD noWrap>) </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">4 </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">— </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">709 </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" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 3px double" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 3px double" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 3px double" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 3px double" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 3px double" noWrap align="right" colSpan="2"> </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> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD noWrap align="left"> </TD>
<TD align="right">(78 </TD>
<TD noWrap>) </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> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 1px solid" noWrap align="right" colSpan="2"> </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> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">631 </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> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 3px double" noWrap align="right" colSpan="2"> </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></TR>
<TR style="BACKGROUND: #cceeff" vAlign="bottom">
<TD>
<DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px"><B><I>Six months ended June 30, 2008 </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>
<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>
<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 noWrap align="left">$ </TD>
<TD align="right">(175 </TD>
<TD noWrap>) </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">797 </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">3,221 </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">2,973 </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">— </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">6,821 </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">1,851 </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">22 </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">6 </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">687 </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">7 </TD>
<TD> </TD>
<TD> </TD>
<TD noWrap align="left"> </TD>
<TD align="right">(2,573 </TD>
<TD noWrap>) </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" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 1px solid" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 1px solid" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 1px solid" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 1px solid" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 1px solid" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 1px solid" noWrap align="right" colSpan="2"> </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">1,676 </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">819 </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">3,227 </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">3,660 </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">12 </TD>
<TD> </TD>
<TD> </TD>
<TD noWrap align="left">$ </TD>
<TD align="right">(2,573 </TD>
<TD noWrap>) </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">6,821 </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" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 3px double" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 3px double" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 3px double" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 3px double" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 3px double" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 3px double" noWrap align="right" colSpan="2"> </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">926 </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">359 </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">508 </TD>
<TD> </TD>
<TD> </TD>
<TD noWrap align="left">$ </TD>
<TD align="right">(25 </TD>
<TD noWrap>) </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">1,768 </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">9 </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">25 </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">39 </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>
<TD> </TD>
<TD> </TD>
<TD align="right">73 </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" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 1px solid" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 1px solid" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 1px solid" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 1px solid" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 1px solid" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 1px solid" noWrap align="right" colSpan="2"> </TD>
<TD> </TD></TR>
<TR vAlign="bottom">
<TD>
<DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Segment operating income (loss) </DIV></TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">917 </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">334 </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">469 </TD>
<TD> </TD>
<TD> </TD>
<TD noWrap align="left">$ </TD>
<TD align="right">(25 </TD>
<TD noWrap>) </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> </TD>
<TD align="right">1,695 </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" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 3px double" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 3px double" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 3px double" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 3px double" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 3px double" noWrap align="right" colSpan="2"> </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> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD noWrap align="left"> </TD>
<TD align="right">(84 </TD>
<TD noWrap>) </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> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 1px solid" noWrap align="right" colSpan="2"> </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> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">1,611 </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> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 3px double" noWrap align="right" colSpan="2"> </TD>
<TD> </TD></TR></TBODY></TABLE></DIV></EFX_UNIDENTIFIED_TABLE>
<P style="FONT-SIZE: 10pt" align="center"> The following table reflects <I>total assets </I>by reporting segment. </P></DIV>
<DIV style="FONT-FAMILY: 'TIMES NEW ROMAN',TIMES,SERIF">
<DIV align="center">
<TABLE style="FONT-SIZE: 10pt" cellSpacing="0" cellPadding="0" width="100%" border="0">
<TBODY>
<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" noWrap align="middle" colSpan="6"><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" noWrap align="middle" colSpan="2"><B>June 30, 2009 </B></TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align="middle" colSpan="2"><B>December 31, 2008 </B></TD>
<TD> </TD></TR>
<TR style="FONT-SIZE: 8pt" vAlign="bottom">
<TD> </TD>
<TD> </TD>
<TD noWrap align="middle" colSpan="6"><B>(Millions) </B></TD>
<TD> </TD></TR>
<TR style="BACKGROUND: #cceeff" vAlign="bottom">
<TD>
<DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Exploration & Production </DIV></TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">9,642 </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">10,286 </TD>
<TD> </TD></TR>
<TR vAlign="bottom">
<TD>
<DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Gas Pipeline </DIV></TD>
<TD> </TD>
<TD> </TD>
<TD align="right">9,234 </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">9,149 </TD>
<TD> </TD></TR>
<TR style="BACKGROUND: #cceeff" vAlign="bottom">
<TD>
<DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Midstream </DIV></TD>
<TD> </TD>
<TD> </TD>
<TD align="right">6,809 </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">6,501 </TD>
<TD> </TD></TR>
<TR vAlign="bottom">
<TD>
<DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Gas Marketing Services (1) </DIV></TD>
<TD> </TD>
<TD> </TD>
<TD align="right">1,539 </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">3,064 </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">3,488 </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">3,532 </TD>
<TD> </TD></TR>
<TR vAlign="bottom">
<TD>
<DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Eliminations </DIV></TD>
<TD> </TD>
<TD noWrap align="left"> </TD>
<TD align="right">(5,687 </TD>
<TD noWrap>) </TD>
<TD> </TD>
<TD noWrap align="left"> </TD>
<TD align="right">(7,055 </TD>
<TD noWrap>) </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" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 1px solid" noWrap align="right" colSpan="2"> </TD>
<TD> </TD></TR>
<TR style="BACKGROUND: #cceeff" vAlign="bottom">
<TD>
<DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px"></DIV></TD>
<TD> </TD>
<TD> </TD>
<TD align="right">25,025 </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">25,477 </TD>
<TD> </TD></TR>
<TR vAlign="bottom">
<TD>
<DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Discontinued operations (see Note 3) </DIV></TD>
<TD> </TD>
<TD> </TD>
<TD align="right">1 </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">529 </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" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 1px solid" noWrap align="right" colSpan="2"> </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">25,026 </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">26,006 </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" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 3px double" noWrap align="right" colSpan="2"> </TD>
<TD> </TD></TR></TBODY></TABLE></DIV></EFX_UNIDENTIFIED_TABLE>
<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">
<TBODY>
<TR>
<TD width="3%"></TD>
<TD width="1%"></TD>
<TD width="96"></TD></TR>
<TR vAlign="top">
<TD noWrap align="left">(1) </TD>
<TD> </TD>
<TD>The decrease in Gas Marketing Services’ total assets is primarily due to the fluctuations in derivative assets as a result of the impact of changes in commodity prices on existing forward derivative contracts. Gas Marketing Services’ derivative assets are substantially offset by their derivative liabilities. </TD></TR></TBODY></TABLE>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align="left"> <B><I>Property Insurance Changes </I></B></DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align="left"> As a result of damage caused by recent hurricanes, the availability of named windstorm insurance has been significantly reduced. Additionally, named windstorm insurance coverage that is available for offshore assets comes at significantly higher premium amounts, higher deductibles and lower coverage limits. Considering these changes, we have reduced the overall named windstorm property insurance coverage for our assets in the Gulf of Mexico area beginning in the second quarter of 2009. In addition, certain assets are no longer covered for named windstorm losses, primarily including certain offshore lateral pipelines and a processing plant. The changes in named windstorm coverage are summarized as follows: </DIV><EFX_UNIDENTIFIED_TABLE><A name="FIS_UNIDENTIFIED_TABLE_26"></A>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align="left"> <I>Named Windstorm Property Insurance </I></DIV>
<DIV align="center">
<TABLE style="FONT-SIZE: 10pt" cellSpacing="0" cellPadding="0" width="100%" border="0">
<TBODY>
<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" noWrap align="middle" colSpan="7"><B>Current Coverage </B></TD>
<TD> </TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align="middle" colSpan="7"><B>Prior Coverage </B></TD></TR>
<TR style="FONT-SIZE: 8pt" vAlign="bottom">
<TD> </TD>
<TD> </TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align="middle" colSpan="3"><B>Offshore </B></TD>
<TD> </TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align="middle" colSpan="3"><B>Onshore </B></TD>
<TD> </TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align="middle" colSpan="3"><B>Offshore </B></TD>
<TD> </TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align="middle" colSpan="3"><B>Onshore </B></TD></TR>
<TR style="FONT-SIZE: 8pt" vAlign="bottom">
<TD> </TD>
<TD> </TD>
<TD noWrap align="middle" colSpan="15">($ millions) </TD></TR>
<TR vAlign="bottom">
<TD>
<DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Deductible per occurrence </DIV></TD>
<TD> </TD>
<TD align="right">$ </TD>
<TD align="right">50 </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">$ </TD>
<TD align="right">16 </TD>
<TD> </TD>
<TD> </TD>
<TD noWrap align="middle" colSpan="7">$10 combined </TD></TR>
<TR vAlign="bottom">
<TD>
<DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Aggregate limit per policy year </DIV></TD>
<TD> </TD>
<TD noWrap align="right">$ </TD>
<TD align="right">37.5 </TD>
<TD noWrap>* </TD>
<TD> </TD>
<TD align="right">$ </TD>
<TD align="right">90 </TD>
<TD> </TD>
<TD> </TD>
<TD noWrap align="middle" colSpan="7">$150 combined </TD></TR></TBODY></TABLE></DIV></EFX_UNIDENTIFIED_TABLE>
<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">
<TBODY>
<TR>
<TD width="3%"></TD>
<TD width="1%"></TD>
<TD width="96"></TD></TR>
<TR vAlign="top">
<TD noWrap align="left">* </TD>
<TD> </TD>
<TD>50 percent of losses above $50 million </TD></TR></TBODY></TABLE></DIV>
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<div>
<div style="FONT-FAMILY: 'TIMES NEW ROMAN',TIMES,SERIF">
<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">
     The following table presents significant gains or
losses reflected in <i>other (income) expense</i> —
<i>net</i> within <i>segment costs and expenses</i> :
</div>
<div align="center">
<table style="FONT-SIZE: 10pt" cellspacing="0" cellpadding=
"0" width="100%" border="0">
<tbody>
<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 nowrap="nowrap" align="middle" colspan="7">
<b>Three months ended</b>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="middle" colspan="7">
<b>Six months ended</b>
</td>
</tr>
<tr style="FONT-SIZE: 8pt" valign="bottom">
<td>
 
</td>
<td>
 
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" nowrap=
"nowrap" align="middle" colspan="7">
<b>June 30,</b>
</td>
<td>
 
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" nowrap=
"nowrap" align="middle" colspan="7">
<b>June 30,</b>
</td>
</tr>
<tr style="FONT-SIZE: 8pt" valign="bottom">
<td>
 
</td>
<td>
 
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" nowrap=
"nowrap" align="middle" colspan="3">
<b>2009</b>
</td>
<td>
 
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" nowrap=
"nowrap" align="middle" colspan="3">
<b>2008</b>
</td>
<td>
 
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" nowrap=
"nowrap" align="middle" colspan="3">
<b>2009</b>
</td>
<td>
 
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" nowrap=
"nowrap" align="middle" colspan="3">
<b>2008</b>
</td>
</tr>
<tr style="FONT-SIZE: 8pt" valign="bottom">
<td>
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="middle" colspan="7">
<b>(Millions)</b>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="middle" colspan="7">
<b>(Millions)</b>
</td>
</tr>
<tr style="BACKGROUND: #cceeff" valign="bottom">
<td>
<div style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">
<b>Exploration & Production</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>
</tr>
<tr valign="bottom">
<td>
<div style="MARGIN-LEFT: 30px; TEXT-INDENT: -15px">
Gain on sale of contractual right to an
international production payment
</div>
</td>
<td>
 
</td>
<td align="right">
$
</td>
<td align="right">
—
</td>
<td>
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="right">
$
</td>
<td align="right">
(30
</td>
<td nowrap="nowrap">
)
</td>
<td>
 
</td>
<td align="right">
$
</td>
<td align="right">
—
</td>
<td>
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="right">
$
</td>
<td align="right">
(148
</td>
<td nowrap="nowrap">
)
</td>
</tr>
<tr style="BACKGROUND: #cceeff" valign="bottom">
<td>
<div style="MARGIN-LEFT: 30px; TEXT-INDENT: -15px">
Penalties from early release of drilling rigs
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="right">
 
</td>
<td align="right">
(2
</td>
<td nowrap="nowrap">
)
</td>
<td>
 
</td>
<td>
 
</td>
<td align="right">
—
</td>
<td>
 
</td>
<td>
 
</td>
<td>
 
</td>
<td align="right">
32
</td>
<td>
 
</td>
<td>
 
</td>
<td>
 
</td>
<td align="right">
—
</td>
<td>
 
</td>
</tr>
</tbody>
</table>
</div>
<div style="MARGIN-TOP: 12pt; FONT-SIZE: 10pt" align="left">
<b>Additional Items</b>
</div>
<div style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align="left">
     In first-quarter 2009, Midstream recorded an
impairment charge related to an other-than-temporary loss
in value of $75 million associated with its Venezuelan
equity investment in Accroven SRL (Accroven), which is
reflected in loss from investments within <i>investing
income (loss)</i> . Accroven owns and operates gas
processing facilities and an NGL fractionation plant for
the exclusive benefit of PDVSA. The deteriorating
circumstances in the first quarter of 2009 for our
Venezuelan operations (see Note 3) caused us to review our
investment in Accroven. We utilized a probability-weighted
discounted cash flow analysis, which included an after-tax
discount rate of 20 percent to reflect the risk associated
with operating in Venezuela. (See Note 10.) Accroven was
not part of the operations that were expropriated by the
Venezuelan government in May 2009. Subsequent to June 30,
2009, we have been engaged in discussions regarding the
eventual disposition of Accroven.
</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> . Exploration &
Production has a four percent interest in a Venezuelan
corporation which owns and operates oil and gas activities.
This investment resulted from our previous 10 percent
direct working interest in a concession that was converted
to a reduced interest in a mixed company at the direction
of the Venezuelan government in 2006. Considering our
evaluation of the deteriorating financial condition of this
corporation, we have recorded an other-than-temporary
decline in value of our remaining investment balance.
</div>
<div style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align="left">
     In second-quarter 2009, Exploration & Production
recognized $11 million of income related to the recovery of
certain royalty overpayments from prior periods, which is
reflected within <i>revenues</i> .
</div>
<div style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align="left">
  
</div>
</div>
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<div> <DIV style="FONT-FAMILY: 'TIMES NEW ROMAN',TIMES,SERIF">
<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 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>
<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">
<TBODY>
<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 noWrap align="left" width="3%"><B>•</B> </TD>
<TD width="1%"> </TD>
<TD>Level 1 — Quoted prices for identical assets in active markets or liabilities 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 noWrap 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 and swaps. </TD></TR></TBODY></TABLE></DIV></DIV>
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<DIV style="FONT-FAMILY: 'TIMES NEW ROMAN',TIMES,SERIF">
<DIV style="MARGIN-TOP: 6pt">
<TABLE style="FONT-SIZE: 10pt" cellSpacing="0" cellPadding="0" width="100%" border="0">
<TBODY>
<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 noWrap 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 valued using industry standard pricing models and other valuation methods that utilize unobservable pricing inputs that are significant to the overall fair value. Instruments in this category primarily include OTC options. </TD></TR></TBODY></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 style="MARGIN-TOP: 12pt; FONT-SIZE: 10pt" align="left"><B>Fair Value Measurements Using: </B></DIV><EFX_UNIDENTIFIED_TABLE><A name="FIS_UNIDENTIFIED_TABLE_14"></A>
<DIV align="center">
<TABLE style="FONT-SIZE: 10pt" cellSpacing="0" cellPadding="0" width="100%" border="0">
<TBODY>
<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" noWrap align="middle" colSpan="14"><B>June 30, 2009 </B></TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align="middle" colSpan="14"><B>December 31, 2008 </B></TD>
<TD> </TD></TR>
<TR style="FONT-SIZE: 8pt" vAlign="bottom">
<TD> </TD>
<TD> </TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align="middle" colSpan="2"><B>Level 1 </B></TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align="middle" colSpan="2"><B>Level 2 </B></TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align="middle" colSpan="2"><B>Level 3 </B></TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align="middle" colSpan="2"><B>Total </B></TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align="middle" colSpan="2"><B>Level 1 </B></TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align="middle" colSpan="2"><B>Level 2 </B></TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align="middle" colSpan="2"><B>Level 3 </B></TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align="middle" colSpan="2"><B>Total </B></TD>
<TD> </TD></TR>
<TR style="FONT-SIZE: 8pt" vAlign="bottom">
<TD> </TD>
<TD> </TD>
<TD noWrap align="middle" colSpan="14"><B>(Millions) </B></TD>
<TD> </TD>
<TD> </TD>
<TD noWrap align="middle" colSpan="14"><B>(Millions) </B></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">264 </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">856 </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">1,627 </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">680 </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">1,223 </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">547 </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">2,450 </TD>
<TD> </TD></TR>
<TR style="BACKGROUND: #cceeff" vAlign="bottom">
<TD>
<DIV style="MARGIN-LEFT: 30px; TEXT-INDENT: -15px">Other assets </DIV></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>
<TD> </TD>
<TD> </TD>
<TD align="right">13 </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">— </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">7 </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">20 </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" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 1px solid" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 1px solid" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 1px solid" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 1px solid" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 1px solid" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 1px solid" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 1px solid" noWrap align="right" colSpan="2"> </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">286 </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">856 </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">1,649 </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">693 </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">1,223 </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">554 </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">2,470 </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" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 3px double" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 3px double" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 3px double" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 3px double" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 3px double" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 3px double" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 3px double" noWrap align="right" colSpan="2"> </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">243 </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">897 </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">94 </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">1,234 </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">615 </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">1,313 </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">40 </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">1,968 </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" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 1px solid" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 1px solid" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 1px solid" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 1px solid" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 1px solid" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 1px solid" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 1px solid" noWrap align="right" colSpan="2"> </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">243 </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">897 </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">94 </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">1,234 </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">615 </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">1,313 </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">40 </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">1,968 </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" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 3px double" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 3px double" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 3px double" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 3px double" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 3px double" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 3px double" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 3px double" noWrap align="right" colSpan="2"> </TD>
<TD> </TD></TR></TBODY></TABLE></DIV></EFX_UNIDENTIFIED_TABLE>
<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 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 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>
<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"> Contracts for which fair value can be estimated from executed transactions or broker quotes corroborated by other market data are generally classified within Level 2. 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 estimate fair value. Where observable inputs are available for substantially the full term of the asset or liability, the instrument is categorized in Level 2. 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 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">
<DIV style="FONT-FAMILY: 'TIMES NEW ROMAN',TIMES,SERIF">
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align="left"> Certain instruments trade in less active markets with lower availability of pricing information requiring valuation models 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 fair value of options is estimated using an industry standard Black-Scholes option pricing model. Certain inputs into the model are generally observable, such as commodity prices and interest rates, whereas other model inputs, such as implied volatility by location, are unobservable and require judgment in estimating. The instruments included in Level 3 at June 30, 2009, predominantly consist of options that primarily hedge future sales of production from our Exploration & Production segment, are structured as costless collars, which combine an option to purchase and an option to sell in order to set a minimum and maximum transaction price, and are financially settled. </DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align="left"> The following tables present a reconciliation of changes in the fair value of net 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><EFX_UNIDENTIFIED_TABLE><A name="FIS_UNIDENTIFIED_TABLE_15"></A>
<DIV align="center">
<TABLE style="FONT-SIZE: 10pt" cellSpacing="0" cellPadding="0" width="100%" border="0">
<TBODY>
<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" noWrap align="middle" colSpan="14"><B>Three months ended June 30, </B></TD>
<TD> </TD></TR>
<TR style="FONT-SIZE: 8pt" vAlign="bottom">
<TD> </TD>
<TD> </TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align="middle" colSpan="6"><B>2009 </B></TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align="middle" colSpan="6"><B>2008 </B></TD>
<TD> </TD></TR>
<TR style="FONT-SIZE: 8pt" vAlign="bottom">
<TD> </TD>
<TD> </TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align="middle" colSpan="2"><B>Net Derivatives </B></TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align="middle" colSpan="2"><B>Other Assets </B></TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align="middle" colSpan="2"><B>Net Derivatives </B></TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align="middle" colSpan="2"><B>Other Assets </B></TD>
<TD> </TD></TR>
<TR style="FONT-SIZE: 8pt" vAlign="bottom">
<TD> </TD>
<TD> </TD>
<TD noWrap align="middle" colSpan="14"><B>(Millions) </B></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">639 </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">7 </TD>
<TD> </TD>
<TD> </TD>
<TD noWrap align="left">$ </TD>
<TD align="right">(186 </TD>
<TD noWrap>) </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">10 </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 from continuing operations </I></DIV></TD>
<TD> </TD>
<TD> </TD>
<TD align="right">182 </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">— </TD>
<TD> </TD>
<TD> </TD>
<TD noWrap align="left"> </TD>
<TD align="right">(55 </TD>
<TD noWrap>) </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 <I>other comprehensive loss </I></DIV></TD>
<TD> </TD>
<TD noWrap align="left"> </TD>
<TD align="right">(229 </TD>
<TD noWrap>) </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">— </TD>
<TD> </TD>
<TD> </TD>
<TD noWrap align="left"> </TD>
<TD align="right">(461 </TD>
<TD noWrap>) </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 noWrap align="left"> </TD>
<TD align="right">(179 </TD>
<TD noWrap>) </TD>
<TD> </TD>
<TD noWrap align="left"> </TD>
<TD align="right">(7 </TD>
<TD noWrap>) </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">62 </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 noWrap align="left"> </TD>
<TD align="right">(1 </TD>
<TD noWrap>) </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" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 1px solid" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 1px solid" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 1px solid" noWrap align="right" colSpan="2"> </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">413 </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">— </TD>
<TD> </TD>
<TD> </TD>
<TD noWrap align="left">$ </TD>
<TD align="right">(641 </TD>
<TD noWrap>) </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">10 </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" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 3px double" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 3px double" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 3px double" noWrap align="right" colSpan="2"> </TD>
<TD> </TD></TR>
<TR style="BACKGROUND: #cceeff" vAlign="bottom">
<TD>
<DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Net unrealized gains included in <I>income from continuing operations </I>relating to instruments still held at June 30 </DIV></TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">4 </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">— </TD>
<TD> </TD>
<TD> </TD>
<TD noWrap align="left">$ </TD>
<TD align="right">(45 </TD>
<TD noWrap>) </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" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 3px double" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 3px double" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 3px double" noWrap align="right" colSpan="2"> </TD>
<TD> </TD></TR></TBODY></TABLE></DIV>
<DIV align="center">
<TABLE style="FONT-SIZE: 10pt" cellSpacing="0" cellPadding="0" width="100%" border="0">
<TBODY>
<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" noWrap align="middle" colSpan="14"><B>Six months ended June 30, </B></TD>
<TD> </TD></TR>
<TR style="FONT-SIZE: 8pt" vAlign="bottom">
<TD> </TD>
<TD> </TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align="middle" colSpan="6"><B>2009 </B></TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align="middle" colSpan="6"><B>2008 </B></TD>
<TD> </TD></TR>
<TR style="FONT-SIZE: 8pt" vAlign="bottom">
<TD> </TD>
<TD> </TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align="middle" colSpan="2"><B>Net Derivatives </B></TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align="middle" colSpan="2"><B>Other Assets </B></TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align="middle" colSpan="2"><B>Net Derivatives </B></TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align="middle" colSpan="2"><B>Other Assets </B></TD>
<TD> </TD></TR>
<TR style="FONT-SIZE: 8pt" vAlign="bottom">
<TD> </TD>
<TD> </TD>
<TD noWrap align="middle" colSpan="14"><B>(Millions) </B></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">507 </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">7 </TD>
<TD> </TD>
<TD> </TD>
<TD noWrap align="left">$ </TD>
<TD align="right">(14 </TD>
<TD noWrap>) </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">10 </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 from continuing operations </I></DIV></TD>
<TD> </TD>
<TD> </TD>
<TD align="right">319 </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">— </TD>
<TD> </TD>
<TD> </TD>
<TD noWrap align="left"> </TD>
<TD align="right">(49 </TD>
<TD noWrap>) </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 <I>other comprehensive loss </I></DIV></TD>
<TD> </TD>
<TD noWrap align="left"> </TD>
<TD align="right">(96 </TD>
<TD noWrap>) </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">— </TD>
<TD> </TD>
<TD> </TD>
<TD noWrap align="left"> </TD>
<TD align="right">(640 </TD>
<TD noWrap>) </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 noWrap align="left"> </TD>
<TD align="right">(317 </TD>
<TD noWrap>) </TD>
<TD> </TD>
<TD noWrap align="left"> </TD>
<TD align="right">(7 </TD>
<TD noWrap>) </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">64 </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 noWrap align="left"> </TD>
<TD align="right">(1 </TD>
<TD noWrap>) </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 noWrap align="left"> </TD>
<TD align="right">(1 </TD>
<TD noWrap>) </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" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 1px solid" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 1px solid" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 1px solid" noWrap align="right" colSpan="2"> </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">413 </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">— </TD>
<TD> </TD>
<TD> </TD>
<TD noWrap align="left">$ </TD>
<TD align="right">(641 </TD>
<TD noWrap>) </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">10 </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" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 3px double" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 3px double" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 3px double" noWrap align="right" colSpan="2"> </TD>
<TD> </TD></TR>
<TR style="BACKGROUND: #cceeff" vAlign="bottom">
<TD>
<DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Net unrealized gains included in <I>income from continuing operations </I>relating to instruments still held at June 30 </DIV></TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">3 </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">— </TD>
<TD> </TD>
<TD> </TD>
<TD noWrap align="left">$ </TD>
<TD align="right">(29 </TD>
<TD noWrap>) </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" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 3px double" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 3px double" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 3px double" noWrap align="right" colSpan="2"> </TD>
<TD> </TD></TR></TBODY></TABLE></DIV></EFX_UNIDENTIFIED_TABLE>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align="left"> Realized and unrealized gains (losses) included in <I>income from continuing operations </I>for the above periods are reported in <I>revenues </I>in our Consolidated Statement of Operations. Reclassification of fair value into and out of Level 3 is made at the end of each quarter. </DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align="left">
<DIV style="FONT-FAMILY: 'TIMES NEW ROMAN',TIMES,SERIF">
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align="left"> The following table presents, by level within the fair value hierarchy, certain assets that have been measured at fair value on a nonrecurring basis, including certain items reported as discontinued operations. </DIV>
<DIV style="MARGIN-TOP: 12pt; FONT-SIZE: 10pt" align="left"><B>Fair Value Measurements Using:</B> </DIV>
<DIV align="center">
<TABLE style="FONT-SIZE: 10pt" cellSpacing="0" cellPadding="0" width="100%" border="0">
<TBODY>
<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> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD noWrap align="middle" colSpan="2"><B>Total</B> </TD>
<TD> </TD>
<TD> </TD>
<TD noWrap align="middle" colSpan="2"><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> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD noWrap align="middle" colSpan="2"><B>Losses for three</B> </TD>
<TD> </TD>
<TD> </TD>
<TD noWrap align="middle" colSpan="2"><B>Losses for six</B> </TD>
<TD> </TD></TR>
<TR style="FONT-SIZE: 8pt" vAlign="bottom">
<TD> </TD>
<TD> </TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align="middle" colSpan="10"><B>June 30, 2009</B> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-BOTTOM: #000000 0px solid" noWrap align="middle" colSpan="2"><B>months ended</B> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-BOTTOM: #000000 0px solid" noWrap align="middle" colSpan="2"><B>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" noWrap align="middle" colSpan="2"><B>Level 1</B> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align="middle" colSpan="2"><B>Level 2</B> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align="middle" colSpan="2"><B>Level 3</B> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align="middle" colSpan="2"><B>June 30, 2009</B> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align="middle" colSpan="2"><B>June 30, 2009</B> </TD>
<TD> </TD></TR>
<TR style="FONT-SIZE: 8pt" vAlign="bottom">
<TD> </TD>
<TD> </TD>
<TD noWrap align="middle" colSpan="18"><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>
<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">Midstream Venezuelan property (see Note 3) </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 noWrap align="left">$ </TD>
<TD align="right">(a </TD>
<TD noWrap>) </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">— </TD>
<TD> </TD>
<TD> </TD>
<TD noWrap align="left">$ </TD>
<TD align="right">(211 </TD>
<TD noWrap>) </TD></TR>
<TR style="BACKGROUND: #cceeff" vAlign="bottom">
<TD>
<DIV style="MARGIN-LEFT: 30px; TEXT-INDENT: -15px">Midstream investment in Accroven (see Note 4) </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 noWrap align="left"> </TD>
<TD align="right">(b </TD>
<TD noWrap>) </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">— </TD>
<TD> </TD>
<TD> </TD>
<TD noWrap align="left"> </TD>
<TD align="right">(75 </TD>
<TD noWrap>) </TD></TR>
<TR vAlign="bottom">
<TD>
<DIV style="MARGIN-LEFT: 30px; TEXT-INDENT: -15px">Exploration & Production cost-based investment (see Note 4) </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 noWrap align="left"> </TD>
<TD align="right">(b </TD>
<TD noWrap>) </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">— </TD>
<TD> </TD>
<TD> </TD>
<TD noWrap align="left"> </TD>
<TD align="right">(11 </TD>
<TD noWrap>) </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" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 1px solid" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 1px solid" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 1px solid" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 1px solid" noWrap align="right" colSpan="2"> </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">— </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 noWrap align="left">$ </TD>
<TD align="right">(297 </TD>
<TD noWrap>) </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" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 3px double" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 3px double" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 3px double" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 3px double" noWrap align="right" colSpan="2"> </TD>
<TD> </TD></TR></TBODY></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">
<TBODY>
<TR>
<TD width="3%"></TD>
<TD width="1%"></TD>
<TD width="96"></TD></TR>
<TR vAlign="top">
<TD noWrap align="left">(a) </TD>
<TD> </TD>
<TD>Fair value measured at March 31, 2009, was $106 million. These assets were expropriated by the Venezuelan government during the second quarter of 2009 and the entities that previously owned these assets are no longer consolidated within our Midstream segment. We recorded our retained noncontrolling investment in these entities at zero and recognized a gain of $9 million on the deconsolidation. (See Note 3.) </TD></TR>
<TR style="FONT-SIZE: 3pt">
<TD> </TD></TR>
<TR vAlign="top">
<TD noWrap align="left">(b) </TD>
<TD> </TD>
<TD>Fair value measured at March 31, 2009, was zero. </TD></TR></TBODY></TABLE></DIV>
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<div> <DIV style="FONT-FAMILY: 'TIMES NEW ROMAN',TIMES,SERIF">
<DIV style="FONT-FAMILY: 'TIMES NEW ROMAN',TIMES,SERIF">
<DIV style="MARGIN-TOP: 12pt; FONT-SIZE: 10pt" align="left">
<DIV style="FONT-FAMILY: 'TIMES NEW ROMAN',TIMES,SERIF">
<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" 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 balance sheet approximate fair value due to the short-term maturity of these instruments. </DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align="left"> <U>ARO Trust Investments: </U>Our Transcontinental Gas Pipeline Company, LLC (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 June 30, 2009 and December 31, 2008, approximately 97 percent of our long-term debt was publicly traded. </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. </DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align="left"> <U>Other </U>: Includes notes and other noncurrent receivables, margin deposits, customer margin deposits payable, cost-based investments and auction rate securities. </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 on the Consolidated Balance Sheet. See Note 10 for discussion of valuation of our energy derivatives. </DIV></DIV>
<P>
<P><A name="eolPage19"></A>
<P>
<DIV style="FONT-FAMILY: 'TIMES NEW ROMAN',TIMES,SERIF"><EFX_UNIDENTIFIED_TABLE><A name="FIS_UNIDENTIFIED_TABLE_17"></A>
<DIV style="MARGIN-TOP: 6pt; 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">
<TBODY>
<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" noWrap align="middle" colSpan="7"><B>June 30, 2009 </B></TD>
<TD> </TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align="middle" colSpan="7"><B>December 31, 2008 </B></TD></TR>
<TR style="FONT-SIZE: 8pt" vAlign="bottom">
<TD> </TD>
<TD> </TD>
<TD noWrap align="middle" colSpan="3"><B>Carrying </B></TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD noWrap align="middle" colSpan="3"><B>Carrying </B></TD>
<TD> </TD>
<TD noWrap align="middle" colSpan="3"> </TD></TR>
<TR style="FONT-SIZE: 8pt" vAlign="bottom">
<TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align="left"><B>Asset (Liability) </B></TD>
<TD> </TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align="middle" colSpan="3"><B>Amount </B></TD>
<TD> </TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align="middle" colSpan="3"><B>Fair Value </B></TD>
<TD> </TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align="middle" colSpan="3"><B>Amount </B></TD>
<TD> </TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align="middle" colSpan="3"><B>Fair Value </B></TD></TR>
<TR style="FONT-SIZE: 8pt" vAlign="bottom">
<TD> </TD>
<TD> </TD>
<TD noWrap align="middle" 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">1,853 </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">$ </TD>
<TD align="right">1,853 </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">$ </TD>
<TD align="right">1,438 </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">$ </TD>
<TD align="right">1,438 </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 align="right">$ </TD>
<TD align="right">30 </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">$ </TD>
<TD align="right">30 </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">$ </TD>
<TD align="right">37 </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">$ </TD>
<TD align="right">37 </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 align="right">$ </TD>
<TD align="right">22 </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">$ </TD>
<TD align="right">22 </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">$ </TD>
<TD align="right">13 </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">$ </TD>
<TD align="right">13 </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 noWrap align="right">$ </TD>
<TD align="right">(8,274 </TD>
<TD noWrap>) </TD>
<TD> </TD>
<TD noWrap align="right">$ </TD>
<TD align="right">(8,162 </TD>
<TD noWrap>) </TD>
<TD> </TD>
<TD noWrap align="right">$ </TD>
<TD align="right">(7,697 </TD>
<TD noWrap>) </TD>
<TD> </TD>
<TD noWrap align="right">$ </TD>
<TD align="right">(6,140 </TD>
<TD noWrap>) </TD></TR>
<TR style="BACKGROUND: #cceeff" vAlign="bottom">
<TD>
<DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Guarantees </DIV></TD>
<TD> </TD>
<TD noWrap align="right">$ </TD>
<TD align="right">(37 </TD>
<TD noWrap>) </TD>
<TD> </TD>
<TD noWrap align="right">$ </TD>
<TD align="right">(34 </TD>
<TD noWrap>) </TD>
<TD> </TD>
<TD noWrap align="right">$ </TD>
<TD align="right">(38 </TD>
<TD noWrap>) </TD>
<TD> </TD>
<TD noWrap align="right">$ </TD>
<TD align="right">(32 </TD>
<TD noWrap>) </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">5 </TD>
<TD> </TD>
<TD> </TD>
<TD noWrap align="right">$ </TD>
<TD align="right">(5 </TD>
<TD noWrap>) (b) </TD>
<TD> </TD>
<TD align="right">$ </TD>
<TD align="right">4 </TD>
<TD> </TD>
<TD> </TD>
<TD noWrap align="right">$ </TD>
<TD align="right">(13 </TD>
<TD noWrap>) (b) </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 align="right">$ </TD>
<TD align="right">505 </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">$ </TD>
<TD align="right">505 </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">$ </TD>
<TD align="right">458 </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">$ </TD>
<TD align="right">458 </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 noWrap align="right">$ </TD>
<TD align="right">(112 </TD>
<TD noWrap>) </TD>
<TD> </TD>
<TD noWrap align="right">$ </TD>
<TD align="right">(112 </TD>
<TD noWrap>) </TD>
<TD> </TD>
<TD align="right">$ </TD>
<TD align="right">24 </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">$ </TD>
<TD align="right">24 </TD>
<TD> </TD></TR></TBODY></TABLE></DIV></EFX_UNIDENTIFIED_TABLE>
<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">
<TBODY>
<TR>
<TD width="3%"></TD>
<TD width="1%"></TD>
<TD width="96"></TD></TR>
<TR vAlign="top">
<TD noWrap align="left">(a) </TD>
<TD> </TD>
<TD>Excludes capital lease obligations. </TD></TR>
<TR style="FONT-SIZE: 3pt">
<TD> </TD></TR>
<TR vAlign="top">
<TD noWrap 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 $11 million and $17 million at June 30, 2009 and December 31, 2008. </TD></TR></TBODY></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" 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 forecasted sales of 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"> Exploration & Production produces, buys and sells natural gas at different locations throughout the United States. To reduce exposure to a decrease in revenues 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. Exploration & Production’s 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. </DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align="left"> Midstream produces and sells NGLs at different locations throughout the United States. Midstream also buys natural gas to satisfy the required fuel and shrink needed to generate NGLs. 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 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. Midstream’s 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>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align="left"> </DIV>
<P style="FONT-SIZE: 10pt" align="center"> </P></DIV>
<P>
<P><A name="eolPage20"></A>
<P>
<DIV style="FONT-FAMILY: 'TIMES NEW ROMAN',TIMES,SERIF">
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align="left"> Gas Marketing Services supports our natural gas business by providing marketing and risk management services, which include marketing the gas produced by Exploration & Production and procuring fuel and shrink for Midstream. Gas Marketing Services also enters 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 margins from fluctuations in natural gas market prices, we may enter into futures contracts, swap agreements, and financial option contracts to mitigate the price risk associated with these contracts. Hedges for transportation contracts are designated as cash flow hedges and 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. Hedges for storage contracts have not been designated as hedging instruments, despite economically hedging the expected cash flows generated by those agreements. </DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align="left"> <I>Other activities </I></DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align="left"> Gas Marketing Services also enters 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" 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: fixed price, basis, index, and options. The fixed price category includes physical and financial derivative transactions that settle at a fixed location price. The basis category includes financial derivative transactions priced off the difference in value between a commodity at two specific delivery points. The index category includes physical derivative transactions at an unknown future price. The options category includes all fixed price options or combination of options (collars) that set a floor and/or ceiling for the transaction price of a commodity. </DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align="left"> The following table depicts the notional amounts of the net long (short) positions in our commodity derivatives portfolio as of June 30, 2009. Natural gas is presented in millions of British Thermal Units (MMBtu) and NGLs is presented in gallons. The volumes presented for options that comprise zero-cost collars represent one side of the short position. While the index volumes are significant, they represent less than 1 percent of the fair value of our net derivative balance. </DIV><EFX_UNIDENTIFIED_TABLE><A name="FIS_UNIDENTIFIED_TABLE_18"></A>
<DIV align="center">
<TABLE style="FONT-SIZE: 10pt" cellSpacing="0" cellPadding="0" width="100%" border="0">
<TBODY>
<TR vAlign="bottom">
<TD width="28%"> </TD>
<TD width="1%"> </TD>
<TD width="15%"> </TD>
<TD width="1%"> </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>
<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 style="BORDER-BOTTOM: #000000 1px solid" noWrap align="middle" colSpan="3"><B>Derivative Notional Volumes </B></TD>
<TD> </TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align="middle" colSpan="3"><B>Measurement </B></TD>
<TD> </TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align="middle" colSpan="3"><B>Fixed Price </B></TD>
<TD> </TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align="middle" colSpan="3"><B>Basis </B></TD>
<TD> </TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align="middle" colSpan="3"><B>Index </B></TD>
<TD> </TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align="middle" colSpan="3"><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="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>
<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" noWrap align="left">Risk Management </TD>
<TD> </TD>
<TD vAlign="top" align="middle" colSpan="3">MMBtu </TD>
<TD> </TD>
<TD vAlign="top" noWrap align="right"> </TD>
<TD vAlign="top" align="right">(45,010,000 </TD>
<TD vAlign="top" noWrap>) </TD>
<TD> </TD>
<TD vAlign="top" noWrap align="right"> </TD>
<TD vAlign="top" align="right">(41,205,000 </TD>
<TD vAlign="top" noWrap>) </TD>
<TD> </TD>
<TD vAlign="top" align="right"> </TD>
<TD vAlign="top" align="right"> </TD>
<TD vAlign="top"> </TD>
<TD> </TD>
<TD vAlign="top" noWrap align="right"> </TD>
<TD vAlign="top" align="right">(283,610,000 </TD>
<TD vAlign="top" noWrap>) </TD></TR>
<TR style="BACKGROUND: #cceeff" vAlign="bottom">
<TD>
<DIV style="MARGIN-LEFT: 30px; TEXT-INDENT: -15px">Gas Marketing Services </DIV></TD>
<TD> </TD>
<TD vAlign="top" align="left">Risk Management </TD>
<TD> </TD>
<TD vAlign="top" noWrap align="middle" colSpan="3">MMBtu </TD>
<TD> </TD>
<TD vAlign="top" noWrap align="right"> </TD>
<TD vAlign="top" align="right">— </TD>
<TD vAlign="top" noWrap>* </TD>
<TD> </TD>
<TD vAlign="top" noWrap align="right"> </TD>
<TD vAlign="top" align="right">— </TD>
<TD vAlign="top" noWrap>* </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">Midstream </DIV></TD>
<TD> </TD>
<TD vAlign="top" align="left">Risk Management </TD>
<TD> </TD>
<TD vAlign="top" align="middle" colSpan="3">Gallons </TD>
<TD> </TD>
<TD vAlign="top" noWrap align="right"> </TD>
<TD vAlign="top" align="right">(28,350,000 </TD>
<TD vAlign="top" noWrap>) </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"></DIV></TD>
<TD> </TD>
<TD vAlign="top" align="left"> </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>
<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 align="left" colSpan="3"><B>Not Designated as Hedging Instruments </B></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>
<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="middle" colSpan="3">MMBtu </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" noWrap align="right"> </TD>
<TD vAlign="top" align="right">(52,042,136 </TD>
<TD vAlign="top" noWrap>) </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">Gas Marketing Services </DIV></TD>
<TD> </TD>
<TD vAlign="top" align="left">Risk Management </TD>
<TD> </TD>
<TD vAlign="top" align="middle" colSpan="3">MMBtu </TD>
<TD> </TD>
<TD vAlign="top" noWrap align="right"> </TD>
<TD vAlign="top" align="right">(12,459,999 </TD>
<TD vAlign="top" noWrap>) </TD>
<TD> </TD>
<TD vAlign="top" noWrap align="right"> </TD>
<TD vAlign="top" align="right">(9,212,500 </TD>
<TD vAlign="top" noWrap>) </TD>
<TD> </TD>
<TD vAlign="top" align="right"> </TD>
<TD vAlign="top" align="right">585,001 </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">Midstream </DIV></TD>
<TD> </TD>
<TD vAlign="top" align="left">Risk Management </TD>
<TD> </TD>
<TD vAlign="top" align="middle" colSpan="3">MMBtu </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">97,099,976 </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">Midstream </DIV></TD>
<TD> </TD>
<TD vAlign="top" align="left">Risk Management </TD>
<TD> </TD>
<TD vAlign="top" align="middle" colSpan="3">Gallons </TD>
<TD> </TD>
<TD vAlign="top" noWrap align="right"> </TD>
<TD vAlign="top" align="right">(9,450,000 </TD>
<TD vAlign="top" noWrap>) </TD>
<TD> </TD>
<TD vAlign="top" align="right"> </TD>
<TD vAlign="top" align="right"> </TD>
<TD vAlign="top"> </TD>
<TD> </TD>
<TD vAlign="top" noWrap align="right"> </TD>
<TD vAlign="top" align="right">(79,743,150 </TD>
<TD vAlign="top" noWrap>) </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">Gas Marketing Services </DIV></TD>
<TD> </TD>
<TD vAlign="top" align="left">Other </TD>
<TD> </TD>
<TD vAlign="top" align="middle" colSpan="3">MMBtu </TD>
<TD> </TD>
<TD vAlign="top" align="right"> </TD>
<TD vAlign="top" align="right">567,623 </TD>
<TD vAlign="top"> </TD>
<TD> </TD>
<TD vAlign="top" align="right"> </TD>
<TD vAlign="top" align="right">1,692,500 </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></TBODY></TABLE></DIV></EFX_UNIDENTIFIED_TABLE>
<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">
<TBODY>
<TR>
<TD width="3%"></TD>
<TD width="1%"></TD>
<TD width="96"></TD></TR>
<TR vAlign="top">
<TD noWrap align="left">* </TD>
<TD> </TD>
<TD>Volumes related to offsetting positions net to zero. </TD></TR></TBODY></TABLE>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" 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 twelve 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 </DIV></DIV>
<P>
<P><A name="eolPage21"></A>
<P>
<DIV style="FONT-FAMILY: 'TIMES NEW ROMAN',TIMES,SERIF">
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align="left">below do not include cash held on deposit in margin accounts that we have received or remitted to collateralize certain derivative positions. </DIV><EFX_UNIDENTIFIED_TABLE><A name="FIS_UNIDENTIFIED_TABLE_19"></A>
<DIV align="center">
<TABLE style="FONT-SIZE: 10pt" cellSpacing="0" cellPadding="0" width="100%" border="0">
<TBODY>
<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" noWrap align="middle" colSpan="6"><B>June 30, 2009 </B></TD>
<TD> </TD></TR>
<TR style="FONT-SIZE: 8pt" vAlign="bottom">
<TD> </TD>
<TD> </TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align="middle" colSpan="2"><B>Assets </B></TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align="middle" colSpan="2"><B>Liabilities </B></TD>
<TD> </TD></TR>
<TR style="FONT-SIZE: 8pt" vAlign="bottom">
<TD> </TD>
<TD> </TD>
<TD noWrap align="middle" colSpan="6"><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">665 </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">160 </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></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">667 </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">693 </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">295 </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">381 </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" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 1px solid" noWrap align="right" colSpan="2"> </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">962 </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">1,074 </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" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 1px solid" noWrap align="right" colSpan="2"> </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">1,627 </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">1,234 </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" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 3px double" noWrap align="right" colSpan="2"> </TD>
<TD> </TD></TR></TBODY></TABLE></DIV></EFX_UNIDENTIFIED_TABLE>
<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. </DIV><EFX_UNIDENTIFIED_TABLE><A name="FIS_UNIDENTIFIED_TABLE_20"></A>
<DIV align="center">
<TABLE style="FONT-SIZE: 10pt" cellSpacing="0" cellPadding="0" width="100%" border="0">
<TBODY>
<TR vAlign="bottom">
<TD width="64%"> </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 noWrap align="middle" colSpan="3"><B>Three months ended </B></TD>
<TD> </TD>
<TD noWrap align="middle" colSpan="3"><B>Six months ended </B></TD>
<TD> </TD>
<TD noWrap align="middle" colSpan="3"> </TD></TR>
<TR style="FONT-SIZE: 8pt" vAlign="bottom">
<TD> </TD>
<TD> </TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align="middle" colSpan="3"><B>June 30, 2009 </B></TD>
<TD> </TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align="middle" colSpan="3"><B>June 30, 2009 </B></TD>
<TD> </TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align="middle" colSpan="3"><B>Classification </B></TD></TR>
<TR style="FONT-SIZE: 8pt" vAlign="bottom">
<TD> </TD>
<TD> </TD>
<TD noWrap align="middle" colSpan="3"><B>(Millions) </B></TD>
<TD> </TD>
<TD noWrap align="middle" colSpan="3"><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 (loss) recognized in other comprehensive income (effective portion) </DIV></TD>
<TD> </TD>
<TD noWrap align="right">$ </TD>
<TD align="right">(54 </TD>
<TD noWrap>) </TD>
<TD> </TD>
<TD align="right">$ </TD>
<TD align="right">271 </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD></TR>
<TR vAlign="bottom">
<TD>
<DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Net loss reclassified from accumulated other comprehensive income into income (effective portion) </DIV></TD>
<TD> </TD>
<TD noWrap align="right">$ </TD>
<TD align="right">(201 </TD>
<TD noWrap>) </TD>
<TD> </TD>
<TD noWrap align="right">$ </TD>
<TD align="right">(330 </TD>
<TD noWrap>) </TD>
<TD> </TD>
<TD noWrap align="middle" 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">1 </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">$ </TD>
<TD align="right">2 </TD>
<TD> </TD>
<TD> </TD>
<TD noWrap align="middle" colSpan="3">Revenues </TD></TR></TBODY></TABLE></DIV></EFX_UNIDENTIFIED_TABLE>
<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><EFX_UNIDENTIFIED_TABLE><A name="FIS_UNIDENTIFIED_TABLE_21"></A>
<DIV align="center">
<TABLE style="FONT-SIZE: 10pt" cellSpacing="0" cellPadding="0" width="100%" border="0">
<TBODY>
<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 noWrap align="middle" colSpan="2"><B>Three months ended </B></TD>
<TD> </TD>
<TD> </TD>
<TD noWrap align="middle" colSpan="2"><B>Six 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" noWrap align="middle" colSpan="2"><B>June 30, 2009 </B></TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align="middle" colSpan="2"><B>June 30, 2009 </B></TD>
<TD> </TD></TR>
<TR style="FONT-SIZE: 8pt" vAlign="bottom">
<TD> </TD>
<TD> </TD>
<TD noWrap align="middle" colSpan="2"><B>(Millions) </B></TD>
<TD> </TD>
<TD> </TD>
<TD noWrap align="middle" colSpan="2"><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">5 </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">20 </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">10 </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">14 </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" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 1px solid" noWrap align="right" colSpan="2"> </TD>
<TD> </TD></TR>
<TR style="BACKGROUND: #cceeff" vAlign="bottom">
<TD>
<DIV style="MARGIN-LEFT: 15px; TEXT-INDENT: -15px">Net gain (loss) </DIV></TD>
<TD> </TD>
<TD noWrap align="left">$ </TD>
<TD align="right">(5 </TD>
<TD noWrap>) </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">6 </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" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 3px double" noWrap align="right" colSpan="2"> </TD>
<TD> </TD></TR></TBODY></TABLE></DIV></EFX_UNIDENTIFIED_TABLE>
<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" 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. </DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align="left"> As of June 30, 2009, we have collateral posted to derivative counterparties totaling $86 million, all of which is in the form of letters of credit, to support the aggregate fair value of our net derivative liability position of $168 million, which includes a reduction of $5 million to our liability balance for our 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 $87 million. </DIV></DIV>
<P><A name="eolPage22"></A>
<P>
<DIV style="FONT-FAMILY: 'TIMES NEW ROMAN',TIMES,SERIF">
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" 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 June 30, 2009, we have hedged portions of future cash flows associated with anticipated energy commodity purchases and sales for up to four years. Based on recorded values at June 30, 2009, $228 million of net gains (net of income tax provision of $138 million) will be reclassified into earnings within the next year. These recorded values are based on market prices of the commodities as of June 30, 2009. Due to the volatile nature of commodity prices and changes in the creditworthiness 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 connection with agreements executed to resolve take-or-pay and other contract claims and to amend gas purchase contracts, Transco entered into certain settlements with producers that may require the indemnification of certain claims for additional royalties that the producers may be required to pay as a result of such settlements. Transco, through its agent, Gas Marketing Services, continues to purchase gas under contracts which extend, in some cases, through the life of the associated gas reserves. Certain of these contracts contain royalty indemnification provisions that have no carrying value. Producers have received certain demands and may receive other demands, which could result in claims pursuant to royalty indemnification provisions. Indemnification for royalties will depend on, among other things, the specific lease provisions between the producer and the lessor and the terms of the agreement between the producer and Transco. Consequently, the potential maximum future payments under such indemnification provisions cannot be determined. However, management believes that the probability of material payments is remote. </DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align="left"> In connection with the 1993 public offering of units in the Williams Coal Seam Gas Royalty Trust (Royalty Trust), our Exploration & Production segment entered into a gas purchase contract for the purchase of natural gas in which the Royalty Trust holds a net profits interest. Under this agreement, we guarantee a minimum purchase price that the Royalty Trust will realize in the calculation of its net profits interest. We have an annual option to discontinue this minimum purchase price guarantee and pay solely based on an index price. The maximum potential future exposure associated with this guarantee is not determinable because it is dependent upon natural gas prices and production volumes. No amounts have been accrued for this contingent obligation as the index price continues to exceed the minimum purchase price. </DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align="left"> We are required by certain lenders to ensure that the interest rates received by them under various loan agreements are not reduced by taxes by providing for the reimbursement of any taxes required to be paid by the lender. The maximum potential amount of future payments under these indemnifications is based on the related borrowings. 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. </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 $41 million at June 30, 2009. Our exposure declines systematically throughout the remaining term of WilTel’s obligations. The carrying value of these guarantees is approximately $37 million at June 30, 2009. </DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align="left"> Former managing directors of Gulf Liquids are involved in litigation related to the construction of gas processing plants. Gulf Liquids has indemnity obligations to the former managing directors for legal fees and potential losses that may result from this litigation. Claims against these former managing directors have been settled and dismissed after payments on their behalf by directors and officers insurers. Some unresolved issues remain between us and these insurers, but no amounts have been accrued for any potential liability. </DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align="left"> We have guaranteed the performance of a former subsidiary of our wholly owned subsidiary MAPCO Inc., under a coal supply contract. This guarantee was granted by MAPCO Inc. upon the sale of its former subsidiary to a </DIV></DIV>
<P>
<DIV style="FONT-FAMILY: 'TIMES NEW ROMAN',TIMES,SERIF">
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align="left">third party in 1996. The guaranteed contract provides for an annual supply of a minimum of 2.25 million tons of coal. Our potential exposure is dependent on the difference between current market prices of coal and the pricing terms of the contract, both of which are variable, and the remaining term of the contract. Given the variability of the terms, the maximum future potential payments cannot be determined. We believe that our likelihood of performance under this guarantee is remote. In the event we are required to perform, we are fully indemnified by the purchaser of MAPCO Inc.’s former subsidiary. This guarantee expires in December 2010 and has no carrying value. </DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align="left"> We have guaranteed commercial letters of credit totaling $20 million on behalf of Accroven. These expire in January 2010 and have no carrying value. </DIV>
<DIV style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align="left"> We have provided guarantees on behalf of certain entities in which we have an equity ownership interest. These generally guarantee operating performance measures and the maximum potential future exposure cannot be determined. There are no expiration dates associated with these guarantees. No amounts have been accrued at June 30, 2009. </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" 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"> The gross credit exposure from our derivative contracts as of June 30, 2009, is summarized as follows. </DIV><EFX_UNIDENTIFIED_TABLE><A name="FIS_UNIDENTIFIED_TABLE_22"></A>
<DIV align="center">
<TABLE style="FONT-SIZE: 10pt" cellSpacing="0" cellPadding="0" width="100%" border="0">
<TBODY>
<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 noWrap align="middle" colSpan="2"><B>Investment </B></TD>
<TD> </TD>
<TD> </TD>
<TD noWrap align="middle" colSpan="2"> </TD>
<TD> </TD></TR>
<TR style="FONT-SIZE: 8pt" vAlign="bottom">
<TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align="left"><B>Counterparty Type </B></TD>
<TD> </TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align="middle" colSpan="2"><B>Grade(a) </B></TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align="middle" colSpan="2"><B>Total </B></TD>
<TD> </TD></TR>
<TR style="FONT-SIZE: 8pt" vAlign="bottom">
<TD> </TD>
<TD> </TD>
<TD noWrap align="middle" 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">27 </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">28 </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">594 </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">609 </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">991 </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">991 </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" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 1px solid" noWrap align="right" colSpan="2"> </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">1,612 </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">1,628 </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" noWrap align="right" colSpan="2"> </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 noWrap align="left"> </TD>
<TD align="right">(1 </TD>
<TD noWrap>) </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" noWrap align="right" colSpan="2"> </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">1,627 </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" noWrap align="right" colSpan="2"> </TD>
<TD> </TD></TR></TBODY></TABLE></DIV></EFX_UNIDENTIFIED_TABLE>
<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 June 30, 2009, excluding collateral support discussed below, is summarized as follows. </DIV><EFX_UNIDENTIFIED_TABLE><A name="FIS_UNIDENTIFIED_TABLE_23"></A>
<DIV align="center">
<TABLE style="FONT-SIZE: 10pt" cellSpacing="0" cellPadding="0" width="100%" border="0">
<TBODY>
<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 noWrap align="middle" colSpan="2"><B>Investment </B></TD>
<TD> </TD>
<TD> </TD>
<TD noWrap align="middle" colSpan="2"> </TD>
<TD> </TD></TR>
<TR style="FONT-SIZE: 8pt" vAlign="bottom">
<TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align="left"><B>Counterparty Type </B></TD>
<TD> </TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align="middle" colSpan="2"><B>Grade(a) </B></TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align="middle" colSpan="2"><B>Total </B></TD>
<TD> </TD></TR>
<TR style="FONT-SIZE: 8pt" vAlign="bottom">
<TD> </TD>
<TD> </TD>
<TD noWrap align="middle" 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">— </TD>
<TD> </TD>
<TD> </TD>
<TD align="left">$ </TD>
<TD align="right">1 </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">49 </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">58 </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">503 </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">503 </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" noWrap align="right" colSpan="2"> </TD>
<TD> </TD>
<TD> </TD>
<TD style="BORDER-TOP: #000000 1px solid" noWrap align="right" colSpan="2"> </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">552 </TD>
<TD> </TD>
<TD> </TD>
<TD> </TD>
<TD align="right">562 </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" noWrap align="right" colSpan="2"> </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 noWrap align="left"> </TD>
<TD align="right">(1 </TD>
<TD noWrap>) </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" noWrap align="right" colSpan="2"> </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">561 </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" noWrap align="right" colSpan="2"> </TD>
<TD> </TD></TR></TBODY></TABLE></DIV></EFX_UNIDENTIFIED_TABLE>
<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">
<TBODY>
<TR>
<TD width="3%"></TD>
<TD width="1%"></TD>
<TD width="96"></TD></TR>
<TR vAlign="top">
<TD noWrap align="left">(a) </TD>
<TD> </TD>
<TD>
<P>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. </P>
<P class="MsoNormal" style="MARGIN: 0in 0in 0pt; TEXT-INDENT: 0.2in">Our eight largest net counterparty positions represent approximately 98 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 counterparty financial institution.</P>
<P class="MsoNormal" style="MARGIN: 0in 0in 0pt"> </P>
<P class="MsoNormal" style="MARGIN: 0in 0in 0pt; TEXT-INDENT: 0.2in">At June 30, 2009, the designated collateral agent held $168 million of collateral support on our behalf under Exploration & Production’s hedging facility. In addition, we held collateral support, including letters of credit, of $9 million related to our other derivative positions.</P>
<P> </P></TD></TR></TBODY></TABLE>
<P style="FONT-SIZE: 10pt" align="center"> </P></DIV>
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<div>
<div style="FONT-FAMILY: 'TIMES NEW ROMAN',TIMES,SERIF">
<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 Exhibit 99.1 of our Form 8-K dated May 28,
2009. 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 June 30, 2009, results of
operations and changes in equity for the three and six
months ended June 30, 2009 and 2008 and cash flows for the
six months ended June 30, 2009 and 2008.
</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: 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
indicators of potential impairment exist. We performed an
interim evaluation as of March 31, 2009, and determined
that no impairment of our goodwill was necessary. At
June 30, 2009, no indicators of potential impairment were
present. It is reasonably possible that we may be required
to conduct an interim goodwill impairment evaluation again
during 2009, which could result in a material impairment of
goodwill.
</div>
<div style="MARGIN-TOP: 12pt; FONT-SIZE: 10pt" align="left">
<b><i>Subsequent Events</i></b>
</div>
<div style="MARGIN-TOP: 6pt; FONT-SIZE: 10pt" align="left">
     We have evaluated our disclosure of subsequent events
through the time of filing this Form 10-Q with the
Securities and Exchange Commission on August 6, 2009.
</div>
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